Bill to amend Electricity Act introduced in Lok Sabha

The government sent the Bill to the standing committee for detailed discussion amid protests by Opposition parties

The Centre on Monday introduced the Electricity (Amendment) Bill, 2022 in the Lok Sabha which proposes radical changes in the power sector including streamlining the payment framework, strengthening regulator and encouraging competition in the sector by giving choice to consumers to select companies to get electricity on the line of telecom.

The government has sent the Bill to the standing committee for detailed discussion amid protests by Opposition parties, who claimed that the proposed amendment would take away certain rights of the state government.

The Bill also received opposition from Opposition ruled state governments, who claimed that the proposed law will pave the way for large scale private sector entry and cut down subsidies.

All India Power Engineers Federation (AIPEF) claimed a large number of power sector employees and engineers across the country stopped work and held demonstrations on Monday in protest against the Bill.

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Defending the Bill, Union Power Minister R K Singh claimed that the Opposition members were indulging in "false propaganda" against the Bill.

"The farmers will continue to get free power. There will be no roll back of subsidy," Minister Singh said amid sloganeering by Opposition members, who then staged a walkout from Lok Sabha.

“The Bill is pro-people and for the growth of our economy. There is no change in subsidy provisions. The state can give any amount of subsidy, even free power to any category of consumers,” Singh tweeted. The changes in the Act will pave the way for more private sector investment in the power sector, he said.

The Bill which was first mooted in 2003, is aimed at allowing privatisation of electricity on the lines of telecom sector. If the Bill is passed in both the houses of Parliament, customers will have the option to choose the supplier of electricity just like one can choose for telephone, mobile and internet services. The Bill seeks to amend section 42 of the Electricity Act to facilitate non-discriminatory open access to the distribution network of a distribution licencee.

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It also seeks to amend section 14 of the Act to facilitate usage of distribution networks by all licensees under provisions of non-discriminatory open access with the objective of enabling competition, enhancing efficiency of distribution licensees for improving services and ensuring sustainability of the power sector.

The Bill enables regulators to fix a minimum tariff ceiling to discourage unhealthy pricing wars among distributors and a maximum ceiling to ensure consumers are protected, said Singh.

It will also have a provision to strengthen functions of the electricity regulatory commissions including suo-moto initiative tariff proceedings if discoms failed to file tariff revision petitions.

The Bill also proposes to empower the load dispatch centres to stop electricity supply to distribution utilities if failed to maintain adequate bank guarantees in favour of power plants with which they are in tie-ups. This will end payment default to electricity generating companies by distribution companies, said an official in the Ministry of Power.