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Reforms

The document summarizes the key regulatory reforms in India's electricity sector over the 20th century, including the Electricity Act of 1910, Electricity Supply Act of 1948, Electricity Regulatory Commission Act of 1998, and the Electricity Act of 2003. The 2003 Act consolidated previous policies, aimed to increase private participation and efficiency, removed the license requirement for power generation, and introduced open access to transmission and distribution networks. These reforms led to more private investment, unbundling of state electricity boards, reduced transmission losses, and greater consumer choice.

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30 views10 pages

Reforms

The document summarizes the key regulatory reforms in India's electricity sector over the 20th century, including the Electricity Act of 1910, Electricity Supply Act of 1948, Electricity Regulatory Commission Act of 1998, and the Electricity Act of 2003. The 2003 Act consolidated previous policies, aimed to increase private participation and efficiency, removed the license requirement for power generation, and introduced open access to transmission and distribution networks. These reforms led to more private investment, unbundling of state electricity boards, reduced transmission losses, and greater consumer choice.

Uploaded by

chakrimish
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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REGULATORY REFORMS

REGULATORY REFORMS
 Indian Electricity Act, 1910
 Covered the technical and operating standards of the Indian
Power Sector.
 Provided the authority to state governments to grant licenses
for supplying power in a specified geographical area
 This Act was amended through the Electricity Laws
(Amendment) Act, 1998 to introduce several measures
relating to transmission
 Transmission license was defined and concept of central
transmission utility (for inter-state transmission) and state
transmission utilities (for intra-state transmission) were
introduced.
REGULATORY REFORMS
 Specified the licensing role of the Central Electricity Regulatory
Commission and state electricity regulatory commissions
 The Electricity (Supply) Act, 1948
 Development of the state sector
 Financing norms for performance of the electricity industry
 Creation of state electricity boards, central generating units and
central electricity authority
 Amended in 1991 to provide for private participation
 100% foreign equity participation by foreign private investors
 Policy guidelines for private participation issued in 1995
 Mega power policy announced in 1995
REGULATORY REFORMS
 Electricity Regulatory Commission Act, 1998
 Separate regulatory bodies at central and state levels
 Creation of STUs and CTUs
 The Electricity Laws Act 1910 was amended to take
transmission as a separate activity for inviting greater public
and private participation

 The Electricity Act, 2003


 Consolidated all the previous policies, streamlining the power
sector and improving efficiency
 Low level of private participation till 2000s
 Requirement of a license for generation
REGULATORY REFORMS
Key features of Electricity Act, 2003
Generation:
 No license required for generation
 International competitive bidding to encourage competition
 Captive power generation and sales to third party encouraged
 Open access in T&D, direct access to retail consumers

Impact:
 Led to entry of more private players in this segment
 Industrial players planning captive power capacities to meet their
demands
REGULATORY REFORMS
Transmission and Distribution:
 Open access to T&D sector, providing choice to customers
 Unbundling and Corporatisation of the T&D business by SEBs
 Higher investments to improve existing infrastructure
 Opportunities for competition in the distribution segment

Impact:
 Presence of private players in transmission through JV with Power
Grid Corporation of India Ltd (PGCIL)
 16 states have been unbundled till May 2009
 Few states have turned into profit making entities
REGULATORY REFORMS
Industry dynamics:
 Regulators to play an important role
 Focus on efficiency improvement
 Cross-subsidies to come down and be eliminated
 Power trading to be encouraged

Impact:
 T&D Losses within the system came down
 Power trading corporation was set up to meet short term
requirement of electricity
REGULATORY REFORMS
Power Consumers:
 Consumers would be allowed to source power from supplier of their
choice
 Availability based tariff (ABT) system introduced to avoid grid
failures
 Tariffs continue to be regulated

Impact:
 Industrial and bulk consumers are free to source power from supplier
of their choice
 ABT system has helped to bring in grid discipline in the system
 Power trading corporation was set up to meet short term requirement
of electricity
REGULATORY REFORMS
 The Electricity (Amendment) Act, 2007
 Central government, jointly with state governments, to endeavour to
provide access to electricity to all areas including villages
 No license required to sale from captive units
 Removal of the provision for elimination of cross-subsidies.,
reduction of cross-subsidies to continue
 Tariffs continue to be regulated
 Theft made explicitly cognisable and non-bailable.
 Amendment likely to make states more lenient in setting targets for
cross-subsidy reduction
REGULATORY REFORMS
 National Electricity Policy, 2005
 Power to all – access to electricity for all households in next 5 years
 Availability of Power – demand to be met by 2012
 Per capita availability of electricity to be increased to over 1000 units
by 2012
 Financial Turnaround and commercial viability of electricity sector
 Huge capacity additions announced to meet the ‘Power to all’ by 2012
vision

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