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

Orissa
Regulation By establishment of an independent State regulatory body, which would
address the problems of the power sector. The State Government decided to
distance itself from the power sector and confine itself only to broad policy
issues.
Tariff By tariff reforms at various levels
The following steps, as envisaged under the reform and restructuring process, were
taken:
(1) OSEB was restructured and corporatised into Grid Corporation of Orissa
(GRIDCO) and Orissa Hydro Power Corporation (OHPC) w.e.f. April 1996.
(2) Orissa Electricity Regulatory Commission (OERC) was established in April
1996 and became functional from 1 August 1996.
(3) Orissa Power Generation Corporation (OPGC) was privatised with disinvestment
of 49 per cent stake and the management control was transferred to a private
sector company, M/s AES, in January 1999.
SECOND PHASE OF REFORMS
Private Sector Participation in the Distribution Segment
Pursuant to the Orissa Electricity Reform (Transfer of Assets, Liabilities, Proceedings
and Personnel of GRIDCO to Distribution Companies) Rules, 1998, the Government
of Orissa transferred the distribution assets and properties along with personnel of
GRIDCO to four DISCOMs w.e.f. 26 November 1998. These distribution companies
namely CESCO, NESCO, WESCO and SOUTHCO continued to function as affiliates
of GRIDCO up to 31 March 1999 and thereafter functioned under the distribution and
retail supply license granted by OERC.
OBJECTIVES OF REFORMS
A. Operational Improvements
(i) Improve the quality of service to the consumers; and
(ii) Improve operational efficiencies and reduce losses.
B. Financial Benefits Envisaged
(i) Attract private investment in the distribution business;
(ii) Reduce dependence on Government funding in the electricity sector; and
(iii) Contribute to increased economic development of the State.
5.3