CM 6-6 Change Requirement To Enhance Commercial and Financial Performance

Change Management in Power Distribution Distribution Reform, Upgrades and Management (DRUM) Training Program
Change Requirement to Enhance Commercial and Financial Performance

Compiled and edited by Pradeep Kumar Srivastava, CORE International, Inc. (based on the paper on Best Practices in Commercial Loss Reduction by Kodanda R. Parupally, CORE International, Inc. and Out Sourcing Power Services by Energy Economy & Environmental Consultants) Introduction There is a need to give a go by to existing attitude of as is condition and cant be improved. There are ways and means to improve the environment and customer attitude through various means. DISCOMs have to make an effort to improve commercial and financial performance. The Approach The DISCOMs have to resort to multi-pronged approach to build the confidence of the customers. There have been a host of reasons for illegal connections, non-payment of bills. If one looks at the genesis, it would be realized that the customers resorted to these due to two main reasons (besides some minor ones): Delay in getting connections Erratic and poor quality power supply
The reduction in commercial losses in power distribution utilities involves the following steps: 1. 2. 3. 4. Direct tapping by the non customers. Pilferage by the existing customers. Defective metering, billing and collection functions, and The role of franchisees, user groups and gram panchayats in billing and collection.
Direct tapping by non customers In certain areas, direct tapping of power by non customers is widely prevalent. This is mainly in domestic and agricultural categories. Geographical remoteness, mass basis for theft, poor law enforcement capability and inaction on the part of utility are helping this phenomenon. Some amount of public relations work by the utility is needed to tackle this menace. It is to be widely publicized that theft will increase the tariff for the genuine consumers, result in poor voltages, burnt motors, failed transformers and dried crops. The scarce resources of the state meant for social welfare are diverted to feed these power thieves.
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Some change in the value systems of the society is also needed. The opinion makers and social leaders are to be involved to effectively tackle this massive social evil. Direct theft is an insult and thus a challenge to the utility engineer. It speaks volumes about the inefficient functioning of the company. Tackling it brooks no delay. Other works can be stopped and total attention diverted for this purpose. The details of legislation, procedure to inspect, detect and prosecute the criminals are discussed separately. Pilferage of power by the existing customers Theft by the existing consumers is the predominant cause of loss of revenue to the electrical utilities. Almost all categories of the consumers are involved in this. However emphasis can be given on inspecting high value services for more effective and immediate gains. The modus operandi A. Totally bypassing the meter.
The meter is not tampered. It is like direct tapping. From the supply lines, the tapping is made and part or full load is fed from that. This can be proved only when it is observed at the time of inspection. The consumer can erase all traces of theft if the inspection is known in advance. B. Tampering the meter. 1. Bypassing at the terminal block. 2. Damaging the meter internal mechanism. There are umpteen methods for tampering the meter. New methods are being constantly evolved. The thief is always ahead of the police. The latter tries and sometimes succeeds in catching the former. The problem of theft, its magnitude, procedural aspects in detecting it and legal position are discussed now in detail. Here, it is to be noted that these are common for both customer and non customer theft. Tackling Power Theft
Genesis Theft of energy is almost the single cause of all ailments afflicting power utilities. The transformer failures, breakdowns, poor collection of revenue, financial losses, the wide spread customer dissatisfaction, the recurring crisis in summer crop period, the poor creditworthiness resulting in inability to raise the funds needed for the required growth, increased technical losses and the corroded integrity of employees... are all the manifestations of the theft. These can include low frequency, cascade trippings in grid and unscheduled shutdowns. The whole bad image of the utilities is due to theft. In the districts where theft is non existent, the utility is having good reputation and vice versa. Magnitude In the nation around Rs.40, 000 crores are lost by the utilities annually. In any other sector - be it private, public or joint - or be it in the state or the nation no other company is losing money in this magnitude. In the world over power utilities are making profits. Those shares are considered as retired peoples and widows' shares. They make money whether it is famine or flood, though not excess profits. With just half of this amount employment guarantee scheme is being planned. Within two and half years of this money all the 444 pending irrigation projects can be completed, irrigating millions of acres. Beneficiaries The beneficiaries of theft are anti social elements, immoral political abettors and unscrupulous industrialists. The bad money is driving out the good money from the