The Rights of the Deceased: Moral Rights Incidental to Copyright Law
- Vanshika Agrawal
- 2024-04-25
A nation that can’t control its energy sources can’t control its future.
While we sit in a room full of bright LED- lights with more than enough fans, overcharging our gadgets there are still 23 million households in India without access to electricity. Their nights are literally dark. Even though being the world’s third-largest producer as well as third-largest consumer of electricity India is facing a severe problem. This is possibly due to various reasons like absence of coal supply, absence of long haul power purchase agreements, the inability of promoters to infuse the equity, and inordinate delays in regulatory orders and
receivables from distribution companies added to the hardships of the energy market in the country.
The framework for the electricity sector in India is governed majorly by Electricity Act, 2003. This act was enacted with an aim to consolidate the laws relating to trading, generation, transmission, distribution, and use of electricity. This act takes measures conducive to the development of the electricity industry, promoting competition therein, protecting the interest of consumers and supply of electricity to all areas, rationalizing of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies. Under its ambit, Central Electricity Authority, Regulatory Commissions, and Appellate Tribunal and
for matters connect therewith or incidental thereto are also establish.
Now that we are in the year 2021, it is to note that the Electricity sector has not been able to score complete results it has set out to i.e. affordable, economical power, and transparency in pricing. There has been substantial addition to generating capacity and considerable progress of electrification
through direct investments, public-private partnerships, and market development.
Contents hide
2.1 (I) Enforcement of contracts
2.2 (II) National Renewable Energy Policy
2.3 (III) Cost reflective tariff
2.5 (V) Powers to Load Dispatch Centres
2.6 (VI) Privatization in power distribution
(i) Irregularities and tardiness in tariff filings – it has been report that DISCOMs in 12 out of the 29 states have not filed tariff petitions for FY2020. This has led to substantial non-revision of their tariff.[1]
(ii) Losses faced by distribution companies (DISCOMs) – Discoms reported a near doubling of their financial losses in FY19 to Rs 27,000 crore; and, the discom losses in FY20 are estimate to be around Rs 30,000 crore.[2]
(iii) Dues to power producers – Owing to their financial distress, discoms have been failing to pay power producers on time. As of February 2020, discoms record over dues to power producers to the quantum of Rs. 80,387 crore.[3] Additionally, there have been recurring instances of power purchase agreements (PPAs) not being honored. Eg. Madhya Pradesh Power Management Co had canceled a PPA signed in 2015 for two 50 megawatts (MW) projects. Most recently, the Andhra Pradesh government had made controversial attempts to renegotiate clean energy tariffs for 140 power plants. Some cases of renegotiation of PPAs have also been seen in Uttar Pradesh and Karnataka. These cases can be attribute to the lack of regulatory enforcement of contracts by SERCs. [4]
It has been observed that few provisions of the Act are unable to enhance or add to the rapid development of the electricity sector. Therefore, to bridge the gaps in the prevailing statutory paradigm and ensure sustainable growth in the sector, it has been thought necessary to further amend
the Electricity Act 2003 so Electricity (Amendment) Bill, 2020 (“Amendment“) was introduce by the Ministry of Power, Government of India on April 17, 2020. The key highlights of the bill are as follows
Under the Electricity Act presently, there is no particular provision to touch upon the problems arising in regard to power purchase agreements (“PPAs”). To seek better regulation and adherence to executed PPAs, the Amendment envisages the creation of an Electricity Contract Enforcement Authority (“Enforcement Authority”) to supervise the fulfillment of contractual obligations under a PPA between a generating company/ power producer and
a distribution/ transmission licensee or between licensees.
The Enforcement Authority will have the powers of a civil court of arrest, attachment of property including executing its orders as a decree of a civil court and will be headed
by a retired judge of the High Court. This is intend to inculcate discipline to honor the executed PPAs in their true spirit.
