Cursory analysis of Electricity Bill 2003

October 2002 - March 2003

VOL. 3-4 NO.4-5

CURSORY ANALYSIS OF ELECTRICITY BILL - 2003

The observations by Parliamentary Standing Committee on energy on Electricity Bill-2003

Committee’s key observations clearly bring out the inappropriate nature of Electricity Bill-2003.

• There is need to give autonomy to states simplify procedures, curtails delays, cut down costs, check multiplicity of Agencies and provide an authority to oversee the working of power sector as a unified unit. CEA and SEB are institutions of Central and State Govts. respectively and were discharging the functions exactly as above. Then why the new law ?

• The bill reveals that powers conferred on various authorities are too wide without the necessary policy framework. There is possibility of arbitrary decision making, multiplicity of approach which may lead to widely varying electricity regimes across the country which is not conducive to power sector.

• State GO Punjab suggested that National Electricity Policy (including tariff Plan) can be prepared only by CEA and not by Central Government because it required in depth multi disciplinary knowledge, experience and technical inputs available only in CEA.

• FICCI stated that National Electricity Policy must clearly outline implementable strategy for each state. Obviously SEBs and CEA shall have to play main role here.

• National Electricity Policy and Plan should contain the broad parameters leaving states to workout minute details keeping in view their ground realities. SEBs making plans with National Electricity (Power) Policy prepared by CEA, and CEA giving Techno-economic nod to meet major power project under E(S) Act 1948, exists to match the above observations.

• Section 16 and 17 of E(S) Act 1948 provide for constitution of ‘State Electricity Consultative Councils’ and ‘Local Advisory Committees’ having representative of consumers of electricity. Such provision be made in EB-2003. Inspite of Estimates Committee of Parliament (1980-81) observations this is not done so far.

• A number of provisions of 1910 and 1948 electricity Acts, which protected that interest of consumers have been deleted in present Bill.

• CEA should be entrusted to examine/investigate ongoing Projects and be vested with power to impose penalty for nor adhering to technical standards, safety requirements etc.

• The committee desire, that Central Govt. should extend financial support to state Govts. for rural electrification works. Govt. should provide necessary funds and expertise to strengthen cooperatives/local bodies which have not proved successful venture so far. Rural Electrification subsidy was not paid by most of the State Govts. to SEBs which resulted in the mess of Power Sector (1975-2000). Provision in clause 14 of EB-2003 provides that in rural areas notified by State Govts. a person intending to generate and distribute electricity would not require any license. This means that power supply to large part of (Rural) country is likely to be dictated/governed by self serving vested interests, which may lead to utter chaos and exploitation of poor consumers, because the unlicensed private entrepreneurs in notified areas could monopolise supply and exploit consumers.

• The committee while welcoming the freedom given (in EB-2003) to set up thermal units; desire that; CEA being repository of technical know-how of power sector; intimation be given to CEA; to ensure that generation projects make technical, commercial and economic sense; and that these matters are gone into carefully before a project is started.

Ministry of power is in a hurry to enact the new law EB-2003; to cover up the violations of E(S) Act 1948. All-India IAS cadre is ruling the Power Sector both at the centre and in states for decades. Then why blame SEBs &CEA. When President issued an ordinance to support Orissa State Electricity Board unbundling effective from 1.4.1996; the country was told by Ministries that it represents model of power sector reforms. Today everyone admits that Orissa reforms failed. Now they say we have learnt the lesson and EB-2003 is the solution. Our political masters and Parliament have been misled to believe that by dismantling premier Power Engineering Services; by undermining the great institutions of CEA and SEB; and by freedom to install Generation capacity Power Sector would turn around. They think that by shifting decision making from CEA to Ministry of Power and from SEBs to State Ministry, the problems would be over. Unless we strengthen our institutions and permit knowledge to prevail over authority the solution in not possible. It is not the law, but the objectivity right implementation of law which would bring the solution.


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