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RAJASTHAN ELECTRICITY REGULATORY COMMISSION Jaipur

Petition No.RERC/57/05 In the matter of:

Removal of difficulties arising out of open access under clause 20 of RERC (terms & conditions for open access) Regulations 2004

And In the matter of: Petitioner

Hindustan Zinc Limited, Udaipur (HZL)- And

Respondents-

(1) Ajmer Vidhyut Vitran Nigam Limited, Ajmer (AVVNL or Discom)

(2) Rajasthan Rajya Vidhyut Prasaran Nigam Limited (RVPN)

Quorum

Sh. Shanti Prasad, Chairman Sh. S.M.Dharendra, Member (F)

Sh. K.L.Vyas, Member (T) Date of hearing: 4.3.06 & 27.5.06 Date of technical discussions: 7.4.06

Presents:-

On 4.3.06 As per interim order dated 24.3.06(Annexure-A) On 7.4.06 As per record note of discussions (Annexure-B) On 27.5.06:- Shri P.N.Bhandari Advocate for Petitioner Shri K.C.Modi Chief Engineer(Comml.),AVVNL,Ajmer Shri Y.K.Raijada Chief Engineer,.RVPN,Jaipur Shri S.C.Datta Chief Engineer(LD),Jaipur Date of Order: 23.06.2006

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ORDER

1. The petitioner, HZL, has filed petition under clause 20 of RERC (terms & conditions for open access) Regulations-2004 (OA Regulations) for removal of difficulty in open access availed by HZL since 24.3.05. The petition was admitted on 28.11.05 and a copy of which was sent to the respondents to file replies. The Respondent-1 (AVVNL) and the Respondent-2 (RVPN) filed replies on 31.1.06 & 25.1.06 respectively. The rejoinder to the replies was filed by HZL on 20.2.06.The case was heard on 4.3.06 and the interim order was passed on 24.3.06. As the matter pertains to removal of difficulties, technical discussions on the implementation of the aforesaid interim order was held on 7.4.06. The case was finally heard on 27.5.06 and this final order is being issued, interalia, giving reasons for our order dated 24.3.06.

Brief particulars of the petition:-

2. The petitioner is in the business of mining of zinc and smelting etc. and has four high tension large industrial power connections (HT-LIP) at Chanderiya, Debari, Agucha & Dariba. The petitioner has set up a captive power plant (CPP) of 154MW (2x77MW) at Chanderiya and sought short term open access to transmission and distribution system under provisions of the Open Access Regulations. The permission for open access was accorded by RVPN on 28.1.05. Accordingly, agreement for open access to transmission system was executed with RVPN on 11.3.05 and three agreements for open access for wheeling of power on distribution system were executed with AVVNL on 10.3.05 with open access capacity allocations from their CPP as under.

Open access allocations

(i) for Rampura Agucha 20,000 KW (ii)for Debari 15,000 KW (iii)for Dariba(Rajpura) 5,000 KW

The above agreements were valid up to 1.12.09.

3. The open access had commenced on 24.3.05. Under this open access, electricity generation of CPP at Chanderiya, after meeting electricity requirement of industrial unit at Chanderiya, was injected at 132KV and 220KV Chittorgarh Grid Sub-stations (GSS) and from which it was transmitted on RVPN’s 220KV & 132KV system and supplied to HZL’s industrial units at 132KV at Agucha,Debari and Dariba. Open

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access from CPP was effected on the same transmission lines on which large industrial supply was effected prior to open access. With open access, the existing contracts for H.T.supply from AVVNL were continued and their references were made in the open access agreements. Accordingly, contract demand for the existing H.T. supply from AVVNL and the date of execution of H.T power agreements were as under:

Contract Demand Date of execution of agreement

(i) for Rampura Agucha 22000 KVA 22.1.2005 (ii) for Debari 21000 KVA 21.4.2003 (iii) for Dariba(Rajpuria) 10,000 KVA 8.5.2003 (iv) for Chanderiya 24000 KVA 1.6.2004

4. HZL has brought out in its petition the difficulties faced in the above open access to distribution system and their causes. Citing references of the Electricity Act, National Electricity policy and Tariff policy notified by Ministry of Power under Section 3(2) of The Electricity Act, 2003, regulations framed by the Commission under the Electricity Act and past precedence HZL has prayed for: - i) Removal of all indirect or direct hurdles ii) Elaboration of Terms & conditions of open access clearly.

iii) Drafting of standard of open access commercial agreement by the Commission.

iv) Only non-tariff matter be subject to negotiation in the commercial agreement.

v) Minimum charges be not levied on CPP and also open access consumer. There should be no discrimination against HZL as CPP on the lines of M/s.Kalpataru power plant.

vi) Power factor incentive may be allowed as applicable for normal consumers.

vii) Discom not to purchase costly power when cheaper power is offered by CPP at a reasonable rate.

viii) CPP be given freedom to sell power outside the State to any trader or licensee.

ix) For accidental increase of demand in 1 or 2 blocks of 15 minutes, transmission charges be levied on prorata basis.

x) Credit for open access supply be given in the same month.

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5. The petitioner, AVVNL & RVPN were heard on 4.3.06 and an interim order was issued on 24.3.06 which is placed at Annexure ‘A’ and forms part of this order. Detailed reasons for the same are given in this order on each aspect. A technical discussion was held on 7.4.06 to discuss with HZL and AVVNL, the various aspects of the order, including difficulties in its implementation and various clarifications were given and incorporated in the record note of discussions, which is placed at annexure ‘B’; and is forming part of this order. Further hearing was held on 27.5.06 when some new issues regarding the interim order were raised. These have been discussed at the end of this order. Preliminary objections: -

6. RVPN has replied to the part of the petition relevant to them only. They have stated that the petition is not maintainable, as in their petition, HZL has not cited any specific clauses of the regulations in the implementation of which difficulty has been experienced.

7. We state that clause 30 of RERC (Terms & Condition of Open Access) Regulation 2004(‘OA Regulation’) provides for power of the Commission to remove difficulties arising in giving effect to any of the provisions of OA regulations and the Commission may, by order, direct the stake holders to take such action as may appear to the Commission to be necessary or expedite to remove difficulties. For this purpose, it is suffice to bring out difficulties and if these are genuine, the Commission has to find solution, issue directions/orders and amend regulations, if required. The petition will not be in-validated, if particular provision is not cited, as such an action will defeat the very purpose of removal of difficulties.

