Order in Petition No. 28 of 2015
PUNJAB STATE ELECTRICITY REGULATORY COMMISSION
SCO NO. 220-221, SECTOR 34-A, CHANDIGARH
Petition No.28 of 2015
Date of Order: 04.01.2016
Present:
In the matter of:
Smt. Romila Dubey, Chairperson
Shri Gurinder Jit Singh, Member
Petition under section 61, 86(1), 57 of Electricity Act
2003 regarding reorganization of distribution
organization on functional basis.
AND
In the matter of:
1.
Shri Gurnek Singh Brar (Retired SE PSEB), # 1,
Ranjit Bagh, Opp: Modi Mandir, Patiala147001.
2.
Shri Padamjit Singh (Retired CE PSEB), # 45,
Ranjit Bagh, Opp. Modi Mandir, Patiala
--------Petitioners
Versus
Punjab State Power Corporation Limited, Patiala.
-------Respondent
ORDER
The petitioners Shri Gurnek Singh Brar and Shri Padamjit Singh,
the retired SE and retired CE of PSEB respectively, filed the present
petition under section 61, 86(1) and 57 of Electricity Act, 2003 (Act)
regarding reorganization of distribution organization on functional basis
by PSPCL.
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Order in Petition No. 28 of 2015
1.0
The petitioners made the following submissions in their petition:
1.1
Aggrieved by inordinate delay on part of PSPCL in implementing
functional reorganisation of PSPCL causing adverse impact by
way of increased employee costs and deteriorated working which
affected consumer service, the petitioners filed petition no. 4 of
2014 in February, 2014 in which the Commission had issued its
Order. However, instead of complying with the Order in letter and
spirit,
PSPCL
has
completely
reversed
the
process
of
reorganisation of distribution set up on functional basis by issuing
office Order no. 363 / cadre -01 dated 09.04.2015 which is not in
accordance with the directions of the Commission as stipulated in
its Order dated 28.11.2014.
1.2
Section 86(1)(i) of the Act provides that the State Commission
shall specify or enforce standards with respect to quality, continuity
and reliability of service by licensee. Further under section 57(1) of
the Act , the Commission is to specify standards of performance
for a distribution licensee. Section 61 (c) of the Act provides that
the Commission is to be guided by the factors which would
encourage competition, efficiency, economical use of resources,
good performance and optimum investments.
1.3
By reversing the process of functional reorganisation of distribution
system by PSPCL through its order dated 09.04.2015, the quality,
continuity and reliability of supply will be adversely affected.
Further, it will make it difficult to achieve Standards of Performance
prescribed by Commission, and go against the principle of
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Order in Petition No. 28 of 2015
efficiency, economical use of manpower resources and good
performance, thus violating the Act in letter and spirit.
1.4
For three consecutive years i.e FY 2012-13, FY 2013-14 and FY
2014-15, PSPCL in its ARR petitions has reiterated and
reconfirmed its commitment for implementing the functional model
of distribution. Now, in 2015, PSPCL has completely reversed its
earlier commitments made before the Commission in successive
ARRs for three years.
1.5
While reproducing the contents of earlier petition no. 4 of 2014 and
Commission’s Order dated 28.11.2014, the petitioners submitted
that the Commission nowhere in its Order allowed the utility to
entirely change the well tested model of functional reorganisation
but only asked it to submit the final plan to implement the said
model by 31.01.2015. However, PSPCL is now out to completely
change the said tested functional model of Patiala and Nabha and
impose a failed model of Ludhiana which shall not serve any
purpose due to the following reasons.
(i)
The Ludhiana and Mohali Model implemented about 20
years back are proposed to be replicated in city areas
whereas full Board of erstwhile PSEB in 2009 and BOD of
PSPCL in 2010 had decided to implement Patiala and Nabha
models by making improvements in earlier functional model
of Ludhiana.
The Ludhiana model does not offer single window clearance
of the release of connections, change of meters and
disconnections due to pending bills and other commercial
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Order in Petition No. 28 of 2015
activities. It does not ensure focus on technical functions i.e.
maintenance of distribution setup because the technical wing
also looks after release of connections, change of meters,
defaulting amounts and other field functions related to
commercial issues.
ii)
There is no functional implementation proposed in rural
areas except cosmetic changes, where the problem of
accountability and staff shortage is more acute.
iii)
The Patiala/Nabha model of urban / rural functional
reorganisation are targeted to attain more efficiency with
lesser manpower. As submitted in petition no. 4 of 2014, this
model is going to result in a saving of manpower of the order
of 40%. The sanctioned posts as per prevailing norms is
52580, while the requirement under this functional setup will
be only 30174. The techno-commercial functions will be
performed by 185 commercial subdivisions as against the
present 500 conventional subdivisions.
1.6
In view of the above, the petitioners prayed that the Commission
may issue Orders to immediately stay the implementation of
PSPCL office Order no. 363/Cadre-1 dated 09.04.2015 and issue
directions to PSPCL to get the functional models evaluated by an
independent agency nominated by the Commission which shall
work under the supervision of the Commission.
2.0
The petition was admitted and the Commission vide Order dated
13.05.2015 directed PSPCL to file reply by 03.06.2015 with a copy to the
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Order in Petition No. 28 of 2015
petitioners, who may file rejoinder to the reply by 08.06.2015.
The
petition was fixed for hearing on 09.06.2015.
3.
PSPCL vide Chief Engineer/ARR & TR Memo No.5855/TR-5/700
dated 28.05.2015 filed reply to the petition. The respondent submitted
as under:
3.1
The present petition is repetition of petition No.59 of 2013 and 4 of
2014 which `has already been decided by the Commission and this
petition is required to be dismissed on these grounds. It will not be
appropriate to give parawise reply to the petition as the status of
compliance of Commission’s Order in these petitions has already
been submitted vide Memo No.5632 dated 06.05.2015.
3.2
A committee comprising of senior officers of PSPCL after taking
into account the field requirements and suggestions of the
stakeholders including that of PSEB Engineers’ Association
finalized the functional model which was submitted to the Board of
Directors for final decision. After approval of Board of Directors,
the functional model was circulated vide Joint Secretary/Personnel
Order No.363/Cadre-1 dated 09.04.2015 giving detail of functional
model to be adopted in various Operation Divisions of PSPCL i.e.
urban/rural/mixed according to the needs of the consumers in
different areas of the State.
