Challenges and opportunities beforeChallenges and opportunities before

Maharashtra State Electricity Distribution Company Ltd.Maharashtra State Electricity Distribution Company Ltd.

If you can dream it, If you can dream it,

you can do ityou can do it

-- -- Walt DisneyWalt Disney

•Electrification of State (3.08 Lakh Sq. Km.)

•Industrialisation / Green Revolution

•Urban / Rural Maharashtra Development

•30/62.5/120/140/200/210/500 MW sets.

•132/220/400 kV & +/-500 kV HVDC.

On 6th June 2005On 6th June 2005

MSEBMSEB

MSPGCLMSPGCL

MSETCLMSETCL

MSEDCLMSEDCL

MSEBHCLMSEBHCL

MSEB Heritage : 20th June 1960 to 5th June 2005

• Demand Supply Gap of 3500 to 4000 MW

• High T&D Loss – 35.2% (04-05)

• Low Collection Efficiency – 90.03%

• Average Cost of Supply: Rs 3.68/Unit whereas Collection: Rs

2.97/Unit

• Inability to Upgrade Infrastructure

• 9 % of consumers subsidise for 73% consumers

• Pending applications for Agricultural connections – 4Lakhs

Problems of Maharashtra Power Sector Problems of Maharashtra Power Sector

• Financial Losses.

• Lack of finances for development

• Consumer dissatisfaction: Poor response from us

• High T&D losses (38%)

• High PD/Live arrears

• Unmotivated employees

• Corruption

• Poor maintenance : Lack of safety

• Poor inventory control

• Load shedding

• Negative public image

MSEDCL used to be the LEADER / No.1 Board.

People used to follow us

What went wrong?

Now No. 13 SEB? Andhra / Gujarat / Punjab / TamilNadu

Provision of Electricity Act – 2003 (Restructuring).

Competition at Door step.

We must assure good quality supply & good services to consumers.

• Financial stability to be improved.

• Conducive atmosphere for investors.

• Accountability at all levels.

• Transparency in working.

Loss making entity (Rs. 1500 Cr/Year) : - Needed restructuring.

Sr. No.

Details Rs. Cr. MUs p/u

1 Gen Cost 4852 47246 103

2 Power Purchase 3864 19638 198

3 O&M 804 Gen + PP

4 Emp. Cost 1802

8716 66884 130

5 A&G 182

6 Interest on Loans 1011

7 Depreciation 1411

8 Others 569

5779 66884 86

Total 14495 66884 216

Revenue 14180 Loss

35.28

Avg. Cost =

216 / 0.6472

= 333Loss -315

Revenue Expenditure FY 2004-05Revenue Expenditure FY 2004-05

Do you know this ?Do you know this ?

● Cost of Generation: 103 ps/unit

● Cost of Power Purchase: 198 ps/unit

● Weighted AVG: 130 ps/unit

● Cost of fixed charges: 86 ps/unit

● Total Cost @EHV : 216 ps/unit

● Losses 35.28 % Cost = 216 / 0.6472 = 333 ps/unit

● Cost of T&D losses = 333 – 216 = 117 ps/unit

Power Purchase Rates 2004-05Power Purchase Rates 2004-05

Sr.No. Source Rate ps/unit

1 Korba 92

2 Kawas 519

3 Gandhar 233

4 NTPC 171

5 KAPP 269

6 PTC / N V V N / ADANI 249 / 268 /253

7 UI 283

8 BHP 266

9 TPC 253

10 A 210

PGCIL Charges = Rs. 136 Cr for 1400 MUs p/u = 97 ps / unit

• Our sentiments are important but we have to keep pace with other

players.

• Better late than never.

• No change in employees service conditions.

• “As is where is policy”

• Absolutely transparent change over.

• Our generation cost is low (no body can come to this level)

• Our strong T&D network (7 Lakh ckt Km.)

• Our efficient work force.

• Our commitment for Nation.

Our Strengths

‘‘Competition at Our Door Step’Competition at Our Door Step’

( Electricity Act 2003)( Electricity Act 2003)

    Generation freed from licensing

    Captive generation free & no surcharge

    Open access in transmission

    MERC becomes the licensing authority

    Anti monopoly provisions

    Transfer scheme

- STU & SLDC to be separated

- Corporatization compulsory

““THE GREATEST DIFFICULTY IN THE WORLDTHE GREATEST DIFFICULTY IN THE WORLD

IS NOT FOR IS NOT FOR

PEOPLE TO ACCEPT NEW IDEASPEOPLE TO ACCEPT NEW IDEAS

  BUT TO MAKEBUT TO MAKE

THEM FORGET THE OLD ONES.”THEM FORGET THE OLD ONES.”

