Chapter

Financial Viability of Distribution Utilities

Alok Kumar and Sushanta K. Chatterjee

in Electricity Sector in India

Published in print October 2012 | ISBN: 9780198082279
Published online September 2012 | e-ISBN: 9780199082063 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780198082279.003.0013
Financial Viability of Distribution Utilities

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Poor financial health of the distribution companies is one of the biggest challenges facing the power sector in India today. This has created an atmosphere of uncertainty in the entire value chain, namely, transmission, trading, and generation. This chapter presents the current scenario of performance of various distribution utilities in the country. Data and statistics have been provided on various key performance indicators to analyse the state of affairs in the distribution sector. The vision in the law and policy in this context has been explained. Distribution loss is the critical area that needs resolution. The distribution franchisee (DF) model has been tried to address the issue of distribution loss. This model has been examined in the light of the experience so far in this regard. The chapter also discusses the status regarding tariff operationalization, issues around supply to agricultural consumers, and the challenges around regulation of government-owned utilities. The chapter also suggests measures to restore the financial viability of the distribution utility.

Keywords: India; electricity sector; distribution companies; power sector; distribution Loss; distribution Franchisee; distribution utility; transmission; tariff operationalization

Chapter.  10663 words.  Illustrated.

Subjects: Economic Development and Growth

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