ENERGY/GOVERNANCE
their dues from the Centre,” she adds. Till March, the Centre owes `30,000 crore to the states in GST compensation alone. The states now plan to move the Supreme Court to get their money back.
The draft introduces the concept of “distribution sub-licensee”. This gives discoms the power to authorise another company to distribute electricity in the state without a separate licence. Similarly, the existing “distribution franchisee” can distribute electricity without separate approval from the authorities. Experts say this is a gradual movement towards privatisation of distribution. It may begin from a public sector company like the National Thermal Power Corporation (NTPC) and gradually move towards the private sector.
Another big concern is the states losing control over the sector. Kanitkar says the effort to centralise is unprecedented. While a central committee would appoint even the state regulators, the creation of ECEA can disempower not only the state regulatory commissions but people engaged in legal battles as well. The power to settle disputes between the generation and distribution companies would vest in ECEA, which would have the status of a civil court. It would be the sole authority to adjudicate conflicts over power purchase and sale contracts. Its decisions can be challenged only at the appellate tribunal and, finally, at the Supreme Court.
This means that the aggrieved party would no longer have the right to approach the high courts for dispute settlement, explains Leo Saldanha of Bengaluru-based nonprofit Environment Support Group. “At present, if we are not happy with the regulatory regcommission, we can easily access the high court. This will not happen. The National Green Tribunal (NGT) is an example,” he says. If a person wants to litigate in Imphal, he or she would have to go to Kolkata. It takes two days to reach Kolkata by road or a heavy expense by flight. This is why thousands of people do not get justice in environmental matters. People may again be deprived of justice in electricity disputes, says Saldanha. “I fear the new authority is being brought in with the single purpose of protecting the interests of licensees.” This is to ensure ease of business to the licensees and power generators, he adds.
REPEATING PAST MISTAKES Kanitkar says the government is promoting the failed model of allowing private parties in power distribution as the distribution franchisee, refusing to learn from the past. On many occasions, the states have expressed reservation over engaging with private players in power distribution. On February 13, for instance, Bihar energy minister Bijendra Prasad wrote to Union power minister R K Singh, saying the state does not support privatisation of the sector as it has
not had good experience with private players. In 2013, Bihar had engaged private companies in Gaya, Muzaffarpur and Bhagalpur for electricity distribution.
Bihar is not an isolated case. In Madhya Pradesh too, the model was executed in three cities—Ujjain, Sagar and Gwalior—with Essel Vidyut Vitaran Private Limited as the distribution franchisee. Just before Simhastha Kumbh 2016, held every 12 years in Ujjain, the government had to terminate its contract with the company for inadequate maintenance work, poor complaint redressal and lack of adequate technical manpower. In fact, the company could not last in any state for long.
Government’s experiment with the sub-licensee model started way back in 2007 when the Maharashtra State Electricity Distribution Company Limited (MSEDCL) handed over distribution in the power-loom town of Bhiwandi to M/s Torrent Power Ltd. Though the contract with the company was extended uptill January 2027, Maharashtra has seen the model failing in two other cities. In Aurangabad, MSEDCL appointed GTL as the power franchisee in May 2011, but the contract was terminated in November 2014. Crompton Greaves was appointed the franchisee in Jalgaon in May 2011 and ousted in 2015. “There are similar examples in Ranchi and Jamshedpur in Jharkhand where regulatory commissions were compelled by hard evidence of failure to cancel the franchise,” says K Ashok Rao, patron of All India Federation of Power Engineers.
Initially, suggestion on the draft bill were to be submitted within 21 days. The government later extended the deadline to June 5. All India Federation of Power Diploma Engineers, All India Federation of Electricity Employees, Electricity Employees Federation of India, Indian Electricity Workers Association and All India Power Men’s Federation have now demanded that the government should extend the submission date to September 30.
Be as it may, Dubey nurses no confusion. “The draft bill is highly problematic and the government must withdraw it.” Kanitkar readily concurs. “The only way out now is for the Centre to take it back.”