The draft replies prepared ranged from queries relating to steps taken in furtherance of the objectives of the Central Electricity Act, 2003 to queries on challenges affecting the power sector.
As per the draft replies prepared for the Lok Sabha Secretariat, the Ministry of Power states that the National Electricity Policy (2005), Tariff Policy (2006) and the Rural Electrification Policy (2006) have been implemented over the years in furtherance of the objectives of the Electricity Act, 2003.
The MoP also mentioned that the recently issued Standard Bidding Documents (SBDs) containing RFQ, RFP and model PPA for long term procurement of power from case-2 projects and Standard Bidding Document for long term procurement of power from Case-1 projects. This SBD comprising the Model RFQ, RFP and PPA is expected to bring in larger private sector investment in the power sector and make tariffs competitive.
The draft replies also highlighted the major challenges afflicting the power sector such as financial health of the distribution sector, lack of freedom of SLDCs which results in inefficient handling of grid related matters, issues related to Open Access, separation of Carriage & Content in the distribution sector, violation of grid discipline, etc.
The Ministry of Power`s draft replies on `Implementation of Central Electricity Act, 2003 - A review` also tends to queries regarding tariff regulation such as details of tariff determination mechanisms available for arriving at the tariff rates being levied on consumers.
The Ministry presented that the Electricity Act, 2003 provides for two alternatives methods for determination of tariff. While under Section 62 of the Act, tariff on the generating station and inter-state transmission system is determined on cost plus basis in accordance with the tariff regulations specified by the Central Commission, the other method is through a process of competitive bidding.
The MoP also clarifies its policies with reference to Regulatory Commission having no say in the bidding process for tariff determination. In this regard, the draft reply states that the Central Government has already issued detailed guidelines for tariff based bidding process.
And as per the guidelines, tariff determined after completion of the bidding process has to be adopted by the Commission and must ensure that a transparent process is followed during the bidding process. Moreover, under the guidelines, the Commission is empowered to adjudicate the disputes between the seller and procurers or between the transmission service providers and long term transmission customers with regards to tariff and other provisions of the PPA.
Source: Energy Line India
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