Digital Discoms: Progress in IT deployments despite challenges

Progress in IT deployments despite challenges

Information technology (IT) deployment in the power sector has been largely shaped by the Restructured Accelerated Power Development and Reforms Programme (R-APDRP). By 2016-17, when the R-APDRP projects are expected to be completed, select towns would have established modern IT-based systems for energy accounting, monitoring and auditing. Many have already done so. So far, the IT deployment experience of utilities has been marked by specific issues, choices and preferences, as well as challenges. Metering, billing and collection modules have received high priority while implementation of geographic information systems (GISs) remains a challenge.

IT adoption scenario

India Infrastructure Research’s survey on IT deployment in various power utilities brought forth key aspects of preferences and implementation choices. A look at some of the key takeaways of this survey:

  • Nine out of 10 utilities surveyed incur IT expenditure in the range of 0-5 per cent of revenue. This seems in line with the global average utility spending on IT. Almost 80 per cent of a typical IT budget is used for “lights on” IT – application support, helpdesk support, administration and planning, and mainframes.
  • IT budgets in most utilities have either remained constant over the past three years or have increased at a rate of less than 5 per cent. Half of the utilities surveyed booked less than 5 per cent growth in their IT budgets, while 14 per cent of them either experienced IT budget cuts or had constant budgets over the same period. Internal accruals are the primary source of funding for many utilities.
  • Utilities prefer a comprehensive and bespoke approach to IT implementation, while there is no clear preference in terms of IT architecture. Almost 78 per cent of the surveyed utilities follow a comprehensive approach to IT implementation. Owing to a large percentage of legacy systems in their IT portfolio, more than two-thirds of utilities employ customisation over commercial off-the-shelf solutions for IT projects.
  • While selecting IT vendors, utilities generally prefer a combination of quality and cost over least cost. Over two-thirds of the surveyed utilities prefer a quality-cum-cost criterion. This may be partially attributed to the R-APDRP, as the scheme mandates such a criterion for vendor selection.
  • Over half of the utilities that follow the quality-cum-cost criterion attach more than 50 per cent importance to the technical component of an IT proposal. Three-fourths of the utilities also prefer to partner with IT vendors that have in-depth knowledge of power systems and the overall utility business.
  • Nine out of 10 distribution utilities attach maximum importance to applications related to customer interface, revenue protection and work management. While most of the discoms surveyed have already deployed billing and customer relationship tools, they are mainly in the evaluation or piloting phase for energy monitoring and accounting solutions, for example, supervisory control and data acquisition (SCADA)/automation.

Metering, billing and CRM

Billing, collection and customer relationship management (CRM) systems are at the centre of most IT initiatives. Billing and collection systems impact the cash flows of utilities, but they are also prone to leakages due to issues like discrepancies in billing data, unaccounted connections and long bill-to-collection cycles. Customer interface is another focus area for utilities to manage issues of releasing new connections, restoring equipment faults, billing errors, etc. in the shortest possible time. IT-based systems fill these lacunae.

The R-APDRP projects currently under way entail setting up some critical IT-based systems in utilities, including a baseline network data. According to latest reports, 550 towns have already achieved “go live” for their IT-based projects under the R-APDRP. This means that these towns have set up dedicated IT-enabled customer care centres to address grievances and made real-time reports on energy consumption and billing available. All R-APDRP towns are expected to be similarly equipped by 2016-17.

Meters based on the Device Language Message Specification (DLMS) are also being deployed under the R-APDRP. The introduction of DLMS has helped reinforce the case for automated and remote metering systems as well as interoperability in metering protocols. As such, distribution utilities have so far deployed automated meter reading (AMR) systems for only industrial consumers. Despite the limited scope of implementation, AMR systems have resulted in key benefits such as shorter reading-to-billing cycles, improved billing accuracy and greater awareness of consumer load trends.

Several utilities are considering new technology options to improve billing and collection efficiency. One example of this is the deployment of prepaid metering. The recently unbundled utility of Manipur is deploying 60,000 prepaid meters under the R-APDRP, after its pilot project demonstrated not only a growth in revenue collection but also a rationalisation of consumer demand. In some cases, infrared and radio frequency communication technologies have been used to design metering solutions specific to local conditions.

The visible impact of metering, billing and collection systems on revenues is one factor that drives the adoption of such systems. It also helps that they are customised for the needs and requirements of utilities. Many utilities such as Odisha’s discoms (CESU, NESCO and SOUTHCO) and West Bengal’s CESC have developed in-house systems for metering, billing and collection.

GIS-based systems

For utilities, a GIS model is critical and represents the most comprehensive inventory of all consumers and assets in its operations. It is also the most challenging of the IT projects currently under implementation in the country. GIS-based consumer indexing is an integral part of the R-APDRP and is also responsible for the delays in the majority of the projects.

The few successful cases of GIS implementation in the power sector include those of Tata Power Delhi Distribution Company Limited and BSES’s Delhi discoms. These discoms implemented GIS in an integrated manner, linked with enterprise resource planning, SCADA, CRM, billing and collection, and outage management systems, among others. Integrated systems have helped utilise GIS for varied issues such as power theft, transformer failures and voltage optimisation.

While the promise of GIS technology was understood, there has been gross underestimation of the efforts required to deploy GIS under the R-APDRP. Policymakers stipulated an unrealistically short timeline and IT implementation agencies underquoted rates. Both parties subsequently realised that these projects entail extensive and costly field surveys for land base information, network mapping and consumer indexing. A key challenge for utilities has been the task of creating a base map for GIS. Further, GIS maps require constant updates to reflect the changes in physical network.

Most discoms are implementing large-scale GIS-based IT systems for the first time. This has led to severe resource constraints, especially in terms of getting specialists to execute these projects. These issues are gradually being resolved by IT implementation agencies. Despite challenges, the GIS projects present an opportunity to equip towns with fully digitised maps of the electrical network and consumer base.

The way ahead

With the completion of ongoing projects for IT deployment, the next steps of transition will be critical. Utilities will have to undertake changes in business processes to make extensive use of the real-time digital network enabled by IT systems. There are reports that several utilities are yet to take over the IT systems deployed by implementation agencies under the R-APDRP as they are not prepared to run the systems on their own.

Existing IT projects are also laying the foundation for future smart grid technologies. Hence, it is important to plan the post-R-APDRP strategy for the power sector, especially the distribution segment. Some of the key suggestions in this regard are introduction of real-time transformer monitoring, extension of billing/CRM modules to other towns and large-scale introduction of outage management systems.

The policy-level thrust on smart cities makes the power distribution segment’s IT projects an important tool in overall infrastructural planning and monitoring. For instance, GIS-based consumer indexing of power utilities could be utilised for other utility services such as gas and water. Similarly, the integrated billing mechanism can be developed to provide various utility services to the consumer. These ideas can be put into action, provided the ongoing technology deployment targets are achieved.