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

Madhya Pradesh
Liabilities Taken Over by the Government of Madhya Pradesh
Based on the recommendation of Montek Singh Ahluwalia Committee, the State
Government has already issued bonds worth Rs 2,663.89 crore for one-time settlement
(OTS) of dues of NTPC, PGCIL, NPCIL, WCL and SECL. Also, during FY 2005-06,
the State Government took over liabilities of MPSEB to the tune of Rs 4,431 crore.
However, this additional liability taken over by the State Government does not appear
to be part of the transfer scheme for transferring assets and taking over of liabilities.
Government Subsidy
MPSEB is heavily dependent on subsidy support from the State Government. The
amount of subsidy was around Rs 794 crore in 2004-05 which is around 15 per cent of
the revenue earned by the DISCOMs from sale of power. This dependence is expected
to increase as, Government of MP would provide subsidy to the agricultural
consumers of the State as well as for meeting the revenue deficit of the DISCOMs
under the FRP. However, the additional subsidy burden could be a constraint on the
State’s finances.
REGULATORY PROCESS
The State Electricity Regulatory Commission has been quite effective in
rationalisation of tariff in the State. The gap between ARR and ACS prevails primarily
for agricultural pumpsets consumers and is nearing the cost to supply for the domestic
category. The realisation attained for the domestic consumers is at 86 per cent of the
average cost to serve and for the rest of the categories, the average revenue realised is
more than the ACS.
MULTI YEAR TARIFF AND OPEN ACCESS
MPERC has notified Open Access regulations in the State and has introduced the
MYT framework. Following the directives of MPERC, only GENCO and TRANSCO
have submitted their ARR in accordance with the MYT in 2006-07. The MYT
framework is envisaged for a control period of three years up to 2009.
Reforms have been in progress in the State for almost five years. So far as the
generation and transmission Utilities are concerned, it can be stated that these two
Utilities have been functioning as separate entities in their respective areas. The
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