The Government of India (GoI) on August 08, 2022, issued The Electricity (Amendment) Bill, 2022 to further amend The Electricity Act, 2003.
The following provisions have been amended, namely:
• In section 8 which specifies “Hydro-electric generation”, after sub-section (1), the following sub-section has been inserted:
“(1A) The Authority shall, after examining the scheme, concur on the scheme in such manner as may be prescribed by the Central Government.”
• In section 14 which specifies “Grant of licence” for clause (b), the following clause has been substituted:
“(b) to distribute electricity as a distribution licensee in an area of supply in accordance with such criteria as may be prescribed by the Central Government;”
• In section 15 which specifies “Procedure for grant of licence”, in sub-section (6), after the proviso, the following proviso shall be inserted:
“Provided further that if the Appropriate Commission fails to grant the licence or reject the application, as the case may be, within the time so provided, the applicant shall be deemed to have been granted the licence.”
• In section 26 which specifies “National Load Despatch Centre”, sub-section 4 has been inserted namely:
“(4) The National Load Despatch Centre shall—
o be the apex body to ensure integrated operation of the power system in the country;
o be responsible for optimum scheduling and despatch of electricity in the country across different States and regions in accordance with the contracts entered into with the licensees or the generating companies:
o Provided that no electricity shall be scheduled or despatched under such contract unless adequate security of payment, as may be prescribed by the Central Government, has been made; Amendment of section 2. Amendment of section 8. Amendment of section 14. Amendment of section 15. Amendment of section 26. 5 10 15 20 25 30 35 40 3
o monitor grid operations and ensure security of the electricity grid and for this purpose give directions as necessary to the Regional Load Despatch Centre or State Load Despatch Centre, as the case may be;
o exercise supervision and control over the inter-regional and inter-State transmission network; and
o have overall authority for carrying out real time operations of the electricity grid of the country.
o The National Load Despatch Centre shall give such directions and exercise such supervision and control over the power system as may be required for the safety and security of the electricity grid of the country, for ensuring the stability of grid operation and for achieving maximum economy and efficiency in the operation of the power system throughout the country.
o The National Load Despatch Centre shall give such directions to the State Load Despatch Centre, as may be necessary through the Regional Load Despatch Centre concerned.
o Every Regional Load Despatch Centre, State Load Despatch Centre, licensee, generating company, generating station, sub-station and any other person connected with the operation of the power system shall comply with the directions issued by the National Load Despatch Centre from time to time.”.
• In section 28 which specifies “Functions of Regional Load Despatch Centre”, in sub-section (3), in clause (a), the following proviso shall be inserted:
“Provided that no electricity shall be scheduled or despatched under such contract unless adequate security of payment, as may be prescribed by the Central Government, has been made”
•In section 32 which specifies “(Functions of State Load Despatch Centres”, in sub-section (2), in clause (a), the following proviso shall be inserted:
“Provided that no electricity shall be scheduled or despatched under such contract unless adequate security of payment, as may be prescribed by the Central Government, has been made;”
•In section 40 which specifies “Duties of transmission licensees” in clause (c), in sub-clause (ii), after the fourth proviso, the following proviso shall be inserted:
“Provided also that a consumer who requires supply of electricity where the maximum power to be made available at any time exceeds one megawatt shall be entitled to get open access to inter-State transmission system in accordance with the regulations made by the Central Commission, on payment of the transmission charges and a surcharge thereon, as may be specified by the State Commission.”
• In section 40 which specifies “Duties of transmission licensees” after the fifth proviso as so inserted, the following Explanation shall be inserted:
‘Explanation - For the purposes of this section and section 42, the expression “megawatt” means ten lakh watts.’
