PowerPoint Presentation by 22zklI

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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
                                                               MAP OF NIGERIA
                                                                    SOKOTO                                                                                                                                                                                 LA K
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                                                      KEBBI                                                                                                             NASSAR AWA / DALA
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                                                                                    ZAMFARRA
                                                                                                                                                                                                                                                   MAIDUGURI
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                                                                                                                    KADUNA
                                                                YAURI
                                                                / YELWA


                                                                                                                         KADU NA
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                                                                                                                                           IN PA
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                                                                          NIGER                                              R IVER                                                                                                         MUBI

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                                                                                                                                                                 KAFANC HA                                                        ADAMAWA
                                              KWARA
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                                                                                                                             ABUJ A
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                            IBADAN_ZONE                                                                                                                  NASSARAWA                                                    JALINGO

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                             OYO                    OGBOMOSO
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                                         IBADAN                       EKITI
                                         (DUGBE /       OSUN
                                         MOLETE)


                                                                                                                                KOGI
                          OGUN                                                                                                                                           BENUE
                                                                                      EKPOMA
                                     SAGAMU


                                   IKEJA
                                OSHODI
                                            IKORODU            E
                                                               BENIN_ZONE                             EDO                                  ENUGU
                                                     LAGOS                        BENIN                                                                         ABAK ALIKI
                                            ISLANDS            ONDO               (UGBOWO /                         ANAMBRA
                                                                                  AKPAPAV A)                                           EKWULOBIA
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                    LAGOS_ZONE
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                                                                                                            ASABA                   AWKA
                                                                                                                    ONITSHA


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                                 SAGAMU                                                                              ORLU                                             CROSS
                                                IJEBU-ODE                                                                           IMO                               RIVER
         OTTA
                          ALIMOSHO                                            DELTA                                                   ABIA
                IKEJA
                                IKORODU
                OSHODI     SHOMULU
FESTAC
                                                    LAGOS                                                     RIVERS                                     UYO
                  IJORA                                                                          YENOGOA
                                                                                                                      PORT HARCOURT
                               ISLANDS
                                                                                                                      (BORO KIRI / DIOUBO)
                                                                                    BAYELSA                                                             AKWA IBOM

                                                                                             P/H_ZONE
  LAGOS_ZONE


                                                                                                                                                                                                                                                                               2
             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.
                                                  3
         Sector Reform (on-going)

 Perhaps the single most profound step taken
  under the reform process has been the internal
  unbundling & decentralization of PHCN’s
  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.
                                               4
PHCN’s Benchmarking &
Performance Monitoring
       Initiatives

                         5
              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

                                             6
  Target Setting………………………cont’d

 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
                                            7
    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)
                                                                  8
KPIs for the Generation NBUs …………cont’d

  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


                                                                    9
                                       Some Performance Monitoring Charts
                                       GRAPH OF BREAKDOWN MAINTENANCE INDEX IN THE SEVEN                                                         GRAPH OF PLANT RELIABILITY INDEX FOR THE SEVEN (7)
                                              (7) POWER GENERATING BUSINESS UNITS
                                                                                                                                                        POWER GENERATING BUSINESS UNITS
                                                                                 BREAKDOWN MAINTENANCE INDEX
                                                                    Target
                              105.00                                                                                                                                                             RELIABILITY INDEX
                                                                                                                                        120.00
BREAKDOWN MAINTENANCE INDEX




                              100.00
                                                                                                                                        100.00




                                                                                                                    RELIABILITY INDEX
                               95.00
                                                                                                                                         80.00


                               90.00
                                                                                                                                         60.00


                               85.00
                                                                                                                                         40.00


                               80.00
                                                                                                                                         20.00


                               75.00
                                        AFAM    DELTA       EGBIN      SAPELE   JEBBA        KAINJI       SHIRORO                         0.00
                                                                                                                                                  AFAM    DELTA       EGBIN    SAPELE    JEBBA       KAINJI          SHIRORO
                                                        POWER GENERATING BUSINESS UNITS
                                                                                                                                                                  POWER GENERATING BUSINESS UNITS

                                 Maintenance Index Chart (Jan – Dec 2005) Reliability Index Chart (Jan – Dec 2005)


                                                                                                                                                                                                        10
            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


                                                                  11
 Some KPIs for Transmission…………………..cont’d


 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)




                                                                       12
           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
                                                                        13
    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
                                               14
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

                                                     15
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
                                                      16
    High Voltage Distribution System in Other Distribution Business Units (DBUs)




  (i) HVDS – Substation Ibadan DBU       (ii) HVDS – Substation Eko DBU            (iii) HVDS – Substation Ikeja DBU




                                                                                                                    17
(iv) HVDS – Substation Kano DBU      (v) HVDS – LV Distribution using insulated cables + LV Distribution Board Kano DBU
         HVDS – SUCCESS STORY
                              ACROSS THE BUSINESS UNITS



BENEFITS                              BEFORE-HVDS                            AFTER-HVDS

Improved Reliability              3 Days ON                           All customers ON 24/7
                                  1 Day OFF
                                  Unit load Shedding

Reduction in LV                   1200m (16 spans) max/Upriser        200m(4 spans) max/Upriser
Reticulation Route
Length

Improved Voltage Profile          200V maximum                        223V maximum
                                  140V minimum                        213 minimum

