power reforms

7/30/2019 power reforms

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POWER SECTOR RESTRUCTURING ABHAY KESHARWANISCH NO.: 072113102


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Introduction

The Indian power sector is undergoing major transformations, the most important of thesechanges are the planned reforms of SEBs. Thisfundamental structural change will have long termimplications, hence is of enormous importance.

Orissa, being the first state which started thisprocess .


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What is Reforms ?

Today, the word Reforms has come tomean effectively three things;Un-bundling,

Privatisation,Creation of an autonomous regulatory body.


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Objectives of Reform policies. Attracting much needed (private) capital, Tariff rationalisation, Improved efficiency of the sector (especially theft

reduction), Improved financial viability of the sector (combined

effect of 2,3) Reduced government interference, and Decreased dependence on government budgets.


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Objectives of Reform policies

Some also expect this to achieve: Competition, Improved services to customer,

Rationalisation policies, etc


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The WB-Orissa model

The Orissa model of power sector restructuring is amajor effort by the state government, in closeassociation with the World Bank, to address the illsbesetting the Indian Power Sector.


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Major components of WB-Orissamodel

Erecting a barrierbetween the

government andthe power sector

Un-bundling

Privatisation


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The Regulatory Aspect

In the Orissa model and other similar models, thestructure of the power sector is broadly decided firstand the regulator is appointed later.

But usually the details of the structure andagreements are decided by the regulator.

Even after deciding the structure, the RC has acontinuous role of custodian of public interest "toplay.


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As per section 11 of the Orissa Electricity Reforms Act(OER Act, 1995) these include:

To issue licences and stipulate licence conditions for all power utilities,

To regulate the working of the licensees and topromote their working in an efficient, economical,and equitable manner;

To promote efficiency, economy, and safety;


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To regulate the purchase, distribution, supply, andutilization of electricity, the quality of service, thetariff and charges payable keeping in view of theinterests of the consumer

To promote competitiveness and progressivelyinvolve the participation of the private sector, whileensuring a fare deal for the consumers.


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The committee would suggest twonames for each vacancy and the stategovernment will have to appoint anyone person suggested by theCommittee on the RC. Afterappointments, the members can not beremoved for five years.

The remuneration and allowances ofthe Chairman and the members of RCcan not be inferior to that of the

Chairman and the members of theOrissa Public Service Commissionrespectively.

RC member can not be removed until asitting high court judge (nominated bythe Chief Justice) conducts aninvestigation and submits his repo

Regulatory CommissionMembers

Chairman of the CEA

Chairman,PublicService

Commission,Orissa,

Secretary of Power,Orissa,


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Advantages of This Process Such a decision-making process, when followed

rigorously, can certainly have many advantages. It istransparent as it allows the public access to allrecords of the case including the calculationsprovided by the utility.

The process allows public intervention in the formof filing of objections and questioning the utility or the RC. The public has a right to seek answers totheir questions.


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