Regulatory compliance mechanism for power utilities on the anvil

The Centre believes the move would help state commissions adopt best practices; it would also speed up implementation of reforms and regulatory policies

India will have a regulatory compliance mechanism for the power distribution utilities. Union minister of power and new & renewable energy R K Singh on Thursday said the ministry of power has set up a regulatory compliance division to monitor the various regulatory parameters and their compliances by the distribution companies (discoms) as well as state regulatory commissions.

The minister met with the electricity regulators and the forum of regulators, following which norms on various regulatory parameters and issues would be worked out. These norms would be adopted by the state commissions.

Contractual and regulatory violations have not only deterred investment in the sector but also led to non-honouring of power purchase and sales agreements.

The Centre is of the view that the move would help the state commissions adopting best practices. It would also speed up implementation of reforms and regulatory policies.

The power ministry is working on guidelines for resource adequacy and for power procurement to deal with issues like load fluctuation requirements, contract term, energy mix, and renewable obligations. Both are expected over the next two to three months.

Singh emphasised a couple of times on cleaning up the accounts of the power distribution utilities besides bringing about greater discipline in the sector. According to some latest reports, losses in the power distribution sector have come down to 21.8 per cent from over 25 per cent in 2014-15.

The meeting also discussed the issues related to electric vehicles relating to technical and commercial issues around their charging. These would be resolved by the state commissions so that EVs can be promoted.

The issue of cost reflective tariff and setting up of the adequate number of the consumer grievance redressal forums with consumer representatives were also discussed.

The regulatory issues like financial viability of the Distribution companies, payment of dues, reduction in AT&C losses, roll out of Smart metering in prepayment mode, timely issuance of tariff orders, timely disposal of the petitions, promotional tariff for the EV charging stations etc were discussed.

The Forum of Regulators had recently undertaken a study to analyze the impact of various factors on the retail tariff of electricity and to develop measures to address them.