Stated Goal for the DG Extension

(last updated 18 Apr 2021)

The DG Extension project had the stated goal of increasing Property Value and Rental value under the assumption that having a full backup in PH would help in achieving the goal. My own view - in today's world, Valuation and Rental value are dependent on Sales pitches and availability.

Let me take reference to these documents shared by owners and members of present and past associations.

ph_dg_faqv0.2.pdf shared by one of our owners
this poll result shared by another. Thank you for this.
the MoM of the AGM held in Feb 2021

When I started writing this, I did not know what was in the poll (I do not have access to Adda) and did not know of the complete removal option for the DG connection.

What the FAQ document, Poll Results and MoM have information on:

DG Specs - Total capacity that can be supported
Cost of extending to all points
Current Load Vs. Final load
What we are trying to solve - The issue with current connection model
Impact on Diesel consumption
Opt-out risks
DG Running Hours
Statutory Requirements
Contingency Plan

Hopefully, all is covered.

Frankly, I fell for this offer, as it says, at a one-time cost of Rs.5,200/- (according to the FAQ and Rs.5,800/- according to the Survey) , I will have full backup for all my 5A points + lights and fans. And possibly no change in maintenance costs (I am one of the few who loves a lower maintenance. Appreciate the Association in bringing the maintenance down). Also, the MoM goes on to say that there will be a 15% increase if less than 50% opt for the the extension. With the survey write-up, I doubt if any one will have a reason to not opt-in. And good effort in getting all the information one place.

Then after reading through a few responses to the post asking for additional information, I re-read the document and found I had the same questions. Would really help if those are answered.

What the documents do Not have:

Financial information and backup of claims:

By how many lakhs is the property value expected to increase and in how many years?
What is the risk on the extension project - how much cost escalation can we expect on the project (we have a project value touching 28.5 lakhs as per the FAQ and 31.5 lakhs according to the survey. With what I gather, when the FAQ was started, the cost was under 5K -- Question 8 of the FAQ - "...Spending less than 5k will increase property value in lakhs"). So we started with 27.5 lakhs (taking 4,999/- per flat) to 28.5 to 31.5 lakhs. Diesel prices also have been seeing a similar rise. A 15% increase if project is subscribed by less than 50% of residents is mentioned in the AGM MoM, but not in the FAQ or Survey.
By what value will maintenance increase by your own estimates for those opting for the project and by what will the maintenance reduce for those opting-out? This should have been part of the survey
How do you plan to apportion Diesel cost to opt-in and opt-out members?
Cost of failure - What is the probability of a DG set going down and from which contingency would you like to take that money from? Is that included in the estimated cost?
Will 1-BHK apartments also have to pay the same amount, since they have lesser number of power points than the 3 BHKs.
Will ACCL replacement (in case of a future failure) be considered part of regular maintenance or personal expense? (most ACCLs have a rated life of 20k cycles - some fail in an year. Most have a warranty of one year.)
Contingency Plan says "Contingency Plan – we will go for DG AMC. Also, in case any DG goes down, we will hire a DG on rent." What is the expected cost of DG on rent? Or the power per watt?

Expected Project Timeline
Stakeholder Participation: The persons who bear the greatest inconvenience are the residents who stay in the lower floors of A3 and 10 blocks - if you have been in the DG area during operation, it has a continuous hum sound - not as silent as it claims to be. By running both the DGs simultaneously for long hours, these residents will have to bear the continuous noise for the duration of power failure.
Legal -> How legal is it to extend a common facility for some who are ready to spend money (Survey says 116 have opted in and assumes all those who did not respond as Opt-in)? For example, can I or a group, pay and buy exclusive use of the Club-house privileges or play area and partially exclude others the facilities provided by the Builder at the time of buying (common area and DG power to two points)?
Assumption on Design: What you call as a design issue - was it meant to be that way for PH? Was it a feature of their Housing plan? An intentional one? What makes us think PH builders wanted to save Rs.1000/- per flat (5.5 lakhs overall) when they already put in MCBs?
Expected disturbances inside the house (re-wiring for refrigerators and so on). If post your setting up the new circuit, my electronic devices go for a toss, who takes responsibility?
Statistics - DG run hours is indicative of how many hours Bescom was down. It is not indicative of the load during the downtime - and the expected load based on numbers during morning and night times (I would expect night time loads to be higher because of the large number of lights).
Regulatory: Do we need Fire safety approval too - have we kept a buffer to run all the fire systems in case of a failure? What about Builder sign off - the last time, the Builder took some part of the cost for STP as there was some work pending. Once we change the wiring, would the builder still take any responsibility for any major electrical or Fire issues?
Stated Mandate - a) Full DG backup is mandatory ask for all renting or selling the property - who mandated this? Is it part of our bye-law? or a Building code from BBMP? Request to clarify. b) Once you provide full DG power, when BESCOM personnel are working outside, you will still have to switch off DG Set for obvious safety reasons.
Environmental Impact: When you use a resource to its full life, you potentially have a smaller environmental footprint. Changing all the MCBs with ACCLs and handing them over to a e-Waste vendor brings no gains to PH.

