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power-engineers-oppose-proposed-amendment-in-electricity-act

Posted On : November 17, 2018
The All India Power Engineers Federation (AIPEF) on Sunday termed the changes proposed in the Electricity Act, 2003 as a matter of serious concern, as this will concentrate all powers in the electricity sector in the hands of Central government and eventually lead to complete privatisation of power distribution in the country.

 

The AIPEF warned against any unilateral rush-through of proposed amendment Bill in Parliament, which will force 1.5 million power employees and engineers to go on a lightning strike, in protest. The Federation submitted its comments on the draft Electricity (Amendment) Bill 2018 to Union Power Minister RK Singh, running into 22 pages, and demanded that the revised draft be again sent to the Standing Committee of Parliament and the Federation be given a hearing, to present its view point. The AIPEF urged that the states should also be allowed to give their views before the Committee, as Electricity is a concurrent subject.

 

AIPEF Chairman Shailendra Dubey said here in a statement that in the proposed Amendment, there will be separate supply licences, Incumbent supply licence and Intermediate Company, to handle all Power Purchase Agreements (PPAs). In the present scenario, every state pools the availability of power and implements merit order dispatch at state level, so that energy requirement is met at the least cost, Mr Dubey pointed out. With the proposed set-up, how the Intermediary Company will implement the merit order with multiple supply licences is not known and it will be an impossible task. It will lead to endless disputes as each licensee will claim power from the least cost PPAs and it will result in problem of the stranded PPAs becoming unmanageable, he added.

He said presently, the Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory Commissions (SERCs) are guided by tariff policy, whereas in the draft amendment, tariff policy will become mandatory. This will make the CERC, as well as all SERCs subservient to policy dictates of the Central government, issued through Section 3 of the Act. The Regulators will no longer be Independent and distanced from the government.

Mr Dubey said the changes in the draft bill have been proposed to pave the way for privatization of power sector, wherein supply licensees will be mostly from private sector and the licensee will get assured profit by way of guaranteed return on capital employed and by stipulating that licenses will get their expenses covered without revenue gap. It can be said that the changes in tariff have been proposed to encourage privatisation and ensure guaranteed profits to private parties.

 

The draft amendment proposes that the cross subsidy payable to different set of consumers within the distribution area will be reduced progressively and eliminated in a period of three years. This is a policy matter for each state to decide. Further, any subsidy payable to a consumer will be through the provision of direct benefit transfer and this proposal is practically unworkable and sure to fail, it added.

 

The AIPEF Chairman said that when most of the State DISCOMS of the country are in financial distress, this is not the time or occasion to introduce changes by way of separating supply and distributing functions, rather it will worsen the financial crisis.
   

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The purpose of the central government is not to review or revise the existing National Electricity Policy but the total replacement of existing policy with a new policy to be recommended by the expert group so as to achieve privatization, the body alleged. As per Electricity Act 2003, National Electricity Policy is to be prepared in consultation with the state governments and Central Electricity Authority (CEA), a statutory body. However, the body said that the CEA is not included in the proposed schedule of discussion. Further, only 5 states have been included in an expert group instead of all the states, it added. K Subramanian, Chief Economic Adviser, has stated that India is the only country that readily implemented a slew of reforms and used this crisis to herald a change in India''s economic thinking, it said. The strategy of government seems to be “never waste a crisis” and use the crisis of pandemic to streamroll so-called reforms by way of privatizing, it alleged. The draft proposal is of serious nature for which the present situation of a pandemic is a serious constraint, it stated. The Ministry of Power has once again found peak pandemic time as an opportunity in crisis to launch the draft amendments to National Electricity Policy, it lamented. Once the draft policy is finalised, the notified policy would have the status of “subordinate legislation”, and for this reason, the matters need to deliberate as in the case of the legislation itself or as in the case of amendment in the Act itself, it opined. Draft national electricity policy is pushing for more private participation in the power sector and launching sell out of public assets as at Chandigarh and Dadra Nagar Haveli, it noted. The preferred route being suggested are failed models like the franchisee system, transferring distribution responsibility to a private party, and separation of carriage (lines) and content (supply) business, it opined. Since the existing Policy is in force since February 2005 there was no emergency to totally replace it, while power engineers and workers as front line workers are already stressed in maintaining power continuity, it added All India Power Engineers Federation on Tuesday condemned the central government''s move to amend the National Electricity Policy "to facilitate privatisation". According to a statement by the AIPEF, the proposed changes require extensive discussions as such time for submission of comments should be six months. When fundamental changes are being introduced by way of privatization of the power sector, there is no basis to rush through more so under extreme distress caused by the COVID-19 pandemic, it said. "All India Power Engineers Federation (AIPEF) condemns the government of India''s move to amend the National Electricity Policy to facilitate the privatization of the power sector," the statement said. The body alleged that this is a clear attempt to introduce privatization through the backdoor and deserves to be scrapped. The purpose of the central government is not to review or revise the existing National Electricity Policy but the total replacement of existing policy with a new policy to be recommended by the expert group so as to achieve privatization, the body alleged. As per Electricity Act 2003, National Electricity Policy is to be prepared in consultation with the state governments and Central Electricity Authority (CEA), a statutory body. However, the body said that the CEA is not included in the proposed schedule of discussion. Further, only 5 states have been included in an expert group instead of all the states, it added. K Subramanian, Chief Economic Adviser, has stated that India is the only country that readily implemented a slew of reforms and used this crisis to herald a change in India''s economic thinking, it said. The strategy of government seems to be “never waste a crisis” and use the crisis of pandemic to streamroll so-called reforms by way of privatizing, it alleged. The draft proposal is of serious nature for which the present situation of a pandemic is a serious constraint, it stated. The Ministry of Power has once again found peak pandemic time as an opportunity in crisis to launch the draft amendments to National Electricity Policy, it lamented. Once the draft policy is finalised, the notified policy would have the status of “subordinate legislation”, and for this reason, the matters need to deliberate as in the case of the legislation itself or as in the case of amendment in the Act itself, it opined. Draft national electricity policy is pushing for more private participation in the power sector and launching sell out of public assets as at Chandigarh and Dadra Nagar Haveli, it noted. The preferred route being suggested are failed models like the franchisee system, transferring distribution responsibility to a private party, and separation of carriage (lines) and content (supply) business, it opined. Since the existing Policy is in force since February 2005 there was no emergency to totally replace it, while power engineers and workers as front line workers are already stressed in maintaining power continuity, it added
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