Torrent power a
Distribution Franchise
…prsented by : Arpit Saran
Torrent Power – At a glance
Part of Rs. 8200 Crore Torrent Group
• Pharma (Turnover ~ Rs. 1916 Crores)
• Power (Turnover – Rs. 5958 Crores)
• Licensee in Ahmedabad, Gandhinagar & Surat
Distribution
• Franchisee in Bhiwandi, Agra & Kanpur*
Integrated Power 1647.5 MW Capacity
Company Generation • 500 MW at Ahmedabad
• 1147.5 MW near Surat
Transmission • JV with PowerGrid for 400 KV network
* - yet to takeover operations
2
Present Distribution – Drawbacks! Before Torrent
High AT&C losses
Frequent power failures due to very old and dilapidated network
Massive load shedding
Low customer satisfaction
• Customer service standards are poor
• Lengthy and tedious mechanisms for resolving consumer
grievances
Uninspiring work culture
Old and obsolete technologies still being used
Unacceptable safety standards
3
Present Distribution Scenario – High Distribution losses
23.2
25
16.4
20
15 10.6
8.5
6.7
10
0
India Russia China Brazil World
Distribution losses in developing countries in 2008
4
Source: Think BRIC – Comparative Study of Power Sector by KPMG- Jan 2010
Need of the hour
The power sector requires huge capital outlay to reduce the current deficit
and to sustain future GDP growth
It is not possible for the government to fund the growth of the sector on its
own
Investment are forthcoming in Generation from the private sector but it is
not sustainable if distribution reforms are not undertaken
The government has embarked on an aggressive mission – “Power for All
by 2010” and the private sector has a key role in achieving the objectives
stated in the mission
5
Benefits of Franchise Model
Reduction in technical losses and theft
Improvement in Metering, Billing and Revenue Collection
Capital investments in upgradation of the network
Enhancement in customer service quality
A win-win scenario for all:
Consumers, DISCOM and Franchisee
6
Technical Benefits
State of the art distribution system in franchise area
Lower peaking load due to better technical T&D management
Better overall grid stability due to lower system interruptions
Improvement in reliability parameters like SAIFI, SAIDI,
CAIDI, etc.
7
Financial Benefits to the State
Assured returns from distribution franchisee
No investment in the franchise area by licensee
Reduction in losses
Contribution to the Government exchequer
• Increase in collection of Electricity Duty as the metering and billing
becomes more accurate
• Increase in collection of other Central and State taxes pursuant to
growth of economy of franchisee area
8
Better services to Customers
Improved services
• Faster new connections/ load extensions
• Lower attendance time for faults
• Grievance Redressal mechanism
• Convenient bill payment facilities
Better availability and quality of power
Increased customer satisfaction
9
What is a Franchisee?
As per Definitions of The Electricity Act, 2003
“franchisee” means a person authorised by a distribution licensee to
distribute electricity on its behalf in a particular area within his area of
supply;
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Features of Input Based Distribution
Franchise
Role of a franchisee
State DISCOM
to supply power at Fault Restoration
Planning
EHV substations
All Obligation and Rights of a
O&M
Distribution Licensee
Revenue Collection
Construction
Energy Input Meter Reading Customer Care CAPEX
Metering
Generation Transmission Distribution
12
Responsibilities of Distribution franchisee
Purchase of power
From Licensee at EHV substations feeding the franchise area
Network Related
Network analysis and improvement planning
Make capital investment for renovation/ upgradation of network
Distribution asset maintenance
13
Responsibilities of Distribution franchisee
Consumer Related
Metering
Meter reading
Billing as per Regulatory Commission’s approved Retail Tariff
Collection (both current revenues and arrears)
Issuing new connections
Adherence to all relevant Regulations of ERC including Supply Code
and SOPs
Attending consumer grievances
14
Commercial Terms
Payment by DF
L
Charges for input energy as quoted by franchisee
Arrears collected
I
Security Deposit for new connections
Electricity Duty etc C
D E
F N
Payment by Licensee S
Incentive on recovery of arrears
Subsidy
