Bharat Book Bureau

Distribution Franchisee is the latest form of public-private partnership in the distribution sector. The proviso to Section 14 of the Electricity Act 2003 states that:

“…in a case where a distribution licensee proposes to undertake distribution of electricity for a specified area within his area of supply through another person, that person shall not be required to obtain any separate license from the concerned State Commission and such Distribution licensee shall be responsible for distribution of electricity in his area of supply”.

This provision provides a conducive framework in which franchisee can operate in many ways in the distribution business. Electricity distribution franchisee is a classic example of public private participation (PPP) and going by the recent trends its acceptability in the private sector outweighs when compared to the overall privatization of distribution companies. Flexibility provided by the franchisee model is key attraction, for instance, a franchisee arrangement can be limited to catering to small segment of distribution business such as managing a single feeder or distribution transformer, etc or taking care of all the distribution functions for a complete circle.

By and large the Indian power sector has traditionally focused on generation alone, as a result the T&D losses in India account for over Rs.50,000 crore. Historically, the losses in T&D have been in the range of 30-45% which negates the considerable amount of investment made in generating the requisite capacities in meeting the power demand in the country. The reasons for the losses are power thefts, lack of modernized systems and network in place. The Distribution in majority of the states has been run by the states that have been lacking the funds and manpower to mitigate the risk of AT&C losses. Realizing the gravity of the issue, the government has thought of roping in the private sector in this area in a way which would be attractive in terms of investments and result in losses reduction benefiting the consumers in the end. Overall electricity franchisee is an attractive opportunity, win-win for both the utility and franchisee participants. With over 62 distribution companies operating in India, the scale of this opportunity is only set to grow and the franchisees operational are only tip of the iceberg.

Infraline’s Business Report Series on Opportunities in Electricity Distribution Franchisee in India is a strategic guide that provides micro-level of detailing that one needs to be familiar with to champion the business of electricity franchisee. It’s a must read for companies already operating in the franchisee domain, those planning to enter, consultants and even the planning authorities in India.

Table of Contents :

1. Electricity Distribution in India
a. Overview
b. Operational Performance
i. AT&C Losses
ii. Reliability
iii. Transformer Failures
c. Fiscal Performance
i. Trend in subsidy burden
ii. Bottom-line performance
d. Key Highlights of Distribution companies in India

2. Electricity Distribution Franchisee
a. Introduction
b. Distribution Franchisee Model
c. Types of Franchisee Model

3. Key Drivers of Electricity Franchisee
a. Programmes
i. REC
iii. R-APDRP
b. Operational Excellence
i. Improvement in Operations
ii. Improvement in Reliability
iii. Improvement in Transformer Failure Rate
iv. Reducing loss levels
c. Business Excellence
i. Revenue Collection

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Related Reports:

Opportunities in Electricity Distribution Franchisee in India – For Indian Customers


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