APDRP

Question: 1. What are the Objectives of APDRP?

Answer: The main objectives of APDRP are

1) Improving financial viability

2) Reduction of T&D losses to around 10%
3) Improving customer satisfaction
4) Increasing reliability of power supply
5) Improving quality of supply
6) Adopting systems approach with MIS
7) Bringing Transparency through computerization

Question: 2. Who will fund the power sector projects under APDRP?

Answer: Power sector projects are funded by Ministry of Finance, Government of India
under the advice from Ministry of Power. The payment would be Channelied
through a designated agency as identified by MOP for smooth implementation
of the programme.

Question: 3. What are the six level intervention strategies in power sector under Distribution
Reforms?

Answer: Ministry of power has formulated a six level intervention strategy to rejuvenate
the power sector, primarily to make it viable. Efforts are to focus on reforms in
the distribution sector to improve accountability & revenue realization in the
form of increased metering conversion of Un metered connections to metered
connections, addition of fresh connections, higher billing and collection
efficiency.

Technical, commercial, financial, IT, organizational interventions have been

devised as part of the six level intervention strategy.

These strategy for Distribution reforms would envisage interventions at the

following levels:

National Level Interventions

The basic issues at national level are related to policy issues, legislation,
uniform standards, and energy conservation, accounting standards.

State Level Interventions

The basic issues confronting the state level interventions are formation of SERc,
issuance to regular tariff orders, providing legislative support for involving local
bodies in management of Distribution business, removal of tariff anomalies,
subsidies and budgetary support.
 SEB Level Interventions
The basic issues confronting the SEB level interventions are Restructuring,
accountability, commercial accounting, integrated management information
system, grid discipline and TOD metering.

Distribution Circle Level

Increase in income:
Increasing the billing, reduction of pilferage, more remunerative pricing of the
commodity (energy) and optimum utilization of physical assets and brand value
of the supplier.

Reducing the Expenditure:

Sourcing of the least cost energy and reducing the energy management or
energy handling cost. In order to achieve the objectives of a retail business
model it is proposed to convert the circle as a independent identifiable business
unit of the DISCOM.

FEEDER Level Intervention

11 kV Feeders are the basic source of income to an electricity utility. The issues
confronting it are Metering and Billing, Bill collection, Abnormal Voltage,
segregation of losses and over all ensuring quality of power supply.

Consumer Level Intervention

The basic issues at Consumer level are related to Mandatory metering,
compliance of billing, consumer satisfaction, and energy conservation.

Question: 4. What are the developments of Distribution Circles as centres of excellence

under APDRP?

Answer: Ministry of power after detailed deliberation with the experts, has identified for
each circle certain short & long term measures which are considered essential to
achieve distribution reform to make the circles as centres of excellence.

1) A scheme was launched in 2000-01 with initial provision of Rs.1000 cr., for
reoriented with introduction of reforms element.

2) The Govt. has approved the proposal of Ministry of power for the six level
intervention strategies for distribution reforms. The approval envisages an
expenditure of Rs.40, 000 Crore during tenth five year plan under APDRP
scheme.

3) An outlay of Rs.20,000 Cr has been provided as central plan assistance under

APDRP to state governments for implementing the up gradation and
modernization of sub transmission and distribution scheme under investment
component.

4) Rs. 20,000 cr has been provided for incentive to the performing states by way
of reduction in cash losses.
Question: 5. Procedure for release of Funds under APDRP?

Answer: The Projects schemes appraised by NTPC/POWERGRID are put up to APDRP sub
monitoring committee of Ministry of Power. On advise of Ministry of Power,
Ministry of Finance releases the funds to respective states for the approved projects
under APDRP in accordance with the procedure for disbursement as given below.

 25% of the APDRP amount- up front on approval of project under APDRP and on
issue of sanction letter by the Financial Institutions.

 Release of matching fund by financial institutions (Fis)

 After Spending 25% of the project cost (i.e 25% APDRP + 25% of loan component
from Fis), 50% of the APDRP amount would be released.

 Progressive release, the balance 50% of the APDRP amount by FIs

 After spending 75% of the project cost (i.e 75% APDRP + 75% of loan component
from FIs)
 Balance 25% of the APDRP amount will be released.

 Progressive release of the balance 25% of the APDRP amount by FIs.

Question: 6. What is the role of NTPC & Power Grid under APDRP?

