Professional Documents
Culture Documents
REPORT
ON
AFFILIATED TO
DECLARATION
Seminar
presentation
of
the
Training
Report
was
made
on
Presentation In-Charge
(Faculty)
Countersigned
Director/Principal of the Institute
ii
ACKNOWLEDGEMENT
Apart from efforts of the person doing the project, the success of any project depends largely
on the encouragements and guidelines of many others. I take this opportunity to express my
gratitude to the people who have been instrumental in the successful completion of the
project.
I express my sincere gratitude to Mr. Subodh Singh, Senior Manager- Corporate HR
MBPPL for giving me the opportunity to work in such a wonderful organization and
facilitating me for the successful completion of my project. I would like to extend my thanks
to my project convener Mr. Sumit Pandey, GM MBPPL & my mentor Mr. Surajit
Chanda, Manager-Business Development, Moser Baer Clean Energy Limited for showing
me the right path and approach towards the project.
I express my solemn regards to Mr. J.S.S.Rao, Principal Director, Corporate Planning &
Monitoring, Business Development Department, Mr. S.K.Chaudhary, Principal Director,
Department of Management Studies, NPTI. I am sincerely thankful to Mrs. Manju Mam
Director, NPTI for her effort & guidance in arranging my internship at MBPPL.
I also thank my Project In-Charge Mrs. Indu Maheshwari (Deputy Director) NPTI for
guiding me through the project duration and providing valuable suggestions.
Last but not the least I would like to express my special thanks to my parents for their
continuous motivation, encouragement and support.
Thank You
Ankur Kumar
iii
EXECUTIVE SUMMARY
The Electricity Act 2003 is essentially a shift from monopoly government supply to
competitive power markets. In the process, the government came out of power generation and
distribution business. Nine years have passed since then, but the core of reforms, i.e., Market
development is yet far away. This is causing Indian economy to suffer.
Markets cannot exist with regulated prices. The required economic efficiency cannot be
achieved. The objective of the society developing its power cannot be achieved. Open Access
gives the consumer to make a choice between suppliers at competitive prices, however the
implementation has not been able to take place in a decade.
This project has been developed to understand the viability of Open Access Consumers in
major Indian States and its comparative analysis with Group Captive in that State. The
analysis has been done considering the Solar and Non-Solar types of generation.
The study begins on a comparison of Pre-reform Market Structure based on Monopoly
market and the Single Buyer Model and the Post- reform Market Structure Power Market
aiming at bringing competition in the market.
The report mentions the regulations enabling the Open Access and the application process &
procedure detailing the manner in which the Open Access can be granted. The Procedure
mentioned in the report is as per the CERC (Grant of Connectivity, Long Term Open Access
and the Medium Term Open Access in Inter-State Transmission & Related Matters)
Regulations, 2009.The regulation is the Umbrella regulation in grant of connectivity & the
grant of Open Access for the major Indian States. With few minor differences depending on a
state the regulatory skeleton for the matter is same.
The Open Access Charges & losses have been defined briefly to make a comprehensible
understanding of such Charges & losses implemented in the states & also in the analysis of
business model developed for the report.
iv
A Landed Cost sheet has been developed for each state at the end of the report. The analysis
has been done from a Developers point of view and also from a consumers point of view so
as to identify the states beneficial for a captive developer or/and consumer and an open
access developer or/an consumer for different injection & drawal voltage.
Based on these findings the report establishes the viability & non-viability of Open Access in
major Indian States and makes recommendations.
TABLE OF FIGURES
Figure 1 :REGULATION FOR THE INDIAN POWER SECTOR ....................................................... 2
Figure 2 :MONOPOLY MODEL/SEB MODEL.................................................................................... 4
Figure 3: SINGLE BUYER MODEL ..................................................................................................... 5
Figure 4: OPEN ACCESS MARKET STRUCTURE ............................................................................ 7
Figure 5: CATEGORIZATION OF OPEN ACCESS .......................................................................... 10
Figure 6: PROVISIONS ENABLING OPEN ACCESS ....................................................................... 21
Figure 7: PROVISIONS ENABLING RENEWABLE ENERGY ....................................................... 26
Figure 8: TYPES OF OPEN ACCESS ................................................................................................. 37
Figure 9: OPEN ACCESS LOSSES ..................................................................................................... 39
LIST OF TABLES
Table 1: TRANSMISSION & WHEELING LOSSES FOR MAHARASHTRA ................................. 43
Table 2: TRANSMISSION & WHEELING CHARGES FOR MAHARASHTRA............................. 43
Table 3: CROSS SUBSIDY SURCHARGE FOR MAHARASHTRA ................................................ 44
Table 4: TRANSMISSION & WHEELING LOSS FOR GUJARAT .................................................. 48
Table 5: TRANSMISSION & WHEELING CHARGES FOR GUJARAT ......................................... 48
Table 6: CROSS SUBSIDY SURCHARGE FOR GUJARAT............................................................. 49
Table 7: TRANSMISSION & WHEELING LOSSES FOR RAJASTHAN ........................................ 51
Table 8: TRANSMISSION & WHEELING CHARGES FOR RAJASTHAN .................................... 51
Table 9: CROSS SUBSIDY SURCHARGE FOR RAJASTHAN ....................................................... 52
Table 10 : TRANSMISSION LOSS FOR TAMIL NADU .................................................................. 55
Table 11: WHEELING LOSS FOR TAMIL NADU ............................................................................ 55
Table 12: TRANSMISSION CHARGES FOR TAMIL NADU .......................................................... 55
Table 13: WHEELING CHARGES FOR TAMIL NADU ................................................................... 55
