More investments are needed to ensure reliable quality power supply across the country, but that needs to be phased over time because these capital expenditures also come back to tariffs, says Srinivasan.
The government has recently promulgated the consumer rights rules which lays down performance parameters for electricity distribution companies (discoms). Ganesh Srinivasan, chief executive officer of Tata Power Delhi Distribution, believes that the new rules will be crucial in improving the quality of service for electricity consumers, and subsequently, will benefit discoms through better revenue realisation from upgraded metering and billing systems. In a conversation with FE’s Anupam Chatterjee, Srinivasan also shares his views on how Tata Power can tackle the challenges in its newly acquired distribution businesses in Odisha. Excerpts:
What kind of impact will the new consumer rights rules have on discoms?
Implementing the new rules will help the discoms in the long run because customers will have greater faith in the quality of service being received. The investment required to put in place a robust billing and metering mechanism will have long term benefits. Lesser disputes regarding billing and consumption will have a positive effect on the revenue of the discoms. Because the structural deficiencies of the discoms are known, it becomes easier for someone to dispute the bills being generated by them. The new rules have a special focus on regular metering as many users across the country pay their bills on estimated consumption. The system also creates a payment challenge for the customer, because with irregular billing, the consumer suddenly has to pay a large amount of money at one go. When bills are issued on actual meter reading, consumers are confident that bills are being paid on actual consumption. Inadequate metering and billing has also been identified as one of the reasons behind discom losses rising across the country.
Do you think discoms are equipped to implement the rules?
More investments are needed to ensure reliable quality power supply across the country, but that needs to be phased over time because these capital expenditures also come back to tariffs. There is a requirement of converting some powerlines in our area from overhead to underground to improve reliability. There are general safety issues which are increased due to unauthorised constructions. But such expenses need to be phased out and cannot be done at one go. The new rules give ample power to the state regulators to frame the performance norms as per the ground realities of the respective states. Plus, there are a few new elements like the ‘prosumer’ which has been defined in the new law.
Tata Power has been awarded power distribution licenses in Odisha. How is the company looking at this new frontier?
It would not be entirely proper for me to fully answer that question because I am responsible for the Delhi business. Odisha is of course not Delhi, Mumbai or Ajmer, the three other locations where we distribute power, but a lot of strategies followed in the three cities which can be emulated in Odisha as well. The robust system of billing, for example, can be adapted in Odisha although there will be challenges unique to the state. It is a more spaced out customer base compared to Delhi where the network is denser. In certain areas the residential mix is much higher than the commercial load. The CESU discom was taken over in June 1 and two more are slated to be taken over since January 1. We have got very good early results as well. For the only remaining discom in the state, Tata Power is the sole bidder.
Hasn’t urban discoms been your forte?
We are positive and keen to prove that we can turnaround larger discoms and our competence lies well beyond urban areas. That is why we have gone so aggressively in the state. Disaster management is a new issue as the state faces severe storms every year. The payment behaviour is different as people there typically pay more in the final quarter (January-March) after the harvest season. With appropriate adaption of the processes, such as billing-collection, providing more flexible payment options to consumers and oversight of the different contractors we will be working with, I am confident this will be successful.