Draft Electricity (Amendment) Bill, 2025 to End Duplication, Promote Network Sharing, and Ensure Fair Competition in Power Distribution

In a move aimed at reducing inefficiencies in power distribution, the Ministry of Power has proposed amendments under the draft Electricity (Amendment) Bill, 2025 to allow distribution licensees to share networks, instead of building separate poles, wires, and substations. Currently, while the Electricity Act, 2003 permits multiple licensees in the same area and mandates non-discriminatory open access, each new licensee is required to construct its own distribution network, raising costs for consumers.

Under the proposed amendment, a distribution licensee can use another licensee’s network upon payment of charges determined by the State Electricity Regulatory Commission (SERC). The move is expected to eliminate wasteful duplication and make electricity more cost-effective.

The Bill retains the Universal Service Obligation for all distribution licensees, ensuring supply to all consumers in their approved area, including rural and domestic users. Large consumers may be exempted as per SERC directives. The amendment also proposes that SERCs establish a transparent framework for introducing multiple licensees in the same supply area, ensuring fair competition.

Officials emphasised that agricultural and domestic consumers will not face adverse impacts. Competition is expected to improve service quality, while state-provided subsidies for specified consumer categories, including agriculture and domestic users, will continue under Section 65 of the Act.