1. Status:
   
   There are 16 towns and 5782 villages in the State of Meghalaya as per the 2001 Census. The number of villages having electricity as on 31st March, 2006 is 4217 which includes 28 numbers electrified by non-conventional renewable energy sources.
   
   There were only 261 electrified villages in the State in 1975 when the Meghalaya State Electricity Board was created. Since then the villages were electrified through various schemes financed by loans from the Rural Electrification Corporation. Village electrification was suspended in 1996 when it was found to be unviable and a burden to the MeSEB. Subsequently, village electrification was resumed in 2000-01 by the MeSEB with 90% Grant and 10% Loan on the cost of the schemes from the State Government.
   
   The performance of the distribution sector in the State at present is far from satisfactory especially in the rural areas. Unscheduled power interruptions and prolonged outages have invited severe criticism from the public. There are also frequent complaints of low voltage. Long HT & LT distribution lines passing through difficult hilly terrains coupled with the inadequate manpower have contributed to the present situation.
   
   100% system metering on feeders up to 33KV has been achieved. However, 100% metering on distribution transformers is yet to be achieved, while the process to attain 100% consumer metering has commenced under APDRP. Action for energy auditing and accounting has also been initiated.
   
   With a view to improve and introduce reforms in the distribution sector the Government of India launched the Accelerated Power Development Programme (APDP) during 2003 which was subsequently renamed as Accelerated Power Development Reforms Programme (APDRP) and is under implementation..
   
   Similarly, to extend electric supply to all the villages & households in rural areas, the Government of India has recently launched the “Rajiv Gandhi Grameen Vidyutikaran Yojana – Scheme for Rural Electricity Infrastructure and Household Electrification” which is also under implementation in Meghalaya.
   
   
2. Policy :
   1. 1. The Government of Meghalaya shall establish Distribution Companies for different areas of the State to develop and maintain an efficient, coordinated and economical distribution system in their area of supply.
      2. The tariff to be levied by the distribution companies on their consumers shall be in accordance with the methods and principles as specified by the State Electricity Regulatory Commission.
         
         
   2. The Distribution Companies shall prepare comprehensive distribution master plans for their areas of operation. The master plans shall be prepared to cover the period till the end of Five-Year Plan periods. Keeping in view the present standards and practices, the distribution capacity would be planned and built with sufficient redundancy levels and margins for security of the system. Strengthening and extension of existing distribution system commensurate with projected load demand shall also be given due consideration while formulating the distribution master plans.
      
      
   3. The Distribution Companies shall improve the HT & LT ratio to 1:1 especially in the urban areas to improve the distribution system and reduce the system losses.
      
      
   4. The Distribution Companies shall introduce the profit centre concept and to establish separate accounting for such centers in their area of operation in order to make the distribution business profitable and self sustainable.
      
      
   5. The Distribution Companies shall reduce the Aggregate Technical & Commercial (AT&C) losses by focusing on the following thrust areas :
      1. 100% metering to all categories of consumers. All new connections should be metered.
      2. Engagement of franchisees in certain areas of operation to make the distribution business in rural areas profitable and sustainable.
      3. Implementation of Energy Auditing & Accounting in right earnest.
         
         
   6. The Distribution Companies shall adopt the latest state–of–the-art technology in the distribution system to improve quality and reliability of power supply to the consumers.
      
      
   7. Energy conservation and demand side management shall be given priority to optimize utilization of available power. Energy conservation measures shall be adopted in all Government buildings.
      
      
   8. The State Government is committed to make electricity available to all the villages and rural households by the end of 11th Plan.
      
   9. The State Government shall ensure timely execution of all distribution schemes both in urban and rural areas through regular monitoring.
   10. For sustainability of rural electrification, the State Government shall involve the local institutional bodies like village committees, non-governmental organisations, self-help groups, users’ associations, village nodal persons, individual entrepreneurs, etc as franchisees for metering, billing and collection of revenue and management of the local distribution, as appropriate, from the village level upwards.
   11. The State Government shall set up an autonomous Nodal Agency which shall be responsible for policy and planning, project implementation and management of the rural electricity services. Budgetary support to the Nodal Agency shall be provided by the State Government.
   12. The State Government shall encourage decentralised generation and distribution for remote and inaccessible areas where grid connectivity is either not feasible or not cost effective and the resources are available.
   13. The State Government shall encourage private investment in the distribution sector in the form of licensees to meet the policy objectives. The State Govt. shall support the sector during the transition period till the distribution entities become financially viable and self sustaining. The transition period shall be determined by the Government.
   14. The State Government shall set up special courts to try cases relating to theft of electricity.
       
       
3. Electricity Franchisee
   
   The Government of India has launched a rural electrification scheme “Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)” in April 2003 to provide electricity to all households within five years. As per RGGVY, the Ministry of Power will provide financial assistance for execution of the scheme. In order to maintain the infrastructure created, revenue sustainability becomes a crucial factor. An innovative step has been taken under the scheme which mandated community participation in electricity distribution. Thus the concept of village franchise for electricity evolved to address the issue of revenue sustainability, improvement in billing and collection systems and reduction of distribution loss in rural areas.
   
   One condition of the RGGVY scheme is that the state has to set up franchisee frameworks in two years time from the sanction of the project for the management of distribution of electricity in rural areas. To fulfill the above stipulation, the state Government lays down the following policy to develop village franchisee in the State of Meghalaya.

Policy :

1. Selection of sites – Franchisee areas could include both rural villages and urban towns having distribution transformer of any capacity and consumer of any category. Franchisee arrangement could also be for systems beyond and including 11KV feeders.
   
   
2. Organization of franchisee – Franchisee can be a user’s association, NGO, village body, co-operative society or an individual entrepreneur.
   
   
3. Application for franchisee - The MeSEB will issue advertisement through the media inviting interested parties to apply for franchisee. The interested parties should submit “Expression of Interest (EOI)” along with the “No Objection Certificate (NOC)” from the village / local durbar.
   
   
4. Criteria for qualification as franchisee – The applicant for franchisee shall have the following qualification :

Category A - For user’s association, NGO, village body and co-operative society :

1. Should have been actively involved for at least three years in any social development programme in the intended area or in the district or in the State with proven credibility to be certified by the District Commissioner.
   
2. Should have satisfactory financial and operational capabilities which shall be judged by both or any one below:-
   1. Proven achievement of completion of development programme involving outlay of not less than annual revenue collection projected in the intended area.
   2. Engaged in any business operation with annual turnover of not less than annual revenue collection projected in the intended area.
      

Category B - For individual entrepreneur:-

1. . Should ideally possess adequate financial resources to be supported by a banker’s certificate that validates possession of finances equivalent to at least three months revenue collection projected in the intended area.

For both Category A and B :

1. Ability to source at least three skilled / semi-skilled employee for full time work.
2. Undertaking to undergo the training / capacity building programme organized by the DISCOM for the franchisee and their employees.
   

Since the duties and responsibilities of DISCOM is to supply electricity to the franchisee areas and ensure non-discriminatory behavior in case of power shortage, Maintain the HT distribution line, the Sub-station and the LT distribution line, the selection to be done in a transparent manner. Training of the franchisee has to be undertaken so that they are able to discharge their responsibility accordingly. A Committee headed by the Chief Executive Officer of the Distribution Company shall recommend the franchisee to the Board for selection. Clear Terms and conditions for the smooth functioning of the Franchisee has to be drawn up which will give a clear picture of the duties and obligations of each respectively