Speech of the Hon’ble Chief Minister, Sri Naveen Patnaik

 Overall growth of the power sector can be ensured only if there is equitable growth of its four segments. These are:-
(i) Generation
(ii) Transmission
(iii) Distribution and
(iv) The End-user

 Growth in each of these sectors should be well integrated with support from the most advanced technologies available.

 Supply of reliable power of specified standards in an efficient manner and at reasonable cost is one of the main objectives of the Orissa Power Sector reform programme. Making the distribution system industry efficient is a key to the success of power sector reforms. Therefore, the Regulatory Commission needs to strike the right balance between the requirement of commercial viability of distribution licensees and consumers’ interest.

In this context, I understand that the overall tariff rise was 17% in 1996-97, 10.33% in 1997-98, 9.30% in 1998-99, 4.5% in 1999-2000 and 10.23% in 2001. Though the rates of tariff for domestic consumers have not increased since 1st February 2001 there is much to be desired for satisfactory services to the consumers. There is a need to ensure uninterrupted quality of power supply and that the licensees must put in their best efforts to ensure such quality supply. They have to be diligent and effective in making their operation efficient. The gains of efficient operation with reference to normative parameters should be appropriately shared between the consumers and the licensees.

 The transmission and distribution losses in the country on the average is 31% whereas in case of Orissa it is as high as 38.6% in 2006-07 against the norm fixed by OERC at 32.8%. Similarly, the Aggregate Technical and Commercial (AT &C) losses on the average in the country is 34.54% but in case of Orissa this is as high as 42.7% in 2006-07 which is much higher than the target fixed by OERC at 37.9%. This is a serious concern for the State, the licensees and the consumers at large.

 Ideally, the technical and commercial losses should be reduced to 15% to make the sector viable. The drastic reduction of losses both, transmission and distribution and AT&C losses is the single most essential measure for turning around the power sector. The various elements involved in the management of distribution losses may be classified under the categories of governance, Commercial and technical issues. For effective control of AT&C losses, the State and State power utility will be required to initiate action on all three fronts. OERC would ensure that the Utility work jointly with the State Government in these directions.

 One area of serious concern is theft of energy in various ways at different levels and on account of various factors. The present levels of theft make further investment in generation and distribution unviable and unattractive. Power theft need to be curbed with determination. I am aware that this is basically a governance issue rather than technical and commercial one. Without this resolve other measures such as special courts and police stations, 100% consumer metering, staff and informer award scheme would also be meaningless. I may assure that the State Govt. would provide the required administrative support to curb theft. Active involvement of employees is also required in theft control measures.

Govt. of Orissa has executed 13 Memoranda of Understanding (MoU) with Independent Power Producers for setting up of thermal power plants in Orissa with an estimated investment of Rs. 68,299 crore and estimated installed capacity of 16190 MW. As per the MoUs, 25% of the power generated (estimated at 4047.50 MW) has been envisaged to be made available to the State. At present 20 industries have established captive generation plants having installed capacity of 2260.188 MW. Besides this, 12 upcoming industries have proposed to install captive generation plants with an estimated capacity of 3650 MW. The setting up of large power plants has huge costs associated with land, water and environmental degradation, as well as rehabilitation and degradation of infrastructure like road and rail. The power industry has very low employment potential, while the State where power is generated does not get any revenue. The State where it is consumed gets an advantage of about Rs. 500 crore per annum, which includes a direct revenue stream of at least Rs. 150 crore per annum for every 1000 MW of power plants set up outside its own borders.

Govt of India should consider some of the following enabling measures:-
(i) Levy of duty on generation of power by the concerned State Government,
(ii) Allocation of 12% of the generated power free to the host state in line with the principle adopted for the hydro power,
(iii) Allocation of an appropriate portion of power generated to the host state at variable cost.
(iv) A suitable contribution by IPPs for ecological generation in the vicinity of the power plants.

 While there is an urgent need to ensure sustainable improvement in the quality of supply, the consumers on their part must realize that if power is stolen by someone in their neighborhood it is they who would suffer in terms of quality and quantity of power. Hence, the State Government, the Power Producing companies, the Distribution Licensees, the consumers must work in tandem to ensure that power sector reform grows from strength to strength in Orissa and the consumers get the real benefit. Let us all work together to realize the dream of Orissa where every house in every village is lit and where reliable, quality and uninterrupted power is made available.