Cabinet note on tariff policy changes next week

The Power Ministry will come out with a Cabinet note on changes in Tariff Policy within a week for enabling greater competition in the sector, an official said.
After receiving responses from various ministries concerned, the Power Ministry will send the note on changes in Tariff Policy to the Cabinet for its approval, the official added.
As part of changes in the Tariff Policy, the Power Ministry has sought extension of Section 62, under which the electricity regulatory commissions have been empowered to determine tariffs, beyond financial year 2017, sources said.
Keeping the hydro projects also under this section for the continuation of cost plus tariff structure is also 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.
Another proposed change is having a formula which would ensure that variation in fuel and power purchase cost is recovered by the power generating firms.
The stakeholders which are believed to have submitted their feedback on the proposed changes include 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.