orissa - power reforms

Presented by- SUMAN. NANJAPPA

POWER SECTOR&

ADMINISTRATION

ORISSAREFORMS

POWER REFORMS

Orissa was the first State in the country to reform the Power sector.

The Orissa Electricity Reforms Act 1995 came into force with effect from 1st April'1996. An independent transparent , Orissa Electricity Regulatory.

The restructuring exercise has its origins in a $350-million World Bank power sector loan negotiated by the Government of Orissa and counter-guaranteed by the Government of India. The loan came with stringent conditions. These included splitting up of the Orissa State Electricity Board (OSEB) into units handling generation, transmission and distribution. Each of them was to undergo a process of corporatisation, commercialisation and eventual privatisation.

OERC was established in April'1996 in order to look after the regulation measures and also to promote accountability in the sector and to encourage private sector investment.

Thermal power plants were transferred to Odisha Power Generation Corporation (OPGC). 

Orissa Hydro Power Corporation (OHPC) owned and operated all hydro power generation stations in the State from 1st April'1996.

The Grid Corporation of Orissa Limited (GRIDCO) was entrusted with the responsibility of Transmission and Distribution Systems.

April'1999, the distribution business of GRIDCO was privatised.

GRIDCO was privatised when GRIDCO disinvested 51% of its share, to Private Investors with financial and technical capabilities. 

By virtue of Power Sector reform in Orissa, NESCO,WESCO & SOUTHCO became a subsidiary of BSES Limited, Mumbai on 1st April 1999 by acquisition of 51% of the shareholding of the Company by BSES Limited.

NESCO, WESCO,SOUTHCO and CESCO was incorporated on 19.11.1997 under the Companies Act, 1956. It has taken over the Business of “Distribution and Retail Supply of Electricity” in the North Eastern Zone, Western , Southern & Central Zone of Orissa , GRIDCO.

CESU - Central Electricity Supply Utility of Orissathe Electricity Act,2003 has formulated a

Scheme named “ Central Electricity Supply Utility of Odisha ( Operation and Management ) Scheme , 2006 for operation and management of the Utility. The said Scheme shall remain in force for a period of 2 years which may be extended by the Commission in public interest. Under the provisions of said Scheme, all

assets, liabilities, rights, proceedings and manpower as well as the license for distribution and supply of electricity held by CESCO.

The scheme was amended and extended upto 07.09.2016. Under the said Scheme, the CESU has to comply with the provisions of the Electricity Act, 2003 and other relevant statutory provisions and license conditions with regard to distribution of electricity in its area of supply.

OUTCOME

Odisha was the first state to privatise power sector in the country, by segregating power generation, trading and distribution business way back in 1996. Out of four power distribution companies (discoms), three were managed by Reliance Infra while the fourth one, Central Electricity Supply Utility (CESU) is currently run by Odisha Electricity Regulatory Commission (OERC).

The three discoms - managed by R Infra.

Licenses were revoked for an unsatisfactory performance. MD, CEOs of the discoms removed.

The State-owned Grid Corporation of Orisssa(Gridco), which would now manage the three discoms is under deep financial crisis. The four power distribution companies owe Rs 4,461.92 crore to Gridco for bulk power supply with CESU alone accounting for a due of Rs 1,856.80 crore. The three discoms run by Reliance Infrastructure have outstanding dues worth Rs2600 crore.