Chapter-1

INTRODUCTION

1.1Industry profile

Power is one of the most critical components of infrastructure crucial for the economic
growth and welfare of nations. The existence and development of adequate infrastructure is
essential for sustained growth of the Indian economy.
India’s power sector is one of the most diversified in the world. Sources of power generation
range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear
power to viable non-conventional sources such as wind, solar, and agricultural and domestic
waste. Electricity demand in the country has increased rapidly and is expected to rise further
in the years to come. In order to meet the increasing demand for electricity in the country,
massive addition to the installed generating capacity is required.

In May 2018, India ranked 4th in the Asia Pacific region out of 25 nations on an index that
measures their overall power. The energy industry is the totality of all of the industries involved
in the production and sale of energy, including fuelextraction, manufacturing, refining and
distribution. Modern society consumes large amounts of fuel, and the energy industry is a
crucial part of the infrastructure and maintenance of society in almost all countries.

In particular, the energy industry comprises:

 the petroleum industry, including oil companies, petroleum refiners, fuel transport and
end-user sales at gas stations
 the gas industry, including natural gas extraction, and coal gas manufacture, as well as
distribution and sales
 the electrical power industry, including electricity generation, electric power
distribution and sales
 the coal industry
 the nuclear power industry

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 the renewable energy industry, comprising alternative energy and sustainable
energy companies, including those involved in hydroelectric power, wind power,
and solar power generation, and the manufacture, distribution and sale of alternative fuels
 traditional energy industry based on the collection and distribution of firewood, the use
of which, for cooking and heating, is particularly common in poorer countries

 History

The use of energy has been a key in the development of the human society by helping it to
control and adapt to the environment. Managing the use of energy is inevitable in any
functional society. In the industrialized world the development of energy resources has
become essential for agriculture, transportation, waste collection, information
technology, communications that have become prerequisites of a developed society. The
increasing use of energy since the Industrial Revolution has also brought with it a number of
serious problems, some of which, such as global warming, present potentially grave risks to
the world.

In some industries, the word energy is used as a synonym of energy resources, which refer to
substances like fuels, petroleum products and electricity in general, because a significant
portion of the energy contained in these resources can easily be extracted to serve a useful
purpose. After a useful process has taken place, the total energy is conserved, but the
ressource itself is not conserved, since a process usually transforms the energy into unusable
forms (such as unnecessary or excess heat).

Ever since humanity discovered various energy resources available in nature, it has been
inventing devices, known as machines, that make life more comfortable by using energy
resources. Thus, although the primitive man knew the utility of fire to cook food, the
invention of devices like gas burners and microwave ovens has increased the usage of energy
for this purpose alone manyfold. The trend is the same in any other field of social activity, be
it construction of social infrastructure, manufacturing of fabrics for covering;
porting; printing; decorating, for example textiles, air conditioning; communication of
information or for moving people and goods (automobiles).

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 The power sector in India is mainly governed by the Ministry of Power. There are three
major pillars of power sector these are Generation, Transmission, and Distribution. As far as
generation is concerned it is mainly divided into three sectors these are Central Sector, State
Sector, and Private Sector.
Central Sector or Public Sector Undertakings (PSUs), constitute 29.78%
(62826.63MW) of total installed capacity i.e, 210951.72 MW (as on 31/12/2012) in
India. Major PSUs involved in the generation of electricity include NHPC Ltd., NTPC
Ltd.,, and Nuclear Power Corporation of India (NPCIL).
Besides PSUs, several state-level corporations are there which accounts for
about 41.10% of overall generation , such as Jharkhand State Electricity Board (JSEB),
Maharashtra State Electricity Board (MSEB), Kerala State Electricity Board (KSEB), in
Gujarat (MGVCL, PGVCL, DGVCL, UGVCL four distribution Companies and one
controlling body GUVNL, and one generation company GSEC), are also involved in the
generation and intra-state distribution of electricity.
Other than PSUs and state level corporations, private sector enterprises also play a major
role in generation, transmission and distribution, about 29.11%(61409.24MW) of total
installed capacity is generated by private sector.
The PowerGrid Corporation of India is responsible for the inter-state transmission of
electricity and the development of national grid.
The Government of India has an ambitious mission of POWER FOR ALL BY 2012. This
mission would require that the installed generation capacity should be at least 200,000 MW
by 2012 from the present level of 167278.36MW. Power requirement will double by 2020 to
400,000MW.
The government had earlier planned to add 78,000 MW of power capacity by the end of the
11th Plan, which the Planning Commission had scaled down to 62,000 MW. This may now
be further curtailed to 58,000 MW (as on Dec’ 2010).

 Objectives
 Sufficient power to achieve GDP growth rate of 8%
 Reliable power

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 Quality power
 Optimum power cost
 Commercial viability of power industry
 Power for all
 Strategies
 Power Generation Strategy with focus on low cost generation, optimization of capacity
utilization, controlling the input cost, optimisation of fuel mix, Technology upgradation
and utilization of Non Conventional energy sources
 Transmission Strategy with focus on development of National Grid including Interstate
connections, Technology upgradation & optimization of transmission cost.
 Distribution strategy to achieve Distribution Reforms with focus on System upgradation,
loss reduction, theft control, consumer service orientation, quality power supply
commercialization, Decentralized distributed generation and supply for rural areas.
 Regulation Strategy aimed at protecting Consumer interests and making the sector
commercially viable.
 Financing Strategy to generate resources for required growth of the power sector.
 Conservation Strategy to optimise the utilization of electricity with focus on Demand Side
management, Load management and Technology upgradation to provide energy efficient
equipment / gadgets.
 Communication Strategy for political consensus with media support to enhance the
general public awareness.,
Rural electrification
Jharkhand, Bihar, Uttar Pradesh, Orissa, Uttranchal, Madhya Pradesh etc are some of the
states where significant number (more than 10%) of villages are yet to be electrified.
 Number of Villages (1991 Census) – 593,732
 Villages Electrified (31/08/2010) – 503,924
 Village level Electrification % – 84.9%
 Subsidies
Several state governments in India provide electricity at subsidised rates or even free to some
sections. This includes for use in agriculture and for consumption by backward classes. The
subsidies are mainly as cross-subsidisation, with the other users such as industries and private

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consumers paying the deficit caused by the subsidised charges collected. Such measures have
resulted in many of the state electricity boards becoming financially weak.
At present (2012), the price per unit of electricity in India is about Rs. 4 for domestic
consumers, and Rs. 9 for the commercial supply.
nvestment Scenario
Between April 2000 and December 2017, the industry attracted US$ 12.97 billion in Foreign
Direct Investment (FDI), accounting for 3.52 per cent of total FDI inflows in India.
Some major investments and developments in the Indian power sector are as follows:

 Energy Efficiency Services Ltd (EESL) has raised US$ 454 million from Global
Environment Facility (GEF) for its energy-efficiency projects in an attempt to boost
India's move towards becoming a low carbon economy.
 IL&FS Financial Services Ltd has partnered with Jammu and Kashmir (J&K) Bank
Ltd to finance nine hydropower projects in J&K with a total capacity of 2,000 MW,
which require financing of around Rs 20,000 crore (US$ 3.12 billion).
 Sterlite Power has won one of the largest 1,800 km power transmission project worth
US$ 800 million in Brazil, the company's third project in Brazil and the largest ever
project won by an Indian company in Latin America.
 In April 2018 ReNew Power made the largest M&A deal by acquiring Ostro Energy
for US$ 1,668.21 million.

 Government Initiatives
The Government of India has identified power sector as a key sector of focus so as to
promote sustained industrial growth. Some initiatives by the Government of India to boost
the Indian power sector:

 Initiatives taken by the Energy Efficiency Services (EESL) have resulted in energy
savings of 37 billion kWh and reduction in greenhouse gas (GHG) emissions by 30
million tonnes.
 The Union and state governments have agreed to implement the Direct Benefit
Transfer (DBT) scheme in the electricity sector for better targeting of subsidies,
according to Mr Raj Kumar Singh, Minister of State for Power (Independent Charge).

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  The Government of India approved National Policy on Biofuels – 2018, the expected
benefits of this policy are health benefits, cleaner environment, employment
generation, reduced import dependency, boost to infrastructural investment in rural
areas and additional income to farmers.

 Market Size
Indian power sector is undergoing a significant change that has redefined the industry
outlook. Sustained economic growth continues to drive electricity demand in India. The
Government of India’s focus on attaining ‘Power for all’ has accelerated capacity addition in
the country. At the same time, the competitive intensity is increasing at both the market and
supply sides (fuel, logistics, finances, and manpower).
Total installed capacity of power stations in India stood at 343.79 Gigawatt (GW) as on
April, 2018.

 Nature

India's power sector is one of the most diversified in the world. Sources of power
generation range from conventional sources such as coal, lignite, naturalgas, oil, hydroand
nuclear power to viable non-conventional sources such as wind, solar, and agricultural and
domestic waste.

india has the fifth largest power generation capacity in the world. The country ranks third
globally in terms of electricity production. In May 2018, India ranked 4th in the Asia Pacific
region out of 25 nations on an index that measures their overall power.Electricity production
in India reached 1,201.543Billion Units (BU) during FY18.
Renewable energy is fast emerging as a major source of power in India. Wind energy is the
largest source of renewable energy in India, accounting for 49.33 per cent of total installed
capacity (69.02 GW). There are plans to double wind power generation capacity to 60 GW
by 2022. India has also raised the solar power generation capacity addition target by five
times to 100 GW by 2022. The Union Government of India is preparing a 'rent a roof' policy

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 for supporting its target of generating 40 gigawatts (GW) of power through solar rooftop
projects by 2022. All the states and union territories of India are on board to fulfil the
Government of India's vision of ensuring 24x7 affordable and quality power for all by March
2019. Over 280 million LED bulbs were distributed to consumers in India by Energy
Efficiency Services Limited (EESL) under Unnati Jyoti by Affordable LEDs for All
(UJALA). The Government of India has been supportive to growth in the power sector.
The Cabinet Committee on Economic Affairs (CCEA) has approved commercial coal mining
for private sector and the methodology of allocating coal mines via auction and allotment,
thereby prioritising transparency, ease of doing business and ensuring the use of natural
resources for national development. The Ministry of Power has passed the guidelines for
tariff based competitive bidding process for procurement of power from grid connected wind
power projects.
The Government of India is planning to invite bids for the largest solar tender in the world,
for installing 20 gigawatts (GW) of solar power capacity, to give a boost to manufacturing of
solar power equipment in India.
 With electricity production of 1,201.543 BU in India in FY18, the country witnessed growth
of around 55.72 per cent over the previous fiscal year.
 Over FY10–FY18, electricity production in India grew at a CAGR of 5.69 per cent.
 In March 2017, the Power Ministry has launched an application named - GARV-II, to
provide real time data related to rural electrification regarding all un-electrified villages in
India. A total of 17,164 villages out of 18,452 un-electrified villages in India have been
electrified up to March 2018 as part of the target to electrify all villages by May 1, 2018.

