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Cover Story | October 2014

DFs Unplugged

Once a success story in Indian power distribution, the distribution franchisee model has attracted core and non-core players. However, the entire model has been marred with high benchmark pricing, dilution in pre-qualification bids and most importantly lobbying of non-core players. The impact has been staggering, where despite plans to implement DFs in 200 cities, there is yet no action on the ground.

It was started in the year 2007 with a bang. It was a success story and many States wanted to replicate the same. It helped many States to bring down the ever-increasing AT&C as well as T&D losses. But, as time passed, once the blue-eyed model of every State, Distribution Franchisees, became a thing of the past.

Power Today, in an attempt to highlight why the DFMs failed, takes you through a series of events that started in 2007, and by the end of 2013, turned out to be the dampest squib in Indian power history.

To begin with, in 2007, Bhiwandi, the most notorious circle for power thefts (both industrial and commercial) was given out to Torrent Power. Industry observers were surprised when the company, in the Bhiwandi circle, brought down the AT & C losses from 58 per cent to a mere 19.3 per cent in 2013-14. Whereas, in Agra, the company brought down the losses to 43 per cent from 51.26 per cent. Simultaneously, in Surat, Ahmedabad and Gandhinagar, AT&C losses were one of the lowest in the country-just 7.6 per cent.

More players became interested in jumping on the bandwagon. In 2007, bids for Dewas and Ujjain were called. However, for reasons best known to the company, despite winning the bid, Dainik Bhaskar opted out of the process. Hence, despite the country tasting success in developing this model, subsequent bidding processes have failed miserably. Between 2009 to 2013, the bid processes for the Meerut, Allahabad, Varanasi, Aligarh, Moradabad and Bareilly circles (in UP) stalled midway. Despite receiving 34 bids, the DF for Patna did not take off (See table for some of the unsuccessful DFs in India).

Are SEBs pulling the plug?
Most genuine power private players, who burnt their hands in the bidding process from 2009-13, are not happy with the way State Electricity Boards are taking all the credit for bringing down the AT&C as well as T&D losses. A few private players whom Power Today spoke to said that the success of the first franchise model in India at Bhiwandi was a genuine development, but the State government took all the credit for it. This move from Maharashtra sent out a wrong signal to the stakeholders involved in the process.

A Mumbai-based private player, who wish not to be named, visibly fumed while complaining about SEBs. He says, ´Earlier, there was tremendous support from State governments in terms of basic input (competitive) rates and inclusion of well-qualified private companies while bidding. But gradually, with the success of a few models, it seems like the government tends to forget the best practices applied earlier.´

Another player who also prefers anonymity alleges that the SEBs are falling prey to the lobbying of a few private players who do not have enough experience in the sector. He questions, ´What role does SPANCO have the in the power sector? Have they ever in their life constructed a single power plant?´

The players in the DF fraternity and consultants are also of the view that non-serious players have managed to win bids because of involvement of SEBs and State governments, who are influenced by lobbying from certain sections. Despite increased benchmark rates formulated by many SEBs during bidding, many players who did not have experience in the distribution sector participated aggressively, making it relatively impossible for others (distribution companies) to bid for these sections.

´In some cases, the prequalification norms were diluted too,´ says an official from a private distribution company.

Some private players allege that the success of DFs in many circles had raised questions over the ability of many SEBs. Ergo, State governments consider the success of DFs as a rebuke. As a result, what was once a lucrative business proposition was deliberately transformed into a ´model of corruption´ (according to a source) in some States like Bihar, Jharkhand and Madhya Pradesh.

Says Siddharth Mehta, CEO, India Power Corporation, who won the Gaya, Bodh Gaya and Manpur circle in 2014, ´The Shunglu Committee has identified more than 250 towns on the franchisee model and if in the next six months at least 50 towns across India with high AT&C loss are given to private players on a competitive basis with timeliness to reduce the losses, one would see the situation further improving with due weightage to the power distribution company.´ (Refer to the table above for key observations of the Shunglu Committee on DF).

