CAUSAL ANALYSIS OF AGGREGATED TECHNICAL AND COMMERCIAL LOSSES: A CASE STUDY OF J&K Tushar Gupta A dissertation submitted in partial fulfilment of the requirements for the Degree of Master of Arts in Public Policy (MPP) National Law School of India University Bengaluru 2016 1 DECLARATION I, Tushar Gupta, hereby declare that this dissertation entitled ‘Causal Analysis of Aggregated Technical and Commercial Losses: A Case Study of J&K’ and’ is the outcome of my own study undertaken under the guidance of Professor Sachin Warghade, Visiting Professor at the National Law School of India University. It has not previously formed the basis for the award of any degree, diploma, or certificate of this University or of any other institute or University. I have duly acknowledged all the sources used by me in the preparation of this dissertation. 15th of May, 2017 Tushar Gupta 2 CERTIFICATE This is to certify that the dissertation entitled, ‘Causal Analysis of Aggregated Technical and Commercial Losses: A Case Study of J&K’ is the original work done by Tushar Gupta under my guidance and supervision. The results of the research presented in this dissertation/thesis have not previously formed the basis for the award of any degree, diploma, or certificate of this University or any other institute or University. 15th of May, 2017 Dr. Mushtaq Ahmad Malla Assistant Professor NLSIU 3 Table of Contents List of Abbreviations vi List of Illustrations vii List of Tables viii Chapter 1: Introduction 1-4 Background 2-3 Scheme of Chapters 4 Chapter 2: Literature Review 5-13 Transmission & Distribution Loss 5-8 Aggregated Technical & Commercial Losses 9-12 Perception of Electricity Theft 13 Chapter 3: Research Methodology 14-26 Research Problem 15 Rationale 15-16 Research Objectives 16 Scope 16 Research Questions 17 Study Design 17 Sampling Technique and Sample Size 18-19 Data Collection Process and the Tools Utilized 19-23 Limitations 24 Ethical Considerations 24 Policy Implications 25 Field Experience 25-26 4 Chapter 4: A Case Study of Jammu & Kashmir 27-45 Ramgarh Tehsil 27-33 Thanamandi Tehsil 34-41 Jammu City 41-45 Chapter 5: Case Analysis 46-57 Research Question 1 46-56 Topography 46-48 Corruption 48-50 Poor Maintenance of Existing Infrastructure 50-51 Political Influence 51-53 Consumer Behaviour 53-54 Unforeseen Circumstances 54-56 Research Question 2 56-57 Chapter 6: Summary of Findings and Conclusion 58-62 Summary of Findings 58 Weak State 58-59 Systems Analysis 60-61 Conclusion 62 References 63-65 Annexure I x-xi Annexure II xii 5 List of Abbreviations J&K- Jammu and Kashmir T&D- Transmission and Distribution AT&C- Aggregated Technical and commercial Losses PDD- Power Development Department CRQ- Central Research Question DRQ- Direct Research Question SRQ- Sub Research Question FGD- Focussed Group Discussion 6 List of Illustrations Figure 2.1- Transmission and Distribution Network Figure 2.2- Metering status in the state of J&K Figure 5.1- A Causal mapping of the role corruption plays in AT&C losses Figure 5.2- Revenue collection mechanism as being employed by the utility Figure 5.3- A causal mapping of the role corruption plays in AT&C losses Figure 5.4- A causal mapping of the role poor maintenance of existing infrastructure plays in AT&C losses Figure 5.5- A causal mapping of the role political influence plays in AT&C loss Figure 5.6- A causal mapping to analyze consumer behaviour vis-à-vis AT&C loss Figure 5.7- A causal mapping of the role unforeseen circumstances play in AT&C losses Figure 6.1- A causal mapping showing the weakness of the state t regulate Figure 6.2- Systems analysis of AT&C losses 7 List of Tables Table 3.1- AT&C loss reduction titles in the successive financial years Table 3.2- Stakeholder mapping during the research work Table 3.3- Table showing the summary of various research methods being employed for various research questions Table 4.1- T&D and AT&C losses of prominent subdivisions along South East Jammu Table 4.2- T&D and AT&C losses of various feeders in Ramgarh subdivision (2015-16) Table 4.3- Energy input, Billed and Realized for different feeders in Ramgarh tehsil for month of December 2015. Table 4.4- T&D and AT&C losses of all subdivisions in Rajouri Table 4.5- T&D and AT&C losses of various feeders in Thanamandi Table 4.6- Energy Input, billed and realized for different feeders in Thanamandi tehsil for the month of December 2015 Table 4.7- AT&C and T&D Losses of different feeders in Subhash Nagar area Table 4.8- AT&C and T&D loss of different feeders in Roop Nagar area 8 Acknowledgement First and foremost, I would like to thank my supervisor, Professor Sachin Warghade, for his invaluable advice and guidance. I