Power distribution reforms in Delhi

Abstract

State Electricity Boards in India have not been run on commercial principles and this has created serious socio-economic problems. Under the circumstances power distribution reforms have become inevitable for the nation. Faced with similar circumstances and the growing public discontent with the performance of state-owned Delhi Vidyut Board, the Delhi Government decided to privatise the distribution business in July 2002. Since then the performance has unambiguously improved as reflected from lower losses, better quality of supply (QoS) and reduced financial burden on the government. However, therefrom strategy has not been without flaws. Hence, Delhi model has number of useful lessons for the other reforming utilities to emulate. Chapter 2 presents the research questions and the methodology used to find answers to them. Extensive reliance has been made on in-depth interviews with people involved in the reform process at various levels and this has helped in adding a practical touch to the analysis. The Chapter 3 comes up with extensive literature review on what studies has been done in this field as yet. However, no study seems to have gone into the details of the reform process as it has unfolded in Delhi. Chapter 4 highlights the managerial and technical measures used by the distribution companies to reduce the losses and improve QoS. The research tries to examine whether there is any freshness in their strategy and whether the measures could have been properly sequenced. The innovate concept of measuring losses as aggregate technical and commercial losses has been discussed in Chapter 5, along with their advantages and limitations. Chapter 6 moves on to examine the role of Delhi Electricity Regulatory Commission in the reform process. The chapter also examines if the regulator could have been more proactive? Taking cue from the Latin American experience with power reforms, Delhi had adopted partial multi- year tariff (MYT). The chapter has tried to examine the usefulness of MYT in the political economy of India and also in light of the controversy created by recent demand to amend the Electricity Act 2003 to make the regulator subservient to the government directions. Finally, Chapter 7 has used the Ahmed Galal Framework to examine how successful the Delhi privatisation experiment has been.