The measures for reducing commercial losses depend on the factors that cause them and we discuss these separately.
Measures for Controlling Direct Tapping by Non-customers and Customers
Stopping Theft by Direct Tapping
Various measures can be taken by the electricity supply authorities to stop theft of energy by direct tapping (Box).
Box : Stopping Theft by Direct Tapping
• Setting up of Vigilance Squads (where these have not been set up).
• Carrying out surprise inspections by Vigilance Squads.
• Periodic inspection of LT feeders by the special Vigilance Squads for tracing unauthorized consumers and direct tapping from line.
• Prosecution proceedings against persons indulging in theft of energy to secure convictions in the Court. The Electricity Act, 2003 is emphatic on incriminating material. Therefore, the materials, wire and equipment may be preserved and provided at the time of court
hearing to prove the crime.
• Imposition of heavy fines on consumers found committing theft of energy.
• Starting a drive for regularizing unauthorized connections and
simplifying procedure for release of new connections to consumers. Use of Aerial Bunched Cables/ Partial Insulated LT Lines Use of modern and effective equipment, like Aerial Bunched Cables/partial insulated LT lines in theft prone areas along with HVDS can prove to be an effective deterrent to theft. Since the cables are insulated, it becomes very difficult to tap energy. The AB cables can be erected on the same poles as are used for street lighting and telecommunication circuits. This would save considerable investment and also avoid associated problems of communication.Public Relation and Awareness Campaigns by the Utility
Measures for Controlling Direct Tapping by Non-customers and Customers
Stopping Theft by Direct Tapping
Various measures can be taken by the electricity supply authorities to stop theft of energy by direct tapping (Box).
Box : Stopping Theft by Direct Tapping
• Setting up of Vigilance Squads (where these have not been set up).
• Carrying out surprise inspections by Vigilance Squads.
• Periodic inspection of LT feeders by the special Vigilance Squads for tracing unauthorized consumers and direct tapping from line.
• Prosecution proceedings against persons indulging in theft of energy to secure convictions in the Court. The Electricity Act, 2003 is emphatic on incriminating material. Therefore, the materials, wire and equipment may be preserved and provided at the time of court
hearing to prove the crime.
• Imposition of heavy fines on consumers found committing theft of energy.
• Starting a drive for regularizing unauthorized connections and
simplifying procedure for release of new connections to consumers. Use of Aerial Bunched Cables/ Partial Insulated LT Lines Use of modern and effective equipment, like Aerial Bunched Cables/partial insulated LT lines in theft prone areas along with HVDS can prove to be an effective deterrent to theft. Since the cables are insulated, it becomes very difficult to tap energy. The AB cables can be erected on the same poles as are used for street lighting and telecommunication circuits. This would save considerable investment and also avoid associated problems of communication.Public Relation and Awareness Campaigns by the Utility
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| Create Public Awareness |
• Some change in the value system of the society is also needed. The opinion makers and social leaders should be involved to effectively tackle this massive social evil
• Some amount of public relations work by the utility is needed to tackle this menace. It is to be widely publicized that theft will increase the tariff for the genuine consumers, result in poor voltages, burnt motors, failed transformers and dried crops. The scarce resources of the State,meant for social welfare, are diverted to feed these power thieves.
Measures for Controlling Pilferage of Energy by Existing Customers
The following steps can be taken to reduce such commercial losses:
• The energy meter should be housed in a separate box sealed and made inaccessible to the consumers. The fuse cut-outs are provided after the meter.
• Multi-core PVC cables should be used as service mains instead of single core wires.
• Severe penalties may be imposed for tampering with metering seals, etc.
• Theft of electricity should be publicised as a social and economic crime and people should be informed of the provisions in electricity laws in this regard.
• Extensive checking of connections for accuracy and detection of tampering/by passing should be undertaken.
• Planning and laying of HT/LT network with HVDS (LT less) and HVDS should be undertaken for all categories of consumers.
• Schemes for classification of consumers based on ABC analysis should be formulated and action should be undertaken for high value consumers in the first instance.
