New Delhi:
The government stated on Saturday that the Electricity (Amendment) Bill, 2025 brings pivotal changes aimed at modernising India’s power infrastructure, fostering competition in distribution, tightening regulatory oversight, and supporting fair pricing structures.
The legislation was drafted to tackle long‑standing problems, including the ongoing financial hemorrhage of distribution companies (discoms) caused by subpar billing, high aggregate technical and commercial (AT&C) losses; the absence of competition in electricity supply, which forces consumers into a single discom and stifles service quality and innovation; and distortions from cross‑subsidisation, where industrial customers pay excessively high tariffs that undermine the competitiveness of Indian manufacturing.
According to official documents, the Bill creates a regulated competitive framework for electricity distribution, permitting several licensees to operate within the same territory while sharing and optimising grid infrastructure.
It also requires all licensees to comply with the Universal Service Obligation (USO), guaranteeing impartial access and reliable supply to every consumer. Simultaneously, State Electricity Regulatory Commissions (SERCs) may exempt large consumers (exceeding 1 MW) from USO when they are eligible for Open Access, in consultation with the relevant state governments.
Beyond price‑reflective tariffs, the Bill safeguards subsidised customers such as farmers and low‑income households through transparent budgeted subsidies under Section 65, while aiming to eliminate cross‑subsidies for the manufacturing sector, railways, and metro railways within five years.
The Bill also authorises appropriate commissions to manage wheeling charges, prevent network duplication, and introduces provisions for Energy Storage Systems (ESS) to clarify their role within the electricity ecosystem.
An Electricity Council will be established to facilitate Centre‑state coordination and consensus building, while SERCs are empowered to enforce standards, penalise non‑compliance, and set tariffs suo moto if applications are protracted.
Overall, the Electricity (Amendment) Bill, 2025 represents a significant step toward reshaping India’s power system to accommodate a rapidly expanding economy, with a clear emphasis on protecting subsidised rates for farmers and low‑income households.
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