power sector 2003

8/7/2019 Power sector 2003

http://slidepdf.com/reader/full/power-sector-2003 1/42

1

APTransco and Distribution Companies

An overviewof

Power Sector Reformsin

Andhra Pradesh

Performance ImprovementInitiatives

July 2003



2

Agenda

1. Background of Power Sector in AP

2. Reforms Milestones achieved.3. Initiatives and Actions taken up till date.4. Results/Benefits of Reforms5. Business Plan (up to FY07) & Turnaround of the Sector



3

Background-Reasons for Decline in financialperformance in AP

The sector enjoyed a reasonably comfortable financial position till 1991 -92 bymeeting the operating expenditure from out of its revenues and State Governmentwas giving assistance to the erstwhile APSEB only to the extent of providing 3 %return on the net fixed assets as prescribed in the ES Act.

The decline in the financial position over the years was due to various reasonssuch as

- Adverse change in Hydro - Thermal mix- Steep increase in cost of power purchase- Higher growth in consumption of subsidised categories like Agriculture and

domestic compared to the subsidizing categories like Industries.- Stagnation in industrial consumption from the grid and shift to captive and

third party because of higher tariff and low quality of supply- High level of T & D losses both technical and commercial.



4

Reform Milestones…..



5

Present Structure of AP Power Sector

APSEB has been ‘unbundled’ into a Generating Company, Transmission Companyand 4 Distribution Companies

Generation• Installed Capacity :

10336 MW• Units Handled :

45804 MU• Average Plant Load

Factor : 88.9%(Genco)

Transmission• Length of

transmissionnetwork : 668,401

km• No. of substations :

2,196Distribution• 4 licenseesT&D Losses26.13% in 2002-03

APGENCO

SouthernDiscom

CentralDiscom

NorthernDiscom

EasternDiscom

APTRANSCO

Single Buyer Model

Differential BSTs

Independent Power

Producers

CentralGenerating stations

Importsfrom other

regionalgrids

CaptivePower Plants

BSA

PPA



6

ANDHRA PRADESH POWER SECTORKEY STATISTICS – APTRANSCO & DISTRIBUTION COMPANIES

ADILABAD

NIZAMABAD KARIMNAGAR

MEDAKWARANGAL

RANGAREDDYEAST GODAVARI

KHAMMAM

SRIKAKULAM

NALGONDA WEST GODAVARI

KRISHNAMAHABOOB NAGAR GUNTUR

NELLORE

CHITTOOR

BAY OF BENGAL

VISHAKAPATNAM

KURNOOL

ANANTAPUR CUDDAPAH

VIJAYNAGARAM

PRAKASAM

Headquarters VishakapatnamPopulation 17.23 mConsumers 2.89 mUnits Input (ARR 2002-03) 5468 MU

EPDCL

Headquarters TirupatiPopulation 20.64 mConsumers 4.17 mUnits Input (ARR 2002-03) 8731 MU

SPDCL

Headquarters HyderabadPopulation 23.75 mConsumers 4.72 mUnits Input (ARR 2002-03) 14949 MU

CPDCL

Headquarters WarangalPopulation 14.09 mConsumers 2.96 mUnits Input (ARR 2002-03) 7219 MU

NPDCL

Headquarters HyderabadUnits Input(ARR 2002-03) 39529 MU

APTransco



7

ANDHRA PRADESH POWER SECTORHIGHLIGHTS IN GENERATION AND INSTALLED CAPACITY

• Total installed capacity to theend of March 2003 is 10336MW, which is second highestafter Maharastra.

• Capacity addition of 3025 MWfrom 99-00

• Energy handled during the year 2002-03 is 45804 MU, which issecond highest after Maharastra.

• The PLF of the thermalgenerating stations of

APGENCO was the highest inthe country.APGENCO PLF was88.9% during 2002-03.VTPS3(95.4%),VTPS2(94.9)&RTPP1(94.8%) were 1 st,2 nd&3rd Units in the Country in PLF.All

India PLF is 70% .

Capacity addition-MW

73417980

906310336

7504

1998-99 1999-00 2000-01 2001-02 2002-03

Reform period



8

ANDHRA PRADESH POWER SECTORINVESTMENTS IN T&D INFRASTRUCTURE

• Invested over 9200 croresover the last 7years in thepower sector towardsgeneration transmissionand distribution.

• Investments increased bymore than two times fromRs. 613 crores in 1998-99to Rs. 1347 crores in 2002-03

• Investment jump in 2002-03 to Rs 1347crores fromRs1072 crores in 01-02through close monitoringfor speedy implementation.

