The Centre has put the proposed amendment to the Electricity Act on the backburner, opting instead to work with state governments on measures to open up the power market and unlock latent demand through regulatory reforms.
“Do you see any work (reforms) suffer or stalled (in the absence of the amendments)? Our initiatives are progressing well even without the (proposed) amendments to the Act. We are working with states on taking things forward,” power minister Piyush Goyal said in reply to a question whether the amendment Bill would be re-introduced in the next session of Parliament.
The amendments seek to segregate the distribution (carriage) and supply (content) businesses. This is expected to bring competition by having multiple distribution licences in an area, giving consumers the freedom to choose their supplier.
The amendment Bill was introduced in the Lok Sabha on December 19, 2014. It was referred to the Parliamentary Standing Committee on Energy. The panel submitted its report on May 7, 2015. The refreshed amendment Bill, incorporating the committee’s recommendations, will have to be cleared by the Cabinet before it can be reintroduced in Parliament.
The Centre’s unwillingness to move the Bill at this juncture is understandable, given the prevailing conditions in the power market where most of the generation units are running at only around 60% due to subdued demand. Besides, the scheme for turning around state discoms has been rolled out only recently and is yet to take root.
So the government appears to be gradually prepping the market and the state governments for a full-on competition. As a first step, at last week’s consultations with states at Vadodara, Goyal got them on board to free up unused plant capacity under their contract so that utilities can sell power in the spot market.
To supplement this move, Goyal said an hourly purchase framework would also be developed alongside the day-ahead market. “This will help generators recover costs and also increase availability of cheaper power. This is a natural progression as we are moving from an absolute deficit to a power surplus situation,” Goyal said after the conference.
Power secretary P K Pujari said the provision allowing generators to sell ‘unrequisitioned’ power in the spot market was there in the tariff policy. But the various levels in state administration reluctant to taking decisions. “The issue is administrative or regulatory, not of policy. We will work out the details,” he said. Boomer Esiason Womens Jersey