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8/3/2019 Act & Policiy 2011 PGCIL Vm Office 2003
http://slidepdf.com/reader/full/act-policiy-2011-pgcil-vm-office-2003 1/77
August 2011
8/3/2019 Act & Policiy 2011 PGCIL Vm Office 2003
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` Objectives-MBO-What is in it for
me? How it affect by Org?
` Legal-Electricity Act,2003
` Policy framework-National
Electricity Policy , Tariff Policy
` Discussion on Major issues and
challenges
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G
T
D/R
Consumers
G
T / SB
T / SB
D/R
Consumers
G G G G G G G EG G G G G EG
T / MO T / MO
D/R
D/R
Consumers
D
R R R R
No Competition
No choice
Gover nment makes
decision
Generation Competition
Single buyer has choiceWholesale Competition
Distribution/retail
companies have choice
Retail Competition
Consumers have choice
Consumers
Consumers
= Who has choice
MO = Market Operator
EG = Embedded Generator
G
T
D/R
Consumers
G
T / SB
T / SB
D/R
Consumers
G G G G G G G EG G G G G EG
T / MO T / MO
D/R
D/R
Consumers
D
R R R R
No Competition
No choice
Gover nment makes
decision
Generation Competition
Single buyer has choiceWholesale Competition
Distribution/retail
companies have choice
Retail Competition
Consumers have choice
Consumers
Consumers
= Who has choice
MO = Market Operator
EG = Embedded Generator
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` Act Definition: The result of public deliberation; the decision or determination of a legislative body, council
,court of justice, etc.; a decree, edit, law, judgment,
resolve, award; as, an act of Parliament, or of
Congress. Three erstwhile Acts that governed the electricity sector:
The Indian Electricity Act, 1910
The Electricity (Supply) Act, 1948
The Electricity Regulatory Commissions Act, 1998
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The Indian Electricity Act, 1910
Provided basic framework for electric supplyindustry in India.
Growth of the sector through private licensees.Licence by State Govt.
Provision for licence for supply of electricity ina specified area.
Legal framework for laying down of wires andother works.
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The Electricity (Supply) Act, 1948
Mandated creation of SEBs.
SEB had the responsibility of arranging the supply of
electricity in the State
Need for the State to step in (through SEBs) to extend
electrification rapidly, which was limited to cities.
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The Electricity (Supply) Act, 1948 Over a period performance of SEBs deteriorated substantially. Amendments made in 1975 to enable generation in Central
sector
Amendment to bring in commercial viability in the functioning of
SEBs ±y Section 59 amended to make the earning of a minimum return of 3% on
fixed assets a statutory requirement (w.e.f 1.4.1985)
Amendment in 1991 to open generation to private sector and
establishment of RLDCs
Amendment in 1998 to provide for private sector participation intransmission, and also provision relating to Transmission Utilities.
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Under Indian electricity (supply) Act,1948 the SEBs
had to determine tariff, but practically state Govt.
determined tariff .
The Electricity Regulatory Commissions Act, 1998
Provision for setting up of Central / State Electricity Regulatory
Commission with powers to determine tariffs.
Constitution of SERC optional for States. .
Distancing of Govt. from tariff determination.
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Requirement of harmonizing and rationalizing theprovisions in the existing laws to
` - Create competitive environment by encouragingprivate sector participation which will result in
enhancing quality and reliability of service to consumer.
` - distancing of Govt. from regulatory responsibilities
Obviating need for individual States to enact their ownreform laws.
Requirement of introducing newer concepts like power trading, open access, etc.
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` This Act is divided in XVIII Parts-Total sections 185
` Open Access to Transmission /Distribution Systems
` De-licensing of power generation
` Trading in electricity permitted
` Liberal provisions for captive power generation
` Rural generation and distribution freed from licensing
` Expanded role for the Regulatory Commissions
` Envisages unbundling of transmission and distribution.
` Regulatory Commissions to develop electricity markets.
