Electrical Monitor :: IT Drives Power Efficiency

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IT Drives Power Efficiency

Venugopal Pillai , Wednesday, February 16, 2011, 15:35 Hrs [IST] Information technology companies are seen playing a pivotal role in Indias power distribution sector through the Centrallysponsored Restructured Accelerated Power Development & Reforms Programme that vows to cut ATC losses to 15 per cent across major towns and cities. The special study by Venugopal Pillai reviews the progress of R-APDRP (Part A) across major states, and attempts to give insights into the challenges ahead of both IT implementation agencies and power utilities The advent of information technology companies in India's power sector, through the Restructured Accelerated Power Reforms & Development Programme (R-APDRP), is a very important milestone. For India that has been traditionally infamous for both power shortages and commercial losses, IT companies have a big role to play in bringing about efficiency and much needed commercial viability to the power sector. The 50,000-crore R-APDRP project of the power ministry is a nationwide pursuit to bring down ATC (aggregate technical and commercial) losses to 15 per cent in project areas, which translates to over 1,400 towns nationwide. Part A of the programme involves extensive use of IT-related applications, aiming among other things, to create baseline data of both consumers and infrastructure. Part B will involve strengthening of the physical power distribution infrastructure. R-APDRP (Part A) will be an IT-centric exercise where consultants and implementation agencies (also called as system integrators) will work towards creating sophisticated infrastructure for better management of the power distribution network, mainly with a view to clamping down commercial losses. The typical mandate for IT implementation agencies is comprehensive: starting from creation of a data centre, disaster recovery centre, implementation of consumer indexing and asset mapping on GIS platform, setting up of automated metering reading systems, etc. The IT-IA will also establish software for new connection management, metering, billing, energy audit, customer care, etc. R-APDRP (Part A) has made a beginning in several states. IT consultants and implementation agencies have got down to implementing what could be technologically the most sophisticated phase of India's power sector upgrade. So far, the Central government has sanctioned nearly 5,200 crore worth of financial assistance to power utilities under R-APDRP (Part A), out of which nearly 1,500 crore has been actually disbursed. It may be mentioned that R-APDRP is applicable only to towns that have a population of 30,000 or more (10,000 or more in the case of Special Category states) and where ATC losses are above 15 per cent. The programme is not applicable to areas where power distribution is privatized. In this reckoning, Orissa is the only state that is entirely left out of the purview of R-APDRP. Some distribution circles in Maharashtra, Delhi and Uttar Pradesh have been privatized and are hence out of the project's purview. In this special study, Electrical Monitor attempts to gauge the overall current status of R-APDRP touching upon aspects like appointment of IT consultants and IT implementation agencies, state-wise developments surrounding R-APDRP (Part A), challenges being faced by utilities and IT agencies, and the way forward. OVERALL STATUS Electrical Monitor got in touch with Power Finance Corporation Ltd, the nodal agency, to know the overall status of R-APDRP-Part A. Officials of PFC elaborated on two broad aspectsappointment of IT Consultants (IT-C) and appointment of IT Implementation Agencies (IT-IA) with respect to the 49 state power utilities that would be involved in R-APDRP. Regarding IT-C, officials said that all utilities that had opted for consultants under R-APDRP have completed the appointment formalities. In Kerala, it is learnt, the process of appointment of IT-C has been put on hold for some technical reasons. Maharashtra (one utility), Andhra Pradesh (four utilities) and Goa (one utility) chose to appoint the IT-C on their own, which means outside the purview of R-APDRP. "PFC was not involved in the appointment of IT-C in these three states," officials explained. As far as appointment of IT-IA goes, the progress has been slower. Around ten utilities have yet to complete the appointment, PFC officials said. They however added that all the pending utilities have reached the technical stage of bidding and by the end of February 2011, all these utilities are expected to have their IT implementation agencies in place. The seven north-eastern states represent the majority with respect to IT-IAs pending appointment.

