Respected Chief Minister,

At the recent Niti Ayog meeting, the Prime Minister (PM) is reported to have said that “India’s federal structure and cooperative federalism emerged as a model for the world during Covid crisis” (https://www.hindustantimes.com/india-news/indias-federal-structure-became-role-model-covid-19-pm-modi-niti-aayog-meeting-101659873302169.html).

While the sentiment underlying the statement is commendable, it is important that it is translated into tangible action in all respects.

In the past, I had addressed you through a series of letters about the areas in which the Centre took unilateral decisions without consulting the States, despite the fact that such decisions had the effect of impinging on the States’ economy and their governance, and the necessity that the States should come together on a common platform to take up such matters collectively, so as to persuade the Centre to respect the lakshman rekha of federalism.

You are aware of how the Centre, without consulting the major stakeholders, namely, the States and the farming community, had rushed into enacting three contentious farm legislations and proposed a Bill to amend the Electricity Act of 2003, which would have hurt the farmers’ interests, as also the finances of the State power utilities and the interests of the electricity consumers. The Centre had to revoke those laws eventually, when the farmers across several States protested vehemently. At that time, the Centre had assured the States and the farmers that it would hold prior consultations with them before acting on those legislative measures in the future.

In my last letter dated 23-7-2022 addressed to you (thttps://countercurrents.org/2022/07/letter-to-the-state-chief-ministers-come-together-on-electricity-and-msp/), I expressed my apprehension that the Centre could renege on its assurance to the States and re-introduce the electricity Bill in the ensuing monsoon session of the Parliament, in which case, some of the regressive provisions of that Bill would become a reality, including the entry of profiteering private companies in remunerative distribution segments, mandatory absorption of expensive renewable energy, dis-continuance of cross-subsidisation etc., imposing heavy costs on the State utilities, resulting in higher electricity tariffs, which in turn would hurt the interests of the consumers, especially the farmers, the small business enterprises and the low-income households.

As expected, the Centre has since tabled the Bill to amend the Electricity Act, 2003, without consulting the States, the farmers associations, the other consumer groups, the utility employees and so on. Surprisingly, the Centre has also come up with a second Bill, proposing amendments to the Electricity Conservation Act of 2001, which also incorporates several regressive provisions that impose a heavy cost burden on the State power utilities. Apparently, the provocation for this is the commitment that the PM had given at the 26th UN Climate Change Conference of the Parties at Glasgow in October-November, 2021 (COP26), which have forced the government to mandate overly ambitious targets to be achieved by India for transiting from coal-based electricity to renewables, mostly solar photo-electric (PV) energy.

So far, India’s efforts in promoting solar PV electricity have their focus on large centralised solar generation plants, predominantly owned and controlled by private corporate entities, based on long-term Power Purchase Agreements (PPAs). Such plants operate at low capacity utilisation levels as they depend critically on solar radiation available on cloud-free days. They appropriate large tracts of land. Transmission of electricity from the centralised solar plants to the consumers involves significant technical losses.

While the unit costs of PV electricity have been on decline due to technological improvements, the long-term PPAs with the solar plant promoters do not permit such improvements to be factored in and the corresponding tariff benefit passed on to the consumers. While several States had made attempts to renegotiate the PPAs for the benefit of the consumers, the Bill that amends the 2003 Electricity Act has a provision to tie the hands of the States in that respect, as if to benefit the private promoters of the solar plants.

It is doubtful as to how long the present trend of declining unit PV costs would continue, as there is a near monopoly in the hands of a few overseas companies on the basic raw materials used in solar PV panels and one cannot rule out the possibility of the unit costs showing an upward trend in the near future. Such monopolies could also create uncertainties in the supply line for solar PV manufacture.

Also, large scale dependence of the electricity supply system on solar energy, as is being planned by the Centre, will pose problems for grid stability, as being witnessed in Australia and a few other countries. It is coal-based electricity generation in India that has so far facilitated grid stability.

The Bill amending the 2003 Act has provisions that mandate compulsory absorption of solar and other renewable forms of energy by the State utilities, irrespective of the costs, which implies that a State power utility would be precluded from drawing less expensive forms of energy, merely to comply with such an externally imposed mandate, to the cost of their own finances and to the detriment of the consumers’ interests.

As if this is not enough trouble for the State utilities, the Bill also imposes constraints on them, in terms of payment security verification by the load despatch centres, coming in the way of the merit-order despatch system administered by the latter, though the financial problems faced by the State power utilities are partly contributed by Central agencies and the Centre seems to ignore that fact conveniently.

For example, during last year and more recently during the current year, when acute coal shortages arose as a result of Centre’s mismanagement of domestic coal supplies, the Centre had conveniently passed on the blame to the States, forcing them to import coal at exorbitant prices, a measure seen by many as a ploy to grant undue benefits to domestic private business houses who supply coal from their overseas mines. The Centre is yet to compensate the States for the additional costs on imports.

