The Ministry of Power in its notification dated 17th April 2020 has issued the Draft Electricity (Amendment) Bill, 2020 which seeks to increase private participation and to strengthen payment security mechanism and establish Electricity Contract Enforcement Authority who has sole authority to adjudicate matters related to specific performance of contracts related to purchase or sale of power, between power generation companies and distribution companies.
Key Amendments proposed to the electricity Act:
- The draft proposes to privatize discoms by way of sub-licensing and franchisee models. The distribution licensees, with the permission of the relevant State Commission, can recognize and authorize a person as “distribution sub-licensee”. However, the original distribution licensee will remain the licensee
- The bill also proposes to restrict deferment of revenue recovery and reduction in cross-subsidy to bring in a cost-reflective tariff or simplified tariff.
- In order to improve the enforce ability of power purchase agreements and contracts relating to transmission, and to ensure time-bound adjudication of disputes under PPAs/transmission related contracts, the Amendment Bill proposes to establish the Electricity contract enforcement Authority (ECEA).
- The Amendment Bill provides that “no electricity shall be scheduled or despatched under such contract unless adequate security of payment as agreed upon by the parties to the contract, has been provided”.
- The draft introduces “Cross border trade of electricity”, meaning transactions involving import or export of electricity between India and any other country and includes transactions related to the passage of electricity through our country in transit between two other countries.
The Ministry invites comments and suggestions from the stakeholders on the draft Amendment Bill to be submitted within 21 (twenty-one) days from the date of release of the Amendment bill.
Click here to read the Notification.
