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In a letter dated August 7, 2021 West Bengal Chief Minister has urged Prime Minister Narendra Modi to refrain from the initiation of the Electricity (Amendment) Bill, 2020 for passage in Parliament stating the Bill provides for the sweeping abdication of the State's pre-eminent role in Power Sector in favour of unregulated unlicensed private players. 

The letter succeeds an earlier letter last year by the CM addressed to PM Modi restating the same arguments. The present letter alleges that despite the avowed objective of the Bill  that is to provide plural choices to the consumers, the Bill will finally end up profiteering by the new service providers through enhancement in tariffs."

The Electricity (Amendment) Bill, 2020, which is to be tabled in Lok Sabha, is an amendment to the earlier 2003 version of the Act, which consolidated the laws relating to the generation, transmission, distribution, trading, and use of electricity; undertook measures that were conducive to the development of the power industry; promoted competition; protected the interest of consumers; and sought to supply electricity to all areas of the country.

However, the said letter states that the dilution of the role of the State Electricity Regulatory Commission and the State Distribution Companies implies a political design to demolish state bodies and domestic industries. Direct interference by the Central Government in activities involving distribution will not at all be helpful to take care of the interest of the common people and the States.

The letter further claims that it is a centrist design to make the entire State electricity grid (right from the local substation) an appendage of the National Grid.

The letter asserts that 'The Electricity Act 2003' had struck a fine balance between the Centre and the States in the management of the power sector, while the proposed Amendment strikes at the root of that federal architecture.

While concluding her apprehensions, calling the center's act a laissez-faire approach, the CM concludes that the bill would result in concentration of private profit-focussed utility players in the lucrative urban industrial segments, while poor and rural consumers would be left to be tended by public sector DISCOMs. In the name of market reforms, the State will give up its commanding height, state PSUs will become sick and ailing and yet forced to serve areas where no corporate body would focus; allowing cherrypicking to select private entities cannot be the goal of public policies, particularly in a strategic sector like power, the letter further reads. 

What is Electricity (Amendment) Bill 2020

The Electricity (Amendment) Bill 2020 seeks to propose amendments to the Electricity Act 2003. Further, it also sets rules and provisions for regulatory authorities in the state and central departments of the power sector.

Replacing the current system of a separate selection panel for the appointment of state electricity regulatory commissions (SERC), the 2020 amendment Bill has proposed a National Selection Committee.The Bill also proposes to establish an Electricity Contract Enforcement Authority to evaluate the performance of contracts in sale, purchase and transmission of power.

It has also proposed Direct Benefit Transfer (DBT), which is a scheme launched in 2013 with an aim to transfer subsidies directly to the account of beneficiaries.

Though there are apprehensions being surfaced against the bill, the Confederation of Indian Industry (CII) and the power-sector giants have expressed their happiness to note that the Bill will be tabled soon in the Parliament. 

'One of the main aims of the 2020 version of the Amendment Bill is to de-license power distribution and increase competition, thereby unleashing next-generation power sector reforms in India. This is a pathbreaking decision that has the potential not only to empower customers but also to bring huge investments into the sector and accelerate technology adoption. The reforms will especially make the regeneration, transmission and distribution financially more attractive to investors,' report in Financial Express adds.