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

State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
• Granting of Licenses to APTRANSCO (transmission and bulk supply
license) and the four DISCOMs (distribution and retail supply license),
prescribing detailed conditions to carry out their functions.
• Prescribing standards of performance to the licensees.
• Carrying out tariff adjustments every year. Tariff revisions were not
allowed earlier for political reasons in spite of rising costs of inputs and
labour.
• Fixing the subsidy to be provided by the Government annually and ensuring
the flow of subsidy to the power Utilities on a regular basis. Earlier, there
was no flow of cash subsidy.
• Bringing transparency in the functioning of power Utilities by conducting
public hearing on tariff filings.
• Allowing only prudent expenditure by exercising control over the
investments proposed by the Utilities.
• Scrutiny and clearance of the power purchase agreements proposed to be
entered into by the Utilities.
All the above measures taken by APERC have started yielding results and the
improvement in the overall functioning of the Utilities are quite visible. The
major gains of the measures taken by the APERC are:
• Regular annual tariff adjustments allowed by the Commission has bridged
the gap between the expenditure and revenue. The revenue deficit for the
year 1997-98 was about Rs 1,170 crore.
• There is regular flow of cash subsidy from the Government and a gradual
reduction in the subsidy component on account of efficiency gains. It has
come down from Rs 1,626 crore (2000-01) to Rs 1,303 crore (2004-05).
• The efficiency improvements in metering, billing and collection, brought
about with the close monitoring by the Commission, has largely contributed
to the increase in the annual receipts from Rs 4,841 crore (1999-2000) to Rs
8,817 crore (2004-05).
• Overall T&D losses have come down from 38 per cent (1999-2000) to 21.4
per cent (2004-05).
• Gradual reduction in cross-subsidy component provided by the industrial
sector, resulted in reduction in the retail tariffs applicable to the sector.
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