GRIDCO – managing a virgin venture
The onset of liberalisation in India in the early 1990s changed the outlook of many power utilities – which at that time were facing the problem of dwindling financial resources. It seemed that liberalisation might present an opportunity to improve their financial position, and the Orissa State Electricity Board (OSEB), a utility from one of the eastern states of India, was the first in the country to take steps to introduce changes to its mode of operation.
The government of Orissa initiated reforms of the state power sector, beginning with substantial restructuring of the state electricity board to make the operation of the power sector more efficient and financially viable. After some initial scepticism OSEB went ahead with the restructuring and set up a reform programme, assisted by the World Bank.
Separate entities established
The erstwhile OSEB was operating as a state monopoly, combining functions relating to generation, transmission and distribution of electricity. This structure has now been replaced by separate corporate entities – the Grid Corporation of Orissa (GRIDCO), Orissa Hydro Power Corp-oration (OHPC) and Orissa Power Generation Corporation (OPGC). The basic purpose of the restructuring was to provide better focus to various activities, with reasonable empowerment of these corporations, and the changes were confirmed by legislative changes in the Orissa Electricity Reform Act 1995
GRIDCO focussed on transmission and distribution, network expansion and revenue improvement, with revenue collection being seen as an important activity A state power regulatory commission, with jurisdiction over the issues relating to tariff and licence, was set up. An important event in the reform process was the installation of intelligent static meters which, instead of being a mere energy logging device, had to be elevated to an effective cash registering device.
GRIDCO had the daunting task of reducing the high transmission and distribution (T&D) losses, which were mainly caused by the huge installed base of inaccurate and inoperative Ferraris wheel meters, as well as by unmetered power consumption.
A survey carried out by an independent organisation had produced some interesting statistics. The transmission and distribution losses were to the tune of 47% in 1996-97, covering both technical and non-technical losses. In addition it appeared that 11% of the energy supplied to large industries, 31% to medium industries, 30% to small industries and 49% of energy supplied to commercial consumers was not billed for various reasons. (See figure 1)
The utility was aware that the solution to these multi-faceted problems lay with the installation of static metering. Accordingly GRIDCO decided to go for intelligent meters with high accuracy, anti-tamper features, multi-tariff billing facilities and communication capabilities.
In August 1994 GRIDCO floated a global tender for 14 950 polyphase static meters. The project was unique – it was not simply the sheer volume of meters required, but the successful tenderer would have to become involved in installation, commissioning, meter reading and training throughout Orissa.
Orissa is one of the large states in the eastern belt, covering roughly 155 000km², with a varied climate. The meters therefore had to met stringent standards relating to climatic and system conditions. Credit and Load Management Unit (CALMU) technology, a time tested flexible technology, was shortlisted as it met the requirements in full.
Once the meters had been delivered, the major activity revolved around their installation. The manufacturers had to interact with GRIDCO, Price Waterhouse (GRIDCO’s corporate consultants) and local consumers. A high level of planning, task force mobilisation, execution, monitoring and control was required – and all these activities involved close interaction with the GRIDCO team. A total of 18 groups, consisting of three members each, worked simultaneously at every possible location, and the excellent co-operation of GRIDCO and the consultants led to a successful implementation of static meters in Orissa.
GRIDCO divided the area into small circles, based on the demography and topology of the state, and the teams – comprising field engineers and technicians – had to visit every possible installation site covering the length and breadth of the state. They even had to persuade the local consumers to allow them to install the meters in their premises. In some instances they were required to travel by boats and bicycles, as these sites were not approachable by normal roads.
The installation process was critically monitored by GRIDCO on a day to day basis, and a daily installation/commissioning report was passed on to the CEO of the utility. An independent body was set up for the Revenue Improvement Action Plan (RIAP) that not only evaluated the project but also provided inputs for improvement.
Loss reduction programmes
The results from different surveys prompted GRIDCO to implement various loss reduction programmes. An increase in the installed base of static meters is perceived to be one of the more effective means of loss reduction. Moreover, the incidental benefits of automation have significantly reduced the billing cycle time and generated better revenue. The benefits of static metering helped to reduce technical and non-technical losses, and improved revenue realisation.
Technical losses can be reduced by installing meters in substations with load profile capability; the data from these meters can be used for effective analysis of power demand on a time basis. A large installed base of static meters with sustained accuracy helps the utility, as it has to spend minimum time on activities such as error testing.
Interestingly, a consumer survey carried out by an independent source revealed consumers’ readiness to pay more for quality power. Independent sources also pointed out that the billing in one of the industrial units called Rajganagpur has increased significantly after the static meters were installed. The Regulatory Commission, as an autonomous body, ensures that tariffs yield reasonable returns and that problems encountered by consumers are addressed. Thus the elusive cash break-even point is now seen as a goal within the utility’s reach.
A project like this was a refreshingly different experience, mainly because of its varied demands. GRIDCO’s success has set an example referred to as the `Orissa model’ and other utilities in India are trying to follow GRIDCO’s restructuring. However, the success of an industry in a venture like this is significantly guided by its ability to apply modern technology with a socialistic perspective to customers’ problems.