NEW DELHI: The government proposes to amend the Electricity Act to ensure that companies applying for power distribution rights in an area have signed sufficient power purchase agreements (PPAs) to ensure uninterrupted supply to consumers, Power Minister R.K. Singh said on Tuesday. 

Briefing reporters here on the achievement of bringing electricity to all villages in the country, R.K. Singh said the changes to the law were being proposed in order to help achieve the next target of universal household electrification in India by December 2018. 

"The regulator giving rights to a distribution company (discom) over an area of 2 crore consumers, for instance, has to ensure that it has enough power to meet up to the peak demand. 

"We are going to propose amendments to the (Electricity) Act that if a discom's demand is 5,000 MW, then it should have entered into PPAs for that amount of power," he said. 

The Minister said although there was a power market in the country in the way of exchanges, it commanded supplies that were limited and variable. 

He said since there was no longer a state monopoly, "discoms have fallen into the habit of not entering into PPAs, but preferring to depend on the spot market". 

"The root of the problems is the discoms' incapacity to buy power because they are running losses and this fundamental problem needs to be addressed." 

The government has set the next target of providing electricity connections to over four crore remaining rural and urban households by March 2019 under the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) initiative. 

According to officials here, the average actual household electrification level in rural areas is more than 82 per cent with variations across states. 

Singh also noted that the government's budget on rural electrificationNSE -2.59 % in the current fiscal at around Rs 22,000 crore was almost at the level spent over the last four years at around Rs 24,000 crore. 

On Saturday evening, Leisang village in Manipur's Senapati district became the last village to be connected to the national power gridNSE -0.19 %. 

The work of bringing power to India's nearly 6 lakh villages had been undertaken under the government's Deen Dayal Upadhyaya Gram Jyoti Yojana. 

As per government data, 1,236 villages are uninhabited and 35 have been notified as grazing reserves.