Skip to main content

Draft power bill promotes privatisation, 'impedes' social, environmental safeguards

Counterview Desk

In an appeal to the chairperson, Rajiv Ranjan Singh, Parliamentary Standing Committee on Energy, and its members, 90 civil society group have sought cancellation of the draft Electricity (Amendment) Bill 2020, proposed by the Union Ministry of Power in April. I am sharing for your reference, regretting that all that it does is to “promote privatization of the power sector. 
Claiming that, if passed, it will “further widen the prevailing disparity in accessing electricity between cities and rural areas, and further between high-income areas and poorer regions”, the appeal states, the bill “promotes profit over public interest and makes no effort whatsoever to protect the rights of consumers, project impacted communities, natural resources and nature.”

Text:

We the undersigned are writing to you to express our serious concerns and draw your attention to the draft Electricity (Amendment) Bill 2020 proposed by the Union Ministry of Power issued online on its website vide letter dated April 17, 2020 (No. 42/6/2011-R&R (Vol-VIII)) requiring the wide public to comment within a period of 21 days, i.e. by May 8, 2020.
Due to widespread protests about attempting to amend a major law of the country when the entire nation was under lockdown, and almost all fundamental freedoms were unavailable, even suspended, we note this deadline to the comment was extended to June 5, 2020 vide letter of the Ministry dated April 27, 2020 vide (No. 42/6/2011-R&R [Vol-VIII]).
At the outset, we consider the advancement of this proposal to amend a major law that has a direct impact on economic, social, and ecological securities of the people of India, during the lockdown, as fundamentally opposed to basic tenets of democracy.
As per Constitutional demands, lawmaking, or amending existing laws, must only be undertaken when every element of democratic decision making in the country is fully functional and the Parliament is able to perform its competent and oversight role on behalf of the people at large.
It must also be in conformance with the principles of prior and informed consent, the principle of intergenerational equity, the principle of public trust doctrine, the principle of sustainable development, and some of the international agreements that India is a signatory to in the context of law-making and bringing in amendments.
This was not possible during lockdown when most fundamental freedoms, especially the freedom to associate and express one’s views and disagreements, enshrined in Article 19 of the Constitution of India, were unavailable to the public at large and also to elected representatives.
As a result, initiating the public commenting period on such comprehensive reform of a major law during lockdown comes across as extremely unconstitutional and therefore constitutes the direct attack on fundamental rights of citizens, and opposed to the very purpose of the main law – which is to advance the public interest.
The Bill aggressively promotes privatization of the power sector which will further widen the prevailing disparity in accessing electricity between cities and rural areas, and further between high-income areas and poorer regions.
Private Multinational AES and domestic private company BSES of Reliance Energy Ltd, both miserably failed in Odisha. Franchise experiences of many cities in India were not great due to non-performance.
Lakhs of people are forced to live without electricity. But the bill proposed to abolish the cross-subsidy that farmers and the poor benefit. And it is imposing on the states to bear the subsidy burden irrespective of the bad financial health. It is imposing DBT in which the productivity of farmers’ crops might be left upon the fate of DBT or rain-fed irrigation only.
The draft bill has strongly advocated bringing huge FDI, PPT model, etc. in the sector. However, the government unnoticed increasing tariff, the highest NPA in the sector, debt-ridden discom companies.
All these facts indicate the failure of privatization in the sector. In addition, it has also proposed to establish an ultra-judicial body named “Electricity Contract Enforcement Authority” to ensure the coercive realization of fixed charge from the DISCOMs even without consuming a single kWh of energy. Electricity will be virtually removed from the concurrent list of the constitution and overlooking the role of the state, advocate for centralization, and commercialization of the sector.
Looking at the following facts nationwide protest were held by power sector employees unions, social media, and virtual protests were also shown by civil society groups and members. Subsequently, 11 states and two UTs have also opposed this bill in power ministers’ conference on July 3, 2020.
As a result union power minister had committed to placing a modified draft of the Electricity (Amendment) Bill 2020. But even after more than 50 days, the Centre is yet to place the amended draft in the public domain.
Although we have submitted our representation of the draft bill to the ministry for reconsideration in a given time duration, there is a crucial need of deeply engaging with the people through nationwide public consultations because the implications of this amendment will affect the lives and livelihoods of people across the country.
You, being representative of the people and a member of the parliament of the standing committee on energy, can play a significant role to ensure the continuance of the right to access electricity by the people in the country. In the enclosed statement we have explained in detail how it will widen the prevailing disparity in accessing electricity and the impacts experienced by local communities from the privatization in the sector.
Draft bill will widen prevailing disparity in accessing power between cities and rural areas, between high income and poorer regions
We, civil society groups and members, collectively demand that the Parliamentary Standing committee on energy should immediately look into the draft bill from a people’s perspective instead of commercialization of the sector.
The Ministry should place a modified draft based on a needs assessment of the challenges in access to electricity by local communities across the country of the electricity (Amendment) Bill 2020 in the public domain. The committee must also ensure the modified draft is shared in various regional official languages of India and ensure there will be public consultations across the country.
Your willingness to take action now will demonstrate your support for a just and democratic process of amending the law and will be a vital step towards protecting the constitutional provisions and India’s commitment to all the international agreements.