 Business environment

 Environmental impact

Government encouragement in the form of subsidies and tax incentives for energy-
conservation efforts has increasingly fostered the view of conservation as a major function of
the energy industry: saving an amount of energy provides economic benefits almost identical
to generating that same amount of energy. This is compounded by the fact that the economics

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of delivering energy tend to be priced for capacity as opposed to average usage. One of the
purposes of a smart gridinfrastructure is to smooth out demand so that capacity and demand
curves align more closely. Some parts of the energy industry generate considerable pollution,
including toxic and greenhouse gases from fuel combustion, nuclear waste from the
generation of nuclear power, and oil spillages as a result of petroleum extraction.
Government regulations to internalize these externalities form an increasing part of
doing business, and the trading of carbon credits and pollution credits on the free market may
also result in energy-saving and pollution-control measures becoming even more important
to energy providers.

Consumption of energy resources, (e.g. turning on a light) requires resources and has an
effect on the environment. Many electric power plants burn coal, oil or natural gas in order to
generate electricity for energy needs. While burning these fossil fuels produces a readily
available and instantaneous supply of electricity, it also generates air pollutants including
carbon dioxide (CO2), sulfur dioxide and trioxide (SOx) and nitrogen oxides (NOx). Carbon
dioxide is an important greenhouse gaswhich is thought to be responsible for some fraction
of the rapid increase in climate change seen especially in the temperature records in the 20th
century, as compared with tens of thousands of years worth of temperature records which can
be read from ice cores taken in Arctic regions. Burning fossil fuels for electricity generation
also releases trace metals such as beryllium, cadmium, chromium, copper, manganese,
mercury, nickel, and silver into the environment, which also act as pollutants.

The large-scale use of renewable energy technologies would "greatly mitigate or eliminate a
wide range of environmental and human health impacts of energy use".[8][9] Renewable
energy technologies include biofuels, solar heating and cooling, hydroelectric power, solar
power, and wind power. Energy conservation and the efficient use of energy would also help.

In addition, it is argued that there is also the potential to develop a more efficient
energy sector. This can be done by:[10]

 Fuel switching in the power sector from coal to natural gas;

 Power plant optimisation and other measures to improve the efficiency of
existing CCGT power plants;

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 Combined heat and power (CHP), from micro-scale residential to large-scale industrial;
 Waste heat recovery

Best available technology (BAT) offers supply-side efficiency levels far higher than global
averages. The relative benefits of gas compared to coal are influenced by the development of
increasingly efficient energy production methods. According to an impact assessment carried
out for the European Commission, the levels of energy efficiency of coal-fired plants built
have now increased to 46-49% efficiency rates, as compared to coals plants built before the
1990s (32-40%).[11] However, at the same time gas can reach 58-59% efficiency levels with
the best available technology.[11] Meanwhile, combined heat and power can offer efficiency
rates of 80-90%.[11]

 Politics

Since now energy plays an essential role in industrial societies, the ownership and control of
energy resources plays an increasing role in politics. At the national level, governments seek
to influence the sharing (distribution) of energy resources among various sections of the
society through pricing mechanisms; or even who owns resources within their borders. They
may also seek to influence the use of energy by individuals and business in an attempt to
tackle environmental issues.

The most recent international political controversy regarding energy resources is in the
context of the Iraq Wars. Some political analysts maintain that the hidden reason for both
1991 and 2003 wars can be traced to strategic control of international energy
resources.[12] Others counter this analysis with the numbers related to its economics.
According to the latter group of analysts, U.S. has spent about $336 billion in Iraq as
compared with a background current value of $25 billion per year budget for the entire U.S.
oil import dependence.

 Policy

Energy policy is the manner in which a given entity (often governmental) has decided to
address issues of energy development including energy
production, distribution and consumption. The attributes of energy policy may

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include legislation, international treaties, incentives to investment, guidelines for energy
conservation, taxation and other public policy techniques.

 Security
Energy security is the intersection of national security and the availability of natural
resources for energy consumption. Access to cheap energy has become essential to the
functioning of modern economies. However, the uneven distribution of energy supplies
among countries has led to significant vulnerabilities. Threats to energy security include the
political instability of several energy producing countries, the manipulation of energy
supplies, the competition over energy sources, attacks on supply infrastructure, as well as
accidents, natural disasters, the funding to foreign dictators, rising terrorism, and dominant
countries reliance to the foreign oil supply.[15] The limited supplies, uneven distribution, and
rising costs of fossil fuels, such as oil and gas, create a need to change to more sustainable
energy sources in the foreseeable future. With as much dependence that the U.S. currently
has for oil and with the peaking limits of oil production; economies and societies will begin
to feel the decline in the resource that we have become dependent upon. Energy security has
become one of the leading issues in the world today as oil and other resources have become
as vital to the world's people. However, with oil production rates decreasing and oil
production peak nearing the world has come to protect what resources we have left in the
world. With new advancements in renewable resources less pressure has been put on
companies that produce the world's oil, these resources are, geothermal, solar power, wind
power and hydro-electric. Although these are not all the current and possible future options
for the world to turn to as the oil depletes the most important issue is protecting these vital
resources from future threats. These new resources will become more useful as the price of
exporting and importing oil will increase due to increase of demand.

 Development

Producing energy to sustain human needs is an essential social activity, and a great deal of
effort goes into the activity. While most of such effort is limited towards increasing the
production of electricity and oil, newer ways of producing usable energy resources from the
available energy resources are being explored. One such effort is to explore means of

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producing hydrogen fuel from water. Though hydrogen use is environmentally friendly, its
production requires energy and existing technologies to make it, are not very efficient.
Research is underway to explore enzymatic decomposition of biomass.[16]

Other forms of conventional energy resources are also being used in new ways. Coal
gasification and liquefaction are recent technologies that are becoming attractive after the
realization that oil reserves, at present consumption rates, may be rather short lived.
See alternative fuels.

Energy is the subject of significant research activities globally. For example, the UK Energy
Research Centre is the focal point for UK energy research while the European Union has
many technology programmes as well as a platform for engaging social science and
humanities within energy research.

 Transportation

All societies require materials and food to be transported over distances, generally against
some force of friction. Since application of force over distance requires the presence of a
source of usable energy, such sources are of great worth in society.

While energy resources are an essential ingredient for all modes of transportation in society,
the transportation of energy resources is becoming equally important. Energy resources are
frequently located far from the place where they are consumed. Therefore, their
transportation is always in question. Some energy resources like liquid or gaseous fuels are
transported using tankers or pipelines, while electricity transportation invariably requires a
network of grid cables. The transportation of energy, whether by tanker, pipeline, or
transmission line, poses challenges for scientists and engineers, policy makers, and
economists to make it more risk-free and efficient.

 Crisis

Economic and political instability can lead to an energy crisis. Notable oil crises are the 1973
oil crisis and the 1979 oil crisis. The advent of peak oil, the point in time when the maximum
rate of global petroleum extraction is reached, will likely precipitate another energy crisis.

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  Mergers and Acquisitions[edit]

Between 1985 and 2018 there have been around 69,932 deals in the energy sector. This
cumulates to an overall value of 9,578 bil USD. The most active year was 2010 with about
3.761 deals. In terms of value 2007 was the strongest year (684 bil. USD), which was
followed by a steep decline until 2009 (-55,8%).[18]

Here is a list of the top 10 deals in history in the energy sector:

1.2company profile

 Profile

Tata Power Delhi Distribution Limited [Tata Power-DDL] is a joint venture between Tata
Power and the Government of NCT of Delhi with the majority stake being held by Tata
Power Company (51%).

Tata Power-DDL distributes electricity in North & North West parts of Delhi and serves a
populace of 7 million. The company started operations on July 1, 2002 post the unbundling
of the erstwhile Delhi Vidyut Board (DVB). With a registered consumer base of 1.64 million
and a peak load of around 1967 MW (recorded in July 2018), the company's operations span
across an area of 510 sq kms.

Tata Power-DDL has been the frontrunner in implementing power distribution reforms in the
capital city and is acknowledged for its consumer friendly practices. Since privatization, the
Aggregate Technical & Commercial (AT&C) losses in Tata Power-DDL areas have shown a
record decline. AT&C loss is a measure of overall efficiency of the distribution business
which is the difference between units input into the system and the units for which the
payment is collected. Today, AT&C losses stand at 8.40 % which is an unprecedented
reduction of around 84% from an opening loss level of 53% in July 2002.

To ensure reliable power supply and to provide best in class service to its consumers, Tata
Power–DDL has implemented several world class technologies such as Advance Distribution
Management system (ADMS) which is designed to replace the conventional SCADA-DMS-
OMS system with features like real time integration of Smart Meter Data / Distributed

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Generation integration and single data model from GIS , Integrated Geographical
Information System (GIS) for instant services, Automated Demand Response (ADR), Smart
Street Light Management system, Field Force Automation, Upgraded Network, Integrated
Toll Free Helpline No. 19124, etc.

Tata Power-DDL provides various facilities and services to its consumers for their ease and
convenience such as 24X7 Integrated Helpline, Mobile Application for both iOS and
Android users, bilingual website, Multiple Payment Avenue, End to End online services for
New Connection etc.

TATA Power-DDL has also added solar generation as a part of its sustainable initiatives
since 2008, and has installed fifteen (15) Solar Plants in its license area with a total
generation capacity is 1.76 MW. Tata Power-DDL has also promoted Rooftop Solar Plants
among its consumers through various path breaking initiatives, and a total number of 124
Rooftop solar plants under net metering with cumulative capacity of 15MWp have been
installed in TATA Power-DDL area of operations till the end of FY 2017-18. TATA Power-
DDL has also been empaneled as “first Utility Channel Partner" with Ministry of New &
Renewable Energy, Govt. of India and has also received the highest honor rating of SP IA as
a “System Integration Grading for Solar PV projects”. The company is now working on
setting up a Smart Grid with the integration of Roof Top Solar, Energy Storage, E-charging
of electric vehicles etc. in its network.

The World Bank in its ‘Doing Business’ Report has acknowledged Tata Power-DDL’s
contribution towards improving the ease of getting electricity connection through process
simplification improving India’s ranking twice, by 111 points from 137 in 2015 to 29 in
2018.

Tata Power-DDL is the first Indian utility to be a member of Global Intelligent Utility
Network Coalition (GIUNC) which is a coalition of 14 power utilities worldwide and is
working towards accelerating the development of common standards, technology solutions
and processes for intelligent networks.

Tata Power-DDL is the only utility in the Country to have been empanelled by the Power
Finance Corporation, Govt. of India's nodal implementation agency for its Restructured

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Accelerated Power Development and Reforms Program (R-APDRP), as IT Consultant and
SCADA Consultant. Tata Power-DDL is also empanelled with the Rural Electrification
Corporation as System Consultant/IT and Energy Auditing and is currently providing
consultancies to various National and International utilities on IT/ SCADA implementation
e.g. Haryana, Uttar Pradesh etc. Tata Power-DDL has been assigned with consultancy service
project with newly privatized utility in Nigeria.

Tata Power-DDL's change management experience, distributed leadership system, adoption

of latest technology; robust competence development process and innovative & open work
culture are the key strategic boosters which helped in building and sustaining competitive
advantage in the changing business scenario.