market. This is a social menace crippling all other developmental and social welfare activities. Forerunner A.P., as usual, is the forerunner in recognizing this menace and established a separate wing for pilferage detection as early as in early sixties. Even now in some states there is no such separate cadre for detecting pilferage. The local officer, either operation or construction or MRT, is very much preoccupied with his busy day-to-day activities and cannot spare time for detection of theft. The social and political influences are more easily brought on the local officer who has, perforce, to deal with them in other fora regularly. A specialized knowledge on the functioning of various meters and the latest M.O. of power theft can be acquired by a dedicated band only. Personnel: While filling up DPE (Detection of Pilferage of Electricity) wing extra care is to be taken so as to have only officers having the required technical knowledge, tact, tenacity and integrity: at times, they would be detecting, dealing and deciding the cases involving crores of rupees on the spot.
Opportune time: With the advent of E.R.C., the functioning of electrical utility is now transparent. Its financial performance is in public gaze. The necessity of eradicating theft is realized by all. After realizing this, state governments are coming out in a big way to support the electrical engineers entrusted with the arresting of power pilferage. The opposition parties, farmers organizations, colony welfare associations and industrialists are one with us in this errand. If we do not move now, our very sincerity will be debated. One cannot be guilty of inaction on the notion that attempting to control theft is dangerous to ones self. Actually the test of ones loyalty to the organization is the number of cases she books in a month. Functions: Though originally DPE wing was meant only for detection of pilferage, of late its functioning is covering many other facets: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Malpractice. Back billing. Excess connected loads. Poor power factors in all categories. Running of captive generator sets without adequate safety arrangements etc. Non sealing of AB switches, meter boxes, and terminal covers. Line losses in selected towns, industrial feeders etc. Functioning of border meters, capacitor banks etc. Bus, P.T. and C.T. facilities for efficient metering. Inspection of high value UDC services. Study of MRBs. Applying CAT for HT & LT services and inspecting class F services, etc. Maintenance of assets by local officers. Billing irregularities in transformer repairs, maintenance and construction works. Non standard releasing of services. Releasing of services in UDC premises. Releasing of services in wrong categories. Coordinating massive inspections with all engineers and APTS personnel wherever required. Involvement of employees in various irregularities. Payment and billing pattern of services of VIPs.
Legal Aspects: Electricity Act 2003 is being implemented now in respect of power theft and other irregularities. The relevant sections with brief description are covered separately. Theft or pilferage of energy is a conscious and dishonest consumption of unmetered energy.
For back billing and such cases where no prosecution is contemplated, section 126 is desirable. Where the loss to utility is heavy, section 135 is to be taken recourse to and otherwise section 138. Sections 135 and 138 are cognizable, nonbailable and punishable with imprisonment. Judgementality: Understand the value systems of the judiciary. Let 99 criminals go scot-free, but one innocent person should not be convicted. So even an iota of doubt will make the case weak. The beneficiary of the crime and the motive are to be established convincingly. Above board. Not only respect judiciary but seem to respect too. Take the seat only when offered which is done fairly quickly. No unnecessary laughing. Keep a smiling face and give firm and polite replies. Rapport: Meet the people of the area in advance. Explain to them that the theft eradication is for their benefit. Higher tariffs, low voltages, drying crops, scarce resources for social welfare and development, failed transformers and burnt motors can be avoided. Initially target the opinion makers who will set the trend for others to follow. In some cases, attacking the weakest link may be taken recourse to. Prove that thieving is not any more economical. The arms and ammunition: Every engineer of utility, authorized to detect, must have the following materials always with her: Inspection notes, white papers, carbons, stamp, stamp pad, gum bottle, cutting pliers, cutter, spanners of assorted sizes, tester, 1000W heater, testing bulb, magnifying lens, torch light, camera, cloth backed covers, meter cartons and a hammer. Seals, sealing wire and sealing pliers are desirable. Where is theft? Contact your worker on one to one basis. He will come out. Explain to him that if theft is detected subsequently by any inspecting officer, he has to explain his ignorance lest he be impleaded as an abettor. If he points out some thefts, subsequent one or two findings can always be explained. Meter reading register is the best source to catch thieves. You go to a house, see the bill, connected load, the consumption pattern and you can easily conclude. Give wide publicity to the phones of vigilance and DPE officers. Once a message goes to the public that you are really serving your organization, there would be a constant stream of revelations by the informants. Reconnaissance: Select five to six targets in a locality. One person should know the location precisely and he should take the inspecting officer to the installation directly. The ownership, the name of the registered consumer, the name of person availing supply and the No./S.F.No. of the house/field are to be collected in advance.
