Challenge Title: How to encourage slum cluster consumers in TPDDL's licensed area to acquire metered connections and ensure 100% payment collection from them?
Challenge Submitter: Amit Kumar Garg
Company: Tata Power Delhi Distribution Ltd. (TPDDL)
Description
There are 218 slum clusters spread across TPDDL’s licensed area with a consumer base of about 0.17 million. These consumers are primarily involved in non-organized sector jobs and have a limited earning capacity. Historically, these consumers have used free electricity in unauthorized manners with political support and this practice has made payment for electricity consumption the least priority for these users/consumers today.
Aggregate Technical and Commercial (AT&C) losses at TPDDL-level came down from 53% in FY 2002 to 15% in FY 2008-09, but in slum clusters the losses were still in the range of 68% and the collection
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efficiency was 61%. A new initiative was taken where slum consumers with limited means were classified as Special Consumer Group (SCG) and the SCG+CSR concept was born to make them pay by augmenting their family incomes through various Corporate Social Responsibility initiatives.
In the last 5 years, some exclusive strategic initiatives have been implemented / initiated for the SCG consumer like:
a. Minimum documentation formalities for providing new metered connection
b. New Connection charges recovered through installments
c. Accidental insurance scheme for Rs 0.1 million to consumers opting metered connection
d. Pay n Win scheme for consumers making regular payment
e. Late Payment Surcharge (LPSC) and other attractive waiver schemes for liquidation of accumulated dues
f. Appointment of Collection based Franchisees for slums
g. Focusing CSR initiatives like Medical / Drug De-addiction Camps for regular paying consumers, enabling employability, entrepreneurship, education for the residents in form of Adult Literacy Centers and Vocational Training Centers
h. Relationship building with local influential people, also referred as Pradhans, and taking their help for registering / resolving complaints in such areas
i. Encouraging local residents to take up meter reading, billing and recovery activities
j. Aligning due date for bills with wage / salary dates for such consumers
Inspite of these initiatives, we still have an annualized loss of around Rs. 500-600 million and our collection efficiency in some months drop down to 85% while billing efficiency is around 70%. There are some users who are still not using electricity through metered connections.
We are looking forward to cost effective innovative solutions to achieve 100% metering, billing and collection efficiency for this particular segment of consumers
Solution:
As per Maslow's
theory of hierarchy human being will always try to satisfy his basic needs
i.e food, clothing and shelter. Whatever he earns will be spent to
satisfy his and his families basic needs. All the implementation and initiative
taken till now may not have 100% impact on revenue generation. Its evident
that unless there is a source of regular income for slum dwellers they will not
pay their billing.
Below are the
initiative which can be taken in improve the billing and 100% metering.
a. SHG(Self
help group) under CSR:
Under CSR TATA Power can assist or facilitate in creation of SHG(Women) group
who can help each other in revenue generating work. Example: Like set up of small
scale industry for producing Lunch box for office goers, Papad, Pickles,
etc. Men can also be part of the SHG, They can provide support in delivery of
produce. The group will need initial investment which can be either financed by
TATA trust or any bank under the backing of TATA trust.
The profits earned
by SHG can be shared among members, part of which can be used for payment of
bills and investment for further growth of SHG.
b. Prepaid
connections: Currently all
the connections are post paid, We can introduce prepaid connections facility.
Customer can top up there connections with some amount which he can use
whenever it is required for him. This will help him to manage his monthly usage
c. Differential
charges: The charges can
be based on the usage of electricity, Higher the usage of electricity higher
the bill the customer will pay. The low user of electricity should be granted
subsided electricity or higher discounts on bills.
Example: Customer having meter reading between 0 to 100 units will get
20% discount, 101 to 200 will get 10% and 201 to 300 to be charged 10% higher
and so and so forth.
d. Educating
customer on electricity usage under CSR: Various free education session can be conducted to Customer on
minimizing usage of electricity to reduce monthly bills. Lower the bill highéer
the chances of bill payment without defaults.
e. Free
distribution of power saving devices under CSR: Most of the slum dwellers use 100 volts
bulbs which consume more electricity. Under CSR free CFL lights can be
distributed to each home to reduce the consumption of electricity. Lower the
consumption lower the bill and higher the chances of payment lower the
defaults.
f: Installation
of Solar panels on roof tops: The roof tops of slums are free space which can be used for
installation of solar panels, The electricity generated from the solar panel
can be be provided to slum dwellers
freely or at a very low rate.
