New Electricity Bill proposes timely tariff revisions, gives more authority to states

The Electricity (Amendment) Bill 2022 tabled in Parliament has proposed fixing adequate tariffs and timely revisions.

The Bill, which was sent to Parliament Standing Committee on Monday for detailed deliberation, also proposed that in case distribution companies (discoms), or power generating companies, failed to file petitions before regulators, state electricity regulatory commissions will have power to initiate tariff revision proceedings suo moto.

“If an application is not made by a generating company or licensee on time, the State Commission shall, not later than thirty days of the last date specified in the regulations, initiate proceedings for determination of tariff and call for such information, details and documents as may be required… before the beginning of the financial year,” the Bill proposed.

To avoid predatory pricing as well as a maximum cut-off to protect consumers, the Bill said that if “two or more distribution licensees operate in the same area of supply”, the state commission will fix the maximum and minimum tariff.

The amendment also proposed that the National Load Despatch Centre be empowered to stop electricity supply to distribution utilities which fail to maintain required bank guarantees, in favour of power plants with which they are associated.

Recently, Prime Minister Narendra Modi, highlighting the power sector’s problems, appealed to the states to clear all discoms’ and generating companies’ dues.

According to the Union Ministry of Power, as of March 31, 2022, the states and the union territories owe over Rs 1 lakh crore to power generating companies, and another Rs 1.3 lakh crore to distribution companies.

In April-May, during peak summer this year, states such as Uttar Pradesh, Maharashtra, Telangana, Tamil Nadu and Andhra Pradesh, had to impose long power cuts, as discoms struggled to purchase power due to their poor financial health.