Comments

  1. The 2003 version of the Electricity act was brought in to promote the corporatization of the power sector and make it market-friendly. However, due to widespread and tireless efforts of trade unions, environmental and social movements, various social and environmental safeguards were introduced into all aspects of electricity generation. The proposed amendment attacks the very foundation of these safeguards and promotes a law that is unabashedly investor and industry-friendly promotes profit over public interest and makes no effort whatsoever to protect the rights of consumers, project impacted communities, natural resources and nature.
  2. The proposed amendment organizes electricity generation, transmission and distribution in an extremely centralized manner, and neutralizes, even does away with, powers of various State and District level institutional mechanisms that currently guarantee decentralization of the electricity sector, especially with the proposal of establishing an Electricity Contract Enforcement Authority (ECEA). This ECEA also takes away powers now latent to State Electricity Regulatory Commission. Such changes are opposed to the Constitution as electricity generation is in the Concurrent list and ought to involve States fundamentally in its planning, generation and distribution.
  3. The proposed amendment promotes uniform tariff across states against the very grain of appropriate public planning of electricity. As a consequence, districts and states which suffer an immense loss due to the diversion of natural resources to power generation, and do not benefit from the generated power, will pay the same tariff as those who consume the power without suffering any loss.
  4. The proposed amendment takes away almost all of the rights to litigate against infirmities and illegalities that are now available in the State Electricity Regulatory Commissions, High Court, Consumer Courts, and Central Electricity Authority and Appellate bodies. Such powers have been delegated to ECEA which is under the direct jurisdiction of the Power Ministry and thus is not an independent or autonomous forum. That such a review mechanism is proposed for one of the most critical aspects of the governance of this country is not merely shocking, but scandalous.
  5. All this suggests that the ECEA is being brought into effect with the single purpose of protecting the interest of the licensee and to promote the licensee’s interest, and is a mechanism for promoting ease of business at the cost of public interest, and also of future generations. 
  6. It is widely known that most of the power purchase agreements under the current law have failed to advance public interest and yet the licensees enjoy due to the benefits of gaining even without delivering per contractual obligations – be it in power generation or transmission. The current proposal energizes such failure franchise agreements. This will also now worsen the situation in rural areas where no private franchisee invests on the claim they are not profitable ventures and thus can create a stark binary of lit-up cities and darken villages.
  7. The Bill aggressively promotes privatization of the power sector which will further widen the prevailing disparity in accessing electricity between cities and rural areas, and further between high-income areas and poorer regions.
  8. The Bill is intended at promoting environmentally disastrous big hydro projects as renewable, which they are not, and thus environmentally safe, which again they are not as is evident across the world.
  9. There is a clear design to take away a variety of subsidies that are necessary to reach electricity to the masses. Lakhs of people without access to electricity, their condition will only worsen as a result of this Bill which makes consumers pay higher rates, thus making electricity a luxury commodity. 
  10. Section 37 of the proposed bill read with Section 176 of the principal act enforces a standard payment security mechanism across states. Due to this, the decision making powers of the state utilities will be compromised and they will be forced to make advance payments to Independent Power Producers (IPP). Stressed State utilities will be forced to pay for this surplus power, even when it is not generated, shifting, thereby, public revenue to private profit. Distressed Discoms will collapse under such obligations.
  11. As per Sections 39 and 42 of the proposed bill read with S 181 of the principal Act, the proposal is to remove the right of SERCs to frame regulations and withdraws the role of SERC in specifying surcharges and associated modalities. Due to this, the State will again risk financial losses as they will not be able to negotiate or frame any regulation regarding tariffs. As far as Power purchase agreements are concerned between the state and power generating companies, the central interference in the process would be harmful to the State, and against the federal character of governance. The Act will thus take away all available rights of the state to define its own future. In summary, it will take away the power of states in the management of generation, transmission, and distribution of electricity
  12. Section 39 of the proposed bill read with Section 181 of the principal act removes the key role of SERC regarding contracts and PPA, while the rest of it is related to tariff disputes and other consumer grievances. Consequently, it will deepen the financial crisis of state DISCOMs.
  13. Further, the bill proposes that the cost of failure in payment of tariff shifts to the DISCOMs which in turn will pass it on to consumers. The power producer is secured.
  14. Section 3 of the proposed bill read with Section 2 (15) (a) of the principal act proposes cross border trade of electricity obviating the due role of CERC which is required to issue regulations.
  15. Section 18 of the proposed bill read with S65 of the principal act proposes that those who cannot pay would be reimbursed through direct cash transfer (DBT) to the bank accounts of the consumers. It would be far simpler if people who cannot pay, are not required to pay at all.
  16. Section 18 of the proposed bill r/w Section 65 of the principal act mandates subsidy released in advance by the respective state governments through a mechanism similar or otherwise to directly to consumers and removes any directions of future assurance or deferment of subsidy to be considered in the tariff setting. It is eliminating the cross-subsidies, and it is assumed that somehow this burden will shift to the pockets of the states’ which already do not have sufficient funds. Such centralizing of power over the power is also shifting the cost to the states.
  17. Section 18 of the proposed bill r/w Section 65 of the principal act addresses issues of subsidies and cross-subsidies which are under the purview of SERC. It is now proposed to transfer this power to the central authority and with a directive to impose a uniform tariff for all discoms of the country. There is no clarity on the issue of state-specific subsidies and another mechanism in the bill. Therefore, it seems that the bill is not brought because the government is keen to protect people's interests, but the primary focus of this bill is to protect the Independent Power Producer.
  18. Section 19 of the proposed bill r/w section number 77 of the principal Act to remove the requirement of consultation with Chief Justice for the appointment of a legal member or chairman. This results in the entire power sector escaping judicial scrutiny and become the preserve of executive decision making.
  19. Proposed changes in Section number 126, 135, and 164 of the principal Act are all oriented towards adopting the failed so-called Private-Public-Partnership model, which is a euphemism for privatizing profits and shifting the burden of losses on to the public. This approach will result in the privatization of DISCOMS in the name of promoting franchises in the distribution sector.
  20. Section 37 of the proposed bill r/w subsection (2) of 176 of the principal act proposes to add the word hydro as renewable. It mandates the minimum percentage of purchase of electricity from renewable and hydro sources of energy under section 3A. In effect, it dangerously promotes hydro as renewable, which it is not, and seeks to promote it as environmentally friendly, which certainly it is not.
  21. Section 4 of the proposed bill read with Section 3 of the principal act brings a separate National Renewable Energy Policy. While promoting renewable energy is welcome, it should not be a plank to allow monopolization of land without conforming to the provisions of the land acquisition act in promoting large solar park development, resulting in widespread displacement and dislocation of communities and capture of common lands.
---
Click here for signatories