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` An Act to consolidate the laws relating to generation,transmission, distribution, trading and use of electricity
` generally for taking measures conducive todevelopment of electricity industry, promotingcompetition therein,
` Protecting interest of consumers and supply of electricity to all areas,
` rationalization of electricity tariff,
` ensuring transparent policies regarding subsidies,
` promotion of efficient and environmentally benignpolicies,
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` Central Govt. to formulate a National Policy in
consultation with the concerned State Govts. for rural
electrification, bulk purchase of power and management
of local distribution through Users¶ Association,Franchisees etc. (Section 5)
` The concerned State Govt. and the Central govt. shall
jointly endeavour to provide access to electricity to all
areas including villages and hamlets through rural
infrastructure and electrification of (Section 6)
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Generation free from licensing. No TEC for non-hydrogeneration (Section 7)-Challenge for planning by CTU
Clearance of CEA for hydro projects required. Necessary dueto concern of dam safety and inter-State issues. (Section 8)
Captive Generation is free from controls. Open access toCaptive generating plants subject to availability of transmission facility as determined by CTU or STU. (Section9)-Challenge & Opportunity
Generation from Non-Conventional Sources / Co-generationto be promoted. Minimum percentage of purchase of power
from renewables may be prescribed by RegulatoryCommissions. (Sections 61 (h), 86 (1) (e))- Challenge for planning by CTU
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` A generating company may supply electricity to anylicensee in accordance with this Act and the rules andregulations made there under and may, subject to theregulations made under sub-section (2) of section 42,
supply electricity to any consumer ( section 10)-Challenges-Planning, Congestion Management,
` Stranded Assets, CERC LTA & MTOA Regulation, Regulatory Approval
( Section 42 (2) is related to intra-State open access)
` Appropriate Government may specify that a generatingcompany shall, in extraordinary circumstances operate andmaintain any generating station in accordance with thedirections of that Government ( Section 11)- Discuss Threat for
income of CTU
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` License is essential for transmission, distribution andtrading ( Section 12)
` CTU, STUs and appropriate Govts. deemed licensee(Section 14)
` There may be two or more distribution licensee in thesame area (Section 14)
` For generation and distribution in rural area notified bythe State Govt. no license is required. (Section 14)
` Distribution licensee does not require license for
trading (Section 14)` CTU/STU recommendation for transmission licensee
(Section 15)- Perspective planning role
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` NLDC for optimum scheduling and despatch of electricity
among RLDCs. (section 26)
` RLDC shall not engage in generation or trading (section 27)
` Wheeling, scheduling and despatch by RLDC in accordance
with the Grid Code ( section 27)
` RLDC shall be apex body to ensure integrated operation of
the power system in the concerned region (section 28)
` RLDC is responsible for optimum scheduling and despatch of
electricity within the region, in accordance with the contractsentered into with the licensees or the generating companies
operating in the region;
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` RLDC shall monitor grid operations;
` RLDC shall keep accounts of quantity of electricitytransmitted through the regional grid;
`
RLDC shall exercise supervision and control over the inter-State transmission system; and
` RLDC shall be responsible for carrying out realtime operations for grid control and despatch of electricity within the region through secure and
economic operation of the regional grid inaccordance with the Grid Standards and the GridCode. (section 28)
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` Section 29(1) - The Regional Load Despatch Centre may give
such directions and exercise such supervision and control as
may be required for ensuring stability of grid operations and
for achieving the maximum economy and efficiency in the
operation of the power system in the region under its control.` 29(2) - Every licensee, generating company, generating
station, sub-station and any other person connected with the
operation of the power system shall comply with the
directions issued by the Regional Load Despatch Centres
under subsection (1).` Penalty up to 15 Lacs for non-compliance of direction by
RLDC
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` Similar provisions for intra-state transmission ( section 31,32,33)
` SLDC shall comply direction of RLDC (section 33)
` Every transmission licensee shall comply with such technicalstandards, of operation and maintenance of transmission lines, inaccordance with the Grid Standards, as may be specified by the
Authority ( section 34)` Relevant Standards for Transmission by the Authority:
(i) Central Electricity Authority (Grid Standards) Regulation 2010
(ii) Central Electricity Authority (Grid Standards) Regulation ( TechnicalStandards for Construction of Electrical Plants and Electric Lines)regulations,2010
(iii) Central Electricity Authority Regulation ( Installation and Operationof Meters) regulations,2006
(iv) Technical Standards for Connectivity to the Grid
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` The Central Government may notify any Government
company as the Central Transmission Utility (CTU)
` Provided that the CTU shall not engage in the business
of generation of electricity or trading in electricity (section 38)
` Functions of CTU;
