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Rajasthan is one of the pioneer states initiating
power restructuring process at the states level.
The Rajasthan Power Reforms Act 1999 provided for
vertical and horizontal unbundling of Rajasthan
State Electricity Board (RSEB).
The
main objective of restructuring was to create a
competitive market for electricity that may
benefit the consumers by improved quality of
service at affordable rates. Rajasthan Electricity
Regulatory Commission (RERC) was established as a
sole authority to regulate the power sector
including tariff payable at consumer’ ends. The
independent regulation was considered helpful in
creating competition and attracting the required
investment in the sector.
As a
result of certain initiatives on behalf of state
government, regulator, utilities and civil society
organisations (CSOs), there have been substantial
improvements in the performance of power utilities
in Rajasthan. ‘The Feeder Renovation Programme’ is
one of the initiatives identified as best at the
national as well as international levels. However,
the state will have to address certain challenges.
Rajasthan is one of the states having lowest per
capita consumption of power.
As
proposed in the eleventh plan documents, the
private sector may play crucial role in bridging
the investment gap in infrastructure including
power sector. Therefore, the govt should provide a
better signal to the potential investors to
encourage the private investment. Electricity Act
2003 also recognises this fact.
In the
press reports, it is stated that the State
Government has prevented the tariff hike of 10
Paise per unit for agriculture sector. The 10
Paise increase in tariff for each consumer
categories was approved by Commission under fuel
surcharge adjustment. As per section 62 (4) of
Electricity Act 2003, the companies are entitled
to claim additional revenue according to formula
specified by the regulatory commission, RERC.
Further, Section 61 requires commission to approve
the tariff eliminating the corss-subsidy in tariff
structure. All consumers are required to pay on
the basis of cost of supplying power.
Since
electricity sector is the backbone of economy
including agriculture sector. The state govt my
provide subsidy for allocative efficiency purpose.
However, Section 65 requires the state government
to compensate the distribution companies on
account of power subsidy. In the news item, the
compensation to be given to distribution companies
was not reported. It is suggested that the govt
should pay the compensatory amount equal to relief
given to farm sector in a transparent and manner.
It will help the companies in improving their
financial health.
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