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New Draft of Electricity Amendment Bill introduced by Power Ministry

The amendment seeks to set up an Electricity Contract Enforcement Authority (ECEA) with a power of civil court that will settle the disputes between power generation companies (gencos) and power distribution companies (discoms).

Apr 20, 2020 14:44 IST
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The fourth draft of the Electricity (Amendment) Bill since 2014 has been introduced by the Ministry of Power.

The amendment seeks to set up an Electricity Contract Enforcement Authority (ECEA) with a power of civil court that will settle the disputes between power generation companies (gencos) and power distribution companies (discoms).

ECEA will have a power of judgment on the matters related to the purchase or sale of power, performance of contracts between gencos and discoms.

The ministry has asked for the comments of the stakeholders on the bill within three weeks from April 17, 2020. The decision on ECEA can be challenged at the Appellate Tribunal of Electricity (APTEL) and at the Supreme Court.

The Bill has been condemned and seen as the Government’s attempt to privatizing the power sector.

Key Highlights:

Presently, the Central Electricity Regulatory Commission and State Electricity Regulatory Commission settles the state level and interstate power purchase agreement (PPA) disputes.

The first draft of the bill was bought in 2014 in Lok Sabha by the ministry mentioning the separate carriage and contend electricity distribution business.

The amendment bill could also have given consumers the option to change their service providers.

The bill was lapsed after the dissolution of Lok Sabha. The second and third draft was circulated in 2018 and 2019.

Proposed Amendments in the Electricity Bill:

The purpose of the bill will be to privatise discoms and ensure payments to the private generator.

The proposed amendments in the acts will increase the electricity tariff.

The bill will also provide that the Electricity Act is applicable to the entire country, which will include Union Territories of Jammu & Kashmir and Ladakh.

The draft law also provides the introduction of power distribution franchisee. It will not require a separate license from the state and providing information will be sufficient.

The bill states that the cross (power)border trade will cover the export or import of electricity from Indian and any other country.

It talks of creating National Renewable Energy Policy by the central government in consultation with the state government.

There will be additional roles to the National Load Dispatch centre. It will include the dispatch and scheduling of power across the country as per the contracts.

•  The bill states that there will be no scheduling or dispatch of electricity unless there is payment security.

•  The bill gives the center as well as state power regulators that will specify transmission charges. Earlier it was only with the central commission.

All India Power Engineer’s Federation (AIPEF) condemns the bill:

VK Gupta from AIPEF stated that the setting up of ECEA will dilute the power of Central and State regulatory commissions to settle matters between gencos and discoms.

AIPEF condemned the Power ministry’s step to bring back the Electricity Amendment Bill 2020 amid the nation’s fight against COVID-19. There was also the strong criticism of the government’s step to privatize the power sector through proposed amendments in the Electricity Act 2003.

There was an expectation of all the sectors including power being nationalized across India due to the bitter experience from the COVID-19 crisis.

AIPEF has demanded the electricity amendment bill 2020 to be put on hold. They have also written a letter to Power Minister RK Singh that the date of the comment on the bill should be extended till September 30.

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