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

10.1 Background
CHAPTER - 10
MAHARASHTRA
Till a decade back, Maharashtra was rated amongst the highly industrialised
States in the country. One of the important contributing factors for this
achievement was the comfortable power supply position in the State. With
adequate generating capacity and extensive transmission and distribution
(T&D) network, Maharashtra State Electricity Board (MSEB) not only
provided 24 hours power supply to all consumers, but also assisted the needy
neighbouring States. To meet the growing demand of electricity in the State,
Government of Maharashtra and MSEB embarked on setting up of a largest
private sector generating plant at Dabhol. From the beginning, it ran into a
number of controversies and after commissioning of the first stage, the project
was abandoned midway. A period of inaction in taking required steps to
augment generating capacity followed. As a result, there was no significant
generating capacity addition in the State during the period 2000-05 and the
consumers had to face hardships due to load shedding.
In the year 2002, the State had a total of 14,420 MW of installed generating
capacity comprising of 9,771 MW of MSEB, 1,774 MW of Tata Power
Company, 500 MW of BSES Limited (now Reliance Energy Limited) and the
State’s share of 2,375 MW in the Central sector generating stations. Besides,
captive generating plants in the State had a capacity of about 641 MW.
Demand for electricity was continuously growing. Even though MSEB needed
more funds for carrying out the expansion of the sector, financial assistance
from the State Government was reducing year by year. For instance, this was
38 per cent in 1992-93, which came down to 13 per cent in 2001-02 as a
percentage of MSEB’s annual plan outlay.
MSEB’s financial health had deteriorated considerably since its average sale
price per kWh remained lower than its expenses by 51 paise in 1999-2000 and
73 paise in 2000-01. Consequently, it suffered losses of Rs 1,681 crore and Rs
2,842 crore respectively in these years. The T&D loss in MSEB stood at 39.4
per cent and arrears of revenue were Rs 7,114 crore.