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Electricity Act amendment

Topics Covered: Infrastructure- energy.

Electricity Act amendment:

Why in News?

The Telangana government has resolved to present a strong case against the proposed amendment to the Electricity Act, 2003 by the Central government, terming it as a “unilateral decision and a blatant attempt against the federal spirit aimed at usurping the States’ powers”.

Key points:

  • The State Legislative Assembly adopted a resolution voicing its strong opposition to the proposed amendment, claiming it was aimed at centralisation of powers, and would impose a huge burden on States.
  • The resolution demanded that the Centre immediately rescind its moves that were harmful to the interests of the people, farmers and underprivileged sections in particular.

Contentious clauses in the Electricity Amendment Bill, 2020:

The Bill seeks to end subsidies.All consumers, including farmers, will have to pay the tariff, and the subsidy will be sent to them through direct benefit transfer.

States are worried about this clause because:

  • This would mean people would have to pay a huge sum towards electricity charges, while receiving support through direct benefit transfer later.
  • This would result in defaults leading to penalties and disconnection.

The Bill “divests” the States of their power to fix tariff and hands over the task to a Central government-appointed authority.

  • This is discriminatory, since the tariff can be tweaked according to the whims and fancies of the Central government.

The Bill also makes it compulsory for the State power companies to buy a minimum percentage of renewable energy fixed by the Centre.

  • This would be detrimental to the cash- strapped power firms.

Other key provisions in the Bill:

Renewable Energy Policy: It delegates the Central Government with the power to prepare and notify a National Renewable Energy Policy “for promotion of generation of electricity from renewable sources”, in consultation with State Governments.

Cross Border Trade: The Central Government has been delegated with the power to prescribe rules and guidelines to allow and facilitate cross border trade of electricity.

Creation of Electricity Contract Enforcement Authority: It has been proposed to be given sole jurisdiction to adjudicate upon matters on performance of obligations under a contract regarding sale, purchase and transmission of electricity, which exclusion of this specialized authority’s jurisdiction on determination of tariff or any other dispute regarding tariff.



Prelims Link:

  1. What is an ordinance?
  2. Composition of the proposed Electricity Contract Enforcement Authority.
  3. How DISCOMS in the country function?
  4. What is the National Load Despatch Centre?
  5. Key functions of ECEA.
  6. How DISCOMS in the country function?
  7. What is the National Load Despatch Centre?
  8. Composition and functions of the Appellate Tribunal (APTEL).

Mains Link:

Discuss the key features and significance of Draft Electricity Act (Amendment) Bill, 2020.

Sources: the Hindu.