Message-ID: <4408795.1075848098515.JavaMail.evans@thyme> Date: Sun, 10 Sep 2000 05:01:00 -0700 (PDT) From: jane.wilson@enron.com To: david.pumphrey@hq.doe.gov Subject: Electricity Bill Developments Cc: thomas.cutler@hq.doe.gov, sanjay.bhatnagar@enron.com, wade.cline@enron.com, ashok.mehta@enron.com, stephen.burns@enron.com, steven.kean@enron.com, neil.mcgregor@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: thomas.cutler@hq.doe.gov, sanjay.bhatnagar@enron.com, wade.cline@enron.com, ashok.mehta@enron.com, stephen.burns@enron.com, steven.kean@enron.com, neil.mcgregor@enron.com X-From: Jane Wilson X-To: David.Pumphrey@hq.doe.gov X-cc: Thomas.Cutler@hq.doe.gov, Sanjay Bhatnagar, Wade Cline, Ashok Mehta, Stephen D Burns, Joe Hillings@ENRON, Steven J Kean, Mark Schroeder@ECT, Neil McGregor X-bcc: X-Folder: \Steven_Kean_June2001_4\Notes Folders\Discussion threads X-Origin: KEAN-S X-FileName: skean.nsf Dear David, I'm so glad you asked for an update! We have indeed had an interesting development regarding the Electricity Bill since your visit. You will recall that in AMCHAM's briefing, it was positively noted that the drafting process of the Electricity Bill had been transparent and that a draft that would provide a blueprint for the restructuring of the electricity sector to move toward competitive markets was attained. Noone was 100 percent satisfied (probably the mark of a good, passable bill) but many agreed to the draft and felt, while not perfect, it would achieve the desired reform. We have learned that there are actually two drafts of the Electricity Bill sponsored by the Ministry of Power. The first has been developed by NCAER (NCAER draft) in a very transparent process with seven iterations and comments from 190 parties. NCAER was hired as a consultant for this purpose by the Ministry of Power. At the time of Draft III, a second draft (MoP draft) was developed in the Ministry which subsequently incorporated some but not all of the NCAER draft provisions negotiated in the transparent process. It was the MoP draft that was sent to the Group of Ministers and has been worked on by the Ministry of Law. The draft, however, was never introduced in Parliament. The industry discovered the existence of the second MoP draft immediately prior to Minister Kumaramangalam's hospitalization and lobbied him and Secretary Basu heavily to introduce the NCAER draft in Parliament or, at a minimum, allow a transparent commenting process on the MoP draft. Several parties in the industry have now been given the MoP draft, and Secretary Basu has said he would entertain comments. (How widely it has been distributed is unknown.) In addition, the death of the Minister, who was a staunch advocate of reform, and the lack of a named successor, has now left things somewhat uncertain. The issues as they now stand are: The existence of two separate Ministry-sponsored drafts, only one of which was subjected to a wide sector review process. The need to use the product of a transparent, commenting process once it has been formulated. The fact that the fine-tuned balance of interests and clear blueprint for a transition to competitive markets achieved by the NCAER draft has been lost in the MoP draft. For example, the clear deregulation of price provisions in the tariff section have been removed so that there is, in the MoP draft, full regulation of price by the state commissions; however, in the state commission section, there is a provision that allows the State Commission to permit access to a consumer class and only determine the wheeling charge (rather than the wheeling and supply price) for that class when it has so determined. Thus, there is an apparent conflict within the statute regarding the regulation of commodity priceand uncertainty regarding access to end users. (There are many such examples.) Action Item: Either support the NCAER draft and send it to the Ministry of Law for legal fine tuning (Basu mentioned that the "form" of the NCAER draft was not right), or repeat the iterative, transparent commenting process with regard to the MoP draft. hWe recommend supporting the NCAER draft because it reflects a balance of the multiple sector interests. It is the first such document produced through an open process in India and was a process sponsored by the Ministry -- for that reason alone, the Ministry should promote and support the NCAER version. Any assistance you can render on this issue will be greatly appreciated by many parties in the sector. Let us know how it goes. Sincerely, Jane Wilson ---------------------- Forwarded by Jane Wilson/ENRON_DEVELOPMENT on 09/09/2000 07:51 PM --------------------------- "Pumphrey, David" on 09/09/2000 03:36:09 AM To: "'sanjay.bhatnagar@enron.com'" , "'jane.wilson@enron.com'" cc: "Cutler, Thomas" Subject: Electricity Bill Developments Dear Sanjay and Jane, I wanted to again thank you for the briefings you provided during my recent visit to India. Your analysis of developments in the electricity sector were very helpful. As you know we are getting ready for the visit of the Prime Minister next week. We have several energy events related to the visit and hope to be able to complete some of the "homework" that you assigned. It would be particularly helpful if you could provide any updates on the status of the Electricity bill. I understand that the Council of Ministers had approved it but I don't know if progress has been made in the Parliament. Also there was a report that some aspects of the bill had been changed in the approval process. Any updates would be useful for us in preparing for our meetings with Secretary Basu and the Prime Minister. Thanks for any help you can provide. David Pumphrey Department of Energy