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NOW THAT THE Parliamentary Standing Committee has approved the Electricity Bill 2001 with some modifications, one would assume it will be smooth sailing for this much-delayed piece of legislation in Parliament. The initiative for such a comprehensive legislation, freeing the power sector of much of the archaic controls that hampered its growth, was first taken by the late Rangarajan Kumaramangalam who, as Power Minister, met with a lot of opposition including from some of the allies of the then Vajpayee Government. It was because of this opposition that the watered down version of the Bill was presented to Parliament, and then referred to a standing committee.

The Electricity Bill 2001 has finally been approved by the Cabinet and is sure to be introduced in Parliament in the Budget session. Among other things, the Bill seeks to replace three existing Acts that govern the electricity sector and free it from a host of controls, all of which were perceived to be hampering the growth of this sector. It seeks to create an electricity market that will ultimately witness competition, simplify the regulatory procedures, and ensure competitively priced quality power to the consumer. The Bill brings back into focus the need for reforms in the power sector, an issue that has inexplicably taken a backseat for some time now. Rather than regulate the power sector from the utilities' point of view, the legislation seeks to place the interests of the consumer first. For instance, it proposes to allow a group of consumers to get together and exercise its choice to purchase power directly from a generating company or from such intermediaries as traders or distribution companies. Besides, the Bill takes a realistic view on captive power generation — allowing industrial units going in for captive generation to sell the excess power to retail consumers through the grid, rather than to the electricity board at pre-determined uneconomical rates. It also seeks to de-licence thermal power generation.

Apart from setting up and making functional the Electricity Regulatory Commissions, some States have still not seriously addressed power sector reforms. Unbundling the monolithic electricity boards has not been taken up and these States tend to argue that unbundling has not been a success in any of the States where it has been tried. Reasons are more political than anything else. Rather than have a reform model thrust on them, the States now have the flexibility to choose the model that suits them best. The passage of the Bill and the other reform measures initiated, it is hoped, will provide momentum for the sector's growth. A sustainable power sector that is competitive and affords the consumer the choice in buying quality electricity at competitive rates is the need of the hour.

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