Explained: The Electricity (Amendment) Bill, 2022 — its aims and objections to it

The All India Power Engineers Federation (AIPEF) has sought a three-month time from the government to comment on the Electricity (Amendment) Bill 2022. The body said it wrote a letter to the Standing Committee on Energy in this regard. "The government's decision to invite comments from stakeholders on the Electricity (Amendment) Bill 2022 is a welcoming step," AIPEF said in a statement on Tuesday.

RK Singh, the Minister for Power and New & Renewable Energy, had earlier sent the Electricity (Amendment) Bill, 2022 to the standing committee on energy for examination, after he tabled it in the Lok Sabha. The government is maintaining that the bill intends to reform the power sector and is pro-consumer.

The bill aims at allowing the licensing of multiple discoms for supply in the same area as well as the fixing of minimum and maximum tariffs. While the bill intends to impose a universal service obligation on all licensees, it allows national and state dispatch centres to cut power supply if the discoms don't give bank guarantees.

The bill provides for management of power purchase and cross-subsidy in case multiple distribution licensees exist in the same area of supply, it allows network sharing for optimum utilisation as well as proposes an enhanced rate of penalty for non-compliance with the revised provisions.

The bill also mandates discoms to abide by the Renewable Purchase Obligations and ensures removal of members of regulatory bodies in case they neglect rules or willfully violate legal provisions.

The bill is being opposed by farmer groups, the All India Power Engineers Federation and opposition-ruled states for several reasons. While the federation claims that the bill favours private companies and hurts government discoms, the Samyukta Kisan Morcha maintains that farmers weren't consulted. Meanwhile, the opposition is claiming that the bill substantially weakens the powers of states.

The federation claims that the universal service obligation will cover only the existing companies which will lead to indirect privatisation. The federation also fears that multiple licensees in urban areas will result in loss-making areas remaining underserved, and power cuts for want of bank guarantees will disrupt power supply, destabilise grids and burden ailing discoms.

Government sources questioned the objections raised against the bill, stating that those objecting to the it have either not read it, didn't understand it or didn't want to understand it. The Union Government has maintained that no provision in the bill reduces powers of the states to regulate the power distribution sector, payment of power subsidy.

Citing Mumbai's example, where multiple power licensees operate in the same area of supply, the government has indicated that multiple discoms can already exist in the same area and the bill only simplifies the process to ensure that competition leads to better operations and service.

The Centre has maintained that it had consulted every state and many associations in writing, including a separate written assurance to the Agriculture Ministry, that there is nothing anti-farmer in the bill. Rather, the government has said that the bill allows the use of additional cross-subsidy that is collected from industrial and commercial users in one area, for subsidising for the poor in other areas.

Stating that the Centre referred the bill to the standing committee to ensure more stakeholder consultation, government sources are maintaining that there hasn't been any encroachment on the domain of states, this issue is in the concurrent list. The Centre has stressed on the need to strengthen the power transmission network and put up defenses to guard against cyber attacks.

With India aiming to achieve 50 percent of its installed power capacity from renewables by 2030, the government is of the view that the push for Renewable Purchase Obligations (RPOs) mentioned in the bill will augment India's power demand, which is expected to double in the next eight years while moving to achieve green targets fixed as per the Paris and Glasgow Agreements. The government has accused a section of politicians distributing everything for free for "bringing the nation to ruin", pointing out that such politicians aren't spending money from their pocket but from the exchequer.