Er. Albert Ovung
Unlike a for-profit utility, Power Department may not recover more than its costs, but it also, by law, may not recover less — rates must be designed to recover the costs to serve each customer group. Power Department, classes include residential, commercial and industrial customers, plus very small groups consisting of streetlights and agricultural sector.
Residential customers make up almost 90 percent of Energy’s customer base, with an estimated 172846 meters, but make up just 67 percent of annual usage, and contribute almost one-half of annual revenues. Technically residential customers consist of 90 % base load but less efficient to serve an account for half of the revenue
The roughly 17612 commercial customers served by Energy make up 10 % of customers, 11 percent of annual usage and contribute 33 percentages in revenue.
Industrial customers make up one percent of customers — there are about 2,050 — but use 4 % of all the power produced, and contribute 10 percent to annual revenue.
The Bulk customers consist of 600 less than 1 percent (.3) but consume 15% of the energy and contribute 16% of the Revenue and have a connected load second highest in the category.
Power Department ’s electrical system must be built to handle the maximum demands placed on it. Customer energy use is greatest on the hottest summer afternoons. Residential customers, as a category, use a greater portion of their energy than do the commercial and industrial category of users.
Industrial and commercial customers use of power is more stable over time, which means they are using power more efficiently. The use of power over time is how electric utilities define “load factor.” The higher the load factor, the more efficient that customer is in using power.
Part of power Department when designing rates should be to promote cost-effective load management. Industrial and commercial customers use power in bulk, which is more efficient, because it means that the fixed costs of serving those customers can be spread over more kilowatt hours, so the unit price is a little lower. It’s analogous to carpooling: the cost for one person to drive to work might be Rs100, but if four people share the ride it would be Rs.25 per person.
The above statement was just to high light the practical problems faced by a electrical customer in Nagaland need introspection and revaluation of the tariff rate to avoid theft of Energy and improvement of revenue collection.
Let me point out some of loopholes or discrepancies I have found out from the DPN and NERC report for Electrical Tariff revision for 2013-14 for revaluation whether tariff should be revised to bridge the revenue gap or system need to be changed/modified improved first.
Revenue gap for FY 2013-14
Table-6.34: Net revenue requirement and gap with revenue at existing tariff (Rs. crore)
Sl. No. Particulars Projected by DPN Approved by the Commission
1 Net Revenue Requirement (Rs. crore) 393.25 272.45
2 Revenue from sale of power (Rs. crore) 178.42 185.63
3 Government subsidy proposed
Administration of Subsidy
The Licensees are directed to submit to the Commission by 15th of every month a status report on payment of subsidy amounts agreed to paid by the Government u/s 65 of the Electricity Act, 2003. -
4 Gap (Rs. crore) T&D losses of 27% 214.85 86.82
5 Energy Sales (MU) 417.30 445.16
6 Average cost (Rs/kWh) 9.42 6.12
A. 1.The gap of T&D losses of 27% need to be re-assessed as Bad debt of around 35 crores are billed to non existing consumer or untraceable consumer which goes on accumulating everymonth with increment (penalty) hence these amounts need to be waived or considered as bad debts then the actual T&D losses can be calculated and new tariff can be formulated.
B. 2. The Commission has not included the fixed charge like minimum billing and Kva charges are not included which constitute major revenue collection.
3. The commission has shown only the meter rent collection and surcharge as no tariff revenue.
4. The commission has not shown the free power of 27MU
5.The rate at which surplus power are sold need to be reviewed as per competitive prices need to be made not as fixed price of Rs.4/unit.
6. CHARGES OF POLES USAGE FOR ADVERTISEMENT/water pipe/cable etc are difficult to collect as billing format or directive need to be discussed as all advertisement comes under the municipal corporation.
7. A consumer who purchase meter by themselves through deposit to the department meter rent should be excluded in the billing.
8. Specially Dimapur district 40% of the Electric bill/moth comes from drawing water through inductive motor till the Government build an infrastructure for potable water supply to the Dimapur district bill consideration be made on the basis on reduce rate of tariff.
