Annexure – I

Welcome Address by Chairperson, OERC at the inauguration of the
 Workshop on “Standards of Performance and Consumer Satisfaction”
 to be held on 22.9.2007 at Hotel Swosti Plaza, Bhubaneswar.

Hon’ble Chief Minister Shri Naveen Patnaik, Hon’ble Finance Minister Shri Prafulla Chandra Ghadai, Hon’ble Minister of Energy, IT and Culture Shri Surjya Narayan Patro, Chief Secretary, Development Commissioner, Secretaries/ Principal Secretaries of different departments, representatives of Consumer Fora, Distribution Licensees, representatives of local bodies, Non-govt. organizations, my colleagues in OERC, representatives of the print & electronic media and ladies & gentlemen.

The Hon’ble Chief Minister amidst his various matters of state calling for his immediate attention has been able to attend the workshop and address the gathering. This is a reflection of the importance he attaches to the subject on hand. My colleagues and I are deeply grateful to him for being able to be with us today. The Hon’ble Minister of Energy, IT & Culture and the Hon’ble Minister of Finance are also present and have spared their valuable time to be amidst us for this workshop on “Standards of Performance and Consumer Satisfaction” in the power sector. Our deep gratitude to them.

We are also grateful to the Chief Secretary, Development Commissioner, senior officials of the State Govt., representatives of the Licensees, Consumer Fora, representatives of the media, representatives of Urban Local Bodies and Panchayati Raj, Institutions and all our distinguished invitees.

We are also grateful to Shri Arup Ghosh, Chief Operating Officer, North Delhi Power Limited, Delhi, Shri Aniruddha Basu, General Manager Operations (Commercial & Mains), Calcutta Electric Supply Corporation Ltd., West Bengal, Shri V. Gandhi Babu former Chief Engineer, A.P. Transco for having consented to be resource persons for the workshop and to present the best practices of their organizations for the benefit of all stake holders in the State.

I take the opportunity thus to welcome amongst us the Hon’ble Chief Minister of Orissa, his cabinet colleagues the Hon’ble Minister of Energy, IT & Culture and the Hon’ble Minister of Finance. I also welcome the Chief Secretary, the Development Commissioner and all the distinguished invitees and the participants.

Ladies and Gentlemen, we are holding this workshop on “Standards of Performance and Consumer Satisfaction” not so much to mark the 12th Foundation Day of OERC as much to the enormous concern the subject generates amongst all stakeholders in the sector and amongst all consumers of electricity. “Reforms in the Power Sector” is an often repeated key phrase as the solution to all the problems in the sector. We need to pause, therefore, and reflect on whether reforms have touched the lives of our vast mass of consumers or not. Reforms have had many objectives but one of the prime objectives was reliable and quality power at affordable prices to all segments of society. To what extent has this objective been met, to what extent has it assisted our economic development and to what extent has it made lives easier for our people? Taking stock of consumer satisfaction at this stage will tell us what has happened for the better, what has not happened and what needs to be done. Emphasis on consumer satisfaction has become central to the entire reform process. Distribution of electricity is a very complex business but like any other good or product, its consumption and satisfaction to the consumer is the very basis of a distribution company’s existence and the underlying commitment to deliver the best service to customers. Nothing is more important in the reform process than acceptance by customers of the ‘reform process’ itself. This would imply that there has to be a sea-change from the standards of performance in the pre-reform days to a state where customer expectations of quality and service are met with a high degree of consistency with a complete re-engineering of all customer interface processes.

The power distribution companies in the state are a classic example of Public Private Participation (PPP). In other words it is a partnership of both the Government and the Private Sector. GRIDCO, the power trading company, fully owned by the Govt. of Orissa has a 49% stake in all the distribution companies. GRIDCO nominates the Chairperson of the Board of Directors of these companies as well as four nominee Directors on the Board. Govt. is not a minor partner in the electricity business. Govt. has a substantial stake in power generation, power transmission and in power distribution. Govt. fully owns the Hydro Power Corporation and the Power Transmission Corporation. It is a majority partner in OPGC and owns practically half of all the distribution companies. Govt. of Orissa’s stake is not small but substantial and, therefore, the role of the public sector in the entire power chain is very significant. Consumer satisfaction and standards of performance is not limited to distribution only, though it is a very important segment of electricity supply and is at the end of the supply chain having a direct interface with the consumer. Generation and Transmission are equally important segments whose performance has a direct bearing on quality and reliability in distribution. Govt. being such a major player in the entire supply chain, their role in standards of performance and consumer satisfaction cannot be underestimated. They need to maintain the highest standards in generation and transmission and as a substantial partner in distribution should prod their partners into the desired levels of performance. While Regulation has its own role to play and should be played transparently and firmly, the public-private partnership should also move smoothly and together.

