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

Synopsis of State Reports (Vol.-IV)
Study on `Impact of Restructuring of SEBs’
and OHPC on the one hand and between the DISCOMs and the GRIDCO
on the other. Government and its parastatals cannot and should not be
routine defaulters.
• For the last five years, there has been no revision in tariff because the cost
of electricity came down as a result of the postponement of asset
revaluation and because of the CERC’s tariff orders relating to NTPC. It
is time to go in for revised tariff particularly when bulk supply tariff of
GRIDCO has been revised by 15 per cent recently.
• Depreciation calculations should be on the basis of the life of the assets,
which will have a favourable impact on the tariff. This should be done in
preference to calculating depreciation for recovery of 90 per cent of the
total investment in 12 years.
• Government of India should ease the norms for raising loans from PFC
and REC by the privatised DISCOMs. Second mortgage of assets should
be permitted.
• Special courts are yet to be set-up for trying electricity theft cases. Only
three special police stations have been set up as against the requirement of
30. The State Government should undertake both responsibilities
immediately. The OERC has also permitted the cost of setting up of
special courts at an estimated cost of Rs 8 crore and allowed the same as
pass through in to the tariff. This is indeed commendable. The State
Government has to do its bit.
• In case of hydro failure, GRIDCO is required to purchase high-cost power
from other sources. This should be subsidised from the Calamities Relief
Fund. The problem arose in 2002-03 when GRIDCO had to spend an
additional amount of Rs 600 crore on purchase of alternative power.
• The Government of Orissa has decided to pass on the World Bank loans
to GRIDCO and DISCOMs as 70 per cent loan (at 13 per cent interest)
and 30 per cent grant, but this decision is yet to be implemented. This
should be done immediately.
• The Deepak Parekh Committee had recommended setting up of a Power
Sector Reform Fund (PSRF). The OERC also has recommended setting
up of such a fund. Last year, the State had a record collection of Rs 320
crore of electricity duty. Over a period of time all such duty collected
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