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International Brands in Hospitality Sector Empowered by Open Access Electricity*

CASELET, MANAGERIAL ECONOMICS
ET Cases - FLAME, 4 Pages
AUTHOR(S) : Prof. Avadhoot Dixit, Asst. Professor, NICMAR, Pune

Case Preview

International Brands in Hospitality Sector Empowered by Open Access Electricity

Ishwinder Singh, the flamboyant CEO of Enertech Global Energy Pvt. Ltd., visited one of the most breathtaking 5-star hotels in Alibaug in the Raigad District of Maharashtra when on a holiday with his family and friends. The hotel, Lalit Leela Palace, had a blanket of lush green lawn with an intricately designed landscape with shrubs and trees and water bodies around. The buildings were state-of-the-art with mesmerising exteriors and detailed fenestrations. The buildings were complemented with timely and regular servicing staff. The overall ambience was worth a leisure outing.

Ishwinder’s family was bogged down by the environs of the 5-star hotel and had made up their mind to enjoy every inch of the property and their time there. His son, Sihaan, was the only one who was thinking something beyond enjoying his time. He was analysing the working of this mega structure and the operation and maintenance of the acres of property that lay spread before him. Sihaan and Ishwinder talked about the working and management of the hotel and the conversation took the form of a detailed discussion about the operations and the maintenance of the hotel. Ishwinder explained to Sihaan about the dynamics of the operations and the maintenance costs of a 5-star hotel. The discussion included understanding of the occupancy ratio, staff required for the prompt services and a detailed discussion on building services...............

Assignment Questions

I. What benefits can be availed under Open Access Electricity?

II. What is the procedure for Open Access Electricity?

III...........

Exhibits

Exhibit I: Data Showing the Details of Electrical Units Consumed by Lalit Leela Palace

Exhibit II: Effect on the expenditure on electricity bills pre and post implementation of open access

Teaching Note Preview

International Brands in Hospitality Sector Empowered by Open Access Electricity

Synopsis

The case deals with understanding the concept of open access electricity. When the electricity consumed from the existing power supply company becomes costly, the major expenditure is towards the electricity bills. If generation of captive power plant is not feasible on site, the open access concept can be used. Open Access Electricity has enabled the consumer to generate captive energy at one place and utilise the same at other place by payment of wheeling charges and taxes. The story in the case explains how the dilemma of hospitality industry can be solved by use of open access electricity.

This Teaching Note is aimed to clarify certain questions which the students can raise after reading the narrative. The probable questions and their answers are included in the following write-up.

Pedagogical Objectives

The case is useful for demonstrating the application of Open Access Electricity to reduce the electricity bills and better the customer experience under the Electricity Act 2003. The primary objective of the case is to demonstrate how Open Access models can be used to reduce electricity bills of high consumption commercial complexes whilst also mentioning theeffectiveengagement with customers associated with utility companies. Other learning objectives include the following:

• Demonstrate the application of Electricity Act 2003
• Demonstrate the superiority of selection process of different categories of connections
• Understand sensitivity and specificity in context of energy requirement and availability problem
• Learning different types of open access charges and treat categorical variables
• Understand deployment strategies based on electricity consumption pattern and service providing company

Positioning and Setting

The Case is positioned in the strategy and policy area, specifically underlining benefits of Government Acts and Policies that an energy consumer and energy generation company can avail.

Assignment Questions

I What are the benefits that can be availed under Open Access Electricity?
II What is the procedure for Open Access Electricity?
III ...............

.....................................


Exhibits

Exhibit (TN)-I: PoC Rates

Exhibit (TN)-II: Possible Scenarios and Change in Charges

Exhibit (TN)-III: Electricity Consumption for Lalit Leela Palace

Exhibit (TN)-IV: Electricity billing for Lalit Leela Palace

 

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Abstract

The case puts forth the concept of use of Open Access Electricity for a 5-star hotel in Alibaug. When the electricity bills of any establishment go beyond manageable limits, and it is not feasible to generate electricity on site, an open access system can be effectively implemented. In this, the electricity can be purchased from the open market without being forced to purchase it from the existing power supplying company. A Tri-Party Power Purchase Agreement can be put in place to help solve the issue of heavy electricity bills by using the open access concept. The story in the case revolves around this concept.

Pedagogical Objectives

The case is useful for demonstrating the application of Open Access Electricity to reduce the electricity bills and better the customer experience under the Electricity Act 2003. The primary objective of the case is to demonstrate how Open Access models can be used to reduce electricity bills of high consumption commercial complexes whilst also mentioning the effective engagement with customers associated with utility companies. Other learning objectives include the following:

  • Demonstrate the application of Electricity Act 2003
  • Demonstrate the superiority of selection process of different categories of connections
  • Understand sensitivity and specificity in context of energy requirement and availability problem
  • Learning different types of open access charges and treat categorical variables
  • Understand deployment strategies based on electricity consumption pattern and service providing company

Positioning and Setting

The Case is positioned in the strategy and policy area, specifically underlining benefits of Government Acts and Policies that an energy consumer and energy generation company can avail.


* 4th FLAME International Conference on Research and Teaching Cases, June 21st 2018 & June 22nd 2018



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- Teaching Note (**ONLY for Academicians)
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