Parliamentary Panel Reviews Draft Electricity (Amendment) Bill, 2025 on Power Sector Reforms

The Parliamentary Consultative Committee for the Ministry of Power met in New Delhi on December 18, 2025, to deliberate on the Draft Electricity (Amendment) Bill, 2025. The meeting was chaired by Union Minister for Power and Housing & Urban Affairs, Shri Manohar Lal, and was attended by Members of Parliament from both the Lok Sabha and the Rajya Sabha representing various political parties.

The meeting was convened to seek parliamentary inputs on key proposals contained in the draft Bill, which has been released by the Ministry of Power for stakeholder consultation. Addressing the committee, Shri Manohar Lal described the proposed legislation as being of significant national importance, aimed at strengthening the legislative framework of India’s power sector in line with the vision of Viksit Bharat @ 2047. While highlighting the progress made since the enactment of the Electricity Act, 2003, he noted that persistent financial stress in the distribution segment continues to pose a major challenge.

The minister explained that the Bill proposes measures to mandate cost-reflective tariffs and empower regulatory commissions to act suo motu in cases where utilities delay tariff filings. He clarified that state governments would continue to provide subsidies to priority consumer categories such as domestic and agricultural users, ensuring that these consumers are not adversely affected. According to him, the proposed reforms seek to balance financial discipline with consumer welfare.

Shri Manohar Lal further stated that the Bill aims to enhance the competitiveness of Indian industry by reducing distortions arising from cross-subsidies and surcharges. These changes, he said, would particularly benefit industries and MSMEs by lowering electricity costs, supporting job creation, and improving global competitiveness.

Under the proposed amendments, State Electricity Regulatory Commissions (SERCs), in consultation with state governments, would be empowered to exempt distribution companies (DISCOMs) from the obligation to supply electricity to large consumers. Such consumers would be allowed to procure power from alternative sources at competitive rates, subject to providing reasonable notice. The move is expected to reduce the fixed-cost burden on DISCOMs and benefit smaller consumers.

The minister also underscored the collective responsibility of promoting electricity generation from non-fossil fuel sources. The Bill proposes a minimum obligation for the use of non-fossil electricity and enables renewable capacity addition through market-based mechanisms, alongside DISCOM-led procurement, to ensure the availability of cost-competitive renewable power and reduce financial pressure on DISCOMs.

Highlighting the government’s focus on ease of living and ease of doing business, Shri Manohar Lal said the Bill includes provisions to improve service delivery, reduce compliance and financial burdens, and strengthen regulatory governance. The draft legislation also proposes expanding the strength of the Appellate Tribunal for Electricity (APTEL) to address rising case loads, incorporating Right-of-Way provisions directly into the Act, and enabling distribution network sharing to avoid infrastructure duplication and enhance consumer benefits.

Addressing concerns related to privatisation, tariff hikes, and employee welfare, the minister said such apprehensions were unfounded and assured that appropriate regulatory and policy safeguards would be implemented to protect the interests of consumers and employees.

The Bill also proposes the establishment of an Electricity Council to promote cooperative federalism and build national consensus on power sector reforms. Shri Manohar Lal further assured members that the government would ensure reasonable compensation to farmers for land used for laying electricity lines, noting that guidelines linked to market rates have already been issued by the Ministry of Power.

Members of Parliament offered several suggestions on various provisions of the draft Bill and appreciated the ministry’s efforts towards creating a future-ready power sector. Concluding the meeting, Shri Manohar Lal thanked the participants for their constructive inputs and sought their support in finalising and passing the Bill in Parliament for the broader benefit of the country.