Govt working on separating content, carriage in power sector

One company would be owning network while electricity supply would be done by different entities

In a move that could usher in more competition in the power sector, the government is working on a proposal where separate entities would handle electricity supply and distribution.

Discussions are already progressing with various stakeholders, including state power utilities on the proposal. Amendments to the Electricity Act 2003 would have to be made to implement the idea, officials said.

Under the separate carriage and content model, one company would be owning the network while electricity supply would be done by different entities.

Similar business models are already in place in some countries, including the United Kingdom.

At present in India, power distribution companies (discoms) supply as well as manage network that provides electricity for residential and commercial purposes.

The current system is also perceived to be raising concerns about fair competition in the market since there is conflict of interest when the same entity is into supplying electricity as well as managing the network that carries it.

"Worst hurt is the power (sector) where capacity shortages have caused constraints to economic growth. The control of the infrastructure, that is the electricity wires, by the dominant firm gives rise to access issues," Competition Commission chief Ashok Chawla had said recently.

The Competition Commission of India (CCI) keeps a tab on unfair trade practices at market place.