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IT CONSULTANTS According to reliable information available with Electrical Monitor, there are eight IT-Consultants, either as individual companies or in consortium, currently associated with RAPDRP (Part A). This does not include states like Maharashtra, Goa and Andhra Pradesh where consultants have been appointed outside R-APDRP, and Kerala, where the appointment of IT-C, though under R-APDRP, is pending due to technical reasons. The most successful IT-C, in terms of both geographical reach and the number of distribution utilities catered to, appears to be the consortium of Feedback Ventures Pvt Ltd and Mastek Ltd. The duo has been appointed IT-C by as many as nine distribution utilities spread over seven states (See table). The other leading IT-C is the consortium between Central PSU Telecommunication Consultants India Ltd and Vayam Technologies Ltd that is based in New Delhi. Vayam, apart from R-APDRP, is implementing several IT-consultancy projects for the Central government. For instance, it is involved in India's largest e-governance project and also the country's first e-district project. Some other IT-C contributing to R-APDRP (Part A) are Infosys Technologies, Wipro, CMC, and Zensar Technologies (with CESC). It is interesting to note that private power distribution utilities, capitalizing on their experience, are also rendering IT consultancy to R-APDRP projects. North Delhi Power Ltd (a joint venture led by Tata Power) and Reliance Infrastructure Ltd are cases in point. While NDPL is associated with utilities in Chandigarh, Chhattisgarh and Haryana, RInfra is rending ITconsultancy to all the five discoms of Karnataka. IT IMPLEMENTATION AGENCIES As of today, R-APDRP (Part A) has provided business worth nearly 3,000 crore to IT implementation agencies, according to estimates made by Electrical Monitor. This estimate is on the conservative side as the value of IT-IA contract is not available in all the cases (see table.) Moreover, several states/Union territories have yet to finalise the appointment of IT-IAs. These are the seven north-eastern states, Chandigarh, Haryana, Jharkhand, Kerala and Haryana, to the best of Electrical Monitor's knowledge. Once all utilities appoint IT-IAs, the business volume generated will be much higher. In terms of allocation, R-APDRP (Part A) has an outlay of 10,000 crore and industry experts believe that the business volume that IT-IAs could capture is anywhere between 6,500 to 7,500 crore. A total of around 100 agencies have been empanelled by nodal agency Power Finance Corporation. The rest of the allocation would be divided into IT consultancy, and also telecom service providers that would be providing bandwidth service. According to the survey made by Electrical Monitor, Tata Consultancy Services (TCS) is so far the most successful IT-IA. This Tata Group enterprise is providing IT-IA services to 13 power distribution utilities in four statesAndhra Pradesh, Gujarat, Madhya Pradesh, West Bengal and Sikkim. The total value of these contracts is well over 750 crore. HCL Infosystems is also a significant player. In October 2009, the company bagged a 529-crore mandate for providing IT-IA services to three discoms in Rajasthan, covering 87 towns housing over 1 crore people. This is the first contract placed under R-APDRP (Part A) and is also widely believed to be the single-largest IT-IA contract placed so far. Apart from the northern desert state, HCL Infosystems is also working on a 100-crore IT-IA mandate in Himachal Pradesh. Besides, HCL Group company HCL Technologies is providing IT-IA services to Uttar Pradesh in 172 towns served by four distribution utilities. Role of SCADA/DMS Supervisory Control & Data Acquisition (SCADA) and Distribution Management Systems (DMS) are essential tools for power utilities to monitor and control their electrical distribution networks. Under RAPDRP-Part A, utilities are expected to appoint SCADA-DMS consultants (SDC) in urban areas where the population exceeds 4 lakh. It may be noted that since RAPDRP-Part A covers urban project areas where population is more than 30,000, state utilities may not find the need to appoint SCADA consultants in all project areas. Populous states like Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh, Gujarat, Madhya Pradesh, Rajasthan and Tamil Nadu are some examples where SDCs have been appointed. According to information available with Electrical Monitor, Reliance Infrastructure is amongst the leading SDC under RAPDRP-Part A. The Anil Ambani-controlled firm is executing SCADA-DSM consultancy works in at least 15 cities in four states of Maharashtra, Haryana, Chhattisgarh and Bihar. RInfra is also engaged as ITConsultant for five discoms in Karnataka. Industry experts feel that SDCs get an opportunity to work very closely with power distribution utilities, given them an in-depth understanding of the consumer profile and systems. Whenever cities serviced by SDCs come up for privatization under the distribution franchisee route, SDCs are better equipped to evaluate proposals and have a distinct competitive edge.

