PMO shoots down plan to amend Electricity Act
The power ministry’s plans to amend the Electricity Act and redefine the powers of the regulator may have to be given a quiet burial with the Prime Minister’s Office.
By Urmi A Goswami and James Mathew, TNN |
NEW DELHI The power ministry���s plans to amend the Electricity Act and redefine the powers of the regulator may have to be given a quiet burial with the Prime Minister���s Office (PMO) shooting down the proposal outrightly. The proposed amendments are being viewed as ���unnecessary��� and uncalled for.
The PMO is of the view that the proposed amendments would lead to tinkering with the Act. The changes, if brought about, would give scope to state governments to deviate from important reform commitments. Giving the state government���s overrising powers to dictate terms to the regulators may interfere with the implementation of the Act.
For instance, the state governments which are required to make upfront subsidy payments to the state electricity boards may refuse to do so if the Act allows the government policy to be binding on the regulator. The Act already provides for the government to have the final say in ���certain exceptional situations���.
However, the proposed change would have needed up given the state government absolute power to overrule the regulator. The PMO has also trashed the argument put forth by the power ministry that the proposed amendments were included to address the concerns raised by the state governments. ���This is not the requirement of the Left parties, nor did the states ask for this change during their interactions on the National Electricity Policy and the tariff policy.���
The PMO says that these changes would actually end up hurting the states instead of benefiting them. ���As things stands, the National Electricity Policy and tariff policy are loaded in favour of generating companies in the central sector,��� a letter from the PMO reads.
The PMO is of the view that the proposed amendments would lead to tinkering with the Act. The changes, if brought about, would give scope to state governments to deviate from important reform commitments. Giving the state government���s overrising powers to dictate terms to the regulators may interfere with the implementation of the Act.
For instance, the state governments which are required to make upfront subsidy payments to the state electricity boards may refuse to do so if the Act allows the government policy to be binding on the regulator. The Act already provides for the government to have the final say in ���certain exceptional situations���.
However, the proposed change would have needed up given the state government absolute power to overrule the regulator. The PMO has also trashed the argument put forth by the power ministry that the proposed amendments were included to address the concerns raised by the state governments. ���This is not the requirement of the Left parties, nor did the states ask for this change during their interactions on the National Electricity Policy and the tariff policy.���
The PMO says that these changes would actually end up hurting the states instead of benefiting them. ���As things stands, the National Electricity Policy and tariff policy are loaded in favour of generating companies in the central sector,��� a letter from the PMO reads.
The PMO has, however, suggested that the term of appointment for members and chairpersons of regulatory commissions be reduced from five to three years, and the age limit for the chairperson of the appellate tribunal be reduced to 67.
Most regulators are retired persons, therefore serve till the age of 65 as a result the age-limit for the appellate tribunal is 70 years. The logic is that reducing the age limit of the appellate tribunal chairperson will require reducing the term of appointment of the regulators.
The PMO has come out to bat for the independence of the power regulator. Responding to the ministry of power���s proposal to amend the Electricity Act to clip the regulator���s wings, the PMO has said that any move to carry through these amendments would have a detrimental impact on the states.
The proposed amendments would affect Sections 61, 66, 73, 75, 79, 86, 107 and 108 of the Act. As a result, the regulator will no longer ���be guided by��� but will ���have to act in conformity with��� the National Electricity Policy and Tariff Policy. The move would make the currently independent regulator subservient to the government of the day.
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