Necessary provisions have been incorporated in the Electricity Bill 2000, according to Gajendra Haldea, senior consultant, National Council for Applied Economic Research (NCAER) and one of the chief architects of the Bill.

Addressing a meeting, organised by the Associated Chambers of Commerce and Industry of India (Assocham), Haldea said a transmission company will not be permitted to undertake any other function such as generation, distribution or supply.

There is, however, no restriction on combining of such functions by any other entity, though it would be necessary to functionally disaggregate the operations, accounts and tariffs in relation of each of these functions. A distribution company will be required to maintain separate accounts and tariffs for wheeling so that its supply business can be exposed to competition.

The predominant role of central or state transmission utilities has been maintained so that they can spearhead planning and development of transmission systems, and also facilitate private investment. Haldea said that the provision of non-discriminatory access to the transmission system is a necessary condition for the efficient operation and development of the electricity industry. Competition in generation and distribution will be thwarted in the absence of open transmission `highways'.

Recognising the critical role of such transmission systems, the Billmandates that the transmission companies will not have any financial interest in generation, distribution or supply.

Responding to queries by representatives of power companies, he said the provision relating to distribution include the duty to supply electricity, recovery of charges, safety, quality and reliability of supply, and protection of consumer interests including payment of compensation.

The Bill also provides for gradual introduction of `open access' to the distribution systems leading to competition among multiple suppliers.

It enables the regulatory commission to exempt from licensing, subject to certain conditions, entities such as consumer cooperative societies or associations that wish to undertake distribution in the areas under their respective ownership or control.