Answer: The roles of NTPC & POWER GRID under APDRP are:

1) Advise and help SEBs/Utilities in preparation of DPRs and wherever requested

specifically by utility, they shall prepare DPR for states as consultant.

2) Assist SEBs/Utilities in prioritization of schemes for urban areas in distribution circles

and ranking of projects for improvement in revenue collection and increase in
customer satisfaction.

3) Assist Monitoring committee for review of techno economic appraisal of the DPR
prepared by utilities.

4) Assist MoP in prioritization of available funds to be allocated to states/Utilities under

APDRP schemes

5) Monitor periodically the physical and financial progress of various distribution circles
for which APDRP funds have been allocated and disbursed.

6) Advise MOP in devising guidelines for uniformity of approach in preparation and

evaluation of project proposals and disseminating information on best practices under
APDRP scheme.
Question: 7. What is the systematic approach to ascertain incentives claim of SEBs/Utilities
under APDRP?

Answer: In order to follow systematic approach to ascertain the incentive claims of

SEB/Utilities, The following guidelines for calculating incentive claim for cash losses
reduction has been worked out.

-Financial year-2001-02 shall be considered as a base year for comparison of

incentive.

-All future loss reductions would be with reference to the base year to start with.

-As the gap or loss reduction has to be macro and over-all basis, the sum total of the
losses for all entities will be compared with the base year. The cash loss reduction
shall be calculated without the subsidy support of the state government both in the
base year as well as the subsequent years.

-Once an incentive has been drawn for improvement that would become the
benchmark to compare for future improvements and therefore any deterioration
thereafter, in the performance would be ignored to incentives the steady
improvement.

-Only cash sales are to be considered for the calculation of cash loss reduction. Thus
any deterioration in the amount of sundry debtors will have to be taken out from the
purview of loss/profit.

-The accounts should be audited and C&AG should certify this account.

Question: 8. What is the role of Financial Institutions under APDRP?

Answer: The Financial Institutions would be participating in financial vetting of the

schemes for ensuring their bank ability. They would also review the provisional and
audited profit and loss accounts and balance sheets for the purpose of release of
incentive and other parameter like-

-Concurrent project monitoring & reporting

-Verification of technical specifications

-Capacity building?-Quality checks during executing

-Post project benefit evaluation

Question: 9. How do accountability & associated responsibility and authority measured in

determining the profit centers in distribution sectors under APDRP?
Answer: In the competitive market environment of today’s business cannot survive unless
there is total accountability and associated responsibility and authority.
Distribution sector also needs to be treated as a business entity-
-The head of the business units will be empowered to act and be held accountable
for their actions & performance.

-The performance parameters as well as benchmarks are set.

-A sense of ownership and competition is created. The segregation of business

units of utilities is done on business accounting basis and financial practices
adopted on the following lines.

-Input Energy handled/sold.

-Revenue realized from sales and cost incurred on purchase of input energy.

-Expenditure incurred on O&M, repairs, spares, supplies, consumables etc.

Question: 10. Who are the Accredited agencies for project formulation, project evaluation,
project monitoring, Implementation, energy audit under APDRP?

Answer: A committee is formed with members from NTPC, PGCIL, PFC, CEA,
SEB/Utilities, Credit rating agencies, FIs etc will constitute to accredit reputed
agencies for the purpose of project evaluation, project monitoring,
Implementation, energy audit & accounting.

Question: 11. How does capacity building exercise helps SEB personnel in preparing
detailed project reports for each distribution/circle within SEBs/Utilities?

Answer: Capacity building exercise helps SEB personnel by

-Training the man power

-Energy audit & accounting studies?

-Making the SEB officials collect relevant data from each 11 KV feeder in the
identified circles.

-Analysing of the data using computer tools to prepare feeder wise computer
aided least cost project report.

-Supervision of Implementation.

Question: 12. Who will formulate the Detailed Project Report-DPR, assist in technical &
managerial skills, and conduct capacity building exercise for SEBs/Utilities
under APDRP?
Answer: The Ministry of Power identified NTPC & Power Grid Corporation Limited as the
lead Advisor-cum-consultants and brought CPRI, MECON under the charge of
NTPC & WAPCOS,NPC,ERDA under the charge of Power Grid.

The Advisor cum- consultants shall assist SEBs/Utilities as follows.

-Assists in formulating Detailed Project Reports.

-Oversee the Implementation of the Project.

-Assists in Technical & Managerial Skills by focusing on the required activities.

-Conducting capacity building exercise.

