Strong operational and financial performance

Dakshin Haryana Bijli Vitran Nigam (DHBVN) is one of the two discoms in Haryana. It serves a consumer ba­se of almost 4.05 million (as of Sept­e­m­ber 2022), and a peak demand of 6,432 MW. Its energy sales for 2022-23, till August 2022, stood at 13,207 BUs.

Over the years, DHBVN has been pro­actively implementing a number of efficiency and loss reduction measures to deliver a strong operational and financial performance, besides improving supply reliability in both urban and rural areas. It is one of the few distribution utilities in India that are currently operating at a sub-15 per cent aggregate technical and commercial (AT&C) loss level (12.59 per cent). Notably, it has also managed to lower its transmission and distribution (T&D) losses with respect to rural feeders by over 25 per cent in the last six years. Financially, DHBVN has been recording profits continuously since 2017-18. Its collection efficiency is over 100 per cent. Further, it eliminated its average cost of supply-average revenue realised (ACS-ARR) gap in 2017-18, two years ahead of the target set by the Ujwal Discom Assuran­ce Yojana.

DHBVN’s rankings in the annual discom rating exercise carried out by the Ministry of Power reflect this strong performance. In both the Ninth and Tenth Annual Integrated Rating and Rankings, for the years 2019-20 and 2020-21 res­pe­c­tively, DHBVN has been accorded the highest A+ rating. Further, its customer satisfaction rate was 97 per cent during 2020-21.

Network growth

As of September 2022, DHBVN’s distribution network consists of 154,904 km of distribution line length. Of this, 81,361 km is at the 11 kV level, followed by 69,101 km at the low tension level, and 4,443 km at the 33 kV level. The discom has 427 substations at the 33 kV level with a transformation capacity of 6,698 MVA, and 317,857 distribution transfor­mers (DTs) with a capacity of 17,082.76 MVA. In addition, it owns 6,449 11 kV feeders. DHBVN’s distribution line leng­th stood at 153,151 km as of March 2022, having grown at a compound annual growth rate (CAGR) of 1.6 per cent from 143,759 km in 2017-18. The number of DTs owned by the company grew at a CAGR of 4.1 per cent from 268,088 in 2017-18 to 315,386 in 2021-22.

Meanwhile, its consumer base has grown to 3.96 million as of March 2022 from 3.29 million as of March 2018, at a CAGR of 4.7 per cent. Around 93.3 per cent of its consumers are covered with conventional meters, 4.2 per cent are covered with smart meters, and 0.3 per cent have installed AMR meters. The remaining 2.2 per cent consumers are unmetered.

Operational performance

UHBVN’s energy sales have grown at a CAGR of 4 per cent, from 22,771 MUs in 2017-18 to 26,711 MUs in 2021-22. Its co­n­nected load has increased from 15,297 MW in 2017-18, to 19,187 MW in 2021-22, to 19,659 MW as of Sep­te­m­­ber 2022.

The average AT&C loss level of DHBVN has improved significantly from 18.15 per cent in 2017-18 to 12.59 per cent in 2021-22, which is much lower than the target of 14.43 per cent. DHBVN recorded a collection efficiency of 102.52 per cent during 2021-22, as compared to 102.02 per cent during 2017-18.

During financial year 2022-23 (till September 2022), the discom’s AT&C losses stood at 17.03 per cent, while collection efficiency stood at 99.15 per cent.

Key initiatives for loss reduction

As part of its loss reduction initiatives for rural areas, the discom has implemented various measures and reforms under the flagship programme launched by the state government, the Mhara Gaon Jag­mag Gaon scheme. The scheme aims to reduce theft and provide 24×7 power supply to rural feeders through cabling, me­ter relocation, meter replacement and new connections. As of August 2022, wo­rk on 792 feeders (2,707 villages) out of a total of 1,118 feeders (3,665 villages) has been completed, while work on another 159 feeders (548 villages) is in progress. As a result of the scheme, T&D losses fell significantly to 35.78 per cent in 2021-22 from 61.32 per cent in 2015-16.

To reduce AT&C losses in urban areas, measures such as meter relocation and sealing of meters; replacement of defective meters, electromechanical meters and theft-prone meters; aerial bunched cabling in theft-prone areas; and release of new connections for unelectrified ho­useholds with unauthorised connections and in slum areas have been implemented. As a result, the number of urban feeders with distribution losses be­low 25 per cent increased significantly to 925 during 2021-22, compared to 568 in 2016-17.

