Tired of poor service and huge electricity bills? Soon you may get to choose the company that sells you power, much in the same way you pick your mobile service provider. The Narendra Modi government is planning legislative changes to usher in competition in the power distribution sector.
Under the proposed plan, the Centre, which has already taken steps to separate power distribution from generation, may separate sale and network – much like the division of wholesale and retail markets in the consumer goods sector. The move is expected to keep tariffs under control, or at least, improve the quality of service.
“Separation of wire and supply business will help states serve consumers better,” said a senior official of the power ministry. “Companies that have technology-supported distribution network and service levels will benefit as these shall prove to be key attributes in wooing consumers,” the official added.
The proposed changes to the Electricity Act are inspired by the UK, which has separated electricity network providers (distributors) from suppliers (marketers).
India currently has an integrated model where discoms (distribution companies) supply and manage network that provides electricity for residential and commercial purposes.
“Allowing competition at last mile delivery will give consumers the choice of electricity supplier. The move is aimed at reducing the losses of discoms as well as improving overall electricity supply and benefitting consumers,” power and coal minister Piyush Goyal said recently while discussing amendment plans.
The changes will enable private players such as Tata Power, Anil Ambani-led Reliance Infra, Torrent Power and CESC, which hold licences in metros such as Delhi, Mumbai and Kolkata to take the lead, and also allow state-owned and controlled NTPC and other interested companies to enter distribution.
Experts say tariffs are not likely to vary much but service quality may help consumers choose from among the competition.
A Reliance Infra spokesperson told HT that established private distribution companies like his may get a headstart with “with ample domain expertise and use of advanced technology to maintain distribution networks”.