There are plenty of deep rooted issues that the power sector faces such as mounting debt of the loss-making power distribution companies (discoms), high technical and commercial losses, inefficiency in payment recovery in the ecosystem, coal production and supply constraints, among others. The entire supply chain in the power sector has been stretched due to payment related issues.
In this backdrop, the amendments aim to streamline the payment framework, empower regulators and encourage competition in the sector.
Here are some of the key amendments:
- More than one power distributor can operate in an area and they will be allowed to use the power distribution infrastructure of other suppliers.
- If the regulator does not approve or reject the power distribution license application of an entity within the prescribed period (90 days), the applicant will be deemed to have been granted the license.
- Regulators will be empowered to execute orders as a decree of a civil court. This is aimed at improving compliance.
- It states that the dispatch centres, both at state and centre, may cut supplies in case discom has not maintained adequate security of payment.
- The bill has amendments that focus on boosting green energy in the country and align states to the national goals.