1 ISSUES RELATING TO RE-ORGANIZATION OF S.E.B.s Bhanu Bhushan

2 RE-ORGANIZATION OF S.E.B.s The Electricity Act, 2003 envisages vertical unbundling of S.E.B.s : -Generating Companies -A State Transmission Utility (STU) -Distribution companies / licensees

3 No stipulations regarding number of generating companies and distribution licensees. Their ownership issue is left open. They can be sub-divided and privatized. STU to be a Government company, to keep away from trading, and to operate the SLDCs (till decided otherwise by the State Government). RE-ORGANIZATION OF S.E.B.s

4 Necessary to specify which organization is responsible for : i)Load forecasting, and planning for meeting the demand growth ii)Coordinated planning of generation and transmission within the State iii)Owning and operating the SLDCs (in the long run) iv)Coordinating (on behalf of their States) with all outside agencies, e.g. CEA, CPSUs, CERC, RPC, IPPs Logical choice: STU RE-ORGANIZATION OF S.E.B.s

5 The Act casts the coordination responsibility only for transmission on the STU. But STU has to take care of other coordination as well. Coordination between the multiple organizations created in SEB unbundling Coordinating with other intra-State organizations Representing them collectively in CEA, CERC, RPC, CPSUs, IPPs RE-ORGANIZATION OF S.E.B.s

6 Issue raised because of diversity and avoidable multiplicity of respondents in matters before CERC 3 identical responses from Rajasthan 2 responses from M.P. : MPPTC & MPPTC HPGCL, Mahavitaran, SPPCC (Karnataka), UPCL, GRIDCO - Transco, DTL - Discoms We should have one nodal organization representing each State RE-ORGANIZATION OF S.E.B.s

7 The Act envisages multi-buyer model for each State : Discoms to buy power directly from suppliers, ultimately. The Act did not envisage formation of State Power Procurement / Coordination Centres and PTCs, since the intent was to avoid “single-buyer”. “Single-buyer” model should be reconciled to as a transitory step in SEB re-organization. (Example - Delhi) RE-ORGANIZATION OF S.E.B.s

8 M.P. Power Trading Company Rajasthan Power Procurement Centre GRIDCO / GUVNL Karnataka SPPCC / APPCC are single-buyer organizations for their States and are not electricity traders. They could be clubbed with the STU. Gencos, Discoms should not be acting as the “single-buyer” for the State. RE-ORGANIZATION OF S.E.B.s

9 Close and continuous cooperation / interaction required between SLDC and STU SLDCs need organizational backup SCADA/EMS, inter-utility metering Both have to be impartial and judicious, and therefore State Government - owned. World-over, wherever vertical unbundling has taken place, load dispatch is clubbed with transmission. RE-ORGANIZATION OF S.E.B.s