The Amendment contemplates a national renewable energy policy to promote renewable energy, particularly solar and hydropower. It proposes a minimum percentage of purchase of electricity from renewable sources, with special attention to hydropower. This is at present left primarily to various State Governments upon their own initiatives. Additionally, a National Renewable and Grid Integration Policy which seeks to improve planning, create an ancillary services market, build short and long-term forecasting capacity, and
drive coordinated investments across generation, transmission, and
distribution are also contemplate in the Amendment
The Electricity Act permit the SERCs to determine tariff after receipt of subsidie, but there was no provision for fixation of the tariff with ‘fair cost’. The tariff so determine was therefore not ‘cost reflective’ and as a result, contribute to the weakening of the financial health of power distribution companies (“Discoms”). Under the Amendment, it is propose that the tariff should be ‘cost reflective’, i.e. reflect the cost of the supply of electricity and
that the retail tariff should reflect the actual cost or
fair cost of the power which is to be supply, in order to ensure the financial health of the Discoms.
Under Section 65 of the Electricity Act, a State Government is require to pay subsidy in advance to the Discoms, resulting in lower tariffs for Discoms and the customers, therefore, could indirectly benefit through the reduced price of power supply by the Discoms. The Amendment proposes that the subsidy shall now be transferre directly into the account of the consumers, through direct benefit transfer. The impact is that Direct Benefit Transfer (DBT) should generate transparency and
accountability for State Governments, and the subsidy will reach the people who are entitle to it. Discoms would benefit
as the subsidy component of the tariff would be directly transfer to the consumer, and improve their revenue streams.
It is propose to empower State Load Dispatch Centres so as they may oversee the payment security mechanisms as per contracts, prior to dispatch of electricity. This is intend to address the major issue of non-payments and delay in payments, which is impacting
the health of Discoms and
also results in increased non-performing assets.
The Amendment contemplates that a franchisee of a distribution licensee (i.e. a person through whom the distribution licensee desires to supply power in its specify area of supply) shall not be require to obtain any separate license for such operation from the relevant SERC and such distribution licensee shall continue to remain responsible for
the distribution of electricity in its area of supply. While the Electricity Act already encourages the participation of the private sector in power generation, transmission and
distribution will greatly benefit from increased private investment.
Penalties under Section 142 of the Electricity Act in relation to non-compliance with the rules/ regulations of the Electricity Act and/or orders or directions of the relevant SERC have been increase to INR 1,00,00,000 and INR 1,00,000 per day for continuing failures. Additionally, for non-compliance with the renewable and hydro-power purchase obligations, the Amendment proposes a penalty of INR 0.50/kWh for the shortfall in purchase in the 1st year of default, and
if such default continues for the 2nd successive year, then
the penalty is propose to be increase to INR 1 /kWh and thereafter INR 2/kWh.
Under Section 146 of the Electricity Act, the penalty for general contravention of any order or direction issued under the Electricity Act, or any of its rules/ regulations, has also been increased
from INR 1,00,000 to INR 1,00,00,000 and
in case of continuing failures, from INR 5,000 per day to INR 1,00,000 per day.[5]
[1] Sengupta, D. (2020). Tardiness in tariff filings and inadequate tariff revision proposals negative for the power sector: ICRA. The Economic Times. Retrieved 1 July 2020, from https://economictimes.indiatimes.com/industry/energy/power/ tardiness-in-tariff-filings-and-inadequate-tariff-revisionproposals-negative-for-the-power-sectoricra/articleshow/68379258.cms?from=mdr
[2] Bureau, F. (2020). Discom losses can spiral to Rs 50,000 crore in FY21: Icra. The Financial Express. Retrieved 1 July 2020, from https://www.financialexpress.com/industry/discomlosses-can-spiral-to-rs-50000-crore-in-fy21- icra/1943588/#:~:text=%2DARR%20gap)
[3] Ibid.
[4] Jhawar, P. (2020). Renewable energy: It is crucial to honour signed contracts. Downtoearth.org.in. Retrieved 1 July 2020, from https://www.downtoearth.org.in/blog/energy/renewableenergy-it-is-crucial-to-honour-signed-contracts-68935.
[5] BGC Legal,(2020),The Electricity (Amendment) Bill, 2020 – Key Highlights,Mondaq.com,from www.mondaq.com//
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