Government may amend power act to levy hefty penalties on discoms ...

    Government may amend power act to levy hefty penalties on discoms

    The government is working on amendments to the Electricity Act to levy hefty penalties on power distribution companies for load shedding and make provisions for direct subsidy transfers by states to power consumers.
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    Electricity Act

    The Union power ministry is aiming to introduce the Electricity Act amendment bill in the budget session of parliament. At present, the Act fixes universal service obligation on distribution licensees to provide electricity to all applicants and the penalty for non-compliance can extend to up to Rs 1,000 per day of default.

    “If a distribution licensee fails to supply the electricity within the period specified …., he shall be liable to a penalty which may extend to one thousand rupees for each day of default,” it says. “Nothing contained in Section 43 shall be taken as requiring a distribution licensee to give supply of electricity to any premises if he is prevented from so doing by cyclone, floods, storms or other occurrences beyond his control,” the Act adds.

    A senior government official said the amendments are proposed in the Act to explicitly fix 24×7 power supply obligation on electricity distribution licencees. “The penalties have not been decided yet but may go up several times from the present nominal charges applicable. The draft bill will be circulated for stakeholders comments and later moved to the Union Cabinet for approval before being tabled in parliament,” he said on condition of anonymity.

    The bill will also provide for subsidy transfers from state governments for power consumption directly to the consumers, on the lines of cooking gas cylinders.

    In an interview to ET in December, power minister RK Singh had said, “Gratuitous load shedding because you don’t want to buy electricity will not be accepted…. Amendments are proposed in the tariff policy and the Electricity Act”.

    Industry experts say a DBT like structure in power distribution sector would help revive the discoms. But the scheme may face challenges in implementation as net electricity metering is not prevalent in rural areas.

    Read More: Delhi power discoms to purchase 1,000 MW clean energy by 2019

    The roadmap for one of the most awaited reforms in the power sector by enabling electricity consumers to choose their supplier is also likely to be provided in the bill. However, the bill may not impose timelines for implementation of the proposal as that has been opposed by states. The states may, however, be asked to notify their plans for implementation of the reform for electricity connection portability in the next 3-5 years.

    The proposal, to separate electricity supply and network maintenance services and introduce multiple licensees for a single area by amending the Electricity Act 2003, has been in works for last many years. The UPA government had in 2014 introduced a bill to this effect in the Lok Sabha. The proposal is similar to mobile number portability where consumers can switch to a telecom operator of their choice. Currently, power distribution utilities are responsible for operating and maintaining.

    Info: economictimes

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