The Andhra Pradesh government has opposed the proposed amendments to the Electricity Act, 2003, saying they were not only "against the spirit of the Constitution of India" but also were likely to undermine consumer interest and affect industrial growth.
The proposed Electricity Amendment Act was apparently aimed at usurping the powers of the states, the state government felt.
AP Transmission Corporation Chairman and Managing Director Nagulapalli Srikant presented the state governments views on the proposed amendments, as sought by the Centre, to the Power Ministry through a letter.
"The proposed amendments appear to be leaning towards centralising the electricity subject which is under concurrent list. It appears to offer more protection to generators than required, and is likely to increase power purchase costs which constitute 75% of power sector cost and thereby cost of service. This is likely to undermine consumer interest and affect the industrial growth," the AP government noted.
It opposed the proposed Section 3A, leaving the consultation process with the states to the Centre, as it was against the spirit of the Constitution.
"As electricity is a subject in the Concurrent List of the Constitution, consultation with states should be mandatory," he added.
The AP government also opposed the proposal to let the Central committee select the State Electricity Regulatory Commission (SERC) Chairman and members, saying "it not only takes away the autonomy from the state, but also is against the principle of decentralisation of powers."
It also opposed the move to transfer powers of the SERC to a new Central Authority, based in New Delhi, saying, "This will cause a significant dilution in powers of the SERCs."
On the proposed Direct Benefit Transfer (of power subsidy), the state government warned that it had the potential to "create social unrest."
"A cautious approach is, therefore, required, though it is beneficial to the financial sustainability of power distribution companies," it said.
The AP government asked the proposed Section 25 (6) to be deleted. "Overarching centralised powers to the National Load Dispatch Centre or Central government would lead to inefficiency and hamper the states to effectively handle operations. SLDCs should be allowed autonomy to act within their jurisdiction as they handle the day-to-day operations. NLDC should not be given responsibility to enforce contracts as the same would mean taking sides with either one of the litigating parties to the contract," the state government said.
Any contract enforcement will drag NLDC and, as a result the Government of India, into a conflict between two commercial entities generator on one side and distribution company on the other, it said.
"It is likely that more often than not, NLDC will be fighting against the Discoms in courts of law," the state noted.
There was no need for a redundant section on renewable energy policy as the existing National Electricity Policy, under Section 3, already provided for policy-making on renewable energy, it said.
"It is a duplication which will lead to two different policies on the same subject and create confusion at the implementation level. A separate mechanism will again be required to resolve conflicts between National Electricity Policy and National Renewable Energy Policy," it added.
It said there should be one Renewable Power Obligation for all renewable energy sources (hydro, solar, wind, etc).
"Stipulating individual RPOs for different sources is not appropriate as different states will have varying potentials of renewable energy and the states should be given an option from which sources it will satisfy its RPO as a whole," it added.