Centre Plans Major Changes in Power Distribution Sector

The Central government is preparing plans to allow private companies to supply electricity through existing power networks across the country. Similar to the telecom sector, the proposed system aims to introduce more private participation in the electricity distribution sector, with states being directed to implement the framework.

Under the proposed plan, private companies can obtain licenses from the State Electricity Regulatory Commissions (ERCs) by paying the prescribed wheeling charges for using power lines managed by distribution companies (DISCOMs). These firms can use the existing infrastructure without setting up new substations or transmission lines and supply electricity directly to consumers. However, concerns have been raised that private companies may impose higher tariffs on consumers while paying wheeling charges to DISCOMs.