Problems before Mahavitaran

Action Plan, Achievements & Future Plans Towards Reforms

Problems before Mahavitaran (June 05)

1. Shortage of Power and Load Shedding of more than 4000 MW

(500MW Chandrapur under long Outage)

2. High Distribution Losses (31.14% in 04-05)

3. Large Amount of Outstanding Arrears (Rs. 8130.61 Cr.)

4. Highly Deteriorated Distribution Infrastructure

5. Large Pending Applications for Ag Connections (1.7 Lakhs Paid App)

6. Poor Response to Consumers

7. Employee Motivation

8. Financial Losses
Slide 2
Action Plan to Resolve the Issues

MSEDCL’s Mission Statement

10 Point Action Plan

Communication Plan

Organizational Changes

Slide 3
1.Shortage of Power and Load Shedding of more than 4000 MW

Action Plan and Achievements in 2005-06

LOAD MANAGEMENT CAPACITY ADDITION PLAN

A) Load Management
• Single Phasing : 7800 villages completed – Load Relief : 960 MW

• Gaothan feeder Separation : 90 feeders completed- Load Relief : 104 MW

• Akshay Prakash Yojana : 4611 Villages, 960 MW

• Energy Conservation : 4.5 Lakhs CFLs, 9 MW

• Pune Zero Load Shedding Model

Total Load Managed: 2122 MW

Load Curve for APY & Single Phasing Slide 4
Shortage of Power and Load Shedding of more than 4000
MW Contd……

B) Capacity Addition Availability Plan Up to FY 12

 Plan of 19000 MW to meet deficit of 10000 MW in 5 years
MahaGenco – 6178
Central Sector – 2753
Interstate – 591
RGPPL - 1768 Total: 19103 MW
IPP – 3973
Ultra Mega PP – 3840

2006-07 (MW):
Mahagenco – 364, Tarapur - 158, NTPC (V’chal, Sipat, K’gaon)– 316,
Ghatghar 200, RGPPL – 650: Total 1688 MW

 Power Purchase at High Cost

Slide 5
Shortage of Power and Load Shedding of more than 4000
MW Contd……

Future Plans (Load Management)

• Single Phasing Phase II - 4515 villages with expenditure of Rs. 270Cr. by March 2008

• Gaothan Feeder Separation-2500 villages by 06-07 and balance by 2007-08

Total No. of villages 40687

Single Phasing Villages 14315
Abstract: Feeder Separation Villages 10232
Askhay Prakash Villages 3757
Villages exempted from Load Shedding
for various reasons 12383

• Energy Conservation-
• CFL Launch in entire Maharashtra ( 3 Crores of CFLs to be distributed in entire
Maharashtra within next 1 year)
• Capacitors-
• LTLMS on 62666 DTCs, Fixed capacitors on 19900 DTCs
Slide 6
2. High Distribution Losses (31.14% in 04-05)

Action Plan & Achievements

•Energy accounting and fixing of responsibility at all levels
- 80% Feeders’ EA Completed, 50,000 DTCs Metered & EA Completed
•Theft reduction drive including abetment & action against employees:
- FIR Against 22 Employees
- Disciplinary Action Against 389 Employees
- 110 Flying Squads Deployed
- 26572 Thefts detected

•Outsourcing of Meter Reading, Bill Distribution and Collection

•Bhiwandi Franchisee Finalized

•HVDS

•Centre of Excellence - DRUM Project at Aurangabad : Tenders Invited

•Commercial Intelligence Wing Set Up

LOSSES REDUCED BY 3.15% TO 27.9% IN 2005-06

Slide 7
High Distribution Losses (contd…)

Future Plans
•Distribution Losses to be reduced to 19 % by 2008-09. [with 3% reduction each year]

•Energy Audit of the remaining 2830 feeders to be completed during this year

•Metering of 1.5 Lakh DTCs to be completed by March 2007

•6 police stations to be set up

•Bhiwandi to be handed over to Franchisee

•High Loss feeders (Losses above 50%) to be franchised out (Feeder Franchisee Scheme)

•High Loss DTCs to be franchised out (Micro Franchisee Scheme)

•16.65 Lakh Ag connections to be metered by the year 2007-08.

