Bengaluru: In a move that could end the decades-old monopoly of Karnataka's state-run electricity supply companies (Escoms), Tata Power has applied for a licence to distribute electricity in areas currently served by government utilities. The move has already come under fire from the Federation of Karnataka Electricity Board Employees' Union, which has warned the government of statewide protests if the application is accepted.
Tata Power's Application to KERC
Tata Power has approached the Karnataka Electricity Regulatory Commission (KERC) to enter the state's power distribution sector. According to a public notice, the company plans to supply electricity across 15 districts under four Escoms. The proposed areas include Bengaluru Rural, Chikkaballapur, Kolar, Ramanagara, Tumakuru, and Chitradurga under BESCOM; Mysuru, Chamarajanagar, and Hassan under CESCOM; Belagavi, Uttara Kannada, and Dharwad under HESCOM; and Dakshina Kannada, Udupi, and Shivamogga under MESCOM. The company plans to focus on urban areas, including city corporations and municipalities.
Potential for Private Participation
Energy sector sources said Tata Power's entry could open the door for private participation in electricity distribution, allowing consumers to choose their power supplier without having to change existing transmission infrastructure that lights up their homes. Independent energy analysts welcomed the move, saying greater competition could improve service quality and reliability. Tata Power currently distributes electricity in Mumbai, New Delhi, Ajmer, and parts of Odisha, reportedly with lower base tariffs than Karnataka Escoms.
Comparative Efficiency
While Tata Power's distribution companies reportedly operate with aggregate losses below 6%, Karnataka Escoms continue to post significantly higher losses, contributing indirectly to rising tariffs. Experts said Karnataka tariffs are heavily shaped by subsidies and accumulated deficits, whereas Tata Power's pricing largely reflects operational efficiency and regulatory discipline.
Legal Framework and Future Prospects
Experts pointed out that the Electricity Act, 2003, permits multiple distribution companies to operate in the same area to promote competition, improve service quality, and reduce infrastructure costs. The proposed Electricity (Amendment) Bill, 2025, also seeks to facilitate multiple discoms sharing existing power infrastructure.
Drawing parallels with the telecom sector, experts said consumers may eventually be able to choose among multiple electricity suppliers based on tariffs, reliability, and service quality. "State-run Escoms currently operate as monopolies and determine tariffs. Multiple discoms could end monopolies, create competition, and help bring down tariffs," experts said.