Sensitive areas: The targets are to be finalized much in advance. The precise time of raid shall be kept confidential. Go in required numbers. Small is beautiful. Mobility is required. Get satisfied if you could detect one or two cases. Close the show in one or two minutes. Inform all the members of the team, to come back to the vehicle in one and a half minutes and there would be no waiting for them. To the extent possible, bring the criminal along with you. Sprinkle color: Take color photos of the scene and details of offence. Avoid private photographer; he may decline to stand as a witness in the end. Have five copies of each photo. Furnish negatives to police. Mark the particulars and if possible signatures on the reverse of photo. Writing notes: Fill up every item of the inspection notes. Note correct postal address. Draw a sketch of the scene of offence on a separate sheet marking the orientation. Try hard to get signature of the consumer/representative. Procure independent witnesses limiting to two. Even departmental witnesses should be limited to one or two. The utility cannot afford more witnesses. You lose the case by not being able to bring all the witnesses at a time for the hearing and by not being coherent. The scene and method of crime should be noted clearly. Don't commit the details of which you are not certain. Police. They are there to protect law and order and to look after all the teams. They are not there in a single scene of offence from the beginning to the end. Their names are not to be noted in the inspection notes. Seizure. The Act is emphatic on incriminating material. So bring the materials, wire and equipment to prove the crime. Note like this; The service wire and the motor used for committing the pilferage are removed from the scene of offence to hand over the same in the police station for producing in the court as material evidence. Keep the incriminating materials in a cover/carton, seal and have it attested by all. F. I. R. Give the complaint as soon as possible. Delay is dangerous. In the complaint you can add the names of the persons who are actually committing/abetting the crime. Narrate the whole event as it passed. Note the taking of photos, removal of incriminating material and hand over the same along with complaint. On a separate sheet, write down the full name, age, profession and address of all the people involved and give one copy to S.H.O. On a small slip, note down the details of crime, signatures and paste it to the removed material. Give extra slips to police. Court matters: calling out in a court is the initial stage in the day when the cases to be actually taken up on that day arc decided basing on the presence of the persons connected with the case. Crime No. is the number given to a complaint registered in the police station. Court Case No. (C. C. No.)/Original Suit No.(O.S.No.) is the serial
number of the case registered in the court initially. I.A.No. (Interlocutory Application No.) is the number given to an interim petition filed by either of the litigants in which one seeks an interim relief while the original case is yet pending. W.P.No. (Writ Petition No.) is the case number in high court. W.P.M.P. (Writ petition miscellaneous petition) is interlocutory application in W.P. IPC 186 is for mere obstructing the public servant and is cognizable. IPC 353 is for obstructing the public servant with force. It is bailable, cognizable and can go up to 2 years or fine or both. IPC 332 is for major injury to public servant. In cognizable offence, police can arrest without warrant. Cr. P. C. 43 authorizes private persons to arrest the criminals in certain cases. Rehearsal: One day before the trial, collect the witnesses and recollect the scene of offence so that the actual incident can be presented to the court accurately and with coherence. Ensure the presence of other witnesses. Go through the file. Meet the lawyers in advance and clear their doubts. Appeals are to be made in time. Suggestions: Let there be frequent change of incumbents interacting with the consumers. A message should go to every one in the society that theft would be curbed at any cost. Every officer should be made conscious of the present policy of making him accountable for the energy taken by him. A comparison with contiguous areas will highlight the weak spots. Any replacement of single phase meter shall be done only after S.O. inspects, Asst. Divisional Engineer in case of 3 phase meters. All removed meters should be handed over to M.R.T. It shall check every meter for possible tampering. Inaction-on the part of any field officer-in detecting cases shall be reviewed and taken seriously. The theft is very predominant in many areas. Single Section Officer or handful of DPE officers can never complete the job. Authorizing revenue and police officials, as is done in M.P., to detect theft is desirable. Sub engineers and UDCs also can be authorized to book category I cases at least when there is no meter at all. Electronic meters will go