The Government of India has enacted the Electricity Act, 2003 to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry and for protecting the interest of consumers. Reform is an ongoing process and hence the amendments to Electricity Act are being carried out as and when required after due consultation with various Stakeholders.

So far, two amendments have been done in the Electricity Act in the year 2003 and 2007.

Though, there have been impressive achievement in the areas of augmentation of generation and transmission capacity, establishment of National Grid, a robust regulatory framework, private sector participation, development of electricity markets and exchanges and restructuring of State Electricity Boards, still there is a need to review the provisions keeping in view the overall objectives of the Act to bring in further competition and efficiency.

Accordingly, Electricity (Amendment) Bill, 2014 was introduced before the Lok Sabha on 19 December, 2014. The Bill was then referred to the Parliamentary Standing Committee on Energy. The Committee, after detailed examination, has submitted its report on 7 May, 2015. Amendments to the Act pursuant to the recommendations of Standing Committee and the need to operate the electricity sector on the basis of sound financial and commercial principles to ensure financial viability of the sector and attract investment and at the same time ensuring availability of electricity to consumers at reasonable and competitive rates are under process.