3.3
For the big urban towns such as Ludhiana, Patiala, Jalandhar,
Amritsar and Bathinda where there are 4 or more urban SubDivisions in a Division, it has been mandated that Ludhiana model
be replicated in other towns since the results of Ludhiana model
have been very good.
However, for purely rural Divisions, the
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Order in Petition No. 28 of 2015
conventional model shall be modified a little by making it two tier
system at Sub-Division level where a JE-1/AAE will co-ordinate the
activities of JE/Technical and RA under overall supervision of a
SDO. This model best suits the requirements of rural areas which
are scattered and centralization of various commercial activities at
one place would cause un-necessary inconvenience to consumers
for travelling long distances to get the electricity services with
regard to new connections/bills etc. Similarly for mixed urban /
rural Divisions, where majority Sub-Divisions are urban, functional
re-organization shall be carried out by converting one AE/AEE into
AE/Commercial and other SDOs will remain AE/AEE/Technical
and for these Sub-Divisions the system will be similar to that of
urban Divisions. However, for the rural Sub-Divisions, the system
shall be suitably modified on similar lines as decided for pure rural
Divisions. The mixed system shall also be put in place in Divisions
where more number of rural Sub-Divisions are there as compared
to urban Sub-Divisions.
The models as described above are
adopted after taking into account the roll out of SAP project under
R-APDRP scheme.
3.4
Various operating parameters/standards of performances to be
achieved by PSPCL have already been fixed by PSERC through
various orders and it should be left to PSPCL to achieve those and
take its own administrative decisions for this purpose rather than
imposing particular type of models. It is purely a prerogative of
PSPCL to decide as to what administration set up is required to
achieve
the
various
operating
parameters/standards
of
performance as laid down by PSERC and such micro level
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Order in Petition No. 28 of 2015
assessment is not required to be carried out by PSERC and rather
be left to PSPCL.
4.
The petitioners filed rejoinder to the reply of PSPCL vide
submission dated 03.06.2015 and made the following submissions:
4.1
This petition is not a repetition of petition nos. 59 of 2013 and 4 of
2014 at all. The petition no. 28 of 2015 has been filed primarily
because PSPCL has disregarded the instructions issued by the
Commission in its Order dated 28.11.2014 in these petitions. The
basis of this petition relates to non-compliance of Commission’s
Order of 28.11.2014.
4.2
The directions of the Commission vide Order dated 28.11.2014
were required to be implemented in letter and spirit by the PSPCL
and they were required to give the final plan for re-organisation by
31.01.2015 against which PSPCL not only failed to give such plan,
it went ahead to issue the circular dated 09.04.2015 without even
informing the Commission or obtaining its approval. The above
quoted order of the Commission contains the following directions:"Such diverse reports about the outcome of the project that too
after a period of more than 4 years, is beyond comprehension &
cannot be accepted without any evaluation by an independent
agency."
It was binding upon PSPCL to have implemented the above stated
directions and undertaken evaluation by an independent agency,
which has not been done and it amounts to non-compliance of the
Commission’s Order. The prayer relates precisely to this issue.
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Order in Petition No. 28 of 2015
4.3
The Commission may direct the PSPCL to supply the copy of the
following
a)
documents referred to by PSPCL:
PSPCL order constituting the Committee referred to,
including the terms of reference.
b)
Copy of report of the Committee.
c)
Copy of Memorandum put up to the Board of Directors.
d)
Copy of the noting sheet wherein the Memorandum has
been discussed and submitted to the BoD.
d)
4.4
Copy of the decision of BoD.
The PSPCL reply of 28.05.2015 now states that during various
hearings in the Commission with respect to earlier petitions filed,
field officers have already given their views regarding functional
model which should be given due cognizance by the Commission.
This statement does not match with the ARR filings for 3
consecutive years made under affidavit by PSPCL.
4.5
Subsequent to the filing of petition no. 28 of 2015 on 21.04.2015,
the
Commission issued tariff order for 2015-16 on 05.05.2015
wherein following directive for implementation during FY 2015-16
has been imparted:
“PSPCL had been claiming excellent results due to re-organisation
of distribution set-up but for last more than one year, PSPCL has
discontinued the implementation of functional re-organisation with
the plea that model is being re-examined in view of adverse
feedback received from some field officers and consumers. In
petition no. 4 of 2014, PSPCL informed the Commission that
BODs in its meeting held on 27.05.2014 has constituted a
8
Order in Petition No. 28 of 2015
committee to suggest a suitable model and will submit the report
within 2 months. The Commission in its Order dated 28.11.2014
directed PSPCL to furnish final plan for reorganisation of
distribution setup along with half yearly targets by 31st Jan. 2015
but till date no plan or decision in this regard has been conveyed
by PSPCL to the Commission. The Commission has indeed
visualised such scenario and commented in the ibid Order that
track record of PSPCL in taking timely decisions for tackling the
issue of employees cost & productivity does not inspire confidence
for speedy resolution of the issue by the utility. While taking a
serious view of the repeated failure of PSPCL to take timely action
on the issue of manpower productivity, Commission directs the
utility to implement re-organization of DS wing on top priority."
[emphasis supplied]”
The claim of PSPCL that only the utility is competent to decide as
to what administration set up is required to achieve the various
operating parameters and standards of performance as laid down
by the Commission has been contested on the grounds that it is
the prerogative of the Commission to ensure that the working
model adopted in PSPCL is economical and of least cost since the
employee costs ultimately are loaded on the consumer tariff. In the
previous ARR filings, it was PSPCL which was repeatedly stating
that the functional model is going to yield 10-12% saving in
employee cost. This factor makes the issue clearly within the
purview of the Commission. In the case of recruitment of linemen,
the Hon'ble Punjab and Haryana High Court directed PSPCL to get
approval of the manpower requirement from the Commission and
on the recommendations of the Commission, the Hon'ble Punjab
and Haryana High Court reduced the number of Linemen to be
recruited in PSPCL from 5000 to 1000. It would thus be in direct
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Order in Petition No. 28 of 2015
conflict of the decision of the Hon'ble Punjab and Haryana High
Court in case PSPCL is allowed to continue unabated employee
expenditure.
