Power Reforms Essay Example for Free

Power Reforms Essay Electricity is central to achieving economic, social and environmental objectives of sustainable human development. In fact it has become essential ingredient for improving the quality of life and its absence is usually associated with poverty and poor quality of life. India has the fifth largest generation capacity in the world with an installed capacity of 173,626 MW as in March 2011. The power sector added record conventional capacities of 12,160 MW during 2010-11. However, despite the Indian power sector having shown substantial growth during the post-independence era, the sector has been ailing from serious functional problems during the past few decades. In 2010-11, India faced power deficit of 10 per cent and peak demand shortage of 13.3 per cent. In this backdrop, Power sector reforms were first initiated in India in 1992 by the Ministry of Power (MoP) to invite private investments in power generation to bridge the demand-supply gap. However, private investments failed to yield much benefit due to serious deficiencies and losses in electricity distribution in most of the State Electricity Boards (SEBs). Post 2001, Reforms were oriented around: 1. Unbundling of the state electricity boards.  2. Corporatization of generation, transmission and distribution sector 3. Setting up of independent central and state electricity regulatory commissions. 4. Passing of the Electricity Act, 2003 which mandates licensee-free thermal generation, non-discriminatory open access of the transmission system and gradual implementation of open access in the distribution system which will pave way for creation of power market in India. In the power sector reform process, Distribution segment was identified as the key area for reform for putting the sector on the right track. Distribution Reforms involve System up-gradation, Loss reduction, Theft control, Consumer orientation, Commercialization and adoption of IT. In this direction, the Government launched the Accelerated Power Development and Reforms Programme (APDRP) during the 10th Five Year Plan (2002-07) for the strengthening of Sub – Transmission and Distribution network and reduction in ATC losses. Continuing its support for power distribution reforms, the Government launched the Restructured APDRP (R-APDRP) in the 11th Five Year Plan (2007-12) with revised terms and conditions. Thus, Two key issues emerge as far as performance and reforms of any distribution company are concerned:- 1. Revenue realization which means reduction of ATC Losses 2. Consumer satisfaction The above factors are mutually reinforcing whereby improvement in one leads to the same for other as well. Technology has emerged as a major enabler of any reform process and this holds true for power sector reforms as well. New technological initiatives have been taken by many states especially in the distribution sector which have aided performance of the distribution companies therein. This paper seeks to throw light on how the above two key issues are being addressed through the use of e-governance mechanisms in KESCO i.e. Kanpur Electricity Supply Company Ltd. Kanpur Electricity Supply Company Ltd., formerly KESA, was restructured as a company on 14 January 2000 under U.P. Electricity reform act 1999. This company is registered for distribution of electricity in the area under Kanpur City (Urban). KESCo is serving around 700 bulk consumers and 4,35,000 other consumers of domestic, commercial and power categories connected to grid through 66 no. 33 KV substations and 340 no. 11 KV feeders after receiving electricity from 7 transmission substation of 220 KV and 132 KV of U.P. Power Transmission Corporation Ltd. It has a peak demand of around 500 MW and annual turnover of around 1000 crores. Coming back to the above two objectives, the situation before the initiatives were launched in KESCO and measures taken therein are as follows: 1. Revenue Realization The biggest challenge of the power sector as far as revenue realization is concerned is the high Aggregate Technical Commercial (ATC) losses. The ATC losses are presently in the range of 18% to 62% in various states in India. The major portion of losses are due to theft and pilferage, which is estimated at about Rs.20,000 crore annually. Apart from rampant theft, the distribution sector is beset with poor billing (only 55%) and collection (only 41%) efficiency in almost in all States. It is estimated that 1% reduction in TD losses would generate savings of over Rs.700 to Rs.800 crores. The line diagram demonstrated below is well explanatory of facts mentioned above:- For KESCO, As far as indicators of Revenue realization are concerned it has high ATC losses to the tune of 29%(March 2011) .Apart from this, other statistics are also not very encouraging with an average turnout of 65% . There was no end to end tracking of theft checking and raids, revenue assessment and realization therein. Not only that, even for billed but non-paying consumers, there was no accurate record of disconnections done and subsequent action thereon for such consumers. Apart from that many consumers were still having defective /mechanical meters installed at their premises, and thus being billed on average basis. There was no mechanism to have a daily tracking of meter replacement work and advices of meters were taking upto3-4 months. Three key fields of revenue realization in above flowchart i.e. Theft and improper metering, collection deficiency, increasing customer base have been targeted through unique initiatives in KESCO. First In this backdrop is a unique , only of its kind in the country, mobile phone based tracking system by the name of M-Drishti introduced in KESCO to ensure end to end tracking of in- field revenue oriented activities: 1. Raids 2. Meter Replacement 3. Disconnections 4. Section 138 Under M-Drishti, 2G internet services have been activated on the official mobile numbers of all distribution officials right from JEs and Assistant Engineers to Chief Engineer. Separate User Id and Passwords have been created for them and they will log in the Mobile M-Drishti interface and fill in details of whatever activities they undertake in field. Screenshot of the mobile phones for activity options is as shown:- So whenever there is a meter checking or katiya raid, a brief report is filled on the spot and sent via phone to the central server. Similarly for any disconnection done against electricity dues or FIR lodged under section 138 of Electricity Supply Act, the information of action taken on spot has to be submitted then and there for addition in the central database. On the server end once the information is collected, the updation is done by the concerned division. So for raid tracking, once revenue assessment and compounding amount at the field level has been entered, it can be edited and information of final assessment done at division, realization therein, Action taken in terms of issuance of notices under section3 and 5, final amount realized etc, can be done by the concerned division. Similar holds true for disconnections done, amount realized therein, action taken in case of non realization etc. For meter replacement a daily report of meters replaced whether defective/mechanical/otherwise is available and is available for linking with online advice. The software generates various MIS reports whereby day/month /JE/Division wise performance with respect to above four activities can be monitored.