Pm Forwards Power Bill For Ministerial Nod

Prime Minister Atal Behari Vajpayee has referred the new electricity Bill---replacing all the existing power legislations -- to the group of ministers (GoM) before the Bill is taken to the Cabinet for approval.

Official sources said the ministry of power was trying to take the Bill to the Cabinet yesterday but due to the controversial nature of the Bill the PM was in favour of referring it to the GoM before taking it to the Cabinet for approval.

As per initial plans, once the Cabinet gave its consent on the Bill, the power minister P R Kumaramangalam was planning to table the Bill in the Parliament before it went into recess from the 17th of this month.

 

The new electricity legislation is a comprehensive legislation seeking to replace the existing Electricity Supply Act of 1948, the Indian Electricity Act of 1910 as well as the Electricity Regulatory Commissions Act of 1998.

Apart from this, the Bill gives the state government powers to directly restructure the existing state electricity boards by separating the transmission services as an independent activity. The states which opt for this form of restructuring could retain the power generation and distribution activities or could even privatise these services.

The new legislation also retains the Sixth Schedule under the Electricity (Supply) Act as well as Sections 12 to 18 of the Indian Electricity Act of 1910 defining the powers of licensee for the supply of energy. Provisions under the Sixth Schedule provide for a cap on profits for companies operating in the power sector by specifying a legislative limit on profits due to the nature of the industry.

Sources said the new legislation specifies that the Sixth Schedule would be a transitory provision until the Central Electricity Regulatory Commission specifies the new guidelines.

Sources also said the new legislation does not change status of the Power Grid Corporation and would be retained as a central power utility. The Bill, however, gives the central government powers to notify and create new central power undertakings. On the tariff front, the new legislation also specifies that the overall tariff structure would be laid down by the CERC with the standards being set by the Central Electricity Authority.

The new electricity legislation has been prepared on the basis of the recommendations of the National Council for Applied Economic Research (NCAER) which prepared the 'Draft Electricity Bill:2000." This Draft Bill was sent to all the states as well the other interested parties for comments before the legislation was finalised.