Odisha is the first state in the nation to introduce power sector reforms. People started talking about reforms only after the Central Electricity Act came in 2003. But Odhisa came up with an Act in 1995 – this is the Odisha Electricity Reforms Act. This is the first state to have an electricity regulation commission in 1995-96 and it is the first sector to privatise the electricity distribution sector.
The distribution sector is the most vital and weakest link in the entire value chain of the power sector. If the distribution sector doesn’t become financially viable, the transmission and generation will be seriously affected. It is, therefore, necessary that all out efforts should be made to strengthen and to ensure the financial viability of the distribution sector. Good governance is one of the important pillars of the reforms of power sector.
In the State of Odisha, the entire distribution business is managed by the private sector. So we can say that Odisha is the only state after Delhi where distribution sector is fully privatised. In other states, some only cities are privatised. We can think of major metros like Mumbai, Kolkata and Agra. Now some other cities like Baroda in Gujarat are taking the privatisation route. But the wholesale privatisation of entire electricity distribution business has only taken place in Odisha and Delhi.
However, despite the reforms, the distribution of power in the state is not functioning as well as we would have expected. In terms of supply of power, Odhisa is still one of the best places in the country when rated in terms of annual average units of power supplied per day. The power-cuts in most areas of the State is less than the national average. But in spite of all these things, the distribution sector has not performed well. The aggregate technical and commercial loss is very high. It is in the range of 42 percent, which is not acceptable.
Why are the losses so high? It is because of lack of investment in this sector and lack of adoption of technology. The distribution companies are not investing in new technology because there seems lack of means to recover the cost. It is a vicious cycle. Lakhs of new consumers have been created in the last two years under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY). But many of these electricity consumers do not have proper electricity metering systems. This leads to lot of losses. We are
thinking of installing RFID based metres that do not need physical presence to be read.
In Orissa all the districts have been included under RGGVY, A quadripartite agreement has been signed between Central Public Sector Undertakings(NTPC, NHPC and PGCIL), Distribution Companies (CESU, NESCO, WESCO, SOUTHCO), Rural Electrification Corporation(REC) and State Government for implementation of this scheme. The CPSUs are the implementing and executing agencies of the scheme. Out of 30 districts, 4 districts like Angul, Nayagarh, Ganjam and Gajapati were covered under the 10th Plan and remaining 26 districts have been covered under the 11th Plan.
Under the scheme 17895 un-electrified/deelectrified villages, 29222 partially electrified villages, 40706 of un-electrified habitations, 31,85,863 of BPL households will be covered for electrification. Total sanctioned amount of the scheme is Rs.3593.75 crore out of which 90 percent is grant and 10 percent is loan to the State Govt.
Need for more investments
The discoms that are managing the distribution business in the state are unable in to invest the substantial amount of funds that are needed. We are working with them on developing ways of introducing high-tech reading of electricity metres. One area in which the State has to do some work is the area of energy accounting. Energy accounting is very much absent in the State. Energy accounting will provide us figures for how much power is being provided to the discoms through any particular sub-station. Such information will allow us to find out how much energy is being accounted for in any particular line.
The Government of India has restructured the R-APDRP (Restructured Accelerated Power Development & Reforms Programme). The focus of the programme is on actual, demonstrable performance in terms of sustained loss reduction. Establishment of reliable and automated systems for sustained collection of accurate base line data, and the adoption of Information Technology in the areas of energy accounting will be essential before taking up the regular distribution strengthening projects. Odhisa has been eligible for getting about Rs 1,500 crore for systems. The entire money is being spent on technology like smart metering, metering devices, billing system, ERP introductions, etc.
As the lack of maintenance of distribution network on time coupled with poor awareness about the safety aspects very often lead to electrical accidents, with new investments it will become possible to have a system of regular inspection of the distribution network and timely maintenance of the lines and substations. Uninterrupted supply of quality power to important medical institutions such as Government medical colleges and hospitals and District Headquarters Hospitals will also be ensured once there is substantial improvement in the infrastructure.