Tata Power-DDL has created several milestones in its journey so far; it is now focused and
committed to the road ahead and is exploring new opportunities to replicate its experience of
distribution reforms both in India and abroad. It is leveraging its unique learning and skillsets
solely and in collaboration with leading utilities and technology providers like GE, IBM,
Enel, Omron, 3M, Siemens, Panasonic, AES, Mitsubishi etc. in the areas of communications
& smart grid technology, change management, consumer service delivery and business
process re-engineering. Tata Power-DDL have also collaborated with leading international
and national Institutions like Harvard, MIT, UCLA, Reyrson University, IIT Delhi, Punjab
Engineering College, Delhi University, Netaji Subhas Institute of technology etc. to carry out
research activities in emerging technologies.

A journey which began a decade ago for empowering the consumers in Delhi now holds the
potential to transform the distribution sector in India and similarly help utilities across the
globe. Today, Tata Power-DDL is providing project management and consultancy services to
20+ Indian states including Haryana Uttar Pradesh, Chhattisgarh and Punjab. The company is
providing a technical and management support to a Distribution Company in Nigeria and is
also looking for consultancy assignments in Kurdistan, Turkey and Iraq.

Tata Power-DDL has also been reaching out to the communities it serves and has been
consistently strengthening and empowering the underprivileged, primarily over 1.5 million
people residing in over 223 JJ clusters in its area of operation who are also company’s

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consumers through its focused Social Innovation Initiative SAATHI. Under the umbrella of
SAATHI several initiatives, like Women Literacy Centres, Vocational Training Centres,
Tutorials, Medical Camps, Drug –de addiction camps etc.

Tata Power-DDL is sensitive to the aspect of Climate Change and is committed to introduce
energy efficient and greener technologies. As a part of the Tata Group, Tata Power-DDL
carries forward the Group's ethos of giving back to society. In fact, 'Reaching out to
communities Tata Power-DDL operates in' is an integral part of the company's mission
statement. Tata Power-DDL has a dedicated Social Innovation Group that drives a wide array
of Corporate Social Responsibility efforts of the company. Tata Power-DDL's CSR Policy
rests on four main pillars – Employability, Entrepreneurship, Education and Employment.

Apart from this, Tata Power Delhi Distribution Limited is also working on various projects to
preserve and regenerate the environment. It is a member of the Greening Agency within the
Department of Forest & Wildlife, Government of Delhi and is committed to promote tree
plantation. Tata Power-DDL has also been aggressively creating energy conservation
awareness among school children, their parents and neighbours though its Energy Club
programmes comprising of students from over 340 member schools. More than 2.5 lakh
students and 12.5 lakh people have been sensitized on the issues of Climate Change through
this initiative and have saved nearly 17.46 lakh units of electricity.

Tata Power Delhi Distribution Limited has won several accolades for its pioneering efforts in
transforming the power distribution scene in its licensed area both at the national and
international levels. It has been conferred with the 'National Award for Meritorious
Performance' thrice by the Ministry of Power, Government of India for outstanding
performance in power distribution. It has also won eight Asian Power Awards in a row and
holds a rare distinction of becoming the first power distribution utility from India to have
received the prestigious Edison Award twice, in the international category in 2008 Edison
Award for Innovative Implementation of GIS and again in 2009 for Policy Advocacy. In
2016, Tata Power-DDL was conferred with the National Award from Ministry of New &
Renewable Energy, Govt. of India under the category "Rooftop Solar Enabler of the Year" at
the Indian Rooftop Solar Summit and was recognized with the International Safety Award by
the British Safety Council in 2017.

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Some of the other key recognitions include Best Performing Private Discom Award at Power
Line Award, Platts Energy Award, ICC Award for most innovative Discom, Asian Power
Awards, IPPAI Award 2013, International Palladium Balanced Scorecard Hall of Fame
award, SAP Ace Award ; UPN, USA metering award. It is also the youngest company and
the first power utility in India to receive the prestigious CII EXIM Award for 'strong
Commitment to Excel'. It is also the only distribution utility to receive the ISO 9001, ISO
14001 and OHSAS 18001 certification. Tata Power-DDL has been recognized as 2nd best in
the "Best in Class – Energy, Oil and Gas Industry by the Great Places to Work, India. With
Tata Power-DDL surpassing the score of 650 in the TBEM External Assessment in 2017
(from 615 in 2016) it has been recognized as “Industry Leader” as per the grading system of
TBEM Assessment. With this it has become the third Tata Group Company to reach this
pinnacle of excellence.

 Vision and Mission

 Vision

To be the most trusted and admired provider of reliable, competitive and sustainable power
and services, using technology and innovative solutions, and be the utility of choice for all
stakeholders.

 Mission

Innovate to deliver world class services to the consumers

Create benchmarks to become a global utility leader with energy efficient services and clean
energy solutions
Achieve excellence through safety, technology adoption, collaborations and teamwork
Reach out and engage with communities with energy efficient services & clean energy
Empower employees, enrich creativity and enhance learning

 Corporate Philosophy

Tata Power-DDL Core Values

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Tata Power-DDL is a value driven organization and these values have continued to direct the
company's growth and business. The six core values underpinning the way we do the
business are:

 Integrity : We must conduct our business fairly, with honesty and transparency.
Everything we do, must stand the test of public scrutiny.

 Understanding : We must be caring, respectful, compassionate and humane towards

our colleagues and customers and always work for the benefit of the communities we
serve.

 Excellence : We must constantly strive to achieve the highest possible standards in

our day-to-day work and in the quality of goods and services that we provide.

 Unity : We must work cohesively with our colleagues across the group and with our
customers and partners to build strong relationships based on tolerance,
understanding and mutual co-operation.

 Responsibility : We must continue to be responsible and sensitive to the

communities and environments in which we work, always ensuring that what comes
to people goes back to people many times over.

 Agility : We must work in a speedy and responsive manner and be proactive and
innovative in our approach.

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  Leadership Team

 Sanjay Kumar Banga, Chief Executive Officer

 Sunil Singh, Chief Operating Officer
 Arup Ghosh, Senior Advisor
 Satya Gupta, Advisor
 M Shenbagam, Chief-Commercial
 Puneet Munjal, Chief-Power Management, BD & Contracts
 Hemant Goyal, Chief Finance Officer
 Sushil Kumar Srivastava, Chief - Human Resources & Administration

AWARDS AND ACCOLADES

2018

 Tata Power Delhi Distribution has been conferred with the Industry Leader Award for active
promotion of Tata Business Excellence Model and crossing the 650+ milestone in TBEM
Assessment 2017
Year : 2018

 Tata Power Delhi Distribution Limited conferred with 'best performing power distribution
utility award' at CBIP Awards 2018
Year : 2018

2017

Recognition as “Industry Leader”, TAAP Jury Award 2017 & Tata EDGE – Promising
Practices

Year : 2017

18
 TATA Power-DDL adjudged Runner-up for Excellence in Cyber Security at IFSEC India
Awards 2017 for Operation Technology (OT)
Year : 2017

 Recognition as 'Industry Leader' TAAP Jury Award 2017 & TATA EDGE - Promising
Practices
Year : 2017

 Tata Power-DDL wins the CII National HR Circle Competition 2017

Year : 2017

 Tata Power-DDL won Quailty Circle Award at ICCQC & NCQC 2017
Year : 2017

 Tata Power-DDL Conferred With CII Industrial Innovation Award 2017

Year : 2017

 Tata Power-DDL Declared the 'Most Innovative DISCOM' at Indian Chamber of Commerce
Awards 2017
Year : 2017

 TATA Power-DDL wins at the BW Business World HR Excellence Awards 2017

Year : 2017

 Tata Power-DDL Wins Safety Innovation Award 2017

Year : 2017

 Tata Power Delhi Distribution's SAATHI Campaign Wins Gold at CMO Asia Awards -2017

19
 Year : 2017

 Tata Power Delhi Distribution Limited Conferred With ‘Solar Utility Of The Year’ Award
At The Indian Solar Excellence Awards 2017
Year : 2017

 TATA Power-DDL wins International Safety Award 2017

Year : 2017

 Hon’ble Minister of Power, Govt. of India, Shri Piyush Goyal Recognizes Tata Power –
DDL for Outstandin Contribution Towards the Transformation of Indian Power Sector
Year : 2017

2016

 CEO & MD - Mr. Praveer Sinha, conferred with ‘CBIP Award for Outstanding Contribution
in Power Distribution Sector’
Year : 2016

 Tata Power-DDL wins ‘DSCI Excellence Award 2016’

Year : 2016

 Tata Power-DDL conferred with Skoch Award for Empowering Women beyond Boundaries
Year : 2016

 Tata Power-DDL’s “DISCOM driven Renewable Energy & Energy Efficiency Program”
wins Skoch - Order of Merit Award

20
 Year : 2016

 Tata Power-DDL, Wins EDGE – Promising Practice (Top Implementer Award & Highest
Contributor Award)
Year : 2016

 Tata Power-DDL wins 2nd Prize in ‘InnovExAsia’ for Technical Paper on ‘Insulated Cables
for Power System for future’
Year : 2016

 Tata Power-DDL enters SAP CCOE– Hall of Fame, 2016

Year : 2016

 Tata Power-DDL Wins Indian Chamber of Commerce Efficient Distribution Operation

Award 2016
Year : 2016

 Tata Power-DDL Wins Indian Chamber of Commerce Quality of Service Award 2016
Year : 2016

 Tata Power-DDL Wins Indian Chamber of Commerce Green Grid Award 2016
Year : 2016

 Tata Power-DDL Wins Indian Chamber of Commerce Most Innovative Discom 2016
Year : 2016

 Tata Power-DDL Wins Safety Innovation Award - 2016

Year : 2016

21
 Tata Power-DDL Wins DELL-EMC Transformer Award for the Year 2016
Year : 2016

 Tata Power-DDL wins CII Industrial Innovation Awards 2016

Year : 2016

 3 Quality Circle Teams from Tata Power-DDL won GOLD Category Awards at the
International Convention on Quality Control Circles (ICQCC-2016)
Year : 2016

 Tata Power-DDL DISCOM driven ESCO Model for Implementing Energy Efficiency
Improvement Projects rated as Innovative Energy Saving Service
Year : 2016

 Tata Power-DDL Wins Asian Utility Innovators Award for ‘Demand Side Management
Project’
Year : 2016

 Tata Power-DDL Recognized with the International Safety Award by the British Safety
Council
Year : 2016

 Tata Power-DDL Wins National Award for Promotion/Facilitation of Roof Top Solar
Programs
Year : 2016

 Tata Power-DDL Wins ‘Solar Utility of the Year’ Award at Indian Solar Week – 2016
Year : 2016

22
 Ms. Satya Gupta, Head - IT Receives Woman CIO of the Year 2015 Award
Year : 2016

 Tata Power-DDL, Wins Association of Business Communicators of India’s ‘Social

Responsibility Communication’ Award
Year : 2016

 Tata Power-DDL, Conferred with ABP News CSR Leadership Award

Year : 2016

 Tata Power-DDL, Wins Rooftop Solar Enabler of the Year Award at Indian Rooftop Solar
Summit 2016

Year : 2016

 Market share
Tata Power Delhi Distribution (TPDDL) pays over Rs 61-crore dividend to Delhi.

