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Competition in power sector will help rationalise tariff: FM

Arun-JaitleyCompetition in the power distribution sector will improve efficiency and rationalise tariff, Finance Minister Arun Jaitley on Friday said.

Laying the foundation stone of two transmission sub-stations besides dedicating one station to the nation, he said: “If there is competition in power distribution it will improve efficiency and control tariff.”

The Electricity (Amendment) Bill 2014, which aims to bring reforms in the power sector and safeguard consumer interest, was introduced in Lok Sabha, last week.

The amendments will usher in much needed further reforms in the power sector.

It may be recalled that Power Minister Piyush Goyal had earlier said that this proposed legislation would promote competition, efficiency in operations and improvement in quality of supply of electricity in the country.

This would result in capacity addition and ultimate benefit to the consumers, Goyal had said.

The concept of multiple supply licencees is proposed by segregating the carriage from content in the distribution sector and determination of tariff based on market principles, while continuing with the carriage (distribution network) as a regulated activity.

Meanwhile, Jaitley said the coal block auction was the first step towards controlling power tariff as the lowest bidders would supply electricity at a cheaper cost.

The process of coal block auction for cancelled coal mines began yesterday with the launch of a portal for electronic bidding for 24 coal blocks in the first tranche.

The Cabinet has approved re-promulgation of the coal ordinance and necessary guidelines for mine allocations, a move that could make the kitty of coal-rich states fatter by Rs 7 lakh crore over the next 30 years.

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