The government plans to introduce a license renewal mechanism for electricity distribution companies to keep a check on the power supply capabilities of the utilities, Power minister R K Singh said on Wednesday.
The proposal is likely to be part of the Electricity Act amendment bill likely to be tabled in Parliament in ensuing budget session, he said.
As per the proposal, the distribution utilities will have to apply for renewal of their licences every five years. “Licenses of discoms that do not have adequate long term power tie ups will not be renewed,” Singh said on the sidelines of an event organized jointly by the Central Electricity Authority and IPPAI.
The electricity act amendment bill is likely to raise multi-fold the penalties on distribution companies for load shedding and propose a direct benefit subsidy transfer mechanism by state governments to power consumers.
