Despite political reasons that delayed its corporatizing as mandated by the Electricity Act of 2003, the Kerala State Electricity Board (KSEB) is one of the best performing power utilities in the country, according to a World Bank study, which reviewed the performance of the Indian power sector during the period 2003 to 2011.
The report, titled ‘More Power to India’, authored by Sheoli Pargal and Sudeshna Ghosh Banerjee, senior economists with the World Bank, published this June, said the KSEB had the highest accumulated profits in 2011 among the power utilities directly serving the consumers in the country. “But since 2011, the KSEB’s finances have been constrained due to the State’s declining hydro generation, forcing the utility to purchase power from external sources and draw down surpluses earned in earlier years. Inadequate planning for power procurement to address demand growth has exacerbated the change in fortunes of the utility, which remains well managed but is now suffering in the face of external shocks,” it said.
In 2011, Delhi, Kerala and West Bengal were the only States where the revenue from sale of power covered the cost of supply without infusion of subsidies.
Kerala had invested substantially on strengthening its power transmission and distribution system during the period to bring down its distribution loss to around 12 per cent in 2011, the lowest in the country and close to international best practice. Other key factors that had helped the KSEB achieve good performance include the role of an ‘effective State regulator,’ who had “diligently issued tariff orders” to ensure cost recovery, and the total, tamper-proof, metering of the power connections.
“KSEB is modernising its systems…These efforts have improved service quality, billing efficiency, transparency and financial savings. The KSEB’s collection efficiency of 97 per cent in 2010-11 attests to the initiatives’ payoff,” it said. Benchmarking the power utilities in the country on a set of financial and operational indicators, the report placed Tata Power in Delhi at the top, followed by the KSEB in Kerala and the power department in Goa.
