EconomyGS3+ GS2

Why Summer Power Cuts Persist Despite Adequate National Supply

Indian Express·2026-09-22· Read original

"Why Summer Power Cuts Persist Despite Adequate National Supply"

Prelims Facts

  • •The Electricity Act, 2003 mandates independent regulatory commissions (CERC at the Centre, SERCs in states) to fix tariffs, while state governments only decide subsidised consumer categories and fund the subsidy.
  • •Mega Power Projects are power stations with capacity of 1,000 MW or more, made eligible for import and excise duty exemptions under the mid-1990s Mega Power Policy.
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Key Terms

Discom

Distribution company that supplies electricity from the grid to final consumers at usable voltage.

Rent-seeking

Profiting by manipulating a system rather than creating new value or output.

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Study Note

BackgroundCore Concept

Background

The Electricity Act, 2003 restructured India's power sector into separate generation, transmission and distribution functions, replacing the old vertically integrated State Electricity Boards. It created independent regulatory commissions, the Central Electricity Regulatory Commission at the national level and State Electricity Regulatory Commissions in the states, to fix tariffs and oversee performance, keeping this function insulated from routine political control. State governments retained only the power to decide which consumer categories deserve subsidised electricity, such as farmers, and to fund that subsidy. Discoms sit at the last mile: they buy high-voltage electricity and supply it to the final consumer, and their commercial health depends on cost-reflective tariffs and adequate investment in the distribution network. Since the 1990s, governments have tried different routes to fix chronic distribution inefficiency, from the mid-1990s Mega Power Policy encouraging parallel private licensees to today's push for rooftop solar and battery storage.

The Topic Explained

Two structural features explain recurring summer power cuts. First, distribution networks are built for a planned load, and the summer surge in air-conditioning demand often outpaces the network's carrying capacity. This forces discoms to impose local cuts to maintain grid stability, even when generation is adequate nationally, which is why one locality can face outages while a neighbouring one, served by a different discom, does not. Second, discom finances remain fragile because revenues depend on regulator-approved tariffs, and a constant complaint is that these tariffs are fixed too low to fund network expansion.

One structural fix already tried is parallel licensing, allowing more than one discom to operate in the same area so consumers can choose. Mumbai has run this model for nearly two decades, with Tata Power, BEST and Adani Electricity competing for the same customers. …

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Related PYQs

2016GS1 Prelims

'Net metering' is sometimes seen in the news in the context of promoting the

Aproduction and use of solar energy by the households/consumers
Buse of piped natural gas in the kitchens of households
Cinstallation of CNG kits in motor-cars
Dinstallation of water meters in urban households
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2025GS1 Prelims

With reference to 'PM Surya Ghar Muft Bijli Yojana', consider the following statements:

I.Its target is to install solar panels on the roofs of one crore households in the residential sector.

II.Ministry of New and Renewable Energy's aim is to provide grassroot-level training on installation, promotion, maintenance and repair of rooftop solar panels.

III.Its target, under the capacity building scheme component, is to create more than three lakh skilled manpower by imparting new skills and upgrading skills.

Which of the statements given above are correct?

AI and II only
BI and III only
CII and III only
DI, II and III
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2018GS1 Prelims

With reference to solar power production in India, consider the following statements :

1.India is the third largest in the world in the manufacture of silicon wafers used in photovoltaic units.

2.The solar power tariffs are determined by the Solar Energy Corporation of India.

Which of the statements given above is/are correct?

A1 only
B2 only
CBoth 1 and 2
DNeither 1 nor 2
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Practice MCQs

Economymedium

Consider the following statements regarding the Electricity Act, 2003:

1.It empowers state governments to directly fix electricity tariffs for consumers.

2.It mandates independent regulatory commissions to determine the tariffs charged by distribution companies.

3.State governments can decide which consumer categories receive subsidised power and must fund that subsidy.

Which of the statements given above is/are correct?

A1 and 2 only
B2 and 3 only
C1 and 3 only
D1, 2 and 3
Sign up to check your answer & see the explanation
Economymedium

Consider the following statements about net metering:

1.It enables rooftop solar producers to feed surplus electricity into the grid and be billed on net consumption.

2.Net metering tariffs in India are administered exclusively by the Solar Energy Corporation of India.

Which of the statements given above is/are correct?

A1 only
B2 only
CBoth 1 and 2
DNeither 1 nor 2
Sign up to check your answer & see the explanation
Economymedium

Match List I (Term) with List II (Feature) and select the correct answer using the codes given below:

List I:

A.Mega Power Project

B.Parallel Distribution Licensee

C.Two-part Tariff

D.Net Metering

List II:

1.Capacity of 1,000 MW or more with duty exemptions

2.Multiple discoms operating in the same area, as in Mumbai

3.Fixed capacity charge plus variable energy charge

4.Billing based on net solar export and import at household level

AA-1, B-2, C-3, D-4
BA-2, B-1, C-4, D-3
CA-1, B-3, C-2, D-4
DA-4, B-2, C-3, D-1
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Economyeasy

Consider the following statements about the PM Surya Ghar Muft Bijli Yojana:

1.Its target is to install rooftop solar on one crore households.

2.It is implemented by the Ministry of Power.

Which of the statements given above is/are correct?

A1 only
B2 only
CBoth 1 and 2
DNeither 1 nor 2
Sign up to check your answer & see the explanation
Economymedium

Which of the following operate as parallel distribution licensees within the same license area in Mumbai?

1.Tata Power

2.BEST

3.Adani Electricity

4.Torrent Power

A1, 2 and 3 only
B1, 2, 3 and 4
C1 and 3 only
D2, 3 and 4 only
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