NEW DELHI: Tata Power Delhi Distribution (TPDDL) has paid a dividend of about Rs 125
crore to its shareholders, Tata Power and Delhi government, at a time when most electricity
distribution firms across the country have been piling up losses and surviving on subsidies
and debt.
The dividend is probably the highest paid by the electricity distribution company to Delhi
government, which holds 49% equity in the power distributor that has 14 lakh customers in
north and north-west areas of t ..
Since 2002-03, when it acquired majority stake in the Delhi government-owned company
following the unbundling of the erstwhile Delhi Vidyut Board, Tata Power Delhi has paid a

23
total dividend of Rs 367 crore to the country’s second largest power producer in private
sector and the state government on five occasions. In mid-2008, Tata Power Delhi also issued
bonus shares.
Often state-owned discoms end up reinvesting their modest profits in improving their
networks and hence they do not dole out dividends to the governments,” said an officer with
the energy department of Gujarat government that boasts of the most successful power sector
in the country.
Tata Power Delhi’s CEO and executive director Praveer Sinha told ET, “Delhi government
used to lose Rs 1,500-2,000 crore a year in power distribution and the annual burden could
have increased to Rs 4,000 c ..

 Major players

1) NTPC with around 33 GW of power generation capacity is India’s largest power utility
by far and is planning to more than double that capacity to 75 GW by 2017 .The company
mainly depends on coal and gas based power but is diversifying into gas,hydel,nuclear and
solar power as well.It is one of the best run state owned companies and has executed well in
building as well as running old plants.The company is one of the most valuable companies in
terms of market cap as well wit ha market cap of nearly $35 billion.
2) NHPC – State owned like NTPC,this hydro power focused power company came out with
an IPO with much fanfare.However slow implementation and lower profits have resulted in
the stock prices declining a lot.However the company aims to double its electricity
generation of 5 GW in the next 5 years or so by focusing on hydel generation in the Northern
states of India.
3) Tata Power – The largest private utility in India has ambitious plans to grow like the
other private sector companies in India.The company has interests in electricity distribution
as well.Tata Power has a presence in thermal, hydro, solar and wind areas of power
generation, transmission and retail with a capacity of nearly 3 GW.Tata Power is building
numerous power plants and transmission projects in JV.
4) Reliance Power – Reliance Power part of the ADAG Group came out with the biggest
IPO of its time before the Lehman crisis.The company part of the ADAG Group has the most

24
ambitious expansion plans in the country.The company is raising huge amounts of capital
from Chinese banks and placed the largest power equipment order with Dongfang
Electric.The company is currently constructing 3 4000 MW projects and has plans of
building 35 GW capacity with a mix of hydel,gas and coal based plants.The company also
win a solar thermal project in JNNSM bidding.
5) Adani Power – Power Limited is part of Adani Group with capacity of 1980MW.The
company currently operates India’s only super-critical power plant in Gujarat. The company
is currently implementing 16500 MW at different stages of construction..The company is
currently implementing thermal projects of 3300MW at Maharastra and 1320MW at
Rajasthan.The Adani Group has bought coal mines outside the country and with its port and
shipping companies forms an integrated coal to power story.
6) Damodar Valley Corporation – DVC is a state owned organization with interests in
flood control, irrigation, generation, transmission and distribution of electricity located in the
Damdoar Valley in the east of the country.There are hydro-electric power stations at Tilayia,
Maithon and Panchet, with total installed capacity of 144 MW.DVC operates thermal power
stations at with total capacity of 2745 MW. DVC is expanding its thermal power capacity
and with the completion of its present plans by 2012 it would be generating more than 11000
MW of power
7) Lanco Infratech – Lanco is fast emerging Andhra Pradesh based Group and has become a
top private sector power developer with 2 GW capacity and another 18 Gw under
development.Lanco through its step down Australian subsidiary, Lanco Resources Australia,
has acquired Griffin Coal Mining Company and Carpenter Mine Management.
8) SJVN – SJVN is the second largest hydel power company in India which is a JV between
the Indian government and the Himachal Pradesh state.The company owns the largest hydro
plant in India the Nathpa Jhakri Hydroelectric 1500 MW Power Project .The company is
trying to expand like NHPC but has been facing execution problems.
9) Nuclear Power Corporation of India( NPCIL) – Another state owned company,NPCIL
is focused on generating Nuclear Power.The company operates around 4.5 GW of Nuclear
Capacity in 6 locations.The company is expected to expand hugely in the future with India
planning to add around 2 GW of Nuclear Power over the next decade.

25
10) CLP Power – CLP India Private Ltd. is a wholly owned subsidiary of CLP Holdings, a
leading investor-operator in the Asia Pacific energy sector.CLP is also the largest foreign
investor in Wind Power in India with over 450MW of wind power projects which are spread
across 5 states. This apart, it is also in the process of developing a 1320MW coal firedpower
plant located at Jhajjar, Haryana, which is due for commissioning in Dec 2011.It also owns a
gas power plant in Gujarat.
11) Neyveli Lignite Corporation -Neyveli Lignite Corporation is a PSU like NTPC and is
also involved in lignite mining company in India. The company is mainly based out of the
southern state of Tamil Nadu and mines some 24 million ton of lignite per year with an
installed capacity of 2490 MW<
12) Torrent Power – Like Adani Power,it is a Gujarat based company with interest in both
transmission and generation.Torrent has a generation capacity of 1647.5 MW and distributes
power in Ahmedabad, Gandhinagar, Surat, Bhiwandi and Agra.It is expanding in Gujarat
and Uttar Pradesh.
Other Private Groups that are setting up big power capacities are JSW Energy,Sterlite
Energy,GVK Energy,Moser Baer,Welspun Energy,Essar Energy,GVK Power.There are also
state owned and run Power Generation Companies Punjat State Power,Haryana Power
Generation,Gujarat State Energy etc.Orient Green Power,Greenko are green focused utilities
with big expansion plans.

 Position and market share

The population of Delhi is approx. 1.70 crore spanned in the area of 1483 Sq kms. The total
electricity consumed in the national capital during the year 2012-13 was 33442 MU
comprising 4970 MU generated locally and 28472 MU purchased from other States.
Importantly, the total consumption of Delhi has grown by 85% in last 10 years. Total
numbers of electricity consumers in Delhi are nearly 46 lakhs, approx. the same as that of
Australia and double of Bihar (23 lakhs consumers). Daily power demand of Delhi is 90 MU
which is the average quantity supplied in UP (UP has population of approx. 20 crores
compared to Delhi’s population of 1.70 crore.). Delhi’s Peak Demand approx. 5600 MW,
which is also the peak demand met of UP as it resorts to approx. 6-8 hours of load shedding
on a day to day basis. It is noteworthy here that, the peak demand of Delhi is sum total of

26
demands of other these metro cities namely Mumbai, Chennai and Kolkata. Satisfied
Consumers Tata Power Delhi Distribution annually conducts a third party Consumer
Satisfaction Survey through reputed marketing research company IMRB. In 2013 results
show that 88% of consumers are satisfied with our services. Wherein, Government, Industrial
and Commercial consumers are having 99% satisfaction level. The findings of the Delhi’s
Human Development Report 2013 reveals that almost 80% of the respondents rated power
supply in city as better. As per the report, reforms in the power sector have yielded positive
results with the supply of power greatly improving post 2002. The power supply in the slums
is found to be at par with the rest of Delhi. In the report the Distribution Companies were
rated next to DMRC services in terms of consumer satisfaction.

Largest, Most Reliable and Efficient Private Sector Energy Company.Andhra

Valley and Tata Hydro merged into Tata Power to result in one large
unified entity.
 Streghts

 Initiatives in Business Excellence

Business Excellence Initiatives at Tata Power-DDL

"Business Excellence" is an integral part of Business Management and is the application of

quality management theory and tools to run our business more efficiently. Business
Excellence is the culture of Tata Power-DDL, which works as an enabler to our commitment
to higher customer satisfaction, increase in stakeholder value & better process management
through the never-ending cycle of continuous improvement.

Based on the principle of TQM & TBEM, we have instituted business excellence practices
across functional areas. The thought of continuous and breakthrough improvement,
preventive management and management by facts are being promoted through a range of BE
initiatives. Some of the quality platforms & tools used are:

 Tata Business Excellence model (TBEM) : TBEM is based on the Malcolm

Baldrige National Quality Award Model of the U.S. The model helps the organization

27
 to get insights on business strengths and opportunities for improvement. Tata Power-
DDL scored 516 in its very first TBEM external assessment in the year 2006 and
created history by scoring above 500 in its 1st attempt in the TATA group.
Assessment score under TBEM is the indicator of organization's excellence maturity.
Our TBEM score has moved from 516 in 2006 to 615 in 2015, thus getting into
"Emerging Industry Leader" band.

 Integrated Management System (IMS) : IMS at Tata Power-DDL integrates all our
systems (ISO 9001, ISO 14001, SA 8000, OSHAS 18001, ISO 27001, ISO 22301,
and ISO 31000) and processes in to one absolute framework, enabling us to work as a
single unit with unified objectives. IMS helps Tata Power-DDL to become a process
driven organization, with each function aligned behind a single goal: improving the
performance of the entire organization. An integrated system presents a clear, holistic
picture of all aspects of our organization.

 Workplace & Visual Management through 5S Methodology : The concept of '5S'

has created a revolution in many industries including at Tata Power-DDL by enabling
establishment of Workplace and Visual Management at the organisational level. This
practice has been implemented across offices, Grids, Sub Stations etc. has helped in
reduction in waste and also helping us in improving quality and safety.

 SHINE : Systematic and Holistic Improvement Initiatives at Tata Power-DDL

through Employee's Engagement - This is the platform for Improvement and
Innovation at Tata Power-DDL. DNA for improvement and innovation is present, but
the ignition of minds needs flashpoint! And SHINE platform is all about this ignition.
It helps us to think differently to innovate and then facilitate our thought process to
convert the same into reality. SHINE doesn't stop there until one is rewarded and
recognized for his/her effort to bring improvement at Tata Power-DDL.

 Quality Circle & PRAYAAS : The term Quality Circles refers to small groups of
line employees who meet periodically to discuss ways to improve the quality of
products & services they produce. Quality circles were considered one of the secrets
of Japanese industrial success. At Tata Power-DDL, Quality Circle initiative plays a

28
 pivotal role in driving improvement and innovation among the Non-Executives. It
also encourages Tata Power-DDL and Business Associate employees’ engagement
through identification of improvement / innovation projects impacting organizational
performance. This initiative is very prevalent among the line staff which enables
systematic approach towards problem solving and also motivates them for
participation at various National and International Quality Conventions.

 GYAN SANGAM : Gyan Sangam is the one stop shop for all knowledge and
information of Tata Power-DDL. All the knowledge is classified in to two categories
Tacit and Explicit. Knowledge is captured, stored and disseminated through Gyan
Sangam application across organization. Through Tacit platforms e.g. SEEKH,
people share their knowledge with others.

