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Feedback Energy Distribution Company Ltd (FEDCO) plans to expand its presence to Rajasthan and Tripura apart from adding more circles in Odisha.
FEDCO, a 100 per cent subsidiary of Feedback Infra, is engaged in electricity distribution. The company is currently in Odisha as a distribution franchisee in four electricity divisions — Puri, Balugaon, Khurda and Nayagarh — for the Central Electricity Supply Utility of Odisha.
“We are currently working on the input-based franchisee model in Odisha and Meghalaya. In Odisha, our area of operation is Bhubaneswar II circle which has four divisions. Similarly, we are operating in four areas in Meghalaya. Both these operations are in a mix of rural and urban areas with 85-90 per cent of our consumers being in rural areas. We are looking forward to opportunities in other States and discoms under a similar model.
“In that context, Odisha (other power Discoms), Rajasthan and Tripura are expected to bid out identified areas on the input-based power distribution franchisee (IBDF) model and we are closely monitoring and evaluating them,” Devtosh Chaturvedi, Managing Director at Feedback Energy Distribution told BusinessLine .
Improving performance
In the private sector, all projects for improving the performance of power distribution utilities are won through competitive bids. “The bids are called on the annualised input rate which the company has to quote. Typically, the bid condition mandates a minimum benchmark rate for each year and it is mandatory for the bidders to quote above that. Then the final calculation is done by the Discom on a net present value basis with 10-11 per cent discounting rate every year. There is a pre-bid determined formula mentioned in the bid document,” he said.
The annualised input rate has parameters pertaining to Aggregate Technical & Commercial losses inbuilt. The Discoms fix a minimum benchmark rate of improvement that has to be met every year.
Chaturvedi said the areas in Odisha, where Feedback Energy Distribution is active, have shown much improvement.
“When we took over in 2013, the consumer collection in our area was around ₹195 crore. We ended March 2019 at around ₹435 crore. So within five years, the collection more than doubled and one of the prime reason for that is our consumer focus,” he said.Responding to criticism that there would have been an eventual improvement even without the involvement of the distribution system operators, Chaturvedi said, “To assess the improvement, the parameter should be a reduction in the average cost of supply and average revenue realised gap. One must look around in States with high losses and assess how many in these rural predominant circles are cash positive on that account. There won’t be many. So there is certainly an effort that goes into making that circle cash positive.”
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