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Performance Improvement of the Distribution Segment
(A Case Study of NDPL)
Arup Ghosh , Chief Operating OfficerNorth Delhi Power Limited
Department of Industrial and Management Engineering
Indian Institute of Technology Kanpur
3rd Capacity Building Programme for Officers of Electricity Regulatory Commissions
23 – 28 August, 2010
Forum of Regulators
2
Structure of Presentation:
• Background
• Strategic Road Map and Strategic Decisions
• Key Initiatives
• Results
• Rewards & Recognitions
• Issues / areas requiring attention of Regulators
3
Delhi Vidyut Board in the Year - 2002:
• AT & C Loss - More than 53%
• Financial Loss - Approx Rs 10 Cr / Day
• Govt. Subsidies - Approx. 1,200 Cr / Annum
• Billing Receivables - Close to 1 year outstanding
• Equipments / Network - Pathetic
• Consumer Records - Manual & incomplete
• Consumer Care - None, No focus
• Power Interruptions - Availability 16 hrs/Day
0
10
20
30
40
50
60
1983
-84
1985
-86
1987
-88
1989
-90
1991
-92
1993
-94
1995
-96
1997
-98
1999
-00
2001
-02
Percentage T&D Losses
T & D Loss Trend - Pre-privatization
4
5
Key Parameters - In Year 2002
• Billing Efficiency = 53.72
• Collection Efficiency = 97.18
• AT & C Loss Level = approx 53 %
6
Geographic Description:
NDPL
BSES Rajdhani
BSES Yamuna
NDMCMES
Joint Venture of TATA Group with Delhi Govt.51:49%
NDPL Profile:
7
As on date
Rs. 2,759 Cr (FY 0910)
1,313 MW (Jul ’10)
6,911 MU
1.21 Million
3,950
510 Sq Kms
4.8 Million
1,439 *2,372
0.57
08% / 06%
As on Jul’2002
Rs. 1,095 Cr
850 MW
5,237 MU
0.8 Million
5,400
510 Sq Kms
4.2 Million
1,246
1,568
1.03
-
Particulars
Turnover
Peak Load
Energy Requirement
Total Registered Consumers
Number of Employees
Area of Distribution
Population Serviced (approx)
Per Capita Consumption (Units)
No of Consumers / Sq km
Employees / MU input
Load / Energy Growth
* (National Average of 500, Mumbai – close to 850)
8
Structure of Presentation:
• Background
• Strategic Road Map and Strategic Decisions
• Key Initiatives
• Results
• Rewards & Recognitions
• Issues / areas requiring attention of Regulators
Strategic Roadmap:
WHAT NDPL INHERITED – JULY 2002
AT&C Losses> 53%
No concept ofconsumer service
& IT Interface
Electricity Supply System on the
verge of collapse
Lack of Performance Orientation
STRATEGY FOR THE 1S T CONTROL PERIOD (2002 – 2007)
AT&C Losses <25%
Consumer service & IT Interface to be
comparable with World Standards
System Reliabilityto be comparable with Best Utilities in
India.
Performance Orientation through
Change Management
Ø50%
1,00,000 Backlog
Complaints
No Planned CAPEX & OPEX
in Past 3 Yrs
5,400 Staff (Unfavorable
Working Condition)
9
Strategic Decision:
• Decentralization of O & M activities / function
• Centralization of Commercial activities / Processes
• Replacement of Old Electro-mechanical Meters by New Electronic Meters
• Energy Accounting
• Intensive introduction of Technology
10
• Background
• Strategic Road Map and Strategic Decisions
• Key Initiatives
• Results
• Rewards & Recognitions
• Issues / areas requiring attention of Regulators
Structure of Presentation:
11
• Identification of components of AT&C Losses
• Loss Reduction Strategy - Technical Solutions
• Energy Accounting
• Re-engineering of Commercial Processes (BPR)
• AMR for all connections above 10 KW
• Automation Roadmap
• Technical & Process Related Initiatives
• Initiatives in association with Govt.
• Initiatives related to Society
Key Initiatives & Implementation:
12
Collection Process Deficiencies:20. Part Payment by Consumer21. Non Delivery of Bills22. Non Payment by Consumer (Defaulters)23. Premise Disconnected with Dues
Billing Process Deficiencies:14. Consumer not billed / under-billed15. Provisional Billing16. Bills pending for Quality Check (BQC)17. Bills pending for assessment18. Meters installed but not appearing in data base19. Un-metered connections:
(Unauthorized Colonies, JJ ClustersStreet Lights Poles)
Metering Process Deficiencies:7. Meter (address) not traceable8. Import / Export Metering Error 9. CT Ratio Errors
10. Stop / Slow / Defective Meter11. CT Ratio Errors12. Meters not read 13. Mismatch of Meters
Theft / Unauthorized Use:2. Direct Hooking3. Tampering / By -passing of Meter4. Misuse of Category5. Use of Multiple Connections - Misuse of Slab6. Sanctioned Load lower than actual usage
Technical Loses:1. Iron & Copper losses atSub-transmission (66kV/33kV) & Distribution (11kV & below) Network
Components of AT & C Losses:
13
• Identification of components of AT&C Losses
• Loss Reduction Strategy - Technical Solutions
• Energy Accounting
• Re-engineering of Commercial Processes (BPR)
• AMR for all connections above 10 KW
• Automation Roadmap
• Technical & Process Related Initiatives
• Initiatives in association with Govt.
• Initiatives related to Society
Key Initiatives & Implementation:
14
HVDS
High Loss
High Resistance
Areas
Implemented in more than 250 areas, more
under implementation.
High Loss
Low Resistance
Areas
LT ABCApprox. 2,500 Kms of
LT ABC laid, more under implementation
MeteringInitiatives
Electronic Meters, AMR,
Pre-Paid Metering
Schemes implemented successfully, more
under implementation
Loss Reduction Strategy – Technical Solutions
15
• Identification of components of AT&C Losses
• Loss Reduction Strategy - Technical Solutions
• Energy Accounting
• Re-engineering of Commercial Processes (BPR)
• AMR for all connections above 10 KW
• Automation Roadmap
• Technical & Process Related Initiatives
• Initiatives in association with Govt.
• Initiatives related to Society
Key Initiatives & Implementation:
16
17
M
M
M
M
By STU
66 or 33 KV
11 KV
At Consumer Premises With HT Load
Feeder Meter
11KV/415 V DT
For Energy Accounting
At Consumer Premises
66/33/11 KV
STU to DISCOM
FEEDERS TO ZONES
Tier 1: Transmission level
M
Tier 2 : Sub transmission Level
Tier 3 : Distribution level
M
Energy Accounting – Flow Chart
• Identification of components of AT&C Losses
• Loss Reduction Strategy - Technical Solutions
• Energy Accounting
• Re-engineering of Commercial Processes (BPR)
• AMR for all connections above 10 KW
• Automation Roadmap
• Technical & Process Related Initiatives
• Initiatives in association with Govt.
• Initiatives related to Society
Key Initiatives & Implementation:
18
19
CMG RRG RDGMRG RBG RCGMMG
RAG
Policy Regulatory Bench Data Revenue Infrastructure Advocacy Compliance Marking Analysis Protection Support
Consumers
Call Center
Customer Care Center
Website E mail LettersDrop boxes
SAMBANDH – Integrated Commercial Package software- Industry First!!
Business Process Re-engineering (BPR)
CCG
• Identification of components of AT&C Losses
• Loss Reduction Strategy - Technical Solutions
• Energy Accounting
• Re-engineering of Commercial Processes (BPR)
• AMR for all connections above 10 KW
• Automation Roadmap
• Technical & Process Related Initiatives
• Initiatives in association with Govt.
• Initiatives related to Society
Key Initiatives & Implementation:
20
Automatic Meter Reading (AMR):
METER
GSM-MODEM GSM-Network
PSTN-NetworkPSTN-MODEM
S/W
USERS
LA
N
DB
DEBS
I. METERING
II. COMMUNICATION
III. BACK OFFICE
21
• Identification of components of AT&C Losses
• Loss Reduction Strategy - Technical Solutions
• Energy Accounting
• Re-engineering of Commercial Processes (BPR)
• AMR for all connections above 10 KW
• Automation Roadmap
• Technical & Process Related Initiatives
• Initiatives in association with Govt.
• Initiatives related to Society
Key Initiatives & Implementation:
22
Automation Roadmap: Journey so far …
23
• GIS - Completed
• GSAS - Completed
• Communication Network - Established and Stabilized
• SCADA - In Operation
• DMS - Under Implementation
• DA - Under Implementation
• OMS - Under Implementation
• Identification of components of AT&C Losses
• Loss Reduction Strategy - Technical Solutions
• Energy Accounting
• Re-engineering of Commercial Processes (BPR)
• AMR for all connections above 10 KW
• Automation Roadmap
• Technical & Process Related Initiatives
• Initiatives in association with Govt.
• Initiatives related to Society
Key Initiatives & Implementation:
24
Technical / Process Related Initiatives:
• Development of Tamper Proof Energy Meters
• Payment Avenues increased from 20 Nos. (July 2002) to more than 1500 Nos.
• Door delivery of new Electricity Connection
• SMS Based Complaint Management System
• Instant Camp Connections at JJ Clusters
25
• Identification of components of AT&C Losses
• Loss Reduction Strategy - Technical Solutions
• Energy Accounting
• Re-engineering of Commercial Processes (BPR)
• AMR for all connections above 10 KW
• Automation Roadmap
• Technical & Process Related Initiatives
• Initiatives in association with Govt.
• Initiatives related to Society
Key Initiatives & Implementation:
26
Initiatives in association with Govt.:
• Constitution of Special Court
• Assistance of Police Force / CISF during Enforcement Activities
• Relocation of JJ Clusters to a new resettlement Colony (Sawda Ghevra) for providing better services
• Amnesty schemes for settlement of old disputed cases (DT / DAE etc)
27
• Identification of components of AT&C Losses
• Loss Reduction Strategy - Technical Solutions
• Energy Accounting
• Re-engineering of Commercial Processes (BPR)
• AMR for all connections above 10 KW
• Automation Roadmap
• Technical & Process Related Initiatives
• Initiatives in association with State Govt.
• Initiatives related to Society
Key Initiatives & Implementation:
28
Initiatives / Programmes related to Society:
• Life Insurance Policy for Socially / Economically Backward Consumers
• Development of local people as Franchisee
• Energy Conservation and Awareness through Energy Club (more than 31,000 Students covered)
• Woman Empowerment (Vocational Training, beautician Courses etc)
• Health Check-ups, Blood Donation etc
• Adult Literacy, Drug / alcohol de-addiction, Support to Orphanages, HIV / AIDS awareness etc.
• Engagement with the Public Representatives
29
New Initiatives:
• 108 MW Combined Cycle Power Plant
• Solar PV Based Power Plant
• GPRS based spot Billing
• SAP – ISU (Billing + CRM)(Industry Specific Solution for Utilities Industry)
• Centralized Call Centre (No current + Commercial)
• Special Consumer Group
30
31
Structure of Presentation:
• Background
• Strategic Road Map and Strategic Decisions
• Key Initiatives
• Results
• Rewards & Recognitions
• Issues / areas requiring attention of Regulators
Savings to Govt. – Victory Curve
32
Loss Reduction (Trend):
33
Parameters FY 02-03 FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08-09 FY 09-10
Energy Input (MU) 5,237 5,552 5,549 5,695 5,986 6,281 6,327 6,911
Units Billed (MU) 2,813 3,196 3,667 4,154 4,351 4,975 5,225 5,816
Amt. Billed 1,126 1,272 1,565 1,883 2,032 2,323 2,468 2,722
(Rs Cr)
Amt. Collected (Rs Cr) 1,095 1,219 1,568 1,897 2,132 2,394 2,539 2,759
AT&C Loss47.79 44.86 33.79 26.52 23.72 18.38 15 .04 14.47
(%)
Billing Efficiency (%)
53.72 57.56 66.08 72.95 72.68 79.21 82.58 84.16
Collection Efficiency (%)
97.18 95.78 100.2 100.73 104.94 103.04 102.87 101.34
Augmentation of Network Capacity:
Particulars Voltage Level
Unit On Takeover- Jul 2002
2010 (As on date)
% Change
Transformation Capacity
66 kV MVA 860 1,545 80
33 kV MVA 791 1,484 88
11 kV MVA 1703 3,770 121
Total (MVA) MVA 3,354 6,799 102
Transmission Lines
66 kV KM 176 309 76
33 kV KM 156 318 103
11 kV KM 2,245 3,555 58
Total (KM) KM 2,578 4,182 62
34
Results – Few other parameters
PARAMETERS / PARTICULARS BEFORE TAKEOVER
AT PRESENT
OPERATIONAL:
Capital Investment (Rs Crores) 1,210(Valuation)
Add. 2,500
Transformer Failures w.r.t Installed Capacity (%) 11 1.2
Percentage Share in Load Shedding (In Delhi) 40 < 1
COMMERCIAL:
Average Days for New Connection Energization (Days) 51.8 8.0
Number of Electronic Meters - > 1.2 Million
% Provisional Billing 22.5 < 1
DT – Wise Energy Auditing (%) - 100
Special Courts (Nos) - 2
AT&C Losses (%) 53 < 14.0
35
36
Structure of Presentation:
• Background
• Strategic Road Map and Strategic Decisions
• Key Initiatives
• Results
• Rewards & Recognitions
• Issues / areas requiring attention of Regulators
37
Awards & Recognitions - To name a few
National Award for Meritorious Performance (For Years 2004-2005 & 2005-2006)
38
Awards & Recognitions - To name a few
National Award for Meritorious Performance (For Year 2007-08)
39
Awards & Recognitions - To name a few
National Award for Meritorious Performance (For Year 2008-09)
40
Awards & Recognitions - To name a few
ASIAN POWER AWARDS – POWER UTILITY OF THE YEAR
(FOR YEARS - 2007, 2008 & 2009)
41
Edison Electric Institute (EEI) 2008 - Award for Implementation of GIS
Edison Electric Institute (EEI) 2009 – Award for Policy Advocacy
Awards & Recognitions - To name a few
Awards & Recognitions - To name a few
Public Lok Adalat Award for the 10,000 Settlements
in 2 ½ years
Expert Choice Award for Most Admired Organization - By
Power Line
SUGAM Award for Transparency in Billing
System
Intelligent Enterprise Award for IT initiatives
- By Indian Express
Award for Corporate Social Responsibility -
By Amity
Leadership Award for excellence in Power
Distribution – By Amity
42
43
Structure of Presentation:
• Background
• Strategic Road Map and Strategic Decisions
• Key Initiatives
• Results
• Rewards & Recognitions
• Issues / areas requiring attention of Regulators
Issues / Areas requiring attention of Regulator :
• Appropriate balancing between the interests of all stakeholders (Consumer, Society, Environment, Govt. DISCOM etc):
a) Cost reflective tariff
b) Timely recovery of Cost
c) Encourage settlement of disputed arrears
d) Sharing of Income (Section 51, EA 2003) – Attractive sharing of profit / income to encourage Asset Sweating
e) Promotion of green power through Regulatory provisions
44
• Regulatory Asset:
a) Against economic principles
b) Sends improper economic signal
c) Unnecessary burden of carrying cost
d) Deferment of problem, not a solution
e) Hence, use of this facility should be minimum and should not be repetitive
45
Issues / Areas requiring attention of Regulator :
46
• Practical approach while framing performance standard regulations keeping in view the ground realities
• Focus on long term development / sustainability of power sector
• An equitable approach towards various incentives / penalties provisions of performance standard regulations
• Regulatory provisions for introduction / promotion of new technologies / Systems
• Long term road map for the development of the power sector
• Pro-active measures to remove difficulties / problems faced by DISCOM (which are beyond the reasonable control of DISCOM)
Issues / Areas requiring attention of Regulator :
Harmonization of regulations in power sector :
• Fuel price variance:
a) Immediate pass through for Generator
b) Annual / Periodic pass through for DISCOM
• Large disparity on treatment of various parameters:
a) O & M Costs (Normative Vs Actual)
b) Consolidated O & M Costs
c) Separate allowance for employee / A & G / R & M Costs
d) R & M Costs: Yearly inflation / % of Gross Fixed Asset
e) Employee and A & G Costs: Yearly inflation / Yearly inflation together with increased growth (MU / Consumers)
47
Harmonization of regulations in power sector :
• Large disparity on treatment of various parameters:
f) Depreciation rate:
- Ministry of Power, GOI specified rates
- CERC rates (2004 notification) with provision of Advance Against Depreciation (AAD) provision
- As per Companies Act
g) Allowance of Depreciation:
- Allowed on all assets
- Depreciation not allowed on assets financed from grants / consumer contribution
48
Harmonization of regulations in power sector :
• Large disparity on treatment of various parameters:
h) Start Date for depreciation:
- From the year of Capitalization
- From the succeeding year after capitalization
i) Provisioning of bad debts:
- No provision
- Based on actual bad debts
- As a % of approved ARR
j) Return:
- Return on Equity
- Return on Capital
49
50
Thank You