want to thank him for taking out time from his schedule whenever I needed it, putting up with my queries in the best manner, and always bolstering my confidence. This dissertation would have been nowhere had it not been for his support. I would also like to thank Prof. Mushtaq Malla for his brilliant advice on Research Methods and political setting of Jammu & Kashmir without which this dissertation would have been impossible to attempt. My parents for giving me all the necessary support for conducting research in the state of J&K, From helping me find the concerned resource person to sometimes advising me on further course of action, and helping me make it this far. I will like to thank the team of Prayas Energy group, Pune for making my stay at Pune comfortable and helping me realize the basic failures of electricity system in India which laid a solid foundation for conducting research in the state of J&K. The representatives from the utility have been kind enough to cope up with my repetitive questions and have added a new direction to this thesis, I have a lot of gratitude for them for participating in my research without having any personal gains. I would also like to thank all the participants in this research for cooperating, for answering my sometimes mundane questions, and for taking the time to do all this. Finally, I would like to thank my very good friend Anirudh Chakradhar who has always been there for me during the course of this research with his inputs on scope of improvement right from the formulation of the research proposal to finishing of the final draft. 9 Abstract Aggregate Technical and Commercial (AT&C) Losses in electricity sector refer to the difference between billing and collection of revenue. AT&C losses come up in all the countries of the world where electricity distribution takes place. The situation in Jammu and Kashmir as far as AT&C losses are concerned is horrible as J&K has registered the highest losses in India for successive years. This research will attempt to understand the factors prompting consumers in the state to engage in socially irresponsible consumption which add-ons to the burden of AT&C losses and come up with necessary solutions. Chapter 1: Introduction There has been an ever increasing demand for electricity in India; the utility level demand in the last decade has more than doubled and is expected to triple in the next two decades (Central Electricity Authority 2015). The demand for electricity in India can be met efficiently in two ways: 1. Increasing Electricity Generation 2. Decreasing Power losses (T&D and AT&C) Today over 22% of the total electricity generated in India is lost in transmission (4-6%) and distribution (15-18%). This loss in transmission and distribution (T&D) when coupled with non-recovery of the billed amount yields Aggregate Technical and Commercial (AT&C) losses. AT&C loss in India amounts to around 25% (Central Electricity Authority 2015). While the desired investment ratio between generation and T&D should be 1:1, during the period 1956-97 it decreased to 1:0.45 (Bhalla). The state of Jammu and Kashmir (J&K) in 2010-11 had a T&D loss of 62% which was the highest in the country (Planning Commission 2014). Jammu and Kashmir will have a peak load of 4217 MW in 2021-22 with an energy requirement of 21884 MUs (Government of Jammu & Kashmir 2015). The installed capacity in the state on the other hand is only 3142 MW (Central Electricity Authority 2016). This deficit in energy requirement and generation capacity can be met through: 1. Power Purchase 2. Increasing Generation capacity 3. Promoting Energy Efficiency 10 As it is said that “Every unit of energy saved is a unit of energy earned”, the research paper will only focus on promotion of energy efficiency techniques and technologies in the state of Jammu and Kashmir. Background The biggest weakness for power sector in the state of Jammu and Kashmir is on the distribution front. Aggregate Technical and Commercial losses (AT&C) of J&K are about 72% and pose great financial challenges to Power Development Department (PDD). The government has realized this weakness on the distribution front to an extent and is trying to strengthen the transmission and distribution network with the help of central government. “Investment in transmission and distribution infrastructure and restructuring of the Accelerated Power Development and Reforms Programme (APDRP), using technological and managerial tools such as smart metering and High Voltage Distribution System (HVDS), tariff monitoring and revision and accountability at each distribution transformer is being worked out” (Planning and Development Department (J&K) 2014).