Table 14: CROSS SUBSIDY SURCHARGE FOR TAMIL NADU.................................................... 55
Table 15: TRANSMISSION LOSS & CHARGES FOR ANDHRA PRADESH ................................ 56
Table 16: WHEELING LOSS FOR ANDHRA PRADESH................................................................. 57
Table 17: WHEELING CHARGES FOR ANDHRA PRADESH ........................................................ 57
Table 18: TRANSMISSION & DISTRIBUTION LOSS FOR MADHYA PRADESH ...................... 59
vi
vii
ABBREVIATIONS
Act /EA:
APERC:
BERC:
CEA:
CERC:
CPP:
CSS:
CTU:
DISCOM:
Distribution Company
EHT:
GERC:
HERC:
IPP:
KERC:
LTOA:
MERC:
MPERC:
MTOA:
MW:
Mega Watt
OA:
Open Access
PERC:
RERC:
SEB:
SERC:
SLDC:
STOA:
STU:
T&D:
TNERC:
TRANSCO:
Transmission Company
ix
TABLE OF CONTENTS
DECLARATION................................................................................................................................... ii
EXECUTIVE SUMMARY ................................................................................................................. iv
TABLE OF FIGURES ......................................................................................................................... vi
LIST OF TABLES ............................................................................................................................... vi
ABBREVIATIONS ............................................................................................................................ viii
CHAPTER 1. INTRODUCTION ........................................................................................................ 1
1.1 WHAT IS OPEN ACCESS : ...................................................................................................... 1
1.1.1 EVOLUTION OF OPEN ACCESS .................................................................................... 1
1.1.2 MARKET STRUCTURES: PRE & OPEN ACCESS MODEL: ..................................... 3
1.2 NEED OF OPEN ACCESS: ....................................................................................................... 8
1.3 CATEGORIZATION OF OPEN ACCESS: ............................................................................ 9
1.4 PROBLEM STATEMENT: ..................................................................................................... 11
1.5 OBJECTIVE OF THE PROJECT:......................................................................................... 11
1.6 SCOPE OF THE STUDY: ...................................................................................................... 12
1.7 ABOUT THE ORGANIZATION: .......................................................................................... 13
CHAPTER 2: LITERATURE REVIEW, REGULATION AND RESEARCH
METHODOLOGY ............................................................................................................................. 15
2.1 LITERATURE REVIEW: ....................................................................................................... 15
2.2 REGULATORY FRAMEWORK : ......................................................................................... 20
2.2.1 PROVISIONS FOR OPEN ACCESS: ............................................................................. 20
2.2.2 PROVISIONS FOR RENEWABLE ENERGY: ............................................................. 25
CHAPTER 3: APPLICATION PROCEDURE FOR OPEN ACCESS ......................................... 31
3.1 PROCEDURE FOR AVAILING THE OPEN ACCESS IN INTER-STATE
TRANSMISSION............................................................................................................................ 31
3.2 PROCEDURE FOR CONNECTIVITY: ................................................................................ 32
3.3 PROCESSING OF APPLICATION FOR CONNECTIVITY: ............................................ 33
3.4 GRANT OF MEDIUM TERM ACCESS AND LONG TERM OPEN ACCESS: ............. 34
3.4.1 CRITERIA FOR GRANT OF MEDIUM TERM OPEN ACCESS: ............................. 34
3.4.2 PROCESSING OF MEDIUM TERM OPEN ACCESS APPLICATION: ................... 34
3.4.3 CRITERIA FOR GRANT FOR LONG TERM OPEN ACCESS:................................ 35
3.4.4 PROCESSING OF THE LONG TERM OPEN ACCESS APPLICATION: ............... 35
xi
CHAPTER 1. INTRODUCTION
While the First two acts namely The Electricity Act, 1910 and The Electricity Act 1948 are
the belong to Pre-reform framework (prior to 1991).Reforms in the sector commenced in
1991, when the Indian Economy underwent liberalisation, amendments were made in these
existing acts The Indian Electricity Act, 1910 & The Electricity (Supply) Act, 1948.
The major purpose of making amendments in these laws was to attract Private investments
for capacity addition in generation and also diluting the monopoly of SEBs in phases. Thrust
to the development of Indian Power Sector came in form of The Electricity Regulatory
Commissions Act, 1998 which sought to delegate the role of government in matters
pertaining to Tariff regulations to independent Regulatory Commissions namely CERC &
SERCs.
Finally it was The Electricity Act, 2003 woven around a framework aimed to promote
competition combined with the regulatory oversight that gave evolution to the concept of
Open Access.
GENERATION
g SEBs
CPSUs
PRIVATE LICENSEES
TRANSMISSION
GRIDCO
PRIVATE LICENSEES
SEBs
DISTRIBUTION
SEBs
PRIVATE LICENSEES
Consumer
DOMESTIC
INDUSTRIAL
AGRICULTURAL
FigureMODEL:
2 :MONOPOLY MODEL/SEB MODEL
B. SINGLE BUYER
COMMERCIAL
In this model, there is competition in the wholesale sector, i.e., generation. Here, the single
buyer agency buys power from Independent Power Producers (IPPs) in addition to its own
generation. The power purchasing agency in turn sells it to state distribution utilities or
distribution companies in the service area. All power generated by generating companies
(Gencos) must be sold only to a purchasing agency and not to any other agency. Distribution
companies (Discoms) are only able to purchase from the single buyer agency. They do not
have a choice of choosing their power supplier.
In this model, sales from power pool to retailers take place at a pre-set tariff price. The single
buyer or the existing utility makes a long term contract with IPPs. A contract is necessary
because, without it, a generator would be reluctant to invest large amounts of capital in a
generating plant. The contracts are generally of life-of-plant type, indicating sale of all
capacity of generating units for its lifetime.