Spanco Ltd is emerging as a leading IT implementation agency for R-APDRP (Part A) projects. It debuted in this space with a 284-crore order from Punjab State Electricity Board in April 2010. This was followed by three orders in Maharashtra, Bihar and Goa, with a total value of 340 crore. Other IT-IAs currently at work with R-APDRP (Part A) include Infinite Computer Solutions (in association with Phoenix), ITI Ltd with Navayuga Infotech, KLG Systel and Wipro Infotech. STATE-LEVEL DEVELOPMENTS Electrical Monitor contacted power distribution utilities of several states and Union territories to know the

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general current status on their respective R-APDRP (Part A) projects. While most officials were very forthcoming in discussing the project, including the challenges being faced or anticipated during project implementation, some state government officials preferred not to speak to the media, while others could not be reached. The following is a brief state-wise summary. Assam & north-eastern states: The entire north-eastern region comprising the seven states of Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura has yet to see the appointment of IT-IA. However, some states like Assam and Meghalaya have appointed the IT consultant. Officials of Lower Assam Power Distribution Company Ltd, one of the three discoms in Assam, said that Assam would be the lead state in terms of appointment of ITIA. A high-level meeting of officials of Assam state power utilities is soon expected where the appointment of IT-IA would be finalized. Assam would be the lead state and whatever decision it takes with respect to appointment of the IT-IA would be binding on the remaining six states, officials explained. There is no timeframe envisaged for the IT-IA appointment but it is likely to materialize by February end, they said. It may be mentioned that Assam Power Distribution Company Ltd was split into three entities, each catering to the lower, central and upper regions of the state, in late 2009. In the entire north-eastern region, there are 134 towns housing a population of 55 lakh to be covered under R-APDRP (Part A). The lead state Assam would have 64 towns with 31.4 lakh people covered under the programme.

Financial assistance under R-APDRP (Part A) No. of Population No. of Loans ( crore) towns (lakh) utilities Sanctioned Disbursed Andhra Pradesh 113 199.97 4 388.04 116.40 Arunachal Pradesh 10 1.81 1 37.67 0.00 Assam 67 31.43 3 173.76 51.95 Bihar 71 76.81 1 194.58 58.35 Chandigarh 1 8.09 1 33.34 0.00 Chhattisgarh 20 32.94 1 122.45 36.74 Goa 4 3.39 1 110.74 31.46 Gujarat 84 172.94 4 225.34 67.61 Haryana 36 51.91 2 165.60 49.68 Himachal Pradesh 14 4.13 1 81.06 24.32 Jammu & Kashmir 30 23.17 1 134.49 40.35 Jharkhand 30 52.48 1 160.61 29.99 Karnataka 100 156.06 5 391.18 117.34 Kerala 43 72.81 1 214.38 64.31 Madhya Pradesh 83 119.79 3 228.89 68.41 Maharashtra 130 377.69 1 324.29 97.24 Manipur 13 4.71 1 31.55 0.00 Meghalaya 9 4.45 1 33.98 0.00 Mizoram 9 4.21 1 35.12 0.00 Nagaland 9 3.43 1 34.58 0.00 Puducherry 4 6.49 1 27.53 0.00 Punjab 47 67.34 3 272.83 81.86 Rajasthan 87 109.61 1 315.95 94.81 Sikkim 2 0.44 1 26.30 7.89 Tamil Nadu 110 201.36 1 417.05 125.08 Tripura 16 4.97 4 35.20 10.31 Uttar Pradesh 168 273.82 1 665.49 190.27 Uttarakhand 31 19.38 1 25.82 37.74 West Bengal 62 204.97 1 160.12 47.99 Total 1,403 2,290.58 49 5,167.94 1,450.10 Source: R-APDRP official website State/UT Andhra Pradesh: The R-APDRP (Part A) is progressing satisfactorily in Andhra Pradesh, officials of Andhra Pradesh North Power Distribution Company Ltd, one of the four discoms said. Tata Consultancy Services has been appointed IT-IA for all the four discoms, with the project area spanning 113 towns. Officials expect that one of the pilot towns Warangal in the northern part of Andhra Pradesh lying in the namesake district would be ready by April 2011 while all the remaining towns would be ready progressively by November 2011. Andhra Pradesh, it may be mentioned, appointed its ITC on its own, outside the R-APDRP purview. Chandigarh: This tiny Union territory, which is capital to both Punjab and Haryana, has only one town covered under RAPDRP. Officials of Chandigarh Engineering Department, which also looks after power distribution, explained that discussions were still in progress for the appointment of IT-IA. However, considering that the project scope is limited, the bidding process would be both time consuming and disproportionately expensive. Hence, it has been decided, conforming to Union power ministry guidelines, that the ITIA for neighbouring state Punjab would be mandated to undertake works in Chandigarh as well. Mumbai-based Spanco Ltd that has been appointed IT-IA for Punjab is therefore likely to have its scope extended to include neighbouring Chandigarh. List of IT-Consultants* IT-Consultant State/s J&K (1) Tripura (1)

