Finally, reforms in power allocation?
New Delhi: In an attempt to lay reform friendliness in the power sector, the cabinet
committee on economic affairs directed all central power utilities to enter into Power
Purchase Agreements with state electricity boards (SEB) based on their capacity to pay.This would mean that utility companies like the National Thermal
Power Corporation which were earlier guided by geographical considerations in their
distribution of power, will now be free to decide on their power allocation based on the
paying capacity of SEBs. Given the old method of distribution which guaranteed supply to
SEBs, the latter were unwilling to reform or commercialise their operations. Further,
almost all the SEBs ran up huge outstandings with the utility companies.
The new norms that will be applicable to all new state run
utilitiy companies will ensure a fair deal to both developers and customers.
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