People's Democracy

 Scrap Electricity Act 2003: EEFI Demands

THE Electricity Act 2003 came into force from June 10, 2003. If any state government desires, the repealed laws can be kept in force for another six months, under the provision of the act itself. The existing state electricity boards (SEBs) can continue up to June 10, 2004 only.

This enactment is made to provide a legal framework for the total privatisation of electricity industry and as a prelude to unbundle the electricity boards, and for a subsequent shift to the deregulation and market driven pricing of power. The provision for open access to transmission system, de-licensing of generation, allowing multiple players in transmission and distribution, removing social control of power industry are the clear cut path of the notorious Enron-promoted American model of the power industry.

The act leads to the following, among other things:

1) The abundant water resources in the country can be exploited for minting profit by any private investor who gets statutory clearance from the concerned government department, which is easy for private capital in the present system.

2) The assets of electricity boards will be handed over to private capital at very concessional prices, as we have seen in the privatisation of Delhi Vidyut Board (DVB).

3) Further, rural electrification will be in the doldrum. As this is a loss making proposition, no company will take up this task. Two thirds of the households in India are still to be electrified. (In Sonabhadra district of Uttar Pradesh where the EEFI recently held its fifth conference and in the adjacent areas of Madhya Pradesh, 7129 MW of power are generated which is about 7 per cent of the total generation of India. Yet half of the villages in these districts, where the majority of the people living are poor agricultural workers, are still to be electrified.)

4) The issue of the transmission licenses will lead to a fragmented transmission system, instead of an integrated transmission system, which will lead to opening up of anarchy in the transmission system and may further lead to massive power failure as we saw in the USA and Canada on August 15.

5) There will be regulatory commissions at the centre and in states. These will be accountable neither to parliament nor to legislative assemblies, and will have enormous powers.

6) The elimination of the subsidy will make the cost of power unaffordable to a majority of Indian population, including the lower middle class in urban and rural areas, public utility services like schools, colleges, transport, hospitals, sports complexes etc, agricultural sector and small-scale industry.  The cost of agricultural production, including food crops, will soar high and consequently the whole population will be affected. The apostles of privatisation are busy creating an illusion that power tariff will come down as a result of introduction of competition among multiple players in the power generation, transmission, distribution and trade. It is a false notion; and the national and international experience negates this propaganda. Only a small section of the people, i e, the affluent class will get the advantages of it.

7) The definition of the captive power plants, as per the provisions of the act, enables those who pay surcharge for supply, to escape from paying the surcharge and utilise the existing transmission system for bringing power from anywhere they like.

8) The service conditions of the employees will be affected, in the public as well as private sector. Utilising this opportunity, the CESC management has proposed a 50 per cent staff reduction; this is a typical example of how the private sector behaves.

9) In order to manipulate the cost of installation so as to fetch higher tariff approved by the regulatory commission, private companies will be importing plants and machinery thereby adversely affecting the self-reliance of the country.

Thus the enactment is to safeguard the interest of the big private capital, both Indian and foreign, contrary to the dreams and vision of the freedom fighters and nation builders. The chairman of the parliamentary standing committee on energy and a few of the chief ministers have in fact raised many of the above criticisms.

Besides, the Electricity Act 2003 also has some provisions that can be used in the present federal set-up of the country to keep the erstwhile electricity boards as a single entity.

It is in this situation that the recently held fifth national conference of the EEFI demanded that the Electricity Act 2003 be repealed/replaced and a new law should be brought to uphold the dominant role of the Central Electricity Authority (CEA) to suit the federal set-up of the country, SEBs and CPSUs. The new act should be in accordance with our national objectives of “power for all, quality power on demand, and power at affordable rates.” The EEFI demand is also that electricity boards should till then be kept intact as a single entity till then to obviate the difficulties to the consumers, employees and the nation. The conference also demanded that the government of India must provide sufficient budgetary support to the states for power development in order to achieve planned and balanced development of the country. The EEFI conference called upon all electricity employees of the country to forge a massive campaign and agitation to expose the evils of Electricity Act 2003 and fight back by joining with the people at large, including the peasantry, to achieve the above goals.