The Electricity (Amendment) Bill, 2014 was introduced today
in the Lok Sabha by the Minister of State (I/c) for Power, Coal and New&
Renewable Energy Shri. Piyush Goyal. The amendments will usher in much
needed further reforms in the power sector. It will also promote competition,
efficiency in operations and improvement in quality of supply of electricity in
the country resulting in capacity addition and ultimate benefit to the
consumers.
The
Electricity Act, 2003 was enacted to amalgamate and modernize the earlier
Electricity Laws, namely, the Indian Electricity Act, 1910, the Electricity
(Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998.
The Act was reviewed and amended twice, in the year 2004 and 2007, to give
effect to certain changes considered necessary.
Based
on the experience gained over the years, it was felt to review the provisions
further to bring efficiency and competition in the distribution sector,
strengthening grid security and safety, promotion of renewable energy,
rationalization of tariff and strengthening and performance oversight of
Regulatory Commissions etc.
Certain legislative changes were suggested by the Working Group on power for
the formulation of 12thFive Year Plan which were further examined
under a Committee constituted under Chairperson, CEA. Based on the
recommendations of the said Committee, the proposed amendments were uploaded on
the website of Ministry of Power in the month of October, 2013. Thereafter,
consultations were held with various stakeholders including those from Central
Ministries, State Governments, Generation, Transmission, Distribution
utilities, Regulatory Commissions, Private Developers, traders, industry
associations, consumer groups, power exchanges and individuals etc., in
meetings taken in the Ministry.
Based
on exhaustive consultations, certain amendments to the Electricity Act, 2003
have been proposed broadly covering the following areas:-
A. Enhancing Grid safety and security: In order to strengthen and enhance Grid safety and
security, specific measures regarding maintenance of spinning reserves along
with strong and effective deterrence in the form of enhanced penalties for
violations of the directions given by the State and Regional Load Despatch
Centres etc., have been envisaged.
B. Separation of Carriage & Content in the Distribution
sector: To achieve the objectives of
efficiency and for giving choice to consumers through competition in different
segments of electricity market, concept of multiple supply licensees is
proposed by segregating the carriage from content in the distribution sector
and determination of tariff based on market principles, while continuing with
the carriage (distribution network) as a regulated activity. To protect the
interest of consumers, the tariff for retail sale of electricity is proposed to
be capped through the Regulator and one of the supply licensees is proposed to
be a Government controlled company. Further, the existing distribution
licensees are proposed to continue till the expiry of their term as specified
in their licence.
C. Promotion of Renewal Energy: In order to accelerate the development of Renewable
Energy sources, a number of measures including the provision for a separate
National Renewable Energy Policy, development of renewable energy industry,
Renewable Generation Obligation on coal and lignite based thermal power plants,
specific exemptions to Renewal Energy sources from open access surcharge,
separate penal provisions for non-compliance of Renewal Purchase Obligation
etc., have been envisaged under the Renewable Generation Obligation for
coal and lignite based thermal power plants.
D. Tariff Rationalization:
To rationalize the tariff structure on sound financial principles for the
viability of the distribution sector and recovery of revenue requirement
of licensees without any gap, the provisions of Tariff Policy are proposed to
be made mandatory for the determination of tariff. Further, the bill envisages
timely filing of tariff petitions by utilities, disposal of the same by the
Appropriate Commission within a specified time period and powers to Appropriate
Commissions for initiating suo-motu proceedings for determination of tariff in
case the Utility/Generating Companies do not file their petitions in time.
E. Miscellaneous :
Suitable amendments are also proposed for improving the
accountability and transparency in the working of Appropriate Commissions
without affecting their functional autonomy; bringing clarity in regard
to appointments, functions and powers of the Chief
Electrical Inspector/ Electrical Inspectors and levying of fees for electrical
inspections; exemption to developer of SEZs, Railways and Metro Rail for
obtaining distribution licence; collection and realization of any dues along
with the electricity dues, etc.
Courtesy: pib.nic.in
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