Tata Power Company Limited has approached the Karnataka Electricity Regulatory Commission (KERC) seeking a power distribution license for areas currently served by Bengaluru Electricity Supply Company (Bescom), Chamundeshwari Electricity Supply Corporation (CESC) and the electricity supply companies in Hubballi (Hescom), Mangaluru (Mescom), and Kalaburagi (Gescom). 

KERC officials confirmed that the petition is currently under scrutiny.  

Power sector employee unions affiliated with Karnataka Power Transmission Corporation Limited (KPTCL) are likely to oppose the move and are expected to strike against the proposal, though the union leaders said a final stand would be decided after internal discussions.

Ambitious plans

Within Bescom limits alone, Tata Power Company said it plans to serve over 1.86 lakh consumers within three years of obtaining the license.  

If Tata Power Company is granted permission to operate, it would open the door for private participation in areas where government utilities currently supply power. Consumers would eventually get an option to choose between distributors. 

The company currently operates in Mumbai, Delhi, Odisha, and Ajmer. In its application, the company claimed to have reduced transmission and distribution losses in the mentioned States and said it intends to use its expertise to meet the growing power demand in the proposed Karnataka regions. The company said it plans to distribute and supply electricity in these geographically connected areas under the provisions of the Electricity Act, 2003. 

Healthy competition

Power experts, speaking on condition of anonymity, supported the move, arguing that this could create “healthy competition” and eventually improve service quality, reduce power losses, and bring more investment into the electricity network.

They added that despite high power generation, Escoms’, specifically Bescom’s, services continue to face criticism because of ageing infrastructure. “A comparative study, explaining the factors, must be done to understand what customers should choose and why,” they added.  

The financial loss incurred by Escoms in Karnataka stood at ₹34,980 crore in 2024-25, while total borrowings rose from ₹32,211 crore in 2022-23 to ₹47,993 crore in 2024-25. 

State-run Escoms told The Hindu that allowing another player is at the discretion of KERC. “The Electricity Act, 2003 permits companies to seek distribution of licences,” officials said, adding that the entry of another company would not mean that State-run Escoms would cease operations. 

Escoms flag concerns

However, some officials, expressing concerns, said electricity distribution works on a cross-subsidy model, where industries, commercial establishments, and urban consumers generally pay higher tariffs, and that the revenue helps utilities supply subsidised power to farmers and rural households. If private companies mainly attract high-paying consumers in profitable urban pockets, Escoms could lose a major source of income while remaining responsible for supplying power to a section of the population and area.

Officials also pointed out that it may create an uneven system where private players enter only financially attractive areas while the burden of public service remains with State utilities. Over time, they said, this could weaken the financial condition of Escoms and increase the subsidy burden on the State government.