Proposed Electricity Act may rework slabs for residential consumers

The proposals in the draft Electricity (Amendment) Bill, 2020, will make it tougher for State governments to cross-subsidise consumers. According to industry watchers, provisions that ensure cost reflective tariff in the draft Bill will ensure that all consumers pay for at least the cost of power once the new Electricity Act is enacted and enforced.

This will be a deviation from the current approach adopted across States to keep power tariffs lower for residential consumers and significantly higher for industrial consumers. Some States also offer free power to agricultural consumers in a bid to keep farm produce costs lower.