Reports indicate that the union power ministry is taking steps to promote competition in the electricity distribution sector by moving towards open access.
Media reports suggest that the ministry is holding talks with different stakeholders for introducing multiple distribution licensees for a single area by amending the Electricity Act 2003. Such a move would increase the choice of distribution companies for power consumers by allowing more players to operate in the sector.
Further, the ministry wants to separate electricity supply and network maintenance services. Presently, a power distribution utility is responsible for operating and maintaining a distribution system.
The above proposals are in line with the Electricity Act, which intends to bring competition in the retail electricity sector.
The proposal will be beneficial to the consumers, as it will ensure better services and tariffs, experts feel.
In order to improve quality of the services and avoid conflict of interest, segregation of the network maintenance and electricity distribution businesses is necessary.
Separate wire business will encourage investment in strengthening the distribution network while separate supply business will ensure reduction of commercial losses and lead to transparency in cost and revenue streams.
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