Hyderabad: Telangana, one of the few States in India that provides free, round-the-clock quality power to the agriculture sector without resorting to power holidays to industries and domestic consumers, has decided to oppose the Draft Electricity Amendment Bill 2020, proposed by the Union Ministry of Power to amend the Electricity Act of 2003. The Union government circulated the draft bill to all the States on April 17 and sought their views within 21 days.
“The Telangana government has decided to oppose the Bill, and is writing to the Ministry concerned expressing its objections. Chief Minister K Chandrashekhar Rao has already spelt out the government stand after the Cabinet discussed the issue. Our line will be that of Chief Minister’s statement at the media meeting after the Cabinet on Tuesday,” Transco and Genco Chairman and managing Director D Prabhakar Rao told Telangana Today on Thursday.
Chief Minister K Chandrashekhar Rao terming the proposals of the Union government as draconian has expressed concern that the amendments if passed in the Parliament will vest the powers of distribution and subsidies in the hands of the central government. “We will oppose the Bill in the Parliament and will stop it,” he said. The main concern of the Telangana government is about the State government’s flagship 24 hour free power to the farming sector and the subsidies that it gives to various sectors.
Cost reflective tariff
The draft Bill says that the State must allow the Electricity Regulatory Commission (ERC) to determine tariffs that are reflective of real cost so as to enable Discoms to recover their costs of taking power to the homes. This means that the Commissions will declare tariff without taking into account the subsidy, which will be given directly by the government to the consumers like subsidy amount of LPG directly deposited into the accounts of the Consumer.
“How can the government deposit the subsidy amount of free power given to lakhs of farmers and collect the tariff from them, “a senior Discom official said. Will the central government allow us to give round the clock power to farmers as we are doing now, if the power goes into the hands of the centre,” he said.
Sanctity of Contracts
Centre proposes to set up a Central Enforcement Authority headed by a retired Judge of the High Court with powers of the Civil Court to enforce performance of contracts related to purchase or sale or transmission of power between a generating, distribution or transmission companies.
However experts in the field of electricity say that Power Purchase Agreements (PPA) are in between the State and the power generating company and any interference will be detrimental to the State’s interest. In case of Andhra Pradesh, where the incumbent government scrapped Solar Power Purchase Agreements entered by the earlier government citing high rates, such decisions can now be under scanner taking away the decision making authority from the hands of the State. The centre argues that the PPAs have a guarantee from the Centre and they can’t be scrapped unilaterally.
ERC selection powers to centre
According to the Electricity Regulatory Commissions Act 1998 , the chairperson and members of the State Electricity Regulatory Commission were to be appointed by the State government. However the new policy proposes to have one Selection Committee for selection of Chairpersons and Members of the Central and State Commissions and uniform qualifications for appointments of Chairperson and members.
Other proposals include establishment of adequate Payment Security Mechanism for scheduling of electricity to empower Load Dispatch Centers to oversee the establishment of adequate payment security mechanism before scheduling dispatch of electricity, as per contracts. A policy document for the development and promotion of generation of electricity from renewable sources of energy will be worked out proposing a minimum percentage of purchase of electricity from hydro sources of energy. There will be a penalty for non-fulfillment of obligation to buy electricity from renewable or hydro sources of energy.
Subsidies will take a hit: NPDCL chief
The proposed amendments to the Electricity Act will adversely effect the subsidies being given by the State government for the benefit of several needy sections of society, Annamaneni Gopal Rao, Chairman and Managing Director of the Northern Power Distribution Company of Telangana Limited (TSNPDCL) said.
“If the proposed amendment becomes a law, then the set goals of the Telangana government will be affected and also those sections of society that were hitherto enjoying the benefits given by the government,” he said. Further explaining the impact of the proposals, he said the Act takes away all the rights of the State governments and wrests them with the Centre. It can be said that the Act will usurp the powers of States in the management of generation, transmission and distribution of electricity by placing them in the hands of the Centre, he added.
He forecasts a situation where the Centre will be deciding the price per unit of power adversely impacting the welfare programmes of the State government with respect to the poor. “As a result the Distribution companies (Discoms) will be pushed further in financial troubles. All the sectors that depend on electricity will face problems as the management of power sector will be taken away from States and will be centralized,” he explained.
With the central authority deciding the power tariff , the State Regulatory authority loses its powers. Moreover the Act proposes a penalty clause of payment of tariff as per the power Purchase Agreement gets delayed, which has a bearing on the Discoms and finally on the consumers, he said. Speaking on the impact of the Act on subsidies, he said that the issue of subsidy and cross subsidies which were under the purview of the State ERCs will be transferred to the central authority which impose uniform tariff for all the discoms of the country. However he said that there is no clarity on the issue of State specific subsidies.
Commenting on the continuation of the 24 hour free current given to farming sectors he said that Chief Minister K Chandrashekhar Rao has already declared that the Telangana government will oppose the Act. “The State has made strides in the agriculture sector with the help of several new irrigation projects as the fight for separate State is for protecting the interests of the farmers . No other state in the country gives round the clock free power to farming sector,” he said.
While Karnataka has 29 lakh agricultural connections, Punjab has 13.78 lakh, Andhra Pradesh has 19 lakh , Telangana has 24.4 lakh connections. “There are no meters fixed to these connection as power is free. If we have to fix motors then we must also follow certain standardized measures such as earthing and a roof,” he said.
Unions see bid to privatise power sector
Vehemently opposing the proposed amendments to the Electricity Act, several employee unions of State Electricity Department expressed fear that the Act would sound the death knell for the power utilities. They saw a nefarious plan by the Centre to privatise the electricity sector and demanded immediate withdrawal of the proposal.
Telangana Electricity Engineers Association, president N Sivaji has alleged that the centre is hell bent on privatising the power sector in the guise of losses. “The ground is prepared to handover the crucial sector into the hands of big corporates such as Tatas and Reliance. Similar efforts were made in Odisha, and Mumbai and Nagpur in Maharashtra, but the experiments failed,” he said. He pointed that electricity is not an luxury commodity but a daily need. If the bill becomes an Act, then Telangana will not be able to give free power, running of heavy lift irrigation projects will become unviable,” he said .
P Ratnakar Rao, president of the Telangana State Power Engineers Association, said that the move would result in steep hike of power tariff thereby pushing the State-run power utilities into losses. “The Bill also proposes several benefits to private companies. The private companies will enter the field under the guise of franchisees and sub-licensees,” he said expressing fear.
On the other hand, P Anjaiah, General Secretary of Electricity Accounts Officers Association, in a statement suspected that the Centre was planning to dividing the massive power sector in bits and planning to hand it over to corporate sector. “The amendments are drafted in such way that the farming sector is decimated and the private players are benefitted,” he argued. The Act will limit tariffs to only four categories, resulting in steep hike in power bills. “While tenants live in houses, the refund of the subsidy amount will go to the bank accounts of the owners, it is absurd,” he said.
Telangana Electricity Employees 1104 Union, General Secretary Saibabu, said that the union has been opposing the Bill and so far staged protests for seven times. “With the efficient Telangana power utility companies running the sector the poor are having quality power round-the-clock. With the entry of corporate players the situation will return back to square one,” he said. TRVKS (Telangana Rashtra Vidyut Karmikula Sangham) General Secretary Koduri Prakash feared that the poor might not be able to pay the bills in future. He said that the lift irrigation projects constructed by the government will run into troubles.
G Nagaraju of Telangana Electricity Contract Workers Association said that the implementation of the Bill will push the ailing economy of the states into abyss. Fearing large scale retrenchment in power utilities he urged the Centre to withdraw the Bill.
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