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States should dissuade Centre from introducing Electricity Bill – AIPEF

States should dissuade Centre from introducing Electricity  Bill – AIPEF

Bahadurjeet Singh/Rupnagar

The States should   dissuade the centre from taking any unilateral  action on Electricity Amendment Bill 2021 as its adverse implications  for the states and the electricity consumers are far-reaching,  V K Gupta spokesperson of  All  India Power Engineers Federation (AIPEF) said on Monday.

The Federation has   written  to the Chief Ministers of  Punjab, Haryana and other states  ,  forwarding the letter from EAS Sarma, a former power secretary, with a request that states  must  discuss and debate the adverse implications of the Electricity Amendment Bill 2021 to  give their response  to the power ministry’s  proposals.

Sarma’s  letter mentions that the NDA government  had unilaterally enacted the three farm laws, without taking the states and the farmers’ association into confidence. Later the government assured them that neither the farm laws nor the electricity bill would be revived without prior consultation with all the stakeholders. But nothing has happened in this regard and the bill is likely to be introduced in the coming monsoon session.

The Electricity  Bill seeks to introduce an “open access” facility which would expedite large-scale privatisation of the existing electricity distribution networks by permitting the private licensees to pick and choose the remunerative loads within their distribution segments and provide them electricity by making use of the State
utilities’ power infrastructure. The Bill would further replace the existing tariff  cross-subsidisation,  with a system of “direct benefit transfer” by introducing “cost-reflective tariffs.

States should dissuade Centre from introducing Electricity Bill - AIPEF
VK Gupta

The Bill would impose obligations with associated penalties on the state utilities to absorb a  prescribed proportion of electricity supplied from renewable sources, and impose a “payment security mechanism” on electricity flows to the state utilities from the load despatch centres. The establishment of the
“Electricity Contract Enforcement Authority ” under the control of the centre will prevent the states from re-negotiating the existing Power Purchase Agreements (PPAs).

To date, the track record of privatised distribution networks has been far from satisfactory. In the past, in more than ten cities in different States, the distribution franchises had to be revoked due to their unsatisfactory performance.

States should dissuade Centre from introducing Electricity Bill – AIPEF . The private companies with little or no experience would raise loans from the banks and subsequently saddle them with liabilities.

V K Gupta said that the proposed legislation of July 2022 must be put on the website of the ministry of power clearly mentioning that this supersedes earlier versions and  6 months period be given to all states and stakeholders for giving comments.

June 20,2022

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