Institutional Capacity and Operational Constraints in Power Distribution Utilities: Evidence from a Himalayan State Utility

Abstract

Purpose: This paper examines the impact of institutional capacity and operational constraints, in particular the geographical ones, on the process of implementing power sector reforms. It aims to address the "gap in implementation" of state owned utilities (SUVs) despite much of the policy effort at the national level like UDAY and RDSS.

Design/Methodology/Approach: Qualitative-dominant Mixed method approach was used in the study with focus on the case study of Himachal Pradesh State Electricity Board Limited (HPSEBL). The data was collected using 84 semi-structured interviews with people at different hierarchical levels (managerial, technical, and field) and also through administrative reports and operational performance data from 2018 to 2023.

Findings: The study identifies a vicious cycle wherein chronic staffing shortages and skill–technology mismatches are exacerbated by difficult terrain. Such factors give rise to institutional absorption bottlenecks that block the way for reforms to flow from the top to the field-level.

Originality/value: The paper generates a Context-Adjusted Resource-Based View (CA-RBV) that puts geographical context in the first order of the resource–performance relationship, and proposes the Institutional–Operational Nexus (ION) framework as a diagnostic tool for utility underperformance in geographically constrained environments. Contributions to the present study question the linearity of the standard reform templates and build a spatially sensitive theory of public utility performance, with 84 field level interviews.

Research limitations/implications: This study is conducted in one utility in the Himalayan state, but CA-RBV can be applicable in other utility areas in remote or developing areas worldwide. Future studies need to expand the model to comparative analyses between multiple states.

Practical implications: Terrain adjusted benchmarks should be included in reform policy and regulation. The training infrastructure and capacity building for utilities should be decentralised and an emphasis placed on local rather than top-down technology mandates.

Social implications: Far away hill-state communities that are relying on hill-state utilities are affected disproportionately by failures in reform implementation. For reliable access to electricity and to bridge the service quality gap of Himalayan and other marginalised communities, the design of policy needs to be terrain sensitive and equitable regulatory benchmarking is required.