4.6
Against the sanctioned 52580 posts as per prevailing norms, with
the Patiala / Nabha functional model, the requirement would be
30174 posts. With such a huge saving of manpower, there is no
justification for PSPCL to go in for a costlier model. In any case,
the cost of inefficiency of PSPCL cannot be passed on to the
consumers in the form of tariff to be decided by the Commission.
4.7
The model proposed by PSPCL vide its office order 363/Cadre-1
dated 9.4.2015 and the functional model already implemented in
PSPCL should be got evaluated by an independent agency
nominated by the Commission which shall work under the
supervision of the
Commission and Implementation of PSPCL
office order No. 363/Cadre-1 dated 09.04.2015 requiring higher
manpower may be immediately stayed to serve the consumers'
interest.
5.0
The petitioners filed additional rejoinder vide letter dated
04.06.2015 and highlighted the following issues:
5.1
The functional model (Patiala Model) is a proven and established
system that has produced all round excellent results. The losses
are around 8% for Patiala which has predominantly domestic and
commercial load and there is no concentrated industrial load as in
the case of
Ludhiana, Gobindgarh etc. With such level of losses,
the issue of segregating technical from commercial losses
becomes unimportant.
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Order in Petition No. 28 of 2015
5.2
PSPCL has admitted in its reply that there is a tendency for the
staff to give preference to Commercial Functions (while as a result
the technical functions get ignored). It is precisely to tackle this
problem that the functional model was introduced in the first
instance. With the technical divisions doing only technical job, the
mixing of commercial with technical functions is avoided and there
is no scope for the staff to prefer the commercial functions at the
cost of technical. With this model, the technical Divisions can
concentrate and focus on technical jobs such as system
improvement, augmentation, replacement of old conductors etc.
with the result that the 11 kV and LT system becomes vastly
improved, with drastic reduction in faults and breakdowns and
improved voltage to the consumers. This directly results in
improvement in service to the consumers by way of better voltage
and reduced breakdown time. Simultaneously, the commercial
Divisions concentrate on the commercial aspects in an exclusive
and focused manner which reduces the commercial and billing
losses and leakages.
5.3
The commission has to ensure that whichever model is proposed
satisfies some basic criteria.
a)
That the employee cost should be optimum/minimised.
b)
That the consumer service has to be ensured efficiently.
c)
That the losses are at bare minimum.
All these three parameters directly impact the ARR which has to
be allowed / approved by the Commission. Therefore, the model
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Order in Petition No. 28 of 2015
proposed by PSPCL must ensure that the three parameters stated
above are being adequately or in optimum manner satisfied.
Whatever, model is adopted must be proven to satisfy the criteria
of low employee cost, improved consumer service and minimum
losses. The Patiala Model meets all these three benchmarks.
6.0
During hearing on 09.06.2015 the petitioners and PSPCL were
heard at length and the Commission vide Order dated 09.06.2015
directed PSPCL to supply the following documents to the Commission
and the petitioners by 30.06.2015:I. Copy of PSPCL memo No.5632 dated 06.05.2015 whereby status
of compliance of Order dated 28.11.2014 in Petition No.4 of 2014
was submitted to the Commission.
II. PSPCL Order constituting the Committee for finalization of
functional model of PSPCL including the terms of reference.
III. Copy of the report of the Committee.
IV. Copy of the Memorandum put up to the Board of Directors (BOD).
V. Copy of the noting sheet wherein the Memorandum has been
discussed and submitted to BOD.
VI. Copy of the decision of BOD.
The petition was fixed for hearing on 14.07.2015.
7.0
PSPCL vide Chief Engineer/ARR & TR Memo No.5110/TR-5/700
dated 02.07.2015 filed the necessary documents as desired by the
Commission vide Order dated 09.06.2015.
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Order in Petition No. 28 of 2015
8.0
The petitioners vide e-mail dated 10.07.2015 requested the
Commission to postpone the hearing scheduled to be held on
14.07.2015 to 21.07.2015 due to unavoidable circumstances.
The
Commission vide Order dated 15.07.2015 postponed the hearing to
04.08.2015.
9.
The petitioners in response to documents supplied by Chief
Engineer/ARR & TR vide letter dated 02.07.2015, filed response vide
letter dated 29.07.2015.
It was submitted that PSPCL has not
implemented Orders of the Commission in petition No.59 of 2013 with
regard to fixing of responsibility of outsourced Meter Readers at par with
departmental employees including theft of power.
PSPCL has also
revised model of functional reorganization of distribution setup which has
serious draw backs as detailed below:i.
Under the new model, the consumers shall have to deal with two
offices i.e. of SDO/Commercial and SDO/Technical even for basic
electricity services like release of new connections involving
installation of meter/PVC, change of meters and correction of bill
because technical staff viz LM/JE have been withdrawn from the
Commercial Wing.
If single window clearance of release of connections, change
of meters, correction of bills etc. is to be ensured, then commercial
wing needs to be provided with required technical staff for field
compliance of the job orders.
In case of Patiala model the consumer has to deal with one
office of SDO/Commercial only for such services. Since this wing
had technical staff posted with it.
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Order in Petition No. 28 of 2015
ii.
The functions of technical wing in the Patiala model were designed
to ensure complete focus on O&M of distribution networks on the
pattern of best business practices followed by private distribution
companies in India. The technical wing under the model now being
adopted by PSPCL shall be responsible for O&M, construction and
field compliance of job order i.e. installation of meters for release
of connections, change of meters and defaulting amount. Thus
focus on O&M of distribution set up shall be causality which
adversely affects quality of supply to the consumers.
iii.
BOD has decided to retain the conventional model in rural areas.
Thus there shall not be any uniform model throughout in PSPCL.
iv.
BOD of PSPCL in December, 2010 had observed that saving of
manpower is achieved by implementing Patiala model and the
committee for fixing norms has estimated requirement of 27124
employees against 56084.
v.