• Consumers’ meters can be shifted outside consumer premises.
• Potential link should be provided inside the body of the energy meter rather than inside thermal cover. This prevents the potential link to be disconnected by the consumer.
• Energy variation in consumption must be regularly checked for all categories of consumers and doubtful consumers should be kept under
watch through special checking.
• Strict control over working of meter readers with close and continuous monitoring should be ensured.
• There should be provision of swapping of duties between meter readers and ledger clerks.
Measures for Reducing Defective Metering
Utilities incur high commercial losses due to inadequate metering and data collection system. The general defects observed in metering are:
• stuck up meters;
• no readings furnished by the meter reader, for a good number of services, at times, continuously;
• constant nil consumption cases reported without any comment;
• progressive readings recorded in disconnected services;
• no relation between the meter capacity and the load;
• adoption of wrong multiplication factors (MF) for billing as the change in
MF is not intimated to the billing agency.It goes without saying that utilities have to achieve the target of 100% metering of 11 kV feeders and consumers. At the national level, 96% feeders have been metered as of now, as against 81% metered during 2001- 02. You may know that 100% feeder metering has been achieved in 18 States. During 2001-02, the consumer metering was at 78%. It has now increased to 92% during 2005-06. The majority of un-metered consumers belong to agricultural and flat rate categories. The distribution transformer metering is a prerequisite for carrying out energy audits and identifies the high loss areas in the LT system. The overall DTR metering in the country is still low in most of the States. Meters should be provided on distribution transformers in high loss areas.Some methods to prevent revenue losses due to the consumer end metering system and associated connections are given in Box .
Box : Preventing Commercial Losses
• Defining installation procedures and ensuring that installation check points are tested / followed while installing meters.
• Use of electronic meters with tamper and load survey logging features for all categories of consumer.
• Use of optical port for taking the reading for all categories of consumers.
• Sealing of meters with seals and having proper seal management system.
• Installation of CTs/PTs in sealed boxes so that terminals are not exposed for tampering / bypassing.
• Testing of the metering system as a whole to ensure accuracy.
• Ensuring accuracy in meter reading and billing activities by generating exception lists and following up on exceptions.
• Carrying out regular energy audits covering the feeder DT and all end consumers to ensure that there is no revenue leakage beyond the
permissible technical loss.
In addition to these measures, non-working and defective meters should be identified and replaced. There are many services un-metered, which should be immediately metered. Similarly, a large-scale drive is necessary for bringing all unauthorized consumers on to the rolls.The Electricity Act, 2003 contemplates metering of all the services within 2 years and visualizes action on the company and the individual officers responsible for lapses. Utilities should purchase adequate quantity of meters both for fresh services and for replacement of the defective meters in the existing services. Metering facilities should be installed not only for measuring the electricity sold to the consumers but also for monitoring the energy consumption at different voltages.
The electromechanical meters tend to get sluggish over a period of time. Old meters should be replaced in a phased manner by high accuracy static meters, especially for high value services and at places where the load varies substantially. Electromechanical meters should be replaced with electronic meters having ultrasonic welding. CT meters should be adopted instead ofwhole current meters for LT high value services. Advanced metering technologies, viz. prepaid metering and remote meter readers should be used
Inaccurate readings from the meters are another cause of losses and need to be tackled so that the occurrence of human errors is eliminated. A meter reading instrument (MRI) or hand held unit is a data collector that retrievesusage information from the meter using optical sensors (Fig.). The meter reader takes this instrument to the customer site and connects it to the meter. Data is transferred from the meter to the MRI. The data is downloaded from MRI into the computer system for billing purposes. By using MRI there is less scope for utility staff to fudge the readings.
Meter Installation
Meter installations have often been considered as a low skill, labour oriented activity. The quality of installations must be given due importance to guard against revenue loss. The installation practices should take into account various classifications of meters .
Measures for Controlling Pilferage of Energy by Existing Customers
The following steps can be taken to reduce such commercial losses:
• The energy meter should be housed in a separate box sealed and made inaccessible to the consumers. The fuse cut-outs are provided after the meter.
