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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
In Delhi, the assets were valued through a business valuation process, based on
revenue earning potential. This ensured a sustainable level of liabilities.
OERC AND THE DISCOMS
Orissa has four DISCOMs. Of these, CESCO, abandoned by M/s AES, is going to be
handed over to a new investor company.
As regards the other three DISCOMs, viz. NESCO, WESCO and SOUTHCO, which
are with Reliance Energy Ltd, the OERC has asked them to show cause as to why
their distribution licenses should not be suspended. This is because of the refusal of
the promoter company, Reliance Energy Ltd, to bring in investment required for
system improvements in distribution segment. The three DISCOMs have also been
resisting renewal of the Shareholders' Agreement. It is understood that the DISCOMs
have gone on appeal to the Appellate Authority in Delhi. Thus, the entire distribution
business in Orissa is mired in uncertainty. All the DISCOMs have shown some
progress in metering, billing and collection. They are paying the BST bill of GRIDCO
and are also able to pay salaries. But they are yet to clear Rs 1,000 crore of loans and
about Rs 1,200 crore of old electricity dues.
There has been no retail tariff revision during the last five years. Only recently, BST
has been revised upwards by 15 per cent but no increase has been allowed by the
OERC in retail tariff. The OERC apparently thinks that the DISCOMs should collect
old arrears to the tune of Rs 2,000 crore and also reduce the losses (one per cent
improvement in T&D loss indicates additional collection of about Rs 43 crore). It is
interesting to note that the State Government has not opposed the revision of tariff.
The law enforcement machinery seems to think that it should not get involved in the
matter of collection of dues of the private companies although even now 49 per cent
of stake in the DISCOMs is held by a para-statal entity. It is one thing to have a
dispensation in place, it is yet another thing to ensure that it works. The neighbouring
States of West Bengal and Andhra Pradesh seem to have fared much better in this
regard.
A special collection drive needs to be undertaken throughout the State in order to
recover the past dues. One time settlement of the long pending dues of consumers
could be taken up through holding of Bijli Adalats. Penal dues could be waived off for
those who pay their arrears at one go.
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