 IDEA LOGY : TIdea Logy is a social platform that leverages the power of
collective wisdom by creating an innovation hub to enable Tata employees to
collaborate, share, remix and execute innovative ideas swiftly. The Tata Group’s
diverse and skilled workforce, with experience across industries, continually comes
up with new ideas to meet challenges and serve our customers better. It shrinks the
Innovation cycle time in an interesting manner by empowering employees to select
good ideas for implementation in an open and transparent manner.

 TATA InnoVista : A group wide program to recognize and celebrate the ‘successes’
and ‘struggles’ of innovation. Tata InnoVista is a movement to build self-confidence
amongst Tata managers to undertake bold Innovations. The platform provides an
opportunity for our people to share their innovations, learn from one another and
compete to win the most coveted awards in the Tata Group.

29
 Chapter-2

Conceptual Discussion

 Background

The basis for the electricity sector in Delhi is the three principal acts namely the Indian
Electricity Act, 1910; the Electricity (Supply) Act, 1948; and the Electricity Regulatory
Commission Act, 1998. DVB used to be the organization that provided power to Delhi
Metropolis until June 2002. Until this time the power situation in Delhi had gradually
deteriorated to such an extent that there were long hours of power cuts, the number of
unattended complaints had piled up to over one hundred thousand and the financial picture of
the board was dismal. Performance of power sector in Delhi has deteriorated dramatically

due to various reasons:

• In spite of increasing demand, new capacity addition was minimal.

• T&D losses (Transmission and Distribution losses) increased from 7 percent in 1953 to 23
percent in 1989 and had reached a level of over 50 percent. About 18 percent were
transmission losses and 32 percent were lost due to power theft.

• Maintenance had been neglected which led to inefficient working equipment.

• Commercial losses of DVB increased sharply. (From Rs. 207 Crores in 1993 to Rs. 1,103
Crores in 2000). In the “Strategy Paper on Power Sector in Delhi” DVB identified various
reasons for this upsurge in T&D losses which have been put as under:

• Many consumers who were on metered supply still abstracted energy illegally.

• Consumers who lived in electrified colonies did not take legal connections

• Under that legal framework, it was not possible to provide consumers who live in
unauthorized colonies with a legal connection. This lead to illegal direct tapping of power
from the mains.

30
• Some industries and commercial establishments in non-conforming areas and urbanized
villages resort to misuse or theft due to prevalent conditions of supply.

Distribution in Power Sector:

Potential Role of the Private Sector According to Shahi (2005) the total Annual losses of
Electricity Boards aggregated for the whole country for the years shown were as in Table 2.1
below: Table: 2.1 Annual Rupee Losses on account of Power Losses Year Annual Losses.

Legislative Support

Privatization and creation of NDPL required major legislative support of the Central
government and that of GNCTD. Some of the legislative support from central government
included enactment of the Central Electricity Regulatory Act of 1998. Under this, an
effective Regulatory Commission (whose function initially was envisaged to be simply tariff
setting) came into being. This was soon followed by the Electricity Reform Ordinance. From
GNCTD side too there were several initiatives that resulted in the privatization process. This
included passage of the Delhi Electricity Reforms Ordinance which empowered Delhi
Electricity Regulatory Commission (DERC) to regulate the power industry including
licensing and restricting government’s role in power policy matters. Delhi Vidyut Board
(DVB) was the state electivity board which came into existence in 1997 under the Electricity
Supply Act of 1948. Until 1997 Delhi received power directly from Municipal Corporation
of Delhi (MCD) through its wing, Delhi Electric Supply Undertaking (DESU). It was thought
that spinning off of DESU which was like a department of MCD and creation of a separate
board will solve the deteriorating power situation in Delhi. However it 15 was not to be.
Power situation continued to deteriorate. There was widespread discontent among the
residents and finally it was resolved that “privatization” was the only option. There had to be
a slew of legislative and legal initiatives before this occurred.

Public Private
Company

31
 Industry Electric utility

Founded 2002

Founder Tata Power & Govt. of NCT of

Delhi

Headquarters New Delhi, India

Key people Sanjay Banga (Chief Executive

Officer), Tata Power Delhi
Distribution Ltd) [1]
Praveer Sinha (CEO & MD,
TATA Power and Chairman
TATA Power Delhi
Distribution)[2]

Services Electricity distribution

Parent Tata Power

Website www.tatapower-ddl.com

Tata Power Delhi Distribution Limited (TPDDL),[3] previously North Delhi Power
Limited, is a joint venture between the Government of the National Capital Territory of
Delhi and Tata Power Co. Ltd., which holds a 51% majority stake in the venture.

It started operations on 1 July 2002 and currently serves 6 million people in the North and
North-west parts of Delhi. It has a registered consumer base of 1.40 million. The company’s
operations span an area of 510 sq. km. with a recorded peak load of around 1704 MW. It is
the only distribution utility to receive the ISO 9001, ISO 14001 and OHSAS
18001 certification, and the only Indian utility to have SA8000 certification.

32
Tata Power Delhi Distribution Limited was initially known as the North Northwest Delhi
Distribution Company and subsequently renamed North Delhi Power Limited. In 2011, nine
years after it first started operations, its name was changed once again to Tata Power Delhi
Distribution Limited [5]

In June 2002, the distribution network of the erstwhile Delhi Vidyut Board was privatised as
per the provisions of the Delhi Electricity Reform Act, 2000 and the Delhi Electricity Reform
(Transfer Scheme) Rules, 2001.[6] The Delhi Vidyut Board was unbundled and split into six
entities managed by BSES Limited (now Reliance Infrastructure Ltd.) and Tata Power. These
six companies were BSES Rajdhani Power Limited, BSES Yamuna Power Limited, Delhi
Transco Limited, Indraprastha Power Generation Company Limited, Delhi Power Company
Limited, and North Delhi Power Limited (known today as Tata Power Delhi Distribution
Limited).[7][8]

Under the agreement, Tata Power gained a 51% stake in the North and Northwest Delhi firm
with a payment of Rs. 187 crores. It also agreed to reduce the Aggregate Technical and
Commercial (AT&C) losses of the firm by 17% in the next five years [8]

On July 1, 2002, Tata Power Delhi Distribution Limited began its operations as the North
Northwest Delhi Distribution Company [9]

33
 Chapter 3

Research Methodology

3.1 Title

Research comprise defining and redefining problems, formulating hypothesis or suggested

solutions; collecting, organizing and evaluating data; making deductions and reaching
conclusions; and at last carefully testing the conclusions to determine whether they fit the
formulating Hypothesis. In short, the search for Knowledge through Objective and
Systematic method of finding solutions to a problem is Research.

3.2 Title justification

Descriptive research includes Surveys and fact-finding enquiries of different kinds. The main
characteristic of this method is that the researcher has no control over the variables; he can
only report what has happened or what is happening.

3.3 Research objective

 To study the behaviour of consumer.

 To recommend strategies to Nike to increase sales.

The main objectives of this study are:

 Understanding Nike Customer behavior and identifying the perceptual gap.

 SWOT analysis of the product sold.

 Comparative study with the competitors.

 To study the tastes, preferences, and buying behavior of consumers in case of

footwear of Bata.
- To analyze buying behavior of ladies segment of consumers.

34
 -To recommend strategies to Nike to increase sales in ladies segment.

 3.4 Research Methodology

This study has been prepared based on detailed discussions with the company’s personnel,
and using secondary information from various sources. In case of primary sources, we have,
in many cases, included the names of the individuals and or their role and designations. In
case of secondary information, citations have been provided for all the sources which have
been consolidated as “References” at the end of the study.

This study describes how TPDDL has been able to lay the foundations for a purposive and
profit-making organization that is poised to be a model, which it probably already is, in
private-public partnership in the power distribution sector. The success that TPDDLhas been
able to achieve is based on a massive change management effort that included streamlining
of technical and operational matters, right investments, customer orientation, adept human
resources polices and multiple stakeholder management. The purpose of this study is to
provide a record of how the turnaround has been achieved. As objective as one likes to be,
there is an underlying assumption that power sector performance has been far from
satisfactory in India with the State Electricity Boards performance being dismal. Further,
there is an underlying assumption in this study that private participation, particularly at the
distribution end, may be the answer and that success of TPDDL is something to be studied
and understood for better organization of power distribution in the entire country and
possibly elsewhere too. TPDDL in a short span of six years have won several accolades
which are summarized in Annexure: 1. This study may be carried to the next stage wherein
cases could be developed for various functional and integrative areas of management. These
cases would not only have value for in-house use for TPDDL in their training and induction
programs but also elsewhere. This material may be use for classroom teaching of MBA
students and also be a source of scholarship for executive education in the power sector.
Considering the structural changes that are expected to take place in this sector in future the
need for such training material cannot be overemphasized.

35
While functional arrangement allows specialization, processes are instruments for delivery of
results on terms acceptable to the stakeholders. Speed, timeliness, completeness etc. are
ensured by the process orientation. Earlier we discussed Key Value Creation Processes of 1)
Network Operations and Management (NO&M) and 2) Revenue Cycle Processes (RCP).
These are further divided into sub-processes such as: 1. Delivering quality electricity 2.
Delivering operational efficiency 3. Ensuring safety 4. Delivery of commercial services 5.
Billing 6. Collection of pending bills The processes mentioned here are for illustrative
purposes and are not exhaustive. To address new strategic challenge under MYT, new
process for ‘power procurement’ too has been institutionalized since April 2007.

4 Customer Satisfaction – Determination and Enhancement Various methods of

determining Consumer Satisfaction have been adopted which are listed below:

1. Consumer satisfaction Survey by Independent Agency

2. Feedback forms placed at consumer care centers analyzed

3. Feedback from Independent & Eminent consumers

4. Analysis of complaints filed within the organization, DERC, CGRF & Ombudsman

5. Performance Trend of key parameters Key Parameters that are measured and monitored
through the above means are: „ AT&C Losses „ Reliability Index „ SAIDI, SAIFI, CAIDI „
Billing Efficiency „ Collection Efficiency „ Consumer care and Servicing (Consumer
Satisfaction Index)

Some of the changes that have been affected in the processes to better serve the customer can
be cited as follows:

1. There were complaints of cash collection centers taking too much time. It was identified
that the delay was caused by the cashier having to access the central server. To overcome the
problem it was decided that there should be a off-line cash collection module (OCCM). This
system ensured that the entire consumer data is transferred on to a CD which is compatible
with only one desktop terminal. This terminal posts all the details on the server at regular
intervals, but otherwise works offline ensuring greater speed

36
2. It was found that some of the customers who had clean billing records were denied
services. It was found that this was being caused by improper inputting of addresses which
caused misidentification of customers. This was overcome by proper address formatting
whereby the addresses were structured based on 23 distinct fields. This ensured that similar
addresses do not cause confusion. 96

3. The consumers complained that there was no convenient way to control their power
expenditure since the billing was done based on meter reading at the end of the billing cycle.
To give consumer greater awareness of power consumption the company developed a system
whereby the consumers could prepay for power with intimation from the company well
before the limit gets exhausted.

The inputs collected from these processes are being used for process improvements. For
illustrative purposes some of these changes are pointed out below:

1. With sufficient details it was possible to segregate feeders that should ideally have better
reliability. In other words, those feeding customers for whom reliability of power was
absolutely important (like hospitals) was identified.

