In Light of Electricity (Amendment) Bill 2022

Finally, there seems some traction in the archaic electricity act which has been dragging for the past almost 2 decades.

Following are my views on the salient points of the bill

1.??????FREE MARKET IN, MONOPOLY OUT -?

Well, the most controversial reform that the bill aims to introduce is a provision that allows more than one electricity distribution company in one region, which could lead to the end of the monopoly of one electricity network in one region.

The provision in section 5 of the bill, provides for multiple distribution licensees (DISCOM) to distribute electricity to local consumers. The requirement to allow multiple discos in one area was also mentioned in the 2003 law, but under the old law new DISCOM had to have their own cable and distribution infrastructure, but the new bill provides a system that allows new entrants to use existing disco distribution infrastructure by paying fees, such as transmission charges, etc. which of course is an attempt to encourage the privatization of power distribution businesses, something that the country desperately needs. Privatization would not only make the system more transparent but also efficient.

Though I would also take this with a pinch of salt, given our history of Crony Capitalism where the profits are private and the losses are public!

2.??SERC the new Civil Court?

It also introduces several changes in the powers of State Electricity Regulatory Authorities to regulate electricity costs in the country, giving SERC powers equivalent to that of a civil court. Given the state of our Civil courts, this is definitely a welcoming step, as this would expedite decisions and other civil disputes that unnecessary drag on for years due to our understaffed judiciary, but even here there needs to be a steady caution as the misuse of such power has quite a precedence.

3. Consolidation of Power

Now, these moves can also be seen as giving more teeth to the Centre by circumventing the states, as now the center gets to directly appoint the chairman and members of the SERC committee, which could be seen as trespassing the autonomy of the state govt.

This could be good or bad depending on which side of the fence you sit, but one this is clear that the change is coming

4. What’s in for SOLAR (RPO!)

Finally coming to the green question of RPO’s, with the amendment in the bill, the monitoring, and execution of the RPO targets will now become more stringent and enforceable, giving a greater chunk of renewable energy in the total energy mix for the DISCOMS. But given the price difference between the non-renewable power vs. power from Solar wind and other renewables (renewable being the pricier one!) it needs to be seen who would finally bear the higher cost

Well it’s going to be the ones enjoying the subsidized power aka Domestic Households? - only time will tell.