Electricity (Amendment) Bill Won't Weaken State Regulators: Power Minister
Coal Insights|June 2020
Growing opposition forces government to respond

Following opposition from several states and also non-political bodies like All India Power Engineers Federation which opposed that the draft Electricity (Amendment) Bill would hurt federal structure of the country by taking away powers of the state electricity regulators, Union Power & New and Renewable Energy minister RK Singh held a press conference on June 25 denying such allegations and claimed that the proposed changes would improve transparency and improve overall state of the power sector. Here are highlights of what the minister said.

While giving clarity on electricity tariff fixation, the Union Power Minister stated that the powers of tariff fixation remains with SERCs. He emphasised that proposed power reforms are aimed at introducing transparency and accountability to protect the interest of consumers and ensuring healthy growth of the power sector. He also mentioned that there is no restrictions on States for providing subsidy as States can give as much subsidy as they want but they must pay it upfront through Direct Benefit Transfer(DBT) so that Discoms remain healthy and are able to maintain and improve distribution infrastructure like transformers and distribution lines, pay for power purchased and are able to provide quality electricity to the people.

“While we have made significant improvements in the electricity generation and transmission segments, the distribution segment, having achieved 100% village electrification and near-universal access to electricity, is beset with problems of operational inefficiencies, liquidity, and financial solvency,” Singh said.

To overcome these issues, Ministry of Power had prepared a draft proposal for Amendments in Electricity Act 2003 in the form of draft Electricity (Amendment) Bill 2020 with the following broad objectives:

♦ Ensure consumer centricity

♦ Promote Ease of Doing Business

♦ Enhance sustainability of the power sector

♦ Promote green power

No proposal to take away powers of state electricity regulators

There is no proposal to take away the power of appointment of members or chairpersons of state electricity regulatory commissions from state governments.

As per the draft circulated the appointments of members/chairpersons of SERCs will continue to be made by the state governments.

The selection committee currently has equal number of members from the central and state government – one member from central and one from state government. The proposed selection committee in the draft Bill also has equal number of members from central and state governments as earlier. The only difference is that instead of selection committee being presided over by a retired Judge of the High Court, it is proposed that the committee be headed by a sitting Judge of the Supreme Court.

Instead of multiplicity of selection committees, there be one selection committee for drawing up of panels for the vacancies in the Central Electricity Regulatory Commission and State Electricity Regulatory Commissions.

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