Karnataka Power Reforms - Preamble
- In order to sustain the growth of its economy and reduce
poverty, Karnataka needs to implement an in-depth reform of its power sector. In spite of
some impressive achievements, power sector has become a major bottleneck to the economic
development of the State and has not been able to meet the needs of the people of
Karnataka, in particular, that of rural population and the poor. Power Sector is also
exerting a considerable drain on Karnataka's public finances, which in turn reduces
capacity of the State Government to address social needs, notably for the most vulnerable
segments of the population. The indifferent status of availability, quality and
reliability of power has reduced the competitiveness of the Karnataka industry; Rapid
increase in consumption by irrigation pumpsets has imposed high costs on KPTCL with regard
to its agricultural and rural operations. High costs on consumers are also attributable on
high T&D losses. The poor quality of power and resultant damage to their machinery,
has left a vast number of consumers dissatisfied. Furthermore, too large a part of rural
population still does not have access to electricity services.
- In particular, Government of Karnataka
recognizes the need to have specific energy policies and aims to achieve the
following three priorities:
(1) Ensuring that people of
Karnataka have equitable access to basic and reasonably priced electricity services, in
that to electricity all the remaining households and hamlets by the year 2010.
(2) Providing electricity supplies
that industry and commerce need to achieve economic growth.
(3) Promoting the kind of energy use that
will not damge our environment.
- Government of Karnataka recognized this situation and
following a careful analysis of its root causes and a wide debate on options available has
decided to accelarate the reform process of power sector which commenced in 1995 itself.
In this direction Karnataka Electricity Reform Act was enacted. In November 1999 the
Karnataka Electricity Regulatory Commission was constituted. As a second step, the
Karnataka Electricity Board was dissolved, and in its place, Karnataka Power Transmission
Corporation Limited (KPTCL) has been incorporated under the Companies Act. These are
important steps, which have laid foundations for further reforms aimed at resolving the
problems faced by the sector. Government of Karnataka has decided to launch a new wave of
reforms, and complete the reform process in the shortest possible time.