Latest (August 2011), Comprehensively parameterized, indicative Report capturing satisfaction and preferences of electricity consumers in upcoming Distribution Franchisee areas in Madhya Pradesh, India. The following locations are covered in this report series. Bhind Satna Shajapur Gwalior Sagar Dewas Datia Narsinghpur Ujjain Contact Rahul Bagdia (+91 956 109 4490, rahul.bagdia@pManifold.com)

1. Comprehensively Parameterized, Indicative Report For Upcoming Distribution Franchisee Areas in Madhya Pradesh satisfaction and preferences of electricity consumers 2011 August 2011 Series Snapshot

2. Study overview Most recent, independent, “indicative, land based, face-to-face” survey providing estimates of customer’s perspective on local electricity utility performance The study executed in August 2011 provides the most latest customer insights across upcoming Power Distribution Franchisee areas in Madhya Pradesh, India including Bhind, Satna, Shajapur, Gwalior, Sagar, Dewas, Datia, Narsinghpur & Ujjain The reports in this series attempts to raise the customers voice to, better able the distribution franchisee & utility stakeholders to monitor the local situation, identify key priority actions and plan investments & roadmaps accordingly. Most comprehensively parameterized, customer centric “indicator” of the effectiveness of utility performance on 28 well-chosen attributes that appropriately represent key areas like power quality, reliability, metering, billing, payments, information systems, customer services and privatization perception The study attempts to help the local utilities understand their customer and know whether their performance is effective enough to meet the needs of the current and potential customers. Especially in the case of distribution franchisees where a complete new management will be handed over the operations of the local distribution system, it is imperative to measure the existing effectiveness of performance from all different perspectives - of which the customer perspective is a significant one. Additional independent primary and secondary research for Local Electricity Utility stakeholders specifically Distribution Franchisee bidders and licensees. Socio Economic Parameters impacting load growth Distribution Franchisee RFP Data Analysis (Read our blog on Distribution Franchisee Attractiveness on the 9 districts which compares the districts in detail on multiple parameters) 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 2

4. Profession & Education level

5. Economic status

7. Order of Importance for all Attributes

9. Validation Unplanned Outages Planned Outages Voltage Stability Safety & Maintenance Local Electricity Infrastructure Breakdown Restoration Ease of New Meter Resolution Meter Complaints Resolution Billing Complaints Customer Service Response Time Staff Behavior Access to customer service Capability Community Engagement Advance notice about disruption Advance notice about public work Awareness- Energy Efficiency Awareness- Customer Rights Communication Modes Complaints Traceability Online Accessibility of Records Meter Accuracy Bill Receipt on Time Billing Accuracy Easy bill understanding Modes of Payment Fairness of Price Value for money 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries

10. Key Findings Gwalior – Datia - Bhind 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 4

12. Bhind district scored a dismal 26.96

13. Gwalior district scored 52.41 &

14. Datia district scored 58.22

15. Specifically in Datia, the increased score can be attributed to the respondents in the Commercial category who indicated satisfaction on most major factors under consideration especially their comfort with the current Pricing available to them and also their satisfaction with the Power Quality and Reliability.

16. While, long hours of load shedding (6-10 hours), frequent unplanned outages, poor infrastructure and maintenance and poor customer services in Bhind specifically constitute its low score. regional traits like urban/ rural development differentiation are strikingly clear; Customer satisfaction lowest in Bhind Best score is 100 computed when all respondent are ‘very satisfied‘, and the worst score is 0 computed when all respondents are ‘very dissatisfied’ on all 28+ questions in the study.

17. 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 6 When asked if they agree that “A lot needs to be done to improve the current systems and make me fully satisfied” comparatively least respondents agreed in Datia (55%) than Gwalior (58%) followed by Bhind (91%) where most respondents agreed they are expecting a lot to be done before they get satisfied with the utility services. Regions where customer’s believed more needs to be done to make them satisfied scored low on customer satisfaction. Satisfaction of customers is also relative and consistent to the level of customer’s expectations in different regions

18. 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 7 When asked if ““Service levels will improve if a private company manages electricity distribution” In Gwalior 51% respondents agreed In Datia 36% respondents agreed In Bhind 83% respondents agreed Over 70% of respondents from Commercial Category in both Datia & Gwalior disagreed that privatization would help improve service levels. Over 80% of respondents in Bhind, both in Residential and Commercial categories, agreed that Privatization will help improve the current situation. Mixed reactions towards privatization of power distribution through franchisee model in Gwalior, Datia and Bhind.

