Top 15 - Field analysis of Customer Indexing for a Utility Company

GIS based consumer indexing is one of the effective tool to improve the complex network of consumers for the utility company. The complexity of network and minimal baseline data available, the utility needs to take substantial efforts on field to create a strong database of the consumer.

While working with a major water utility in India, some of our observations are listed below. These observations could help in creating a strong database of consumer.

Problems & Resulting Issues:

A) Systemic Problems (arising due to problem in process/system)

• Background and purpose not clearly defined which is essential for correct inputs and improve the quality of data. 
• Lack of strong processes and system base implementation for customer indexing
• Recruitment of low quality people for on-field surveys which leads to lack of presentations skills, confidence, convincing capabilities, etc.
• No processes for submission of on-field data which results in faulty batching of data and missing of survey forms
• No regular updates of data (Monthly or Quarterly)
• Lack of effort estimation and resource allocation which results in exceeding deadlines and duplication of efforts

B) Data Collection Problem (Due to Presentation / Understanding / Customer Support)

• Wrong plot markings of property polygons in GIS base maps
• Incomplete information filled by surveyor to achieve the daily target
• Missed out consumers and properties by surveyors
• No validation of Consumer Indexing process compliance by surveyors who are doing mistakes on field
• No continuous tracking of surveyor records and inputs
• Management of surveyors becomes difficult due to high attrition rate on-field
• Difficulty in categorizing registered, unregistered and no-connection Consumers 
• Lower level supervisors tackling the issues arising out of political influence may create unwanted barriers

Recommendations:

- Create a strong stakeholder (internal & external) agreement on what is required output of the consumer indexing survey
- One of the most effective ways to ensure high quality of data collected is to emphasize more on re-validation of the data by a field team
- Preliminary survey by taking GIS base map also helps to minimize GIS related issues on-field.
- On-field continuous training and quality monitoring of surveyors which will help minimise mistakes at ground level
- Appropriate costing and effort estimation is required for timely delivery of data
- Frequent updates of data is important which will help resolve to bring consistency in data

Prologue:

A systematic execution of customer indexing creates a whole new intelligence about the local variables. At the same time it can suggest strategic interventions which could be used for creating a positive cash flow for the utility.

Nominations invited for Power Distribution Conclave for IT Decision Makers on 12 June 2013 at Mumbai

This is an announcement sent to the Power distribution franchisee group and mailing list of pManifold as a call for nominations. Reproduced for broader dissemination.

After the 'India Utility Knowledge and Networking (IUKAN)' Conference in Delhi in Feb 2013, yet again,  we are taking another step to engage the utility professionals offline with the following Business Technology Conclave in association with SAP,

Business Technology Conclave for IT Decision Makers and Thought Leaders in Power Distribution Utilities

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Theme: Organised IT: Recoding for Indian Power Discoms and Franchisees

Focus: IT in Power Distribution

Venue: Hilton Mumbai International Airport, Mumbai

Date: 12 June 2013 (1 day event)
Registration: By invitation only and Free

Bihar Distribution Franchisee Updates: 2 LoIs issued in March

Bihar State Power Holding Company Ltd (BSPHCL), the state owned Power Distribution utility has recently issued Letter of Intent (LoI) of Distribution Franchisee of Muzaffarpur and Bhagalpur regions to Essel Utilities and SPML respectively. The LoIs has been issued in March 2013.

Tender for appointment of distribution franchisee in PESU & Gaya regions has been cancelled. It is expected that BSPHCL will float new tenders for these 2 regions soon.

We wish the winning two companies successful operationalization so that the DF model achieves its potential.

For latest updates and information from the Power Distribution Franchisee industry, join our 'LinkedIn Group' having 700+ industry professionals.

Posted by - Kunjan Bagdia @ pManifold

Comparative View of Key Performance Indicators across Gujarat’s Power Distribution Utilities

Paschim Gujarat Vij Company Ltd. (PGVCL), the largest Power Distribution Utility, compared to other distribution utilities in Gujarat, is serving more than 47 lakhs customers, across 8 districts and 44 divisions. The utility PGVCL has considerable losses (both Aggregate Technical & Commercial (AT&C) and Transmission & Distribution (T&D)) compared to other utilities and hence, is evaluating different options of Public Private Partnership (PPP) models to improve the operational efficiency and performance monitoring. They are evaluating various models including the Input Based Distribution Franchisee (IBDF), Light Capex new Orissa model and others. To have a detailed understanding of IBDF model, a team of PGVCL recently visited MSEDCL’s office in Mumbai for a deeper study on the model.

pManifold has done a quick market research to understand the performance of Gujarat’s distribution utilities on key parameters using its DF Attractiveness Matrix. The data used is of the FY 2011-12.

