The Kerala Assembly on Thursday unanimously passed a resolution demanding the Centre to withdraw the Electricity (Amendment) Bill, 2021.
The resolution presented by Minister for Electricity K. Krishnankutty and passed by the ruling LDF and Opposition UDF members noted that the proposed amendments would render cost-effective electricity inaccessible to farmers and weaker sections of society. It would bring about a situation where private players corner the profits at the cost of the public sector and lead to hike in tariffs, it said.
Furthermore, the proposed amendments encroach upon the powers of State governments in matters pertaining to electricity and seeks to vest total control in the Centre. In going ahead with the Bill, the Centre had ignored the objections raised by Kerala. Usurping the powers of States in this matter would serve only to weaken the federal structure, the resolution said.
Electricity is on the Concurrent List of the Constitution, and as such, the Centre has the responsibility to discuss the Electricity (Amendment) Bill, 2021, with the States and arrive at a consensus. This constitutes the essence of cooperative federalism.
Several States had expressed their strong objection to the amendments at the meeting convened by the Minister of State for Power in July 2020. Although the Minister had assured that the government would not proceed without discussing the Bill with the States, the amendments now proposed are different from the ones then presented, the resolution said.
Mr. Krishnankutty pointed out that Kerala had also conveyed its objections to the proposals in two separate letters in March and July this year.
The move to delicense power distribution will free rein to private companies in power supply sector. They do not have the responsibility of investing in infrastructure, which would also lead to their speedy withdrawal when profits dip. This would create uncertainty in the sector.
Again, private players are likely to cherry-pick high-end consumers leaving the public sector to cater to the electricity needs of the low-paying ordinary consumers and rural regions. This scenario where the profits go to the private sector and the public sector gets mired in losses would lead to the denial of electricity to the common man, the resolution said.
Further, the proposed amendments give the Centre power over the State Electricity Regulatory Commissions (SERCs). They also give the Centre the power to entrust the functions of the state regulator to any other State commission, the resolution noted.
Previously, interventions of a general nature by the Centre aside, electricity distribution was handled by the states. Even when there was the pressure to privatise the sector, the State governments had the power to decide. However, the Electricity (Amendment) Bill is designed to wrest even such rights enjoyed by the states and vest total control of the power sector in the Centre, the resolution said.