Presentation on Standard of Performance (SoP) Regulations for Distribution Licensees

1. November 2010 Presentation on Standard of Performance (SoP) Regulations for Distribution Licensees By Palaniappan M., Director, ABPS Infrastructure AdvisoryPrivate Limited

2. Contents About ABPS Infra Related Provisions of Electricity Act, 2003. Salient features of Draft MERC (Standard of Performance of Distribution Licensees, Period of Giving Supply and Determination of Compensation) Regulations, 2010. Comparison of Standards of Performance specified by different SERCs.

3. An introduction to ABPS Infra • Set up in Sep 2005 as start-up Consulting Organisation by professionals, having wide range of experience (~ 40 Man-years) in the energy sector. • Promoted by AjitPandit, Balawant Joshi, Palaniappan M & Suresh Gehani. • Experience spans commercial, financial, regulatory and technical spheres of the energy sector. Experience spans across spectrum covering all stake-holders Developers Govt – MOP / MNRE FI / Banks SEBs / Utilities / Private Utilities Regulatory Commissions

4. We work in entire value chain of electricity sector Coal / FO/HFO/LSHS / Natural Gas / LNG Fuel Renewable Energy Wind / Biomass / Small Hydel / Co-gen / Solar Tariffs / Reforms / T&D losses / Market Develop. Distribution Transmission Open Access / Capacity / Planning - CTU / STU / JV Thermal / Hydel / Nuclear - State / Central / Private Generation Govt. (Central & State) Developers & Investors Regulatory Commissions Utilities (State & Pvt) Banks & FIs Industry Associations

5. Contents About ABPS Infra Related Provisions of Electricity Act, 2003 Salient features of Draft MERC (Standard of Performance of Distribution Licensees, Period of Giving Supply and Determination of Compensation) Regulations, 2010. Comparison of Standards of Performance specified by different SERCs.

6. Section-57 of EA 2003 states as under “(1)The Appropriate Commission may, after consultation with the licensees and persons likely to be affected, specify standards of performance of a licensee or a class of licensees.” (2) If a licensee fails to meet the standards specified under sub-section (1), without prejudice to any penalty which may be imposed or prosecution be initiated, he shall be liable to pay such compensation to the person affected as may be determined by the Appropriate Commission: …” Section-58 of EA 2003 states as under “The appropriate Commission may specify different standards under sub-section (1) of section 57 for a class or classes of licensee.” - Related Provisions of EA, 2003...1/2

7. Section-59 of EA 2003 states as under “(1)Every licensee shall, within the period specified by the Appropriate Commission, furnish to the Commission the following information, namely:- a) The level of performance achieved under sub-section (1) of the section 57; b) The number of cases in which compensation was made under sub-section (2) of section 57 and the aggregate amount of the compensation. (2) The Appropriate Commission shall at least once in every year arrange for the publication, in such form and manner as it considers appropriate, of such of the information furnished to it under sub-section (1). “ Section-86 (1) (i) of EA 2003 states as under “(1) The State Commission shall discharge following functions namely: … (i) specify or enforce standards with respect to quality, continuity and reliability of service by licensees;” - Related sections of EA 2003...2/2

8. Contents About ABPS Infra Related Provisions of Electricity Act, 2003 Salient features of Draft MERC (Standard of Performance of Distribution Licensees, Period of Giving Supply and Determination of Compensation) Regulations, 2010. Comparison of Standards of Performance specified by different SERCs.

9. Salient Features- Introduction... 1/2 • Performance Standards specified by the Commission act as guidelines for efficient, reliable, coordinated and economical system of electricity distribution by the Distribution Licensee, so that consumer’s installations can function properly. • The Standards specified are the Guaranteed Standards of Performance, being the minimum standards of service that a Licensee shall achieve. Any failure by the Distribution Licensee to maintain the guaranteed standards of performance specified in SoP Regulations shall render the Distribution Licensee liable to pay compensation to an affected person claiming such compensation. • MERC has also specified the Overall Standards of Performance, which the Distribution Licensee should seek to achieve during discharge of his obligation. • The compensation paid by the Distribution Licensee for respective parameter, may be allowed to be recovered partly or fully in the Aggregate Revenue Requirement (ARR) of Licensee, keeping in view the extent to which the licensee is able to achieve the Overall Standards of Performance.

