Mp Agrees To Split Seb For Additional Power

The Madhya Pradesh government and the Power ministry yesterday entered into a memorandum of understanding (MoU) for undertaking power reforms in the state.

Under the MoU, the state government has agreed to reorganise the Madhya Pradesh Electricity Board (MPEB) into generation, transmission and distribution companies.

In return, the Union power ministry will immediately allocate an additional power of 100 mw from Central Generating Stations as well assist the state in securing funds for structural adjustment from financial institutions and other sources. Based on the reforms being undertaken the FIs have agreed to fund the four IPPS projects including the 1,000 mw Daewoo project, the 500 mw Bina, the 400 mw Maheshwar hydel project as well as the 330 mw Guna project.

As per the restructuring plans successor companies of the electricity board will be corporatised under the Companies Act and the tariffs will be rationalised with the approval of the State Electricity Regulation Commission (SERC), which has been already set up.

The MoU provides that all classes of consumers should be made to pay at least 75 per cent of cost of supply of electricity. However, the state government can take steps to protect the needy consumers. The state government will take steps for reducing cross subsidisation in a progressive manner within a period of 5 years.

The role of the state government will be limited to issuing policy directives.

Under the MoU, the Central Electricity Authority will operationalise the technical and commercial arrangements for supply of this power. For strengthening and improving transmission network, including the setting up of the 400 kv Rourkela-Raipur interstate transmission line.

Apart from this, the Centre will ensure financial support for the state to strengthen sub-transmission and distribution system. For this, MPEB has identified five transmission lines including 400 kv Korba Katni Bina transmission line (560 kms), 400 kv Bina Gwalior Line (230 kms) as being critical for Madhya Pradesh.

The MoU also provides that additional power from new central sector generating stations will be allocated directly to the commercially viable distribution companies in Madhya Pradesh.

Another MoU was signed between Madhya Pradesh and National Hydroelectric Power Corporation for completion of Indra Sagar and Omkareshwar projects. National Hydroelectric Power Corporation shall have a 51 per cent share of the share holding in the venture.

The state shall be entitled to 12 per cent of the power generated by these projects, free of cost.

THE UNDERSTANDING

* FIs have agreed to fund four IPPS including the 1,000 mw Daewoo project, the 500 mw Bina, the 400 mw Bina, the 400 mw Maheshwar hydel power project and the 330 mw Guna project

* Successor companies of the electricity board will be corporatised under the Companies Act

* All classes of consumers will be asked to pay at least 75% of cost of supply of electricity

* The state also can take steps to project the needy consumers

* MP will have to take steps for reducing cross subsidisation in a progressive manner in 5 years

* The CEA will operationalise the technical and commercial arrangements for supply of power

* The 400 kv Rourkela-Raipur line interstate transaction line will be setup soon

* The Centre will ensure financial support for the state to strengthen sub-transmission and distribution system

* MPEB has identified five transmission lines including 400 kv Korba Katni Bina transmission line (560 km), 400 kv Bina Gwalior Line (230 km) as being critical for MP