alok final presentation on distribution

8/9/2019 Alok FinaL Presentation on Distribution

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Electricity Distribution in

India

An Overview


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Electricity Distribution in India-at a glance

Total No. of Distribution Utilities 61

Total energy billed by these utilities increased from 3,77,637

Mkwh in the year 2005-06 to 4,13,311 Mkwh in the year 2006-07

registering agrowth of 9.45%. All India AT&C losses were 35.18% in the year 2005-06 which

reduced by 2.11% to 33.07% in the year 2006-07.

All India AT&C losses varies from 12.08% to 67.56% during 2006-

07.

The utilities incurred losses of 11.02% of the revenue earned bydirect sales to consumers during 2006-07.

Metering Status:

- 23 States have achieved 100% Metering at 11 KV Feeder level.

- 9 States have achieved 100% consumers metering.


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Electricity Distribution in India-at a glancecontd..

Consumer Mix:

Category wise % of No. of Consumers

Domestic

77%

Commercial

11%

Industrial HT

0.05%Agricultural

10%

Industrial LT2%


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Electricity Distribution in India-at a glancecontd..

Sales Mix:

Consumer Category wise Sale of Power in Mkwh

(2006-07)

Public Water

Works

2%Railway

2%PublicLighting

1%Industrial LT

7%

Agricultural

24%

Commercial

8%

Domestic24%

Industrial HT30%

Bulk Supply

2%


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In the presentation.

Legal/Policy/Regulatory Framework

Distribution: Issue

Forum of Regulators (FOR) Recommendations


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Legal/Policy/Regulatory

Framework


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Earlier Sector StructureVertically Integrated Utilities

Generation

Transmission

Distribution

CustomerCustomer

SEB

ES Act1948

BY VIRTUE OF BEING

INTEGRATEDNO SPECIFIC FOCUS

ON

DISTRIBUTION

NO SYTEM OF ACCOUNTING SEGGREGATION !WHERE DOES THE PROBLEM LIE?


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Provisions in Electricity Act-2003

Provision for reorganisation of SEBs : unbundling G,T,D

Generation delicensed

Expanded role for the Regulatory Commissions

Provision for private licensees entry in distribution through an

independent network,

Open access in distribution

Distribution licensees would be free to undertake generation and

generating companies would be free to take up distribution

businesses after obtaining license. Metering of all electricity supplied made mandatory.

Provisions relating to theft of electricity made more stringent

Thrust to complete the rural electrification.

Provision for license free generation and distribution in the ruralareas

Provisions for safeguarding consumer interests.

Ombudsman scheme for consumers grievance redressal.

N i l El i i P li Vi i


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National Electricity Policy VisionStatement

Encourage private sector participation in

distribution for requisite reduction in losses

Segregation of technical and commercial losses

through energy audits

IT systems may be implemented by the utilities

on a priority basis by support of APDRP scheme

Promote HVDS, implementation of SCADA and

data management system

The States and distribution utilities should ensureeffective implementation of the provisions against

theft of electricity


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Tariff Policy Provisions

Mandates notification of standards of

performance for licensees.

Encourage efficiency in operations by sharing ofgains between licensees and consumers.

Promote Multi-Year Tariff (MYT) framework.

Encourage loss reduction Strategies.

Tariff design : Linkage of tariffs to cost of service

- gradual reduction in cross subsidy (+/- 20% of average

cost of supply)

Reasonable cross-subsidy surcharge and

additional surcharge for open access.


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Distribution: Issues


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ISSUES

Open Access

Distribution Losses

Efficiency improvement APDRP, IT

intervention, Models of privatization,

PPP(franchisee), Pune Model.

Energy Efficiency and Demand Side

Management

Tariff Rationalisation


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1. Open Access

Open Access, an important framework seeking to

promote competition.

Independence of State Load Dispatch Centers

- Lack of independence of SLDC impacting open access insome States due to conflict of interest between system

operator and distribution licensee .

Role of State Governments

- SEBs unbundled but problems continue in some states

- Single buyer model need to phased out

- Need to insulate SLDC from influence of incumbent

licensees.


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Open Access contd..

Regulatory interventions for facilitating open

access

- Need to rationalize Open Access charges.

- Monitoring of open access transactions and display of

various charges in Commissions websites.

Status of Intra-State Open Access (as on31.03.2009)

- Total OA applications received 174 (130 CPP)

- OA capacity applied for 17474 MW- Total OA applications approved 116 (84 CPP)

- OA capacity approved 14462 MW


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2. Distribution Losses

High level of losses at distribution level poses the

biggest challenge to reforms in power sector.

