New tariff regime for hydel power

India's electricity regulator, the Central Electricity Regulatory Commission, has proposed a new tariff scheme for power generated from hydroelectric stations, whereby the risks associated with changes in water flow would now be borne by producers. This is a move that is likely to bring down the price being paid by users, usually the state electricity boards.

At present, hydrological risks (risks associated with changes in the water flow pattern) is borne by buyers, and power producers like NHPC, the largest hydroelectricity generator, take only risks associated with the failure of equipment. CERC is proposing the new regime for five years starting April 2009.

"We will now put this up as the new regulation, invite suggestions and the decision will be taken after a final hearing," said S C Anand, joint chief (engineering), CERC. The entire process of inviting comments and final notification is expected to take at least five months. Hydroelectric power constitutes nearly a fourth of India's total installed capacity of 1,43,000 mw at the end of March 2008.

The second son-in-law Himanshu Koirala is an entrepreneur in alternative energy options. His two daughters, Suparna and Mandira are into the publishing and luxury businesses.  Regarding his son and sons-in-law, Kapur said, "They don't understand the businesses of Sona group companies in the true sense. This means they should not get into the operational part of the business."

While the three male members will become executive chairmen of the group companies, Kapur's two daughters and daughter-in-law will be inducted into the board later. "We don't have women directors on the board. However, in the next three years, 10 per cent of our workers will be women," Kapur said.

Kapur said if the need to hire a prospective CEO from outside the firm arises, the candidate will have to work two rungs below the CEO's post and then work his way upwards.  Kapur is averse to hiring "shortsighted" CEOs who close down factories and lay off workers."

The succession plan Kapur has put in place draws from the Toyoda family (which owns Japanese auto maker Toyota) and the supervisory structure in German companies where founding family members only play a fiduciary role.

"It's a hybrid model between the two, where founding family members will communicate the values of the company and give confidence to employees during difficult times," says Kapur. "They will build relationship with customers and employees."