Comments

TRENDING

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

How lead petitioner was rendered homeless when GM mustard matter came up in SC

By Rosamma Thomas*  On January 5, 2023, the Supreme Court stayed a December 20, 2022 direction of the Uttarakhand High Court to the Indian Railways and the district administration of Haldwani to use paramilitary forces to evict thousands of poor families occupying land that belonged to the railways.  Justice AS Oka remarked that it was not right to order the bringing in of paramilitary forces. The SC held that even those who had no rights, but were living there for years, needed to be rehabilitated. On December 21, 2022, just as she was getting ready to celebrate Christmas, researcher Aruna Rodrigues was abruptly evicted from her home in Mhow Cantonment, Madhya Pradesh – no eviction notice was served, and nearly 30 Indian Army soldiers bearing arms were part of the eviction process. What is noteworthy in this case is that the records establishing possession of the house date back to 1892 – the title deed with the name of Dr VP Cardoza, Rodrigues’ great grandfather, is dated November 14

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam* RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Tax buoyancy claims when less than 4% Indian dollar millionaires pay income tax

By Prasanna Mohanty  In FY18, the last year for which disaggregated income tax data is available, only 29,002 ITRs declared income above Rs 5 crore, while Credit Suisse said India had 7.25 lakh dollar millionaires (the wealth equivalent of Rs 8 crore and above) that year. Often enough, the Centre claims that demonetization in 2016 raised tax collections, improved tax efficiency, and expanded the tax base. Now RBI Monetary Policy Committee (MPC) member Ashima Goyal has also joined their ranks, attributing the “claims” of rising tax collections in the current fiscal year to “tax buoyancy” brought by the demonetisation . Do such claims have any basis in official records? The answer is unequivocal. The budget documents show the tax-to-GDP ratio (direct plus indirect tax) increased from 10.6% in FY16 (pre-demonetization) to 11.2% in FY17, remained there in FY18 (demonetization and GST fiscals), and then fell to 9.9% in FY20. In FY22, it improved to 10.8% and is estimated to drop to 10.7% in