And by doing the DG extension variably, would property value really increase or bring about differentiation in property Sale, rental and maintenance values?

If this is seriously in discussion, can the Association support in listing out other areas where we can opt-out and reduce our maintenance expense? A few examples below:

Garbage collection - I can walk down and drop the garbage at the bottom of my block, if 3 separate bins are provided (like what we managed during the lockdown). How much would be maintenance reduction?
Cleaning of common area on the floor - I really do not need the common area in front of my door to be cleaned. We can help ourselves on that.

People can support me with more ideas on similar lines.

Into some Details:-

The below are expansion of my thoughts on what I listed above.

This is what I think could be additional information that would help in making a decision

Financials

Question 2 of FAQ - Cost of extending DG connection to all utilities -

At 5.2k per flat according to FAQ, we hit around 28.5 lakhs. Based on the survey, we would be spending 32 lakhs. Request for Break up of the approximately 28.5 Lakhs we plan to spend.
By how much is the AMC going to increase maintenance cost per month?
Is the vendor going to take the cost of getting electrical clearance or is it budgeted into the above cost? What about costs for Fire clearances?
In case we need to go for hire, what are the costs? (Typical hire charges start at Rs.4,500/- for an 8 hour day and transportation costs of 30 per KM. Diesel and Oil are to our (customer) account for 250 KVA)
What if the Vendor talks of cost increase in the project and / or leaves midway?
What are the performance guarantees on the Vendor?
What is your estimate of increase in property value (stated --> Spending less than 5k will increase property value in lakhs -- How many lakhs increase are we expecting on property valuation)

The Need Vs. the Implementation

Two very popular images in this line:

Images source: http://www.fressadi.com/blog/the-art-of-building/design/what-the-client-wanted/what-the-client-wanted/

http://www.fressadi.com/blog/the-art-of-building/design/what-the-client-wanted/

What we Need: --> Full backup. And what are the various interpretations of full backup? Let me try to put this into perspective.

All lights and fans functioning through out the day. In PH, the Living Room and three bedrooms have sufficient light all through the day. During summer months, we need fans to work. In most flats, the bathrooms and kitchens are dark. Yes, having lights there would help. And having lights and fans during the night is good to have. But do we need it for all lights and fans is the question. A backup in common areas seem to be necessity and to be provided by the Common fund. However, extending that to inside the house could be a luxury.
Ability to charge mobile phones and have our computers running: Our work-from-home situation is hopefully going to end in a year or two. Our Bescom could get better with the underground cables and then our DG set utilization will be lower.
Entertainment Devices: Extend this to all 5A points and we can include the following to be operational during a power-cut - Television and the set-top-box, Music systems.
Kitchen Appliances: With 5A sockets operational, you can get the following also to run - Mixie (you get 250 and 300 W capacities), Refrigerator (the smaller ones start at 100W). So if we can plan well, we could get all our home systems to run during a powercut. Which is good in one way. The only impact will be the maintenance and environment.

What we are providing --> Full backup for all light points, fan points and 5A sockets

What are we trying to achieve --> Higher property value compared to flats around

Who would benefit from a higher property value --> Real estate agents, Sellers, Persons who want to rent out.

Persons who will not really benefit from a higher property value --> Owners who wish to stay in the apartment (the appreciated value is only on paper - higher valuation could mean higher tax). A lower maintenance cost is a blessing in the troubled times.

An Illustration:

Property Type	Sale Prices	Rents	Deposit	Maintenance
Flat with full backup	55 lakhs	20k	1 lakh	4k
Flat with 2 point backup	52 lakhs	15k	80k	3.9k
Flats with no backup	50 lakhs	12k	80k	3.8k
Flats with no backup + invertor provided by owner	50 lakhs	15k	1 lakh	3.8k
Flat with 2 point backup+invertor provided by owner	52 lakhs	15k	1 lakh	3.9k

A speculation of how the property prices will look like (You can make your own combinations.)

I will leave it to you figure out which flats have a probability of getting occupied first.

Split of Expenses between opt-ins and opt-outs:

How do you plan to split the expenses for Opt-in and Opt-out? For example, I did not have Adda access since Feb 2020. If the above expense can be split, I would like to ask the Association to refund the Adda cost apportioned to me as I was denied of the facility.

I do not see the apportioning part in the plan. Are you going to say - Persons getting the DG extension done - will they pay more? If yes, how much more?

