Hyderabad: The Union power ministry will introduce drastic changes to the power sector from the next financial year, changes that will for once favour consumers.
This includes reduction of cross subsidies, simplification of tariff categories and rationalisation of tariff. The ministry has warned state governments that if the tariff is too high, consumers will opt for open access or captive generation.
The ministry said that from March 2019 the tariff should be within 20 per cent of the cost of supply. The tariff should be affordable and for this, the cross subsidy should be restricted to 20 per cent.
Subsidy may be necessary for economically weaker sections, but it has to be managed through Direct Benefit Transfer as in the case of cooking gas.
Union minister R.K. Singh said at a conference of power ministers recently that states should bring the tariff categories down to five.
Mr Singh said that retail consumers should be able to choose their power supplier. States have been told to separate the transmission and the distribution system. This would improve efficiency of the service of the supplier and result in theft of electricity disappearing.
The target under UDAY scheme was to reduce transmission and commercial losses to 15 per cent and from January 2019 losses beyond 15 per cent may not be compensated by increase in tariff.
The policy is to be amended to this effect. For 100 per cent metering of the energy supplied, the power ministry has directed all states to set up prepaid meters for small consumers and smart meters for large consumers.
