Electricity Act, 2003: Telangana Chief Minister raises objection towards proposed amendments

Venkatesh Ganesh Mumbai | Updated on June 05, 2020

Telangana Chief Minister K Chandrashekar Rao   -  Nagara Gopal@thehindu

Telangana Chief Minister K Chandrasekhar Rao has raised strong objections to the proposed amendments to the Electricity Act, 2003.

In a letter written to the Prime Minister, Rao has strongly advocated that the proposed amendment Bill seeks to take away the functions of the State government, which is against the spirit of Federalism.

"This would have a direct negative bearing on the functioning of power sector in the state," he wrote.

The proposed Electricity Amendment Bill has come up with a provision wherein a selection committee constituted by the Centre will appoint the State Electricity Regulatory Commission (SERC). Further, SERC’s responsibilities under certain circumstances will be entrusted to a neighbouring State Electricity Regulatory Commission.

“This is hitting at the core of the Indian Constitution. Power being in the concurrent list (laid down by the Constitution) does not mean that the Parliament will enact laws which have a direct and major influence on the functioning of state government. We strongly oppose such a tendency," noted Rao.

The State Regulatory Commissions are responsible for the administration and regulation of the electricity and power industry in the state.

He is also aggrieved at the fact that any national renewable energy policy should be formulated with the explicit consent of the state governments and not merely consulting them.

“Each state in India has its own unique advantages such as hydro power, wind, solar power, land availability and states should have the flexibility to determine within the broad policy at national level without any penal provisions,” he noted.

Telangana has the second-highest installed solar power generation capacity in India and has a total installed electricity generation capacity of 15,944 MW .

In the proposed amendment, the National Load Despatch Centre (NLDC) is made all powerful with regard to scheduling of power all over the country.

"It is not advisable to entrust NLDC with additional powers which will result in backing down of state thermal units and they will not be able to compete with the Central Generating Stations," opined Rao. Further, the cost of generation of central utilities such as NTPC, NHPC will be less and they are likely to get priority in merit order despatch causing losses to state generating companies.

"Hence, intra-state transmission decision should be left to SLDCs only," he said.

Also, the proposed amendment seeks to give powers to NLDC to enforce payments security. Such commercial aspects should be left to the State Electricity Regulatory Commissions and civil courts, which is way it is done currently. NLDCs should deal with only technical issues, stated Rao.

The Bill also has a provision for Direct Benefit Transfer (DBT) of subsidy provided to consumers, particularly to the agriculture and domestic households. It also stated that the node of payment of subsidy should be left to the State government as has been the policy of Telangana government that farmers shall receive 24x7 fee power."

It is also proposed that the Commission will fix tariff for all consumers without any subsidy and bills are to be issued for actual cost to all categories of consumers including agriculture. "Discretion to levy cross subsidy on certain sections of consumers shall be better left to the state governments," noted Rao.

Published on June 05, 2020

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