R. Rameshwar, R. Agrawal and M.K.

Pathak / International Energy Journal 11 (2010) 101-110 101

Review of State Electricity Boards and Indian Energy

Sector: A Case Study
www.rericjournal.ait.ac.th Rudra Rameshwar *1, Rajat Agrawal* and Mukesh Kumar Pathak*

Abstract – Energy is one of the important inputs for economic progress of a country. Power generation is a key
parameter in the development of recent economies and the augmentation of productivity. The main objective of the
present paper is to review; compare the performance of SEB’s and effect on energy sector in India. The paper
discusses the more important of the problem areas holding up significant economic gains that could be realized
through cost reductions, operation of market forces, needed levels of investments and targeting of resources to
promote equitable growth. The slow rate of progress is a matter for concern.
The state governments were unenthusiastic and conflicting to the unbundling of electricity boards, but
according to the power research and recent studies, restructuring has improved the performance of these boards. The
present research paper concludes with few case studies of unbundling of SEBs in India.

Keywords – Energy, energy efficiency, peak demand, peak met, SEBs.

commercial activity. For upgrading the technology,

1. OBJECTIVES AND SCOPE OF THE STUDY
improved plant utilization is required. However, the
Power and energy have turned into a primary issue with entry of central undertakings into power generation also
the state governments managing the electricity boards. denoted adoption of larger unit sizes, improved
The main objectives of this paper are to review and maintenance practices and better plant utilization [1].
compare the growth of state electricity boards (SEBs) in India’s transmission and distribution (T and D)
India and what is being done by the state governments to system comprises a 400 kV network as the main and
bring back their economic fitness. The paper attempts to bulk transmission system in each region; a 220 kV, 132
assess the status of restructuring and reforms in India by kV and 110 kV network as the main and support
inspecting a case study of few state electricity boards transmission systems in each State; a 66 kV, 33 kV and
and search of new methods of studies for monitoring the 22 kV network as sub-transmission system; an 11 kV
performance of these boards. network as primary distribution systems; and a 400 V
(three phase) and 230 V network as local distribution
2. INTRODUCTION systems. While the predominant technology for
electricity distribution and transmission has been
Per capita energy consumption is one important
alternating current (AC) technology, high voltage direct
indicator of standard of living in a country. energy crisis
current (HVDC) technology has been introduced for
is due to the hike in world’s population and human
back-to-back interconnection between the northern and
beings daily needs. To fulfill these needs electricity is
western regional systems and also for the bulk transfer
required in sufficient amount. Thus, electricity is a
of power in the northern region [1], [2]. Even though the
matter of concern of central as well as state
T and D network expanded by about 6.3 % per annum
governments. The structure of SEBs was designed after
during the 1980’s, its growth has not kept pace with the
independence, nearly sixty years ago, when the
capacity to supply power. There were instances when
electricity sector was virtually non-existent in the
the generation levels of certain power stations,
country. The substantial expansion that these
especially in the northern region, had to be reduced
organizations could bring about and the plan-linked
because not all the required 400 kV lines could be
mode of funding supported from state and central
commissioned in time to deliver the power generated
sources seems to have served to allow organizational
[1], [2]. Even then, the growth of power has been
structures unsuited to commercial functioning and self-
increased as tabulated in the following Table 1.
sustainable expansion. Managements of SEBs are
In addition to these quantitative parameters, there
answerable to government, the legislature, the auditing
has been qualitative augmentation in terms of
authority and in a small degree to the consumer. The
engineering proficiency and excellence of supply.
problem is partly common to public enterprises and
However these achievements, the power sector has been
partly specific to the electricity sector, the retail
overwhelmed by serious lack of supply in comparison
distribution part of which is still not viewed as a
with demand. Electricity regulatory commissions
(ERCs) have been set up to improve the working of the
* Department of Management Studies, Indian Institute of Technology SEBs in India. Despite the passive public sector and its
Roorkee-247667, India.
impressive growth, India continues to face power
1
Corresponding author; shortages.
Tel: + 91 94 11 12 26 19, Fax: + +91 13 32 28 55 65.
E-mail: [email protected]
102 R. Rameshwar, R. Agrawal and M.K. Pathak / International Energy Journal 11 (2010) 101-110
th
In the 8 plan, India could achieve only a little investment of US $ 123.2 billion is required in power
above half the planned target for generation capacity generation, transmission and distribution sector [3].
addition. In the 9th plan period also the position was not Here, Table 2 is indicating the overall generation
improved. Thus, India is still a power starved nation, capacity addition monitored from major sources. In
even after 55 years of planning and a vast experience of recent years only some of the SEBs has taken up
putting up a 112,058 MW generating capacity with the systematic studies for planning of their distribution
associated transmission and distribution systems. During systems using the available computer technology and
10th plan (2002-2007) and 11th plan (2007-2012) a total other SEBs are expected to follow the same strategy for
capacity addition of 113,000 MW is proposed and an their distribution planning [3].

