PROJECT REPORT

ON
“A STUDY ON POWER PURCHASE AND PROCUREMENT
PROCESS WITH ABT & UI IN POWER DISTRIBUTION
SECTOR IN MPPKVVCL”

Submitted In Partial Fulfillment of Degree of

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF BUSINESS ADMINISTRATION, APSU

REWA (M.P)

SESSION: 2022-23

Under the Supervision of

Dr. ASHOK TIWARI

Submitted By
ABHISHEK SHUKLA
MBA IInd Semester
 FORWARD

DEPARTMENT OF BUSINESS ADMINISTRATION

I here, forwarded the project entitled on the topic “A Study on power

purchase and procurement process with ABT & UI in power
distribution sector in MADHYA PRADESH POORV KSHETRA
VIDYUT VITARAN COMPANY Ltd.” in “M.P.P.K.V.V.C.L.” which
is submitted by ABHISHEK SHUKLA a student of MBA II Semester
in the partial fulfillment of course curriculum of the degree of MBA
from “AWADESH PRATAP SINGH UNIVERSITY REWA
(M.P.)”

HEAD OF DEPARTMENT

Dr. Atul Pandey

 DECLARATION

I hereby declare that the Project entitled “A Study on power purchase

and procurement process with ABT & UI in power distribution
sector in MADHYA PRADESH POORV KSHETRA VIDYUT
VITARAN COMPANY Ltd.” in “M.P.P.K.V.V.C.L.” which is being
submitted in partial fulfillment for the award of degree of M.B.A.
“AWADESH PRATAP SINGH UNIVERSITY REWA (M.P.)” is the
authentic record of my own work.

The matter reported in the project is neither being used elsewhere nor
has been submitted earlier for the award of the degree of MASTER OF
BUSINESS ADMINISTRATION.

ABHISHEK SHUKLA
MBA IInd Semester
 ACKNOWLEDGEMENT
It was a great privilege for me to performing project in such emerging
topic “A Study on power purchase and procurement process with ABT
& UI in power distribution sector in MADHYA PRADESH POORV
KSHETRA VIDYUT VITARAN COMPANY Ltd.”.
The completion of this report would have been dream without the help
and co-operation of the respondent who gave me their precious time and
attention to me for the collection of information needed for the report.
I express my heartful gratitude to my guide Dr. Ashok Tiwari, GM
(Training) of M.P.P.K.V.V.C.L. Jabalpur for his inspiring guidance,
cooperation and constructive criticism.
I am also thankful to Prof. Prashant Dutta, Prof. Neha Kandhari and
Prof. Vandana Patel from CTI group, Jabalpur for helping me in this
project report.

I would also like to thanks all the staff members of the CTI and CFO,
MPPKVVCL, Jabalpur for their kind co-operation and facilities
throughout this project.

ABHISHEK SHUKLA
MBA IInd SEM
 INDEX

Sr. No. Particulars Page No.

1. Executive Summary 1-2

2. Introduction of Topic 3 - 15

3. Company Profile 16 - 32

4. Objective of The Study 33

Research Methodology& Data Analysis &
34 - 47
5. Interpretation

6. Findings 48

7. Suggestions 49

8. Limitations 50

9. Conclusion 51

10. Bibliography 52
 CHAPTER – 1
EXECUTIVE SUMMARY
This is the summer training report based on the 45 days training.
I have successfully completed in“A Study on power purchase
and procurement process with ABT & UI in power distribution
sector in MADHYA PRADESH POORV KSHETRA VIDYUT
VITARAN COMPANY Ltd. At NayagaonJabalpur”Under
finance department from 13/06/2022 to 27/07/2022 as a
requirement of my MBA program in Department of Business
Administration, AWADESH PRATAP SINGH UNIVERSITY
REWA (M.P.). As being completely new to practical, every
hours I spent in the corporate world they were all useful for my
career. Finance department gaves me some amount of
experience all the time all of which cannot explain in words.
Madhya Pradesh Power Management Company Limited
(MPPMCL), Madhya Pradesh PoorvKshetraVidyutVitaran
Company Ltd, Jabalpur (MPPKVVCL), Madhya Pradesh
PaschimKshetraVidyutVitaran Company Ltd, Indore
(MPPaKVVCL) and Madhya Pradesh Madhya
KshetraVidyutVitaran Company Ltd, Bhopal (MPMKVVCL),
hereinafter called as DISCOMs, Electricity distributed two
different tariff plan Avalibility Based Tariff
(ABT)&Unscheduled Intercharge (UI).
Although I have tried my level best to prepare this report an
error free report every effort has been made to offer the most
authentic position with accuracy.

