The Andhra Pradesh Electricity Regulatory Commission (APERC) is understood to have opposed various provisions of the draft Electricity (Amendment) Bill, 2020 (EAB), especially the sub-licensing of power distribution and creation of an Electricity Contract Enforcement Authority (ECEA) at the national level.
Besides, the APERC raised an objection against making the Central government’s consultation with States before formulating the National Renewable Energy Policy discretionary rather than a mandatory requirement.
Sub-licensing
As far as sub-licensing is concerned, the APERC has expressed apprehensions that the sub-licensees may procure power independently to the exclusion of power contracted by distribution licensees and it will add to the licensees’ cost of recovery through higher tariffs.
The APERC has insisted that consultation with the States on renewable energy should be mandatory, else there will be a chance of the Centre making an arbitrary prescription that a minimum percentage of purchase of electricity should be made from renewable and hydro sources of energy.
Concurrent List
It has also been observed that the subject of electricity is in the Concurrent List of the Constitution and the blanket power with Central government to prescribe renewable power purchase obligation will affect the autonomy and independence of ERCs.
The APERC has further stressed the need for leaving the decisions on intra-State transmission to the State Load Dispatch Centres instead of vesting that power with the proposed National Load Dispatch Centre.
It has maintained that the new Bill seeks to take away the ERCs’ adjudicatory functions such as fixing tariffs, approving power purchase agreements (PPAs) and settling disputes in connection therewith.
The APERC has also conveyed the above objections to the draft EAB in the form of comments to the Ministry of Power (MoP) suggesting that the Centre should rethink before making such amendments to the Electricity Act (EA), 2003.
Earlier, The MoP noted that the 2003 Act brought in huge direct investments, public-private partnerships, market development, transparent tariff mechanism and etc., but the sector was seized with some critical issues that weakened the commercial and investment activities, hence the need to amend the EA, 2003.
