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Partnerships in Power Franchisees

Partnerships in Power Franchisees. Shuvendu Patnaik. Key Result Areas for Franchisees. Franchisees deal with almost every activity, like a licensee There are many KRAs Key for survival Loss reduction Revenue realization Managing cash flow. O&M. Meter reading. Grievances & public dealing.

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Partnerships in Power Franchisees

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  1. Partnerships in Power Franchisees Shuvendu Patnaik

  2. Key Result Areas for Franchisees • Franchisees deal with almost every activity, like a licensee • There are many KRAs • Key for survival • Loss reduction • Revenue realization • Managing cash flow O&M Meter reading Grievances & public dealing Billing Collection These are easier said than done IUKAN 2013/Session 3/12th February 2013

  3. Technical Loss Non Technical loss No load loss All energy purchased Theft or pilferage 33/11 kV S/S Transformer loss Consumer 33 kV line loss CT tampering CT/PT nameplate error Load loss Meter Burnt Meter Tampering 11 kV line loss Wiring Error No load loss PT Error Meters bypassed DT loss Not sealed Metering System Errors Load loss LT line loss Meters Not read (provisional reading) Meter Error CT Error Unmatched CT ratio AT&C Loss MF Error Distribution loss … but he is not entirely to be blamed Is never paid for fully Meter sl no not matched Commercial loss Collusion of meter readers with consumers Avoidable commercial loss (large) Coffee shop readings Consumer does not desire to pay Bills delivered In wrong address Consumer refused access Meters at height Meters damaged There are too many contributing factors Delay in Meter Reading kWh Late issue of Notice Bills illegible/ damaged Meter box locked Billing not found Inadvertent reading error Display Errors Billing dispute Errors in bill processing & billing Premises locked Digits not visible Bills not delivered Display off Mismatch in meter & account no. in bill Temporarily locked Late distribution Of bills Consumers never pay for everything they consume Unavoidable technical loss (small) Permanently locked Billing & Bill Distribution errors Meter reading errors Delayed Payment/ Non payment IUKAN 2013/Session 3/12th February 2013

  4. What causes loss What is it which franchisees are not doing, or can be done differently?  Lack of reliable measurements  • There are only two factors • Technical • Administrative What is it we can contribute, which could be different or unique? Lack of trustworthy information  ‘Where’ a higher loss is taken place x This is where collaboration could be possible Administration and enforcement  ‘What’ intervention is needed Returns (Technical possibilities due to investment)  Technical factor This is where partnerships can help Need for administrative teeth What complimentary skills can be brought on the table? How much Capex would be involved Partner This is not the domain of technical partners Risk arising from legal complications These are the areas where reliable results can be actually delivered How long will the the payback be This is where the skills of franchisee’s management should lie Risk (Technical risk if investments do not deliver expected results) Dealing with local goons What would be the ROI Franchisee business and administrative risks Franchisee Political interference IUKAN 2013/Session 3/12th February 2013

  5. Complete range of metering products But these in isolation can never address the problems What would be different about this? Secure deals with Something more is needed, which we could provide Measurements Revenue protection Revenue completeness Intellectual capital Wide range of utility services In-depth field experience in India IUKAN 2013/Session 3/12th February 2013

  6. Revenue protection & revenue completeness cover a wide range of individual activities What would be different about this? Choice of meters (specs) Energy & loss accounting Sound Installation practices Consumer indexing What is needed is integration They are all well known individually Seals & seal management This is where we could become a technical partner Tamper analysis Intellectual capital Installation audits and field testing (CTs, PTs, meters) Data validation Consumer meter reading Data acquisition from DT & feeder meters IUKAN 2013/Session 3/12th February 2013

  7. Technical partnerships Capex and Opex sharing can be discussed and linked to two-way SLAs and reliable measurements Assurance Risk to partner Involvement Supplier, Contractor Business Partner Franchisee decides what is needed Partner decides what is needed It is possible to have a partnership anywhere along this band Implements whatever is needed Supplies only what is ordered Modifies decisions, as time goes by Responsible for timely & quality deliveries Not accountable for results Fully accountable for results IUKAN 2013/Session 3/12th February 2013

  8. A common problem • A number of problems are often due to • Meter reading and billing errors, integrity issues, delays, etc. • Consumers’ bill-related grievances • Meter reading & billing infrastructure costs, etc. • Poor collection efficiency, perennial defaulters • Need for notices before disconnection, and related social issues • Poor cash flow, long cash cycle, need for Working Capital This is where a technical partner can help in many ways IUKAN 2013/Session 3/12th February 2013

  9. Benefits Energy billed (Sale) Actual Consumption Remote display (1 phase) Energy realized Measured Consumption (3 phase) Prepayment addresses these problems Technical Loss Energy accounting would be needed to know if things are fine Input Energy Pilferage Reading errors Delays, non payment etc. Electrical infrastructure Tamper & fraud But energy accounting is tricky and needs special techniques Metering errors Delivered Energy Revenue Energy input to Franchisee Billed Energy IUKAN 2013/Session 3/12th February 2013

  10. Technical partnerships can become a great enabler for franchisees Thank you

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