Amendments to Electricity Act to benefit customers

Electricity consumers will have the option of selecting their power supplier soon, with the Centre proposing to amend the Electricity Act.

The Electricity (Amendment) Bill, 2014, introduced by Minister for Power and Coal Piyush Goyal in the Lok Sabha on Friday, aims at promoting competition and improving electricity supply in the country.

The amendments are expected to provide those consuming less than one megawatt a choice of power distribution companies, as the government proposes the concept of multiple supply licensees by separating carriage from content. This means disintegrating power supply and the distribution network. As per the proposed model, there will be a separate power supplier and a separate electricity distributor or multiple distributors.

“The power supplier will not manage the distribution network. It will be managed by another firm, which will disseminate electricity to the end-user,” said a Power Ministry official. The model is based on the system that exists in the United Kingdom, which has separate suppliers and electricity network providers.

At present, power distribution companies (discoms) supply electricity as well as manage the network that provides it for residential and commercial purposes. Carriage will continue to be a regulated activity, and it has been proposed that tariff for retail sale will be capped by the regulator with one of the supply licensees proposed to be a government-controlled company.

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