Performance Monitoring

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Performance Monitoring Benchmarking in an
Electricity Sector in Transition
Being presentation made by Engr. (Dr.) J. O.
Makoju MD/CE PHCN Plc at the World Bank 2006
Energy Week in Washington DC 6th 10th March,
2006
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(No Transcript)
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About Nigeria

• Located in West Africa
• Total area of 923,770 sq km (about the same
  territory as France Germany combined).
• Climate varies from equatorial (in the south),
  tropical (in the central area) and arid (up
  north).
• Population of over 130 million people
  (multiethnic, multicultural, secular society)
  with an average pop. growth rate of 3 p.a.

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Sector Reform (on-going)

• Perhaps the single most profound step taken under
  the reform process has been the internal
  unbundling decentralization of PHCNs
  operations
• NBUs have been operating as semi autonomous units
  over the past 2yrs (while they await full
  corporatization in April 2006).
• With increased autonomy came the need for greater
  accountability performance monitoring
  benchmarking.

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PHCNs Benchmarking Performance Monitoring
Initiatives
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Target Setting

• Based on realistic expectations rather than
  international benchmarks
• Challenges in the local environment taken into
  account (Weak/ fragile electricity
  infrastructure Network limitations etc)
• Customer Service Charter also taken into
  consideration

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Target Settingcontd

• A consultative approach is adopted in target
  setting (Targets are agreed with the NBUs not
  handed down).
• Adjustments are made where necessary based on the
  peculiar situation of an NBU.
• Targets are monitored by the Planning Strategy
  Dept./ Market Operator
• Ranking circulated at the end of each month

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Some KPIs for the Generation NBUs

• Generation Unit Cost - Total Expenditure
  (Naira)
• Total Energy
  Delivered (KWH)
• Generation Utilization Index - Actual
  Generation (MW)
• 
  Available Capacity (MW)
• Capacity Utilization Index - Available
  Capacity (MW)
• Installed Capacity (MW)
• Fuel Cost per Unit Gen.- Total Cost of
  Fuel (Naira)
• Total Energy Generated (MWH)

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KPIs for the Generation NBUs contd

• Staff Cost Index - Total Expenditure
  (Naira)
• 
  Number of Employees
• Staff Productivity Index - Total Energy
  Delivered (MWH)
• Number of Employees
• Breakdown Mtce. Index- No of Breakdown defects
  rectified
• 
  No of Breakdown defects reported
• Plant Reliability Index - Time of Reporting
  Period
• 
  Total Down time of unavailable Units

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Some Performance Monitoring Charts
Target
Reliability Index Chart (Jan Dec 2005)
Maintenance Index Chart (Jan Dec 2005)
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Some KPIs for Transmission

• Grid Loss Ratio - Energy
  dispatched to distribution
• 
  Energy Received from Generation
• Transformer Cap. Utilization - Transformer
  Max. Load Installed
  Capacity
• Transmission Cost Index - Total Monthly
  Expenditure
• 
  Energy Received from Generation
• Staff Productivity - Energy Received from
  Generation
• 
  Ave. no. of employees

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Some KPIs for Transmission..contd

• Dispatch Unit Cost - Total Operation
  Expenditure (Naira)
• 
  Energy Delivered to Distribution
• Transmission Losses - Energy sent out from PS
  (MW) Energy delivered
• 
  Energy sent out from P.S (MW)

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Some KPIs for the Distribution NBUs

• Fault Clearance Index - Total faults Cleared
  
• 
  Total faults reported
• Collection Efficiency - Total Monthly Cash
  Collection (Naira)
• 
  Monthly Billing Revenue (Naira)
• Capacity Utilization Index - Maximum Monthly
  Load (MW)
• 
  Installed Capacity (MW)
• Metering Ratio - Total
  no. of Customers metered
• 
  Total number of customers
• Customer Response Time - Time from customer
  enquiries/ complaints
• 
  To time of resolution

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Impact of Performance Monitoring / Benchmarking

• Has triggered various innovations by the NBUs
• Helped to build up managerial capacity
• More efficient resource allocation
• NBUs have a foretaste of full blown reform (as
  the now compete against each other)
• Now more willing to embrace new ideas eg
  innovations under CREST

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More About the CREST Programme

• Commercial Reorientation for Electricity Sector
  Tool Kit (CREST)
• Designed to address some of the downstream issues
  of the Industry (metering, billing, revenue
  collection, customer care etc).
• Commenced in 2003

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Distribution Efficiency Enhancement Initiatives
under CREST

• High Voltage Distribution System (HVDS)
• High Voltage Panel Metering
• Customer Care Centres
• Rapid Response Vehicle
• Spot Billing
• Scratch Card system
• Split pre prepayment meters.
• Performance rewarding initiative

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High Voltage Distribution System in Other
Distribution Business Units (DBUs)
(ii) HVDS Substation Eko DBU
(iii) HVDS Substation Ikeja DBU
(i) HVDS Substation Ibadan DBU
(iv) HVDS Substation Kano DBU
(v) HVDS LV Distribution using insulated
cables LV Distribution Board Kano DBU
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HVDS SUCCESS STORY ACROSS THE BUSINESS
UNITS
BENEFITS BEFORE-HVDS AFTER-HVDS
Improved Reliability 3 Days ON 1 Day OFF Unit load Shedding All customers ON 24/7
Reduction in LV Reticulation Route Length 1200m (16 spans) max/Upriser 200m(4 spans) max/Upriser
Improved Voltage Profile 200V maximum 140V minimum 223V maximum 213 minimum
Customers satisfaction Regular complaints from the areas where the HVDS was implemented Near Zero complaints from the areas after implementation
Technical Loss Reduction achieved in one of the Business unit 40.19KW 0.05KW (negligible)
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High Voltage Metering
In-door HT Panel Meter
Out Door HT Panel Meter
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HT Panel Metering Success storymonthly revenue
improvement across the business units
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Split Pre-Payment Meters Mambolo Abuja
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Scratch Card Initiative
Telephone vending possible Internet vending
possible More care of customer is not required
20 Digit Codes
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Pre-Payment Meters Success Story at Mambolo Abuja

• No more unbalanced load due to disconnection and
  re-connection of customer
• No more bills and debt accumulation
• Commercial Losses reduced
• Improved relationship with customers (no bad
  reading, no disconnection and re-connection fees)
• Customer manages his consumption
• Up-front payment

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TYPICAL CASH COLLECTION PERFORMANCE
REPORT
ABUJA ZONE JAN 2003 TO DECEMBER 2005
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Rapid Response Vehicle - Abuja
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Customer Care Center Garki - Abuja
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Naira Yield 2005 N3.23/Kwh
Naira Yield 2001 N1.87/Kwh
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Consolidating on the Gains

• Sector reform leading to privatisation will
  ensure that the gains made are improved upon
  (Privatization to commence in 20062GenCos and 2
  DisCos)
• PPP initiatives being introduced with the
  corporatization of PHCN in April, 2006
• The outsourcing programme will run parallel to
  the privatization programme and is designed to
  add value to the DisCos and significantly improve
  their financial positions

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Conclusion

• The Nigerian power sector is gradually recovering
  from two decades of neglect (the pace may be slow
  but a consistent upward trend has clearly
  emerged)
• Target Setting, Performance Monitoring
  Benchmarking have been key tools in this
  transformation process
• Finally, we must commend the WB for the support/
  assistance of the on-going power sector reform
  programme through projects such as the NTDP
  CREST and more recently the NEDP.

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• Thank you for your attention