• In section 42 which specifies “(Duties of distribution licensee and open access” for sub-section (1), the following sub-section shall be substituted:
“(1) It shall be the duty of all distribution licensees to,
• ensure an efficient, co-ordinated and economic distribution system in their area of supply: Amendment of section 28. Amendment of section 32. Amendment of section 40. Amendment of section 42. 5 10 15 20 25 30 35 40 45 4 Provided that a distribution licensee may use the distribution systems of other licensees in the area of supply for supplying power through the system of non-discriminatory open access;
• give non-discriminatory open access to other distribution licensees on payment of wheeling charges; and
• provide supply of electricity to the consumers, in accordance with the provisions of this Act and the rules made thereunder by the Central Government and the regulations made by the Appropriate Commission and in accordance with the model regulations laid down by the Forum of Regulators.”
• In section 42 which specifies “(Duties of distribution licensee and open access” after sub-section (4), the following sub-sections shall be inserted:
“(4A) A distribution licensee shall provide non-discriminatory open access through its distribution system to all distribution licensees having licence within the same area of supply, subject to payment of wheeling charges and in accordance with the regulations specified by the Appropriate Commission.
(4B) In case any complaint is filed before the Appropriate Commission by any person or if that Commission is satisfied that a distribution licensee has knowingly failed to provide open access through its distribution system to another distribution licensee or hindered it in any manner from using its distribution network, the Appropriate Commission may, after giving the distribution licensee an opportunity of being heard, issue such directions as it considers necessary and impose the penalties in accordance with the provisions of this Act.”
• In section 59 which specifies “Information with respect to levels of performance”, in sub-section (1), after clause (b), the following clause shall be inserted:
“(c) the status of compliance of the guidelines issued by the Central Government regarding corporate governance.”
o Section 60A which specifies “Management of power agreement, cross subsidy” has been inserted:
“60A. Notwithstanding anything contained in this Act, on the issuance of licence to more than one distribution licensee in an area of supply, the power and associated costs from the existing power purchase agreements with the existing distribution licensee, as on the date of issuing licence to another distribution licensee, shall be shared among all the distribution licensees in the area of supply as per such arrangements as may be specified by the State Commission in accordance with the provisions of this Act and the rules made thereunder by the Central Government: Provided that the State Commission shall periodically review the sharing of power as provided in the existing power purchase agreements: Provided further that a distribution licensee may enter into additional power purchase agreements, after meeting the commitments of the existing power purchase agreements, to meet any additional requirement of power without sharing with other distribution licensees.
In case of issuance of licence to more than one distribution licensee in an area of supply, the State Government shall set up a cross subsidy balancing fund which shall be managed by a Government company or entity designated by that Government in accordance with such regulations as the State Commission may make in accordance with the provisions of this Act and the rules made thereunder by the Central Government.
Any surplus with a distribution licensee on account of cross subsidy or cross subsidy surcharge or additional surcharge shall be deposited into the fund referred to in sub-section (2), and the fund shall be utilised to make good deficits in cross subsidy in the same area or any other area of supply.”
• In section 61 which specifies “Tariff regulations”, for clause (g), the following clauses shall be substituted:
“(g) the tariff recovers all prudent costs incurred for supply of electricity;
(ga) the tariff reduces cross subsidies in the manner specified by the Appropriate Commission;”
• In section 62 which specifies “Determination of tariff” in sub-section (1), in clause (d), for the proviso, the following provisos shall be substituted:
“Provided that in case of distribution of electricity in the same area of supply by two or more distribution licensees, the Appropriate Commission shall, for promoting competition among such distribution licensees, fix the maximum ceiling of tariff and the minimum tariff for retail sale of electricity in accordance with the provisions of this Act and the rules made thereunder by the Central Government.
Provided further that in such ceiling tariff, the cross subsidy, wheeling charges and adjustment in tariff pertaining to the period prior to the introduction of ceiling tariff, if any, shall be indicated separately by the Appropriate Commission.”
• In section 62 which specifies “Determination of tariff” in sub-section (4), the following proviso shall be inserted:
"Provided that the Appropriate Commission may, by an order and for reasons to be recorded in writing, allow the licensee to effect the changes due to amendment in tariff, not exceeding in four stages, during a year in accordance with the Tariff Policy."
