The objective of the present study is to evaluate and analyse the performance of Indian electricity distribution utilities post the implementation of landmark Electricity Act 2003.
Abstract
Purpose
The objective of the present study is to evaluate and analyse the performance of Indian electricity distribution utilities post the implementation of landmark Electricity Act 2003.
Design/methodology/approach
Stochastic frontier analysis (SFA) that incorporates exogenous influences on operational efficiency is adopted in the present study. Specifically, a stochastic frontier production function model with a technical inefficiency effects model (Battese and Coelli, 1995) is chosen as a preferred model. In this model, the function that explains the inefficiency scores is estimated in a single stage with the production technology. This avoids the problem of inconsistency which is possible in the two-stage approach.
Findings
The sample involved 52 Indian electricity distribution utilities for seven-year period from 2006 to 2013. Major findings of SFA show that Indian electricity distribution utilities post the implementation of Electricity Act (2003) had, on average, experienced efficiency improvement during the observed period. The overall mean technical effciency score is estimated as 78.5% which indicates that there exist wide scope for effciency improvement in the sector. Further, the empirical findings also indicate that publicly owned distribution utilities obtain average technical efficiencies of 71.3%, which is lower than privately owned distribution utilities, which achieve average technical efficiencies of 85.7%.
Research limitations/implications
Power supply quality indicators such as SAIFI, SAIDI, CAIFI, etc. and unobserved heterogeneity also influence the efficiency analysis of electricity distribution utilities. Hence, these parameters as explanatory variables can be incorporated in the future work.
Practical implications
The results obtained from this empirical study would likely be helpful for utility managers and policymakers to know how well they are performing, and how a better corporate strategy a particular utility can formulate to improve its operational efficiency and also its position in the marketplace.
Originality/value
This paper is amongst the first significant attempts that implement SFA approach to the panel dataset over a longer period of time – 2006 to 2013, so, as to evaluate and analyse the operational efficiency of Indian electricity distribution utilities in a single framework after the enactment of Electricity Act (2003). Unlike previous studies, this study investigates the degree to which various exogenous (or environmental) factors influence efficiency levels in these utilities.
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Praveer Sinha, Ravi Shankar, Prem Vrat and Shweta Mathur
Distribution and retail supply of electricity is the most important cog in the power sector value chain. Despite several reforms, most of the Discoms are facing huge financial…
Abstract
Purpose
Distribution and retail supply of electricity is the most important cog in the power sector value chain. Despite several reforms, most of the Discoms are facing huge financial losses and resorting to a tariff hike which may not be a viable solution. The purpose of this paper is to analyze a case study of Tata Power Delhi Distribution Ltd (Tata Power-DDL) which inoculated itself against the financial ills, and demonstrates how a utility can nurture itself and manage the key stakeholder expectation with innovation, ethics, safety, transparency and agility being its cornerstone.
Design/methodology/approach
The study analyses the situation for Tata Power-DDL which needs to realign its strategy to meet emerging sustainability challenges. The case covers the aspect of strategic management, strategy formulation and change management system deployment using tools such as strength, weakness, opportunities, threat (SWOT), political economical social technological legal environment (PESTLE), critical success factor and key performance indicator cascade. It touches upon the emerging need for distribution utilities to look beyond economic signals and take social and environmental impacts into the strategy planning process.
Findings
It viewed the distribution business beyond its conventional responsibility of making power available to consumers and to provide quality service. A well thought out adaption and adoption of upgraded technology can be a game changer even for a market which is highly regulated and dominated by players in their respective defined territories.
Research limitations/implications
Since the sector is regulated and each utility has a pre-defined set of area of operation with no competition within its licensed area, hence, there is a limited application of applied strategy tools such as SWOT and PESTLE.
Practical implications
Since the sector is regulated and each utility has a pre-defined set of area of operation with no competition within its licensed area, hence, there is a limited application of applied strategy tools such as SWOT and PESTLE.
