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The Union power ministry has circulated the proposed Electricity (Amendment) Bill, 2021, for inter-ministerial consultation and has also sent it to the law and justice ministry for vetting, a government official aware of the development said.

The proposed amendments aim to de-license power distribution and increase competition, unleashing next-generation power sector reforms in India. After Cabinet approval, the government aims to introduce and pass the Bill in the current session of Parliament.

Prime Minister Narendra Modi has said an electricity consumer should be able to choose his supplier like any other retail commodity. The Union budget presented last month proposed to create a framework to allow consumers to choose their electricity suppliers. “The amendment has been circulated now for inter-ministerial comments," the official cited above said on the condition of anonymity.

The amendments also propose appointing a member with legal background in every electricity regulatory commission and strengthening of the Appellate Tribunal for Electricity (Aptel). They will also spell out penalty for not meeting renewable purchase obligations that require power distribution companies (discoms) to buy a fixed amount of renewable energy to reduce reliance on fossil fuels.

India has set a target of achieving a 450GW renewable energy capacity by 2030. It currently has an installed renewable energy capacity of 89.63GW, with around 49.59GW capacity under execution and another 27.41GW tendered.

With the discoms being the weakest link in the electricity value chain, the National Democratic Alliance government wants state power regulators to ensure regular tariff revisions and put an end to creating the so-called regulatory assets, as it seeks to enforce financial discipline on discoms.

In addition, Electricity (Amendment) Bill may also prescribe power consumers’ rights and duties, as the government plans to ensure round-the-clock supply.

Queries emailed to a power ministry spokesperson on Saturday afternoon weren’t answered till press time.

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