[Electricity Bill 2020] Electric Shock Kept On Hold

S V Singh //

Capitalism is finding extreme difficulty in breathing by each passing day. The only panacea for all systemic ills is privatization!! Next in line of sectors to be ‘liberated’ now is Energy Sector. ‘Electricity Amendment Bill, 2020’ would have already seen the light of the day by now by an ordinance but the draft got stalled, thanks to the unprecedented farmer’s fury. ‘Repeal Electricity Amendment Bill, 2020’ is one of the four demands of the present ongoing unprecedented farmers movement. Braving extreme hostile weather, bone shattering chilling cold waves, lakhs of the farmers are camping at all the borders leading to Delhi, surrounding the capital from all sides like an alien army at all the border points since over a month now, in a do or die battle, quite literally. Agitating by keeping their very life on line since last 36 days, farmers deserve heartiest congratulations for succeeding in getting 2 of their 4 demands met by the Modi government in a meeting held on Dec 30 at Vigyan Bhawan. The proposed Electricity Amendments Bill, 2020 has been taken back by the government. This, however, does not in any way diminish the importance of knowing seriousness of these amendments as this is going to impact entire population and secondly, government will certainly try to bring it back in future. Privatization process has already been completed to a large extent by Electricity Act 2003 & Electricity Amendments Act 2014 and government is not going to roll back that process. Government may try another method, chose another time but will take the process through. People, therefore, need to know this issue in detail, be on their toes and thwart any such attempt in future.

 For getting the proposed Electricity Amendment Bill passed, Modus operandi was the same which has now become trade mark of the working of fascist Modi government. Extract maximum advantage of the deadly Corona pandemic and get maximum possible anti people legislations passed before situation returns to normal as the people are scared to come on road to resist and if they dare come, invoke pandemic restrictions bogey, vociferously.  Don’t care whether a particular legislation falls under state or concurrent list. Rather prioritize those falling under these categories as those under union list can be taken up anytime afterwards. First decide what the corporate want, proceed to do it and then remain unflinching, unyielding on this, name any opposition to this as antinational. After that, formalities of seeking public reaction are completed. ‘Public opinion’ is sought as a ritual, paying any heed to that is a thing of the past, not known to the present government. Get the bill passed in parliament on the strength of brute majority and blatant manipulations, machinations. The days of constitutional nuances like first seeking opinion of states, sending the same to the respective parliamentary committees etc are now over. Modi government has appropriated sweeping powers in every respect throwing the concept of federalism out of the window.

Chronology Of Power Sector ‘Reforms’ (Privatization)

There are three segments in electricity sector: generation, transmission and distribution.  Generation is the process of producing power using different sources of energy.  Transmission system means carrying power from the power generating stations to the distribution sub-stations.  Power is transmitted through the grid network which is a system of inter-connected generating plants, transmission lines, and sub-stations.  The distribution system supplies electricity from sub-stations to individual consumers through a network.

Restructuring (Privatization Of) The Electricity Sector

Till 1975All three segments were bundled together and were mostly government owned (except in few cities). Generation, transmission and distribution were carried out by the State Electricity Boards/ Electricity Departments.
1989The transmission segment was separated from the central generation agency. Power Grid Corporation of India (POWERGRID) was set up to carry out transmission.
Early 90sGeneration segment opened up for private sector
1996-98Some states (Odisha, Haryana) started restructuring their state electricity boards. Restructuring included unbundling of generation, transmission and distribution activities, privatization of generation and distribution etc.
1998Electricity Regulatory Commission Act, 1998- established Regulatory Commissions at both the central and state levels.
2003Electricity Act, 2003 – de-licensed generation, brought out in open access and parallel licensing, gave more powers to the Regulatory Commissions, provided for reorganization of the state -owned electricity boards, provided for elimination of cross subsidies in the sector.
20072003 Act amended to allow for reduction of cross-subsidies instead of eliminating them.
(Source: Ministry of Power: Electricity Amendment Act, 2014)

What Are The Amendments To Electricity Act 2003?

Power generation, transmission, distribution, trading and consumption are governed by the Electricity Act 2003. It also defines separation of powers to be exercised by the center and state governments in power sector as the power sector falls under concurrent list.

