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House rein on power regulators

New Delhi, Dec. 20: The parliamentary standing committee on power has sought to check the independence of the Central Electricity Regulatory Commission and state regulatory panels by making them accountable to Parliament and state legislatures.

To ensure the accountability of the commission towards legislatures, Parliament or state legislatures might require the presence of the chairperson and the members of the competent body when the annual report is submitted by the panel “or at any other time”, suggests the report of the 45-member standing committee set up to examine the Electricity Bill, 2001.

“This is in connection with any investigation, functions performed by the commission under the provisions of this Act and the commission should provide such information and render such assistance to Parliament or state legislatures as the case might be, as felt necessary,” says the report prepared under the chairmanship of Lok Sabha MP Sontosh Mohan Dev.

While suggesting accountability of the power regulator, the committee has suggested that legislatures should not take up individual cases on which the appropriate commission has passed any order and restrict their examinations to matters of principle only.

“This recommendation has all the ingredients to control the functioning of the regulators both in the states and the Centre,” said a senior CERC official.

The first spat between a state regulatory commission and the state government erupted in Bengal when the commission rejected the government’s views on CESC tariff revision. This sparked a case that went all the way up to the Supreme Court. The apex court ordered that there ought not to be cross-subsidies among consumer groups.

The West Bengal Electricity Regulatory Commission then shocked everyone last week by directing a uniform tariff structure for all classes of CESC consumers. The panel’s decision created a precedent that breaks with a 150-year-old tradition where poor and underprivileged sections of the population have received cheap power that has been cross-subsidised by the other consumers, largely industrial units.

To free the accountability of commission from the appellate tribunal with regard to non-judicial functions, the parliamentary standing committee has asked the government to delete the relevant clause in the Electricity Bill, 2001.

The chairperson of the appellate tribunal had been given general powers of superintendence and control over the appropriate commission and might from time to time constitute benches by notification and distribute business among the benches.

“The committee felt that the provision infringes the independence of the regulatory commission and brings them to a subordinate position. Therefore, the committee urges the government to delete Clause 121 of the Electricity Bill, 2001, so far as it extends to superintendence over non-judicial functions of the commissions,” states the report.

To effect speedy reforms in the power sector, the committee said: “The objectives the Bill should concentrate on include promotion of competition, protection of consumer interests and universal obligation to supply electricity.”

It also suggested a bigger role for state governments, as they have to implement the policy in the sector.

The committee in its report has recommended that the National Electricity Policy and plan should contain only the broad parameters, leaving the state governments to work out the minute details, keeping in view ground realities.

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