Power Secretary Ajay Kumar Bhalla said that the government is injecting competition in the power distribution sector through content and carriage reforms to make the supply of power consumer-friendly. Speaking at a workshop on ‘Ensuring Sustainability of India's Electricity Sector Through Tariff Reforms, Industry Involvement and Innovative Business Models' organized by FICCI jointly with Shakti Sustainable Energy Foundation and PwC, Bhalla stressed on the need for the regulators to be market-oriented and stakeholder-friendly. The workshop was held at a time when Ministry of Power (MoP) is taking concerted steps to simplify and rationalize power tariffs in the country through amendments in policies and provisions.
The workshop witnessed deliberations among participants on the necessity of tariffs and market reforms for the overall benefit of the sector. Tariff reforms can act as a powerful tool to tackle issues pertaining to financial distress in the distribution sector, high levels of cross subsidies, peak power deficits, and lack of competition in the sector. The prevailing tariff structure across the states are complex, non-uniform and do not adequately reflect the costs that are incurred in power supply. The workshop also discussed approaches to estimate cost of supply, designing alternative tariff structures and assess consumer affordability and the economic cost of load shedding. It was attended by the entire spectrum of power sector stakeholders including those from the (MoP), state regulatory commissions, distribution utilities, industries, research institutions, multilateral and bilateral developmental institutions.