1Director, Maharashtra Electricity Regulatory Commission, India
2Professor- Power Management, Department of Energy Management, University of Petroleum & Energy Studies, Dehradun, India
3Professor- Strategic Management & Assistant Dean-Research, Department of General Management, School of Business, University of Petroleum & Energy Studies, Dehradun, India
Online published on 27 October, 2021.
With the institution of the Electricity Act 2003 in India, the expectations were to address the financial viability of the Indian distribution sector and development of a competitive power market with a platform to the Consumer for exercising their choice. However, despite efforts of Central and State Governments initiatives of improving the operation and financial health of the distribution sector, their success has been limited so far and the distribution sector continues to be a resource drain on the Indian economy.
Previously, the Government of India had come up with the Electricity Amendment Bill, 2014 (now superseded with Electricity Amendment Bill 2021) with the objective of introduction of separation of carriage and content, under which a transfer scheme and rollout plan was to be made by State Governments for segregation of content and carriage businesses. Although the model suggestive framework for Transfer Scheme and the Rollout Plan is known as preprepared by the Forum of Regulators, it is still not known to what extent the State distribution sector is adequate and the factors that are affecting the financial viability of the distribution sector. This analysis would formulate an appropriate transfer scheme and rollout plan for the State.
This paper aims to understand various financial and operational parameters that are affecting the financial viability of Maharashtra State Electricity Distribution Company (“MahaDiscom”) through detailed analysis and identify the possible causes by the “Root Cause Analysis” method. This paper aims to assess and diagnose the financial health of MahaDiscom using the Fishbone Diagram as a tool of Root Cause Analysis. This analysis would help in the formulation of an appropriate Transfer Scheme and Rollout Plan of introducing retail competition in the electricity distribution sector of Maharashtra. This will act as a revival plan to overcome the vicious cycle, and therefore help Distribution companies to bounce back and lead them into being a financially robust entity.
Electricity Act 2003, Distribution, Financial performance
