ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Governance of Power Sector

Of several institutions constituted for the governance of power sector, the village electricity committee in Orissa, as a forum of users of electricity service to check theft, support officials collect revenue and help villagers in getting good service, has become an innovative step towards giving local people an opportunity to participate in the governance of the power sector at the grassroot level, thereby heralding an era of decentralised governance in the power sector in the state. Though VECs face some inherent problems like dominance of the powerful in the village and interference of local political leaders, these committees can do well with the active support and cooperation of the officials of the utility.

Governance of Power Sector

Orissa’s Experiments withVillage Electricity Committees

Of several institutions constituted for the governance of power sector, the village electricity committee in Orissa, as a forum of users of electricity service to check theft, support officials collect revenue and help villagers in getting good service, has become an innovative step towards giving local people an opportunity to participate in the governance of the power sector at the grassroot level, thereby heralding an era of decentralised governance in the power sector in the state. Though VECs face some inherent problems like dominance of the powerful in the village and interference of local political leaders, these committees can do well with the active support and cooperation of the

officials of the utility.


he reforms initiated in Orissa’s power sector include unbundling of the vertically integrated Orissa State Electricity Board (OSEB), constitution of the Orissa Electricity Regulatory Commission (OERC), privatisation of distribution of electricity, etc. Besides these, many micro-level institutions have been created/encouraged to participate in the governance process in the Orissa power sector. These are franchise system or micro privatisation initiatives (under this scheme, certain areas are contracted out to certain NGOs/companies/institutes to collect revenue from the consumers on getting certain percentage of the revenue collected as their fees), village electricity committee, district level advisory-cumcoordination committee, state advisory committee, grievance redressal forum (GRF), office of ombudsmen, special electricity police and squad in Orissa power sector.

Village Electricity Committee

If the users of electricity decide to constitute an electricity committee, they have to pass a resolution to that effect and hand over the document to junior engineer (JE), electrical, of the electricity section office under which the village is situated. The JE then registers the constitution of the electricity committee and gives a recognition letter to the committee. Thereafter, the committee is constituted with a president, one secretary and some members including the local lineman. The committee performs functions like helping the utility officials record metre readings and distribute bills to the consumers in the village, helping the officials collect bill payments from the consumers on a specified date and place called “bill collection centre” in the village, giving clearance for new electricity connection to any person in the village if he/she requires so, help correct right the wrong billing of the consumers by taking the matter to the assistant manager (commerce) of the utility, getting the electric wire, pole, sub-station, transformer, etc, in the village repaired, by approaching the concerned authority, preventing unnecessary use of electricity, illegal connection, unauthorised reconnection of the line wire and hooking, etc, of the village and keeping in touch with the officials in these matters, educating the villagers about the importance of electricity for the overall development of the village in the spheres of education, health and livelihood and convincing the villagers regarding their role and responsibility in ensuring proper maintenance of the electricity in the village and bringing consciousness among villagers on energy conservation, on billing process, their rights and duties as consumers.

Logic of Constituting VECs

Transmission and distribution loss is a major problem as it occurs due to theft of electricity, poor metering, poor billing and collection. Out of the total connections given to consumers, 57.15 per cent, 46.04 per cent, 69.4 per cent and 72.11 per cent in CESCO, NESCO, WESCO, and SOUTHCO zones respectively had working meters during the year 2001-02 in Orissa [Ramanathan and Hasan 2005:46]. The remaining connections were, therefore, either with defective meters or without meters. This explains why the distribution loss is high in Orissa. Again, the trends in billing and collection are not encouraging. The collection to billing efficiency was 71 per cent in CESCO, 67 per cent in NESCO, 79 per cent in WESCO and 78 per cent in SOUTHCO zones respectively during the year 2001-02 in Orissa [Ramanathan and Hasan 2005:42].

Economic and Political Weekly January 21, 2006 The role of the village electricity committees is important so far as the minimisation of the distribution loss is concerned as the metering, billing and collection can improve with the active participation of village committees. This is one advantage of the village committees. Another thing is that the sale of electricity to consumers across the categories differs. For example, according to a report collected from OERC office titled “AKP/Review of DISTCOMs, 2004”, out of the total 5,773.21 million units of electricity sold to different categories of consumers, the sale component to extra high tension (EHT), high tension (HT) and low tension (LT) category consumers was 1,335.62, 1,185.75 and 3,251.83 million units of electricity respectively in the year 2001-02 in Orissa. That means LT consumers consumed the largest percentage of electricity. But the collection to billing efficiencies from the LT, HT and EHT categories of consumers were 54.75, 96.25 and 77.5 per cent respectively in the year 2001-02 in Orissa (ibid). A similar trend was found in other years also. That means lower percentage of collection is realised from the category of consumers, which consumes more units of electricity. The LT consumers are mostly domestic category consumers living in rural areas. Thus, the major problem in the distribution segment of the power sector is poor billing, poor collection, poor metering and theft, which are responsible for commercial losses in the sector. As this occurs mostly in the case of domestic consumers living in rural areas, the effective functioning of the village electricitycommittees can improve the situation a lot by helping the process of better metering and collection, and checking theft of electricity in the rural areas.

