APEPDCL: Ambitious capex and capacity addition plans

Ambitious capex and capacity addition plans

Set up in 2000, Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL) caters to the power needs of the eastern region of Andhra Pradesh. APEPDCL is involved in power distribution in five districts of Andhra Pradesh – Srikakulam, Visakhapatnam, Vizianagaram, East Godavari and West Godavari; and serves a consumer base of around 6.77 million.

APEPDCL has proactively been working towards lowering its aggregate technical and commercial (AT&C) losses in recent years through initiatives such as underground cabling, network strengthening and smart metering. It also launched a real-time data acquisition systems (RT-DAS) control system last year. Its AT&C losses stood at 9.56 per cent in 2021-22, even lower than the 12.65 per cent posted in 2017-18. Its billing and collection efficiency was fairly high at 93.4 per cent and 96.84 per cent, respectively, during 2021-22. APEPDCL achieved a turnaround in its financial performance during the previous fiscal year, and registered net profits of Rs 2.64 billion. Its revenue gap also fell to Re 0.07 per kWh in 2021-22 from Re 0.27 per kWh in 2016-17.

Going forward, the discom has planned a massive capex of over Rs 45 billion for the period from 2022-23 to 2025-26. The discom has chalked out plans to install 1.34 million smart meters by 2024-25. Further, the discom plans to achieve 100 per cent distribution transformer metering (which is currently around 28 per cent) by 2025 under the Ministry of Power’s newly launched Revamped Distribution Sector Scheme (RDSS).

Operational performance

The APEPDCL consumer base includes 5.69 million domestic, 0.63 million commercial, 0.27 million agricultural, 0.02 million low tension (LT) industrial and 0.002 million high tension (HT) industrial consumers, with the remaining falling under the other consumers’ category. The discom’s energy sales have increased by 12.4 per cent from 21,002 MUs in 2020-21 to 23,605 MUs in 2021-22. Of these, 45 per cent of energy sales were in the HT category, while the remaining 55 per cent were in the LT category.

As of March 2022, APEPDCL’s distribution line length stood at 151,176 ckt. km, having grown at a compound annual growth rate (CAGR) of 2.93 per cent from 130,854 ckt. km in 2016-17. It comprises 84,663 ckt. km of LT lines, followed by 58,115 ckt. km of 11 kV lines and 8,398 ckt. km of 33 kV lines. The company’s substations grew at a CAGR of 5.0 per cent from 732 substations in 2016-17 to 934 in 2021-22 at the 33 kV level. APEPDCL’s transformer capacity recorded a CAGR of 10.3 per cent from 12,015 MVA in 2016-17 to 19,625 MVA in 2021-22. The discom has 277,238 transformers, having grown at a CAGR of 9.7 per cent from 174,381 in 2016-17. Of the total transformers, 99.5 per cent are at the 11 kV level, and remaining 0.5 per cent are at the 33 kV level.

The discom’s feeders have achieved 100 per cent metering coverage, while it has achieved 28.16 per cent metering of its distribution transformers. All other consumer categories have been fully metered, except for agricultural consumers, for whom around 66 per cent metering has been achieved. The average AT&C loss level of APEPDCL has improved from 12.65 per cent in 2017-18 to 9.56 per cent in 2021-22. APEPDCL recorded a billing efficiency of 93.4 per cent and a collection efficiency of 96.84 per cent during 2021-22. In terms of the overall network reliability, the discom’s System Average Interruption Duration Index (SAIDI) stood at 436 minutes in 2021-22 as against 514 minutes in 2016-17. Meanwhile, the distribution transformer failure rate decreased from 6.8 per cent in 2016-17 to 3.96 per cent in 2021-22.

Financial highlights

In 2021-22, the discom’s total income stood at Rs 160.63 billion, a 3.7 per cent increase over the previous year’s income of Rs 154.86 billion, having grown at a CAGR of 13 per cent since 2016-17. The discom turned profitable and recorded a profit after tax of Rs 2.64 billion in 2021-22, as compared to a net loss of Rs 4.41 billion in 2016-17. Meanwhile, the gap between the average cost of supply and the average revenue realised for the distribution utility fell to Re 0.07 per kWh in 2021-22 from Re 0.27 per kWh in 2016-17.

The earnings before interest, taxes, depreciation and amortisation stood at Rs 5.87 billion in 2020-21. The discom booked a subsidy of Rs 30.18 billion but received Rs 7.27 billion in 2020-21. The outstanding debt increased from Rs 31,317.1 million in 2016-17 to Rs 81,274.8 million in 2020-21. The payback period was 170 days in 2020-21. Meanwhile, the debt-equity ratio stood at 3.32:1 in 2020-21 as against 1.89:1 in 2016-17. Its return on equity stood at 0.33 per cent, while the return on capital employed stood at 0.15 per cent. The total expenditure stood at Rs 154.46 billion in 2020-21. The power purchase cost contributed the largest share of expenditure at Rs 109.59 billion or 71 per cent. The utility recorded a capex of Rs 7,079.2 million in 2020-21, having grown at a CAGR of over 4.3 per cent from Rs 5,992.3 million in 2016-17.

