Tamilnadu Electricity Board (TNEB) , from the days of independence has always been at the fore front of managing the state's Power requirements fairly well. Especially so, when compared with like enabled boards and organizations, who also operate in similar regulatory environment. There are interesting lessons available in the recent initiatives of the board for those who are propagating the PPP, Public Private Participatory model.
Till the late eighties, the entire investment plans for the Power network, be it Generation or Transmission & Distribution (T&D) was fully managed by the state entity. Given the socialistic approach then practiced that limited the return to just 6% on your investment, the planners, realised the need to bring in robust billing and collection systems. This ensured that billing is done for the services used and what is billed is collected. Default in payment resulted in punitive action of disconnection, which has been practiced over the years. This helped build a good culture, where the consumers built a healthy habit of paying electricity bills. This is similar to the situation where no one questions, why one should buy a ticket when you board a bus.
Having built a system for strong revenue collection, the board could go about the task of implementing capacity additions to the generation and distribution network. Here again the planners understanding of the requirements and deciding on technical merits is there for all to appreciate.
There are Hydel stations, Thermal (coal & lignite) based stations, Nuclear stations, eco friendly Wind mills and sugar mills based co generation plants. These are spread across the geography of the state to assist in overall development of the state. The selection of Mettur which is land locked thermal station based on Indian coal is a case in point. There are coastal plants as well, which are not hampered by the conditions of local availability of coal. In the early seventies, it would have been unthinkable for any one to plan for import of coal given the impression of abundant availability of local coal and the controlled Export - import regime then prevailing.
Similarly the T & D network is built to deliver the generated power across the state. There are no un electrified villages in the state and there are not many instances of power connection being denied for protracted periods of time in the state.
During the Enron era of the nineties, the state also jumped in to the band wagon of liquid fuel power stations. The move was mainly due to the collective hype around these stations and Tamilnadu was not wanting to be left behind. Like other boards, TNEB also suffered. But here again, the board has distinguished itself from others by at least partly putting to use the majority of these plants.
Around this time the concept of Private enterprise building Utility assets was gaining momentum and TNEB adopted it. The main reason being the perceived in capability of the state government to fund capital expenditure of the board. But the board realised that it was being asked to explain their business model to the investor who was looking to maximise the returns on their investment with minimum risk. But the entire exercise has left the board poorer, but richer by experience.
When the signs of economic growth was visible in the mid 2000 and the board started seeing significant demand growth (over 14% in some pockets), they decided to look at alternate models for finding the investment. They have gone about the task in a very commendable manner and have also prepared a scheme for other states to emulate. They have encouraged Wind Power, reactivated dormant schemes and have signed joint development scheme with central organizations. Given the experience of the nineties, the board has this time placed its bets on Public sector entities rather than private enterprises. Plans are in place to double the installed generation capacity through these efforts in the next 8 years.
One awaits a similar approach to increase investments in the T & D Segment. New models, be it the franchise model of PPP (Public Private Partnership) or transfer of assets to joint venture, have to be put in place quickly to fully deliver the large quantum of Power that will be generated in the state. Otherwise one runs the risk of exporting this power to neighbouring states to earn short term profits.
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