16 - Y S Butola - Performance Improvement of The Distribution Segment A Case Study of NDPL

Department of Industrial and Management Engineering
Indian Institute of Technology Kanpur

Forum of Regulators
3rd Capacity Building Programme for

Officers of Electricity Regulatory Commissions
23 – 28 August, 2010
Performance Improvement of the

Distribution Segment
(A Case Study of NDPL)
Arup Ghosh , Chief Operating Officer

North Delhi Power Limited
Structure of Presentation:
• Background
• Strategic Road Map and Strategic Decisions
• Key Initiatives
• Results
• Rewards & Recognitions
• Issues / areas requiring attention of Regulators
2
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
T & D Loss Trend - Pre-privatization

Percentage T&D Losses
60
50
40
30
20
10
0
1983-84
1985-86
1987-88
1989-90
1991-92
1993-94
1995-96
1997-98
1999-00
2001-02
4
Key Parameters - In Year 2002
• Billing Efficiency = 53.72
• Collection Efficiency = 97.18
• AT & C Loss Level = approx 53 %
Geographic Description:
Joint Venture of TATA Group with Delhi Govt.

NDPL51:49%
BSES
Yamuna
BSES NDMC
Rajdhani MES
6
NDPL Profile:
Particulars As on Jul’2002 As on date
Turnover Rs. 1,095 Cr Rs. 2,759 Cr (FY 0910)
Peak Load 850 MW 1,313 MW (Jul’10)
Energy Requirement 5,237 MU 6,911 MU
Total Registered Consumers 0.8 Million 1.21 Million
Number of Employees 5,400 3,950
Area of Distribution 510 Sq Kms 510 Sq Kms
Population Serviced (approx) 4.2 Million 4.8 Million
Per Capita Consumption (Units) 1,246 1,439 *
No of Consumers / Sq km 1,568 2,372

Employees / MU input 1.03 0.57
Load / Energy Growth - 08% / 06%
* (National Average of 500, Mumbai – close to 850)

7
• Background
• Key Initiatives
• Results
8
Strategic Roadmap:
STRATEGY FOR THE 1S T CONTROL PERIOD (2002 – 2007)

AT&C Losses Consumer service System Reliability Performance
<25% & IT Interface to be to be comparable Orientation through
comparable with with Best Utilities in Change
World Standards India. Management
1,00,000 No Planned 5,400 Staff

Backlog CAPEX & OPEX (Unfavorable
Ø50% Complaints in Past 3 Yrs Working Condition)
WHAT NDPL INHERITED – JULY 2002

AT&C Losses No concept of Electricity Supply Lack of
> 53% consumer service System on the Performance
& IT Interface verge of collapse Orientation
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
• Key Initiatives
• Results
11
Key Initiatives & Implementation:
• Identification of components of AT&C Losses

• Loss Reduction Strategy - Technical Solutions
• 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
12
Components of AT & C Losses:
Technical Loses: Billing Process Deficiencies:

1. Iron & Copper losses at 14. Consumer not billed / under-billed
Sub-transmission (66kV/33kV) & 15. Provisional Billing
Distribution (11kV & below) Network 16. Bills pending for Quality Check (BQC)
17. Bills pending for assessment
18. Meters installed but not appearing in data base
Theft / Unauthorized Use: 19. Un-metered connections:
2. Direct Hooking (Unauthorized Colonies, JJ Clusters
3. Tampering / By -passing of Meter Street Lights Poles)
4. Misuse of Category
5. Use of Multiple Connections - Misuse of Slab
6. Sanctioned Load lower than actual usage Collection Process Deficiencies:
20. Part Payment by Consumer
21. Non Delivery of Bills
Metering Process Deficiencies: 22. Non Payment by Consumer (Defaulters)
7. Meter (address) not traceable 23. Premise Disconnected with Dues
8. Import / Export Metering Error
9. CT Ratio Errors
10. Stop / Slow / Defective Meter
11. CT Ratio Errors
12. Meters not read
13. Mismatch of Meters
13

14
Loss Reduction Strategy – Technical Solutions
High Loss
Implemented in more
High HVDS than 250 areas, more
Resistance under implementation.
Areas
High Loss
Approx. 2,500 Kms of
Low LT ABC LT ABC laid, more
Resistance under implementation
Areas
Electronic
Metering Schemes implemented
Meters, AMR,
Initiatives successfully, more
Pre-Paid
under implementation
Metering
15

16
Energy Accounting – Flow Chart
Tier 1: Transmission level 66 or 33 KV STU to DISCOM
M By STU
66/33/11 KV
Tier 2 : Sub transmission Level
11
KV FEEDERS TO ZONES
M M
Feeder Meter
At Consumer Premises
With HT Load 11KV/415 V DT
M
Tier 3 : Distribution level For Energy Accounting
At Consumer
M M Premises
17

18
Business Process Re-engineering (BPR)
Consumers
CCG
Call Customer Website Drop

Center Care Center E mail Letters boxes
CMG MMG MRG RBG RCG RRG RDG
RAG
Policy Regulatory Bench Data Revenue Infrastructure
Advocacy Compliance Marking Analysis Protection Support
SAMBANDH – Integrated Commercial Package software- Industry First!!
19

20
Automatic Meter Reading (AMR):
I. METERING METER
GSM-MODEM GSM-Network
II. COMMUNICATION
PSTN-MODEM
PSTN-Network
S/W
USERS
DEBS
LAN
III. BACK OFFICE DB
21

22
Automation Roadmap: Journey so far …
• GIS - Completed
• GSAS - Completed
• Communication Network - Established and Stabilized
• SCADA - In Operation
• DMS - Under Implementation

• DA - Under Implementation
• OMS - Under Implementation
23

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

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

• Initiatives in association with State Govt.
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
• Background
• Key Initiatives
• Results
31
Savings to Govt. – Victory Curve
32
Loss Reduction (Trend):
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

1,095 1,219 1,568 1,897 2,132 2,394 2,539 2,759
Cr)
AT&C Loss
47.79 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
97.18 95.78 100.2 100.73 104.94 103.04 102.87 101.34
Efficiency (%)
33
Augmentation of Network Capacity:
Particulars Voltage Unit On Takeover 2010 (As % Change

Level - Jul 2002 on date)
66 kV MVA 860 1,545 80

Transformation
33 kV MVA 791 1,484 88
Capacity
11 kV MVA 1703 3,770 121
Total (MVA) MVA 3,354 6,799 102
66 kV KM 176 309 76
Transmission
33 kV KM 156 318 103
Lines
11 kV KM 2,245 3,555 58
Total (KM) KM 2,578 4,182 62
34
Results – Few other parameters
PARAMETERS / PARTICULARS BEFORE AT

TAKEOVER PRESENT
OPERATIONAL:
Capital Investment (Rs Crores) 1,210 Add. 2,500
(Valuation)
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
• Background
• Key Initiatives
• Results
36
Awards & Recognitions - To name a few
National Award for Meritorious Performance

(For Years 2004-2005 & 2005-2006)
37

(For Year 2007-08)
38

(For Year 2008-09)
39
ASIAN POWER AWARDS – POWER UTILITY OF THE YEAR

(FOR YEARS - 2007, 2008 & 2009)
40
Edison Electric Institute (EEI) 2008 - Award for Implementation of GIS
Edison Electric Institute (EEI) 2009 – Award for Policy Advocacy
41
Expert Choice Award

Public Lok Adalat Award for Most Admired
for the 10,000 Settlements Organization - By
in 2 ½ years Power Line
SUGAM Award for Intelligent Enterprise

Transparency in Billing Award for IT initiatives
System - By Indian Express
Leadership Award for

excellence in Power Award for Corporate
Distribution – By Amity Social Responsibility -
By Amity
42
• Background
• Key Initiatives
• Results
43
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
• 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)
46
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

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
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
Thank You
50

16 - Y S Butola - Performance Improvement of The Distribution Segment A Case Study of NDPL

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Department of Industrial and Management Engineering

Indian Institute of Technology Kanpur

3rd Capacity Building Programme for

Performance Improvement of the

Arup Ghosh , Chief Operating Officer

• Strategic Road Map and Strategic Decisions

• Rewards & Recognitions

• Issues / areas requiring attention of Regulators

• 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

T & D Loss Trend - Pre-privatization

• Billing Efficiency = 53.72

• Collection Efficiency = 97.18

• AT & C Loss Level = approx 53 %

Joint Venture of TATA Group with Delhi Govt.

Per Capita Consumption (Units) 1,246 1,439 *

No of Consumers / Sq km 1,568 2,372

* (National Average of 500, Mumbai – close to 850)

• Strategic Road Map and Strategic Decisions

• Rewards & Recognitions

• Issues / areas requiring attention of Regulators

STRATEGY FOR THE 1S T CONTROL PERIOD (2002 – 2007)

1,00,000 No Planned 5,400 Staff

WHAT NDPL INHERITED – JULY 2002

• Centralization of Commercial activities / Processes

• Replacement of Old Electro-mechanical Meters by New

• Intensive introduction of Technology

• Strategic Road Map and Strategic Decisions

• Rewards & Recognitions

• Issues / areas requiring attention of Regulators

Key Initiatives & Implementation:

• Identification of components of AT&C Losses

Technical Loses: Billing Process Deficiencies:

Key Initiatives & Implementation:

• Identification of components of AT&C Losses

Key Initiatives & Implementation:

• Identification of components of AT&C Losses

Tier 2 : Sub transmission Level

Key Initiatives & Implementation:

• Identification of components of AT&C Losses

Call Customer Website Drop

CMG MMG MRG RBG RCG RRG RDG

SAMBANDH – Integrated Commercial Package software- Industry First!!

Key Initiatives & Implementation:

• Identification of components of AT&C Losses

Key Initiatives & Implementation:

• Identification of components of AT&C Losses

• Communication Network - Established and Stabilized

• DMS - Under Implementation

• OMS - Under Implementation

Key Initiatives & Implementation:

• Identification of components of AT&C Losses

• Development of Tamper Proof Energy Meters

• Payment Avenues increased from 20 Nos. (July 2002) to

• Door delivery of new Electricity Connection

• SMS Based Complaint Management System