On Monday, 27 lakh power sector workers and engineers protested against the Electricity (Amendment) Bill, 2022, which was introduced in Lok Sabha.

What is Electricity Amendment Bill 2022?

Protests against the Energy Amendment Bill 2022 are primarily directed at the privatisation of electricity supply in India, which, according to power engineers, will result in significant loss and monopoly in the country’s power business.

The Bill aims to allow for the privatisation of power over communication lines.

According to the Centre, if the Bill is enacted by both Houses, customers would be able to pick their electrical supplier in the same way that they may choose their telephone, mobile, and internet service providers.

The Bill proposes to alter Section 42 of the Electricity Act to provide non-discriminatory open access to a distribution licensee’s distribution network.

Furthermore, the bill seeks to amend Section 14 of the Act to facilitate the use of distribution networks by all licensees under non-discriminatory open access provisions, with the goal of enabling competition, enhancing distribution licensee efficiency for improving services, and ensuring the power sector’s sustainability.

The measure also includes a new section 60A in the Act to provide for the administration of power purchase and cross-subsidization in the case of numerous distribution licensees in the same region of supply.

The bill also proposes to alter Section 62 of the Act to include provisions for graded tariff revisions throughout a year as well as required setting of the maximum ceiling and minimum tariff by the Appropriate (electricity regulatory) Commission.

The proposed bill also proposes revising Section 166 of the Act to increase the functions of the Forum of Regulators.

The measure will also change Section 152 of the Act to make it necessary to accept compounding in order to achieve decriminalisation.

It will also change section 146 of the Act to change the penalty from “imprisonment or with fine” to “fine.”

Why the protests?

Following significant protests by over 27 lakh power engineers throughout the nation, the All India Power Engineers Federation (AIPEF) has urged that the Electricity Amendment Bill 2022 be forwarded to the power committee for further consideration.

According to the AIPEF, the measure is “misleading,” resulting in significant losses for state-run utilities. The AIPEF spokesperson told PTI about the key reason why electricity engineers were protesting against the law.

“According to the bill, only government discoms would have universal power supply obligation, therefore private licensees will opt to deliver energy exclusively in profit-making sectors, i.e. industrial and commercial users,” Gupta added.

Opposition parties such as the Aam Aadmi Party, Shiromani Akali Dal and Congress have criticized the bill, most of them citing that it goes against the federal structure of the country and gives more powers in the hands of the Centre.

The following are some of the significant issues voiced by the opposition and others:

The provision to foster competition may lead to more organisations entering profitable and metropolitan regions, while underserved areas may remain unserved.

Farmers are afraid that it will eventually result in the loss of subsidies.

Some elements of the electricity sector’s workforce are afraid that it would be detrimental to farmers and homes. They also feel that this is an attempt to privatise the distribution business, which would harm employees.

There are fears that the modifications would give the centre more control over the nomination and dismissal of members of regulatory organisations, decreasing the state’s role.

If the center dictates the minimum level of Renewable Purchase Obligation for states, the latter’s powers are reduced.

What does Centre say?

The Centre has argued that the law in no way eliminates the provision for agricultural subsidies. The adjustments are targeted at boosting sector efficiency and will not limit the role of the state.

In response to the opposition, Power Minister RK Singh stated that the measure will be thoroughly considered by the parliamentary standing committee.