CHAPTER - 2
 INTRODUCTION OF TOPIC
POWER PURCHASE
WHAT IS POWER PURCHASE?
Power purchase means the transferring in quantity and time of
electricity from electricity traders and energy Exchanges, to the
Purchaser, upon the payment and other conditions defined in the
relevant purchase contract, and according to the procedures
defined in this regulation.
Electricity Services means the services associated with the
provision of electricity to a person, including the exchange of
electric energy, making financial arrangements to manage
financial risk associated with the pool price, Distribution Access
Service, system access service, ancillary services, billing,
metering, performing load settlement and any other services
specified in regulations made under the Act.
PROCUREMENT OF ELECTRICITY
The process of procurement of electricity is done through
different tariff plans
 Availability Based Tariff ( ABT )
 Unscheduled Interchange ( UI )

WHAT IS ABT?
The term Availability Based Tariff, particularly in the Indian
context, stands for a rational tariff structure for power supply
from generating stations, on a contracted basis. The power
plants have fixed and variable costs. The fixed cost elements are
interest on loan, return on equity, depreciation, O&M expenses,
insurance, taxes and interest on working capital. The variable
cost comprises of the fuel cost, i.e., coal and oil in case of
thermal plants and nuclear fuel in case of nuclear plants. In the
Availability Tariff mechanism, the fixed and variable cost
components are treated separately. The payment of fixed cost to
the generating company is linked to availability of the plant, that
is, its capability to deliver MWs on a day-by-day basis. The total
amount payable to the generating company over a year towards
the fixed cost depends on the average availability (MW
delivering capability) of the plant over the year. In case the
average actually achieved over the year is higher than the
specified norm for plant availability, the generating company
gets a higher payment. In case the average availability achieved
is lower, the payment is also lower. Hence the name
‘Availability Based Tariff’
What is U.I.?
Unscheduled Interchange (UI) is the mechanism developed to
improve grid efficiency, grid discipline, accountability and
responsibility by imposing charges on those who defer from
their scheduled generation or drawal. Unscheduled generation
and drawal of electricity puts the whole grid and many other
electrical equipment in to danger by dumping large fluctuations
in frequencies. Huge benefits can be incurred by following the
UI mechanism of tariff both on the monetary side as well
discipline side also some benefits given as below –
 UI is a real time pricing mechanism
 UI can be used for Merit Order Dispatch
 UI increases efficiency of the grid

Power Purchase Agreement (PPA) 

A Power Purchase Agreement (PPA) often refers to a long-term
electricity supply agreement between two parties, usually
between a power producer and a customer (an electricity
consumer or trader). The PPA defines the conditions of the
agreement, such as the amount of electricity to be supplied,
negotiated prices, accounting, and penalties for non-compliance.
Since it is a bilateral agreement, a PPA can take many forms and
is usually tailored to the specific application. Electricity can be
supplied physically or on a balancing sheet. PPAs can be used to
reduce market price risks, which is why they are frequently
implemented by large electricity consumers to help reduce
investment costs associated with planning or operating
renewable energy plants.
Contractual terms of a PPA may last anywhere between 5 and
20 years, during which time the power purchaser buys energy,
and sometimes also capacity and/or ancillary services, from the
electricity generator. Such agreements play a key role in the
financing of independently owned (i.e. not owned by a utility)
electricity generating assets. The seller under the PPA is
typically an independent power producer, or "IPP."
VARIATION IN POWER PURCHASE
 Any power purchased by the Distribution Licensee over and
above the requirement of power approved by the Commission
or variation.
 In the mix of power purchased in any year shall be considered
by the Commission if it is for the reasons beyond the control
of the Distribution Licensee.
 SOURCES OF POWER PURCHASE

We well acquainted that, these are the main sources of power

purchase in India which can be broadly classified into two broad
categories are as follows-Renewable & Non- Renewable. Or
Conventional and non-conventional.

