Empowering Consumers

Highlights of a report on enhancing customer centricity in distribution

Customer centricity is becoming an intrinsic part of business strategies across utilities. Driven by changing demographics, an economic shift and technological developments that are reshaping market dynamics, customers today are better informed and have higher expectations of their service providers. In light of the changing dynamics, various service providers have come forth to provide seamless experiences with omni-channel interfaces, 24×7 customer support systems, customised services, etc., besides offering customers the freedom to make choices. This trend is putting pressure on sectors such as electricity to enhance their customer experience.

The Covid-19 pandemic has further emphasised the need for electric utilities around the globe to focus on increasing customer centricity. Proactive initiatives taken by utilities to ensure business continuity have led to the adoption of new and innovative ways to engage and help customers in these difficult times. Harnessing cutting-edge technology and digital platforms can unleash an entirely different customer experience for electricity customers, and redefine the supplier-customer relationship.

In this context, the US-India bilateral programme, Smart Power for Advancing Reliability and Connectivity (SPARC), recently conducted a study on “Enhancing Customer Centricity in the Electricity Distribution Sector”, in partnership with the National Smart Grid Mission under the Ministry of Power. The implementing partner of the United States Agency for International Development’s SPARC programme is KPMG Advisory Services Private Limited. The report proposes that electric utilities revisit their business processes and provide enhanced value-added as well as customer-centric services such as data analytics, energy management solutions, home automation, flexible payment options, and multimedia interaction platforms.

Key findings and proposed interventions

The report provides an in-depth analysis of existing consumer-utility touchpoints – from availing of new service connections to metering, billing, payment, quality, grievance redressal, and emerging services, and suggests the following interventions for enhancing customer centricity in the electricity distribution segment:

New service connections

Availing of a connection is the first step for customers to join the electricity supply value chain. The process generally involves the submission of an application form, inspection by utilities (to assess feasibility), payment, external and internal wiring-related work, and installation of meters. As per the current practice, a typical application form requires inputs on 50-70 parameters and takes 30-45 minutes to complete. In some cases, customers need to provide technical information such as estimated load and nearest pole number, which is difficult to determine. In 2018-19, the average time needed to avail of an electricity connection in India was 53 days, as compared to 23 days and seven days in Singapore and the UAE respectively.

When it comes to new connections, customers seek responsive parameters in their application forms, fast-track procedures, and best-in-class services. The US and UK application forms are good models, as they require inputs on just 20-30 parameters and take only 15-20 minutes to complete. Indian utilities should thus simplify the application forms, seek minimum information from customers and provide default values wherever possible. Further, they should provide doorstep assistance in applying for a new connection and reduce the number of steps that customers need to take to get a new connection, besides revisiting the standards of performance (SoP) regulations and training their staff on customer management and behaviour.

Metering

Customer metering is the lifeline of the electricity supply business as it directly impacts the revenue stream and the operations of utilities. Two of the major issues in metering are that most of the existing meters do not capture hourly consumption data, and that customers do not have a choice between a prepaid and a post-paid connection. Further, the current practice of physical meter reading is prone to human errors, and in case of a dispute, customers have to pay either the entire bill or an amount based on their average consumption for the past three to six months to avoid disconnection, regardless of the dispute resolution status.

Consumers have been demanding consumption monitoring, more choice in the selection of meters, and no disconnection in case of unresolved complaints. To address these demands, utilities should initiate large-scale deployment of advanced metering infrastructure in order to enable remote meter reading. This will also help utilities in revenue collection, as demonstrated by the fact that during the Covid-induced lockdown, utilities in Bihar and Uttar Pradesh that used smart meters were able to achieve 95 per cent billing efficiency. Further, there is a need to introduce consumption monitoring, provide self-meter reading options as well as the ability to choose between prepaid and post-paid connections to customers, and develop a mechanism to avoid disconnection in case of pending meter accuracy-related complaints.

Billing

While consumers expect a flexible, timely and accurate billing cycle, various studies have shown that many of them do not receive electricity bills regularly. A study conducted in some states by the Council on Energy, Environment and Water Environment revealed that about 23 per cent of rural customers had mentioned that their billing frequency was more than three months. A World Bank study revealed that issues related to inaccurate billing contributed to the second highest number of grievances. In many states, the billing cycle for customers is decided by the respective state regulators. There is a need to give customers an option to select/change their billing period; encourage them to opt for digital bills; redesign bill formats and include information on energy saving tips; and implement a know-your-customer campaign to provide seamless customer services and enable direct benefit transfer.

