Adani Electricity Navi Mumbai Limited (AENML) filed an Application before the Maharashtra Commission for grant of Distribution License. Prayas (Energy Group)’s submission is in response to notice seeking pubic comments on the petition.
The provision of license for such a large area where there are multiple existing licensees and potential for new load growth should be approached with caution. Without consideration and clarity provided for several aspects and the provision of a clear framework for operation of multiple distribution licensees in parallel, there could be underutilization of assets, resource lock in due to poor planning and the possibility of cherry picking of consumers. Some of these risks have already been identified by the Commission itself in other matters.
The need for a deliberate and cautious approach, in public interest is all the more critical given recent changes in the policy frameworks at the national level and the significant number of players planning to apply as 2nd (or 3rd) license in areas across Maharashtra. As the first application of it’s kind for such a large area, this matter is bound to become a precedent for other such applications in the state.
Given the risks, we urge the Commission to keep in abeyance the present petition and all such petitions regarding applications for parallel licensing till:
- Clear Uniform Regulatory Framework is notified by MERC for addressing implementation challenges and addressing specific risks pertaining to multiple distribution licensees in the same area of supply. These should be finalised based on widespread stakeholder consultations.
- Open access regulations are amended to provide consumer choice to a wider set of consumers
Unless an extensive uniform regulatory framework which address many of risks and challenges raised in our submission is put in place and competition through open access is broadened and deepened, there is a serious and real danger that multiple/parallel distribution licenses would lead to increased operational and regulatory complexity and litigation. In light of the cost-plus nature of the distribution license, this would negate the benefits of cost-competitive electricity supply to consumers, especially small consumers, within the parallel license areas as well as in areas being served by the state-level licensee.
Our detailed submission in the matter is enclosed.