SOURCES OF POWER PURCHASE

RENEWABLE OR NON RENEWABLE OR NON

CONVENTIONAL SOURCE CONVENTIONAL SOURCE
OF POWER OF POWER

WIND BIOMASS THERMAL NUCLEAR

ENERGY ENERGY POWER POWER

SOLAR COAL
ENERGY POWER
 DISCOMs AND COST OF SUPPLY

The distribution company (DISCOM) plays an important role in

ensuring a reliable power supply to its end consumers. To
supply electricity to its consumers, a DISCOM incurs an average
cost of supply (power-purchase cost, operation and maintenance
cost, manpower cost, office expenses, etc.). To recover this cost
of supply and sustain its operations, DISCOMs need to bill the
consumers. It is important that bills reflect the total amount that
needs to be recovered from the consumers. Similarly, consumers
need to properly understand the components of a bill to be able
to spot any errors in the bill, as well as to make payments
promptly.A consumer bill is reflective of the total cost incurred
by the generation, transmission, and distribution companies in
supplying power. It is important that consumers understand the
economics involved in the electricity-supply chain. Such
understanding will, on one hand, build confidence in consumers
about the charges levied by DISCOMs, and on the other, help
them appreciate the significance of making timely payments, so
that power entities can recover their costs and are able to provide
reliable power supply.
 Madhya Pradesh State Electricity Board
1. MP POWER GENERATING CO LTD JABALPUR
2. MP POWER TRANSMISSION CO LTD JABALPUR
3. MP POWER MANAGEMENT CO LTD JABALPUR
4. MP POORV KSHERTA VIDYUT VITRAN COMPANY
LTD JABALPUR
5. MP PASHCHIM KSHERTA VIDYUT VITRAN COMPANY
LTD INDORE
6. MP MADHYA KSHERTA VIDYUT VITRAN COMPANY
LTD BHOPAL
POWER GENERATION / TRANSMISSION /
DISTRIBUTION CHART
 ELECTRIC POWER GENERATION
A generator is a machine that transforms mechanical energy into
electric power. Prime movers such as engines and turbines
convert thermal or hydraulic energy into mechanical power.
Thermal energy is derived from the fission of nuclear fuel or the
burning of common fuels such as oil, gas, or coal. The
alternating current generating units of electric power utilities
generally consist of steam turbine generators, gas combustion
turbine generators, hydro (water) generators, and internal-
combustion engine generators.
DC Generation
The requirement for direct current power is limited largely to
special loads; for example, electrochemical processes, railway
electrification, cranes, automotive equipment, and elevators.
Direct current power may be generated directly as such, but is
more commonly obtained by conversion or rectification of AC
power near the load.
WHICH TYPE OF GENERATORS IS SUITABLE FOR
POWER PURCHASE
While calculating the power purchase cost per unit for the
different generator operated by different sources like coal, water,
gas, wind have found that hydel generators having minimum
cost per unit so MPPKVVCL try to make agreement with hydel
generators for the purchasing of power to minimize their power
purchase cost. But in practical situation hydel projects are
limited in India. For this reason the company has to arrange the
power from other source of power having higher cost per unit.
All power stations have broad three categories of cost
components on which I am going to show some highlight and
their brief descriptions. Fixed cost, Variable cost and other cost.
Fixed costs tend to remain, unaffected by the by the variation or
change in volume of (production) output up to particular level. It
arises from policy decision of top management to provide and to
keep in readiness a given capacity to produce and sell regardless
of current actual volume of production or sales. Variable cost
changes with the change in volume of production. It means that
VC per unit is constant at any level of production.

ALTERNATING CURRENT POWER TRANSMISSION

SYSTEM
The transmission system is the bulk power transfer system
between the power generation station and the distribution center
from which power is carried to customer delivery points. The
transmission system includes step-up and step-down
transformers at the generating and distribution stations,
respectively. The transmission system is usually part of the
electric utility's network. Power transmission systems may
include sub-transmission stages to supply intermediate voltage
levels. Sub-transmission stages are used to enable a more
practical or economical transition between transmission and
distribution systems.
POWER PROCUREMENT PROCESS

EXPECTATION

 Customer services to improve.

 Qualitative& quantitative electricity supply to consumers.
 Strengthening up gradation of transmission and distribution
infrastructure.
 New generation capacity addition.
 Financial self Sufficiency.
 Power sector should be a net contributor to Govt. exchequer.

MAJOR FUNCTION OF MPERC

 To regulate purchase distribution supply and utilization of
electricity.
 To promote efficiency economy and safety in the use of the
electricity.
 To determine the tariff for electricity wholesale bulk grid or
retail
 To determine the tariff for intra state transmission.
 To grant revoke and amend licenses.
 To scrutinize & monitor perspective plans and schemes
formulated by licensees.
 To set and enforce standards relating to safety quality
continuity and reliability of service.

LONG TERM POWER PROCUREMENT PLAN

 Distribution licensee shall prepare a long term power
procurement plan for the next five year.
 Least cost plan (least financial cost to the distribution
licensee) the ultimate objective being to make available
secure and reliable power supply at to all consumers with
economically viable tariffs while satisfying power supply
planning and security standards.
 Month wise category wise sale and losses in its area of
operation.
Deadline for submission of long term power procurement
plan
 31st day of October each year duly updating the long term
power procurement plan for the previous year as approved by
the commission and included in the ARR filing.
 The commission may call for such additional information and
data as it may deem necessary for reviewing the long term
power procurement plan and the distribution licensee shall
furnish such information within two weeks of being asked.
 SHORT-TERM POWER PROCUREMENT PLAN
 The Distribution Licensee for meeting this requirement shall
solicit competitive offers by informing all potential suppliers
of its intention to receive offers through fax, telephones, e-
mail etc.The Distribution Licensee shall maintain all such
reports for next two years, which prove that all potential
suppliers of short term power were appropriately informed.
 Load Forecast, Distribution Licensee shall prepare an Annual
Power Procurement Plan for the forthcoming year.
 Short-Term Power Procurement Plan shall consider the
balance requirement of power and energy during the year.