a long way in controlling theft. Clear guidelines on the procedure to be adopted, while releasing a new service, are to be issued. MIS: The performance of DPE wing is to be reviewed periodically as is done for other wings. Their functioning in all the activities is to be taken into account. MIS reflecting the performance of an officer in controlling theft is to be insisted. IT Applications: Of late, the rate of booking cases increased substantially. The drudgery of paper work is appalling. No meaningful review and follow-up is becoming possible manually. Marking of copies to various wings, communicating to them and confirming subsequent actions manually is really meaningless in this age. So I.T. should be brought in and made full use of. Already M.A.T.S. is being implemented in Hyderabad company. This is to be studied and revised suitably and implemented throughout. CAT is a useful tool for detection of theft before inspection. Nemesis: Control of theft is not a single time operation. No amount of hi-tech gadgetry, ABC, boxes to meters, theft-revealing meters - will serve any purpose unless they are
accompanied by continuous vigilance. Stop other work, if necessary, and rush for catching the thieves now! Theft of energy and Electricity Act 2003 I. II. III. Electricity Act 2003 brought radical changes in all the facets of the electricity sector. Let us consider its impact on power theft and assessment. Sec.55 contemplates compulsory metering of all the services within 2 years. Concerned E. R. C. is to initiate action on the defaulting company and person. It can extend this period if necessary. Sec.126. Earlier, the litigation could be prolonged endlessly. Further there were innumerable stages for appeal by the accused. Now they are reduced to just two. a. Inspecting officer is herself the provisional assessing officer and acts as the final assessing officer too. b. This section is non criminal in nature. c. Assessment is at one and half times the normal rate. d. The assessment is to be made for 3 months for domestic and agricultural services and 6 months for other services. e. The consumer could always say that he did not receive any notice from the utility. Now the Act says that it could be served on any person available. Sec.127. There is only one appeal. It is to be made within 30 days after making one third payment. Earlier, there was protracted litigation without any payment or with nominal payment. After such long periods, interest too was not levied. This section specifies 16% half yearly compounded interest after 30 days of order of assessment and not from the date of serving of the notice. Further, the decision is final. Sec.135. Criminal prosecution is to be launched on the person who DISHONELSTLY taps, tampers, damages etc. a. 3 years imprisonment or fine or both can be levied. For the first offence, the fine is at 3 times the loss sustained by the utility. For the second offence, it is at 6 times and if the connected load is more than 10 kw, imprisonment is from 6 months to 5 years. b. The burden of proof rests on the consumer. c. The inspecting officer can break open, seize and remove records. d. But the presence of one adult male member of the family is necessary from 6 p. m. to 6 a. m.
IV.
V.
VI.
Sec.138. Restoration during disconnection period, even if it is through the meter, is a criminal act entailing 3 years imprisonment or fine of Rs. 10,000 or both. VII. Sec.145. No civil court has jurisdiction. VIII. Sec.150. The utility officials can prosecute the ruffians and misleading leaders for abetment of these offences even if it is against the provisions of Cr. P.C. The black
IX. X.
sheep in the utility employees can be prosecuted as abettors whenever they even just acquiesce. Sec.151. The complaint can be lodged, inter alia, only by the employees of the utility. Sec.152. Compounding of the case is permitted at the specified rates. S. No. 1. 2. 3. 4. Nature of service Industrial Commercial Agricultural Others Rate per kw /hp /kva Rs. 20, 000 Rs. 10, 000 Rs. 2, 000 Rs. 4, 000
The appropriate government may change these rates. The acceptance of the compounding fees by an officer empowered shall amount to clean acquittal. This can be availed only once for any person or consumer. XI. Sec.153. A special court shall be constituted for these cases with a judge of the cadre of Additional District and Sessions Judge.
XII. Sec.154. Only Special Court. Summary trial with punishment up to 5 years. Can pardon. Civil liability not less than 2 times the assessment for 12 months. XIII. Sec.156. Appeal to High Court. XIV. Sec.157. Review by special court. XV. Sec.168. Protection for bonafide actions of assessing officer, public servant etc. XVI. Sec.169. Assessing officers along with others are public servants. XVII.Sec.170. Considered as land revenue. XVIII. Sec.171. Notice can be served on the person available, or pasted at a prominent place. Defective metering, billing and collection functions. These losses are not due to any deliberate actions of the customers. They are due to internal shortcomings and hence are that much easier to tackle. They thrive due to the fact that the boards did not function on commercial lines though they were supposed to do so. Metering: There are many services unmetered. A large scale drive is necessary to bring all unauthorized consumers on to the rolls. Such drive in Andhra Pradesh during a single