The network inherited by the DISCOMs was never in the pink of health and continues to have many problems in its state of health. A healthy Network demands systematic capital investment for enhancement of reliability and reduction of AT&C losses. A judicious use of CAPEX would expeditiously and easily get manifested in a healthy transformer failure rate and improvements in reliability indices. This is where the private sector needs to show some bold approach in capital investments. We will see during the course of the day what other privatised DISCOMs have done in this regard and how they have approached this basic problem. Nothing is more appalling than living with constant power interruptions, power cuts, low voltage, poor quality of supply and constant outages. This certainly is not the case in Orissa but quite common in many other parts of India. The main cause amongst other causes for the poor health of the distribution companies is the network inherited by the DISCOMs. Upgradation requires some amount of investments if we are to make a dent in improving service delivery.

AT&C losses is also a significant factor in improving standards of performance. Theft of electricity is creating a major problem in reduction of AT&C losses. Whilst capital investments and network Upgradation will greatly assist in technical loss reduction, vigorous state and police action in prosecution and conviction will create an environment of controlling theft. This is the most serious area of concern. The high AT&C losses and high incidence of power theft in the State is acting as a great dampener on the health of the DISCOMs. The level of AT&C Losses is around 43% and this should ideally be reduced to 15%. In recent days there is a perceptible improvement in the standards of performance and consumer satisfaction in those states where govt. has played a pro-active role in ensuring active support for controlling theft of energy. Though we have also made a beginning in the establishment of Energy Police Stations and Special Courts, this is required to be operationalised with vigour and vitality. The mere opening of Energy Police Stations and Special Courts is not going to reduce the incidence of theft of energy unless the functioning of these Energy Police Stations and Special Courts are actively monitored at the appropriate levels with proactive action along with the DISCOMs in detection and prosecution of theft. Public participation in controlling theft through the concept of franchisee operations both in rural areas and in urban areas is being vigorously explored by the DISCOMs. Nevertheless, there is no substitute for vigorous action by the law-enforcement agencies which has excellent impact by way of deterrence. This is where it is earnestly hoped that Govt. would assist the DISCOMs to systematically reduce and eliminate theft so that the paying customer gets the service he deserves by way of reliable and quality power.

IT and automation have been the backbone of any network based organization. In power distribution a complete and well equipped network is a must. We have to build a sophisticated and well equipped IT infrastructure. Automated and remote reading of meters that collects meter reading and automatically uploads the data to the DISCOMs’ billing server, prevents manipulation of data even at the meter reading stage. Similarly, consumers should be able to not only view their bills on the website of the DISCOM but also make payments, find out their consumption pattern and even print a duplicate bill.

The vision for us is a modern IT based system that keeps the customer always supplied with his demand and always satisfied with his expectations. IT based technologies should be effectively leveraged to enable seamless integration across the entire power value chain. We are looking for a Smart Power System – a grid that will always be switched on and be inter-connected, interactive and fully networked through communication devices to a complex network of real time information and data interchange. It would be capable of constantly monitoring and correcting itself to maintain quality and reliability. The system will sense disturbances and counteract them or instantly alter the configuration of power flow to isolate damage before it can occur. It should be able to integrate large centrally located generating stations seamlessly with a host of small distributed generating sources or renewables into a dynamic and robust regional network.

Today, we may be in a difficult situation. Our AT&C losses may be high and the system may need substantial investments for Upgradation. There is also the National Vision of ‘Power for all by 2012’. That may be difficult to achieve but small changes are happening and gathering momentum. AT&C losses are slowly coming down. Investments through APDRP is on the rise. Substantial augmentation and expansion of transmission is high on the agenda. Distribution is showing signs of turning around with 100% metering, energy audit, theft reduction, improved maintenance, improved billing and collection. What we desperately need is to address power issues with urgency, dedication and focus. Capacity deficit, AT&C losses, inefficient usages, wanton waste, satisfaction of basic needs, deficient rural electrification and more rational tariff structures are all issues which call for our urgent attention. Access to electrical energy with quality and quantity must be made universal and affordable in the shortest possible time. This is the key to rapid economic development.