New ordinance likely by December-end to address power sector woes: Report

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The government is likely to introduce an ordinance by December-end to tackle pain points of the long-languishing power sector in order to make generation (gencos) and distribution companies (discoms) more attractive to investors, The Economic Times reported.

The ordinance would ensure that contracts are followed, cross-subsidisation of consumers is restricted and utilities make timely payments.

Moneycontrol could not independently verify the report.

It will also sort out the independence of electricity regulators and quick finalisation of tariffs based on costs, both originally part of the proposed Electricity Act (2003) amendments, which states have been opposing.

It proposes that a separate dispute resolution court, along the lines of the Appellate Tribunal for Electricity, be set up to resolve gencos-discom issues in a time-bound manner. It will have an independent member from the private sector, besides a chairperson and technical member.

Likely to be introduced by December-end, the ordinance would be converted into legislation within six months.

The move comes amid much investor disquiet around reneging of contracts and payment delays by state discoms. The Centre is working on fairness, transparency and increasing investor support in the power sector, the paper quoted a government official as saying.