Question: 13. Who will appraise the DPR- Technical & Finance under APDRP?

Answer: The DPR shall be forwarded to the MOP for review and appraisal. The MOP
reserves the right to get the DPR-Technical reviewed by NTPC, POWERGRID.
After technical appraisal the DPR shall be forwarded to financial Institutions for
checking the commercial viability of the proposals.

Question: 14. What are the measures taken to reduce the technical loss reduction under
APDRP?

Answer: The following are the measure

-Installation of capacitors at all levels.

-Re-conducting of over loaded section.

-Re-configuration of feeder lines & distribution transformers so as to reduce the

length of LT lines.

-Make the system less LT oriented by installation of smaller size energy efficient
distribution transformers so that each transformer supplies power to 10 to 15
house holds only.

-Development of digital mapping of the entire assets of distribution system.

-Computerized load flow studies so that investments could be undertaken for

long-term strengthening of the distribution system.

Question: 15. Who will assist in technical specification & standardization of equipments
used in the distribution section?

Answer: The Indian Electrical & Equipment manufacturing Association, the Confederation
of Indian Industry & Bureau of Indian standards will assist in technical
 specification & standardization of equipments like electronic & static meters,
transformers, capacitors, conductors, Insulators etc used in distribution sectors.

Question: 16. What is the action plans accepted under Chief Ministers National Action plan
(CMNAP) for power sectors?

Answer: The action plan under CMNAP identified and accepted are

-Establishing independent regulatory commissions at Central and state levels.

-Minimum of 50 paise per kwh to be charged as agricultural tariff in phases.
-Withdrawal of flat rates and metering of all connections

Question: 17. What are the factors involved in analyzing the load factor?
Answer: Load forecast is extremely important in planning, distribution network and
capacity addition.

The factors involved in analyzing load forecast are

-Analysis of past trends of growth in electricity demand

-System load forecast viz. forecasts of load for the entire study area

-Spatial or small area load forecast (Division of Utility service 1area into
sufficiently large number of small areas and forecast for each small area)

Electricity Act-2003
Question: 18. How does the enactment of Electricity Regulatory commission Act-1998
helps?

Answer: This helps in paving the way for creation of independent regulatory commissions
at the center and in the states with a view to bring in Electricity Act

Question: 19. What are the main objectives of Electricity Act-2003?

Answer: An Act to consolidate the laws relating to generation, transmission, distribution,

trading and use of electricity by taking the following measures.

-Taking conducive measures to develop electricity industry

-Supply of electricity to all users
-Protecting consumer Interest
-Rationalization of electric tariff
-Transparency in policies regarding subsidies
-Promotion of efficient & environmentally policies constituted by Central
Electricity Authority (CEA),
Regulatory commissions & establishment of Appellate tribunal.
Question: 20. Is Electricity Act-2003 extended to whole of India?

Answer: Yes, The Electricity Act-2003 is extended to whole of India except the state of
Jammu & Kashmir.

Question: 21. What does the term Dedicated Transmission lines means?

Answer: Dedicated Transmission lines means any electric supply line for point to point
transmission which are required for the purpose of connecting electric lines or
electric plants or generating stations or any transmission lines or sub station or
generating stations or load centre.

Question: 22. What does the term Distribution licensee means?

Answer: Distribution licensee means a licensee, authorized to operate and maintain a

distribution system for supplying electricity to the consumers in his area of supply.

Question: 23. What does the term Power Systems means?

Answer: All aspects related to generation, transmission, distribution and supply of electricity
which includes one or more of the following.

-Generating stations
-Transmission or main transmission lines
-Sub-stations
-Tie-lines? Load dispatch activities
-Mains or distributing mains
-Electric supply lines
-Overhead lines
-Service lines
-Works

Question: 24. What does the Regional Power Committee do?

Answer: Regional Power Committee is established by the Central Government for a

specified region for facilitating the integrated operation of the Power system in that
region.

Question: 25. What do you mean by Stand-alone system?

Answer: Stand-alone system means the electricity system set up to generate power &
distribute electricity in a specified area without connecting to the Grid.
Question: 26.What do you mean by Transmission lines?

Answer: Transmission lines" means all high pressure cables and overhead lines (not being an
essential part of the distribution system of a licensee) transmitting electricity from a
generating station to another generating station or a sub-station, together with any
step-up and step-down transformers, switch-gear and other works necessary to and
used for the Control of such cables or overhead lines, and such buildings or part
thereof as may be required to accommodate such transformers, switchgear and other
works.

