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

8.7 TRANSMISSION SYSTEM
8.7.1 Loss Reduction and System Availability
State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
While there has been an increase in the quantum of energy handled by MPTRANSCO
by about 7 per cent in the year 2004-05 from year 2003-04, the overall losses in the
transmission system for the year 2004-05 have come down to 5.62 per cent from 6.12
per cent in the year 2003-04. Also, there has been no failure of power transformers
during the years 2003-04 and 2004-05. MPPTCL has also claimed that there were no
grid disturbances or major breakdowns during the year 2004-05.
There has been an increase in the transmission system availability from 97.59 per cent
in 2000-01 to 99.53 per cent in 2003-04. In a positive development for providing
incentive for high level of transmission availability, MPERC has devised a formula for
incentive to promote high standards of performance by the transmission Utility.
8.8 DISTRIBUTION
8.8.1 Transition Support by Government of MP
The reform model in Madhya Pradesh has provided for independent companies
inheriting the functions and assets of the erstwhile MPSEB, but the latter continues to
be exercising control over the Utilities. MPSEB will exercise powers for revenue and
cash management till such time each of the Utilities becomes capable of managing
their revenue and expenditure requirements and become self-sustainable. In the
present scheme of the reforms the control of the MPSEB is justified by the State
Government on the ground that during the transition period the State is providing
transition support for the implementation of the reforms and therefore close
monitoring and management of revenue and expenditure was necessary in the interim
period.
8.9 SUSTAINABILITY OF THE STATE POWER SECTOR
8.9.1 Dependence on Government Subsidy
MPSEB is heavily dependent on subsidy support from the State Government. The
amount of subsidy is around Rs 794 crore in 2004-05 and around 15 per cent of the
revenue earned by the DISCOMs from sale of power. This dependence is expected to
increase as Government of Madhya Pradesh has committed to continue to subsidise
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