Power tariff won't go up in amended law: Centre

Dismissing apprehension about a possible increase in power tariff after implementation of the proposed draft amendments to Electricity Act, the Centre on Thursday said after reforms, electricity tariff will come down.

“Power tariffs are in fact supposed to come down after the reforms we are undertaking. The Central generating companies are absorbing the hike in coal and freight tariffs. There is a reduction in power supply costs to power distribution companies (Discoms) because of merit order dispatch," Union Power and Renewable Energy Minister R K Singh told reporters here.

As per the proposed law, electricity distribution companies cannot pass their inefficiency on consumers. The regulator has to cap the losses and power distribution companies will not be allowed to pass on this beyond 15%, the Minister said.

The new draft of the Electricity (Amendment) Bill was ready as comments on draft have come by June 15 and it would be introduced in the coming session of Parliament once the Ministry of Law clears it.

If possible the bill will be introduced in the coming monsoon session of Parliament, he said.

One of the key proposals of the amended law will be the exercise of direct benefit transfer (DBT) in the power sector. As per the DBT, instead of giving free power or discounter power to consumers, the state governments transfer money to consumer account and they pay the full bill as per electricity meter reading.

Dismissing concerns that DBT would result in an interruption in power supplies to the consumers if the state did not release its share of subsidy, the Minister said in such scenario consumers electricity supply will not be disconnected.

As per the proposal, the state would transfer subsidy into the power accounts maintained by customers with discoms and even if the state failed to pay, consumers paying their bills will get an uninterrupted electricity supply.

The new law will ensure both stare government and electricity distribution companies accountable to consumers. With the discoms dues running more than Rs 90,000 crores, many of them not able to provide quality power to consumers, the Minister said.

He also clarified that the Centre will not take the power of states on appointing the head of state electricity regulators. "Now, we are even considering having a standing committee in each state headed by Chief Justice of High Court and members from both Centre and state for appointments. Even in this framework states can appoint their regulators while Centre can do so for CERC," the minister said.