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

Andhra Pradesh
• Standards of performance for consumer services are fixed and enforcement
mechanism ensured through the consumer grievance redressal forums
established in the DISCOMs and the appointment of Ombudsman.
1.3.4 Organisational Development and Autonomy
The power industry in the State grew phenomenally during almost four decades
of the existence of APSEB. Rise in consumer strength from a mere two lakh in
1960 to more than one crore by 1998-99 indicated its growth in good measure.
Along with the growth, APSEB, a vertically integrated power Utility, had to
encounter certain managerial problems, both operational and financial in
nature. On account of the increasing gap between the demand and supply, the
Board has to impose power cuts and restrictions affecting the quality of supply.
Non-remunerative tariffs and revenue deficits had left APSEB in a financial
crunch, posing a serious challenge to its capacity of debt servicing and resource
mobilisation. After studying and analysing the prevailing conditions, the High
Level Committee of experts, appointed by the Government, suggested bringing
in certain changes in the organisational structure of the power industry in the
State. In 1997, the Government gave its approval for reform and restructuring
of power sector. Ultimately the restructuring of APSEB took place in February
1999 and two corporate entities Andhra Pradesh Power Generation Corporation
(APGENCO) for generation function and Transmission Corporation of Andhra
Pradesh (APTRANSCO) for transmission and distribution functions were
created. The distribution function was later separated from the APTRANSCO
and vested in four DISCOMs created on geographical area basis (north, east,
central and south).
1.3.4.1 Benefits
The benefits derived by creation of corporate bodies in place of APSEB are
analysed hereunder:
• APSEB was one of the largest power Utilities in the country and it had
become unwieldy to manage effectively. Six separate corporate entities
were created in place of APSEB to manage the affairs either on functional
lines as in the case of generation and transmission companies or on local
area segment basis as in the case of DISCOMs.
• In the restructured scenario, inefficiencies are localised and largely
identified by the DISCOMs. The State generation company took control of
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