By

To

Shri R K Singh

Minister of State – IC (Power and New & Renewable Energy)

Shram Shakti Bhawan,

Government of India

New Delhi-110001  

                                                                                                                                                                                                                                         5th June 2020

Sub: Comments and Objections of Civil Society Groups and members on the draft Electricity (Amendment) Bill 2020

Dear Shri. Singh,

This is with regard to the draft Electricity (Amendment) Bill 2020 proposed by Union Ministry of Power issued online on its website vide letter dated 17th April 2020 (No. 42/6/2011-R&R (Vol-VIII)) requiring the wide public to comment within a period of 21 days, i.e. by 8th May 2020. Due to widespread protests about attempting to amend a major law of the country when the entire nation was under lockdown, and almost all fundamental freedoms were unavailable, even suspended, we note this deadline to the comment was extended to 5th June 2020 vide letter of the Ministry dated 27th April 2020 vide (No. 42/6/2011-R&R (Vol-VIII)).

At the outset, we consider the advancement of this proposal to amend a major law that has a direct impact on economic, social and ecological securities of the peoples of India, during the lockdown, as fundamentally opposed to basic tenets of democracy. As per Constitutional demands, lawmaking, or amending existing laws, must only be undertaken when every element of democratic decision making in the country is fully functional and the Parliament is able to perform its competent and oversight role on behalf of the people at large.  This is not possible during lockdown when most fundamental freedoms, especially the freedom to associate and express one’s views and disagreements, enshrined in Article 19 of the Constitution of India, are unavailable to the public at large and also to elect representatives.  As a result, initiating the public commenting period on such comprehensive reform of a major law during lockdown comes across as extremely unconstitutional and therefore constitutes the direct attack on fundamental rights of citizens, and opposed to the very purpose of the main law – which is to advance the public interest.

With this categorical position, we civil society groups and members submit hereunder other reasons why this proposed amendment has to be shelved.

Comments

1.     The 2003 version of the Electricity act was brought in to promote the corporatization of the power sector and make it market-friendly.  However, due to widespread and tireless efforts of trade unions, environmental and social movements, various social and environmental safeguards were introduced into all aspects of electricity generation. The proposed amendment attacks the very foundation of these safeguards and promotes a law that is unabashedly investor and industry-friendly promotes profit over public interest and makes no effort whatsoever to protect the rights of consumers, project impacted communities, natural resources and nature.

2.     The proposed amendment organizes electricity generation, transmission and distribution in an extremely centralized manner, and neutralizes, even does away with, powers of various State and District level institutional mechanisms that currently guarantee decentralization of the electricity sector, especially with the proposal of establishing an Electricity Contract Enforcement Authority (ECEA).  This ECEA also takes away powers now latent to State Electricity Regulatory Commission. Such changes are opposed to the Constitution as electricity generation is in the Concurrent list and ought to involve States fundamentally in its planning, generation and distribution.

3.     The proposed amendment promotes uniform tariff across states against the very grain of appropriate public planning of electricity.  As a consequence, districts and states which suffer an immense loss due to diversion of natural resources to power generation, and do not benefit from the generated power, will pay the same tariff as those who consume the power without suffering any loss. 

4.     The proposed amendment takes away almost all of the rights to litigate against infirmities and illegalities that are now available in the State Electricity Regulatory Commissions, High Court, Consumer Courts and Central Electricity Authority and Appellate bodies.  Such powers have been delegated to ECEA which is under the direct jurisdiction of the Power Ministry and thus is not an independent or autonomous forum. That such a review mechanism is proposed for one of the most critical aspects of the governance of this country is not merely shocking, but scandalous.

5.     All this suggests that the ECEA is being brought into effect with the single purpose of protecting the interest of the licensee and to promote the licensee’s interest, and is a mechanism for promoting ease of business at the cost of public interest, and also of future generations.

6.     It is widely known that most of the power purchase agreements under the current law have failed to advance public interest and yet the licensees enjoy due to the benefits of gaining even without delivering per contractual obligations – be it in power generation or transmission.  The current proposal energizes such failure franchise agreements. This will also now worsen the situation in rural areas where no private franchisee invests on the claim they are not profitable ventures and thus can create a stark binary of lit-up cities and darken villages.

7.     The Bill aggressively promotes privatization of the power sector which will further widen the prevailing disparity in accessing electricity between cities and rural areas, and further between high-income areas and poorer regions.

8.     The Bill is intended at promoting environmentally disastrous big hydro projects as renewable, which they are not, and thus environmentally safe, which again they are not as is evident across the world. 

9.     There is a clear design to take away a variety of subsidies that are necessary to reach electricity to the masses. Lakhs of people without access to electricity, their condition will only worsen as a result of this Bill which makes consumers pay higher rates, thus making electricity a luxury commodity.  