19. Annotated Excerpts from Gwalior District Report To provide snapshot of report contents 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 8

20. Residential 8/8/2011 9 Report contains 5 such slides for each location Sampling: Population size (No. of Commercial connections): 32433 (as in 2011) Sample size: 55 Consumption: Segment wise, profiling of customers on the following parameters is reported, Profession Consumer category (LT or HT) Avg. electricity consumption Avg. Bill Avg. Turnover Meter type Backup Equipments Online access Segment wise, Customer specified details are provided Copyright (c) pManifold. Electric Utility/CSAT/MPSeries Type of Meter Backup Equipment Online Access Segment Type

21. Overall Factor I: Power Quality & Reliability 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 10 Report contains 7 such slides for each location Segment wise, Customer perception is aggregated and reported across each of 7 broad factors which comprise of customer satisfaction (e.g. this slide shows details reported for “Power Quality and Reliability” Key Observations per attribute are reported Visualization of satisfaction on GIS map for indicating potential localities which need immediate attention Segment wise, Customer specified relative Order of Importance given to each attribute Relative more dissatisfaction among ‘Agri’ Customers across Attributes ‘Voltage Stability’, ‘Safety & Maintenance’ & ‘Breakdown Restoration’ Relative less dissatisfaction among ‘Industrial’ Customers across Attributes ‘Unplanned Outages’, ‘Planned Outages’ & ‘Voltage Stability’ ‘Safety & Maintenance’ has more dissatisfaction followed by ‘Voltage Stability’ for all responses ‘Unplanned Outages’ has High Order of Importance followed by ‘Planned Outages’ & ‘Breakdown Restoration’

22. Factor I: Power Quality & Reliability 8/8/2011 11 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries A1: Unplanned outages - How satisfied are you with frequency and duration of unplanned outages? Over 60% respondents from ‘Commercial’ category are dissatisfied with ‘Unplanned Outages’ with high proportion of ‘very dissatisfaction’ Over 70% respondents from ‘Residential’, ‘Industrial’ & ‘Agri’ categories are satisfied with ‘Unplanned Outages’ ‘Unplanned Outages’ has High Order of Importance for all categories Report contains 28 such slides for each location Segment wise, Customer perception is measured and reported across each of the 28 broad factors which roll up into the 7 factors which comprise of customer satisfaction (e.g. this slide shows details reported for “How satisfied are you with frequency and duration of unplanned outages?” Key Observations per attribute are reported Visualization of satisfaction on GIS map for indicating potential localities which need immediate attention Segment wise, Customer specified relative Order of Importance given to each attribute

23. Overall Satisfaction Level 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 12 Report contains 1 such slide for each location Overall, Customer perception is aggregated and reported by rolling up customer responses across each of the 28 broad factors which roll up into the 7 factors which comprise of customer satisfaction. Key Observations per factor are reported Comparative dissatisfaction levels and overall distribution of customers by customer segment on the satisfaction scale is reported. Overall, Customer specified relative Order of Importance is aggregated and given to each broad factor and reported Relative more dissatisfaction among ‘Commercial’ Customers across all Attributes Relative more dissatisfaction among ‘Agri’ Customers with Attributes ‘Price’ & ‘Power, Quality & Reliability’ ‘Communication’ has less dissatisfaction followed by ‘Information Access & Record Handling’ across all responses ‘Customer Service’ has High Order of Importance followed by ‘Meter, Billing & Payment’ and ‘Communication’

25. Industrial Customers indicating better customer services than other Customers

26. Only Industrial respondents are satisfied with 4 attributes (Green Dots)

27. Commercial respondents are dissatisfied with most of attributes

28. Most Dissatisfaction (Factors)

29. Information Systems

30. Customer Service

31. Communications

32. Power Quality & Reliability

33. Company Image

34. Most Dissatisfaction (Attributes)

35. Safety & Maintenance

36. Resolution Meter Complaints

37. Resolution Billing Complaints

38. Online Accessibility to records

39. Voltage Stability

40. Awareness Customer Rights

41. Complaints Records Handling8/8/2011 13 CSI Attribute Scores –Customer Servicehas Critical Dissatisfaction across almost all Categories Overall, Customer perception is scored with a specially designed scale and reported on a simple red, green and orange dashboard Scores are reported across each of the 28 attributes which roll up into the 7 factors which comprise of customer satisfaction. Key comparative Observations per attribute are reported

