Tamil Nadu CM asks PM to keep Electricity Amendment Bill on hold till talks

Proposed Bill takes away certain powers of the State government, and seeks to bring in changes in the existing Electricity Act that would make power utilities in the public sector totally unviable

Tamil Nadu Chief Minister Edappadi K Palaniswami has sought the Prime Minister Narendra Modi's intervention in keeping the amendments to the Electricity Act proposed by the Ministry of Power in abeyance till there are thorough discussions on the subject with the State governments. These talks would likely be held the Covid-19 pandemic subsides.

The proposed Electricity Amendment Bill takes away certain powers of the State government and at the same time seeks to bring significant changes in the existing Electricity Act. These include separating carriage and content in the distribution sector, which would make power utilities in the public sector totally unviable. 

The Chief Minister said that the State government has already highlighted on November 12, 2018, that the proposed new draft bill seeks to privatise not just the supply of power to the end consumer through franchisees, but to also privatise the entire distribution network, which would be highly detrimental to the state utilities and against public interest.

Despite the State government's strong reservations, the new draft Bill continues to have provisions for the Direct Benefit Transfer (DBT) of subsidy provided to consumers, particularly in the agricultural and domestic sector. There would be serious difficulties in implementing Direct Benefit Transfer in the Electricity sector and this would work against the interest of our farmers and domestic consumers. 

It has been the consistent policy of the State Government that its farmers should receive free power and it should be left with the State Government to decide the mode of payment of such subsidy.

The proposed amendment bill also seeks to take away the power of the State Government in deciding the constitution of the State Electricity Regulatory Commission, which is against the federal principles of the Constitution. In the draft Bill not just the same provisions are being retained, but it is also proposed to set up a parallel authority, namely Electricity Contract Enforcement Authority at the Central level to handle all contractual issues, which was so far dealt with by the Central and State Electricity Regulatory Commissions. This would unnecessarily dilute the authority of the Electricity Regulatory Commissions and needs to be deleted.

"You are aware that all states are currently pre-occupied with fighting the Corona virus pandemic and will, therefore, require some time to give their detailed response to the proposed amendments. At the same time any hasty amendments to the Electricity Act may create hardship to the State power utilities, which are going through a severe financial crisis because of the present pandemic," he said. 

As some of the provisions of the draft amendment bill are also likely to put the general public to hardship, particularly during this crisis period, he opined that this may not be an appropriate time to bring in such sweeping amendments to the Electricity Act. 

"In the circumstances, I urge you to prevail upon the Ministry of Power to put the proposed amendments to the Electricity Act in abeyance till these are thoroughly discussed with the state governments after the pandemic subsides,” he added.