Specified payments upon termination / expiry
E
E
Competitive bidding ensures that the State Discom gets the
right price for input energy
15
Agra
International Tourist Place
Area : 188 Sqkms
Population : 23 Lacs
Customer base : 4.2 Lacs
Peak Demand : 420 MVA
Energy Input : 1800 MU
33KV OH Line : 230 Kms
33/11KV Substations : 38 Nos
11KV OH Line : 713 Kms
DTCs : 3269 Nos
HT Consumers : 350 Nos
LT Network : 1500 Kms
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Agra : At the time of takeover
AT&C losses : 80%
Mandatory load shedding of 6 hours at the
time of takeover and subsequently
increased to 8 hours
Further distress load shedding due to
deficit of 300 MVA in EHV Network
Overstressed distribution Network
• Overloading
• Breakdowns / trippings
Distribution transformer failure rate of 60%
Poor reliability of supply
Only 23% of the customers have accurate
metering and there are many unregistered
consumers
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Overcoming the Challenge
Problem: Frequent Power Failures
Issue: 2 to 3 DTs failing everyday
Overloaded System
Frequent conductor breakdown
Lack of adequate maintenance leading to deterioration
of network
Long restoration time in case of faults
Measures: Failed DT replaced within 24 hours
24 x 7 control room to ensure faster restoration
All DTs revamped
18
Overcoming the Challenge
Problem: Technical Losses
Issue: Overloaded feeders leading to higher I2R losses
Improper crimping at joints
Poor power factor of the system
Measures: Reconfigured the existing feeders
Added 29 new feeders to the existing 46 feeders
Added 125 MVA distribution transformer capacity
Proper termination and crimping provided
Installed capacitor banks to improve power factor
19
Distribution System
22 KV feeders
Distribution Transformers and FSPs
20
Shunt Capacitors
21
Overcoming the Challenge
Problem: High Commercial losses
Issue: Only 23% customers metered
Rampant theft of energy
No substantial action against non payment of bills
Measures: Provide systematic metering for accurately measuring
consumption of the customers
Securitization of the network and extensive vigilance
Filing of FIR in case of repetitive power theft
Streamline processes to improve collection efficiency
“Ujjwal Bhiwandi Abhiyan” for legalising connections
22
Metering
23
Overcoming the Challenge
Problem: Safety
Issue: Lack of adequate clearance with lines
Transformers located at roadsides without any fencing
Double feed through hooking
LT/HT lines in poor condition (conductor snapping)
Measures: Lines replaced by underground cables at critical
locations where clearance are issue
Earthing provided for all poles, transformers
Removal of double feed
Fencing provided for transformers
Lines replaced, where necessary
Public Safety Awareness programs
24
LT Network Revamping
25
Safety
26
Overcoming the Challenge
Problem: Customer Service
Issue: No concept of customer service
No consumer redressal system
Customers had lost confidence in utility
Measures: Call Center started from Day One
Customer friendly bill introduced
2 Customer Service Centers Opened
Customer Redressal Mechanism established
Mobile Van as a value added service
27
24 x 7 Call Center
28
Customer Care Centers
29
The results
Major Accomplishments :
Distribution Transformer Failure Rate
At the time of takeover
As on April 2010
60% 2.8%
DT Failure Rate reduced by 57%
31
Major Accomplishments : Load Shedding
At the time of takeover
At present
10 to 12 Less
hours than 3
Hrs
Reduction in losses has improved power
reliability in the area
32
Major Accomplishments : Accurate Metering
At present
At the time of
takeover
23% 92%
99% of sales is based on actual reading.
33
Key Requirements for DF arrangement
Key Requirements for DF Arrangement
The required power should be made available
• Despite the marked improvement brought in Bhiwandi, change not
visible as load shedding continues
• Customers want quality power 24 x 7
• Availability of adequate upstream infrastructure (Transmission
Capacity) to cater to the demand in the franchise area
• Distributed Generation based Dist Franchisee is a step in the right
direction
Franchise should be provided with adequate power so that the benefits of the
improvement are realized
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Thank you