• Multi-core PVC cables should be used as service mains instead of single core wires.
• Severe penalties may be imposed for tampering with metering seals, etc.
• Theft of electricity should be publicised as a social and economic crime and people should be informed of the provisions in electricity laws in this regard.
• Extensive checking of connections for accuracy and detection of tampering/by passing should be undertaken.
• Planning and laying of HT/LT network with HVDS (LT less) and HVDS should be undertaken for all categories of consumers.
• Schemes for classification of consumers based on ABC analysis should be formulated and action should be undertaken for high value consumers in the first instance.
• Consumers’ meters can be shifted outside consumer premises.
• Potential link should be provided inside the body of the energy meter rather than inside thermal cover. This prevents the potential link to be disconnected by the consumer.
• Energy variation in consumption must be regularly checked for all categories of consumers and doubtful consumers should be kept under
watch through special checking.
• Strict control over working of meter readers with close and continuous monitoring should be ensured.
• There should be provision of swapping of duties between meter readers and ledger clerks.
Measures for Reducing Defective Metering
Utilities incur high commercial losses due to inadequate metering and data collection system. The general defects observed in metering are:
• stuck up meters;
• no readings furnished by the meter reader, for a good number of services, at times, continuously;
• constant nil consumption cases reported without any comment;
• progressive readings recorded in disconnected services;
• no relation between the meter capacity and the load;
• adoption of wrong multiplication factors (MF) for billing as the change in
MF is not intimated to the billing agency.It goes without saying that utilities have to achieve the target of 100% metering of 11 kV feeders and consumers. At the national level, 96% feeders have been metered as of now, as against 81% metered during 2001- 02. You may know that 100% feeder metering has been achieved in 18 States. During 2001-02, the consumer metering was at 78%. It has now increased to 92% during 2005-06. The majority of un-metered consumers belong to agricultural and flat rate categories. The distribution transformer metering is a prerequisite for carrying out energy audits and identifies the high loss areas in the LT system. The overall DTR metering in the country is still low in most of the States. Meters should be provided on distribution transformers in high loss areas.Some methods to prevent revenue losses due to the consumer end metering system and associated connections are given in Box .
Box : Preventing Commercial Losses
• Defining installation procedures and ensuring that installation check points are tested / followed while installing meters.
• Use of electronic meters with tamper and load survey logging features for all categories of consumer.
• Use of optical port for taking the reading for all categories of consumers.
• Sealing of meters with seals and having proper seal management system.
• Installation of CTs/PTs in sealed boxes so that terminals are not exposed for tampering / bypassing.
• Testing of the metering system as a whole to ensure accuracy.
• Ensuring accuracy in meter reading and billing activities by generating exception lists and following up on exceptions.
• Carrying out regular energy audits covering the feeder DT and all end consumers to ensure that there is no revenue leakage beyond the
permissible technical loss.
In addition to these measures, non-working and defective meters should be identified and replaced. There are many services un-metered, which should be immediately metered. Similarly, a large-scale drive is necessary for bringing all unauthorized consumers on to the rolls.The Electricity Act, 2003 contemplates metering of all the services within 2 years and visualizes action on the company and the individual officers responsible for lapses. Utilities should purchase adequate quantity of meters both for fresh services and for replacement of the defective meters in the existing services. Metering facilities should be installed not only for measuring the electricity sold to the consumers but also for monitoring the energy consumption at different voltages.
The electromechanical meters tend to get sluggish over a period of time. Old meters should be replaced in a phased manner by high accuracy static meters, especially for high value services and at places where the load varies substantially. Electromechanical meters should be replaced with electronic meters having ultrasonic welding. CT meters should be adopted instead ofwhole current meters for LT high value services. Advanced metering technologies, viz. prepaid metering and remote meter readers should be used
Inaccurate readings from the meters are another cause of losses and need to be tackled so that the occurrence of human errors is eliminated. A meter reading instrument (MRI) or hand held unit is a data collector that retrievesusage information from the meter using optical sensors (Fig.). The meter reader takes this instrument to the customer site and connects it to the meter. Data is transferred from the meter to the MRI. The data is downloaded from MRI into the computer system for billing purposes. By using MRI there is less scope for utility staff to fudge the readings.