Table 1. Growth of the Indian power sector.

Parameter Year 2008 status Growth Since Independence (times)
Installed capacity (MW) 147,715.51 90
No. of consumers (millions) 216 88
Agricultural connections (millions) 18 625
T and D network (‘000 circuit km.) 772 238
Electrified villages (‘000) 803 358
Per capita annual consumption (kWh) 631 36
[Source: Ministry of Power and Planning Commission (2008)]

Table 2. Generation capacity addition during April-September, 2008.

Sources Additional Generation Capacity (MW)
Thermal 1319.80 MW
Hydro 439.00 MW
Nuclear 0.0 MW
Total 1758.80 MW
[Source: CEA-Vidyut Bharati, October, 2008]

3. DATA AND RESEARCH METHODOLOGY infrastructure. Government support to RETs through

favorable policy framework enhances energy mix and
The current study uses qualitative data to a better
financial health utilities.
coverage; nevertheless quantitative data have also been
In addition, the government earnings from
gathered to have an in-depth observation. Primary
electricity duty, tax on manufactured capital goods and
records about the restructuring of SEBs have been
inspection fees will increase [4].
collected from diverse sources and discussions. For the
broader study, the secondary data are obtained from
5. FUTURE ENERGY DEMAND
several research papers, annual reports, newspaper
articles, and publications by CEA, MoP, CERCs, SEBs, India is not only experiencing an electricity shortage but
etc. The study is not restricted to a particular number of is also all the time more dependent on oil imports to
years thus, the information and statistics concerning in meet the demand [5]. In addition to pursuing domestic
SEBs performance since its inception have been oil, a gas exploration and production project, India is
analyzed for comprehensive point of view. also stepping up its natural gas imports, mostly all the
Compounded annual growth rate (CAGR) has been way through imports of liquefied natural gas.
derived for data available for latest two years (2007- The country’s aptitude to secure a consistent
2008) on the basis of following energy parameters: supply of power and energy resources at reasonable
i. Requirement and availability [figures in million prices will be one of the most significant factors in
units, MU] shaping its future energy demand. ‘According to the
ii. Peak demand and peak met [figures in MW] Indian government, 30 percent of India’s total energy
needs are met through imports’ [5].
4. STATE ELECTRICITY BOARDS /
UTILITIES 6. OPERATIONAL EFFICIENCY: MEETING
ENERGY NEEDS
In India, the Electricity (Supply) Act, 1948, requires the
SEBs to work like an independent corporation. With dependability for the electricity supply shared
However, the SEBs / utilities in HT-tariff for industrial constitutionally between the central government and the
consumers are a gainful opportunity, i.e. purchasing states, the Indian government now recognizes the need
electricity from renewable energy technologies (RET) to increase its stress on improving the efficiency of
projects at lower prices and selling it to HT consumers. supply, utilization, and pricing of electricity and this can
SEBs benefit from wheeling and banking charges for only be achieved by reforming power sector
offering their transmission and distribution management and financing at the state level.
R. Rameshwar, R. Agrawal and M.K. Pathak / International Energy Journal 11 (2010) 101-110 103
The states' power sector problems are attributable improved. An energy conservation policy is another
to the poor operational efficiency of the SEBs, which are solution to increase its efficiency [6].
a key element of India's power system. The SEBs were performing well till the mid 1980s
The weak financial position of the SEBs also both in technical and financial aspects but now
remains the fundamental obstruction to private sector government can not survive with the going up demand
investment in the power sector. India's state of investment required in the power sector.
governments have clearly accepted the problems of the To the innocent brains, India’s progress has been
SEBs in various national meetings. Finally, only few extraordinary. According to recent updates i.e. April to
states namely Orissa, Haryana, Andhra Pradesh and September, 2008 the power supply position – a
Uttar Pradesh have initiated broad power sector reform compounded annual growth rate (CAGR) of 11% [2].
programs. The main affects of operational efficiency are During the same interval, the energy peak demand
government’s instability, disorganized commercial and peak met, a CAGR of 18.5%, it is seen that the
execution and political involvement. development in the various sectors over the last 30-40
Hence, restructuring the SEB is the only technical years has ranged from 10-20%. This is outstanding and
solution and the efficiency of the power sector can be is explained in Figures 1 and 2.

