ELECTRICITY AMENDMENT BILL 2022

1. About

Electricity (Amendment) Bill 2022 was introduced in the monsoon session of the parliament
The advised amendments area unit to the Electricity Act, 2003 that was enacted to consolidate the laws concerning the generation, transmission, distribution, trading, and use of electricity and customarily for taking measures contributing to the event of electricity.
The Bill proposes that power distribution licensees are allowed to use the networks of different licensees, which may boost competition and enhance potency.
The government conjointly hopes to insert a brand new section within the Act which will change the management of power purchase and cross-subsidy just in case of multiple distribution licensees within the same space of offer.
These measures area unit expected to push competition within the power distribution sector so shoppers get pleasure from competitive costs.
The government conjointly proposes to change regulators to repair a minimum tariff ceiling to discourage unhealthy valuation wars among distributors and the most ceiling to confirm shoppers area units are protected against increment shock.
Amendments also are being created within the Act to strengthen the functioning of the National Load Despatch Centre for guaranteeing the protection and security of the grid and for the economic and economical operation of the ability system within the country.

2. Prominence of the present amendment

The Bill comes at a time when there is a debate around freebies being offered by political parties that has also, among other things, led to various state power distribution companies (Discoms) not being able to raise enough resources to make timely payments to power generating companies.

3. What can be expected after the implementation of the Bill

DISCOM Restructuring: solely 100% of India’s population is served by personal distribution licensees. Hence, sensible company Governance and better personal participation in distribution hold out the likelihood of larger potency.
Regulatory Reforms: The state governments ought to promote autonomy, ability and transparency of the State Electricity regulative Commission (SERC). Depoliticisation of DISCOMs could be a should.
Operational Reforms: the general AT&C loss figure in India is high. several discoms got to improve their charge potency through higher and good metering.
Renewable Energy Integration Reforms: DISCOMs got to prepare to accommodate associate degree increasing quantity of renewable energy (RE), from generators in addition as prosumers.
Managerial Reforms: Effective reforms like simply accessible decision centres and convenient bill payment facilities will facilitate cutting back client discontent and increase revenue. Moreover, Performance incentives can even facilitate aligning income workers to the interests of the organisation.

The creation of a national power distribution company to make sure procurance of electricity at competitive costs.
While errant charge and assortment, the opposite side of high price are often partly resolved by renewable power, particularly star. A cheap strong solar array producing business in India can cause a lower price of power for DISCOMs. because the share of alternative energy will increase, the price for DISCOMs can return down.

Privatization of DISCOMs: it's an associate degree experiment that has yielded positive ends up in several cities, as well as city, Mumbai, metropolis and Ahmedabad. Before it was privatised in 2002, AT&C losses within the metropolis were at a high fifty-three and therefore the government was subsidising discoms to the extent of Rs twelve,000 large integers per annum. once privatisation losses weakened, and these days city has one in every of the bottom AT&C losses among DISCOMs within the country at simply eight per cent.

4. Prime focus of the government via amendments

5. What's resulting in inefficiencies of the DISCOMs

5.1. Electrification push while not price restructuring

The government’s push for making certain electrification of all has contributed to larger unskillfulness.
To support higher levels of electrification, price structures got to be reworked, and also the distribution network would wish to be increased — within the absence of all this, losses square measure sure to rise.

5.2. Economic fallout of the pandemic

With demand from industrial and business users falling, revenue from this stream, which is employed to cross-subsidise alternative shoppers, has declined, exasperating the strain on discom finances.
A turnaround within the economy can give some relief, however won't kind the premise of a sustained improvement in finances.

5.3. Lack of shopper knowledge and metering

Even six years once UDAY was launched, numerous levels within the distribution chain — the feeder, the distribution electrical device (DT) and also the shopper — haven't been metered.
As a result, it's tough to establish the extent within the chain wherever losses square measure occurring.
Other than discoms in metros like Delhi and metropolis, there is additionally restricted knowledge on that shopper is hooked up to that DT.
This lack of knowledge makes it tough to isolate and determine loss-making areas and take corrective action.

5.4.No tariff hike

The continued absence of political accord at the state level to boost tariffs or to bring down AT&C losses signal a scarcity of resolve to tackle the problems plaguing the arena.

6. Conclutionary Remarks

Experts recommend empowering the regulator to be able to take calls for tariff revision and ensuring that the government freebies, even on electricity, should be through direct benefit transfer.

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