BREIF ANALYSIS OF ELECTRICITY BILL AMENDMENT DRAFT :2021 AND REVAMPED DISTRIBUTION SECTOR SCHEME
Author: Sathvik Reddy Sudireddy, III year of B.A.,LL.B(Hons) from Amity Law School,Noida.
Co-author: Yadvinder Singh, III year of B.A.,LL.B(Hons) from Amity Law School,Noida.
This is a landmark bill to reform power distribution
This bill aims to separate carriage and content operations of the distribution companies to households,industries etc.In easy words by this bill people get option to choose the distributor of power just like how we choose a mobile carrier.The union cabinet considers at aiming to de-license power supply,allowing multiple distributors in the same area of operation and giving consumers the option to switch power suppliers.
Date of Introduction: 19th July,2021(6th session of 17th Loksabha)
As per CII(Confederation of Indian Industry),it has been discussed by Power Minister Raj Kumar Singh and all stakeholders(both private and public),State power grids over proposed amendments.
Generally,In India power producers and distributors are different,the problem arising was distribution was heaping large amount of losses and eventually debts(approximately 70 thousand crores) today to producers causing damage to national economy.This new bill aims to help with transmission losses faced by discom(distribution companies) and also help in building high tech infrastructure in power distribution with huge schemes and subsidies.
The bill also imposes fines for any failure by DISCOM to meet renewable purchase obligations.It’s compulsory for DISCOM to purchase some stake of power from renewable energy companies.
The success of de-licensing depends on its ability to address:
(a)High level of cross subsidies in retail tariff
(b)Inefficiencies in the form of T&D(Transmission and Distribution)/AT &C(Aggregate Technical and commercial)losses
(c)Poor state of T&D Infrastructure
Issues faced by DISCOMS
Difficulty in collecting revenues from customers and feed the stream of supply
Inability to recover power purchase costs
Cost element of tariff on coal,natural gas etc which causes price fluctuation and where as tariffs are fixed by state governments
AT&C may be made a key performance indicator by provisions in the act for evaluation of states of governance of states.
The Bill also proposes appointing a member with legal background in every electricity regulatory commission and strengthen the Apellate Tribunal for Electricity
DISCOMS are required to buy a fixed amount of renewable energy to reduce reliance on fossil fuels thus reducing carbon footprint and eventually meet the Paris Agreement on Climatic Change and Negative Carbon Footprint.
Main motto of the bill is “The people needs choice”.if one DISCOM isn’t performing well or providing low standards, they should have a choice to switch companies.
This draft amendment also aims at protecting the rights and duties of electricity consumers to get availed of round the clock supply of power. Consumers can even sue companies for continuous disruption of power.
Appellate Tribunal for Electricity (APTEL) is being reinforced by expanding number of individuals, The areas, from where Chairperson and individuals from Central Electricity Regulatory Commission (CERC) and State Electricity Regulatory Commissions (SERC) would come, have been portrayed. Keeping in see the public environmental change objectives, the duty of fixing inexhaustible force commitment (RPO) is moved from State Commissions to the Central Government.
As the interconnected force framework is getting more intricate with expansion of inexhaustible generators, the job of Load despatch focuses is acquiring significance. Simultaneously debates identified with despatch of force are expanding, Adjudication of Load despatch focus related questions have been remembered for the elements of Regulatory Commissions.
The Regulatory Commissions were prior called 'innocuous tigers' by a few. Their orders would now be executable as announcement including connection of property, capture and confinement in jail. With Member (Law) in the Commission, these forces will be practiced fittingly bringing about better implementation.
Punishment for repudiation of the arrangements of the Act have been expanded upto Rupees one Crore. Non-satisfaction of RPO will draw in rigid punishments according to the proposed revisions.
Proposed bill doesn't resolve numerous significant issues looked by the Power Sector. Discoms gather income from the purchasers and feed the inventory network upstream. They are, be that as it may, unfit to recuperate their expenses, out of which almost 75 to 80 % are power buy costs.
As of late Forum of Regulators (FOR) came out with a report on cost components of Tariff and recommended measures to diminish duty. There is no controller to fix coal expenses and rail route cargo.
These expenses have expanded much in overabundance of weighted normal increment of discount value list (WPI) and retail value list (RPI). No mutually advantageous answer for (generators and Discoms) is offered to lessen fixed expense of unutilised power through the correction bill.
Revamped Distribution Sector Scheme
This is a reform based and result linked scheme and related to Electricity Bill:2021
Approved on 30th June 2021 by Cabinet
This aims at improving operational efficiency and financial sustainability of all DISCOM/Public Power departments “excluding private DISCOMS”
It provides conditional financial assistance to DISCOM for strengthening of supply infra based on performance of the company.
It doesn’t follow “one size fits all” model and each model depends on the demands of the state.
This is valid till 2025-26 and it held by Rural Electrification Corporation(REC) and Power Finance Corporation(PFC) as its nodal agencies
Reduction of AT&C losses to 12-15%
Reduction of ACS-ARR gap to zero(income-expenditure)
Develop institutional Capabilities and improve in quality,reliability,affordability through sustainable ways.
Special Focus on High Electricity Theft
To install prepaid smart meters for all consumers except agricultural consumers.
Communicable Advance Metering infra meters for all feeders and distribution therefore to enable energy accounting and reduce losses.
Feeder segregation into Solar and Non Solar.This would enable solarization under KUSUM.
Modernization in urban areas by Supervisory Control & Data Acquisition(SCADA)
The Power generation capacity of India is 383.37 GW which is far higher than our demand of 200GW,but still lot of states doesn’t have access to 24/7 power supply due to huge losses in distribution/transmission,theft,poor infrastructure.
I personally believe this Act would bring greater transparency and effective usage of electricity in sustainable ways.The future energy is going to be sustainable and foraying into various forms apart from fossil fuels is very much appreciated.Power generation is also going to rise with greater connectivity and demand too owing to fast pace development of our nation.