Parliamentary panel clears Electricity Bill

NEW DELHI: A Parliamentary panel on Thursday cleared the much awaited Electricity Bill that proposes to rationalise electricity tariff and bring about transparency in policy regarding subsidies.
The Standing Committee on Energy, in its report tabled in Parliament on Thursday, said "the Bill may be passed", subject to minor recommendations.
The Electricity Bill, 2001, proposes to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and rationalisation of electricity tariff, transparency in subsidies and constitution of a Central Electricity Authority and Regulatory Commissions.
The Committee asked the government to include promotion of competition, protection of consumer interest and universal obligation of supply of electricity to all in the preamble of the Bill.
The Electricity Bill was first proposed in the year 2000.
The Electricity Bill would give the Centre powers to formulate a national electricity policy and tariff policy. It also permits stand alone power generation systems (including those based on renewable sources of energy) for rural areas.
The Bill permits generating companies to establish, operate and maintain a generating station without obtaining a licence but transmission and distribution of power would need a licence.
Presently, the Central Electricity Authority (CEA) gives techno-economic clearances and concurrence of schemes. "This function is proposed to be dropped from the scope of work of CEA in respect of all but hydro projects."
The Bill also provides for establishment of a national grid and a centre at the national level - to be known as the National Load Despatch Centre - for optimum scheduling and despatch of electricity among the regional load despatch centres.
It also provides for open access to distribution while principles and methodologies specified by the Central Commission would be used for determination of tariff.
The Parliamentary panel suggested that the National Electricity Policy and Plan should contain only the broad parameters, leaving the state governments to work out the minute details, keeping in view their ground realities.
"It would be better if the states are allowed to chalk out their own plans and programmes within the broad National Policy framework," it said.
Taking note of the recent gas finds, the committee said that the National Electricity Policy should give priority for setting up of power plants using natural gas as feed stock.
"The optimal utilisation of indigenous sources such as coal, gas, nuclear, hydro and renewable sources of energy and sourcing of fuel should be prime considerations while drafting the National Electricity Policy and Tariff Policy," it said.
The Committee asked state electricity regulators to fix a minimum percentage of power from renewable energy sources.
It felt that a provision should be made in the Bill to ensure that entire funding for rural electrification programme is made by the Central government while suggesting rural electrification mandatory for the private sector.
"Some incentives/exemption be thought of in central and state taxation, for encouraging the private entrepreneurs to invest in rural electrification," the committee report said.
On freeing of generation business, the report said, "There is a need to provide in the Bill that if the CEA comes to a conclusion based on the information received from the generating company, that any particular company has not maintained the specified technical standard in the plant set up by it, it can advise the state government concerned not to allow operation of any such plant."