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Voice of Electricity Workers You can call it the preamble to the forthcoming power sector reforms. The Power Ministry today made a case for stronger distribution reforms rather than changes in the policies for generation plants. Budget recommendations are expected to highlight the need for these reforms. In a presentation made to the Union Cabinet, power ministry presented various models by which the state governments could initiate power sector reforms. Speaking to Et, Ajay Shankar, joint secretary in the power ministry, said: “The generation plants are already overworked and most of them have reached optimal PLF. While PSUs have to add more capacities and make efforts to reach targets, states have to take up reforms at the distribution level to improve the system.” Among the models that have been recommended are the existing ones where a company takes up both generation and distribution. Citing examples of BSEs or Tata Power, sources said that this model has often been success with regard to revenue collection and proper billing. The other model is where the State government could start off by offering cities for private distribution. For example how Delhi is starting or how the UP government attempted to privatize Kanpur. In this case, since the cities have more urban population bringing about reforms could be easier. The third example is that of Orissa which was divided the state into distribution zones with private companies handling each zone. But the success of the distribution policies would depend largely on the state governments. In fact, power minister Suresh Prabhu has even suggested that the centre will give the states the option to chose the best model and it may not be necessary that unbundling SEBs is the only answer. The power sector currently incurs a loss of Rs. 20,000 crore due to theft and a 19 percent negative return. Both the Centre and the states will have to put in place drastic power sector reforms to meet the growing additional demand of 1 lakh MW of power by 2012, sources said. According to power ministry officials tariff distortions and large scale theft and pilferage lead to the poor state of state electricity boards, and only 50 per cent supply was metered. The prime minister’s economic advisory council which recently submitted its report to put in place a medium term reform strategy has suggested rationalization of tariff with low tariff levels on some consumer like agriculture progressively raised to economically viable levels while ensuring high tariff to consumers like industry remained unchanged. Courtesy: Economic Times-14.2.2001 |
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