Electricity Act 2003
Opportunities
for Investment & Growth
in Distribution Sector
By
23 July 2003
Anil Kr. Sardana
Overview of the Presentation
Before and After EA 2003
Distribution Sector Provisions
– Distribution by generators
– Distributed Generation
North Delhi Power Limited
– Trading, Open Access & Multiple Licensing
– Anti Theft Provisions
– Franchise
– Privatization
Way Forward
23-7-03
EA 2003- Come to a full Circle ?
Electricity Act 1887 & 1903 Private Capital
Minimal Regulations
Electricity Act 1910 Private Capital
More Regulations
North Delhi Power Limited
Electricity Supply Act 1948, State Ownership
Constitution 1950, IPR 1956 State Regulations
Electricity (Amend) Acts 1991 Private Capital
&1998 “Generation & Transmission”
ERC Act 1998 & State reforms Autonomous Regulations
Acts Unbundled SEBs &
Privatistaion
Electricity Act 2003 Autonomous Regulations
Private Capital, Open Access
23-7-03
The Salient Features
Attempt to consolidate laws – Generation, Transmission, Distribution,
Trading & Use of Electricity
Take measures conducive to Development of electricity industry,
Promoting competition
North Delhi Power Limited
Protecting interest of consumers
Supply of electricity to all areas,
Rationalization of electricity tariff,
Ensuring transparent policies regarding subsidies
Promotion of efficient and environmentally benign policies
Has it been able to fill the voids fully ???
23-7-03
Critical Success Factors
The Political Will - Is it really there? – Perhaps Yes,
but past experience ??
Employees - Change mind set – need to take firm
and positive decisions
North Delhi Power Limited
Consumers- Payment habits
Investors - Market conditions, Commercial viability
Clarity of policy, laws etc. – Yes – A big achievement by
EA 2003
Let’s not repeat the history of 1991 ………
23-7-03
Distribution By Generators
Opportunity
Generators may supply directly.
Choose your customer
North Delhi Power Limited
Concerns
Hardware - Availability of adequate and
robust T&D system
Software - Commercial Arrangements
Caution
The Imbalance of Economics
23-7-03
Distributed Generation
Opportunity
Self developed and self run electric
supply system
North Delhi Power Limited
Big boost to rural/urban supply as well
as for industrial estates
Concern
Not significant
Caution
Consumer Protection
23-7-03
Trading,Open Access and Multiple Licensing
Opportunity
Acknowledges “trading” (purchase of electricity for resale) as a distinct
but licensed activity in the electricity business.
Competition through multiple licenses
The Advent of Consumerism and Commercialization in the electricity
North Delhi Power Limited
supply business. Consumers to benefit in the long term.
Concerns
Availability of network
Surcharge – Clarity / Viability
Caution
Conflict of Interests
23-7-03
Antitheft Provisions
Opportunities
The provision for antitheft legislation will help in
reducing the commercial losses of the utilities
North Delhi Power Limited
Concerns
Socio Political Will
How fast government set up courts
23-7-03
Franchise
Opportunity
A distribution licensee can distribute electricity
through another person within its distribution
North Delhi Power Limited
area.
This will make way for micro distribution system
concept through franchisees
23-7-03
Private Sector Investment
Opportunity
Lot many
– IPPs, CPPs, Rural, Trading …..
Concerns
North Delhi Power Limited
Policy Decisions
Market Conditions
Political Will Power
Caution
If it does not happen now, It may never
happen
23-7-03
Still Awaited …
National Electric Plan and Tariff Policy
CERC and ERCs to frame the Tariff guidelines within one year
Policy for Open Access – With in one year
Existing Distribution Licensees to be issued new license with in
North Delhi Power Limited
one year.
Norms for Trading License
Norms for setting up parallel distribution network
Notification for Rural Areas
Appellate Tribunal
clarity to emerge after these are issued…
23-7-03
The Way Forward …
While Power For All, On Demand, Anywhere and
from Anywhere, is Nation’s dream - the key to
emergence of a consumer friendly competitive
electricity market scenario will depend on …
North Delhi Power Limited
Building up adequate capacity both in generation
and transmission
Reforms of SEBs – MUST at distribution level
Regional Players
Political will power – still a major factor
23-7-03
North Delhi Power Limited
23-7-03
Thank You