There is acute shortage of staff in PSPCL, which is adversely
affecting the consumer services. The status of manpower as per
MIR report of PSPCL as on 31.03.2015 indicates 24047 of group C
employees against sanctioned strength of 54239 i.e. 44% and
situation in rural areas is even worse.
The petitioners also filed additional data on Employee Cost for FY
2012-13 on 04.08.2015.
In view of above the petitioners prayed that PSPCL may be
directed to implement the Orders of the Commission and also to ensure
better consumer services, the following measures may be adopted:
14
Order in Petition No. 28 of 2015
a) To ensure single window clearance of job orders in the
commercial wing by providing adequate technical staff in this
wing.
b) Ensure focus on O&M of distribution networks on the pattern
of best business practices.
c) To either recruit manpower as per sanctioned strength or to
redesign
the
distribution
setup
which
requires
less
manpower. However, the recruitment of additional staff shall
raise the employee cost.
10.
During hearing on 04.08.2015, PSPCL submitted that before
arguments of the petitioners are heard, PSPCL may be allowed to file
reply to the submissions dated 29.07.2015 filed by the petitioners. The
Commission vide Order dated 05.08.2015 directed PSPCL to file the
same by 25.08.2015 with a copy to the petitioners and the petition was
fixed for hearing on 02.09.2015.
11.
PSPCL vide Chief Engineer/ARR & TR Memo No.5470/TR-5/700
dated 25.08.2015 filed reply and made the following submissions:
11.1 With respect to petition No.59 of 2013, PSPCL submitted that no
tender has been issued after the directives of the Commission
regarding Spot Billing and the requisite clause shall be
incorporated in upcoming tenders.
11.2 Regarding petition No.4 of 2014, PSPCL argued that the points
raised by the petitioners have already been discussed in the report
of the Committee constituted for functional reorganization of
distribution set up.
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Order in Petition No. 28 of 2015
11.3 It was further brought out that in the starting phase the model
adopted in Patiala city was initially successful because of the fact
that most of the services carried out in this city were outsourced.
The same model was then replicated in Nabha Division but has
failed to achieve the desired performance results on the pattern of
Patiala city. The root cause for failure of this model in Nabha
division is due to the fact that in commercial division Patiala the
number of connections, substations and number of transformers
are very less.
But with the passage over 4 years, lot of
discrepancies had been noted down.
Thus Patiala model has
failed miserably and needs not to be replicated in any other area of
Punjab.
11.4 Regarding requirement of less staff in case of functional model of
Patiala city, it is submitted that the details given by petitioner are
totally denied and wrong. It is because of the fact that the norms
created in functional model require more staff than the present
posted staff.
The already depleted staff strength in the Sub
divisional office was divided in the ratio 80:20 in Technical and
Commercial Divisions.
This resulted in acute shortage in both
technical and commercial divisions resulting in poor performance
in core sectors e.g. attending in to no current complaints and
recovery of defaulting amount. The point was also deliberated with
PSEB Engineers’ Association while finalizing the report for
adoption of functional model in PSPCL but they could not give
specific comments in favour of lesser requirement of staff with
regard to Patiala model.
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Order in Petition No. 28 of 2015
11.5 The Ludhiana model was started in the year 1995 after configuring
the experience and feedback from the field offices. This model is
successfully working for the past 20 years. In the meantime, it has
been decided to adopt a new model under Patiala City with the
hope that with implementation of this model the existing staff will
decrease. However, with this new model, PSPCL has to create a
new post of Sr.Xen/Commercial keeping in view the field
compulsions and for better services to the consumers. This model
when adopted in Amritsar City, PSPCL has to create one post of
Sr.Xen. Thus with implementation of this model, PSPCL could not
reduce the existing staff neither spare/withdraw any staff due to
field requirements and to provide better control over the basic
electricity services to the consumers..
11.6 Further, petitioner has stated that single window clearance system
be adopted. In this regard it is submitted that due to shared work
responsibilities, there is always delay in providing services to the
consumers covered under single window clearance system. Thus
the adoption of this system has resulted in to non-coordination
between various offices and due to this the activities which is to be
resolved at Sr.Xen/DS level have escalated to SE/DS level which
make this model unfit in the PSPCL present scenario. The profit
centre becomes Dy.CE/SE levels and Sr.Xen/ASE commercial and
technical does not share collective responsibility.
11.7 Whereas employee cost is concerned, it is admitted that per unit
employee cost is little more in PSPCL. However, efforts are being
made to reduce this cost and same are being intimated to PSERC
in the ARR Tariff Petition filed by PSPCL every year. Thus the
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Order in Petition No. 28 of 2015
employee cost cannot be reduced quickly since after retirement of
officers/officials, PSPCL has to pay the retirement benefit/pension
and the liability still remains on the part of PSPCL.
12.
During hearing on 02.09.2015, the petitioners filed rejoinder to
PSPCL letter dated 25.08.2015 and made the following submissions:
12.1 The reply given by PSPCL is totally inadequate as PSPCL has not
given any figures or data regarding the employee cost implication
in implementing the revised scheme.
On the other hand, the
petitioners had given facts and figures of how the functional model
results in saving of manpower and cost.
PSPCL should have
carried out an analysis of cost implication of its amended model
and supplied the figures/data to the Commission.
12.2 Since the high employee cost is a major element of the Annual
ARR and it imposes a burden on the consumer tariff, it was
incumbent upon PSPCL to have addressed the cost implications
and supplied the data to the Commission. Just because a cost
plus approach is adopted in finalizing the ARR, it does not mean
that PSPCL can give inflated figures of employee costs on the
assumption of a pass through in the tariff. The Commission is fully
justified and empowered to ask PSPCL to give full details of the
cost implications of its revised model.
12.3 The Commission is also directly concerned on ensuring that cost
efficient and timely service is given to the consumers. With the
Patiala
model
of
Commercial
division
handling
both
the
commercial aspects as well as release of connections; it gives the
improved consumer service through single window operation and
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Order in Petition No. 28 of 2015
also saves on manpower costs. On the other hand, the model now
proposed by PSPCL will require the consumer to contact different
offices and the single window model would be adversely impacted.
It is a prime concern of consumer service that for release of
connection with meter and PVC, change of meters and corrections
of bills, the service must be given through a single window.