  1. Electricity Amendments Act 2014: Modi government had initiated the process of amending rules in power sector immediately after assuming power in center in 2014 itself.  That time, though, at least due parliamentary process was followed but intentions, direction and motive of the amendment were pretty clear and unambiguous that time also. Bill was introduced in Lok Sabha on 19.12.2014, referred to the Standing Committee on 22.12.2014 and the report was submitted by the Standing Committee on 07.05.2015.  Five key recommendations of this act were; first: The bill seeks to amend Electricity Act 2003 to segregate the power distribution network business and electricity supply business and introduce multiple supply licensees in the market. Second: The bill introduces a supply licensee who will supply electricity to consumers. The distribution licensee will maintain the distribution network and enable supply of electricity to the supply licensee.  Third: State Electricity Regulatory Commissions will grant supply licenses. Consumers can choose to buy electricity from any of the supply licensees in a given area of supply. Fourth: if a supply licensee ceases to be supply licensee, or is suspended, electricity supply will be supplied by a Provider Of Last Resort (POLR). The POLR will be a supply licensee designated by the State Electricity Regulatory Commission (SERC). Fifth: the bill defines renewable energy and provides for a National Renewable Energy Policy. It requires coal and lignite based thermal generators to produce 10% of thermal power installed capacity as renewable energy. 
  2. Electricity Amendments Bill 2020: Countrywide strict lockdown was imposed on March 24th and the draft ‘Electricity Amendment Bill, 2020 was introduced by the power minister on 4th of April for seeking ‘public opinion’. There can’t be a better time to introduce and seek public opinion and consent from the states over such a bill that is going to impact each and every citizen of the country than in April when entire nation is scared of the deadly pandemic Covid-19 and is under strict lockdown!! Energy is one of the key sectors and is a prime driver of the economy. It accounts for about 7% of the GDP. India is one of the top 5 markets of the world. So called ‘federal sprit’ has already passed its expiry date. Who cares for such nuances when the very life of the bourgeois system is at stake. Total 11 states and 2 union territories have lodged their objections to the idea of cash transfer in place of subsidy in power consumption. All India Power Engineer’s Federation (AIPEF) staged nationwide protest against the proposed amendments particularly the privatization of Discoms (power distribution companies) on 26 November. In spite of all these protests, power minister chose to go ahead with the amendments to make the power sector ‘consumer centric’. Nation should thank farmers for displaying exemplary courage and forcing the government to take this draft bill back on Dec 30 meeting.

What Were The Proposed Amendments?