Fig. 1. Graphical projection of the power supply position in cifferent state/system/region (April to September, 2008).

Fig. 2. Graphical projection of the energy peak demand and peak met in different state/system/region (April to
September, 2008).

There are many profitable and hurting insights that According to Figure 1, in the northern region / state,
we get from the statistics in these studies. Figures 3 and especially Uttar Pradesh requirement is more i.e. 31,946
4 are signifying the graphical projection of power supply MU with the deficit of 17.3 % which shows that power
position in different regions. supply requirement is high.
Apart from the failure of SEBs to raise However, in Punjab demand is 23,293 MU with the
investments, it is the uneconomic pricing of electricity. deficit 8.7 %, which is the 2nd largest demand in the
104 R. Rameshwar, R. Agrawal and M.K. Pathak / International Energy Journal 11 (2010) 101-110
region. On the other hand, if we consider the eastern 3.8 % in Uttar Pradesh, Punjab and Orissa states
state, Orissa shows the 2nd highest demand i.e. 10172 respectively.
MU with the deficit of 1.7% in the region. It is one of Moreover according to the energy data available
the states in the power sector, where the SEB is from the general review 2007 of Central Electricity
structured and well organized. Authority (CEA), the State-wise energy available (in
With reference to Figures 5 and 6, there was a GWH) / Transmission and Distribution Loss (%) were
shortfall monitored in 2008 between peak demand and monitored in the states of Orissa, Punjab and Uttar
peak met of 10,564 MW with deficit of 22.2 %, 8,737 Pradesh are 16,036.37 GWH / 40.86 %, 35,956.22
MW with deficit of 16.3 % and 3,137 MW with deficit GWH / 26.61 % and 51,937.13 / 33.49 %, respectively.

Fig. 3. Graphical projection of the power supply position in Fig. 4. Graphical projection of the power supply position
northern state/system/region (April to September, 2008). in eastern state/system/region (April to September, 2008).

Fig. 5. Graphical projection of the energy peak demand and Fig. 6. Graphical projection of the energy peak demand
peak met in northern state/system/region (April to and peak met in eastern state/system/region (April to
September, 2008). September, 2008).

