Government plans to allow consumers to switch power service companies

NEW DELHI: Consumers will be able to change their power suppliers just like telecom services, after proposed amendment to the existing Electricity Act is approved, Union Minister R K Singh said.

The power ministry will push Electricity Amendment Bill in forthcoming Budget session, which provides for segregating the distribution network business and the electricity supply business.

"We are bringing a lot of amendment in the Electricity Act. It also provides for separation of carriage and content business. The draft would come to me in another week or so. We will try to push it for passage in Budget session of Parliament," the power and new & renewable energy minister told PTI in an interview.

The separation will pave the way for introducing a new system where consumers will have option to choose from multiple electricity service providers in their areas, similar to that of telecom services.

Elaborating further Singh said, "Once the Act is amended, we would prepare a roadmap in consultation with states to prepare a roadmap to segregate distribution and supply wings of the discoms. After that monopoly will be eliminated in supply wing by giving franchise to more than one players in an electricity supply area".

He also told that the amendments would also provide for stricter enforcement of Renewable Purchase Obligation (RPO).

Besides, the bill will also provide for making tariff policy mandatory to keep cross subsidy below 20 per cent. It means that difference between highest and lowest tariff rates should not be more than 20 per cent.

The minister said that it will help to make industrial tariff reasonable which is unsustainable at present.

The bill would also provide direct benefit transfer of subsidy to farmers to improve efficiency in power consumption.

It also seeks service obligation on part discoms to ensure reliable power supply service by March, 2019.

"Power demand growth rate will be good because of two reason. Firstly, we are adding 40 million more consumer under Saubhagya Scheme by December 2018. Besides, industrial growth would create more demand for power consumption," Singh said.

The minister was of the view that per capital consumption in the country will also increase in future. It is 1,075 units in India as against 5,000-6,000 units in Europe and around 1,1000 units in the US.

"Future increase in energy consumption is going to happen here in India and electricity will be leading it because of change in energy mix. I see that electricity is edging out the fossil fuel. It is easier to transport. Mobility and cooking would become electrical," he said.

On village electrification he said that it is snowing in some areas in Jammu & Kashmir, so the work in those areas will start in March or April. And in Arunachal Pradesh, it will be completed by January or February next year, excluding areas affected due to snow fall.

"We will go to the Cabinet with a proposal to make 24X7 power obligatory from March 2019. Load shedding would not allowed except in cases of act of god or technical faults.

There would be penalty for violators. This will not have any impact on tariff," the minister said.

The power ministry has identified some states where leakages or losses are more than 21 per cent and written a letter to them for reduction of these losses.

Aggregate technical and commercial (AT&C) loses should not be more than 5 to 7 per cent otherwise it can be construed that there is theft of power, Singh said.

In order to deal with this issue, the government is promoting pre-paid and smart meters.

The minister further said that the power ministry has asked the states to reduce their AT&C losses below 15 per cent by 2019.