MERCADOS ENERGY MARKETS INTERNATIONAL Finding new paths for the energy market

Consultancy Support to Consultancy Support to the HERCthe HERC

Consumer Aspects – Preliminary Findings of the Consumer Survey

CUTS International

Presentation 0utline

● Update of the assignment

● Objectives (Consumer Aspects Components)

● Overall approach

● Key findings of concept paper

● Consumer survey -Methodology -Questionnaire and data collection -Survey findings

● Recommendations

● Way forward

Current status of the assignment

Component Activities Completed Ongoing Activities

Component 1: Tariff Aspects

● Concept papers – on Generation, Transmission and Distribution MYT and Benchmarking

● Development of MYT Regulations – G, T, D

● Public Hearing ● Notification of

Regulations

Component 2: Intra-state ABT and Market Design

● Concept Paper on Market Design and Intra-state ABT

● Draft Regulations on Intra-state ABT under preparation

● Draft Regulations on Open Access also under preparation

Component 3: Consumer Aspects

● Concept Paper on Consumer Aspects

● Survey Methodology and Questionnaire

● Execution of Survey

● Development of detailed report on survey findings

● Development of road map for Social Accountability and Consumer Involvement

Objectives

● Assess the scope and role of HERC in promoting consumer participation in the regulatory decision making process

● Review the state of consumer satisfaction in Haryana

● Assess the level of consumer awareness through a structured survey

● Identify key barriers for effective consumer participation in the State

● Recommend measures to promote adequate public participation in the sector

Overall Approach

Review of literature, statutes, policy, regulations

Comparison with best practices at national/international level

Identification of gaps & scope for improvement (Concept Paper)

Consumer perceptions: satisfaction and awareness (Survey)

Summary and conclusions

Development of roadmap for social accountability and consumer involvement

Concept paper: key findings

● Haryana: pioneer state to initiate reforms at state level

● Increased scope for consumer participation

Key regulations notified to empower consumers (CBR, SOPs, Supply code, CRM etc.)

● Constitution of Complaint Redressal Forums and Ombudsman- a step forward

HERC has processed all orders/regulations inviting consumers to participate

Concept paper: key findings (contd..)

● Weak participation in public hearings and inadequate geographical coverage

● Inadequate written comments on the draft proposals

Lack of effective consumer representation in SAC

● Lack of independence of Complaint Redressal Mechanism (controlled by Discoms)

No mechanism for effective monitoring of SOPs

Lack of awareness among consumers on key issues

Consumer survey: methodology

Consumer survey: sampling methodology

● Sampling methodology (Multi-stages, PPS, random)

● Geographical representation Each Discoms area was divided into 2 zones 2 districts chosen from each zone based on chosen criteria

Criteria: Composite ranking score of Literary rate & consumption (Click for details)

● Most of the blocks covered in each sample districts

● Rural/urban ratio of the state was maintained - About 20% female respondents were targeted

● Agricultural sector (both metered and un-metered consumers covered)

Consumer survey: questionnaires and data collection

● Base questionnaire covered domestic, agricultural and commercial consumers

● Separate questionnaire prepared for industrial consumers

● Questionnaires translated into local language (Hindi)

● Two days training programme conducted for field investigators 17th March: Mercados EMI Office, Gurgaon, 18th March: Field Training and Visit (Sonipat)

● Interview method used for investigation Data collection though interviews: 18th March-12th April 2010,

Tabulation:13-22nd April 2010

Consumer survey: methodology

Sample size:

● Domestic, Agricultural & Commercial ~1100 (data collected 1134)

● Industry 200 (data collected 227)