10. Salient Features- Introduction...2/2 • The objective of Standard of Performance Regulations are: • To lay down the Performance Standards for Distribution Licensees. • To specify the maximum time limits to be adhered by the Distribution Licensee for performing the activities specified in SoP Regulations. • To specify the amount of compensation payable by the Distribution Licensee to consumers in the event of a default. • To specify the procedures to be followed by the Distribution Licensee for handling consumer complaints. • To specify the Reliability Indices and their computation methodology to measure performance of Distribution Licensee. • To specify data/information requirements of the Commission to be submitted by the Distribution Licensee periodically in standardized formats.

11. New Connection (Procedure) Application by the owner or occupier of any premises for supply of electricity to the Distribution Licensee Inspection of the premises related to an application for supply of electricity by the Distribution Licensee as per the time limit specified in Regulations Intimation of charges to be borne by the applicant for supply of electricity by the Distribution Licensee as per the time limit specified in Regulations Supply of electricity to such premises of applicant by Distribution Licensee as per the time limit specified in Regulations

12. New Connection…1/2 • The Distribution Licensee shall provide new connection to any consumer upon receipt of a complete application, as per MERC (Electricity Supply Code and Other Conditions of Supply) Regulations, 2005. • Distribution Licensee shall complete the inspection of the premises related to an application for supply of electricity not later than seven (7) days from the date of submission of application for new connection in case of Urban areas and within ten (10) days in case of Rural areas. • Intimation of charges to be borne by the applicant by the Distribution Licensee: Time Limit from the date of receipt of application In Case: Supply is to be given from existing network 15 days for Urban areas and 20 days for Rural areas Supply is to be given by extension or augmentation of distributing main or commissioning of a new sub-station 30 days The applicant seeks dedicated distribution facilities to his premises 30 days

13. New Connection…2/2 The Distribution Licensee shall provide electricity supply to the applicant: Time Limit after receipt of application and payment of charges In Case: Supply is to be given from existing network 1 Month Supply is to be given by extension or augmentation of distributing main 3 Months Supply is to be given by commissioning of new sub-station 1 Year

14. Temporary Connection…1/2 • The Distribution Licensee shall provide temporary supply of electricity upon application within the time limit, given below: Up to 10 KVA 5 days Up to 25 KVA 10 days 20 days Up to 50 KVA Over 50 KVA 30 days • Distribution Licensee shall release supply subject to the condition that distribution system exists for supply to the premises, the connection meets safety requirements and is technically feasible.

15. Temporary Connection…2/2 • However, no connection up to 10 KW shall be rejected on technical ground. • If there are dues on the premises of the applicant , temporary connection can be refused by the Distribution Licensee till the dues are paid by the applicant. • Distribution Licensee shall repay / refund balance deposit, if any, within one month by adjusting dues from the date of dismantling temporary supply. • Temporary connection shall be granted for a maximum period of one year at a time, which can be further extended depending upon the requirements. • The grant of temporary connection does not give right to the applicant for claiming permanent connection.

16. Wherever the consumer’s requests for shifting the service connection in the existing premises or for the deviation for the existing lines at their own cost, licensee shall inspect and inform the estimated cost to the consumer within the following time period: The Distribution Licensee shall give effect of reduction in load of the consumer upon receipt of an application within second billing cycle. However, the consumer should have completed compulsory period for availing of supply as per existing agreement and provisions of Supply Code and should have executed fresh agreement for revised load. Shifting of Meters/Service Lines, Reduction in Load

17. If the Distribution Licensee has disconnected supply to a consumer for a period of not more than six months, it shall restore power supply to the consumer, if such consumer pays all amounts due and payable by him to the satisfaction of the Distribution Licensee or in case of a dispute, pays such amounts under protest. The time limits are: Reconnection of supply • If the period of disconnection exceeds six months, an application for reconnection of supply shall be treated as a fresh application for supply of electricity under the provisions of the Act, after either payment of amounts due or upon settlement of dispute.

18. Transfer of ownership and change of category • Distribution Licensee shall give effect to transfer of ownership and change of category upon receipt of an application within the following time lines: • Distribution Licensee shall examine the technical feasibility upon receipt of such application and inform the consumer the feasibility within seven days of receipt of application.