8. HZL has stated that normally after meeting Chanderiya industrial unit’s load, CPP is in export mode at Chittorgarh i.e. point of injection but when the generating unit(s) of CPP trips, power has to be imported from the Grid and even though, normally, neither at Chanderiya nor at other three units, power is drawn from AVVNL, HZL will have to pay minimum charges even without using power. In order to consume electricity up to minimum charges (i.e. minimum billing of large industrial service tariff schedule HT/LP-5), the petitioner has to draw 50MW of power at four points from AVVNL after backing down its CPP. This backing down as per HZL’s, version is against the spirit of the Act, wherein open access has been permitted to CPP for carrying electricity from CPP to the destination of his use under section 9(1) & (2) of the Electricity Act-2003 at par with any other generation station.

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Liberal definition of CPP has been provided under section 2(8) of the Electricity Act-2003 (‘Act’) to encourage captive power plant generation in the country, so that without extra investment by the State/State utilities, additional generation effected by CPP is available to distribution licensee either directly or by way of less drawl from Discom through captive use or supply to other consumer of the distribution licensee. It has cited the Para 5.2.26 of the National Electricity Policy and Para 6.3 of Tariff Policy which lay stress on facilitating captive generation under Section- 30 of the Act and to encourage them to have grid connectivity and supply power to consumers under open access, the regulatory Commissions will exercise regulatory oversight on commercial arrangement between captive generators and licensees. The Petitioner has stated that open access is a new field and old rules cannot tackle the new problems and the Commission is to find solution, so that old rules of minimum charges/billing are not levied on CPP and when they draw power in emergency, they may be required to pay normal tariff of HT consumers. Citing the decision taken by the coordination committee in its meeting held on 31.7.04 to exempt generating station of Kalpataru Ltd., Sriganganagar from the payment of minimum charges and stating that as per the Act all generating stations are to be treated alike, HZL has sought waiver of minimum billing charges for CPP at Chanderiya and three industrial units at other locations. HZL has also stated that had there been no provision of minimum billing, units drawn by HZL at four places to meet minimum billing liability, would have been available for sale to other consumers and AVVNL would not have to effect purchase of power at very high rates from outside the State.

9. The Petitioner has stated that under clause 12 of OA Regulations, an

open access consumer is required to enter into agreement with the licensee. The present dispension allowing a CPP and licensee to negotiate the terms and conditions of agreement is inequitable, as there is conflict of interests between CPP & Discom and no serious negotiations with the Discoms are feasible for such agreement & open access consumer/ CPP have to sign the agreements on the dotted lines. The Commission may incorporate some solutions in the regulations. During hearing on 4.3.06,Shri P.N.Bhandari, advocate for the petitioner, has suggested that there be only one agreement for open access and H.T. supply from the Discom and it should be subject to approval by the Commission.

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10. HZL has also stated that the Discoms have purchased about 1350 lakhs unit from them at Rs.2.75 per unit, while it had overdrawn power from grid at much higher rate. The Petitioner has sought the Commission’s intervention to specify tariff for such sale to do away with negotiations. HZL has argued that CPP be not equated with normal consumer in respect of levy of minimum charges, as CPP/OA consumer effect payment in the form of transmission & wheeling charges for the infrastructure utilized for open access and that the erstwhile RSEB was not charging fixed charges for the HT consumer who had set up his own captive power plant and did not draw RSEB power. On account of the provisions of minimum billing charges, CPP is forced to shut down its generation to consume Discoms power to the extent of minimum charges. On this ground, HZL has sought for not levying minimum charges in respect of HT power supply agreement with AVVNL for its three industrial units at Agucha,Debari & Dariba which also receives supply under open access. Shri P.N.Bhandari referred to clause 14,15 & 16 of open access regulations and stated that only fixed charges in the form of transmission and wheeling charge, cross subsidy surcharge and additional surcharge, as may be applicable, are recoverable from the open access consumer and minimum billing charges are not provided for. In the hearing on 27.5.06, Shri Bhandari also referred to the erstwhile RSEB’s order No.2474 dated 15.9.95, which provides that where the contract demand is reduced to zero i.e. the consumer runs his factory from the power generated out of its captive power plant, no minimum charges would be charged.

11. RVPN has replied that the case of Kalpataru, Ltd. is completely different and has no similarity with that of HZL. Kalpataru is purely a generating company and their plant is covered by non-conventional energy sources policy of the State Government, whereas HZL’s units at Debari, Rampura, Dariba & Chanderiya are consumers of the distribution licensee with captive generation plant at Chanderiya.

12. AVVNL, in its reply, has stated that HZL has contracted 50MVA power

to meet the requirement of Zinc smelter at Chanderiya, which is a large industrial consumer of the Discom and HZL has also contracted similar capacity at three other industrial units located at Rampura Agucha, Debari & Dariba. In respect of all the four connections having contract demand with AVVNL, the distribution licensee is committed to supply the contracted power to HZL whenever called upon. Hence, irrespective of drawl or no drawl by HZL, AVVNL has to contract for the purchase of power from the generators and pay the

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fixed charges to them. Therefore, such commitment cannot be honoured, unless Discom is allowed to recover the fixed cost payable to generators. It has also stated that HZL is free to terminate these agreements and in that case, no charges other than open access charges will be levied. AVVNL is effecting supply to 18.98 lakhs consumers and commercial & financial viability of the Discom is necessary for effecting supply to these consumers, and AVVNL is within its right to protect its commercial interest within the policy frame work issued by the Commission. It has stated that HZL’s argument that power is required only in case of shut down of the power plant is not correct. The CPP of HZL not only has a generating station at Chandeeriya but has smelter unit also, which consumes power for the production purpose as a consumer (‘as per Electricity Act’). There is no similarity in the HZL’s CPP and Kalpataru power plant wherein agreement provides for supply to project for construction and start up and during scheduled maintenance & forced outages only. The generating plant of Kalpataru Ltd. is not involved in any industrial production activity at its biomass-based plant in Sriganganagar District. Further, the agreement was executed before the new Electricity Act-2003 and cannot be compared with the present open access agreement of Discom with HZL, where power is consumed at four places for its industrial unit.

13. It has also argued that in ABT regime, any adverse impact of unscheduled interchange resulting from the operation of open access consumer, like HZL, cannot be borne by other consumers of AVVNL and AVVNL is within its right to recover the applicable charges as per the tariff. AVVNL has further pleaded that while deciding the issue of minimum charges, the Commission should also keep in view its adverse impact on the Discom and its consumers. AVVNL has stated that the credit for open access units is given in the bill as soon as the energy account is received from SE (EA), RVPN, Jaipur.

