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IPP Policy          Karnataka Power Reforms


IPP Policy   -   Preamble


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  1. Karnataka is one of the most progressive states in India. Bangalore, the State's Capital is called the Silicon Valley of India and has drawn the attention of the  whole world, particularly in the field of Information Technology. Government of Karnataka (GoK) has already initiated measures for strengthening infrastructure  facilities and creating an atmosphere for rapid industrial development in the State, thereby improving more employment opportunities and enabling rapid economic development.

  2. Power Sector   is the most vital for economic development of any State/country.The State visualizes an annual GDP growth of at least 8%.To achieve this adequate power availability is essential. The Indian situation in terms of the electricity : GDP elasticity ratio is 1.5. This means that the power requirement should grow at the rate of 12% per annum. However the ratio may undergo some change depending upon the nature of activities that contribute to GDP.

  3. Government of Karnataka is of the view that the existing structure of the power sector is inadequate to satisfy the criteria of efficient management of power production and supply, bringing down T&D losses to international standards, enhancing the quality of supply and rendering good service to the consumers. Hence, the Karnataka Electricity Reform Act, (KERA) has been enacted in 1999. The salient features of the Act are :
    (1) Constitution of  Electricity Regulatory Commission.
    (2) Corporatisation of the erstwhile Electricity Board and formation of several          distribution companies.
    (3) Privatisation of distribution companies and
    (4) Augmentation of generation through Independent Power Producers

  4. Reform process has been initiated and the following steps have been taken:
    (1) Karnataka Electricity Board has been dissolved and in its place a Corporation
         called Karnataka Power Transmission Corporation Ltd., (KPTCL) has been
    (2) Karnataka Electricity Regulatory Commission (KERC) is already in
         place and is examining the tariff proposals of KPTCL.
    (3) Consultants are being appointed for deciding on the modus operandi of
         Privatisation of distribution companies, which will be carved out of

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