Amendments to Electricity Act could be tabled in monsoon session: R K Singh

Government seeks another round of power distribution reform and boost renewable energy

The government will table amendments to the Electricity Act 2003 in the upcoming monsoon session of Parliament, said R K Singh, minister for power, new and renewable energy, on Thursday.

“The amendment will have 2-3 added provisions; one of them is increasing the penalties on the renewable purchase obligations. The demand has increased, and the market is not an issue currently. The market is going to become more vibrant because of the increase in size of our product,” Singh said at the India Energy Transition Summit 2022 organised by FICCI.

India will sell renewable energy with storage at Rs 6.5-7 and there will be continuous demand even at that rate. “The government will bring down the price of storage and further add storage. By and large, our future bids will transform to round-the-clock energy,” Singh said.

The government, in April 2020, unveiled the first set of draft amendments and asked states to submit their comments. Major amendments included ending subsidised power rates and replacing it with ‘direct benefit transfer’ (DBT) of subsidy, reduction of cross-subsidy burden on industrial consumers, new contract enforcement authority and new selection process for existing state electricity regulatory commissions (SERCs).

The government again amended the Act in February 2021 to abolish power “distribution licence”, allowing any company to supply electricity in an area after regulatory approval. The amendment ended the monopoly of state-owned power distribution companies (discoms) and offered space to private companies.

The push to privatise the discoms has become a bone of contention between the Centre and states. The challenge comes at a time when the BJP-ruled central government has unveiled a second power distribution reform amounting to Rs 3 trillion. The scheme aims at improving the finances and operations of state-owned discoms, most of which are in a dire state.