14. HZL in its rejoinder has reiterated that it is totally self sufficient in power and its captive power plant is able to meet total demand of its three units. HZL has remained connected with the grid (i.e. contracted for electricity supply from AVVNL) in order to avail stand- by power in case of shut down/maintenance. It is not correct that Ajmer Discom has to pay fixed charges to generators whether power is drawn or not, since power supply meant for the petitioner, is supplied elsewhere by AVVNL against full payment and AVVNL is not put to financial loss. It has also reiterated that if CPP is allowed to operate round the clock, without insisting for the unreasonable condition of the minimum

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charges, such extra power will be available to the consumers and by levy of such charge, AVVNL is reducing power availability to consumers. It has also stated that as per para 5.4 & 6.7 of tariff policy, captive generation is to be promoted and the State Commission is to specify in advance the reasonable and fair charges for wheeling and other terms and conditions. HZL/CPP and three units are consumers of the Discom only notionally because in the normal course, they are not supposed to draw power. Levy of minimum charges from open access consumer like traditional consumer is not justified. They have stated that decision of the coordination committee has been taken in respect of Kalpataru Ltd. on 31.7.04 after the enactment of the Electricity Act, 2003. Waiver of minimum charges in that case was primarily on account of it being not importing but exporting power to the grid and the same logic applies to the petitioner. In its rejoinder, HZL has referred to CERC (Open Access Inter-State Transmission) Regulations, 2004, which vide clause 23A, provides for billing for transmission charges for short term customers on 6 hourly block basis.

15. We first take up the issue of the petitioner comparing its position with that of Kalpataru’s power station. The clause 3.6.1 of the agreement executed between Kalpataru Ltd & RVPN on 16.2.02 provides for supply of power to Kalpataru Ltd at applicable tariff:

a) for construction of the project b) for the start up & commissioning of the project c) During scheduled maintenance of the project d) During forced outage.

16. No tariff is specified for such sale by the Commission. HT industrial service tariff has been applied on Kalpataru Ltd. HZL has claimed parity on the ground of non discrimination between generating stations and CPP and the fact that CPP also effects enhancement in power availability within the state and sought for not levying minimum charges on their CPP at Chanderiya citing the decision taken by Coordination Committee in its meeting held on 31.7.04. Parity with Kalpataru Ltd has been resisted by AVVNL/RVPN on the ground that Kalpataru Ltd is supplying entire power to Vitran Nigam, while HZL is supplying for its industrial units. The agenda for the aforesaid decision indicates the background of waiver of minimum charges. It states that ‘Kalpataru Energy Ventures Pvt. Ltd. is a generating company and cannot use electricity from Discom system on regular basis. The power supply by a generating plant is required either for scheduled maintenance or for starting of the plant in case of break down. As

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such, power plant cannot be expected to consume energy from our system to cover minimum charges and accordingly, waiver of minimum charges has been proposed and only energy charges and fixed charges in lieu of their demand will be recovered.’ We also observe that Kalpataru’s agreement provides for sale to large industrial service consumers. It is clarified, that the Commission can specify tariff for supply of power to a generating company only through its regulation or through its order against tariff petition to be filed by the licensee. The Commission will be issuing consultation paper on CPP, which will provide for tariff/mechanism for supply of power during shut down and shall prescribe the tariff/mechanism after following the procedure of previous publication. At this stage, the Commission is of the view that unlike power plant of Kalpataru, Ltd. CPP at Chanderiya is not directly connected to grid and it injects power to State Grid after meeting the requirement of its industrial units at Chanderiya, and as such, when it draws power for itself alongwith Industrial unit at Chanderiya in case of shut down, drawl of power by Kalpataru’s Plant cannot be compared with that of HZLs CPP for its industrial unit also. In view of this, there is presently no parity and we do not find it appropriate to consider CPP at Chanderiya on the lines of M/s.Kalpataru’s power plant till HZL CPP is directly connected to the State Grid.

17. Rebutting the argument of HZL for non-levy of minimum charges on account of infrastructure cost being charged from them, AVVNL has stated that fixed charges recovered by the Discom are not for the system use but for the contract demand maintained by the Discom for the consumer with generator to fulfill the commitment of providing contracted capacity on demand. The Commission observes that infrastructure, i.e. transmission charges, does not cover the entire fixed cost of power purchase incurred by the Discom. While effecting supply to H.T. consumer, Discom bears the transmission charges and recovers it alongwith fixed cost of generation in the form of fixed charges/minimum billing of electricity tariff from the consumer. Though transmission charges to the extent of open access capacity allocated is borne by the open access consumer, it does not cover fixed cost of power purchase. (of generation tariff) for HT supply by AVVNL. As fixed cost of power purchase is not covered by fixed charges of tariff minimum billing has been specified in the tariff, and as such, waiver of minimum billing on this account is not justified.

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18. Implication of minimum billing of H.T.tariff:-

HT large industrial tariff (under schedule HT/LP-5) as relevant in this case, is as under:- (i) Fixed charges: Rs.90/- per KVA per month of billing demand plus

(ii) Energy charges:- 401 paisa per unit.

19. This tariff is subject to minimum billing of Rs.440/- per KVA per month of billing demand up to 1000 KVA contract demand and Rs.520/- per KVA per month of billing demand for contract demand exceeding 1000KVA. Billing demand is defined as maximum demand actually recorded in KVA during the month or 75% of contract demand, whichever is higher. Tariff is also subject to late payment surcharge, excess demand charges, incentive based on consumption and power factor surcharge/incentive. On account of minimum billing (commonly referred as ‘minimum charges’), a H.T consumer has to consume 107.23 Kwh (520-90FC) per KVA of billing demand for

4.01 contract demand exceeding 1000KVA.The waiver of minimum billing

relieves a consumer from this obligation, while it deprives Discom to recover full fixed cost of power purchase.

20. We find that the Commission’s open access Regulations deals only

with open access to transmission and distribution system, its agreements, charges etc and not the supply of balancing power from Vitran Nigams and its agreement, and as, such balancing power need not be arranged from Vitran Nigams. The issue of minimum charges has arisen out of distribution licensee’s existing H.T. supply agreements, which were referred to in open access agreements and agreed to be continued by both parties. As open access to distribution system and HT supply by AVVNL is inter-linked, we will first discuss OA agreements. The three open access agreements are all alike except for open access capacity allocation and contract demand for HT supply from AVVNL. We are, therefore, referring to the provision of open access agreement for Debari only. Some of the relevant portions of clauses of the open access agreement, etc. are reproduced as under :(Portion-reproduced):

“(Preamble) And whereas the open access consumer is having the following existing connections with Ajmer Discom: 1… … …

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2. At their Zinc Smelter Debari under Udaipur Sub-division having Account No.UC/04-02-0015(HT) with contract demands of 21000KVA at supply voltage of 132KV as per the agreement dated 21.4.2003. And whereas Ajmer Discom has considered the request of the open access consumer and is ready for wheeling of 15000KW power on its distribution system. Ajmer Discom shall continue to supply power to open access consumer against his existing connections for the sanctioned contract demand as detailed above, subject to terms & conditions as modified by this agreement.

