ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Content and Carriage

An Emerging Issue in Electricity Distribution

There is a need to rethink the existing Electricity Act 2003 and amend it to address the problems of the Indian power sector. The issues surrounding healthy competition in the power sector and the costs of "wires and content" segregation must be debated in the Indian context.

Now that the Electricity Act 2003 (henceforth called the Act) has been in force for more than a decade several inadequacies have been noticed, which may require its amendment if they are to be addressed. However, before turning to the required amendments, a brief look at two amendments in the Act, which were brought about in 2003 and 2007, may be in order. In 2003, the government had made a very important amendment in the Act whereby it mandated that all consumers with a load in excess of 1 MW would necessarily have the option of open access not later than five years of the amendment coming into force, which meant January 2009. In addition, there were some other amendments relating to powers of the appellate tribunal, wastage of electricity, grant of distribution licences to more than one licensee, etc. In 2007, several amendments were passed relating to joint responsibility of central and state governments of rural electrification, recognising that subsidies in the power sector cannot be reduced to zero but may be reduced over time, stringent provisions for theft of electricity among others.

Inadequacies of the Act

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