Draft Electricity (Amendment) Bill, 2020

May 04, 2020 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Ministry of Power on April 17, 2020 issues the Draft Electricity (Amendment) Bill, 2020 to further amend the Electricity Act, 2003. The draft discusses about the privatisation of distribution companies, cost-reflective electricity tariff without subsidy, strengthening of payment security mechanism and Electricity Contract Enforcement Authority to bring in investment and ease of doing business in the power sector.

The key amendments are as follows:- 

1. The draft proposes to privatise discoms by way of sub-licensing and franchisee models. The sub-licensing will allow states to choose a private company for the distribution of electricity supply of a particular area to help it bring down losses of both electricity and finances. The bill proposes to restrict deferment of revenue recovery and reduction in cross-subsidy to bring in a cost-reflective tariff, simplified tariff.

2. The draft proposes to bring the Electricity Contract Enforcement Authority (ECEA) to deal with the issues of non-performance of contracts leading to uncertainty.

3. For the renewable sector, the draft proposes to bring National Renewable Energy Policy and may bring in a minimum percentage of the purchase for the states from renewable sources.

4. The bill enables state as well as central power regulators to specify transmission charges under open access. Earlier, both functions were with the central commission.

5. The draft provides additional role of National Load Despatch centre that include scheduling and dispatch of power across the country in accordance with contract. 

6. The Bill also provides that the Electricity Act would be applicable to the entire country, including the Union Territories of Jammu and Kashmir and Ladakh.

7. The draft introduces “Cross border trade of electricity” means transactions involving import or export of electricity between India and any other country and includes transactions related to passage of electricity through our country in transit between two other countries.

8. The Bill increases the penalties for non-compliance with the direction or order of an Appropriate Commission, under Section 142 and 146 of the Electricity Act. 

The Mistry invites comments and suggestions from the stakeholders on the draft Amendment Bill within 21 (twenty-one) days from the date of release of the Amendment Bill i.e. May 08, 2020. The comments or suggestions, if any, may also be forwarded to [email protected] and [email protected]

[No. 42/6/2011-R&R(VoI-VIII)]


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