Washington: The United States (US) has said its power companies were finding it difficult to fulfill their contracts in India even as New Delhi assured that the recent reforms undertaken on the distribution front would make its power sector more investor-friendly, sources said on October 8.

"What concerns me most is that American power development and distribution companies in a number of states in India continue to face serious problems in having their contracts fulfilled," US assistant secretary, Department of Energy, Vicky Bailey told a visiting high-level delegation from India, which included Union Power Minister Anant Geethe, on October 6.

"Hopefully, your work on the distribution issue will help address these concerns and make certain that India can be viewed as an attractive investment environment," he said at "Indo-US Energy Dialogue” on electricity distribution reform at the US Chamber of Commerce.

Describing power as a "critical infrastructure for the growth of the Indian economy", Geethe said the government has now devised a plan, which includes incentives and disincentives to reform the distribution sector and attract investment.

"However, the financial health of the state electricity boards (SEBs) in India is a matter of grave concern due to their non-commercial operations," the minister proclaimed.

The core of the problem was the poor state of sub-transmission and distribution system of SEBs, he said.

"The gap between the average revenue realisation and average cost of supply is also constantly increasing. Distribution reforms at the state level have, therefore, become absolutely essential," he added.

PTI