Close on the heels of the reprimand by Uttar Pradesh Chief Minister Mulayam Singh Yadav over the slow-paced electrification of Agra villages, the Anil Ambani-controlled Reliance Energy [Get Quote] has hit another roadblock in its power distribution projects in Noida, Ghaziabad and Meerut.

The UP Electricity Regulatory Commission has asked Reliance Energy to produce a no-objection certificate from the ministry of defence within a month to get a licence to operate a parallel power distribution network in these cities.

Not that there is any opposition on principle. UP Electricity Regulatory Commission Chairman Vijay Kumar emphasised that for effective reforms in the power sector, consumers must have choice of power distribution companies.

Talking to mediapersons in Agra after holding a meeting with Agra industrialists on Tuesday, Kumar said at the moment, the UP Power Corporation Ltd. was the running a monopoly in the state. As a result, it was imposing unreasonable restrictions on power consumers, and its service, too, was very poor, he added.

But this situation, he said, could change drastically with the entry of a private sector competitor like Reliance Energy in power distribution. Kumar said the entry of private companies in the power sector would make this field more competitive and force the public-sector power corporations to provide better service to consumers.

He said, so far, Reliance Energy Ltd was the only private company that had applied for a distribution licence in three cities of the state and had claimed that it had made full preparations to make a big entry in the power sector as soon as it was granted a licence.

But, he said, the company had so far failed to produce a no-objection certificate from the ministry of defence which made it impossible for the UPREC to grant a distribution licence to Reliance.