Electricity sector regulators need to be market-oriented and stakeholder-friendly, a senior official has said, adding that the government is injecting competition in the distribution sector through carriage and content separation.

Once the carriage and content is separated in the distribution sector, consumers would be able to choose their power supplier as in the case of mobile telephone services.

“The government is injecting competition in the power distribution sector through content and carriage reforms to make the supply of power consumer-friendly,” Power Secretary Ajay Kumar Bhalla said Wednesday.

He was addressing a workshop on ‘Ensuring Sustainability of India’s Electricity Sector Through Tariff Reforms, Industry Involvement and Innovative Business Models’, organised by FICCI jointly with the Shakti Sustainable Energy Foundation and PwC, a statement said.

Bhalla stressed on the need for the power regulators, like state electricity commissions, to be market-oriented and stakeholder-friendly.

The Ministry of Power (MoP) is taking concerted steps to simplify and rationalise power tariffs in the country through amendments in policies and provisions.

The workshop witnessed deliberations among participants on the necessity of tariffs and market reforms for the overall benefit of the sector.

Tariff reforms can act as a powerful tool to tackle issues pertaining to financial distress in the distribution sector, high levels of cross subsidies, peak power deficits and lack of competition in the sector.

The prevailing tariff structure across the states are complex, non-uniform and do not adequately reflect the costs that are incurred in power supply, the statement added.

The workshop also discussed approaches to estimate cost of supply, designing alternative tariff structures and assess consumer affordability and the economic cost of load shedding.