The Evaluation of the Efficacy of an Ongoing Reform Initiative of an Indian Electric Utility

Abstract

This article evaluates the performance of electricity distribution divisions (EDDs) of an Indian state utility namely, Uttarakhand Power Corporation Limited (UPCL) in terms of overall efficiency through data envelopment analysis with an objective to trace the effectiveness of an ongoing restructuring process. Relative efficiencies of the divisions are compared for the period 2005 to 2008. Further using the Malmquist productivity index and its decompositions, productivity change is investigated for EDDs during the same period. This study gives an assessment of UPCL to monitor and diagnose the changes in the productivity of EDDs, so it will help regulators to formulate more effective policies on deregulation and disintegration and to determine the appropriate productivity factor when imposing yardstick competition on electric utilities.

Keywords:

• data envelopment analysis (DEA)
• Malmquist productivity index (MPI)
• productivity change
• Uttarakhand Power Corporation Limited (UPCL)

Notes

Note: ^a The results are geometric means of individual indexes for all the EDDs excluding Vikasnagar, Dehradun (C), Roorkee (R), Haridwar (R), Bazpur, and Sitarganj.

Note: ^a The figures are estimates for the period 2006 to 2008.

^bThe results are geometric means of individual indexes for all the EDDs excluding Vikasnagar, Dehradun (C), Roorkee (R), Haridwar (R), Bazpur and Sitarganj. The results of Malmquist index of annual productivity change for these six EDDs have been calculated in separate model.