month of June 2000 resulted in metering of 20 lakh new consumers and regularization of 2.57 lakh agricultural services. The Act contemplates metering of all the services within 2 years and visualizes action on the company and the individual officers responsible for lapses. So unequivocal instructions are to be issued to not to release any new service without meter. All the existing unmetered services shall be stopped to be so immediately. The utility should concentrate on purchasing of adequate quantity of meters both for fresh services and for replacement of the defective meters in the existing services. Purchasing of other materials shall be given low priority, if the financial position demands it. Other materials can be purchased by the consumers. Unmistakable instructions are to be given on the standards to be adopted at the time of releasing of new services. The service wire is to be brought in a pipe which shall be visible throughout and end in the meter box with a gland. The meter, preferably electronic, shall be fixed in a box visible and accessible from outside. The meter shall be fixed in a box at a height of 5to 6 from the ground. The particulars of seal bits used are to be noted and attested by the consumer. Proper earthing is needed at the installation. This earth, body earth and neutral are to be clubbed up on the meter board. If all these precautions are taken, possibility for theft and defective metering are reduced drastically. An exhaustive note on releasing of high value services is given separately. The meters tend to get sluggish over a period of time. Old meters are to be replaced in a phased manner by high accuracy meters, specially for high value services and at places where the load varies substantially. C.T. meters are to be adopted in stead of whole current meters for L.T. high value services. A comprehensive energy audit will pinpoint the areas of high commercial losses. Important services, feeders and towns are to be taken up early for this exercise. Actually, the biggest ever theft case was detected while on one such exercise. Following are the general defects observed in metering. Many stuck up meters are allowed for years. For a good number of services, no readings are furnished by the meter reader, at times, continuously. Constant nil consumption cases are reported without any comment. There are progressive readings in disconnected services. There is considerable voltage drop in metering cables. The meter capacity and the load have no relation.
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Wrong multiplication factors are adopted. After the M. F. is changed, it is not intimated to the billing agency.
BILLING Correct billing and timely serving will go a long away in improving the collections. The normal complaints in the billing process are: non receipt/ late receipt of bills, receiving of wrong bills, wrong reading/ status, table readings and wrong calculations. All these can be avoided in a single go by going for computerized spot billing as is already done in some states. This can be introduced in stages starting from cities. A thorough understanding by the readers on the various statuses of the meter is a sine qua non for the success of the system. Common billing software adoption is to be achieved so as to have a meaningful control, review, storage and retrieval of the consumer database. Even the application of CAT would be more effective this way. Monthly billing is to be achieved for the convenience of the consumer and also for psychological reasons. Stringent checks are to be adopted in the billing process so as to plug the leaks. The first bill is not issued or is issued late in many cases. The customer service number is to be noted on the meter at the time of issue in the section office. The utilities adopt the last 3 months average in case of abnormal meter status. A meter becomes initially sluggish and then slowly drifts to stuck up position. So the last three months average would not give a correct picture of the consumption. A study in A. P. revealed that the utilities are annually losing scores of crores on this count alone. Very high consumption when compared to the similar connected loads indicates unauthorized additional loads. The services, where the standard deviation in consumption is less than 2%, are to be targeted. Similar action when there is abnormal variation. Constantly getting less than minimum in good areas should attract our intention. The power distribution companies have a unique advantage of contacting millions of citizens at least once in a month. This is to be utilized fully to explain the latest initiatives and seek their support in their own interest and in the interest of the company. The Tirupathy based company spared some space in the reverse of the bill to an advertiser and thus the bill making cost is saved. Collection