Another important reason for the need of the village committees is effective service delivery. Power cuts, fluctuating voltage, low voltage, electrical accidents, mechanical breakdowns, technical defects due to burnouts, etc, keep the consumers dissatisfied and many areas remain dark due to prolonged power cuts particularly in rural areas. In this regard, the committees are expected to help the consumers in the village.

Actual Functioning

As per the information collected from the power project office, Xavier Institute of Management, Bhubaneswar, which executed a pilot project of forming village electricity committees in WESCO and NESCO zones, the billing and collection had increased and the theft of electricity had reduced, metering had improved, which went up to 100 per cent, voltage had increased, incidence of transformer burning had come down, enhancing the reliability of power supply and the WESCO officials admitted that their job got streamlined after the formation of the village committees. The WESCO implemented this project in 1,900 villages covering Baragarh, Sundergarh, Rourkela, Balangir and Deogarh while NESCO is focusing on 1,200 villages in Anandapur and Jajpur In CESCO around 3,000 village committees have been formed and are functional. Now, thousands of villages committees are working in the state.

In places where officials are cooperative and responsive to the village committee’s need and opinions, the outcome is encouraging in terms of service delivery and collection of revenue. It is found that the village committees formed and monitored under the franchisee have been functioning well in terms of regularity of meetings, collection of bills and delivery of services. The franchisee staff tries to educate people of the village about the value of electricity for social development and the need for timely payment of electricity bills. For example, the Gandhinagar Electric Consumers’ Committee in the Nischintakoili electric section in Cuttack district has taken many steps to educate the villagers regarding the value of electricity and the importance of paying bills in proper time. The committee has got a message written on its working pad in Oriya, “Bina bijulire aau chaliheba nainhi, Bina paisare bijuli jali heba nainhi”, which means, “it is impossible to live without electricity and it is also impossible to use electricity without paying the user fee”. The study in that village showed encouraging results in terms of stable voltage, collection of revenue and grievance redressal. Similarly, in many villages where the committees have been formed by the Xavier Institute of Management, one of the franchisees has done well in terms of economical use of electricity and the consumers have expressed their satisfaction about the quality of service and the service delivery process.

In some villages, however, the performance of the committees is not up to the mark. The reason found is a vested interest among the members of the committee.

Generally, the influential persons in the village are selected as members. If some of them are stealing power or if some of their relatives are doing similar activities, the committee members hesitate to take action and oppose any discussion in that regard in the meeting. Another important thing is that some village committees have recounted that when incidents like the transformer burning or similar major electrical breakdowns occur in the village, the villagers approach the electricity section office and the latter tells the villagers to deposit the arrears of electricity bills pending on consumers in the village and to form village electricity committees for the collection of pending electricity dues from the consumers. This is why, in many cases, the village electricity committees have been formed. Thus, the main purpose of the formation of the village committee is to organise and improve the collection of revenue from the consumers. This is fine. But the problem is that according to the consumers or the village committees, the electricity section office takes less interest in the proper functioning of the electricity committees in subsequent periods. It was reported that most often the officials ignore the committee in matters like giving new connections and renewing them, and in some cases in mechanical breakdowns.

The village committees are to be consulted in matters concerning new connections and the officials are expected to pay heed to the complaints or the suggestions of the village committee. But, the members of some committees have complained that officials are not so responsive to the needs and opinions of the village committee

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Economic and Political Weekly January 21, 2006

in its day-to-day dealings. Some members have complained that the officials turn a deaf ear to these kinds of problems, which discourages the committee members, which in turn, affects the functioning of the committee. It is learnt from certain villages that opposition to hooking by the committee has led to violence and quarrels in some cases in the villages. Sometimes, factions are created in the villages when the committee checks the theft of electricity and sometimes, the matter is politicised with the interference of local political leaders. In another village in the WESCO zone, the villagers complained that one member of the village electricity committee took money from them to help them correct their erratic bills. But the member used the money for his personal expenditure without spending it for the said purpose.

Thus, the functioning of VECs has produced mixed experiences and an evaluation suggests that the model of VECs can succeed depending on two important factors: the extent of cooperation of the utility officials with the VECs and the quality of the leadership of the committee members. In the end, it can be said that the officials of the utility should cooperate with the committee in responding positively to the needs and opinions of the members of the committee and should ensure that the committees are working effectively. The utility office should interfere in situations where petty events concerning electricity management in the village are politicised and it should come to the rescue of the committees when they are threatened and put to problems by the illegal users of electricity in the village.

Information regarding the functioning of the village committees of Orissa given here has been collected by the author as part of his data collection to prepare his doctoral dissertation. In all, eight village committees were selected from four zones like CESCO, WESCO, NESCO and SOUTHCO – two from each zone – on the basis of purposive sampling and data were collected through the method of focused group discussion.




Ramanathan K and Shahid Hasan (2005):

Privatisation of Electricity Distribution: The Orissa Experience, TERI Press, TERI, New Delhi.

Economic and Political Weekly January 21, 2006

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