CMC

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Feedback Ventures + Mastek

Assam (3) Gujarat (1) Meghalaya (1) Puducherry (1) Mizoram (1) Tamil Nadu (1) West Bengal (1) Infosys Technologies Madhya Pradesh (3) Rajasthan (3) Uttar Pradesh (3) North Delhi Power Ltd Chandigarh (1) Chhattisgarh (1) Haryana (1) Reliance Infrastructure Karnataka (5) TCIL + Vayam Technologies Bihar (1) Gujarat (2) Haryana (1) Himachal (1) Uttar Pradesh (1) Uttarakhand (1) Wipro Ltd Jharkhand (1) Punjab (1) Sikkim (1) Zensar Technologies + CESC Gujarat (1) *List is indicative, figures in brackets stand for number of utilities Chhattisgarh: R-APDRP (Part A) took off in December 2010 with the appointment of KLG Systel Ltd as IT-IA, officials of the sole discom Chhattisgarh State Power Distribution Company Ltd said. North Delhi Power Ltd, the Tata Group-led power utility in Delhi, is the IT-C. R-APDRP in Chhattisgarh will span 20 towns with capital city Raipur being the pilot town. CSPDCL officials said that the statewide R-APDRP (Part A) will cover 28.22 lakh electric connections and a population of 6.76 lakh. Speaking of the time schedules, officials noted that while the pilot town of Raipur would be ready by November 2011, the remaining ones would roll out by June 2012. Officials also explained that in some towns like Raipur, Durg and Bhilai, there are SCADA-related works for which Reliance Infrastructure has been working as SCADA consultant. Gujarat: Gujarat appears to be making good overall progress, as gauged from the feedback received from a highlyplaced official of Uttar Gujarat Vij Company Ltd, one of the four state power distribution utilities. With Tata Consultancy Services being appointed IT-IA way back in November 2009 for all the four utilities, R-APDRP (Part A) is chugging along despite the odd challenges, the official said. The pilot town of Veeramgam (under the command area of UGVCL) is expected to be ready by February 2011, and as some industry sources believe, it would be amongst the first towns to be completed under R-APDRP (Part A) nationwide. Gujarat, in its entirety, has 85 towns housing 1.73 crore people to be covered under the programme. Gujarat is facing several challenges, some of which are strangely stemming from the fact that the western state has been very proactive in implementing IT-based solutions even before the advent of R-APDRP. (See section "Challenges" ahead.) Haryana: This northern state is on the verge of appointing its IT-IA, officials of Uttar Haryana Bijli Vitaran Nigam Ltd said. The price bids have been opened and the IT-IA should be finalized by mid-February, they said. "The response to the bidding process was encouraging," officials noted without commenting on the contenders. Haryana will have a common IT-IA for its two utilities, Uttar and Dakshin Bijli Vitaran Nigam. However, the two utilities have appointed different IT-Consultants (see table). Officials also noted that there would be some SCADA-related work in the project areas of Dakshin Bijli Vitaran Nigam. Haryana has 36 towns housing 52 lakh people, to be covered under R-APDRP (Part A). Jammu & Kashmir: The state that has always been known for its weak and inefficient power infrastructure has made a recent beginning to its R-APDRP (Part A) endeavour with Wipro Infotech being appointed as IT-IA. Speaking to Electrical Monitor, senior official of the state's Power Development Department said that the R-APDRP project will cover 30 towns housing 23.2 lakh people. Wipro will implement the project over the next 18 months and will have a four-year operations & maintenance contract thereafter. The official said that inefficient power distribution was a big drain on the state's economy with AT&C losses running as high as 57 per cent. "It is a black box," the official said who chose anonymity. "Only a small percentage of the power generated translates to revenues to the state," he added. PDD officials are hopeful that successful implementation of R-APDRP (Part A) would be the first step towards bringing in much needed efficiency in the power distribution sector. List of IT Implementation Agencies* Agency HCL Infosystems Ltd HCL Technologies Ltd Infinite Computer Solutions Ltd + Phoenix Infosys Technologies Ltd ITI Ltd + Navayuga Infotech Ltd State/s Himachal Pradesh (1) Rajasthan (3) Uttar Pradesh (4) Uttarakhand (1) Karnataka (5) A & N Islands Puducherry Tamil Nadu (1) Chhattisgarh (2) Bihar (1) Goa (1) Maharashtra (1) Value ( crore) 100 529 125 307 307 90 160 85 95

