Govt Mandates All Discoms to Comply EC Act to Improve Financial Stress

With an aim to help electricity distribution companies (Discoms) to monitor their performance parameters and bring in transparency in the distribution sector through professional inputs, the Power Ministry has mandated all Discoms to comply Energy Conservation (EC) Act, 2001.

November 10, 2020. By Manu Tayal

With an aim to help electricity distribution companies (Discoms) to monitor their performance parameters and bring in transparency in the distribution sector through professional inputs, the Power Ministry has mandated all Discoms to comply Energy Conservation (EC) Act, 2001.

In line with this, the Ministry of Power, Government of India had issued notification S.O. 3445 (E) on September 28, 2020 to cover all Discoms under the preview of the EC Act.

The notification, which was formulated in consultation with Bureau of Energy Efficiency (BEE), says that “all entities having issued distribution license by State/Joint Electricity Regulatory Commission (JERC) under the Electricity Act, 2003 (36 of 2003)” are notified as Designated Consumers (DCs).

Post this notification, all Discoms will be governed under the various provisions of EC Act, such as appointment of energy manager, energy accounting & auditing, identification of energy losses category wise, implementation of energy conservation & efficiency measures etc. for each Discoms.

Earlier, the Discoms whose annual energy losses were equal to or above 1000 MU were only covered as DCs. Now with this notification, the number of Discoms covered under the EC Act will increase from 44 to 102.

The Ministry of Power (MoP) said that, this decision will facilitate energy accounting & auditing as mandatory activity for all Discoms, leading to the actions towards reducing losses and increase their profitability.

It further added that, the amendment will also assist in developing projects for reducing the electricity losses by Discoms and implementing effective solutions. It is also expected to improve the financial state of Discoms.

Thereafter, the quarterly data of these Discoms will be collected and monitored by the government to suggest measures for increasing the efficiency and reduce energy loss. This move is expected to gradually become more effective if extended upto the level of end consumers.

BEE is a statutory body under the Ministry of Power, Government of India. It assists in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy. BEE coordinates with designated consumers, designated agencies, and other organization to identify and utilize the existing resources and infrastructure, in performing the functions assigned to it under the EC Act.

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