GENCOs
HIM
CPSUs
PVT. LICENCEES
IPPs
CAPTIVE
CTUs
STUs
PRIVATE LICENSEES
BULK
POWER
MARKET
DISCOMs
PRIVATE LICENCEES
DOMESTIC
INDUSTRIAL
AGRICULTURAL
COMMERCIAL
Open Access in this context grants right to the generating company, the nondiscriminatory use of
Open Access led competitive environment can raise investment sentiments in the
sector and thus it can help network strengthening for better evacuation and
distribution.
Power sector has been currently marred by ageing and inadequate infrastructure.
With competitive players active in the sector infrastructure and network connectivity
can be developed as well as strengthened.
This will help route electricity from the area with surplus amount of electricity to the
region of deficit.
Open Access makes Power Sector more consumer friendly in the sense that consumer
will have choice for the retailer who in turn will not only compete on prices offered
to the consumer but also on the facilities offered to him in form of better quality, a
better plan or better reliability.
Consumers who have requirement of more than 1 MW can directly source their
requirements from generators, instead of contacting themselves to trader or
distributor.
While the above categorization largely follows the inter-state open access, in intra-state open
access the type of consumers and the duration of term of open access may vary from state to
state.
10
The Project has been under-taken with an objective to understand the reasons for lack
of intra-state Open Access and to give recommendations for the progress of the same.
11
To identify favorable and non-favorable states for Open Access from the following
ten states considered for study:
1. Maharashtra
2. Gujarat
3. Rajasthan
4. Tamil Nadu
5. Andhra Pradesh
6. Madhya Pradesh
7. Haryana
8. Punjab
9. Bihar
10. Karnataka
To understand the various types of charges in monetary term and losses in kind levied
in case of normal & Solar Open access transaction in the identified states.
1. Transmission charges
2. Transmission losses
3. Wheeling charges
4. Wheeling losses
5. Cross subsidy surcharge
To develop a business model to compute the landed cost of electricity from Solar and
Non-solar Open Access and Group Captive project in identified states by assuming a
typical 1MW capacity project.
12
MBPPL DIVISIONS:
Solar Power Division: Moser Baer Clean Energy Limited (MBCEL), a 100% subsidiary of
MBPPL, was incorporated in September 2008 with a strategy to undertake development of
solar power projects worldwide. MBCEL is a project developer, owner and operator of solar
power projects. MBCEL is a Moser Baer promoted company, established for setting up solar
PV power projects in India and in international geographies. It is Indias largest solar power
development company with a presence in key international markets. MBCEL has 250 MWp
under development across multiple states in India and a project portfolio of over 200 MWp in
Europe to be developed by 2012.
Hydro Division: Moser Baer Electric Power Limited (MBEPL) undertakes development of
hydropower projects sustainably by respecting the environment, public safety and well-being
by synergizing economy and development in a viable balance. MBEPL current have two
hydro projects viz. (3 X 40 MW Miyar Hydro Electric Project and 4 X 100 MW Seli Hydro
Electric Project) in its portfolio.
Thermal Power Division
13
Moser Baer Power & Infrastructures Ltd (MBPIL) was incorporated in 2008 with the strategy
to foray into power and infrastructure. The company aims at having a thermal generation
portfolio of 5000-6000 MW by 2015. The company is all set to enter into power distribution
business through strategic tie-ups with various leading power sector companies. Currently
MBPIL is developing three Thermal Power Generation Projects with a combined generation
capacity of around 4000 MW in the states of Madhya Pradesh and Chhattisgarh.
Mining Services Division
Mining Division in MBPPL became functional in 2008 with the two pronged objective:
1.Building a portfolio of technically feasible and economically viable coal assets in India and
other coal rich countries to:
a. Provide fuel security to coal based thermal generation portfolio.
b. Explore opportunities arising out of growing demand of commodity (coal) amongst bulk
and marginal consumers, contribute a major share in organic growth of MBPPL and become
a favored supplier of coal from domestic and international source.
2. To provide consultancy services to the mineral industry from planning to optimization of
operation and value addition for organic growth of the customer.
Projects: Sondiha Coal Block, (Dist. Sarguja), Chhattisgarh
Moser Baer Projects Private Limited, (MBPPL) one of its promoted company (Lumen
engineering Private Limited) has formed a joint venture with Chhattisgarh Mineral
Development Corporation Limited (CMDCL) as partner for development of a commercial
coal block. The State Government holds 51% of the stake and 49% of economic interest of
this coal block is held by MBPPL. This project is expected to add at least one million tonnes
per annum of coal to the Indian economy.
14
access to the distribution and transmission electricity system. Unfortunately, this has
not happened. The often quoted reason is that the surcharge formula, as stipulated
under the NTP 2006, gives rise to an amount, which, in many cases, is more than the
cross subsidy amount. Even in the remaining cases, the number of players seeking for
open access is almost nil. This calls for a closer look at the open access regulation.
Clyde Wayne Crews [1999] in his journal Rethinking Electricity Deregulation: Does
Open Access Have It Wired -- Or Tangled? discusses that Open access to the power
grid, is intended to mean every commercial, residential or industrial customer shall
have a choice of any electricity provider, while the local utility would be required to
distribute the new providers electricity.
Prof. S.A. Khaparde in his paper [Power Sector Reforms and Restructuring in India]
discusses the issues of provision of non-discriminatory use of inter-state transmission
system, payment of transmission charges and surcharges for use of transmission
system belonging to CTU, reducing and eliminating surcharges as the cross subsidy
surcharge in a phased manner, specification of rates, charges and terms and conditions
for use of inter-state transmission facilities.
Tushar Giri Nath in his paper [OPEN ACCESS: UNFINISHED AGENDA OF
POWER SECTOR REFORMS IN INDIA] described Open Access Regulations in
17
transmission and distribution as a must for the development of private sector power
generation and in the development of market for distribution entities. The charges
payable by the generator for using the network should be reasonable and access
should be non-discriminatory. This will not only ensure the power flow to the deficit
areas but also facilitate optimal use of the network and investment in the network by
the distribution and transmission utilities based on the actual demand of the region
rather than on their capacity to procure and distribute power. This paper attempts to
find out the limiting factors in the success of open access regulations in India.
