'Final decision lies with KERC', officials say as Tata Power applies for distribution licence in Karnataka

Bengaluru: Tata Power Company Limited (TPCL) may have applied for licence for power distribution in parts of Karnataka, but the final decision lies with the Karnataka Electricity Regulatory Commission (KERC), officials have said. 

While the Electricity Act, 2003, mandates that the licence should be provided if the applicant meets the norms stipulated in the Act, the law can also be interpreted considering the larger public good. 

Interpretation of the existing law is crucial in deciding on the applications.

While plainly, the licence can be approved if the applicant meets the requirement, it is also important to interpret the rules from the law of natural justice point of view, experts said. 

Wires and distribution networks constitute huge infrastructure and duplicating such infrastructure could snatch away the economic benefit. 

“If the new company has to set up a complete infrastructure, it may not offer a very competitive price. If there is no larger public good, creating duplicate inefficient infrastructure does not make sense. The regulator is bound to justify if the decision to allow another private company is doing any public good,” one of the experts said. 

It is also important to scrutinise the network rollout plan to understand if the private companies meet the universal supply obligation. 

“They cannot cherry-pick a particular group of high-value consumers. It is important that they are ready to serve everyone who meets the norms to be a valid consumer,” another expert said.  While many argue that there are multiple power distribution companies in Western countries, which has increased efficiency, that may not be the case in India. 

“In Western countries, physical infrastructure like wires are run by a separate company and distribution companies only pay a rent. This way, there is no question of infrastructure duplication and hence, multiple companies can be approved without fear of such redundancy,” the expert said. 

However, KERC officials said that the application has just been filed and they will look into the matter after objections or suggestions
are filed.