19. Quality of Supply • The Distribution Licensee shall keep the voltage at the point of supply to vary from the declared voltage, as per the table below: • The voltage of neutral shall not exceed 2% of phase voltage value and the imbalance in voltage of phases shall not be more than 3%. • The Distribution licensee shall control the power factor of system of supply at level above 0.90. • The Distribution Licensee shall control the harmonics level at the point of supply in accordance with that prescribed by the IEEE STD 519-1992. • The Distribution Licensee shall give supply of energy on the following systems:

20. Classification of Installations AC System DC System

21. Classification of Installations • The classification of installations shall be as follows:

22. Restoration of Power Supply • The Distribution Licensee shall restore power supply in case of failure as per the following time limits: • The period of interruption as a result of any scheduled outage shall be specified in a public notice of such scheduled outage. • Such scheduled outage shall not normally exceed twelve (12) hours on any day and supply should preferably be restored by 18-00 Hours.

23. Disconnection of Supply • The Distribution Licensee upon receipt of request for disconnection from a consumer, shall intimate the consumer any amount outstanding and disconnect the supply as per the following time limit: • Refund of security deposit along with issuance of “No- Dues certificate” should be made by licensee within thirty (30) days from the date of clearance/adjustment of all dues outstanding from the consumer in Urban Areas, and within forty five (45) days from the date of clearance of all dues outstanding from the consumer in Rural Areas.

24. Reconnection of supply following disconnection due to non-payment of bills • The Distribution Licensee shall restore power supply to a consumer, whose supply has been disconnected due to non-payment of electricity bills, as per the following time limits, after production of proof of payment by the consumer:

25. Meter Related Standards • The Distribution Licensee shall, in the case of a burnt meter, restore supply • within the following time limits, after the receipt of a complaint.

26. Meter Related Standards • The Distribution Licensee shall perform the following meter related activities subject to the provisions provided in the Supply Code and other associated regulations and codes. * Cost of inspection shall be borne by the Distribution Licensee. # If the burning of meter is due to causes attributable to Distribution Licensee. If the meter is burnt due to causes attributable to the consumer the Distribution Licensee shall serve a notice to the consumer for recovery of cost of the meter within seven days of detection and shall replace the meter within fifteen days on receiving the payment.

27. Testing & Calibration of Meter • The Licensee shall carry out periodical testing and calibration of consumer’s meter along with CT / PT and accessories, as per table below:

28. Complaint Registration and Complaint Handling…1/6 Establishment of Call Centre(s) • The Distribution Licensee shall establish call centre(s) for redressal of complaints of its consumers and such call centre(s) shall be accessible to its consumers round the clock during all days of the week, within the following time limits, from the date of commencement of MERC (Standard of Performance, Period of Giving Supply and Determination of Compensation) Regulations:

29. Complaint Registration and Complaint Handling…2/6 • Every Licensee shall employ sufficient number of officers or employees at its Call centre(s) and establish a basic telephone or cellular mobile telephone number having sufficient lines or connections to be called as the “toll free number” or “consumer care number” or “help line number” at its call centre(s). • Call charges or SMS charges shall not be levied upon the consumers for calls made or SMS sent, to these numbers. • Every Licensee shall, immediately upon establishment of its Call centre(s), inform about the same through a public notice in newspapers and should also ensure proper circulation of information to the consumers in case of any changes in the contact numbers. • Licensee should ensure availability of electronic data base to record complaints. • The Licensee shall convey information of the name of office (s), address (es) and telephone numbers where the consumer can lodge complaints, in the form of additional information along with the electricity bills.

30. Complaint Registration and Complaint Handling…3/6 Operation of Call Centre(s) • The Distribution Licensee shall adhere to the following time limits for operation of call centre(s):

31. Complaint Registration and Complaint Handling…4/6 Process of handling complaints • The Distribution Licensee shall devise its own process at complaint handling centres/ call centre(s)/ customer care centre(s)/ service centre(s) or any other customer interface channels to handle consumer complaints. The process should include the following: a) Registration of complaints by allotting a unique identification number to be called the complaint number; b) Communication to consumer of the complaint number, date/ time of registration of the complaint and expected complaint resolution time to the consumer; c) Record details of each complaint; d)Intimate contact details of the next higher authority (including his name, telephone number and address) to the consumer in case the consumer is not satisfied with the complaint handling; d) Update and record feedback and intimate contact details of the next higher authority to the consumer in case the consumer is not satisfied with the complaint handling.

