Draft Electricity Act (Amendment) Bill 2020

Draft Electricity Act (Amendment) Bill 2020

  • Bill has been framed to ensure that renewable energy tariffs are not changed by the states after the execution of contracts, and electricity regulatory commissions have more teeth to enforce power purchase agreements between projects and distribution companies (discom).
  • It seeks privatisation of discoms (distribution companies) by way of sub-licensing & franchisees.
  • According to the draft, state commissions will determine tariff for retail sale of electricity without any subsidy under Section 65 of the Act and the tariff should reflect the cost of supply of electricity and cross-subsidies to be reduced.
  • It seeks to eliminate  the cross-subsidies in retail power tariff.
  • The State governments will directly subsidise whichever category they want to, through direct benefit transfers.
  • State regulators will henceforth be appointed by a central selection committee.
  • The establishment of a centralised Electricity Contract Enforcement Authority whose members and chairman will again be selected by the same selection committee referred to above.
  • It proposes that the ECEA would adjudicate on matters regarding performance of obligations under a contract related to sale, purchase or transmission of electricity.
  • It proposes to empower load dispatch centres to oversee the payment security mechanism before scheduling dispatch of electricity, and suggested a National Renewable Energy Policy for the promotion of generation of electricity from renewable sources.
  • It seeks to set up National Selection Committee instead of the separate Selection Committee (for appointment of Chairperson and members of State Electricity Regulatory Commissions-SERCs).
  • It is proposed to increase the strength of APTEL to at least seven to facilitate quick disposal of cases.
  • To improve quality of supply, an option is proposed to be provided to Discoms to authorise another person as a sub-license to supply electricity in any particular part of its area, with the permission of the State Electricity Regulatory Commission.
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