'Electricity Act needs changes; rules implementation important'

The Electricity Act, the governing framework for the power sector, needs changes but it is more important that entities comply and implement the relevant regulations, a senior government official said today.

 

Amid various problems faced by the sector, the Power Ministry is discussing possible amendments to the Electricity Act that came into existence in 2003 with various stakeholders.

 

"It is not that we need a lot of amendments (to the Electricity Act). It is governance, accountability and implementation issues which are very important going forward... We need to make some changes," Joint Secretary at the Power Ministry, Jyoti Arora, said.

 

She was speaking at a conference on '10 Years of The Electricity Act, 2003: A Critical Review' organised by industry body Ficci here.

 

The Act has brought together laws relating to generation, transmission, distribution and trading of electricity, among others.

 

A high level advisory panel, headed by Power Minister Jyotiraditya Scindia, is also looking into possible amendments needed in the Electricity Act.

 

The committee has already made various suggestions, including mechanism to pass through higher fuel costs to consumers.

 

One of the suggestions made by the committee is to have a formula which would ensure that variation in fuel and power purchase cost is recovered by the generators.

 

A change in the Act in this regard would help in clarifying the need for surcharge formula which at minimum covers various costs, including mix variance that are to be passed through to consumers in a reasonable time-frame.

 

Many power plants are facing issues related to rise in fuel costs, especially pricier overseas coal.