1. MERCADOS ENERGY MARKETS INTERNATIONAL Finding new paths for the energy market Consultancy Support to the HERC Consumer Aspects – Preliminary Findings of the Consumer Survey CUTS International

2. Presentation 0utline ● Update of the assignment ● Objectives (Consumer Aspects Components) ● Overall approach ● Key findings of concept paper ● Consumer survey -Methodology -Questionnaire and data collection -Survey findings ● Recommendations ● Way forward

3. Current status of the assignment ComponentActivities CompletedOngoing Activities Component 1: Tariff Aspects ● Concept papers – on Generation, Transmission and Distribution MYT and Benchmarking ● Development of MYT Regulations – G, T, D ● Public Hearing ● Notification of Regulations Component 2: Intra-state ABT and Market Design ● Concept Paper on Market Design and Intra-state ABT ● Draft Regulations on Intra-state ABT under preparation ● Draft Regulations on Open Access also under preparation Component 3: Consumer Aspects ● Concept Paper on Consumer Aspects ● Survey Methodology and Questionnaire ● Execution of Survey ● Development of detailed report on survey findings ● Development of road map for Social Accountability and Consumer Involvement

4. Objectives ● Assess the scope and role of HERC in promoting consumer participation in the regulatory decision making process ● Review the state of consumer satisfaction in Haryana ● Assess the level of consumer awareness through a structured survey ● Identify key barriers for effective consumer participation in the State ● Recommend measures to promote adequate public participation in the sector

5. Overall Approach Review of literature, statutes, policy, regulations Comparison with best practices at national/international level Identification of gaps & scope for improvement (Concept Paper) Consumer perceptions: satisfaction and awareness (Survey) Summary and conclusions Development of roadmap for social accountability and consumer involvement

6. Concept paper: key findings ● Haryana: pioneer state to initiate reforms at state level ● Increased scope for consumer participation  Key regulations notified to empower consumers (CBR, SOPs, Supply code, CRM etc.) ● Constitution of Complaint Redressal Forums and Ombudsman- a step forward  HERC has processed all orders/regulations inviting consumers to participate

7. Concept paper: key findings (contd..) ● Weak participation in public hearings and inadequate geographical coverage ● Inadequate written comments on the draft proposals  Lack of effective consumer representation in SAC ● Lack of independence of Complaint Redressal Mechanism (controlled by Discoms)  No mechanism for effective monitoring of SOPs  Lack of awareness among consumers on key issues

8. Consumer survey: methodology

9. Consumer survey: sampling methodology ● Sampling methodology (Multi-stages, PPS, random) ● Geographical representation Each Discoms area was divided into 2 zones 2 districts chosen from each zone based on chosen criteria Criteria: Composite ranking score of Literary rate & consumption (Click for details)(Click for details) ● Most of the blocks covered in each sample districts ● Rural/urban ratio of the state was maintained - About 20% female respondents were targeted ● Agricultural sector (both metered and un-metered consumers covered)

10. Consumer survey: questionnaires and data collection ● Base questionnaire covered domestic, agricultural and commercial consumers ● Separate questionnaire prepared for industrial consumers ● Questionnaires translated into local language (Hindi) ● Two days training programme conducted for field investigators 17 th March: Mercados EMI Office, Gurgaon, 18 th March: Field Training and Visit (Sonipat) ● Interview method used for investigation Data collection though interviews: 18 th March-12th April 2010, Tabulation:13-22 nd April 2010

11. Consumer survey: methodology Sample size: ● Domestic, Agricultural & Commercial ~1100 (data collected 1134) ● Industry 200 (data collected 227) Consumer Category Number of respondentsPercentage shares StateUHBVNDHBVNStateUHBVNDHBVN Domestic89444944579% Agricultural131725912%13%10% Commercial109496010%9%11% Total1134570564100%

12. Key survey findings: Domestic, Agricultural and Commercial Consumers

13. Metering & Billing: Key Findings ● About 71% consumers are satisfied with metering ● Agricultural consumers are more satisfied than domestic and commercial ● SOPs are not being implemented comprehensively ● Only a few consumers can understand Electricity bill completely ● Overall Score for metering & billing is not satisfactory

