The Telangana State Legislative Assembly has accepted the state government’s resolution opposing the central government’s proposed amendments to the Electricity Act, 2003.

In April 2020, the Ministry of Power (MoP) issued a draft proposal to amend the Electricity Act 2003 to address contract enforcement, renewable purchase obligations (RPO), among other vital issues. The Ministry had invited comments, suggestions, and objections from stakeholders.

The Chief Minister of Telangana, K. Chandrashekhar Rao, stated that the proposed bill is prepared “against the federal spirit” and intended to seize the rights of states. He added that the proposed bill would be harmful to the interests of farmers and the poor.

Before this, several states had spoken up against the proposed amendments.

In July 2020, in a letter to the Union Power Minister, R.K. Singh, the Chief Minister of Tamil Nadu, Edapaddi K Palaniswamy, underlined several concerns relating to the proposed amendment. In the letter, Palaniswamy noted that the proposed privatization of distribution networks would adversely affect distribution companies (DISCOMs) and would lead to massive losses for the DISCOMs.

“Allowing private franchisees or sublicensee would only lead to cherry-picking of remunerative areas by the franchisee or the sub-distribution licensee affecting the DISCOMs directly. The state DISCOMs will be left with serving social sector obligations and rural areas, which will result in massive losses to the DISCOMs,” said Palaniswamy.

Earlier, the Andhra Pradesh Electricity Regulatory Commission also expressed its disagreement with the government’s proposed amendments to the Electricity Act in a letter to the Ministry of Power.

In the letter, the APERC noted that the ‘National Renewable Energy Policy’ might be detrimental to the interests of state governments and distribution licensees. The new policy could restrict state governments and distribution licensees’ ability to set the RPO targets based on state requirements and divest the responsibility to the central authority. It added that this would turn state agencies into mere executing agencies.

Also, Maharashtra State Electricity Distribution Company Limited raised several objections to the amendment.

Mercom recently analyzed some of the important amendments the Ministry of Power had proposed that would directly impact the renewable sector and invigorate it.