labels: power, economy - general
CMs demand subsidy revamp news
29 May 2007

New Delhi: Worried about power shortages in the country, the chief ministers'' conference on power has resolved to operationalise open access in transmission and distribution segments.

The final resolution passed by the chief ministers'' conference agreed to "issue policy directives to regulators, if necessary, to appropriately restructure cross subsidy surcharge, wheeling charges and other charges, with a view to augment the quantum of power flowing into the grid in the prevailing environment of shortages".

Operationalising open access is likely to ensure an additional 5,000-6,000 mw into the system.

Under Sections 107 and 108 of the Electricity Act, 2003, the governments — central and state — can issue policy directives to the regulator. However, these are in rare circumstances. The government has yet to invoke the clause of the Act.

Rationalisation of levies and cross-subsidy charges has been an issue that has been discussed by the Forum of Regulators.

There is no consensus on how to calculate cross-subsidy surcharge, the payment that a customer has to make to the incumbent utility when opting for a different power supplier. Regulators have maintained that the cross-subsidy formula in the National Tariff Policy is not practical as there is a huge differential in the surcharge.

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CMs demand subsidy revamp