Power Today has learned that Bihar State Power (Holding) Company Ltd (BSPHCL) is working out details to lower the benchmark price of Rs 4.13 per unit to float fresh tenders for selection of distribution franchise for Patna Electric Supply Undertaking (PESU) area.

The power company did not receive a single bid from private power firms even in its fourth attempt in 2013 to appoint a distribution franchisee for Patna. The benchmark price of Rs 4.13 per unit, the rate at which the private power firm (distribution franchisee) would have to buy power from the holding company, was the ostensible reason behind the lack of response.

The Central government promised affordable and consistent 24x7 power for all homes, within five years. The statement of achievements in 100 days of its operations highlights the work done in improving inter-ministerial coordination, coal supply issues and incentives on renewable energy based power generation. It is pertinent to highlight that the power distribution segment is the main source of revenues for all other segments of the electricity value chain. Incidentally, it is also the weakest link in the chain. The reforms/initiatives triggering long-lasting improvement in power distribution can only build investor confidence for the other segments, power generation and transmission.

Over the past three years, India´s GDP growth rate has slowed down from 10.3 per cent in 2010 to 5 per cent in 2013. Power, so vital for growth, is India's biggest bottleneck. At present, domestic fuel supplies are not able to keep up with demand even during the slow growth period. Financial health of power distribution utilities is also poor, due to untimely retail tariff revisions and other commercial issues. Under such a situation, another wave of private investment in power generation looks unlikely in the near future unless efficiencies in distribution are improved substantially.

Says Umesh Agrawal, Associate Director - Energy, Utilities & Mining, PwC, ´In this context, the sound way of serving the additional power demand is though reducing AT&C losses, which are one of the highest among the developing countries.´ He adds, ´By reducing such losses, same quantity of generated power will satisfy increasing demand of electricity. Installed capacity at the national level was 182 GW in 2011.´

Indeed, during the same period, overall AT&C loss of the country stood at 27 per cent. That means, 1 per cent reduction in such AT&C loss will avoid the need for building additional power generation capacity of 1,820 MW or Rs 10,000 crore of additional investment and environmental impact thereon. The mission of bringing down AT&C losses to 15 per cent at national level is possible if it is focused enough with the concrete steps to encourage mechanisms like DF in the regions with high T&D as mentioned below. Reducing such high magnitude of losses requires high capital expenditure. Such requirement makes the franchisee set-up a desirable model. DF has a potential to bring down losses to 18 per cent in those cities which would account for around 40 per cent of the consumption.

Rural potential
In rural areas, private participation remains nascent. A decisive push toward rural franchises was achieved because of their inclusion in the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) programme-rural franchises are to ensure revenue sustainability and to help State utilities in managing rural distribution networks that have expanded hugely under the scheme. In fact, utilities in rural areas need and welcome the franchises, primarily as an instrument to help the utility with metering, billing, and collection. The approach creates scope for involving village or town intermediaries as partners in metering, billing, and collection as well as in operation and maintenance, in cases where the required numbers of skilled workers and community structures are available.

According a World Bank report, ´The challenges of electricity distribution´, more than 37,000 rural franchises are now in operation, covering more than 216,000 villages across 18 States. Most of these franchises are collection based, where the franchisee either takes a part of the revenue or earns an incentive up to a preset collection-efficiency target, depending on the contract.

Contracts are usually annual with flexibility to grant extensions. There is also a group of ´input-based´ franchises, where the franchisee buys the energy input in the franchise area, and then resells it to consumers (similar to the input-based model used for some urban DFs). About 1,600 rural franchises are input based, the most notable being the single point power supply system, which sells power to consumers at tariffs approved by the SERC and pays a fixed fee to the distribution licensee. Putting a negative remark on the rural franchisee, the World Bank report mentions, ´Rural franchisees have yet to invest in the network.´

DFs are welcomed, but...
It seems the honeymoon period of most of the SEBs is likely to get over, as the Centre has drawn up a plan to cover 200 cities where the franchisee model is to be implemented. This was purely due to satisfaction over the performance of DFs and private licensees in the States of Gujarat, Maharashtra, Uttar Pradesh, Odisha and Delhi. Earlier, Uttar Pradesh franchised out Agra and Kanpur but in the latter the franchisee was unable to take over due to strong resistance from State power staffers.

