Government pushes competition in power distribution | India News

NEW DELHI: Union power ministry’s consultative committee met on Thursday to discuss a consumer-centric framework for parallel distribution licensing that would allow multiple electricity suppliers to use the same distribution network.The proposed reform aims to improve service quality, encourage competition, reduce infrastructure duplication and give consumers the freedom to choose their electricity provider.The draft National Electricity Policy-2026, which is under consultation and is likely to be placed before the cabinet soon, has also underlined the need to phase out monopoly in electricity distribution and introduce competition by allowing multiple players.According to officials, the existing legal framework permits more than one distribution licensee in the same area, but requires each of them to establish its own distribution network. This results in duplication of infrastructure, higher capital expenditure, discourages fresh investment and leads to “inefficient utilisation of resources”.Mumbai is the only city where consumers have exercised supplier choice for several years, while the distribution network is developed in a coordinated manner under the supervision of the state electricity regulatory commission.Emphasising the consumer-centric nature of the reform, Union power minister Manohar Lal said consumers would have the freedom to choose their electricity supplier, similar to the choices available today in sectors such as telecom and aviation. “Increased competition is expected to encourage better consumer service, improved reliability, greater innovation and operational efficiency, while ensuring optimal utilisation of existing infrastructure and avoiding unnecessary expenditure,” the minister said at the meeting.Power ministry, in a statement, said members of Parliament who are part of the consultative committee offered valuable suggestions on the proposed framework. Under the proposal, existing distribution licensees will continue to own, operate and maintain their networks. “New distribution licensees will be able to use the existing network by paying regulated wheeling charges, while retaining the option to develop their own network wherever permitted by the concerned state electricity regulatory commission,” govt said in the statement.