Gandhian unease at Mahadev Desai book launch: Sabarmati Ashram may lose free space

By Rajiv Shah  A simmering apprehension has gripped the Gandhians who continue to be trustees of the Sabarmati Ashram: the “limited freedom” to express one’s views under the Modi dispensation still available at the place which Mahatma Gandhi made his home from 1917 to 1930 may soon be taken away. Also known as Harijan Ashram, a meeting held for introducing yet-to-be-released book, “Mahadev Desai: Mahatma Gandhi's Frontline Reporter”, saw speaker and after speaker point towards “narrowing space” in Gujarat for Gandhians (as also others) to express themselves. Penned by veteran journalist Nachiketa Desai, grandson of Mahadev Desai, while the book was planned to be released on January 1 and the meeting saw several prominent personalities, including actor-director Nandita Das, her scholar-mother Varsha Das, British House of Lords member Bhikhu Parekh, among others, speak glowingly about the effort put in for bringing out the book, exchanges between speakers suggested it should be rele

Civil rights leaders allege corporate loot of resources, suppression of democratic rights

By Our Representative  Civil rights activists have alleged, quoting top intelligence officers as also multiple international forensic reports, that recent developments with regard to the Bhima Koregaon and the Citizenship Amendment Act-National Register of Citizens (CAA-NRC) cases suggest, there was "no connection between the Elgaar Parishad event and the Bhima Koregaon violence." Activists of the Campaign Against State Repression (CASR) told a media event at the HKS Surjeet Bhawan, New Delhi, that, despite this, several political prisoners continue to be behind bars on being accused under the anti-terror the draconian Unlawful Activities (Prevention) Act. Addressed by family members of the political prisoners, academics, as well as social activists, it was highlighted how cases were sought to be fabricated against progressive individuals, democratic activists and intellectuals, who spoke out against "corporate loot of Indian resources, suppression of basic democratic

Kerala natural rubber producers 'squeezed', attend to their plight: Govt of India told

By Rosamma Thomas   Babu Joseph, general secretary of the National Federation of Rubber Producers Societies (NFRPS) at a recent discussion at Mahatma Gandhi University, Kottayam, explained that it is high time the Union government paid greater heed to the troubles plaguing the rubber production sector in India – rubber is a strategic product, important for the military establishment and for industry, since natural rubber is still used in the manufacture of tyres for large vehicles and aeroplanes. Synthetic rubber is now quite widespread, but styrene, which is used in making synthetic rubber and plastics, and also butadiene, another major constituent of synthetic rubber, are both hazardous. Prolonged exposure to these even in recycled rubber can cause neurological damage. Kerala produces the bulk of India’s natural rubber. In 2019-20, Kerala’s share in the national production of rubber was over 74%. Over 20% of the gross cropped area in the state is under rubber cultivation, with total

Why no information with Assam state agency about female rhino poaching for a year?

By Nava Thakuria   According to official claims, incidents of poaching related to rhinoceros in various forest reserves of Assam in northeast India have decreased drastically. Brutal laws against the poachers, strengthening of ground staff inside the protected forest areas and increasing public awareness in the fringe localities of national parks and wildlife sanctuaries across the State are the reasons cited for positively impacting the mission to save the one-horned rhinos. Officials records suggest, only two rhinos were poached in Kaziranga National Park and Tiger Reserve since 1 January 2021 till date. The last incident took place probably in the last week of December 2021, as a decomposed carcass of a fully-grown (around 30 years old) female rhino was recovered inside the world-famous forest reserve next month. As the precious horn was missing, for which the gigantic animal was apparently hunted down, it could not be a natural death. Ironically, however, it was not confirmed when

Lack of welfare schemes, BSF curbs force West Bengal farmers to migrate far away

Counteview Desk  In a representation to the National Human Rights Commission chairperson, a senior West Bengal based activist has complained that villagers living near the border with Bangladesh are forced to migrate to as far away as Mumbai and Kerala because of lack of government sensitivity towards their welfare in original villages. Giving specific instances, Kirity Roy, secretary, Banglar Manabadhikar Suraksha Mancha (MASUM), said, if the Border Security Force (BSF) had not put any restriction on agricultural activities, and if villages had properly implemented welfare schemes, these people would never migrate to other States. Text: I want to attract your immediate attention to the inhumane condition of the migrated workers of Gobra village, Swarupnagar Block in North 24 Parganas district of West Bengal to seek your urgent intervention to protect the rights of these people. Gobra is a village situated near the Indo-Bangladesh Border where the border fencing is about 500 meters i