A day after the government notified the breaking up of the state-run Bihar State Electricity Board into five companies, they began functioning separately Thursday.
The move is part of the Bihar State Electricity Reforms Transfers Scheme, Energy Secretary Sandeep Poundrik said.
Bihar Energy Minister Bijendra Prasad Yadav told IANS that the creation of five companies would improve the power supply in the state.
"It is a big step to strengthen the power supply situation," he said.
The companies have been given a year to turn themselves into self sustaining independent units, he said.
Yadav said power-starved Bihar will benefit from the reforms. "The reforms are necessary for consumers and to attract private investors," he said.
The five companies are Bihar State Power Co (holding company), Bihar State Power Transmission Co, Bihar State Power Generation Co, South Bihar Power Distribution Co and North Bihar Power Distribution Co.
He said the government had decided not to transfer the losses of the power board to any of the five companies.
In August, the cabinet approved the restructuring plan of the BSEB.
Bihar set up an independent State Electricity Regulatory Commission some years ago to initiate power sector reforms.
According to energy department sources, the restructuring was to begin in 2001 but got delayed.