Key excerpts are mentioned below:

• PGVCL has highest area compared to other utilities, covering scattered geography with 8 districts and 44 divisions. 
• Total number of customers is double in PGVCL as compared to others, with highest percentage of Agricultural customers (i.e. ~11%) followed by UGVCL with (~8%). 
• Losses are highest in PGVCL, compared to others due to larger proportion of agriculture sales. Due to this, the state regulatory has set trajectory of 2% loss reduction per year for PGVCL and 1% for others.    
• Average cost of supply (ACS) is highest for PGVCL and its sales realization is least. 
• Quarterly Transformer Failure rate is also highest for PGVCL. 

Apart from the above points, based on the analysis of tariff reports, it is observed that the tariff for domestic and agriculture customer categories has remained at 70-80% and 20-30% of the average cost of supply, while the non-domestic and industrial categories pay in the range of 120-150% respectively, across different utilities. Thus, non-domestic and industrial revenues continue to cross subsidize agriculture and domestic categories.      

With a view to reduce the losses and improve the overall system efficiency, PGVCL has taken a good initiative to understand more on the Distribution Franchisee model. We hope that the preliminary thoughts picks up more traction in coming time period so that the DF model develops further and reach to its potential.

Posted by - Kunjan Bagdia @ pManifold

Interview with Mr. Ajai Nirula, COO at TP-DDL on PPP models for Power Utilities in India

Mr. Ajai Nirula, Chief Operating Officer (COO) at Tata Power - Delhi Distribution Limited (TP-DDL) was one of the sessions moderator in recently concluded IUKAN 2013. As a veteran in the Power industry, he shared his inputs on various distribution reforms and the challenges associated with it.

1. What are the current trends in PPP models for Power Utilities in India? 
• Presently, three business models are in existence i.e. Privatization, Franchisee Based (Unit Based Input Model) & Concession Based (Now recommended by Planning Commission)
• Franchisee Based Model: Operates in designated areas, responsible for network maintenance, for a fixed period (generally 15 Yrs.), Bidding is done on price you pay for per unit power purchased
• Concession Based Model: Fix tenure for 25 Yrs., Bidding party gets a license to operate in the area, bidding is done on viability gap funding concept
• Privatization Model (Delhi/Orissa): Responsible for AT&C Reduction & maintaining reliability of network, licenses to operate in designated areas, asset valuation at a notional value, incentivization on overachievement of targets, Governed through a regulator
2. What are the challenges in PPP models in India?
• Franchisee Based Model
• How to handle customers if you can’t but power as it is in the hands of  utility
• How to carry-out enforcement raids (don’t have legal powers to conduct raid)
• Long term sustainability
• Quality of material / specifications being used
• Governance issues as there is no regulator
• Concession Based Model
• Not started yet. States are slightly hesitant to go ahead with this
• Requires calculation of CAPEX etc. for next 25 years
• No standard bidding guidelines in place
• Privatization Model (Delhi/Orissa)
• No political will to take it forward in-spite of a being a successful model in Delhi
• Asset valuation for future models to be re-looked
3. What is the future outlook for PPP projects in India’s (Power and/or Water)Utilities
• Franchisee Based Model: Though in few cases, this model has been adopted; its results on long term basis are yet to be seen. In Bhiwandi, initial results were good but now, pace has slowed down. Agra is yet to show the results. Kanpur has still not been handed over to the party. This model is bankable but only with the support of parent company
• Concession Based Model: This model can work with few modifications. Needs to be properly explained along-with the problems being faced in franchisee model
• Privatization Model (Delhi/Orissa): Good model to work for. Some political will is required. It is a win-win situation for private party & Govt. as there is an independent regulator to check the performance and govt. also gets benefitted through better revenue realization in the form of AT&C reduction.

The above views are respondent's personal views, and not to be associated with his company in any other ways.

Posted by: Kunjan Bagdia @ pManifold

Before you start consumer indexing...

There has been a huge hue and cry about the unavailability of consumer data with the Indian utilities. However, the question that needs to be asked is that whether we have really made an effort to collect the right data set? And if we have, do we have the processes to continuously update the database and maintain it?

In this post, I've tried to list down baby-steps that would go a long way in creating a reliable and comprehensive customer database through the Consumer Indexing (CI) process.

# 1 Create consensus on how the data is required across the teams within utility 
A lot needs to be done to really come to a common consensus across the utility stakeholders about how the utility plans to use the consumer data, not just to create a database because it's a mandate in the contract. This would also require the utility to project and decide how the data will be maintained finally when the utility operations smoothen up in due course.

Further, one also needs to take a call on what data is the priority and when and how it will be collected.

# 2 Create a methodology to collect the data
Now, most widely used methodology currently adopted is the consumer surveys or consumer indexing, as many call it. However, the whole process is extremely tedious and static. One needs to think destructively to really create a methodology which will be, not just fast, but also reliable enough to feed data continuously to the other internal teams. 

This could encompass use of social media to really entice and engage the customers to voluntarily post their data and update their data.

What precaution needs to be taken is to adopt a infrastructure to really accept data from multiple sources and consolidate the same into one piece of data.

