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

INTRODUCTION
State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
RESTRUCTURING EXERCISE
MSEB provides electricity throughout the State of Maharashtra except for Mumbai
city, which is served by Tata Power Company (TPC), Reliance Energy Limited (REL)
and Bombay Electric Supply and Transport Undertaking (BEST). In the year 2002, the
State had a total of 14,420 MW of installed generating capacity comprising of 9,771
MW of MSEB, 1,774 MW of TPC, 500 MW of REL and the State’s share of 2,375
MW in central sector generating stations. Besides, captive generating plants have a
capacity of about 641 MW.
With such a huge generating capacity and a T&D network of about 6.7 lakh ckt km of
lines, MSEB was the largest SEB in the country. Its power stations used to be
awarded prizes at the national level for achieving excellence in performance. MSEB’s
energy sales recorded more than hundredfold increase from 346 MU in 1960-61, the
year of its formation, to 37,067 MU in 2001-02. Despite such impressive performance
of MSEB, the State faced shortage in meeting the peak demand. Further, T&D losses
in MSEB stood at 39.4 per cent and arrears of revenue at Rs 7,114 crore. Provisions of
Government of Maharashtra’s loans to MSEB had come down from 38 per cent
(1992-93) to 13 per cent (2001-02) as a percentage of MSEB’s Annual Plan Outlay.
FINANCIAL POSITION OF MSEB
To remedy this situation, it was necessary to set up additional generating capacity and
strengthen the T&D network to meet the anticipated growth in demand in the next ten
years, which required an estimated investment of over Rs 30,475 crore. MSEB’s
financial health had deteriorated considerably due to its average sale price per kWh
being lower than its expenses and it suffered huge losses in the years 1999-2000,
2000-01 and in 2001-02 (to a lesser extent due to some improvements in performance)
as will be seen from the table below:
Gap between ACS and ARR
Particulars 1999-2000 2000-01 2001-02
Average cost of supply (Rs/kWh) 3.01 3.65
Average realisation without subsidy (Rs/kWh) 2.50 2.92
Gap (Rs/kWh) 0.51 0.73
Revenue (Rs crore) 10,626.00 11,739.00 12,030.00
Profit/Loss (Rs crore) without subsidy (1,681.00) (2,842.00) (308.00)
10.14