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Interaction | February 2011

40% AT&C loss reduction meant replacing equipment

This is in view of the fact that the national average of aggregate and technical losses (AT&C) is around one per cent, Gopal K Saxena, CEO, BSES Rajdhani Power (BRPL) informs R Srinivasan.

After Delhi's power sector was unbundled in 2002, the business of power distribution was transferred to BSES Yamuna Power (BYPL) and BSES Rajdhani Power (BRPL). Over the next few years, the BRPL area witnessed a record reduction in AT&C losses. Gopal Saxena, CEO, BSES Rajdhani Power (BRPL) spoke to us about the journey after unbundling, how the AT&C losses were brought down and their achievements, awards and milestones. Excerpts of the interview:

AT&C losses in the BRPL area have witnessed a record reduction of around 40 per cent. What measures were adopted to ensure this achievement?
Major initiatives taken by us vary from replacement of electromechanical meters, replacement of bare overhead conductors with insulated aerial bunched (AB) conductors, optimal loading of transformers and feeders, revamping low tension (LT) distribution systems by changing/repairing worn-out equipment and cables and installation of high voltage distribution systems and automatic power factor controllers, apart from others.

BSES has invested over Rs 2,000 crore to improve infrastructure. Kindly elaborate to what extent this has led to a decrease in AT&C losses?
Over Rs 4,000 crore has been invested on network improvement and upgradation of BSES. BRPL alone has invested about Rs 2,700 crore on network expansion and renovation of customer-care centres and various other customer touch points. Implementation of new schemes and new technologies were also funded through this capital expenditure.

If we consider the performance of all private discoms in Delhi then the combined savings to the Delhi government will be more than Rs 24,000 crore, considering the pre-privatisation performance.

What do you believe would help overcome challenges in terms of distribution reforms?
Within the power sector, high T&D/AT&C losses coupled with absence of a suitable and timely regulatory regime, particularly in the distribution sector, has rendered the business commercially unviable. To increase the financial viability of state utilities, politics needs to be isolated from business. With private utilities in Delhi, Mumbai, Kolkata and Gujarat showing the way by over achieving AT&C loss reduction targets and bringing about sustained improvement in operational efficiencies, it is clear that privatisation of distribution is the best possible remedy.

However, unless this goes hand-in-hand with a suitable regulatory regime that allows timely relief through cost-reflective tariffs, this whole sector will continue to remain in limbo, as it is now. This indeed has now been further brought out by the 13th Finance Commission Report.

What according to you are the internal challenges that obstruct the pace of operational reforms?
Maintaining the rate of loss reduction is itself a big challenge. We have achieved an AT&C loss reduction of about four per cent per year, against the national average of around one per cent. Strengthening of systems and processes will be key to the next level of loss reduction initiatives. These will necessarily have to be coupled with technological advancements, system de-bottlenecking and value-added services. One of the biggest challenges is to build an environmentally sustainable model that takes into cognisance aspirations of all stakeholders and draws on the commitment, motivation and excellence of our entire workforce to achieve targeted results.

What anti-theft measures have been employed?
The measures already in place include replacing bare conductors by AB conductors, distribution transformers metering, high voltage distribution system, sealing of bus bars, metering of all connections with installation of tamper-resistant meters etc. A strong analytics section has been created to analyse downloaded data on a real-time basis and regularly reviews the meter reading data.

Enforcement action is carried out on the basis of analytic reports, reliable information or an analysis of losses of distribution transformers or feeders. Due care is taken to ensure that all parameters and governance of the Electricity Act, 2003, are rigorously followed on the field as also in establishing the cases. Even as these acts are undertaken, we continue to seek the support of residents' welfare association, government departments, local representatives and influential persons to educate people about the disservice to society through electricity theft and dishonest abstraction of energy.

What plans have been formulated for technological upgradation?
On the technological side, advanced metering infrastructure (AMI) is going to be the backbone of the electricity sector. Smart metering and smart grids will be in place in the next few years. Several steps will have to be taken to bring in demand side management and deployment of solar power in particular for both grid as well as non-grid applications will witness a tremendous upsurge. With availability of gas and building-up of a suitable transport network, we expect more distributed generation.

