The Electricity Amendment Bill was introduced in Lok Sabha on August 8, 2022, a vital bill of the Bhartiya Janata Party (BJP)-led central government, which aims to bring reforms in India's power sector. It proposes certain amendments to the Electricity Act of 2003. It covers various concerns like the country's generation, distribution, transmission, and power trading.
Pros of the Bill:
• Non-discriminatory power supply networks:
This Bill allows multiple distributors to operate in the same area of supply. Previously the distributors used to supply electricity through their network. Still, with this Bill, all the distributors have access to an open network where they can distribute through a network with payment of certain charges. This also boosts competition in among the discoms
• Consumer's right to choose:
In the past, only prominent players have the opportunity to choose their distributors. With the introduction of this new Bill, consumers have the right to choose their distributors through a principle like open access, which helps in the protection of the consumer's right to choose. The regulator must decide in 90 days, or the application will be deemed approved, which promotes faster disposal.
• Improved Regulations for both consumers and distributors:
State Electricity Regulatory Commission (India) must fix the minimum and the maximum tariff ceilings. This protects customers from predatory prices of the distributors operating in the same area. These bills also help to promote payment security as electricity will not be scheduled or despatched if adequate payment security is not provided by the discom and gives more power to regulators.
• Promotion of green energy:
The mandatory procurement of a certain percentage of electricity from renewable sources is referred to as a Renewable purchase obligation (RPO). The Central or State Electricity Regulatory Commission (India) specifies the RPOs to the discoms. The RPO should not be below the minimum percentage. If discoms violate, this rule leads to punishment with a penalty between 25 paise and 50 paise per kilowatt of the shortfall. This helps protect the environment and promotes green energy by reducing the harmful effects of thermal pollution.
• Benefits the remote areas:
The positioning of one consumer category subsidizing the consumption of another consumer category is called a Cross-subsidy Balancing Fund. Any surplus with a discoms on account of cross-subsidy will be deposited into the fund. Deficits in the same area or other areas fund these surplus finances.
Cons of the Bill:
• Violates Federal Principal and authority:
First, the legislation should consult the state government before introducing the Bill. The authority is in the hands of the central electricity regulatory commission. Still, it should be in the state electricity regulatory commission's hands as they are aware of the field-level conditions in a state than its primary counterpart. Both the state and central government should be given authority to make laws.
• Privatization:
With the scope of private companies entering the field, there is a fair chance of privatization of profits and the nationalization of losses. Like the telecom industry, they may also create a monopoly, where private and smaller companies will destroy the public sector. So private companies should be regulated appropriately.
• Farmer's opposition:
With the introduction of this new Bill, there is strong opposition from farmers who fear that the free power supply will be affected, which is why the Bill is still controversial. One of the main concerns is that the Bill will make electricity unaffordable for ordinary power consumers and farmers by ending all subsidies.
Conclusion:
The Electricity Amendment Bill of 2022 will bring several reforms to the power sector. This Bill helps to achieve India’s dream of providing 24*7 electricity and achieving sustainable development goals. But proper attention should be paid to concerns related to the bill.
With the significant changes and the issues that this Bill brings to the power sector, it is currently under the Parliamentary Standing Committee of Energy for further discussion.
Author Details:
Name: Harshitha
Batch: 2022-24
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