10.    Section 37 of the proposed bill read with Section 176 of the principal act enforces a standard payment security mechanism across states. Due to this, the decision making powers of the state utilities will be compromised and they will be forced to make advance payments to Independent Power Producers (IPP). Stressed State utilities will be forced to pay for this surplus power, even when it is not generated, shifting, thereby, public revenue to private profit.  Distressed Discoms will collapse under such obligations.

11.       As per S 39 and 42 of the proposed bill read with S 181 of the principal Act, the proposal is to remove the right of SERCs to frame regulations and withdraws the role of SERC in specifying surcharges and associated modalities. Due to this, the State will again risk financial losses as they will not be able to negotiate or frame any regulation regarding tariffs. As far as Power purchase agreements are concerned between the state and power generating companies, the central interference in the process would be harmful to the State, and against the federal character of governance. The Act will thus take away all available rights of the state to define its own future.  In summary, it will take away the power of states in the management of generation, transmission, and distribution of electricity.

12.    Section 39 of the proposed bill read with Sec 181 of the Principal act removes the key role of SERC regarding contracts and PPA, while the rest of it is related to tariff disputes and other consumer grievances. Consequently, it will deepen the financial crisis of state discoms.

13.   Further, the bill proposes that the cost of failure in payment of tariff shifts to the DISCOMs which in turn will pass it on to consumers. The power producer is secured.

14.   Section 3 of the proposed bill read with section 2 (15) (a) of the principal act proposes cross border trade of electricity obviating the due role of CERC which is required to issue regulations.

15.   Section 18 of the proposed bill read with S65 of the principal act proposes that those who cannot pay would be reimbursed through direct cash transfer (DBT) to the bank accounts of the consumers. It would be far simpler if people who cannot pay, are not required to pay at all.

16.    S18 of the proposed bill r/w Section 65 of the principal act mandates subsidy released in advance by the respective state governments through a mechanism similar or otherwise to directly to consumers and removes any directions of future assurance or deferment of subsidy to be considered in the tariff setting. It is eliminating the cross-subsidies, and it is assumed that somehow this burden will shift to the pockets of the states’ which already do not have sufficient funds. Such centralizing of power over the power is also shifting the cost to the states.

17.   Section 18 of the proposed bill r/w Section 65 of the principal act addresses issues of subsidies and cross-subsidies which are under the purview of SERC.  It is now proposed to transfer this power to the central authority and with a directive to impose a uniform tariff for all discoms of the country. There is no clarity on the issue of state-specific subsidies and another mechanism in the bill. Therefore, it seems that the bill is not brought because the government is keen to protect people’s interests, but the primary focus of this bill is to protect the Independent Power Producer.

18.  S 19 of the proposed bill r/w section number 77 of the principal Act to remove the requirement of consultation with Chief Justice for the appointment of a legal member or chairman. This results in the entire power sector escaping judicial scrutiny and become the preserve of executive decision making.

19. Proposed changes in Section number 126, 135, and 164 of the principal Act are all oriented towards adopting the failed so-called Private-Public-Partnership model, which is a euphemism for privatizing profits and shifting the burden of losses on to the public.  This approach will result in the privatization of DISCOMS in the name of promoting franchises in the distribution sector.

20. Section 37 of the proposed bill r/w subsection (2) of 176 of the principal act proposes to add the word hydro as renewable. It mandates the minimum percentage of purchase of electricity from renewable and hydro sources of energy under section 3A. In effect, it dangerously promotes hydro as renewable, which it is not, and seeks to promote it as environmentally friendly, which certainly it is not.

21.   S 4 of the proposed bill r/w section 3 of the principal act brings a separate National Renewable Energy Policy. While promoting renewable energy is welcome, it should not be a plank to allow monopolization of land without conforming to the provisions of the land acquisition act in promoting large solar park development, resulting in widespread displacement and dislocation of communities and capture of common lands.

CC to:

(1)   Secretary, MoP

(2)   Director, MoP

(3)   Director, CERC

Endorsements by Civil Society Groups and Members

  1. National Alliance of People’s Movement
  2. Narmada Bachao Andolan, Madhya Pradesh
  3. National Alliance of People’s Movement Madhya Pradesh
  4. Jan Sangharsh Morcha Mahakaushal  Mandla-Ghaat
  5. Madhya Pradesh Janshangharsh Samanvay Samiti
  6. Beyond Copenhagen Delhi
  7. Bharat Gyan Vigyan Jatha Delhi
  8. Centre For Financial Accountability, Delhi
  9. Lok Shakti Abhiyan Odisha
  10. National Alliance of People’s Movement Odisha
  11. National Alliance of People’s Movement Rajasthan
  12. Environment Support Group, Bangalore
  13. Citizen Consumer and Civic Action Group, Chennai
  14. Mahengi Bijali Abhiyan Madhya Pradesh
  15. Bhu-Adhikar Abhiyan Madhya Pradesh
  16. Bargi Bandh Visthapit Avam Prabhabit Sangh Jabalpur
  17. Srijan Lokhit Samiti Singrauli
  18. Roko Toko Thoko Krantikari Morcha Sidhi
  19. Chutka Parmanu Virodhi Sangharsh Samiti Mandla
  20. Kishan Sangharsh Samiti Chhindwada
  21. Bhartiya Kishan Union Jaitehari Anuppur
  22. Financial Accountability Network India, Delhi
  23. Swaraj Abhiyan Jabalpur
  24. Lok Jagrati Manch Jhabua
  25. Vindhya Vikash Abhiyan Satna
  26. Rashtriya Kishan Kamgaar Parisad Satna
  27. Humara Adhikar Abhiyan Rewa
  28. Jangle Jivan Gaon Kheti Bachao Abhiyan Satna
  29. Jhabua Power Plant Prabhavit Sangh Seoni
  30. Zindagi Bachao Jamin Bachao Sanghathan Narsingpur
  31. Jan Pahel Bhopal
  32. Nagrik Adhikar Manch  Jabalpur
  33. Asanghathit Majdoor Huk Abhiyan Jabalpur
  34. Bargi Bandh Matasya Utpadan Avam Vipanan Sangh Jabalpur
  35. Bharat Gyan Vigyan Samiti Katni
  36. Patrakar Nagrik Manch, Jabalpur
  37. Poshan Abhiyan Panna
  38. Sachha Prayas Samiti Jabalpur
  39. Khedut Majdoor Chetna Sangathan Alirajpur
  40. Vindyachal Jan Andolan Satna
  41. Jal Jangle Jameen Jeevan Bachao Shanjha Manch, MP
  42. Unorganized Labour Rights Abhiyan Jabalpur
  43. Kishan Adivasi Sangathan Hoshangabad
  44. Shramik Adivasi Sangathan, Betul-Harda
  45. Humara Gram Adhikar Abhiyan, Rewa
  46. Chhattisgarh Bachao Andolan Chhattisgarh
  47. Machhimar Adhikaar Sangharsh Samiti, Kutch Gujarat
  48. Johar  Unorganized Labour Forum, Jharkhand
  49. Nagpur Municipal Corporation Employees Union, Nagpur Maharashtra
  50. All India Union of Forest Working People
  51. National Alliance of People’s Movement, Bihar
  52. Civil Society Women Organisation, Meghalaya
  53. Indigenous Perspective, Manipur
  54. All Laktak Lake Fisherman’s Union, Manipur
  55. National Alliance of People’s Movement, Delhi
  56. Himdhara Environment Collective, Himachal Pradesh
  57. Manthan Adhyayan Kendra, Pune
  58. Matu Jan Sangathan, Uttarakhand
  59. Johar Unorganised Labour Forum, Jharkhand
  60. South Asia Network on Dams, Rivers and People
  61. Delhi Solidarity Group
  62. Vikalp’s Women’s group, Baroda, Gujarat
  63. Delhi Forum, Delhi
  64. Andhra Pradesh Vyavasaya Vruttridarula Union (APVVU), Andhra Pradesh
  65. India Climate Justice
  66. National Network of Sex Workers (NNSW)
  67. Niraj Bhatt, Citizen Consumer and Civic Action Group, Chennai
  68. Rajendra Agrawal, Former Additional chief engineer, MP Power Generating Company/ Member AIPEF
  69. Willy, Indian Social Action Forum
  70. Krishnamurthy Nagarajan Bangalore
  71. Sanjeev Dalit Adivasi Shakti Adhikar Manch, Delhi
  72. Vinay K Sreeninvasa, Advocate Bangalore
  73. Ashok Srimali, General Secretary, mines, mineral & People, Gujarat
  74. Linda, Independent Journalist, Meghalaya
  75. Mahendra Yadav, Koshi Navnirman Manch Bihar
  76. Bijay Bhai, Convenor, Bharat Jodo Andolan
  77. Jigisha Maheta, Goonj, Chennai
  78. Sandeep Patnaik, Center for Public Policy Alternatives Bhubaneswar, Odisha
  79. Sreedhar Ramamurthy, Environics Trust
  80. Ulka Mahajan, Sarvahara Jan Andolan, Raigad Maharashtra
  81. Usmaan Sherasiya, Secretary, National Fishworker Forum, Gujarat
  82. Dr. Sunilam, Former MLA Samajwadi Party, Madhya Pradesh
  83. Ravindranath, River Basin Friends, Assam
  84. Ravi Pragada, Mines Mineral & People
  85. Nityanand Jayaraman, Chennai Solidarity Group, Chennai
  86. Jesu Retinam, Coastal Action Network Tamil Nadu
  87. Rajendra Ravi, Institute for Democracy and Sustainability
  88. Balu Gadi, Rythu Swarajya Vedika, Andhra Pradesh
  89. Virendra VIdrohi, G. S. Indian Social Action Forum
  90. Vijay Kumar, State Secretary, CPI (ML) Red Star Madhya Pradesh
CFA , , , , Energy, National Consultation on The Electricity Amendment Bill 2020

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