Explained: What Is the Electricity Amendment Bill 2022? Why Is It Drawing Flak?

Opposition parties and power employees have said that the bill will lead to privatisation of the electricity sector.

Amid widespread contentions, the Centre on Monday, 8 August, tabled the Electricity Amendment Bill 2022 in the Lok Sabha during the ongoing Parliament Session.

(Photo: Wikipedia)

Amid widespread contentions, the Centre on Monday, 8 August, tabled the Electricity Amendment Bill 2022 in the Lok Sabha during the Parliament's Monsoon Session.

The bill, if passed, will amend the Electricity Act 2003, which puts together laws regarding "generation, transmission, distribution, trading and use of electricity" and the "development of the electricity industry."

While the Opposition and power sector employees have argued that the new bill will lead to rampant privatisation of the sector and impact farmers adversely, Union Power Minister RK Singh has dismissed these allegations as "false propaganda."

In between claims and counterclaims, here's a lowdown on everything the bill is about:

What Is the Electricity Amendment Bill 2022?

The bill will facilitate "non-discriminatory open access" to the distribution network, allowing private companies to supply electricity, provided they get a license.

It will allow for the use of distribution networks by all licensees, enabling competition, enhancing efficiency of distribution licensees for improving services and ensuring sustainability of the power sector.

What Does It Say About Tariff Revisions?

The bill, if passed, will amend section 62 of the existing act and provide for graded revisions in tariff over a period of one year. An appropriate commission, the bill says, will also fix the maximum ceiling and minimum tariff by the appropriate commission.

How Will 'Multiple Licensees' Be Managed?

The bill proposes to insert a new section in the act so as to enable management of power purchase and cross-subsidy, in case of multiple distribution licensees in the same area of supply.

Further, it will also amend section 26 of the Act so as to strengthen the functioning of the National Load Dispatch Centre. This will ensure the safety of the grid and efficient operation of the power system in the country.

Will There Be Changes to Penalties for Non-Compliance?

There is little clarity so far on penalty for non-compliance to the act.

While one part of the proposed bill seeks to amend section 142 of the act "so as to enhance the rate of penalty for noncompliance of the provisions of the Act and the rules and regulations made thereunder," the other seeks to alter section 146 of the Act so as to convert the rate of punishment from "imprisonment or with fine" to "fine."

It further provides for the amendment of section 152 so as to facilitate decriminalisation of offence under it. It will also strengthen the functions to be discharged by the Forum of Regulators.

Why Are Power Employees Opposing It?

Electricity employees and engineers led by All India Power Engineers Federation (AIPEF) stopped work on Monday and held demonstrations against the bill, claiming that it:

• Was introduced in the Parliament "in an undemocratic manner with a view to complete privatisation of the energy sector"

• Will end all subsidies to power consumers and affect farmers adversely

They have demanded that the bill:

• Either be withdrawn in its present form

• Or be referred to the standing committee so that all the stakeholders, especially the common electricity consumers and power workers get to put forth their perspectives

According to the power engineers' body, the central government in a letter to the United Kisan Morcha last year had promised that the bill would not be introduced in the Parliament without having detailed talks with farmers and other stakeholders.

What Have Opposition Parties Said?

• The Congress, Left parties, and the Trinamool Congress (TMC) have alleged that the bill not only violates the federal principles of the Constitution but will also lead to privatisation

• Delhi Chief Minister and Aam Admi Party supremo Arvind Kejriwal has said that the bill is dangerous since it will only benefit a few power distribution companies

• Further, Punjab Chief Minister Bhagwant Mann said that the Centre's move was an attack on the constitutional rights of the states

• He alleged that free power supply is also being provided to domestic consumers and if the Centre amends the Electricity Act, the farmers and others will reel under the pressure, since states like Punjab will not be able to continue such initiatives