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Power ministry’s advisory group calls for amending Electricity Act

According to reports, an advisory group of the power ministry has called for amending various provisions of the Electricity Act 2003 to resolve issues hurting investments in the sector. The suggestions surrounded misuse of open access provisions by states, tightening of grid security norms, powers of the regulators to intervene in disputes, promotion of hydro resources and prevention of theft.

The panel made the suggestions in a presentation made to power minister Jyotiraditya Scindia in the meeting attended by Torrent Group Chairman Sudhir Mehta, CLP India Chairman Rajiv Mishra, GMR Group’s energy division Chairman GBS Raju and the chairmen of Central Electricity Authority (CEA) and Powergrid.
The panel asked for amending section 11 of the Act to modify the definition of “extraordinary circumstances.” The section gives the state governments the power to give directions relating to operation of power plants to generating companies in public interest. “There are many examples of misuse of section 11 by states by restricting open access to companies for sale outside the state,” the group said. The definition of extraordinary circumstances should not cover normal problems faced by states such as deficit due to improper planning.
The panel also asked for amending section 61 of the Act to include hydro power projects of above 25 Mw capacity in “renewable energy”. Currently, such projects are not considered as renewable power projects as the Government of India (Allocation of Business) Rules 1961 allocates matters related to projects of less than 25 Mw capacity to the Ministry of New and Renewable Energy (MNRE).
The group asked for keeping intact the provisions related to tariff determination by the electricity regulator (section 62) and tariff discovery through competitive bidding (section 63). It, however, said the national tariff policy needs to be amended to bring it in line with the provisions of the Act.

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