Ministry of Power mandates all DISCOMS to comply Energy Conservation Act, 2001

The Ministry of Power has recently mandated that all electricity distribution utilities and distribution companies (DISCOMS) would comply with the Energy Conservation Act, 2001 (“Act”) which would reduce energy losses and bring in more transparency in the sector.

The Ministry of Power had issued a notification[i] on September 28, 2020 to cover all DISCOMS under the purview of the Act. As per the notification, which was formulated in consultation with the Bureau of Energy Efficiency, all entities having issued distribution license by state/joint electricity regulatory commission under the Act would be notified as designated consumers. After this notification, all DISCOMS will be governed under various provisions of the 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.

According to Mr. Rohitaashv Sinha, Associate Partner, Agarwal Jetley & Co., this decision would facilitate energy accounting and auditing as a mandatory activity for all the DISCOMS, leading to the actions towards reducing losses and increase their profitability. The amendment is expected to help DISCOMS to monitor their performance parameters and bring in transparency in the distribution sector through professional inputs. 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 update is by Rohitaashv Sinha, Advocate & Associate Partner at Agarwal Jetley & Co., Advocates & Solicitors. Contact: Email: rohitaashv.sinha@agarwaljetley.com or Mob: (+91) - 9999565393