The Electricity Bill 2001, which was cleared by the Lok Sabha yesterday, will allow generating companies like the National Thermal Power Corporation to bypass state electricity boards.
It will make the valuation of generating companies more attractive because they will have a better cash-flow position.
Investments in the power sector had often been stymied because generating companies could not guarantee timely recovery of dues from distribution utilities.
But the new Bill will allow generating companies to supply power directly to high-paying customers like industrial houses.
Also, new power projects, with the exception of hydroelectric projects, can come up without the approval of the Central Electricity Authority.
"This will be a major reprieve for project developers because once the Bill is passed, only an environmental clearance will be required for most projects. Projects will no longer be delayed for want of clearance from the Central Electricity Authority," an official from a public sector power utility said. Independent power projects will also benefit from the Bill.
The Electricity Bill, which seeks to consolidate laws relating to generation, transmission and distribution of power, was supported by almost all the major parties in the Lok Sabha, barring the Left.
