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

National Report (Vol.-II)
Study on ‘Impact of Restructuring of SEBs’
implemented in a time-bound manner. The example of the West Bengal
State Electricity Board (WBSEB) which charges tariff at the rate of Rs
1.50 per unit from the agricultural sector is a model to emulate.
(d) The issue of reasonable recovery from the agricultural sector is closely
linked to the political commitment and support extended by the political
leadership for reforms efforts. The mindset that free power or highly
subsidised power is a Fundamental Right should be removed from the
consumers of this category.
(e) There is a clear need to define the “creamy layer” among the farmers,
those who are the “haves”, and to distinguish them as a class apart from
the poor and marginal farmers. It is a fact that the former group is in a
better position to pay a reasonable price for the electricity consumed by
them. The decision should be taken at the national level to address this
issue and ensure that the subsidies are only targeted towards small and
marginal farmers. Also, State Governments should formulate policies to
encourage differential cropping patterns aligned to the water-tables.
(f) A detailed financial plan should also be put in place to bring down the
subsidy support on a diminishing pattern, with targets and set goals for
each year and for each DISCOM.
(g) MoP should circulate a consultation paper (converging all related issues)
on “Reducing Cross-subsidies” and continue its efforts to arrive at a
political commitment on this vital issue.
6.23 Fostering Competition Through Open Access
6.23.3 Captive generation, as brought out in the Tariff Policy, is an important means
for making competitive power available, provided an enabling environment is
created to encourage the connecting of captive plants to the grid. Open access
would encourage non-captive users to draw power from captive plants at
negotiated rates, provided Regulatory Commissions fix a reasonable surcharge
for open access. In its absence, captive plants would remain under-utilised. As
brought out in Chapter-3, the average PLF of captive plants with a total
installed capacity of 19,103 MW (1 MW and above size) was at the low level
of only 42.8 per cent (2004-05), which could be raised significantly in the
interest of the economy by encouraging Open Access.
6.23.4 Ministry of Power should take the lead in the matter and strive to arrive at a
practical solution, in consultation with FOR, by prescribing broad principles for
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