Centre seeks States’ inputs on Electricity Bill

HYDERABAD: The Union Ministry of Power, in a notification, sought comments from all the State governments on the Electricity (Amendment) Bill, 2020, which is to be tabled in the Parliament soon. The Bill proposes key amendments to the existing Act, including those regarding subsidies and tariff determination.

The State governments have been asked to send their responses in three weeks’ time. It may be mentioned here that Section 65 of the Electricity Act, 2003, mandates the State government to grant subsidy to any consumer or class of consumers. However, there is no corresponding provisions on the treatment of subsidies in the tariff determined by the State commissions. The Bill proposes that the State commissions determine the tariff for retail sale of electricity sans subsidies under Section 65 of the Act.

Further, the Act mandates the regulatory commissions to determine tariff after the receipt of subsidies; there is no provision to fix tariff in accordance with fair prices. However, the tariff determined has not been not cost-reflective and has resulted in the weakening of financial health of the discoms. In addition to under-recovery of the prudent cost, it also hampers the transparency in cost-reflective tariff as mandated under the Act. In view of the same, the Ministry is mulling the expansion and strengthening of the provisions concerning tariff determination by imposing certain restrictions on deferring revenue-recovery. The tariff should reflect the cost of supply of electricity.

Bill calls for changes to tariff determination
The Electricity (Amendment) Bill, 2020, proposes key amendments to the existing Act, including those regarding subsidies and tariff determination. The Bill also proposes that the State commissions determine the tariff for retail sale of electricity sans subsidies