C. Category need to be reviewed
1.Domestic category should be further bifurcated as per contractual load demand.
2.Industry Category should be further bifurcated as per contractual load demand.
3.Commercial Category should be further bifurcated as per contractual load demand.
4.Bulk category need to be abolished and accommodate into the above 3 category.
(Reasons :- 1.Major industry have shifted to Bulk category and enjoy cheapest rate 2.Major commercial building have shifted to Bulk category and enjoy cheapest rate)
5.New Category proposed .
a).Religous (Churches, Mosgue,Temple etc ) are presently billed at Commercial category and Bulk category which is very costly compared to their usage.
b).Educational Institution (private and Government) which are presently billed at Commercial and Bulk category.
At present the Industry category are mostly fabrication unit and small furniture unit who could not afford to buy their own transformer. The connected load of the Industrial i.e 8000KW and Bulk i.e23000Kw.
D. Fixed Charge( Minimum Charge) need to be stopped from Domestic and commercial category below 10kw. At present in Dimapur prepaid meters don’t pay minimum bill if they don’t use where as non prepaid pay minimum bill even if they don’t use or reading is zero.
E. The commission says domestic customer minimum tariff is 0 to 30kwh then rate Rs.3.10 i.e 30kwh into Rs.3.10=Rs.93.00/month but the minimum bill is set as Rs. 100.00 pm/kwh of contract demand or part thereof. Hence the computer generates Rs.100/pm, again if your contractual demand is 10 kw but your consumption is 30 kwh/month then you will be billed at 10kw into Rs.100.00 that comes to around 1000 plus meter rent , street light etc. But the commission has not included the above amount to recover the energy Gap.
F. The commission has calculated the sales of energy on the basis of Kwh only or resistive load of unity power factor but in reality even the Government pays for the pure energy cost ,reactive power cost ,UI charges wheeling charges distribution charges etc. We therefore need to review some changes for fair and improvement of revenue billing some suggestions are noted down :-
a). Where an individual consumer seeks to avail supply for Domestic purpose with a connected load of over 56 kW/75 HP, such consumers may be given supply under this category subject to the following conditions.
i. The metering shall be provided on HT side of the distribution transformer .
ii. Meter reading shall be done monthly and the energy recorded in the HT metering shall be billed at tariff rates .
(b) COMMERCIAL
1. For loads 10 kW and above, a LT tri-vector meter shall be provided and energy charges shall be billed on kVAh.
2. For loads below 10 kW, the billing shall be based on kWh.
3. In respect of the complexes having connected load of more than 56 kW /75 HP released under specific orders of Licensee for Single Point Bulk supply, where such complex is under the control of a specified organisation/agency taking responsibility to pay monthly current consumption bills regularly and abide by the Terms and Conditions of supply as per agreement, the billing shall be done at the highest slab tariff rate under domestic category. The energy shall be measured on the High Tension side of the transformer. In case, where energy measured on LT side of the transformer, 3% of the recorded energy during the month shall be added to arrive at the consumption on High Tension side of the transformer.
C) Metering and load Conditions
i. A LT Tri-vector meter shall be provided for the consumers with contracted load of 15 kW/20 HP to 37.5 kW/50 HP.
ii. For loads above 37.5 kW/50 HP to 75 kW/100 HP, the metering will be provided on HT side of the Distribution Transformer.
iii. Energy charges shall be billed on kVAh basis, for all consumers with contracted load of 15 kW/20 HP and above. For loads below 15 kW/20 HP, billing shall be done based on kWh.
iv. If the recorded demand of any service connection under this category exceeds the 75 kVA (1 kVA = 1 kW), such excess demand shall be billed at the demand charge prescribed under HT Category (11 kV supply).
v. In cases where metering is provided on LT side of transformer (due to space constraints), 3% of the recorded energy during the month shall be added to arrive at the consumption on High Tension side of the transformer.