Now, Bihar and Madhya Pradesh have appointed DFs while Jharkhand and Andhra Pradesh are following suit. However, there are many States that are yet to implement the model. Since the last three to four years, the Union Ministry of Power (MoP) has been making it clear that in future, Central funding for upgradation of power infrastructure will only be provided if distribution losses are reduced. The best way for doing so in urban areas is the DF model.

While the MoP may feel that DF is a success, the reality on the ground is quite different. Most of the franchisees are running losses. Some like GTL, which distributes power in Aurangabad, are not paying dues to the State-run discom MSEDCL. The Maharashtra government, which was on the forefront of appointing franchisees, has put a full stop on its scheme.

However, in Muzaffarpur (Bihar), the franchisee has improved service by leaps and bounds. In general, Bihar franchisees have been welcomed by consumers because the State discom's services were extremely poor.

Devtosh Chaturvedi, Managing Director, Feedback Energy Distribution Co. Ltd (FEDCO), points out to the positive attitude of consumers. He says, ´In general, franchisees have been welcomed by consumers since the services have been improved without any additional burden on consumer in terms of increased tariff. While base year AT&C losses were as high as 40-50 per cent, some models have already reduced losses and others have a steep reduction trajectory.´ FEDCO operates Puri, Balugaon, Khurdha and Nayagarah devision of CESU, and has manged to increase its coverage by 8-10 per cent with existing resources in the first year of its operations and has reduced T&D losses by 5-7 per cent. (Refer to case study: ´Automated and error free´).

This is not the case with all States. Some have gone in for different type of franchisee models (Refer to ´Different States have adopted different DF Models´). In Rajasthan's capital Jaipur, the contract of collection and billing has been given to one private company and subcontracts for operation and maintenance of transformers to another.

...the ground realty is different

While many distribution franchisee transactions were carried out and successful bidders have been identified, some of them have been delayed or cancelled for various reasons. The delays have been primarily on account of slow decision-making at the utility´s end. The delay in handover creates confusion and also becomes a hurdle for future transactions. So while there is significant interest from private sector players, the delay and lack of action from the utilities is emerging as a significant reason for lack of progress in implementation of distribution franchisees.

This trend needs to change so that the whole transaction process is carried out with complete transparency in a time-bound manner. Significant efforts are required to ensure that the transaction documents are carefully drafted; adequate data room facilities are created for the bidders to evaluate the opportunities and above all, once selected there should be a handover timeline which is implemented without delay.

While the competitive bidding mechanism for appointing a franchisee ensures that the intended efficiency benefits are passed on to the licensee, licensees have started to put additional clauses in such agreements, giving specific targets to the franchisee on AT&C losses, minimum capital investment, metering levels, and call centre and complaint management systems. But this ´micromanagement´ by the licensee may dampen the enthusiasm of participants in later bidding rounds.

Moreover, there needs to be strict penalty for players who are unable to perform to ensure that only capable players get into the sector and create success stories for all the stakeholders involved. This should be achievable given that the country has about 10 years´ experience in creating and implementing the model and has taken away sufficient learnings from the transactions that did not create value for stakeholders. With the focus the government has on ensuring 24x7 supply, we see the trend reversing with many more successful implementation of distribution franchisees across the country in the near future.

Having said this, almost all the auctions put up by the utilities saw a good response from bidders except where the base numbers were aggressive or there were issues with respect to the quality of data. Hence the key reasons for the model not able to catch up speed have been unavailability of quality deal flow pipeline and inordinate delays in handing over the franchisees where the transactions have been completed. While the basic framework is time-tested and transaction documents are in place, the key would be to incentivise the utilities to identify where they require the franchisee intervention for improving their financials and putting them up for private participation.

