The Supreme Court in Writ Petition No.79 of 1997 had constituted a High Power Committee to investigate into the affairs of UPSEB.  The findings of the aforesaid committee exposes the actual reasons of the failure of electrical industry in the state and are reproduced below for the information of this Hon’ble Commission in the

belief that it will provide an effective tool for determining the actual maladies to initiate effective steps for bringing in the reforms.

The incidence of theft of electricity in the state is of the order of 27.13 %.

Though the UPSEB claim to have been doing energy accounting and auditing, but the Committee is disappointed to note that this activity has not been drawing requisite attention from the concerned authorities in UPSEB  and as a result, the T&D losses in the system had been rising unchecked over the years.   On scrutiny of their records, it is noted that the Board Officers were not even aware of the exact quantum of the losses in their system during the previous months.

Owing to their casual approach in undertaking this activity, no effective remedial measures were taken and thus T&D losses in their system had been growing unchecked and have gone as high as 35.18% (Tech. Losses 8.05% + non-tech. Losses 27.13% ) as against corresponding figures ranging from 6% to 11% in developed countries and few developing countries e.g. China 10%),  Thailand (11%) and Taiwan(7%).

The High Power Committee on specific allegation of corruption and high handed interference in the working of the Board came out with the following findings:

A)   The allegation that Chairman adopted policy of appeasement, complete surrender of power and discretion in transfers postings and personnel matters, therefore, stands.

B)   Allegation of helping vested interest  by causing harassment to honest and conscientious officers by their transfers to insignificant posts or by awarding punishment is found correct and fully established.

C)    Allegation of providing protection to dis-honest officer in posting them in lucrative post stands duly admitted by Chairman and Secretary  Board UPSEB.

D)    Allegation about making a nexus with ministers, politicians, bureaucrats, influential consumers, industrial and suppliers is established.

E)     Allegation of granting favours to large and heavy consumers under political pressure on their own even if it causes damage to the interest of the Board technically or financially stands proved.

F)     The High Power Committee also estimated the influence of the aforesaid interference as under :

Devastating  Net Result of Political Interference

The result of political interference,  therefore, is that within a period of 10 years, UPSEB, a leading SEB till 1988 has been brought to a state of complete bankruptcy.  Now , among the SEBs, it is almost at the bottom in the country.  It is not the fault of the engineers or the workers of the Board, but of the leadership of the State and Chairman, whose job  was to lead and guide the Board and the future of the electricity in the State.

G)     Cost of Power

            The cost of power has gone up five times in last ten years.  In future, power will be extremely costly and may go beyond the paying capacity of consumers.

In the aforesaid situation this association humbly submits before this Hon’ble Commission that the aforesaid high incidence of theft of energy, as would be evident is because the officers and officials of UPPCL are directly involved in it under political patronage  and the factual situation prevailing in UPPCL today is that such officers or officials have become so strong that they cannot be touched at all and they manage not only their own posting but those of others too at their sweet will.

The High Power Committee in their report have also touched on the system of purchase and repairs and have reported as under :-

The system of purchase and repairs of transformers is very faulty. 

            In the aforesaid circumstances it becomes bounded duty of this Hon’ble Commission not to allow the losses on account of theft of electrical energy in computation of the  ARR because it will result in encouraging all the aforesaid activities as indicated by the High Power Committee and will take the state towards ruin.  Of course technical losses can be allowed along with their annual programme of reduction because these require finance and execution of various works whereas reduction of energy losses on account of theft  of electricity require only the following:

Honesty, integrity and strong will which can only be achieved if   it is ensured that political interference is not allowed to help the undesirable elements and this Hon’ble Commission forces UPPCL to initiate immediate  measures to check theft of electrical energy, by insisting preparation of ARR on the basis of technically reasonable losses  only.

It was hoped that with the introduction of Reforms Act and formation of this Hon’ble Commission would put a check to political interference but Miss Nishimizo, Vice President, World Bank, in the meeting held with the Chief Minister of the state recently has specifically intimated to the Chief Minister that right from transfer to purchase of material, the political interference continues rampant in UPPCL and no doubt Miss Nishimizo has further commented that if U.P. would have been a country, the World Bank would not have agreed to  have any business with it.  This shows the true condition prevailing in the state and the necessity of taking tough stand by this Hon’ble Commission.   We reiterate that only reasonable losses should be allowed in the formulation of ARR not only by UPPCL but to other private licensee as well, because the impact of allowing unreasonable losses to private licensee directly felt by consumers of UPPCL and mainly by Industries.