KLG Systel Ltd Spanco Ltd

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Tata Consultancy Services Ltd

Punjab (1) Andhra Pradesh (4) Gujarat (4) Madhya Pradesh (3) Sikkim (1) West Bengal (1) Wipro Infotech Ltd Jammu & Kashmir (1) *List is indicative; figures in brackets stand for number of utilities

284 283 293 193

Jharkhand: While Wipro has been appointed IT-C, the appointment of the IT-IA is still pending, officials of Jharkhand State Electricity Board said. No further details were available. The scope of R-APDRP (Part A) will cover 30 towns housing 52.5 lakh people. Kerala: The appointment of IT-IA in Kerala has embroiled into a controversy. Although Kerala State Electricity Board could not be reached for comment, it is reliably learnt that the contract for IT-IA placed on Korea Electric Power Data Company in July 2010 was scrapped in mid-December 2010. The award of this contract, valued at nearly 240 crore, came under sharp criticism from the Opposition for alleged lack of transparency in the bidding and award process. KSEB plans to re-tender the contract, it is further learnt. Karnataka: At five, Karnataka has the maximum number of power distribution utilities for any state. Reliance Infrastructure Ltd is the IT-C for all the five discoms while Infosys Technologies is playing a role of IT-IA statewide. Speaking to Electrical Monitor, a nodal officer of Chamundeshwari Electricity Supply Company (CESC), one of the five discoms, said that in the command area of CESC, the pilot town project would be implemented by February or March 2011 all towns would be covered by November 2011. A spokesperson from Hubli Electricity Supply Company (Hescom), another discom in Karnataka, said that R-APDRP (Part A) was progressing well in Hescom's command area where 31 towns are being covered under the programme. While the pilot town of Dharwad would be ready by April 2011, the remaining towns would be gradually commissioned thereafter. Across entire Karnataka, R-APDRP (Part A) spans 99 towns housing a population of over 1.5 crore. The official observed that while the mandated completion date for all towns in Karnataka, spread over five discoms, was June 2011, the actual timeline might stretch by a few months. He also noted that the appointment of a common IT-Consultant for all the five distribution utilities has brought about better co-ordination and greater efficiency in project execution. Tamil Nadu: A consortium of ITI Ltd (formerly Indian Telephone Instruments Ltd) and Hyderabad-based Navayuga Infotech Ltd has been appointed IT-IA for this southern state, an official of Tamil Nadu Generation & Distribution Company Ltd (Tangedco) said. Electrical Monitor also got in touch with Bangalore-based ITI Ltd. A nodal officer of ITI said, "The letter of approval was awarded on January 14, 2011, and we have begun preliminary work." The contract is worth over 300 crore and marks the entry of ITI in the field of IT solutions for the power sector. Apart from 114 towns in Tamil Nadu, the ITI-Navayuga consortium will also act as IT-IA for Puducherry (four towns) and Andaman & Nicobar Islands (one town), the official explained, adding that the contract has an 18-month completion period schedule. As far as the geographical spread of a single IT-IA contract goes, the Tamil Nadu contract is very prominent, an industry expert felt. West Bengal & Sikkim: Nodal agency West Bengal State Electricity Distribution Company not very forthcoming in discussing matters over telephone. An official merely confirmed the appointment of Tata Consulting Services as the IT-IA and said that the project was underway. TCS, apart from executing R-APDRP (Part A) in 63 towns in West Bengal, will also act as IT-IA for neighbouring Sikkim where it would be involved with two towns. A senior official of Sikkim Energy & Power Department told Electrical Monitor that while TCS will be the IT-IA for Sikkim, physical work on the project has not yet begun. The power ministry is currently finalizing the cost estimate for R-APDRP (Part A) works in Sikkim. One the cost estimate is approved, the IT-IA could begin work, he noted. The official elaborated that the project would be implemented in two townsGangtok and Upper Tadong. While the data centre would be shared with West Bengal and housed in Kolkata, Sikkim's consumer care centre would be set up at Gangtok, he explained. CHALLENGES It must be accepted that physical commencement of R-APDRP (Part A) projects, at least in some states, is a milestone development for the Indian power sector. However, the entire exercise is fraught with challenges that can be overwhelming and even daunting. Electrical Monitor in its interaction with state power utilities and IT-IAs sought to understand the ground realities and anticipated challenges. Power utilities unanimously maintained that the journey is going to be far from smooth given that this massive exercise is unprecedented. The collective body of experience of both utilities and implementation agencies is yet insignificant, and all involved in R-APDRP (Part A) are grappling with surprises, many of which are unforeseen and of course, unwelcome. By far the biggest impediment that utilities foresee is implementation of the GIS (Geographic Information System) mapping. Under this, all utilities are expected to create an indexed database of customers and assets using GIS mapping. The technology available with IT companies, leave alone power utilities, is limited. This is in turn because although the Indian IT industry is versatile and even globally competent, the experience in the power distribution sector is limited. Unfortunately, the power distribution sector in India has traditionally been a messy affair resulting in daunting challenges for implementation agencies. Lack of relevant IT experience was a concern shared by several utilities. As earlier mentioned, Indian IT companies have done wonders in say the financial sector, but when it comes to power distribution, their experience is limited. Informally, it is learnt that some IT-IAs are falling behind their time schedules because many ground realities were never anticipated during project design and planning. Consumer indexing, which forms the core component of baseline data, is a tough job, utilities feel. There is no solid precedent in India that can be followed, it is felt.