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Unbundling and corporatisaion will give a real boost for the collection effort. Every citizen would feel it to be her normal duty to pay for the commodity she purchased. The poor now have a tendency to feel that they have a natural right to enjoy the government bonanza. But even the poorest man will not dream of having a soap freely from the seller. After reforms, there was phenomenal increase both in demand and in collection percentage in A. P. Increased customer convenience shall be the guiding factor for smooth collections. Drop box facilities and roping in more collection agencies make the lengthy queues vanish. E seva centers are a relief to the customer as around 25 types of bills are accepted in a cool atmosphere at convenient hours in the holidays too. On line facilities like icici bill junction are extended. Special collection drives, coupled with intensive inspections, in the areas where the payment history was bad, brought terrific results. Effective disconnection of defaulters shall be a norm rather than a chance occurrence. CAT is to be applied and high arrears services are to be targeted. Class F services, where the consumer is availing supply without any payment from last one year are to be initially tackled for more impact. Reversal entries in the case of non paying consumers demand immediate attention. The worst villages are to be adopted by DPE and vigilance wings and make them as model villages. This will be a spark for others to act. Every house shall have the service connection no. painted at the pole, gate and meter. In fuse off call offices, before attending a fuse off call, they verify the defaulters list. Only when these two conditions are fulfilled, the complaint would be attended. The electricity revenue officials are to work and they are to be pin pointed for poor collections. The revenue recovery act is to be made use of. There shall be compulsory and immediate prosecution in the case of bounced cheques. It is interesting to note that no witness, except the bounced cheque, is necessary for imprisoning the offender promptly, in these cases. The problem of fraud ever lingers on in the collection process. In one case, a single employee in electricity revenue office could knock off more than one crore rupees in about a year. Computerized monitoring system will help here. Increased booking of cases on thieves and defaulters will bring real change in collection scenario. Anti power theft police stations (APTS) to deal exclusively with these cases are desirable to have any meaningful effect. Out sourcing Power Services and the concept of Franchisees
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The ESCOs have certain limitations in operating continuously at a particular location, which will limit their scope to a large extent since they have many other roles to play in the overall energy sector scenario. After the initial introduction of the particular model suiting the particular area with its own characteristic features ESCOs have to find some alternative entity to take over the operation. The alternatives can be a cooperative society formed at the village/group of villages level, franchisees with required background that are willing to take up the responsibility. In this context it is appropriate to quote the relevant section of the Electricity Act 2003. Section 5 of the Electricity Act 2003 states -The Central Government shall formulate a national policy, in consultation with the State Governments & the State Commissions, for rural electrification and bulk purchase of power and management of local distribution in rural areas through Panchayat Institutions, users associations, cooperative societies, non-Governmental organizations or franchisees. Thus it is imperative that a suitable mechanism be put in place to take care of the rural electricity distribution management at the earliest. In Orissa and Karnataka States attempts have been made to bring in some sort of community participation in rural electricity distribution. The following illustrations will lead to the final evolution of Franchisees for rural power distribution management.
Grama Vidyut Prathinidhis: In Karnataka the concept of Grama Vidyut Prathinidhis were introduced as a pioneering effort at HESCOM and the same was extended to all the ESCOMs in Karnataka. The following paragraphs give the salient features of the scheme. Rural power sector is not commercially viable as at present. HESCOM is a predominantly rural utility. Grama Vidyut Pratinidhi concept introduced in June 2003 to improve revenue. One-Gram Vidyut Pratinidhi per Gram Panchayat. Grama Vidyut Prathinidhis were selected from the same Grama Panchayat area and the Gram Panchayat was also involved in the process of selection. Minimum qualification of ITI was prescribed. GVPs main activities include Meter reading; Bill distribution and Revenue collection and the required training in these activities were imparted to them. GVP acts as one point customer care center for the rural consumers and not only solves many local day to day electricity problems but also initiates actions
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through local sub division of ESCOM system improvement works to solve major problems like providing additional Distribution transformers to reduce overload, improve voltage profile etc. GVP also facilitates the reduction of unauthorized users of electricity with the help of local leaders. An incentive based compensation package was devised for the GVPs. GVP with proper service satisfies customer, and thereby improves collection With the introduction of GVPs the following important phases were covered. Phase-I: 127 GVPs in 5 Taluks- 1/06/2003 Phase-II: 463 GVPs in 11Talukas-1/11/2003 Phase-III: 757 GVPs In 23Talukas-1/04/2004 Total 39 rural based Taluks are covered by GVP Operation Enhancement in revenue collection in rural sector achieved. The following graphs illustrate the success level of the GVP project in HESCOM Chart 1:Performance
GVP Performance-HESCOM TOTAL