Deadline for submission of short term power procurement

plan
The Distribution Licensee shall submit by 15 th of the following
month of each quarter the details of all the short term purchase
made for that quarter.
 UI charges shall be allowed at the average of allowed power
purchase cost.
 Any financial loss or gain on account of power purchased by
the distribution.
 Licensee in any year over and above the approved level and
not covered by shall be borne by the Distribution Licensee.
Circle wise connections & energy consumptions for
FY 2020-21
Energy consumption with type of consumers is given in the table:
 CHAPTER - 3
INTRODUCTION OF MPPKVVCL
The Government of Madhya Pradesh vide order dated 1st July,
02 has incorporated Madhya Pradesh PoorvKshetraVidyutVitran
Company Limited as a wholly owned Government of Madhya
Pradesh Corporations under the Companies Act, 1956 to
undertake activities of distribution and retail supply for and on
behalf of Madhya Pradesh State Electricity Board in the areas
covered by the Commissionaires of Jabalpur, Sagar, Rewa and
Shahdol.
Govt. MP proposed a transient phase in which the assets and
liabilities would continue to be serviced by the Board, with only
the operational activities being vested onto this new Company.
Madhya Pradesh Electricity Regulatory Commission in the order
dated 16th July, 02 has granted approval to this Operation and
Management arrangement for facilitating the process of reform
and reorganization and bringing in economy and efficiency in
the operational activities of electricity sector.
PoorvKshetra encompasses an area served by 89,489 kms of HT
and 1, 02,231 km of LT distribution network. The size of the
administrative set-up is as below:-
SLOOGAN OF MPPKKVVCL
Number of Regions 4

Number of Circles 21

Number of Divisions 53

Number of Sub-divisions 118

Number of Distribution Centers 467

Number of Fuse Call Centers 1,888

OBJECTIVE
The main objectives are to achieving efficiency gains and
making necessary changes to make the Company commercially
viable, progressively self-sustainable and less government
dependent and at the same time, balancing the interest of the
consumers in regard to quality of service and economical tariff.
The plan would include among other things, metering, billing,
collection, identifying the present deficiencies and the
improvements to be made, mapping supply feeders,
measurement of energy supplied to feeders and energy audit,
study of losses and scheme for progressive reduction, reduction
in input costs, consumer affairs handling, investments required
for improvements in the distribution system etc.
 MISSION
Our Mission is to provide quality electricity supply services to
each customer satisfying his / her needs in most efficient and
effective manner at reasonable prices through continuous
innovations and by maintaining commercial & financial viability
of the company along with employee’s satisfaction.
VISSION
MPPKVVCL aspires to be the best electricity supply company
in India by continuously enhancing its technological leadership
and commercial acumen to satisfy its customers.
CORE VALUE
To  achieve its mission, the Company and its employees commit
themselves to honesty and integrity,  result oriented work, 
transparency in work, dedication to duty, Cost consciousness,
openness  to  suggestions and feedback from all stake holders.
M.P. POWER MANAGEMENT COMPANY LTD.
In accordance with Govt. MP decision the name of MP Power
Trading Company Ltd has been changed to MP Power
Management Company Ltd. The MP Power Management
Company has been made holding company for all the
DISCOMS of MP. The Registrar of Companies MP has issued
the Certificate of Incorporation Consequent upon Change of
Name on 10.04.2012. The electricity supply act 1948 is an
enactment in the history of power development in our country. It
aimed at coordinated development of electricity on a regional
basis to enable its generation, transmission and distribution
systematically. The Madhya Pradesh State Electricity Board was
established on 1957 with the power sector reform process taking
place in the state Madhya Pradesh, the vertically integrated
MPSEB was segmented into 6 companies as per the provision
contains in the MP VidhutSudharAdhiniyam 2000. The power
sector was corporatized were formed in May 2002.
AWARDS AND RECOGNITION

The List of Awarded Officer And Employee For His Excellent

Works And Best Circle Division Awards On Occasion Of
Independence Day 2016
Awards to MP PoorvKshetraVidyutVitaran Co. Ltd. for its
Automatic Meter Reading Project.
Recognition By Government Of MP
Rated best application in e-Governance initiatives by
Government of Madhya Pradesh for the year 2007-08 and
awarded ‘AWARD OF EXCELLENCE’.
Recognition By Government Of India
National e-Governance award (First Prize-Silver) 2008-09 by
Government of India in the category “Exemplary Usage of ICT
by Public Sector Undertakings.
International Award
Manthan South Asia Award 2009.