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One power utility official said that private distribution utility North Delhi Power Ltd has accomplished the task of consumer indexing in its command area. However, this process took years, including much trial and error and periodic change in software applications. "Consumer indexing is as challenging as it is critical," he noted. SEB restructuring bears fruit: Study The Indian Institute of Public Administration (IIPA) in its study has concluded that "despite some short comings, the overall impact of restructuring has been positive and in the right direction." IIPA was commissioned by the Union ministry of power to study the impact of reorganization of state electricity boards. The report given by IIPA states that overall improvement have been noticed in four states-Andhra Pradesh, Haryana, Karnataka and Orissa. The improvement has come about by several parameters that include: trend towards reducing AT&C losses; increased and more focused investments; capacity addition and strengthening of the power systems; localization and reduction of inefficiencies; improved customer care; progress in metering, billing and collection etc; increased accountability of the utilities; establishment of regulatory mechanism; empowerment of consumers; and reporting and reviewing of performance of the utilities on a regular basis. The setting up of automated metering reading (AMR) systems is another factor that could delay matters, utilities felt. While AMR systems will be a boon in terms of remote reading of meters (without human intervention), there are issues of compatibility. There are different types of meters currently installed all over, and the proposed AMR system should be able to "relate" to a diversity of meter types. Standardisation of meters has always been an area of concern even before the advent of APDRP. One utility official maintained that for a long time, no Indian specification for DLMS (Device Language Message Specification) protocol existed. It was only recently that the Union power ministry finalized and promulgated the DLMS protocol for India. While one can expect future energy meters to be standardized, one cannot be sure of electronic energy meters already installed. With respect to IT-IAs, the challenge foreseen is the sheer lack of time available. On an average, an IT-IA is expected to deliver the pilot town project within 12 months and the entire project area in six months thereafter. One IT-IA that Electrical Monitor interacted with admitted that time overrun cannot be ruled out because, among other things, R-APDRP (Part A) involves co-ordination with multiple government agencies. In several states, more than one distribution utility exists but there is only one IT-IA per state. Further, in some cases, the scope of a single IT-IA extends even to neighbouring states. Progressive states like Gujarat have done a lot of IT-related work independent of R-APDRP. A senior official of Uttar Gujarat Vij Company Ltd said that the incumbent IT-IA will have to ensure that the new IT infrastructure that would be developed is compatible with the existing software. "The IT-IA would also have to ensure that intelligent interfaces are created so that the transition is smooth." Following the successful implementation of R-APDRP (Part A), power utilities will expect to undertake Part B which involves strengthening of 33/11kV power distribution infrastructure. However, grants under Part B will be available only when ATC losses (measured after implementation of Part A) are less than 15 per cent. There is a piquant situation where some towns already have ATC losses lower than 15 per cent. With this, utilities will no access to Part B funds purely on ironic technical grounds. For instance in Uttar Gujarat Vij Company Ltd that has 20 towns with a population exceeding 30,000, the ATC losses in only six towns exceeds 15 per cent and hence only these qualify for Part B funding. A similar situation exists for a couple of cities in Rajasthan. "Instead of complimenting us for having low ATC losses, we are being penalized," an official of UGVCL official noted in a lighter vein. THE WAY FORWARD For a country like India that aspires to grow by 7-8 per cent, an efficient power sector is a prerequisite. Power shortages apart, the sheer fact that the country's power losses are ruling at over 30 per cent is an embarrassing reality that cannot be condoned. Revenue realizations of state power distribution entities are pathetic, financially atrophying the entire power system. The gravest reality facing distribution utilities today is unaccountability of power consumption. Except in cities, the entire act of power consumption is a largely unaccounted activity. Utilities are not equipped with a scientifically-designed database about who their consumers are, where power distribution assets are located, etc. Thus, the baseline data on which management and strategy planning can be based is simply missing. R-APDRP (Part A) aims to achieve precisely this, moving further to the upgrade of physical power distribution infrastructure. For IT companies, the job is tough. As pointed out earlier, the experience of IT companies in the power distribution sector is limited. Further, the scale and complexity of an RAPDRP project can pose unforeseen challenges. A power distribution utility official nicely summed up the situation: "Designing a plan in air-conditioned offices is one thing and executing it on ground is quite another." It would be unfair to expect miraculous results from the IT sector given the timeframe of 12-18 months that they have been allotted. Creating an IT backbone, which is quintessentially the backbone of power sector reforms, will of course take time. All the same, one can expect that matters will progressively improve over time. During 2011, one can expect the first set of IT-enabled towns, envisaged under R-APDRP (Part A), to roll out. It can only then be clear how IT infrastructure "behaves" in real life. At the moment, the primary focus is on

