Partnerships in Power Franchisees

Shuvendu Patnaik

2

These are easier said than done

Key Result Areas for Franchisees

Franchisees deal with almost every activity, like a licensee

There are many KRAs

Key for survival– Loss reduction– Revenue realization– Managing cash flow

IUKAN 2013/Session 3/12th February 2013 © Secure Meters Ltd

O&M Meter reading

Billing

Collection

Grievances & public dealing

3IUKAN 2013/Session 3/12th February 2013 © Secure Meters Ltd

There are too many contributing factors

AT&C Loss

Technical LossNon Technical loss

Meter reading errors

Load loss

No load loss

DT loss

33 kV line loss

11 kV line loss

LT line loss

Coffee shop readings

Display Errors

Meters damaged

Display off

Digits not visible

Meter box locked

Not sealed

Meters bypassed

Distribution loss

Billing & Bill Distribution errors

Commercial loss

Delayed Payment/Non payment

Meters Not read (provisional reading)

Theft or pilferage

Meter Tampering

CT tampering

Consumer does not desire to pay

Billing dispute

Late issue of Notice

Bills notdelivered

Late distributionOf bills

Bills deliveredIn wrong address

Errors in bill processing & billing

Bills illegible/damaged

Mismatch in meter & account no. in bill

Inadvertent reading error

33/11 kV S/STransformer

loss

No load loss

Load loss

Meter sl no not matched

Consumer refused access

Meters at height

Billing not found

Premises locked

Temporarily locked

Permanently locked

Collusion of meter readers with consumers

Delay in Meter Reading

PT Error

Wiring Error

CT/PT nameplate error

CT Error

Meter Error

Unmatched CT ratio

MFError

Meter Burnt

Metering System Errors

All energy purchased

Is never paid for fully

Unavoidable technical loss (small)

Avoidable commercial loss (large)

Consumers never pay for everything they consume

kWh

… but he is not entirely to be blamed

Consumer

4

These are the areas where reliable results

can be actually delivered

IUKAN 2013/Session 3/12th February 2013

xThis is not the domain of technical partners

This is where the skills of franchisee’s management should lie

Administration and enforcement

Need for administrative teeth

Risk arising from legal complications

Dealing with local goons

Political interference

Lack of reliable measurements

Lack of trustworthy information

‘Where’ a higher loss is taken place

‘What’ intervention is needed

How much Capex would be involved

How long will the the payback be

What would be the ROI

What causes loss

There are only two factors– Technical – Administrative

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Returns (Technical possibilities due to investment)

Risk (Technical risk if investments do not deliver expected results)

Technical factor

Franchisee business and administrative risks

This is where partnerships can help

This is where collaboration could be possible

What is it which franchisees are not doing, or can be done differently?

What is it we can contribute, which could be different or unique?

Partner

Franchisee

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Complete range of metering products

Wide range of utility services

In-depth field experience in India

Secure deals with

Measurements

Revenue protection

Revenue completeness

But these in isolation can never address the problems

Something more is needed, which we could provide

Intellectual capital

What would be different about this?

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Intellectual capital

What would be different about this?

Revenue protection & revenue completeness cover a wide range of individual activities

Choice of meters (specs)

Sound Installation practices

Seals & seal management

Installation audits and field testing (CTs,

PTs, meters)

Tamper analysis

Consumer indexing

Consumer meter reading

Energy & loss accounting

Data acquisition from DT & feeder meters

Data validation

They are all well known individually

What is needed is integration

This is where we could become a technical partner

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Supplier, Contractor

Business Partner

Supplies only what is ordered

Franchisee decides what is needed

Responsible for timely & quality deliveries

Not accountable for results

Partner decides what is needed

Implements whatever is needed

Modifies decisions, as time goes by

Fully accountable for results

Ass

ura

nce

Involvement

Ris

k to

p

artn

er

It is possible to have a partnership anywhere along

this band

Capex and Opex sharing can be discussed and linked to two-way SLAs and reliable measurements

Technical partnerships

8

A common problem

A number of problems are often due to– Meter reading and billing errors, integrity issues, delays, etc.– Consumers’ bill-related grievances – Meter reading & billing infrastructure costs, etc.– Poor collection efficiency, perennial defaulters– Need for notices before disconnection, and related social issues– Poor cash flow, long cash cycle, need for Working Capital

IUKAN 2013/Session 3/12th February 2013 © Secure Meters Ltd

This is where a technical partner can help in many ways

9IUKAN 2013/Session 3/12th February 2013 © Secure Meters Ltd

Energy input to

Franchisee

Delivered Energy Billed

Energy

Technical Loss

Electrical infrastructure

Rev

enu

e

Measured Consumption

Actual Consumption

Input Energy

Pilf

erag

e

Tam

per

& f

raud

Met

erin

g er

rors

Rea

ding

er

rors

Del

ays,

non

pa

ymen

t et

c.

Energy realized

Energy billed (Sale)

Prepayment addresses

these problems

Benefits

Remote display

(3 phase)(1 phase)

Energy accounting would be needed to know if things are fine

But energy accounting is tricky and needs special techniques

Thank you

Technical partnerships can become a great enabler for franchisees