14. Quality of Service: Key Findings ● Overall score for quality of service is low ● Load shedding and poor voltage quality are major concerns ● Agricultural and domestic consumers facing more power cuts ● No prior information about load shedding to most of consumers ● Wider variations in QOS across the districts

15. Awareness on Reforms & Regulation: Key Findings ● The awareness level on reforms process is very low ● A very few consumers are aware of websites of HERC/utility ● None of the consumers visited website of HERC/utility ● Most of the consumers are aware of energy efficient equipment ● Overall score for information made available to consumers is low

16. Complaint Redressal Mechanism: Key Findings ● The awareness about CRF and Ombudsman is too low ● Because of poor awareness level, very few consumers approached to CRF ● Traditional method such as ‘personal visit’ still dominating for registering complaint ● Consumers are not given a reference number for the complaint registered with utility

17. Awareness on Tariff and Related Issues: Key Findings ● Majority of commercial consumers believe that tariff is High ● About two-third agricultural consumers observed the tariff Just Fair ● Majority of consumers not satisfied with the procedure for new connection ● Overall non transparent process in releasing new connection is a major concern

18. Key Findings: Industrial Consumers

19. Industrial consumers: Key findings ● 86% respondents (out of 14) were satisfied with meter testing procedure  74% of the respondents believe that the QOS remained unchanged over the last 3 years  93% consumers are receiving the electricity bills regularly ● 95% out of total respondents were not aware of remote metering technology

20. Industrial consumers: Key findings (contd...) ● 50% respondents experienced damage/burnt electrical equipment in last 3 years ● 95% respondents were never given advance information of power shut downs  Awareness about HERC: (functions-14%, regulation 6%)  Open access: 71% believe it can help in reducing cost  None of the consumers applied for open access

21. Comparative Analysis of Consumer Perceptions IndicatorIndustryDomestic etc. Satisfied with metering91%72% Satisfied with meter testing 86%29% Load shedding (for 10 hrs or more) 58%68% Aware of regulatory mechanism 14% (functions of HERC) 1.6% (aware about HERC) Received complaint no.40%13% View on tariff: High53%55% Awareness on EE53% (Star rating and labeling) 89% (CFL etc.)

22. Broad recommendations ● HERC to adopt a proactive role in promoting consumer participation ● Concrete steps should be taken to generate adequate awareness and involvement Process of public hearing to be held in rural areas as well Involvement and nurturing active consumers groups/CSOs Translation of key documents in vernacular ● Complaint redressal mechanism to be made more effective with generation of compliance reports from time to time  Effective compliance of standards of performance through appropriate measures (MYT Regulations)  Wider dissemination of key regulatory information including tariff filings

23. Next Steps ● Report on detailed consumer survey findings Calculation of consumer satisfaction index and sub-indexes (such as those related to metering, billing, etc) ● Preparation of Roadmap for Social Accountability Outlining the actions, key responsibilities and timelines for achieving increased consumer participation  Discussions with the Commission and select Consumer Associations  On the findings and the road map including aspects that require further elaboration  Mechanisms to improve consumer involvement and satisfaction  Finalization of the above documents  Suggested action points for key stakeholders and wider dissemination of key findings  Development of framework for sustained action: replication of consumer satisfaction survey

24. Mercados – Energy Markets International C/ Orense, 34, 8th floor 28020 – Madrid, Spain Tel.: (+34) 91 579 52 42 Fax: (+34) 91 570 35 00 Web: www.mercadosemi.es Email: info@mercadosemi.es Thank You Mercados – Energy Markets India Private Limited Gurgaon: 206, Tower B, Millennium Plaza, Sec 27, Gurgaon – 122002, India Tel.: (+91) 124 424 1750 Fax: (+91) 124 424 1751 Mumbai: 110 Master Mind I, Royal Palms, Aarey Milk Colony, Goregaon (East) Mumbai 400 065 Tele fax: (+91) 22 2879 3510 Web: www.mercadosemi.es /asiawww.mercadosemi.es Email: ade@mercadosemi.es CUTS International D-217, Bhaskar Marg, Bani Park Jaipur 302 016, India Ph: 91.141.228 2821; Fx: 91.141.228 2733/2485; Em: rk2@cuts.org; c-cier@cuts.orgrk2@cuts.orgc-cier@cuts.org Web: www.cuts-ccier.org; www.cuts-international.org (Also at Geneva, London, Hanoi, Nairobi and Lusaka)www.cuts-ccier.orgwww.cuts-international.org