# 3 Support systems needs to be designed and put in place to receive and organize the customer data
As the process of consumer data upgradation picks up pace, the utility should really be ready to receive huge chunks of data from various sources - viz. legacy systems, new connections, on-field checks, consumer indexing process, social media, etc.

I believe that MS Excel is fairly strong a tool to manage such data, provided the data structure is correctly created. At the same time, appropriate end-to-end integration needs to be done for the data collection methodology.

# 4 Selecting the right tool for the right data
GIS systems, though being one of the latest of technologies adopted by the utilities, has a major drawback. The data once imported into a GIS system is static. A GIS system will always take only that data as input that you'll feed to the system without doing any sanity check.

Now this creates a major loop hole in the system that can only be fixed by selecting a robust tool for data collection. This tool should also take into account that at times, the data might need to be collected from the field. Our experience in the field of customer data collection has proved that even a simple smart phone integrated with web-based forms is good enough. However, a well-designed consumer survey form is the easiest of all techniques used to initially populate the customer database.

Once the base-data is ready, the Billing Centers and Customer Care Centers should be developed to act as the nodal touch-points to gather the customer data on a more regular process.

# 5 Create the right training and monitoring modules
Even with the best of the methods and tools, without a systematic training and monitoring methodology, a good consumer indexing process could go for a toss. Right tools for training, and data audits are indispensable parts of the CI process

One of the speakers at the recently concluded India Utility Knowledge and Networking Conference (12-Feb-2013, New Delhi) pointed out that the utilities will go slow when it comes to adoption of technology and partner with smaller, local players to help them roll out the operations. We believe that there is a whole lot of internal thinking that needs to go in to really ensure that the utilities hit the ground running. Lack of clarity from the utility, coupled with the inefficiencies of the local players could kill the effort spent in the consumer indexing process.

Further readings: Putting your best foot forward - Best Practices in Consumer Indexing

IUKAN 2013 - Sessions Coverage and Post Event Publications

pManifold’s 1st Annual Indian Utilities Knowledge and Networking (IUKAN) 2013 conference at New Delhi on 12th Feb 2013, saw participation from  over 100+ companies including stakeholders Governments/DISCOMs, Private Operators, Consultants, Vendors, Utilities, New Entrants, Investors, etc. making 210+ delegates and speakers. The conference focus was on ‘Challenges and Best Practices in Operational Roll-Out of Utility PPPs in Power Distribution and Water 24x7’.

The programme with five sessions, had industry experts sharing and discussing the potential way forward for Power & Water Distribution PPP models in Indian Utilities. Session-wise discussion can be read below:

• Takeaways from the Vision Session at IUKAN 2013
• Co-creating new PPP Design
• Understanding the utility customers – helping the utilities in better roll out of Operationalizing
• Strategizing Vendor Management – Collaboration, Innovation, and Integration
• Raising Finance for Investments in Loss Reduction 

Post Event Publications of the conference, including speaker presentations, photos, television coverage, etc can be seen at http://www.iukan.in/conference-2013/proceedings/

You can stay updated at our page www.iukan.in for future events and conferences.


Posted by: Kunjan Bagdia @ pManifold          

IUKAN Session 4 Proceedings: Raising Finance for Investments in Loss Reduction

Investments in network and service delivery infrastructure will be required by operators to make interventions that would drastically reduce losses and improve end-customer services. Raising equity, debt and managing working capital will be key to the success of the operating Distribution Operators. However, the exposure of banks and private equity in the utility segment is still an emerging space and very few private utilities have had successful financial closures.

The key question here was

1. What will breathe confidence amongst investors to invest in tariff regulated Utility PPP models?

IUKAN Session 3 Proceedings: Strategizing Vendor Management – Collaboration, Innovation, and Integration

Utilities are heavily driven by outsourcing of products and services, but most times, their integration is limited by lack of strong SLAs and vendor management practices. The new private operators usually start dealing with several products and contractors, and already scarce Management bandwidth gets occupied in monitoring and renegotiating contracts and performance. Strong vendor management should be a key point for private players taking over power distribution.

The key question here was

1. Can organized vendors be developed with more end-to-end managed services for these new PPPs?
2. What new business models need to emerge for such managed services that have performance-linked contracts?

Interim (or Mini) Distribution Franchisee through MoU route – new initiative from MSEDCL

MSEDCL has taken another step in appointing Interim (or mini) Distribution Franchisee in Multi-storey buildings in its continuous effort to reduce AT&C losses, improve customer services and collection efficiency. After the appointment of Distribution Franchisees for bigger circles like Bhiwandi, Nagpur, Aurangabad and Jalgaon, they are now appointing Mini Distribution Franchisee in areas such as - Rural / Hilly area having scattered network, IT- Park, SEZ, etc., Urban Township Area and others including small colonies (having 100 connections or more), by signing a Memorandum of Understanding (MoU).