7. ELECTRICITY LEGISLATION IN INDIA (supply) Act, 1948 was exclusively meant to comprise
and regulate the activities of these utilities [6]. The
The electricity legislation that has evolved in India over
straight structure of power utilities came into question
the years, in many ways, reflects the worldwide trends.
worldwide on grounds of efficiency during the 1990s.
By 1948, there were considerable advances in power
India too was affected by this international concern for
generation technology, giving rise to economies of scale
efficiency, which gave rise to electricity reforms.
in power generation. This together with the advances in
Indian power sector has also experienced a speedy
transmission technology, made it possible to transmit
change where India’s installed capacity was 1.362 MW
power at high voltages over long distances.
in 1947 but rose to 127.673 MW as on October, 2006
The result was the concern of typical state owned,
[1]. Reforms and privatization is important to look upon
centralized power generation, transmission and
the required amount of power, where government is
distribution utilities in the form of State Electricity
unable to provide the same.
Boards (SEBs) in the country. In fact, the Electricity
R. Rameshwar, R. Agrawal and M.K. Pathak / International Energy Journal 11 (2010) 101-110 105
As today, Indian energy strategy is coal based with Electricity Boards and the Power Grid Corporation
major 65% power comes from coal-fired plants and rest Limited.
from other energy sources. Power sector reforms are For optimum utilization of generating resources the
commonly acceptable on the basis that a state authority company has planned to create a strong national grid in
leads to poor productivity, services and financial returns. a phased manner to bringing out the security and the
As a part of restructuring exercise, Power Grid reliability in power system operation [4].
Corporation of India Limited (PGCIL) was set up to
9.1 Identifying the Main Problem in SEBs
look after T and D.
It was strong willed that distribution would be Independent power producers (IPPs) are demanding that
privatized in phase manner. Even most of the states in they have been allowed to sell power to third parties
India adopted and initiated this scheme of privatization straight as a substitute of selling to SEBs. The most
for better results to reduce theft, corruption and improve critical issue is finance under the PPA between IPPs and
the revenue collection strategy, efficiency and reliability SEBs. One basic requisite for identifying effective
of the distribution system. solution is the correct identification of the problem
itself. The weak finances of the SEBs are generally and
8. REFORMS IN POWER SECTOR incorrectly diagnosed as the basic problem of the sector.
The central problem of the sector is its politicization,
Through the sign of liberalization in the 1992,
which prevents the restoration of SEB finances and
governments across the world began to reassess the
blocks many other desirable developments. The policy
structure of the electricity industry. Various
making process would benefit greatly in effectiveness if
governments also viewed privatization and competitive
the central problem of the sector is recognized.
markets opportunity for reducing participation in their
Following identification principles are important as:
own power sector.
• Avoiding of any measures that contribute to further
Exceptionally steeped in the amount outstanding as
entrenching of the politicizing process
they were, many were no longer in a position to finance
future expansion of their power projects. They, as a • Priority to measures that would insulate the sector
result, used this as a means to shift at least part of their from the adverse effects of politicization
responsibilities to private participants. These principles continue to be overlooked, which
The main purpose behind this was to get private is cause for concern. Much damage has resulted from
parties to invest in generation, while leaving the the adoption of the MOU approach to project selection,
complex matter of network operations and long-term without either stipulation of a screening and pre-
planning with the central organization. Indian qualification mechanism or transparent regulatory and
government has to a pro-active role in unleashing and approval procedures in position.
accelerating the process of reform in the power sector in Table 5 is indicating the grid performance analysis
the country. using power supply position through different factors
According to the Tables 3 and 4, Central and States like energy requirement, availability and shortage
power reforms are expressed to be acquainted with the comparing with peak demand and peak met in different
different scenarios of reforms at a glance. With the regions of India, which shows the situation of its trading
beginning of economies liberalization in 1990s, and security of national grid.
solutions were sought to the crisis in power sector. THE CASE OF ORISSA STATE
Major role was played by international financial
institution to reform plans in the growing power State Overview
industry. Reform plans intended to introduce private The Orissa State Electricity Board (OSEB) is a statutory
players into the sector beginning with generation. body working with different corporations in the state
SEBs was unbundled and plans were made to named as Grid Corporation of Orissa Limited
privatize distribution. Additionally, independent (GRIDCO), Orissa Hydro Power Corporation Limited
regulatory commissions were also set up during the (OHPC), Orissa Power Generation Corporation Limited
period and achieved major milestones are indicated (OPGC), Central Electricity Supply Corporation Limited
below. (CESCO), Northern Electricity Supply Corporation
Limited (NESCO), Southern Electricity Supply
9. GRID MANAGEMENT AND TRADING Corporation Limited (SOUTHCO), Western Electricity
In order to expand the scope of power trade in the Supply Corporation Limited (WESCO) with an
coming years, it would be necessary to plan a suitable independent regulatory administration i.e. Orissa
tariff structure for the inter-system energy exchanges Electricity Regulatory Commission (OERC) established
which would be attractive to all and that would enable in April 1996 to promote responsibility in the power
best possible operation of the regional systems. The sector and invite the private sector investment in the
obligatory managerial structure at the regional and state.
national level has already been created to encourage
efficient integrated operation in the form of Regional
106 R. Rameshwar, R. Agrawal and M.K. Pathak / International Energy Journal 11 (2010) 101-110

Table 3. Indian power reforms- major milestones.

