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

Karnataka
CHAPTER - 2
A FACTSHEET OF THE REFORM EFFORTS
INITIAL STUDY ON RESTRUCTURING OF THE ELECTRICITY BOARD
In its policy statement, the Government of Karnataka had envisaged the appointment
of national and international consultants to study specific issues, which need policy
options and provide advice on the most suitable course of action. The first sector study
concerning the reform process was accordingly entrusted to the Administrative Staff
College of India (ASCI) in 1997. The study brought out (May, 1998) the need for
restructuring of the KEB and recommended the creation of one transmission company
for the whole State and four or five distribution companies, based on area-wise
jurisdiction. ASCI 11 report also recommended that the residuary generation activities
carried out by KEB (such as the diesel project at Yelahanka) may be entrusted to
another generating company to be formed as part of the restructuring process, which
could be privatised as a stand alone unit. A reform implementation plan (September,
1998) was also submitted by the ASCI outlining the procedure to be followed in
taking forward its recommendations.
KARNATAKA ELECTRICITY REFORM ACT, 1999
The recommendations of ASCI were accepted by the State Government almost
entirely. This led to the enactment of the Karnataka Electricity Reform Act, 1999
(KERA). The Act led to the following developments:
i) The Karnataka Electricity Regulatory Commission (KERC) came into being. The
Act provided, among other things, that the Commission shall be responsible to
regulate the purchase, distribution, supply and utilisation of electricity, the
quality of service, the tariff and charges payable keeping in view the interest of
the consumers and that the charges for electricity supplied are adequately
recovered for sustained operation;
ii) Incorporation of a company with the principal objectives of purchase,
transmission, sale, and supply of electricity. The company was named as
KPTCL. The company was to discharge all powers, duties and functions of KEB,
which was to be dissolved;
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Since a copy of this report was not readily available, what is mentioned in this Chapter is extracted from
parallel documents.
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