POWER SECTOR RESTRUCTURING

ABHAY KESHARWANI SCH NO.: 072113102

Introduction
The Indian power sector is undergoing major transformations, the most important of these changes are the planned reforms of SEBs. This fundamental structural change will have long term implications, hence is of enormous importance. Orissa, being the first state which started this process.

What is Reforms ?
Today, the word Reforms has come to mean effectively three things; Un-bundling, Privatisation, Creation of an autonomous regulatory body.

Objectives of Reform policies.

Attracting much needed (private) capital, Tariff rationalisation, Improved efficiency of the sector (especially theft reduction), Improved financial viability of the sector (combined effect of 2,3) Reduced government interference, and Decreased dependence on government budgets.

Objectives of Reform policies

Some also expect this to achieve: Competition, Improved services to customer, Rationalisation policies, etc

The WB-Orissa model

The Orissa model of power sector restructuring is a major effort by the state government, in close association with the World Bank, to address the ills besetting the Indian Power Sector.

Major components of WB-Orissa model

Privatisation

Un-bundling

Erecting a barrier between the government and the power sector

The Regulatory Aspect

In the Orissa model and other similar models, the structure of the power sector is broadly decided first and the regulator is appointed later. But usually the details of the structure and agreements are decided by the regulator. Even after deciding the structure, the RC has a continuous role of custodian of public interest "to play.

The Regulatory Aspect

As per section 11 of the Orissa Electricity Reforms Act (OER Act, 1995) these include: To issue licences and stipulate licence conditions for all power utilities, To regulate the working of the licensees and to promote their working in an efficient, economical, and equitable manner; To promote efficiency, economy, and safety;

The Regulatory Aspect

To regulate the purchase, distribution, supply, and utilization of electricity, the quality of service, the tariff and charges payable keeping in view of the interests of the consumer To promote competitiveness and progressively involve the participation of the private sector, while ensuring a fare deal for the consumers.

The committee would suggest two names for each vacancy and the state government will have to appoint any one person suggested by the Committee on the RC. After appointments, the members can not be removed for five years. The remuneration and allowances of the Chairman and the members of RC can not be inferior to that of the Chairman and the members of the Orissa Public Service Commission respectively. RC member can not be removed until a sitting high court judge (nominated by the Chief Justice) conducts an investigation and submits his repo

Chairman, Public Service Commission, Orissa,

Secretary of Power, Orissa,

Chairman of the CEA

Regulatory Commission Members

Advantages of This Process

Such a decision-making process, when followed rigorously, can certainly have many advantages. It is transparent as it allows the public access to all records of the case including the calculations provided by the utility. The process allows public intervention in the form of filing of objections and questioning the utility or the RC. The public has a right to seek answers to their questions.