Power Sector Reforms in India: A Case Study

Abstract

The country's development is measured in terms of per capita consumption of electricity which in turn depends on electricity generated. In India per capita energy consumption is quite low and for the year 2007 it was only a meager 665 KWH per annum in comparison to about 12000 KWh for USA and 34000 in Norway, which indicates fairly low level of industrialization in the country. The peak power shortage of 16.6% and average energy shortage of 9.8 % has been plaguing Indian power sector for 2007-08. As a result, regulators, worldwide are now implementing new regulatory schemes and organizational reforms in an effort to improve the incentives for efficient operation of electricity utilities. All these reforms are consistent with the view that competition should be introduced into the electricity supply industry, wherever, it is technologically feasible and India is not exception to these reforms. In this paper, a case study of Himachal Pradesh, which is a hilly state with difficult terrains in the Northern Part of India has been carried out. This state has distinction of achieving 100% electrification way back in 1989 and rapid load growth. With enactment of Electricity Act 2003, there has been tremendous improvement in power sector of this state. There is significant improvement in the areas of transmission and distribution, tariff rationalization and in availability of power supply.