To begin with only spare transmission capacity can be made available for open
access.
Since, RLDCs will have a key role to play in the open access related issues; neutrality
in their functioning is expected.
In the new scenario, original beneficiaries will also be treated as open access
customers at par, for the purpose of power trading and bilateral exchanges. However,
the original beneficiaries shall continue to pay transmission charges for transmission
of allocated power from the ISGS.
18
Contract Path Method and Incremental Postage Stamp Methods have been suggested
for Open Access Pricing
The Transmission Service Providers in the country (CTU, STU, Licensees etc.) will
have to declare rates for various types of services within the ceiling price as decided
by the Commission.
Special Energy Meters will be installed by the open access customer as and when
required.
S.K. Chatterjee, Deputy Chief (RA), CERC [7th July, 2009] [Open access
challenges & way forward] describes application procedures and approval for
consumers connected to distribution system, intra-state transmission system. It
describes eligibility conditions and provisions under FOR model regulations. It also
describes the provision for imbalance settlements and various charges payable by
open access consumers.
Planning Commission, Government of India (2009) [Report of the Task Force on
Measures for Operationalizing Open Access in the Power Sector] confirmed that no
consumer in any State has availed of open access under Section 42 of the Act so far
and in fact in many States the provisions of the Act have not been operationalized so
far. The facility has been availed of only by captive producers and that too marginally.
The Task Force noted that the surplus states were extracting undue rent from their
surplus supplies, some of which actually came from the Central Public Sector Units
(CPSUs). The Task Force concluded that it would be in public interest to amend
Section 62(1) (a) to make it explicit that supply of electricity by a generating company
to a distribution licensee includes supply through an electricity trader. The Task Force
also recommended that since no case of open access under Section 42 of the Act had
been reported so far, the Regulators should meet with the stakeholders to address their
concerns with a view to operationalising the scheme of the Act. It further
recommended that consumer education and pro-active action by the electricity
regulators both at the Centre and in the States was vital for encouraging open access
to consumers.
Andhra Pradesh Electricity Regulatory Commission (APERC) [Consultative Paper on
Cross subsidy surcharge] evaluates the residual Generation rate of various discoms on
19
basis of different approaches e.g. Embedded Cost Approach, Avoided Cost Approach,
Retail Tariff Based Approach.
S.S. Barpanda [2010] in his paper [Open Access in Inter State Transmission System]
3rd Capacity Building Programme for Officers of Electricity Regulatory
Commissions discusses the overview of Indian Power Market and the contribution of
Open Access to it. It provides an insight into the Open Access in inter-state
transmission, Open Access charges, scheduling of collective transaction through
Power Exchanges, Real time congestion management.
Hari Natarajan in his paper [An approach to introduce competition in The Indian
Power Sector] proposed a model allowing bilateral between IPPs and large users.
Given the current state of transmission infrastructure, the generating companies
should be allowed to contract with industrial customers in their own region with first
preference to customers within the state in which the generating company is going to
be located.
20
Every person, who has constructed a captive generating plant and maintains and
operates such plant, shall have the right to Open Access for the purposes of carrying
electricity from his captive generating plant to the destination of his use.
Provided that such Open Access shall be subject to the Central Transmission Utility
or the State Transmission shall determine availability of adequate transmission facility
and such availability of transmission facility Utility, as the case may be:
Provided further that the Appropriate Commission shall adjudicate upon any dispute
regarding the availability of transmission facility.
21
Any licensee or generating company on payment of the transmission charges can avail
open access.
Any consumer as and when such Open Access is provided by the State Commission
under sub-section (2) of section 42 on payment of the transmission charges and a
surcharge thereon.As may be specified by the Central Commission:
Provided that such surcharge shall be utilised for the purpose of meeting the requirement
of current level cross-subsidy: Provided further that such surcharge and cross subsidies
shall be progressively reduced in the manner as may be specified by the Central
Commission.
Provided also that the manner of payment and utilization of the surcharge shall be
specified by the Central Commission.
Provided also that such surcharge shall not be leviable in case Open Access is provided
to a person who has established a captive generating plant for carrying the electricity to
the destination of his own use.
Provided further that such surcharge and cross subsidies shall be progressively reduced in
the manner as may be specified by the State Commission.
22
Provided also that the manner of payment and utilization of the surcharge shall be
specified by the State Commission.
Provided also that such surcharge shall not be leviable in case Open Access is provided to
a person who has established a captive generating plant for carrying the electricity to the
destination of his own use.
IV. SECTION 42 (DUTIES OF DISTRIBUTION LICENSEE AND OPEN ACCESS)
It shall be the duty of a distribution licensee to develop and maintain an efficient, coordinated and economical distribution system in his area of supply and to supply
electricity in accordance with the provisions contained in this Act.
The State Commission shall introduce Open Access in such phases and subject to such
conditions, (including the 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. It shall have
due regard to all relevant factors including such cross subsidies and other operational
constraints.
Provided that such Open Access shall be allowed on payment of a surcharge in addition
to the charges for wheeling as may be determined by the State Commission.
Provided further that such surcharge shall be utilised to meet the 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 specified by the State
Provided also that such surcharge shall not be leviable in case Open Access is provided to
a person who has established a captive generating plant for carrying the electricity to the
destination of his own use.
Provided also that the State Commission shall, not later than five years from the date of
commencement of the Electricity (Amendment) Act, 2003, by regulations, provide such
23
Open Access to all consumers who require a supply of electricity where the maximum
power to be made available at any time exceeds one megawatt.
