India: Changes to Electricity Act Propose Penalty Norms for PPAs, RPOs

The power ministry will include penalty provisions in the electricity amendment bill for stricter enforcement of power purchase agreements (PPA) and renewable purchase obligation (RPO), Union minister R K Singh said on Thursday.

The minister also said that he has a roadmap for reforms in the power sector and he will try to move the amendment bill in the upcoming winter session of Parliament.

“We will deal with the issues of PPA (power purchase agreement) and RPO (renewable purchase obligation) among others in the Electricity Amendment Bill,” Singh told reporters on the sidelines of an investors’ forum organised by Assocham.

Asked whether the long pending bill which would incorporate other new amendments, can be pushed for passage in the winter session, he said, “I am trying for that. I have a roadmap for reforms in power sector.”

Under PPAs, discoms are required buy certain amount of power from generators while under the RPO, the principle of polluter pays applies. The utilities either buy electricity generated by specified renewable energy sources, or buy renewable energy certificates (RECs) from the market.

Elaborating on new amendments, Singh said, “We are going to change the law and provide that any PPA which is signed, will be honoured. If they don’t honour it then there would strict penalties. So the uncertainties will go.”

He further said, “We will also bring it to the law making it necessary for all discoms to tie up for PPAs to cover the requirement of power in the area which they serve. They must have tied up PPA to cover 100 per cent of that requirement before their licences can be renewed. You cannot get a monopoly licence to distribute power in certain area without tying up PPA for 100 per cent requirement.”

He also said, “It (bill) will also provide that RPOs will be obligatory, a statutory legal compulsion. We are going to world saying our 40 per cent of power would be from renewables.”

In his address to the forum, the minister talked about cyber security in areas including power generation, distribution and transmission, saying as India goes for more automation, it is a vital point.

He told that a group has been working on the issue related to cyber security in power sector and has given some directions.

The minister also spoke about changes in law for imposing stricter penalties for non-payment of electricity bills.

On the Rs 16,000 crore hydro power policy to boost the segment, he said, “As far as hydel policy is concerned, a draft was put up to me. I have seen it. They (officials) are refining it. Once it is ready it will go to the Cabinet.”

The minister also raised doubt on the intention of non- government organisation (NGOs) saying that in certain cases they have delayed the implantation of hydro power projects.

He said, “We have to look at these NGOs. I dont know how genuine are their intentions.


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