Manthan South Asia Award 2022.

National e-Governance award
MADHYA PRADESH POORV KSHETRA MAP
 CENTRAL TRAINING INSTITUTE

ABOUT CTI
Central Training Institute, Nayagaon, Jabalpur is an apex
training Institute of MPPKVVCL which provides Induction
training, Refresher training , On-job Training and routine
training to all employees of the MPPKVVCL which includes
officers (class-I and II), engineers, Programmers, Accounts
Officers, HR Managers; Technical staff such as line staff,
Testing Assistants, Meter reader and non-technical staff such as
Office Assistants etc.
The Central Training Institute (CTI) Nayagaon Jabalpur is an
ISO: 9001:2015 certified training institute which has state-of- art
air conditioned class rooms with projectors, computer center,
testing laboratories, library, workshops, seminar hall etc. It has
most experienced faculty from Power Sector and other
academia. It is also partner training institute of Rural
Electrification Corporation (REC) and Power Finance
Corporation (PFC), Ministry of Power, Govt. of India.
The Central Training Institute Nayagaon, Jabalpur also imparts
training to the employees of other organizations as per their
request, such as MPPGCL, AKVN, Municipal Corporation
Jabalpur, Military Engineering Services, Lanco Power Company
etc.
The Central Training Institute Nayagaon Jabalpur also provides
vocational training to Diploma/B.E./B.Tech. MBA, MCA, LLB
students of various engineering colleges, management institutes
etc.
Technical Training Center (TTC) Katni is also a subsidiary
training centre under Central Training Institute. TTC Katni is
also ISO: 9001:2015 certified institute which has state-of- art air
conditioned class rooms with projectors, computer centre,
testing laboratories, library etc.
THE INSTITUTE
The audio-visual class rooms are equipped with air conditioners,
overhead projectors; multi-media Interactive touch screens,
Internet access unit, VHS, CD/VCD units which are being used
for trainees and faculty activities like classroom presentations,
meetings, conferences and lectures
The Seminar hall is well equipped with multi-media projection
system, audio-video facilities, and recording systems.
For imparting IT skills to the students we have built state-of-the-
art Computer Centre. The air-conditioned labs are well equipped
with internet and latest software solutions in its ultramodern
networked environment. We believe that education should not
be restricted only in classrooms and labs so we have provided
campus that has Wi-Fi facility.
The institute has library with books and journal section, Canteen
Facility, Transport Facility, Hostel Facility, Electrical
workshops and Power system Labs.
 AWARDS

Business Leaders Summit & Awards 2017 (Best

1.
Corporate Training in M.P.)

Big Research Education Excellence Awards 2012 (Best

3.
Training Institute in India)

2. Cedia Awards 2011 (Best Training Institute)

Recognition by Government of India.

National e-Governance award (First Prize-Silver) 2008-09 by
Government of India in the category “Exemplary Usage of
ICT by Public Sector Undertakings.

Recognition by Government of MP.

Rated best application in e-Governance initiatives by
Government of Madhya Pradesh for the year 2007-08 and
awarded ‘AWARD OF EXCELLENCE’.
 ORGANISATION STRUCTURE

UNIT HEAD OF UNIT

Corporate Office Managing Director

Region Chief Engineer

Circle Superintendent Engineer

Division Executive Engineer

Sub Division Assistant Engineer

Distribution Centre Junior Engineer

Fuse of call Centre Line Man

 CORPORATE ORGANISATION STRUCTURE

FINANCE & PRESENT ORGANIZATION STRUCTURE

OF ACCOUNT

Head of Finance & AccountCFO

DD
Finance,
JD
Sections handling, collection, payments, bills and account
account &
bills

EE Loans, AO ADB AO Cash

ADB, &
supporting officersand and
TRAC Revanu Account
 DISTRIBUTION COMPANIES

Distribution
Company’s

Central
East Zone West Zone
Zone
East zone is called as MP PoorvKshetraVidyutVitaran
Company Limited (MPPKVVCL).