ConsumerCategory

Number of respondents Percentage shares

State UHBVN DHBVN State UHBVN DHBVN

Domestic 894 449 445 79% 79% 79%

Agricultural 131 72 59 12% 13% 10%

Commercial 109 49 60 10% 9% 11%

Total 1134 570 564 100% 100% 100%

Key survey findings: Domestic, Agricultural and Commercial Consumers

Metering & Billing: Key Findings

● About 71% consumers are satisfied with metering

● Agricultural consumers are more satisfied than domestic and commercial

● SOPs are not being implemented comprehensively

● Only a few consumers can understand Electricity bill completely

● Overall Score for metering & billing is not satisfactory

Quality of Service: Key Findings

● Overall score for quality of service is low

● Load shedding and poor voltage quality are major concerns

● Agricultural and domestic consumers facing more power cuts

● No prior information about load shedding to most of consumers

● Wider variations in QOS across the districts

Awareness on Reforms & Regulation: Key Findings

● The awareness level on reforms process is very low

● A very few consumers are aware of websites of HERC/utility

● None of the consumers visited website of HERC/utility

● Most of the consumers are aware of energy efficient equipment

● Overall score for information made available to consumers is low

Complaint Redressal Mechanism: Key Findings

● The awareness about CRF and Ombudsman is too low

● Because of poor awareness level, very few consumers approached to CRF

● Traditional method such as ‘personal visit’ still dominating for registering complaint

● Consumers are not given a reference number for the complaint registered with utility

Awareness on Tariff and Related Issues: Key Findings

● Majority of commercial consumers believe that tariff is High

● About two-third agricultural consumers observed the tariff Just Fair

● Majority of consumers not satisfied with the procedure for new connection

● Overall non transparent process in releasing new connection is a major concern

Key Findings: Industrial Consumers

Industrial consumers: Key findings

● 86% respondents (out of 14) were satisfied with meter testing procedure

74% of the respondents believe that the QOS remained unchanged over the last 3 years

93% consumers are receiving the electricity bills regularly

● 95% out of total respondents were not aware of remote metering technology

Industrial consumers: Key findings (contd...)

● 50% respondents experienced damage/burnt electrical equipment in last 3 years

● 95% respondents were never given advance information of power shut downs

Awareness about HERC: (functions-14%, regulation 6%)

Open access: 71% believe it can help in reducing cost

None of the consumers applied for open access

Comparative Analysis of Consumer Perceptions

Indicator Industry Domestic etc.

Satisfied with metering 91% 72%

Satisfied with metertesting

86% 29%

Load shedding (for 10 hrs or more)

58% 68%

Aware of regulatory mechanism

14% (functions of HERC)

1.6% (aware about HERC)

Received complaint no. 40% 13%

View on tariff: High 53% 55%

Awareness on EE 53% (Star rating and labeling)

89% (CFL etc.)

Broad recommendations

● HERC to adopt a proactive role in promoting consumer participation

● Concrete steps should be taken to generate adequate awareness and involvement Process of public hearing to be held in rural areas as well Involvement and nurturing active consumers groups/CSOs Translation of key documents in vernacular

● Complaint redressal mechanism to be made more effective with generation of compliance reports from time to time

Effective compliance of standards of performance through appropriate measures (MYT Regulations)

Wider dissemination of key regulatory information including tariff filings

Next Steps

● Report on detailed consumer survey findings Calculation of consumer satisfaction index and sub-indexes (such as those related

to metering, billing, etc)

● Preparation of Roadmap for Social Accountability Outlining the actions, key responsibilities and timelines for achieving increased

consumer participation

Discussions with the Commission and select Consumer Associations On the findings and the road map including aspects that require further

elaboration

Mechanisms to improve consumer involvement and satisfaction

Finalization of the above documents

Suggested action points for key stakeholders and wider dissemination of key findings

Development of framework for sustained action: replication of consumer satisfaction survey

Mercados – Energy Markets International

C/ Orense, 34, 8th floor 28020 – Madrid, SpainTel.: (+34) 91 579 52 42 Fax: (+34) 91 570 35 00Web: www.mercadosemi.es Email: info@mercadosemi.es

Thank You

Mercados – Energy Markets India Private Limited

Gurgaon: 206, Tower B, Millennium Plaza, Sec 27, Gurgaon – 122002, India Tel.: (+91) 124 424 1750 Fax: (+91) 124 424 1751

Mumbai:110 Master Mind I, Royal Palms, Aarey Milk Colony, Goregaon (East)Mumbai 400 065Tele fax: (+91) 22 2879 3510