25. Supporting Data and Detailed Analysis

26. Metering & Billing

27. Key Finding 1: About 71 percent of consumers are satisfied with metering

28. Key Finding 2: For about 60 percent of the consumers, metering complaints were addressed more than a week later (Out of 127 who registered a meter related complaint) SOP Regulations provide a maximum time frame of 7 days

29. Key Finding 3: There is a need to produce bills in simple, Local language

30. Key Finding 4: Overall ranking of the metering and billing process is not very satisfactory Overall, commercial consumers have more concerns

31. Key Finding 5: Urban consumers are less satisfied than the rural consumers on metering and billing issues

32. Quality of Service

33. Key Finding 1: No prior information on power shutdowns is supplied to most of the consumers Need for dissemination of vital information to consumers (sms, advertisement in papers, etc)

34. Key Finding 2: Overall score for QOS is low for majority Overall, agricultural consumers have more concerns with QOS

35. Key Finding 3: the majority of consumers do not observe any improvement in QOS over last 3 years

36. Awareness about Reforms & Regulations

37. Key Finding 1: Awareness about HERC is very low Set up a Consumer Welfare Fund to support capacity building/awareness activities Involve Panchayats to ensure effective participation by local institutions

38. Key Finding 2: There is adequate awareness on EE

39. Key Finding 3: Overall ranking about information available to consumer is low Need for wider dissemination of useful information to consumers

40. Complaint Redressal Mechanism

41. Key Finding 1: Most of the consumers make personal visits for registering complaint Make the compliant redressal process more consumer friendly

42. Key Finding 2: Most of the consumers are not given a reference no for the complaint registered Need for a accountable complaint redressal mechanism

43. Key Finding 3: awareness about complaint redressal forum as well as ombudsman is very low Wider dissemination of information about the CRM

44. Key Finding 4: About 2/3 rd consumers do not observe any improvement in Complaint Redressal Mechanism over last 3 years

45. Tariff and other Related Issues

46. Key Finding 1: Majority of the commercial and domestic consumers believe that they are paying higher tariff

47. Key Finding 2: Majority of the consumer applying for new connection are not satisfied with the procedure

48. Key Finding 3: Lack of transparency in releasing new connection is the major concern of consumers

49. Zonal Distribution

50. DHBVN: Sampling Districts Zone UHBVNLiteracy (%age) Index score Consumpti on (Lakh kWh) Index score Compos ite Score Rankin g (Ascen ding) (Literacy)(Consu mption) Eastern Zone Faridabad70.799.35204547.458.405 Palwal70.799.3529031.065.202 Gurgaon63.618.402747210.009.206 Mewat63.618.407290.274.331 Mahendergarch70.439.3044541.625.463 Rewari75.7510.0066932.446.224 Western Zone Sirsa61.28.9884017.718.342 Hisar65.859.661090010.009.834 Fatehabad58.168.5368956.337.431 Bhiwani68.1710.0084057.718.863

51. UHBVN: Sampling Districts Zone UHBVNLiteracy (%age) Index score Consum ption (Lakh kWh) Index score Composi te Score Ranking (Ascend ing) (Literacy)(Consump tion) Eastern Zone Panchkula*76.5410.00113918.379.193 Yamunanagar72.209.43102577.548.491 Ambala76.209.96113918.379.162 Karnal68.208.911360810.009.465 Panipat69.759.11128619.459.284 Western Zone Kurukshetra70.049.15100669.689.415 Rohtak74.5610.0049414.757.372 Sonepat73.719.891040410.009.946 Jhajjar72.489.7246324.457.091 Kaithal59.57.9893588.998.494 Jind62.88.4267836.527.473

52. Blocks Covered ● Yamunanagar – Jagadri, Chhachhrauli, Radaur ● Hisar – Hisar, Hansi, Adampur ● Sonepat – Sonepat, Gannur, Gohana ● Karnal – Karnal, Nilokhri, Asand ● Jhajjar – Jhajjar, Salahwas, Beri ● Gurgaon – Gurgaon, Sohna, Pataudi ● Fathehabad – Fathehabad, Ratiya, Tohana ● Mewat – Firozpur Jhirka, Nuh, Tauru