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getting the plan rolling. It is premature to think of the benefits that will come along. In a way, the benefits of IT-enabled solutions are already there to see. For example, privatization of distribution circles has brought about drastic reduction in ATC losses. Apart from private sector acumen, the role of IT-based solutions has been very prominent in bringing about technical and commercial efficiency. For a developing country like India, while augmenting power generation and transmission infrastructure would always be a priority, it would never bring desired results if distribution losses are not plugged. It would be as meaningless as trying to voraciously fill up a barrel riddled with holes. After years of neglect, the power distribution sector today stands at the cusp of reform and resurrection. IT companies will need to play a supportive role in bringing about this transformation, helping India to groom its power sector into a robust and efficient enabler of socio-economic development. Introduction to R-APDRP The government of India proposed to continue Restructured Accelerated Power Development & Reforms Programme (R-APDRP) as a Central government scheme during the XI Plan with revised terms and conditions. The focus of the programme is on actual, demonstrable performance in terms of sustained loss reduction. Establishment of reliable and automated systems for sustained collection of accurate base line data, and the adoption of information technology (IT) in the areas of energy accounting will be essential before taking up the regular distribution strengthening projects. PROGRAMME COVERAGE It is proposed to cover urban areas (towns and cities) with population of more than 30,000 (10,000 in case of special category states). In addition, in certain high-load density rural areas with significant loads, works of separation of agricultural feeders from domestic and industrial ones, and of high voltage distribution system (11kV) will also be taken up. Further, towns / areas for which projects have been sanctioned in X Plan R-APDRP is being considered for the XI Plan only after either completion or short closure of the earlier sanctioned projects. PROPOSED SCHEME Projects under the scheme shall be taken up in two parts. Part-A shall include the projects for establishment of baseline data and IT applications for energy accounting/auditing and IT-based consumer service centres. Part-B shall include regular distribution strengthening projects. The activities to be covered under each part are as follows: Part A: Preparation of base-line data for the project area covering consumer indexing, GIS mapping, metering of distribution transformers and feeders, and automatic data logging for all distribution transformers and feeders and SCADA/DMS system (only in the project area having population exceeding 4 lakh and annual input energy of the order of 350 million kwh). It would include asset mapping of the entire distribution network at and below the 11kV transformers and include the distribution transformers and feeders, low tension lines, poles and other distribution network equipment. It will also include adoption of IT applications for meter reading, billing & collection; energy accounting & auditing; MIS; redressal of consumer grievances; establishment of IT-enabled consumer service centres etc. The base line data and required system shall be verified by an independent agency appointed by the Union ministry of power. Part B: Renovation, modernization and strengthening of 11kV level substations, transformers/transformer centers, reconductoring of lines at 11kV level and below, load bifurcation, feeder separation, load balancing, HVDS (11kV), aerial bunched conductoring in dense areas, replacement of electromagnetic energy meters with tamper proof electronics meters, installation of capacitor banks and mobile service centres etc. In exceptional cases, where sub-transmission system is weak, strengthening at 33kV or 66kV levels may also be considered. ELIGIBILITY CRITERIA FOR R-APDRP ASSISTANCE The states/utilities will be required to: Constitute the state electricity regulatory commission Achieve the following target of AT&C loss reduction at utility level: Utilities having AT&C loss above 30%: Reduction by 3% per year Utilities having AT&C loss below 30%: Reduction by 1.5% per year Commit a time frame for introduction of measures for better accountability at all levels in the project area Submit previous year's AT&C loss figures of identified project area as verified by an independent agency appointed by the Union ministry of power by June 30; the independent agency would verify that: All input points are identified and metered with downloadable meters for energy inflow accounting in scheme area All outgoing feeders are to be metered in substation with downloadable meters Scheme area should be ring fenced i.e. export and import meters for energy accounting shall be ensured besides segregating the rural load of the scheme area by ring fencing if not on separate feeder The above shall provide the input energy and corresponding cash collected for calculating AT&C losses. The same shall be carried out for at least for three billing cycles and got verified by the independent agency. This loss level will be the baseline for considering conversion of loan into grant for Part B projects Devise a suitable incentive scheme for staff linking to achievements of 15 per cent AT&C loss in the project area. FUNDING MECHANISM The Central government will provide 100 per cent loan for Part A of the R-APDRP schemes