Where any person, whose premises are situated within the area of supply of a distribution
licensee, (not being a local authority engaged in the business of distribution of electricity
before the appointed date) requires a supply of electricity from a generating company or
any licensee other than such distribution licensee. Such person may by notice, require the
distribution licensee for wheeling such electricity in accordance with regulations made by
the State Commission and the duties of the distribution licensee with respect to such
supply shall be of a common carrier providing non-discriminatory Open Access.
Where the State Commission permits a consumer or class of consumers 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 surcharge 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.
Every distribution licensee shall, within six months from the appointed date or date of
grant of licence, whichever is earlier, establish a forum for redressal of grievances of the
consumers in accordance with the guidelines as may be specified by the State
Commission.
Any consumer, who is aggrieved by non-redressal of his grievances under sub-section (5),
may make a representation for the redressal of his grievance to an authority to be known
as Ombudsman to be appointed or designated by the State Commission.
The Ombudsman shall settle the grievance of the consumer within such time and in such
manner as may be specified by the State Commission.
The provisions of sub-sections (5),(6) and (7) shall be without prejudice to right which
the consumer may have apart from the rights conferred upon him by those sub-sections.
24
Where the Appropriate Commission has allowed Open Access 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.
VII. SECTION 86. (FUNCTIONS OF STATE COMMISSION)
(1) The State Commission shall discharge the following functions, namely:
Determine the tariff for generation, supply, transmission and wheeling of electricity,
wholesale, bulk or retail, as the case may be, within the State:
Provided that where open access has been permitted to a category of consumers under
section 42, the State Commission shall determine only the wheeling charges and
surcharge thereon, if any, for the said category of consumers;
25
The Electricity Act 2003 has specified following enabling policy / regulatory provisions for
development of Renewable Energy:
SECTION 3 (1)
SECTION 4
SECTION 61 (h & i)
SECTION 86(1)(e)
NATIONAL RURAL
ELECTRIFICATION POLICIES, 2006
I. SECTION 3(1):
Under Sections 3(1) it has been stated that the Central Government shall, from time to time,
prepare and publish the National Electricity Policy and Tariff Policy. In consultation with the
state governments and authority for development of the power system based on optimal
utilization of resources such as coal, natural gas, nuclear substances or material, hydro and
renewable sources of energy.
II. SECTION 4:
Section 4 states that the Central Government shall, after consultation with the state
governments, prepare and notify a national policy, permitting stand-alone systems (including
26
those based on renewable sources of energy and other non-conventional sources of energy)
for rural areas.
III. SECTION 61(H & I):
Section 61, 61(h) and 61(i) state that the appropriate commission shall, subject to the
provision of this Act, specify the terms and conditions for the determination of tariff, and in
doing so, shall be guided by the following. Namely the promotion of cogeneration and
generation of electricity from renewable sources of energy and the National Electricity Policy
and Tariff Policy.
IV. SECTION 86(1)(E):
Section 86(1) and 86(1)(e) states that the state commissions shall discharge the following
functions; promote cogeneration and generation of electricity from renewable sources of
energy by providing suitable measures for connectivity with the grid and sale of electricity to
any person. Specify, for purchase of electricity from such sources, a percentage of the total
consumption of electricity in the area of a distribution license.
V. NATIONAL ELECTRICITY POLICY 2005:
The National Electricity Policy 2005 stipulates that progressively the share of electricity
from non-conventional sources would need to be increased. Purchase by distribution
companies shall be through competitive bidding process; considering the fact that it will take
some time before non-conventional technologies compete, in terms of cost, with
conventional sources, the commission may determine an appropriate deferential in prices to
promote these technologies
VI. TARIFF POLICY 2006:
The Tariff Policy announced in January 2006 has the following provisions:
Pursuant to provisions of section 86 (1) (e) of the Act, the Appropriate Commission
shall fix a minimum percentage for purchase of energy from such sources taking into
account availability of such resources in the region and its impact on retail tariffs.
Such percentages for purchase of energy should be made applicable for the tariffs to
be determined by the SERCs latest by April 01, 2006.
It will take some time before non-conventional technologies can compete with
conventional sources in terms of cost of electricity. Therefore, procurement by
27
Goals include provision of access to electricity to all households by the year 2009,
quality and reliable power supply at reasonable rates, and minimum lifeline
consumption of 1 unit / household/day as a merit good by year 2012.
For villages/habitations where grid connectivity would not be feasible or not cost
effective, off-grid solutions based on stand-alone systems may be taken up for supply
of electricity. Where these also are not feasible and if only alternative is to use
isolated lighting technologies like solar photovoltaic, these may be adopted.
However, such remote villages may not be designated as electrified.
State government should, within 6 months, prepare and notify a rural electrification
plan, which should map and detail the electrification delivery mechanism. The plan
may be linked to and integrated with district development plans. The plan should
also be intimated to the appropriate commission.
Gramapanchayat shall issue the first certificate at the time of the village becoming
eligible for declaration as electrified.
certify and confirm the electrified status of the village as on 31st March each year.
28
by
keeping
the
following
in
mind
RESEARCH DESIGN
This study is an exploratory research to understand about the viability of Open Access
SAMPLE
The sample states taken for the study are Maharashtra, Gujarat, Rajasthan, Tamil
Nadu, Andhra Pradesh, Madhya Pradesh, Punjab, Bihar, Haryana & Karnataka
COLLECTION OF DATA
The data such as Transmission Charges, Transmission Losses, Wheeling Charges.
Wheeling Losses & Cross Subsidy surcharges have been collected from various SERC
websites from the sample state.
Solar generation related charges have been collected from MNRE websites and also by
visiting the renewable orders of the sample states taken for the study.
ANALYSIS PATTERN
Data Analysis has been done by developing a landed cost sheet model of the sample state
& making a comparative analysis of Open Access Consumer & Captive Consumer to
study the feasibility of Open Access in that particular state.
