Revision of power tariff to become mandatory

Monday, 22 December 2014 12:58 Suresh Kumar MG
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Traiff hikeTimely revision of electricity tariff by power utilities will be made mandatory soon, with the provisions in the proposed the Electricity (Amendment) Bill, 2014, stipulating that if power firms do not approach the Electricity Regulatory Commission seeking revision, it can revise power tariff on its own.

The bill, which was tabled in Lok Sabha on Friday, envisages the timely filing of rates petitions by power utilities as well as their disposal within a specified period.

It envisages that power utilities will expeditiously file rate petitions and dispose of them in a specified time period.

The amendments also seek to empower the commission to initiate rate revision if a power utility or company fails to file a petition, besides penalising those that are not complying with the directions.

The bill may be welcomed by power utilities, which have often faced state government intervention while attempting to file a revision petition before the commission.

This type of hurdle occurs mainly during the poll season, as governments want to appease voters. Power firms have accumulated losses up to Rs 1.5 lakh crore in the country because of undue interference from state governments.

In addition to facing difficulties in filing revision petitions before the Electricity Regulatory Commission, utilities have also not been paid to supply power.

"To enable power firms to recover their cost of electricity production and its supply and remove them from the clutches from their political bosses, the government included tariff policy in the proposed amendment," sources in the Ministry of Power told Deccan Herald.
For consumers consuming less than one megawatt of power, the amendment provides a choice of companies with separate content and carriage.

There are proposed measures to enhance safety and security of electricity grids, separate carriage and content in the distribution sector, promote renewable energy and to rationalise rates. The bill also allows the power generating firms to sell surplus power out side the states companies.

On the flip side, the government will be able to impose fines up to Rs 1 crore on power firms that fail to implement the provision of Electricity Act.

"The amendments will also promote competition, efficiency in operations and improvement in quality of supply of electricity in the country, resulting in capacity addition and ultimate benefit to the consumers," said the Power Ministry official.

Source- Deccan Herald