The distribution franchise (DF) model holds significant promise for reforming the power distribution segment. The DF model enables state-owned discoms to allow private parties to perform specific functions without a transfer of ownership. The attractiveness of this model lies in the potential for a speedy reduction in technical and commercial losses, and the adoption of better operational and management practices.
Sai Computers Limited (SCL) is a key DF player in the north-eastern part of India. It operates two DFs in the region, one at Dalu in Meghalaya and the other in Kailashahar in Tripura. The total number of consumers that the DFs handle is close to 75,000. Both franchises are rural-focused DFs, with their areas having very low population density. For instance, in Meghalaya, the DF handles about 30,000 consumers, spread across 250 sq. km.
Both DFs are based on the input-based DF (IBDF) model, and have seen sustained improvements in performance on all fronts over the baseline. From 87 per cent at the time of handover, AT&C losses fell to 16 per cent last year, and SCL expects to reduce them to less than 15 per cent this fiscal. Within four to five years of operation, through various customer-centric and target-oriented initiatives, the DFs have managed to achieve a turnaround. By inculcating a safety culture in the organisation, customer service initiatives, technological upgradation, etc., the company has been able to make a difference in the distribution sector in the Northeast.
A look at the key challenges faced by SCL when it took over, strategies implemented and results achieved…
Challenges
The challenges for the DFs when they took over operations included customer outreach issues due to the difficult terrain, especially in the rainy season, which lasts up to six months. Moreover, frequent storms impacted the network. Frequent outages and damage to distribution transformers resulted in low consumer satisfaction.
Breakdown time exceeded five to six hours on average, and could stretch up to an entire day and night. Another challenge was delayed replacement of failed/damaged transformers. Old network infrastructure presented technical challenges.
On the commercial side, scattered and distant consumers, low metering, low billing coverage and efficiency, low collection coverage, and the absence of doorstep collection or field collection vans/teams were key challenges. As there was only one collection counter, customers were forced to travel up to 40 km to make
bill payments.
Key initiatives
Some of the key strategies implemented by the team under the IBDF model are:
Preventive maintenance
- Tree pruning along the lines
- Regular heath check-up of distribution transformers
- Regular load balancing
- Replacement of damaged poles
Consumer facilities
- Mobile van for payment collection
- New connections within seven days
- Same-day bill revision
- On-site meter testing
- Online payment and complaint facility
- Dedicated customer care team
- No human interventions above 5 kW
AI-based utility applications
- AI-driven pole maintenance
- Smart workforce management for hotspots
- Advanced OMS for efficient trouble call management
- Seamless team planning through web and
mobile apps - Leveraging of customer scores for payment
insights
The 5S strategy
- Samvaad: Communicating with consumers and gram pradhans for awareness
- Samasya: Listing out and categorising reasons for non-payment
- Samadhan: Analysing, tracking and camping for on-spot resolution of problems
- Suvidha: Establishing a call centre and an online payment facility, enabling door-to-door collection, and deploying a cash van
- Sudhaar: Ensuring positive impact of the work
Results
In Meghalaya, there has been a fourfold increase in the revenues of Meghalaya Power Distribution Corporation Limited in the last five years. The number of consumers has grown by 264 per cent. The average restoration time has decreased from six hours to 55 mins. The average power supply duration has increased from 16 hours to 23 hours. Of the 112 total employees working at the DF, 97 per cent are local people. Notably, AT&C losses have decreased from 87 per cent when it began operations to 16.93 per cent within five years.
Meanwhile, in Tripura, there has been a doubling of revenues for Tripura State Electricity Corporation Limited in the last four years. Other benefits include a 65 per cent growth in the number of consumers, and a reduction in the average restoration time from 6 hours to 42 minutes. Further, there has been an increase in the average power supply duration from 18 hours to 23 hours. Moreover, of the DF’s 152 employees, 97 per cent are local people. There has been a 19.23 per cent rise in energy consumption due to the increased consumer base and 24-hour supply.
Clearly, both Meghalaya and Tripura demonstrate positive outcomes, not only in terms of loss reduction but also in quality of supply and efficiency. Reducing operational costs through AI-driven initiatives and data intelligence platforms, and raising the reliability levels in the rural and hilly markets have been instrumental in achieving this turnaround for SCL.