Customers satisfaction            Regular complaints from the areas   Near Zero complaints from the areas after
                                  where the HVDS was implemented      implementation


Technical Loss Reduction          40.19KW                             0.05KW (negligible)
achieved in one of the Business
unit

                                                                                                            18
            High Voltage Metering




In-door HT Panel Meter   Out Door HT Panel Meter


                                                   19
                          HT Panel Metering Success story
                          monthly revenue improvement across the business units




                                                                              Abuja DBU                                                                 Enugu DBU                                                            Port Harcourt DBU
                                                      25
                                                                        21M                                                             7                                                                                                              329,784
                          Revenue in Millions Naira




                                                                                                                                                                          6.1M                                    350,000




                                                                                                             Revenue in Million Naira




                                                                                                                                                                                               Revenue in Naira
                                                      20                                                                                6
                                                                                                                                                                                                                  300,000
                                                                                                                                        5                                                                                           227,466
                                                      15                                                                                                                                                          250,000
                                                                  10M                               11 M                                4            3.5M                                                         200,000
                                                      10
                                                                                                                                                                                                                                                 131,760
                                                                                                                                        3                                                                         150,000
                                                       5
                                                                                              4.M                                       2
                                                                                                                                              2M
                                                                                                                                                                                                                  100,000    52,554
                                                                                                                                                                  1.30M
                                                                                                                                        1
                                                                                                                                                                                                                   50,000
                                                       0                                                                                                                                                                0
                                                                                                                                        0
                                                                  Nicon Hotel          Le - Meridian Hotel                                    Guiness-Aba        Golden Oil-Onitsha                                         Land Mark Hotels     OdimonTaj Nig
                                                              Before HT metering
                                                                                                                                                                                                                                                     Ltd
                                                              After HT metering                                                             Before HT metering
                                                                                                                                            After HT metering                                                               Before HT metering
                                                                                                                                                                                                                            After HT metering

                                                                    Jos DBU                                                                                                                                                              Kano DBU
                   3.00                                                                                                                                                                                           1,200,000.00
                                                                  2.4
Revenue in Naira




                   2.50                                                                                                                                                                                           1,000,000.00




                                                                                                                                                                                      Revenue in Naira
                   2.00                                    1.57                    1.51 1.6                                                                                                                        800,000.00
                   1.50
                                                                                                                                                                                                                   600,000.00
                   1.00
                                                                                                                                                                                                                   400,000.00
                   0.50
                                                                                                                                                                                                                   200,000.00
                   0.00
                                                      Jos International      Benue Breweries                                                                                                                                0.00
                                                         Breweries                 Ltd                                                                                                                                                Aminu Kano        Federal
                                                                                                                                                                                                                                       Specialist      Secretariat
                                                                                                                                                                                                                                        Hospital
                                                           Before HT metering
                                                                                                                                                                                                                                                                 20
                                                           After HT metering                                                                                                                                                           Before HT metering
                                                                                                                                                                                                                                       After HT metering
Split Pre-Payment Meters – Mambolo Abuja




                                           21
Scratch Card Initiative

                  Telephone vending possible
                  Internet vending possible
                  More care of customer is not
                  required

 20 Digit Codes




                                                 22
  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
                                                      23
               TYPICAL CASH COLLECTION PERFORMANCE REPORT
                     ABUJA ZONE: JAN 2003 TO DECEMBER 2005
               850.00



               750.00                                                                             2005
                                                                                                  2004
                                                                                                  2003
               650.00
=N= (Million




               550.00



               450.00



               350.00



               250.00
                                          APR
                        JAN




                                    MAR




                                                                    AUG




                                                                                      NOV
                                                             JULY




                                                                          SEP
                                                      JUNE
                              FEB




                                                                                            DEC
                                                                                OCT
                                                MAY




                                                                                                  24
Rapid Response Vehicle - Abuja




                                 25
Customer Care Center Garki - Abuja




                                     26
(MW)           Average Peak Generation (MW) - 2000 & 2005
4000

3500

3000

2500
                                                                                    2000
2000
                                                                                    2005




                                                                                           Generation (MW)
1500

1000

 500

  0
       Jan   Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov   Dec
                                       Month


                                                                               28

                                                                               27
                PHCN INTERNALLY GENERATED REVENUE, 2001 - 2005

8,000,000,000                                                                                               Naira Yield 2005:
                                                                                                            N3.23/Kwh
7,000,000,000


6,000,000,000


5,000,000,000
                                                                                                                                        2001
                                                                                                                                        2002
4,000,000,000
                                      LAST TARIFF                                                                                       2003
                                       INCREASE                                                                                         2004
3,000,000,000
                                                                                                                                        2005
                                                                                               Naira Yield 2001:
2,000,000,000
                                                                                               N1.87/Kwh
1,000,000,000


           0
                 JANUARY



                           FEBRUARY




                                                                          AUGUST
                                                                   JULY
                                              APRIL



                                                      MAY



                                                            JUNE
                                      MARCH




                                                                                                  OCTOBER



                                                                                                             NOVEMBER
                                                                                   SEPTEMBER




                                                                                                                        DECEMBER
                                                                                                                                   28
29
      Consolidating on the Gains
 Sector reform leading to privatisation will
  ensure that the gains made are improved upon
  (Privatization to commence in 2006—2GenCos 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
                                              30
                  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.
                                                   31
Thank you for your attention




                               32

								
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