May 31, 2020

Electricity Bill 2020: A Road to Complete Darkness

V Sivadasan

WHEN the whole world is living tensed over the Covid-19 pandemic, the central government has been trying to cook up an anti-people reform in the electricity sector. The Electricity (Amendment) Bill 2020, to amend the parent act of 2003, has been published by the ministry of power. They are in hurry to introduce the reforms in the electricity sector in spite of the people facing an unprecedented and devastating impact of the pandemic. The aim of the bill is total privatisation of the sector. During the pandemic, people are experiencing the importance of the public sector, universally. At the same time the measures for privatisation is being taken up in India. The Electricity Act-2003 itself was passed for protecting the market interest. Nevertheless, certain provisions were imposed to rein in the profit-motive of such giant corporates. Even now, the multinational corporates wouldn’t accept such constraints. Some of the sections and clauses had been kept in the act as an island of peace and hope for the people as a result of the militant struggle of the working class in India.  

Privileging the commercial interest over the public interest is the main thrust of the Bill. The corporates have been trying to change the act and rules which are standing against their interest, and formulating rules and regulations for their capital build-up. Now they are facing some regulatory control over their international trade of electricity. Earlier, they couldn’t take it as a serious one but now the situation has changed. In the recent past, some of the companies have started or extended their electricity generation activities in abroad too; even though they couldn’t get the legal right to sell the power in India without barriers. To overcome the existing regulations, a new clause, 15 (a), was incorporated. The Bill not only provides the opportunity of international trade of electricity to multinational corporates, but also hands over the right on control of electricity trade, all forms of import and export. It will ruin the prospect of the retail producers of electricity, including the ones producing new and renewable energy. Meanwhile, the advice of NITI Aayog is strengthening the anti-people move of the government. They are suggesting a complete reform in the electricity sector. The merger of the power ministry into the petroleum and gas ministry is one among such moves. It provides the opportunity to loot the money from the electricity like petroleum and gas sector. They are interested to discuss on the implementation of dynamic price system in electricity sector and the compulsion of smart meters.

The Bill has suggested that there shall be sub-licensees in electricity distribution sector in addition to the licensees. For that purpose a new clause, 17 (a), was incorporated in the Electricity Act 2003 and. The regulatory commission has the right to give the license to them. Presently, the state governments have a limited space for the intervention in the affairs of regulatory commission. As a result, the centre could not succeed in distributing the license to their chosen ones. But, according to the bill, the central government will have the power of controlling the entire activities of the state regulatory commission. Then the centre will decide everything like who will distribute the electricity or where they will distribute electricity. At present, in Kerala only one distribution licensee, Kerala State Electricity Board Limited, is working because of the intervention of the Left-led government and the strong protest of the working class. The new act will give the opportunity to the centre for appoint one or two new licensees. If it is allowed, then it will open another opportunity in the name of sublicensee. According to the Bill, the centre will get the right to allot the sub-licensees in any part in the country. So, the private players will be appointed as sub-licensees in the districts or even taluks. The licensee has some mandatory responsibilities like maintaining the system and other infrastructures. But the sub-licensee will get opportunity of looting the people without the responsibilities. Some time, the profit of sub-licensees should be more than the licensees. The lesson of the experience of BSNL is knocking on the door of the all public sector electricity companies, including NTPC and KSEB.

The ruining of the public sector distribution companies in the state is the main aim of the change of clause 27 of the Electricity Act 2003. According to the addition of the clause proposed, an agreement will be made between the distribution licensees and their franchisees. The acceptance of agreement by the state regulatory commission is mandatory. Generally, the name - state regulatory commission - is creating an illusion that the commission is under the state government, but it is totally wrong. States do not have any administrative power on the regulatory commission. In the amendment of section 14 clearly says two points: (1) A separate license from the state regulatory commission is not necessary for the franchisees in distribution sector. (2) The separate license from the state government is not needed for the distribution licensee. The bill has proved the vested interests of centralisation of electricity sector through the announcement of the new agency, Electricity Contract Enforcement Authority (ECEA), as the final word on the issues in the electricity sector.

