Aiming to bring another set of reforms in the sector, Power Ministry is expected to come out with a cabinet note in tariff policy within a week for enabling greater competition in the sector. However, it is after receiving responses from various ministries concerned, the Power Ministry would be sending the note on changes in Tariff Policy to the Cabinet for its approval.
The stakeholders reportedly have submitted their feedback on the proposed changes to Central Electricity Authority (CEA), Central Electricity Regulatory Commission (CERC), principal secretaries of all the state governments and chairpersons of power generation, transmission and distribution utilities. The earlier amendments to the tariff policy were approved in 2011.
As part of changes in the Tariff Policy, the Power Ministry has sought extension of Section 62, which basically empowers electricity regulatory commissions to decide upon tariffs, beyond financial year 2017. Besides, the ministry has decided to keep hydro projects under this section for the continuation of cost plus tariff structure, as a part of proposed changes.
Under the cost plus tariff structure, PSUs like NTPC and NHPC charge a lump sum fee as well as a per-unit charge from distribution companies. Additionally, the minister also is contemplating on having a formula, which would ensure that variation in fuel and power purchase cost is recovered by the power generating firms.