Provisions of the Indian Electricity Act - 2003 to 2022 Amendment Act

- Lokabhimukha Guidance : H.S. Patel IAS (Retd.)

- The power sector of Gujarat needs to be assessed separately in the Central Amendment Act

The Electricity Act- 1910 was enacted during the British rule in our country, which was mainly a regulatory law. After a long period, a consolidated law of 2003 was enacted and in this law, for the first time, provisions were made for electricity consumers to receive electricity supply in a quality-reliable and economical form along with the provision of consultation process and submissions through the Electricity Regulatory Commission in determining the tariff. . But finally the law is formulated by the central government, but its implementation has to be done by the states within the framework of the federal structure. So even today, even though provisions have been made to manage the power sector on a non-political, apolitical basis, due to the inefficient management of the government-owned power companies, the consolidated financial loss of some states is about 2.5 lakh crores. It has been 19 years since the enactment of the Electricity Act-2003 and according to the provisions of this Act, the Electricity Boards which were functioning under the original Act of 1910, under the Power Sector Reforms, the Electricity Boards of all the States have been divided (bundling of Electricity Boards) to generate electricity. ) Transmission Discom companies have been created as state owned companies in all states or given to private sector companies. E.g. In Delhi, Orissa power generation is done in the private sector on the basis of IPP (Independent Power Producer) transmission sector has also been privatized to a limited extent. But in all these segments, power distribution is the most important sector because along with providing power to consumers, generation and transmission are based on the income that power distribution companies get through electricity rates as revenue. Many states of the country have given NTPC to the power generation companies. (Government of India venture) against the power supply money they have provided and crores of rupees of which is yet to be paid, besides the AT&CL - Aggregate Technical and Commercial loss of power distribution companies which is simply called power loss is not reduced as per the criteria laid down in Cross-subsidization is the approach taken to provide free electricity to agricultural or rural areas or to certain units.

Against which the power companies do not have a compensatory assured mechanism. So the loss increases gradually and the burden falls on the consumers and consequently affects the quality of power supply.

It is necessary to give the above background because the Central Government is bringing drastic changes in the electricity distribution sector with the Electricity Act - 2023 and 2022 Amendment Act by the Government of India. The amendment bill was introduced in the Parliament in the Lok Sabha, but since several provisions of the Act affect states and consumers, the bill has been referred to the Standing Committee of the Parliament for consultation. But energy sector experts as a whole need to adapt to the situation of our different states because there is a difference in performance and financial status between progressive states and sick states in the framework of the federal structure. As part of Gujarat's power sector reforms, Gujarat's power distribution companies have fared better than other power distribution companies in the country and 24x7 power supply is provided to villages through the Jyotigram scheme. Based on my long-term experience in the energy sector, I can say that the amendments that have been suggested in the current proposed law should be implemented in Mandatory form based on the performance of the states. The most important amendment in this Act is the addition of Section - 60A to the Electricity Act and it provides for handover of electricity distribution operations to more than one licensee in the license area of ​​an electricity distribution company and also provides for consumers to choose the electricity distribution company and the State Electricity Regulatory Commission to decide Accordingly, in the current Power Purchase Agreement, the Power Sharing Agreement between more than one power company is to be reviewed from time to time, besides, the maximum and minimum power rate structure is to be decided for the choice of the customers and if any power company wants to make an agreement for additional Power Purchase, it can do so. Such a provision has also been made. When licenses are granted to more than one power distribution company in an area, a 'Cross Subsidy balancing fund' will be set up and administered by a government-owned company and the State Regulatory Commission may order for the same.

Even today there are four power distribution companies in Gujarat but the tariff remains the same. The objective of these provisions is that one area has potential consumers and the other area has more agricultural electricity consumers. E.g. Dakshin Gujarat Power Company and Uttar Gujarat Power Company Finally the customers of the company which is performing better should benefit. But as part of rationalization of tariff, electricity rate is charged at the same rate in Gujarat.

Second, private companies will choose areas where there are good customers in more than one area i.e. urban areas. In rural or agricultural areas, no one will come forward except the state government owned power distribution company. Apart from this, the provisions regarding constitution of Electricity Regulatory Commission and Tribunal are in the amendment act but the above mentioned amendment is the most important. Further, the Chairman/Members of the Regulatory Commission can issue orders independently only if they are appointed in a professional manner.