PSPCL should be asked to explain how the above functions would
be achieved through a single window under the revised/proposed
scheme of PSPCL. In case PSPCL is not able to give the standard
of service under revised scheme as was available in the earlier
scheme, the Commission is requested to ensure that the proposed
scheme of PSPCL does not make the consumer suffer.
12.4 Under the functional scheme, the technical division was doing only
the technical work of O&M and was able to concentrate on these
vital aspects as there was no mixing up with commercial or
consumer related issues. Under the proposed scheme there will
be a mix up of commercial with technical functions and the
staff/limited manpower would be having tendency to concentrate
on the consumer related/commercial aspects as these appear to
be attractive.
As a result, under the proposed scheme, the
technical, maintenance and augmentation functions would tend to
suffer which would ultimately impact the reliability of power to the
consumers.
PSPCL should explain how under conditions of
manpower shortage, it would be able to ensure that the technical,
O&M aspects are not neglected in favour of commercial functions.
In the earlier functional model, there was no scope for such mixing
of functions or neglect of technical/O&M functions.
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Order in Petition No. 28 of 2015
12.5 PSPCL should be required by the Commission to demonstrate how
and in which manner the model it is proposing will require less
manpower and how it will increase the productivity of the work
force.
13.
The Commission, after hearing the arguments of both the parties
on 02.09.2015, directed PSPCL to supply to the Commission and the
petitioners a comparison of organizational Chart of Jalandhar distribution
set up (including rural/sub-urban areas) before and after implementation
of revised functional model as per PSPCL office Order dated
09.04.2015.
PSPCL was also directed to explain how in the new
dispensation, the employee productivity, O&M expenses and consumer
services shall improve as compared to the Patiala model of functional
reorganization adopted earlier by PSPCL. PSPCL was directed to file its
submissions by 15.09.2015 with a copy to the petitioners and the petition
was fixed for further hearing on 22.09.2015.
14.
PSPCL vide Chief Engineer/ARR & TR Memo No.5571/TR-5/700
dated 15.09.2015 requested for extension in time up to 22.09.2015 for
submission of information and postpone the hearing. PSPCL vide Chief
Engineer/ARR & TR Memo No.5618/TR-5/700 dated 18.09.2015
submitted the organisational Chart of Jalandhar Town & also submitted
as under:
14.1 Currently under Operation Circle Jalandhar, there are 388 Nos. 11
kV feeders of various categories, 14721 No.DTs, 3838.979 KM of
11 kV Line, 4724.216 KM of LT Line and 5,08,714 No. consumers.
The last revision of sanctioned posts for Jalandhar Circle was done
in 1980 when the number of consumers were approximately 2.00
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Order in Petition No. 28 of 2015
lac. Since then, no revision of sanctioned posts has been done
and the sanctioned strength has remained 2924 nos. Even against
the sanctioned strength, the present working strength is only 1393.
14.2 Under Patiala based functional model, only employees posted in
technical sub divisions/divisions used to look after 11 kV feeders
and other technical matters while employees in commercial subdivision/divisions used to receive consumer applications for various
services including release of connections.
As such, technical
employee could do only one function.
14.3 Whenever a connection with load above 20 kW was applied in
commercial sub division, his case was sent for framing Estimate in
technical sub division where the Estimate was passed and then
again, the consumer case was sent to commercial sub division for
issue of Demand Notice. After the receipt of Test Report from
consumer, consumer case was again sent to technical sub division
for construction of line etc. after which the completed I.O. was sent
to commercial sub division where the meter was issued and SCO
generated. Thus, the file of consumer moved many times between
commercial wing and technical wing leading to harassment of
consumer. Dealing of the file in above manner cannot be termed
as single window clearance.
14.4 Jalandhar city is a big City where commercial and technical sub
divisions are located more than 5 KMs apart in most of the cases.
As such, the frequent movements of consumer case between
different offices resulted in delay in release of connection to the
consumer.
Also because of the implementation of the Patiala
21
Order in Petition No. 28 of 2015
based functional model, the beat area of JEs had increased. Due
to posting of some JEs in commercial sub divisions, the JEs of
technical sub divisions were made in-charge of more feeder. In
many cases, JEs had to look after 10 to 14 number 11 kV feeders
which emanated from different sub stations. In case of feeders
emanating from two or more sub stations becoming faulty at the
same time, the JE could get PTW for only one feeder from one sub
station, resulting in delay of attending the fault of other feeders.
Thus, the consumer service suffered a lot due to above reasons.
14.5 In the revised functional model, the beat area of JE has decreased
as the number of technical sub divisions have almost doubled.
Also more number of JEs have been posted in technical sub
divisions, resulting in prompt attendance of faulty feeder and better
consumer service. The services of a technical employee, who
looks after maintenance of feeder can also be used for release of
connection, collection of defaulting amount, maintenance of 11 kV
feeders etc.
Thus, productivity of an employee has definitely
increased in the revised functional model.
14.6 Patiala based functional model was implemented in Patiala and it
was initially successful since the number of consumers were not
much and there was out sourcing of various activities to a large
extent
but
as
already emphasized
earlier,
due
to
large
geographical area at Jalandhar, the model was not successful in
Jalandhar.
14.7 It is worth mentioning here that number of protests from
public/social organizations were faced in 2011 and many sub
22
Order in Petition No. 28 of 2015
offices remained functional as per traditional system till date e.g.
Alawalpur, Daroli Kalan, Badshahpur, Model House. It was difficult
to fix accountabilities of officials e.g. evaluation T&D Losses, as
the functions are interrelated. The staff under Commercial Division
was slightly less burdened whereas skeleton technical staff were
over burdened. There remained consistent pressure for posting in
Commercial Organization from all quarters. It was difficult to fix
responsibility due to non-defining of a particular duty. For example
in case of increase in parameter “T&D Losses”, it is difficult to pin
point whether technical sub division employee is responsible or
commercial sub division employee is responsible.
14.8 Because, the JEs posted in technical sub divisions had to look
after large number of feeders all the time, they were only attending
faults.
Thus, no maintenance work of feeders including up
gradation of system, especially in rural area was done as claimed
by petitioners. Thus, employee productivity suffered a lot in Patiala
based functional model.