Meter Installation
Meter installations have often been considered as a low skill, labour oriented activity. The quality of installations must be given due importance to guard against revenue loss. The installation practices should take into account various classifications of meters .
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| A Meter Reading Instrument |
Box : Considerations for Meter Installation
•Type of meter: These cover meters of different accuracy classes used for domestic, commercial and industrial purpose. The
different types of meters are as follows:
− 1 phase meters,
− 3 phase 4 wire Whole Current meters,
− 3 phase 4 wire CT connected meters,
− 3 phase meters for HT supplies (CT/PT connected meters),
− For the HT consumers meter with tamper logging features should be used.
•Reading
•Instrument
Nature of application: The metering applications can be categorised under the following broad headings:
− Tariff metering (for consumers),
− Inter utility tariff metering, and
− System metering (for feeders and DTs).
Location of meters
It is important to recognize that different applications need not only different installation practices but also different functional specifications for the meters. Taking care of the installation practices alone without proper functional specifications will not serve the purpose. The location of meters, i.e., type or nature of site where meters are to be installed is important, as installation practices differ as per the following types of site:
− Indoor Installations,
− Outdoor installations at/near transformers, and
− Outdoor installations on poles.
The major cause of loss of revenue has been due to lacunae in installations practices that allowed tampering of the metering systems. Certain installation practices to prevent this are given in Box .
Box : Installation Practices to Guard against Tampers
• A “Visually Traceable” and “joint free” incoming cable, or shrink wrapped sealed joint helps in preventing tampers.
• Having clearly visible and accessible seals that can be subjected to easy inspection
• Mounting the meter and CTs inside a box with a clear window, where the internals cannot be accessed without breaking through a seal
• Ensuring height and location of the installation for easy readability of meters
• Locating meters in public domain − An alternate location for the meter can be on the poles from where service cables are laid out. With this type of installation the meters are at a height in full public view and the direct connections by unscrupulous customers bypassing the meter is difficult.
Installation of Meters with Tampers Logging Features
Electronic meters with tamper and load survey logging feature should be installed for HT consumers and LT CT consumers. Installation of such meters for high value 3 phase whole current consumers is also recommended. Having meters with tamper logging features is not sufficient unless it is backed by a process for regular data (i.e., tamper) analysis. Most utilities provide meters with tamper logging features but they ignore the need for a regular data analysis, and hence the purpose is not served. The presumption that in case something “adverse” is observed a “tamper data analysis will be carried out” makes the matter subjective. A regular data analysis for all such meters is recommended.
The data analysis, apart from summarizing meters that are tampered, also gives a record of other operational details like demand violation, poor power factor, load utilization etc. The fact that all meters are being routinely analysed becomes a deterring factor for consumers who might tamper with meters. In addition, we have to care equally for the accuracy and installation aspects for CT/PT installations to prevent revenue leakage. These aspects are:
− Influence of CT& PT wire: In CT connected meters and CT & PT connected HT meters installation the CT wire size and length, length and cross section of PT wires play a major role in measurement accuracy.Large voltage drop in undersized PT wire causes a lower energy to be registered by the meter and hence loss in revenue.
− Influence of VA burden: VA burden of both CTs and PTs need to be carefully examined prior to installation. In case of CTs loop burden by considering the CT, leads needs a quick calculation or test at site. The operating burden must be such that these instrument transformers are not over-burdened or under-burdened.
−Influence of errors in wiring and nameplate: In case of CTs, special caution is needed to ensure
•Type of meter: These cover meters of different accuracy classes used for domestic, commercial and industrial purpose. The
different types of meters are as follows:
− 1 phase meters,
− 3 phase 4 wire Whole Current meters,
− 3 phase 4 wire CT connected meters,
− 3 phase meters for HT supplies (CT/PT connected meters),
− For the HT consumers meter with tamper logging features should be used.
