Telangana Chief Minister K Chandrasekhar Rao on Tuesday urged the Centre to withdraw the proposed draft electricity amendment bill, stating that it is neither in the public interest nor in the interest of state power utilities. The appeal by the Telangana CM was also backed by the Hyderabad Member of Parliament Asaduddin Owaisi.
The Union government had asked states to express their opinion on the proposed draft Electricity Bill Amendment Act, 2020, which seeks to set up an Electricity Contract Enforcement Authority (ECEA). The ECEA will have the power a civil court to settle disputes related to power purchase agreements between power generation companies (gencos and distribution companies (discoms). Other provisions under the draft law include creating a National Renewable Energy Policy introducing power distribution sub-licensee or franchisee, and allowing state and central power regulators to specify transmission charges under open access. If passed as a law, the Act will be applicable across India.
In a letter to Prime Minister Narendra Modi, the Telangana Chief Minister voiced serious concerns over amendments to the Electricity Act (Draft Electricity Bill Amendment Act, 2020). He made it clear that this would have an adverse impact directly on the management of the state electricity organisations.
The Chief Minister, in his letter, stated that the proposed amendments to the Electricity Act, 2003 (which failed to become law in 2014 and 2018) would have a direct bearing on the functioning of the power sector. He pointed out that the bill takes away certain functions and powers of the state government.
"The provision to appoint state electricity regulatory commission by a selection committee, constituted by the government of India, and entrusting the responsibilities to a neighbouring state electricity regulation commission under certain circumstances, is hitting on the core of the federal polity, which is enshrined in the Constitution," reads the letter by the Telangana CM.
"Merely a particular subject is in the concurrent list of the Constitution does not mean that the Government of India/Parliament will enact laws, which have a direct and major influence on the functioning of the state government. We strongly oppose such a tendency," he wrote.
The Chief Minister said the proposal to take away the functions of the state government in constituting State Electricity Regulatory Commission is against the spirit of federalism.
Referring to the provision in the draft bill for the direct benefit transfer of subsidy provided to consumers, KCR wrote that this would work against the interest of farmers and very poor domestic consumers. "It has been the policy of the Telangana government that the farmers should receive 24x7 free power. Mode of payment of the subsidy should be left to the state government. Any proposal to modify the current statute on this specific subject matter will be highly objectionable to our government," he said.
He strongly opposed the provision that the Commission will fix the tariff for all the consumers without any subsidy. He pointed out that presently tariff fixation includes some cross-subsidy to be borne by a certain category of consumers. He demanded that discretion to levy cross-subsidy on certain sections of consumers be left to the state government.
The Chief Minister conveyed that any national renewable energy policy should be formulated with the explicit consent of the state governments, and not merely in consultation with the state governments.
KCR also pointed out that the proposed bill would make National Load Despatch Centre (NLDC) all-powerful with regard to the scheduling of power throughout the country which will result in backing down of state thermal units. He demanded that intra-state transmissions decisions should be left to the SLDCs only.
The letter by KCR also found support from the AIMIMâ€™s president and Hyderabad MP Asaduddin Owaisi, who tweeted, â€śCompletely support Telangana CMO's stand against PMâ€™s Electricity Amendment Bill, which deprives the poor of affordable electricity and takes away essential powers from state governments. Iâ€™d written against the Bill exactly on these grounds.â€ť
Completely support @TelanganaCMO's stand against @PMOIndia's #ElectricityAmendmentBill which deprives the poor of affordable electricity & takes away essential powers from state governments. I'd written against the Bill exactly on these grounds (https://t.co/16eCfjOTwE) pic.twitter.com/BH3acL6hq7â€” Asaduddin Owaisi (@asadowaisi) June 2, 2020