Electricity Bill moots radical changes in retail distribution

The government is proposing radical changes in the electricity distribution regime, the weakest link in the power sector, by enabling competition, strengthening payment security for producers and ensuring more muscles for regulatory commissions.

The Union cabinet on Wednesday cleared a bill that is expected to be introduced in Parliament next week, people aware of details told ET.

The Electricity (Amendment) Bill 2022 once cleared would enable competition in the retail distribution of power by allowing other suppliers to use the distribution network of the existing supplier.

If a regulatory commission fails to decide on an application for a distribution licence in a specified time, the application will be deemed to have been accepted, they 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 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 supplying power to them.