Tamil Nadu power sector reform and restructuring — A case study

Abstract

Electricity is backbone for almost all economic activities in present times and it is a proven fact that access of this precious perishable commodity to people bears direct impact on pace of development of the country. The country's development is measured in terms of per capita consumption of electricity which in turn depends on electricity generated. India has the fifth largest installed power capacity in the world (the first four are–US, Japan, China and Russia–in that order), and is one of the top power consumers. India has an installed power capacity of approximately 150 MW for the year 2009, which is 4% of the global capacity. The per capita power consumption (per year) in India has increased to 720 KWh (or units) from 15.6 kWh as on 31.03.2003, which is less than 5% of the per capita consumption in USA, and less than 20% than that of China. The global per capita consumption of power is about 2,340 KWh (or Units). The peak power shortage of 9.9% has been plaguing Indian power sector as on January 2010. As a result regulators worldwide are now implementing new regulating schemes and organizational reforms in an effort to improve the efficient operation of the electric utilities. Reforms and restructuring are taking place in the electricity sector by introducing competition in the electricity supply industry, wherever, it is technologically feasible and India is not exception to these reforms. In this paper, a case study of Tamil Nadu has been carried out, which is bordered on the north by the states of Andhra Pradesh and Karnataka and on the west by the state of Kerala. Kanyakumari, the southernmost tip of this land is the meeting point of the Bay of Bengal, the Arabian Sea and the Indian Ocean. In India, Tamil Nadu state ranks third in Electricity generation, Transmission and Distribution. Tamil Nadu is the first state in the country to achieve 100 % electrification of all villages as early as 1992. With the enactment of Electricity Act 2003, there has been tremendous improvement in the areas of transmission and distribution, tariff rationalization and in availability of power supply.