lahore electric supply company limited

Lahore Electric Supply Company Limited2nd Workshop on Power Sector Reforms

11th & 12th November | 2010WAPDA House Auditorium Lahore

Lahore Electric Supply Company Limited

SCHEME OF PRESENTATION

Service TerritoryConsumer ProfileStakeholdersCompany Level KPIs & InitiativesStakeholders’ Major Obligations as per Performance ContractPerformance Management SystemPerformance Contract & Its EffectivenessReview of KPIs for 1st Quarter, ending September 2010AMR Pilot Project – At Consumer EndBenefits of AMR Pilot Project AMR Project – RequirementsFuture AMR Projects: -

AMR at CDP, GRID, FEEDERAMR on RF Mesh at Consumer End


SERVICE TERRITORY

Sheikhupura

SheikhupuraNankanaNankana

0.40 M0.40 M

0.41 M0.41 M

0.38 M0.38 M

0.11 M0.11 M

1. 91

M1. 91

M

FESCO

GEPCO

MEPCO


Consumers

Revenue

Category wise Comparison Ending JUN-2010


Category wise Comparison Ending JUN-2010

Revenue

Consumption


Stakeholders

Customers Employees SuppliersContractorsRegulatorGovernmentLendersCommunity


Company Level KPIs & Initiatives

S# Category Wise KPIs Weight Initiative 1 Operational & Commercial Performance 40% AMR, ERP, SBU

Line Losses (Transmission & Distribution) 15% AMR (CDP, Grid, Feeder)

Collection Ratio 15% CIBS/Online Banking

Transformer Failure Rate 2% Oracle MM

Line Failure Rate - Below 20 minutes 2% AMR, Call Center

Line Failure Rate - Above 20 minutes 2% AMR, Call Center

Defective Meters 4% CIBS/AMR (Cons. End)

2 Financial Performance 20% Oracle Financials, CIBS,SBU

3 Capital Expenditure Project Implementation 15% Oracle Financials & Oracle Projects , MM

4 Customer Relations Management 5% CIBS, Call Center

5 Human Resource Management 10% Oracle HRMS, BPR, JDs & KPIs

6 Employee Safety 10% Safety Stock from Oracle MM, Workshops/Train.

Operational & Commercial Performance 40%

Line Losses 15%Collection Ration 15%Transformer Failure Rate

2%Line Failure Rate – Below 20 Minutes 2%Line Failure Rate – Above 20 Minutes 2%Defective Meters 4%

[AMRCDP, GRID, FEEDER

Oracle ERP (MM)

CIBS, AMR (Cons. end)

CIBS/Online Banking

AMR(CDP,GRID,FEEDER)

Call Center

SBU

Financial Performance 20%Cash – In – Transit 8%Operation & Maintenance 12%

ERPOracle Financials

CIBSCustomer Info & Billing System

SBUStrategic Business Unit

Capital Expenditure Project Implementation 15%

Capitalization (A-90 Form) 5%Capital Expenditure 10%

• STG 5% • DOP 2% • ELR 2% • RE 1%

ERPOracle Financials

ERPOracle Projects

ERPOracle MM

Customer Relations Management 5%

New Connection 2%Customer Facilitation 1%Efficiency of Supply Complaints Resolution 1%Efficiency of Billing Complaints Resolution 1%

CIBSCustomer Info & Billing

System

Call Center(118)

Human Resource Management 10%Officer’ Strength - Occupancy Ratio 2%Staff’ Strength - Occupancy Ratio 2%Resolution of Disciplinary Cases 2%%age of Officers Trained 2%%age of Staff Trained 2%

ERPOracle HRMS

Review of Business Processes,JDs, KPIs

Employee Safety 10%Safety Policy & Trainings,

Awareness WorkshopsERP

Monitoring of Safety Items Oracle MM


Stakeholders’ Major Obligations- As per Performance Contract

Full Corporate Autonomy in their business & commercial operation.No Interference in Companies OperationsSupport in clearing the outstanding dues relating to GOP & Govt. of PunjabEnsure Timely Implementation of TariffAdhere to Regulatory Standards & Procedures regarding tariff adjustmentsProvide Security to Employees where law and order is serious concernSupport to obtain soft long term bilateral and multilateral external financial assistance

