Report of Indian Institute of Public Administration ... - Ministry of Power

Karnataka
iii) Providing incentive for energy conservation; and
iv) Releasing scarce Government resources, which are now deployed in power
sector for being used in other areas of greater priority (i.e., where private
investment may not be available).
The policy statement identified the steps of the reform process although the details
were to be worked out after thorough studies by experts in the field. The steps to be
taken provided for the separation of the transmission and distribution functions, on the
lines of KPCL, with one transmission company and several economically viable
DISCOMs. The policy also hinted at redeployment and possible voluntary separation
of staff through manpower planning and consultation process. Another major step was
the establishment of a Regulatory Commission, to be manned by persons of assured
independence, qualification and competence. The Commission, with wide overseeing
powers over the sector, will also usher in competition, set standards, bring in tariff
reform, and would settle certain kinds of disputes.
A significant initiative spelt out in the policy was the resolve of the State Government
to open the restructured distribution operations of KEB to private sector parties. This
measure was with a view to improve operational efficiency in distribution and to
enhance customer service quality. Similarly, the holding of the Government in KPCL
was to be diluted by offering shares to the public. The policy also proposed to
introduce adequate safeguards in the ownership of the transmission company so as to
prevent manipulation by a single or a set of distributors influencing its operations to
the detriment of the public.
The Government further constituted a Steering Committee to be chaired by the Chief
Secretary to provide policy guidance and to monitor the implementation of the reform
programme. A Task force under the Secretary (Energy) was also established to
manage the day-to-day activities of the programme.
It must be pointed out that the energy reform policy of Government of Karnataka had
an excellent basis, considered various possible options, and delineated the reform
process professionally and precisely, without giving room for unnecessary doubts and
misinterpretations. The approach was clear and definite; and except for providing a
time line, had a fairly sound road map.
The predicament arising from the continuing heavy subsidies to the power sector was
highlighted by the then Chief Minister of Karnataka, Sri. S.M. Krishna, who also held
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