Diesel cost as a part of the overall maintenance might not be huge - but putting that figure in an FAQ would help

One of the members spoke of pilferage - when you are anyway spending 32 lakhs, have you through of adding an energy meter in place for all DG users and doing a usage based billing? Also, a master meter would be required to apportion the cost of common utilities to all the members. This could also find more takers. Would like to see the Circuit diagram suggested by Vendor.

Project timeline and Risk assessment

I would love the see the following in your assessment:

How long is it going to take from start to finish?
What if a DG set goes down even during the installation? Who pays?
Each DG set costs around 12 lakhs at a base cost (other charges apply). In case the vendor says - for optimal performance, you will need another DG set - will the new DG set be only for the Opt-ins? Like you do for events, will you also put in a cost for housing the DG set in our campus? (Land is common property!)
What if the project fails? (Vendor disappears after part of the job is done - we are in covid time)
What if you start work and there are OPT-outs?

Stakeholder Participation

Let me try to identify some of the major stakeholders in this project:

Persons who are bearing the cost - Owners - who bear the initial cost and increased maintenance and tenants who end up with higher overall monthly rent in all possibility. With a participation like 116 Opt-ins vs. 149 overall participation vs. 548 overall flats, we could be looking at minority rule. Did Owners have the time to discuss the impact with their tenants or are we giving least priority to our primary customers (our tenants?)
Persons who are bearing the noise - Residents of lower floors of A3 and A10 - blocks which house the DG sets - who have this continuous noise when the DG is operational.
Persons who are going to maintain the system - Visteon or who ever the vendor team might be - the Electricians who will need to man the DG during operation
The designers of the system: The building planners would know why they designed it the way they designed. We will know if our assumption of cost is the only consideration. They might not be impacted by the decision - but they will know the logic

I assume the poll on Adda was not anonymous. The Association can check what is the proportion of participation of each of the above stakeholders in the survey before taking a decision.

Legal

We are making changes to a facility provided by the builder.

In case of a disaster, will the Builder not absolve himself of any deficiency on his part, since we have seriously modified what they have provided?
Is it legal to extend this to a select number (as of now 116) who are ready to pay extra and claim extended services of a shared resource?
Why is Proportional metering not part of the plan - which makes a flat pay extra according to usage rather than draw from a shared resource pool, whose capital expenditure is already borne by all residents? What is the logic of 116 persons (Opt-ins) being subsidized by the remaining 432?
How are you going to reimburse those who are forced to forego the two connections that were running on common power?
What is the proof of consent from the opt-outs - especially for persons like me, whose access to Adda has not yet been restored. And how many more are there like me?

Would all of the above be closed by saying - we did a survey and only so many responded?

Design Feature OR Flaw?

Having two power points on common electricity for 548 flats is pinching the common cost by 548 * 100 W -->

Flats	Units
548	100	W	54800	W
55	Units	at	8	Rs per Unit
440	Rs per hour		24	hours
10,560	Per day		31	days
3,27,360	per month		365	days
38,54,400	per year

If all the flats were to use these common points all through 24 hours a day for 365 days, we will have a 39 lakh bill annually on common electricity. To plug this, we have a 32 lakh solution with a potential increase in maintenance, for which we do not know the returns yet.

And we are not sure if this is a flaw or feature by design. Someone who has flats in other Apartment complexes by the same builder would be able to let us know if they have a similar situation.

Expected changes inside the flat

The FAQ is not specific on what exactly are the changes inside the house. When it says, refrigerator would be moved to 5A connection, does it indicate to any wiring changes?

Statistics

The numbers provided in FAQ talk of how many hours the DG has run. This is indicative of how many hours BESCOM has failed to provide us power or suffered a voltage drop (our DG also comes on when the voltage is low - someone can help with the threshold). This also could indicate a maintenance inside PH (like the transormer oil change days)

It does not talk of the diesel consumed and max load. It does not talk of the results of the "intense survey". For those interested, some photos from the log book for three months are included. Putting them into a chart would help. Hope to do that some time.

Regulatory Requirements

The FAQ states this is the only one:

Inspection and Approval from Electrical Inspector of BESCOM (already stated in FAQ)

The discussion on telegram points to approval from Builder. I understand this would be hard to get. However, not having an approval will provide them an escape from any future liability.

Do we also need to approach the Fire Department as there is a change to the electrical components?

Environmental and Future Impacts

For all equipment, it is environmentally clean to use it for its full life. Constantly upgrading because of Peer pressure leads to us junking a perfectly working appliance and wrecking havoc on the environment. In the past, we have seen this:

Street lights (within PH) were changed from Mercury Vapour to LED bulbs as we said LED will save costs. The Mercury vapour lamps would have ended in some junk yard even when in working condition. Since we do not consider the environmental costs, our CBAs (Cost Benefit Analysis) can look good.
The Garbage processing area was shifted from some area (near A5) to parking area 151. Now this Association is trying to find alternative car parks for the impacted residents who have car parks in that area.

