The Hindu : Business : Centre to unveil National Tariff Policy next week

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Saturday, Dec 24, 2005

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Centre to unveil National Tariff Policy next week

Method of surcharge calculation to be sorted out Method of surcharge calculation to be sorted out

More private companies to be encouraged for distribution of power State and Central regulators to fix the surcharge

NEW DELHI: The Central Government will come up with a new National Tariff Policy next week to accelerate power sector reforms.

Finance Minister P Chidambaram had a meeting with Planning Commission Deputy Chairman Montek Singh Ahluwalia and Minister of State in PMO Prithviraj Chavan on Friday to give final touches to the new tariff policy.

"We discussed certain issues pertaining to the tariff policy,'' Dr. Ahluwalia said after the meeting.

Power Secretary R. V. Shahi, who also attended the meeting, said a formal announcement might be made on Monday.

Government sources said the new National Tariff Policy would resolve the contentious issue of calculating cross subsidy surcharge for open access in distribution.

The Finance Ministry had pitched for amendment in the policy so that consumers were not over-burdened with the cross subsidy surcharge if they wanted a different electricity supplier.

The method of calculating surcharge was one of the most important issues that needed to be sorted out in order to make open access a reality and encourage more private companies to foray into the critical distribution sector.

Open access was an important provision for power sector reforms and had been envisaged in the Electricity Act.

The new policy is likely to include provisions that allow State and Central regulators to fix the surcharge instead of a uniform formula for all States.

Open access, which allows consumers to choose their source of power supply, has already been implemented in transmission from June 2003 as per the Electricity Act. Open access in distribution has to be implemented by 2008. — PTI

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