System 'reluctant' to pay more for electricity, says Ahluwalia

Most electricity boards reject power at higher rates because they don't want to raise the price for consumer, and solve the problem by introducing power cuts

Power production in the country will take time to become efficient as "the system is reluctant" to pay more for electricity, Planning Commission Deputy Chairman Montek Singh Ahluwalia today said.

"The power producers in the country are facing fuel supply problem but it would be unfair to expect power companies to undertake fuel risks," he said in an interview to CNBC-TV18.

Ahluwalia added that producers should neither make a lot of money on fuel supply risk turning out one way, nor lose financially on fuel supply risk turning out the other way.

Most electricity boards are happy to reject power at higher rates because they don't want to raise the price for consumer and solve the problem by introducing power cuts, he said.

Ahluwalia welcomes the Central Electricity Regulatory Commission's (CERC) recent pronouncement on Adani Power.

Central Electricity Regulatory Commission (CERC), recently gave a decision to grant a "compensation package" to Adani Power for rise in price of imported coal.

He said this decision would encourage any participant that once used to rely on some statutory pronouncement, it might encourage them to take the right stand.

The Planning Commission Deputy Chairman said companies should not shelve or abandon their projects till the time the cases are on in the courts.

"One solution is that they can carry on their case in court but they should get on with producing the power and getting the coal and resolving this later rather than simply not producing the power," he said.

In the environmental area, large number of issues that were pending and which were required to be cleared up have been taken up and some notifications have been removed, he further added.