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Cabinet nod for new power tariff policy in a month

08 January, 2016

The Cabinet is likely to approve by the first week of February a new power tariff policy with focus on clean energy, better regulation of discoms and faster roll out of investments, Power Minister Piyush Goyal has said.

“Last consultation process is going on. My own sense is that during this month we should be able to clear, or at best first week of next month,” Goyal told PTI when asked about the Cabinet approval for the new power tariff policy.

Besides encouraging faster roll-out of investment, the new policy will reflect a concern for environment and encourage renewable energy.

It will also look to strengthen regulatory mechanism so that discoms become more efficient and conscious towards their duties to consumers.

In 2006, the central government had approved the National Tariff Policy under the provisions of Electricity Act, 2003.

In September last year, Goyal had said: “We are finalising the contours of the (power) tariff policy. We will soon take the proposal for tariff policy to the Cabinet for approval.” 

There was a buzz last month that the policy is going to be approved by the Cabinet. But that did not happen.

Explaining about delay in Cabinet approval, the minister explained, “My process in tariff has been very consultative.

In fact on two occasions we have referred it back to the states to get their comments and amending it to make it more robust.” 

He further said: “Now that we have a challenge to add 1.75 lakh MW of renewable energy, we are also bringing in certain more elements in tariff policy which will promote renewable energy.” 

The minister also said: “We are brining in elements, which will promote Swachh Bharat Abhiyan and help waste to energy prosper in India. The certain new elements we decided to bring in.” 

It will also promote Swachh Bharat initiative. Under the policy, the power plants will have to use processed municipal waste water available in their vicinity (in 100 km radius).

The proposed policy will bring in several unique aspects which have not been touched in the past. It will allow distribution companies to buy any amount of power produced from the waste.

The minister said, “What we are providing are two very important elements subject to the Cabinet nod. The suggestion is that wherever in the country the waste is converted into energy in an environment friendly manner, we are making it compulsory for that state to purchase that power so that we can encourage faster deployment of waste to energy plants and ensure that we don’t allow waste to ruin at the countryside.”

The minister further said: “Secondly we are trying to introduce the condition that wherever the waste water is generated particularly in urban areas, that if it is processed and converted into usable water (need not be portable) can be used by power plants like of NTPC.” 

“We are making it mandatory that any (power) plant in the vicinity of waste water treatment plant will procure the water from there and then the clean water then there is free, will go to serve the people of that city so that our people can get more fresh water,” he added.

The proposed policy aims to provide incentives to renewable energy projects as well as push for efficient use of power generated from conventional sources of energy like coal and others.

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Cabinet nod for new power tariff policy in a month

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