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Performance evaluation and improvement directions for an Indian electric utility

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  • Yadav, Vinod Kumar
  • Padhy, N.P.
  • Gupta, H.O.
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    Abstract

    This study evaluates the performance of 29 Electricity Distribution Divisions (EDDs) of an Indian state – Uttarakhand – deploying Input oriented Data Envelopment Analysis (DEA). The results indicate that the performance of several EDDs is sub-optimal, suggesting the potential for cost reductions and possible reduction in employees number. In the DEA method more than one unit are identified as efficient. Therefore, this study suggests a method for ranking the efficient units by their importance as benchmarks for the inefficient units through benchmark share measure. The bigger the benchmark share, the more important an efficient division is in benchmarking for inefficient ones. Result reveals that plain area divisions are relatively efficient and have higher potential to influence the performance of inefficient EDDs. This study is envisaged to be instrumental to policy makers and managers to increase the operational efficiency of inefficient EDDs and thereby increase the competitiveness in the face of restructuring and liberalization of Indian electricity sector.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 39 (2011)
    Issue (Month): 11 ()
    Pages: 7112-7120

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    Handle: RePEc:eee:enepol:v:39:y:2011:i:11:p:7112-7120

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Data envelopment analysis; Technical efficiency; Benchmark-share measure;

    References

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    1. Thakur, Tripta & Deshmukh, S.G. & Kaushik, S.C., 2006. "Efficiency evaluation of the state owned electric utilities in India," Energy Policy, Elsevier, vol. 34(17), pages 2788-2804, November.
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    8. Sharma, D. Parameswara & Nair, P. S. Chandramohanan & Balasubramanian, R., 2005. "Performance of Indian power sector during a decade under restructuring: a critique," Energy Policy, Elsevier, vol. 33(4), pages 563-576, March.
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    11. Jamasb, T. & Pollitt, M., 2000. "Benchmarking and regulation: international electricity experience," Utilities Policy, Elsevier, vol. 9(3), pages 107-130, September.
    12. Tankha, Sunil & Misal, Annasahed B. & Fuller, Boyd W., 2010. "Getting reforms done in inhospitable institutional environments: untying a Gordian Knot in India's power distribution sector," Energy Policy, Elsevier, vol. 38(11), pages 7121-7129, November.
    13. Tone, Kaoru, 2002. "A slacks-based measure of super-efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 143(1), pages 32-41, November.
    14. Li, Xiao-Bai & Reeves, Gary R., 1999. "A multiple criteria approach to data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 115(3), pages 507-517, June.
    15. Zhu, Joe, 2000. "Multi-factor performance measure model with an application to Fortune 500 companies," European Journal of Operational Research, Elsevier, vol. 123(1), pages 105-124, May.
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