One of probably the most contentious proposals within the draft amendments to the Electricity Act, 2003, is more likely to be dropped. This comes because the Union ministry of energy prepares to desk a Bill within the upcoming monsoon session of Parliament.
The modification pertains to delicensing of energy distribution that may have paved the way in which for any firm to provide electrical energy in an space, after needed regulatory approval.
In a current presentation to stakeholders, the ministry has stated it’s contemplating to drop the proposal, based on sources.
Other proposed amendments, which might be dropped, are cross-border commerce of electrical energy, adjustments to Section 63 for tariff adoption and a excessive court docket decide choosing members of the state electrical energy regulatory commissions (SERCs).
The amendments — launched in February final 12 months — have been circulated for feedback from key stakeholders, together with the states.
Several states — primarily the non-BJP-ruled ones — clamoured in opposition to the proposed amendments and had stated they have been an assault on federalism. In its illustration, West Bengal stated the amendments to the Act are an “infringement on the sovereignty of the state.”
In the facility sector provide chain, technology and transmission are underneath the Centre whereas distribution is a state topic.
The draft Bill, nevertheless, has introduced again proposal to have a number of electrical energy suppliers in a single space. The current set of amendments proposed that option to shoppers via a number of distribution licensees would stay. Under this, a number of licensees can function on the identical community.
Through this, the Centre has retained the primary set of amendments launched in 2016, permitting “content and carriage separation.” However, the community possession stays with the state utility and there are a number of electrical energy suppliers, stated senior executives.
The resolution to permit one other provider would stay with the state and the SERC. The modification simply paves the way in which for an overarching regulation. The concept to get a number of electrical energy sellers has come at a time when the Centre has floated a Rs 3-trillion scheme to revive the facility distribution sector.
State-owned discoms throughout the nation are grappling financially and operationally regardless of 4 reform schemes within the final 15 years.
The earlier discom reform scheme UDAY concluded in FY20 with most states failing to satisfy their stipulated targets and are nonetheless within the crimson.
Provisions, which have been retained, have a penalty for these defaulting on renewable buy obligation (RPO).
Other proposals embrace a number of enhancements within the functioning of SERCs and cost safety mechanism for producing firms (gencos) to get well timed cost from distribution firms (discoms).
The Electricity Bill, 2022, has additionally proposed to empower the grid operator National Load Despatch Centre (NLDC). It offers it the appropriate to cease dispatch of energy to states that don’t present cost safety in opposition to their contracted provide.
In Section 28 of the Bill — which pertains to NLDC’s operations — a brand new provision has been added.
It states, “No electricity shall be scheduled or dispatched under such contract unless adequate security of payment, as agreed upon by the parties to the contract, has been provided.”
The modification is within the wake of rising dues of discoms to producing firms. The dues of discoms stand at Rs 1.11 trillion as on June-end. This is a report excessive.
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