Government pushes competition in power distribution

Union power ministry's consultative committee discussed a consumer-centric framework for parallel distribution licensing, allowing multiple electricity suppliers to use the same distribution network.

The draft National Electricity Policy-2026 aims to phase out monopoly in electricity distribution and introduce competition by allowing multiple players.

Existing legal framework permits multiple distribution licensees but requires each to establish its own network, causing infrastructure duplication and higher capital expenditure.

Union power minister Manohar Lal said consumers would have freedom to choose their electricity supplier, like in telecom and aviation sectors.

New distribution licensees can use existing network by paying regulated wheeling charges, while retaining option to develop own network where permitted.