At least nine states, including Andhra Pradesh, Madhya Pradesh, Tamil Nadu and Karnataka, have written letters of dissent to the Centre against its draft power tariff policy, floated earlier this month.
A couple of states have suggested that the Centre should consider dismantling the state electricity regulatory commissions if the tariff policy is to be retained in its present form.
Crisil Advisory Services, which was supposed to advise the Centre on the policy, has washed its hands off it. In a letter to the Central Electricity Regulatory Commission, Crisil said its support to the government was merely 'secretarial in nature' and did not involve consultations.
Crisil managing director Shrikant Kulkarni said the guidelines spelt out in the draft tariff policy were formulated by a four-member committee and 'did not represent Crisil's views.'
The letters of dissent received by the Centre include statements from the chief ministers of Andhra Pradesh and Madhya Pradesh, power ministers of Tamil Nadu and West Bengal and power secretaries of Karnataka, Orissa, Maharashtra, Punjab and Rajasthan.
The states have said the draft policy undermines the jurisdiction of their power regulators.
They were ignored while the policy was worked out, though Section 3(1) of the Electricity Act, 2003, said they should be part of the consultation process, state government officials said.
Also, the states feel that their power to spell out policy guidelines under Section 108 of the Electricity Act has been taken away.
The government had set itself on a collision course with power sector regulators by prescribing financial norms in its draft tariff policy, though its mandate was to merely spell out the guidelines for setting tariffs.
According to officials in the central and state power regulatory bodies, the draft "intruded" into their jurisdiction by prescribing specific financial parameters like depreciation rates and incentive norms for stations.
States say:
- They were ignored during policy formulation.
- The draft policy breaches the jurisdiction of state regulators.
- Their powers to spell out policy guidelines under the Electricity Act has been taken away.
- Crisil Advisory Services has washed its hands off the draft policy.
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