Web: www.mercadosemi.es /asia Email: ade@mercadosemi.es

CUTS International

D-217, Bhaskar Marg, Bani Park Jaipur 302 016, India Ph: 91.141.228 2821; Fx: 91.141.228 2733/2485; Em: rk2@cuts.org; c-cier@cuts.org Web: www.cuts-ccier.org; www.cuts-international.org (Also at Geneva, London, Hanoi, Nairobi and Lusaka)

Supporting Data and Detailed Analysis

Metering & Billing

12%

2%

19%

12%

16%

17%

16%

16%

33%

29%

38%

33%

39%

52%

28%

38%

Domestic

Agricultural

Commercial

Total

Totally Dissatisfied Partially satisfied Adequately satisfied Highly satisfied

Key Finding 1: About 71 percent of consumers are satisfied with metering

46%

13%

17%

5%

20%

More than amonth

Betweenone month and a week

Betweenone week

and one day

One day

No actionwas taken

Key Finding 2: For about 60 percent of the consumers, metering complaints were addressed more than a week later (Out of 127 who registered a meter related complaint)

SOP Regulations provide a maximum time frame of 7 days

18.90%

41.70%

32.90%

6.50%

Not

at a

ll

Partia

lly

Reaso

nabl

y

Com

plet

ely

Key Finding 3: There is a need to produce bills in simple,Local language

16%

11%

26%

16%

60%

60%

58%

60%

23%

28%

17%

23%

Domestic

Agricultural

Commercial

Total

Low Average High

Key Finding 4: Overall ranking of the metering and billing process is not very satisfactory

Overall, commercial consumers have more concerns

24%

12%

16%

60%

60%

60%

16%

27%

23%

Urban

Rural

Total

Low Average High

Key Finding 5: Urban consumers are less satisfied than the rural consumers on metering and billing issues

Quality of Service

Yes2%

No98%

Key Finding 1: No prior information on power shutdownsis supplied to most of the consumers

Need for dissemination of vital information to consumers (sms, advertisement in papers, etc)

67%

78%

54%

67%

32%

22%

46%

32%

1%

0%

0%

1%

Domestic

Agricultural

Commercial

Total

Low Average High

Key Finding 2: Overall score for QOS is low for majority

Overall, agricultural consumers have more

concerns with QOS

52%

52%

44%

66%

75%

55%

46%

52%

56%

36%

38%

52%

20%

24%

39%

28%

45%

35%

10%

3%

1%

13%

1%

6%

26%

1%

8%

1%

7%

2%

1%

0%

0%

0%

1%

2%

Sonipat

Yamuna Nagar

Karnal

Jhajjar

Hisar

Fatehabad

Gurgaon

Mewat

Total

Deteriorated UnchangedMarginal improvement Improved significantly

Key Finding 3: the majority of consumers do not observe any improvement in QOS over last 3 years

Awareness about Reforms & Regulations

1.60%

0.03%

Aw

are

of

HER

C

Aw

are

of

Websi

tes

of

HER

C/u

tili

ties

Key Finding 1: Awareness about HERC is very low

• Set up a Consumer Welfare Fund to support capacity building/awareness activities

• Involve Panchayats to ensure effective participation by local institutions

87%

92%

99%

89%

94%

96%

98%

95%

Dom

estic

Agricul

tura

lCo

mm

ercial

Ove

rall

Aware (Out of total) Started use (Out of aware candidates)

Key Finding 2: There is adequate awareness on EE

High0%Average

23%

Low77%

Key Finding 3: Overall ranking about information available to consumer is low

Need for wider dissemination of useful information to consumers

Complaint Redressal Mechanism

72%

72%

73%

75%

14%

14%

16%

12%

12%

11%

17% 7%

2%

2%

0%

0%

Overall

Domestic

Agricultural

Commercial

Personal visit Call to distribution circleRegister available in village Toll Free NoEmail

Key Finding 1: Most of the consumers make personal visits for registering complaint