(a) to undertake transmission of electricity through inter-
State transmission system;
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` (b) to discharge all functions of planning and co-
ordination relating to inter -State transmission system
with -
(i) State Transmission Utilities;
(ii) Central Government;
(iii) State Governments;
(iv) generating companies;
(v) Regional Power Committees;
(vi) Authority;
(vii) licensees;
(viii) any other person notified by the Central
Government in this behalf;
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(c) to ensure development of an efficient, co-ordinated andeconomical system of inter-State transmission lines for
smooth flow of electricity from generating stations to the
load centres;
(d) to provide non-discriminatory open access to itstransmission system ( section 38)
Similar provisioning for STU ( section 39)
Discuss challenges, opportunity, threats
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Duties of Transmission Licensee: ( section 40)(a) to build, maintain and operate an efficient, co-ordinated and
economical inter-State transmission system or intra-State
transmission system, as the case may be;
(b) to comply with the directions of the RLDC and the SLDC as
the case may be;
(c) to provide non-discriminatory open access to its
transmission system for use by-
(i) any licensee or generating company on payment of the
transmission charges; or (ii) any consumer as and when such open access is provided
by the State Commission under sub-section (2) of section 42
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` A transmission licensee may, with prior intimation to the Appropriate Commission , engage in any business for optimum utilisation of its assets (Section 41)-Telecom
` Provided that a proportion of the revenues derived from suchbusiness shall, as may be specified by the Appropriate
Commission, be utilised for reducing its charges for transmission and wheeling
` Provided further that the transmission licensee shall maintainseparate accounts for each such business undertaking toensure that transmission business neither subsidises in anyway such business undertaking nor encumbers its
transmission assets in any way to support such business` Provided also that no transmission licensee shall enter into
any contract or otherwise engage in the business of trading inelectricity
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` The State Commission shall introduce open access insuch phases and subject to such conditions, (includingthe cross subsidies, and other operational constraints)as may be specified within one year of the appointed
date by it and` in specifying the extent of open access in successive
phases and in determining the charges for wheeling, itshall have due regard to all relevant factors includingsuch cross subsidies, and other operational
constraints` Necessarily with effect from 27.01.2009 for consumer
of more than 1 MW. (Section 42 (2) )
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` Provided that such open access shall be allowed on paymentof a surcharge in addition to the charges for wheeling as maybe determined by the State Commission:
` Provided further that such surcharge shall be utilised to meetthe requirements of current level of cross subsidy within the
area of supply of the distribution licensee :` Provided also that such surcharge and cross subsidies shall
be progressively reduced in the manner as may be specifiedby the State Commission:
` Provided also that such surcharge shall not be leviable in
case open access is provided to a person who hasestablished a captive generating plant for carrying theelectricity to the destination of his own use (section 42 (2))
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` Where the Appropriate Commission has allowed openaccess to certain consumers under section 42, such
consumers, notwithstanding the provisions contained in
clause (d) of sub-section (1) of section 62, may enter
into an agreement with any person for supply or purchase of electricity on such terms and conditions
(including tariff) as may be agreed upon by them.
(section 49)
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Authority in consultation with the State Govt.,specify suitable measures in this regard (section
53)
` CEA has made two draft Regulations in this
regard
` Central Electricity Authority (Safety
requirements for construction, operation and
maintenance of electrical plants and electriclines) Regulations, 2008
` Central Electricity Authority (Measures relating
to Safety and Electric Supply) Regulations, 2007
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` The licensee or the generating company may, cut off
the supply of electricity and for that purpose cut or
disconnect any electric supply line or other works
being the property of such licensee or the generating
company through which electricity may have beensupplied, transmitted, distributed or wheeled and may
discontinue the supply until such charge or other sum,
together with any expenses incurred by him in cutting
off and reconnecting the supply, are paid ( section 56)` Discuss CERC Regulation of Power Supply , Regulation 2010
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` (1)The Appropriate Commission may, after consultation withthe licensees and persons likely to be affected, specifystandards of performance of a licensee or a class of licensees.
` (2) If a licensee fails to meet the standards specified under sub-section (1), without prejudice to any penalty which maybe imposed or prosecution be initiated, he shall be liable topay such compensation to the person affected as may bedetermined by the Appropriate Commission(section 57)
`
Every licensee has to furnish information to Commissionregarding level of performance achieved and no. of cases inwhich compensation was made (section 59)
` Draft Regulation on Standard of Performance.
