Important and useful changes to India's electricity law have been cleared by the Cabinet

Moneylife Digital Team 15 December 2014

The Union Cabinet has cleared changes in the Act. Union Power Minister Piyush Goyal earlier this week said the Bill would be tabled in Parliament soon

The amendments to the Electricity Act are likely to change the business dynamics for power distribution companies (discoms).

It will provide small consumers a choice of suppliers and allow distribution companies (discoms) to procure power from their own renewable energy plants to meet their renewable purchase obligation.

The Union Cabinet has cleared changes in the Act. Union Power Minister Piyush Goyal earlier this week said the Bill would be tabled in Parliament soon.

The features likely to be in the new Electricity Act include:

(a) Open access for over 1 Mw allowed – enabling inter-state transmission from surplus to deficit points

(b) Power supply business separate from setting infrastructure for supply – opens the market for ancillary business, increases competition

(c) Choice to consumer to select his power supplier – market driven tariffs, better supply and open ground for competition

(d) Time-bound distribution licence – pressure on discom to perform better

(e) promotion of clean energy and its adoption

Comments

User

Rajinder Kachroo

1 decade ago

Open access will largely depend upon the infrastructure available at 33/11kV network. Most of the states have poor track record on the maintenance of this sub transmission and distribution lines. Lines need to be maintained and added in order to achieve free access successfully. It has been seen like in Mumbai that the management of utilities is not comfortable with this and have been creating hurdles through repeated court cases.

vipul

1 decade ago

Great Steps taken, but some things we can not afford to ignore:

My comments for points:
a. Open access has so far being not much successful though lot has been talked about this since last couple of years. As few states are not allowing it to happen. I think analysis should be done on how Open access methodology has moved in last couple of years.

c. Its good that consumer can now choose his power supplier, but what if there are not enough of supplier. I think first supplier should be encouraged (cautiously)to enter into supplier side across different regions(not only restricted to one or other States)