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Professional Energy BusinessManagement Course.
Presented By :
Syed Hasan Bilal Gilani.DCM Bahawalnagar.
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PresentationOutline: PMEBM Course
Objectives. Focus.
Important Subjects Studied . Energy Management System. Power Sector Under De-Regulation. Power Distribution System. Developments And Evaluation Of Energy Projects. Energy Resources And Technologies.
Electricity Economics And Planning. International Transfer Of Technologies.
Proposed Cash Posting And Monitoring System For Mepco.
Reason Of Project Selection.
Scope And Limitation
Literature Review Methodology
Results.
Financial Evaluation.
Conclusion.
Recommendation.
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Power Sector Management Sector Under Deregulation:
Process of removing restrictions and regulations to achievecompetitive wholesale prices without compromising
adequacy, system reliability and security.
Vertically integrated Vertically unbundled
Regulated cost-based Unregulated price-based
Monopoly Competition
Service Commodity
Consumer CustomerPrivilege Choice
Regulated Market Deregulated Market
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Electricity Market Model:
Monopolistic Model.
Single Buyer Model. Wholesale competition Model.
Retail Competition Model.
Components Of Deregulated Market:
Generators.
BOT Or IPP.
Distributors
Retailers. TO Or ISO.
PX.
Brokers.
Aggregator.
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Types Of ISO:
ISO Micro.
ISO Mini.
ISO Max. UK Market
Trading Arrangements.
Pool. UK Market
Bilateral or Multilateral.
Pool + Bilateral or Multilateral. California Market
Bidding:
48 hours Ahead UK Market
Day Ahead
Hour Ahead
California
Market
California
Market
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Reasons Of Project selection.
Existing electricity cash posting system in all Discos is
1. Obsolete ,
2. Time consuming.3. Prone to errors and
4. Can easily be manipulated.
5. Require extra Labour.
Overall Objectives Of The Project.
1. Reduction in Cost.
2. Effective Monitoring And Control .
3. Increasing Productivity.4. Reduce Labour.
5. Time saving.
6. Targeted Utilization of Work Force. 7
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Specific Objective:
1. Reduce cost and help company make financially viable.
Scope And Limitation:
Scope:
focusing on developing a mechanism for MEPCO cash
posting system by which the monitoring system will be
convenient and viable than the prevalent system.
Limitations:
1. financial crises of the MEPCO.
2. Lack Of Funds.
3. Lack Of skilled Manpower.
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Literature Review:
1. Prepaid billing In Uganda
2. Inter Net Billing in UK.
3. Paper Less Billing In Pessynlvania.
4. Online Billing In Orissa India:
Summary Of Literature Review:Adopting and using modern and advanced means of billing andpayment system helps utilities
1. Reduce their cost,
2. Improve efficiency
3. Improve %age of Recovery.4. Improves customer relationships.
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Methodology:
Hiring Of renowned national or international Softwarecompany for developing cash posting and monitoring software.
That caters our todaysrequirement of cash posting and monitoringsystem through bidding system.
OR
Developed Indigenously.
Mepco will Offer franchise and give its franchise rights to private peopleas well as banks and post offices.
This software will consist of three steps.
There will be one server which will be in the MIS center in the head
office for processing and control.
Input Side. Out Put Side.
Franchisers SDO,RO,Xen, SE,And
Chief Office.
Process
MIS
D f di d P i i f Bill ill b d i RO ffi T
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Data feeding and Printing of Bills will be done in RO office. Tosave time and cost.
No need Of sub computer centers.
Franchiser may get the franchise after paying securityamount.
Franchisers can receive payments of the bills equal amountrecharge into Mepco collection account on each day.
Franchisers will post the collected bills on daily basis.
At the end of the day we will be able to know %age
recovery of the particular batch.
General Public
SecurityCategory
0.02 MillionFinancial Institutions 0.05 Million or More.
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This software will provide us real time information about
recovery.
This system is already in practice in NADRA.
Mepco is giving Rs:8/- per bill for collection charges .
Nadra is offering Rs:5/- per bill as a collection charges of
the bills to franchisee and remaining Rs:3/- per bill is going
to Nadraevery month.
Using franchisee system , Mepco can also offer Rs:6/- for
collection charges and can save Rs:2/- per bill every
month .
R
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RESULTS:
By doing so Mepco can
Save reasonable revenue every month .
Be able to monitor the recovery in real time. Be able to know recovery position at the end of day.
The proposed system will not only remove all these
problem but also bring Ease and convenience
Reduce unnecessary workload from employees.
It will also provide Better customer friendly image in the eyes of valued customers
Reducing unnecessary complaints
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In this system there will be facility of feeding the dailypayment of bills which will be done by opening of franchiseshops through software.
Effective monitoring system.
Improving recovery due to correct , timely delivery of billsand effective monitoring system
Eradication Of Misappropriation or fraud in Revenueoffices/Computer centers/Banks.
Elimination of bogus information regarding recovery.
Eradication of bogus billing and reducing public complaints .
Improving company image in the eyes of public.
