Supply of quality power at affordable
prices is essential for sustained growth of the economy of the
country. For further development of the power sector, Ministry of
Power has issued draft proposal for amendment of Electricity Act, 2003
in the form of draft Electricity Act (Amendment) Bill, 2020 for comments
/ suggestions from Stakeholders on 17th April 2020. Comments / observations / suggestions have been invited from stakeholders within twenty one days.
Major amendments proposed in the Electricity Act are as follows.
Viability of Electricity Distribution companies (Discoms)
- Cost reflective Tariff: To
eliminate the tendency of some Commissions to provide for regulatory
assets, it is being provided that the Commissions shall determine
tariffs that are reflective of cost so as to enable Discoms to recover
their costs.
- Direct Benefit Transfer: It is
proposed that tariff be determined by Commissions without taking into
account the subsidy, which will be given directly by the government to
the consumers.
Sanctity of Contracts
- Establishment of Electricity Contract Enforcement Authority:
A Central Enforcement Authority headed by a retired Judge of the High
Court is proposed to be set-up with powers of the Civil Court to enforce
performance of contracts related to purchase or sale or transmission of
power between a generating, distribution or transmission companies.
- Establishment of adequate Payment Security Mechanism for scheduling of electricity –
It is proposed to empower Load Dispatch Centres to oversee the
establishment of adequate payment security mechanism before scheduling
dispatch of electricity, as per contracts.
Strengthening the regulatory regime
- Strengthening of the Appellate Tribunal (APTEL): It
is proposed to increase the strength of APTEL to seven apart from the
Chairperson so that multiple benches can be set-up to facilitate quick
disposal of cases. It is also proposed to further empower the APTEL to
enforce its decisions.
- Doing away with multiple Selection Committees: It
is proposed to have one Selection Committee for selection of
Chairpersons and Members of the Central and State Commissions and
uniform qualifications for appointments of Chairperson and Members of
Central and State Electricity Regulatory Commissions.
- Penalties: In
order to ensure compliance of the provisions of the Electricity Act and
orders of the Commission, section 142 and section 146 of the
Electricity Act are proposed to be amended to provide for higher
penalties.
Renewable and Hydro Energy
- National Renewable Energy Policy: It
is proposed to provide for a policy document for the development and
promotion of generation of electricity from renewable sources of energy.
- It
is also proposed that a minimum percentage of purchase of electricity
from hydro sources of energy is to be specified by the Commissions.
- Penalties:
It is being further proposed to levy penalties for non-fulfilment of
obligation to buy electricity from renewable and/or hydro sources of
energy.
Miscellaneous
- Cross border trade in Electricity: Provisions have been added to facilitate and develop trade in electricity with other countries.
- FranchiseesandDistribution sub licensees: Many
States Distribution Companies have been assigning the task of
distribution of electricity in a particular area or city to Franchisees /
Sub-Distribution Licensees. However, there was a lack of clarity
regarding the legal provisions related to this. It is proposed to
provide that the Distribution Companies, if they so desire, may engage
Franchisees or Sub-Distribution Licensees to distribute electricity on
its behalf in a particular area within its area of supply, however, it
will be the DISCOM which shall be the licensee, and therefore,
ultimately responsible for ensuring quality distribution of electricity
in its area of supply.