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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
EA, 2003. However, the TRADECO has not applied for “bulk supply” license under
the EA, 2003. This is a grey area as to whether distribution of power purchased by the
TRADECO is permissible without license under section 14 of the EA, 2003.
8.4 FINANCIAL RESTRUCTURING PLAN AND CASH FLOW MECHANISM
The State Government ownership for the reform is demonstrated by the FRP, which
stipulates the total transition cost involved for the power sector in the State. The State
Government is providing financial support is provided to the tune of Rs 6,881 crore to
the DISCOMs. The role of the MPSEB has some advantages. However, in actual
practice, it amounts to concentration of decision-making with MPSEB in several
areas, which are normally in the jurisdiction of the DISCOMs. Since MPSEB is no
longer a licensee now and, therefore, not answerable to the MPERC, there is a
likelihood of conflict with the objectives and spirit of the EA, 2003. The objectives of
the CFM and the FRP could be achieved through a holistic approach, which
guarantees prior consultation with the MPERC and control and responsibilities on the
DISCOMs for implementation of the FRP and targets.
The FRP has been revised to cover the period from 2006 to 2012. The FRP provides
for the reduction of AT&C losses from 50 to 32.5 per cent in a seven years period, i.e.,
around 2 per cent on a yearly basis, which appears to be low. The targets of AT&C
losses given in the FRP and those prescribed by the MPERC do not tally. In fact, the
targets prescribed by MPERC are aimed at bringing down the targets so as to come
closer to the target of 15 per cent as prescribed in the NTP. In view of the above, there
is a fresh need to look for the targets set for AT&C losses in FRP and also those fixed
by MPERC.
8.5 REGULATORY PROCESS
8.5.1 MYT Framework
MPERC is one of the few Electricity Regulatory Commissions in the country to issue
MYT order providing a control period with specific efficiency and loss reduction
targets. The AT&C loss reduction roadmap has been fixed for the three DISCOMs,
which gives differential loss reduction trajectory for these DISCOMs. The rationale
appears to be: the geography, past legacy and the extent and nature of the problems in
each of the DISCOMs.
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