Question: 27. Who will prepare & publish National Electricity Policy and tariff policy Plan?

Answer: The Central Government shall, from time to time, prepare & publish the national
electricity policy and tariff policy plan, in consultation with the State Governments
and the Authority for development of the power system based on optimal utilisation
of resources such as coal, natural gas, nuclear substances or materials, hydro and
renewable sources of energy.

Question: 28.How does any person transmit or distribution or under take trading in
electricity?

Answer: Any person is allowed to transmit or distribute or under take trading in electricity
provided he has authorized license issued under section-14 or is exempted under
section-13.

Question: 29. What is the network for Transmission of Electricity in the country?
Answer: The Central Government makes region-wise demarcation of the country, and, from
time to time, makes such modifications therein as it may consider necessary for the
efficient, economical and integrated transmission and supply of electricity.

-The Central Government may establish a centre at the national Level, to be known
as the National Load Dispatch Centre for optimum scheduling and dispatch of
electricity among the Regional Load Dispatch Centres.

-The National Load Dispatch Centre shall be operated by a Government company

or any authority or corporation established or constituted by or under any Central
Act, as may be notified by the Central Government?

-The Central Government shall establish a centre for each region to be known as the
Regional Load Dispatch Centre having territorial jurisdiction as determined by the
Central Government for the purposes of exercising the Powers, and discharging the
functions under this Part.

-All directions issued by the Regional Load Dispatch Centres to any transmission
licensee of State transmission lines or any other licensee of the State or generating
company (other than those connected to inter State Transmission system) or sub-
station in the State shall be issued through the State Load Dispatch Centre.
Question: 30. What are the responsibilities of Regional Load Dispatch Centre?

Answer: The Regional Load Dispatch Centre shall,

-Be responsible for optimum scheduling and dispatch of Electricity within the
region, in accordance with the contracts entered with the licensees or the generating
companies operating in the region.

-Monitor grid operations;

-Keep accounts of the quantity of electricity transmitted through the regional grid;

-Exercise supervision and control over the inter-State transmission system.

-Responsible for carrying out real time operations for grid control and dispatch of
electricity within the region through secure and economic operation of the regional
grid in accordance with the Grid Standards and the Grid Code.

Question: 31. What are the responsibilities of State Load Dispatch centre?

Answer: The State Load Dispatch center shall:

-The State Load Dispatch Centre shall be the apex body to ensure integrated
operation of the power system in a State.

-Responsible for optimum scheduling and dispatch of electricity within a State, in

accordance with the contracts entered into with the licensees or the generating
companies operating in that State.

-Monitor grid operations.

-Keep accounts of the quantity of electricity transmitted through the State grid;

-Exercise supervision and control over the intra-state transmission system.

-Responsible for carrying out real time operations for grid control and dispatch of
electricity within the State through secure and economic operation of the State grid
in accordance with the Grid Standards and the State Grid Code.

Question: 32. What are the features available under Electricity Act-2003 for Electricity Bill
2003?

Answer: Following are the features under Electricity Act-2003 for Electricity Bill-2003.

-The central Government to prepare a National Electricity Policy in consultation

with state governments?
-Trust to complete the rural electrification and provide for management of rural
distribution by
panchayats, cooperative societies, non-government organizations, franchisees, etc.

-Provision for license free generation & distribution in the rural areas, Generation,
being de-licensed and captive generation being freely permitted.

-Hydro projects need clearance from the central electricity authority.

-Transmission Utility at the central as well as state level, to be a government

company with responsibility for planned and coordinated development of
transmission network.

-Provision for private licensee in transmission & entry in distribution through an

independent network.

-Open access in transmission from the outset.

-Open accesses in distribution to be introduced in phases with surcharge for current

level of cross subsidy to be gradually phased out along with cross subsidies and
obligation to supply. SERs to frame regulations within one year regarding phasing
of open access.

-Distribution licensees would be free to undertake generation and generating

companies would be free to take up distribution licensees.

-The State Electricity Regulatory commission is a mandatory requirement.

-Provision for payment of subsidy through budget?

-Trading, a distinct activity is being recognized with the safeguard of the

Regulatory commissions being authorized to fix ceilings on trading margins, if
necessary.

-Provision for reorganization or continuance of SEBs?

-Metering of all electricity supplied made mandatory?

-An Appellate Tribunal to hear appeals against the decision of the CERC and SERc.

-Provisions relating to theft of electricity made more stringent.