The CMs have agreed to set up State Electricity Regulatory Commission (SERC) by March 31, 1999. Addressing the CMs, Prime Minister Atal Behari Vajpayee said that Central Government had decided to set up an inter-ministerial Crisis Resolution Group which will resolve the pending power projects.

The states have also agreed to open letters of credit (LoCs) for the entire power purchased by them, Union Power Minister P R Kumaramangalam told newsmen after the day-long conference on power, inaugurated by the prime minister.

The conference adopted a 12-point action plan, including constitution of SERCs by March 1999, corporatisation and commercialisation of generation, transmission and distribution companies and help central power utility to execute hydel projects during the TenthPlan.

The Centre would introduce a Bill on power cess, amounting to about Rs 2,000 crore annually for development of hydel sector and distribution network, Kumaramangalam said, adding that states would get 60 per cent of the kitty in proportion to their generation.

On the issue of rationalisation of power tariff for the farm sector to help state electricity boards (SEBs) to cut their annual losses of over Rs 10,000 crore, he said there was a general consensus but the subject of fixing the rating should be better left to central regulator (CERC) and SERCs.

Inaugurating the conference, Vajpayee had sought a ``national consensus'' on rationalisation of power tariffs to farmers for financial revival of SEBs and providing relief to industry, which was cross-subsidising other consumer groups.

He asked the chief ministers to sink political differences for nurturing the crisis-ridden power sector that required investment to the tune of Rs 250,000 crore till 2000, saying ``if we take political power seriously,we must take the power sector seriously.''

In a bid to clear the ``last mile'' obstacles for power projects, the power ministry would soon set up a crisis resolution group with representation from Coal, Petroleum, Railway and Finance ministries, the Power Minister said.

At least 15 power projects would attain financial closure and start construction by March 1999, he said.

Kumaramangalam said that he would also send a proposal for Cabinet's consideration shortly for floating a special purpose vehicle (SPV) to securitise outstanding dues of SEBs to central public sector undertakings (CPSUs), which were nearing a whopping Rs 17,000 crore.

The SPV would float bonds guaranteed by the Centre for a specified amount, to be decided by the Cabinet, and the fund collected would be given to the PSUs concerned.

The states, which have been given the option to stand guarantee for bonds, would reconcile their accounts and repay the money from their central appropriation over a period of time.