Current Affairs 11 August 2022 – IAS Current Affairs

Current Affairs 11 August 2022 focuses on Prelims-Mains perspective. Major events are :

Electricity Amendment Bill 2022

Source : Indian Express
GS II : Infrastructure- Energy

What is discussed under Electricity Amendment Bill 2022?

1. About the Order
2. How it helps

Why in News ?

The government tabled the Electricity (Amendment) Bill 2022, was referred to the parliamentary standing committee on energy for wider consultation with stakeholders.

Key Facts

• • Draft suggested that Fuel and Power Purchase Adjustment Surcharge (FPPAS) means the increase in cost of power, supplied to consumers, due to change in fuel cost, power purchase cost, and transmission charges with reference to cost of supply approved by the State Commission.
  • FPPAS shall be calculated and billed to consumers, automatically, without going through regulatory approval process, on monthly basis, according to the formula, prescribed by the respective State Commission, subject to true up on annual basis as decided by the State Commission.
  • This came after the Electricity (Amendment) Bill 2022 was introduced in Parliament during the winter session.
  • It was later sent to the standing committee for further deliberation amid protests by several Opposition parties.

Provisions of the Bill

• • The Union Cabinet has proposed to amend Sections 42 and 14 of the Electricity Act, enables competition in retail distribution of power by offering the customers the option to choose electricity suppliers.

    

  • Section 62 of the Act, it makes provision for mandatory fixing of minimum as well as maximum tariff ceilings by the appropriate commission.
  • Amendments in Section 166 of the Act seeks to strengthen payment security mechanisms and give more powers to regulators.
  • Renewable purchase obligation(RPO)
    • Under the previous act SERCs are empowered to specify renewable purchase obligations(RPO) for discoms.
    • RPO refers to the compulsory procurement of a certain percentage of electricity from renewable sources.

Opposition to the Bill

• • Federal Principal : Power or electricity is a subject which comes under the Concurrent List of the Constitution, and that the Centre should have consulted the States before bringing the Bill.
  • There is also criticism that the Bill paves way for privatisation of profits and the nationalisation of losses.
  • There is a fear that the Bill might result in the privatization of profits and the nationalization of losses.
  • Privatisation of distribution companies and generating units will result in job losses.
  • Farmers’ groups fear that the Bill will lead to stopping of subsidies and that power distribution will thereafter be under the control of private companies.

History of the Bill

• 2003 Act
  • The Electricity Bill was for the first time passed in Parliament in 2003 to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity.
  • Setting up the Central and State Electricity Regulatory Commissions (CERC and SERCs) to regulate interstate and intrastate matters, respectively.
• 2007 Amendment
  • The provisions for cross subsidy ensuring subsidy to poor households was added to the Bill in 2007.

2014 Bill was cleared by the Standing Committee on Energy, it could not be passed in the House as the Centre wanted to revise it.

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