Rs crores

613

1118

937

1072

1347

1998-99 1999-00 2000-01 2001-02 2002-03

Reform period



9

ANDHRA PRADESH POWER SECTORPHYSICAL AND OPERATIONAL PERFORMANCE

PHYSICAL PERFORMANCE• New era of 400 KV system introducedwith the erection of 3 Nos. sub-stationsand 2015 ckt. KM of line.

• Separate 709 industrial feederserected to provide reliable, interruptionfree supply to industrial consumers.

OPERATIONAL PERFORMANCE• Transmission and Distribution system

strengthened to handle 160 MU per day

• Peak demand crossed 7000MW during

the month of March 2002• Revenue increased from Rs.4159 crs.In 1998-99 to Rs. 7451 crores in 2002-03

• T&D losses reduced considerably from38% in 1999 to 26.13% by end of 2002-03.

Particulars Commissionedduring last 7years Existing ason31-03-03

Substations400 kV 3 3220 kV 29 73132 kV 36 19133 kV 783 2123Total 854 2390DistributionTransformers

112239 243893

Services (Lakhs)Domestic 51.35 111.54Agriculture 6.44 22.50Others 4.83 13.40Total 62.62 147.44



10

Government of AP Support & Subsidy

GoAP is releasing subsidy regularly monthly to the sector as per the directives of APERC andeven some times in advance also. The details of Government Subsidy / support is as in thetable shown below.

1999-00 2000-01 2001-02 (Provl.) 2002-03 (Provl.)

1. Tariff Subsidy 1626 1561 15092. Grants in aid 80 20

3. Other support

a) APPFC Bonds 1053 876

b) Adjustments 3064

4. Net Gap to be supported byGovt.

177 548 373

Total 3064 2936 3005 1882



11

Government of AP Support & Subsidy

1256

2074

30642935

2953

1882

1513

1224

519

FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07

Business Plan Assumption

GoAP Subsidy for FY 04

Net revenue Gap

Zero



13

Profile of Key Indicators during Reforms

FY0 0 FY01 FY0 2 FY03Metered Sales

Revenue

Cost Coverage

Support+Subsidy

T&D Losses

35% 38.1% 42.7% 46.4%

FY00 FY01 FY02 FY03

Rs 8128 cr

Rs 6438cr Rs 5597 cr

Rs 4657 cr 26.13%29.6%33.9%

36.9%

80.2%

68.4%62.5%60%

Rs 1882 cr

Rs 2985 cr

Rs 2935 cr Rs 3064 cr



14

Investments v/s Reduction in T&D Lossesand Reliability/Quality improvements

FY00 FY01 FY02 FY03

Rs 1118 crsRs 937 crs

Rs 1072 crs

18.72%

116kv110kv

24.33%

119kv

29.07%28.03%

127kv

48.52Hz48.67Hz48.7Hz

48.88Hz

29.6%

33.9%36.9%

Investments

Average 132kvVoltages

Frequency

T & D Loss

DTR Failures

26.13%

Rs 1347 crs



15

Revenue realised and Cost incurred

3 .3

3 .1

2 .8 2 . 9 2

2 .0

2 . 3 8

2 .3

2 . 0 1

1 .5

1 .7

1 .9

2 .1

2 .3

2 .5

2 .7

2 .9

3 .1

3 .3

3 .5

F Y0 1 F Y0 2 F Y0 3 F Y0 4

Revenue realised per unit of sale

Cost incurred per unit of sale

FY02FY01 FY03 FY04

Actuals for FY01,02 & 03 As per Tariff order

Rs/Kwh



16

Initiatives and Actions for Improved Performance

1. Regular Monitoring of Key Performance Indicators and implementation of Grading System2. Adjusting the Target Demand based on actual energy drawals and monitoring Demand

accordingly3. Improving the Energy Audit methodology and energy accounting system by Fixing interface

meters .4. Improving the Information system by implementation of IT Tools like PMRS/TIMS/CAT5. Improved employee benefits by way of increase in Salary levels6. Extensive Training in Technical & Managerial skills to officers and workmen7. Improved Customer focus-Establishment of Call Centers, Vidyut - Adalats. Spot Billing

