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Govt mulls separate power suppliers, network providers

Last Updated: Sunday, March 10, 2013 - 10:46

New Delhi: In a major move aimed at reducing losses of discoms and improving overall electricity supply, the government is mulling a new model where a power supplier will not manage the electricity distribution network.

The model, on the lines of existing system in the United Kingdom, of having separate suppliers and electricity network providers could usher in far-reaching changes for the power starved India.

At present, power distribution companies (discoms) supply as well as manage network that provides electricity for residential as well as commercial purposes.

Sources said that the new model is being discussed and its introduction can happen only after amending the Electricity Act 2003.

"We are thinking of a model for the power sector, like in the UK where carriage and content (electricity) are different," they said.

In a separate carriage and content model, the network would be owned by one company while the suppliers of electricity could be more than one.

Discoms supply power as well as own the electricity distribution network.

"... What is proposed that a parallel licencee should come and he must set up his own network," sources said.

Most of the state-owned discoms are deep in the red and their cumulative losses touched a staggering Rs 2.46 lakh crore at the end of March 2012.

One of the major reason is the rising distribution losses, stemming from various factors such as theft and inefficient technologies.

Distribution losses are much higher than transmission losses that happen when power is transmitted from the generating station to the distribution hub.

Meanwhile, a panel headed by Central Electricity Authority (CEA) Chairman is looking into possible amendments into the Electricity Act.

As far as amendments in the Electricity Act are concerned, all the states have to come on board, it is a long process.

"There is a committee under the chairmanship of CEA Chairperson and Forum of Regulators (a statutory body electricity regulators) had given some views," sources said.

According to them, the Power Ministry has to decide what amendments are to be proposed.

In the current fiscal, peak power shortage is expected to be more than 10 percent.

Generally, peak power shortage is the shortfall in generation capacity during the time when the electricity consumption is at the maximum.


First Published: Sunday, March 10, 2013 - 10:46
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