The Telegraph
Since 1st March, 1999
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Bid to speed reforms in power sector

New Delhi, Jan. 23: The government is likely to convene a meeting of all the chief ministers before the budget session of Parliament to evolve a consensus on two initiatives to accelerate power reforms.

Union power minister Ananth Geethe has approached Prime Minister Atal Bihari Vajpayee requesting him to convene a conference of chief ministers to discuss the revised draft of the Electricity Bill 2001.

The power ministry has proposed two major initiatives that aim to improve the dependence on state electricity boards and major power generating utilities, improve billing efficiency and reduce distribution losses.

The power ministry is in the process of formulating a draft that will allow captive power plants to sell their surplus power. Till now, major industries like automobile manufacturers and heavy metal manufacturers that had captive power plants could not sell the surplus power.

“It is like allowing someone to build a kitchen with modern accessories and employ a good cook just for consumption of one person. Why cannot the surplus food be sold at the commercial rate' The power ministry is aware that many of them sell surplus power illegally. This only adds up to a loss of revenue to the government. If regularised, a part of the revenue will come into the government’s treasury,” said a senior power ministry official.

“Before independence, many private generating centres (managed by the British entrepreneurs) existed in various parts of the country that were nationalised. Private entrepreneurs run power stations with a capacity of less than 50 kv. Why should we not use the existing ones to meet the power targets,” sources said.

“We are planning to allow these captive power plants with less than 100 kv power generating capacity to sell surplus power either to the neighbouring villages or towns. An arrangement with the SEB or a private distribution contractor or company will expedite the supply of power,” sources said.

In another major initiative, the power ministry is planning to further break up the distribution arm of the SEB or private distribution company and allow the private entrepreneurs in the locality to take up the responsibility to turn it into a profit centre.

Initially, the power ministry plans to extend the scheme to the existing 11 kv feeder stations that have already been identified in a few states. The pilot project will simultaneously be identified both in rural and urban areas.

“The panchayats can be authorised to take over a 11 kv sub-station and manage the distribution in the area. Similarly, entrepreneurs who are willing to invest money in such small distribution schemes may be allowed to enter the fray. We may not have stiff entry restrictions and adopt the principle followed in telecom sector when it opened up the Internet sector for private ISPs,” sources said.

“The Centre and the state governments can decide on the modalities together or with their respective regulatory commissions. We are in the process of discussing the format that will be placed before the chief ministers for discussion,” sources said.

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