•Reading
•Instrument
Nature of application: The metering applications can be categorised under the following broad headings:
− Tariff metering (for consumers),
− Inter utility tariff metering, and
− System metering (for feeders and DTs).
Location of meters
It is important to recognize that different applications need not only different installation practices but also different functional specifications for the meters. Taking care of the installation practices alone without proper functional specifications will not serve the purpose. The location of meters, i.e., type or nature of site where meters are to be installed is important, as installation practices differ as per the following types of site:
− Indoor Installations,
− Outdoor installations at/near transformers, and
− Outdoor installations on poles.
The major cause of loss of revenue has been due to lacunae in installations practices that allowed tampering of the metering systems. Certain installation practices to prevent this are given in Box .
Box : Installation Practices to Guard against Tampers
• A “Visually Traceable” and “joint free” incoming cable, or shrink wrapped sealed joint helps in preventing tampers.
• Having clearly visible and accessible seals that can be subjected to easy inspection
• Mounting the meter and CTs inside a box with a clear window, where the internals cannot be accessed without breaking through a seal
• Ensuring height and location of the installation for easy readability of meters
• Locating meters in public domain − An alternate location for the meter can be on the poles from where service cables are laid out. With this type of installation the meters are at a height in full public view and the direct connections by unscrupulous customers bypassing the meter is difficult.
Installation of Meters with Tampers Logging Features
Electronic meters with tamper and load survey logging feature should be installed for HT consumers and LT CT consumers. Installation of such meters for high value 3 phase whole current consumers is also recommended. Having meters with tamper logging features is not sufficient unless it is backed by a process for regular data (i.e., tamper) analysis. Most utilities provide meters with tamper logging features but they ignore the need for a regular data analysis, and hence the purpose is not served. The presumption that in case something “adverse” is observed a “tamper data analysis will be carried out” makes the matter subjective. A regular data analysis for all such meters is recommended.
The data analysis, apart from summarizing meters that are tampered, also gives a record of other operational details like demand violation, poor power factor, load utilization etc. The fact that all meters are being routinely analysed becomes a deterring factor for consumers who might tamper with meters. In addition, we have to care equally for the accuracy and installation aspects for CT/PT installations to prevent revenue leakage. These aspects are:
− Influence of CT& PT wire: In CT connected meters and CT & PT connected HT meters installation the CT wire size and length, length and cross section of PT wires play a major role in measurement accuracy.Large voltage drop in undersized PT wire causes a lower energy to be registered by the meter and hence loss in revenue.
− Influence of VA burden: VA burden of both CTs and PTs need to be carefully examined prior to installation. In case of CTs loop burden by considering the CT, leads needs a quick calculation or test at site. The operating burden must be such that these instrument transformers are not over-burdened or under-burdened.
−Influence of errors in wiring and nameplate: In case of CTs, special caution is needed to ensure
In most power distribution utilities, delays in payments or non-payment are the major cause of revenue loss. Collection effectiveness refers to the Distribution Company’s ability to collect payment in a timely manner against the bills it issues. Performance on this front is deteriorated due to the utility’s restricted recourse for non-payment or delayed payment and inability to write-off bad customer debts or negotiate payments with customers. The utilities should have a system where defaulters are short-listed immediately after non-payment within due date with amount and time, etc.
A must for financial viability Special collection drives, coupled with intensive inspections, in the areas where the payment history is bad, brings positive results. For recovery of arrears, the utility should
• list defaulting consumers;
• send reminders / notices;
• initiate legal proceedings; and
• resort to disconnection, if need be.
REMEMBER: Effective disconnection of defaulters should be a norm rather than a chance occurrence.
A must for financial viability Special collection drives, coupled with intensive inspections, in the areas where the payment history is bad, brings positive results. For recovery of arrears, the utility should
• list defaulting consumers;
• send reminders / notices;
• initiate legal proceedings; and
• resort to disconnection, if need be.
REMEMBER: Effective disconnection of defaulters should be a norm rather than a chance occurrence.