GOP Support & Obligations

NEPRA ObligationsTimely Determination of TariffSustainable Competitive Power MarketMonitoring of Companies PerformanceEnsure Consumers’ Interests

Company Obligations

Employee Obligations

Implement Approved Strategic Business PlanSet Performance TargetsReview of Performance Targets by BODEstablish Performance Monitoring & Control MechanismAlign the HR Policies with Performance ContractHR Development w.r.t. Performance Contract

Proactive towards JobEfficient use of available resourcesAct as Custodian of the Assets of the Company


Performance Management SystemCascading of Performance Contract

Review of Job Descriptions (JDs)

Linkage of KPIs with Proposed JDs

Signing of Revised / New Contracts

Revised HR Polices / Procedures

Targets Setting

Performance Evaluation Criteria

Rewards & Penalties

Business Process Re-engineering Operation &Customer Services

Financials

Human Resource

Projects

Employee SafetyCasc

adin

g of

Per

f. Co

ntra

ct

Org

aniz

ation

Dev

elop

men

t

InformationSystem


Performance Contract & Its Effectiveness

MW&P Vs CEO

CEO Vs Functional Heads

Functional Heads Vs SEs

SEs Vs DCM DDT XEN

XEN Vs SDOs

SDOs Vs LSs Maintenance Recovery Meter Reading Complaint

Individual Employee Level

• Very Good Tool to Align All the Employees to the Company Objectives & Targets• For Its Effective Implementation, Job Description of Each Employee Needs to be Reviewed & Related KPI should be embedded in Job Description.• USAID/IRG Has Been Requested to Provide Assistance for Development of Performance Measurement System

• Very Good Tool to Align All the Employees to the Company Objectives & Targets• For Its Effective Implementation, Job Description of Each Employee Needs to be Reviewed & Related KPI should be embedded in Job Description.• USAID/IRG Has Been Requested to Provide Assistance for Development of Performance Measurement System

Signed

In Progress


Performance Contract Targets & Results for 2010-11 (1st Quarter)

KPIs 2010-11Goal

1st Quarter2009-10

1st QuarterAchievement Score

Line Losses (D) 13.4% 14.9% 14.4% 7.5

Collection Ratio 93.0% 88.5% 92.82% 15

Transformer Failure Rate 3.75% 6.6% 3.84% 2

Line Failure Rate < 20 Minutes 225 310.9 304.5 1

Line Failure Rate > 20 Minutes 45.0 61.6 51.7 2

Defective Meters (7-12 months as % of total defective)

