New Delhi: Consumers will soon be able to choose their power supply company as the government is making necessary amendments to the Electricity Act to enable this provision which is aimed at encouraging greater competition in the distribution sector.
Shifting focus from generation, the government plans to fix electricity distribution which is often described as the achilles heel of the power sector. Power and Coal Minister Piyush Goyal said the provision allowing the end-user to choose its distribution company is in the works. "What we are looking at is allowing competition at last mile delivery so that consumers have a choice of supplier of electricity... it will also help states serve the people better," the Minister told reporters here at a CII event.
Goyal assured that wherever there is existing power purchase agreements, the interests of stakeholders will be protected, which will be done in consultation with the power regulator. The Minister said the government will allow competition at the last mile or to the end-consumer without raising tariff or compromising on better customer service.
On being asked about allowing end users of electricity to select their power distribution firm, Goyal said it will be done gradually, adding that it was tried in Maharashtra but did not deliver the desired results due to some legal issues. There were some hurdles under the Electricity Act of 2003, he said when asked why the proposed model did not work in that state. "We are trying to resolve those hurdles under the current amendment to the Electricity Act," he added. Goyal further said that the government started the exercise of making amendments to the existing Electricity Act some time back and in the process has consulted several stakeholders from whom it has received numerous suggestions for consideration.
The move is aimed at reducing the losses of discoms as well as improving overall electricity supply. As per the proposal, a new model where a power supplier will not manage the electricity distribution network, is being looked at. It is on the lines of existing system in the United Kingdom which has separate suppliers and electricity network providers.
At present here, power discoms supply as well as manage network that provides electricity for residential as well as commercial purposes. In a separate carriage and content model, the network would be owned by one company while the suppliers of electricity could be more than one.
