Union Cabinet likely to approve Electricity (Amendment) Bill

New Delhi: The Union Cabinet is likely to take up for approval the Electricity (Amendment) Bill, 2021 in the next few days, which seeks to enable power consumers to choose from multiple service providers as in the case of telecom services, a source said.

“The Electricity (Amendment) Bill, 2021 could come up for consideration and approval before the Union Cabinet in the next few days as the government plans to introduce it in the monsoon session of Parliament which concludes on August 13, 2021,” the source in the government said.

According to a Lok Sabha bulletin issued on July 12, 2021, the government has listed this bill as one of the new 17 bills it plans to introduce in the ongoing parliament session.

The bulletin explains that the proposed amendments (in the Electricity Act) entail de-licensing of the distribution business and bring in competition, appointment of member from law background in every Commission, strengthening of APTEL (Appellate Tribunal For Electricity), penalty for non compliance of RPO (Renewable Purchase Obligation).

The RPO is a mechanism by which the obligated entities (mainly power distribution utilities or discoms) are obliged to purchase a certain percentage of electricity from renewable energy sources, as a percentage of the total consumption of electricity.

Earlier last month, Power and Renewable Energy Minister R K Singh had said that the bill seeks to de-license distribution of electricity. “We proposed to de-license distribution of electricity just like the generation. The Cabinet note on the bill was circulated and all concerned ministries have approved it. But the law ministry has one or two queries,” Singh had said.

He had exuded confidence that the bill would be sent for the Union Cabinet approval soon, and hopefully it would be introduced and pushed for passage in the ongoing session.
The proposal to seek the Cabinet approval for the Electricity (Amendment) Bill 2021 was circulated in January this year and the draft law was to be pushed for passage in the Budget session.

The bill seeks to delicense power distribution to reduce entry barriers for private players for creating competition in the segment, which would ultimately enable consumers to choose from multiple service providers.

The bill also prescribes the rights and duties of electricity consumers.

Last month, the power minister had also said the penalty for non-compliance of RPO would be increased.

Under the RPO, discoms and other large consumers are required to buy a certain proportion of renewable energy prescribed by their respective regulators. They can also buy renewable energy certificates to meet the RPO obligation.

Earlier on many occasions, the minister had expressed dismay over persistent non-compliance of RPO norms, especially by state utilities.