23 July 2003
Electricity Act 2003
Opportunities
for Investment & Growth
in Distribution Sector
By
Anil Kr. Sardana
Nor
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23-7-03
Overview of the Presentation Before and After EA 2003 Distribution Sector Provisions
– Distribution by generators– Distributed Generation – Trading, Open Access & Multiple Licensing– Anti Theft Provisions– Franchise– Privatization
Way Forward
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EA 2003- Come to a full EA 2003- Come to a full Circle ?Circle ?
Electricity Act 1887 & 1903 Private Capital
Minimal Regulations
Electricity Act 1910 Private Capital
More Regulations
Electricity Supply Act 1948, Constitution 1950, IPR 1956
State Ownership
State Regulations
Electricity (Amend) Acts 1991 &1998
Private Capital
“Generation & Transmission”
ERC Act 1998 & State reforms Acts
Autonomous Regulations Unbundled SEBs &
Privatistaion
Electricity Act 2003 Autonomous Regulations Private Capital, Open Access
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Attempt to consolidate laws – Generation, Transmission, Distribution, Trading & Use of Electricity
Take measures conducive to Development of electricity industry,
Promoting competition
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 policiesHas it been able to fill the voids fully ???Has it been able to fill the voids fully ???
The Salient The Salient FeaturesFeatures
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The Political Will - Is it really there? – Perhaps Yes, but past experience ??
Employees - Change mind set – need to take firm and positive decisions
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 Let’s not repeat the history of 1991 ……… ………
Critical Success Critical Success FactorsFactors
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Distribution By Distribution By GeneratorsGeneratorsOpportunity
Generators may supply directly. Choose your customer
Concerns Hardware - Availability of adequate and
robust T&D system Software - Commercial Arrangements
Caution The Imbalance of Economics
Nor
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Distributed GenerationDistributed Generation
Opportunity Self developed and self run electric
supply system Big boost to rural/urban supply as well
as for industrial estates
Concern Not significant
Caution Consumer Protection
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OpportunityAcknowledges “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 supply business. Consumers to benefit in the long term.
Concerns
Availability of network
Surcharge – Clarity / Viability
CautionConflict of Interests
Trading,Open Access and Multiple LicensingTrading,Open Access and Multiple Licensing
Nor
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23-7-03
Antitheft ProvisionsAntitheft ProvisionsOpportunities
The provision for antitheft legislation will help in reducing the commercial losses of the utilities
Concerns
Socio Political Will How fast government set up courts
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FranchiseFranchise
Opportunity A distribution licensee can distribute electricity
through another person within its distribution area.
This will make way for micro distribution system
concept through franchisees
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Private Sector InvestmentPrivate Sector InvestmentOpportunity
Lot many – IPPs, CPPs, Rural, Trading …..
Concerns Policy Decisions Market Conditions Political Will Power
Caution If it does not happen now, It may never
happen
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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 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…clarity to emerge after these are issued…
Still Awaited …Still Awaited …
Nor
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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 …
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
The Way ForwardThe Way Forward … …
Nor
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Thank YouThank You
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