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.
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
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