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This unit is responsible for different activities related to supply management and network maintenance. It becomes difficult by a single entity to carry out all the various tasks related to maintenance and supply management activities. Therefore, outsourcing of various major distribution components such as a distribution feeder, a distribution transformer, etc., for their separate maintenance and management can lead to more efficient results. The financial capital required by the DISCOM for management and maintenance related works can be utilized in infrastructure development works by allowing private participants to carry out these tasks through outsourcing. To facilitate outsourcing, the concept of a feeder franchisee (FF) and distribution transformer franchisee (DTrF) has been proposed. Similarly, active power management, reactive power management, various other auxiliary services-based management are some other essential tasks that can be managed through the creation of a distribution power trader (DPTr), a distribution VAR trader (DVTr), and an energy service company (ESCO).

In this model FF will take part in power trading (both active and reactive) business through DPTr and DVTr. For the contract period, FF will be responsible for the management and maintenance of the allotted feeder. FF will do the business with all the DTrF connected to that particular feeder as its end-customers. Apart from DTrF, various industrial consumers will also buy power from the FF at HT (high tension) level. Similarly, DTrF will be responsible for all the management and maintenance-related works of the distribution transformer for the contract period. DTrF can do business directly with residential and commercial consumers. Required manpower to carry out different management and maintenance-related tasks can be hired through business process outsourcing (BPO).