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July 2005 - September 2005 Index
Shimla, May 29, 2005
> The Power Sector is a critical infrastructure Sector. The growth of the rest of the economy is dependent upon availability of ‘quality’ Power at the ‘right price’. > Today, energy shortage is 11%. Availability of Power is a major constraint for our growth. > Over the years, SEBs have become financially sick with losses of over 21,000 crores. Given this state of affairs, there is a need to reform the Power Sector to ensure that it becomes the engine of growth. Key Questions(a) The Electricity Act has been passed and the Electricity Policy notified. Many states have altered their Institutional structure for generating and distributing electricity. (b) The key element underlying reform in many State is ‘unbundling’, whereby the generation, transmission and distribution of power is handled by different companies. (c) Unbundling is not a goal in itself. The goal is efficiency, economy, enhancement of power generation and overall, ensuring that a competitive environment prevails. (d) I want to know why has there not been a boom in private investment in the Power Sector? I want States which have already unbundled to answer this. (e) Is there any issue of accurate pricing of various fees and charges? (f) A critical element is ‘cross subsidy’. Cross subsidy will continue for a long time so that certain sections of the society, for whom power is an absolute necessity and cannot afford, can continue to get power at affordable less than cost rates. However, in any unbundled framework, there has to be a cross subsidy fee which has to be collected at some level. Is this cross subsidy known? (g) What are the weaknesses in Government of India and CPSUs itself which you notice? (h) Are there elements in the Electricity Act which are difficult to implement because of lack of clarity in definitions? (i) Can open access happen in your states in distribution in the near future? Under what circumstances do you see this happening. (j) Do you see the Electricity Act weighted in favour of generations at the cost of other levels? Secretaries/Chairmen are requested to focus their comments/observations on the questions raised by the Prime Minister at d,e,f,g,h,i &j above |
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