A smart power tariff policy

The new National Tariff Policy for Electricity approved by the Cabinet looks like a win-win situation for the consumer, producer and distributor, though one would have to see how it works at the ground level. The policy is also investor-friendly as it enables automatic pass-through of levies, duties and cess, and imported coal if Coal India does not meet its obligations.

The most exciting takeaway from the amendments is what power minister Piyush Goyal said would enable consumers to become producers of electricity. It is interactive between consumers with smart meters and the distribution companies. Consumers can save on electricity bills by switching off gadgets during peak hours and using them during non-peak hours as there will be different tariffs for different times of the day. Power theft, which today runs into crores of rupees, will be reduced substantially. Renewable energy, earlier only talked about, gets a positive push as the power sector is now obligated and will be incentivised to purchase, generate and distribute renewable energy.

Customers nationwide will hopefully get efficient, uninterrupted quality power by 2021-22. Power plants already in operation will be allowed 100 per cent expansion and developers will be allowed to participate in competitive bidding to ensure faster completion of projects at minimum cost. The smallest villages will get power through mini and micro grids, a boon to the millions who live in darkness.

Whether the 30 amendments to the old policy will fulfil all these objectives will have to be seen. One will have to watch its progress to fruition over the next five to six years.