2. Identification of feeders with repeated failures was possible. This allowed for making
changes in the maintenance plan.

3. Load shedding to loss-making feeders was possible to divert supply to other areas with
demand-supply gaps.

4. By matching billing amounts with actual power supplied at disaggregated levels, it was
possible to assess the quantum of AT&C Losses (and thereby theft) at micro levels. This
allowed for creation of schemes to bring more under billing net, conversion of network to
HVDS and LT ABC technology.

5. The new information system also allowed availability of information regarding

disconnected services. It was possible to track whether the defaulters have made the right
payments that would allow them to be reconnected.

37
6. Reliability could be enhanced for sensitive and large customers who potentially would
have a choice to go to another supplier if and when open access regime comes in.

3.4.1research design

Research design is needed because it facilitates the smooth sailing of various research
operations thereby making research as efficient as possible, yielding maximum information
with minimum expenditure and time. Research design stands for advance planning of
methods to be adopted for collecting the relevant data and techniques to be used in the
analysis. Generally the design which minimizes bias and maximizes the reliability of the data
collected and analysed is considered to be a good design .The design which yields maximal
information and provides an opportunity for considering many different aspects of a problem
is considered and efficient design in case of many research problems.

3.4.2 Data collection

There are two types of data.

Source of primary data for the present study is collected through questionnaire and answered
by consumers of TPDDL The secondary data is collected from journals, books and through
Internet search.
Source of primary data for the present study is collected through questionnaire and
answered by consumers of TPDDL. The secondary data is collected from journals,
books and through Internet search.

 Primary Data

The data that is collected first hand by someone specifically for the purpose of facilitating the
study is known as primary data. So in this research the data is collected from respondents
through questionnaire.

This will be collected through questionnaire and personal interviews with the officers of the
selected companies and investors. The questionnaire will contain different questions on
interim reporting. It will also include the items of information which will be required to be
published in the annual report of a company. The main aim of questionnaire will be to know

38
the opinions of Indian investors and views of officers of companies about the disclosure of
item of interim reporting. Direct contact with the prospective and present investors will be
established for analysis of ‘perceptions of investors’. The questionnaire will printed and
distributed among different investors across the country to obtain ideal answer for the
research questions.

 Secondary data

For the company information I had used secondary data like brochures, web site of the
company etc. The Method used by me is Survey Method as the research done is Descriptive
Research.

This will be collected through published financial and annual reports of the selected
companies and from the web site of www.nseindia.com, www.sebi.com,
www.moneycontrol.com. The data thus collected will be tabulated, classified and grouped
for the purpose of interpretation, analysis and finding conclusions in order to analyze the
data. The various financial techniques such as common size analysis, comparative analysis
and trend analysis will be used in the proposed study. A number of statistical techniques such
as mean, standard deviation, co-efficient of variation, indices, chi-square, t-test, correlation,
regression etc. are to be used to compute the result of proposed study.

3.4.3 sampling

The research method is the field research where in the survey through questionnaire for the
collection of data is used as well as personal interviews are conducted. While collecting data
from industrial and domestic customers the researcher made it a point to visit the unit/work
place or residence for explaining the purpose of this research and interacted with them to sort
out any specific queries and difficulties. For reviewing problems faced by MSEDCL in Pune
city , the data collection method is by conducting personal interviews of MSEDCL’s
engineers through structured questionnaire.

 sampling design
Sampling design consists of: 1. Non-probability designs which are known as
purposive, convenient or judgement sampling design and 2. Probability sampling

39
 design. Due to paucity of funds and time constraints, for this research study,
nonprobability, convenient sampling design is used.
 sampling unit
 Sample area -delhi
 Sample size

The selection of sample size for domestic and industrial customers is as given belowFor
domestic Customers- For domestic customers the sample size is 270 numbers in Pune city.
For industrial Customers-For industrial customers the sample size chosen is 30 numbers in
Pune city. The total sample size is therefore 300 Nos. To carry out comparative study of
distribution companies in Pune and Mumbai, 12 54 numbers of respondents of each domestic
customer and 3 numbers of respondents of each industrial customer of every electric utility
company were selected. Hence the total respondents for this comparative study are 60
numbers of domestic customers and 15 numbers of industrial customers. In order to get
opinions and suggestions from customers in key area of research, the researcher has selected
27 numbers of domestic customers in Pune city and 03 numbers of industrial customers in
Pune city for responding to open-ended questions. The respondents considered for open-
ended questions were different from those selected for earlier study of 270 numbers of
domestic and 30 numbers of industrial customers in Pune city. Finally, 05 numbers of’
MSEDCL’s engineers were interviewed to review the problems faced by MSEDCL with
regard to domestic and industrial customers in Pune city.

3.5 data analysis tools

40
3.6 limitation of study

41
 Chapter-4

Analysis

Power is a Regulated Business under the purview of respective State and Central Electricity
Regulatory Commission & governed by provisions of Electricity Act’03

• India has a generation capacity of 267 GW with 71% share from Thermal, 15% from
Hydro, 2% from Nuclear & 12% from Renewable Energy Sources. Additionally, there is
captive generation of 40 GW

• The country as a whole is currently in a power deficit scenario with peak & energy deficits
of around 5% (Delhi is in surplus situation).

• Average Per capita consumption of India is around 950 units while that in Delhi is around
1300 units. Distribution is a licensed activity under the EA 2003.

• SERCs award distribution license.

• 85% of Distribution sector largely dominated by State Owned Electricity Boards.

• TPDDL (Distribution) is Regulated by Delhi Electricity Regulatory Commission (DERC)

who is responsible for determination of tariffs chargeable to consumers. Distribution Sector
Delhi Mumbai, Kolkata, Ahmedabad, Surat, Greater NOIDA DF PPP Pvt State-owned DF –
Distribution Franchisee; PPP-Public-Pvt Partnership Maharashtra (Bhiwandi, Nagpur,
Jalgaon, Aurangabad), UP (Agra), MP (Gwalior, Ujjain, Sagar), Bihar (Muzaffarpur,
Bhagalpur, Gaya) Govt. DISCOMs 8

• Discoms are in dire situation due to the following

• Growing gap between the Average Cost of Supply and tariff realization (113 p/unit)

• AT&C losses (~25%) and infrequent and inadequate tariff increases . • Most states hovering
at 40%.

• 16 utilities had losses below 15 per cent, while 40 had losses below 30 per cent

42
• Total exposure amount till date of Indian Banks are Rs. 3,20,238 crs. (FY 13)

• Distribution utilities are preferring load shedding to meeting DSM obligations

• Competition through Open Access – A non-starter

• Increased cross subsidization in last 5 years – an unsustainable trend

• Slow or virtually no Reforms in Distribution Sector despite successful reforms in Delhi in

2002

• State Governments only pursuing the Franchisee Model, whereby O & M contract(s) for
10-15 years in particular areas are tendered to private parties.

• Approx. rise of 40-50% in the cost of Generation over last 2 years and ~100% in last 5
years

• Inefficient Power Procurement and Management 8 * Source World Bank 2014 report Key
Issues

Tata Power Delhi Distribution Limited is owned by the Government of Delhi and Tata
Power. A majority stake of 51% was acquired by Tata Power in 2002-03 post the unbundling
of the Delhi Government owned Delhi Vidyut Board in the form of equity and preference
shares. Since then it has paid a total dividend of Rs.367.41 crores on five occasions to its
stakeholders – Tata Power and the Delhi Government. In mid-2008, the company issued
bonus shares. In 2014, the Tata Power Delhi Distribution Limited paid a total of Rs.1285
crores as dividend to its shareholders.

Total Dividend Paid Since Inception

Total Dividend Tata Power Delhi Government

Total Dividend
3,674,126,027 1,873,804,274 1,800,321,753

(Equity + Preference) in Rs.

43
Table 1: Break-up of dividend payment to Tata Power Delhi Distribution Stakeholders[13]

Smart technology

In 2003, Tata Power Delhi Distribution Limited made its first ten-year technology roadmap.
Different technologies such as SCADA, GIS, Distribution Management System (DMS),
Distribution Automation (DA) and SAP components including Outage Management System
(OMS) were implemented in the following years [15]

By 2008, TPDDL had achieved 100% consumer indexing using GIS in its area of business,
the first step towards implementing its smart grid project. The second phase of the smart grid
project was launched in October, 2013 [16]

In 2014, the company became the first Indian power utility to launch an Automated Demand
Response (ADR) Project with smart meters in the capital. This Rs. 12.5 crore pilot
project [16] was implemented in partnership with IBM, Honeywell, Landis+Gyr and with the
participation of select Industrial and Commercial Consumers of Tata Power Delhi
Distribution. It is one of the first projects in the world where ADR and AMI (Advanced
Metering Infrastructure for Smart Meters) were conceptualised together. The project was
rolled out with approval from the Delhi Electricity Regulatory Commission (DERC)[17]

Apart from ADR infrastructure, the projects components include Smart Meters, Radio
Frequency (RF) Mesh Based Communication, Meter Data Management System (MDMS)
and integration with other previously existing operational technology and IT systems like
OMS and SAP.[17] It covers over 100 km2. of Industrial & Commercial Belt in North and
North-West Delhi and will help to analyse consumption patterns and optimise equipment
performance.[18] Up to 250 consumers are participating in the project, leading to a collective
shed potential of 20 MW. Future plans include extending the project to include 800
additional consumers which would lead to a shed potential of another 20 MW [17]

Tata Power Delhi Distribution Limited was hailed for its initiatives in smart grid
technologies at the International Conference & Exhibition on Smart Grids and Smart Cities
organised by India Smart Grid Forum 2015 (ISGF) in March, 2015 [19]

TPDDL launches GPS and RFID technology for quick resolution of faults [20]

44
  Projects

Tata Power Delhi Distribution Limited provides consultancy services in the power sector to
companies in the country and abroad.[21][22] The company offers project management,
technical advisory, IT enablement and managed services amongst a host of other services.[23]

 Project Management: Business Process Reengineering, IT Solutions, Smart Metering

Solutions, GIS, OMS, AMI, SAP Implementation, Demand Side Management, Energy
Efficiency.
 Technical Advisory: SCADA & Automation, Smart Grid, Network Planning, System
Improvement, O&M services, Loss Reduction Services, Distributed Power Generation
(Renewable and Non-Renewable)
 IT Services: Consumer Relationship Management, Revenue Management, Automated
Meter Reading & Data Analysis, Energy Audit Application and Performance
Management.
 Managed Services: Technical and Management Strategy Services, Open Access,
Capacity Building and Change Management, Strategic Business Unit, Commercial
Process Outsourcing, Business Process Outsourcing.

The company has provided consultancy services to various companies in India, Bhutan
Mauritius, Nigeria, Uganda and Yemen. Recently, the company has also entered into
providing System Integrator services for IT and OT Implementation.