5,7. Both the parties agree that charges for existing connections for the sanctioned contract demands as a Discom consumer and charges for open access consumer shall be governed by the tariff and regulatory order in force from time to time, except where the specific provisions has been made in this agreement.

“8( C ) The open access consumer at 10 AM each daily shall furnish Ajmer Discom schedule of drawl on 15 minutes block basis which it intend to draw against the open access and on 15 minutes block basis schedule against contract demand of existing connection, if any, separately. The drawl schedule of open access power shall be limited to availability shown by the supplying generator in its schedule.

(9)(a) The parties agree that the settlement of mismatch between schedule injection and actual injection by the generating station injecting open access power into state transmission system or by generating station embedded in the distribution system for each 15 minutes block shall be done in the following manner: (i) Unscheduled generation not exceeding 5% of the

generation/injection scheduled in any 15 minutes block at the UI price specified by the Commission for the State from time to time.

(ii) Generation exceeding 5% of the generation/injection scheduled in any 15 minutes blocks shall be considered as zero and no UI charges shall be receivable by the generating station for such excesses generation.

9 ( C ) The mismatch in total drawl schedule by consumer against open access and against the existing contract demand and total actual drawl in each 15 minutes block shall be done in the following manner:- (i) Unscheduled drawl not exceeding 5% of the total schedule made

by the consumer against open access and existing Discom

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connection in any 15 minutes block shall be priced at U.I. rate and payable/recoverable by the open access consumer.

(ii) The balance mismatch in schedule and actual drawl shall be paid by open access consumer to the Ajmer Discom at the mutually agreed rates and in absence of any agreement such drawl could be treated as temporary supply and shall be charged at the tariff for temporary supply as contained in part-III of the tariff for supply of Electricity-2004 booklet for the applicable category.

11. Ajmer Discom shall raise the bill at the end of the month to the use of distribution system for wheeling of open access power and against the existing Discom connection of the consumer for the following amount:-

(a)… … … … … … .

(b)… … … … … …

( c )… … … … … … ..

(d) Energy charges for scheduled energy against existing connection for the contract demand of 10000KVA as discoms consumer as per applicable tariff. (e) Fixed charges for the contract demand of 10000 KVA as discoms consumers as per applicable tariff. (f) Minimum bill amount as per tariff applicable in force for the contract demand against the existing connection.

13(d) No incentive for maintaining PF above 0.95 shall be admissible to the open access consumer”.

21. The Commission observes that with the above provision, the existing HT supply under HT supply agreement have been treated differently from other HT large industrial power (LIP) supply of the Discom. First of all, LIP supply consumer is not required to schedule his drawl, while clause 8( C ) of OA agreement provides for scheduling of drawl of power under HT supply agreement. Not only this, while LIP consumer is billed for energy charges and fixed charges under schedule HT/LP-5 based on actual energy consumption and recorded demand respectively, clause 11(d) & (e) of open access agreement provides for billing of energy charges as per the scheduled energy and fixed charges as per contract demand (instead of actual energy consumption and recorded demand). Further, such billing is subject to adjustment at UI rate up to 5% deviation from scheduled drawl and balance energy drawl at mutually agreed rates (and in absence of it, at temporary

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supply tariff). Such provision of UI rate and temporary supply is not applicable to normal HT-LIP consumer.

22. RERC’s Open Access Regulations deals with the energy

injection/drawl under open access and the clause 20 of the said regulation specifies as under:-

“ 20 unscheduled interchange pricing:- The payment for mismatch between the schedule and the actual drawl shall be governed by the pricing mechanism as specified by the Commission for the State from time to time”.

23. The Commission has not specified intra-state ABT for unscheduled interchange in its order dated 30.4.04. The Commission has subsequently specified the same UI rates, as those specified by CERC, at clause 50 of its regulation on terms & conditions for the determination of tariff which is applicable to the generating companies supplying electricity to distribution licensee (vide clause 31 of the RERC (Terms & Conditions for Determination of Tariff) Regulations and whose tariff is determined under these Regulations. As regards applicability of UI rates, it will be relevant to refer to the Commission’s order dated 30.4.04 finalizing the OA regulations. Para 60 to 62 of that order states as under: -

“60… Shri D.P. Chiraniya, RVVNL expressed that real time monitoring of supplies by generating station(s) /trader(s) for open access consumer and drawl by open access consumer will not be feasible and only course left is that generating company/ trader and open access consumer should give their generation, supply and drawl schedules respectively and deviation, if any, from the schedule will be subject to UI rate of CERC. 61… any mismatch between energy supplied by generating station or trading licensee for open access consumer and actual drawl by the consumer, will result in corresponding mismatch (i.e. overdrawl/underdrawl) by the distribution licensee from northern region and will be reflected by the NRLDC in its energy account which will be subject to UI charges. As per regulation 18 of CERC Regulations such UI account shall be billed to STU for the state as a whole and SLDC shall allocate such UI charges among distribution licensees. With open access allowed to consumers, such allocation will also be made to the consumers. As frequency linked UI price of CERC is for drawl at bus bars of Central sector generating stations (CSGS), UI pricing applicable to open access consumer shall be based on his overdrawl/

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underdrawl extrapolated to Ex-CSGS bus bar. If power station / trader is subjected to ABT, then the course suggested by Shri D.P. Chiraniya will be in order for permissible deviation but in other cases where power station (or trader) is not subjected to ABT, it will not apply. Power station supplying power to open access consumer, may and may not be subjected to ABT. As such, where generator (or trader) is not subjected to ABT, overdrawl/underdrawl of the consumer shall be worked vis-à-vis electricity injected by his generator less transmission and distribution losses. Agreement between open access consumer and generating station /trader need provide for sharing of UI charges between them”.

62. UI charges specified by CERC takes into account the variable cost of incremental generation. However, heavy over drawl / under drawal may not only lead to grid indiscipline (i.e. utilization of transmission and distribution capacity beyond contracted capacity) and abnormal voltage levels but also drawl of electricity at incremental cost of generation without bearing/sharing fixed cost (which is borne by Discoms). Therefore, such over drawls/under drawls at UI prices of ABT need be limited to a narrow band of 10% during each interval of 15 minutes. Beyond this, it will be based on balancing agreement between consumer and Discom or other generating company or trader.”

