Section 1: Top Story / Deal Insight
Electricity Act Overhaul: Distribution Competition and Market Discipline Proposed
The Ministry of Power has released the draft Electricity (Amendment) Bill, 2025 (“Electricity Bill”), the first major rewrite of the Electricity Act, 2003 since it came into force. The Bill aims to break state-run DISCOM monopolies by introducing multiple supply licensees under state regulators’ oversight, fostering competition for the same supply area. It pushes cost-reflective tariffs (curbing hidden cross-subsidies) while protecting vulnerable consumers via transparent state subsidies under Section 65.
Key proposals: shared use of distribution networks, time-bound regulatory orders (120 days), and a National Electricity Council for Centre-State alignment. It also strengthens market discipline - empowering CERC on power market instruments/derivatives (incl. VPPAs) and aligning state renewables obligations with stricter national standards (with penalties for shortfalls). Cybersecurity/smart-grid standards are to be set by CEA; APTEL capacity is expanded for faster dispute resolution.
What it means: If enacted, expect a more competitive landscape where service quality, reliability, and tariff prudence determine market share - monopoly-era inefficiencies won’t be masked by regulation.
Section 2: Quick-Hit News Round Up
Ports: The Lok Sabha has passed the Indian Ports Bill, 2025 (“Ports Bill”), a landmark reform of century-old port laws aimed at integrated port development. The Ports Bill creates a statutory Maritime State Development Council to coordinate national and state port planning through a consultative framework. It also encourages states to set up Maritime Boards and introduces state-level Dispute Resolution Committees for port contracts, which can hear issues between port authorities, concessionaires, and users (appeals will lie to High Courts). Port operators and investors should anticipate more centralized data-sharing and planning - and a dedicated forum for resolving port project disputes.
Highways: To support the new FASTag Annual Pass scheme (which offers commuters a flat yearly toll fee), the National Highways Authority of India issued a policy to compensate toll road operators for revenue shortfall. The scheme, launched on Aug 15, 2025, enables unlimited travel for a fixed fee, so NHAI will make up the difference in collections for an initial 3-month period (mid-August to mid-November). Compensation is capped at two one-way trips per vehicle per day to prevent abuse. This loss-sharing mechanism - to be reviewed after three months - will be factored into future highway concession bids, limiting operators’ risk exposure to government policy changes. Toll road concessionaires should update their financial models and monitor NHAI’s review, as the annual pass could become a permanent feature with ongoing compensation or adjusted contract terms.
National Renewable Obligation: In a bid to unify and raise clean energy usage, the Ministry of Power has replaced disparate state renewable purchase mandates with a nationwide Renewable Consumption Obligation (RCO) framework. Notified on 27 September 2025 under the Energy Conservation Act, the RCO requires discoms, open-access consumers, and captive plants to meet a rising share of their consumption from renewables - from 29.9% in FY 2024-25 up to 43.33% by FY 2029-30. Within this target, there are sub-quotas (e.g. a minimum for wind, hydro, distributed RE by 2030) and a 50% compliance relaxation on distributed renewables for Northeastern and hill states. Compliance can be achieved via own generation, buying RE power/Certificates, or as a last resort by paying a buy-out price to a central fund. CERC has proposed setting the buy-out at 105% of average REC price (≈₹245/MWh for FY25), with 75% of these funds flowing back to state renewable projects. The Bureau of Energy Efficiency will monitor RCO compliance, and penalties under the Act may apply for shortfalls. This means power distributors and large consumers must strategize procurement to hit ambitious green targets or face financial levies - the era of lax state-by-state RPO enforcement is over.
Energy Storage: Electricity Rules (Amendment), 2025 formally recognises Energy Storage Systems (ESS) as infrastructure assets that may be owned/leased by generators, licensees, and consumers. Project documents will need to be updated to reflect ESS as a standalone, bankable asset class (ownership, O&M, dispatch rights).
SEBI (Infrastructure Investment Trusts) - Third Amendment Regulations, 2025: Broadens admissible assets and streamlines reporting for InvITs. Infra sponsors and lenders should reassess InvIT pathways for transmission, roads, renewable platforms, and storage-linked assets.
Tamil Nadu Green Energy Open Access Regulations, 2025 (notified 18 Sept 2025): Eligibility: EHT/HT consumers ≥ 63 kVA (and captive users) can procure green power via OA. Timelines: 15 days (intra-state) / 30 days (inter-state) with deemed approval. Banking: Monthly banking only; 8% in-kind charge; unutilised month-end surplus lapses (pay-out at 75% tariff). Process: Single- window via NOAR; metering/communications mandatory. Faster corporate PPAs, but monthly balancing replaces legacy annual banking; manufacturers/data centres will have to tighten scheduling.
