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Electricity consumers across India will be able to choose their suppliers in a year

According to reports, in another year, electricity consumers across the country will be able to choose their suppliers. In a bid to increase competition in the distribution sector, the ministry of power is working on some amendments to section 42 of the Electricity Act, 2003 to allow multiple suppliers of power in any licensed distribution area. Sources said a high powered committee was set up to examine the proposed amendments and they are expected to be in place within a year.

The freedom to choose power suppliers was so far discussed under the open access policy. But experts said this is a new concept and would bypass open access completely. “Open access has a cap of 1 MW across the nation and has not really taken off in any city. Once the amendments are in place and notified by the Centre, it would be a much simpler process. Power suppliers can supply to any consumer in the city, irrespective of location and quantum of consumption . Consumers will be obliged to pay wheeling charges and cross-subsidization charges for getting power from their preferred power supplier,” said a top official.

In Delhi, this would mean the end of the monopoly enjoyed by the BSES discoms in south, east and west Delhi and by Tata Power Delhi in north Delhi. Each discom will be able to poach consumers in other areas by offering competitive rates and promise of better power supply.

Section 42 of the Electricity Act deals with distribution . “The Act is at present vague on distribution of electricity and the amendments are being brought in to give more clarity on how to choose power suppliers. The modification will make it clear that there can be more than one distributor in a licensed area,” said sources. The move will mean residents of different floors of the same building may have different suppliers. The distribution network will be shared by the various distribution firms and wheeling charges payable by consumers will be set by state regulatory commissions. “It will bring complete freedom for Delhiites. In the future, differential tariff and time-ofthe-day metering concept will also be introduced. Consumers may even have more than one supplier for their house, and different suppliers for different time slots in a day. Additional charges will be set by DERC,” said Tata Power Delhi CEO Praveer Sinha, who is also a member of the committee.

Experts said while this would be applicable across the country, it would not be feasible for a consumer to choose a power supplier from a different state.

“Technically, it would be possible when the amendments are in place but not very feasible. A consumer in Rajasthan wanting his power from Delhi will have to pay wheeling charges across two states, cross-subsidization charges, as applicable, and then tariff set in the particular state, which would be costly,” said a senior power sector expert. The system is already followed in north Mumbai, where power is supplied to consumers by both Tata and Reliance following a Supreme Court order .

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