Year Milestone
1991 IPP (Independent Power Producer) process
1996 Orissa Reform Act
1998 Central Electricity Regulatory Commission Act
1999 RCs in many states, distribution privatization in Orissa
2003 Electricity Act
2004 Electricity (Amendment) Act
2007 Electricity (Amendment) Act
[Source: Indian Power Sector Reforms Update, Issue VIII-May 2004 Prayas, Pune and MoP, 2009]

Table 4. Power sector reforms in states.

State Status of Reforms State Status of Reforms
Andhra • SERC constituted and is Kerala • MoU signed with the GoI
Pradesh functional • SERC constituted
• Tariff orders issued
• Reform Law enacted
• SEB unbundled
• MoU signed with GoI
Arunachal • SERC notified (yet to be Madhya • SERC constituted
Pradesh constituted) Pradesh • Tariff orders issued
• Reform Law passed by the
Assembly and notified
• MoU signed with the GoI
Assam • Single-member SERC Maharashtra • SERC constituted and is
constituted functional
• Tariff order issued • Tariff orders issued
• MoU signed with GoI • MoU signed with the GoI
Bihar • MoU signed with GoI Orissa • SERC constituted and is
• Tariff revised by the SEB functional
• SERC notified (yet to be • Tariff orders issued
constituted) • Reform Law enacted
• SEB unbundled
• Distribution privatized
• MoU signed with GoI
Chhattisgarh • SERC constituted Punjab • SERC constituted and is
• MoU signed with Madhya functional
Pradesh adopted • Tariff orders issued
Delhi • SERC constituted and is Rajasthan • SERC constituted and is
functional functional
• Tariff orders issued • Tariff orders issued
• Reform Law enacted • Reform Law enacted
• Distribution privatized • SEB unbundled
• MoU signed with GoI
Goa • MoU signed with the GoI Tamil Nadu • SERC constituted
• Single member commission • MoU signed with the GoI
constituted • Tariff orders issued
Gujarat • SERC constituted and is Uttar Pradesh • SERC constituted and is
functional functional
• Tariff orders issued • Tariff orders issued
• The Gujarat Electricity • Reform Law enacted
Industry (Reorganization and • SEB unbundled
Regulation)Act 2003, notified • MoU signed with the GoI
• MoU signed with the GoI
Haryana • SERC constituted and is Uttaranchal • MoU signed with the GoI
functional • SERC constituted and is
R. Rameshwar, R. Agrawal and M.K. Pathak / International Energy Journal 11 (2010) 101-110 107
• Tariff orders issued functional
• Reform Law enacted • SEB unbundled
• SEB unbundled
• MoU signed with the GoI
Himachal • Single-member commission West Bengal • SERC constituted
Pradesh constituted • Tariff orders issued
• Tariff orders issued • MoU signed with the GoI
• MoU signed with the GoI • SEB unbundling initiated
Jammu and • The state government has Nagaland, • Have shown willingness to
Kashmir appointed the Administrative Meghalaya, constitute Joint Electricity
Staff College of India as Mizoram, Regulatory Commission
consultant for conducting Tripura,
reform studies Manipur and
Sikkim
Jharkhand • SERC constituted
• MoU signed with the GoI
Karnataka • SERC constituted and is
functional
• Tariff orders issued
• Reform Law enacted
• SEB unbundled
• MoU signed with he GoI

