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for attracting private investors, etc.

      Figure 1.1 Different distribution models evolved.

      Figure 1.2 Single vertical structure.

      Figure 1.3 Unbundled structure.

      From Figure 1.2, it is clear that the task of generation, transmission, and distribution is under the purview of a single entity, irrespective of whether there are single or multiple subsidiaries in generation or transmission or distribution.

      Figure 1.3 consists of six different blocks where all the six blocks represent a distinct pattern of unbundled power distribution structure. In the first block, more than one subsidiary are being shown for both the generation and distribution segments whereas transmission has been shown as a single subsidiary because most of the countries kept a single transmission utility while undergoing unbundling. Although a vertical integrated structure and unbundled (corporatized) structures are different in structures no significant differences are found in their operations and functions. The relative concerns relating to this model are:

       High technical losses in distribution.

       No theft handling mechanism.

       No proper fault handling mechanism.

       Lack of sourcing and management.

       Overstaffing.

       Poor collection efficiency.

       High rate of outages, blackouts, device failures, etc.

       Losses are not established.

       Commercial losses are not accountable.

       No outage handling and transactional mechanisms.

       Lack of enterprise resource planning (ERP) practice.

       Poor managerial efficiency.

       High fiscal deficit.

       No asset management and facility management.

       High political interferences.

      1.3.2 Privately Owned DISCOMs

      In this case, the ownership of the distribution lies with a private company. As a measure of private participation and introducing competition, the following steps were implemented:

       More than two licensees were allowed to sell power in the same area.

       Provision was made for different tariff rates based on different technical factors like load demand, voltage demand, power factor, etc.

       Licensees were allowed to do other business required for optimal utilization of assets but with prior permission.

      The relative concerns with this model are:

       The private companies started running the power distribution business without bothering government norms and provisions.

       They failed to protect consumer interests.

       The tariff rate was high.

       They faced political resistance as privatization is not welcome in public services.

       The number of consumer protests increased.

      1.3.3 Public–Private Partnership (PPP) Model

      The relative concerns with this model are:

       Tariff will be fixed separately for the PPP project area; this will bring multiple tariffs in the same state.

       May face political resistant as privatization is not welcome in public services.

       The PPP model needs attention for structuring, as it is complex in nature, so more conscious efforts are required from the government.

       The tariff may be different for urban and rural areas, so for uniform tariffs the government needs to provide subsidies.

      1.3.4 Distribution Franchisee (DF) Model