Honest consumers have to bear the burden

caused by dishonest consumers/officials.

Issues:

- achieving loss reduction in a time-bound manner;

- Relative appropriateness of technical solutions, such as

separation of agricultural supply feeders, single phase

supply, HVDS etc.,

- Development of baseline data and its verification by athird party;

- Suitable incentive/disincentive schemes for

rewarding/penalizing the areas with low/high loss levels.


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3. Efficiency improvement

Accelerated Power Development & ReformProgram (ARDRP)/IT intervention,

- aimed at bringing about improvement in the urban

distribution sector by funding investment in thedistribution network, and by incentivising the states whoperformed well in reducing losses.

- The Govt. of India has restructured APDRP during the

XI Plan with revised terms and conditions as a CentralSector Scheme. The focus of the program shall be onactual, demonstrable performance in terms of sustainedloss reduction. Establishment of reliable and automated

systems for sustained collection of accurate base linedata, and

- the adoption of Information Technology in the areas ofenergy accounting will be essential before taking up the

regular distribution strengthening projects.

APDRP IT f B li


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APDRP IT for Baseline

IT interventions being attempted by


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IT interventions being attempted byNDPL (DISCOM)

Spectacular achievement of reducing distribution lossesfrom 50% to 20% in 6 years

Boundary Metering- Introduced (Availability Based Tariff)ABT compliant metering on boundary and up 11kV Feeder

Energy measurement. Meter Repository System - each Meter issued against a

specific K No. based on a random selection through acustomized application.

- this eliminated the probability of misuse & installation atmisdirected place institutional check on manipulationinstitutional check on manipulation..

Introduced GIS data Interface

Automated Meter Reading - 60% of the Revenue generatedthrough (all high end consumers >15 kW)

Introduced Pre paid Metering enabled consumers to trackand monitor their consumption.

Billing database of 100% of consumers on website,institutionalized transparency and enables consumers to:

View Bill View Consumption Graph


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Efficiency improvement contd

Models of: PPP

I. Distribution Franchising In Bhiwandi, Maharashtra M/sTorrent Power appointed Distribution Franchisee onenergy input basis in Dec 2006

- Customer base of 0.16 million

- Area spread over 721 square kilometres.

- The estimated demand in the circle is 750 MVA with

an annual power consumption of 2400 million units. Achievements :

- 15% T&D loss reduction in 9 months (Losses brought down

to 30% from 45%).

- Improvement in Metering, Billing and Revenue Collection- Defective Energy meters (25300 Nos.) replaced.

- Approx. capital investment : USD 20 million

- Enhancement in customer service quality

- DT failure reduced by replacement and revamping of DTs


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II. Distributed Generation based Distribution Franchisee-PUNE MODEL II

Concept of Franchisee

Public private partnership where the Franchisee need not

have a separate license for distribution Vested with the specific activities related to distribution in

the designated area

Licensee supplies electricity to the Franchisee at a

predetermined price as per Franchisee Agreement Franchisee retains pre-defined portion of the revenue as

charge

Tariff applicable in Franchisee area will be the same as that

applicable in the respective license area Reliability surcharge, to recover the expenditure on

additional generation/costly power purchase, will bedetermined by the Commission


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Concept of Franchisee

Franchisee system does not amount to

privatisation Since license area will continue to be

single, treatment of cross-subsidy will

continue to be the same Expensive power purchase can be

supplied to areas that can afford the price

This model valid in cases where lossesare at reasonable level.

Amendment Act 2007 New Theft Provisions


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Amendment Act 2007-New Theft Provisions

Thefts including abetment made cognizable offenceswith arrests where prescribed made non-bailable

Immediate disconnection on theft detection Supplier to lodge complaint regarding offence within 24

hours of disconnection with Police StationPolice Officerto have investigating power Court can take cognizance on the basis of report by

Police Officer Restoration within 48 hours of deposit of assessed

amount For load >10KW, for 2nd & 3rd convictions, power

supply not to be restored before 3 months & the periodmay extend to two years. Consumer shall be debarredfor taking power supply from other sources as wellthrough open access.