Rahul Kamat

Some of the key observations of the Shunglu Committee on DF were:
Distribution Franchise system is capable of being implemented in small scale to drastically reduce distribution losses
Franchising of 255 towns from among those covered in R-APDRP town listing in order to bring down losses in duration of 3-4 years from present levels to around 18 per cent
Model agreement for large scale roll-out of DF; and
While making financial assistance available to State governments & distribution utilities, franchising of towns can be made an essential precondition.

´Distribution is most vital but also the weakest link´
For many years, the onus of power generation, transmission and distribution was on the government. How has the franchise model, especially in distribution, helped to bring down T&D losses in the respective circles?

The first franchisee model in Bhiwandi was a success due to the excellent approach adopted by all stakeholders i.e., the investors, the discom and the State government. The basic benchmark rate was competitive enough for an investor to work in a challenging environment and only companies with power experience were invited to participate in the process of bidding. Torrent Power due to its nine decades of experience was well equipped managerially and technically to analyse as to what needs to be done for improvement. The State government was extremely supportive as this was the first experimentation on a Public Private Partnership in the power distribution space. The consumers were looking forward to private sector participation as they were facing five hours of scheduled power cuts and another six hours of unscheduled power cuts due to dilapidated network. With all the stakeholders having a common goal of improving the services to the consumers, the task of the undersigned as Bhiwandi in-charge was made easier during the implementation process.

What must have gone wrong as the franchise model has been unable to gain popularity?
After the success of Bhiwandi, it was felt that even non-power companies should be permitted to participate, thereby diluting the qualification criteria. Coupled with this, the basic benchmark rate was revised upwards thereby leaving a lesser margin for the investors who had to take the risk of investing, reducing the losses, and servicing the capex through improvement. In this process while there was initial enthusiasm from investors, especially non-power companies to participate in the franchisee model, the realities of business were soon realised.

How can the government make this franchise model more lucrative?
It is extremely important that a reasonable balance is maintained on the benchmark rate, investors´ expectation on investment and the qualification criteria for the success of future distribution franchisees in the country. Further, various Central government schemes under R-APDRP, Rajiv Gandhi Gramin Vidyut Yojona and Deendayal Upadhyaya Gram Jyoti Yojana should be made available to the franchisee on identical terms as being available to the discom, as the consumers would be benefitted with the reduction in the loss level.

What has been your learning experience from your circles?
India Power, a 94 years old utility with the lowest T&D loss of 2.5 per cent has now taken over the Gaya franchisee in Bihar which has a high loss level of 70 per cent and we expect the losses to be brought down to less than 15 per cent in the next two to three years with the cooperation with all stakeholders.

´Government should maintain a balance benchmark rate´
Have the DFMs helped to bring down T&D losses?

The distribution sector has accumulated huge losses; from the total units generated, 25-30 per cent is never accounted for and is lost as T&D losses in the system. (Some pockets still have high losses in the range of 50-60 per cent). Such high losses severely affect the health of distribution utilities and leaves very low scope to bring in the much-needed investment into the sector owing to low cost recovery. However, with the franchisee coming into the forefront and investment channelised through the route, the sector has seen progress.

The wisdom behind adoption of the franchisee model is that while a utility may not have enough cash generation to pay for the network upgradation, technology introduction and other activities, the franchisee will invest money in all the concerned activities and thus, reduce AT&C losses, increase revenue, make the system reliable and enhance customer satisfaction while the asset ownership still rests with the State-owned utility. Distribution is most vital but also the weakest link that connects the end user to the generation and therefore improvement in distribution sector trickles down the positive effect on the whole chain. The franchisee model has been in existence for more than seven years now and in a few cases, the franchisee has improved services by leaps and bounds. They have invested in technology and improved customer satisfaction.

