Distribution of Electricity in Industry

Open access in distribution is to be described in phases. There is no separate trading licence for distribution licensee. Distribution licensee has to gives non-discriminatory open access of its network to consumers where permitted through ERC. Cross subsidy surcharge has to be at the current level of subsidy and has to be phased out gradually. Licensees are allows to conduct business by another entity inside its own territory.

Such open access is being given on payment of wheeling and cross subsidy charges to encourage multiplicity, competition and entry of market forces. This means in which the consumer has a choice to decide his/her supplier. Therefore, this could be practically utilized only through the bulk consumers, as individual customer may not benefit from this. In case multiple distribution licensees operate in the same area, the consumer has the option to choose his/her distribution licensee. This is yet to happen, and depends on the Regulatory approvals.