5.0% 26.16% 30.52% 0

Total Score 40 27.5 27.5

Operational & Commercial

69%


Financial Performance

KPIs 2010-11Goal

1st Quarter2009-10

1st QuarterAchievement score

Cash In Transit (Monthly Average) 9.0% 9.21% 5.96% 8

O & M Expenses (Rs./ kWh) 0.77 0.58 0.59 12

Total 20 20 20


100%


Capital Expenditure Project Implementation

KPIs 2010-11Goal

1st QuarterAchievemen

tscore

Capitalization (A-90) 80% 79% 2.5

Capital Expenditure

STG 90% 90% 3.75

Distribution of Power 90% 90% 1.5

Energy Loss Reduction 90% 90% 1.5

Rural Electrification 90% 90% 0.75

Total 15 10 10


67%


KPIs 2010-11Goal

1st Quarter2009-10

1st QuarterAchievement Score

New Connection 100.00% 99.61% 97.79% 1.5

Customer Facilitation 96.00% 95% 95.00% 1

Efficiency of Supply Compliant Resolution 100.00% 100.00% 100.00% 1

Efficiency of Billing Complaint Resolution 100.00% 100.00% 100.00% 1

Total 5 4.5 4.5

Customer Relations Management


90%


Human Resource ManagementKPIs 2010-11

Goal1st Quarter

Achievement Score

Officers’ Strength – Occupancy Ratio 95.33% 96.65% 1.5

Staff Strength – Occupancy Ratio 79.33% 81.97% 1.5

Resolution of Disciplinary Cases 80.00% 74.88% 0.5

% of Officers Trained 24.86% 13.38% 2

% of Staff Trained 12.28% 13.75% 2

Total 10 7 7

Employee SafetyKPIs 2010-11

Goal1st Quarter

Achievement Score

No. of Accidents – Fatal 0 0 0

No. of Accidents – Non Fatal 24 3 0


70%

Internet(DSL)

AMR Server

Server at America

InternetGateway

LESCO Shad Bagh Sub Division Office

Delhi Gate-Feeder

AMR Pilot Project


Single PhaseMeter

Three PhaseMeter

MDI

FireflyRepeater

Mesh


Installation of AMR Meters On 11-KV Delhi Gate-3 Feeder

10 No. General Duty Distribution

T/F

48 No. Independent T/F

11 KV Dehli Gate-3 Feeder from 132 KV Badami Bagh G/S

48 No. Domestic

136 No. Industrial

B-1

156 No. Commercial

9 No. IndustrialB-2

Note: - All the AMR Meters are functioning

properly

Note: - All the AMR Meters are functioning

properly

1 No. B-3 Connection


Benefit of AMR Pilot Project

Months %age Line Losses

[Apr-08 to Mar-09] Before Installation of AMR Meters {12-Months} 13.2%[Apr-2009 to Mar-2010] After Installation of AMR Meters{12-Months} 4.4%

AMR Project – Requirements


Description

Hardware1. Meter compatible with utility software2. Modem / Gateway3. Server Machines

Communication Network Public GSM Network / LESCO WAN

Software Multivendor compliant

Human Resource Training & Motivation

Project Team Dedicated preferably external hiring


AMR Proposed Project at CDP, GRID, FEEDER

Modem

LESCO MIS

LESCO Grid Station

Transmission Lines 132KV

Feeders Lines 11KV

MIS Server

AMRServer

GPRS CloudWith VPN

TCP/IP CloudWith VPN

LESCONetwork

LESCO USERLESCO UserLESCO User

NEPRA

FireflyRepeater

Wireless

Wireless

LESCO Sub Division/Division/RO Office

Gateway

Router

LESCONetwork

Wi-Fi

LESCO MIS

AMRServer

BillingServer

Gateway

Router

LESCO Sub Division/Division/RO Office

Ethernet


AMR Future Strategy on RF Mesh at Consumer End

Firefly

Single PhaseMeter

Three PhaseMeter

MDI

Single PhaseMeter

Three PhaseMeter

MDI

Regulatory Authority

MW&P

LESCO Office/User

LESCO Office/User

Financial Summary – 1st Quarter, 2010


Description Sep-10Rs./kWh PPP – Unadjusted 5.63PPP – Adjusted 6.65Distribution Margin 0.56Prior Period Adj. 0.91Total 8.11Actual Revenue 10.91Variance, Rs/kWh 2.79Income Statement Summary (Mln Rs.) Sales Revenue 35,969+ GOP Subsidy 11,299+ Other Operating Inc. 203- PPP 28,815- Operating Expenses 3,118+ Non-operating Inc. 874- Fin. & other Exp. 38EBT (with PYA) 16,374Taxes Net Income 16,374


Thanks

RECORDED LOAD OF DIFFERENT CATEGORIES OF 11KV FEEDERS UNDER LESCO FROM DEC-2009 TO JUNE-2010


# FEEDERS CATEGORYDec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10

Load in MW

1 Dedicated Industrial Load 621 527 532 541 552 567 569

2 Dominating Industrial Load 301 299 320 400 449 503 506

3 Commercial Load 185 189 192 202 251 306 309

Sub Total 1107 1015 1044 1143 1252 1376 1384

4 Agricultural Load 140 139 149 253 211 199 202

5 Domestic Load 940 873 915 1357 1429 1650 1695

6 Exempted Load 28 20 19 21 23 37 39

Grand Total 2215 2047 2127 2774 2915 3262 3320

* Tentative load required for Industrial & Commercial Sectors with zero load shedding round the clock.