• In section 64 which specifies “Procedure for tariff order” for sub-section (1), the following sub-section shall be substituted:
“(1) An application for determination of tariff under section 62 shall be made by a generating company or licensee at such time and in such manner and accompanied by such fee, as may be specified by the Appropriate Commission.
Provided that the time specified should be such that the new tariff comes into effect from the beginning of the following financial year.
Provided further that 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 for such determination with the objective of determining the tariff before the beginning of the financial year.
Provided also that, where two or more distribution licensees operate in the same area of supply, the State Commission shall fix the maximum ceiling of tariff and the minimum tariff, suo motu, after calling for requisite information from such distribution licensees.”
• In section 64 which specifies “Procedure for tariff order” in sub-section (3), in clause (a), the following proviso shall be inserted:
“Provided that if tariff order cannot be issued due to any reasons which are to be recorded in writing, the Appropriate Commission shall Amendment of section 61. Amendment of section 62. Amendment of section 64. 5 10 15 20 25 30 35 40 45 6 issue the order for interim tariff within the said period of ninety days from the date of receipt of such application or initiation of such proceedings.
Provided further that the interim tariff shall remain in operation till issue of final tariff order which shall be issued within such period not exceeding one hundred and fifty days of receipt of such application for determination of tariff or initiation of such proceedings."
• In section 77 which specifies “Qualifications for appointment of Members of Central Commission” for sub-section (1), the following sub-section has been substituted:
“(1) The Chairperson of the Central Commission shall be a person of ability, integrity and standing, who is or has been,
o head of an organisation dealing with generation, transmission or distribution of electricity; or
o Secretary to the Government of India or its equivalent: Provided that preference shall be given to a person having adequate knowledge and experience of not less than two years in the power sector.”
• In section 77 which specifies “Qualifications for appointment of Members of Central Commission” for sub-section (2), the following sub-section has been substituted:
“(2) The Members, other than the Chairperson of the Central Commission shall be persons of ability, integrity and standing, having adequate knowledge of and experience in the fields of engineering, law, economics, commerce, finance, public policy or public administration or management and shall be appointed as follows:
o one person having adequate qualifications and experience in the field of engineering with specialisation in generation, transmission or distribution of electricity;
o one person having adequate qualifications and experience in the field of finance, economics, commerce, public policy, public administration or management; and
o one person, who is, or has been holding a judicial office or is a person possessing adequate professional qualifications and experience in law.”
• In section 79 which specifies “Functions of Central Commission”, in sub-section (1), for clause (f), the following clauses has been substituted:
“(f) to adjudicate upon the disputes including those relating to performance of obligations under a contract related to sale, purchase or transmission of electricity, involving generating companies or licensees in regard to matters connected with clauses (a) to (d); Amendment of section 77. Amendment of section 78. Amendment of section 79. 5 10 15 20 25 30 35 40 45 7
(fa) to adjudicate upon the disputes involving the National Load Despatch Centre or the Regional Load Despatch Centre in regard to matters connected with sections 26, 28 and 29;”
• In section 79 which specifies “Functions of Central Commission”, in sub-section (1), after clause (j), the following clause has been inserted:
“(ja) to grant licence for distributing electricity in more than one State;”
• In section 79 which specifies “Functions of Central Commission”, in sub-section (1), after clause (k), the following proviso has been inserted:
“Provided that the Chairperson of the Central Commission shall constitute a Bench consisting of a Member appointed under clause (c) of sub-section (2) of section 77 and not more than one Member, as may be nominated by the Chairperson, who shall discharge the functions as provided in clauses (f) and (fa).”
• In section 82 which specifies “Constitution of State Commission” for sub-section (4), the following sub-section has been substituted:
“(4) The State Commission shall consist of a Chairperson and three other Members.”
• In section 82 which specifies “Constitution of State Commission” sub section 6 has been inserted:
“(6) If any State Commission is unable to perform its functions on account of vacancies, the Central Government may, in consultation with the State Government concerned, entrust its functions to any other State Commission or Joint Commission, as it deems necessary.”