•20,000 HT consumers will get AMR

•Ludhiana Pattern to be introduced on large scale.

Slide 8
3. Low collection efficiency

Action Plan & Achievements

•After Company formation Monthly repatriation has increased from Rs. 932 Cr. to Rs.

1426 Cr.

•Collection Efficiency has reached 95.32% in 2005-06.

•Elimination of average billing: Normal Billing Increased to 84.2% in 2005-06 from

77.44% in 2004-05.

•100 % disconnection of consumers with arrears above Rs 5000/-

•Reduction of arrears: RCI Arrears reduced from Rs.1466 Cr. In FY 05 to Rs.1360 Cr in FY 06

•E-billing (all Bills), Spot billing (20 Cities), ATM Cash Collection Centres (50), Drop Boxes, E-

payment Introduced.

•Special PD Arrears Recovery Team Set Up: Rs. 8.28 Crs Recovered.

Slide 9
Low collection efficiency (contd..)

Future Plans

• Spot Billing and ATMs at all circles

• Mobile Collection Centres

• Increasing the scope of e-payment

• Collection Efficiency to be increased by 2% every year

Slide 10
4. Deteriorated Distribution Infrastructure
Action Plan & Achievements
(Infrastructure Development Plan) Objectives

• 3 years’ Load Profile at SDO Level: Prepared for 580 Sub-

Divisions (Growth of 8870 MW)
• 3 years’ Infrastructure Plan to cater to the load:
DPR Prepared for 580 Subdivisions of Rs. 14524 Crores
 Plan includes 590 Sub Stn, 35 Switching Stn, 68751 DTC, 84531 KM HT Lines,
23229 KM LT Lines
 Project Management Consultants Appointed

 Quality Control Department Set Up

 Material Management Cell set Up

 Rs. 5000 Cr. MOUs Signed with REC/ PFC, (15 projects approved by REC worth
Rs.2256 Cr
 Received In-Principle Go-Ahead from MERC
Slide 11
Deteriorated Distribution Infrastructure (Contd…..)
Details of Proposed Major Works
Related Related
Sub-Station (Nos.) DTC (Nos.) HT Lines HT Lines
Switchin Related
(Km) (Km)
Year g Station LT Lines
(Nos.) 11 / 0.4 22 / 0.4 (Km)
33/11 KV 22/11 KV 22 KV 11 KV
KV KV

06-07 57 4 3 6,562 553 569 8,180 2,404

07-08 250 16 16 28,532 2,406 2,474 35,565 10,453

08-09 248 15 16 28,311 2,387 2,455 35,288 10,372

Total 555 35 35 63,405 5,346 5,498 79,033 23,229

HVDS Transformer
Distribution Special Project
(Nos.)
Year HT Line LT Line DTC (Nos.)
25 KVA 16 KVA (GFSS) (GFSS)
(Km) (Km) 63 kVA 100 kVA
06-07 4,313 2,728
07-08 18,753 11,862 6,000
24,000 4,000 4,000
08-09 18,608 11,769
Total 41,674 26,359 24,000 4,000 6,000 4,000
Slide 12
Deteriorated Distribution Infrastructure (Contd…..)

Financial Plan for 3 years - (FY 06-07 to FY 08-09)

Year Wise Outlay:

Rs. Cr.

Year Capital Works R&M Works Total

FY06-07 774 1,027 1,801

FY07-08 4,343 2,000 6,343
FY08-09 4,343 2,037 6,380
Total 9,460 5,064 14,524

Slide 13
5. Pending Applications for Ag connections

Status of Pending Ag Pump Applications as on 31-03-2006

Total Applns Recd - 3,76,385

Paid Pending Applns - 1,98,837
Test Reports Received - 1,03,601

Achievements
04-05 05-06 06-07
Connections Conn Released (till
Conn Released Target
released May 06)
81,294 79,466 1,11,927 12,095

Future Plan
 Bring down the Ag. pending connections to one month in 3 years

Circle Wise Break Up Slide 14

6. Poor Response to Consumer
Action Plan & Achievements
• Implementation of MIS:
MIS Phase I – Computers and CMS/FEMS software provided to 345 S/Dns.
Module for Store, EA, Finance, Consumer Systems etc.