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` The Appropriate Commission shall specify the terms and conditionsfor the determination of tariff, and in doing so, shall be guided by :
the generation, transmission, distribution and supply of electricity
are conducted on commercial principles;
the factors which would encourage competition, efficiency,
economical use of the resources, good performance and optimuminvestments;
safeguarding of consumers' interest and at the same time, recovery
of the cost of electricity in a reasonable manner;
the principles rewarding efficiency in performance;
the tariff progressively reflects the cost of supply of electricity the National Electricity Policy and tariff policy: (Section 61)
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` Notwithstanding anything contained in section 62,
the Appropriate Commission shall adopt the tariff if
such tariff has been determined through
transparent process of bidding in accordance withthe guidelines issued by the Central Government.
(section 63)
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` Provision as to opening of street, railways etc. By thelicensee for transmission or supply of electricity (section67)
` Appropriate Govt. has to make rules about the casesand circumstances in which consent is required, the
authority which may grant permission, compensation etc.` The licensee shall cause as little damage and
inconvenience as may be and shall make fullcompensation for it.
` In case of dispute matter shall be decided by the
Appropriate Commission (section 67)` Approval by Govt. for laying overhead lines for
excceding 11 kV ( section 68)
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` Constitution, Functions, duties etc of Authority, ( section 70-75 ,Part IX)
` Constitution, functions of Central commission ( section 76-79)
` Constitution, functions of Central commission ( section 82-86
` Establishment of fund for CERC by Central Govt. (section 99)
` Establishment of fund for SERC by State Govt. (section 103)
` Powers of Authority and CERC to make regulations ( section177, 178)
` Direction in matter of policy involving public interest byCentral Govt. to CERC and State Govt. to SERC ( section107, 108)
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Theft of Electricity- ( section 135)` Consumption < 10 kW-3 times for first time and subsequently
6 times of financial gain
` Consumption > 10 kW-3 times for first time and subsequently
6 times of financial gain and imprisonment not less than 6
months and up to five yearsTheft of electric lines and materials- ( section 136)
first time Imprisonment up to three years or fine or both
Subsequently, imprisonment not less 6 months and up to 3
years and fine not less than ten thousand. above offences are cognisable and non-bailable ( section
151 B)
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` Total village electrification by year 2010
By year 2012 :
` Per capita availability 1000 units.
` Installed capacity over 200,000 MW.
` Spinning reser ves 5% .
` Minimum lifeline consumption of 1 unit per household per
day.
` Inter -regional transmission capacity 37,000 MW.
` Energy efficiency / conser vation savings about 15%.
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Notified by Central Govt. on 12th Feb,2005 under section 3 of the Actwith the objectives:
Electricity to be available for all households in next five years
Demand to be fully met by 2012. Energy and peaking shortages tobe overcome and adequate spinning reserve to be available.
Supply of Reliable and Quality Power of specified standards in an
efficient manner and at reasonable rates. Per capita availability of electricity to be increased to over 1000
units by 2012. Now it is 733 kWh(2008-09) from 567kWh in 2002-03
Minimum lifeline consumption of 1 unit/household/day as a meritgood by year 2012.
Financial Turnaround and Commercial Viability of Electricity Sector.
Protection of consumers¶ interests.
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` Determined efforts should be made to ensure that the task of
rural electrification for securing electricity access to all
households and also ensuring that electricity reaches poor
and marginal sections of the society at reasonable rates is
completed within the next five years.` Each block should have Rural Electrification Distribution
Backbone (REDB) with at least one 33/11 kv (or 66/11 kv)
substation in every Block and more if required as per load,
networked and connected appropriately to the state
transmission system` One Distribution Transformer in every village
` Every household electrification
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` Necessary institutional framework would need to be put inplace not only to ensure creation of rural electrification
infrastructure but also to operate and maintain supply system
for securing reliable power supply to consumers.
` Responsibility of operation & maintenance and cost recovery
could be discharged by utilities through appropriate
arrangements with Panchayats, local authorities, NGOs and
other franchisees etc.
` The distribution licensees recover at least the cost of
electricity and related O&M expenses from consumers,
except for lifeline support to households below the poverty
line who would need to be adequately subsidized.
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`
To provide availability of over 1000 units of per capitaelectricity by year 2012 it had been estimated that needbased capacity addition of more than 1,00,000 MWwould be required during the period 2002-12
` Thrust on Hydro, imported coal based thermal power
station, use of low ash content coal, improved Lignitemining Technology, R&M
` Economics of generation and supply of electricity shouldbe the basis for choice of fuel for thermal power, . Pit-head stations would be economical
` Private sector Partnernisp for Nuclear Power and non-conventional sources
` Grid inter-connection of captive generation to befacilitated to harness their capacity
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` The Central Government would facilitate the continueddevelopment of the National Grid for providing adequateinfrastructure for inter-state transmission of power and toensure that underutilized generation capacity is facilitated togenerate electricity for its transmission from surplus regionsto deficit regions.
