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

Synopsis of State Reports (Vol.-IV)
Study on `Impact of Restructuring of SEBs’
The encouragement to civil society and closer involvement of advocacy groups
in the reform process will help in understanding the issues and problems
specific to the power sector of Madhya Pradesh. An effective communication
strategy will be crucial for creating a positive atmosphere for reform and to
enlist wider public support for the same.
4.2.5 Regulatory Process
MPERC was established in August 1998 and started functioning from January
1999. Since its inception, MPERC has issued five tariff orders with a view to
gradually reduce cross-subsidies. Besides, the Commission has also issued the
‘supply code’ for ensuring better and quality service to the consumers.
Tariff Revision
The gap between ACS and ARR prevails primarily because of agricultural
pumpset consumers and is nearing the cost to supply for the domestic category.
The realisation attained for the domestic consumers is at 86 per cent of the
average cost to serve and for the rest of the categories, the revenue realised is
more than the ACS.
The State Electricity Regulatory Commission has been quite effective in
rationalisation of tariff in the State and in meeting the stipulation of ‘MP
Vidyut Sudhar Adhiniyam’, i.e., to eliminate cross-subsidisation in the tariff.
The provision stipulates that tariff to any class of consumers should reflect a
level of at least 75 per cent of the cost of supply to that particular class of
consumers within the next five years.
Directives Issued by the Commission
The Commission has so far issued about 25 final/draft regulations on several
issues. From time to time, the Commission has also been issuing concept
papers and relevant directives. The Commission has played a proactive role in
making the process of reform a success. However, the DISCOMs have not been
able to fully comply with the directives issued by the Commission. It is
apparent that non-compliance with the Commission’s directives is affecting the
DISCOMs themselves.
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