F. MAINTENANCE OF POWER FACTOR AT CONSUMER END
HT consumers, who are provided with metering capable of measuring active and reactive power under the orders of the Commission, shall maintain their power factor preferably in between 0.95 lag and 0.95 lead in the interest of the system security. The consumers should not maintain the power factor on leading side less than 0.95. If any consumer maintain the power factor less than 0.95 lead for a period of 2 consecutive months, it must be brought back in the range of + or -0.95 within a period of 3 months failing which without prejudice to such other rights as having accrued to the licensee or any other right of the Licensee the supply to the consumer may be discontinued. However, for the purpose of kVAh billing leading kVArh shall be blocked.
G. Generation Transmission /DT staff : should be encouraged by awarding bonuses monthly to maintain the required frequency and sell the surplus power at better rate this will reduce the penalty from the grid and increase the revenue.
H. Service Calls
(a)Charges for attendance of Fuseman for Low Tension Consumers
i) Replacing of Licensee’s cut out fuses Nil
ii) Replacing of consumer's fuses ` 3/-
(b)Charges for attendance of Fuseman/Wireman at the consumer's premises during any function or temporary illumination provided a Fuse man/ Wireman can be spared for such work` 100/- for each day or part thereof.
(c) Charges for in fructuous visit of Licensee employees to the consumer's premises` 25/- for each visit when there is no defect in Licensee’s equipment.
The above write-up is purely for the general interest of electrical customer in Nagaland and have no personal interest in any way to any person related to the DPN or NERC as the tariff proposed is much higher and will be a huge burden for the common people and business community which may indirectly effect the price rise in the Market. If the above suggestion is implemented the growth rate of Revenue collection may reach at 2% profit annually with the previous tariff alone. As per the NERC report the department is fully on the verge of corporatization but just raising the tariff should not be more than 4%-8% but present suggestion is more than 90% on average per unit. The commission should also take into account for the welfare of the power department staff before unbundling .What the commission should do first is to change the system and bring the T&D loss to below 10% before unbundling .
Unlike a for-profit utility, Power Department may not recover more than its costs, but it also, by law, may not recover less — rates must be designed to recover the costs to serve each customer group. Power Department, classes include residential, commercial and industrial customers, plus very small groups consisting of streetlights and agricultural sector.
Residential customers make up almost 90 percent of Energy’s customer base, with an estimated 172846 meters, but make up just 67 percent of annual usage, and contribute almost one-half of annual revenues. Technically residential customers consist of 90 % base load but less efficient to serve an account for half of the revenue
The roughly 17612 commercial customers served by Energy make up 10 % of customers, 11 percent of annual usage and contribute 33 percentages in revenue.
Industrial customers make up one percent of customers — there are about 2,050 — but use 4 % of all the power produced, and contribute 10 percent to annual revenue.
The Bulk customers consist of 600 less than 1 percent (.3) but consume 15% of the energy and contribute 16% of the Revenue and have a connected load second highest in the category.
Power Department ’s electrical system must be built to handle the maximum demands placed on it. Customer energy use is greatest on the hottest summer afternoons. Residential customers, as a category, use a greater portion of their energy than do the commercial and industrial category of users.
Industrial and commercial customers use of power is more stable over time, which means they are using power more efficiently. The use of power over time is how electric utilities define “load factor.” The higher the load factor, the more efficient that customer is in using power.
Part of power Department when designing rates should be to promote cost-effective load management. Industrial and commercial customers use power in bulk, which is more efficient, because it means that the fixed costs of serving those customers can be spread over more kilowatt hours, so the unit price is a little lower. It’s analogous to carpooling: the cost for one person to drive to work might be Rs100, but if four people share the ride it would be Rs.25 per person.
The above statement was just to high light the practical problems faced by a electrical customer in Nagaland need introspection and revaluation of the tariff rate to avoid theft of Energy and improvement of revenue collection.
Let me point out some of loopholes or discrepancies I have found out from the DPN and NERC report for Electrical Tariff revision for 2013-14 for revaluation whether tariff should be revised to bridge the revenue gap or system need to be changed/modified improved first.
Revenue gap for FY 2013-14
Table-6.34: Net revenue requirement and gap with revenue at existing tariff (Rs. crore)
Sl. No. Particulars Projected by DPN Approved by the Commission
1 Net Revenue Requirement (Rs. crore) 393.25 272.45
2 Revenue from sale of power (Rs. crore) 178.42 185.63
3 Government subsidy proposed
Administration of Subsidy
The Licensees are directed to submit to the Commission by 15th of every month a status report on payment of subsidy amounts agreed to paid by the Government u/s 65 of the Electricity Act, 2003. -
4 Gap (Rs. crore) T&D losses of 27% 214.85 86.82
5 Energy Sales (MU) 417.30 445.16
6 Average cost (Rs/kWh) 9.42 6.12
A. 1.The gap of T&D losses of 27% need to be re-assessed as Bad debt of around 35 crores are billed to non existing consumer or untraceable consumer which goes on accumulating everymonth with increment (penalty) hence these amounts need to be waived or considered as bad debts then the actual T&D losses can be calculated and new tariff can be formulated.
B. 2. The Commission has not included the fixed charge like minimum billing and Kva charges are not included which constitute major revenue collection.
3. The commission has shown only the meter rent collection and surcharge as no tariff revenue.
4. The commission has not shown the free power of 27MU
5.The rate at which surplus power are sold need to be reviewed as per competitive prices need to be made not as fixed price of Rs.4/unit.
6. CHARGES OF POLES USAGE FOR ADVERTISEMENT/water pipe/cable etc are difficult to collect as billing format or directive need to be discussed as all advertisement comes under the municipal corporation.
7. A consumer who purchase meter by themselves through deposit to the department meter rent should be excluded in the billing.
8. Specially Dimapur district 40% of the Electric bill/moth comes from drawing water through inductive motor till the Government build an infrastructure for potable water supply to the Dimapur district bill consideration be made on the basis on reduce rate of tariff.
C. Category need to be reviewed
1.Domestic category should be further bifurcated as per contractual load demand.
2.Industry Category should be further bifurcated as per contractual load demand.
3.Commercial Category should be further bifurcated as per contractual load demand.
4.Bulk category need to be abolished and accommodate into the above 3 category.
(Reasons :- 1.Major industry have shifted to Bulk category and enjoy cheapest rate 2.Major commercial building have shifted to Bulk category and enjoy cheapest rate)
5.New Category proposed .
a).Religous (Churches, Mosgue,Temple etc ) are presently billed at Commercial category and Bulk category which is very costly compared to their usage.
b).Educational Institution (private and Government) which are presently billed at Commercial and Bulk category.
At present the Industry category are mostly fabrication unit and small furniture unit who could not afford to buy their own transformer. The connected load of the Industrial i.e 8000KW and Bulk i.e23000Kw.
D. Fixed Charge( Minimum Charge) need to be stopped from Domestic and commercial category below 10kw. At present in Dimapur prepaid meters don’t pay minimum bill if they don’t use where as non prepaid pay minimum bill even if they don’t use or reading is zero.
E. The commission says domestic customer minimum tariff is 0 to 30kwh then rate Rs.3.10 i.e 30kwh into Rs.3.10=Rs.93.00/month but the minimum bill is set as Rs. 100.00 pm/kwh of contract demand or part thereof. Hence the computer generates Rs.100/pm, again if your contractual demand is 10 kw but your consumption is 30 kwh/month then you will be billed at 10kw into Rs.100.00 that comes to around 1000 plus meter rent , street light etc. But the commission has not included the above amount to recover the energy Gap.
F. The commission has calculated the sales of energy on the basis of Kwh only or resistive load of unity power factor but in reality even the Government pays for the pure energy cost ,reactive power cost ,UI charges wheeling charges distribution charges etc. We therefore need to review some changes for fair and improvement of revenue billing some suggestions are noted down :-
a). Where an individual consumer seeks to avail supply for Domestic purpose with a connected load of over 56 kW/75 HP, such consumers may be given supply under this category subject to the following conditions.
i. The metering shall be provided on HT side of the distribution transformer .
ii. Meter reading shall be done monthly and the energy recorded in the HT metering shall be billed at tariff rates .
(b) COMMERCIAL
1. For loads 10 kW and above, a LT tri-vector meter shall be provided and energy charges shall be billed on kVAh.
2. For loads below 10 kW, the billing shall be based on kWh.
3. In respect of the complexes having connected load of more than 56 kW /75 HP released under specific orders of Licensee for Single Point Bulk supply, where such complex is under the control of a specified organisation/agency taking responsibility to pay monthly current consumption bills regularly and abide by the Terms and Conditions of supply as per agreement, the billing shall be done at the highest slab tariff rate under domestic category. The energy shall be measured on the High Tension side of the transformer. In case, where energy measured on LT side of the transformer, 3% of the recorded energy during the month shall be added to arrive at the consumption on High Tension side of the transformer.
C) Metering and load Conditions
i. A LT Tri-vector meter shall be provided for the consumers with contracted load of 15 kW/20 HP to 37.5 kW/50 HP.
ii. For loads above 37.5 kW/50 HP to 75 kW/100 HP, the metering will be provided on HT side of the Distribution Transformer.
iii. Energy charges shall be billed on kVAh basis, for all consumers with contracted load of 15 kW/20 HP and above. For loads below 15 kW/20 HP, billing shall be done based on kWh.
iv. If the recorded demand of any service connection under this category exceeds the 75 kVA (1 kVA = 1 kW), such excess demand shall be billed at the demand charge prescribed under HT Category (11 kV supply).
v. In cases where metering is provided on LT side of transformer (due to space constraints), 3% of the recorded energy during the month shall be added to arrive at the consumption on High Tension side of the transformer.
F. MAINTENANCE OF POWER FACTOR AT CONSUMER END
HT consumers, who are provided with metering capable of measuring active and reactive power under the orders of the Commission, shall maintain their power factor preferably in between 0.95 lag and 0.95 lead in the interest of the system security. The consumers should not maintain the power factor on leading side less than 0.95. If any consumer maintain the power factor less than 0.95 lead for a period of 2 consecutive months, it must be brought back in the range of + or -0.95 within a period of 3 months failing which without prejudice to such other rights as having accrued to the licensee or any other right of the Licensee the supply to the consumer may be discontinued. However, for the purpose of kVAh billing leading kVArh shall be blocked.
G. Generation Transmission /DT staff : should be encouraged by awarding bonuses monthly to maintain the required frequency and sell the surplus power at better rate this will reduce the penalty from the grid and increase the revenue.
H. Service Calls
(a)Charges for attendance of Fuseman for Low Tension Consumers
i) Replacing of Licensee’s cut out fuses Nil
ii) Replacing of consumer's fuses ` 3/-
(b)Charges for attendance of Fuseman/Wireman at the consumer's premises during any function or temporary illumination provided a Fuse man/ Wireman can be spared for such work` 100/- for each day or part thereof.
(c) Charges for in fructuous visit of Licensee employees to the consumer's premises` 25/- for each visit when there is no defect in Licensee’s equipment.
The above write-up is purely for the general interest of electrical customer in Nagaland and have no personal interest in any way to any person related to the DPN or NERC as the tariff proposed is much higher and will be a huge burden for the common people and business community which may indirectly effect the price rise in the Market. If the above suggestion is implemented the growth rate of Revenue collection may reach at 2% profit annually with the previous tariff alone. As per the NERC report the department is fully on the verge of corporatization but just raising the tariff should not be more than 4%-8% but present suggestion is more than 90% on average per unit. The commission should also take into account for the welfare of the power department staff before unbundling .What the commission should do first is to change the system and bring the T&D loss to below 10% before unbundling .