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| Effective collection − A must for financial viability |
• Provision of additional counters, depending upon the crowd, having Flexible Timings.
• Providing comfort to consumers, e.g., drinking water, toilet, sitting arrangement at collection centres.• Installation of electronic cash register machines for collection and counting cash.
• Drop box facilities and roping in more collection agencies to make the lengthy queues vanish.
• Providing comfort to consumers, e.g., drinking water, toilet, sitting arrangement at collection centres.• Installation of electronic cash register machines for collection and counting cash.
• Drop box facilities and roping in more collection agencies to make the lengthy queues vanish.
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| Customer Convenience at Collection Centres is Important |
E-seva centres are a relief to the customer as around 25 types of bills are accepted in a cool atmosphere at convenient hours in the holidays too. These types of centres can offer different services like:
• payment of bill/ taxes, registration of complaints, providing information,booking for connections, etc.
• Online facilities like ICICI bill junction.
• Bar coding facility, even when payment is made in person, for faster payment.
• Electronic payments, including direct debit payments.
Additional Measures
Utilities can adopt MIS and carry out energy accounting and audit for preventing revenue losses. We discuss these, in brief.
Development of MIS
Effective use of IT (Information Technology) can play a major role in AT&C loss reduction and ensure better management of distribution utilities.Distribution utilities should institute an MIS (Management Information System) for effective monitoring and control. The reports that can be generated for MIS are given in Box .
Box : Reports to be Generated for MIS
− Feeder-wise/Distribution Transformer-wise loss;
− Equipment failure and interruption analyses for the feeder;
− Consumer analyses (kWh/kW);
− Realisation Index (Rs./kWh) for each category and feeder as a whole;
− Consumption rise or drop by more than 20%;
− Payment update;
− Day-wise and amount-wise payments received from the consumers;
− Communication with banks regarding payments realised;
− Identifying the defaulters;
− Recovery of arrears;
− Listing of defaulting consumers;
− Sending reminders/notices; and
− Disconnections due.
The asset and consumer database of the Utilities often gets outdated over a period of time and needs to be updated. It is therefore necessary to keep the database updated on a regular basis. The outdated information of the consumer such as contract demand, multiplication factor (CT/PT) can be a source of revenue loss. The utility should also have detailed historical information on consumers tampering their meter. This information is available from the analysis of the meter. (MIS can be effectively used for this purpose.)
Energy Accounting and Auditing
To tackle losses effectively it is necessary to compute the AT&C losses accurately, identify high loss areas and segregate these losses into losses due to commercial as well as technical factors. For this, utilities establish an Energy Accounting System area-wise to establish the losses on a continuous basis. Experience in many parts of the world demonstrates that it is possible to reduce the revenue losses in a reasonably short period of time by carrying out energy audits, prioritizing the results and focusing on high loss areas. Energy accounting helps in devising asystematic plan for handling the revenue loss in the system and in finding out whether the purpose has been adequately served. Ignoring energy audits is like driving in the dark.
Accounting and auditing in the electricity sector involves evolving procedures and checks to account for energy from the generating stations down to the consumer level .In the present scenario, the focus should be from grid substations where sub-transmission systems (66/33/11 kV) take off generally as a radial system to supply power to consumers at different voltage levels. The objective is “to prepare an energy account so as to establish the energy input and quantum consumed by/billed to various categories of consumers”. This leads to identification of high loss areas, which, in turn, would help in evolving strategies and action plans for reduction of losses.
The accounting system should ensure that the energy made available at substation/11 kV feeder/distribution transformer and units utilized by consumers, respectively, is checked to see whether the difference between the two is reasonable and within permissible limits.For proper energy accounting, metering equipment both at the sending end and receiving end has to be ensured. This activity should cover review of the existing energy accounting system, replacement of defective meters and installation of meters at appropriate locations for proper energy accounting. Important services, feeders, distribution transformers and towns should be taken up for this exercise.
