States can take their time to end power cross-subsidy

There is good news for power domestic and small power consumers- there is no time limit for phasing out of cross subsidy at the state level, according to said A K Basu, chairman of the Central Electricity Regulatory Commission (CERC).

Basu was speaking on the sidelines of the seminar on 'Impact of Electricity Act 2003 "" A regulator's perspective' organised by the Confederation of Indian Industry (CII).

"Unlike the time limit of five years in case of open access in distribution, which has been in the limelight, there is no provision in the Act pertaining to phasing of cross subsidy. It remains in the hand of ERC in consultation with the stakeholders including the state government ," explained Basu.

Not a single state ERC has set any time-bound programme for phasing out cross subsidy, he added.

In case of any development in future regarding cross subsidy , the state government could issue directives in public interest, Basu pointed out.

He said the committee constituted to come up with a draft on the issue of surcharge related to open access in distribution would finish its work soon.

"The surcharge issue is open ended. The committee is expected to submit its draft recommendation by January," he added.

Speaking on power tariffs, Basu pointed that it had so far been handled through micro management solutions.

"The tariff policy should be more of a vision paper and not a micro management issue. In addition, there has been no discussion with the ERCs and state government while the state government's discretion has been reduced", he pointed out.

CERC has advised the United Progressive Alliance (UPA) government to set up a separate committee to look into the matter, Basu pointed out.

CERC on its part had sent its statutory advice on tariff based competitive bidding on procurement of generation on long term contract.