REGION

JABALPUR SAGAR REWA SHAHDOL

REGION REGION REGION REGION
REGIONAL ACCOUNTS OFFICES

JABALPUR
CHHATARPUR
SAGAR
REWA
CHHINDWARA
SIDHI
SHAHDOL
 CHAPTER - 4
OBJECTIVE OF STUDY
 To describe the organization profile of MPPKVVCL.
 To discussed the process of Power Purchase.
 To find out the problems faced by Power Management
company Limited.
 To understand how different activities are performed at
MPPKVVCL.
 To analyze how different tariff plans are applicable to
customers.
 To understand the process of procurement& distribution of
power.
 To understand the Power Purchase Agreement related
policies.
 To understand fund management system in Power
Purchase.
 To understand the different charges and policies in related
with Power Purchase which have been imposed by the
government.
 To analyze the risks associated with transmission of
purchased electricity.
 CHAPTER - 5

RESEARCH METHODOLOGY

ABOUT RESEARCH?

Research The process of research came into being due to

man’s quest to be at tune with his environment and also
understand nature. To achieve this, man uses the tools of
experience and reasoning available to him. Man also makes use
of experience and authoritative sources beyond his immediate
circle. Experience and authority are rich and major sources of
hypothesis, which are based mainly on common sense
knowledge and haphazard events, therefore it can be
unjustified for drawing conclusions on events. Hence
research hypothesis formulation using experience and authority
is judged to be unscientific. Research anchors on scientific
reasoning; which could be inductive and deductive or both.
Research is a combination of both experience and reasoning and
can be said to be the most appropriate way of discovering the
truth, precisely in the natural Sciences.
Research methodology is a way of explaining how a
researcher intends to carry out their research. It's a logical,
systematic plan to resolve a research problem. A methodology
details a researcher's approach to the research to ensure reliable,
valid results that address their aims and objectives.
DEFINITION:
A broad definition of research is given by Martyn Shuttle
worth “In the broadest sense of the word, the definition of
research includes any gathering of data, information and facts
for the advancement of knowledge.”
“It is the process of arriving at dependable solution to the
problems through the planned and systematic collection,
analysis and interpretation of data” by Mouley
By Redman and Mory – “A systematized effort to gain new
knowledge.”
Characteristics of Research
Controlled
It means exploring casualty in the relation of two factors. In
simpler words, it can be stated that one must set his study in
such a way that minimizes the other factors affecting the
relationship.

Rigorous
You must be careful in ensuring the procedures used to find the
answers to the questions are relevant, justified & appropriate.
The degree of rigor varies between physical and social science.
Systematic
The procedure adopted to take an investigation should follow a
certain logical sequence. Some procedure must follow others.
Valid & verifiable
Whatever you conclude on the basis of your findings is correct
and can be verified by you and others.
Empirical
Any conclusion drawn should be based on the data gathered
from information based on life experiences or observations.
Critical
The process of investigation must be foolproof and free from
drawbacks. The process adopted and the procedures used must
be able to withstand critical scrutiny.
For a process to be called research, it is imperative that it has the
above characteristics.
It is a structured inquiry that utilizes acceptable scientific
methodology to solve problems and create new knowledge that
is generally applicable.
METHODOLOGY
Methodology is the systematic, theoretical analysis of the
methods applied to a field of study. It comprises the
theoretical analysis of the body of methods and principles
associated with a branch of knowledge. Typically, it
encompasses concepts such as paradigm, theoretical model,
phases and quantitative or qualitative techniques.
"The strategy or architectural design by which the researcher
maps out an approach to problem-finding or problem-solving.”
Methodology is the systematic, theoretical analysis of the
methods applied to a field of study. It comprises the theoretical
analysis of the body of methods and principles associated with.
A branch of knowledge.
WHAT IS RESEARCH METNODOLOGY?
Research methodology is defined as a systematic way to solve a
research problem by collecting data using various techniques,
providing an interpretation of the collected data, and drawing
conclusions about the research data. A research method is
fundamentally the blueprint of the research or study.
TYPES OF RESARCH METHODOLOGY
Qualitative
Qualitative research involves collecting and analyzing written or
spoken words and textual data. It may also focus on body
language or visual elements and help to create a detailed
description of a researcher's observations. Researchers usually
gather qualitative data through interviews, observation and focus
groups using a few carefully chosen participants.
Quantitative
Quantitative research relies on the measurement and testing of
numerical data. Unlike qualitative research that is more
exploratory in nature, quantitative research is typically leveraged
when the research objectives are confirmatory in nature. 
Mixed-Methods Methodology
As the name suggests, the mixed-method methodology
combines qualitative and quantitative methodologies to integrate
both their strengths and obtain rich results.
WHAT IS SAMPLING?
A sample is a finite part of a statistical population whose
properties are studied to gain information about the whole
(Webster, 1985). When dealing with people, it can be defined as
a set of respondents (people) selected from a larger population
for the purpose of a survey.
A population is a group of individual’s persons, objects, or items
from which samples are taken for measurement for example a
population of presidents or professors, books or students.
For example - if you are researching the opinions of students in
your university, you could survey a sample of 100 students.
 TYPES OF SAMPLES

