The government has readied a raft of power sector reforms, including implementing the direct benefit transfer (DBT) scheme in the electricity sector for better targeting of subsidies, freeing renewable energy from licensing requirement for generation and supply, and promoting retail competition.
According to the draft amendments to the Electricity Act, 2003, which is available on the power ministry’s website, the government is trying to give consumers wider choice by promoting competition in the distribution sector and addressing contracting issues with medium- and long-term power purchase agreements.
The government has been pushing for separating the so-called carriage and content operations of existing power distribution companies, and electricity supply business.
Such a move will allow consumers to buy electricity from a power company of their choice.
According to the draft amendments, there will be a price cap for electricity tariffs in a particular area under which multiple supply licensees can operate.
The electricity (amendment) bill, 2014, was introduced in the Lok Sabha in December 2014.
It was then referred to the standing committee on energy, and after its recommendations, consultations were held with the states.
“It is forward looking and provides clarity and accountability across institutions and on a range of issues,” said Sambitosh Mohapatra, partner, PwC India.