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Marketing Channel Project
Distribution Strategies of Public Utilities :
A case study
Synopsis
Submitted By:-
GROUP-10
Prashant Khatri195
Keerthi Nagendra- 28
Sagar Aswani- 55
Vineet Anand- 69
Amit Kumar-0 9
Anmol Ahlawat- 14
Asha Meena- 19
Pratik Bharat Marfatia - 44
Udhaykumar T- 68
Wangchuk Tsheringla -71
Sneha Motwani 209
Rubeena 202


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Contents
Abstract: .............................................................................................................. 3
Introduction: ........................................................................................................ 4
Research Objectives: ............................................................................................ 6
Design/Methodology: Roadmap Ahead ............................................................... 6
Scheduling ........................................................................................................... 7
Expected Outcome .............................................................................................. 7



















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Abstract:
A public utility is an organization (often a private company, but may be owned by local
government or non-profit agency) regulated by your state laws and administered by a public
utilities commission. The term utilities also refer to the set of services provided by these
organizations consumed by the public for eg:
Energy & Power: Electricity, Petroleum, Natural Gas
Transportation : Buses, Metro, Railways
Water & Sanitation
Postal Services
ATM
Passport
Banks etc
In our research, we would primarily focus upon Power Sector of India. We shall analyze various
distribution strategies that Government and private sector , both are using in the domain and
present it as a case-study.
In India, Power sector is still not entirely privatized and is under lot of regulations. The
distribution system is not uniform across all the states and the distribution varies according to the
state government. Majorly, the two models that are followed are joint venture wth private
companies in the form of Public-Private Partnership (PPP), Franchise Model and State
Government distribution.
India is a diverse country. The population is huge and serving to their energy needs is a challenge
for the Government. It become even more difficult when people have different ranges of income.
They may or may not afford fully privatized electricity. Indian government has stated that 21.9%
of its population is below poverty line. Therefore, serving this segment of customers is also
crucial given the fact that everybody has equal right over public utility.
Here distribution strategy becomes crucial. The project will show various models that are
currently being followed to cater the need of power to all the segments: General public,
Industries, manufacturers etc.
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Introduction:
Indian Power Sector: An Overview
The Electricity Act 2003 and downstream policies have brought about a fundamental change in
the power sector with the last decade witnessing a number of headways. Private sector
participation and competition are being witnessed across the value chain, albeit of different
degrees. Four ultra-mega power projects (UMPP) of 4000 MW capacity each, have been awarded
to private entities. A number of distribution licensees have also completed the power
procurement process from independent power producers (IPP) under various modes of tariff-
based competitive bidding. A number of inter-state transmission projects have been awarded to
private entities on an independent power transmission company (IPTC) basis. At the state level
too, transmission projects are being commissioned on a competitive bidding basis. Two power
exchanges have commenced operations and are offering various day-ahead and term-ahead
contracts.
On the distribution side, barring a few states, all the others have unbundled their erstwhile state
electricity boards (SEB) and have corporatised their successor entities. The Government of India
is facilitating efficiency improvement and expanding distribution networks to rural areas through
its flagship programmes of R-APDRP and RGGVY respectively.
The financial health of distribution utilities continues to remain critical for the overall success of
power sector reforms. The aggregate financial losses of the state utilities were estimated at Rs.
52,623 crores in FY 2008-09 with Aggregate Technical & Commercial (AT&C) losses for the
same year being pegged at 28.44%. According to a report released by the 13
th
Finance
Commission, these financial losses may increase to Rs. 116,089 crore by FY 2016-17, assuming
tariffs remain at the 2008 level.
Private participation in the distribution sector is limited and exists in different forms. While
distribution utilities such as Tata Power Company Limited (TPCL) and Calcutta Electricity
Supply Company (CESC) are privately owned and have been in operation for nearly a century,
distribution utilities such as North Delhi Power Limited (NDPL) and BSES Rajdhani Power
Limited (BRPL) have been privatized rather recently (eight years ago) with part ownership
(49%) of these companies residing in the state government.
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Figure 1: Power distribution model: State owned
Quite recently, private participation in power distribution has assumed another form, viz., the
Distribution Franchisee model. As per this model, a certain area of the distribution unit is handed
over to a private entity, and the performance of the private entity is regulated through a contract
between the private entity and the distribution licensee of that area. For instance, MSEDCL (a
state-owned distribution company in Maharashtra) has appointed Torrent Power Bhiwandi
Limited as a distribution franchisee for the Bhiwandi circle in Maharashtra
Some facts about the scenario of power sector in India:

17 percent of worlds population.

Population growth rate of 1.58 percent annually.

GDP growth rate of 6 9 percent.

6th (IEA Report) largest energy producer of the world.

Ranks 5th in energy consumption.

Energy consumption per capita among the lowest in the world (900 kWh/year approx.)

Participation of private players into the Distribution Sector has also been encouraged through
various models such as Public Private Participation as in case of Delhi and Orissa and more
recently through input based distribution franchisee models in Maharashtra, Madhya Pradesh and
Uttar Pradesh.

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Following are the four models of electricity distribution in India :
Ownership/ PPP Distribution Companies (Discom)
State Owned Discom Jaipur Vidyut Vitran Nigam Ltd.
Private Discom ( in jv with State Government) North Delhi Power Ltd,
Private Discom ( private companies) Reliance- BSES, Tata Power
Public-Private Partnership ( Franchisee) Torrent Power Bhiwandi Ltd.

Research Objectives:
To critically analyze the major strategies for Power Distribution in India
To do a comparative analysis between the models of Power Distribution
Design/Methodology: Roadmap Ahead
Step 1: Literature Review
Step 2: Primary and Secondary research
Step 3: Data Collection through surveys and primary visits
Step 4: Consumer segment analysis
Step 5: Analysis of current distribution system
Step 6: Investigating External and Internal Constraints and opportunity
Step 7: Gap Analysis
Step 8: Confronting the constraint objective
Step 9: Critical comparative Analysis of the strategy






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Scheduling ( Tentative)
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Step 7
Step 8
Step 9


Responsibilities
Step 1 Sagar Aswani ( F-055)
Keerthi Nagendra ( F-028)
Step 2 Prateek Marfatia ( F-044)
Step 3 Sneha Motwani ( F-209)
Vineet Ananade ( F-069)
Amit Kumar ( F-009)
Step 4, Step 5 Prashant Khatri ( F-195)
Anmol Ahlawat ( F-014)
Step 6, Step 7 Wangchuk ( F-071)
Asha Meena ( F-019)
Step 8, Step 9 Udhay Kumar T ( F-068)
Rubeena ( F-202)

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Expected Outcome
The expected outcome will be the output related to the 2 research objectives as stated in above
sections. Moreover, A comparative analysis shall be done between PPP and Franchise model of
power distribution in India .We will be analyzing the performance of government firms, who
operate over much larger areas comprising urban/semi urban centers and huge rural areas to
private companies who are mainly operating in compact areas with a concentration of
consumers and substantial loads. We will do the performance analysis on companies selected
under various distribution models and analyze their strengths and weaknesses. Few of the
expected outcomes are Reliance-Infra and NPCL will lead in technical and financial
performance. NDPL and Torrent Power who are able to turn around the distribution business in
urban areas within a short span of time. NDPL, especially, will lead in IT interventions and
infrastructure improvement initiatives which will bring down their distribution losses and
improve their collection efficiency. The main factors to improve the performance of these
companies include high levels of consumer metering, system automation, and augmentation of
the existing network