Pant for free entry into power

NEW DELHI, JULY 8: In the second phase of reforms for the power sector, the government should allow free access into the electricity grid...

NEW DELHI, JULY 8: In the second phase of reforms for the power sector, the government should allow free access into the electricity grid for transmission and distribution Tamp;D purposes. This was stated by K C Pant, deputy chairman of the Planning Commission while speaking at a seminar on quot;Developing the power market in India by 2010quot; organised by Associated Chambers of Commerce and Industry ASSOCHAM.

Pant said that this would allow optimum usage of network for distribution facilities by various utilities and enable transportation of power from one region to other at the minimum cost to the consumers.

quot;This would encourage competition not only among various generating companies but also at the distribution level and would enable improvements in revenue collection with adequate tariffs,quot; he said.

Pant said the second generation reforms should aim at allowing competition in the market which will enable freedom to the consumers to get power from any distributor/generating company of his choice. He alsosaid a differential pricing policy for different times of the day should be introduced in order to shift demand to the off-peak period.

The reforms process should also focus on power pooling arrangements and the possible market structure for such power pools, he said. Stating that investments in the transmission sector has not kept pace with generation investments, Pant said benefits of unbundling State Electricity Boards SEBs would not be achieved unless distribution of electricity was privatised.

A J Engineer, Director of Tata Electric Company said that the present market was a monopolistic one and even companies which were producing power had to depend on the whims and fancies of the SEBs as transmission and distribution is their monopoly. He said that 1800 mw TEC plant in Mumbai, had at least 200 to 400 mw extra power which was not being purchased by Maharashtra State Electricity Board MSEB 8220;due to extraneous factors8221; even though this power was at a knocked down price of Rs 1.80 per unit.

TheNinth plan period envisages a capacity addition of 40,425 mw. Power supply position as on March 1999 indicates energy shortage of around six per cent and peak shortage of around 14 per cent, Pant said.

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Ninth plan envisages a total investment of Rs 1,24,526 crore and quot;if we follow the trend of Ninth plan investments for power sector during the 10th and 11th plan would be in order of Rs 1,95,000 crore and Rs 3,05,000 crore,quot; he said.

The poor financial health of the SEBs may make them unable to raise the resources for funding their on-going schemes. The commercial losses of the SEBs without subsidy have increased from Rs 4,560 crore in the eighth plan to Rs 13,808 crore at the end of 1998-99, Pant said.