In a significant development that may unleash competition enabling consumers in the country’s any town for the first time, the UP Electricity Regulatory Commission (UPERC) on Monday granted a parallel power distribution licence to the government-owned Paschimanchal (Meerut) discom, a subsidiary of the UP Power Corporation Ltd (UPPCL), to sell power in Gerater Noida.
The Meerut discom will now distribute electricity in Greater Noida area alongwith the Noida Power Company Ltd (NPCL) which has been selling power in the town since 1993 under a distribution licence valid for 30 years. Both the licencees will distribute power in the same localities with the consumers having an option to choose their distributor.
In the order issued by UPERC Chairman, Rakesh Awasthi, the regulator has asked the discom/UPPCL to develop and complete its power distribution network in Greater Noida within five years and inform it about the progress ever six months. The parallel distribution licence, says the order, shall come into effect from the date of its issue and unless revoked earlier, will continue to be in force for a period of 25 years. It also says that the two licencees cannot claim any exclusivity and the regulator will be free to grant a licence to any other person, company within the same area for distribution of electricity.
Following a prolonged dispute between the UPPCL and the NPCL over dues they claimed against each other, the Paschimanchal discom, the former’s subsidiary, filed an application before the UPERC on January 21, 2009 for grant of distribution licence for supplying electricity in Greater Noida area. The NPCL did oppose the idea and urged the regulator to reject discom’s application for a parallel licence but the UPERC found its arguments to be too frivolous. Moreover, the Commission, as it has said in its order, no other stakeholders including consumers objected to the Meerut discom’s plan to get a parallel licence, during public hearings.
The NPCL had mainly submitted that the Paschimanchal discom did not have the requisite capital adequacy, creditworthiness and positive track record to apply for the grant of a second distribution licence. It also argued that Greater Noida area did not fall within the definition of Municipal Council/Corporation or a revenue district, which was the basis requirement for grant of second ditribution licence a per rules. The Meerut discom, also known as Paschimanchal Vidyut Vitran Nigam Ltd (PVVNL) demolished the NPCL’s arguments to the satisfaction of the regulator which finally issued the licence to the latter on Monday.