Installation audits are a short-term measure for preventing revenue loss.These audits cover the inspection of the site and a detailed testing.Installation audits are needed to detect and correct any problems that may have resulted from poor installation practice or by the concerted effort by unscrupulous consumers.During the installation audits, aspects such as accuracy of the meters, accuracy of CTs and PTs, present load on the meter, fuses, ferruling of wires, evidence of tampers, etc. are checked. In addition, the terminals are opened to examine deposits and re-tightened. Thus, the installation audits also cover the preventive maintenance aspects of a meter installation.The periodicity of installation audits have to be decided on a scientific basis based on sampled observation from the field and other data generated through energy audits. Typically installation audits need to be carried out on an annual basis for 3-phase or HT consumers and at least once in 2 years for single phase consumers. Most Regulatory Commissions have now specified the periodicity for meter testing.
Users’ Associations, Panchayats and Franchisees in Billing and Collection
The Electricity Act, 2003, visualizes the role of Users’ Associations, cooperatives, panchayats and franchisees in electricity distribution management especially in rural areas. The concept of payment for the power consumed can be successfully inculcated if more people are involved in the process and if a sense of belonging to and stake in the entity is created.For rural consumers, the role of panchayats is significant for utilities.Panchayats can be associated for bringing awareness amongst the rural consumers for timely payment of bills. Panchayats can also be associated for effective reading and delivery of bills. Incentive schemes can be launched for villagers / panchayats where there are minimal or no losses and nil arrears.
The Franchisee System
As per the Electricity Act, 2003, a Franchisee means a person authorized by a distribution licensee to distribute electricity on its behalf in a particular area within its area of supply. The franchisees may take village level, feeder level or cluster of villages as their areas of operation. There are various models for the franchisee system, which we describe briefly.
•Input-based Franchisee Model
The basic concept of input based franchisee is that the franchisee is appointed for a particular feeder and the input energy of the feeder is measured by the utility. A target for loss reduction is set based on units collected as a percentage of input energy supplied to the consumer beyond the point of metering. The franchisee is paid fixed returns for carrying out meter reading, billing and collection. However, incentive is paid only on achieving the loss reduction target.
•Revenue Franchisee Model
In this model, the franchisee could be appointed for a particular Grama Panchayat and is given a target for collection based on the average of previous 6 months collection. The franchisee is paid a fixed percentage of the collection on achieving base line collection. For non-achievement of baseline collection, penalty is levied as a fixed percentage of the incentive payable.
•Other Models
The institutional design and structure of Franchisee models vary from State to State. In Nagaland, the traditional structure of Village Council has been used to form a sub-committee called Village Electricity Management Board (VEMB) to function as a Franchisee. Electricity is billed to VEMB on Single Point Metering (SPM) basis. In Karnataka, Gram Panchayats have been involved to identify Grameen Vidyut Pratinidhi(GVP) to function as Franchisee. The GVP is a local unemployed youth from the same Panchayat. They are working as revenue franchisee and targets apart from retainer-ship fee for achieving the baseline targets. In Assam, the utility initiated the Single Point Supply Scheme (SPSS) and appointed input based franchisees and collection franchisees atdistribution transformers. In West Bengal and Uttarakhand, women Self-Help Groups (SHGs) have been engaged to function as Franchisee.
These are at present revenue franchisees. The franchisee and people working with franchisee are mostly resident of the same locality.Deployment of franchisee is in progress in other States like Uttar Pradesh,Bihar, Haryana, Rajasthan, Madhya Pradesh, etc. The key factors for the success of the franchisee system are the reliability, vailability and maintainability of power in the rural areas and upfront payment of subsidies to the utilities. The utility has to ensure this, to make it a viable proposition, by ensuring supply of power for a reasonable number of hours. In this context, distributed decentralized generation assumes importance to ensure reliable power supply. The success of the franchisees also depends to a large extent on the ability of the franchisees to reduce AT&C losses as they will have to account for energy input into their system. Loss reduction again depends on many factors, the most important being investment for system improvement and IT application for improved commercial functioning. Theft of electricity is one of the major issues, which contributes to losses of the utilities. Franchisees should be given proper support by the local administration in detection and prevention of theft of electricity.
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