The need for Electricity Reforms

      The electricity reforms in this country was long overdue especially because of the total politicisation of the electricity sector ever since electricity tariff and the subsidies were sought to be fixed on extraneous considerations rather than based on techno-commercial vialibility of such actions. Added to this was the lack of incentive for maintaining a higher level of operational efficiency in the running of Electricity Boards owned by the State. As in many other fields of economic activity, corruption was also eating into the revenue that the system was capable of generating even with the distorted tariff. Thus it is not surprising that the Transmission and Distribution losses amounted to anything between 35-50 % in different States of the country. The national capital Delhi itself having more than 50% system loss. Though the technical losses are more than the norm due to improper maintenance and non replacement of ageing equipments the non-technical losses resulting from pilferage is the major factor responsible for such high T & D losses.

      In such a scenario when a Electricity Regularity Commission is set up to fix the tariff and to bring in systemic changes, so that consumers get proper service while the electricity supply and distribution companies get their due share of revenue, its task get quite complicated. The Commission is entrusted with the onerous job of balancing the interest of all the stakeholders including  consumers and also to maintain continuity as abrupt changes are resented strongly. Add to this the work force which are retained from the State Electricity Board, as a prerequisite for doing business, whose work culture would take enormous efforts to change under the existing labour laws, law and order machinery and the courts of law.

      Government of Orissa is the pioneer in introducing reforms in the electricity sector. Orissa Electricity Reform Act was passed in 1995 and the Regulatory Commission (OERC) was set up in 1996. With no precedence to fall back, the Commission in right earnest undertook the assignment and made several procedures and rules governing the Commission, licensees and the consumers. Such documents are being sought by all other States, which are in the initial stages of the reform process.

      Balancing conflicting interests and under compulsion to maintain continuity, the Commission ordered a tariff hike of 10 % in 1997 and 9 % in 1998. It has to be noted that even as on date, with a mere 40-45 % load being contributed by the industries, the domestic electricity tariff is one of the lowest in the country, even though the Regulatory process resulted in jacking up of the tariff by more than 20 % in the last 3 years. During 1999, licensees, which are fully privatised companies had demanded a tariff hike of between 40-45 %. As per norms the entire process was made transparent and the licensees were asked to supply all the details to all those interested, on payment of nominal charges towards cost of stationery. The Commission also fixed dates and heard all objections to the proposals. But many preferred to raise issues which were of no consequence, rather than raising techno-commercial issues which would have been better appreciated by all concerned. Someone even suggested that a hike of more than 20 % would not be reasonable. Contrary to all the fears expressed, the tariff hike allowed recently is the lowest at 4 %.

      The reforms have the potential to bring in benefits in all fields of economic activity, in the long run. Reforms usher in competition, which we have never witnessed in the past, without sacrificing consumer's interests. Is that not what we all want? Everyone including the consumer activist need to gear up themselves for this changed scenario. Meeting the demands of the changed scenario would help themselves and the constituents for whom they are struggling. 

     Some of the important documents issued by the Orissa Electricity Regulatory Commission, Bhubaneswar, are available here.  Please choose the one you want to read:

1. Consumer Rights Statement
2. Grievance Handling Procedure

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