The research methodology is based on certain assumptions. Some of them are summarized as
follows:
The selection of sample states have been done on the following assumptions:
The business model developed for Landed Cost Sheet analysis on the following
assumptions:
29
Calculations have been done for the Long term & Medium term Open Access
consumers depending upon the availability of charges on the SERC website
The injection & drawal voltage wherever not mentioned have been considered
generally at these voltage levels and taken from the respective SERCs website of
the sample state :
i) 11Kv
ii) 33Kv
iii) 66Kv &
iv) 132Kv
Non- Solar category refers to thermal generation and not other means of
renewable energy.
Calculation of Landed Cost has been done for 1MW plant with CUF 19% & tariff
at bus bar to be Rs. 7/kWh for Solar category and CUF with 80% & tariff at bus
bar of Rs.4/kWh for the Non-Solar category.
Calculation of Landed cost has been done taking into account the Transmission
charges, Wheeling charges, Transmission losses & Wheeling losses
30
generating stations, and seeking connection from CTU at a single connection point at
the pooling sub-station under CTU, termed as the lead generator.
d) A bulk consumer meaning any consumer who intends to avail supply of a minimum
load of 100 MW from Inter-State transmission System defined in Regulation 2 (1)(c)
e) 3rd amendment has added a new definition of applicant which entitles any renewable
generating station as an applicant with capacity between 5 MW and 50 MW by a
generating company in its existing generating station.
This addition has been made to facilitate development of renewable energy projects in
the premises of existing generating stations.
However an applicant has to apply for a fresh application in cases of Material Change
in the location of the applicant such as:
33
term
access
for
the
period
mentioned
in
the
application.
However in case if the agency cannot grant the access for the period mentioned in the
application, but can grant the same for a period less than sought by the applicant, the reason
for the same has to be provided in writing.
d) The applicant in turn has to sign an agreement for medium term open access with the
Central Transmission Utility agreeing to the terms of detail procedures. The agreement
should mention details such as the date of commencement and end of medium term open
access, point of injection into the grid and point of drawal from the grid.
e) Immediately after the grant of Medium term open access, the nodal agency shall inform the
RLDCs and the SLDCs so that they can consider the same while processing request for short
term open access.
34
c) Upon receiving the application the nodal agency in consultation and through coordination
with agencies involved in inter-state transmission system including STU (if required) process
the application and carry out the necessary transmission studies to its best so as to grant the
access to the applicant within the timeframe as laid in the regulation. The agency might
approach the commission for appropriate directions in case of any difficulty.
d) After the study has been done, the agency specifies the inter-state transmission system
required for the long term access and also informs the applicant if the system requires
augmentation.
e) In case the system requires augmentation, a Committee formed based on Tariff based
Competitive-bidding Guidelines for Transmission Service identifies element(s) needed for
augmentation.
f) While granting long-term access, the nodal agency communicates information pertaining to
estimated transmission charges likely to be payable and the date from which the long-term
access will be granted.
The applicant in turn has to sign an agreement for long term open access with the Central
Transmission Utility agreeing to the terms of detail procedures. The agreement should
mention details such as the date of commencement and end of long term open access, point of
injection into the grid and point of drawal from the grid and the details of transmission line.
In case of augmentation, the time line of same shall be mentioned in the agreement.
g) Immediately after the grant of Long term open access, the nodal agency shall inform the
RLDCs and the SLDCs so that they can consider the same while processing request for short
term open access.
h) Towards the end of the period of Long term open access, a written request can be made at
least 6 months in advance for extension, which otherwise will be deemed to have expired.
36
TRANSMISSION
CHARGES
OPEN
ACCESS
CHARGES
CROSS SUBSIDY
SURCHARGE
WHEELING
CHARGES
37
38
WHEELING
LOSSES
TRANSMISSION
LOSSES
OPEN
ACCESS
LOSSES
Figure 9: OPEN ACCESS LOSSES
39
Applicability: This loss is applicable to generating stations, captive generating plants and
consumers who are connected to state transmission network i.e, at 66 or 132 kV and discom
network i.e, at 11 and 33 Kv.
These are the general Charges & Losses pertaining to Open Access. However in the report for
the State-wise comparative analysis of Open Access and the Viability assessment, only
Transmission charges & Losses, Wheeling Charges & Losses, Cross Subsidy Surcharge have
been considered.
40
5.1 MAHARASHTRA:
The Distribution Licensee shall, upon receiving application for open access by a
consumer shall intimate to such consumer the additional surcharge payable by such
consumer, along with the details of such calculation, if open access is to be provided.
41
The additional surcharge to meet the fixed cost of the Distribution Licensee arising
out of its obligation to supply shall be calculated by the Distribution Licensee, based
on the following principles
(i)
The cost must have been incurred by the Distribution Licensee or is expected
with reasonable certainty, to be incurred on account of such consumer; and
(ii)
The cost has not been or cannot be recovered from the consumer, or from
other consumers who have been given supply from the same assets or
facilities, or from other Connectors, either through wheeling charges, standby
charges or such other charges as may be approved by the Commission in
exercise of powers under Section 64 of the Act.
The amount of additional surcharge on the charges of wheeling shall be paid by the
Supplier to the Distribution Licensee in accordance with the terms and conditions of
the Connection and Use of Distribution System Agreement.
Every consumer and person requiring supply of electricity who has been granted open
access in accordance with these Regulations shall be liable to pay a cross-subsidy
surcharge, as may be stipulated, as a condition for availing of open access:
Provided that such cross-subsidy surcharge shall be based on the current level of
cross-subsidy of the tariff category / tariff slab and/ or voltage level to which such
consumer or person belong or are connected to, as the case may be, and shall not be
leviable if such tariff category / tariff slab or voltage level of connection does not bear
any current level of cross-subsidy.