MIS Phase II – TCS Appointed, 15 Modules (including Asset Mgt,

GAD, HRMS, Training .etc.) envisaged

• Communication Backbone with BSNL & Data Centre Started

• Training to employees: Mandays Trained in 2005-06 increased to 36757 in comparison to 28226

in FY 2004-05.

• Customer Facilitation Centres: 5 CFCs Set Up

• Call Centres: 9 at Pune, Bhandup, Nagpur, Akola, Amravati, Kalyan, Ahmednagar, Nasik,
Kolhapur Set Up

• SCADA: Being Implemented in 10 Cities (Amravati, Aurangabad, Kolhapur, Malegaon, Nagpur,

Nanded, Nashik, Pimpri-chinchwad, Sangli, Pune)

• E-billing , Online payment , SEVAK ATM (50 Achieved in 2005-06), Bill junction / Bill desk
Slide 15
• 9 Consumer Grievance Redressal Forums Set Up
Poor Consumer Response (contd…..)
Future Plan

• 50 CFCs to be completed by August 06

• 12 Call centres to be set up at Municipal Corporations by March 07

• 67 more SEVAK ATMs to be installed by October 06

• MIS Phase I – Computers and CMS/FEMS software will be provided to additional

220 S/Dns by March 2007

• Integration of 6 modules of MIS Phase I will be completed by October 06

• GIS Network Mapping

• MIS Phase-II will be Completed in 1 Year.

Slide 16
7. Employee Motivation

Action Plan & Achievements

• Communication Plan & Motivational Work Shop

• Reward for Good Performance of all Employees
• Performance Scorecard of All Officers’ on KPIs on Internet
• Increasing Officers’ Exposure to Best Practices
• Voluntary Uniform, Flag & Anthem
• 4 Mobile MDs Representatives
• De-centralization & Regional Executive Directors
• Simplification of Procedures and Transparency
• Quality Consciousness
• Drive Against Corruption
Slide 17
Summary of Major Achievements

•Monthly repatriation increased from average Rs. 932 Crores to maximum Rs. 1426

Crores

• Distribution Losses reduced by 3.14 % (31.14 % in 2004-05 to 28 % in 2005-06)

• 50,000 Urban DTCs metered and Energy Accounting started

• 5 years’ load Profile and Infrastructure Work Plan prepared for 580 Subdivisions of Rs.

14524 Crores for a three year period

Summary of Major Achievements Contd……

•Effective Load Management through Akshay Prakash Yojana, Single Phasing,

GFSS,use of CFLs, capacitor installation on DTCs and at sub-stations being

implemented successfully for greater consumer satisfaction

•Bhiwandi Franchisee Finalised

•Employee motivation through training

•Communication Plan implemented for Goodwill building up

•Enhanced Consumer Response through CFCs, Call Centres, ATMs, E-billing etc.

•Pune Zero Load Shedding Model

Summary of Future Plans

 3 years’ Infrastructure Plan to cater to the future load growth

 Distribution Losses to be reduced to 19 % within 3 years

 Energy Audit to be started on the remaining 1.5 Lakh DTCs
and 2830 feeders by March 2007

 Collection Efficiency to be increased to 100% within 3 years

 Normal Billing Percentage to be 100% in one year

Summary of Future Plans (Contd…..)

 Load Management and Capacity Addition so as to have zero

Load Shedding by 2009-10

 Micro franchisee and Feeder Franchisee Schemes
 Use of SCADA, Call Centres, CFCs etc. in all Municipal

Corporation Areas
 16.5 Lakh Ag Consumers to be metered by 2007-08
 Bring down the Ag pending Connections to 1 month in 3 years
Issues with Govt. of Maharashtra

— Promised Conversion of Govt. Debt of Rs. 2742 Cr. Not Cleared.

Experience of Other States

— Appointment of Director (Finance), Director (HRD)

— Valuation/ New Balance Sheet/ New P&L Account

— Establishing dedicated police stations and special courts- Appointments of SP’s on
deputation
— M/s. Mula Pravara Electric Co-op Society – recovery of arrears and other pending
issues
— Payment of Arrears of State Govt. Dept.

