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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
getting views of industrialists, consumers, staff in MSEB, agricultural consumers,
NGOs and Maharashtra Electricity Regulatory Commission (MERC), the following
options of reforms emerged:
(a) MSEB to retain its existing identity with generation, transmission and
distribution to be run as profit centres;
(b) Corporatisation of MSEB without restructuring;
(c) Restructuring and corporatisation of reorganised entities of MSEB; and
(d) Restructuring, corporatisation of restructured entities of MSEB followed by
privatisation of distribution entities.
Government of Maharashtra’s Strategy for Reform
In August 2002, Government of Maharashtra presented the White Paper in the
Legislature. It highlighted the condition of the power sector in the State and the urgent
need for reforming MSEB. It also spelt Government of Maharashtra’s strategy for
reform in the power sector, aimed at meeting consumer interests while addressing
concerns of the employees. Government of Maharashtra promised not to totally
withdraw from the sector but to bring efficiencies in the sector to enable it to become
self-sustaining.
Measures outlined in the White Paper
Restructuring of MSEB into separate companies for generation, transmission and
distribution (one or more) along with implementing an agenda of internal reforms
(initially, while in ownership of the State) was proposed in this White Paper.
The reform process proposed in the White Paper incorporated the following major
components:
(a) Internal Reforms: This included development of human resources, reduction of
T&D losses, prevention of theft of electricity, energy audit and metering,
demand side management, redressal of consumers’ complaints and improvement
of services to consumers;
(b) Independent Regulatory Framework: Government to withdraw from regulation
and operation of the power sector and eventually ownership of certain segments
of the sector but continue to provide support of law and order, administrative
support;
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