Provided that the Distribution Licensee is entitled to raise the bill on and recover the
charges from the Supplier in accordance with Clause 8.2
42
Cross Subsidy Surcharge (CSS) Computation:In line with the National Tariff Policy, the Commission vide order dated 09th September
2011 has adopted the following formula for determination of the CSS. The same formula has
been used for determination of the revised circular vide order dated 21st February 2013:
CSS=T-[C{1+L/100)+D]
T is tariff payable by the relevant category of consumers
C is Weighted average cost of power purchase of top 5% at margin excluding liquid fuel
based generation and renewable power.
D is the wheeling charge & L is the system loss for the applicable voltage level.
TABLES OF VARIOUS OPEN ACCESS CHARGES:
VOLTAGE LEVEL
33 Kv
4.19%
6%
22 or 11 Kv
4.19%
9%
VOLTAGE LEVEL
TRANSMISSION CHARGE
WHEELING
(Rs./unit)
(Rs./unit)
33kv
0.44
0.11
22 or 11kv
0.43
0.60
CHARGE
43
66 kV & ABOVE
33kV
22/11kV
(Rs./unit)
(Rs./unit)
(Rs./unit)
EXPRESS FEEDER
1.63
1.18
0.53
NON-EXPRESS
1.2
0.76
0.10
2.84
2.39
1.74
EXPRESS FEEDER
5.53
5.09
4.43
NON-EXPRESS
4.91
4.47
3.81
1.76
1.32
0.66
CONSUMER
CATEGORY
INDUSTRY
FEEDER
SEASONAL
INDUSTRY
COMMERCIAL
FEEDER
RAILWAYS
5.2 GUJARAT:
ACs = Sum of capacities allocated to all long-term and medium-term open access customers
in MW.
Provided that Monthly Transmission Tariff shall also be shared by a Generating Company if
power from such Generating Company is sold to a consumer outside the State of Gujarat, to
the extent of capacity contracted outside the State:
Provided further that the transmission tariff payable by any long-term or medium-term open
access customer utilizing the transmission system for part of a month shall be determined as
under:
Transmission Tariff = TTC/(ACs x 8760) (in Rs./MWh);
Where;
TTC = Total Transmission Cost determined by the Commission for the transmission system
for the relevant year (in Rs), and
ACs = sum of capacities allocated to all long-term and medium-term open access customers
in MW.
Provided that where a dedicated transmission system used for open access has been
constructed for exclusive use of an open access customer, the transmission charges for such
dedicated system shall be worked out by transmission licensees for their respective systems
and got approved by the Commission and shall be borne entirely by such open access
customer till such time the surplus capacity is allotted and used by other persons or purposes.
(ii)By Short-Term Open Access Customers:
Transmission Charges payable by a Short-Term Open Access customer shall be at a rate onefourth of the transmission charges applicable to the Long-Term / Medium-Term customer, as
described above.
Transmission charge payable by Short-term open access customers
= Rate of transmission charge payable by long-term / medium-term open access
customers
45
Wheeling charges are payable to distribution licensee, by an open access customer for
usage of its system shall be as determined by the Commission in the tariff order from
time to time:
The Commission shall specify the wheeling charge of Distribution Wires Business of
the Distribution Licensee in its Order passed under sub-section (3) of Section 64 of
the Act:
Provided that the charges payable by a Distribution System User under this Chapter
may comprise any combination of fixed/demand charges, and variable charges, as
may be stipulated by the Commission in such Order.
Provided that Wheeling charges shall be payable on the basis of scheduled energy.
Provided also that an open access customer connected to the STU system shall be
liable to pay the wheeling charges determined under this regulation, if such customer
was paying wheeling charges directly or indirectly before availing open access.
46
Provided also that such cross subsidy surcharge shall not be levied in case distribution
access is provided to a person who has established a captive generation plant for
carrying the electricity to the destination of his own use.
CROSS SUBSIDY SURCHARGE COMPUTATION:
The cross subsidy surcharge is based on the formula given in the Tariff Policy as below:
S = T-[C(1+L/100)+D]
Where, S is the surcharge
T is the tariff payable by the relevant category of consumers;
C is the weighted average cost of power purchase of top 5% at the margin excluding fuel
3based generation and renewable power.
D is the Wheeling charges.
L is the system losses for the applicable voltage level, expressed as percentage
An open access customer, receiving supply of electricity from a person other than the
distribution licensee of his area of supply, shall pay to the distribution licensee an
additional surcharge on the charges of wheeling, in addition to wheeling charges and
cross-subsidy surcharge, to meet out the fixed cost of such distribution licensee
arising out of his obligation to supply as provided under sub-section (4) of section 42
of the Act.
This additional surcharge shall become applicable only if the obligation of the
licensee in terms of power purchase commitments has been and continues to be
stranded or there is an unavoidable obligation and incidence to bear fixed costs
consequent to such a contract. However, the fixed costs related to network assets
would be recovered through wheeling charges.
47
The distribution licensee shall submit to the Commission on six monthly basis, a
detailed calculation statement of fixed cost which the licensee is incurring towards his
obligation to supply.
The Commission shall scrutinize the statement of calculation of fixed cost submitted
by the distribution licensee and obtain objections, if any, and determine the amount of
additional surcharge:
Provided that any additional surcharge so determined by the Commission shall be
applicable only to the new open access customers.
Additional surcharge determined on Per Unit basis shall be payable, on monthly basis,
by the open access customers based on the actual energy drawn during the month
through open access:
Provided that such additional surcharges shall not be levied in case distribution access
is provided to a person who has established a captive generation plant for carrying the
electricity to the destination of his own use.
