CUTS Centre for Consumer Action Research and Training (CART)

2. Threat to Ozone Layer

Involvement of Consumers in Power Sector Reforms

Back Ground

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 society.

Almost four years have been passed since reform and restructuring process initiated in the unhealthy power sector of the country. The prevailing scenario in the power sector can be best described with, unbearable and ever increasing financial burden on State Electricity Boards (SEBs), half of the power generated goes as `Losses’, mere one third of the power generated get billed, and inadequate and poor quality of supplies.

More and more of the states are gradually opting for the `Reform’ process which includes unbundling the existing structure into Generation, Transmission and Distribution companies separately and to privatise them at subsequent stages. Also, the proposed Energy Bill-2001 is expected to initiate the process of free trade of electricity and induction of competition at distribution level.

Although it is too early to talk about the outcome of reform process, the experience of last four years strongly suggests that it can not be afforded to ignore the consumers, the end user of the service, while deciding upon fate of the sector.

In Rajasthan, Government initiated the process with strong commitment in year 2000, erstwhile Rajasthan State Electricity Board has been bifurcated into separate Generation, Transmission, and three Distribution companies.

Rajasthan Electricity Regulatory Commission (R.E.R.C.) has been established in 1999 to regulate (or de-regulate) the sector, has directed the Distribution companies to bring down their existing Transmission & Distribution (T& D) losses to 20% level in coming five years and reduce it by 5.4% in the current financial year. Since it requires interface with the end users, companies finding it difficult as there is no formal mechanism to involve the consumers in the process.

During the hearings at RERC on tariff setting petitions, there was hardly any active participation, apart from CUTS, to argue the consumers interests and sole reason was lack of awareness.

The current statistics of the power scenario in the Rajasthan is as given.

• The installed generation capacity in the state is 3356 MW. Of which 1302 MW is exclusively owned by the state. And a share of 949 MW in inter-state partnership projects, with its share from the central grid being 1105 MW.

• The transmission & distribution system covers a large geographical area of 342,000 Sq. Kms, 2/3rd of which is desert with low population density, serving over 50 lac consumers from different categories.

• Demand for electricity has been growing at an annual average of 11%.The unserved demand is significant, as evidenced by a backlog of over 6 lac applications for service connections.

• The projected demand in coming years has been estimated to be in the range of 5000 MW and the deficit in terms of percent is estimated to be 4.5%. The per capita consumption of electricity is 301 kWh as per 1996/97 figures.

• Plant load factor is at level of 78.9%.

• The T&D loss for all the three distribution companies is estimated to be in the region of 47%.

• Village electrification in the state is achieved to the tune of 94.85% - this is in terms of revenue villages. However, taking Dhaanis and actual households having electric power connection, the percentage is fairly low at 57%.

• Furthermore, there is conflicting opinions of various political parties about the `Reform’ process.

BACK

Project Rationale

The current trend suggest that the power scenario in Rajasthan continues to remain grim, despite the fact that the reform process has been initiated.

As far as the consumer is concerned, they having found no difference in the functioning of the new Distribution Companies from the erstwhile RSEB, opine that the reform process initiated in the state has absolutely no benefits. In their eyes, the reform process has not done much, the quality of service still remains poor, while tariffs have gone up substantially.

Also, behavioural pattern of the employees of the distribution companies remain the same, by and large uncompromising, discourteous and inefficient in responding to complaints.

From political side there is no consensus among the numerous political parties vis-à-vis reforms, many political leaders in public condemn the reform process, stating that it has not achieved any thing.

Given this scenario, it is imperative for the success of the reform process to involve consumers to participate in the reform process in a big way, and also play an active role in the functioning of the distribution companies. This would be more so required, when the distribution companies get privatised, which is expected to take place in the near future.

Further, the success of the `Reform’ process largely depends on sensitisinig the service providers, regulators, and other stakeholders that the reform process does not just mean unbundling, privatisation etc. but should result in qualitative and quantitative improvements in the services. The `Reform’ process could definitely be turned to be an achiever, if there is consensus among everyone as to what is required, and participate of all stakeholders in the process rather than be cynical and rhetorical about it.

Understood this all, CUTS in association with Fiedrich Ebert Stiftung, took initiative and announces the project, titled `Involvement of Consumers in Power Sector Reforms’ which would cover three divisions of Rajasthan, namely, Jaipur, Jodhpur and Udaipur.

BACK

About the Project

Project Objectives

• Long term objectives:

• Improvement in power supplies and services in qualitative as well as quantitative terms.
• Increased use of alternate energy source such as renewable energy etc.
• Community involvement and participation in power distribution, collection of dues etc.
• Drastic reduction in theft
• Greater level of electrification, especially rural electrification, either through grid or through alternate energy source
• Involvement of people in the reform process gets reflected in their involvement in the governance process also, leading to greater transparency and improvement in the functioning of government machinery
• Overall improvement in the power scenario gets reflected with improvements being initiated in the other infrastructure and utility services too.

Target Audience

• Common man
• Consumer activists, rights advocacy groups at the grassroot levels
• Village representatives – PRIs
• Village elders
• Block and district level administration officials
• State administration officials
• Political leaders at all levels
• Utility providers, and officials of transmission companies too
• State Regulators

Tentative Methodology

• The project would be a combination of networking and advocacy, with just enough outreach study in order to collect and collate information. The research component too, would be more in the manner of one to one discussions, open house meetings, and literature survey, which would be more in the form of collecting and collating public grievances which is regularly published in the newspapers.

• Under outreach study, the project has been designed to have 4 workshops during the first year.

