The Electricity (Amendment) Bill 2022 was introduced in Parliament on July 8, 2022. The bill created controversy in some states like Tamil Nadu, Telangana, Rajasthan and others. Power engineers protested against the bill throughout the country.
The farmers of Punjab and Haryana reportedly burnt the copies of this bill as a mark of protest. Some political parties like the Aam Aadmi Party, the Shiromani Akali Dal, and the Indian National Congress (INC) also criticised this move.
On the other hand, the bill is sent to the standing committee for further deliberation. According to the tweet of Union Power Minister RK Singh, a Bill is for the welfare of the people. Also, there is no change in the provisions of subsidies by the government.
What is the Electricity Act 2003?
The Electricity Act 2003 governs the generation, transmission, distribution, trading and use of electricity in India. Here, the term “Generation of Electricity (GoE)” refers to an activity that does not require a licence. Also, distribution, transmission, and electricity trading are licenced activities under the Electricity Act 2003.
The Central Electricity Authority (CEA) is the statutory body under the Electricity Act. It also advises the Government of India (GOI) on establishing policies, safety requirements, and technical standards.
The electricity market in India
India ranks in third place. India, the third-largest electricity producer in the world, installed 373.029 GW power capacity as of September 30, 2020. According to the data, it was 1.376 trillion kilowatts per hour during 2018–19. Similarly, it was 1.389 trillion kilowatts per hour in 2019-20.
History of the Electricity (Amendment) Bill, 2022
The electricity amendment Bill was introduced in 2003, during the time of Atal Bihari Vajpayee. The purpose of the electricity Amendment Bill is to consolidate the laws related to the generation, transmission, distribution, trading and use of electricity.
The Electricity (Amendment) Bill was launched to protect consumers’ interests in offering electricity to all areas. Moreover, it was launched to meet the rationality of electricity tariffs. It is the most transparent policy regarding the Government of India (GOI) subsidies.
Later in 2007, it was amended. The provisions for cross-subsidies ensured subsidies for poor households. In 2014, this bill was cleared by the standing committee on energy, but it could not be passed in the house as the centre wanted to revise it.
Mentioned below are the introducing amendments:
1. More power to distributors
Under the amendment, more than one power distributor can operate in an area. Any power distributor can also use the power distribution infrastructure of other suppliers. This move will increase the competition.
Not only this but consumers will also be given a chance to choose through which distributor they want their electricity to be handled.
2. Rationalisation of power rates and discouraging pricing wars
The amended policy empowers regulators to fix a minimum tariff ceiling. On the other hand, a maximum ceiling will also be launched to ensure consumer protection.
3. Reduction in excessive delays
The applicant applying will be granted the licence if the regulator does not approve or reject the power distribution licence application within 90 days.
4. Improvement in the function of regulators
Regulators play a considerable role here. The eligibility criteria for the appointment of members of the regulatory body will be fixed—the timely selection of key roles.
5. Enhanced efficiency
If any state commission cannot perform its functions properly, its functions can be entrusted to other state commissions or any joint commission.
6. Accountability
After the amendment in 2017, new provisions for removing a member of a regulatory body were introduced. Also, rules regarding the wilful violation or gross negligence were introduced later.
