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

3.1 INTRODUCTION
CHAPTER - 3
KARNATAKA
The Government of Karnataka initiated the power sector reforms in 1997. The
objectives included improvement of the financial stability of the sector and
increased customer satisfaction. The reform policy also aimed to attract private
sector investments, establishing a regulatory mechanism to promote
competition, improved operational efficiency and cost reduction, and
encourage energy conservation. The policy professed the restructuring of the
Karnataka Electricity Board (KEB) into one transmission and several
distribution companies and redeployment of the staff so as to improve
operational efficiency and increase customer satisfaction. The policy was very
objective and focussed in its approach and spelt out the Government’s resolve
to implement the sector reform on a sustainable basis.
Karnataka was one of the first States (1971) to establish a separate company for
generation of electricity, Karnataka Power Corporation Limited (KPCL), which
accounts for about 56 per cent of the installed capacity in the State.
3.2 BACKGROUND
The total installed capacity in Karnataka, including central allocations and
private sector, is 8,355 MW, of which 3,673 comes from hydel sources. The
coal-based project of KPCL at Raichur has seven units and a total capacity of
1,470 MW. Another Government undertaking, Visweswarayya Vidyut Nigama
Limited (VVNL), has an installed capacity of 354.32 MW, including from its
diesel generators at Yelahanka near Bangalore (127.92 MW) and hydropower
resources (226.40 MW). About 21 per cent of the total installed capacity is in
the private sector. Total energy available for transmission and energy delivered
during 2004-05 were 33,110 MU and 31,711 MU respectively. The
transmission loss was only 4.18 per cent during that year. Distribution losses
were estimated at 26.57 per cent. The AT&C losses were 36.65 per cent.