  1. More powers to the center: One very interesting change was being brought in with regards to the appointment of chairperson of the selection committees that appoints top ranking officials in power sector. These selection committees have members from both the states and center as power sector falls under concurrent list. The selection committees will now be presided over by a sitting judge of Supreme Court and not by a retired judge of the High Court as at present. May be, it has come to the government’s notice that some judges have a nasty knack of suddenly acquiring wisdom immediately after the day of retirement!!  National Load Dispatch Centre (NLDC) is going to be an all powerful agency in the hands of the union government now with regard to scheduling of power throughout the country to all 5 Regional Load Dispatch Centers; Northern, Eastern, Southern, Western & North Eastern. Proposed amendments are in line with the government policy that states should be divested with crucial powers and more and more powers are to be appropriated by the center.
  2. Subsidies, meant for the poor, to go: It is now obvious that government intends to do away with all the subsidies except those given to the corporates by way of tax relief, loan write offs, interest waiver or forgoing several income receivables but they are reluctant to do this in a single stroke. The disguised method of doing the same is to give subsidy by DBT ‘Direct Benefit Transfer’. The truth spills out when the power minister tries to remove the public ‘misconceptions’ on DBT, “It may be noted that Government of India have implemented Direct Benefit Transfer for 419 Schemes pertaining to 56 Ministries with cumulative savings of Rs. 1.70 lac crore.” Where from this amount of Rs.1.70 lac crore saving has accrued, Sir, if not by denying subsidy to the needy? Point to be noted here is that whenever government complains of the ‘burden of subsidies’ it means subsidies meant for the poor and not for the corporates. During last 6 years, debt written off amount alone is over Rs. 8 lakh crore!!
  3. “Cost will determine tariff”: This, in simple English means that the tariffs are set to increase manyfold. It is to be kept in mind that privatization, anywhere, means rise in cost for the consumer and cumulative rise in profit for the corporate owner. Market forces will determine the cost of electricity to the consumer. “It is estimated that the total regulatory asset, i.e. revenue due to a Discom but not collected because appropriate tariff increase was not given, in the country is about Rs. 1.4 lakh crore.” Power minister is, in a way, scolding the states that the private Discoms are suffering losses because states have not increased electricity rates in time. Why should the private Discoms suffer losses, they exist on this earth only to earn profit?? Monthly or bimonthly electricity bills that the consumer receives now are ‘heavily subsidized’ and in future the consumer will be paying the actual cost of electricity. Steep tariff rise is long overdue, they say and it is justified in a very interesting manner by the intelligent power minister as is expected from a retired bureaucrat. Corporate electricity distribution companies, Gencos and Transcos owe over Rs.2.26 lakh crore to the government. They have borrowed this amount from consortium of different banks which will collapse if this debt is not repaid by these companies and this will, eventually, lead to the collapse of the whole banking system, that is why tariff have to rise!! But we have to say, Mr. Minister, that if this system is so keen to collapse then why not let it collapse once and for all!!! 
  4. Ease of doing business: This has become a very dreaded jumla these days because the nation has just witnessed that all the worker’s rights have been snatched for providing ‘ease of doing business’ for the corporates. Cross subsidies mean differential rate of electricity to the industry and domestic consumption and to the agriculture sector. The nationalist government doesn’t like this ‘partiality’ at all. Why should there be discrimination? Electricity will, therefore, now be available to domestic consumers, industrial and corporate bourgeoisie and farmers at the same rate. Farmers were ‘enjoying’ double subsidy in matter of electricity supply these days, one at their home and another at their tube wells. Hence their cost of electricity was certainly going to shoot up. They are up in arms not without reason. This was going to be done but not in one stroke as that may jeopardize the whole design as the people may rebel. This was, therefore, to be done but in phases. Government says that cost of cross subsidy at present is about 50% of the cost of electricity which was to be brought down to 20%. This 20% was also certain to go but not now. Government has mastered the tactics of ‘managing the pain’ that reminds one interesting story; if a frog is dropped into a pan filled with boiling water, it will either jump away or die but if the same boiling water is poured over it slowly for longer period than frog will feel pain and get used to it but will survive!! We are being treated the same way!!
  5. Establishment of Electricity Contract Enforcement Authority: This was going to be a draconian amendment to punish the defaulters of electricity bills but the complete details are not yet available. “CERC (Central Electricity Regulatory Commission) and SERC (State Electricity Regulatory Commission) do not have powers to execute their orders as decree of a civil court. An Authority headed by a retired Judge of the High Court is proposed to be set up with such powers including but not limited to powers of attachment and sale of property, arrest and detention in prison and appointment of a receiver to enforce performance of contracts related to purchase, sale or transmission of power between a generating company, distribution licensee or transmission licensee. This will enhance sanctity of contracts and spur much needed investment in the power sector.” These civil as well as criminal punishment provisions were not going to stop at ‘transmission licensee’ but these were set to be extended to include the defaulting consumers also. It was meant for them only.
  6. APTEL: Appellate Tribunal (APTEL) would have 7 members with increased powers for quick disposal of cases. It was to enjoy powers of the High Courts and also powers of the Contempt of Court Act to punish the ‘guilty’ severely. Sections 142 and 146 of the Electricity Act were to be amended to enhance quantum of penalties, exact details of which were not available though. Section 146 deals with penalties to those who disrupt electricity supply so it had potential to be used against democratic mass movements also.
  7. Corporate Discoms were to be given powers to sublet their job of electricity supply. This would have facilitated formation of a giant company getting contract to supply electricity in as many cities as they could, may be entire country and then the corporate company would had powers to appoint franchisees/ sub licensees. Adanis and Ambanis of the country were, obviously, delighted and backing Modi government with full might not without reason. They may complain now or would have already been assured that ‘please wait a while’.
  8. Cross border trade of electricity: Please do not get confused by this title. This, actually, meant supply of electricity to other countries, meaning export of electricity. This clause didn’t refer to trade of electricity among different states within the country.    