` The Central Transmission Utility (CTU) and StateTransmission Utility (STU) have the key responsibility of network planning and development .The CTU would need tocoordinate with the STUs for achievement of the sharedobjective of eliminating transmission constraints in costeffective manner.
` Network expansion should be planned and implementedkeeping in view the anticipated transmission needs that wouldbe incident on the system in the open access regime.
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`
Prior agreement with the beneficiaries would not be apre-condition for network expansion. CTU/STU shouldundertake network expansion after identifying therequirements in consultation with stakeholders andtaking up the execution after due regulatory approvals.
{1.Regulatory approval has been granted for High capacityCorridors with estimated investment of Rs. 58,061 Cr.and Punatsangchu ±I Tr. Projects )
2. Regulation for Regulatory approval}
` Structured information dissemination and disclosure
procedures should be developed by the CTU and STUs` Grid Code by SERC by Sep,2005
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`
Open access in transmission has been introduced to promotecompetition amongst the generating companies who can now sell to
different distribution licensees across the country. This should lead
to availability of cheaper power.
` The Act mandates non-discriminatory open access in transmission
from the very beginning. When open access to distribution networks
is introduced by the respective State Commissions for enabling bulkconsumers to buy directly from competing generators, competition
in the market would increase the availability of cheaper and reliable
power supply.
` The Regulatory Commissions need to provide facilitative framework
for non-discriminatory open access. This requires load dispatchfacilities with state-of-the art communication and data acquisition
capability on a real time basis. For SLDC time line was June,2006
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`
To facilitate orderly growth and development of thepower sector and also for secure and reliable operation
of the grid, adequate margins in transmission system
should be created.
` The transmission capacity would be planned and built to
cater to both the redundancy levels and margins keepingin view international standards and practices.
` A well planned and strong transmission system will
ensure not only optimal utilization of transmission
capacities but also of generation facilities and wouldfacilitate achieving ultimate objective of cost effective
delivery of power.
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`
To facilitate cost effective transmission of power across theregion, a national transmission tariff framework needs to be
implemented by CERC( 5.3.5).
` The tariff mechanism would be sensitive to distance, direction
and related to quantum of flow.
` Special mechanisms would be created to encourage privateinvestment in transmission sector so that sufficient
investments are made for achieving the objective of demand
to be fully met by 2012.
` The necessary regulatory framework for providing non-
discriminatory open access in transmission is essential for signaling efficient choice in locating generation capacity and
for encouraging trading in electricity for optimum utilization of
generation resources and consequently for reducing the cost
of supply.
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` Open Access, a mechanism for encouraging
competition and providing choice to consumers
`
Open Access ± Stages
Inter-State transmission
Intra-State transmission network
Intrastate distribution network
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Vijay Menghani, Joint Chief, CERC 52
0.00
10.00
20.00
30.00
40.00
50.00
60.00
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12( Till
June)
16.44
22.53 23.60
29.8327.76
32.37
41.69
12.39
2.77
7.09
13.54
3.93
V o l u m e ( B i l l i o n U n i t s )
Year
Short Term Power Transactions
Power Exchanges
Bilateral
Source: NLDC
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` 25% OA retained by CTU.
` In 2010-11 more than income from Telecom. About 2.5% of total
Income.(Data Collected from PGCIL Financial Statement.)
Vijay Menghani, Joint Chief, CERC 53
0
50
100
150
200
250
2006-07 2007-08 2008-09 2009-10 2010-11
38.7552.73 61.61
124.18
211.51
R
s . C r s .
Short Term Open Access Income
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` Rationalization of charges for Open Access by SERCs
` Availability of surplus power at reasonable rates
` Independence of SLDCs
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`
For achieving efficiency gains proper restructuring of distribution utilities is essential.
` Adequate transition financing support should be arranged andlinked to attainment of predetermined efficiencyimprovements and reduction in cash losses and putting inplace appropriate governance structure for insulating the
service providers from extraneous interference while at thesame time ensuring transparency and accountability.
