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New power tariff policy for boosting investment, clean energy

In bold reforms, the government has allowed passing of taxes and levies affecting power generation cost to consumers and permitted producers to sell spare capacity via exchanges so as to improve avaiability.

The new Tariff Policy, approved by the Cabinet headed by Prime Minister Narendra Modi, also allowed 100 per cent expansion by existing power plants and mandating states to buy all power generated from waste.

Power Minister Piyush Goyal said the reform will help meet the objective of making electricity available to all, reduce litigation, revive investments and protect environment.

"A holistic view of the power sector has been taken and comprehensive amendments have been made in the Tariff policy 2006. Our aim is to achieve the objectives of Ujwal DISCOM Assurance Yojana (UDAY) with the focus on 4 Es: Electricity for all, Efficiency to ensure affordable tariffs, Environment for a sustainable future, Ease of doing business to attract investments and ensure financial viability," he said.

With loss-making state electricity distribution companies not buying all of the power, the generators are running plants below capacity.

Source: Times Of India