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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
with the various State Governments indicate that private sector participation is not a
closed option but the more immediate concern is about the existing DISCOMs which
in their present condition may not appear to be ideal for private sector participation.
Private sector participation The States/Utilities need to consider alternative models for
improving the financial and operational efficiencies, private-public partnership in
network management activities, SCADA, DMS application, Customer Relation
Management (CRM), etc.
For the distribution reforms to lead to appreciable/demonstrable impact on delivery of
quality power supply, road map for network upgradation and reliability of subtransmission
and distribution system will have to be accorded high priority. This
should be preceded by a detailed study of the condition and problems of the network.
Promotion of energy conservation measures, both from the Utility side as well as at
the utilisation end and promoting the use of energy-efficient pumpsets in the
agricultural sector and introducing tradable incentives such as interest subsidy on
purchase of energy efficient pumpsets are some of the other measures that need to
considered.
To avoid the cascading effect of the power systems fault, measures to enhance grid
security must be devised and separate funds should be earmarked for implementing
the appropriate islanding schemes for DISCOMs.
Although this may not be right time to introduce the MOU mechanism for making
them achieve the predetermined productivity and other efficiency targets, some steps
are needed to promote competition between the distribution Utilities. Unless some
inter-DISCOM competition or incentives are built, there would be no pressure on
them for under or poor performance. There would be no tangible benefits to
consumers in terms of low prices or benefits. Utilities which are ready to introduce
better pricing for certain categories of consumers such as industrial, commercial, etc,
should be encouraged to do so. In this direction, a good move by the MPERC to
consider Differential Retail Supply Tariff (DRST) for DISCOMs was dropped as the
State Government conveyed to the Commission its intention in its letter dated 7 March
2006 “to have similar tariffs for various consumer categories in the foreseeable
future”. It is felt that the intention to protect tariffs for domestic and agriculture
consumers on socio-political grounds should not prevent the Commissions to attempt
“rebalancing” of tariffs to translate efficiency gains in better pricing for industrial and
commercial categories of consumers.
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