Originality/value
India as a market is evolving in energy space and utilities are still struggling to have a fundamental structure to meet the agenda of “power to all.” The paper provides the valuable insights into the process of environmental scanning and formulation of organizational strategy to meet the needs of existing and future energy markets.
Details
Keywords
- Public–private partnership (PPP)
- Advanced distribution management system (ADMS)
- Aggregate technical and commercial losses (AT&C)
- Strength weakness opportunity threat (SWOT)
- Political economic social technological legal environmental (PESTLE)
- Tata Power Delhi Distribution Ltd (Tata Power-DDL)
- Distribution company (DISCOM)
Lean Six Sigma is a most widely used technique in quality management. In manufacturing and service industries, this technique is used for process excellence. In the power sector…
Abstract
Purpose
Lean Six Sigma is a most widely used technique in quality management. In manufacturing and service industries, this technique is used for process excellence. In the power sector, there has been hardly any study on the usage of LSS. Can LSS transform the ailing power sector organization from frog into princes? The purpose of this paper is to explore LSS impact on the power sector.
Design/methodology/approach
A multiple case study approach is followed. Five cases, one each from the generation, the transmission and three from distribution companies are studied based on the rationale of theoretical sampling.
Findings
LSS is an important methodology that can be used in generation, transmission and distribution of electricity energy to drive out inefficiency and improve customer satisfaction, profits, etc. In addition, the success stories of all five cases suggest the sustainable economic benefit to the organization due to the implementation of LSS.
Research limitations/implications
This study intends to make an academic contribution to the pertinence of LSS in the power sector. The multiple case study approach is used on a theoretical sample of power utilities in India. This study will provide the theoretical contribution for LSS. In addition, this study will help the practitioner and managers to effectively implement LSS, especially in the power sector.
Practical implications
This study can be used by power sector organizations to implement LSS. A special section on implication for practice is added so that organization can make use of it while implementing LSS in the power sector.
Originality/value
Power is one of the most important infrastructures for the development of a country. In a developing country, the power sector is ailing; the application of LSS can transform the power sector by driving out inefficiency, waste and variation. It will not only prove to be a boon to utilities, but it will also help the customer and society at large. Consequently, it will help in reducing the power tariff, which in turn will make power financially accessible to all categories of consumers. In addition, the private investment in this sector will also improve, if power sectors appeal, to financiers as an efficient organization, compared to loss-making one organization, at present.
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Kwame Owusu Kwateng, Agartha Kwakye, Francis Kamewor Tetteh and Shirley Opoku-Mensah
In today’s highly competitive milieu, many organizations are entering into the international market to gain greater share and take advantage of higher production. However, the…
Abstract
Purpose
In today’s highly competitive milieu, many organizations are entering into the international market to gain greater share and take advantage of higher production. However, the introduction of advanced technology has brought a significant amount of competition within the supply chain especially within the bounds of the power distribution sector. This study aims to examine how information and knowledge sharing influence supply chain performance in the power distribution sector.
Design/methodology/approach
The quantitative method and cross-sectional survey design were used in the study. A sample of 200 officers specifically selected from power distribution companies was used for the study. Data was analysed using descriptive, correlation, regression and structural equation models.
Findings
The relationship between information sharing, knowledge sharing and performance of the supply chain are positively mediated by supply chain collaboration. The findings indicate that technological innovation positively moderates the relationship between information sharing, knowledge sharing and supply chain performance.
Practical implications
Information sharing, knowledge sharing and technological innovation are critical indicators driving the supply chain operation of power distribution organizations.
Originality/value
This study presents a contemporary approach towards understanding knowledge and information sharing as antecedents of supply chain performance.
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Kamaljit Singh, Jasvinder Kaur and Simmi Vashishtha
The purpose of this study is to conduct a critical review of the operational and financial trends of Uttar Haryana Bijli Vitran Nigam Limited and Dakshin Haryana Bijli Vitran…
Abstract
Purpose
The purpose of this study is to conduct a critical review of the operational and financial trends of Uttar Haryana Bijli Vitran Nigam Limited and Dakshin Haryana Bijli Vitran Nigam Limited. Furthermore, the study aims to determine whether loss-making utilities would benefit from adopting the strategic model employed by Haryana.
