December 18, 2014

Users To Soon Get Choice Of Selecting Power Discom in India

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 today 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 are 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 stakeholder from whom it has received numerous suggestions for consideration.      
 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.  ater, speaking at the India Economic Conclave event, Goyal said that the country will have 24x7 power supply just like Gujarat and Madhya Pradesh over the next five years.   "I am very confident come 2019, just like Gujarat and Madhya Pradesh and Chhattisgarh, ... have 24x7 power for all, more than adequate power for farmers," he said.      

Talking about framework for achieving 100 per cent power in India by 2019, the minister said, "Basically the industry has three critical elements. It needs fuel for production, we are addressing the coal problem through an e-auction with the private sector, and doubling the production in Coal India." He further said that stranded and stressed assets can get back on stream and all national assets created will get adequate fuel.     

The minister further said that the government is looking at generating larger amounts of renewable energy.  "Teesta which is a project of strategic importance in Sikkim for 1200 mw of hydropower which is stranded for quite a long time got resolved in one and half meeting...Very soon we will get it into finalising," he said. 
He said 50 billion dollar investment plan on transmission and distribution -- for which 10 billion dollars will come out of government support -- will help the states which are starved for funds strengthen the sub-way transmission and distribution network right up to the last mile.   
 The government is also looking at major amendments to the policy framework both in tariff policy and the electricity act. "We are also creating a new renewable energy policy," he added.

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