Proposed Amendment in the Electricity Act, 2003

Brief Highlights of the proposed amendment in the Electricity Act, 2003 are as follows:-


1. Introduction of the energy security mechanism and inclusion of the definition of ancillary support and smart grid.
2. Specifically defined the area of distribution licensees and the time period.
3. Modified the definition of the Group Captive projects as per the conditions prescribed by Central government.
4. Modified the definitions of dedicated transmission lines, distribution licensee and franchisee and proposed the meaning of distribution and decentralised distribution generation.
5. Introduced long term open access, medium term open access and obligated entities.
6. Supported renewable energy sector by defining the renewable energy sources, renewable energy service companies, renewable purchase obligations and renewable generation obligation.
7. Proposed to notify the national renewable energy policy.
8. Planned to support the Renewable Energy Sector by notifying policies and adopt measures for promotion of Renewable Energy Generation including grant of fiscal and financial incentives and issuing trajectory for Renewable Purchase Obligations from time to time.
9. Introduction for the policy for harnessing solar and other RE sources for standalone system.
10. Suggested to notify rules and policy for cross border exchange of electricity.




11. All the generating companies who has established a coal or lignite based thermal generating station shall have to fulfil the RGO from physical RE or any instrument representing RE.
12. Penalty of maximum to Rs. Fifty Lakh for non-compliance of RGO.
13. Indian railway, Metro Rail, mono rail and such other transport will be deemed distribution licensee.
14. Generation and supply of renewable energy will not require any licence for such generation and supply.
15. Discom after implementation of transfer scheme shall not engage in trading or supply of electricity unless specified by Central government.
16. Franchisee does not require any licence from the concerned Commission.
17. Introduction of National, Regional and State Power Committee.
18. Appropriate Commission shall review power purchase agreements of Discoms in every two year
19. The surcharge for open access shall not be more than twenty percent of the wheeling charges.
20. For non-compliance of RPO the appropriate commission may impose a penalty which shall be minimum of Rs 1 per unit with maximum of Rs 5 per unit to the extent of shortfall.
21. The tariff determined, after the date of implementation of the transfer scheme, for retail sale of electricity shall be the ceiling tariff for the respective categories of consumers, the supply licensee shall be entitled to charge any consumer category at an amount lesser than the ceiling tariff.
22. Subsidy to the consumer or class of consumer as per the tariff determined by the State Commission under section 62 and as per the final tariff order issued under section 64, such subsidy shall be directly transferred to the beneficiary.
23. Central Commission shall promote energy efficiency, renewable energy, cogeneration from renewable sources of energy.
24. State Commission shall promote cogeneration from sources other than renewable sources and hydro power generation and ensure the time bound reduction of cross – subsidies in tariff.
25. Every proceeding before the Appropriate Commission shall be decided expeditiously.
26. Matters pertaining to pass through in tariff on account of change in law/duties/taxes etc shall be decided in a maximum of 30 days.
27. All other matters will be disposed off within ninety days.
28. Appropriate Commission shall have all the powers of a civil court.
29. Penalty also imposed on renewable energy generating companies or person in-charge of renewable energy generating companies in case of non-compliance.

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CMA Sandeep Kumar
Founder – CMA CLUB INDIA

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