Payment

At the all-India level, the bill collection efficiency stood at 97 per cent in 2018-19. However, during the Covid-induced lockdown period, it came down to 20-40 per cent. In some rural areas, customers still have to travel long distances for payment of bills. In certain states, discoms levy processing charges for digital payments, which may be as high as 0.8 per cent of the transaction value. Therefore, consumers are looking for enhanced collection efficiency, financing options for bill payment, and convenience of payment.

Discoms should collaborate with banks and financial institutions (FIs) to provide financing options for payment of bills; enable multiple payment avenues including digital payment channels (such as e-wallets, payment banks and net banking), 24×7 collection centres, and doorstep collection for different consumer categories; encourage customers to opt for digital payment by highlighting the benefits and providing financial incentives; and establish targeted assistance programmes to help the underprivileged.

Quality and reliability

The average monthly duration of outages in urban areas is in the range of 0-43 hours across different states (during the period February 2019-March 2020). Lack of one-to-one communication regarding outages often leads to inconvenience for consumers and loss of productivity. Hence, consumers have been demanding reliable and timely power supply, and prior communication regarding outages for some time now. Discoms should avoid planned outages during working and non-working days for industrial/commercial and domestic customers respectively, and adopt a proactive approach of one-to-one communication to inform customers about outages beforehand. Further, although SOP regulations across states include quality and reliability parameters, these are not adequately measured and monitored. Discoms should reassess SOP regulations and provide clear descriptions of the method of measurement and ensure strict compliance.

Complaint resolution

The complaint resolution process of discoms involves multiple steps, and lack of empowerment of call centre executives adds to its woes. Discoms should thus provide multiple options for complaint registration – through websites, chatbots, social media, mobile applications, etc. – and work to reduce the number of steps involved in the complaint resolution process. The customer care call centre should be equipped with modern facilities such as interactive voice response and computer telephony integration, and implement an automatic call distributor for optimum routing of consumer calls. Sending regular updates to customers about their complaints will further strengthen consumer centricity in this process.

Others

Advances in technology and utility modernisation are setting the stage for electric utilities to expand their services beyond electricity supply and grid management. A range of new services related to demand-side management, energy efficiency, decentralised energy solutions, etc. are being provided by utilities to generate additional revenues. Through demand response programmes, consumers can support utilities in grid operation by curtailing or shifting their electricity usage during peak periods in response to time-based rates or other forms of financial incentives. The key interventions in this regard include the provision of dynamic tariffs, a customer communication strategy, a consumer portal to enhance convenience, and a robust monitoring framework.

Distributed energy resource (DER) systems generate, store and distribute energy in a localised manner for multiple applications. Such systems help electric utilities in lowering the installation time against conventional methods, and reducing transmission and distribution losses. They also enable cost savings due to the reduced installation of long distance transmission lines and provide a clean and cheap source of energy. But DER projects are capital intensive and demand high lead times for obtaining approval for net metering, varying from one to three months in some states. Many studies have also identified low awareness as a key barrier in the large-scale deployment of rooftop solar projects. Hence, there is a need to collaborate with banks and FIs to provide financing options for setting up DER projects, simplify the processes of application and approvals, and enhance consumer awareness.

Further, there is a need to explore cross-sector partnerships to leverage the expertise and network of existing market players. Discoms can provide additional services to customers such as establishing a marketplace for selling energy efficient appliances, setting up electric vehicle charging infrastructure, providing home automation systems.

Conclusion

The Government of India, in the last few years, has been leading the transformation effort and has made significant strides in improving access to electricity. It has taken various reform measures, such as improvement in customer convenience while availing of a new electricity connection, distribution of LED lamps under the Unnat Jyoti by Affordable LEDs for All (UJALA) programme, launch of the pan-Indian complaint number 1912, an integrated mobile application (Urja Mitra), and promotion of digital payments, among other initiatives. A key requirement for discoms today is to initiate systematic and structured interventions that not only deliver better value to the customer, but also enhance the overall experience of dealing with public discoms.

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