24. Though the Commission in its order has clearly laid down that where

generator is not subjected to ABT, overdrawal/undrawal of the open access consumer will be worked out vis-à-vis electricity injected by his generator. Neither the situation of drawal of electricity concurrently as OA consumer as well as HT consumer of the distribution licensee nor any balancing mechanism for settlement of mismatch between actual drawal and injection has been specified in the OA regulations. Neither the applicability of ABT on the generator supplying electricity to the OA consumer nor settlement mechanism has been specifically provided in the OA Regulations. The provision of clause 9(c) (i) of the agreement was, thus, mutually agreed between both the parties considering as if both the generator and the OA consumer have been specifically covered under ABT and for adjustment at UI rates splitting 10% deviation into 2 parts i.e.. 5% for generation end & 5% at load end. The former is specified on scheduled generation and the latter on scheduled open access drawl plus scheduled drawl from AVVNL (e.g. 5% less generation and 5% excess drawl).

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25. Though consumer having HT supply agreement with AVVNL will be entitled to draw power up to contract demand (that too without scheduling) as per clause 9( c) (i) & (ii) of open access agreement, electricity drawn from AVVNL by open access consumers(say at Debari) shall be spitted into three parts as under:-

(i) billing as per schedule under HT- LIP tariff &

(ii) 5% deviation at UI rate

(iii) balance at temporary supply tariff (as there is no mutually agreed tariff).

26. To elaborate this, if open access is scheduled in a time block of 15 minutes as 10000 KW and scheduled drawl from AVVNL, it is 6,000 KW against contract demand of 10000 Kw but actual drawl is 20000KW then mismatch is 20000 –(10000+ 6000)=4000KW to be apportioned as (i) 5 % of total schedule of 16000 kw i.e. 800 kw at UI rate

(ii) 3200 kW at temporary supply tariff.

27. Thus, though HZL has drawl of 10000 Kw from open access and 10000 kw remaining within the contract demand from AVVNL is billed at UI rate and temporary supply tariff which does not appear to be fair and logical. Therefore, the Commission cannot permit it to be continued.

28. However, without going into this aspect any further, we would like to state that although the above provisions have been made in the agreement, yet AVVNL has not been able to bill HZL as per these provisions of the agreement for want of requisite software, non availability of schedules etc. AVVNL has billed HZL on monthly basis initially based on maximum demand and energy consumption by applying schedule HT/LP-5, applicable electricity duty &voltage rebate but without considering power factor incentive/surcharge and energy consumption incentive. Thereafter, when monthly energy account of supply of electrical energy is received from SLDC for the month as a whole (and not on 15 minutes time block basis as provided in the agreement), credit of energy charges for 90% of energy transmitted and wheeled under open access has been allowed with adjustment for voltage rebate and electricity duty through credit note in the subsequent bill. Copies of such credit notes have been enclosed with the reply given by AVVNL. Since energy account was not prepared on 15-minute block basis, credit is given only for energy charges, without providing credit for fixed charges towards the demand met by open access supply. Besides this, credit for 10% of the

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energy transmitted & wheeled have been withheld towards UI charges. This matter has been separately dealt with in our order dated 22.5.06 on the petition RERC/87/06. Even this procedure of billing is not in consonance with the provisions of the open access agreement which should not be allowed to continued. On account of provision of minimum billing for AVVNL’s supply, HZL has to necessarily draw 107.23 units per KVA of its contract demand from AVVNL at Debari, Agucha & Dariba and for that it has to reduce its open access drawl by equivalent energy. This will be accomplished by either reducing its generation or shutting down the unit. HZL has an industrial unit at Chanderiya. To meet contingency of plant outage, it has HT supply contract with AVVNL for this unit also, for which provision of minimum billing is applicable. As HZL’s CPP is not directly connected to Grid Sub-station (GSS) and is connected to GSS through this industrial unit, for drawl of energy equal to 107.23 kwh per KVA of contract demand for HT supply for this Industrial unit from AVVNL, it has to change mode of operation from export of energy to import of energy and this can be effected by reduction of generation, so that there is no injection and consequently no open access supply to other three industrial units at Debari,Agucha & Dariba.Thus,HZL’s contention of shutting down of its unit on account of provision of minimum billing has some substance. Even if HZL had direct connection of CPP at Chanderiya, it would have to effect relatively lower reduction in generation to enable Chanderiya unit to draw energy up to minimum billing. Reduction in generation will definitely act as hindrance in open access. Besides, it will result in loss of electricity availability to the State/Country and will also cause undue stress on power plant. This bottleneck has, therefore, to be removed to harness full potential of captive power plant, and to promote open access to enable utilization of available generation at a remote location for captive use or for supply to third party. Both National Electricity Policy and Tariff Policy emphasize on facilitating captive generation and open access. It provides (vide para 5.2.26) that appropriate commercial arrangement would need to be initiated between licensee and the captive generators for harnessing of spare capacity /energy from captive power plants and that the Regulatory Commission shall exercise regulatory oversight on such commercial arrangement between captive generation & licensee.

29. Although the minimum billing is the cause of shutting down of CPP, the Commission cannot overlook AVVNL’s contention of fixed charges and minimum billing to cover fixed cost of generation and transmission. It can not accept its waiver, as this will mean alteration

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in tariff, which can be decided only while considering tariff petition by the licensee and not otherwise (i.e. under removal of difficulties). If so, what is the cause of shut down of power plant? The same is not difficult to trace. The cause is not the minimum charges but the fact that balancing agreement has not taken into consideration the short duration power requirement during the plant shut down and the continuance of contract demand as existing at the time of commencement of open access under H.T. agreement.

30. In this respect, HZL has stated that an open access consumer does not have the same bargaining capacity as that of a distribution licensee while executing power supply agreement and open access agreement has been executed under duress and on the dotted lines. AVVNL has denied this charge and has stated that they, too, were also under a great pressure for execution of the agreement. The Commission observes that CPP of HZL was on the verge of commissioning at the time of execution of the agreements and both parties appear to have signed the agreements under time squeeze without conceiving its implications. This is because when open access is permitted, complete change from the past is required, so that open access becomes operational. If open access is permitted without change in the existing contract demand with the licensee, then the full benefit of open access will not be derived as reflected in this extant case. The Section 42(4) of the Act, which provides as under: -

“Where the State Commission permits a consumer or class of consumer to receive supply of electricity from a person other than the distribution licensee of his area of supply, such consumer shall be liable to pay an additional surcharges on the charges of wheeling as may be specified by the State Commission to meet the fixed cost of such distribution licensee arising out of his obligation to supply”.