32. Complaint Registration and Complaint Handling…5/6 Complaints about Consumer’s Bills • The Distribution Licensee shall perform the following related to complaints about consumer’s bills: • * In case additional information is not required. In cases, where any additional information is required to be collected, the complaint shall be resolved within ten days of receipt. • In case the complaint of the consumer is genuine and revision of bill becomes necessary, the due date for payment of bill would be reckoned from the date of the revised bill. For purpose of calculating additional charges for delayed payment or for disconnection of supply, the date of revised bill shall be considered.

33. Complaint Registration and Complaint Handling…6/6 Complaint regarding meter working and Voltage Fluctuation • If a complaint is made by the consumer about the working of the meter and he requests for replacement, it shall be inspected and replaced as per the following time limits, provided it is established through laboratory checks that the meter is not performing to required standards. • The Distribution Licensee shall ensure that the voltages are brought within the specified limits after receipt of complaint regarding voltage fluctuation, as per the following:

34. Consumer Charter / Service…1/2 • Every Authorized Representative of the Distribution Licensee shall display his name-tag and if required by consumer his proof of identity and authorization of the Distribution Licensee. • The Distribution Licensee shall maintain at least one consumer service center which shall be open for not less than eight (8) hours a day, on all days of the week, in every town and city within the area of supply, for essential services to be provided to consumers. • Every licensee shall publish a “Manual of practice for handling customer complaints” containing following information within three months from the date of commencement of these regulations: a) Channels of complaint registration-details of personnel, offices, Call centre(s); b) Process of handling complaints; c) Duties and obligations of licensee-guaranteed standards of performance and compensation details; and d) any other information which may be affecting the consumers. Manual of practice for handling consumer complaints

35. Consumer Charter / Service…2/2 • The manual shall be prepared in English, Hindi and local languages and shall be available for reference of consumers at every office of licensee and downloadable from its website. • A consumer shall always be entitled to approach the Grievance Redressal Forum directly in accordance with the applicable regulations of the Commission. • A copy of the manual certified by licensee as “true copy” thereof shall be filed with the Commission within three months from the date of commencement of these regulations. • The Distribution Licensee shall make available to a consumer a hard copy of any of the following documents on demand, subject to payment of reasonable reproduction charges. • (a) Electricity Supply Code and Other Conditions of Supply; • (b) Standard of Performance Regulations; • (c)Terms and Conditions of Supply along with the approved Schedule of Charges and the prevailing approved tariff schedule; and • (d) Manual of practice for handling consumer’s complaints.

36. Reliability Indices…1/2 • The Distribution Licensee shall calculate the reliability of his distribution system on the basis of the following: • a) System Average Interruption Frequency Index; • b) System Average Interruption Duration Index; and • c) Customer Average Interruption Duration Index. • System Average Interruption Duration Index (SAIDI) is the average duration of sustained interruptions per consumer determined by dividing sum of all sustained consumers interruption durations by total number of consumers. Measured in the units of time. • System Average Interruption Frequency Index (SAIFI) is the average frequency of sustained interruptions per consumer. Measured in the units of interruptions per consumer. • Customer Average Interruption Duration Index (CAIDI) is the average interruption duration of sustained interruptions for those consumers who had experienced interruptions. Measured in the units of time.

37. Reliability Indices…2/2 SAIDI = Σ (Ri * Ni) / Nt SAIFI = Σ (Ni/Nt) CAIDI = SAIDI/SAIFI Where: i = Number of feeders in the Distribution Licensee’s area Ri=Restoration time for each interruption event on ith feeder. Ni=Number of consumers who have experienced a sustained interruption during an interruption on ith feeder Nt=Total number of consumers of the distribution Licensee‟s area. • While calculating the above indices, the following types of interruptions shall not be taken into account: • a)Scheduled outages; • b)Momentary outages of duration of less than three minutes; • c)Outages due to the failure of the grid

38. Exemptions • Nothing contained in Regulations shall apply where, in the opinion of the Commission, the Distribution Licensee is prevented from meeting his obligations under these Regulations by cyclone, floods, storms or other occurrences beyond the control of the Distribution Licensee.