` For ensuring financial viability and sustainability, StateGovernments would need to restructure the liabilities of theState Electricity Boards to ensure that the successor
companies are not burdened with past liabilities.` The Central Government would also assist the States, which
develop a clear roadmap for turnaround, in arrangingtransition financing from various sources
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` Conducive business environment in terms of adequate
returns and suitable transitional model` Private sector participation in distribution
` Multi-Year Tariff (MYT) framework
` open access in distribution not later than five years from 27thJanuary 2004 to consumers >1 MW
` A time-bound programme by SERC for segregation of technical and commercial losses through energy audits
` Standards for reliability and quality of supply as well as for loss levels in line with international practices by year 2012
` competition in distribution by allowing multiple licensees in the
same area of supply through their independent distributionsystems
` High Voltage Distribution System, SCADA and data management ,automation, Metering
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` urgent need for ensuring recovery of cost of service fromconsumers to make the power sector sustainable.
` Efforts would be made to ensure that the subsidies areprogressively reduced and reach the targeted beneficiaries inthe most transparent and efficient way
`
TECHNOLOGY DEVELOPMENT AND R&D` Competition and market Development through trading and
Power-Exchanges
` To meet the objective of ³power for all´ an investment of theorder of Rs.9,00,000 crores at 2002-03 price level would berequired
` appropriate surplus is to be generated through return oninvestments and, at the same time, depreciation reservecreated so as to fully meet the debt service obligation
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` All efforts will have to be made to improve the efficiency of
operations in all the segments of the industry.
` Suitable performance norms of operations together with
incentives and disincentives will need to be evolved along
with appropriate arrangement for sharing the gains of efficient
operations with the consumers .` Concerted efforts would be required for restoring the financial
health of the sector.
` For this purpose, tariff rationalization would need to be
ensured by the SERCs.
` This would also include differential pricing for base,intermediate and peak power.
` The Central Government and the State Governments need to
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`
Reduction in T&D losses` Energy conservation
` Environmental concern to be addressed
` Training and HR Development
`
Co-generation and Non-conventional Energy Sources` Protection of Consumer Interest and Quality Standards
` Co-ordinated development-consultative process
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August 2011
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` In Compliance with section 3 of the Act, Tariff Policy wasnotified by Central Govt. on 6th January,2006.
` Objectives:
(a) Ensure availability of electricity to consumers atreasonable and competitive rates;
(b) Ensure financial viability of the sector and attractinvestments;
(c) Promote transparency, consistency and predictability inregulatory approaches across jurisdictions and minimiseperceptions of regulatory risks;
(d) Promote competition, efficiency in operations andimprovement in quality of supply.
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` All future requirement of power should be procuredcompetitively by distribution licensees except in cases of expansion of existing projects or where there is a Statecontrolled/owned company as an identified developer andwhere regulators will need to resort to tariff determinationbased on norms
` provided that expansion of generating capacity by privatedevelopers for this purpose would be restricted to one timeaddition of not more than 50% of the existing capacity.
` Even for the Public Sector projects, tariff of all newgeneration and transmission pr ojects should be decided
on the basis of competitive bidding after a period of fiveyears or when the Regulatory Commission is satisfied that thesituation is ripe to introduce such competition.
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` Competition with appropriate market condition` Wire Business- Natural Monopoly
` Return on investment-at par with, if not in preference to, other
sectors ; Benchmarks on capital cost
`
Equity Norms- Debt: Equity -7
0:30; Structuring of debt toreduce tariff
` Foreign Exchange variation Risk not to be passed through.
Cost of Hedging and swapping to take care of these
variations to be allowed
` Suitable performance norms to be evolved for sharing of gains with consumers. R&M to be encouraged
` Multi year Tariff Frame work w. e.f April,2006
` Duties etc. by State Govts. at reasonable level
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` power procurement for future requirements should bethrough a transparent competitive bidding mechanismusing the guidelines issued by the Central Governmentvide gazette notification dated 19th January, 2005.
` These guidelines provide for procurement of electricity
separately for base load requirements and for peak loadrequirements.
` This would facilitate setting up of generation capacitiesspecifically for meeting peak.
` Two-part Tariff Structure for all long-term contracts
` Adequate PSM in PPA , provision for selling to other buyers in case of persisting default
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` captive plants could inject surplus power into the grid and could also
supply power to non-captive users connected to the grid.` The prices should be differentiated for peak and off-peak supply and
the tariff should include variable cost of generation at actual levels andreasonable compensation for capacity charges.
