Electricity Amendment Bill to be introduced in Parliament on Monday

The Electricity Amendment Bill, to be introduced in Parliament on Monday, proposes radical changes in the power distribution sector, the weakest link, by enabling competition, strengthening payment security and more muscles to regulatory commissions.

The Bill, cleared by the Union Cabinet last Wednesday, enables competition in retail distribution of power by allowing use of other distribution licensee’s network. Also, if a regulatory commission fails in deciding on grant of distribution licence within specified time, the application will be deemed to have been accepted, the sources said.

The Bill also provides for minimum tariff ceilings to avoid predatory pricing by power distribution companies as well as a maximum price to protect consumers.

The Bill also proposes to the load dispatch centres to stop electricity supply to distribution utilities that do not maintain adequate bank guarantees in favour of power plants with which they are in tie-ups.

The moves seeks to address the recurrent problem of default by distribution companies in payment to generation companies.

The amendment to Electricity Act proposes to address the laxity of state electricity regulatory commissions in fixing adequate tariffs and enabling timely revisions. The Bill provides that the regulators will have to suo-moto initiate tariff proceedings in case distributions companies do not file petitions. Provisions related to removal of members of regulatory commissions in case of willful violation of overlooking the provisions of the Act, have been introduced in the Bill.

It proposes to extend powers of civil court to the regulatory commissions which means they can attach properties and order properties to implement orders.