The Ministry of Power has released the draft Electricity (Amendment) Bill, 2025, to strengthen and reform the electricity sector in alignment with industry requirements.
A key proposal mandates the state electricity regulatory commissions to determine tariffs in line with the National Tariff Policy, and empowers them to revise tariffs suo motu to avoid implementation delays. Tariff orders must be published in advance of the financial year to ensure timely cost recovery by discoms. To promote competitive markets and attract private investment, the draft authorises the Central Electricity Regulatory Commission to design and implement market-based instruments. It also provides legal basis for renewable energy consumption obligations, mandating penalties for non-compliance ranging between Rs 0.35 per kWh and Rs 0.45 per kWh. Further, the draft includes several provisions to reduce cross-subsidisation and encourage open access. It proposes that discoms be exempt from universal service obligations for open access consumers exceeding 1 MW and allows designated supply at a premium only if alternative arrangements fail. Furthermore, it exempts new manufacturing units from cross-subsidy charges for five years to incentivise industrial investment. Finally, the bill proposes the creation of a national electricity council, comprising the union power minister as chair, state electricity ministers as members, and the power secretary as member-convenor, to advise on reform implementation and policy coordination.