Draft Electricity (Amendment) Bill, 2025 Intends to Remove Wasteful Duplication in Building Distribution Network

**Executive Summary** The Draft Electricity (Amendment) Bill, 2025, aims to eliminate wasteful duplication of infrastructure in electricity distribution networks by allowing distribution licensees to utilize existing networks of other licensees upon payment of charges decided by the State Electricity Regulatory Commission (SERC). The announcement was posted on February 9, 2026, by PIB Delhi. The Bill aims to foster competition and improve the quality of service. **Key Points / Main Content** * **Purpose of the Amendment:** * Seeks to remove duplication of poles, wires, and substations, which are currently required for each new licensee, leading to higher power costs. * Allows distribution licensees to use other licensees' networks upon payment of charges determined by SERC. * **License Granting & Area of Supply:** * The area of supply for each distribution licensee must be defined and approved by the SERC. * Minimum geographical area prescribed for granting a distribution license includes an entire Municipal Corporation, at least three adjoining revenue districts, or a smaller area as notified by the Appropriate Government. * **Universal Service Obligation:** * Every distribution licensee, whether public or private, must provide Universal Service Obligation to all consumers, including rural and domestic, except large consumers specifically exempted by the SERC. * Licensees have a duty to supply electricity to all consumers in their area of supply without discrimination. * **SERC Framework:** * Mandates the SERCs to establish a clear framework for introducing multiple licensees within the same supply area. * The framework should ensure transparency and fairness. * **Impact on Consumers:** * No adverse impact is expected on agricultural and domestic consumers; instead, competition is expected to improve the quality of service. * **Subsidies:** * State Governments may continue to provide subsidies for specified consumer categories, including agricultural and domestic consumers, under Section 65 of the Act. **Impact Analysis** **Distribution Licensees** * **Impact:** * Can potentially reduce capital expenditure by utilizing existing infrastructure. * Subject to paying charges decided by SERC for using other licensees' networks. * Must adhere to SERC's framework for multiple licensees in the same supply area. * **Action Required:** * Understand the new regulations and associated charges for using existing networks. * Comply with the SERC framework for introducing multiple licensees. **Agricultural and Domestic Consumers** * **Impact:** * Expected to benefit from improved service quality due to increased competition among licensees. * Subsidies will continue to be provided. * **Action Required:** * No immediate action is required; they can continue to avail of existing services and subsidies. **State Electricity Regulatory Commission (SERC)** * **Impact:** * Responsible for defining the area of supply for each distribution licensee. * Required to establish a clear framework for introducing multiple licensees within the same supply area, ensuring transparency and fairness. * **Action Required:** * Develop a framework that allows multiple licensees within the same supply area. * Set charges for the utilization of existing distribution networks by other licensees.

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