Shares of 11 companies operating in power sector rose by 2.44% to 8.70% at 14:29 IST on BSE after the government decided to set up Power System Operation Corporation as an independent government company for reforms in power sector.
Torrent Power (up 8.70%), Reliance Infrastructure (up 4.85%), Jaiprakash Power Ventures (up 4.16%), Tata Power Company (up 3.75%), Reliance Power (up 3.67%), JSW Energy (up 3.52%), Adani Power (up 3.24%), NTPC (up 3.20%), CESC (up 3.12%), NHPC (up 2.73%) and GMR Infrastructure (up 2.44%), edged higher.
The S&P BSE Power index was up 3.05% at 1,995.34. It outperformed the S&P BSE Sensex, which was up 1.46% at 27,099.38.
The S&P BSE Power index had underperformed the market over the past one month till 17 December 2014, falling 10.18% compared with 5.21% fall in the Sensex. The index had also underperformed the market in past one quarter, falling 5.38% as against Sensex's 0.30% rise.
The Government has decided to set up Power System Operation Corporation (POSOCO) as an independent public sector company.
POSOCO operates the National Load Despatch Centre and the Regional Load Despatch Centre which are responsible for operating the electricity market in the country. It is also the nodal agency for major reforms in the power sector such as Renewable Energy Certificate mechanism, transmission pricing, short term open access in transmission, deviation settlement mechanism and the power system development fund (PSDF).
With transmission coming under competition and multiple transmission licensees operating, need was felt to ensure the independence and neutrality of the system operation function, an official statement from the Ministry of Power said.
POSOCO will become a wholly owned Government of India company under the Power Ministry. The Ministry's statement added the decision creates an example for implementing similar reforms at the state level for independent operation by the State Load Despatch Centres.
The Ministry expects the move to strengthen the institutional mechanism of POSOCO and help bring innovation in the power sector.
Powered by Capital Market - Live News
