Electricity Amendment Bill 2022
Context:
- Recent protests resulted in the introduction of the Electricity (Amendment) Bill 2022 in Parliament, which was then referred to the standing committee for more discussion.
- Across the nation, in places like Tamil Nadu, Telangana, Rajasthan, and others, numerous electricity engineers demonstrated against the Bill.
The Electricity (Amendment) Bill 2022: What Is It?
About:
- The Electricity Amendment Bill, 2022 seeks to open up the distribution networks of power suppliers to a variety of businesses while also allowing customers to select any service provider.
Implication:
Aiming to alter the 2003 Electricity Act:
- To make it easier for all licensees to use distribution networks under the terms of non-discriminatory “open access,” with the goal of fostering competition, increasing licensee efficiency for better services to customers, and maintaining the long-term viability of the power industry.
- to enable open, non-discriminatory access to a distribution licensee’s network of distributors.
- In addition to the necessary setting of the maximum ceiling and minimum tariff by the competent commission, provisions must be made for a graded review of tariff over the course of a year.
- to change the punishment from incarceration or a fine to a fine.
- to strengthen the duties that the regulators would carry out.
What are the Arguments Against the Bill Made by the Protestor?
Against Federalism:
- Both the Central and state governments have the authority to enact legislation on this matter because “Electricity” is listed in the Constitution as Item 38 of List III (Concurrent) of the Seventh Schedule.
- The proposed revisions contravene the Indian polity’s federal framework, which is a component of the “fundamental structure” of the Indian Constitution.
- Electricity Subsidy: Free electricity for farmers and anyone living below the poverty line will soon disappear.
Will Diffuse Differentiation:
- The only entities required to provide universal power supply are government discoms or distribution firms.
- As a result, it is likely that private licensees will favor providing power to industrial and commercial consumers in profit-making locations.
- As a result, government discoms will lose money-making sectors, turning them into loss-making businesses.
What effects would this bill have on consumers and power employees?
The monopoly of Individual Private Players:
- Government distribution businesses will suffer a significant loss as a result, eventually paving the way for a few private players to gain a monopoly in the nation’s electricity market.
Operational Challenges:
- Power purchases, which are the same for all distribution licensees operating in a region, account for about 80% of the cost of supply.
- A wide range of operational problems will arise from having different retailers.
- The level of service or cost won’t change by adding more stores or distribution licence holders.
Hit on the common public:
- According to a research by UK auditors, consumers were forced to spend more than 2.6 billion pounds as a result of the adoption of such flawed models.
- The average customer was required to pay for these transactions.
- Although private businesses failed, consumers were hardest harmed.
What justifies the bill according to the Central Government?
- According to the government, no provision in the law limits the states’ ability to control the payment of electricity subsidies or the sector of power distribution.
- Multiple discoms may already operate in the same area, according to the government, and the measure just makes the process easier to ensure that competition results in better operations and services.
- The administration has insisted that the measure is pro-farmer and that it has consulted with every state and numerous associations in writing, including providing a separate written assurance to the Agriculture Ministry.
- According to the proposed legislation, additional cross-subsidies that are gathered from industrial and commercial customers in one area may be used to subsidise the underprivileged in other areas.
- The government is of the opinion that the push for Renewable Purchase Obligations (RPOs) mentioned in the bill will increase India’s power demand, which is expected to double in the next eight years while moving to achieve green targets fixed as per the Paris and Glasgow Agreements. India is aiming to achieve 50% of its installed power capacity from renewable sources by 2030.
Steps to Take Ahead:
- Since the bill’s contents are covered by the Concurrent List of the Indian Constitution, suggestions from the states should be taken into account for their effectiveness.
- Subsidy-related provisions should be elaborately written to avoid confusion or disagreement.
- To prevent unequal distribution, regulations for private participants should be implemented.