Design/methodology/approach
Time series data from 2005–2006 to 2022–2023 is analysed using various significant accounting ratios and operational and financial performance parameters to assess the annual performance over the period.
Findings
The substantial operational and financial performance results of UHBVNL and DHBVNL indicate that from 2017 to 2018 onwards, the power discoms started performing well and are in an improving stage. These results create a strong profile for the utilities, suggesting that their model could be a viable solution for other loss-making power distribution companies.
Practical implications
As a policy recommendation, rather than privatizing the discoms, authorities should study the strategic model of profit-making states like Haryana and implement it in other states without any political interference.
Originality/value
The relevant research questions addressed are: What best practices have Haryana power discoms adopted to enhance financial performance and minimize losses? What lessons can other loss-making state-owned power discoms learn from Haryana? Can Haryana power discoms be a benchmarking model for public and private discoms operating at a loss?
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Pallawi Baldeo Sangode and Sujit G. Metre
The purpose of this paper is to identify various risks in the power distribution supply chain and further to prioritize the risk variables and propose a model to the power…
Abstract
Purpose
The purpose of this paper is to identify various risks in the power distribution supply chain and further to prioritize the risk variables and propose a model to the power distribution industry for managing the interruptions in its supply chain. To accomplish this objective, a case of a major power distribution company has been considered.
Design/methodology/approach
Failure mode and effects analysis (FMEA) analysis has been done to identify the potential failure modes, their severity, and occurrence and detection scores. Then an interpretive structural model (ISM) has been developed to identify and understand the interrelationships among these enablers followed by MICMAC analysis, to classify the risk variables in four quadrants based on their driving and dependency powers.
Findings
The results of this study exhibit that technical failure in the information and technology system, the use of improper equipment, poor maintenance and housekeeping in the internal operations are the major risk drivers. Exposure to live wires and commercial loss in power supply has strong dependence power.
Research limitations/implications
This study is limited to a single power distribution company and not the whole power distribution sector.
Practical implications
This study suggests the managers of the power distribution company develop an initial understanding of the drivers and the dependent powers on the supply chain risks.
Social implications
Through prioritization, identification of drivers and the dependent risks, the losses in the power distribution supply chain can be minimized.
Originality/value
Various failures in the power distribution have been studied in the past, but they have not investigated the supply chain risks in the power distribution of a power distribution company.
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Kwasi Dartey-Baah, Samuel Howard Quartey and Angeline Adotey
This study aims to investigate the influence of transformational and transactional leadership styles and their related dimensions on safety citizenship behaviors (SCBs) in the…
Abstract
Purpose
This study aims to investigate the influence of transformational and transactional leadership styles and their related dimensions on safety citizenship behaviors (SCBs) in the power distribution sector (PDS) in Ghana.
Design/methodology/approach
As a cross-sectional survey approach, questionnaires were used to collect data from managers of power distribution centers. Valid questionnaires were retrieved from 197 managers across four power distribution centers. The hypotheses were tested using Pearson correlation analysis and standard multiple regression analysis.
Findings
The results revealed that both transformational and transactional leaders have a positive influence on SCBs. The results also showed that some of the dimensions of transformational and transactional leadership styles cannot strongly predict SCBs in the PDS.
Research limitations/implications
The study was limited by the use of cross-sectional data which did not allow the study to examine any changes in some of the constructs examined with time. The results are occupation-, industry- and country-specific.
Practical implications
Several management implications are discussed, such as managers recognizing that both leadership behaviors can be the basis for SCBs and for mitigating the socioeconomic consequences of unsafe employee behaviors.
Originality/value
The paper’s principal theoretical contribution is the application of social exchange theory toward an understanding of SCBs in a high-risk sector. Energy sector reforms in developing countries are inconceivable without safety consideration.