14.9 Because technical and commercial work was done in different
divisions i.e. Technical division and Commercial division, many
times, there were co-ordination problems between them requiring
frequent intervention of Superintending Engineer, thus overburdening of Superintending Engineer with mundane activities.
The office of Senior Executive Engineer is recognized as
accounting unit/profit centre and as such, in revised functional
model, executing agency is Senior Xen.
In revised functional
model accountability of each employee is defined and hierarchy is
not disturbed resulting in better consumer service and increased
23
Order in Petition No. 28 of 2015
employee productivity because more than one function can be
performed by same employee. It results in pooling of manpower
and decrease in O&M expenses.
14.10 It is worthwhile to mention here that out of 388 No. 11 kV feeders,
under Op. Circle Jalandhar, work on only 83 Nos. 11 kV feeders is
being done under R-APDRP – Part B scheme. The claim of the
petitioner regarding reduction of staff in Patiala based model is
hypothetical as there is shortage of staff in Operation Circle,
Jalandhar even as per norms of this Patiala based model. To
overcome this shortage, many activities are being outsourced so
as to carry on the essential day-to-day activities. Even if staff is
worked out as per norms defined by petitioners then we require
e.g. JE, L.M. ALM, as per table hereunder. Moreover, with the
Jalandhar being developing City, the 11 kV/LD system is
expanding in haphazard manner for which more maintenance staff
will be required considering the growth of un-approved colonies in
the periphery of the City. As per staff norms in revised functional
model under Operation Circle, Jalandhar, technical posts data
regarding JEs, Lineman & A.L.M. is as under:Sr. Category
No.
1.
2.
3.
J.E.
L.M.
A.L.M.
Total
Posts as
per staff
norms in
revised
functional
model.
180
538
1080
1798
No.
of Vacant
working
posts.
Employees.
%age of
vacant
posts.
82
256
492
830
53.84%
98
282
588
968
24
Order in Petition No. 28 of 2015
From the above, it is clear that against 1798 posts as per staffing
norms, only 830 technical employees are working, thus 53.84%
posts of technical staff are lying vacant under Operation Circle,
Jalandhar. The argument regarding reduction of staff in Patiala
based Model or Ludhiana based model carries no weight.
14.11 PSPCL is not rigid about implementation of any particular model.
The Patiala based model has not been successful in Jalandhar
while revised functional model based on Ludhiana model, which is
working successfully for the last 15 years in Ludhiana, has been
started in Operation Circle, Jalandhar which may be a better option
both for the consumers and PSPCL employees.
The petitioners are respectable retired Officers of PSPCL who
have served in the erstwhile PSEB about more than 10 years back
when the work culture and working scenario was quite different
than what it is today.
14.12 The petitioners have earlier pointed out that implementation of
Part-A and Part-B of R-APDRP scheme is a pre-requisite for any
model. PSPCL is in the process of implementing it and it will cover
only approx. 1/4th no. of feeders. Remaining 11 kV & LD system is
supposed to be maintained by existing staff or by outsourced staff.
PSPCL has already started outsourcing complaints and labour
component for activities like release of connections, system
improvement works etc.
It is concluded from above that the functional model of Jalandhar is
more appropriate in the present scenario.
25
Order in Petition No. 28 of 2015
15.0 The petitioner vide letter dated 21.09.2015 requested for
postponing the hearing scheduled to be held on 23.09.2015.
The
Commission vide Order dated 24.09.2015 fixed the hearing on
28.10.2015. PSPCL vide Chief Engineer/ARR & TR Memo No.5793/TR5/700 dated 26.10.2015 requested for postponing the hearing scheduled
for 28.10.2015. The Commission vide Order dated 28.10.2015 fixed the
hearing on 17.11.2015 for hearing the final arguments on behalf of both
the parties.
16.
The petitioners vide letter dated 13.11.2015 filed reply to PSPCL
letter dated 18.09.2015 and made the following submissions:
16.1 The purpose and intent of the present petition was that since the
Patiala
Model
of
functional
reorganisation
of
distribution
organisation of PSPCL had succeeded and given good results, the
same should have been rolled out and implemented across the
state of Punjab particularly as the PSPCL itself had been admitting
its success and admitting its intention to extend the pattern across
Punjab. However, PSPCL has changed its approach without valid
reason and the reply given by PSPCL on 18.09.2015 is with
respect to Jalandhar only and this reply does not apply across the
entire state of Punjab. The reply of PSPCL therefore is inadequate
and not applicable to the state as a whole.
16.2 Majority of DS connections are below 20 kW and the majority of
new connections are therefore served through single window
system. To suit the minority of consumers above 20 kW, the
majority of new consumers which are below 20 kW must not be put
to inconvenience.
26
Order in Petition No. 28 of 2015
16.3 PSPCL admitted that staff prefer to give duty in a commercial
division instead of a technical division. For this very reasons in the
Patiala model, the commercial and technical divisions were
segregated so that the personnel posted in technical division
necessarily have to carry out exclusively technical functions. In this
way the technical staff do the technical jobs only and are
responsible
for
the
progress
in
various
works
such
as
augmentation, improvement works which give better power supply
to the consumers. As opposed to this, the PSPCL model mixes up
the commercial with the technical functions within the same
division with the result that the limited staff will definitely
concentrate on the commercial aspects and the technical working,
O&M will suffer hugely and consumers will have poor service.
16.4 Under the Patiala model, the AT&C losses have reduced to about
8.5%. Since Patiala is city with predominantly domestic and
commercial load, the attainment of losses of the order of 8.5% in
Patiala is sufficient proof of the success of the functional
organisation model. With a loss level of 8.5%, it automatically
implies that the commercial losses are extremely low. By contrast
in a city like Ludhiana with large concentration of industrial load,
the loss level is expected to be much lower than 8.5%.
16.5 The model of functional reorganization which has worked
successfully in Patiala is not an isolated instance. Even in private
sector discoms in this country, the staff is deployed on functional
basis. This is the widespread global practice adopted in developed
countries and PSPCL should adopt the model which is practically
27
Order in Petition No. 28 of 2015
working in utilities / private sector utilities in this country as well as
in the advanced / developed countries.