Table 5. Grid performance analysis (provisional) power supply position during the year 2008 and 2007.
Energy
April –September, 2008 April-September, 2007 Annual Growth
Energy Energy Energy Energy Energy Energy
Energy Shortage Energy Shortage
Requirement Availability Requirement Availability Requirement Availability
(MU) (MU) (MU) % (MU) (MU) (MU) % % %
Northern 112256 101877 -10379 -9.2 112841 104925 -7916 -7.0 0.5 -2.9
Western 121322 102405 -18917 -15.6 111480 97924 -13556 -12.2 8.8 4.6
Southern 101753 94580 -7173 -7.0 91228 89236 -1992 -2.2 11.5 6.0
Eastern 41664 39489 -2175 -5.2 37868 36645 -1223 -3.2 10.0 7.8
North
4940 4198 -742 -15.0 4421 3911 -510 -11.5 11.7 7.3
Eastern
All India 381935 342549 -39386 -10.3 357838 332641 -25197 -7.0 6.7 3.0
Peak
April –September, 2008 April-September, 2007 Annual Growth
Peak Peak Peak
Peak Met Peak Shortage Peak Met Peak Shortage Peak Met
Demand Demand Demand
(MW) (MW) (MW) % (MW) (MW) (MW) % % %
Northern 34036 29504 -4532 -13.3 32462 29495 -2967 -9.1 4.8 0.0
Western 37171 27634 -9537 -25.7 36371 26732 -9639 -26.5 2.2 3.4
Southern 27576 25035 -2541 -9.2 25682 24194 -1488 -5.8 7.4 3.5
Eastern 12210 11435 -775 -6.3 11284 10562 -722 -6.4 8.2 8.3
North
1744 1343 -401 -23.0 1589 1347 -242 -15.2 9.8 0.3
Eastern
All India 109962 93046 -16916 -15.4 102428 90022 -12406 -12.1 7.4 3.4
Source: CEA-Vidyut Bharati, October, 2008

