Electricity Bill introduced in Lok Sabha, referred to Standing Committee

House panel now to debate electricity Bill

The amendments to the Electricity Act, 2003 — which seek to allow private players in the perpetually loss-making power distribution sector — were introduced in the Lok Sabha on Monday. Though the Centre has retracted its earlier stance of delicensing the power distribution sector, it looks to allow multiple players to operate in an area.

After tabling the Electricity (Amendment) Bill, 2022, Union Power R K Singh said it has been sent to the Standing Committee on Energy for “examination”. Through a proposed amendment to Section 14 and 42 of the Act, the Centre is looking to allow the use of distribution networks by anyone who applies for a distribution licence in a state. This shall allow consumers to choose among multiple power suppliers in an area. 

The said provisions of the Bill have already triggered protests by Opposition parties and employee unions. Several non-BJP states -- led by Delhi, West Bengal, Tamil Nadu, and Kerala -- have been opposing several provisions of the Bill since consultations started in 2020.

Congress MP Jairam Ramesh said on Twitter: “The Opposition protested the very introduction of the highly contentious Bill that has been objected to by many states and farmers. At least, the Bill has found its way to the Standing Committee concerned. Hopefully, it will follow a consultative process.”

 Arvind Kejriwal, Delhi chief minister, took to Twitter to claim that the Bill was “dangerous”, and requested the Centre to not rush ahead with it. In a press conference, he said instead of “fretting” over free access of basic amenities like electricity, “we should be worried of the Rs 10-trillion debt that the Centre has waived of its corporate friends”.

The Delhi CM was responding to Singh, who said that any state can give free power but should pay from its pockets and not burden the financials of discoms. Speaking to TV channels, Singh said the Bill would be discussed in detail by the Parliamentary Standing Committee and there was no provision in the Bill to stop electricity subsidies given to farmers.

Last week, the All India Power Engineers Federation (AIPEF), which represents engineers of state owned power utilities, in a statement last week, called to cease work and organise mass demonstrations to protest the provisions in the Bill, including “privatisation” of the power distribution.

Speaking to Business Standard, Swadesh Debroy, secretary, Centre of Indian Trade Unions (CITU), welcomed the move to send the Bill to the committee. “Since the Bill has been sent to the standing committee, CITU will also lead a delegation to the committee,” he said.

The legislative proposal to have multiple electricity sellers comes at a time when the Centre has floated a Rs 3-trillion scheme to revive the power distribution sector. State-owned discoms across the country are financially and operationally beleaguered despite four reform schemes in the past 15 years. The earlier discom reform scheme UDAY concluded in FY20 with most states failing to meet their stipulated targets and still in the red.

Another significant amendment proposed is the empowerment of the National Load Despatch Centre or the power grid operator, which can now regulate electricity supply to discoms/states which default on their payment to power generating companies (gencos). The amendment is in wake of rising dues of discoms to generating companies which stood at a record high of Rs 1.12 trillion as of July end.

Other agencies to be empowered are the Central Electricity Regulatory Commission (ERC) and SERCs, which will now have the status of a civil court. SERCs can also now issue suo moto tariff orders, even if discoms don't file regular tariff revisions.