Slide 22
Major Performance Indicators Previous Years

Description 2004-05 2005-06

Revenues (Rs. Cr.) 14,930 14,058 #
Power Purchase Cost (Rs. Cr.) 12,942 11,787 #
Surplus/ Deficit [Accrual], (Rs. Cr.) -1137 -599 * #
Distribution Losses (%) 31.14 27.98
AT&C Losses (%) – Mahavitaran 26.93 26.53
[Effect of Free Power]
Average Collection Per Month (Rs. Cr.) 999.36 1113.93
RCI Arrears (Rs. Cr.) 31st Mar 1466 1360
DTC Failure Rate (%) 18.52 16.14
Capital Investment (Rs. Cr.) 511.27 1277.43
Cash Losses (Rs. Cr.) 998 150 (Projected)
SCADA Progress Nil 10 Cities
Call Centers 2 3 Operational
Franchisee Nil 1 (Bhiwandi)
Finalized
Spot Billing Nil 20 Cities
No. of Theft Cases Detected 16337 26572

•FY 2005-06: Genco: Profit Rs. 256 Cr, Transco: Profit Rs. 330 Cr. Net -13 Cr

• # Values for period 05/06/2005 to 31/03/2006 Slide 23

Further Ideas . . . . . . . . . . . . . . . .

?
Slide 24
Thank You
ARR & Tariff Petition Summary
– Total Revenue Expenditure (Rs. Crore)

Previous Current
% Inc. over Ensuing Year % Inc over FY
S.no. Particulars Year (FY Year (FY
FY 2004-05 (FY 2006-07) 2005-06
2004-05) 2005-06)
1 Power Purchase Expenses 10706.91 12878.41 20.28% 16335.13 27%
2 Operation & Maintenance Expenses 1747.64 1865.48 6.74% 2045.66 10%
2.1 Employee Expenses 1360.53 1456.35 7.04% 1564.64 7%
2.2 Administration & General Expenses 121.03 127.00 4.94% 133.35 5%
2.3 Repair & Maintenance Expenses 266.08 282.12 6.03% 347.66 23%
Depreciation, including advance against depreciation
3 511.43 540.72 5.73% 599.18
11%
4 Interest on Long-term Loan Capital 348.97 180.88 -48.17% 278.65 54%
Other Interest & Finance Charges incl. Interest on working
capital & consumer security deposits
5 123.69 260.72 110.79% 348.39

34%
6 Bad Debts Written off 209.88 219.95 4.80% 238.08 8%
7 Other Expenses (details given separately) 130.20 122.70 -5.76% 137.40 12%
8 Income Tax 0.00 108.50   160.89 48%
9 Transmission Charges paid to Transmission Licensee 1533.89 1715.66 11.85% 1868.34 9%
10 Contribution to contingency reserves   44.83   49.65 11%
11 Total Revenue Expenditure 15312.60 17937.84 17.14% 22061.38 23%

Slide 26
MSEDCL - ARR & Revenue Gap

Rs. Cr.

S.No Particulars FY 2004-05 FY 2005-06 FY 2006-07 Total

1 Aggregate Rev. Reqmt. 14505 16910 22490 53905
2 Revenue with Existing Tariff 13992 15509 18942 48443
3 Revenue Gap 513 1401 3548 5462

Slide 27
Proposed Tariffs
Existing – Proposed –
Fixed Existing Fixed Proposed
Charges Energy Charges Energy
Category Charges Charges % Increase
(Rs) (Rs)
(Rs/ Unit) (Rs/ Unit)

Domestic
20 221 25 265 28.8%
(0-30 Units)
Domestic
40 386 60 480 28.8%
(31-300 Units)
Industrial LT
60 376 100 480 28.8%
(0-1000 Units)
Commercial
100 386 100 500 28.8%
(0-100 Units)
Agriculture (Per Hp) 213 213 0%

Others 28.8%
Slide 28
Need for tariff increase

Power Purchase Cost has increased from Rs 10707 Crore in FY 04

to Rs 16335 Crore in FY 07

The average cost of supply (ACOS) has increased from Rs. 3.07
per kWh to Rs. 4.22 per kWh.

