Title

Reduction of transmission and distribution losses through the implementation of prepaid billing system in K-electric ltd

Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

Spring 2018

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Keywords

Business enterprises--Finance | Telephone call accounting | Billing system | K-Electric

Executive Summary

Prepaid electricity billing system is basically a system of 'pay as you use'; a methodology of buying or selling of electricity units before the actual consumption. This system does not involve prepaid energy meters only; rather it is a whole different system for monitoring and controlling of electricity. This research was therefore performed to analyze the impact of prepaid billing system in reduction ofT&D losses in K-Electric Ltd. A research design was applied which used the secondary data obtained through financial statement of K-Electric for the last six years i.e. from 2011 to 2016, and the primary data obtained through interviews and questionnaires. Data analysis was performed by means of classification analysis, data modeling and decision tree. Some empirical results conflicted general and theoretical prospects: the study established that there exists strong relationship between some of the independent variables with the dependent variable. The results concluded that 'consumers preference of prepaid billing system over postpaid billing system' has an association with their ages, their area of residence and daily load-shed frequency they have been experiencing at their homes. A large percentage of consumers have preferred prepaid billing system over postpaid system as they believe that the prepaid system shall help in reduction of Transmission and Distribution (T&D) losses and consequently there would be a decrease in daily loadshedding. Respondents also believes that prepaid system encourages less power consumption and it is more budget friendly system than postpaid billing system. A very small percentage of respondents opposed the idea of prepaid system as they consider it a non-credit friendly system. Financial analysis of the project was also performed by estimating the initial cost of investment of prepaid billing system project, and by evaluating the stream of cash flows the project is expected to generate in the future. Net Present Value of the Project was also calculated on various discount rates and the results confirms the positive net present value, even on higher required rate of return.

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