Govt, power regulator face-off over autonomy

Anil Sasi :
New Delhi, Wed Mar 14 2012, 00:50 hrs
In a move that would set the clock back on reforms in the electricity sector, the Power Ministry is planning to set up government-appointed panels to carry out performance appraisals of regulators at both the Centre and states, something that could strike at the very independence of the regulatory establishment in the sector.
The Power Ministry is in the process of preparing the Cabinet note with these amendments to the Electricity Act 2003. The amendments aim at introducing a new provision entrusting the performance review of the Central Electricity Regulatory Commission (CERC) to a panel headed by the Member (Energy), Plan Panel and State Commissions to panels headed by the Chief Secretaries of the respective state. The government’s justification for the move is that some commissions “have not been performing their statutory duties”, an argument that those in the regulatory circles and independent analysts are unwilling to buy. “Most power regulators are under fire precisely on the count of not being independent enough and towing the government line while discharging their statutory duties. The provisions in the amendments only serve to buttress this view,” an analyst tracking the sector said.

When contacted, CERC Chairman Pramod Deo said the proposal could end up making regulatory institutions a subordinate body. “As things stands, we are accountable to Parliament... This (proposed amendments) has not been discussed with us. Several questions remain unanswered, including how do you go about doing a performance review of individual members. We plan to take this up at a meeting of the Forum of Regulators and then decide the course of action... Clearly, nobody likes a fully autonomous body.”

In the list of amendments, Section 89 (6) of the Act, a new provision dealing with the performance review of regulatory commissions is proposed to be inserted to the effect that “performance of the Regulatory Commissions shall be reviewed annually by a multi-disciplinary body on the basis of performance evaluation matrix and report to the appropriate government for necessary action.” Under the proposal, the government will devise the performance evaluation matrix and constitute a monitoring committee for the same.

Most distribution utilities, being state-owned and under specific instructions from the governments, tend to avoid filing their tariff petitions in time or in proper form before the designated state power regulators. In many states, allegations have been levelled against regulators towing the government line and subverting the process of tariff hikes or blocking reform measures such as open access.

Performance check

Body to review the CERC: Member (Energy), Planning Commission as the Chairperson, Member (Technical) Appellate Tribunal for Electricity; Union Secretary Power and three experts to be nominated by the Centre

Body to review State

Commissions: The Chief Secretary as Chairperson; Central Electricity Authority chief; Power Secretary or his representative; Secretary – Forum of regulators and three outside experts