There are three primary kinds of samples: the convenience, the

judgment sample, and the random sample. They differ in the
manner in which the elementary units are chosen.
The convenient sample
A convenience sample results when the more convenient
elementary units are chosen from a population for observation.
The judgment sample
A judgment sample is obtained according to the discretion of
someone who is familiar with the relevant characteristics of the
population.
The random sample
This may be the most important type of sample. A random
sample allows a known probability that each elementary unit
will be chosen. For this reason, it is sometimes referred to as a
probability sample. This is the type of sampling that is used in
lotteries and raffles. 
 PROCESS OF SAMPLING
 The five steps are
Defining the target population; determining the sample frame;
selecting a sampling technique; determining the sample size; and
executing the sampling process.
 SOURCE OF DATA
What are the Sources of Data?
The sources of data can be classified into two types: statistical
and non-statistical. Statistical sources refer to data that is
gathered for some official purposes, incorporate censuses, and
officially administered surveys. Non-statistical sources refer to
the collection of data for other administrative purposes or for the
private sector.
TYPES OF DATA
The following are the two sources of data
A) Primary data
An instrument is used to collect the required information from
the employees and also interact the employees personally.
Primary data helps us in making observation of employee’s
behaviors, talk gestures which helped me in identifying the
attitude of employees towards the training program and the
effectiveness of the training program in the organization.
Primary Data Sources:
 Observation
 Interview
Secondary data
It was collected from the website of the company, and the
company personnel, certain reports from the HR department.
The research also took the help of the books and journal.
Secondary Data Sources:
 Book
 Periodicals or journals
 Research thesis and dissertations
 Footnotes

DATA ANALYSIS & INTERPRETATION

A STEP BY STEP APPROACH OF MPPKVVCL

Cost reduction is the process used by companies to reduce their
costs and increase their profits. Depending on a company’s
services or Product, the strategies can vary. However, it is
important to remember that every decision in the product
development process affects cost. Companies typically launch a
new product without focusing too much on cost. Cost becomes
more important when competition increases. A step by step
approach for cost reduction methods are-
Scrutinize Existing Costs -associated with each department or
business function. This will enable you to highlight all the areas
where you can save resources. Extensive research can allow you
to benchmark your expenditure and provide an approximation of
potential savings. 

1.COMPONENTS OF COST

AMOUNT (IN LAKHS)

Components of cost FY % Of FY % Of
2018 TC 2019 TC
Power Purchase Cost 260907 62.70% 358795 69.9%
Wheeling charges 24903 6% 36895 7.20%
SLDC Charges ----------- 809 0.16%
Repairs & maintenance 2915 0.70% 4486 0.87%
Cost
Employee Cost 56899 13.67% 62299 12.15%
Administrative 7428 1.79% 12468 2.43%
&General Cost
Interest &Finance 34117 8.19% 12679 2.47%
Charges
Depreciation 9481 2.28% 11701 2.28%
Provision for Bad & 19465 4.67% 18034 3.52%
Doubtful Debts
TOTAL COST 416115 512691
 TOTAL COST
600000

500000

400000

300000 TOTAL COST

Rs. in Lakhs

200000

100000

0
2018 2019

INTREPRETATION- The above chart shows that the main

cost of company. Power Purchase Cost,Wheeling charges,
Repairs & maintenance Cost, Employee Cost, Administrative
&General Cost, Interest &Finance Charges, Depreciation,
Provision for Bad & Doubtful Debts.These are main reasons that
cost of the next year is rising. I have analysis that Expenditure
rises and cost increased.
 2.OTHER INCOME
AMOUNT (IN LAKHS)
PARTICULAR FY 2019 FY2018 CHANGES %
Changes
Interest on staff Loans & 10.28 13.36 -3.08 -23.05%
Advances
Interest Income from 244 142.55 101.45 71.16%
Investments
Delayed payment charges from 134.1 164.87 -30.77 -18.66%
consumers
Interest from banks 0.11 1.42 -1.31 -92.25%
Other Miscellaneous receipts 391.41 389.74 1.67 0.42%
Recovery from staff 3.14 3.61 -0.47 13.01%
Deferred Income 120.73 120.73 --- ---
GRAND TOTAL 903.77 836.28 67.49 8.07%

450
400
350
300
250
200
150
100
50
0 2019
es ts er
s
nk
s ts ff e
nc en m a e ip sta com 2018
va tm u b
re
c m n
Ad es ns m fro ed
I
& Inv co fro ous y r r
s m m es
t ne er fe
an ro fr o er lla c ov De
Lo f s t e e
ff e ge In isc R
sta com h ar r M
on tI
n tc th
e
est r es en O
te
r te ym
In In pa
ed
elay
D

