Competition in power generation to benefit consumers: Raje

JAIPUR, JULY 24. The Rajasthan Chief Minister, Vasundhara Raje, has underlined the need to promote competition in the generation and supply of electricity for benefiting the consumers and empowering them with choice. She described the generation, control on transmission losses and proper supply as the areas of special emphasis in the power sector.

Ms. Raje made the observations while speaking about the draft Rajasthan Electricity Bill, 2004, currently being circulated for getting feedback and public opinion. She said the draft Bill aimed at strengthening the power infrastructure in the rural areas and providing universal access to electricity at competitive prices within a defined timeframe.

Addressing the participants in a dialogue on the draft Bill here on Friday, Ms. Raje said Rajasthan was among the pioneering States which had trifurcated the functions of generation, transmission and distribution of electricity as part of an ambitious power sector reforms programme.

"The work on the draft Bill will be carried forward after receiving suggestions from consumers, stakeholders, experts and farmers," Ms. Raje said. The Bill proposes to modify the State Electricity Act, 2003, which was enacted after the Rajasthan State Electricity Board was unbundled by the previous Congress-led regime.

The Chief Minister pointed out that the ideal status in the power sector would be achieved when the gap between demand and supply was removed and no consumer had any complaint about availability of electricity. "The State Government has taken the initiative to get the draft Bill prepared for carrying forward the reforms programme," she said.

The Bill has been drafted by Gajendra Haldia, Chief Advisor of the National Council of Economic Research, on the State Government's request to spell out the enabling legal framework for initiating further reforms. The Government intends to evolve a strategy that would eliminate shortages, empower consumers and reduce the costs of power supply.

The State Government's Energy Department, while inviting the views of public on the draft Bill, had recently stated that the competition in the power sector would "enhance public welfare", while pointing out that the introduction of competition had improved the quality of power supply and reduced tariffs in several developed and developing countries.

However, the Minister of State for Energy, Gajendra Singh -- speaking in the dialogue -- denied that the Bill would increase electricity tariff through unchecked private sector's participation in the power sector. "But we must agree that changing the present form of monopolistic functioning is the need of the hour," he said.

Mr. Haldia, making a presentation of the draft Bill on the occasion, said it had stipulated a State-specific industry structure aimed at elimination of the chain of monopolies that withheld the consumer choice. The resultant competition is expected to bring about efficiency improvements and cost reduction.

The supply of subsidised electricity to farmers and economically weaker sections will remain a priority in the reforms programme, even as the entire power sector would be restructured, decentralised, opened up and made accountable. Mr. Haldia emphasised that the new framework would ensure growth with equity.

The State Energy Secretary, V.S. Singh, expressed the hope that the Bill would promote competition, economy and efficiency in the interest of the consumers and the State's economy. The participants made several suggestions for settling the grievances in the Grid areas and checking the transmission losses.

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