Power tariffs are bound to change

Published: Monday, Jul 9, 2012

By RN Bhaskar | Place: Mumbai 

The energy sector is being buffeted by powerful forces that it had not anticipated a few years ago. It seemed to be the most lucrative business to get into.But domestic coal availability on the one hand, and a sudden surge in the pricing of imported coal on the other, have both compelled the industry to ask for a revision in tariffs. 

At the same time, agricultural subsidies threaten to make industrial tariffs unsustainable. At stake is the entire financial viability of the power sector, and even the Indian economy. At the same time, other power players want state governments to allow them to distribute power in specific regions as parallel licensees in addition to the existing player.

The Supreme Court had allowed Tata Power to supply power in the same region catered to by Reliance Infra.

But some legal pundits believe that existing provision of the Electricity Act may not allow other players to enjoy a similar benefit. At stake is the concept of competition and open access.

DNA’s RN Bhaskar discussed these issues with a panel of experts. The panel included (in alphabetical order) OP Gupta, IAS, General Manager,BEST; Ajoy Mehta, IAS, Managing Director, Maharashtra State Electricity Distribution Company Ltd; RR Mehta, Sr. Exec.Vice President (head of business), Reliance Infrastructure; Siddharth Mehta, Head, Business Development (T&D), Essar Power; and S Padmanabhan, Executive Director, Tata Power Ltd. To read the full report, please CLICK HERE.