Does the franchise model in India have lucrative prospects?
To reiterate, the distribution losses are plaguing the sector and are responsible for the precarious health of the sector. With projected losses of over Rs 1.16 lakh crore, it is imperative that the nagging problems plaguing the sector are immediately addressed. With any improvement in the sector, consumers are the winners and beneficiaries, but the State economy, as a whole, also gets a boost. Thus, it is the need of the hour to divert much needed investment to the distribution sector to augment the growth and meet the increasing energy demand. The franchisee model provides a via media for creating a win-win environment for all the concerned stakeholders û franchisee, State utility and the consumer and brings in the much needed investment, management expertise, technological innovations and this is bound to show pathbreaking results.

The input-based franchise model improves power supply for consumers and revenue collection for discoms but its success also depends upon execution.

What can be done to overcome the challenges?
It is important that relevant stakeholders understand that the role of a Distribution Franchisee is perceived to be of Business Transformation and not Business Outsourcing. The biggest challenge in making a DF an engaging PPP example is much before the takeover, when the utility finalises the baseline parameter based on which the DF is supposed to quote its financials. An accurate baseline assessment makes a sound foundation for the DF operations to be successful.

Post takeover, apart from various challenges, if we have to shortlist two most critical ones, it would be consumer services and investment scheduling. Change in consumer perception, from the softer issues as office clean-up to toilet hygiene to an effective and responsive customer care centre, all add up to make the DF more acceptable. While typically, the industry benchmark is investment for system improvement in the first 2-3 years to be equal to the yearly revenue in the DF area, the ´when´ and ´where´ of it determines the success of the project. Investments include technology. It is important to note that while the franchisee is responsible for end-to-end operations in its designated area, it also seeks willingness and support from all key stakeholders - government, utility, regulator and consumers.

´DF improves quality and availability of power´
How has the franchise model, especially in distribution, helped to bring down T&D losses in the respective circles?

The distribution franchisee (DF), unlike a traditional utility business model, adopts a risk based business model where the bidder takes on the risks of improving the operational efficiency and commercial efficiency for the targeted levels of returns. The operator makes returns only by bringing out operational improvements while managing the risks. The risk return relationship and the freedom provided to the operator with respect to operations and capital investments are the prime reasons for success of the model.

DF improves quality and availability of power and provides better services to the consumers. It brings operational and financial efficiency in the business.

Furthermore, the financial gains to the franchisee come from technical and operational improvements through improved operating practices and targeted capex. DF brings fresh investments without adversely affecting retail electricity tariffs.

Do you feel that the Bhiwandi distribution model should be the benchmark model?
The Bhiwandi distribution franchisee clearly demonstrated that the DF business model creates value for all the stakeholders involved- customers, utility, employees and the franchisee. Significant loss reduction (both distribution as well as commercial losses) achieved in Bhiwandi distribution franchisee from about 70 per cent at the time of handover to about 16 per cent is possible only when all the stakeholders benefit from the initiative.

The consumers have benefited both by virtue of quality of power availability as well as customer service standards. Moreover power availability has led to overall developments in terms of investments in industrial developments and subsequent cascading effects on the society. The success led to replication of the similar models in various parts of the country with varying degrees of success.

Why has the franchise model not been able to gain popularity?
The basic tenets of the distribution franchisee business model are based on the risk involved, returns are ensured only when the targeted levels of operating efficiencies are achieved. The reserve operational targets need to be set on a more realistic basis with players taking a calculated call to improve the parameters while bidding for the opportunities. The feasibility of the business depends quite a bit on the value it creates for all the stakeholders. Recent experience has not been very encouraging in this aspect with either the initial numbers presented by the utilities being aggressive or the winning bidder going for an aggressive improvement trajectory than what most players think feasible. These factors, while quite encouraging from the perspective of the utilities, are leading to a waning interest levels among the bidders. An input-based franchise model improves power supply for consumers and revenue collection for discoms but its success also depends upon execution.

So what are the challenges in recovery and input model of franchise? And what can be done to overcome them?
As discussed, the distribution franchisee is a risk-based performance model where execution is key to realising the returns budgeted at the time of bidding. The capabilities of the successful bidder in bringing about improvements and undertake required investments in the business are important factors for success. So one of the important factors would be to review the qualification criteria used in the transaction process to ensure that the successful bidder apart from paying the maximum value to the utility is also able to create value for the customers and itself. Otherwise the businesses will not be sustainable from a long-term perspective.

