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Power Distribution in India Outlook Update Q1 2020

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Report Summary Separation of content and carriage – A long-awaited reform! Will it see the light this Quarter  

Power Distribution in India Outlook Update Q1 2020

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    The Electricity Amendment Bill, 2014, was proposed to boost competition in the Indian power space through the restructuring of the distribution and supply businesses. As per the amendment, power distribution is to be separated from the retail portion, i.e. carriage (distribution network) and content (electricity supply business) or C&C are to be separated. The aim was to provide consumers with more suppliers to choose from, as the amendment proposed multiple supply licensees to share space within a distribution area. However, the amendment has not been enacted owing to challenges in its implementation. Recently, in CY 2019, center has again 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. This for sure can help in improving efficiency of discoms by enthusing competition in the sector, which can indeed help discoms to squeeze it’s outstanding overdue amount to gencos.

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