At present, the electricity board has the right to collect the wheeling charge from the corporate companies if the power lines are used by them. However, as per the Bill, the state government or the board has no right to collect the charge. Through the amendment, the corporates will get an opportunity to utilise the entire lines without any expenses. For an example, if a KSEB transmission or distribution line is used by a company, then the KSEB has the right to collect the charge. It will be stopped by the amendment. Basically, the transmission lines and the poles are the blood and sweat of the ordinary man in our country, be it small or big. The power lines have been established on the land which had been gifted by the poor and the common men in the country. We can’t forget the reality that the gigantic pillars of the big electricity towers are erected in the same place where the small hut of the poor had existed. The suggested amendment is a shortcut for the corporates to catch the fish without getting wet.

The right of the collection and the utilisation of the surcharge are mentioned in section 42 of the Bill. It has assumed the entire right to the regulatory commission. The state government and the electricity board do not have any right to intervene in this matter. In the Constitution, electricity is in the concurrent list. But here, through the law-making process, it will be negated. It is a clear violation of the federal concept of the Constitution.        

Section 65 of the Bill clearly recommended that the entire existing subsidy in electricity sector will be stopped. The reduction of the surcharge for the big capitalist and the reduction of the subsidy for the poor are the integral part of the Bill. The concept of the termination of subsidy incorporated in the tariff policy is the strong proposal to the regulatory commission in the Bill. The central government said that the financial stability of the distribution companies will be very badly affected by the subsidy system. How will such a concept work in a nation like India? The reality is that a majority of the people are getting benefit through the subsidy. As an example, In Kerala, the adivasis, peasants, workers and the large majority of the house holders are the beneficiaries of the electricity subsidy. A good number of persons are involved in agriculture because of the subsidy only. Various agricultural schemes are popularised by the availability of electricity with subsidised rates. Sure, the Kerala scenario is very different from the national level except some similarities.  

In Kerala, the hospitals are getting electricity at comparatively cheaper rates. It will help the people to reduce the expenditure on the treatment and health care. The benefit of the state government intervention in the health sector has been proved beyond doubt during the time of the Covid-19 pandemic. If the electricity in hospitals is under the control of the private players then the things would be changed. Only the common people are going to be affected. The education institutions in Kerala are working with the same kind of subsidy. Recently, digital class rooms have increased by the public education rejuvenation mission of the state government. In the future, a large-scale escalation of the electricity consumption will be reflected in the education sector. Then, if the subsidy is stopped, the students from the economically backward will be expelled from the benefits of the quality education. Surely, the cultural institutions too will face the challenge. Even now, the libraries in the local areas are worrying on the existing burden of the electricity bill. Many of the small-scale establishments in the productive sector will be collapsed. For the protection of people, in a democratic country, the government has to assure electricity to all of its citizens.

Electricity in human development and inequality in capitalist development are unavoidable. In capitalism, inequality has provided the opportunity for the exploitation and the profit maximisation. It is essential for the aggrandizement of industry and trades in capitalist society. The poverty of the majority will facilitate the profit accumulation in capitalist development. Exploitation and primitive accumulation of the natural resources form the basic character of the system. There is no principle, be it the sale of air or water. In capitalist system, the ruling class will try to maximise surplus production and surplus value. In recent world, corporates recognize the importance of control over the electricity for profit maximisation. In the modern period, electricity is considered as a part of the basic infrastructure. The modern industry and trade will not work without electricity. And it is also one of the indices of the human development. The monopoly over the electricity will provide the opportunity either to protect or ruin the establishments. The control over the electricity has opened up a large space to the multinational companies to capture the market at the time of the competitions between the monopolies.  The monopoly of the private companies over the electricity sector will create the barriers in front of the social development. The public ownership in the generation, transmission and distribution of electricity is essential to sustain the freedom of mankind.