Glorious Peasant Movement Against Electricity Amendment Bill, 2020 In Punjab

Protest against the proposed Electricity Amendment Bill in Punjab is precursor to the historic farmers movement going on at present.  ‘The Print’ report has revealed the modus operendi of the  fraud, how the governments are helping the private players to enable them to sell power at higher rates to consumers and how the public sector enterprises are being made sick, how the power crisis are created. This report also reveals a very pleasant aspect, how the farmers are seeing through the entire game, getting wise to lead their protest movements effectively. This columnist acknowledges, thanks and appreciates their effort.

There are total 5 power stations in Punjab; 2 government run at Lehra Mohabbat and Ropar, having power generation capacity of 1760 MW and 3 private run at Talwandi Sabo, Rajpura and Goindwal Sahib, generating total 3920 MW. Punjab produces 1300 MW via renewable sources and has total power capacity of about 7000 MW and has a distinction of being 22.9% power surplus state. Bhartiya Kisan Union (Ekta Ugrahan), farmer organization spearheading the agitation in Punjab against proposed Electricity Amendment Bill, 2020 alleges that government is selling electricity to Delhi @Rs.2/ per unit but they are charging farmers @Rs.8/ per unit. The more serious allegation, however, is that Pujnab government (a Congress government) is hand in glove with private corporates running the power plants in the state. They have deliberately shut Ropar plant and are deliberately reducing power generation capacity of government plants so that private power generation players could mint money out of sucking blood from the poor peasants by charging far higher rates per unit of electricity. Sukhdev Kokri, General Secretary of the BKU (Ekta Ugrahan) made a very interesting announcement, “If the government power plants run to the full capacity and there is still a power shortage, we will, immediately, call off the protest and vacate the plant entrances.” In retaliation to the government move to close down government run Ropar plant, the union protested aggressively, sit at the gates of the private plants at, Talwandi Sabo owned by Vedanta and Rajpura owned by L&T and forced closure of both. “We started our protest on the rail tracks leading to these power plants on 1 October and continued till 23 October to choke the coal supply. After the Centre suspended freight trains on 24 October, we moved to the entrance because we don’t want to inconvenience farmers who need essential supplies for cultivation at this time. But our protest against the corporates is still underway,” said Uttam Singh of BKU (Ekta Ugrahan), who was protesting at Talwandi Sabo. Nation should learn from Punjab farmers, how to lead the protest these days and how to outsmart the corporate bought governments, keeping the unity of the toiling class intact. “We have targeted the corporates who want to take over our land through the new farm bills brought by Modi. This is why we first blockaded the rail tracks so coal could not reach these private industries and our message would reach Delhi,” said Ravinder Singh, who was also protesting at Talwandi Sabo. Yes Sir, message has indeed reached Delhi in emphatic manner and the fascist government at center is running out of jumlas. All their tricks to befool the masses are falling flat on the ground!! “We are also protesting against the proposed Electricity (Amendment) Bill, which seeks to make farmers pay high prices for electricity in order to favor private companies and help them profit,” said BKU (Ekta Ugrahan) chief Joginder Ugrahan. They are spot on. Can anyone find fault in their approach? Is it not exactly the motive of government? Only a moron can allege that the farmers are misguided and the opposition is playing game using these farmers as pawns!!

Power Sector Employees/Engineers Are Protesting Against Privatization Of Power Sector In UP

 Lakhs of power sector employees and engineers are protesting this proposed Electricity Amendments Bill all over the country. UP electricity employees too are protesting this bill. Besides offering power sector to the corporate sharks to loot maximum profit, employees are also going to lose job securities. It is pertinent here to mention that the electricity department employees of UP under the banner of ‘Vidyut Karamchari Sanyukt Sangharsh Samiti’ have successfully launched a massive protest movement against the bill introduced by Yogi government to privatize Purvanchal Vidyut Vitaran Nigam Limited of electricity department in UP. Over 15 lakh employees went on strike on Oct 5 and forced the UP government to hold back the law.

We Are Already Paying Four Times Of Cost Of Electricity; This Bill Would Have Increased Manifold

According to a report published in National Herald dated 25 July 2020, Indians are paying highest electricity tariffs in entire South Asia whereas the cost of power generation here is the lowest here. We are the only country where solar energy costs 14% less than thermal power and it does not pollute climate. It is the corporate greed that is coming in the way of huge power generation by way of solar energy as we have unlimited solar light available in entire country throughout the year.  Power distribution companies Discoms are charging three to four times of the cost of power generation even than these are always showing huge losses to seek tax and interest rate concessions from government. These companies often resort to blackmailing tactics threatening to cut electric supply in case their accounts are audited by the government agencies. Government has recently come out with a Rs. 900 billion bailout package for Discoms but these companies again manage to qualify for another bail out!!  