Millions Coll In Rs. 70 60 50 40 30 20 10 0 April May Month June July Base Actual
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Chart 2: Cumulative Additional Revenue Mobilized in 39 Taluks under Project GVP Millions 40 35 30 25 Million Rs. 20 17.655815 15 10 5 0 April.04 May.04 June.04 July.04 Month Franchisees for Commercial operation: Close monitoring of GVPs for further improvement in revenue mobilization is very essential. GVP is not a stakeholder in loss reduction. Large network of GVPs becomes unwieldy to monitor without additional supervisory support from ESCOMs. Since ESCOMs cannot provide additional supervisory support it becomes imperative to have Franchisees at the intermediate stage. The Concept of Input Based Feeder Franchisee for 11kV rural feeders was introduced purely for commercial operation at the first instance.
33.974931
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8.974223 3.727399
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Rural Distribution can be transferred to the franchisee. Models & incentive schemes for transfer of Distribution system to be worked out with different approaches. Certain exemptions are available to the transferee as per the Electricity Act 2003. In the first phase handing over of the metering, billing & collection activities are envisaged. In the final stage grid extension & undertaking of capital expenditure programs may also be covered. A Commercial Entity will take over as Feeder Franchisee Technical intervention in terms of Loss Reduction Move all Rural Feeders to IBF Franchisee expected to become a partner in revenue enhancement & loss reduction. Franchisee may use the existing GVPs services to carry out the Activities. IBF will monitor, Supervise and Pay the GVPs. GVPs will carry out Meter reading, Bill distribution and Revenue Collection activities under the supervision of IBF.
In the present model the payment package to the franchisee was on the line indicated below. Though models can be devised with different structure, the present model is only an illustrative one and further fine-tuning can be done depending on the experiences and situational requirements. Meter reading and billing- Rs1.50 to Rs.2.00 per installation. Receipt drawn per consumer per bill-Rs 1 to Rs 2. Per IP Set reading Rs.5 Replacement of faulty/MNR meter & providing meter to new installation-Rs.20/Additional incentive for regularization of unauthorized installations as per prevailing rules. Additional incentive for encouraging farmers to avail the benefit of Own your transformer. Slab based incentive scheme of payment for reduction of base line commercial loss.
Note: Sufficient meters will be provided by ESCOM. The following data was collected for all the feeders for the analysis Data Collected to analyze: Feeder Average Input Base loss figure
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Per unit Recovery No. of consumers, No. of LT4 consumers No. of metered LT4s and No. of un-metered LT4
In the first phase 142 feeder from 12 O & M subdivisions in HESCOM were entrusted to Feeder Franchisees purely for commercial activities. In this change over many Grama Vidyut Prathinidhis were capable and took over as franchisees. Input and Investment based Feeder franchisee. Final step in the out sourcing process for rural electricity distribution management will be obviously The input and Investment Based Feeder Franchisee Here again thru franchisee can be an individual/group of individuals forming a society, a rural cooperative society or an entrepreneur, self help group, user associations, NGOs, Panchayats, local bodies etc. However the entity should be acceptable to the local beneficiaries and should have experience in such operations or should associate with persons/entity having the requisite experience. The GVPs and the commercial franchisees can also take up such schemes. 5.3.1 Objective: The model should be a participatory model of distribution in rural areas, which are sensitive to the local aspirations and requirements. The objective of such arrangement can be listed as follows: (a) (b) (c) (d) To promote public participation for bringing effectiveness in the present distribution arrangement for reducing theft and conducting maintenance and distribution system on community basis through the Distribution Franchisee. To encourage community management in the maintenance of distribution lines for its' protection and promotion. To attract private investment in distribution through the Distribution Franchisee To promote technical and managerial capability of the beneficiaries / community in the field of electricity distribution through institutional capacity building and training efforts.
5.3.2 Benefits to stakeholders from the scheme For rural households, there will be direct and indirect benefits of increased access to adequate and reliable supplies of electricity, which would improve the quality of their lives and expand income generation opportunities. Direct benefits include improved convenience, safety and quality of lighting, enhanced ability to operate small appliances and improvements in indoor air quality resulting from displacement of kerosene smoke. The indirect benefits would arise from the improved services provided by rural public institutions - health, education and water - deriving from their increased access to electricity;
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For rural enterprises, the benefits of increased productivity and income arising from electricity access; For utility customers, greater access and reliability of electricity service due to increase in generating capacity and mitigation of tariff increases due to increased energy efficiency investments; For medium to large scale local investors who can invest in electrification business opportunities; Greater leveraging of Government financial resources for capacity addition and rural electrification.
