New Delhi, Nov 22 (NationPress) On Saturday, the government announced the introduction of the Electricity (Amendment) Bill, 2025, which aims to implement significant reforms designed to modernize India’s power sector. This Bill encourages competition in distribution, enhances regulatory oversight, and establishes fair pricing mechanisms.

The initiative is intended to address longstanding inefficiencies, such as ongoing financial losses faced by distribution companies (discoms) stemming from inadequate billing procedures, elevated aggregate technical and commercial (AT&C) losses, and a lack of competition in electricity supply. Consumers have been limited to a single discom, which hampers service quality and stifles innovation. Additionally, the current system of cross-subsidization results in industrial users bearing inflated tariffs to subsidize other categories, adversely impacting the competitiveness of Indian manufacturing.

An official document indicates that the Bill facilitates regulated competition in electricity distribution, permitting multiple licensees to function within the same region using shared and optimized infrastructure.

Moreover, the Bill mandates a Universal Service Obligation (USO) for all licensees, guaranteeing non-discriminatory access and supply to all consumers. It also allows State Electricity Regulatory Commissions (SERCs) to exempt distribution licensees from USO obligations in consultation with State Governments for large consumers eligible for Open Access (greater than 1 MW).

This legislation aims to encourage cost-reflective tariffs while safeguarding subsidized consumers, such as farmers and low-income households, through transparent budgeted subsidies under Section 65, and it seeks to phase out cross-subsidies for the Manufacturing Industry, Railways, and Metro railways within five years.

Additionally, it empowers Appropriate Commissions to regulate wheeling charges and prevent the duplication of distribution networks. The Bill introduces provisions for Energy Storage Systems (ESS) and determines their role in the electricity ecosystem.

The establishment of an Electricity Council for Centre-State policy coordination and consensus-building is also included. SERCs are empowered to enforce standards, impose penalties for non-compliance, and autonomously determine tariffs if applications are delayed.

The Electricity (Amendment) Bill, 2025 marks a critical milestone in transforming India’s power infrastructure to cater to the demands of a rapidly growing economy, according to the document.

Importantly, the reforms ensure the complete protection of subsidized tariffs for farmers and low-income households.