by Anurag Yadav
This article tells us about the recent amendment made to electricity act 2003after last amendment made to this act in 2013 and the government is planning to made amendment in this bill that will be known as Electricity (Amendment) Act 2021. It tells us that how this reform can be considered as one of the greatest reform in India and how it does affect the lives of the people and what are the key features of it that will introduce by this amendment.
The Electricity Amendment Bill 2021 is set to be tabled in parliament in monsoon session of Parliament which concludes on August 13. The Electricity (Amendment) Bill 2021, which enables power consumer to choose from multiple service providers as in the case of telecom services. Participating in the virtual Bloomberg NEF (BNEF) Summit, Power and Renewable Energy Minister R K Singh said the bill seeks to delicense distribution of electricity. It is being considered as a panacea for the power sector by many.
The bill seeks to delicense power distribution to reduce entry barriers for private players for creating competition in the segment, which would ultimately enable consumers to choose from multiple service providers. The bill also prescribes the rights and duties of electricity consumers. The minister further said the penalty for non-compliance of renewable purchase obligation (RPO) would be increased. Under the RPO, discoms and other large consumers are required to buy certain proportion of renewable energy prescribed by their respective regulators. They can also buy renewable energy certificates to meet the RPO obligation. For the renewables space, he said the government is in the process of introducing ‘green tariff’. Green tariff will help the discoms supply electricity generated from clean energy sources like solar or wind at a cheaper rate as compared to power from conventional fuels like coal.[i]
According to the Lok Sabha bulletin, the bill is in the tentative list of government’s legislative and financial business that is expected to be taken up during the sixth session of the 17th Lok Sabha. Speaking at a conference organized by lobby group Confederation of Indian Industry (CII), power minister Raj Kumar Singh on Thursday said all stakeholders, including states, industry and the ministries, have been consulted over the proposed amendments.[ii]
FEATURES OF ELECTRICITY AMENDMENT BILL, 2021
- Delicensing of power distribution: The bill proposed to abolition of power “Distribution license” which means allowing several distributors in the same area and giving choices to consumers to chose the power supplier at their own discretion. It also remove the barriers for the private companies now they also can enter into market as power supply provider or in other words that all areas are also opened to private distribution companies.
- Mandatory appointment of a member from law background in the Electricity Regulatory Commission in Compliance to the Hon’ble Supreme Court Judgment dated 12th April 2018.[iii]
- Strengthening of Appellate Tribunal for Electricity: In view of the large pendency of cases and consequent delay in deciding the appeals, it is proposed to increase the number for appellate tribunal for Electricity. So from the present strength of two benches it would increase to four benches.[iv]
- Responsibility of RPO shifted to central government: Keeping in view the national climate change goals, the responsibility of fixing renewable power obligation (RPO) is shifted from state commissions to the central government. The RPO is a mechanism by which the obligated entities (mainly power distribution utilities or discoms are obliged to purchase a certain percentage of electricity from renewable energy sources, as a percentage of the total consumption of electricity and non compliance to it will impose huge amount of penalty i.e. Rs. 1 crore.[v]
ISSUES RESPONSIBLE FOR AMENDMENT;
- Problems faced by Discoms: It is one the major issue that is faced by the Distribution companies as despite the last 25 years of reforms in the power sector, Discoms are hardly met with their expenditure, unable to pay the power generators, and unable to repay the loan taken from the Banks and Financial institutions due to their poor financial health that is due to the delay in payment from the consumer side and power theft by the people. Discoms able to cover its 75% to 80% of their purchase cost therefore they always run in loss.
- Poor availability of electricity and quality related issue: It is one of the major concerns that availability of power is very bad and bad quality except some major cities. Power is not available for hours at small towns and rural areas after some little natural phenomena like drizzling and thunderstorm etc. and if there is any defect in the power system then the supply provider takes many days to repair the power system.
- Monopoly of State or Government companies: Monopoly of power supply’s companies in hand of government is also a major issue because power is in hand of single person or there a single or limited number of power supply provider in area due to which people have limited choices and they can’t change their power supplier easily and had to tolerate the monopoly of power supplier.
IMPACT OF ELECTRICITY AMENDMENT BILL, 2021
The impacts of the bill are as follows:
- Improvement in the availability and quality of Power Supply: After the implementation of the proposed bill, 2021 it improve the availability of power supply and also the quality of power supply that means when there is a large number of power suppliers in a given area like telecom companies then they will improve the condition and quality of power supply which is necessary for their long term survival and profits just like the telecom companies.
- Monopoly come to an end: When there is no barrier for private companies after delicensing then monopoly will not be there and there will be a multiple service provider start emerging in market that leads to competition in the market among the service providers which will force the supply providers to provide electricity uninterrupted and at better price or affordable price.
- Prepaid Smart meter: It is very effective solution to stop power theft and delay in payment from consumer that means the consumer should recharge their meter in advance and the amount will deduct from meter balance as per the consumption made by the consumer, business etc. if they fail to do so within stipulated time then the connection will cut off and stop the supply of light.
- Better implementation of law because of the mandatory appointment of a member from law background in the Electricity Regulatory Commission in Compliance to the Hon’ble Supreme Court Judgment dated 12th April 2018 and quicken in decision making by Strengthening of Appellate Tribunal for Electricity.
- Right of Electricity also becomes a right of people as they are able to take compensation if the suppliers fail to discharge their duty.
The brief discussion on Electricity Amendment, 2021 help us to understand the basic approach of it’s toward the nation that how does this bill affect the lives of the people and bring revolution in the field of Electricity. This bill can be considered as one of the greatest reform in India. It is really a wonderful amendment through which electricity can be available at affordable prices and also improve the quality and availability of Electricity due to competition among the service provider and due to the end of monopoly. Our grievances will be redress at very rapid pace due to the competition and it is only possible when there is no barrier for Private companies or players and because of the entry of private players government owned also started functioning efficiently and effectively. It is also a very good step by government as by making compulsory appointment of a member from law background for better implementation of law by and quicken decision making by increasing the number of member from 2 to 4 in Appellate tribunal for electricity. There is nothing in this world flawless so the bill is but overall the proposed bill is one of the greatest reforms in field of electricity in India and brings evolution in the world.
[i] Available at: https://economictimes.indiatimes.com/industry/energy/power/electricity-amendment-bill-likely-to-be-introduced-in-monsoon-session-power-minister-r-k-singh/articleshow/83956193.cms (Last visited August 06 2021)
[ii] Available at: https://www.livemint.com/industry/energy/power-users-may-soon-get-to-choose-supplier-11626375847269.html (Last visited August 06 2021)
[iii] E-Pdf Available at: https://tnebeaengineers.in/wp-content/uploads/2021/02/Board_Proposed-amendment-to-Elelctricity-Act-2003-522021.pdf (Last visited August 06 2021)
[v] E-Pdf Available at: https://blog.forumias.com/electricity-amendment-bill-2021-explained-pointwise/ (Last visited
August 06 2021)
[vi] Picture: the sentinal assam
4 thoughts on “ELECTRICITY BILL AMMENDMENT, 2021: AN ANALYSIS”
Amazing piece of writing brother
Great analysis, keep going.
Keep it up brother
Amazing work. Well explained.