Orissa is the first state to have undertaken reform thermal 44.50% and captive generating plants (CGPs)
and restructuring in power sector to build efficient 2.7%.
power supply structure and to meet the investment needs The 17th Electric Power Survey (EPS) has
of the sector. The Orissa Electricity Regulatory (OER) projected peak demand of 4,459 MW at the end of XI
Commission established by the Government of Orissa Plan (2012) and installed capacity requirement of about
under OER Act, 1995 is deemed to be a state 6,778 MW. Energy requirement is projected to grow
Commission u/s 82(1) of the Electricity Act, 2003. from 18,076 MU in 2007-08 to 27,149 MU in 2011-12
The demand for power has been growing [7].
increasingly and to meet the higher demand, necessary
Regulatory Involvement and its Impact
planning for capacity addition is required.
The installed capacity as of 30.06.2007 in the state OERC gave its order on intra-state open access in June
is 3,822 MW out of which hydro constitutes 52.80 %, 2005. Long term (>25 years contract) and short term
(others) customers are specified and the phasing plan is
108 R. Rameshwar, R. Agrawal and M.K. Pathak / International Energy Journal 11 (2010) 101-110
given. Compared to Andhra Pradesh, Orissa has chosen Regulatory Involvement and its Impact
to introduce open access rather slowly, with customers
According to the recent decision made by the
having > 5 MW connected load getting the facility by
government, PSEB is heading towards bankruptcy to
April 2008 and those with > 1 MW by January 2009’
adjust the cash subsidy due to board against earlier
[8].
loans. PSEB was facing a deficit of $ 171.5 million in
Government is also trying to establish Regulatory
the financial year of 2008 but the decision of the state
Information Management System (RIMS) for entering,
government not to give cash subsidy of $300 million to
monitoring, analyzing and exchange of utility data
adjust the earlier loans.
applicable to finance, operation, technical and planning.
In 2000-01, there was a shortfall in power of
Utilities can also seek data on such matters and
12.05% at peak demand and 10.3% in terms of gap
communicate with regulator easily and effectively. between demand and supply. But in the last decade the
Additionally, establishing unique Integrated Tariff average rate of growth on demand of electricity had
Module (ITM) and interfacing the same with RIMS. been 6%. Around $0.06 was the average cost of power
Private Sector Generation supply per unit in Punjab recorded in the year 2001-02,
which was among the lowest rate in India [3], [9]. PSEB
It is mentioned that Calcutta Electric Supply was not rewarded for this reduction in cost of supply by
Corporation (CESC), Kolkata discussed with the the government. Thus, the fiscal position of the board is
Government of Orissa for setting up 2,000-MW power unstable with sickness.
plant (coal-based) around Talcher at a cost of $171.5
Private Sector Generation
billion.
However private player viz. Jindal Steel and Power PSEB recently launched an important initiative for
(JSPL) has revised its contract with the State Rajpura power plant with the contracted generating
Government to increase the capacity of the proposed capacity of 1,200 MW ± 10% (1,080-1,320 MW) coal
plant and also took the new steps to set up a 900 MW based thermal power plant at Nalash village, near
captive power plant [8]. Rajpura, District Patiala, Punjab.
As per the Ministry of Power (MoP), Government
Private Sector Distribution
of India’s guidelines, the project will be given to a
Reliance Energy took over the management of the three developer on the basis of tariff based competitive
district distribution companies; BSES in 2001 had issued bidding. Accordingly, Nabha Power Limited (NPL)
bonds worth $85.8 million at a 12.5 % interest in favour invites the proposals for the same.
of GRIDCO to cover its arrear dues. New thermal power plant at Gidderbaha (2400
GRIDCO, while securitizing its past dues of $236.4 MW ± 10%) has been proposed in the state near Village
million to NTPC, had pledged the BSES bonds to Ghagga, Tehsil Gidderbaha, District Muktsar on
NTPC. The other companies such as Tata Power, AEC- Bathinda-Abohar National Highway and the information
Ahmadabad, NTPC, and CESC have also shown interest for bidders have been provided. The selection of the
in private distribution network [8]. project developer will on the basis of tariff based
competitive process as per the government guidelines.
THE CASE OF PUNJAB STATE
Private Sector Distribution
State Overview
With recent updates, private participation in distribution
The Punjab State Electricity Board (PSEB) is a
under the PPP approach is the best decision because
constitutional body formed on 1st Feb.1959 under the
private managements may lead in professional
Electricity Supply Act. 1948. The board’s net generation
efficiency and bring the required investments.
during the year 2006-07 was 36,412.055 MU. This
The Punjab Government has ambitious plans to
board is serving T and D network to more than 19,172
build a wide distribution network for power in
km2 consumers comprising of 15,843 km2 general, 336
association with private players. It is assumed that PSEB
km2 industrial and 2,791 km2 agricultural connections
is in the process of developing a comprehensive plan for
approximately [8], [9]. Punjab has given approval for
T and D.
20.78 % of its budget to be spent on the energy sector in
2007-08. THE CASE OF UTTAR PRADESH STATE
The state put emphasis on reducing the T and D
State Overview
losses and take full advantage of the utilization of
existing capacities, adopting non-conventional sources On January 14th, 2000, UP Power Corporation, UP State
for power generation and the increase of captive power Power Generation and UP Hydel Power Corporation had
plants. Total installed capacity in Punjab in 1990-91 was been formed by re-organising UP State Electricity Board
3,049 MW, which increased to 4,626 MW in 2006-07. (UPSEB). At the time of inception the total installed
Per capita consumption of electricity in the state is capacity of UPSEB, including thermal and hydro, was
940kWh, nearly 2.5 times the all India number of 2,635 MW which has now been raised to 4,621 MW.
390.3kWh. However, MoP has further pointed out that the amount
of $137.3 million that has already been released to UP
under 'Accelerated Electrification of 308 km2 area
villages and 30,769 km2 of houses, now merged with
R. Rameshwar, R. Agrawal and M.K. Pathak / International Energy Journal 11 (2010) 101-110 109
Rajiv Gandhi Grameen Vidyutikaran Yojana, needs to SERC and should also not involve itself in the day-to-
be utilized in the first instance before any further day operations of the SERC.
allocations could be made [8]. These regulatory institutions should have sufficient
Since 2005, a total of $1,072 million has been funds, manpower, technology and authority to regulate
sanctioned for rural electrification during the 10th plan the public-private mix experiment in the power sector.
and $2,358 million could be availed in the 11th plan
based on the performance of UPSEB.
ACKNOWLEDGEMENT
Regulatory Involvement and its Impact
The authors acknowledge and extend thanks to the
The UP Power Corporation is of the view that the Ministry of Power (MoP), Central Electricity Authority
average cost of supply of power is $0.09 per unit while (CEA), National Power Training Institute (NPTI), etc.
the average selling cost is only $0.06 per unit. After the for their continuous help in all aspect for providing
five years of the reforms in the power sector, the power data, was particularly helpful in the development
financial position of the UPPCL remains precarious. of the work. Special gratitude is also expressed to
According to the financial year 2004-05, cash losses of anonymous referees for their efforts, valuable comments
the UPPCL were $592 million, which too after it and suggestions.
received a subsidy of $215 million from the state
government [8].
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