45
http://tatapower-ddl.com/Editor_UploadedImages/Content/net-meeting-diagram.jpg

https://simconblog.files.wordpress.com/2014/04/capture4.png

46
https://i1.wp.com/greencleanguide.com/wp-content/uploads/2013/08/Institutional-structure-
of-the-power-sector-in-National-Capital-Territory-of-Delhi.jpg?resize=609%2C380

https://encrypted-
tbn0.gstatic.com/images?q=tbn:ANd9GcQEIGCPpVePP5eRmhYX7GK59nfjyCFlljb72vjron
nKhXRwIHrj

India Ltd. for evacuation of Power from Tala hydro plant in Bhutan to Delhi and ‘Maithon
Power Ltd.’ with Damodar Valley Corporation for a 1050 MW Mega Power Project at
Jharkhand.

47
  Key Financial Figures

Consolidated (Rs. Cr)

Particulars FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Total Income from 33,025.43 35,648.70 34,366.85 37,480.20 27,897.72

Operations

Expenses 26,393.09 27,942.25 27,426.37 28,469.59 22,051.02

Earnings Before Other 6,632.34 7,706.45 6,940.48 9,010.61 5,846.70

Income, Interest, Tax and
Depreciation (Operating
Profit)

Depreciation 2,051.69 2,729.62 2,174.21 2,376.39 1,988.59

Finance Costs 2,635.53 3,439.90 3,699.27 3,476.53 3,113.97

Other income 181.56 (561.86) 416.74 78.96 202.22

Exceptional items 850.00 – – 1,299.98 1,260.91

PBT 1,276.68 975.07 1,483.74 1,936.67 (314.55)

Tax 1,177.96 1,008.38 1,074.92 869.28 (45.82)

48
PAT (before Minority 98.72 (33.31) 408.82 1,067.39 (268.73)
Interest and share of
Associates)

Profit/ (loss) attributable to 208.07 272.03 289.37 255.66 –

Minority Interest

Share of profit / (loss) of (23.92) (45.37) (48.38) (61.62) (1,217.29)

Associates

Other Related Items – – – – –

Consolidated Profit / (Loss) (85.43) (259.97) 167.83 873.35 948.56

for the year

 Profitability Analysis

Consolidated (%)

Particulars FY FY FY FY FY
2013 2014 2015 2016 2017

Operating Profit Margin Ratio 20.08 21.62 20.20 24.04 20.96

Net Profit Margin Ratio 0.30 (0.09) 1.19 2.85 (0.96)

Operating profit margin is a measurement of the proportion of a company’s revenue that is

left over after paying for production costs such as raw materials, salaries and administrative
costs. Net profit margin is arrived at by deducting non operating expenses such as
depreciation, finance costs and taxes out of operating profit and shows what is left for the

49
shareholders as a percentage of net sales. Together these ratios help in understanding the cost
and profit structure of the firm and analysing business inefficiencies.

https://higherlogicdownload.s3.amazonaws.com/PENTON/UploadedImages/66e3e752-399d-
4df7-b00c-edd79949c8a4/analytics_in_india.png

https://www.outlookbusiness.com/public/uploads/editor/2015-12-18/1450419668.jpg

50
  Key Balance Sheet Figures

Sources of Funds / (Rs. Cr)

Liabilities

Particulars FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Share Capital 237.29 237.29 237.29 270.48 270.48

Reserves & Surplus 11,011.41 10,501.19 10,473.29 12,271.57 12,843.44

Net worth (shareholders 11,248.70 10,738.48 10,710.58 12,542.05 13,113.92

funds)

Unsecured Perpetual 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00

Securities

Special Appropriation 533.61 533.61 533.61 533.61 533.61

Towards Project Cost

Statutory Reserves 617.77 604.23 613.23 623.23 644.23

Minority Interest 1,631.27 2,064.60 2,273.31 2,492.59 2,581.38

Capital Grant 9.39 8.91 8.82 8.30 7.80

Service Line Contributions 401.32 450.56 534.83 611.70 698.02

From Consumers

51
Long term borrowings 29,733.11 31,599.34 30,469.94 32,618.38 34,296.81

Current liabilities 13,207.27 16,642.57 21,726.72 21,111.12 20,621.63

Other long term liabilities 2,219.01 2,113.70 1,889.34 2,000.50 2,221.61

and provisions

Deferred Tax Liabilities 647.05 1,025.41 1,137.88 1,401.37 1,487.49

Total Liabilities 61,748.50 67,281.41 71,398.26 75,442.85 77,706.50

Application of Funds / (Rs. Cr)

Assets

Particulars FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Fixed Assets 35,468.27 37,986.72 40,450.23 41,763.82 46,069.52

Noncurrent Investments 2,645.42 2,642.71 2,678.72 2,732.57 2,885.49

Current assets 11,470.09 12,150.12 13,360.88 14,916.36 15,874.34

Long term advances and 7,312.01 8,752.84 8,561.43 9,398.49 8,188.81

other noncurrent assets

52
Deferred Tax Assets 8.31 24.88 14.96 5.85 11.68

Goodwill on consolidation 4,844.40 5,724.14 6,332.04 6,625.76 4,676.66

(net)

Total assets 61,748.50 67,281.41 71,398.26 75,442.85 77,706.50

 Efficiency Analysis

Particulars FY FY FY FY FY
2012 2013 2014 2015 2016

ROCE 12.50 14.94 17.73 14.56 18.02

ROE / RONW (9.67) (0.80) (2.43) 1.34 8.14

Return on Capital Employed (ROCE) measures a company’s profitability from its overall
operations by calculating the return generated on the total capital invested in the business (i.e.
equity + debt). Return on Equity (ROE) or Return on Net Worth (RONW) measures the
amount of profit which the company generates on money invested by the equity shareholders.
In short, ROE draws attention to the return generated by the shareholders on their investment
in the business. Together these ratios can be used in comparing the profitability of the
company with other companies in the same industry.

 Dividend History

The Company has maintained an average dividend yield of 1.33 % over the last 5 financial
years.

53
  Liquidity and Credit Analysis

 Current Ratio

Higher current ratio implies healthier short term liquidity comfort level. A current ratio
below 1 indicates that the company may not be able to meet its obligations in the short run.
However, it is not always a matter of worry if this ratio temporarily falls below 1 as many
times companies squeeze out short term cash sources to achieve a capital intensive plan with
a longer term outlook. Tata Power’s average current ratio over the last 5 financial years has
been 0.74 times.

 Long Term Debt to Equity Ratio

Companies operating with high debt to equity on their balance sheets are vulnerable to
economic cycles. In times of slowdown in economy, companies with high levels of debt find
it increasingly difficult to service the interest on their borrowings as profit margins decline.
We believe that long term debt to equity ratio higher than 0.6 – 0.8 could affect the business
of a company and its results of operations.

Tata Power’s average long term debt to equity ratio over the last 5 financial years has been
2.30 times which indicates that the Company is vulnerable to economic slowdowns such as
the one we have been witnessing over the last few years.

 Interest Coverage ratio

Interest coverage ratio indicates the comfort with which the company may be able to service
the interest expense (i.e. finance charges) on its outstanding debt. Higher interest coverage
ratio indicates that the company can easily meet the interest expense pertaining to its debt
obligations. In our view, interest coverage ratio of below 1.5 should raise doubts about the
company’s ability to meet the expenses on its borrowings. Interest coverage ratio below 1
indicates that the company is just not generating enough to service its debt obligations.

54
Tata Power’s average interest coverage ratio over the last 5 financial years has been
2.54 times which indicates that the Company has been generating enough for the
shareholders after servicing its debt obligations.

 Ownership pattern

In its latest stock exchange filing dated 31 March 2017, Tata Power reported a promoter
holding of 33.02 %. Large promoter holding indicates conviction and sincerity of the
promoters. We believe that a greater than 35 % promoter holding offers safety to the retail
investors.

At the same time, institutional holding in the Company stood at 50.98 % (FII+DII). Large
institutional holding indicates the confidence of seasoned investors. At the same time, it can
also lead to high volatility in the stock price as institutions buy and sell larger stakes than
retail participants.

55
 Chapter-5

Findings

 Satisfied Consumers

Tata Power Delhi Distribution annually conducts a third party Consumer Satisfaction Survey
through reputed marketing research company IMRB. In 2013 results show that 88% of
consumers are satisfied with our services. Wherein, Government, Industrial and Commercial
consumers are having 99% satisfaction level. The findings of the Delhi’s Human
Development Report 2013 reveals that almost 80% of the respondents rated power supply in
city as better. As per the report, reforms in the power sector have yielded positive results with
the supply of power greatly improving post 2002. The power supply in the slums is found to
be at par with the rest of Delhi. In the report the Distribution Companies were rated next to
DMRC services in terms of consumer satisfaction.

 Corporate Social Responsibility

A Way of life at Tata Power Delhi Distribution Going by the Tata Group’s ethos, Tata Power
Delhi Distribution is proactively working for the inclusive growth of the community residing
in 223 Jhuggi Jhopri clusters in its licensed area. The company is imparting Women Adult
Literacy classes to 140 Jhuggi Jhopri clusters where illiterate women are provided training
through Functional Literacy Program in Hindi and Mathematics. Till date we have imparted
this training to over 9000 women. We are running Vocational Training Centers for imparting
training, like Stitching & Tailoring, Beautician, Computer literacy, Typing, Electrician,
Mobile Repairing etc., to the youths residing in Jhuggi Jhopri cluster and resettlement
colonies and around 1400 people have benefitted through these 6 centres. Passed out
beneficiaries are 100% placed and are employed with Westside, Big Bazar, Dee Mark Health
Care, More Mega Mart, Chai Point, Pizza Hut, Fun Cinema, Café Coffee Day etc. We have
created Tutorial Programs to ensure children of Jhuggi Jhopari can have better and improved

56
access to education and better grooming. Program caters to 670 underprivileged kids and has
succeeded to achieve zero dropout status of students.

 National Scenario – A Comparison:

Delhi has the highest per capita power consumption of electricity among the States and
Union Territories of India. The per capita consumption of electricity in Delhi has increased to
1400 units against the National average of 800 units. Peak Demand of Delhi in 2002 was
3097 MW which has gone upto 5727 MW in 2013 i.e. increase of 85%, while the load
shedding has reduced significantly to around 0.2% as against 15% to 20 % prior to 2002.
Against a back drop of nearly 6-8 hours of load shedding and power cuts prior to 2002, Delhi
Discoms are now providing round the clock quality power supply to all its consumers.
System availability has improved to a level of 99.94%. Delhi distribution utilities have been
able to significantly bring down AT&C Losses to less than 15% from 50-53% in 2002. The
National average of AT&C Losses is 26% whereas most of the Indian States are hovering at
more than 40%.

Electricity tariff in Delhi is the lowest as compared to all Metros and NCR. Current Tariff is
Rs. 3.90 (w/o subsidy) for monthly consumption less than 200 Units as compared to Rs 4.20
in Mumbai (BEST) , Rs. 5.86 in Kolkata, Rs. 5.64 in Haryana , Rs. 5.08 in UP, Rs. 5.94 in
Punjab, Rs. 5.71 in Madhya Pradesh and Rs. 5.16 in Rajasthan.

