The Electricity (Amendment) Bill 2022 was introduced in Parliament Monday amid protests and later sent to the standing committee for further deliberation. Many power engineers protested the Bill across the country, in states like Tamil Nadu, Telangana, Rajasthan, and others.
Farmers in Punjab burned copies of this Bill, and political parties — the Aam Aadmi Party, the Shiromani Akali Dal, and the Congress — also criticised it. Union Power Minister RK Singh said in a tweet that the Bill is “pro-people” and there is no change in subsidy provisions, adding: “The state can give any amount of subsidy, even free power to any category of consumers. No provisions affecting farmers”.
The amendment Bill to the Electricity Act of 2003 has been introduced multiple times from 2014 onwards, almost on a yearly basis. Punjab Chief Minister Bhagwant Mann said: “Through such nefarious designs, the Union government is weakening the foundations of the federal structure”.
What is the Bill, why are there protests against it?
According to Ajaypal Singh Atwal, the General Secretary of Punjab State Electricity Board Engineers Association (PSEBEA), “In this Bill, Section 42 of the Electricity Act will be amended to allow ‘non-discriminatory open access’ to the distribution network, allowing private companies to supply electricity provided they get a license.”
Atwal further said, “Section 14 of the Electricity Act has also been proposed to be amended, allowing private companies to use distribution networks built by public sector electricity companies, enabling competition and enhancing the efficiency of power supply across the country.”
Under the Bill, consumers will be able to choose from multiple electricity providers, essentially like how they choose currently between telecom providers like Airtel, Vodafone, etc., he added.
Protesters claim that as per the Bill, only government discoms or distribution companies will have universal power supply obligations. Therefore, it is likely that private licensees will prefer to supply the electricity in profit-making areas – to industrial and commercial consumers.
Jagtar Singh Dhiman, President of the PSEBEA, said that once this happens, profit-making areas will be snatched from government discoms and they will become loss-making companies. It will be difficult for them to purchase electricity from generators or to undertake infrastructure upgradation, he said.
Another problematic aspect, as per the Bill’s critics and the Chief Minister of Punjab, is that the Constitution lists ‘Electricity’ as Item 38 of List III (Concurrent) of the Seventh Schedule, so both the Central and state governments have the power to make laws on this subject. They said with the proposed amendments, the federal structure of Indian polity, a part of the ‘basic structure’ of the Constitution of India, is being violated.
Labour unions and the Sanyukt Kisan Morcha, an umbrella organisation that was at the centre of the Farmers’ Protests in 2020 and 2021, are of the view that free power for farmers and Below Poverty Line population will go away eventually.
Presently, around Rs 15,000 crores are spent on the various power subsidies that the Punjab government offers. ‘Zero power bills’ or free electricity in the domestic sector are given out if consumption is up to 600 units in two months per family. Around 61 lakh households come under this criterion, for which the subsidy amounts to around Rs 1,800 crore according to Vinod Gupta, the spokesperson of the All Indian Power Engineers Federation.
How is it expected to impact power employees and consumers?
PSEBEA chief patron Padamjit Singh said that as per available details on this Bill, if passed in its current form it will lead to a major loss for government distribution companies, eventually helping to establish the monopoly of a few private parties in the country’s power sector.
General Secretary Atwal also argues that by bringing in more retailers or distribution licensees, the quality of service or price is not going to be any different.
“After all, about 80 per cent of the cost of supply is on account of power purchase, which will be the same for all distribution licensees operating in an area. Besides, having different retailers will open a plethora of operational issues,” he said.
Atwal explained, “The United Kingdom is a prime example. As per a report of UK auditors, due to adoption of such faulty models the consumers had to pay in excess of 2.6 billion pounds. The cost of such transfers was charged to the ordinary consumer. While the private companies failed, consumers were hit the most.”
The PSEBEA plans to participate in rallies across the state and intensify the protests. They have said the bill should not be passed without holding any discussion with the stakeholders like power sector experts, engineers and consumer bodies.