What lessons learnt from years spent in varied companies like Babcock (manufacturers of boilers), Reliance ADA group, Essar Group (Hazira plant) and training at the Isle of Grain Megapower plant in UK came to your aid for your present stint with BRPL?
Ajay Shriram, CMD, DCM Shriram Consolidated (DSCL), once mentioned to me that, "The only way to change is to stop looking at the problem and start looking at the solutions". This has been my motto all along, but along with that is a strong will to excel and succeed. I believe in following an inspirational leadership style and try to involve people at the problem-solving stage by inviting their inputs.

In our company we follow practices that include various interventions, structured meetings, a balance score card and internal newsletters and magazines which act as employee engagement tools. I try to instill a sense of sanctity in people to processes, discipline and standard operating procedures which is needed for any business to evolve.

Evolution and achievements of BSES Rajdhani Power (BRPL)

Delhi faced among the highest losses in the country (over 50 per cent) due to rapid urbanisation and the growth of industries in residential areas. Deteriorating financial position, rampant theft and absence of IT led to high aggregate technical and commercial (AT&C) losses and the government to bail out Delhi Vidyut Board (DVB), provided financial support of over Rs 1,200 crore every year as subsidies to enable the board to buy power from generating stations. In 2002, the Delhi power sector saw a major transformation and the Delhi Vidyut Board (DVB) was divided into two generating companies, one transmission company and three distribution companies as an outcome of the Delhi Electricity Reform Act 2000.

The concept of AT&C losses, namely the difference between energy supplied and energy for which payment has actually been recovered was introduced. The opening level of AT&C losses for discoms was fixed by the Delhi Electricity Regulatory Commission (DERC) as 57.2 per cent for CEDEDCL, 48.1 per cent for NNWDDCL, 48.1 per cent for SWDEDCL and 50.7 per cent for all discoms. The loss reduction targets were established by competitive bidding. In this, the bidders would bid on the basis of efficiency improvement, ie, the reduction of AT&C losses that they would achieve year-wise over a five-year period and whose bid yielded the highest net present value in terms of consequential benefits would become the highest bidder. Tariffs would be set annually by DERC on the basis of accepted targets.

Since privatisation of distribution in 2002, BSES has taken many innovative customer-friendly steps. Consumers in Delhi witnessed hours of load-shedding, poor quality of supply and dilapidated equipment during the pre-privatisation era. On the customer care side, there were limited payment options and longer time for redressal of complaints. By taking the various measures and interlinking customer care with IT backup, there has been a lot of improvement in metering and addressing billing complaints. In turn the response time for redressal too has improved. Measures in this direction are improved customer care centres, new improved bills, bill payment kiosks, on-line facilities for consumers, centralised call centres, 'Bijli Gyan Abhiyan', 'Aap Ke Dwar,' etc.

BSES has achieved complete IT automation of business processes and emerged as the largest IT network in North India.

Some key developments are:

1. All the offices across the licensed area of distribution and around 330 locations are interconnected through LAN and intranet.
2. All commercial and technical processes are IT automated, which means minimal manual work and hence minimal chance of errors.
3. Records are saved on the central server.
4. Technologies adopted are SAP, SCADA, AMR, GIS, etc.

The organisation is one of the first utilities to have installed downloadable single-phase meters which are more accurate than conventional electromagnetic meters. There is a provision for data storage so the possibility of human error in data downloading and recording is reduced. These new meters are also tamper-resistant. Tampering it for manipulation of reading data is not possible with these meters. These meters also have a facility of earth leakage indicator.

Consumer convenience has been accorded top priority and almost every mode of payment has been made available like cash counters, cheques, payment kiosks, online payment, drop boxes, ECS, etc. AT&C loss reduction is the biggest achievement by the BSES discoms in Delhi. In the BSES Rajdhani area, AT&C losses have been reduced from 51.5 per cent in 2002-03 to 19 per cent by 2009-10 and in the BSES Yamuna they have been reduced from 63.1 per cent to 23.1 per cent in 2009-10. AT&C loss reduction achievement is 32.5 per cent by BRPL and 40 per cent by BYPL. BSES discoms are ISO 14001:2004 and ISO 18001:2007 certified utilities and have won the prestigious India Power Award 2010 for "Overall Utility Performance–Urban Area".

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