Friday, April 22, 2011

Key Performance Indicators (KPIs) for Distribution Utility

Utility Performance Monitoring is one of major gaps in Indian distribution utility or DISCOMs. The major reason is missing measurements and analytics to drive decisions and implementations. Even the MIS that gets created (inspite of its questionable integrity) is not effectively used to control distribution system optimally. One abstraction is to look utility as a complex distributed network with multiple stakeholders/nodes (various end consumers, linked to DTCs, feeders and substations forming a network and one network interconnected with others). Each stakeholder has different metrics of performance and it is this mismatch of KPIs along various stakeholders, that make the network run non-optimally.

It is attempted here to give readers a detailed list of KPIs that could be applied to benchmark performance of a utility with other utilities or with itself across time. The list is not claimed to be complete, but have been arrived with good amalgamation from available literatures. The various broad categories of KPI's identified in utility distribution are:
  1. Operational Performance
  2. Operational Cost & Management
  3. Financial Performance
  4. Customer Service Quality
  5. Energy Efficiency & Demand Side Management (DSM)
  6. Workforce (Including Health & Safety)
  7. Sustainability
The subcategories and specific metrics under each broad category are given below in the table:
Key Performance Indicators for Distribution Utility (Source - pManifold)
(Click on the image to see the enlarged view)
A good framework for use of KPIs to monitor performance of the utility will need answering:
  1. what to measure?
  2. how to measure?
  3. how to present the information across different utility levels for decision/action support?
A good set of KPIs together should also give a good causal analysis of any problem in the network. With above KPIs broadly known, a question then comes then still why Indian utilities are not running profitable? This is because just having KPI alone is not sufficient for growth, and follow up interventions have to be executed well. Since most of the mis-management of utilities get directly pass through to the end-consumers, there is missing incentive layer for efficient utility management.

Figure below shows a different taxonomy of KPI's across different hierarchy of Distribution delivery:

Will privatization of Distribution utilities be able to better use the KPIs to drive utilities to optimal performance and profitability? Readers please share your thoughts and any specific benchmark numbers on KPIs for Indian distribution utilities?

  1. Performance Benchmarks for Electricity Distribution Companies in South Asia - by Nexant for USAID and SARI Energy (2004)
  2. Development of Key Performance Indicators - @ Maritime Electric Company Ltd. (2007)
Posted by: Kunjan Bagdia @ pManifold

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