License of Discom personnel abetting theft to becancelled

4 Energy Efficiency and Demand Side


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4. Energy Efficiency and Demand SideManagement

Components in the tariff structure for incentivizingenergy efficiency;

Institutionalizing energy efficiency in the

organizational structure of distribution utilities; Load Research, load forecasting and appropriateDSM options;

Preparation of DSM plans and how to implement

them; Special measures for promoting energy efficiency

in pumping ground water for

Agricultural use; DSM and energy conservationare as important as capacity addition to tide overshortage.

5 T iff R i li i


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5. Tariff Rationalization

High level of cross subsidy is not desirable as itdiscourages competition and efficiency inoperation.

The Act and the Policies require the RegulatoryCommissions to ensure that the tariffprogressively reflects the cost of supply.

Tariff Policy gives a target that tariff should be

rationalised in a time bound manner and thattariffs of every consumer category should bewithin 20 % of the average cost of supply inStates.

Progress is somewhat slow on tariffrationalization.


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Forum of Regulators(FOR)

Recommendations


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1. FOR Recommendations on

Open Access : Theory andPractice

O A Th d P ti


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Open Access : Theory and Practice

Independence of SLDC

- SLDC not to report to transmission or trading licensee.

- Reporting requirements could be on lines of State

Electoral Officer under Election Commission.

Operation of SLDC

- with STU as a subsidiary of transmission utility as stop-

gap arrangement;

- by a separate entity as soon as possible

State Governments be advised to phase out

single buyer model.

O A Th d P ti


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A model scheme for technological

upgradation of SLDCs recommended.

Urgent need of financial autonomy toSLDCs.

- CERC to make regulations for RLDCs to ensure

recovery of not only operating and capital servicing

costs but also generation of adequate surplus to

provide equity for future investments.

- Similar pattern to be adopted by SERCs for SLDCs.



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Display of information on OA charges in the

websites of SERC/FOR for transparency and to

enable informed decision on open access.

Monitoring of open access transactions by SERCs

Standby arrangement for open access consumers

- by levying retail tariff as applicable for respective consumer

categories only for the period during which such standby

support is requested.

Open Access Charges


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Open Access Charges

8.581.52Uttar Pradesh

7.961.94Rajasthan10.41.14Punjab

5.823.2Orissa

9.061.68Maharashtra (MSEDCL)8.33.8Karnataka (BESCOM)

6.082.78Himachal Pradesh

9.11.62Haryana6.221.96Chhattisgarh

6.55.88Assam

Tariff (Discom)**(Cents./kWh)*

Open Access Charges(Cents./kWh)*

State

*OA charges for a consumer of 5MW at 11 KV (33 KV in some cases) seeking OA for a month. This includestransmission & wheeling losses (Cents/kWh) calculated assuming power purchase cost as Rs 4/kWh.**Tariff for an embedded consumer of 5MW at 11 KV (33 KV in some cases).


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2. FOR Recommendations on

Loss Reduction Strategies

LOSS REDUCTION STRATEGIES


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Focus on reduction of distribution losses

- Transmission losses not to be clubbed with distribution

losses

For segregation of technical and non-technical

loss,

- baseline data should be compiled for each electricity

division.

Trajectory for loss reduction

- keeping in view actual loss levels, capital expenditure

made in the past for improving the network and future

capital expenditure plans



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The utilities should effectively use the theft

related penal provisions in the Electricity Act,

2003

As stipulated in para 8.2.1(ii) of the Tariff Policy

SERCs should encourage suitable local area

based incentive and disincentive schemes

- for the staff of the utilities linked to reduction in losses.



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3. FOR Recommendations onDemand Side Management and Energy

Efficiency

Demand Side Management


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SERCs to direct all the distribution utilities to

constitute a DSM Cell within their organizations.

SERCs to also direct all the distribution utilities

to submit DSM Plans along with ARR rates for

the next tariff period.

Recovery of cost of approved DSM

programmes should be allowed as pass-through

in ARR.




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SERCs to consider appropriate tariff

interventions (like ToD tariff, incentive for energy

efficient buildings/ appliances etc) to support

DSM.

BEE has been requested

- to undertake development of Monitoring and Verification

protocols for various DSM programmes which may be

undertaken by utilities.

- to prepare draft of a suggested Regulation for appraisal ofprogrammes of DSM and Energy Efficiency in distribution

sector.




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The State Governments to be requested to

consider the following:

- Financially supporting the DSM programmes aimed at such

category of consumers which are receiving tariff subsidy

from the State Governments.

- Enhancing effectiveness of the State Designated Agency

(SDAs).

- Reduction in taxes on energy efficient appliances.


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THANK YOU

alok final presentation on distribution

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