New Electricity Bill to Make Power Costly for Farmers, Common Consumers

Under Sections 14, 42, and 43 of the Amendment Bill, private companies are being given the right to use the network of government electricity distribution companies to supply power, and in return, they will pay nominal wheeling charges to the government electricity companies. This will mark the beginning of the end of electricity distribution in the government sector, said All India Power Engineers Federation (AIPEF) Chairman Shailendra Dubey.

In Section 14, the bill has changed the words “through their own distribution system within the same area”, with the words “through their own or shared distribution system within the same area in accordance with the framework as specified by the Commission”.

Section 42 of the bill says: “the distribution licensee should provide non-discriminatory open access to his network to other distribution licensees in their areas of supply on payment of wheeling charges”.

“The entire responsibility for the maintenance and strengthening of the network will lie with the government distribution companies. The financial burden of this will fall on the government electricity distribution corporations. Private companies are being given the freedom to earn money through this network,” said Dubey.

Further, private companies will not have the obligation of universal power supply, the adverse consequence of which will be that private companies will use the government company's network to supply electricity to profitable industrial and commercial establishments, while the responsibility of supplying power to loss-making farmers and poor domestic consumers will remain with the government electricity distribution corporation.

As a result, government electricity distribution companies will become bankrupt and will not even have money to purchase electricity or pay salaries to their employees.

The amended Section 61(g) will eliminate cross-subsidy within the next 5 years. Along with this, the bill provides that electricity tariffs should be cost-reflective, meaning no consumer should be supplied electricity at a price lower than the cost. This means that farmers will have to pay at least Rs 12,000 per month as electricity bill for a 5 horse- power pump. Similarly, electricity rates for consumers below the poverty line will become at least Rs 8 to Rs 10 per unit.

“Through this Amendment Bill, the central government is snatching away the rights of the states in electricity matters, and there will be direct intervention by the central government in electricity distribution and tariff determination, which is against the federal spirit of the Constitution,” added Dubey.