Lok Sabha Question No. 16 (STARRED), answered on 2017-02-02
Subject: National Electricity Policy
Ministry: POWER
Asked by: JAGDAMBIKA PAL, PRATAPRAO GANPATRAO JADHAV

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA STARRED QUESTION NO.16 TO BE ANSWERED ON 02.02.2017

NATIONAL ELECTRICITY POLICY

*16. SHRI JAGDAMBIKA PAL: SHRI PRATAPRAO JADHAV:

Will the Minister of POWER be pleased to state:

(a) whether any progress has been made in the implementation of the National Electricity Policy as envisaged in the Electricity Act, 2003 and if so, the details thereof and if not, the reasons therefor;

(b) whether any new electricity policy is being formulated and if so, the details thereof;

- (c) whether the Government proposes to review the outcome of the Electricity Act, 2003;
- (d) whether this Act has benefitted the private Power Distribution Companies to the disadvantage of the public and the loss of revenue to the Government and if so, the details thereof; and
- (e) the corrective action proposed to be taken by the Union Government in this regard?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER, COAL, NEW & RENEWABLE ENERGY AND MINES

( SHRI  PIYUSH GOYAL )

(a) to (e) : A Statement is laid on the Table of the House.

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STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF STARRED QUESTION NO.16 TO BE ANSWERED IN THE LOK SABHA ON 02.02.2017 REGARDING NATIONAL ELECTRICITY POLICY.

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(a) : The  National  Electricity  Policy  (NEP)  notified  by  the  Central Government on 12.2.2005, in compliance with section 3 of the Electricity Act,  2003,  aims  at  laying  guidelines  for  accelerated  development  of  the power sector,  providing  supply  of  electricity  to  all  areas  and  protecting interests of consumers and other stakeholders keeping in view availability of  energy  resources,  technology  available  to  exploit  these  resources, economics  of  generation  using  different  resources,  and  energy  security issues. The details of progress made in implementation of the NEP, are as under-

- (i) The number of Villages electrified has increased from 4,82,864 as on 31.3.2007 to 5,90,488 as on 31.12.2016, constituting 98.09% of the total villages in India.
- (ii) Installed  capacity  increased  from  132329  MW  as  on  31.03.2007  to 310005 MW as on 31.12.2016.
- (iii) Energy and peak demand deficits decreased from 9.6% and 13.8% respectively for the year 2006-07 to 2.1% and 3.2% respectively for the  year  2015-16.  The  corresponding  figures  (Provisional)  for  the period  April - December, 2016 are 0.7% and 1.6% respectively.
- (iv) Per capita consumption of electricity increased from 671.9 kWh as on 31.3.2007 to 1075 kWh as on 31.3.2016.
- (v) Central Electricity Regulatory  Commission  (CERC)  has  notified Sharing of Inter-State Transmission Charges and Losses Regulations,  2010  which  is  in  accordance  with  the  requirement  in the NEP that the tariff mechanism should be sensitive to distance, direction and related to quantum of flow.
- (vi) Volume of Electricity  transacted  through  Power  Exchanges,  which was 2.77 Billion  Units  (BU)  during  2008-09,  increased  to  35.01  BU during 2015-16.
- (vii) The installed capacity of Renewable Energy based power generation has reached to the level of 45,915 MW, as on 31.12.2016.

(b) : The  Working  Group  on  Power,  constituted  to  formulate  the programme  for  development  of  the  power  sector  during  the  12th   Plan, under  the  Chairmanship  of    Secretary,  Ministry  of  Power,  had  made recommendation for amendments in the NEP  in addition to the recommendations  on  the  Electricity  Act,  2003  and  the  Tariff  Policy.    In order  to  review  the  NEP,  a  Committee  was  constituted  under  the Chairperson,  Central  Electricity  Authority,  which  after  consultation  with various stakeholders, has  submitted  the draft NEP.

(c) : Based  on  the experience  gained over the years in the implementation of the Electricity Act, 2003,  it was felt that while there have  been  impressive  achievements  in  the  areas  of  augmentation  of generation  capacity,  establishment  of  National  Grid, a multi-layered regulatory framework, private sector participation,  development  of electricity markets and exchanges and restructuring of  State Electricity Boards.  At the same time, the distribution sector which is managed by States  continues to be the weakest link in the power sector value chain. There  have  also  been  other  issues  like  grid  indiscipline,  regulatory accountability,  policy  framework  for  enhanced  renewable  penetration, bringing further competition and efficiency in the distribution sector and giving choice to the consumers  etc. for which it was felt that  there is a need to review and amend some of the provisions in line with the overall objectives of the Act.

Based on recommendations of the Working Group on Power for the  12 th   Plan  and  suggestions  received  from  various  stakeholders,  the Electricity  (Amendment)  Bill  2014  was  introduced  in  the  Lok  Sabha  on 19.12.2014. The Bill was subsequently referred to the Standing Committee on Energy for examination and report. The Committee had submitted its report  on  7.5.2015.    These  amendments  entail  competition  in  retail  (i.e. choice  to  consumers  to  select  retail  suppliers),  strict  enforcement  of Renewable Purchase Obligations (RPO) and zero tolerance on Grid Safety and Security.

Based on the recommendations of the Standing Committee on Energy and further consultation with the State Governments/Union Territories  and  other  stakeholders,  Ministry  of  Power  is  expediting  to move official amendments to the Electricity (Amendment) Bill, 2014.

(d) & (e) :  The provisions of the Electricity Act, 2003, provide level playing field  for  both  the  private  distribution  companies  and  State  distribution companies.  Further,  the  power  procurement  process,  Annual  Revenue Requirement  and  tariff  for  all  distribution  companies,  whether  publicly owned  or  privately  owned  is  regulated  by  State  Commissions,  which follow a transparent process for issuing orders after public hearing.

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