Jalgaon Power Distribution Franchisee
Jalgaon has a population of 800,000 people with various consumer types. It includes consumers using power on both high tension (11,000 volts and above) and low tension (415 volts and below) for purpose of domestic, commercial, industrial, agricultural, railway traction, street lights, public water pumps etc. At the time when Crompton Greaves took over, the Jalgaon area had over 35 per cent distribution losses; the failure rates of transformers and switchgears were high; billing efficiency was severely low at 69 per cent; and even the collection efficiency was only 81 per cent. In other words, a little over two-thirds of the users were billed; and only four-fifths of them actually paid. The first task for CG was to improve power supply situation in the entire franchisee area along with improvement in billing and collection efficiency. Further in order to increase sales, expediting new service connection process was an important task.

The business pioneered CG´s Smart Grid Meter Project. This has been done by replacing the old network in urban areas with 205 single phase smart meters in the urban area and two data concentrator units. The connectivity is good and the usage data of consumers is instantly transmitted to the system. This technology will be further adopted across the urban zone of the franchise, especially in areas where there are high power-use customers.

CG´s approach for meeting challenges: CG approached with the fundamentals of capturing factual data - quick analysis for solution, provide immediate solution, plan for sustainable solution and execution. Along with this, close interaction with all the consumer groups like industrial associations, village leaders, and government officials was essential to communicate to them the process adopted by CG for achieving desired results. In the first five months and then over the financial year 2012-13, CG gained control over operations with zero failure of power transformers, zero failure of switchgears, reduction in distribution transformer failure from 20 per cent to 11 per cent, improved billing efficiency to 86 per cent, improved collection efficiency to 93 per cent and on top of it reduction of distribution losses to 20 per cent over a six-monthly sliding scale.

How did CG achieve success at Jalgaon?
It is important to understand the requirement of consumers to whom power is distributed. The consumer´s main expectations include:
1. Continuous and good quality power supply
2. Accurate billing along with adequate hassle-free cash collection facility
3. Mechanism to communicate grievances to distributing company
In order to fulfill the expectations of consumers CG started with a 24x7 call centre for both urban and rural areas. This has become popular with consumers and seldom do they visit the CG office to lodge ´no power´ complaints. Citizens living in villages are enjoying this facility and are satisfied since they do not have to walk in search of the distribution company technician to resolve their complaint. 

  • CG has also opened special seats in call centres for MIDC consumers. Additionally it has opened a facility to lodge ´no power´ complaints through SMS.
  • The company opened Consumer Facilitation Centre from day 1, to attend to consumer grievances regarding change in existing power load requirement, change in static billing data like name and address, applying new power connection, billing related queries etc. It further established ´Internal Grievance Redressal Forum-IGRF´ to attend to those consumers who are not satisfied at CFC or wish to speak to senior officers.
  • The maintenance of all power transformers and switchgears at substation has been completed to achieve zero failure.
  • CG has established healthy rapport with the Jalgaon Industrial Association with regular interaction at senior level for attending various needs of this sector for increased industry satisfaction and increased production.

How is loss reduction achieved?
1. Distribution loss reduction means stopping wasteful use of electricity. This means recording of correct energy usage at consumer meters, stopping theft and pilferage of electricity at consumer premises and in distribution network and using best engineering practices and switchgears for optimum electricity utilisation.

Distribution loss reduction means lesser requirement of electricity in the same area leading to lesser generation of electricity. In Maharashtra 85 per cent electricity is generated thermally. Lesser generation means lesser emission of toxic gases and carbon contents into the atmosphere and thus helps reduce atmospheric pollution. Thus the task of distribution loss reduction not only helps the consumer with power supply as per their aspiration, but also increases power conservation and reduces pollution.

2. CG achieved this by taking various engineering approaches, human interaction clubbed with CSR activities both in villages and in slum areas, increased service reliability of power by adequate equipment and switchgear maintenance.