39. Compensation Mechanism • Where the Distribution Licensee finds that it has failed to meet the Standards of Performance specified under Regulations, either by its own knowledge, or upon written claim filed by any person affected, the Distribution Licensee shall be liable to pay compensation to person(s) affected within two billing cycles from the date of failure meet to Performance Standard or the date of claim. • In case the Distribution Licensee fails to pay the compensation or if the affected person is aggrieved by non-redressal of his grievances, he may make a representation for the redressal of his grievance to the concerned Consumer Grievance Redressal Forum, in accordance with MERC (Consumer Grievances Redressal Forum and Electricity Ombudsman) Regulation, 2006. • In case the claim for compensation is upheld by the Consumer Grievances Redressal Forum, the compensation determined by the Commission will be implemented by the Forum. The Distribution Licensee shall pay within 90 days of direction issued by the Forum. • In case of appeal filed against order of the Forum before the Ombudsman by the affected person, the amount of compensation determined by Ombudsman shall be paid by the Distribution Licensee within 90 days of Order issued by the Ombudsman.

40. Compensation Mechanism • The Distribution Licensee shall be liable to pay compensation to the affected • consumer as specified by the Commission in the Regulations. Licensee fails to achieve Guaranteed SoP. Consumer shall file his claim within the period from the time the consumer is affected by failure of the Distribution Licensee to meet the SoP Maximum 60 days The Distribution Licensee shall compensate the consumer within the period from the date of his claim. Maximum 90 days • The actual compensation may be decided by the Commission considering the following factors: • hardship caused to the consumer; and • average monthly bill of the consumer

41. List of Guaranteed SoP against which Compensation is Applicable…1/2

42. List of Guaranteed SoP against which Compensation is Applicable…2/2

43. Overall Standards of Performance…1/2

44. Overall Standards of Performance…2/2 • The compensation paid by the Distribution Licensee for respective parameter, may be allowed to be recovered partly or fully in the Aggregate Revenue Requirement (ARR) of Licensee, keeping in view the extent to which the licensee is able to achieve the Overall Standards of Performance.

45. Information regarding Level of Performance • The Distribution Licensee shall maintain and submit information regarding • a)The level of performance achieved by the Licensee during a month; • b)The number of cases in which compensation was made and the aggregate amount of compensation made; • to the Forum on a monthly basis and put up such information on the internet website of the Distribution Licensee, within a period of thirty (30) days from the end of the month. • It shall also submit the above information to the Commission on an annual basis, within a period of thirty (30) days from the end of the financial year. • It shall separately state the total number of cases where compensation has been paid by it without dispute and the total number of cases where compensation has been paid in compliance with an order or direction of the Forum or Ombudsman, along with the total amount of compensation in each category.

46. The Commission may authorize the Commission staff or any independent agency to conduct annual checks, in order to monitor the compliance of the standards by the Licensees and submit audit report to the Commission. The audit report shall address the following specific matters: Adherence to procedures and formats as per Regulations; Assessing staff engaged in call centres/ complaint handling centres/ customer care centres for their understanding of complaint handling procedures, quality parameters, and training adequacy for their task; Method of data collection and management procedures and Review of relevant records (as per appropriate sampling procedures) for reliability and accuracy across quality parameters. Audit Report

47. The following procedure shall be adopted for engaging agency: Audit scope and the methodology for carrying out the audit to be set by the Commission The Commission will identify and publish panel of approved agency Licensee shall nominate an agency from notified panel of agencies Licensee shall not engage an agency: (i) consecutively for more than two years. (ii) current statutory auditor (iii) current internal auditor (iv) current consultant Procedure for engaging agency

48. Grading of the audit report on performance standard submitted by the licensee shall be done in two parts: Reliability Grading Accuracy Grading Auditing Methodology Note: If Reliability Grading of data is A then only further analysis to check accuracy will be carried out

49. Contents About ABPS Infra Related Provisions of Electricity Act, 2003 Salient features of Draft MERC (Standard of Performance of Distribution Licensees, Period of Giving Supply and Determination of Compensation) Regulations, 2010. Comparison of Standards of Performance specified by different SERCs.

50. Comparison of Performance Standards • Draft Maharashtra Electricity Regulatory Commission ( Standard of Performance of Distribution Licensees, Period of Giving Supply and Determination of Compensation) Regulations, 2010. • Andhra Pradesh Electricity Regulatory Commission (Licensees' Standards of Performance) Regulation, 2004. • Delhi Electricity Supply Code and Performance Standards Regulations, 2007, DERC. • Madhya Pradesh Electricity Regulatory Commission (Distribution Performance Standards) Regulations, 2004. • The Electricity Supply Code 2005, Uttar Pradesh Electricity Regulatory Commission.