Tata Power Delhi Distribution Limited Environment Analysis

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Tata Power Delhi Distribution Limited(TPDDL) – Environment Analysis

Basically, environment refers to all the actors and forces influencing the company’s ability to transact business effectively with its target market. It can be further categorized into Microenvironment (Forces close to the company that affects its ability to serve customers) and Macroenvironment (Larger societal forces that affect the whole economy). Now let us analyze each of them in detail:

MICROENVIRONMENTAL FACTOR : COMPANY

INTRODUCTION

It was in July 2002 that the Government of Delhi, after unbundling and corporatization of the erstwhile Delhi Vidyut Board formed a 49%:51% Joint Venture Company, Tata Power Delhi Distribution Limited (TPDDL) (then known as North North West Delhi Distribution Company Limited which was subsequently renamed as North Delhi Power Limited), with the objective of improving quality of service to its consumers, making electricity available at competitive prices and improving operational efficiencies.

Figure 1 : TPDDL Plant (Source Website)

MANAGEMENT

Since inception, TPDDL has believed in the concept of “Distributed Leadership”. The entire operational area is divided into 5 circles, 12 districts and 46 zones and senior officers have been appointed and empowered to run these as individual business units. Competition amongst them has been institutionalized through creation of Performance Scorecards and its regular review and monitoring. Both Reward & Recognition as well as knowledge sharing platforms have been established to recognize the best performers and to replicate the best practices with agility across the remaining work units.

Figure 2 : Organizational Structure (Source Internet)

FINANCE

To obtain desired outputs and efficiencies Capital Expenditure was made through:

·         Consumer Contribution towards capital costs.

·         Internal Accruals.

·         Retained Earnings.

·         Debt from Financial Institutions.

The Capex (Cumm.) on March 2018 was 1060 Mn USD as compared to that of 187 Mn USD in July 2002 (% change = +467%)

Table 1 : Financial Summary (Source Annual Report)

CABABILITIES

The table below provides a better picture of changing capabilities since inception:

Table 2 : Changing Parameters over the years (Source Website)

MICROENVIRONMENTAL FACTOR: COMPETITORS

The distribution of power in Delhi has been handed over to Private companies. Accordingly the distribution function including TPDDL (North and North West Delhi) is taken care by:

·         BRPL (JV with Reliance Infrastructure) – South and West Delhi.

·         BYPL (JV with Reliance Infrastructure) – East and Central Delhi.

·         NDMC (Govt. owned deemed licensee) – Areas include Parliament house, Rashtrapati Bhavan, Residential areas of Ministers, Members of Parliament, Embassies etc.

·         MES (deemed licensee under Defence Ministry) – caters to Delhi cantonment area.

However tariff charges are regulated by Delhi Electricity Regulatory Commission.

MICROENVIRONMENTAL FACTOR: CUSTOMERS

On the basis of load, customers are categorised into:

·         High Consumer Base: Load lies between 1KW to 15 KW.

·         High Revenue Base: Load lies between 16 KW to 99 KW.

·         Key Consumer Group: Load more than 100 KW and less than 500KW.

·         Xpress: Load equal or greater than 500 KW.

Figure 3 : Diagrammatic Representation of Customer segments (Source Internet)

MICROENVIRONMENTAL FACTOR: SUPPLIERS

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  MICROENVIRONMENTAL FACTOR: MARKET INTERMEDIARIES

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                       MICROENVIRONMENTAL FACTOR-PUBLIC

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The World Bank in its 2017 ‘Doing Business’ Report has acknowledged Tata Power Delhi Distribution’s contribution towards improving the ease of getting electricity connection.

                MACROENVIRONMENTAL FACTOR-DEMOGRAPHIC

Tata Power-DDL distributes electricity in North & North West parts of Delhi and serves a populace of 7 million. The company started operations on July 1, 2002 post the unbundling of the erstwhile Delhi Vidyut Board (DVB). With a registered consumer base of 1.64 million and a peak load of around 1967 MW (recorded in July 2018), the company's operations span across an area of 510 sq kms.