Power Bill Sparks Heated Debate Over Shared Distribution Networks
A crucial meeting held in Lucknow on Friday brought intense focus on a proposed amendment to India's electricity laws. The gathering examined 424 suggestions and objections regarding the draft Electricity (Amendment) Bill, 2025. Union Power Secretary Pankaj Agarwal chaired the session, which included representatives from FICCI, MSME organizations, private distribution companies, and consumer advocacy groups.
The Core Proposal: Adding One Word Changes Everything
At the center of discussions stood a seemingly simple change to Section 14 of the Electricity Act, 2003. The amendment would insert the word "shared" into the clause governing distribution systems. Currently, private distribution companies must build their own parallel networks alongside state-owned systems. The revised draft explicitly permits supply "through their own or shared distribution system."
This change, paired with modifications to Section 42(1) guaranteeing non-discriminatory access to infrastructure, would allow multiple licensees to use the same physical network. Officials described this as the "competition on the wires" moment the sector has long awaited. They argue it would eliminate wasteful duplication of poles and cables while lowering long-term system costs through more intensive asset utilization.
Consumer Advocates Sound Alarm Bells
Despite official enthusiasm, consumer advocacy groups expressed serious reservations. Avadhesh Kumar Verma, member of the Central Electricity Regulatory Commission and chairman of the Uttar Pradesh Rajya Vidyut Upbhokta Parishad, highlighted fundamental concerns. He warned that without careful cost-sharing mechanisms, household tariffs could rise significantly.
"Our first concern was tariff stress on the network owner," Verma explained. "State discoms carry legacy capital expenditure, long-term power purchase agreements, and regulatory assets built over years. If new entrants cherry-pick high-value consumers using existing infrastructure, the owner must still recover historical costs."
Verma emphasized that new suppliers using shared networks might avoid capital expenditure entirely while benefiting from established infrastructure. Between 2022 and 2030, state-owned discoms require approximately Rs 7.42 lakh crore in investments. The Centre's Revamped Distribution Sector Scheme already supports recovery efforts, with Rs 44,000 crore earmarked for Uttar Pradesh alone.
Broader Issues Under Discussion
The meeting addressed several additional critical matters. Participants discussed cost-reflective tariffs and empowering regulators to issue suo motu tariff orders when discoms delay filings. This aims to end the regulatory asset spiral that has pushed power sector losses to Rs 6.9 lakh crore nationwide.
The draft bill also proposes eliminating subsidies for manufacturing enterprises, metro systems, and railways within five years. Industry representatives welcomed this move, while advocacy groups expressed concern about impacts on agricultural and small consumers. "Subsidies are not free gifts," argued one advocacy member. "They are social justice mechanisms for those who cannot compete in an open market."
Cybersecurity and Consumer Choice Concerns
With smart prepaid meters and data management systems expanding nationwide, participants pushed for stronger cybersecurity safeguards. They emphasized that practice must catch up with technological ambition.
Simultaneously, the group underscored the importance of consumer choice under Section 47(5). They argued households should retain legal options between prepaid and postpaid systems rather than being nudged into a single mode through subordinate rules. The group insisted that rules should not conflict with the provisions of the Act itself.
All suggestions and objections raised during this significant meeting will now inform the final draft of the Electricity (Amendment) Bill. The legislation is expected to be tabled in the upcoming Parliament session scheduled for February.
