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The development of infrastructure is an important factor to sustain economic growth. The Power Sector is one of the most important constituents of infrastructure. Electricity is a concurrent subject and the responsibility of improving the health of Power Sector, therefore, lies on both Centre and the States.
The Government has initiated several reforms in the Power Sector to revive the poor financial health of the SEBs/power utilities. These steps inter alia include enactment of the Electricity Act, 2003, setting up of Regulatory Commissions, unbundling of vertically integrated state utilities, introduction of open access to transmission and encouraging power trading etc.
Power Sector Reforms
Twenty five states viz. Orissa, Haryana, Andhra Pradesh, Uttar Pradesh, Karnataka, West Bengal, Tamil Nadu, Punjab, Delhi, Gujarat, Madhya Pradesh, Maharashtra, Rajasthan, Himachal Pradesh, Assam, Chhatisgarh, Uttaranchal, Goa, Bihar, Jharkhand, Kerala, Tripura, Sikkim, Jammu & Kashmir and Meghalaya have either constituted or notified the constitution of SERCs.
Mizoram and Manipur have notified the constitution of Joint Electricity Regulatory Commission. Joint Electricity Regulatory Commission has also been notified for Union Territories except Delhi. Delhi has constituted Delhi Electricity Regulatory Commission.
Thus, so far, 22 State Electricity Regulatory Commissions (SERCs) are operational. Of these, Nineteen SERCs have issued tariff orders.
National Electricity Policy
The Government has notified National Electricity Policy on 12th February, 2005 which aims at accelerated development of the power sector, providing supply of electricity to all areas with reliability and quality, protecting interests of consumers and other stakeholders, and financial turnaround and commercial viability of the Power Sector. Objectives of the National Electricity Policy are : Access to Electricity to all households in next five years; Power demand to be fully met by 2012, Energy and peaking shortages to be overcome and spinning reserve to be available; Supply of Reliable and Quality Power of specified standards in an efficient manner and at reasonable rates; Per capita availability of electricity to be increased to over 1000 units by 2012; Minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012; Financial Turnaround and Commercial Viability of Electricity Sector and Protection of consumers’ interests.
Procurement Of Electricity
In compliance with the provisions contained in the Electricity Act, 2003, the Central Government has notified on January 19, 2005 the guidelines for procurement of power by Distribution Licensees through competitive bidding. It has issued the guidelines for competitive bidding for determination of tariff for procurement of power by distribution licensees.
Main objectives of these guidelines are promoting competitive procurement, facilitating transparency and fairness, reducing information asymmetry, protecting consumer’s interests, enhancing standardization and reducing time for procurement, and finally, providing flexibility to suppliers on availability of power while ensuring certainty on tariffs for buyers.
The Government has notified the establishment of the Appellate Tribunal for Electricity (ATE) under Section 110 of the Electricity Act, 2003.
Rajiv Gandhi Grameen Vidyutikaran Yojana
Rajiv Gandhi Grameen Vidyutikaran Yojana has been launched in April, 2005 for creation of rural electricity infrastructure and household electrification. The scheme envisages electrification of all un-electrified villages and habitations to provide access to electricity to all households, give electricity connection to Below Poverty Line families free of charges in five years. This is to be done through creation of Rural Electricity Distribution Backbone (REDB) with one 33/11 kV (or 66/11kV) substation in each block, Village Electricity Infrastructure (VEI) for electrification of all un-electrified villages/habitations and Decentralized Distributed Generation (DDG) and Supply System for Village/habitations where grid supply is not cost effective.
The estimated cost of the Scheme is Rs.16,000 crore. Ninety percent Capital Subsidy will be provided for overall cost of the project. The Government has sanctioned Rs.5,000 crore for implementation of Phase-I of the programme in the remaining period of the Tenth Plan.
Energy Conservation
Measures for Energy Conservation by way of standardisation of power efficient gadgets, educating masses through media and introduction of Energy Audit are being pursued. In fact a year-long national Campaign on Energy Conservation was launched by the Prime Minister on December 14, 2004, focusing on industrial, commercial, domestic, agriculture sectors, government buildings, educational institutions and public sector units. This campaign aims at spreading information about energy, simple methods of conservation and efficient use of energy.
Accelerated Power Development
Some major successes achieved under the Accelerated Power Development & Reforms Programme (APDRP) are:- 96 per cent 11KV Feeders have been metered, and 100 per cent metering achieved in 17 states; 100 per cent consumer metering achieved in 4 states, overall percentage of consumer metering is 87 per cent; Supervisory Control & Data Acquisition (SCADA) System has been introduced in selected towers in Andhra Pradesh, Delhi, Gujarat, Maharashtra & Tamilnadu; Electronic/static meters are being installed on feeders and consumer premises in almost all states to introduce energy accounting and audit. Spot billing process is being introduced in many states; Computerised billing and online payment system have been introduced in several states; In order to arrest power pilferage and reduce T&D losses, High Voltage Distribution System (HUDS) has been introduced in some states; Consumer Care Centres have been set up in many cities and 9 states have enacted anti-theft laws; Many states are in the process of handing over of the distribution systems to Franchisees/Cooperatives/Consumer Associations; Operating losses of state power utilities have reduced considerably, gap between Average Cost of Supply (ACS) and Average Revenue Realised (ARR) has narrowed down, and realisation of dues of CPSUs has improved substantially 76 per cent in 2000-01 to nearly 100 per cent on date.
With the various initiatives taken by the Government a healthy Power Sector would emerge in the country which would pave the way for fast industrialisation, growth in agricultural production, rural development and a better quality of life.
*Secretary, Ministry of Power
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