University of Minnesota
Computer Science & Engineering

Challenges of Electricity Sector in a Developing Economy: Maharashtra Case Study

Tuesday, October 06, 2009

Presenter: Dr. Ajay Bhushan Pandey
Time: 03:00 - 04:00
Location: EE/CS 4-192A
Host: Shashi Shekhar


Electricity is extremely vital for the growth of any developing country, and that growth itself fuels electricity demand. If this demand, along with the growth of the economy, is not properly forecasted, this cycle collapses in a situation where the demand exceeds the supply and further growth becomes unsustainable. Capacity addition has a high gestation period and other problems such as fuel linkage, environment, and land and water availability issues. Moreover a developing country is often saddled with dilapidated distribution infrastructure, high distribution losses, and financial hardships. Therefore, along with capacity addition plans, it is also imperative to make distribution systems more efficient, so that existing generation capacities can be maximally utilized and electricity gaps can be reduced.

Maharashtra, the second largest state in India, in terms of area as well as population, consumes almost 12% of India’s electricity. Maharashtra showed economic growth rate of 8.4%  from   2002 onwards which spurred the demand for electricity. As a result, the state was pushed into an acute power crisis in 2005 with peak power shortages of around 5000 MW. A large part of the state had to undergo power cuts ranging from 6 hours to 14 hours every day. Even at other times, the power supply was not reliable because of old and outdated distribution infrastructure. People were also burdened with huge electricity bills because of very high distribution and commercial losses, which were around 35%. Dr. Ajay Bhushan Pandey, an alumnus of the Department of Computer Science and Engineering, University of Minnesota, who was CEO and Managing Director of Maharashtra State electricity Distribution company will discuss these issues and elaborate on how a series of reforms in the power distribution to reduce distribution losses, shift load to non-peak hours, and conserve energy improved the power situation and helped turn around the Distribution company from loss making to a profitable entity in a short span of two years.


Dr. Ajay Bhushan Pandey is an officer of Indian Administrative Service with over 20 years experience of working in senior positions in the Government of India and the State Government of Maharashtra. From October 2006 to February 2009, he held the position of Managing Director and CEO of the Maharashtra State Electricity Distribution Company, the largest electricity distribution utility in India with over 15 million consumers, 70,000 employees, and annual revenue of over US $5 billion. When he took over the reins, the company was facing huge challenges in terms of massive peak power shortage of 4500 MW, distribution loss of over 30%, and dilapidated distribution infrastructure. At this crucial time Dr. Pandey provided leadership and managed a complete turnaround of the entire company in a short span of two years. The company which had a net annual cash loss of US $200 million in 2005 made a profit of about US $30 million in 2008. Under his leadership his company achieved a record reduction in distribution loss of electricity from 32.89 % to 24.08% and annual revenue increased from US $3.5 billion to US $5 billion. He played a pioneering role in franchising distribution business in the city of Bhiwandi to a private company - the franchisee model implemented thus has even been recommended by the Central Electricity Authority to all Indian states for implementation. He has also been on the National Steering Committee for Accelerated Power Development and Reforms Program (APDRP) constituted by the Government of India to oversee implementation of restructured APDRP program in the entire country.

Earlier, he worked as Secretary of Information Technology Department of Maharashtra State. During his tenure, he provided leadership to critical e-governance projects on the Automation of Sales Tax Department, Computerization of Government hospitals, Transport department, and Land records. Prior to that, he was Staff officer to the Chief Minister of Maharashtra state where he was closely involved in running the state administration. Dr Pandey has traveled extensively to the different parts of India- rural and urban both, and fully understands the needs, limitations and opportunities of a developing economy.

Dr. Pandey is a graduate of Electrical Engineering from IIT Kanpur. In 1998 he went on to join University of Minnesota where he obtained his MS and PhD degrees in Computer Science. In 2009, he has been awarded the Distinguished Leadership Award for Internationals by the University of Minnesota for his outstanding leadership accomplishments in his professional career.

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