Southern States - Tamil Nadu

TNEB asked to evaluate Electricity Act

By T. Ramakrishnan

CHENNAI JUNE 8. The State Government has asked the Tamil Nadu Electricity Board to carry out an evaluation study of its position in the light of the Electricity Act 2003 coming into force soon.

"We have told it to assess the likely scenario that will be emerging out of implementing the Act. It will study how to counter competition and the business potential," says a government official, calling the exercise "strategy thinking".

The Act, replacing the earlier three legislation, including the 1998 Electricity Regulatory Commission Act, received the Presidential assent last week. The Centre is expected to notify it in the Gazette to give effect to the Act.

The legislation deregulates power generation except hydropower production and provides open access in transmission. Power producers can take up distribution, doing away with the hitherto followed rule of selling electricity only to State Electricity Boards. "Even some producers can come together and form a distribution company," suggests the official. Similarly, distribution companies are free to generate power.

Though the entry of private operators in distribution may take time, the Government is keen that the Board should regroup itself well in advance so that it remains a key player in the power sector.

As the Act itself provides for continuance of the SEBs in their present form, the thinking on the part of policymakers is not to disturb drastically the character of the Board but to improve its functioning and make it "customer-friendly".

One important implication for the State is that the new law is against cross subsidy. It states that if any section is to be given concession, it has to be provided for in the manner prescribed by the State Electricity Regulatory Commissions which, normally, is in budgets.

In Tamil Nadu, there are nearly 17 lakh agricultural and 14 lakh hut connections. If the Government wants them to receive the subsidised supply, it has to foot the bill for the subsidy component. When the TNERC announced the fixation of tariff for these sections in March, the Government came up with a cash support scheme. It remains to be seen what arrangement the Government will work out.

Meanwhile, the TNERC is organising presentations on the salient provisions of the Act for the electricity board staff. One reason for the exercise is that the new law has conferred more powers on the SERCs. Henceforth, the regulatory panels will be empowered to resolve disputes that may arise between private players and the SEBs. For any new power purchase arrangement, the consent of the regulatory panels has to be obtained. "So, the presentations are one way of educating ourselves," an engineer says.

Last week, senior Board officials had a meeting with the TNERC to brief the commission on the steps being taken by the TNEB to implement the latter's directives.

Voluntary deposit scheme

The Board began implementing a voluntary deposit scheme, wherein consumers can deposit average consumption charges for as many months as they want. As for the Electronic Clearing System, the Board is going to seek the willingness of the consumers soon. Initially, it may be tried out in Chennai. Depending upon the response, the scheme will be extended to other centres. However, one information that the Board has received from the Chennai Telephones is not encouraging, sources in the Board say. Against 10 lakh telephone consumers in the city, only 55,000 have opted for the ECS.

This apart, the power managers are working on various measures to improve the Board's interface with the consumers and they say the consumers will see the impact of such measures in two or three months.

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