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Abbreviations:

MERC – Maharashtra Electricity Regulatory Commission

MSEDC – Maharashtra State Electricity Distribution Company Limited

CII – Confederation of Indian Industry

Opinion was divided among CII members as to what should be industry’s role in solving the problem

1. It should be restricted towards advocacy on changing policies to allow for more private
generation of power
2. Few felt CII should play a more active role in ‘solving the problem’ (Pradeep Bhargava)

Solution Proposal:

Pradeep proposed a possible solution, as large companies had their own generating capacity of about
200MW (they use only 100MW), Govt supply was 650MW and demand was at 750MW. Why not share
the extra produce with others? (the users would pay a slightly higher amount to compensate the utility,
the question again will ‘puneites’ pay?)

Implementation is tough?

The following questions arose in the minds of CII members.

1. Would policy makers permit this?


2. Would the complexity of bureaucratic and regulatory mechanisms allow this?
3. Will this proposal be sustainable?
4. Generating power through ‘gensets’ cost Rs.12 – 13 per unit. Isn’t that too expensive?
5. Whose responsibility is this? Should Govt. take lead in doing this?
6. Would Government see this a threat to its primacy in power sector
7. Why should an industry forum be doing this? Any Benefit?

Other groups are skeptical, Shanthanu Dixit of Prayas (leading analysis based public advocacy group) had
below thoughts in mind,

1. Is a localized solution for a single city possible (appropriate)?


2. Does it create urban – rural divide
3. Isn’t it selfish as neighboring villages still face power shedding issues
4. Would the model be transparent and accountable?

Common proposal points finalized:

1. Government would be acting as a facilitator for short term, as it is not expected to make any
financial arrangements/ differential treatment to Pune city
2. Citizens wanted solution but would not be willing to pay higher costs
3. Industry willing to help if it did not mean incurring additional costs
Implementation Proposal:

1. CII made a public proposal on May 31, 2005 at a hearing with MERC
2. Document for regulations and protocol ‘Principles and Protocol for Load Shedding’ was released
on May 16, 2005 by MSEDC
- Proposed ‘equitable sharing’ of load shedding b/w consumer categories based on
contribution to economy, revenue, flexibility in user requirements
- It recognized areas where to supply

Political and Social groups opposed saying, why should people pay extra for Government’s
inefficiency. Well off people and business could look for alternatives

Tweaking the model to make it Acceptable:

1. Exempt common man with domestic consumption of <300 units per month from additional
charges
2. Reliability charge (by state Govt. averaged at around Rs.4/unit) is exempted for almost 1.2m
customers
3. Compensation costs paid by industries included fuel and maintenance costs alone (exempted
capital costs/ depreciation costs)
o Precise metering of power generated and self-consumed by the industry was required
o Changes had to be made into accounting process

Views about the project:

 Press and media wondered about the novelty, number of diverse groups convinced and involved
 Other colleagues and industrialist proposed to meet power minister and convince for support,
follow up with state government regularly, getting the idea accepted by other interest groups in
Pune
 MERC, chairman viewed this as ‘complementary’ rather than ‘competing’ with their role

Phase 2 Plan & Implementation:

As the demand exceeded beyond 100MW, MERC has asked to stop as zero load shedding (ZLS) is
becoming costlier

CII later proposed, for additional power import it from other states and extra cost is borne by citizens of
Pune. MERC invoked alternate provision of licensed power purchase from Tata Power (1and half year)

Reflecting this situation, every consumer had to pay extra 21p/unit

Further, state identified 16 power deficit places and purchased power (10% buffer). CII role was
minimized

Model was later followed in Navi Mumbai, Baramati cities and later to 6 revenue divisions.

Cooperation of public is involved as they have to pay extra cost for ZLS, in the form of reliability charge
Future:

In July 2011, PPM was officially disbanded, MSEDCL argued that there was no need for PPM anymore
since they could buy and pay for power themselves

Has PPM been a fundamental change to power problem,

Could the convergence of CSR and public private partnership (PPP) that worked successfully go beyond
Pune?

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