• In section 84 which specifies “Qualifications for appointment of Chairperson and Members of State Commission” for sub-section (1), the following sub-section shall be substituted:
“(1) The Chairperson of the State Commission shall be a person of ability, integrity and standing, who is or has been,
o the head of an organisation dealing with generation, transmission or distribution of electricity;
o a Principal Secretary to the State Government or its equivalent: Provided that preference shall be given to a person having adequate knowledge and experience of not less than two years in the power sector.”
• In section 84 which specifies “Qualifications for appointment of Chairperson and Members of State Commission” for sub-section (2), the following sub-section has been substituted:
“(2) The Members, other than the Chairperson of the State Commission, shall be persons of ability, integrity and standing having adequate knowledge of and experience in the fields of engineering, law, economics, commerce, finance, public policy, public administration or management and shall be appointed as follows:
o one person having adequate qualifications and experience in the field of engineering with specialisation in generation, transmission or distribution of electricity
o one person having adequate qualifications and experience in the field of finance, economics, commerce, public policy, public administration or management
o one person, who is, or has been holding a judicial office or is a person possessing adequate professional qualifications and experience in law.”
• In section 86 which specifies “(Functions of State Commission”, in sub-section (1 ) for clause (e), the following clause has been substituted:
“(e) promote generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such person, a percentage of the total consumption of electricity in the area of supply of a distribution licensee which shall not be less than such percentage as may be prescribed by the Central Government;”
• In section 86 which specifies “(Functions of State Commission”, in sub-section (1) for clause (f), the following clauses has been substituted:
“(f) adjudicate upon the disputes including those relating to performance of obligations under contracts related to sale, purchase or transmission of electricity involving generating companies or licensees: Provided that in case of reneging of Power Purchase Agreement by a generating company or a licensee, the dispute shall be adjudicated along with appropriate compensation to the affected party, within ninety days from the date of submission of petition to the Appropriate Commission;
(fa) adjudicate upon the disputes involving the State Load Despatch Centre in regard to matters connected with section 32 and section 33;”
• In section 86 which specifies “(Functions of State Commission”, in sub-section (1) after clause (j), the following clauses has been inserted:
“(ja) issue directions or guidelines or specify regulations to secure consumer choice and an efficient, coordinated and economical use of the distribution system, where there are more than one distribution licensee in an area of supply;
(jb) review the resource adequacy at intervals of every six months for each of the distribution licensees in accordance with the guidelines issued by the Central Government;”
• In section 86 which specifies “(Functions of State Commission”, in sub-section (1) after clause (k), the following proviso has been inserted:
“Provided that the Chairperson of the State Commission shall constitute a Bench consisting of a Member appointed under clause (c) of sub-section (2) of section 84 and not more than one Member, as may be nominated by the Chairperson, who shall discharge the functions provided in clauses (f) and (fa).”
• In section 94 which specifies “Powers of Appropriate Commission”, after sub-section (3), the following sub-sections has been inserted:
“(4) An order made by the Appropriate Commission or its Bench shall be executable as a decree of a civil court and, for this purpose, such Commission or Bench shall have all the powers of a civil court including but not limited to powers of attachment and sale of property and appointment of a receiver.
(5) Notwithstanding anything contained in sub-section (4), the Appropriate Commission or Bench referred to in that sub-section may transmit an order made by it to a civil court having local jurisdiction and such civil court shall execute the order as if it were a decree made by that court.”
• In section 183 which specifies “Power to remove difficulties”, after sub-section (1), the following sub-section shall be inserted:
“(1A) Notwithstanding anything contained in sub-section (1), if any difficulty arises in giving effect to the provisions of this Act as amended by the Electricity (Amendment) Act, 2022, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act, as may appear to it to be necessary for removing the difficulty.
Provided that no such order shall be made under this section after the expiry of a period of two years from the date of commencement of the Electricity (Amendment) Act, 2022.”.
[Bill No. 187 of 2022]
