The draft Electricity (Amendment) Bill, 2025 proposes to reduce duplication in distribution infrastructure by permitting distribution licensees to use another licensee's network on payment of charges set by the State Electricity Regulatory Commission.

The Electricity Act, 2003 already permits multiple distribution licensees in the same area and requires non-discriminatory open access to networks, but new entrants have typically constructed separate poles, wires and substations. The amendment aims to lower overall costs and make power more affordable by removing the need for redundant physical infrastructure.

Under the Act the area of supply for each distribution licensee is defined and must be approved by the regulatory commission at the time of granting a licence. Subordinate legislation sets a minimum geographical area for a licence, which may cover an entire municipal corporation or at least three adjoining revenue districts, while smaller areas require specific notification by the appropriate government. The draft bill retains these territorial parameters while enabling shared use of network assets.

Every distribution licensee, whether public or private, will continue to have a universal service obligation to supply electricity to all consumers in its area of supply without discrimination, although large consumers may be exempted by the commission as provided in the draft. The amendment would require State Electricity Regulatory Commissions to establish a clear framework for introducing multiple licensees within the same supply area, with measures to ensure transparency and fairness. The intention is to maintain service obligations while facilitating competition and operational efficiency.

The government envisages no adverse impact on agricultural or domestic consumers and expects competition to improve quality of service, while subsidies for specified consumer categories may continue to be provided by the state government under Section 65 of the Act. The information was provided by the Minister of State in the Ministry of Power, Shri Shripad Naik, in a written reply in the Rajya Sabha. The draft seeks to balance universal service obligations with more efficient use of existing distribution networks.