31. This provision provides for compensation to distribution licensee of the financial implications arising out of his obligation to supply. The provision of an additional surcharge will be applicable to all cases of open access, even when CPP supplies to its remote unit. For even the captive use, a remote unit of a captive power plant is a consumer as per definition at Section 2(15), of the Electricity Act, 2003, as its premises is connected with the works of licensee. Clause- 16 of OA Regulations prescribes the procedure for determination of additional surcharge by the Commission on application made within 15 days of receipt of application for open access. While discussing this provision, the Commission in its order dated 30.4.04, has stated as under:-

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“54 We state that as per the provisions of Section 42(4) additional surcharge is to cover the fixed cost which arises out of distribution licensee’s obligation to supply. For a consumer supplied electricity on the distribution licensee’s distribution system, this may be fixed cost not covered in wheeling charges or the cost of distribution system exclusively laid for him and rendered unutilized with switch over to OA. It may be obligation of distribution licensee arising out of minimum off take guarantee for power purchase or transmission capacity contracted to meet obligation to supply. These are only illustrative examples of stranded cost arising out of distribution licensee’s obligation to supply. There can be other cases, too, of such stranded cost… … … … ..”

32. The additional surcharge towards stranded cost was conceived in the Act as well as by the Commission to cover the fixed cost of obligation to supply whether it arises due to power purchase or transmission of electricity as per prevalent agreement and its determination is to be initiated almost simultaneously with open access to provide compensation to the licensee. The provision of additional surcharge provides compensation for obligation to supply and implies the new agreemental set up with the open access irrespective of the validity of prevalent agreement. . The para 8.5.4 of the Tariff policy as reproduced below also reflects it: “8.5.4. The additional surcharge for obligation to supply as per Section 42(4) of the Act should become applicable only if it is conclusively demonstrated that the obligation of a licensee, in terms of existing power purchase commitment, has been and continues to be stranded or there is an unavoidable obligation and incidence to bear fixed costs consequent to such contract. The fixed cost related to net works assets would be recovered in the wheeling charges. The tariff policy also provides for standby agreement to meet plant outage, as under:- “8.5.6 In case of outage of generator supplying, to a consumer, an open access standby arrangement should be provided by the licensee on the payment of tariff for temporary connection to that category as specified by the appropriate Commission”. Thus, standby supply to meet power requirement is to be effected at temporary supply tariff.

33. As per the tariff for supply of Electricity-2004, the temporary supply tariff is 1.5 times the tariff for respective category i.e. in this case 1.5 times of the tariff as per schedule HP/LP-5.The energy charges of

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temporary supply tariff itself will be Rs. 1.5x 4.01=n Rs. 6.015 per kwh, which is more than the highest UI rates of ABT (i.e. Rs.5.70 per kwh) at the frequency of 49.0 Hertz. In view of this and the fact that system does not operate at such low frequency for all the times, we are of the view that provisions of tariff policy be followed. Thus, in consideration of stranded cost, if any, having been met by additional surcharge, with the commencement of open access, the prevalent HT supply agreement need be modified at the earliest, irrespective of the provisions of validity of HT supply agreement and a new set of contract need be drawn up for regular HT supply and stand- by supply. The latter to meet contingency of the outage of generator, the former will be billed as per applicable tariff for supply of electricity (in this case, schedule HT/LP-5) and the latter at tariff for temporary supply. As temporary supply tariff is applied for the period it is availed, which in case of O.A. will be the period of plant outage, it will be applied on day-to-day basis. As both tariff for regular & temporary supply has to determine fixed charges based on billing demand, contract demand will be specified for both separately. During the hearing on 27.5.06, Shri K.C.Modi, expressed the view that since contract demand at stand-by supply is maintained throughout the year and as such, commitment for purchase will exist for entire year, so billing of temporary supply be on monthly basis. We are unable to agree with this. Even though contract demand is specified for the year, this supply is available only during plant outage as provided in the recorded note of decision-annexure ‘B’). Even normal temporary supply is availed by a consumer on short notice and on daily billing basis, Stand by supply shall have advance notices for annual and other scheduled maintenance and only for forced outage, which is a force measure, no prior notice will be required. However, once forced outage occurs, its intimation with rectification period will be conveyed to SLDC and Discom. Therefore, Discom shall have a notice to schedule its drawl from the day following the day of forced outage till the day it will continue. On account of this, we consider application of stand by supply tariff on daily basis to be appropriate.

34. As open access is accomplished by injection at sending end and drawl at receiving end(s), provision of stand by supply tariff will apply for sending/generator end also. Above para of tariff policy implies it for both ends. For generator end also, contract demand for stand by supply will also be specified. However, at Chanderiya end, CPP will be supplying power at GSS through its industrial unit. Let us compare this condition with a notional case, say when Chanderiya CPP and

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Chanderiya industrial unit are directly connected to GSS. Chanderiya industrial unit is getting OA supply from GSS and also from internal connection with CPP .In that case, CPP would have contracted for stand by supply to meet plant outage. No transmission charges would have been payable, as no transmission system is utilized. Wheeling charges would have been payable for consumer servicing of both connections which presently is in the form of 1p/kwh on energy drawn in open access. As Chanderiya industrial unit connection to GSS, in this case, will be floating, wheeling charges will become due only on minor inter- changes on account of load or generation fluctuations. Practically, no customer service charges for the drawal of energy by Industrial Unit at Chanderiya from CPP will be payable. AVVNL, in this case, could have made application for additional surcharge in respect of stranded cost for the period of agreement, which has expired, for Chanderiya Industrial Unit. The existing arrangement is equivalent to shifting of industrial unit connection from GSS to CPP, as such provisions for these cases be equivalent, that is, HZL can specify regular H.T. supply as well as stand-by supply demand at Chanderiya and AVVNL could have filed the petition for additional surcharge for the stranded cost.

35. In consideration of the above discussions, the changes in contract demand cannot be effected retrospectively from the date of open access. The interim order dated 24.3.06 provides discretion to effect reduction in their HT supply contract demand with AVVNL for its individual industrial units and to have stand-by supply at temporary supply tariff during the outage of captive power plant and review of existing agreement by AVVNL and HZL to make appropriate changes to make it workable vide para 2 & 4 of the order dated 24.3.06 to the extent modified by recorded notes of discussions both of which shall deemed to be part of this order.

36. During the hearing on 27.5.06,Shri K.C. Modi has stated that contract demand for Chanderiya & Agucha has been raised to 50MVA and 25MVA from July 2005 and as per provisions of HT power supply agreement, reduction in it can be effected only in July 2006 after a period of one year (as per agreement) and not from the date seven days after the day HZL has conveyed its demand. In view of provisions of open access to CPP in the Act, open access Regulations, additional surcharge, Tariff policy and National Electricity Policy and the background discussed in our order dated 30.04.2004, we have come to conclusion that in case of CPP with open access, in this case change in contract demand of prevalent agreement should be

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allowed within a period of 7 days to be counted from the date of application by CPP and it should not be governed by the provisions of standard HT Tariff agreement i.e. after one year. Seven days period is sufficient to complete formalities. Therefore, no change is required in the order.

