ensuring quality of service through regulation - the international experience

8/8/2019 Ensuring Quality of Service Through Regulation - The International Experience

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IPA EnergyConsulting

Agenda

1. Why Quality of Service Regulation

2. Quality of Service Regulations3. Case Studies


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Purpose of Quality of Service Regulations

Distcos are monopolies - natural monopolies in network business

Distcos allowed to recover prudently incurred costs Distcos allowed to earn a reasonable rate of return on assets

NERC is proxy for competition - defines and publishes regulations

following wide stakeholder consultation Need for distcos to be proactive and more responsive to customer

needs

Therefore need to strike a balance between financialrequirement/viability of distcos and quality of service rendered


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Purpose of Quality of Service Regulations

NERC aware of investment time frames of the industry and the

need to encourage investment in the Nigerian power sector,

therefore does not take this responsibility lightly

Intention is not to punish but to encourage distcos to provide

better quality service and behave as if they are in a competitive

market environment Only things customers want from distcos are light, heat and

motive power - i.e. for equipment to work and work properly

without danger of being damaged. Equipment are expensive.


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Quality of Service Regulations

Monitor through monthly, quarterly and annual submissions

Enforce through warnings, penalties and publication of league

tables to highlight or name and shame laggards Token payments made to customers where distco has failed to

meet standard - payment not netted off electricity bill

Such payments/compensation will not be applied to Nigeria exceptperhaps in exceptional cases such as wrongful disconnection of

customers

Targets must be tough but achievable

Seem to be at war with customers - treated with disdain and

customers feel alienated

Intention is not to punish but to encourage distcos to provide

better quality service


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Agenda

1. Purpose of Quality of Service Regulation

2. Quality of Service Regulation

3. Case Studies


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Case Studies

UK

Pakistan

India

Maharastra

Gujarat

Andhra Pradesh


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Case Study - UK

The Office of Gas and Electricity Markets (OFGEM) has set nine

Guaranteed Standards - essentially reliability targets

Guaranteed Standards are backed by guarantee

Guaranteed Standards include tight but achievable response times

to events

Customers receive a payment from their suppliers if Guaranteed

Standards are not met

OFGEM has also set a number of Overall Standards - these are

essentially quality targets


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Case Study - UK

Distributors fuse: If main fuse between the incoming supply cable and a

customers meter fails, distco will attend within 3 hours on weekdays if

notified us between 7am and 7pm. At weekends and holidays, distco willattend within 4 hours if notified between 9am and 5pm. If notified

outside these times, distco will treat call as if received it at the start of

the next day

Restoration of supply during normal weather: If electricity fails duringnormal weather conditions because of a problem on distcos system,

Distco will restore it within 18 hours of first becoming aware of the

problem

Restoration of supply during severe weather: If electricity supply fails

during severe weather because of a problem on distcos system, distco

will restore supply within the period prescribed by the regulations

dependent upon the scale of the event/severity of weather


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Case Study - UK

Multiple interruptions: If electricity supply fails because of a problem on

distcos system and customer is without power for three hours or more on

four or more different occasions in any single year (12 month period)starting on 1 April, customer is entitled to a payment

Estimated charges: If customer requires a new or additional low voltage

connection, or an alteration to his existing connection, distco will provide

a written estimate within 5 working days if no extension to the system isrequired or within 15 working days if an extension is required

Notice of planned supply interruptions: If distco needs to switch off a

customers power to work on the network distco will give customer at

least two days' notice


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Case Study - UK

Voltage complaints: If customer reports a problem with the voltage of the

electricity to his premises distco will send customer an explanation within

5 working days or offer to visit customer to investigate within 7 workingdays

Appointments: Should a distco need to visit a customer or should a

customer request a visit from a distco for any reason, customer will be

offered an appointment during the morning or the afternoon, or within atwo-hour time band

Notification of payments under the Guaranteed Standards: A distco will

notify its customer of any Guaranteed Standards that it has failed to

meet (other than those for which the customer needs to make a claim forpayment). In any case, distco will send payment to customer within 10

working days of becoming aware of the failure, except in the case of

Supply Restoration during Severe Weather when distco will issue payment

as soon as is reasonably practicable


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Case Study - Pakistan

National Electric Power Regulatory Authority (NEPRA) has set six

(6) Guaranteed Standards and seven (7) Overall Standards

Standards are tough but achievable

Guaranteed Standards focus on outages

Overall standards cover outages, new connections, frequency,safety, etc.