• The design cum launch workshop is scheduled at third week of August, 2001- where the participants would be representatives from utility providers, politicians, regulators power experts and other stakeholders (consumer organisations, administration officials, trade union etc.). The discussions at the workshop would be planned in a manner such that the outcome of the workshop would be a status report on the current power scenario in the state and the broader outlines of three year long programme

• The second, third and fourth workshops would be at division level to be held at three select divisions (tentatively Udaipur, Jodhpur and Jaipur). These would be a common platform comprising of consumers, local Panchayat Raj Representatives, utility providers and other stakeholders. This would be compiled in to a report, which would be consumer’s perception of power scenario, what they think of the system, what they expect out of the system, what are their views about reforms etc.

• The completion of this would result in us having a complete fact sheet, perception of all section of people etc. This will give us a broad framework on advocacy, whom do we need to address, what we need to do and how we go about it, and also the time frame for achieving our objectives. The research work would also give an idea of the functioning of cooperative societies for power distribution either in the country or abroad, functioning of community projects for power supply inclusive of generation using locally available raw materials. A number of such projects are being run in our country and also some of the South East Asian countries, and they have been quite successful.

• Networking would form a very crucial part of the project, to keep the work sustained, even after the end of the project. Hence, it would be a constant and continuous endeavour to keep building network – network of consumer organisations at the grassroot levels, PRIs, village elders, local linesman and engineers of utility providers, block and district level administration etc.

• A committee would be formed among the members of these networks at various levels, which would meet at regular intervals and advocate at their own level.

• Under the outreach component there would be,one to one discussions among all stakeholders, study tours- national and international where select people could be taken to various other reform states in the country, to study what was the scenario before and after the reform process was initiated, in developed countries, what the scenario was and how it is now, and how people are managing, some select developing countries where the power scenario was bad earlier and situation has been improved.

• National level seminars and focused seminars at other states would also be organised with a view to record the perception and experience of consumers of other reform states and to study the specific aspects of reform process in these states. Some of the select reform states where the focused seminars and workshops would be organised are Haryana, West Bengal, Madhya Pradesh, Karnataka and Andhra Pradesh.

• In the advocacy component there would be series of seminars, workshops, conferences at various levels, exhibitions and fairs, innovative approaches to bring people together on a common platform like a chaupal bhaitak for instance, briefing papers, reader friendly vernacular fact sheets, situation sheets, advocacy documents.

• Number of workshops would be planned at a later date, tentatively at least one for each of the selected blocks in the selected district per year. This could culminate with a division level and then a state level seminar subsequently. A national level seminar/workshop could also be organised to discuss the work done in the state, with a view that these ideas could be replicated in other states as well.

A combination of advocacy and networking would be the formation of cooperative societies for power distribution, or a community generation plant using locally available renewable energy source such as bio mass for instance.

Project Duration

The project duration is initially slated for a period of 3 years and would be extended further on the basis of the response received and the success which would be measured in terms of performance indicators, which is listed below.

Indicators of Achievement

• Greater involvement of people
• People’s attitude towards utility providers change towards positive
• People’s representative on advisory committee of utility providers, regulators etc
• People’s representatives taking active role in the decision making – with the regulators– on issues related to licensing, tariffs, supply conditions, rural electrification etc, and with utility providers on issues related to quality of supply, T&D losses, installation of transformers, setting up of power plants, setting up of generating stations etc.
• People agreeing to time of the day tariffs etc
• Greater use of non-conventional energy appliances.
• Competition created in the manufacture of non-conventional energy appliances leading to manufacture of high quality appliances at lesser costs.
• Drastic reduction in T& D losses
• Improvement in overall power situation in the state
• Rural electrification accelerated
• Politicians being less vocal against the reform process – lesser rallies, demonstration, but in turn greater cooperation with the utility providers leading to improvement in services.

Event Report

Involvement of Consumers in Power Sector Reforms in Rajasthan:

Evaluation & Design Workshop

March 18-19, 2004, Jaipur India ^New

Sixth training seminar of the CUTS-FES joint programme ‘Involvement of Consumers in Power Sector
Reforms in Rajasthan’
February 16, 2004, Abu Road

Fifth training seminar of the CUTS-FES joint programme ‘Involvement of Consumers in Power Sector
Reforms in Rajasthan’
January 13, 2004, Alwar

Fourth training seminar of the CUTS-FES joint programme ‘Involvement of Consumers in Power Sector
Reforms in Rajasthan’
November 23, 2003, Sawai Madhopur

Third training seminar of the CUTS-FES joint programme ‘Involvement of Consumers in Power Sector
Reforms in Rajasthan’
October 22, 2003, Bhilwara

Second training seminar of the CUTS-FES joint programme ‘Involvement of Consumers in Power Sector
Reforms in Rajasthan’
September 24, 2003, Jalore

First training seminar under third phase of the CUTS-FES joint programme ‘Involvement of Consumers in
Power Sector Reforms in Rajasthan’
September 01, 2003, Chittorgarh

First of the Series of Focussed Workshop under the project ‘Involvement of Consumers in Power Sector
Reforms in Rajasthan’
August 19-20, 2002, Alwar
3rd Division Level Workshop, "Involvement of Consumers in Power Sector Reforms in Rajasthan"
December 27, 2001, Hotel Aravali, Alwar.
2nd Division Level Workshop, "Involvement of Consumers in Power Sector Reforms in Rajasthan"
November 20, 2001, Abu Road,India
1st Division Level Workshop, "Involvement of Consumers in Power Sector Reforms in Rajasthan"
October 06, 2001, Chittorgarh, India
Involvement of Consumers in Power Sector Reforms in Rajasthan: Design and Launch Workshop
August 20-21, 2001, Jaipur India