Centre agrees to form standing committees for appointment of power sector regulators

As part of big ticket reforms in the power sector, the government has proposed to fast track appointment of power sector regulators both at central and state levels by forming permanent standing selection committees presided by the chief justice of High Court of the state. The chief justice would oversee and clear all appointments based on merit.

The proposal is expected to remove delays in appointments of power sector regulators. Such delays are disastrous for the functioning of the power sector as the absence of regulators results in power tariff not being revised for years resulting in financial stress for discoms (distribution companies) and the states.

Officials in the power ministry said that to prevent such a situation, it has now been proposed that a standing selection committee be set up in each state exclusively for appointment that would be headed by Chief Justice of High Court while having equal members from both Centre and state. Selection of members and chairperson of State Electricity Regulatory Commission (SERCs) would be done by a panel formed by the state government while selections for Central Electricity Regulatory Commission (CERC) would continue to be carried out by the Centre.

Power and Renewable Energy Minister R.K. Singh had earlier proposed single Standing selection committee presided by sitting Supreme Court judge and members from both centre and states to do appointment for both SERCs and CERC. This was also proposed in the Draft Electricity (Amendment) Bill, 2020. But with several states not being comfortable with the idea of having a central structure for such appointments, Singh has agreed to include provision for a standing committee in each state for appointments in the draft bill before it is placed for cabinet approval.

The reform initiative is being taken as in the current structure for every appointment of regulators at central and state level, a fresh committee has to be set up and this took time. In some cases the time taken for appointment was up to two years leading to disruption of work of the regulatory commission.

Regulatory commissions are the fulcrum around which the Power sector revolves. Delays were deleterious for the various stakeholders such as consumers, discoms, and generators etc.

Last week, Singh had said that a canard is being spread that the government is shifting the power of appointment to SERCs from state to central government through amendment in the Electricity Act. This, he had said, was false as the Centre respects the authority of states and just proposes to fast track appointments without invading into state's jurisdiction.

The Electricity Amendment Bill is currently being vetted by the law ministry. The power ministry wants to introduce it in the coming monsoon session of Parliament..