Explained: What is Centre's new Electricity Bill? How will it impact people?

The Government of India plans to introduce a total of 26 new Bills in the upcoming Winter Session of Parliament. The parliamentary session will begin on November 29 and will cover a wide range of topics. Farm Laws Repeal Bill, 2021, Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, and The Electricity (Amendment) Bill, 2021 are a few of the major bills to be introduced by the Centre.

The Union Government's 'Electricity (Amendment) Bill, 2021' will facilitate de-licensing of power distribution in order to encourage competition between private and state-owned companies, as well as the appointment of a member with a legal background to the Regulatory Commissions. 

Apart from providing penalties for non-compliance with the Renewable Purchase Obligation (RPO) and prescribing consumer rights and duties, the bill will help strengthen the Appellate Tribunal for Electricity (APTEL).

Impact of Electricity (Amendment) Bill, 2021 

• If the Centre's electricity amendment bill is passed, the power sector will undergo significant changes. This will have a direct impact on the country's millions of electricity customers. 

• One of the major changes is that the government will no longer provide subsidies to power companies, but will instead transfer them to customers' accounts, similar to how LPG subsidies are distributed.

• Customers, on the other hand, will be charged the full bill by the power companies, implying that they will receive electricity at full cost. The government will then transfer the subsidy to the customers' accounts. 

• As the next election cycle approaches, politicians are promising voters of free electricity. But Centre’s new power bill is going to impact these poll promises too. As per the new bill, no government will be able to provide free electricity and can only subsidize customers.

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• Experts also suspect that the Centre, just like LPG subsidies, will provide the benefit to those in need. Currently, all electricity customers across the country are eligible for a subsidy.

• Electricity could become more expensive with the new law, which allows electricity companies to charge bills based on input costs. Currently, power generation companies' costs are Rs 0.47 per unit higher than the bill charged to customers. Subsidies are used by businesses to compensate for this.

• So far, the state governments have been providing advance subsidies to the distributor power companies. This subsidy is used to determine electricity rates.

Fresh farmer-Centre conflict

In India, power prices have changed dramatically over the last decade, and farmers are concerned that privatisation will make electricity more expensive.

Pushpendra Singh, a farmer leader says that paying the electricity bill in full would put farmers in a financial bind. Farmers should be allowed to pay the subsidised charges, while the government should pay for the remaining amount.

According to the India Environment Portal, "the availability of electricity at low rates has been one of the important factors contributing to the sharp rise in irrigation facilities, thus helping growth in agriculture."

The country's agriculture consumers (electricity customers who have taken out an agriculture connection) number in the millions, so the new rules will have an impact on them.