Restructuring of the electricity sector in India was initiated through the Electricity Act 2003 (Act), though a few states had already passed their own reforms act—for instance, Odisha (1995), Haryana (1997), Andhra Pradesh (1998), Uttar Pradesh, Karnataka and Rajasthan (1999), Delhi and Madhya Pradesh (2000) and Gujarat (2003). We also had the Electricity Regulatory Commissions Act, 1998 that paved the way for the setting up of the Central Electricity Regulatory Commission. The two main features of all these reform acts were unbundling the monolithic state electricity boards (SEBs) into separate entities of generation, transmission and distribution and setting up of the state electricity regulatory commissions so as to relieve the government from the task of tariff determination. This entire process was, no doubt, time consuming as some states were not eager to unbundle and sought repeated extensions from the Centre. As of August 2009, Bihar had sought 16 extensions and Jharkhand, 19. Other states seeking extensions include Punjab (14), Tamil Nadu (12), Meghalaya (14), Kerala and Himachal Pradesh (10 each).
The enactment of these reform acts had little effect on the functioning of the sector—especially the distribution sector—and the financial health of the discoms continued to go downhill.