To improve billing efficiency, DHBVN has taken various measures such as re­placing defective meters and ensuring timely resolution of bill-related complaints. An emphasis has been laid on meter reading through meter downloads to minimise human interface. The discom has also automated the process of site verification through a real-time mobile application. Further, it has mi­gra­ted 100 per cent of its billing to a real-time billing application. To resolve consumer complaints in an effective manner, centralised back offices (CBOs) have been established. The aim of the CBOs is to simplify the revenue realisation and revenue generation process and reduce the undue burden of billing and bill rectification on field offices, resulting in less effort being spent on improving revenue realisation. System strengthening and segregation of agricultural feeders have also been taken up to reduce losses.

A trust reading facility was introduced for domestic, non-domestic service and LT consumers with connected loads of up to 20 kW in May 2020. Consumers may use this facility to take their own meter reading in case the reading re­corded in their bill is incorrect. Further, a facility for getting bill details through a missed call has been introduced; and real-time spot billing has been undertaken in 70 subdivisions. The remaining subdivisions are also being billed throu­gh a mobile application. All citizen services are being provided through this online portal as well as the Saral platform. The ability to make online payments through real-time gross settlement, Paytm, BHIM and other payment gateways has been introduced. Curren­tly, more than 80 per cent of DHBVN’s revenue is received online. Moreover, to improve consumer satisfaction, a 24×7 call centre has been laun­ched with toll-free calling, email, SMS and WhatsApp facilities for registering consumer complaints. Further, outage-related information is being disseminated through the Urja Mitra App.

Financial highlights

DHBVN recorded a profit after tax (PAT) of Rs 2.4 billion during 2020-21, an inc­rease of 110.8 per cent from Rs 1.14 billion in the previous year. DHBVN’s PAT has increased at a CAGR of 111.6 per cent between 2016-17 and 2020-21.

DHBVN’s total income for 2020-21 stood at Rs 161.02 billion, compared to Rs 177.76 billion in the previous year, recording a year-on-year decline of 9.4 per cent. DHBVN’s expenses stood at Rs 158.63 billion during 2020-21, a decline of 10.2 per cent from Rs 176.63 billion in the previous year. The cost of power contributed the largest share of expenditure at Rs 135.62 billion, or 85.5 per cent.

The company recorded a PAT of Rs 1.79 billion during 2021-22. Meanwhile, its ACS-ARR gap has fallen to Re 0.05 per kWh in 2021-22 from Re 0.08 per kWh in 2020-21. The company’s total capex during 2021-22 stood at Rs 10.76 billion, an increase of 12.3 per cent from the Rs 9.58 billion recorded in the previous year. Its capex has grown at a CAGR of over 7.4 per cent from Rs 8.08 billion in 2017-18. The discom’s planned capex for 2022-23 is around Rs 13.8 billion.

Challenges and future plans

A key area of concern for the discom is the release of renewable energy subsidies. Against the announced subsidy of Rs 45.38 billion, the state government has released only Rs 28.92 billion. The di­s­com is also facing challenges on account of the pending government departmental dues, amounting to Rs 3.83 billion.

Moreover, the discom is facing a sharp increase in its power purchase cost due to the stipulated blending of imported coal, non-supply of power by Adani Power Li­mited and Coastal Gujarat Po­w­er Limi­ted, and high rates at power exch­anges. As a result, the actual power purchase cost is Rs 4.14 per unit, higher than the Ha­r­yana Electricity Regulatory Com­mi­ssion-approved cost of Rs 3.75 per unit. This is leading to mounting arrears. Th­at said, the discom is working on eco­no­mising its power purchase costs.

The discom is also planning to participate in the newly launched Revamp­ed Distribution Sector Scheme. To this end, a distribution reform committee and a district electricity committee ha­ve been formulated for both state discoms, while the appointment of a project management agency is in progress. An action plan and a detailed project report worth Rs 44.06 billion for the RDSS have been approved.

Net, net, with consistent efforts, the discom is confident of reducing its AT&C lo­sses to single digits in the coming ye­ars while enhancing electricity supply for its consumers in rural areas.

With inputs from a presentation by Anil Kumar Sharma, Chief Engineer, Commercial, DHBVN, at a recent Power Line conference