Meeting of Consultative Committee for the Ministry of Power Held
Parallel distribution licensing framework discussed to expand consumer choice without duplicating electricity distribution networks
GS3GS2EssayPIBGS3Ministry of PowerElectricity Act, 2003Parallel distribution licensing
What happened
The Consultative Committee of the Ministry of Power met under the chairmanship of the Union Minister for Power and Housing & Urban Affairs, Shri Manohar Lal, to deliberate on a proposed framework for parallel distribution licensing. The proposal aims to promote consumer choice, improve service quality, and ensure efficient utilisation of electricity distribution infrastructure.
Background and earlier position
The discussion is linked to the Electricity Act, 2003. The Act is cited as having introduced competition in electricity generation, transmission, and trading, while competition in electricity distribution remains limited. A key problem highlighted is that, although the legal framework permits more than one distribution licensee in the same area, each licensee must establish its own distribution network. This can lead to duplication of poles, lines, and substations, increasing capital expenditure and discouraging fresh investment, thereby reducing efficient utilisation of distribution resources.
