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The draft Electricity (amendment) Bill, 2021

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Recently, the government has removed several sections from the draft Electricity (Amendment) Bill, 2021.

The draft bill seeks to amend the Electricity Act, 2003 to address the issues undermining commercial and investment activities in the power sector.

It may be noted that the combined revenue deficit of all the Power Distribution Companies (DISCOMs) had reached Rs 5 lakh crore.

Key provisions included in the draft of the bill

  • De-licensing power distribution system to allow private sector agents to enter into contracts and compete with state-owned power discoms.
  • It empowers the central government to formulate a national renewable energy policy in consultation with the state governments.
  • Provision of a Universal Service Obligation Fund to meet any shortfall in cross-subsidy.
  • The bill has shifted the responsibility of ensuring renewable purchase obligation (RPO) from state commissions to the central government.

However, several states have pointed out concerns about certain provisions of the draft Bill, such as:

  • Entry of private agents can lead to ‘cherry-picking’. Private agents will provide electricity only to commercial and industrial consumers and not to residential and agricultural consumers.
  • Stringent punishment for failure to fulfill RPOs.
  • The Regional Load Despatch Centre and the State Load Dispatch Center need to ensure compliance with the directions of the National Load Despatch Center.
  • Now, the government has decided to remove several clauses of the draft Bill after objections raised by various stakeholders.

Source – PIB

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