INTREPRETATION - The above chart shows that the main

source of other incomes. Interest on staff loan decreases in this
year because the company is not going to provide the staff loans
and advances to their employees. Interest on bank deposits are
not the main other source of income, it’s only the result of cash
management. Delayed payment charges is a kind of penalties on
the late submission of electricity bill by any categories of
consumers,

3.SOURCES OF REVENUE

MPPKVVCL is a social utility sector company which engages

in the business of supply of electricity to the public of the MP in
the Jabalpur region. Two broad categories of revenue are sale of
power and others incomes…

Sources of FY2019 FY2018 Changes %

Revenue (In lakhs) (In lakhs) changes
Sales 375365 313373 61992 19.78%
volume
Others 20643 23015 -2372 -10.31%
Income
Total 396008 336388 59620 17.72%
Revenue
 400000
350000
300000
250000 2018
200000 2019
150000
100000
50000
0
sales volume
Others income
Total revenue

INTREPRETATION -Total Revenue from the sale of power

and other sources in FY 2019 is Rs. 396008 which is 17.72%
higher than the FY 2018.The main source of revenue of this
company comes from the distribution of power between two
broad categories of consumers i.e. LT & HT Consumer. (Low
Tension consumer and High tension Consumers.)

CHAPTER -6
FINDINGS
 The company Madhya Pradesh Poorv Kshetra Vidut Vitran
Company limited is working in losses for many years.
 Tariff schedule is followed properly.
 The total cost is increased from 2018 to 2019.
 The other income is decreased from 2018 to 2019.
 Revenue is increased because of the sales volmue from 2018
to 2019 by 17.72%.
 Bills to consumer are major source of income for
MPPKVVCL.
 Power purchase cost is the major expenditure of the company
and other expenditures are employees cost and transmission
cost.
 The government provide subsidiary to company for the low
tension consumer to sell them electricity in low tariff rate.
 The company runs in losses due to government tariff plans for
electricity consumers.

CHAPTER - 7
SUGGESTIONS
 Non-Technical losses of the MPPKVVCL should be
controlled to reduce overall losses.
 Company should ensure that the total cost must be
decreases.
 Also, company should ensure that other income source is
must rises.
 The company should try to estimate its future cash flow for
power purchase in future.
 The company should try to shift manual paper based office
work to computer based work.
 Revenue is increase but ensure that it never fall.
 The company should ask the govenment to not impose
unnecessary tariff rates of electricity.
 The management should try to decease the credit burden of
power purchased.

CHAPTER - 8
LIMITATION
 MPPKVVCL involved in commercial business and there
islots of information which cannot be shared during such
study.
 Shortage of time also reason for incomprehensiveness.
 Lack of opportunity to visit Regional Head Office.
 The functions and activities of MPPKVVCL are too vast,
so they change their strategy day by day. As a result I can’t
collect update information & strategy.
 As I am student it is not possible for me to collect all the
necessary information.
 Lack of administrative work experience.
 There was various information the head office employee
can’t provide due to confidential and other corporate
obligations.

CHAPTER - 9
CONCLUSION
MPPKVVCL is a government Company which is owned and
controlled by Government of M.P. Madhya Pradesh Power
Management Company is a holding company of these three
Disco’s i.e. Jabalpur, Bhopal and Indore. From several financial
years MPPKVVCL suffering loss. The company has to reduce
their cost for maximizing their profit margins.
The Company charges tariffs from the consumers and the
government provides subsidy to the company as well as to the
consumers. The major expenditure of the company is Power
purchase cost, employees cost and transmission cost. Non-
Technical losses of the Company should be controlled to reduce
overall losses.
The Power Purchase is done under power purchase agreement
(PPA), in which the parties are the traders and buyers.
Power system follows the chain of Generation-Transmission-
Distribution.
The company has to take several important steps for this purpose
like, the company has to minimize their power purchase cost,
employee cost and Operational and Maintenance cost for their
benefit and also company has to compare their annual
performance from same line of business or utility acting as a
bench mark or standard in India.

CHAPTER - 10
 REFRENCE

BIBLIOGRAPHY
 Annual Report of 2018 – 19.
 Components of cost2018 – 19.
 Sources of Revenue2018 – 19.
 Annual Energy Aduit Report 2020 – 21.

WEBLIOGRAPHY
 www.mpez.co.in
 www.mpez-electricity.discom.nic.in
 www.mppkvvcl.com
 ctijabalpur.com
 www.google.com