Bill To Set Up Power Tariff Regulators On The Cards

Prime Minister I K Gujral has announced that the bill to create power tariff regulatory bodies at the state and central levels will be placed before Parliament in the coming monsoon session. The Prime Minister made the announcement at a meeting of the full Planning Commission in the capital yesterday.

The bill seeks to create the Central Electricity Regulatory Commission (CERC) at the Centre and a State Electricity Regulatory Commission (SERC) at the state level. The formation of the two committees is based on the recommendations of the T L Shankar committee.

Tariff fixation will be one of the main functions of both the regulators, which are aimed at ending the governments role in fixation of power tariffs. Other proposed CERC functions include formulation of operating rules for the operation of the national/regional grid; regulation of transmission and wheeling charges; interstate and bulk power tariffs; provision of broad guidelines for tariff fixation by the states; and association with an environmental agency to develop an appropriate environmental policy for the power sector.

 

The CERC will also formulate detailed guidelines on the conduct of competitive bidding and bid evaluation for the selection of independent power producers (IPPs) for additional generating capacity, and for selecting private entities to own and manage or only manage the distribution companies. The CERCs other functions will include arranging national level power plans on a long-term basis in consultation with different developmental agencies.

The SERC will be required to approve the power charges negotiated between the generation corporation and the IPP on consideration of the fairness of the competitive bidding and evaluation; determine the transmission charges for the transmission company; and fix the tariffs for retail sales by the distribution companies.

The SERCs other functions will be to prepare state power plans with emphasis on optimum selection of projects in harmony with the national plan; issue licences for generation, transmission, distribution and supply of power within the state; and monitor the state grid in co-ordination with the regional grid.