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which shall include projects for establishing baseline data and IT applications for energy accounting/ auditing and IT-based consumer services etc.

Government of India will provide up to 25 per cent (90 per cent for special category states). Loan for Part B of the R-APDRP schemes shall include regular distribution strengthening projects. The entire loan from the Centre will be routed through Power Finance Corporation (PFC), Rural Electrification Corporation (REC) or financial institutions for the respective schemes funded by them. The counterpart funding will be done by PFC/REC (FIs) as per its prevailing policy. PFC/REC will be the prime lender for funding these schemes. In case of default by the utility the commercial loan of PFC/REC will be recovered first (being the primary lender) before that of any other lender for funding such schemes. CONVERSION OF GOI LOAN TO GRANT The entire amount of Central government loan for Part A of the project shall be converted into grant after establishment of the required base-line data system within a stipulated time frame and duly verified by TPIEA (Third Party Independent Evaluating Agency). Up to 50 per cent (90 per cent for special category states) loan for Part-B projects shall be converted into grant in five equal tranches on achieving 15 per cent AT&C loss in the project area duly verified by TPIEA on a sustainable basis for a period of five years. If the utility fails to achieve or sustain the 15 per cent AT&C loss target in a particular year, that year's tranche of conversion of loan to grant will be reduced in proportion to the shortfall in achieving 15 per cent AT&C loss target from the starting AT&C loss figure.

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