Revised tariff policy to be rolled out within a month: Power Minister

The revised tariff policy has been cleared by a group of ministers and it is likely to be implemented within a month, Power Minister R K Singh said on Friday.

The policy provides for steps like penalty for unscheduled power cuts by distribution companies.

"The tariff policy which had been sent to Union Cabinet, was referred to an informal group of ministers (GoM). That GoM has cleared it. So we propose to take it to the next Cabinet (meeting)....and hopefully it should be there within a month," Singh said.

He was speaking at a digital interaction with CEOs from the power and renewable energy sectors, under the CII's Energizing India Series.

The revised tariff policy provides for penalty for unscheduled power cuts, except in the case of technical faults or act of God (natural calamities).

The government intends to provide '24X7 Power to All' at affordable rates. Therefore, there is a provision in the tariff to cap transmission and distribution losses. Once the tariff policy is approved, the discoms would not be allowed to pass on these losses beyond 15 per cent.

The policy would also encourage time of the day tariff where consumer would be charged more during peak hours. This would also enable the consumers to reduce their electricity bill by consuming more electricity during non-peak hours.

Talking about the recent relief given to discoms reeling under financial stress due to slump in demand amid the lockdown, Singh said, "We have asked our central public sector undertaking (CPSU) power generators to defer fixed charges from the discoms. After the economy opens up, those fixed charges would be paid by discoms in equal installments without interest. This would be huge relief."

"We have asked our CPSUs (gencos) to give 20 to 25 per cent discount to discoms on cost of power. We want discoms to pass it on to consumers. This will be reflected in the first bill of the consumers after economy reopens (after lockdown is over)," he added.

He also told the industry representatives that the power ministry is making open access simpler as any such application would be processed within 30 days under the new tariff policy.

He also talked about removing custom barriers to give incentives to solar and wind energy equipment manufacturing.

There would be higher penalty for not complying with RPO (renewable purchase obligation) and the states would start bidding for clean energy projects themselves, he added.

The industry representative made a case for bringing power under the Goods and Service Tax (GST) regime and also asked for indirect subsidy for setting up clean energy projects.

They were of the view that direct subsidy is probabilistic and not definite, so the government should offer differential tariff for clean energy projects.

They also pitched to enhancing the deadline for project development in view of the coronavirus lockdown.