Khurana, ManiBanerjee, Sudeshna Ghosh2014-11-122014-11-122015978-1-4648-0392-5https://hdl.handle.net/10986/20527At the end of 2011, the Indian power sector found itself in financial crisis, just a decade after the 2001 bailout of state electricity boards (SEBs) by the central government. Bankrupt state power distribution utilities in several states were unable to pay their bills or repay their debts. Despite the passage of the landmark 2003 Electricity Act and implementation of a broad set of reforms over the past decade, the sector today is looking at another rescue from the center, four times larger than before. This financial rescue scheme amounts to about Rs 1.9 trillion ($42 billion) and was instigated by the nonperforming assets of the banks and other financial institutions. The Electricity Act was envisaged to create independent companies functioning on commercial principles, but they are still far away from that goal. This report presents a diagnostic of the financial and operational performance of segments in the power sector value chain between adoption of the Electricity Act, 2003, and 2011, including analysis of the factors that contributed to the recent crisis. The report focuses on efficiency and productivity, whether performance has improved over time, and which states have emerged as performance leaders. Analysis of this kind is not new or unique, but this report aims to integrate historical performance, the current situation, future projections of the impact of worsening sector finances, and the actions that need to be taken to check the downturn. The report draws primarily from utility data collected by the Power Finance Corporation in successive years on utilities operational and financial performance. The Power Finance Corporation data were collated into a single database with the addition of various operational parameters at the plant level and the utility level from the Central Electricity Authority.en-USCC BY 3.0 IGOACCESS TO ELECTRICITYACCOUNTINGADVERSE IMPACTSAFFORDABLE PRICESAGRICULTUREAMOUNT OF POWERAPPROACHARREARSAVAILABILITYBAILOUTBALANCEBALANCE SHEETBENCHMARKBENCHMARKINGBIDSBILATERAL TRANSACTIONSBUSINESS MODELSCAPABILITIESCAPACITY PLANNINGCAPITAL ADEQUACYCAPITAL EXPENDITURESCASH FLOWSCOALCOAL CONSUMPTIONCOAL PRODUCTIONCOLLECTION EFFICIENCYCOMMERCIAL BANKSCOMPETITIVE BIDDINGCOMPETITIVE MARKETSCOMPETITIVE POWER MARKETSCOMPETITIVE PRICESCOMPETITIVE PROCUREMENTCOMPOSITION OF DEBTCONSUMERSCOPYRIGHTCOST ASSUMPTIONSCOST OF POWERCOST RECOVERYCREDITORSCUSTOMER RELATIONSCUSTOMER SATISFACTIONCUSTOMER SERVICEDEBTDEBTORDEBTSDEFICITSDEMAND FOR ELECTRICITYDEMAND FOR ENERGYDEMAND FOR POWERDEVELOPMENT FINANCEDISTRIBUTION COMPANIESDISTRIBUTION LOSSESDISTRIBUTION OF ELECTRICITYDISTRIBUTION OPERATIONSDOMAINDOMESTIC COALE-MAILECONOMIC GROWTHECONOMIES OF SCALEEFFICIENCY IMPROVEMENTEFFICIENCY IMPROVEMENTSEFFICIENT POWER PROCUREMENTELECTRIC POWERELECTRICITYELECTRICITY CAPACITYELECTRICITY DISTRIBUTIONELECTRICITY GENERATIONELECTRICITY SECTORELECTRICITY SUPPLYENERGY CONSUMPTIONENERGY EFFICIENCYENERGY GENERATIONENERGY SHORTAGEFINANCESFINANCIAL CRISISFINANCIAL DISTRESSFINANCIAL INSTITUTIONSFINANCIAL PERFORMANCEFINANCIAL SUPPORTFINANCIAL VIABILITYFISCAL DEFICITFIXED COSTSFOREIGN EXCHANGEFOREIGN INVESTORSFUELFUEL COSTSFUTURE DEMANDGASGDPGENERATIONGENERATION CAPACITYGOVERNMENT BONDSGOVERNMENT BUDGETSGOVERNMENT POLICIESGROSS DOMESTIC PRODUCTGROWTH RATEHEATHEAT RATEHEAT RATESHUMAN DEVELOPMENTHUMAN RESOURCESHYDROPOWERIMAGESINDEPENDENT POWER PRODUCERSINDEPENDENT REGULATIONINEFFICIENCYINFLATIONINFORMATION SYSTEMSINFORMATION TECHNOLOGYINFRASTRUCTURE DEVELOPMENTINSTITUTIONINSTRUMENTINTEREST COSTSINTEREST PAYMENTSINTERNATIONAL BANKINTERNATIONAL ENERGYINVESTMENT FLOWSKILOWATT HOURLICENSELICENSESLIQUIDITYLLCLOAD FACTORLOAD FACTORSLOAD PROFILELOANLOANS FROM BANKSLONG-TERM LOANSMARKET DATAMARKET DEVELOPMENTMARKET REFORMMARKET REFORMSMARKET STRUCTUREMARKET STRUCTURESMONOPOLYMONOPOLY SUPPLIERNETWORK ACCESSNETWORK PLANNINGNETWORKSNONPAYMENTNONPERFORMING LOANSOILOIL CONSUMPTIONOPEN ACCESSOPERATIONAL EFFICIENCYOPPORTUNITY COSTOUTSOURCINGOUTSTANDING LOANSPEAK DEMANDPHOTOPOLICY FRAMEWORKSPOWERPOWER CAPACITYPOWER CORPORATIONPOWER COSTSPOWER DISTRIBUTIONPOWER GENERATIONPOWER GENERATORSPOWER GRIDPOWER INDUSTRYPOWER PLANTSPOWER PROCUREMENTPOWER PRODUCERSPOWER PURCHASEPOWER PURCHASE AGREEMENTSPOWER PURCHASE COSTSPOWER PURCHASESPOWER REQUIREMENTPOWER SECTORPOWER SECTOR DEVELOPMENTPOWER SECTOR REFORMPOWER SECTORSPOWER SHORTAGEPOWER STATIONSPOWER SYSTEMPRIMARY ENERGYPRIMARY ENERGY SUPPLYPRIVATE CREDITORPRIVATE PARTNERSHIPPRIVATE SECTORPRIVATE SECTOR PARTICIPATIONPUBLIC SECTORQUALITY OF ENERGYQUERIESREGRESSION ANALYSISRENEWABLE ENERGYRENEWABLE SOURCESRESERVERESERVE BANKRESULTRESULTSRETAIL MARKETSRETAIL TARIFFSRETURNREVENUE COLLECTIONRISK PROFILERURAL ELECTRIFICATIONSENSITIVITY ANALYSISSHORT-TERM BORROWINGSOLVENCYSTATE UTILITIESTARGETSTARIFF CHANGESTARIFF REFORMSTARIFF REVISIONSTARIFF STRUCTURETAXTELEPHONETHERMAL PLANTSTHERMAL POWERTHERMAL POWER GENERATIONTHERMAL POWER PLANTTOTAL COSTSTOTAL DEBTTOTAL FACTOR PRODUCTIVITYTRADINGTRANSACTIONTRANSLATIONTRANSMISSIONTRANSMISSION LINESTRANSMISSION SYSTEMTRANSMISSION SYSTEMSTRANSPARENCYTURNOVERUNIVERSAL ACCESSUTILITIESVALUE CHAINVARIABLE COSTVARIABLE COSTSWHOLESALE MARKETWIND10.1596/978-1-4648-0392-5