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Piyush Goyal to consult states over amending Electricity Act

Power minister Piyush Goyal said on Tuesday he will reach out to states to seek their support for a proposed amendment in the 2003 Electricity Act that would allow multiple power delivery utilities to compete in the same area, thus improving the quality of services and driving down power bills. As per the proposed change, a power distribution company which already has supply network in a region will allow competing businesses in electricity retailing to use its network for a user-fee so that all the players compete for the same customer. While the infrastructure owner will get a return for their wire business as decided by the power regulator, competition will determine the price of power sold to consumers. “All the reforms we have brought in are with the consensus of states. We will talk to them. I look forward to moving an amendment (to the Act) in the next (winter) session of Parliament which will allow consumers to choose their electricity supplier,” said Goyal.

“Competition will reduce the tariff and consumers will get better quality service,” said Goyal. To ensure that all distribution companies have a level playing field, the electricity regulator will only fix a ceiling price for power, not separate tariff for individual players. Experts said that competition is likely to prompt suppliers to cut their margins and make an extra effort to improve efficiency and provide a quality service.