The Electricity (Amendment) Bill, 2014 was
introduced today in the Lok Sabha by the Minister of State (I/c) for Power,
Coal and New& Renewable Energy Shri. Piyush Goyal. The amendments will usher in much needed further reforms in the
power sector. It will also promote competition, efficiency in operations and
improvement in quality of supply of electricity in the country resulting in
capacity addition and ultimate benefit to the consumers.
Salient features of the
proposed amendments
The Electricity
Act, 2003 was enacted to amalgamate and modernize the earlier Electricity Laws,
namely, the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948
and the Electricity Regulatory Commissions Act, 1998. The Act was reviewed and
amended twice, in the year 2004 and 2007, to give effect to certain changes
considered necessary.
Based on the
experience gained over the years, it was felt to review the provisions further
to bring efficiency and competition in the distribution sector, strengthening
grid security and safety, promotion of renewable energy, rationalization of
tariff and strengthening and performance oversight of Regulatory Commissions
etc.
Certain legislative
changes were suggested by the Working Group on power for the formulation of 12th
Five Year Plan which were further examined under a Committee constituted under
Chairperson, CEA. Based on the recommendations of the said Committee, the
proposed amendments were uploaded on the website of Ministry of Power in the
month of October, 2013. Thereafter, consultations were held with various
stakeholders including those from Central Ministries, State Governments,
Generation, Transmission, Distribution utilities, Regulatory Commissions,
Private Developers, traders, industry associations, consumer groups, power
exchanges and individuals etc., in meetings taken in the Ministry.
Based on
exhaustive consultations, certain amendments to the Electricity Act, 2003 have
been proposed broadly covering the following areas:-
A. Enhancing Grid safety and security: In order to strengthen and enhance Grid safety and security,
specific measures regarding maintenance of spinning reserves along with strong
and effective deterrence in the form of enhanced penalties for violations of
the directions given by the State and Regional Load Despatch Centres etc., have
been envisaged.
B. Separation of Carriage & Content in the Distribution sector: To achieve the objectives of efficiency and for giving choice
to consumers through competition in different segments of
electricity market, concept of multiple supply licensees is proposed by
segregating the carriage from content in the distribution sector and
determination of tariff based on market principles, while continuing with the
carriage (distribution network) as a regulated activity. To protect the
interest of consumers, the tariff for retail sale of electricity is proposed to
be capped through the Regulator and one of the supply licensees is proposed to
be a Government controlled company. Further, the existing distribution licensees
are proposed to continue till the expiry of their term as specified in their
licence.
C. Promotion
of Renewal Energy: In order to accelerate the
development of Renewable Energy sources, a number of measures including the
provision for a separate National Renewable Energy Policy, development of
renewable energy industry, Renewable Generation Obligation on coal and lignite
based thermal power plants, specific exemptions to Renewal Energy sources from
open access surcharge, separate penal provisions for non-compliance of Renewal
Purchase Obligation etc., have been envisaged under the Renewable Generation
Obligation for coal and lignite based thermal power plants.
D. Tariff
Rationalization: To rationalize the tariff structure on sound financial principles for the
viability of the distribution sector and recovery of
revenue requirement of licensees without any gap, the provisions of Tariff
Policy are proposed to be made mandatory for the determination of tariff.
Further, the bill envisages timely filing of tariff petitions by utilities,
disposal of the same by the Appropriate Commission within a specified time
period and powers to Appropriate Commissions for initiating suo-motu
proceedings for determination of tariff in case the Utility/Generating Companies
do not file their petitions in time.
E. Miscellaneous
: Suitable amendments are also proposed for improving
the accountability and transparency in the working of Appropriate Commissions
without affecting their functional autonomy; bringing clarity in regard to appointments, functions and powers of the Chief
Electrical Inspector/ Electrical Inspectors and levying of fees for electrical
inspections; exemption to developer of SEZs, Railways and Metro Rail for
obtaining distribution licence; collection and realization of any dues along
with the electricity dues, etc.
RM/ND