The Ministry of Power has released the Draft Electricity (Amendment) Bill 2025 seeking comments from stakeholders on proposed changes to improve the sector’s financial sustainability, ease of doing business, industrial competitiveness and non-fossil fuel electricity generation, and strengthen regulatory accountability.
The draft bill draws from a Supreme Court decision in BSES Rajdhani Power Ltd & Anr v Union of India and Ors (2025). The judgment made it mandatory for state electricity regulatory commissions (SERCs) to determine cost-reflective tariffs while allowing state governments the flexibility to support specific consumer categories through subsidies. SERCs will also be able to determine tariffs, preventing delays arising from late filing of tariff petitions.
To strengthen regulatory accountability, the draft bill proposes introducing grounds for wilful violation and gross negligence to remove members of state or central electricity commissions.
In addition, a timeline of 120 days has been proposed for commissions to resolve adjudicatory matters, which addresses the current backlog. An increase in the number of Appellate Tribunal for Electricity members from three to seven has also been proposed.
To lower transport and logistics costs, exemption of manufacturing enterprises, railways and metro railways from cross-subsidy for five years has also been proposed.
The draft bill also proposes empowering central and state governments to frame rules on captive generation; the Central Electricity Regulatory Commission to attract foreign investments and encourage competition; the Central Electricity Authority to set regulations on cybersecurity over power system operations; and aligning the Electricity Act, 2003 with the Energy Conservation Act, 2001 and Telecommunication Act, 2023.
It is also proposed that distribution licensees shall be exempt from the universal service obligation for consumers eligible for open access.
Other proposals include uniform benchmark service standards, capping assessment periods to one year, reducing or waiving mandatory deposits for appeals on assessments and removing the mandatory “no objection” from the central government over licensed areas such as defence establishments.
Submission of comments close on 9 November 2025.