System. Improved Communications with Farmers

8. Administrative, Operational and Financial Autonomy to the Distribution Companies

9. Monitoring of power supply through Micro Logic Controllers to ensure stipulated supply toAgriculture

10. Intensive Inspection by DPE & Operation staff and simplification of Assessment process.11. Massive replacement (37 Lakhs) of meters with High Quality meters12. Monitoring of Power Supply to Industries and creation of Express feeders13. Recruitment of Specialists in various Key positions14. Monitoring of Power Purchase Cost through Merit order dispatch15. Support and assistance from Government by way to timely release of Subsidy



17

Highlights 2002-03

2001-02 2002-03

R s / K w h

2.07

5.84

0.17

4.6

2.01

2.56

6.05

4.29

0.35

4.5

2.33

4.08

Domestic Commercial LT-Industrial Agriculture HT Industrial All Catagories

Specific Revenue improved for all categories.For HT Industrial category the tariff has been reduced and there by sales improved by 26% and Revenue by 24%



18

Highlights 2002-03

2001-02 2002-03

R s c r o r e s

1394

821724

208

2053

372

533

1779

943817

431

2488

453

844

Domestic Commercial LT-Industrial Agriculture HT Industrial Non Tariff Income

Other Income

Total Revenue increased by Rs 1690 crores in 2002-03 compared to 2001-02 representing 26.25 % increaseIn 2001-02 the Revenue was Rs 6438 crores and in 2002-03 the Revenue is Rs 8128 crores



19

Institutional StrengtheningAdministrative and Financial autonomy to Discoms

• Manage it’s own cash;

• Raise it’s own funds;

• Determine it’s own payment priorities and areas of expenditure;

• Manage it’s own treasury function

Financial autonomy provided to Discoms to :

Measures taken to enhance autonomy of Discoms • Distribution company boards reconstituted.

• Executive Director Finance inducted into the board.

• Managing Directors of the Distribution companies elevated as Chairman &

MDs.• Roles and responsibilities of employees in various positions defined and

accountability fixed at each level

• Performance Appraisal Systems have been introduced to bring inAccountability and improve efficiency



20

Institutional StrengtheningRecruitment and Training initiatives

• Fresh talent inducted at Managerial levels – Chief General Manager – Human Resources

– General Manager – Corporate Planning

– General Manager – Information Technology – General Manager – Costing

– General Manager – Energy Audit

– Public Relations Officer • Zonal Training Centers placed under control of Discoms

– Various Executive and Management development programs

were conducted



21

Institutional StrengtheningEmployees’ Options Exercise

Employee Options process completed successfully

• A total of 8230 employees allotted through options

• More than 93% of the employees got the company of their firstpreference

• All transfers, postings, promotions and disciplinary actionpowers have been delegated to the DISCOMs in the post-options scenario



22

Institutional StrengtheningPerformance Review and Monitoring

Monitoring Key Performance Indicators (KPI)• Financial KPI’s

• Revenue Billing• Revenue Collection, including Daily Cash

Collections

• Arrears• Operations statistics• Customer Complaints

Viewing relevant aggregated data at each level of the

hierarchy• Relevant reports available circle level upwards,online at all levels of the organization

• Identification of exceptions at all levels• Centralised reporting facilitates timely updation of

data

• PerformanceManagement andReporting System(PMRS) in place for

review and analysis of performance at variouslevels

• Information updated atthe district headquarterson a monthly basis

• MIS cells established atall Discom headquarters

PMRS is used for:



23

Efficiency Improvement Initiatives

• Consumer Analysis Tool (CAT), a tool for targeting irregularities inMetering, Billing and Collections

– CAT cells established at all four Discoms

– Company personnel trained on Data Acquisition (receiving andvalidating data) and Report Generation

– Detailed reports being rolled out for inspections by Operations,DPE & APTS

– Consumption and receivables analysis for the ARR filing to begenerated from CAT across the four Discoms

• Monitoring and Tracking system, aimed at regularisation

– Enables tracking of theft and malpractice cases, right fromdetection to recovery

– Generates separate exception lists for all cases where proceduresand time-lines are not being adhered to

– Being implemented in CPDCL; proposed rolled out in other Discoms as well



24


• Transformer Information Management System, TIMS, isa tool which assists in – Analysing reports for effective and faster decision making by the Top

management – Facilitating preventive maintenance through focussed inspections

– Better inventory management with increased visibility in the stockposition

– Evaluation of vendors based on their performance

• Status of TIMS implementation – Rolled out in all the six circles in SPDCL – Discom has taken the ownership of the system and the process – TIMS reports used for reviewing the performance of offices and

vendors• Assisted in reducing the failure of DTRs and saving in repair cost.