ADDITIONAL LOAD REQUIRED FOR ZERO LOAD SHEDDING ON DEDICATED & DOMINATED INDUSTRY


PEROID

MAX. LOAD (MW)

DRAWN BY LESCO

LOAD MANAGEMENT QUOTA (MW)

INERRUPTIONS 1 HOUR EACH TO BE CARRIED OUT Last year

Quota

* Required Load for 2010-11

Proposed Quota

Dec-09 2025 675 385 290 04 Hrs closure of Market Feeders04 Hrs closure of Flour Mills Feeders08 Hrs closure of T/Well Feeders04 Hrs closure of Urban Domestic Feeders08 Hrs closure of Rural Domestic Feeders

Jan-10 1887 675 365 310

Feb-10 1939 675 388 287

Mar-10 1974 1200 440 760 09 Hrs closure of Market Feeders09 Hrs closure of Flour Mills Feeders12 Hrs closure of T/Well Feeders09 Hrs closure of Urban Domestic Feeders12 Hrs closure of Rural Domestic Feeders

Apr-10 2229 1260 465 795

May-10 2479 1260 785 475 04 Hrs closure of Market Feeders04 Hrs closure of Flour Mills Feeders08 Hrs closure of T/Well Feeders04 Hrs closure of Urban Domestic Feeders08 Hrs closure of Rural Domestic Feeders

Jun-10 2665 1155 671 484* For zero load shedding to industrial sector in LESCO areas.

ADDITIONAL LOAD REQUIRED FOR ZERO LOAD SHEDDING ON COMMERCIAL, DEDICATED & DOMINATED INDUSTRY


PEROID

MAX. LOAD (MW)

DRAWN BY LESCO

LOAD MANAGEMENT QUOTA (MW)

INERRUPTIONS 1 HOUR EACH TO BE CARRIED OUT Last

year Quota

Required Load for 2010-11

Proposed Quota

Dec-09 2025 675 460 215 4 Hrs closure of Flour Mills Feeders. 08 Hrs closure of T/Well Feeders.04 Hrs closure of Urban Domestic Feeders.08 Hrs closure of Rural Domestic Feeders

Jan-10 1887 675 430 245

Feb-10 1939 675 429 246

Mar-10 1974 1200 515 685 09 Hrs closure of Flour Mills Feeders. 12 Hrs closure of T/Well Feeders.09 Hrs closure of Urban Domestic Feeders.12 Hrs closure of Rural Domestic Feeders

Apr-10 2229 1260 560 700

May-10 2479 1260 820 440 04 Hrs closure of Flour Mills Feeders. 08 Hrs closure of T/Well Feeders.04 Hrs closure of Urban Domestic Feeders.08 Hrs closure of Rural Domestic Feeders

Jun-10 2665 1155 705 450

* For zero load shedding to commercial, dedicated & dominated industry in LESCO areas.


Remittance To CPPA – Current Procedure

Consumers

Collection in Bank Branches

HBL UBL ABL MCB Others

HBL ESCROW Agent

Taxes/Duties SPPs D.M. CPPA


Settlement with CPPA – Proposed Mechanism

Purchase of PowerFrom CPPA (100%)

Billing

Consumer(76%)

To GOPSubsidy (24%)

Collection inEscrow A/cDaily Basis

100% Payment to CPPA

Through L/CNet of Subsidy

L/C Arrangement (subsidy)24% GOP with CPPA

L/C Arrangement76% LESCO with CPPA

Credit Line with BanksTo meet Seasonal Variations

Limitations•Individual bank may not be able to have more exposure on power sector•Heavy collateral may be required by the bank•Additional financing cost

Taxes/Duties SPPs D.M.

lahore electric supply company limited

Documents

amr cdp

jds kpis

effectivenessreview

financial performance

center line failure

business commercial

employee safety

safety stock