   - - - - JOHN M KENYO- - - - JOHN M KENYO

‘‘Generation freed from Licensing’Generation freed from Licensing’

 

• Except for hydro,no license required for setting up a

generation plant ( 7,8 (b))

• Implications :

• Increased Private investments in generation ( Good for

the Sector as it reduced load shedding)

• Merchant power plants may come up.

• But not many GENCOs are expected in the beginning till

introduction of open access

‘‘Captive Generation freely permitted’Captive Generation freely permitted’

 

No license required for Captive Generation 9 (1)

• Right to open access from plant to destination on payment

of wheeling charges

• Associations of persons can set up a captive plant

anywhere- primarily for their own use & MSEDCL will have

to allow access through their lines on payment of

wheeling charges ( Without any Surcharge) (42)

‘‘Open access in Transmission’ Open access in Transmission’

 

Transmission licensee has to provide non-discriminatory

open access to any licensee or Genco on payment of the

transmission charges. ( 40 (c))

Implications :

Facilitates trading & development of market

 

‘‘Parallel Distribution Networks Possible’ Parallel Distribution Networks Possible’

 

MERC can grant distribution license to more than one

persons for distribution through their own networks in the

same area (6th provision of 14)

   Implications –

MSEDCL will face competition in its HT & high revenue areas

as new distribution licensees with their own networks may

come there

‘‘Open Access in Distribution in Phases’ Open Access in Distribution in Phases’

 

Open access means that the customer can pick & choose their

supplier & any supplier can use the existing lines to reach any

customer

On payment of wheeling charges, surcharge & any additional

surcharge wherever applicable. (42 (2), 42 (4))

Implications : Competitors will be able to cherry pick MSEDCL’s

high revenue customers

Cross subsidy gets phased out & tariffs will reflect cost of supply

‘‘New Anti-Theft Provisions’ New Anti-Theft Provisions’

 

-      More stringent punishments for theft 135 (c)

-      Provision for Special Courts (153)

-      Abetting a theft a crime (150)

Theft a cognizable & non-bailable offence ( 151)

Implications :

 

     GOM will have to open special courts, authorize officers of licensee to inspect the premises.

     GOM to decide whether it the recently passed ‘Anti Theft Act’ to continue as before

Service provisionsService provisions

 

1. The State Government may by a transfer scheme provide for transfer of

employees to the transferee on vesting of properties, rights and liabilities in

such transferee as provided under section 131

2. Upon such a transfer under the transfer scheme the personnel shall hold office

or service under the transferee on such terms and conditions as may be

determined in accordance with the transfer scheme

Provided that such terms and conditions on transfer shall not in any wayProvided that such terms and conditions on transfer shall not in any way

be less favorable than those which would have been applicable to them ifbe less favorable than those which would have been applicable to them if

there would have been no such transfer under the transfer schemethere would have been no such transfer under the transfer scheme

As per Sec 133 the provisions relating to officers and employees are as under

• Present transfer on Book value to Govt. of Maharashtra but

with in one year it will be by market value.

• No tariff shock envisaged.

• Small & controllable size / Competition.

MSPGCL :- Will be self sufficient / can create new Power

stations leading to lesser load shedding.

MSEDCL :- Our strength is our employees.

SEB ReformsSEB ReformsSTATES INDUSTRY STRUCTURE YEAR –

FIRST TRANSFER SCH.

ORISSA THERMAL CO, HYDEL CO., TRANSCO AND FOUR DISCOMS 1996

AP GENCO, TRANSCO AND FOUR DISCOMS 1999

HARYANA GENCO, TRANSCO AND TWO DISCOMS 1999

RAJASTHAN GENCO, TRANSCO AND THREE DISCOMS 2000

UP THERMAL CO, HYDEL CO., TRANSCO AND FOUR DISCOMS 2000

KARNATAKA GENCO, TRANSCO AND FOUR DISCOMS 2001

MADHYA PRADESH

GENCO, TRANSCO AND THREE DISCOMS;OPERATION AND MANAGEMENT AGREEMENT WITH MPSEB 2004

GUJARAT GENCO, TRANSCO AND FOUR DISCOMS 2005

ASSAM GENCO, TRANSCO AND THREE DISCOMS 2005

PUNJAB GENCO, TRANSCO, BULK SUPPLY CO. AND THREE DISCOMS

CHHATTISGARH GENCO, TRANSCO AND DISCOM

FY T&D Losses Theft cases % DTC failed

99-00 37% 3902 27%

00-01 34% 18505 28%

01-02 31% 35536 23%

02-03 28% 108889 19%

03-04 25% 91168 11%

1. Collection Efficiency from 90-98% to 100-112%

2. AG connections released from 1.9 Lakhs to 2.3 Lakhs /year

APSEB ReformsAPSEB Reforms

FY T&D Losses Collection Eff

99-00 38% 85%

00-01 36% 88%

01-02 36% 91%

02-03 32% 96%

03-04 31% 98%

KEB ReformsKEB Reforms

FY T&D Losses Collection Eff

01-02 42-45% 68-76%

02-03 38-43% 77-78%

03-04 36-41% 78-87%

Orissa ReformsOrissa Reforms

FY AT&C Losses Collection Eff

01-02 51% 91%

02-03 46% 96%

03-04 44% 96%

04-05 35% 100%

Delhi Reforms (NDPL)Delhi Reforms (NDPL)