42. Key Overall Priorities (Attribute level) – Satisfaction on ALL Attributes Lies in the Red-Orange Zone. No Attribute in Green Zone. Satisfaction scores range between 1 to 100. Some parts of the scale may not be shown in the view above for better visualization. Refer detailed Attribute level information in the detailed supplementary report. Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 8/8/2011 14 Report contains 5 such slide for each location Attributes are mapped on a matrix of satisfaction and importance so as to identify key areas which customers expect attention from the utility. These are indicative of the key actions that are/will be needed by the utility operator to improve customer satisfaction and hence performance. Potentially useful for planning and modeling capex and opex requirements.

43. information coverage for each site location(over 100+ slides for each site location) Top level Customer Satisfaction Survey Results Satisfaction Ranking across consumer categories Satisfaction matrix 7 Factors x 4 consumer categories 28 Attributes x 4 consumer categories Overall Priority matrix – Satisfaction vs. Order of Importance Factor wise (7) Attribute wise (28) Identification of top priority factors/attributes for quick customer satisfaction win Identification of consumer category which needs priority intervention Identification of factors and attributes with most dissatisfaction Consumer category wise Priority Matrix - Satisfaction vs. Order of Importance Residential Priority Factor Matrix Commercial Priority Factor Matrix Industrial Priority Factor Matrix Agri Priority Factor Matrix Customer Opinion and Expectations Customer’s preferred payment modes Customer’s preferred Communication modes Customer’s perception on Distribution Privatization Customer’s Expectation from Utility Key Recommendations Radar plot – Customer Expectation vs. Perception Top priority areas identification which has high weightage in overall ECSI and big gap between Expectation and measured perception Executive summary of top actionable items across consumer categories 8/8/2011 15 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries

44. Report details 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 16

45. 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 17 The Madhya Pradesh Electricity Customer Satisfaction Study Reports for the 9 districts are available as PDF documents with findings presented as tables / graphs / charts Separate Reports in this series for Locations (districts) with delivery dates: Bhind(10th Aug) Gwalior (10th Aug) Datia(10th Aug) Satna(15th Aug) Sagar(15th Aug) Narsinghpur(15th Aug) Shajapur(20th Aug) Dewas(20th Aug) Ujjain(20th Aug) For each site location, there are two overall level documents: Customer Satisfaction – Top Results (30+ slides) includes top level findings with attribute and factor level comparisons and recommendations. Customer Satisfaction – Detailed Results(65+ slides) includes findings with GIS visualizations and individual factor level aggregated responses at overall level and for each customer segments – residential, commercial, industrial and agriculture. For each location the following additional supplements are also provided, Socio Economic Parameters impacting load growth Distribution Franchisee RFP Data Analysis Reporting

48. Our Motivation – why this study is needed? Why now? The Forum of Regulators Report on Standardization of the Distribution Franchisee model(September 2010) mentions that the objectives of appointing a distribution franchisee, inter alia,are: i. To minimise Aggregate Distribution and Commercial losses ii. To bring improvement in Metering, Billing and Revenue Collection iii. To minimise Current Assets on account of arrears iv. To enhance customer satisfaction level by improving quality of service Placing focus on the fourth point, we find that while much information is shared in the Distribution Franchisee RFPs, they hardly provide any information on the current customer satisfaction levels nor the customer's perspective of the network infrastructure, current quality of services etc. This is a stark thing to miss considering all CERC, CEA, State ERCs and State Discom's mandate Improving Customer Satisfaction as one of the 4 objectives of a Power Distribution Franchisee. However, while all utilities, licensees and potential or current distribution franchisee operators try to improve quality of service; could efforts to understand the customer's perception and expectations from the utility help the utility make more quality decisions to improve the services and have a happy, paying customer? The answer probably is a big "Yes". Measuring customer satisfaction - using a structured methodology that relates the customer responses with consumer demographics and key factors/attributes affecting business performance - is probably the only way of independently & periodically benchmarking effectiveness of utilities operating in same or different zones. No doubt a number of such mechanisms have evolved and established themselves in the western countries where multiple state / private companies operate in the same locality. The reports in this series attempts to raise the customers voice to, better able the distribution franchisee & utility stakeholders to monitor the local situation, identify key priority actions and plan investments accordingly. But how really could measuring customer satisfaction or proactively identifying customer preferences help? Read more here to learn how we think it does. 8/8/2011 20 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries

49. 8/8/2011 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries 21 Who will benefit from these reports?

