The Government may get tougher with power producers and distribution companies (discoms) that violate power purchase agreements (PPAs).

The proposed amendments to the Electricity Act, 2003 — in the draft Electricity (Amendment) Act, 2018 — have defined penalties for such violations.

These may extend to ₹1 crore per day and may also attract suspension and cancellation of a licence. Further, in the case of non-compliance of renewable-power purchase obligations, the proposed amendments specify a penalty of ₹1-5 per unit.

The draft has also proposed that cross-subsidies within a distribution area shall not exceed 20 per cent and shall be progressively reduced and eliminated in three years.

Also, the reduction in cross subsidy shall be not less than 6 per cent a year.

Proposing changes to Section 25 of the Act, the draft talks about having three levels of committees to facilitate efficient, economical and integrated transmission and supply of electricity.

Three-level committees

The committees will aid voluntary inter-connections and coordination of facilities for inter-State, regional and inter-regional generation and transmission of electricity.

At the top will be the National Power Committee, established by the Centre to facilitate integrated operations of the power system at the national level.

The Centre shall also establish a Regional Power Committee. The third layer is the State Power Committee that will be established by the respective State governments.

These committees are expected to set the base for the Centre’s larger goal of having a national-level discom that can balance the integration of renewable energy in the national grid.

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