Official sources said Union Power Secretary Anil Razdan pulled up Y S Ratra, chairman of Punjab State Electricity Board on August 28, asking the state to restructure its power utilities according to the provisions of the Central Electricity Act, 2003, immediately rather than seek yet another extension to implement the Act. Although the Power Ministry had asked the Punjab Government to spell out its future reforms through a roadmap latest by August 31, Chief Minister Parkash Singh Badal has been sitting on the issue and is yet to take a final decision.

It is understood that Badal has told his officials to delay the unbundling of the PSEB till the results of the forthcoming Parliamentary elections (May 2009 is the date given by him). Punjab is among Bihar, Tamil Nadu, Kerala, Himachal Pradesh, Chhattisgarh and the Northeast states that are resisting moves to restructure their loss-making electricity boards.

Razdan, however, told Ratra, who is running his sixth year in PSEB after retiring as State Chief Secretary, that even Left-ruled Kerala and Tamil Nadu have agreed to set up separate transmission entities as a first step before restructuring the state electricity boards. The 2003 Act prohibits state electricity boards from functioning as an integrated power utility. It instead segregates transmission from generation, distribution and trading to allow a level playing field for private players. Under the Act, there is no restriction on generation, distribution and trading of power but it is mandatory that transmission is handled by state-funded entity that is neutral to all players in the power field.

Even though Minister of State for Power Jairam Ramesh had publicly promised to amend the Electricity Act before the agitating PSEB employees in July, privately he had told the state power officials, including Ratra, that Punjab should at least fulfil the minimum statutory compliance by setting up a separate transmission company.

While the state power officials are in favour of complying with the 2003 Act, the problem is due to the indecisiveness of the state leadership. Even though the Power Ministry has talked tough before the state bureaucrats, there are indications that Badal will handle the issue at a political level to buy more time for his party.