For the DG extension project, we could be buying a large number of ACCLs and junking a similar number of MCBs. Selling the MCBs to a e-waste vendor could raise money - but will not offset the cost of not using them for their desired life.

At the end, it all depends on how we view a situation. For me, the DG Set is like a battery in a torch - If I need light when the power goes off, I need to use it judiciously. When not in use, I have to remove it from the torch and keep it separately (practice in the older days). For convenience, I can keep it in the torch and know that they will slowly drain out. I know the battery will last only some time and I will have to throw it and get a new one. Mapping to the current scenario, the DG is for backup. If I think of utilizing it to the max, there will be an environmental impact. In a few years, environmental agencies will in all probability extend Pollution-under-check (PUC) certificates to DG sets too (Not sure if it already is there). Then we will have higher expenses. If we live like a family and limit shared resources utilization, we will live happily for a long time. If we feel we are not getting value for the ~4k we are already paying for maintenance, we will maximize utilization and continue in the usage spiral.

A comment on the Survey

The survey looks as much leading as an advertisement. It talks of all the good the project can delivery.
"Those who do not vote, they will considered as opt-in." Yes Sirs. You are the Kings and can decide for us. What about persons like me who do not have an option to vote? I thought even the legal system requires an explicit "OPT-IN" in recent times for all advertisement calls and expenses.
The following seems to be taken from the DG Set's marketing material for a hospital.

"Continuous power supply: When you do experience a blackout, a
well-maintained diesel generator can prove very reliable and keep your critical
power systems running for long periods of time. With summer having set it
fans will have to keep running 24-hours in the wards and air-conditioners in
the special wards"

Feel free to pick holes in what I wrote above. All sorts of comments welcome.

An Optional Survey : https://forms.gle/UMohTMRxQf7c3bar9

And Association, thank you again from reducing the Maintenance.

Some Suggestions

Like none of the questions above are new (asked by persons on the group), none of the suggestions below are new. You already know most of it.

A survey at the end of an advertisement will get your what you desire from the advertisement. Suggest to keep the survey objective to gather information about a preference rather than influence a preference. Also, if the decision is based on responses from 116 active members against 548 members, then the same group can sway all decisions in their favour. This does not bode well for common good.
Provide sufficient Information to allow the persons to make a decision - not lead him to your results.
You can force the decision on us and force us to pay by putting this into our "Payable Account". Some persons will ignore it and you can keep claiming that as "unpaid dues" in all your accounts.
Please limit common amenities to remain common and not extend it to select few. Everyone has an agenda. If you think it really helps the common good with out having to extend ourselves too much, we are fine. In this case, if you really are convinced that this 32 lakhs spend will carry you long, by all means go for it. Rather than keep it on common funds, make it proportional usage based (an energy meter - yes your budget could shoot to 40 lakhs). Look for persons who back out when the energy meter is introduced in your plan.
We are all ready for fair play. If you feel we need an ACCL to reduce billing to common utilities, we are all in for it. However, extending the DG to all points could be a killer. Try ACCL for a month or more in one block before replacing all.
Bring changes slowly. This Association already has sufficient feathers in their caps - lowering maintenance charges, Covid management, Garbage vendor change... to name a few. If you do all, what will next Association do :)
Regulatory environment is changing fast and getting a Diesel Car is no longer economic. Same goes for increasing backup now. So suggest to look beyond Diesel for power extensions.

Notes:

On 17 April 2021, there was a power failure around 5:00 PM IST. This was attributed to a cable cut. The cause of the cable cut was attributed to digging work by Jio to lay their cables. BESCOM conveniently cut power to the faulty cable and allowed Jio to work at their pace. Some posts of the group said we should recover the cost of diesel spent during this power failure from Jio. My own opinion - we will not be able to recover either from Jio or Bescom. Also, this was outside our campus. Similarly, with a contractor playing with connections set up by PH, we will not be able to assign responsibility for any faults, since each party can conveniently blame the other. If we can put this indemnity clause in the contract, and enforce it, will be laudable effort.

Some PH Info

Know your OWC - Organic Waste Convertor

Know your OWC - Organic Waste Convertor

Where you can help:

Instructions on Running the Waste Convertor:

DG Set - One Point extension - The expected impacts

The impact of extending the DG point by another 5Amp Socket

Current Load vs. Expected Load from In-Home use:

So is this a big increase?

Is this extension good for us?

DG Set Extention - Need vs. Stated Goals and Financials