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National Electric Power Regulatory Authority (NEPRA) has set six(6) Guaranteed Standards and seven (7) Overall Standards

All distribution companies MUST implement Guaranteed Standards

for each and every customer

Standards are tough but achievable


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Guaranteed Standards focus on outages - in the event of planned

power supply interruptions, distco must serve notice to all

affected customers at least forty-eight hours in advance of theplanned interruption - defence establishments are excluded

Overall standards cover reliability and quality issues, including

outages, new connections, frequency, safety, etc. - they provide

the underlying indicators of assessment of supply reliability,

quality of supply, and safety of electric power supply that a distco

provides to its customers

Overall Standards also provide time required for a connection to anew consumer and the principles and priorities of the Load

Shedding policies of distcos


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Case Study - Pakistan Guaranteed Standards

GS1: In the case of an unscheduled or unplanned supply interruption, a

distco must restore supply to all affected customers within 10 (urban)

and 16 hours (rural) - the clock starts ticking when the first complaint isreceived

GS2: In the event of an unscheduled or unplanned supply interruption,

GS2 places limits on the number of times in a year that customers can be

interrupted - limits are on high voltage customers, urban customers andrural customers

GS3: In the event of an unscheduled or unplanned supply interruption,

GS3 places limits on the aggregate duration of interruptions in any given

year that a customer could suffer.


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Case Study - Pakistan Guaranteed Standards

GS4 places a limit on the number of scheduled or planned outages that

any customer could suffer in any given year. The maximum number of

outages vary according to customer category

GS5 places a limit of the aggregate duration of the planned outages that

a customer could suffer in any given year. Aggregate durations vary

according to customer category

GS6 focus on the frequency of short interruptions to supply - these could

cause considerable damage to equipment: in the event of an unscheduled

or unplanned short duration supply interruption (duration lasting less

than or equal to three minutes) a distco must ensure that supply of

electricity is not interrupted, on an annual basis more frequently thanspecified limits.


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Case Study - India (Maharastra)

Standards set by the state regulatory commission

Standards cover period for giving supply, quality and system of supply,

restoration of supply, metering and reconnections, a consumer charterand reliability indices.

Failure by a distco to meet any of the standards will render it liable to

payment of compensation to a customer claiming the compensation

Distco is proactive in the payment of compensation - must not wait to be

told

Payment must be made not later than two billing cycles


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Period for giving supply: within one month upon receipt of application -

within this period all inspections, cost estimates and works (whether to

existing or new premises) would have been finalised with prescribed

periods.

Quality of supply and system of supply: prescribed voltage variation bands

Restoration of supply:

In the case of normal fuse-off calls, within 4 hours in urban areas and within

24 hours in rural areas

In the case of 22kV/11kV/415v breakdowns, upon receipt of a complaint,

restore supply with 6 hours in urban areas and within 24 hours in rural areas

Upon receipt of a complaint of interruption to supply caused by atransformer failure, restore supply within 24 hours in urban areas and within

48 hours in rural areas

Restore supply caused by underground cable fault within 12 hours

Publish period of supply interruption as a result of planned outage


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Metering, reconnections:

Burnt meter: distco must restore supply to premises within 24 hours in urban

areas and within 48 hours in rural areas upon receipt of a complaint

Reconnection: where a distco has disconnected supply to a customer for a

period less than 6 months for non-payment, if the customer pays the amount

owing in full the distco must restore supply within 24 hours (urban) and 48

hours (rural)

Where the period of disconnection exceeds 6 months, the customer must

make a new application for supply which will be provided upon receipt by

the distco of the full amount of any payment due or upon settlement of an

outstanding dispute


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Consumer charter/services:

Distco must maintain in every town and city of its area of supply at least one

service centre which must be open 7 days a week for at least 8 hours for

essential services, including the collection of sums from customers

Distcos must ensure that consumer rights are made available to customers

on demand and in downloadable format through its website.

Customer meters must be read at least one every 3 months for

agricultural customers and once every 2 months for all other customers

Where the customer applies for account closure the distco must pay all

outstanding amounts within 30 days of receipt of the application

The distco must maintain reliability indices on a monthly basis andpublish annual reliability indices - the regulator will set the distcos

reliability standards based on its submitted indices and the distco must

implement the standards set by the regulator within 3 months of being

notified


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Thank You

ensuring quality of service through regulation - the international experience

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