Lessons to be Learned from the Experience of Electricity Reforms in India

The electricity sectors in India have been undergoing signifi cant reforms since nineties. The initial status of the electricity sector when reform of the industry was initiated was very similar across all states in India. The state electricity boards prior to reform were vertically integrated public utilities, the distribution companies had signifi cant technical and commercial losses and the state utilities were in poor fi nancial health. Most states in India shared similar stories; however, when these states reformed their electricity sector in the nineties, we see differences in the current market structure despite all states having started with similar industry organization. In this paper, we carry out case studies of electricity sector reforms in Orissa, Delhi and Karnataka. These three cases have been selected for their diversity in approaches to electricity reform. What motivated these states to reform? What types of market designs are currently in place and why market designs differed in these states? We analyse these cases and aim to explain the differences in sector performances and extract some lessons in the context of Nepal’s electricity sector.