` Alternatively, a frequency based real time mechanism can be used andthe captive generators can be allowed to inject into the grid under the
ABT mechanism.` Wheeling charges and other terms and conditions for implementation
should be determined in advance by the respective State Commission,duly ensuring that the charges are reasonable and fair.
` Appropriate Commission shall fix a minimum percentage for purchaseof energy from non-conventional and co-generation sources taking into
account availability of such resources in the region and its impact onretail tariffs.
` Such percentage for purchase of energy should be made applicable for the tariffs to be determined by the SERCs latest by April 1, 2006.
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` national tariff framework implemented should be sensitive to
distance, direction and related to quantum of power flow.` transmission system users to share the total transmission cost in
proportion to their respective utilization of the transmission system.
` tariff framework not to inhibit planned development/augmentation of thetransmission system, but should discourage non-optimal transmissioninvestment.
` prior agreement with the beneficiaries would not be a pre-condition f or network expansion. CTU/STU should undertakenetwork expansion after identifying the requirements in consonancewith the National Electricity Plan and in consultation with stakeholders,and taking up the execution after due regulatory appr ovals.
` The tariff of the projects to be developed by CTU/STU after the period
of five years or when the Regulatory Commission is satisfied that thesituation is right to introduce such competition would also bedetermined on the basis of competitive bidding
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` ABT compliant and ToD metering
` Transactions should be charged on the basis of average lossesarrived at after appropriately considering the distance anddirectional sensitivity, as applicable to relevant voltage level, on thetransmission system.
{ New Regulation for Transmission pricing and loss allocation byCERC}
` Since additional flows above a level of line loading leads tosignificantly higher losses, CTU/STU should ensure upgrading of transmission systems to avoid the situations of overloading.
` Financial incentives and disincentives should be implemented for the CTU and the STU around the key performance indicators (KPI)for these organisations. Such KPIs would include efficient networkconstruction, system availability and loss reduction.
{}
67
New Proposed Regulation for Performance
Standards by CERC
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` MYT Frame work. sharing of excess profits and losses with the
consumers as part of the overall MYT framework` All power purchase costs need to be considered legitimate unless it
is established that the merit order principle has been violated or power has been purchased at unreasonable rates.
` Consumers, particularly those who are ready to pay a tariff whichreflects efficient costs have the right to get uninterrupted 24 hours
supply of quality power.` ATC loss reduction should be incentivised by linking returns in a
MYT framework to an achievable trajectory
` Appropriate Commission shall be guided by the objective that thetariff progressively reflects the efficient and prudent cost of supply of electricity
` Extent of subsidy for different categories of consumers can bedecided by the State Government. But provision of free electricity isnot desirable as it encourages wasteful consumption of electricity
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` The computation of cross subsidy surcharge, therefore, needs to bedone in a manner that while it compensates the distributionlicensee, it does not constrain introduction of competition throughopen access. Progressive reduction of cross-subsidy within + 20%by 2010-11.
` The additional surcharge for obligation to supply as per section42(4) of the Act should become applicable only if it is conclusivelydemonstrated that the obligation of a licensee, in terms of existingpower purchase commitments, has been and continues to bestranded, or there is an unavoidable obligation and incidence tobear fixed costs consequent to such a contract.
` In case of outages of generator supplying to a consumer on open
access, standby arrangements should be provided by the licenseeon the payment of tariff for temporary connection to that consumer category as specified by the Appropriate Commission.
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` Appr opriate Commission shall fix a minimum percentage f or
purchase of energy fr om such sources considering
Availability of such resources in the region, and its impact on retail tariffs.
` Pr ocurement by distribution companies shall be done at
preferential tariffs (thr ough competitive bidding as far as
possible).
` CERC should lay down guidelines f or pricing non-firmpower, especially fr om non±conventional sources, where
pr ocurement is not thr ough competitive bidding
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` Understand Opportunity, Threat and Weakness` Understand role of Regulator is Not only Tariff
Determination Term & Conditions of Tariff Regulation
Capital Cost benchmarking.` Planning : Electricity Act, Grid Code, Regulation of
Connectivity, Long Term & Medium Term Section
8(8), Regulatory Approval
` Operation: OA, Congestion Management, SOP` Sharing of Transmission Charges
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` CERC Sharing of Transmission Charges and
losses Regulation-15.6.2011- Action in
accordance with Electricity and Tariff Policy No impact on Tariff but totally changed Business
environment in respect of Planning, Construction,enhanced role & Risk
CTU role as Centralized agency for Billing , Collection
and disbursement
Investment in Transmission Sector without prior agreement
Distance Direction and Usage sensitive- It bring out
Utilization too ,planning aspects relook.
