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Power consumers will soon have the option of selecting their electricity supplier, with the Government proposing to amend the Electricity Act.
Piyush Goyal, Minister for Power, Coal and New and Renewable Energy, introduced the Electricity (Amendment) Bill, 2014 in the Lok Sabha on Friday, which aims to promote competition and improve electricity supply.
A concept of multiple supply licensees has been proposed in the amendment by segregating carriage from content. Carriage will continue to be a regulated activity and it has been proposed that tariff for retail sale of electricity will be capped by the regulator with one of the supply licensee proposed to be a Government controlled company. Existing distribution licenses are likely to continue till the expiry of their term.
Apart from the amendment to the Electricity Act, changes are also required in the Tariff Policy to enable the smooth implementation of certain provisions of the first round of coal block e-auctions.
The Coal Ministry has proposed to allow power plants bidding for coal blocks to sell up to 20 per cent of capacity on a merchant basis. This proposal is for those plants where the complete generation capacity is not covered under power purchase agreements. Current, regulations restricts merchant power sales in such cases to only 15 per cent.
“This would require a change in the tariff policy. But it is a policy and not an act, a Cabinet approval will do,” said a senior Government official.
The amendments to the Electricity Act also propose to make the provisions of the Tariff Policy mandatory for determination of rates.
Meanwhile, the other major amendments in the Electricity Act aim to enhance grid safety and connectivity, separate carriage and content in the distribution sector, promote renewable energy and rationalise tariffs for consumers, an official statement said.
For grid security, measures to maintain spinning reserves and enhanced penalties for violations of directions given by State and Regional Load Despatch Centres has been proposed in the amendments.
To promote renewable energy, a National Renewable Energy Policy will be formulated. Renewable Generation Obligation has been brought in for generators using coal and lignite as fuel.
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