Make the compliant redressal process more consumer friendly

88%

6%

4%

3%

Nev

erOcc

asio

nally

Mos

tly

Alway

s

Key Finding 2: Most of the consumers are not given a reference no for the complaint registered

Need for a accountable complaint redressal mechanism

1.60%

1.00%

Awarenessabout CGRF

Awarenessabout

Ombudsman

Key Finding 3: awareness about complaint redressal forum as well as ombudsman is very low

Wider dissemination of information about the CRM

18%

21%

23%

18%

47%

54%

50%

48%

28%

17%

22%

26%

8%

8%

5%

8%

Domestic

Agricultural

Commercial

Overall

Deteriorated Unchanged Marginal improvement Improved significantly

Key Finding 4: About 2/3rd consumers do not observe any improvement in Complaint Redressal Mechanism over last 3 years

Tariff and other Related Issues

33%

17%

39%

24%

14%

29%

43%

66%

30%

0%

3%

1%

Domestic

Agricultural

Commercial

Too high Slightly high J ust fair Low

Key Finding 1: Majority of the commercial and domestic consumers believe that they are paying higher tariff

Satisfied26%

Highly satisfied

20%

Not at all34%

Partially satisfied

20%

Key Finding 2: Majority of the consumer applying for new connection are not satisfied with the procedure

24%

43%

60%

30%

57%

43%

40%

54%

18%

14%

0%

16%

Domes

ticAgric

ultura

lCom

mer

cial

Tota

l

Too high charges

Non transparentprocess

Un-friendlybehaviour

Key Finding 3: Lack of transparency in releasing new connection is the major concern of consumers

Zonal Distribution

DHBVN: Sampling Districts

Zone

UHBVN Literacy (%age)

Index score

Consumption (Lakh kWh)

Index score

Composite Score

Ranking (Ascending)(Literacy) (Consum

ption)

Eastern Zone

Faridabad 70.79 9.35 20454 7.45 8.40 5

Palwal 70.79 9.35 2903 1.06 5.20 2

Gurgaon 63.61 8.40 27472 10.00 9.20 6

Mewat 63.61 8.40 729 0.27 4.33 1

Mahendergarch 70.43 9.30 4454 1.62 5.46 3

Rewari 75.75 10.00 6693 2.44 6.22 4

Western Zone

Sirsa 61.2 8.98 8401 7.71 8.34 2

Hisar 65.85 9.66 10900 10.00 9.83 4

Fatehabad 58.16 8.53 6895 6.33 7.43 1

Bhiwani 68.17 10.00 8405 7.71 8.86 3

UHBVN: Sampling Districts

Zone

UHBVN Literacy (%age)

Index score Consumption (Lakh kWh)

Index score

Composite Score

Ranking (Ascending)

(Literacy) (Consumption)

Eastern Zone

Panchkula* 76.54 10.00 11391 8.37 9.19 3

Yamunanagar 72.20 9.43 10257 7.54 8.49 1

Ambala 76.20 9.96 11391 8.37 9.16 2

Karnal 68.20 8.91 13608 10.00 9.46 5

Panipat 69.75 9.11 12861 9.45 9.28 4

Western Zone

Kurukshetra 70.04 9.15 10066 9.68 9.41 5

Rohtak 74.56 10.00 4941 4.75 7.37 2

Sonepat 73.71 9.89 10404 10.00 9.94 6

Jhajjar 72.48 9.72 4632 4.45 7.09 1

Kaithal 59.5 7.98 9358 8.99 8.49 4

Jind 62.8 8.42 6783 6.52 7.47 3

Blocks Covered

● Yamunanagar – Jagadri, Chhachhrauli, Radaur● Hisar – Hisar, Hansi, Adampur● Sonepat – Sonepat, Gannur, Gohana● Karnal – Karnal, Nilokhri, Asand● Jhajjar – Jhajjar, Salahwas, Beri● Gurgaon – Gurgaon, Sohna, Pataudi ● Fathehabad – Fathehabad, Ratiya, Tohana● Mewat – Firozpur Jhirka, Nuh, Tauru