The power purchase price has increased by 300% since 2002 due to increase in price of coal,
gas, freight etc. However there is a disconnect between consumer prices and electricity
supply price. The actual tariff being paid by consumers consuming up to 200 units has
increased by 122% and 66% for consumers consuming 200-400 units. However, the non-
proportional hike in Tariff with respect to increase in power purchase cost was bridged by the
sharply decrease in the AT&C Losses and funding through the borrowing. The benefits of
sharp reduction in AT&C losses have gone directly to the consumers. More importantly, if
we go by the AT&C losses of over 50% at the time of privatization in 2002 the present day
Tariff should be around Rs. 10 but the actual tariff today is around Rs. 6.5 only.

57
Since 2002, Tata Power Delhi Distribution has incurred capital expenditure of over Rs. 3000
crores towards strengthening and augmenting the network, reduction of losses, improving
consumer care centers, etc. As mentioned earlier in the report, Tata Power Delhi Distribution
has reduced the Aggregate Technical & Commercial (AT&C) Losses in its Area of Supply in
North, North West Delhi from an opening AT&C loss level of 53% in July 2002 to 10.78%
by end of FY 2012-13, thereby generating additional revenues to the tune of approx. Rs.
10,300 Cr. for the benefit of the consumers; this amount has been utilized for meeting
increasing input costs (mainly power purchase) which would otherwise have been required to
be funded either by the Government of Delhi (by way of subsidy) or through revision of
Tariffs. We have also paid dividends to the Govt. of Delhi to the tune of Rs. 17 crores for the
period 2005-09 In addition to the estimated accumulated benefit which has accrued to the
Government over last eleven years due to loss reduction, the Delhi Government’s annual
financial support/subsidy of around Rs. 1,500 Crore p.a. to the Sector prior to privatization,
(in today’s terms, this support would be around Rs. 3,000 Crore. p.a.), which has virtually
been reduced to Rs. 200-500 crores. The accumulated benefit of nearly Rs. 30,000 Crore (for
all Discoms) to the State since privatization, which has been deployed by the Delhi
Government in financing other infrastructure projects including roads, flyovers, Delhi Metro,
Stadiums and for development of the social sector.

 Building Careers

Tata Power-DDL, as an organization, attributes its competence, success and surpassed

milestones to its people. They have also made significant difference to the lives of customers
and the community. Tata Power-DDL impresses upon a performance driven DNA in its
system by linking the employees’ potential and performance to the compensation structure
and reward system. It consistently encourages its employees to compete with themselves and
prove their mettle.

 Career Progression

Tata Power-DDL has deployed a defined career progression scheme in order to boost the
growth opportunities for its employees through vertical and horizontal progression. This is
done by assigning higher roles and cross functional exposure.

58
  Fast Track Promotions

Fast Track Promotion scheme is an initiative to reward our high potential employees with
outstanding performance. Fast Track Promotions have been devised to accelerate career
growth in order to take on higher roles. It is a well-structured developmental plan with
functional and cross-functional exposure alongwith high value training programs at leading
Technical and Management institutes which complement this scheme in order to groom the
high potential employees as ‘Business Leaders of Tomorrow’.

 Internal Job Posting

We recognize the distinct advantage of our talented employees seeking job and career
advancement within the company. All employees who are seeking job advancement or
considering a job change are encouraged to use the internal Job Posting as a method for
seeking a suitable position within the company.

We firmly believe that the employees are the key strength behind the company’s growth in
various Consultancy Projects in the Power Sector across India and International locations.
Internal Job posting Scheme enables the employees to apply and seek professional growth
through exposure in challenging consultancy assignments and also become torch bearers for
taking the organization to the next level.

 Cross Functional Exposure

We value the inherent personal and professional requirement of our employees to explore
various aspects of the organization. To fulfill this need, we consistently focus on their job
rotation and enrichment through cross-skilling or up-skilling, ensuring long-term career
development of our employees into various leadership roles.

tata Power Delhi Distribution (TPDDL) is one of India’s most remarkable success stories in
public-private partnerships. A joint venture carved out of the government-owned loss-making
power distribution company, Delhi Vidyut Board (DVB), TPDDL has come a long way in
the decade of its existence. It is the first power distribution company in India to report profits
and present dividend earnings to its joint owners, the state government of Delhi and Tata
Power. And it is the first power distribution utility from India to win the prestigious Edison

59
Award (twice) for outstanding contributions to the advancement of the industry worldwide.
Most importantly, it represents a successful working model for future public-private
initiatives.

TPDDL, earlier named North Delhi Power (NDPL), which services the north and northwest
areas of Delhi, began operations in July 2002. In the years since, it has brought aggregate
technical and commercial (AT&C) losses down from 53 percent to 12 percent, beating the
world average of 15 percent. Power outages in the region it lights up are down from a regular
five hours a day to near zero and revenues are up 60 percent. Just as significantly, the number
of enterprises in the TPDDL distribution area has grown six times, thanks to reliable power
supply.

60
 Chapter-6

Conclusion

In this study, we have elaborated how NDPL has been able to achieve a level of performance
that is highly commendable – whether in an absolute sense or in comparison with other
Discoms. We started the discussion by looking at the background under which NDPL came
into existence and the nature of the industry at that time. This was followed by how the
company identified its stakeholders and the nature of the industry dynamics. Next we
discussed the corporate support and parenting (TBEM, Ethics management, Corporate
Governance, etc.) provided by the Tata group. We have shown in this report how NDPL,
through sustained application of sound management principles has been able to largely get
everyone on board as a team and create a unique company that it is today. The company has
been able to significantly overcome many of the impediments it faced vis-à-vis trade unions
who were earlier largely confrontationist and also vis-à-vis customers who, for historical
reasons, had been thoroughly disenchanted with the services provided to them earlier before
privatization of the utility. This is quite commendable particularly because the improvement
had to be brought about in the midst of deep cynicism from many quarters including the
consumers and consumer groups that represent them. We have also pointed out how many
independent watchdogs have by and large given NDPL kudos for its actions and commended
its performance vis-à-vis other Delhi Discoms. It is common to see in press and elsewhere
mention of NDPL as a success model. In showing NDPL’s achievement we have covered
how strategic objectives have been translated to operational terms. We discussed how the
company went about devising “functional strategies”. In essence, it identified key areas in
major functional areas such as Customer Service, Operations, Human Resources and
Finance. Together with these, there was also keen emphasis on certain integration of these
functional activities. This involved creation of a culture of performance, harmonization of the
two workforces - Ex DVB and NDPL recruits, sound strategic management practices, with
emphasis on dovetailing activities across functions with Vision-Mission of the company,
process orientation, customer orientation, measurement, feedback, creation of an effective
network of communication that 132 went beyond traditional reporting structures, appropriate

61
work design etc. Behind all these efforts were also the important role played by corporate
parenting through TBEM, Tata Ethics policy etc. Needless to say, the company also faces
many challenges. These challenges can be said to be with respect to the following issues: a)
Input Supply (bulk power) of Electricity b) Power Tariff c) Open Market for Power d)
Further AT& C Losses Reduction e) Capital Investments f) Well-defined Role of the
Regulator g) Employee Issues According to the original agreement with Transco, the latter
would provide power only until 2007. Since 2007 the multi-year tariff (MYT) regime has
come in place. To explore various power sourcing options for future, NDPL had constituted a
Generation & Power Trading Group. This group explores possibilities of accessing own
power, including through own generation route. The company is planning a 1000MW plant
at Khanjawala. It has now applied for land there. Earlier it was believed that the NDPL will
be setting up a plant in Bawana which the government has now decided to build itself. The
parent company, Viz., Tata Power Limited, is said to increase its generation capacity fourfold
from its current 2300MW to over 9000MW by 2010, which includes the 4000MW Mundra
Ultra mega Power project in Gujarat. With better institutional infrastructure for trading of
electivity, it is expected that NDPL will be able to buy electricity elsewhere, pay the
wheelage charges and bring it to Delhi. The challenge would be to source adequate power
and obtain it at prices that are favorable to the company. While economic viability will be
dependent upon the cost at which power is bought, it will also be dependent upon the top line
that NDPL will be able to realize. The extent of control over top line has many if and buts
given that the government will continue to fix final energy rates to consumers – which is
anyway the case for most electric utilities all over the world. Right now, the MYT structure is
in place. How this system is going to pan out on the ground is still somewhat unclear. This is
a major challenge the company faces. The question is “How 133 can NDPL influence
government policy towards a price formulae that is objective and realistic?” This issue
becomes even more complicated because there are various segments of customers with
varying rates. Uncertainty is further compounded by differential pricing for different
segments and slab system of pricing within each segment, a system that government and
customers will demand to be continued into the future too. The third challenge is that, until
an efficient market for power evolves in the country there is likely to be power shortages –
overall as well as regional. NDPL and its parent company, Tata Power, being considered

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progressive organizations in the power sector will be expected to play a significant role in
shaping this market – against much odds inherited through the legacy of power sector
mismanagement in the country. NDPL will also have to design an effective power trading
systems, create networks with other players in the power exchange sector and reap the
potential from such a system. In this respect, the company will have to also educate the
customers – power trading has been, and will continue to be, construed as diverting power to
more lucrative locations at the cost of starving Delhi customers! The fourth challenge that the
firm faces is further reduction in AT&C Losses. No doubt, the company has been able to
effect dramatic reduction is AT&C Losses in the initially phases. Be that as it may, the same
downward trends cannot be expected in the future. Any further reduction will require not
more of the same! It is quite evident from the numbers that the company has quite a way to
go in terms of reaching loss levels comparable to the best in world. Since the profitability of
the company will continue to be strongly influenced by the extent of reduction in AT&C
Losses, it would, no doubt, be important to put pressure on this important parameter. And yet
there is a limit to which this factor can be exploited. Strategies other than those meant for
AT&C Losses will have to play a greater role in the future. There have been substantial
investments in streamlining the operations. However, capital investments, as pointed out
earlier in the report, were higher than those estimated at the time of the takeover. Who will
make up these losses? This is an issue that will impact the bottom line of the company
significantly. These will have to be entirely borne by the government or it will have to be
shared by government and the Discoms. These are moot points where the decision would
impact the bottom line by a huge number at one go! 134 The regulator-regulated role
definitions are only evolving in this sector. Even with the multiyear tariff regime, there is still
lack of clarity on many fronts. For example, it is unclear what constitutes performance of the
“regulated”? This gives rise to much ambiguity in terms of clearly pursuing a course of
action which will satisfy the important stakeholder that regulator/ government is. Another
issue is what is the prudent extent to which the regulator can exercise control (or limit) over
Discoms’ financial expenditure? Beyond a certain point, control naturally becomes counter
productive. The final challenge would be to keep up the pressure on enhancing positive
culture within the organization. While the overall climate of the workforce has been
assiduously enhanced through various means, it will take some more time before all the

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employees are completely sold into the new system. Now that a lot of innovations and hard
work has gone into developing a new culture and positive organizational climate, the
important questions that is being asked are how to enhance systems, talents and performance
even better. NDPL had recently scored well (544 in early 2008 vis-à-vis 516 in late 2006)
under the aegis of TBEM model, but there are more “peaks to scale”, especially given its
own aspiration of crossing 600 score in the next year. As they say, the saga continues… and
certainly, in case of NDPL, it will be a saga of success and glory!

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