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Power Sector Reforms : Chronology
  Towards Reforms
    Pre-reform stage


Major Developments
1991 The Electricity Laws (Amendment) Act, 1991--Notification. Amends the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 by
Private Sector allowed to establish generation projects of all   types   (except nuclear)
100% foreign investment & ownership allowed
New pricing structure for sales to SEBs.
5 Year Tax holiday; import duties slashed on power projects
  1992 Intensive wooing of foreign investors in US, Europe & Japan
1992-97 8 projects given "fast-track" status.
sovereign guarantees from Central Government.
Seven reached financial closure
Dabhol (Enron), Bhadravati (Ispat), Jegurupadu (GVK),   Vishakapatnam (Hinduja), Ib Valley (AES), Neyveli (CMS),Mangalore
1995-96 World Bank Reform Model - First Test Case Orissa
 Orissa Electricity Reform Act passed
 Establishment of Orissa Electricity Regulatory Commission
 SEB unbundled into Orissa Power Generating Company (OPGC),    Orissa Hydel Power Corporation (OHPC) and Grid Corporation of    Orissa (GRIDCO)
 Distribution privatized
1996 Chief Ministers Conference: Common Minimum Action Plan for Power:Recommend policy to create CERC and SERCs
 Licencing, planning and other related functions to be delegated to    SERCs.
 Appeals against orders of SERCs to be in respective High Courts
 SERC to determine retail tariffs, including wheeling charges etc.,    which willensure a minimum overall 3% rate of return.
 Cross -subsidization between categories of consumers may be    allowed bySERCs, but no sector to pay less than 50% of the    average cost of supply ( costof generation plus transmission and    distribution). Tariffs for agricultural sectornot to be less than Rs.    0.50 Kwh and to be brought to 50% of the average costin not    more than three years.
 Recommendations of SERCs to be mandatory, but financial    implications anydeviations made by State/UT Government, to be    provide for the explicitly inthe State budget.
 Fuel Adjustment Charges (FCA) to be automatically incorporated in    the tariff .
 Package of incentives and disincentives to encourage and    facilitate the implementation of tariff rationalisation by the States.
 States to allow maximum possible autonomy to the SEBs, which    are to berestructured and corporatised and run on commercial    basis. SEBs toprofessionalize their technical inventory manpower    and project managementpractices.
1997 CEA Clearance exempted for projects under 1000MW but State    govt environment clearance required up to 250-500 MW
 Liquid fuel policy -- naphtha allocations to IPPs
1998 - Mega-Power Policy : special incentives for the construction and   operation of hydro-electric power plants of at least 500 MW and   thermal plants of at least 1,000 MW.
- The Electricity Laws (Amendment) Act, 1998 and Electricity   Regulatory Commissions Ordinance -- Notification.
Creation of Central Transmission Utility
STUs to be set up with government companies
Establishment of CERC and SERCs
Rationalization of electricity tariffs,
Policies regarding subsidies
Promotion of efficient and environmentally benign policies
- Power Grid notified as Central Transmission Utility
- Haryana Electricity Reforms Act:
HSEB unbundled into Haryana Vidyut Prasaran Nigam Ltd., a Trans   Co. (HVPNL) and Haryana Power Corporation Ltd.
Creation of HERC
Two Government owned distribution companies viz. Uttar Haryana   Bijli VitaranNigam Ltd. (UHBVNL) and Dakshin Haryana Bijli Vitaran   Nigam (DHBVNL) have been established.
DFID's technical co-operation grant of 15 million pounds available   for reforms.
1999 - Andhra Pradesh Electricity Reforms Act
APSEB unbundled into Andhra Pradesh Generation Company Ltd.
(APGENCO) and Andhra Pradesh Transmission Company Ltd.   (APTRANSCO for transmission & distribution)
Creation of APERC
Other Developments:
World Bank loan of US $ 210 million under the APL
DFID's 28 million pounds as technical co-operation grant.
CIDA technical assistance of Canadian $ 4 million.
- Karnataka Electricity Reforms Act
KEB and KPCL transformed into new companies: Karnataka Power Transmission Corporation Ltd. (KPTCL) and Visvesvaraya Vidyut Nigama Ltd., a GENCO, (VVNL)
Creation of KERC
Other Developments:
KPTCL has carved out five Regional Business Centres (RBC) for five identifiedzones.

Power Ministers' Conference and Electricity Bill 2000 (draft):
Functional disaggregation of generation, transmission   and distribution with aview to creating independent profit centres   and accountability;
Reorganisation and restructuring of the State Electricity Boards   in accordancewith the model, phasing and sequencing to be   determined by the respective StateGovernments
States to determine the extent, nature and pace of privatisation.
   (public sectorentities may continue if the States find them   sustainable);
Transmission to be separated as an independent function for   creation oftransmission highways that would enable viable public   and private investments;
Amendments to the Indian Electricity Act, 1910 made in 1998 for   facilitatingprivate investment in transmission have been broadly   retained except that theprivate transmission companies would   be regulated by the RegulatoryCommissions and Transmission   Centres inst under the direction, supervision and control of the   Central/State TransmissionUtilities;
Present entitlements of States to cheaper power from existing   generating stationsto remain undisturbed;
Provision of compulsory metering for enhancing accountability and   viability;
Central and State Electricity Regulatory Commissions to continue   broadly onthe lines of the Electricity Regulatory Commissions Act,   1998;
State Regulatory Commissions enjoined to recognise in their   functioning theneed for equitable supply of electricity to rural areas   and to weaker sections;
Stringent provisions to minimise theft and misuse.

Status in other States http://powermin.nic.in/er_opt3.htm

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