Electricity Amendment Bill 2026- Is it in the right path?

With India's population exceeding 1.5 billion, the power sector—already one of the most litigated industries in the country—stands on the brink of transformation. The discussion highlighted a basic fundamental shift toward allowing multiple electricity providers in the same geographical area, a move aimed at fostering competition but raising questions about shared infrastructure and cost recovery. A senior advocate acknowledged the sector's ongoing turmoil and the policy's positive aspects, such as its focus on long-term developments over the next 10-15 years.

However, he critiqued the document for falling short on urgent issues, emphasizing that the policy could have addressed more pressing concerns. He expressed reservations about certain elements, setting the stage for a deeper debate. Another advocate provided a comprehensive curtain-raiser, contrasting the 2003 Electricity Act's emphasis on electrification with the current need to move  toward efficiency and sustainability. He noted that the bill hasn't been tabled in Parliament yet, making the publicly available policy document the key focus.

He identified five radical shifts: automatic tariff revisions to combat delays seen in places like Delhi; elimination of universal service obligations for consumers above 1 MW, opening high-end users to competition; abolition of cross-subsidy surcharges on manufacturing activities; and a strong push for battery storage to balance renewable energy integration. He warned that without amendments to the parent statute, these ideas might remain unimplementable, potentially harming consumer interests.

A former High Court Judge concurred with the initial assessments, comparing the policy to an artist's sketch—having a broad outline but lacking finer details. He praised its dual focus on current practical problems and future-oriented goals, such as integrating variable renewable energy and entering the green hydrogen era. He highlighted the tension in automatic tariff revisions, noting the Act's cap on hikes to protect consumers, and stressed that resolution depends on effective amendments. He expressed optimism about India's potential to lead globally in clean energy but underscored the need for detailed implementation.

A central debate emerged around the bill's provision for multiple licensees sharing infrastructure, as articulated by Union Minister of State for Renewable Energy Shripad Y. Naik in Parliament. Naik argued it would reduce duplication of poles, wires, and substations, cutting costs and making power more affordable, with regulatory oversight ensuring smooth operations. Power experts cited existing examples: Mumbai's overlapping licenses from Adani, Tata, and BEST; Torrent alongside the state discom in Ahmedabad; and three providers in West Bengal's Asansol-Raniganj district.

However, a retired executive at a public sector company pointed out persistent disputes in Mumbai, stemming from a 2012 Appellate Tribunal judgment promoting network sharing. He raised alarms about unresolved issues, including recovery of sunk costs and massive regulatory assets—estimated at 1-1.7 lakh crores nationwide—questioning who bears the burden when new entrants use existing networks without compensating for unrecovered investments.

The lawyer, drawing from his involvement in the Mumbai Tata-Adani dispute, countered that while the 2003 Act originally required separate networks, the tribunal's push for sharing evolved into practical models like "changeover" (using another's lines) and "switchover" (physical shifts). He described how Maharashtra's regulator (MERC) devised a formula for fixed-cost recovery, ensuring the incumbent gets paid while fostering competition in power procurement costs.

He acknowledged challenges, such as disputes over new infrastructure in vertically growing cities like Mumbai, but argued that forward-thinking regulators could emulate this nationwide. He emphasized benefits for high-tension consumers and the economy, though legacy long-term power purchase agreements (PPAs) at higher rates (e.g., 6-6.5 rupees per unit) could disadvantage existing ones unless pooled or shared.

The retired judge addressed concerns about new entrants undercutting prices using existing infrastructure, potentially eroding markets for discoms locked into expensive PPAs. He dismissed the notion of a "badly planned policy," asserting that regulations could manage the influx of providers, akin to limiting "too many chefs in the kitchen." Drawing on Mumbai's experience, he advocated consulting stakeholders—including generators, distributors, and legal experts to refine the Act and avoid pitfalls. He stressed balancing short-term consumer protections with long-term economic gains, trusting the government's 2047 vision.

The discussion underscored the bill's transformative potential amid India's energy transition, but also its complexities. The whole episode highlighted a touchy subject: multiple players in one area, already tested in pockets but fraught with litigation risks, signaling a sector poised for both innovation and contention.