Bill introduces key reforms to modernise India’s power sector. It promotes competition in distribution, strengthens regulatory oversight, and supports fair pricing mechanisms.
Key Features of the Bill:
- Structural Reforms:
Bill seeks to resolve key issues persisting in power sector i.e.:
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- Mandates Universal Service Obligation (USO) for all licensees, ensuring non-discriminatory access and supply to all consumers.
- It also enables SERCs to make Distribution licensees free from USO, in consultation with State Governments, for large consumers eligible for Open Access ( >1 MW).
- Tariff and Cross-Subsidy Rationalisation
- Promotes cost-reflective tariffs while protecting subsidised consumers (e.g., farmers, poor households) through transparent budgeted subsidies..
- Seeks elimination of cross-subsidy for the Manufacturing Industry, Railways, and Metro railways within five years.
- Governance and Regulatory Strengthening
- Establishes an Electricity Council for Centre-State policy coordination and consensus-building.
- Empowers State Electricity Regulatory Commissions (SERCs) to enforce standards, penalise non-compliance, and determine tariffs suo moto if applications are delayed.
- Sustainability and Market Development
- Strengthens obligations for non-fossil energy procurement, with penalties for non-compliance.
- Promotes power market development, including new instruments and trading platforms.
