The Electricity (Amendment) Bill, 2021 which is being finalised by the Government, is expected to delicense power distribution in the country and further open doors for a new set of players in this space, official sources said.

While this may open a new chapter in power sector reforms, the existing distribution companies will continue to function as usual even as they may see more competition. The new bill will put an end to the monopolies in the power distribution segment, whether Government or private monopolies, sources added.

Meanwhile, Power Minister RK Singh questioned West Bengal Chief Minister Mama Banerjee’s opposition to the amendment bill. He said, “License Raj has to go. There should be a rule-based law.” He further added, “Why does she want to protect the monopoly? She has been briefed wrongly. Especially in Kolkata, the private companies have the highest tariffs.”

Furthermore, the Minister assured that the fixed cost for power distribution companies will be protected. He stated that there would be a ceiling tariff to protect the interest of consumers.

It may be noted that last week, Banerjee had reportedly written a letter to the Prime Minister Narendra Modi, opposing the government's intent to introduce the Electricity (Amendment) Bill, 2021, in Parliament in the current monsoon session when many States have raised reservations against the bill. She called the bill anti-people and said it would only promote crony capitalism.

According to the sources, the Ministry has drafted a reply to the West Bengal Chief Minister but as she wrote the letter directly to the Prime Minister, so the reply will be sent only when the letter comes to the Power Ministry. The sources said that the letter will also be written to Kerala explaining about the benefits of the Electricity (Amendment) Bill. Besides this, Singh will also explain about other provisions like cross-subsidies and renewable purchase obligation in his letter to these two states.

Another provision of the bill is the strengthening of the regulators- central electricity regulatory commission (CERC), state electricity regulatory commission (SERC). More members are being added to the regulatory system, as per the Supreme Court order. The third provision in the amendment bill is to encourage green energy. The bill has a provision for renewable purchase obligation, which obligates DISCOMS to buy a certain percentage of electricity from renewable energy sources, as a percentage of the total consumption of electricity.

In addition, as the grids are sensitive, it is crucial to handle them properly. So, the Government is providing authority to the National Load Dispatch Centre to give directions to the other Regional Load Dispatch Centres and State Load Dispatch Centres to comply with all the safety measures, the sources said.