Ministry of Power has said that it had mandated that all electricity distribution companies would be brought under the ambit of the Electricity Conservation (EC) Act.
According to an official release issued by the ministry on Monday, a notification issued by it on September 28 covered all the electricity distribution companies under the purview of the EC Act. The notification that was prepared in consultation with the Bureau of Energy Efficiency (BEE) said, “All entities having issued distribution license by State/Joint Electricity Regulatory Commission under the Electricity Act, 2003 (36 of 2003)” are notified as designated consumers (DCs).
BEE is a statutory body under the Ministry of Power, that assists in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy. BEE coordinates with designated consumers, agencies and other organisations to identify and utilise the existing resources and infrastructure in performing the functions assigned to it under the EC Act.
After this notification, all power distribution companies will be governed under the various provisions of the EC Act, such as the appointment of an energy manager, energy accounting & auditing, identification of energy losses category wise, implementation of energy conservation & efficiency measures, etc., for each distribution company.
Earlier, distribution companies with annual energy losses equal to or above 1000 million units (MU) were only covered as DCs. Now with this notification, the number of distribution companies covered under the EC Act will increase from 44 to 102. This decision is expected to facilitate energy accounting & auditing as a mandatory activity for all distribution companies, resulting in action towards reducing their losses and improve profitability.
The amendment is expected to help distribution companies to monitor their performance parameters and bring in transparency in the distribution sector through professional inputs. It will also assist in developing projects for reducing electricity losses by distribution companies and implementing effective solutions.
The amendment is expected to improve the financial state of distribution companies. The quarterly data of these distribution companies will be collected and monitored by the government to suggest measures for increasing efficiency and reduce energy losses. This move is expected to gradually become more effective if extended up to the level of end consumers.