Section 3: Insight / Strategy Tip
The MoRTH circular (4 Sept 2025) introduces accountability into what was often an untracked zone of EPC dispute management - the arbitral timeline. Under Section 29A of the Arbitration and Conciliation Act, 1996, an award must be issued within 12 months from completion of pleadings, extendable once by 6 months through party consent. After that, only the High Court can grant further time.
What MoRTH now mandates:
One-month rule: Regional Officers must send extension proposals to HQ at least one month before the 12-month limit expires.
Two-month rule: If High Court approval is needed, the file must reach HQ two months before the extended period ends.
Why it matters: miss these windows, and the arbitrator’s mandate lapses automatically - wiping out months of hearings and forcing a restart. For projects worth hundreds of crores, these procedural hiccups can easily be pre-empted / streamlined.
Treat 29A like a project schedule. Track “pleadings + 12 months” in your claim dashboards alongside project milestones.
Embed cooperation clauses. In EPC and concession contracts, specify that both sides will consent to justified extensions and jointly approach the court if required.
Trigger early coordination. By month 10, evaluate progress and alert the authority; file mutual-consent extensions before MoRTH’s cut-offs.
Prepare the petition proactively. Have draft court papers and justifications ready; once filed, the tribunal’s mandate continues while the court decides.
Institutionalise internal alerts.
Section 4: Featured Deal/ Case Snapshot
Can a Commission modify tariff outcomes without fresh notice and hearing? The Bombay High Court (DB) in O2 Renewable Energy VII Pvt Ltd & Ors v MERC & Ors (2025) scrutinised a review order that altered tariff positions without full statutory consultation. The Court underscored that a Commission’s power is bounded by due process - public notice, stakeholder consultation, and opportunity to be heard - before issuing any order that materially modifies prior tariff determinations. Result: orders passed without those safeguards are vulnerable and liable to be set aside.
👉 For a deep dive, see our analysis in the SageBridge Legal Knowledge Hub: O2 Renewable Energy VII Pvt Ltd & Ors v MERC & Ors (2025)
Section 5: What’s Coming/ Call to Watch
Electricity (Amendment) Bill, 2025: Competitive distribution; cost-reflective tariffs; National Electricity Council. Prepare for PPA/tariff realignments.
CERC’s draft Power Market (Amendment) Regulations, 2025: Proposes to legally recognise Virtual PPAs as regulated power-market instruments; Permits corporate buyers to hedge renewable power prices through financial settlement rather than physical delivery; will fall under CERC oversight, with requirements for standardised documentation, reporting, and margining. Companies entering into sustainability-linked or derivative-style energy contracts must prepare for regulatory filings, disclosure norms, and standardised settlement mechanisms.
Hydrogen Purchase Obligations: Expected mandates for refineries/fertiliser (e.g., ~10% by 2030; 100% for new plants). Contracts will need H₂ sourcing/certification mechanics.
SECI Demand-Side Tenders: After 724 ktpa green ammonia, watch tenders for green steel/SAF with 10-year offtake and payment security.
OALP-X (Upstream) Bids close Dec 2025: Expanded offshore acreage; track bid terms and arbitration-friendly clauses.
Oil Fields (Amendment) Bill: Modernises the 1948 law; brings shale/CBM/deep-sea within one code; international arbitration pathway. Upstream PSCs/JVs will need clause reviews post-enactment.
Highway PPP - New Model Concession Agreement: Risk-sharing clarity, early-exit rights, standard termination payments - designed to reboot BOT appetite.
Maritime Digitisation - Bills of Lading Act 2025 Follow-On: Expect rules enabling e-Bills of Lading and digital trade record-keeping/audits.
National Manufacturing Mission (FY26): Clean-tech manufacturing clusters; PLI extensions (chemicals, batteries, containers); localisation and audit-linked disbursals.
Carbon Credit Trading Scheme (2026 go-live): Compliance market with intensity targets; build carbon-cost models and contract credit-ownership terms.
Captive Generation Rules (MoP Draft, 23 Sept 2025): Clarifies indirect shareholding, SPVs, 110% cap, annual certification, central registry - tightens group-captive compliance.
DSM Tightening (CERC Draft): Shrinking deviation bands for wind/solar from 1 Apr 2026; budgeting for penalties/firming will be crucial.
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