Customers will soon be able to choose a power supply company as a mobile company. For this, the government will bring a long-awaited bill to amend the power law during the monsoon session. The monsoon session starts Monday. In this, you will be given the responsibility of supplying multiple companies in one area so that customers have the option of selecting the company of their choice.
This law paves the way for electricity consumers to have a continuous supply and other facilities. The bill promotes competition in power distribution by eliminating cross subsidies in the power sector. This renewable energy procurement (RPO) will be strictly enforced on the companies, Union Energy Minister RK Singh said. In addition, the bill makes the duty policy less than 20 per cent of the rate difference in the case of cross subsidy, which means that consumers can afford electricity from one class to another by taking a higher price. This means that the difference between high and low tariffs should not exceed 20 per cent, which is now quite high. This would justify the electricity tariff for the industry which is currently very high, the minister said.
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The finance minister had announced in the budget
The Finance Minister Nirmala Sitharaman has announced a huge boost to the energy sector when presenting this year’s budget and the government is going to provide this facility to the consumers so that they can choose their own power companies. Under this, a framework is put in place to give electricity consumers the option to choose from more than one power supply company. Moreover, there will be rules to give the power of choice to companies. There is an opportunity to differentiate the business of power supply and distribution network.
Cheap power clears the way
Currently, the cost of electricity exchanges is less than Rs 3 per unit, while companies charge Rs 5 to Rs 6 per unit from customers. Experts say that because of the old and long-term deal, existing power companies are not ready to cut prices. New companies buy electricity at the current market price so they can offer it cheaper. This will benefit the customers.
All States ready: RK Singh
Speaking to the Union Minister of Power and Energy RK Singh, we have introduced several amendments to the power law. There is also the opportunity to separate the distribution network and power supply business. Just as we separated manufacturing and distribution, we must now separate the supply and distribution business. He said no state has so far created a conflict. Also, under this, old companies will not be eliminated, but new companies will be allowed in the market.
This status is for companies
Supply companies need to ensure 24 hour power supply to all customers. The sale or purchase of electricity is done through Power Purchase Agreements (PPAs) to meet the annual average electricity demand in the region. Moreover, at least renewable energy needs to be purchased.
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