17.0 During hearing on 17.11.2015, PSPCL submitted that since the
reply of the petitioners was received on 13.11.2015 at 4.15 P.M. through
e-mail, therefore, PSPCL requires time to file its response.
The
Commission vide Order dated 18.11.2015 directed PSPCL to file reply
by 27.11.2015 and ensure to supply a copy of the same directly to the
petitioners. The petition was fixed for hearing and final arguments on
01.12.2015.
18.0 PSPCL vide Chief Engineer ARR & TR Memo No.5132/TR-5/700
dated 04.12.2015 filed the reply to the submissions made by the
petitioners and submitted as under:
18.1 The Commission in its Order dated 02.09.2015 directed PSPCL to
provide analysis of Jalandhar distribution system and the same
has been submitted.
18.2 Regarding release of connections for categories below and above
20 kW, it is submitted that in case both the categories are clubbed
then better performance results will be achieved by PSPCL
besides bringing uniformity in release of connections.
18.3 The distribution model adopted for Commercial Division Patiala
cannot be replicated in Jalandhar city as the area in Patiala was
confined.
18.4 PSPCL has submitted all the documents which the Commission
directed to file and reply to all issues raised by the petitioners from
time to time has already been submitted.
28
Order in Petition No. 28 of 2015
18.5 The petitioners are unnecessarily demanding more and more data
and in view of the suggestions and details already supplied by the
PSPCL, the case may be closed and the petition be dismissed
since the issues involved are purely administrative issues for which
PSPCL is fully competent to take suitable decisions keeping in
view the pros and cons.
19.0 The Commission vide Order dated 08.12.2015 directed PSPCL to
file the detail of T&D losses with respect to Distribution Circle, Jalandhar
City where Ludhiana model is stated to have been adopted, by
15.12.2015 with a copy to the petitioners. The hearing of the petition was
closed and Order was reserved.
19.1 The petitioner has filed additional submissions dated 10.12.2015
re-iterating that Patiala and Nabha Model of functional re-organization
has clear-cut advantages over the Ludhiana Model being adopted and
advocated by PSPCL because Patiala / Nabha Model is more
economical and efficient. PSPCL has supplied the information with
respect of T & D losses in the Distribution Circle, Jalandhar City vide
memo. No. 5298 dated 21.12.2015 to the
Commission and the
petitioners.
19.2 The Commission has gone into the matter carefully and at the
outset it is expressed that
the concern shown by the senior and
experienced former Chief Engineer and Superintending Engineer of
erstwhile Punjab State Electricity Board in this petition with regard to
achievement of economical and efficient functioning of distribution
organization of PSPCL, is appreciable. After thorough perusal of the
29
Order in Petition No. 28 of 2015
submissions of the petitioners as well as PSPCL, the Commission notes
that the moot point that emerges is as to whether Patiala / Nabha Model
or
Ludhiana
Model
of
functional
re-organization
of
distribution
organization of PSPCL is more economical and efficient.
19.3 The petitioners have filed this petition under Section 61, 86(1) and
57 of The Electricity Act, 2003. Provisions of the Sections are discussed
hereunder in so far as these apply in the context of the instant petition.
The petitioners have made following prayers:
“(i)
That the Hon’ble Commission may be pleased to issue
orders to immediately stay the implementation of PSPCL
office order no. 363/Cadre-1 dated 9/4/2015.
(ii)
That the Hon’ble Commission may be pleased to issue
directions to PSPCL to get the functional models evaluated
by an independent agency nominated by the Hon’ble
Commission which shall work under the supervision of the
Hon’ble Commission.”
PSPCL had issued office order No. 363/Cadre-1 dated 09.04.2015 for
re-organization of Distribution Organization on functional basis. The
petitioners have prayed to stay the implementation of the same vide
prayer no. (i) above. The impugned Office Order dated 09.04.2015 is reproduced hereunder:30
Order in Petition No. 28 of 2015
“PUNJAB STATE POWER CORPORATION LIMITED
(CADRE SECTION-1)
Office Order No. 363 / Cadre-1
Dated: 09/04/2015
Punjab State Power Corporation Limited, Patiala after
considering
the
report
of
the
Committee
constituted
for
re-organization of Distribution Organization on functional basis is
pleased to order as under:(i)
The office of Sr.Xen/Addl.SE shall be classified as Profit
Centre. Divisional Office shall be NODAL POINT responsible for
monitoring all parameters such as AT&C losses, Key exception,
consumers grievances/redressal of consumer complaints etc. The
role of Dy.CE/SE shall be overall supervisory control and interface
with Management.
(ii)
Depending upon the geographical area of the city, one or
more two tier system divisions in a city on Ludhiana pattern will be
created. However, concept will be to have only one AEE/AE
Commercial and rest of AEE/AE Technical per Division. This
model be implemented in major cities like Amritsar, Jalandhar,
Patiala and Bathinda etc. where there are 4 or more urban sub
divisions in a city/divisions and AEE/AE both Technical as well as
Commercial shall be reporting to Sr.Xen/Addl.SE.
(iii)
In case of divisions, which are purely catering the rural sub
divisions and are presently covered under conventional model
shall now be converted and covered under modified two tier
system at sub-divisional level. JE-1/AAE will co-ordinate the
31
Order in Petition No. 28 of 2015
activities between JE’s Technical and RA under the overall
supervision of the SDO and office of Sr.Xen/Addl.SE shall remain
as NODAL POINT and profit Centre.
(iv)
In case of divisions which comprises of 3 number urban sub
divisions and one or 2 rural sub divisions, two tier system may be
implemented by converting one post of AE/AEE Technical to
commercial out of 3 number AEE/AE Technical in Urban areas and
the rural sub divisions attached with these divisions shall be
converted to modified two tier system as explained in para (iii)
above.
(v)
In a division, where there are 1 or 2 Urban sub divisions and
balance rural sub divisions, the modified two tier system as
explained in para No.(iii) above shall be implemented both in rural
as well as Urban sub divisions.
