Bill to amend Electricity Act tabled in Lok Sabha

Within days of cabinet approval, the government Friday tabled in the Lok Sabha amendments to the Electricity Act, 2003, designed to bring in the much needed second phase of reforms in the power sector.

The Electricity (Amendment) Bill, 2014 will promote competition, efficiency, and improvement in the supply of electricity in the country resulting in capacity addition and benefit to the consumers, Power Minister Piyush Goyal said while introducing the bill in the Lok Sabha.

The salient changes proposed are aimed at enhancing grid safety, unbundling the distribution sector, promoting renewable energy and tariff rationalization, the minister said.

Within a given area, multiple distribution companies would be licensed to operate and offer power to consumers.

"To achieve efficiency and for giving choice to consumers through competition, concept of multiple supply licensees is proposed by segregating the carriage from content in the distribution sector, while continuing with the carriage (distribution network) as a regulated activity," the power minister said.

While there will be a government distributor to ensure that power is provided to financially weaker sections, competition and a private sector role is proposed through these changes.

Regarding grid security, the amendments envisage stiff enhanced penalties for violating directions of the state and regional load despatch centres.

The enquiry committee set up following the July 2012 grid collapse recommended putting in place zero tolerance systems for breaking grid discipline by overdrawing power.

To boost the renewable energy sector, the government proposes to bring in amendments to the act introducing stricter penalties for failing to meet renewable purchase obligation (RPO) targets.

Under the RPO system, the state power distribution companies have to mandatorily purchase electricity generated through renewable energy sources during the year.

The proposed changes will also introduce the renewable generation obligation (RGO), which will make it compulsory for thermal power producers to generate electricity through renewables.

On rationalising tariffs, the bill envisages timely filing of tariff petitions by utilities and their disposal by the concerned regulator.