Gujarat power reform begins with new electricity bill

Vol 5, PW 3 (28 Mar 01) Midstream & Downstream

Privatisation of the power sector in Gujarat has begun, with the introduction of a bill in the local assembly on Friday 23rd March to split the Gujarat Electricity Board into separate generation, distribution and transmission companies.

The 'Gujarat Electricity Industry (reorganisation and regulation) Bill, 2001' was a key pre-condition laid down by the Asian Development Bank ahead of a $350m loan to restructure the state's power sector. Kaushik Patel, state energy minister, told the assembly that the bill aims to "privatise" the Gujarat Electricity Board.

"The functions along with the related property of the Gujarat Electricity Board will be transferred to the three new companies." Assembly discussion and debate of the bill began on Monday 26th March. Key to the new legislation are measures to replace restrictions under the 'Electricity (Supply) Act, 1948', by making it easier to set up an independent generating company.

Patel said this was necessary to increase electricity-generating capacity in the state. A revamped Gujarat Electricity Regulatory Commission will also have the following powers: Regulation of purchase, transmission, distribution, supply and utilisation of electricity Fixing tariff for electricity, wholesale, bulk, grid or retail Regulating licensee activity to ensure efficient, economic, and equitable operations Setting up and enforcing safety, quality, continuity and reliability standards Promoting competition in the electricity industry in the state Adjudication of disputes and differences