(vi)
While implementing any of the above model, in case any
difficulty with regard to geographical location of sub division or
beat area requires modification, then the details shall be examined
by the concerned EIC/CE/DS keeping in view hardship to
consumers and in best interest of PSPCL and any boundary
redefining, redistribution of existing staff, if required to implement
two tier system, the same shall be carried out by the concerned
EIC/CE/DS and EIC/CE/DS shall put up the detailed proposal for
the above before the Committee of Whole Time Directors and for
infrastructure required, if any, for the implementation of above.
This issues with the approval of competent authority.
Sd/Joint Secretary/Personnel,
PSPCL, Patiala.”
32
Order in Petition No. 28 of 2015
19.4 Section 57 of the Electricity Act, 2003 provides as under:“57. Standards of performance of licensee.(1) The Appropriate Commission may, after consultation
with the licensees and persons likely to be affected,
specify standards of performance of a licensee or a
class of licensees.
(2) If a licensee fails to meet the standards specified under
sub-section (1), without prejudice to any penalty which
may be imposed or prosecution be initiated, he shall be
liable to pay such compensation to the person affected
as may be determined by the Appropriate Commission:
Provided
that
before
determination
of
compensation, the concerned licensee shall be given a
reasonable opportunity of being heard.
(3) The compensation determined under sub-section (2)
shall be paid by the concerned licensee within ninety
days of such determination.”
The Commission has already specified the Standards of
Performance and Compensation payable to the consumers in case of
violation of Minimum Standards of Performance as Annexure 5 to the
Punjab State Electricity Supply Code and Related Matters Regulations,
2014. No further directions can be issued to the Distribution Licensee
under Section 57 of the Electricity Act, 2003.
33
Order in Petition No. 28 of 2015
Section 61 is the 1st Section of PART VII – TARIFF
of The
Electricity Act, 2003 and provides that the Appropriate Commission
shall, subject to the provisions of this Act, specify the terms and
conditions for the determination of tariff and in doing so shall be guided
by following namely :“(a)
the principles and methodologies specified by the Central
Commission for determination of the tariff applicable to
generating companies and transmission licensees;
(b)
the generation, transmission, distribution and supply of
electricity are conducted on commercial principles;
(c)
the factors which would encourage competition, efficiency,
economical use of the resources, good performance and
optimum investments;
(d)
safeguarding of consumers’ interest and at the same time,
recovery of the cost of electricity in a reasonable manner;
(e)
the principles rewarding efficiency in performance;
(f)
multi-year tariff principles;
(g)
that the tariff progressively reflects the cost of supply of
electricity and also reduces cross-subsidies in the manner
specified by the Appropriate Commission;
(h)
the promotion of co-generation and generation of electricity
from renewable sources of energy;
(i)
the National Electricity Policy and tariff policy:
34
Order in Petition No. 28 of 2015
Provided that the terms and conditions for determination of
tariff under the Electricity (Supply) Act, 1948 (54 of 1948),
the Electricity Regulatory Commission Act, 1998 (14 of
1998) and the enactments specified in the Schedule as they
stood immediately before the appointed date, shall continue
to apply for
a period of one year or until the terms and
conditions for tariff are specified under this section,
whichever is earlier.”
Section 86 (1) providing for functions of the Commission is not
relevant to the prayers made by the petitioners.
In exercise of powers conferred on it under Section 61 read with
Section 181 of The Electricity Act, 2003 and all other powers enabling
the Commission in this behalf, the Commission has made the Punjab
State Electricity Regulatory Commission (Terms and Conditions for
Determination of Tariff) Regulations, 2005 keeping in view and in
accordance with all the guiding principles mentioned under Section 61
of The Electricity Act, 2003. Regarding Employee Cost, which is one of
the contentious issue apart from functional efficiency and better service
to the consumers, Regulation 28 of these Regulations, specifies the
same. Allowable Employee Cost under the Regulation is subject to
prudence check by the Commission while considering the ARR and
Tariff Determination for PSPCL. The Commission is bound to exercise
its powers within Law and Regulations and not beyond that as its own
Regulations are also binding on the Commission.
19.4 The petitioners insist that Patiala / Nabha Model of functional
organization is more efficient, economical, tried & tested and provide
35
Order in Petition No. 28 of 2015
better service to the consumers and T & D Losses are minimum. PSPCL
on the other hand with equal vehemence contend that Ludhiana Model
is better. The Commission finds some merits in both Models and there
could also be some demerits compared to other in the both. It would
not be prudent for the Commission at this stage to record any infirmity in
the Model adopted by PSPCL vide its office order No. 363 / Cadre-1
dated 09.04.2015 without giving it a try. At this stage, the Commission
also does not agree with the contention of PSPCL that Patiala / Nabha is
failed Model and the contention of the petitioners that Ludhiana Model
is likely to fail.
19.5 The petitioners have further submitted that order dated 28.11.2014
passed by the Commission in Petition No. 59 of 2013 and Petition No. 4
of 2014, has not been implemented by PSPCL in letter and spirit. The
Commission notes that PSPCL has issued impugned office order dated
09.04.2015 in compliance of directions of the Commission in its Order
dated 28.11.2014. The Commission is not inclined to interfere further in
day to day functioning and micro-management of the Utility.
19.6 In view of above discussion, the implementation of office order No.
363/Cadre-1 dated 09.04.2015 is not stayed as prayed by the petitioners
vide prayer (i) of the petition.
The Commission, however, observes that any of the Model
adopted by PSPCL must achieve following parameters :
1.
Increase in manpower productivity and decrease in per unit
employee cost
36
Order in Petition No. 28 of 2015
2.
Efficient consumer service and achievement of Standard of
Performance
3.
Low T & D loss level
4.
Increase in revenue assessment / realisation
The responsibility to ensure achievement of above parameters shall be
solely of PSPCL. The Commission may review the results of the reorganization of distribution set up at appropriate stage either of its own
or through an independent agency.
The
Commission
further observes
that implementation
of
directions of the Commission vide Order dated 28.11.2014 in Petition
Nos.
59 of 2013 and 4 of 2014 has been delayed inordinately by
PSPCL. PSPCL is directed to comply with the directions without further
delay under intimation to the Commission.
The petition is disposed of.
Sd/(Gurinder Jit Singh)
Member
Sd/(Romila Dubey)
Chairperson
Chandigarh
Dated: 04.01.2016
37