Electricity reforms: Consumers likely to be allowed to choose supplier offering lowest tariff

NEW DELHI : Unable to introduce amendments to Electricity Act, 2003 due to lack of concensus among states, the Centre has decided to push through next big reform in the power sector — to allow consumers to choose their electricity suppliers offering the lowest tariff — through an administrative order.

Government sources said that the Power Ministry has drawn up a draft model plan for states that will allow multiple private franchisees to operate as power suppliers in a distribution area, with state-run distribution utilities becoming just owners of the network.

The plan is akin to the earlier proposal of the Power Ministry that suggested separation of the content (electricity supply business) and carriage (distribution network) business of distribution entities, thereby making discoms aggregators of power and owners of the distribution network and allowing multiple suppliers in their area to offer competition to consumers.