The uproar over the Electricity (Amendment) Bill, 2022

The Samyukt Kisan Morcha (SKM) and the trade unions; the Union Power Ministry, introduced the Electricity (Amendment) Bill, 2022 in Lok Sabha.

The Opposition questioned the introduction of the Electricity (Amendment) Bill.
The Opposition MPs said the Bill is not just anti-farmer but also anti-Constitutional and against the interest of States.

The Electricity Bill was introduced for the first time and passed in Parliament in 2003.
The intention was to consolidate the laws relating to electricity generation, transmission, distribution, trading, and electricity use.
The Act also offered to protect consumers’ interests and supply electricity to all areas, rationalise electricity tariffs, transparent policies regarding subsidies, etc.
The Act resulted in the privatisation of distributing companies.
It was amended in 2007 to add provisions for “cross-subsidy”—ensuring subsidies to poor households.
Cross-subsidy refers to the arrangement of one consumer category subsidising the consumption of another consumer category.

The Act allows multiple distribution licensees (Discoms) to operate in the same supply area.
The Act (2003) requires discoms to distribute electricity through their own network.
The Bill removes this requirement.
It adds that a discom must provide non-discriminatory open access to its network to all other discoms operating in the same area on payment of certain charges.
Power procurement and tariff:
Upon grant of multiple licenses for the same area, the power and associated costs per the existing power purchase agreements (PPAs) of the existing discoms will be shared between all discoms.
Cross-subsidy Balancing Fund:

The Bill adds that upon the grant of multiple licenses for the same area, the state government will set up a Cross-subsidy Balancing Fund.
Cross-subsidy refers to the arrangement of one consumer category subsidising the consumption of another consumer category.
License for distribution in multiple states:
As per the Bill, the Central Electricity Regulatory Commission (CERC) will grant licenses to distribute electricity in more than one state.
Renewable purchase obligation:

The Act empowers the State Electricity Regulatory Commission (SERCs) to specify renewable purchase obligations (RPOs) for discoms.
RPO refers to the mandate to procure a certain percentage of electricity from renewable sources.
The Bill adds that RPO should not be below a minimum percentage prescribed by the central government.
Failure to meet RPO will be punishable with a penalty between 25 paise and 50 paise per kilowatt of the shortfall.

Electricity is a subject that comes under the Constitution’s Concurrent List.
The Centre should have consulted the States before bringing in the Bill.
Farmer’s subsidies:
The opposition to the bill is primarily from farmers’ groups, as they fear that it will lead to the stopping of subsidies and that power distribution will be under private companies’ control.
Job losses:
The workers in the power sector oppose the bill, citing that the privatisation of distribution companies and generating units will result in job losses.

Pic Courtesy: The Hindu

Content Source: The Hindu