5.3.3 Role of Stakeholders a) b) State Government Publicize and make aware the stakeholders about potential sites / locations for implementing the schemes. Provide an enabling framework for streamlined operation of the developer in the area. Maintain system of constant checks and controls through local administration with involvement of the beneficiaries for more participative interaction. Monitor and evaluate implementation of the scheme. State Utility / DISCOM Assist the Supply provider during identification and execution of the scheme. Support the supply provider during the initial operation period. To educate the Supply provider and consumers in its jurisdiction on the efficient use of equipments such as lighting, pumpsets etc. for conserving energy. Educate community on safe use of energy. Designate Project Manager for the scheme who would be responsible for overall financial and physical progress, verification of bills of the Proposer, furnishing of claims to PFC for seeking funds etc. Local administration Act as trustee of beneficiaries interest w.r.t. the investments made, security of assets, continuity of the system & stakeholders. Provide for quality of service measures & controls ensuring streamlined operation of the system without any undue interference. Supply provider/ Franchisee
c) d)
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The scope of work given herein is indicative for an input based Franchisee model, the scope would vary as per terms and condition on case-to-case basis.) Technical o Breakdown maintenance and repairs of Distribution lines. o Maintenance of Distribution Transformers and other equipments. o Maintaining the reasonable stock of line and sub-station materials required for repairs. o Replacement of failed transformers and equipments. o Install meters to all unmetered installations o Attend to consumer's complaints & grievances. o Prevent pilferage & thefts of energy. o Receive application for new connections. o Prepare feasibility report & estimate for new connections. o Sanction estimates for new connections as per norms & approved polices / procedures. o Prepare estimates and drawings for extension and improvement works, to bring down energy losses to acceptable levels, check theft and energy accounting. o Servicing of new installation with meters o Execution of improvement works. o Identify inefficient pumpsets and arrange for replacement with efficient pumpsets by bringing in necessary investments. o Submission of prescribed reports to the DISCOM / Government. o Identifying unauthorized installations & take suitable action. o To follow the provisions relating to safety and electricity supply. Revenue: o Meter reading o Billing o Collection o Maintenance of records o Submission of monthly accounts & statistics to respective DISCOM / Government. o Reply to audit queries o Use necessary hardware/software for issuing computerized billing and generating reports, wherever feasible. o Collecting government charges /levies & paying the same to the Government. General Functions, Duties and Responsibilities of Distribution franchisee The rights and obligations of the Franchisee will include:
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o Supply of electricity to all consumers within the Franchise Area Increase technical efficiency of distribution system, reducing technical losses, evolve innovative solutions to improve system performance and revenue realization. o All commercial activities relating to issue of new service connections, metering, meter reading, billing, collection, realizing bad debts, disconnection, reconnections, customer complaint handling etc. within the Franchise Area o All repairs and maintenance activities related to all equipment and infrastructure within the Franchise Area o All investment decisions (capital and operating), subject to approval by the DISCOM, that might be required to enhance the operations or meet the specified standards of performance of the distribution business within the Franchise Area o All manpower to run the operations and commercial activities will be provided, managed and paid for by the Franchisee without any recourse to employment by the DISCOMs o Responsible for the operation and maintenance of the substation however, any repairs. Replacements related to the power transformer in the substation are excluded from the responsibility of the Franchisee. o The Franchisee shall reasonably maintain and operate the billing system database and ensure the overall integrity of the system. o The Franchisee shall furnish DISCOM with data, information and analysis and any other information as may reasonably be required by DISCOM from time to time o Ensure Franchisee Distribution System has a [99%] availability, and adequate quality of supply is maintained [measurement parameters and methodology to be developed] thus put in place a Performance Monitoring System. o Set up a system to respond to Consumer complaints with respect to consumer servicing [measurement parameters and methodology to be developed] o As an agent of the DISCOM, comply with all the regulatory, legal and reporting requirements that are applicable to the DISCOM.
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CM 6-6 Change Requirement To Enhance Commercial and Financial Performance

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CM 6-6 Change Requirement To Enhance Commercial and Financial Performance

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Change Management in Power Distribution Distribution Reform, Upgrades and Management (DRUM) Training Program

Change Requirement to Enhance Commercial and Financial Performance

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

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Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Space for Institution Logo

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Space for Institution Logo

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Space for Institution Logo

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Space for Institution Logo

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Space for Institution Logo

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

(A Govt. of India Undertaking)

GVP Performance-HESCOM TOTAL

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Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Space for Institution Logo

(A Govt. of India Undertaking)

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Space for Institution Logo

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Space for Institution Logo

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

Space for Institution Logo

Power Finance Corporation Ltd.

(A Govt. of India Undertaking)

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