Posoco (Power System Operation Corporation Limited) is currently a wholly-owned subsidiary of state-run Power Grid Corporation Ltd.
"A lot of private companies are entering power transmission space and therefore we cannot have a public sector company as transmission network head which operates the grid," a Power Ministry official said.
It is proposed to hive off Posoco as an independent company that will operate and maintain the transmission grid network in the country.
It will also be engaged in maintaining grid discipline and discouraging overdrawal of electricity by the states.
Asked about the proposed company's revenue model, the official said, revenue could also be through penalties imposed for violation by power companies.
Currently, two companies -- Reliance Power Transmission and Sterlite Technologies -- are executing independent power transmission projects in the country.
State-run Power Finance Corp and Rural Electrification Corp are the nodal agencies and are engaged in awarding these projects across the country.
Posoco, currently, also acts as the apex organisation for human resources requirement of National and Regional Load Despatch centres in the country.
It ensures planning and implementation of infrastructure required for smooth operation and development of these load despatch centres, among other things.