50. Methodology Overview A 9 district “indicative, land survey” was conducted to profile and measure satisfaction & key preferences of the electricity customers through “face-to-face” personal interviews. The survey covered urban and rural areas of all population strata in the 9 districts of Madhya Pradesh – Gwalior, Bhind, Datia, Sagar, Satna, Narsinghpur, Ujjain, Dewasand Shajapur. The key objective of the survey was to capture and present, fairly and timely, perception and opinion of customers about the local utility on well-chosen performance indicators so as to reliably identify which areas do customers give higher importance to, which would be of help to the utilities, and distribution franchisee stakeholders. The selection of “survey regions” was “Purposive” based upon the coverage of allotted Divisions to Distribution Franchisee in those districts. The sampling was done on “Stratified Random” basis with 4 different electricity consumer types – Residential, Commercial, Industrial and Agri. Regional clusters/grids with dominant or high density of one of these consumer categories was chosen. Then a random selection of survey respondent was done in defined clusters. More clusters/grids were allocated in urban areas compared to rural based upon connected load. However attempt was to spread grids across the district to cover all electrical divisions. The grids and random samples chosen within were kept distant to allow capture of different localities responses to their local power infrastructure. A comprehensive GIS model was used for survey planning and visualization of the sample grids to avoid any sampling mistakes during data collection. The approximate locations of sample respondent was coded in GIS to add additional layer of validation to tie digitized data to the location. Secondary research and local intelligence was employed to identify clusters. Previous experience in electoral surveys, census surveys and NREGA in same regions was leveraged. 8/8/2011 22 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries

51. Methodology Addendum The decision to do an “indicative-land-based-face-to-face” survey with a fair sample of total 900 sample points across 9 districts, instead of deploying a larger sampling online or offline, was chosen to capture customer’s perspective on current performance of local utility in a timely and fair manner. A target confidence level of 95% with ±10% confidence interval was identified good (based on existing literature survey) to make the findings fairly representative of all electricity customer segments in that district (and not just of those surveyed). Segment wise figures may also be fairly representative of the independent population based on the stratified distribution considered in the survey plan. The fair sample size has confidence for existing number of electrical connections. The total 100 samples were divided between 4 consumer categories almost proportional to the number of connections in that category. The survey plan, methodology and design were drawn from recent study done at Nagpur with 1200 sample point land-survey for the same. A more pragmatic way of looking at the survey results would be to use the results as an indicator of the customers perspective of the local utility and its performance on different business areas. 8/8/2011 23 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries

52. Quick Contact RahulBagdia +91 95610-94490 Rahul.Bagdia@pManifold.com Blog http://blog.pmanifold.com/ Global Group connecting Power Distribution Franchisee Stakeholders http://tinyurl.com/PowerDFgroup 8/8/2011 24 Copyright (c) pManifold. Electric Utility/CSAT/MPSeries

53. Get in touch with us…. Copyright (c) pManifold. Electric Utility/CSAT/MPSeries DISCLAIMER pManifold Business Solutions Pvt. Ltd. (“pManifold”) and its partners prepared this report. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by pManifold. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of pManifold. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of pManifold and its partner’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. pManifold and its partner’s neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither pManifold nor its partners shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation. Logo’s and pictures are properties of their respective owners. With no existing benchmarks, the information presented may not be comprehensive, but is a first attempt to create a baseline and provide real customer perspective to other electricity distribution stakeholders. CleanTech Practice RahulBagdia +91 95610-94490 Rahul.Bagdia@pManifold.com Faiz Wahid +91 88056-55069 Faiz.Wahid@pManifold.com India (Main office) Crystal Plaza, Level 2 276 Central Bazaar Road, Ramdaspeth Nagpur - 440010 Maharashtra, INDIA http://www.pmanifold.com USA (Liaison Office) 2020 Calamos Ct., Suite 209 Naperville, IL 60653, USA Mr. Dinesh Jain +1 630-853-3520 dinesh.jain@pManifold.com 8/8/2011 25