1. Transformer failures reduced from 272 to 248 in NDPL and from 513 to 259 in BRPL

2. Consumer complaints / day reduced from 4000 to 2500

3. Distribution capacity addition 80 MVA / 350 MVA / 490 MVA in FY 03 / 04 / 05

Vision without action Vision without action

is merely a dreamis merely a dream

Action without vision Action without vision

merely passes timemerely passes time

Vision with action Vision with action

can change the can change the OrganisationOrganisation

1) We, as a professional company, rededicate ourselves to serve all our customers by

extending reliable and quality power supply at reasonable and competitive tariffs so

as to boost agricultural, industrial and overall economic development of Maharashtra.

2) We commit to Honesty, Integrity and Transparency in actions to achieve higher

standards of Consumer Satisfaction.

3) We aim at achieving technological excellence and financial turnaround for the overall

benefit of the customers.

4) We will strive hard for system improvement and stress upon preventive maintenance.

5) We will ruthlessly curb the theft of electricity.

6) We will encourage and support energy savings activities and Demand Side

Management thereby optimizing the use of electricity.

7) We will fulfill our commitment to society by improving quality of life.

MSEDCL’sMSEDCL’s MISSION STATEMENTMISSION STATEMENT

• Distribution loss reduction (5% p.a.)

• Improvement in collection efficiency (3% p.a.)

• Circles to act as profit center : self sufficient / Improve work culture.

• Use of Technological advances for improving efficiency.

• Improving quality of supply / Reducing interruptions.

• Improved services to Ag. consumers : Reduction in DT failure.

• DSM & peak load measures.

• Improved Customer Grievance Redressal / SoP

• Proactive – Power Distribution network planning.

• Improve safety / working conditions / Special training programs

MSEDCL’s Ten Point ProgramMSEDCL’s Ten Point Program

MSEDCL’s Ten Point ProgramMSEDCL’s Ten Point Program

1) Distribution system loss reduction Introduction of complete accountability through Energy Accounting .

and complete metering of consumers. 100% DTC metering and DTCwise loss reduction program. Catching & prosecution of theft & severe action against those

who abet in theft. Reducing line and transformer losses through HVDS & improve HT /LT

ratio. Installation of LT/ HT capacitors.

2) Improvement in Collection efficiency Reduction of live arrears. Reduction of P.D. arrears. Zero tolerance for non payment of bills. ( proper timely disconnection) Elimination of average billing and 100% billing on the basis of actual

meter reading. Spot billing.

MSEDCL’s Ten Point ProgramMSEDCL’s Ten Point Program

3) Circles to act as profit centers Circles to buy the power they require, pay for it and make their other expenses through their income

4) Use of technological advances and computers systems for improving the efficiency, accountability, information level & consumer satisfaction.

Circles Distribution automation projects like AMR, SCADA, MIS Call center at major cities Customer facilitation centers at 50 sub-divisions E-tendering E-billing and online payment, ATM type collection centers Network mapping through Graphical Information System (GIS)

5) Improving quality of supply and reduction of interruptions Priority focused on upgradation, renovation andmodernization of distribution system. Repairs & preventive maintenance of distribution systems

MSEDCL’s Ten Point ProgramMSEDCL’s Ten Point Program6) Improved services to Ag. consumers Reduction of distribution transformer failure rate

7) Demand Side Management and peak load management. (Measures to reduce load shedding

Separate feeders for Gaothans. Single phasing for Gaothans. Energy saving schemes for residential, public lighting,

public water works and Agricultural consumers. Reactive power management through capacitor installation

8) Consumer Grievances Redressal Systems Single window customer facilitation center. MERC's Standard of Performances (SOP) as consumer charter Training of employees RCI connection to be released on demand priority focused on

upgradation, renovation and modernization of distribution system Repairs & preventive maintenance of distribution systems

MSEDCL’s Ten Point ProgramMSEDCL’s Ten Point Program

9) Proactive distribution network planning with viable funding plan

Preparing sub-division wise information about consumer load profile

and demand growth Infrastructure strengthening plan. Preparing viable funding plan

10) Measures to improve working conditions of employees

Improvement in work culture Measures to improve safety during working Working conditions of employees to be improved Honesty, Integrity & hard work of employees to be rewarded Special Training programs for employees to improve

motivation for dealing with consumers

Present status of MSEDCLPresent status of MSEDCL

Shri. Sanjay Bhatia (IAS) as MD

Shri. Vinayak Rao as Director

Shri. A.D.Palamwar as Director (Operations)

Strong Work Force of about 64,000 employees

Consumers about 1.40 Crores.

