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States should dissuade Centre from introducing Electricity Bill 2021

VINOD GUPTA | June 20, 2022 04:43 PM

CHANDIGARH: 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..

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. 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.

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