The average increase in tariff works out to 28.8%

Slide 29
Circle wise Distribution loss YoY Comparison

Circle 2004-05 2005-06 Circle 2004-05

2005-06

Wardha 14.0% 11.06%

Satara 19.3% 20.09%
Bhandara 38.0% 34.79%
Pen 10.2% 9.5%
Chandrapur 13.0% 12.09%
Kalyan (U) 34.7% 25.09%
Gadchiroli 38.9% 34.67%
Kalyan 31.6% 31.5%
Ahmadnagar 37.7% 36.39%
Vasai 19.2% 17.51%
Nashik ( R ) 39.4% 38.75%
Osmanabad 52.5% 48.14%
Nashik ( U ) 22.5% 17.18%
Nanded 59.7% 55.8%
Dhule 44.3% 42.18%
Beed 60.4% 59.07%
Jalgaon 48.6% 38.76% Latur 53.7% 46.74%
Parbhani 57.3% 52.47% Ratnagiri 15.9% 16.92%
Aurangabad [R] 42.5% 37.88% Sindhudurga 27.4% 29.46%
Jalana 36.1% 32.97% Ganeshkhind 15.2% 12.68%
Aurangabad [U] 35.3% 31.13% Rastapeth 17.6% 17.14%
Buldhana 34.7% 30.42% Pune [R] 30.9% 27.51%
Akola 39.9% 37.39% Nagpur [U] 33.8% 31.14%
Amrawati 39.6% 34.85% Nagpur (R) 20.4% 18.98%
Yeotmal 43.0% 42.41% Washi 12.4% 7.89%
Solapur 36.2% 39.93% Bhandup 21.2% 21.17%
Kolhapur 17.9% 14.92% Bhiwandi 37.9% 44.53%
Sangli 21.7% 17.79%

Slide 30
Major Performance Indicators

Description 2004-05 2005-06

Distribution Losses (%) 31.14 27.98
Average Collection Per Month 999.36 1113.93
(Rs. Cr.)
RCI Arrears (Rs. Cr.) 31st Mar 1466 1360
DTC Failure Rate (%) 18.52 16.14
Capital Investment on 511.27 1277.43
Distribution Infrastructure
Cash Losses (Rs. Cr.) 537 900 (Projected)
SCADA Progress Nil 10 Cities
Call Centers 2 3 Operational
Franchisee Nil 1 (Bhiwandi) Finalized
Spot Billing Nil 20 Cities
Theft Cases Detected 16337 Cases 26572 Cases

Slide 31
Demand Supply Gap (In MW)
Instances of Peak Demand

Financial Year 2004-05 2005-06

Date 28th March 28th December

Demand (MW) 12749 14061

Total Availability (MW) 9704 9756

1. MahaGenco (MW) 6899 7238

2. Central Sector Share (MW) 2317 2096

3. Traders (MW) 377 443
4. Tata Power (MW) 111 79

Gap (MW) 3045 4205

Slide 32
Load Management

Description 2005-06

4611 Villages
No. of APY villages
960 MW

90 Feeders
Special Gaothan feeder separation
104 MW

7800Villages
Single Phasing Scheme
960 MW

4.5 Lakh
DSM/ Energy Conservation
9 MW

Total Load Managed 2122 MW

Slide 33
Power Purchase at High Cost – Monthly 2005-06

FY 05-
UTILITY UNITS Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
06
219. 446.
MUs 378.2 196.8 213.1 198.2 223.8 298.1 208.2 345.2 243.5 323.0 3294.0
6 3
TRADERS
Cost 163.
67.3 122.1 64.4 66.6 61.6 68.9 106.5 72.6 127.6 94.6 112.4 1128.2
Rs.Cr 4
207. 142.
MUs 152.5 24.8 0.3 0.0 0.0 0.0 0.0 77.7 243.2 129.9 977.8
KAWAS 1 3
LIQUID Cost 135. 101.
93.8 14.8 0.2 0.0 0.0 0.0 0.0 56.2 179.4 94.8 676.3
Rs.Cr 9 4

