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 These are easier said than done Grievances & public dealing Billing Collection IUKAN 2013/Session 3/12th February 2013

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

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

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

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

Technical partnerships Assurance Involvement Capex and Opex sharing can be discussed and linked to two-way SLAs and reliable measurements Risk to partner 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 Supplies only what is ordered Implements whatever is needed Responsible for timely & quality deliveries Modifies decisions, as time goes by Not accountable for results Fully accountable for results IUKAN 2013/Session 3/12th February 2013

This is where a technical partner can help in many ways 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

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

Technical partnerships can become a great enabler for franchisees Thank you