Telangana CM Chandrasekhar Rao writes to PM Modi opposing Electricity Amendment Bill

Rao says the proposed amendments are neither in public interest nor in the interest of State power utilities; it takes away certain functions of the State

Chief minister K Chandrasekhar Rao with Prime Minister Narendra Modi in New Delhi. (Photo | File)

HYDERABAD:  Chief Minister K Chandrasekhar Rao urged Prime Minister Narendra Modi to advise the Ministry of Power to withdraw the amendments proposed to the existing Central Electricity Act. Rao dashed off a letter to Modi to this effect on Tuesday. 

The proposed Electricity (Amendment) Bill takes away certain functions and powers of the State government, Rao told the Prime Minister. The Electricity (Amendment) Bill would have an adverse impact on the management of the State Electricity organisations, Rao said. Rao also opposed the DBT system for giving subsidies. 

“The proposed amendments to the Electricity Act will have a negative bearing on the functioning of power sector and it takes away certain functions/power of the State. The provision to appoint State Electricity Regulatory Commission by a selection committee constituted by the Central Government and entrusting the responsibilities to a neighbouring State Electricity Regulatory Commissions under certain circumstances is hitting on the core of the federal polity, which is enshrined in the Constitutions of India. 

Merely because a particular subject is in the concurrent list of the Constitution does not mean that the Government of India will enact laws which have a major influence on the functioning of the State government. We strongly oppose it,” Rao said in his letter. Rao said that the proposed amendments were neither in public interest nor in the interest of State power utilities/State governments. 

The other concerns raised by the Chief Minister against the Electricity Bill 2020 are:

• The Bill also has a provision for the direct benefit transfer (DBT) of subsidy provided to consumers, particularly to the agriculture and domestic sectors. This would work against the interest of farmers and poor domestic consumers. It has been the policy of Telangana government that the farmers should receive round-the-clock free power. Mode of payment of the subsidy should be left to the State government. Any proposal to modify the current statute on this specific subject matter will be highly objectionable to TS.
• The renewable energy policy should be formulated with explicit consent of the State governments. States should have the flexibility to determine within the broad policy at the national level without any penal provisions.
• As per the Bill, NLDC is made all powerful with regard to scheduling of power throughout the country. Though Grid discipline is very important, it is not advisable to entrust the NLDC with additional powers which will result in backing down of State thermal units. The State units will not be able to compete with Central generating stations. The cost of generation of Central generation utilities such as NTPC and NHPC will be less and get priority in merit order despatch causing loss to State generating companies.
• It is proposed that open access shall be allowed freely. This facility will erode the revenue of Discoms, since several consumers with more than 1MW can go for open access without even technical feasibility. 
•  It is proposed that the Commission will fix the tariff for all the consumers without any subsidy. At present, tariff fixation by the Commission includes some cross subsidy to be borne by certain category of consumers. With the proposed amendment, bills are to be issued for actual cost to all the categories of consumers including agriculture. We strongly oppose this provision. The cross subsidy option should be left to the State government.
• It is proposed to set up a parallel authority namely Electricity Contract Enforcement Authority at the Central level to handle all contractual issues. This will lead to multiplicity of litigation, as contracts are to be adjudicated by the civil courts.