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Naveen Upreti, Raju G. Sunder, Narendra N. Dalei and Sandeep Garg
This paper aims to present a practical and sequential application of the theory of constraints (TOC) to eliminate the critical barriers to Indian power transmission system (IPTS…
Abstract
Purpose
This paper aims to present a practical and sequential application of the theory of constraints (TOC) to eliminate the critical barriers to Indian power transmission system (IPTS) that were limiting the entire power service quality.
Design/methodology/approach
This study uses a well-known management technique known as TOC, which has the capability and positive force to eliminate the barrier through sequential managerial procedures. TOC framework can provide practical guidance to stakeholders of the power transmission sectors through situational assessment, conflict resolution, planning and implementing changes required in the IPTS.
Findings
This study explains the utility of five-steps thinking process (TP) of TOC especially in the IPTS sector. The study also describes how each step of TP can improve the performance of IPTS against its specified goal. The study brings management’s attention on the system’s weak links that must be leveraged by eliminating them from the system. Major types of constraints are related to the restrictive policy of the sector that mainly include lack of strategic planning, lack of investments and lesser participation of the private players in the IPTS. This study further identifies and suggests various strategies to eliminate the critical barriers of IPTS.
Originality/value
The five-step process of TOC has been successfully applied in manufacturing sector and service sector processes, such as banking and medical services. This paper has uniquely applied TOC in the area of power sector, which is considered as one of key service sectors that form an important share for the Indian economy.
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Jaime Sánchez-Ortiz, Teresa Garcia-Valderrama, Vanesa Rodríguez-Cornejo and Francisca Cabrera-Monroy
The purpose of this paper is to demonstrate that overcapacity and tariff deficit (external constraints) negatively affect the efficiency of distribution firms in the Spanish…
Abstract
Purpose
The purpose of this paper is to demonstrate that overcapacity and tariff deficit (external constraints) negatively affect the efficiency of distribution firms in the Spanish electricity sector. To do this, the paper is based on the theory of constraints and theory of economic regulation.
Design/methodology/approach
Data envelopment analysis (DEA) window methodology is carried out on the constant scales (I-C) with a sample consisting of five main distribution firms during the period from 2006 to 2015. In turn, an analysis of the Malmquist index is carried out to assess whether it has had a displacement with respect to the efficiency frontier.
Findings
The results show that the overcapacity and the tariff deficit negatively affect the efficiency of the distribution firms of the Spanish electricity sector. In addition, there is an existence of external constraints that affect the activities of regulated organisations and the importance of adequate legislation in regulated sectors.
Originality/value
This study defines a model that shows how the efficiency problems associated with electricity distribution companies such as productive overcapacity or tariff deficit can be measured based on the theory of constraints and theory of economic regulation.
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Shabana Naveed and Aisha Azhar
With governance networks as the critical emerging feature of public administration, this article examines the structure, governance and challenges of networks in the public sector…
Abstract
Purpose
With governance networks as the critical emerging feature of public administration, this article examines the structure, governance and challenges of networks in the public sector. Using complexity theory, this article explains that control-based relations do not hold much relevance to govern the complex systems of networks.
Design/methodology/approach
Case study research design is employed taking the power network in Pakistan as the unit of analysis. Data were collected through eleven semi-structured interviews, companies' websites, government policy reports and other companies' reports. The structure of the power network was examined through the technique of social network analysis using UCINET. Thematic analysis of interviews was conducted with the help of NVivo 13 to identify the mode of governance and challenges.
Findings
The study found that five central public sector actors have a high degree centrality and betweenness centrality. Thematic analysis further revealed that these actors are controlling most of the decisions in the network in a hierarchical mode of governance. Other actors face multiple challenges including lack of autonomy, overlapping authorities, conflicting rules and complex decision processes.
Research limitations/implications
The findings imply that instead of top-down and control-based relations, networks require self-governance mechanisms where actors independently participate and interact with other actors to generate common solutions to problems.
Practical implications
The authorities should use network management strategies, participatory approaches and consensus-building methods to reach decisions.
Originality/value
The study explores the network structure and network governance challenges in the context of a developing country that is barely addressed in the public management literature.