37. We may state that HT supply agreement requires specifying contract

demand in KVA but since for open access, accounting of open access supply, HT supply & stand- by supply from AVVNL has to be made at 15 minutes interval and for this purpose addition/subtraction etc. can be made only for KW (or kwh) or Kvar (or Kvarh) as these are the scalar quantities, so contract demand will have to be specified both in KW &KVA in respect of H.T. supply and stand -by supply. Drawl by the consumer from AVVNL is not to cross either of them. Drawl in KVA can be worked out by vector summation of drawl of KW & KVAr from AVVNL determined for 15 minutes time in respect of HT supply and stand-by supply.

38. Delay in final billing:- HZL has stated that AVVNL raises the bill for the total power supplied( i.e. open access as well as AVVNL supply)at three industrial units at normal tariff and after a delay of one month or more, it provides credit for open access supply and this has resulted in blocking of considerable funds and also causing loss of interest thereon AVVNL has stated that credit for open access units is given in the bill as soon as the energy account is received from SE(EA),RVPN, Jaipur. We observe that on the lines generating company/ distribution licensee supplying schedule to SLDC, the generation & drawl schedule by an open access consumer to SLDC has been specified. As per para 6.46(5) b of chapter 6 of Indian Electricity Grid Code effective from 1.4.06, and applicable to energy account for beneficiaries of Northern region, NRLDC prepares the energy account for the state and supplies to SLDC for further segregation among distribution licensee. Accordingly, UI drawl under open access will be based on energy account prepared by the SLDC and this causes delay in final billing. We find that AVVNL effects meter readings, including extraction of recorded data at 15 minutes internal using MRI. HZL’s open access both at generator end and consumer end lies within the State and area of supply of AVVNL and the changes to be effected in agreement, as per the Commission’s order of 24.3.06, do not envisages for determination of UI and its billing at ABT. As such, if schedules are also supplied by HZL to AVVNL, it can itself prepare complete account. In consideration of this, in general, it can be

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specified that every open access consumer, including HZL, shall supply injection schedule at generator end and drawl schedule at load end to SLDC as well as to distribution licensee, in whose area of supply injection and/or for drawl is effected. Schedules will be supplied in excel format for each 15 minutes interval from 0.15 hours to 24.00 hours. Scheduled generation drawl during 0.00 to 0.15 hours will be indicated as that for 0.15 hours. In case of open access having generator end in one licensee’s area (say AVVNL, referred as ‘first licensee) and consumer in other licensee’s area (say. Jd.VVNL, referred as second licensee) meter readings/ MRI data will be transmitted by first licensee (i.e. AVVNL) to second licensee (i.e. Jd.VVNL) to enable second licensee to prepare energy account. Not only this, as open access is effected from first licensee area to second licensee area, injection in the first licensee area will be considered by SLDC as drawl from State Grid by first licensee and such injection (less transmission losses) will be considered as supplied by a generating plant to the second licensee through State Grid. For this purpose, meter readings and MRI data at generation end will have also to be conveyed to SLDC to effect appropriate changes in energy accounts of distribution licensees. However, based on MRI data supplied by first licensee to second licensee, second licensee will prepare provisional energy account and bill and serve the same to the consumer. However, this provisional account will be finalized only on receipt of energy account from SLDC. In case, open access is effected from outside the State, schedule of injection and actual injection to State Grid will have to be conveyed by generator to SLDC and also by SLDC/generator to distribution licensee. If generator is governed by inter State/intra State ABT, then permissible deviation from schedule drawl i.e. UI will have also to be considered by distribution licensee provisionally, subject to receipt of final energy account from SLDC. As energy account for northern region is prepared on weekly basis and so the energy account by SLDC, so it may be appropriate that Discoms also prepare open access energy account on weekly basis and serve monthly bills based on energy account from the week (up to which previous bill has been served) to the week ending on or before 25th of the month. Sporadic changes in demand:-

39. In respect of billing of transmission charges, HZL has expressed that even if it exceeds the open access capacity allocation for one or two interval of 15 minutes in a month, HZL is billed for transmission charges based on recorded demand for entire month. In this respect, they

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referred to para 68 of the Commission’s order dated 17.12.04 on tariff petition of Discoms. RVPN has stated that transmission charges, payable to RVPN by Discoms has been determined by the Commission and incidence of transmission charges from open access consumers is passed on to Discom through revised/subsequent ARR. As per OA Regulations and tariff order of the Commission, transmission charges is on the basis of capacity reservation and their recovery, based on maximum demand caused, if in excess of capacity allocated, is in order to the extent transmission capacity is utilized. Charging of transmission charges on prorata daily basis in line with Commission’s order dated 20.8.05 is not justified, as the order is applicable for first and last month of the term of open access. Based on Commission’s order of 17.12.04 in respect of Discom’s tariff, we have passed the order at para-8 of interim order and have given reasons therein. CERC’s order for charging on six hourly basis is not relevant, as open access has not been allowed for a period less than one year in the State.

40. Other Aspects:-

(i)Power factor surcharge/ incentive: HZL also raised the issue of power factor incentive & voltage rebate not allowed to them. We have already specified at para 6 of the interim order as to how segregation of Kvarh drawn by open access consumer and their billing will be effected. As Kvarh will be segregated based on kwh drawl under open access, HT supply and stand-by supply, so kwh and Kvarh drawl under HT supply and stand-by supply will give the same power factor and as such Kvarh drawl can also be effected based on average power factor of total supply (i.e. open access + HT supply and stand-by supply) (ii)Standard terms & conditions:

As regards, HZL’s submission to frame terms & conditions of open access and leaving only the non tariff matters to be subject of negotiation with distribution licensee in commercial agreement, the Commission shall prepare standard open access agreements, which shall be incorporated in open access regulations. (iii)Power purchase from CPP:

The petitioner has desired that Discoms may effect purchase of power from CPP in preference to costly power purchases from others and CPP should have freedom to sell power outside the State. In reply, AVVNL has stated that they are willing to negotiate with the petitioner

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for purchase of surplus power at reasonable rates and it feels that only through negotiations an agreed rate can be decided. For sale of power on long-term basis, HZL should get its tariff decided by the Commission. We have already received tariff petition from HZL. The Commission will also be coming out with consultation paper and draft CPP regulations shortly. These will be finalized after following procedure of previous publications. (iv) Excess demand charges:

(1). HZL also has stated that AVVNL is penalizing them as soon as MD at Debari crosses 20 MW of supply from AVVNL and under clause 13 of the agreement, HZL can not be billed for excess demand charges so long as 54 MW is not exceeded. Rebutting the argument of HZL, AVVNL has stated that adding up of open access capacity allocation of 34 MW and contract demand of 20MW with AVVNL is not correct. As the petitioner has only contracted for 20MW supply at Debari, if it draws more than 20 MW, it has to pay the penal MD charges. We clarify that the total drawl of an open access consumer will be segregated to open access, H.T. supply and stand by supply. Each shall be governed by the relevant tariff schedule and relevant provisions of excess demand charges.

