A lot of analysts are praising the proposed changes in tariff policies as well as the legislation to amend the Electricity Act. Tells us about the proposed key reforms and when are will these get implemented?

The tariff policy mainly brings in reforms for the distribution companies so that their losses can be checked and beyond a certain percentage of loss will not be treated as a pass through. So, discoms will have to become efficient. Any subsidies should be given to the consumers directly and they should make efforts to supply power 24/7. If they do not do that, then they will face penalties. These are some of the major things in the policy which we would like to finalise soon. 

It needs the approval of the government which is already under process. Once that happens, we will announce this policy. As far as the act is concerned, we have made some large scale changes and that amended bill will have to be taken to the parliament.

The Ministry of Power has proposed a breakthrough amendment of making 24/7 power supply an obligation for discoms. Is this possible and can this be made a reality soon?

In the meanwhile, over last four years, different government schemes have already brought in a good quantum of infrastructure. Under the Deendayal Upadhyaya Gram Jyoti Yojana and integrated power development scheme which is in urban areas and Deendayal Upadhyaya Gram Jyoti Yojana in the rural areas, a lot of money has been given as budgetary support to state governments to build infrastructure. On top of that, the Saubhagya scheme has come in wherein we are funding the last mile connectivity to the households. 

We are required to complete implementation of the Deendayal Upadhyaya Gram Jyoti Yojana and other schemes by March 2019 and that is the time we are putting to reach this target of 24/7 power supply also. The 24/7 commitments have come from the state governments as a voluntary agreement. They have signed MOUs with the central government that by March 2019 they will be able to provide 24/7 power. 

We have put in a lot of efforts in building the infrastructure to ensure that the transmission lines are there, the distribution transformers are strengthened and the last mile connectivity of distribution network is strengthened. We definitely are very much hopeful.

A lot of power producers have spoken about the lack of coal to run plants. Coal inventory levels have become a crucial issue. How are you looking and helping power producers deal with coal shortage issues?

We have been holding reviews very regularly with the Ministry of Railways as well as Ministry of Coal and the situation has remarkably improved over the last three days when sufficient quantity of coal is getting loaded.

Over the next seven to eight days, we should be able to start building stocks in the power plants. Coal despatches have grown by 10 per cent and our power growth is also around 6 per cent and some of the power stations which were based on imported coal are not generating so that generation also is being met from the domestic coal. 

In all this, what has happened is that we have not shut down any plants because of coal shortage. The issue is that we were not able to build up stocks. There was rains and a cyclone. Then there was festival time and we expect that in seven to 10 days, we will be able to build sufficient stocks. The loading definitely has improved over the last three days.

We also understand that a merger of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) is in the works. What is the rationale behind the merger and would government capitalise the merged entity?

As of now, there is no merger plan on the table and of course, there are different disinvestment proposals which keep on happening. We do not have a merger plan on our table at this moment.

How long can the lender consortium including REC run stressed power plants and not declare these as unsustainable assets under NPA norms?

Wherever the lead lenders are REC, PFC or SBI and other banks, they had resorted to bidding for certain assets outside NCLT and there was a time limit. Then they went to Allahabad High Court to give them more time so that some of these assets could be resolved. 

Lenders are still in discussion. We have done bidding for about 10 to 12 assets and expect to resolve some of the cases. Otherwise, remaining assets will have to go to NCLT and will undergo the NCLT process where other bidders will also participate. We definitely expect some of these assets to be resolved before they go to NCLT.

Have any power players shown interest in the takeover of these stressed assets? 

Yes, very much. There is a lot of interest in bidding for these assets. The question is at what price? This bidding was invited after doing a proper rating of these assets. The sustainable debt rating has been done by independent agencies and then these projects have been put on bidding system and people have shown much interest in five, six projects.

So, there are takers. Only lenders have to take a final call and there are some minor issues which are getting resolved. 

Recently there was a surge in power prices. Merchant power prices rose 33 per cent in the first half of FY18, as capacity additions from conventional sources compressed. How are you coping with the situation?

Definitely capacity is being added as per the plan. There was a sudden decline in wind energy which was a major contribution happening till the month of September and the coal stocks were not sufficient in the power plants. There was some shortage of generation and in some slots in the exchange, for about 15-30 minutes, the prices had gone up steeply. 

It is an exchange system and depends on the bidders and how they anticipate and bid. Some of the companies were bidding high prices looking at buying power at any cost. Otherwise, sellers were not quoting very high prices and sufficient sellers were available. This mismatch was there for a few days when the prices were high. The only thing I would like to clarify is that this is a very small percentage of energy -- about 4 per cent and these are 15 minute slots -- when prices are high at peak time slots between 7:30 to 8:00 or 8:30 to 9. 

Two factors led to the shortfall. One, wind energy production went down as this is the time when certain units are shut down for maintenance and two, during monsoon, there was a sudden decline. These shortcomings have been resolved and as I said, it is only 4 per cent of total production. The last term contracts for PPAs are at very reasonable prices.

What is the status of the Mundra Power Plant? Both Adanis and Tatas are keen for a resolution. How early can we expect a solution?

What I understand from papers filed in the Supreme Court is that the committee had given some report on which Gujarat government has filed a petition in the Supreme Court requesting for a direction to the regulators to re-examine the whole matter as there is a mutual agreement on revising the price. The case is coming up next week in the Supreme Court. We will have to watch that as the matter is sub-judice.