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

Madhya Pradesh
1. GENERAL OVERVIEW
1.1 BACKGROUND OF POWER SECTOR REFORMS
The process of reform and restructuring was initiated in the State in 1996 with the
constitution of a High Level Committee under the chairmanship of Dr. N. Tata Rao,
The Committee recommended the restructuring of Madhya Pradesh Electricity Board
(MPEB) on functional basis, i.e., formation of separate generation, transmission and
distribution companies and setting up of an Electricity Regulatory Commission in the
State.
1.2 THE REFORM ACT
The Reform Act, “Madhya Pradesh Vidyut Sudhar Adhiniyam, 2000” for the State
was enacted on 20-02-2001 and made effective from 03 July 2001 provides for the
following:
(a) Establishing State Electricity Regulatory Commission (SERC);
(b) Restructuring of the electricity industry;
(c) Rationalisation of generation, transmission, sub-transmission, distribution and
supply of electricity in the State;
(d) Regulating the licensing of transmission and supply of electricity;
(e) Regulating the purchase, transmission, distribution, supply and utilisation of
electricity;
(f) Providing quality of service and the tariff and other charges considering the
interest of consumers and Utilities; and
(g) Taking measures conducive to the development and management of the
electricity industry in the State in an efficient, economic and competitive manner.
Besides other provisions, the Reform Act provides for restructuring MPSEB and
limiting the role of the State Government to policy making. It has a unique provision
to eliminate cross-subsidisation in the tariff. It stipulates that the tariff to any class of
consumer should reflect a level at least 75 per cent cost of supply to that particular
class of consumer with in next five years.
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