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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
unwieldy with about 79,000 employees spread over the entire state. Restructuring will
certainly lead to a competitive environment in which performance of restructured
entities could be more accurately measured, making them more responsible and
accountable.
The first step that the TNEB should take is to restructure itself into a transmission,
generation, and at least three distribution utilities with each restructured utility
functioning as a separate corporate entity. Three distribution entities have been
recommended, as one will be too large and it will preclude a competitive environment.
Competition among government owned utilities, though may not be ideal, would
certainly lead to efficiency gains. A close supervision by the SERC too will be
necessary to realise such gains. By accurately fixing the tariff compensation to the
restructured distribution utilities, the SERC can hope to unleash the forces of
competition on a level-playing field. It should not be difficult for the management to
convince the employees unions on the need to push reform further.
Tamil Nadu has an excellent manufacturing base, and Chennai is emerging as an
automobile and IT centre. Good quality power at a competitive rate is essential to
attract industries to the State. Because of intense competition arising out of
globalisation, industries migrate towards areas having a sound infrastructure. Power is
a vital infrastructure for investment and also for the growth and well-being of the
people of the area, and therefore, the TNEB has a major role to play in the
development of the State. For this, the reform process has to be speeded up. The
alternative of status quo will lead to lowered efficiency, the signs of which are already
evident by frequent supply interruptions and increased consumer complaints. There is,
therefore, no alternative to taking up reform in right earnest while addressing the issue
of tariff distortion.
Summary of Findings and Recommendations
Findings
• Tamil Nadu Electricity Board (TNEB) is one of the best-performing electricity
boards in terms of technical and commercial parameters – its PLF is about 78 per
cent; its T&D losses are at 17.8 per cent; the availability of power is said to be 99
per cent; the failure rates of transformers are relatively low; its billing and
collection efficiency is almost 100 per cent - only the local bodies are the
defaulters; the level of electricity theft is low because of effective systems of
detecting such thefts.
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