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` Objective: To ensure standards of performance of interstate transmission licensees within the
permissible limits in a natural monopoly like
transmission of electricity and for providing an
efficient, reliable, coordinated and economical
system of electricity transmission, non-adherence of
which would entitle compensation to the affected
parties.
` Key Perf ormance indicators are yet to be
prepared by CTU on efficient network construction,
system availability and loss reduction.
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Sl. No. Types of failures Restoration Time
(Days)
1. Insulator failure2
2. Tower after collapse by Emergency Restoration System (ERS)12
3. Tower after collapse
Plain Terrain30
River Bed50
Hilly Terrain 50
4. Snapping of phase conductor
Plain Terrain2
Hilly Terrain3
5. Failure of earth wire
Plain Terrain2
Hilly Terrain3
6. Failure of Inter Connecting Transformers (ICTs)
Restoration of the faulty transformer by spare
transformer 120
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S. No. StateNet OA
Charge (Rs. /kWh)
Net cost of
power fr om
Open Access
(Rs. /kWh)
Tariff (Discom)
(Rs. /kWh)
1 Assam 2.94 6.94 3.25
2 Chhattisgarh (Short term) 1.00 5.00 3.38
3 Haryana 1.07 5.07 4.57
4 Himachal Pradesh 1.33 5.33 3.04
5 Kar nataka (BESCOM) - ST 0.97 4.97 4.85
6 Maharashtra (MSEDCL area) - LT 0.71 4.71 4.53
7 Orissa ( WESCO) 1.82 5.82 2.918 Punjab ( short term) 1.77 5.77 5.09
9 Ra jasthan 0.97 4.97 3.98
10 Uttar Pradesh ( short term) 0.66 4.66 4.29
11 Madhya Pradesh - ST 1.00 5.00 4.57
12 Uttarakhand ( Long term) 1.47 5.47 3.9
13 Gujarat - LTOA 1.43 5.43 7.39
14 West Bengal - short term 2.81 6.81 3.95
15 Tamil Nadu 2.47 6.47 3.96
16 Delhi 1.93 5.93 4.05
17 Jharkhand 3.14 7.14 4.4818 Andhra Pradesh 0.97 4.97 3.49
19 Kerala 2.38 6.38 3.94
20 Bihar ( HTS) 2.56 6.56 4.35
*Tariff for an embedded consumer of 5MW at 11 KV (33 KV in some cases).
** Effective Open Access Charges for consumer of 5MW at 11 KV (33 KV in some cases) in addition with a assumption of power
purchase cost of 4 Rs./KwH.
Power Purchase cost assumed(Rs.4 /kWh)
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*Tariff for an embedded consumer of 5MW at 11 KV (33 KV in some cases).
** Effective Open Access Charges for consumer of 5MW at 11 KV (33 KV in some cases) in addition with a assumption of
power purchase cost of 3 Rs./KwH.
S. No. State Net OA Charge(Rs. /kWh)
Net cost of power fr om Open Access
(Rs. /kWh)
Tariff (Discom)(Rs. /kWh)
1 Assam 2.61 5.61 3.25
2 Chhattisgarh (Short term) 0.88 3.88 3.38
3 Haryana 0.98 3.98 4.57
4 Himachal Pradesh 1.20 4.20 3.04
5 Karnataka (BESCOM) - ST 0.89 3.89 4.85
6 Maharashtra (MSEDCL area) - LT 0.59 3.59 4.53
7 Orissa ( WESCO) 1.69 4.69 2.91
8 Punjab ( short term) 1.65 4.65 5.099 Rajasthan 0.88 3.88 3.98
10 Uttar Pradesh ( short term) 0.53 3.53 4.29
11 Madhya Pradesh - ST 0.94 3.94 4.57
12 Uttarakhand ( Long term) 1.27 4.27 3.90
13 Gujarat - LTOA 1.27 4.27 7.39
14 West Bengal - short term 2.68 5.68 3.95
15 Tamil Nadu 2.35 5.35 3.96
16 Delhi 1.57 4.57 4.05
17 Jharkhand 2.54 5.54 4.4818 Andhra Pradesh 0.82 3.82 3.49
19 Kerala 2.21 5.21 3.94
20 Bihar ( HTS) 2.45 5.45 4.35
Power Purchase cost assumed(Rs.3 /kWh)
77
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