All discoms to come under Energy Conservation Act: Power ministry

The power ministry on Monday said it has mandated all electricity distribution utilities or discoms to comply with the Energy Conservation (EC) Act, 2001, which would reduce energy losses and bring in more transparency in the sector.

Earlier, only discoms with annual energy losses equal to or above 1,000 MU (million units), notified as designated consumers, used to come under the purview of the EC Act.

The ministry had issued a notification on September 28, 2020 to cover all electricity distribution companies (discoms) under the preview of the EC Act, it said in a statement.

As per the notification, which was formulated in consultation with the Bureau of Energy Efficiency (BEE), "All entities having issued distribution license by State/Joint Electricity Regulatory Commission under the Electricity Act, 2003..." are notified as designated consumers (DCs).

After this notification, all discoms will be governed under various provisions of the EC Act, such as appointment of energy manager, energy accounting and auditing, identification of energy losses category-wise, and implementation of energy conservation and efficiency measures.

With this, the number of discoms covered under the EC Act will increase from 44 to 102.

This decision will facilitate energy accounting and auditing as mandatory activity for all the discoms, leading to the actions towards reducing losses and increase their profitability, the ministry said.

The amendment is expected to help discoms to monitor their performance parameters and bring in transparency in the distribution sector through professional inputs, it added.

It will also assist in developing projects for reducing the electricity losses by discoms and implementing effective solutions.

The amendment is expected to improve the financial state of discoms. The quarterly data of these discoms will be collected and monitored by the government to suggest measures for increasing the efficiency and reduce the energy losses.

This move is expected to gradually become more effective if extended upto the level of end-consumers.

The Bureau of Energy Efficiency (BEE) is a statutory body under the Ministry of Power. It assists in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy.