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	Title	Performance Evaluation of Electric Supply Utilities in India
	Publisher/ Author	India Core Publishing/ Dr Tripta Thakur, Dr S.C. Kaushik, Dr S.G. Deshmukh
	Year Published	2009
	ISBN/ RNI	-
	Format	Paperback
	Pages	Pp 270
	Delivery	Indian as well as International Orders & Deliveries accepted
	Product Code	IPPR-122
	Price in INR (for Indian Orders)	5000 Special Rate for SERCs, SEBs & Educational Institutions- Rs 2500
	Price in USD (for International Orders)	200

Book Details

The Report focuses on evaluation of the performances of the Electric utilities in India. The work is particularly significant in the context of the ongoing reforms in the Indian electricity sector. Unfortunately, the concept of efficiency in the delivery of power services has been historically alien in the Indian context (even outside India, efficiency measurement studies have been relatively scarce in developing countries), and it is now being realized that efficiency evaluation is an integral component of any comprehensive reforms program.

The efficiency evaluation is also necessary for generating competition in the sector and for sector regulation and scientific tariff setting. Hence, it is vital for the success of any reforms program to review the performance of existing utilities. Based on the productivity and efficiency analysis, benchmarks can be set, and targets for improvement may be identified.

The Report is coming at a crucial time when the Indian government has initiated measures that promise to revamp the sector. The work presented in the Report is a pioneer study on evaluation of performances in the Indian power sector, as so far no known study has attempted such comprehensive sector measurement by employing advanced benchmarking technique such as the Data Envelopment Analysis (DEA) employed in the present analysis.

Such a study can be regarded useful from the following viewpoint:

The study provides the efficiency scores of SOEUs & distribution utilities so that they can rank themselves, identify their shortcomings, set targets, and try to achieve these targets
The model can be extended for use by regulatory commissions for tariff setting, and as a tool for developing a monitoring system.
The analysis can have future application in the form of X-factor calculations under the incentive based regulation
The results can be used for preferential funds allotment under various government schemes such as the allocation of the Accelerated Power Development and Reforms Program (ARDRP)
Such a study can help create awareness and competition amongst the SOEUs, for sustained improvements in the distribution sector.

About the Authors

Dr Tripta Thakur is Assistant Professor, Department of Electrical Engineering, National Institute of Technology, MANIT-Bhopal, India
Dr S.C. Kaushik is Professor and Head, Centre for Energy Studies, Indian Institute of Technology, New Delhi, India
Dr S.G. Deshmukh is the Director, Indian Institute of Information Technology & Management (ABIIITM), Gwalior, India

Objectives and Scope of the Report

The objective of this report is to evolve a framework that may be applied for evaluating efficiencies of the Indian electric supply utilities in the Pre and Post Electricity Act 2003 periods. The work also aims to discuss some of the related policy issues for the sector in the context of sector sustainability.

More specifically, the scope of the work presented in this report comprises the following

To review the Indian electricity sector, and the related reforms program.
To establish the need for evolving performance appraisals of the power supply utilities in India in the current context
To carry out an impact assessment of the newly enacted Electricity Act 2003.
To study the distribution sector critically and identify the major inefficiencies prevalent
To measure efficiencies and productivities of utilities in the Pre and Post Electricity Act, 2003 era, and to examine results in the policy context to suggest possible sector improvement

The work will be particularly useful to various stakeholders in the power industry including the government and the public bodies, regulatory authorities, funding institutions, development institutions, power producers, utilities and the consumers. The results of the study can provide a common basis for informed policy debate and decisions, and can facilitate in initiating a dialogue between stakeholders.

Contents

Chapter	Page Number

*Chapter 1. Introduction*	Ch-1-1 to Ch-1-15

1.1. Reforms in Developing Countries	Ch.1—2

1.2. The Case of India	Ch.1—3

1.3. Need for the Performance Analysis in the Indian Electricity Sector	Ch.1—5

1.4. The Advantages of Measuring Performances	Ch.1—8

1.5. The contribution of this Report	Ch.1—10

1.5.1. Objectives and Scope of the Report	Ch.1—12

1.5.2. Outline of the Report	Ch.1—13

*Chapter 2. Indian Electricity Sector: A Critical Review of Organizational Structure, Reforms and their Impact Assessment*	Ch-2-1 to Ch-2-42

2.1 Introduction	Ch. 2—1

2.2 Organizational Structure of Electricity Supply Industry In India	Ch. 2—3

2.3 Review of Performance of the Indian Electricity sector	Ch. 2—6

2.4 Background of the Electricity Reforms	Ch. 2—8

2.4.1. The Case of India	Ch. 2—9

2.4.2 Major Legislative Initiatives in India	Ch. 2—10

2.5 The Electricity Act 2003: What it Entails	Ch. 2—12

2.5.1. Impact Analysis of the Electricity Act 2003	Ch. 2—16

2.5.2. Implementation of Open Access: Core Issues	Ch. 2—25

2.5.3. Trading: A New Policy Perspective	Ch. 2—27

2.5.4. Role of the Regulator	Ch. 2—28

2.5.5. The Electricity Act and Rural Electrification	Ch. 2—31

2.5.6. The National Electricity Plan-2004	Ch. 2—33

2.5.7. Consumer Protection	Ch. 2—35

2.5.8. Environmental Concerns	Ch. 2—36

2.5.9. Shortfalls and Limitations of Electricity Act 2003	Ch. 2—38

2.6 Summary	Ch. 2—42

*Chapter 3. Distribution Sector Reforms in India*	Ch-3-1 to Ch-3-37

3.1 Introduction	Ch.3—1

3.2 Need for Distribution Sector Reforms	Ch.3—2

3.3 Distribution Reforms in India	Ch.3—8

3.3.1. Reforms Initiatives in the Distribution Sector	Ch.3—8

3.1.2 Status of Distribution Reforms in India	Ch.3—11

3.1.3. Reform Initiatives in Rural Electrification	Ch.3—14

3.2. The Tasks Ahead: A Roadmap to Success	Ch.3—17

3.2.1. Strengthening the Role of Regulatory Commissions	Ch.3—18

3.2.2. Implementation of Multi-Year Tariff (MYT) Framework	Ch.3—19

3.2.3. Ensuring Universal Metering and Initiating Proper Billing Practices	Ch.3—21

3.2.4. Reorganizing the Distribution Sector	Ch.3—23

3.2.5. Benchmarking of Indian Power Distribution Utilities: The need forPerformance Appraisal	Ch.3—28

3.2.6 Privatization of DISCOMs	Ch.3—31

3.3 Summary	Ch.3—33

*Chapter 4. Efficiency Evaluation Framework: A Study of Literature and Methodology Employed in the Analysis*	Ch-4-1 to Ch-4-27

4.1 Introduction	Ch.4—1

4.2 Performance Measurement and Analysis: the Need	Ch.4—2

4.3 Stakeholders That Require Efficiency Analysis	Ch.4—4

4.4 Benchmarking Methodology Employed	Ch.4—6

4.4.1 Data Envelopment Analysis	Ch.4—8

4.4.2. Total Factor Productivity (TFP) Analysis	Ch.4—13

4.5 Efficiency Evaluation Studies in Various Sectors	Ch.4—16

4.5.1. Review of Literature for DEA Applications	Ch.4—16

4.5.2. Review of Literature for TFP Applications	Ch.4—23

*Chapter 5. Productivity and Benchmarking Studies for the IndianEelectric Utilities in the Pre-“Electricity Act, 2003” Era*	Ch-5-1 to Ch-5-55

5.1 Introduction to Indian Electric Utilities in the Pre-“ElectricityAct, 2003” Era	Ch. 5—1

5.2. Productivity Analysis of the Indian SEBs	Ch. 5—4

5.2.1. Scope	Ch. 5—4

5.2.2. Data and Methodology	Ch. 5—5

5.2.3. Results and Discussion for the Productivity Analysis	Ch. 5—8

5.2.4. Concluding Remarks on the Productivity Analysis	Ch. 5—17

5.3. Efficiency Measurements for the Indian SEBs	Ch. 5—18

5.3.1. Review of Literature for Efficiency Evaluation of the Indian SEBs	Ch. 5—20

5.3.2. Selection of Input and Output Variables	Ch. 5—22

5.3.3. Preliminary Data Exploration	Ch. 5—24

5.3.4. Results, Discussions and the Policy Implications of the EfficiencyAnalysis	Ch. 5—31

5.3.5. Concluding Remarks on Efficiency Evaluation	Ch. 5—53

*Chapter 6. DEA Based Benchmarking Studies for the Indian Electric Distribution Utilities in the Post-“Electricity Act, 2003” Era*	Ch-6-1 to Ch-6-37

6.1. Introduction	Ch. 6—1

6.2. Need for Unbundling	Ch. 6—3

6.3. Performance Evaluation of Electricity Distribution	Ch. 6—4

6.3.1. The Case of India	Ch. 6—7

6.4 Private Distribution Companies in India	Ch. 6—9

6.5 Methodology and Data Analysis	Ch. 6—12

6.5.1 Methodology	Ch. 6—12

6.5.2 Data Source	Ch. 6—13

6.5.3 Input and Output Selection	Ch. 6—15

6.5.4 Preliminary Data Exploration	Ch. 6—16

6.6. Results, Discussions and the Policy Implications	Ch. 6—19

6.6.1 Model 1 (Input: Total Cost (Totex)	Ch. 6—19

6.6.2 Model 2 (Input: Operating Cost (Opex)	Ch. 6—23

6.6.3 Observations on the Performances of Private Utilities	Ch. 6—26

6.6.4 Observations about the State Owned Utilities	Ch. 6—29

6.6.5 Sensitivity Analysis	Ch. 6—30

6.7. Concluding Remarks	Ch. 6—35

*Chapter 7. Summary and Conclusions*	Ch-7-1 to Ch-7-12

7.1 General	Ch. 7—1

7.2 Main Conclusions	Ch. 7—1

7.3 Limitations of the Analysis	Ch. 7—8

7.4 Scope for Undertaking Further Studies	Ch. 7—10

*References*	R-1 to R-24

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