The following major activities are carried out to achieve distribution loss reduction at 20 per cent from 35.75 per cent:

  • Replacement of over 35,000 defective meters for proper recording of energy (nearly 10 per cent of total population).
  • Releasing over 14,000 new service connections (added 6 per cent new consumers).
  • Maintenance of all 35 small power transformers (33/11 kV, 3.15 to 10 MVA).
  • Maintained over 1000 distribution transformers to reduce failure.
  • Bifurcated 25 11kV and 33 kV High Tension feeders to reduce (I2 R) technical losses.
  • Added 20 MVA power transformer capacity for increased reliability.
  • LT network for 28 distribution transformers centre out of 93 identified transformers having high losses provided.
  • Charging of 22 capacitor banks.
  • Significant reduction in the stealing of power through ´hooking´ by replacing low transmission overhead bare conductors with cables.
  • Regular maintenance work has been carried out on 577 transformers.

Key takeaways
The success achieved by CG in shortest possible period attributes to the vision of CG management, efforts taken by team CG and consistent support received from consumers. Moreover, CG has worked with Infosys, one of India´s leading global IT service providers, to create an IT-based integrated ´smart billing´ system at Jalgaon. This integrates billing, including online bill payments, with a customer facilitation centre, asset maintenance and meter reading through mobile devices. Jalgaon has given CG considerable experience in managing a real-life electricity distribution franchise in India. By integrating an IT-driven smart grid methodology with upkeep, automation, maintenance, billings, customer service and inventory control, Jalgaon is helping CG to understand what it takes to run power distribution franchises, an experience that will enable CG to make similar bids in other regions as and when they arise.

Automated and error free
Feedback Energy Distribution Company (FEDCO) has delivered tangible results on the ground. The initiatives have a direct impact on over half-a-million consumers served by the company, and therefore the company introduces innovative practices which are not only reliable, accurate and useful but scalable and sustainable in the long term. Here below are a few examples of such innovations.

Automated, error-free billing and digitisation: FEDCO is responsible for reading meters for over 5 lakh consumers every month, spread over 10,000 sq km. This activity could require a huge manpower and time. At the same time, it could be fraught with erroneous reading and thus consumer complaints. In order to rule it out, FEDCO deployed Spot Billing Machines (SBM) integrated with GPRS technology. This enables the company to finish the entire billing activity in a period of 10 days. The data is stored and served using a dedicated server, which makes the billing process foolproof, secured and error-free. This data is further utilised for planning, forecasting and spotting areas of concerns and improvement.

Using WhatsApp for sharing photo: For over 7,000 consumers in the LT three-phase, high value category, the company is utilising WhatsApp (a popular messaging application) to ensure accurate billing. Under this, the pictures of the meters are sent by engineers to a centralised control room and the billing is done accordingly. It helps in instant meter reading and rules out all possibilities of suppressed billing.

Optimising network planning: FEDCO is utilising GPS based survey technology for mapping LT network corresponding to all DTRs (Distribution Transformers) and utilising the same for optimising network planning. This initiative brings in tremendous operational efficiencies with minimum investment. Today, the company is covering up to 6,700 DTRs and around 10,000 ckt km of LT network. LT network strengthening is the most neglected area of the distribution network, which is complex and voluminous. Geographical mapping of the LT network and using the same to optimise planning in network analysis software saves investment and operation costs. Application of this process in LT network is uncommon in other distribution utilities. Even though the Central government has taken initiatives to empower the power utility organisations to implement IT related services including GPS based mapping, they are yet to start using these systems.

Moreover, the company is also using an Online New Service Connection tracking system to deliver services in minimum possible time. Overall, these initiatives help eliminate human intervention, rule out errors, enhance efficiency, curb malpractices, and deliver the best-in-class services to end users. By developing this technological ecosystem, the company has managed to increase its coverage by 8-10 per cent with existing resources in the first year of its operations and has reduced T&D losses by 5-7 per cent.

DF Circle: Orissa (Puri, Balugaon, Khurdha and Nayagarh divisions of CESU)

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