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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
• The four DISCOMs should arrange funds from the banks duly guaranteed by the
respective promoter companies in order to take up capital improvement works.
With this they can avail of APDRP benefits. Only CESCO is doing it.
• Dues of the State Government as well as PSUs amount to Rs 250 crore. A special
reconciliation drive should be undertaken with the initiative of the State
Government and prompt payment made.
• For the last five years, there has been no revision in retail tariff because the cost
of electricity came down as a result of the postponement of asset revaluation and
because of the CERC's tariff orders relating to NTPC. It is high time to go in for
revised tariff particularly when bulk supply tariff of GRIDCO has been revised
upward by 15 per cent recently.
• Depreciation calculations should be on the basis of the life of the asset, which
will have a favourable impact on the tariff. This should be done in preference to
calculating depreciation for recovery of 90 per cent of the total investment in 12
years.
• Government of India should ease the norms for raising loans from PFC and REC
by the privatised distribution companies. Second mortgage of assets should be
permitted.
• Special courts are yet to be set-up for trying cases of electricity theft. Only three
out of 30 police stations have come up. The State Government should undertake
both the responsibilities immediately. Even the OERC has permitted the cost of
setting up of special courts estimated at Rs 8 crore to be paid from the system
and to be passed on to the tariff.
• In case of low hydro availability, GRIDCO is required to purchase high cost
power from other sources. This should be subsidised from the Calamities Relief
Fund. The problem arose in 2002-03 when GRIDCO had to spend additional Rs
600 crore for purchase of alternative power.
• The Government of Orissa has decided to pass on the World Bank loans to
GRIDCO and DISCOMs as 70 per cent loan (@ 13 per cent interest) and 30 per
cent as a grant, but this decision is yet to be implemented. This should be done
immediately.
• The Deepak Parekh Committee had recommended setting up of a Power Sector
Reforms Fund (PSRF). The OERC has recommended setting up of such a fund.
Last year, the State had a record collection of Rs 320 crore of electricity duty.
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