1. Home
2. Legal News
3. Deadline for Comments and feedback on Draft Electricity Bill 2020 extended by four weeks till June 5. Read the important amendments here!

Deadline for Comments and feedback on Draft Electricity Bill 2020 extended by four weeks till June 5. Read the important amendments here!

Dated: May 02, 2020

The Electricity Act 2003 was enacted on 10 June 2003 to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity. A new amendment to the act has been proposed through the draft. The draft was published on 17th April 2020 by the Ministry of Power. A 21 day (ending on 8th May 2020) time was provided for the comments to be provided on the draft. The power ministry has extended the deadline for submission of stakeholders' comments on the draft Electricity Amendment Bill by four weeks till June 5.

The aim of the draft Electricity Amendment Bill 2020 is to promote competition, protect interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies, constitution of Central Electricity Authority, Regulatory Commission and establishment of Appellate Tribunal and for matters connected therewith and incidental thereto. The act previously extended to all the states in India except Jammu & Kashmir now extends to whole of India i.e. all the states including Jammu & Kashmir. Key proposed amendments are as follows, 

Power Purchase Agreement and establishment of ECLA : - As per the amendment to section 49, we can see that now power purchase agreements can now be entered into and executed. These agreements will deal with the supply, purchase or transmission of the electricity. A new chapter has been introduced, which in turn establishes a ELECTRICITY CONTRACT ENFORCEMENT AUTHORITY. This authority after its establishment has the authority and jurisdiction to deal with matters regarding performance of obligations under a contract related to sale, purchase or transmission of electricity. It does not have not have any jurisdiction over any matter related to regulation or determination of tariff or any dispute involving tariff. it is sole authority which has to deal with the matter file expeditiously and has to dispose the same within 120 days of the date of receipt. The powers vested in the ECEA will the be same as that of the Civil Court under the Code of Civil Procedure, 1908. ECEA has the all the powers of a civil court including but limited to powers of attachment and sale of property, arrest and detention in prison and appointment of a receiver. It is further proposed that, order made by the ECEA under this Act shall be executable by it as a decree of civil court. 

Appellate Tribunal Powers : - The Appellate Tribunal shall have the same jurisdiction, powers and authority to take action on wilful disobedience to any of its judgment, decree, direction, order or other process or wilful breach of an undertaking given to a it, as a High Court under the provisions of the Contempt of Courts Act, 1971 (70 of 1971)

Introduction of Payment Security Mechanism : - Amendment to section 28 & 32 has been provided which says, "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." It is clear that there will be no dispatch of electricity by the regional and the state dispatch center without adequate security. This solves the problem of pending dues,for which at times the generators had to take harsh legal methods to recover the amount. 
National Renewable Energy Policy

Promoting National Renewable Energy Policy : - It is proposed that the Central Government may after consultation with the State Governments, as may be considered necessary, prepare and notify a National Renewable Energy Policy for the promotion of generation of electricity from renewable sources of energy and prescribe a minimum percentage of purchase of electricity from renewable and hydro sources of energy. 

Subsidy : - The benefit of subsidy to be granted directly to the consumer and the licensee shall charge the consumers as per the tariff determined by the Appropriate Commission. The determination of tariffs shall be fixed by the commission without accounting for subsidies. It is proposed that state commissions to determine tariff for retail sale of electricity without any subsidy under section 65 of the Act.

Sub-license : - In order to reduce disparity and increase the effective distribution of the electricity, distribution licensee can appoint a 'Distribution sub-licensee' to distribute electricity on its behalf in a particular area within its area of supply, with the permission of the appropriate State Commission.

The draft Electricity Amendment Bill 2020 can be read here.

BY: Rohan Kharche