The government on August 8 introduced the Electricity (Amendment) Bill, 2022 in the Lok Sabha amid protests by opposition parties.
Power minister RK Singh said the bill would be sent to a standing committee for detailed discussion. Moneycontrol has exclusively reported on August 5 that the government is likely to introduce the much-awaited Electricity (Amendment) Bill 2022, which aims to streamline the payment framework, empower regulators and encourage competition in the sector, this week.
The opposition parties protested against the Bill, citing that it will allow several power companies to distribute powers in any license area. They also said that it was against the interest of farmers.
Responding to the opposition, Minister Singh said that the bill will be discussed in detail in the standing committee. He also said that the bill makes no provision to stop electricity subsidies for farmers.
The Bill proposes changes to allow operation of more than one power distributor in a supply area, which will give consumers the option to choose electricity suppliers and encourage competition. The minister said that this was first proposed in the 2003 bill.
The proposed amendments are to the Electricity Act, 2003 which was enacted to consolidate the laws relating to the generation, transmission, distribution, trading, and use of electricity and generally for taking measures conducive to the development of electricity.
“The amendments to the Act are also necessary in view of the importance of green energy for our environment in the context of global climate change concerns and our international commitments to increase the share of renewable energy. Further, it has become necessary to strengthen the regulatory mechanism, an adjudicatory mechanism in the Act and to bring administrative reforms through improved corporate governance of distribution licensees," the government said.
The Bill proposes that power distribution licensees will be allowed to use the networks of other licensees. This will boost competition as it will help new distributors to overcome infrastructure hurdles and also improve the efficiency of the power distribution network.
The government also hopes to insert a new section that will enable the management of power purchase and cross-subsidy in case of multiple distribution licensees in the same area of supply.
The Bill also proposes to enable regulators to fix a minimum tariff ceiling to discourage unhealthy pricing wars among distributors and a maximum ceiling to ensure consumers are protected against price increase shock.
Among other amendments, the government is also making changes to strengthen the functioning of the National Load Despatch Centre for ensuring the safety and security of the grid and for the economic and efficient operation of the power system in the country.
Meanwhile, All India Power Engineers Federation (AIPEF) said that lakhs of electricity employees and engineers from across the country have joined hands to observe a protest demonstration against the Electricity (Amendment) Bill 2022. The association is against the privatization of power distribution and believes that the bill will negatively impact the farmers and also lead to a rise in power bills for households. The association said in a statement that power sector employees and engineers exercised their democratic right by boycotting their official duties and holding gate meetings in all the union territories and states like Jammu and Kashmir, Haryana, Uttar Pradesh, Maharashtra, Gujarat, Assam, Telangana, Tamil Nadu, Andhra Pradesh, Kerala, West Bengal, Karnataka, Chhattisgarh, Ladakh, among others.