Tata Power withdraws application for parallel electricity distribution in Karnataka after opposition

Tata Power Company Limited (TPCL) has withdrawn its application seeking a licence for parallel distribution of electricity in Karnataka. The decision was announced on Friday during a hearing before the Karnataka Electricity Regulatory Commission (KERC).

According to a senior official from KERC, TPCL orally withdrew its application and will submit a formal memo to the commission. The application, filed in May 2026, sought permission to supply electricity in 19 districts across the state, competing with existing state-owned power distribution companies (Escoms).

TPCL had justified its move by citing its successful operations in other states such as Odisha, Maharashtra, Delhi, and Rajasthan. However, it does not have its own transmission and distribution network in Karnataka.

The application faced strong opposition from various stakeholders. Several unions, including the Federation of Karnataka Electricity Board Employees’ Union and Associations, the Karnataka Electricity Consumers Association, and the Karnataka State Licensed Electrical Contractors Association (KSLCA), staged protests against the entry of private players in power distribution.

In June 2026, all Escoms filed a joint objection petition with KERC. Bengaluru Electricity Supply Company (Bescom) raised concerns about legal non-compliance, network deficiency, consumer protection risks, and competition. Bescom argued that under the Electricity Act, 2003, TPCL must have its own infrastructure, which could not be built within 30 days of licence approval. It also contended that TPCL sought to enter profitable markets without bearing full obligations as a distribution licensee and would rely on Bescom's infrastructure.

Political leaders also weighed in. Karnataka Chief Minister D. K. Shivakumar and Energy Minister K. J. George assured employees that there was no plan to privatise the power sector. Shivakumar criticised the Electricity Act, 2003, introduced by the erstwhile Bharatiya Janata Party-led central government, for allowing private players and dismantling state-run monopolies.

In a cabinet meeting on July 2, Escom officials were directed to file individual objections against TPCL. Shivakumar stated that the government would represent its objections through the Escoms.

Following the withdrawal, K. Balram, President of the KPTCL Employees Union, expressed gratitude to the state government and energy department officials. “KERC has asked for clarification and reasons behind the withdrawal,” he said, adding that employees promise to provide better services.

C. Ramesh, President of KSLCA, said the government’s support saved jobs of over 60,000 contractors and labourers. “We will strive to provide better service even if it is for a single house in a remote village,” he added.

The withdrawal marks a significant development in Karnataka's power sector, reflecting the challenges faced by private firms in entering state-dominated electricity distribution markets.