Benchmarking the Performance of State Owned Power Distribution Utilities
Keywords:Data Envelopment Analysis (DEA), State Owned Power Distribution Utilities (SOPDU), Benchmarking, Efficiency Scores and Performance
One of the greatest challenges faced by developing nations today is to operate and manage their power industries in efficient and economical way. This study focuses on one aspect of economic performance, namely the efficiency with which electricity is generated. A non-parametric technique, Data Envelopment Analysis (DEA) is used to compare the performance of State Owned Power Distribution Utilities (SOPDU) with those other in similar stage of development. Technical efficiency of electric utility is the critical element for its competitiveness in the Power Market and very relevant in the Indian Power sector presently. This Study is aimed to measure the efficiencies of 16 SOPDU for the year 2011-12 by applying DEA models with single input and two outputs. The result of this model shows that SOPDU are generally inefficient in expenditure frontier and there is an urgent need for intro inspection. This will help for SOPDU. The result shows that the total average of overall, technical and scale efficiencies are 32.7%, 71.6% and 51% respectively. This efficiency measurement assists the utilities by identifying their shortcomings, setting targets and trying to reach the set targets.
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