MUs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 108.3 41.0 7.7 0.0 156.9
TPC
Cost
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 47.3 17.9 3.3 0.0 68.6
Rs.Cr

MUs 13.5 11.9 8.3 6.5 14.8 18.0 18.0 19.0 22.0 31.0 34.0 35.0 232.1
CPP Cost
3.5 3.1 2.2 1.7 3.9 4.7 5.8 5.9 6.0 8.9 11.3 12.0 68.8
Rs.Cr
440. 660.
MUs 542.7 229.9 220.0 213.0 241.8 316.1 227.2 553.2 528.3 487.8 4660.8
2 6
TOTAL
Cost 206. 291.
219.0 81.3 68.5 65.5 73.6 112.3 78.5 237.1 288.5 219.3 1941.9
Rs.Cr 7 7

MUS, Average Cost, Total Cost

Slide 34
Communication Plan

Communication Strategy
Communication Focused towards internal Employees
Communication of reforms to consumers

Means of Communication
Workshops with field staff and with unions
Workshops conducted by Unions for members
Staff Meetings at Division/Circle Level
House Journal (E-magazine) – “Maha Vitaran Veej Varta”
Video message on Ten Point Program
Articles in Newspapers
Slide 61
Officers KKPI
SN KKPI Weightage HOD
Below 15% ( U ) 05
1 Percentage DTC having losses CE (IR)
Below 25% ( R )
Below 15% ( U ) 05
2 Percentage Feeders having losses CE (IR)
Below 25% ( R )
3 Sub-division / Division / Circle/Zone losses 05 CE (IR)
4 Repatriation against target 10 CE (Comm)
5 Commercial efficiency : Rs. collected/ input units 10 CE (Comm)
6 Normal billing percentage 05 CE (Comm)
7 FIR lodged/Compounding cases 10 CE (Comm)
RCI Live 03 CE (Comm)
8 Arrears in Days: Others Live 02
RCI PD 05
9 Percentage DTC failure against target 05 CE (LM)
10 SAIFI / SAIDI 05 CE (LM)
11 Reduction in Accidents 05 CE (LM)
12 Pending RCI connections beyond SOP 05 CE (Dist)
Physical 05 CE (IS)
13 Annual plan progress
Financial 05
14 Capacitors: MVAR in service out of MVAR installed 05 CE (Dist)
15 Training (mandays) 05 CE (IR)
Total : 100 Slide 62
Drive Against Corruption

Drive including abetment & action against employees:

- FIR Against 22 Employees
- Disciplinary Action Against 389 Employees

Slide 63
Pune Load Shedding Model

Total Load Required for Pune Urban Circles: 751 MW

Non Sheddable Load : 393 MW
Sheddable Load : 358 MW
CPP Generation : 90 MW (From 28 Consumers)
CPP Generators to run : 4 to 6 Hrs. / Day
Loading on Consumer : 42 Ps. / Unit
except (0 to 300 Units Consumption)

Slide 69
Major Performance Indicators (Previous Years)
Description 2002-03 2003-04 2004-05 2005-06

Revenues (Rs. Cr.) 12,437 13,225 14,930 14,058 #

Power Purchase Cost (Rs. Cr.) 12,942 11,787 #
Surplus/ Deficit [Accrual], (Rs. Cr.) -1137 -599 #
Distribution Losses (%) 33.24 33.12 31.14 27.98
AT&C Losses (%) – Mahavitan 44.25 38.95 26.93 26.53
Average Collection Per Month (Rs. Cr.) 999.36 1113.93
RCI Arrears (Rs. Cr.) 31st Mar 1666 1845 1466 1360
DTC Failure Rate (%) 18.52 16.14
Capital Investment (Rs. Cr.) 511.27 1277.43
Cash Losses (Rs. Cr.) 998 150
(Projected)
SCADA Progress Nil Nil Nil 10 Cities
Call Centers Nil Nil 2 3 Operational
Franchisee Nil Nil Nil 1 (Bhiwandi)
Finalized
Spot Billing Nil Nil Nil 20 Cities
No. of Theft Cases Detected 16337 26572

•# Values for period 05/06/2005 to 31/03/2006

Slide 79