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On October 9, 2025, the Ministry of Power released the Draft Electricity (Amendment) Bill, 2025, seeking feedback from stakeholders, including State Governments.

The Bill aims to enhance regulatory accountability, promote sustainable energy, and strengthen financial viability—laying the groundwork for a transformative shift in India’s power sector.

India’s vision of becoming a developed economy by 2047 (“Viksit Bharat”) rests on a strong, sustainable, and competitive energy framework. To achieve this, the Draft Bill proposes major amendments to the Electricity Act, 2003—addressing long-standing inefficiencies, financial distress, and structural challenges while accelerating the energy transition.

This article explores the key provisions of the Draft Electricity (Amendment) Bill, 2025, its expected impact on consumers, and the broader implications for India’s power sector.

Powering Viksit Bharat: Inside the Draft Electricity (Amendment) Bill, 2025

For India to achieve its Viksit Bharat goals, the power sector must balance affordability, reliability, and sustainability.

The proposed amendments aim to ensure universal access to clean and affordable electricity, financial stability, and a just energy transition.

The Draft Bill notes:

“Despite major structural reforms under the Act—such as unbundling of utilities, competition, and open access—the distribution segment continues to face severe financial stress, with cumulative losses exceeding ₹6.9 lakh crore.”

High industrial tariffs due to cross-subsidies have weakened industrial competitiveness, while regulatory delays have eroded financial discipline. The Bill therefore seeks to improve sectoral efficiency, enhance accountability, and align policy with India’s clean energy commitments.

Major Provisions of the Draft Electricity (Amendment) Bill, 2025

1. Financial Viability and Tariff Reform

The Bill mandates that tariffs must reflect the actual cost of electricity supply, in line with the Supreme Court’s 2025 ruling in BSES Rajdhani Power Ltd. & Anr. vs. Union of India & Ors., which stated that cost-reflective tariffs are essential for financial sustainability.

Key measures include:

Empowering State Electricity Regulatory Commissions (SERCs) to fix tariffs suo motu if utilities delay submissions.

Ensuring tariff revisions take effect from April 1 of each fiscal year, promoting discipline and predictability.

2. Boosting Industrial Competitiveness

Reliable and affordable electricity is vital for industrial growth and global competitiveness. The Bill seeks to:

Simplify electricity tariffs and reduce logistics costs.

Allow open access for consumers above 1 MW, exempting them from the universal service obligation of DISCOMs.

Remove cross-subsidy burdens for railways, metros, and manufacturing enterprises.

Promote captive generation through clearly defined eligibility criteria.

These measures are expected to stimulate MSME growth and attract industrial investment.

3. Accelerating the Energy Transition

To meet India’s targets of 500 GW non-fossil capacity by 2030 and 2,000 GW by 2047, the Bill empowers the Central Electricity Regulatory Commission (CERC) to create market-based mechanisms such as contracts for difference.

It also:

Introduces provisions for mandatory non-fossil energy consumption, aligning the Electricity Act with the Energy Conservation Act, 2001.

Imposes penalties of 35–45 paise per kWh for entities failing to meet renewable purchase obligations.

This strengthens India’s path toward cleaner, affordable, and reliable energy.

4. Regulatory Strengthening and Cybersecurity

The Bill enhances regulatory governance by:

Expanding grounds for removal of commission members to include willful violations and gross negligence.

Increasing Appellate Tribunal members from three to seven and setting a 120-day adjudication timeline.

Mandating nationwide benchmark service standards for electricity distribution.

Capping assessment periods for unauthorised power use at one year, reducing arbitrariness in penalties.

Allowing reduced or waived appeal deposits in cases of hardship.

Recognising the growing risk of cyberattacks, the Central Electricity Authority (CEA) will set cybersecurity standards for integrated power systems.

5. Ease of Living and Doing Business

To streamline operations and improve consumer experience, the Bill introduces:

Minimum service standards for electricity supply.

Simplified appeals for unauthorised usage assessments.

Removal of outdated licensing requirements in defence areas.

6. Institutional Reform: The Electricity Council

The Bill proposes establishing a new Electricity Council, chaired by the Union Power Minister, to coordinate reforms, advise on policy, and foster Centre–State consensus.

Key Benefits for Consumers

1. Transparent and Fair Tariffs

Cost-reflective pricing reduces hidden cross-subsidies.

Industrial and transport sectors will no longer subsidise others, potentially lowering household tariffs.

2. Improved Service Standards

DISCOMs will be bound by minimum service obligations, ensuring better reliability.

Streamlined grievance redressal enables quicker resolution of billing and supply disputes.

3. Greater Consumer Choice

Large consumers can choose their supplier through open access.

Simplified rules for captive generation empower industries to produce their own power.

4. Cleaner and Greener Energy

Mandatory clean energy use encourages DISCOMs to offer renewable options.

Market-based incentives will make renewable energy cheaper over time.

5. Enhanced Regulatory Oversight

Stronger accountability for regulators and faster adjudication of consumer complaints.

Cybersecurity standards safeguard digital infrastructure and consumer data.

Conclusion

The Draft Electricity (Amendment) Bill, 2025, has drawn resistance from some States—such as Kerala, which fears that open access provisions may lead to “cherry-picking” of high-value consumers by private players, leaving public DISCOMs with financial losses.

Despite these concerns, the Bill represents a major step toward a cleaner, more competitive, and consumer-centric power sector. It strengthens India’s legal and regulatory framework, paving the way for a stable, efficient, and inclusive energy future—an essential foundation for Viksit Bharat 2047.