– Rollout of the solution in other Discoms is currently being done



25


• Contract Management – Use of Energy Management System (EMS) for merit order

dispatch – Prototype of dispatch tool for planning merit order being

implemented•

Book Consolidation Module (BCM)BCM, a tool for aggregation of trial balances, has beenimplemented at all DISCOMs and assists in

– Reduction in the errors in Trial Balances

– Timely generation of financial statements – Reduction in monthly books closing time to 3 weeks

– Routine books consolidation activities at Circle level

– Development of a Fixed Assets Register is in process



26

Pre EBC Establishment • 536 Transmission to Distribution Metering Points considered for Monthly Energy

Accounts

• Meter Readings finalised by 10th

of Month• Monthly Energy Accounts agreed with Discoms on 25 th of each month• Diverse local meter reading procedures used

Post EBC Establishment• 152 Generation to Transmission Metering Points considered for Monthly Invoice Production• 807 Transmission to Distribution Metering Points considered for Monthly Invoice Production• Meter readings Finalised by 3 rd of Month• Monthly Energy Certification agreed with Discoms on 6 th of each month• Standardised Meter Reading Procedures used by 200 trained APTRANSCO staff


Energy Billing Centre (EBC) - established on April 1, 2001 to produce accurate monthly

invoices in accordance with Bulk Supply Tariff awarded by APERCBenefits from The EBC



27

Customer Service Initiatives

• Customer service and call centers established at all districtheadquarters and being established in all municipalities.

• Citizen Charter introduced and implementation monitored through call

centers.• Spot Billing implemented for all consumers across the State since

July, 2002• Payment through E-Seva centers as in Hyderabad will be extended to

other municipalities during the year 2003-04.• Meetings with consumers held every month at circle and division level

• Vidyut Adalats conducted every Monday in Mandal Head Quarters atSection Offices by ADE & AO to redress defective bills of consumers.

• Various IT initiatives taken up to improve the performance and bring in

transparency / accountability



28

Performance Highlights - April 02– March 03

Operational Performance

– Cumulative T&D System Losses from Apr. 02 – Mar. 03 is

26.13% compared to ARR Target of 28.40%

– Transmission losses from Apr.02 – Mar. 03 are 7.47 %

compared to the ARR Target of 8 %

– Distribution losses from Apr02 – Mar 03 are 21.03%

compared to the ARR Target of 22.16 %

– Losses in 114 Towns have been reduced from 19.72% in

March 2002 to 16.01% in March 2003

– 17% reduction in 11 kV breakdowns compared to previous

year



29

Performance Highlights - April 02 – March 03

Commercial Performance – Demand raised for the period of April to March is Rs 7726 crores as

compared to an ARR target of Rs. 7314 crores

– Collection for the period April billed in May to February 03 billed inMarch 03 is Rs 6917crores, 98.52% of demand raised of Rs 7021 crs.

– HT metered sales have increased by 21.78% over the previous year – Rs 895 Crores were collected as arrears from April 02 to March 2003

– 108934 cases registered and 67630 cases compounded from April2002 to March 2003

– Rs 12.80 crores realised against Rs 34.74 crores assessed

– 1732 persons arrested from April 02 to March 03 under theft andmalpractice cases, compared to 860 in the entire last year



30

Performance Highlights April 02– March 03

Financial Performance – For Transmission & Distribution System, the total revenue

income from April 02 to March 03 is Rs. 9638 crores and

expenditure is Rs. 10011 crores resulting in net loss of Rs.

373 crores

– For Transco Revenue Income from Apr. 02 – March 03 is

Rs. 8647 crores and Expenditure is Rs. 8434 crores

resulting in net profit of Rs. 213 crores. – For DISCOMS Revenue Income from Apr. 02 – March 03 is

Rs. 9380 crores and Expenditure is Rs. 9966 crores.

Resulting in net loss of Rs. 586 crores.

S i i l f



31

Summary Financial Performance- April 02 to March 03

As a combined entity, APTransco and Discoms have combined losses of Rs373 crores

Sl.

No.Particulars TRANSCO DISCOMS

Transmision &

Distribution

1 Revenue Income 8,647 9,380 9,638

2 Revenue Expenditure 8,434 9,966 10,011

3 Net Profit/ (Loss) 213 -586 -373

SN Particulars EPDCL SPDCL CPDCL NPDCL Total

1 Revenue Income 1668 2210 3979 1523 93802 Revenue Expenditure 1669 2376 4205 1717 99693 Net Profit / Loss -1 -166 -226 -194 -5894 Energy Drawal 5883 9560 17246 7496 401855 Cost per unit drawal 2.84 2.48 2.44 2.29 2.486 Revenue per unit drawal 2.84 2.31 2.31 2.03 2.337 Gap per unit -0.17 -0.13 -0.26 -0.15

l ( ) d f



32

Business Plan(up to FY07) & Turnaround of the Sector

•The latest Business plan forecasts load growth at 8.2% CAGR for all the categories

in the plan horizon of 2002-2007.The LT Growth rate is 8.32% and HT 10.79%.LT forecast includes –2.57% growth for Agriculture.