The second Bill, which seeks to amend the Electricity Conservation Act of 2001, to some extent, reinforces the mandatory requirement that the State power utilities should absorb electricity supplied from renewable sources but it also lays down a tight time scale for escalating the minimum threshold levels for such mandatory drawal of renewable energy, presumably in line with the goals committed by the PM at Glasgow. What should cause concern to the States is that the Centre should impose such a regressive mandate without caring to analyse the cost implications of it and how it would cripple the finances of the already debt-burdened State utilities. The resultant tariff escalation would hurt the electricity consumers in the States and would also have adverse implications for the economy of the States.

It is not the Centre, but the States that stand accountable to the consumers in their respective areas.

There are other provisions of the two electricity Bills which are equally regressive and the States may get them examined in detail. Some of us could provide inputs, if needed.

Had the Centre held consultations with the States well in advance of the Glasgow conference on the technological and financial implications of the use of renewable energy, the mechanisms that should exist in place for the State utilities and the consumers to be compensated for the additional costs, if any, and the ways and means of the Centre helping the States in making a smooth transition to renewable energy, the Centre would have been able to evolve a domestic consensus on the basis of which it could have made implementable commitments at the UN COP26.

After all, the term “cooperative federalism” referred by the PM at the recent Niti Ayog meeting represents such consensus building in consultation with the States.

In principle, it is unacceptable that, in a federal set up like ours, the Centre should unilaterally take decisions that weaken the hands of the States in the matter of governance, impose schemes that may not fit into the State’s own development priorities and cast statutory obligations that impose costs on the States. The two Bills now tabled in the Parliament, one to amend the 2003 Electricity Act and the second to amend the 2001 Electricity Conservation Act amount to such an imposition. Had the Centre been more sensitive to the spirit of federalism, it would have prepared analytical papers on the technical and the financial implications of the proposed legislative measures and circulated them in advance to the States for eliciting their views.

Against the above background, I would once again appeal to you to bring this up collectively on behalf of a “Federal Front” to persuade the Centre not to overstep the lakshman rekha of federalism and hold meaningful prior consultations with the States and the other stakeholders, before proceeding further on these two Bills.

In the federal scheme of governance provided in the Constitution, the subjects to be dealt with by the Centre exclusively, those by the States exclusively and those concurrently by the Centre and the States stand well defined. In principle, the States which are nearer the people in terms of governance and, therefore, better placed to understand their needs, should have a greater say in decision making in matters that concern the people. In the recent times, in the name of several Central and Centrally Sponsored Schemes (CSSs), the Centre has been intruding into the domain of the States and resorting to direct transfer of cash assistance to the beneficiaries through the banking system, bypassing the States and the local bodies. During the last few years, there has also been a shift away from capacity building assistance under the CSSs towards direct cash assistance, which tends to push the beneficiaries into dependence on Centre’s munificince rather than being empowered to be self-reliant. These are disturbing trends that need to be discouraged.

I earnestly hope that you will take up such issues collectively in the coming days.

Regards,

Yours sincerely,

E A S Sarma

Visakhapatnam

Former Secretary to Government of India

Courtesy: https://countercurrents.org

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All India Forum Against Privatisation (AIFAP) members on August 3, 2021 expressed whole-hearted support for the nationwide strike of electricity workers on August 10 to decry the Electricity (Amendment) Bill 2021.

“On behalf of the AIFAP, we support the struggle that various National Federations and their associated unions of state distribution companies (discoms) are waging under the banner of the National Coordination Committee of Electrical Employees and Engineers against the proposed Electricity (Amendment) Bill 2021,” said the AIFAP press release signed by 46 workers organisations.

According to the AIFAP, the Bill will privatise electricity distribution under the pretence of giving consumers a choice to select cheaper and better service. It claimed that the provisions will put the future of over 25 lakh discom employees and their families in danger.

With regards to consumer interest, the private distributor will choose the people it wants to serve to earn maximum profit, said the workers unions. Small consumers in remote areas will suffer as they will not be profitable for private distributors.

“Electricity rates will rise and inflated bills and disconnections will be common. Crores of consumers will be badly hit by the Bill,” said the AIFAP.

Organisations like the Air India Service Engineers Association (AISEA), the All India Railwaymen’s Federation (AIRF), etc voiced a fear that the Bill will compel discoms to provide their distribution infrastructure to private distributors, who will not make any investment in building their own.

“The extensive infrastructure of discoms has been built over the last seventy years by lakhs of electricity workers using lakhs of crores of rupees of public money. How can this infrastructure, which belongs to people, be offered for the use of private distributors for earning profit,” asked AIFAP.

Farmers reject Electricity Amendment Bill

Along with the electricity supply workers union, farmers demanded the immediate withdrawal of the Bill during Monday’s Kisan Sansad. Noting that the 2021 version of the Bill has not been shared on public domain, farmers asked MPs not the table the Bill or similar provisions in the Parliament.