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METHODSOFFINANCIALEVALUATION:
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Financial evaluation will be done on the basis of
Simple pay back period
Discounted pay back period.
Net Present Value.
Internal Rate Of Return.
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Budgetary Requirement:
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Cost Total No Total cost Cost Total NoTotal
cost
1 2 3 4 5=3+4 6 7 8=6+7 12=5+8+11Prevalent
System 0 0 0 0 0 0 0 0
NewSystem
90 0.13 280 36.4 0.8 70 56 182.4
No PC required No Of Printers RequiredTotal
System
Cost
Cost Of
New SoftwareAnd Its
maintenance
Categoryof System
S i
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Savings:
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No Of
employees
required InThe System
Average
salary
Per Person
Total
Salary
PerMonth
Total
salary
for 5years
Monhtly
TA
& DAAmount
No Of
Offices
Monthly
TA&DA
expense
PerMonth
Total TA&
DA cost
for 5years
Amou
nt
Per Bill
No Of Bills
Paid
each
Month inmill
Monthly Bill
Collection
Charges inmillion
Bill
Collection
Charges
For 5 Yearsin million
1 2 3 4=2*3 5=4*60 6 7 8=6*7 9=8*60 10 11 12=10*11 13=12*60 14=5+9+13
Prevalent
System 100 0.03 3 180 0.06 35 2.1 126 8 3 24 1440 1746
New
System 70 0.03 2.1 126 0 0 0 0 6 3 18 1080 1206
Total
Saving
-30 0 -0.9 -54 -0.06 -35 -2.1 -126 -2 0 -6 -360 -540
Total
Operation
Cost in
millions
Amount In
Million Rupees.
Category
of System
Saving In TA & DA Cost
Total Savings Involved In the New Computerized Billing System
Saving In Salary Bill CollectionCharges
i l b k i d
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Simple Payback Period:
182.4 (Outflow)
(Inflows) 115.2 115.2 115.2 115.2 115.2
Simple Payback period= 182.4/115.2= one year and six
months.
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Discounted Payback Period.
182.4 (Cash Outflow)
(Cash Inflows)115.2 115.2 115.2 115.2 115.2
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Year Income InvestementIntrest
18%Total
1 2 3 4 5=2-3-4
0 182.4 0 182.4
1 115.2 182.4 31.01 98.21
2 115.2 98.208 17.68 0.69
3 115.2 0.68544 0.11 -114.40
4 115.2
5 115.2
Hence discouted Payback
period is 2 years and 2 months.
Calculation For determining Discounted Pay Back Period
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Net Present Value.
182.4 (Outflow)
(Inflow)
115.2 115.2 115.2 115.2 115.2
NPV= -182.4+ A( P/A,I,N=5) Annuity=115.2 I=18%
NPV= -182.4 + 115.2 (3.127)
NPV= -182.4 + 360.23
NPV= 177.8320
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Internal Rate Of Return:
Internal rate of Return will
IRR = 56%
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Analysis: From the figures in the above table, it indicates that simple
payback period and discounted payback period is 3 years. Its Net
present value is also positive.
Any payback period less than 5 years is considered to be good for
business purpose.
This payback period of only 3 years and net present value is alsopositive. It makes this project very lucrative and can easily adoptthis system without any hesitation.
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C l i A d R d ti
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Conclusion And Recommendation:Conclusion:
After implementing this model it would be expected to get
following benefits
Financially viable.
Reduces cost.
Improves Recovery position.
Provide effective monitoring.
Reduces extra labor and save a reasonable revenue every
month.23
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Recommendations:
Due to facing financial problem it is highly recommended to firstdevelop cash posting and monitoring system in the first phase then
develop a new billing system and use hand held devices for meterreading which is low in cost.
But it is highly recommended to use AMR meters in the high tariffconsumers when the company financial health will be improved ,and priority must be given to these tariff.
Industrial consumers.
Tube wells consumers.
Commercial consumers above 5 kW. 24
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References: Awoleye Michael. Evaluat ion and Program Planning, Volume 3, Issue
3, 1980, Evaluating the impact of utility company billing plans on residentialenergy consumption.
Francis M. Mwaura 2012.Adopting electricity prepayment billing system to reducenon-technical energy losses in Uganda: Lesson from Rwanda.
Kenneth Train, Patrice Ignelzi, Robert Engle, Clive Granger, RamuRamanathan. Energy, Volume 9, Issues 1112, NovemberDecember1984, The billing cycle and weather variables in models of electricity sales.
Marilyn Chikaodili Amobi. Socio-Econom ic Planning Sciences, Volume 41,Issu e 4, December 2007, Deregulating the electricity industry in Nigeria: Lessonsfrom the British reform.
Maureen Milroy, Feng Li. Research ArticleInternational Journal ofInfo rmat ion Management, Volume 21, Issu e 2, Ap ril 2001,Internet billing: theexperience from four UK utility companies.
Yu-Yi Chen, Jinn-Ke Jan, Chin-Ling Chen.Computer Networks, Volume 48,Issu e 4, 15 July 2005.A fair and secure mobile billing system. 25
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THANKYOU.
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