•The total T&D losses are expected to be reduced to 19.5 % from FY03 loss of 26.13%.This includes reduction of Transmission losses from 7.47% to 5% in 2007 & DistributionLosses from 18.66% to 14.5% in 2007.

•To meet this load a capacity addition of 5326 MW is estimated till 2007.

•In order to meet the load growth and reduce losses as stated above an investment of Rs 5671 crores is required in Generation(APGenco) & Rs 4683 crores for T&D Sector.

•Revenue increase has been projected at a rate of 12% for FY04, 23% forFY05,

17% for FY06 and 18% for FY07.

•With support from the Government (net support of Rs 13,623 crores between FY03 & FY07 )andrealisation of projected revenue as above the T&D Sector will be able to earn a return fromFY 04 onwards.

•APTransco has already earned a return in FY03.Discoms will earn a return from FY04.



34

Kfw, Germany have agreed to finance the expansion of Vijayawada Thermal Power Station Stage-IV (660MW).

Proposals finalised for setting up of Rayalaseema Thermal Power Station Stage II(2x210 MW) with the assistance of M/s CMEC, China.

Kothagudem Thermal Power Station (KTPS) Stage-V (2 X 250MW) completed with

PFC, ICICI and IDBI funding.Technical assistance to support implementation of Reform & Restructuringprogramme is grant funded by DFID and CIDA.

Post Reform Benefits to Andhra Pradesh Power Post Reform Benefits to Andhra Pradesh Power Sector (Contd.,)Sector (Contd.,)



35

Way Forward



36

Formation of Joint Venture Distribution CompaniesFormation of Joint Venture Distribution Companies

Key component of Power Sector Reforms is introduction of Private Sector

participation in the Distribution Power Sector and formation of Joint VentureDistribution Companies through a transparent International Competitive Biddingprocess.

This is to be done by divesting a majority Stake and relinquishing managementcontrol in each of the four Distribution Companies to bring in better managementpractices of Private Sector and required investments into the Sector.

A Cabinet Sub-Committee comprising Ministers of GoAP was constituted to take aview on the strategy on privatization and options available.

DFID appointed HSBC /Crisil Consortium as Privatisation Consultants and they areon board from January 2002.

The privatization consultants have furnished a draft privatisation strategy report in

July 2002 and discussions held with APTRANSCO and GoAP.The Hon’ble CM, AP was also apprised of the proposal by the consultants in the firstweek of August 2002.

Based on Sub-Committee views on strategy report, Government to take decision onlaunching of the privatisation process after studying the investment climate.

It will take about 12 – 18 months to form 1st Joint Venture after GOAP takes a

decision on launching of privatisation process.



37

٭

AP is one of the largest states in India witha population of over 77 million and ageographical area of over 275 thousand sq.Kms.

٭ Richly endowed with minerals and other natural resources like coal, natural gas etc.,

٭ Two of the large rivers (Krishna &Godavari) flow across the State.



38

٭ First State to come out with a visiondocument (Vision 2020)

٭ Focus on infrastructure development,attracting foreign investment and privatesector participation.

٭ Programmes are supported by financialassistance from the World Bank and other International funding agencies.



39

٭ Govt.commitment for overall developmentof the State and in particular taking all steps

to make the State as Investor destination.٭ Single window clearances for new

industries.



40

٭ The State Power Sector is the third largest in theCountry.

٭ APGENCO Thermal Plants eg. RTPP,VTPS andKTPS etc.,got awards for highest PLF in the

country.٭ As per the CRISIL rating A.P. Power Sector is

rated as number one in the Country in the year 2001-2002.

٭ A.P. is one of the first few States in implementingreforms successfully .

Rated by funding agencies as one of the best

reforming States .



41

٭ Quality of supply improved٭ Separate industrial express feeders provided

for maintaining uninterrupted and quality

supply to the industries.٭ Incentives provided for industrial

consumers consuming more power.

٭ For HT consumers separate cells formed for redressal of grievances.



Thank you

power sector 2003

Documents