Coal watchdog welcome, but look at energy holistically: experts

March 5th, 2008 - 11:19 am ICT by admin  

By Noor Mohd
New Delhi, March 5 (IANS) Power producers have welcomed the move for a watchdog for the coal industry as announced in India’s national budget for 2008-09, but feel the nation’s interests would be served better if an independent regulator oversaw the entire energy sector. “This is a very good move and we welcome it,” said Harry Dhaul, director-general of the Independent Power Producers Association of India (IPPAI).

“Even though around 70 percent of electricity in the country is being generated from coal, there was no authority to hear the complaints of power generators against public sector coal companies,” Dhaul told IANS.

“As a result, electricity generators were at the mercy of coal suppliers. An independent regulator will keep coal producers from charging arbitrary prices from power generators.”

The regulatory body will also ensure that coal companies adhere to the agreed coal quality specifications, Dhaul added.

“When I was power secretary, we had recommended an independent coal regulator. Now that the government has decided to set up such a body, we should welcome the move,” said R.V. Shahi, former power secretary.

Recently, the government had instituted an independent regulatory body for the downstream oil and gas sector and there is a demand from consumer industries now for another institution to regulate the upstream oil and gas business.

Experts said the US has been successfully regulating its energy sector with a single independent body and this, they said, should serve as the model for India as well.

Sanjay Kaul, energy advisor at consultancy firm Deloitte Touche Tohmatsu, says the government should have set up a common regulator for the entire energy sector instead of separate watchdogs for different areas.

“The strategy of having stand-alone regulators and independent policies for the different energy sectors might not prove effective considering the inter-connection between the different energy sectors,” said Kaul.

“There should be a single regulator and a uniform policy for the entire energy industry.”

Adding to Kaul’s comments, Shahi said along with a common institution to oversee the energy sector, separate divisions can deal with coal and oil and gas sectors since their requirements are quite different from each other.

But Kuljit Singh of the global consultancy firm Ernst and Young said it was too early to comment on the government’s proposal, as the structure and composition of the regulator was still evolving.

“It is not yet clear if the proposed regulator will have administrative powers and whether it will be given a role in the allocation of coal linkages and coal blocks,” Singh said.

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