Energy Service Franchise Model
Demonstrating customer focused delivery of services in partnership with the Government

Smart Power India believes that the current policy environment and call-to-action by the Government in the rural electrification mission presents a great opportunity to play a distinct role in ensuring adequate electricity is available with maximum reliability and quality.

SPI’s Energy Services Framework (ESF) builds upon past learnings in rural electricity supply and provides a robust framework incorporating sound governance principles, balanced approach to risk-reward sharing, best in class operating practices and prudent regulatory mechanisms. Accordingly, standard business models, of partnership between Discoms and Energy Service Providers (ESPs), have been designed to meet the requirements in the current market scenario. Each model has its own set of Performance Metrics to enable meeting of the laid-out objectives i.e. customer satisfaction, electricity access, reliability, quality, efficiency and sustainability, respectively. All the three models are comprehensive, with a balanced risk sharing mechanism, and the choice of model can be dovetailed with the State Government’s priorities.

The first ESF model, Customer Service Delivery, provides primarily customer service satisfaction with partial objectives of access, efficiency and sustainability. For Discoms, this model results in increase in billing and collection efficiencies leading to increased revenues and net margins. For Government, improved efficiency leading to potential tariff optimization and subsidy reduction. For ESPs it assures revenues with low to moderate investments and for customers it improves electricity service levels.

The second model, Distribution Supply, is designed to fully meet the objectives of access, electricity quality, customer satisfaction and efficiency and also reliability and sustainability. For customers this model provides uninterrupted supply of reliable electricity, timely billing through metering and focused complaint resolution mechanism. For Discoms, this model results in reduction in AT&C losses leading to business viability and optimization of power purchase costs. For Government, improved efficiency leads to tariff optimization, subsidy reduction and expenditure savings to exchequer, which provides scope for increased budgetary allocation to citizen centric programs. For ESPs it assures higher revenues and returns potential than first model with moderate investments.

The third model, Distributed Energy Resource, is a variant of Model 2 and meets all primary objectives of the second model with similar outcomes for all stakeholders. This model provides additional flexibility for the ESP to be able to leverage distributed energy resources to provide uninterrupted electricity access to hamlets and households in remote and far flung areas.

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Energy Service Franchise Model = Access, Quality, Reliability
Customer Service
Number of connections
Electricity Quality
Predictability of power availability
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