“Electricity being a basic resource for rural production and processing including by farmers, cottage industries, for health, education and other civic services, the policy should be to provide free, high quality, regular supply of electricity, to enable rural people and farmers to benefit from the same,” said Rajasthan farmer leader Rajaram Mil.

Farmer leaders particularly dismayed that the government had expressed intention to table such a Bill despite assurances on December 30, 2020 to withdraw the same upon farmer demands.

Like the AIFAP, farmers claimed the Bill works in favour of the private sector capturing the electricity sub-sector. This raised concern about the Bill’s tariff impact on farmers activities in rural areas as they would get exposed to commercial charges.

Another concern is the removal of cross-subsidies for farmers and other poor consumers. As per Sec.42(2) of the Bill ‘such surcharge and cross subsidies shall be progressively reduced by the State Commission as may be provided in the Tariff Policy,’ while the corporate consumers will benefit with reduced bills.

Meanwhile, subsidy schemes will be converted into direct benefit transfer (DBT) schemes. However, this does not assure the receipt of subsidy in a timely manner and assumes that farmers will manage cash flows.

Farmers claimed that much like the Air Quality Management Bill, the Electricity Amendment Bill takes away power of state authorities in deciding their own policies for tariffs and other aspects, and increases the financial burden on state governments without commensurate inflows. As a result, state governments will either reduce/ end cross-subsidies or bear a higher burden of subsidies in future.

“This goes against the federal spirit of our Constitution. State government’s powers to appoint Chairperson and Members of State Electricity Regulatory Commissions will be taken away, just as powers of the Commissions to address disputes between electricity generators and DISCOMS has been taken away,” said farmer leader Som Singh Punjab.

The AIFAP emphasised that it is the government’s duty to make electricity available at an affordable rate to everyone. The Electricity Act of 1948 stated that it is the responsibility of the Government to ensure supply of power in every nook and corner of India.

“It declared that profit should not be the motive of the power sector. The government must honour this commitment to India,” said AIFAP.

Related:

Kisan Sansad urges Parliament to dismiss the AQM Bill
Maharashtra Adivasis still left in the dark!
Letter from Central Trade Unions to the Indian Prime Minister, Narendra Modi
Implementation of Electricity Bill 2021 violates India’s democratic process: AITUC

The post AIFAP voices support for pan-India strike against Electricity (Amendment) Bill appeared first on SabrangIndia.

Thousands of employees associated with the Democratic Employees’ Federation and the Punjab Subordinate Service Federation have set off to join Delhi protest sites on April 11, 2021, to maintain the farmers’ struggle vigour during wheat harvest.

Samyukt Kisan Morcha (SKM) leaders on April 7 said full preparations have been undertaken to strengthen the protest sites. “The movement will not be allowed to weaken in any manner,” said the SKM in a press release.

While wheat farmers prepared for this year’s harvest, cotton farmers strongly condemned the increase in Bt cotton seed prices by Rs. 37 per packet by the central government. Calling it an attack on farmers, they said the new prices will put an additional burden of Rs. 14 crores on Punjab farmers alone. 

“Last year, the price was fixed at Rs. 730 per packet, whereas the supply of seeds for this season started at Rs. 767 per packet. Farmers of Malwa belt of Punjab as well as cotton growers in other parts of India will be affected by this price rise,” said SKM leaders.

They also warned the central government against falling short of their commitment to withdraw the Draft Electricity Amendment Bill. Any re-introduction and passing of the Bill would be a reneging on the commitment made, and would lead to an intensification of the agitation, warned SKM leader Darshan Pal.

Meanwhile, Haryana farmer unions warned BJP and JJP leaders that their social boycott will continue and that leaders should refrain from participation in public programs anywhere in the state. Earlier, leaders issued an ultimatum to this effect as a response to the anti-farmer attitude and behaviour.

Farmers took such actions against the backdrop of Tuesday protests against BJP State President OP Dhankar and BJP MP Nayab Singh Saini, and MLA Gopal Kanda – the State Lok Hit Party President, who voted against a recent No Confidence Motion against Khattar government – in Sirsa on Wednesday. Police used water cannons on protesting farmers. However, the SKM appealed to farmers to remain peaceful in their social boycott of anti-farmer politicians.

Further, the SKM noted that a member of the Uttar Pradesh State Women’s Commission resigned from her post in support of the farmers’ movement and invited other BJP leaders to quit their posts too.

Related:

Haryana: Farmers condemn police lathi-charge on peaceful protesters
Provide adequate budget to FCI! Protect the hungry! Demand India’s farmers
Farmers’ struggle, a battle against a single party’s communal thoughts: Punjab SKM leaders
Punjab: Contract workers put ‘No Entry’ signs for Ministers who failed employment promises

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