Restructuring of power distribution entities in developing economies

The Indian Power Sector is poised to enter a radically different structural changes. The overall framework through regulatory environment is going through a sea change after the enactment of the Electricity Regulatory Act, 1998. The ground realities and the power industry structures are changing rapidly not only in India, but also in developed economies, thereby gaining ground for consumer choice. The challenge of new millennium in Power Sector is to improve the political management of energy policy rather than ensure energy security through increased investment alone. Uttar Pradesh State Electricity Board has been unbundled into three corporate entities, viz. for thermal generation, for hydro generation and for transmission and distribution system under regulatory regime. Creation of financially viable distribution companies (Distcos) are envisaged for consideration. The paper mainly deals with various aspects of distribution configuration and privatization strategy.