Shedding Load Shedding In Pune

Bringing To Life - Public Private Partnership

14th Quality Summit Pradeep Bhargava

Bangalore 18 November, 2006

© Confederation of Indian Industry

Shedding Load Shedding In Pune….. Bringing To Life Public Private Partnership

1. Motivation / Compulsion For The CII Initiative

 Maharashtra Has Promised Its Citizens Power Shortage For Next 3 – 5 Years.

 Neither Centre Nor Neighboring States Have Surplus Energy to Share.

 Load Shedding A Reality – We only Speculate “How Much” ?

 Legal Framework / Political Compulsions force Same Treatment for Pune.

 So CII, Pune Evolved A Solution which ensured Relief with ….

 Zero Help From the Governments

 Financial Pass thru for MSEB
 No Demand On the Grid
 No “Out of Pocket” for Industry.
 Reasonable charge for Citizens……

No Load Shedding In Urban Pune After Years Of Hardships – Almost A Miracle

© Confederation of Indian Industry

 Shedding Load Shedding In Pune….. Bringing To Life Public Private Partnership

2. How The Pune Model Works

Before After

MSEB Grid MSEB Grid

Shortfall – 100 MW Shortfall – Nil 650 MW
Load Shedding
650 MW Zero Load Shedding

Pune Load
750 MW 100 MW
200 MW 550 MW
550 MW
Self Generation 100 MW
Consumption

Extra Cost (CPP) Recovery (Citizens)

@ Rs. 6 Per Unit Financials 230 Mn Unit / Month
Rs. 10 Crore / Month Rs. 0.42 / Unit

Self Contained, Participative Model – Win Win

© Confederation of Indian Industry
Shedding Load Shedding In Pune….. Bringing To Life Public Private Partnership

3. Challenges (Conceptual / Practical)

 Why Indulge – Sovereign Responsibility of State to provide Services.

 “Pseudo” Socialism – What about “Have Nots” !!!

 What is the “Hidden Agenda” of Industry ??

 Give me a “Long Term Solution” – Choose to Ignore Short Term

 “Public Posturing” is at Premium over “Private Conviction”.

 Where Does Final Responsibility rest in this “Multi Star” Show.

 Continuity / Consistency of a Voluntary Gesture.

Do We “Give Up” Because of Pothholes / Speed Breakers – Or “Give To” Society Comfort / Dignity

© Confederation of Indian Industry

Shedding Load Shedding In Pune….. Bringing To Life Public Private Partnership

4. What Has Been Unleashed / Learnt In This Experience

 Raising / Analysing Problems Is Easy – Success comes By Being A Part of the

Solution.

 Enhance Mental Bandwidth – Most Barriers Are Self Imposed.

 No Free Lunches – Pay For A Facility – And then Demand its Availability

 Truly A Public Private Partnership – Citizens / Industry / Service Provider

 What Better CSR – Industry Using Its Assets to Bring “Light” to 4 Mn Citizens.

 There are few things Governments Cant / Wont Do…..Citizen Power Can.

 “Fringe Benefit” – Lower T & D Losses / Cleaner Environment / Encourages

Conservation.

Having A Good Idea Is Not Good Enough – Success Demands Tenacity & Team Work

© Confederation of Indian Industry

Shedding Load Shedding In Pune….. Bringing To Life Public Private Partnership

5. What Next
 Can Be Replicated In Other Communities Across India, Where…..

 Load Shedding Is Regular & likely to Continue.

 Manageable Circle with Reasonable Technical & Commercial Losses
 Citizen Fraternity with Reasonable Mindset.
 Progressive State Electricity Regulatory Commission & Positioning State
Electrical Board.
 Strong Industry Base – with Captive Gensets Capacity

Bangalore, Gurgaon, Indore, Noida, Nashik……

 CII Brand vital to Proceed – Also need a “Champion”.

 Framework in Place after Pune - Can Move Fast.

 Utilising Corporate Assets for Community Use (with Cost Recovery)

Should Be Tried for Other Sectors.

Opportunity For Increasing Our EPS – Empathy Per Share

© Confederation of Indian Industry

© Confederation of Indian Industry
Shedding Load Shedding In Pune….. Bringing To Life Public Private Partnership

BACK UP

A) Basis : Average Load Shedding for Pune Urban 600 MW Hr / Day

(as per Protocol agreed by MERC)
216 Mn Units / year

B) CPP Cost : Variable Cost of CPP Generation HSD Rs. 11.04 / unit
(Fuel, consumables) LDO Rs. 8.24 / unit

Variable Energy Tarrif of MSEDC to Industry Rs. 4.61 / unit

(including FCA, Peak Hour Tariff etc.)

Amount to be Reimbursed to stay Cost Neutral

HSD Rs. 6.43 / unit
LDO Rs.3.63 / unit

C) Total Cost to be Reimbursed to CPPs Rs. 129 crore / year

(85% HSD, 15% LDO)

D) Total Energy Units sold by MSEDC in Pune (Urban) 3066 Mn Units

(excluding domestic consumers upto 300 units/month)

E) Reliability Charge for Consumers of Pune Urban Rs. 0.42 / unit

(to recover cost payouts to CPPs)

© Confederation of Indian Industry