Capitalism Is Irreversible And Unstallable But Not Undestroyable

It is evident that the process of privatization of the power sector is going on since 1975, well before any other sector was put under the hammer. It was slow but steady till 1991 when crisis of the capitalist system got aggravated insolvably and prompted the Rao-Manmohan government at center to unleash mass privatization of public sector assets under the slogan of LPG (Liberalization, Privatization, Globalization). Parasitic corporate class and their paid cheer leaders hailed the event as freedom from license raj. Actually, that was a freedom for the big monopoly houses to grab PSUs built on the tax collected from the poor people of the country, for a song. Power sector has remained the preferred ‘item’ for the corporate to pick because it’s so vital that it affects rich and poor all. It’s the most critical sector as it provides the owning corporate, a huge potential to arm twist government and people both. By having control over electricity supply which people cannot live without, the corporate owner can make the government dance to their tune, raise the tariff as much as they want. Discoms are doing the same right now. BSES Rajdhani and BSES Yamuna owned by Reliance Infrastructure of Mukesh Ambani supply electricity in Delhi, owe lakhs of crore loan to a consortium of over 10 banks in Delhi. These companies always keep their outstanding balance in their accounts overdue, tentatively close to the point of getting classified as NPA, keeping both the bank management and Delhi government on their toes and blackmailing them. Banks themselves plead before government to raise the tariff or their banks will drown!! Both the companies are notorious to fudge their accounts to declare losses. Arvind Kejriwal boastfully declared to get their accounts audited by the CAG after coming to power. He did come to power, formed the government, CAG officials reached the offices of BSES Rajdhani and BSES Yamuna but could not commence the audit. Such is the brazenness of power that these corporates are enjoying these days!! Kejriwal, since then, has become ‘wise’ and has, conveniently, forgotten that promise and the system is going on as usually!! He was, in fact, getting too hypocritic, all other bourgeois governments and central governments know the reality and keep mum. The Electricity Act 2003 and 2014 were two legislations that were introduced to privatize the power sector at a quicker pace as per needs of the bourgeoisie and the same ‘market conditions’ are now pushing Modi government for the proposed Electricity Amendment Bill, 2020 to go all out and complete the process of privatization of power sector. Modi government has put this bill on hold for the moment to buy peace but let there be no confusion to the farmers that state will keep looking for an opportunity and will rush through this legislation in not a distant future. Otherwise also, government enjoys tremendous powers to do whatever it decides. Exactly the same pattern is being witnessed in every sector of the economy. Farmers are putting unprecedentedly brave resistance never witnessed in free India, blocking the roads of national capital from all sides for over 35 days now and over 40 protestors have laid their lives for the cause, against the three black, anti- farmer agri laws. The question, however, is, whether this process of privatization of power sector can, now, be stalled or reversed? In spite of having highest regards for the bravery and courage of the fighting farmers, the answer is ‘NO’. Modi government has been forced to drag its feet in order to buy peace at this juncture but is it possible that government will roll back the whole process undertaken so far? The answer, again, is ‘NO’.  Capitalism is decaying day by day, bringing more and more miseries to the toiling people on the one hand and increasing the mountains of profit of handful of monopoly houses on the other. This system has crossed its expiry date long back and is now beyond any repair or reform.  Any movement which is seeking to roll back or to stall capitalist ‘development’ is actually seeking to reform the system and is doomed to fail. Privatization in power sector has already reached half way, present halt that is forced on this government will be temporary and government will pursue the same after a while. Besides demanding relief under the system, focus of any mass movement has to be to bury capitalism as such which is at the root of all the problems. Everyone doesn’t need electricity, according to the capitalist rule of market forces. Those who can afford will have light, those who can’t will grope in dark. If we don’t subscribe to this rule, we shall have to join ranks with other toiling masses to bury this anti human system deep because this has a nasty tendency to surface again and establish at its place a just and humane system where every human being matters, everyone counts. When everyone will work and will have access to electricity and to each and every natural resource, rightfully.

[Originally published in The Truth: Platform for Radical Voices of The Working Class (Issue 9 / January 2021)]

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