Power Distribution Reforms in India – a Journey from Monopoly Towards Competition.

2020 Words9 Pages
Power Distribution Reforms in India – A journey from Monopoly towards Competition. Case Objective: Power a basic human need is the critical infrastructure on which modern economic activity is fully dependent. Only 55% households in India have access to Electricity. Most of those who have access do not get uninterrupted reliable supply. In this era of globalization, it is essential that electricity of good qualities is provided at reasonable rates for economic activity so that competitiveness increases, which is essential for higher GDP growth per annum, employment generation and poverty alleviation. Legacy scenario prior to enactment of Electricity Act 2003: Electricity distribution in India had been primarily a Regulated Monopolistic…show more content…
– Provision for Captive generation, Franchisees, Micro franchisees all leading to Competition amongst Power Generators and Distributors. 3. Multiple licensing in distribution. – Consumers given the choice of selecting their Licensee. (e.g. In Mumbai – Tata Power & Reliance, In Seraikela Jharkhand- JUSCO & JSEB etc.) - Competitive Market. 4. Provision for cross-subsidy surcharge on direct sale to consumers – In essence if large bulk consumers avails open access mechanism to procure power, they have to pay surcharge to licensee to whom they primarily belong, so as to poise a balance in tariff for the rest of the consumer. 5. Power Trading recognized as a distinct activity with ceilings on trading margins to be fixed by the Regulatory Commissions. – Open Market Policy for bulk power purchase facilitating competitive bidding process to reduce Power Purchase Cost. 6. Setting up Appellate Tribunal to hear appeals against decisions of CERC and the SERC’s. - Structured mechanism for consumer grievance redressal & Tariff determination. Also to control Govt. influence on licensee operation and finally the entire process subjected to third party audit,

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