The Hindu : Tamil Nadu News : Decision soon on power transmission entity

Online edition of India's National Newspaper
Friday, May 14, 2004

Tamil Nadu

Tamil Nadu

Decision soon on power transmission entity

By T. Ramakrishnan

CHENNAI, MAY 13. The State Government is to decide soon on establishing an exclusive entity for power transmission, as the deadline for separating transmission from the Tamil Nadu Electricity Board (TNEB) is fast approaching.

The one-year period for power utilities such as the TNEB to adopt the provisions of the Electricity Act of 2003 expires on June 9. One of the most important features of the legislation is that the TNEB can either carry out transmission or generation and distribution. It will have to lose its character of performing the three functions together.

Official sources say there are different options to the government. Once the elections are over, it will take a decision.

One reason for a separate transmission utility is to ensure that power generators and consumers get non-discriminatory, open access to the transmission system. As per the Act, the open access concept means allowing bulk consumers to buy power from utilities of their choice.

Late March, the TNEB held discussions with representatives of trade unions. Some unions are of the view that the board and the government can retain the present nature of the TNEB, invoking Section 172, which provides scope for extension of the one-year period for transition. However, the Centre will also have to be involved as the decision on extension can be made only mutually by the Centre and State Governments.

The unions are against privatisation of the board and have also said the concessions, benefits and privileges extended to the employees should not be withdrawn. Besides, the wage revision process will have to be completed.

The sources say it is not that easy to extend the grace period for transition as the Centre has to accept the arguments of the State Government in the event of its wanting to maintain status quo. Hence, the option of establishing a separate transmission utility can be adopted. The main element in such an operation is to transfer assets and liabilities from the board to the proposed organisation.

As for generation and distribution, a predominant opinion among policymakers is that the TNEB itself can perform the functions after making it more accountable, as the State has a high revenue collection rate (around 90 per cent) and comparatively little power theft. There are now about 40 distribution circles all over the State and they can be made profit centres.

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