33/11 kV Sub-Stations : 1658 nos.

2.17 Lakh DTCs

Total Revenue 2004-05 : Rs. 14,180 Crores

Estimated Revenue 2005-06 : Rs. 14,937 Crores

Capital Outlay for 2005-06 : Rs. 868 Crores

State Level overviewState Level overview

T&D losses 2002-03 : 38.59 %

2003-04 : 38.20 %

2004-05 : 35.28 %

Collection Efficiency 2002-03 : 89.36 %

2003-04 : 90.32 %

2004-05 : 98.74 %

79 Divisions have shown loss reduction but in 45 divisions the losses have increased

Status of Pune Zone FY 04-05Status of Pune Zone FY 04-05

Division Input (MUs)Total Sale

(MUs)% Loss % LT Loss

Pimpri . 539.63 446.31 17.29% 34.57%Shivaji Nagar 406.11 334.79 17.56% 25.24%

Kothrud 328.46 268.15 18.36% 22.54%Bhosari . 1152.82 1004.89 12.83% 30.23%

Ganeshkhind Circle 2427.03 2054.14 15.36% 28.33%

Band Garden(Pune) 864.21 734.31 15.03% 27.28%Padmavati(Pune) 292.51 235.70 19.42% 21.48%Rasta Peth(Pune) 291.23 205.22 29.53% 34.93%

Parvati 224.21 175.93 21.53% 28.83%

Rasta Peth Circle 1672.16 1351.15 19.20% 27.82%

Baramati 1063.70 716.76 32.62% 45.86%Daund 270.51 209.16 22.68% 33.98%

Pune (Mulshi ) 1044.38 826.44 20.87% 34.15%Manchar 200.37 134.47 32.89% 34.15%

Rajguru Nagar 814.96 672.78 17.45% 29.75%

Pune ( R ) Circle 3393.92 2559.62 24.58% 37.21%

Pune 7493.11 5964.91 20.39% 32.55%

Status of Pune Zone FY 04-05

Tariffs Tariffs

● Generation Tariffs : MSPGCL will send bill to MSDCL on 6th of every month

and composite tariff is Rs.1.36 / unit

● Transmission Tariffs : MSTCL will send bill to MSDCL on 6th of every month

and composite tariff is 19 paise / unit transmitted

● MSDCL will purchase

●4000 MUs from MSPGCL (Rs. 544 Cr)

●Purchase from outside 1700 MUs (Rs. 357 Cr)

●Transmission charges for 5700 MUs (Rs. 108 Cr)

● MSDCL will have to pay Rs. 1009 Cr. / month

● Our revenue should go up to Rs. 1250 Cr / month

Case StudyCase Study● If Pune zone wants to purchase power from pool

● Power cost at Rs. 1.58 / Unit for 624 MUs : Rs. 99 Cr/ month

● Transmission cost at Rs. 0.19 / Unit for 624 MUs : Rs. 12 Cr

● Total Input cost = @ Rs.111 Cr

● Monthly revenue = @ Rs.139 Cr

● Balance ( 139-110)=Rs.29Cr for salary/depreciation/R&M and interest on loan

● If HT load is not there, LT sale is 251 MUs / month

● Input = 372 MUs x 1.58 = Rs. 59 Cr

● Transmission Charges = 372 x 0.19 = Rs. 7 Cr

● Total = Rs. 66 Cr (HT revenue = Rs.57 Cr)

● Balance ( 57-66) =Rs.(-) 9 Cr for salary/depreciation/R&M and interest on loan

% Collection Efficiency Pune Zone% Collection Efficiency Pune Zone

Circle 03-04 04-05

Ganesh Khind 95.44 99.70

Rastapeth 94.76 101.63

PRC 87.65 99.63

Pune Zone 92.42 100.05

% DTC Failure% DTC Failure

Circle 02-03 03-04 04-05 DT Nos.

Ganeshkhind 7.56 5.60 5.58 5427

Rastapeth

PRC 18.04 16.47 13.93 12633

Pune Zone 15.11 13.30 11.37 18060

If it is to be,If it is to be,

It is up to meIt is up to me

-- Mother Teressa