2. Shri Modi of AVVNL has stated that except for outage stand- by supply should not be available throughout the year. We have already clarified this in record note of discussion dated 07.04.2006 that stand-by supply shall be available only for outage (scheduled maintenance (annual or otherwise) and forced outage). Forced outage is defined under Section 2 of State Grid Code Part-I as an outage of a generating station or any of the power station equipment or transmission line or sub-station, equipment for which no notice can be given. From MRI data at Chanderiya end, it would not be difficult to verify whether or not declaration of outage is in order. If declaration of outage of unit made by the generator/supplier, is found to be incorrect, stand-by supply shall not be available, and distribution licensee shall consider the demand and energy drawn from him, after accounting for open access supply as H.T. supply, and bill the open access consumer accordingly. In addition, if such practice is resorted frequently, it may be treated as indiscipline and for this violation of terms & conditions of open access, the licensee can ask for enhancement in regular supply contract demand or effect curtailment or suspend or terminate open access. Other

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provisions of tariff schedule, vis excess demand charges, power factor surcharge/incentive etc, shall apply to stand-by supply effected at temporary supply tariff.

(v) Contract demand for regular supply:-

(1) In the hearing on 27.5.06,AVVNL has stated that HZL has intimated contract demands as under and expressed that contract demand for regular supply is quite low compared to the stand-by supply and it should not be less than 5000KVA as specified in the supply code for supply voltage of 132KV:

Open access supply Regular supply Stand by supply

1. Chanderiya 40MW(sum of 2 to 4)* 5 MVA 45MVA 2. Debari 15MW 14MVA 10MVA 3. Agucha 20MW 3MVA 22MVA 4. Dariba 5MW 3MVA 6 MVA

*Injection from CPP= sum of drawl at Debari, Agucha & Dariba.

(2) We state that supply code envisages either regular HT supply or temporary supply. Open access consumer has different set of contract demands. . He can avail open access as well as HT supply and standby. Standby supply will be availed only in case of outage and as such, during such period open access supply will get reduced. Thus, some of open access capacity reservation and HT supply contract demand or HT supply and temporary supply contract demand will determine the maximum demand of the consumer and this will determine the supply voltage for open access consumer. Besides this, as per note (iv) under clause 4 of supply code, distribution licensee can effect supply at a voltage level one step higher or lower than that specified therein. This provision may be applied judiciously, i.e. voltage of supply of a consumer before availing open access may not normally be changed if supply can be effected at that voltage without any change in infrastructure. Further, as proven stranded cost, if any, is payable as additional surcharge, quantum of regular supply is immaterial. It can be zero.

(vi) Stand-by charges:-

(1) AVVNL, in the hearing on 27.5.06, referred to the erstwhile RSEB’s order 383 dated 29.1.00 stating that with the installation of CPP, for reduction of contract demand below 50% of the contract

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demand, standby charges at the rate of Rs.4, 50,000 per MVA per year shall be payable by the consumer. The Commission is unable to accept this, as with the establishment of the Commission, tariff for supply of electricity, including standby charges, is to be determined by the Commission. Provision of the aforesaid standby charges, has not been brought before the Commission by the distribution licensee in their tariff petition, and as such, does not bear Commissions approval and are no more valid. Further, the above circular is of the erstwhile RSEB, when generation, transmission & distribution business was handled by the erstwhile RSEB. Above charges were payable to the erstwhile RSEB as an unbundled utility. With the unbundling of RSEB, generation, transmission and distribution business has been separated. With open access, transmission charges, as determined by the Commission, are payable by OA consumer to Prasaran Nigam for open access capacity allocation and wheeling charges to the distribution licensee. In totality, these charges as determined by the Commission have replaced the said standby charges. In view of this, Discom has no case.

(2) During the hearing on 27.5.06, Shri K.C.Modi of AVVNL has brought to the notice of the Commission the State Govt.’s notification No.12 (17)/Energy/93/Pt. Dated 17-18.5.06 extending the CPP policy of 15.7.99 of Govt. of Rajasthan beyond 31.3.04 and stated that charges and terms & conditions specified therein will be applicable for supply of power from CPP for its own use and stand- by charges of Rs.4.5 lakhs per MVA are payable. There is no directive on CPP policy to the Commission. With the enactment of Electricity Act, the notification issued by the State Government is saved under Section 185(2)(a) to the extent of the same being not in consistent with the provisions of the Act. As per the Electricity Act, if CPP effects supply for its units, it is to pay transmission charges vide Section 39(d)(i), and additional surcharge vide Section 42(4) for the use of the system. As such provisions of stand-by charges, being in consistent with the provision of the Act, is inapplicable

(vii) Envisaged changes in UI charges:-

During the hearing on 27.5.06,Shri K.C.Modi of AVVNL stated that as per the petition filed by NRLDC, UI rate under ABT is likely to be revised to about Rs.9.00 per kwh and this rate will be higher than temporary supply tariff and the Commission may review its interim order. We state that CERC has not revised UI rates and this issue raised at this stage is premature. Further, even if rate is revised, low

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frequency corresponding to high UI rate is not likely to last through out the day and during the period stand- by supply is drawn and may not call upon to review provision of applicability of temporary supply tariff to stand-by supply as per the tariff policy. Thus, there is presently no ground to review the Commission’s interim order.

41. It has been brought to the notice of the Commission that interim order

as well as the record note of discussions have not yet been implemented. While taking serious note of this delay on the part of AVVNL, the Commission would like to forewarn that the interim order and its clarifications, through record note of discussions are the Commission’s orders and unless stayed on review application or on appeal, these are to be implemented, in letter and spirit or else the Commission may initiate penal proceeding against the licensee for violation of its order and directions.

42. Copy of this order will be supplied to the petitioner, the respondents &

SLDC. Based on this order, Open Access Regulations shall be amended as per this order, including interim order and record note of discussions after following the procedure of previous publication. No order as to cost.

(K.L.Vyas) (S.M. Dharendra) (Shanti Prasad) Member (T) Member (F) Chairman