IT-OT initiatives

The discom is continuously adopting technological developments to improve operational efficiency and customer care. The information technology (IT) solutions adopted by APEPDCL include systems applications and products such as enterprise resource planning for plant maintenance, an outage management system (OMS), RT-DAS, a geographic information system (GIS) and line staff mobile apps. The operational technology (OT) solutions adopted by the utility include distribution management systems, modems at 11 kV feeders and HT services, supervisory control and data acquisition (SCADA), distribution automation, and distribution transformer failure management.

APEPDCL has achieved almost 100 per cent mapping of assets and real-time feeder monitoring. All its assets have been digitalised using mobile apps and GIS web applications developed in-house. Predictive maintenance of feeders is undertaken using inputs from the OMS module. Hierarchy-wise geofencing of assets has also been achieved. Additionally, modems have been installed on all the 3,862 11 kV feeders of APEPDCL. Interruptions are monitored in real time using the OMS application. Whenever there is a breakdown or scheduled maintenance at a feeder, SMS alerts are generated and sent to the respective consumers tagged to that feeder, thus improving consumer satisfaction. All the substations and feeders have been geotagged. An application has been developed through which consumers can view their feeder status online. As of August 2021, SCADA has been implemented at 28 substations, with 145 ring main units.

APEPDCL has also installed modems for 3,783 HT services, for which load is monitored and bills prepared based on the readings from these modems. Using OT technology, the need for manual intervention in taking readings has been reduced and timely meter readings are achieved more easily. This has improved the efficiency of the system as well as revenues. Based on the available OT data, mobile-based IT applications are developed for HT consumers to view their load graphs, the time and date at which the maximum MD was reached, etc. All HT consumers can view their feeder data, pre-scheduled maintenance and interruptions on their connected feeders.

In November 2021, APEPDCL inaugurated the RT-DAS under the Integrated Power Development Scheme (IPDS), which is now part of the RDSS. The project was sanctioned in December 2018, and was completed in September 2021 at a cost of Rs 48 million. RT-DAS has been implemented in 116 substations of 33/11 kV capacity and 437 feeders of 11 kV capacity, which will cater to 36 IPDS town areas. The required hardware and equipment such as feeder-permitted terminal unit panels and multifunction transducers were installed for all 11 kV feeders. By implementing the project, real-time data from 11 kV town feeders under APEPDCL on voltage, current, power, and planned and unplanned interruptions will be available for measurement of SAIDI and System Average Interruption Frequency Index. This will also enable an energy audit. Also, with the launch of the RT-DAS control system, uninterrupted power supply to consumers will be a genuine possibility. Some other recent initiatives undertaken by APEPDCL include the launch of an automated chat on WhatsApp, which enables monitoring, tracking, updating and provision of better services to consumers.

Other initiatives

The discom has also been undertaking initiatives to promote rooftop solar. It has extended central financial assistance to residential customers interested in installing grid-connected rooftop solar plants. About 2,521 rooftop solar grids with a capacity of 65,709 kWp have been synchronised by the discom, as per the company’s recent ARR filing for 2022-23. As a measure to reduce power purchase cost, especially in agriculture, 16,498 solar agricultural pump sets have also been installed by APEPDCL. Under an earlier pilot project, APEPDCL had energised over 200 conventional pump sets with solar PV, thereby enabling farmers to export excess units to the grid. To encourage e-mobility uptake, 20 DC fast charging stations have been made   operational in Visakhapatnam City for electric vehicles that are being run by APEPDCL on dry lease from Energy Efficiency Services Limited. Additionally, 20 AC charging points have also been installed across APEPDCL offices wherever electric cars are plying.

Future plans

The discom’s Rs 45 billion capex will be mostly spent on upgradation and modernisation of distribution infrastructure. In terms of network expansion, the company has planned an addition of 61,271 ckt. km of distribution lines, 3,616 substations, of 33 kV and 11 kV and 9,768 MVA of transformer capacity, between 2022-23 and 2026-27. It has also planned 3,052.5 ckt. km of underground cabling by 2024-25. Further, the discom plans to install 1.34 million smart meters by 2024-25, of which around 101,278 meters are planned to be installed in 2022-23, another 911,506 in 2023-24, and the remaining 323,591 in 2024-25.

Issues and the way ahead

There are, however, some issues and concerns for the discom with respect to non-receipt of revenue subsidies in a timely manner, no automatic pass-through of fuel cost, and high days payable outstanding, as noted by PFC in its ninth annual integrated ratings report, in which the discom received a C rating.

Nonetheless, going forward, APEPDCL’s ambitious capex and capacity addition plans will strengthen its distribution infrastructure. Further, the technology initiatives that are in place will assist in reducing technical losses, improving operational efficiency and giving uninterrupted, quality power to consumers.

Nikita Gupta