18 th may 2009

1. Review of X Plan APDRP and R-APDRP in XI Plan V.K Sharma AGM (DMS) 18th may 2009

2. NEED FOR DISTRIBUTION REFORMS • Skewed tariff structure leading to unsustainable cross subsidy. • Cost of supply not covered through tariff. • Continuously increasing commercial loss of state power utilities • High AT&C losses, largely due to outright theft and unmetered supply • Old and poor distribution system • Overloaded DT/Lines • Poor quality/unreliable power • Poor billing 51% power generated billed and 41% realized • Lack of accountability in distribution setup of SEBs • Poor return to utilities affecting their viability and capability to invest • Harassed consumers • Lack of private investment in power distribution sector

3. ACCELERATED POWER DEVELOPMENT PROGRAMME (APDP) The Govt. of India approved during 2000-01 a scheme called Accelerated Power Development Programme (APDP) to provide systematic finance to enable SEBs/Utilities to take up distribution sector reform. Further, after including the recommendations of Expert Committee on state specific reforms, Govt. of India rechristened Accelerated Power Development Programme as the Accelerated Power Development and Reform Programme with inclusion of incentive windows in 2002-03

4. ACCELERATED POWER DEVELOPMENT & REFORMS PROGRAMME (APDRP) The programme aims at : • Reduction of AT&C losses • Bring about Commercial viability • Reduce outages & interruptions • Increase consumer satisfaction The programme has two components: INVESTMENT COMPONENTassistance for strengthening and up gradation of sub-transmission & distribution. Focus is on high density urban areas to achieve quick results as losses in absolute terms are very high in such areas. INCENTIVE COMPONENTis a grant for states / Utilities towards reduction of cash losses.

5. ACCELERATED POWER DEVELOPMENT & REFORMS PROGRAMME (APDRP) The programme objective: • Reduction of AT&C losses from 60% to 15% in 5 years in urban & high density areas (@9% / Yr.) • Bring about Commercial viability by significant improvement in revenue realisation • Reduce outages & interruptions by improvement in reliability & quality of supply • Increase consumer satisfaction • Reduction in Technical Loss would result in additional energy of nearly 6000-7000 MW in the system avoiding additional investment • Reduction in cash loss to the tune of Rs. 15,000 Cr. • It will help in reduction of subsidy by State Govt.

6. IMPROVEMENTS: REDUCTION IN AT & C LOSS (In %) (Source : Task force Report on APDRP Restructuring)

7. IMPROVEMENTS: REDUCTION IN COMMERCIAL LOSSES OF SEBs/UTILITIES(WITHOUT SUBSIDY) Fig Rs. in Crore (Source:Plg. Comm/ PFC)

8. National level AT&C Loss Collection Efficiency AT&C Loss Billing Efficiency

9. RE-STRUCTURED APDRP DURING XIth PLAN

10. R-APDRP during 11th Plan • Continue APDRP during the XI Plan with the revised terms and conditions as a Central Sector Scheme. • The focus of the programme shall be on establishment of base line data and fixation of accountability, and reduction of AT&C losses through strengthening & up-gradation of Sub-Transmission and Distribution network and adoption of Information Technology. • Project area shall be towns and cities with population of more than 30,000 (10,000 incase of special category states). Rural areas with heavy loads requiring feeder segregation may also be included in the project areas. • Projects under the scheme shall be taken up in Two Parts. • Part-A shall include the projects for establishment of baseline data and IT applications for energy accounting/auditing & IT based consumer service centers. • Part-B shall include regular distribution strengthening projects.

11. R-APDRP during 11th Plan PART A (Base-line Data System): • Automatic Meter Reading(AMR) on Distribution Transformers and Feeders. • IT for integrating Meter reading, Billing & Collection, Energy accounting & auditing and Management Information System (MIS). • GIS Mapping of the entire distribution network. • Automatic Data Logging for all Distribution Transformers and Feeders. Supervisory Control And Data Acquisition (SCADA) system in big towns / cities. • Establishment of IT enabled consumer service centers for redressal of consumer grievances # System Requirement Specification (SRS) Template for above finalised at MoP to be used by the State power utilities.

12. R-APDRP during 11th Plan PART B (Distribution strengthening projects) : • Renovation, modernization and strengthening of 11 kV level Substations, Transformers/Transformer Centers. • Re-conductoring of lines at 11kv level and below. • Load Bifurcation, Load Balancing. • Aerial Bunched Conductors in thickly populated areas. • HVDS (11kv) • Installation of capacitor banks and mobile service centers etc. • In exceptional cases, where sub-transmission system is weak, strengthening at 33 kV or 66 kV levels also to be considered.

13. R-APDRP during 11th Plan • Initially 100% funds for Part A and 25% funds for Part B projects shall be provided through loan from the Govt. of India. For special category States, GOI loan for Part B projects will be 90%. The balance funds for Part B projects shall be raised from financial institutions. . • The entire amount of loan for Part-A projects shall be converted into grant once the establishment of the required Base-line data system is achieved and verified by an independent agency. • Up-to 50% (90% for special category States) loan of Part-B projects shall be converted into grant in five equal tranches on achieving the 15% AT&C loss in the project area on a sustainable basis for a period of five years.

14. R-APDRP during 11th Plan • If the utility fails to achieve or sustain the 15% AT&C loss target in a particular year, that year’s tranche of conversion of loan to grant will be reduced in proportion to the shortfall in achieving 15% AT&C loss target from the starting AT&C loss figure. • An amount equivalent to 2% of the portion converted from loan into grant for Part-B projects is proposed as incentive of utility staff in project areas where AT&C loss levels are brought below 15%. • No APDRP Assistance to Private Distribution Companies. • A Steering Committee under Secretary (Power) shall sanction projects and monitor the implementation of the Scheme. • PFC is the nodal agency to operationalise the programme.

15. R-APDRP during 11th Plan Eligibility Criteria for APDRP assistance The States / utilities shall be required to: • Constitute the State Electricity Regulatory Commission • Achieve the following target of AT&C loss reduction at utility level: Utilities having AT&C loss above 30%: Reduction by 3% per yr Utilities having AT&C loss below 30%: Reduction by 1.5% per yr • Commit a time frame for introduction of measures for better accountability at all levels in the project area • Submit previous year’s AT&C loss figures of identified project area as verified by an independent agency appointed by MoP by 30th June; • Devise a suitable incentive scheme for staff in the project area linked to achievements of milestones as laid down in Part B of the scheme.

16. Preparation at Utility level for the “Restructured APDRP” • Identification of the Project areas i.e. towns having population more than 30000. Rural areas with heavy loads requiring feeder segregation may also be included in the project areas. • The ring fencing of the project area to measure energy flow should be initiated at the earliest. • The utilities should be able to measure the inflow and outflow from the project area. • The corresponding revenue collection should also be determined separately. • The energy flow to the project area and corresponding revenue collection should be verifiable by the independent agency appointed by MoP. • Dedicated IT Cell in each utility. • Training of utility staff to handle extensive IT component in re-structured APDRP.

17. Responsibilities Flow Chart MoP Nodal Agency (PFC) Process Consultant -KPMG TPIEA Utilities Empanelled IT Consultants (Part-A) Empanelled IT Implementation Agencies (Part-A)

18. THANKS