11Kv
4.10%
10%
VOLTAGE
11kv
(Rs./kWh)
.12
.12
48
CONSUMER CATEGORY
CROSS
SUBSIDY
SURCHARGE
(Rs./kWh)
ALL CATEGORY
0.45
5.3 RAJASTHAN:
5.3.2 SURCHARGE :
The cost of supply to the category of consumers for the purpose of tariff to which the
open access consumer belongs, the voltage at which he is connected and the
realisation from that category of consumers shall be the basis of calculating the extent
of cross subsidy provided by such consumer.The methodology of computing cost of
supply and realisation in respect of a category of consumers shall be laid down by the
Commission by a separate order
The amount of surcharge shall be so calculated as to meet the current level of cross
subsidy from that category of consumers and shall be paid to the distribution licensee
of area of supply where the consumer is located.
The surcharge shall be reduced and eliminated in the same manner as the Commission
may lay down for reduction and elimination of cross subsidies in its regulations
relating to terms and conditions of tariff of distribution licensees.
The consumers availing exclusively interstate transmission system shall pay the same
amount of surcharge as determined under these regulations.
5.3.3 ADDITIONAL SURCHARGE:
A consumer availing open access and receiving supply of electricity from a person
other than the distribution licensee of his area of supply shall pay to the distribution
licensee an additional surcharge, in addition to wheeling charges and surcharge, to
meet the fixed cost of such distribution licensee arising out of his obligation to supply
as provided under sub-section (4) of section 42 of the Act;
The distribution licensee whose consumer intends to avail open access shall submit to
the Commission within fifteen days of receipt of application under regulation 10 or 11
50
an account of fixed cost which the licensee is incurring towards his obligation to
supply;
The Commission shall scrutinize the statement of account submitted by the licensee
and obtain objections, if any, of the open access consumer and determine the amount
of additional surcharge payable by the consumer to the licensee,
The additional surcharge shall be leviable for such period as the Commission may
determine but not normally exceeding one year.
132 Kv
4.20%
N.A
33Kv
4.20%
3.80%
11Kv
4.20%
12.60%
VOLTAGE LEVEL
TRANSMISSION
WHEELING
CHARGES (Rs./unit)
(Rs./unit)
132Kv
N.A
0.01
33Kv
0.22
0.11
11Kv
0.22
0.32
CHARGES
51
CONSUMER TYPE
CROSS
SUBSIDY
SURCHARGE
(Rs./kWh)
LIP-EHV
0.18
LIP- 33Kv
0.13
LIP-11Kv
0.05
ML-EHV
0.15
ML- 33Kv
0.09
ML- 11Kv
0.02
NDS- EHV
0.49
NDS- 33Kv
0.43
NDS- 11Kv
0.36
Where a dedicated transmission system or a distribution system used for open access
has been constructed for exclusive use of an open access customer, the transmission
charges or wheeling charges for such dedicated system shall be worked out by the
Licensee and got approved by the Commission and shall be borne entirely by such
open access customer till such time the surplus capacity is allotted and used for by
other persons or purposes.
The surcharge would be determined by the Commission, taking into account the tariff
applicable to the relevant category of consumers and the cost of the distribution
Licensee to supply electricity to the consumers of the applicable class.
The amount of surcharge shall be so calculated as to meet the current level of cross
subsidy from that category of consumers and shall be paid to the distribution Licensee
of the area of supply from whom the consumer is availing supply.
The surcharge will be reduced and eliminated in the same manner as the Commission
may lay down for reduction and elimination of cross subsidies in its roadmap for such
reduction and elimination of cross subsidy.
Provided that such surcharge shall not be levied in case transmission access is
provided to a person who has established a captive generation plant for carrying the
electricity to the destination of his own use.
Where:
S is the surcharge
C is the Weighted average cost of power purchase of top 5% at the margin excluded liquid
fuel based generation and renewable power
L is the system Losses for the applicable voltage level, expressed as a Percentage
An open access customer, receiving supply of electricity from a person other than the
distribution Licensee of his area of supply, shall pay to the distribution Licensee an
additional surcharge on the charges of wheeling, in addition to wheeling charges and
surcharge, to meet out the fixed cost of such distribution Licensee arising out of his
obligation to supply as provided under sub-section (4) of section 42 of the Act; This
additional surcharge shall become applicable only if the obligation of the Licensee in
terms of power purchase commitments has been and continues to be stranded.
The distribution Licensee whose consumer intends to avail open access shall submit
to the Commission within fifteen days of receipt of application, a detailed calculation
statement of fixed cost which the Licensee is incurring towards his obligation to
supply;
The Commission shall scrutinize the statement of calculation of fixed cost submitted
by the distribution Licensee and obtain objections, if any, from the open access
customer and determine the amount of additional surcharge.
The additional surcharge shall be levied for such period as the Commission may
determine.
Provided that such additional surcharges shall not be levied in case transmission
access is provided to a person who has established a captive generation plant for
carrying the electricity to the destination of his own use.
230 Kv
0.80%
110 Kv
1.90%
54
VOLTAGE
33 Kv
0.66%
22 Kv
2.76%
11 Kv
2.87%
CONSUMER TYPE
TRANSMISSION CHARGES
LTOA
Rs.1973/MW/day
STOA
Rs.82.21/MW/hr
VOLTAGE LEVEL
230 / 110 / 33 / 22 / 11 kV
.1735
VOLTAGE LEVEL
INDUSTRY (Rs./unit)
COMMERCIAL (Rs./unit)
33kV
0.35638
0.47654
22kV
0.35114
0.47130
11Kv
0.35093
0.47101
Open Access users connected to the transmission/distribution system shall pay the
transmission charges and / or wheeling charges and any other applicable charges as
determined by the Commission from time to time, and notified in the relevant Tariff
Order or otherwise, and as per the conditions stipulated therein
Provided that the wheeling charges so payable shall be subject to a minimum level as
fixed by the Commission in the relevant Tariff Order or otherwise.
The Open access users of the Transmission and / or Distribution System where such
open access is for delivery of electricity to the consumers premises in the area of
supply of a distribution licensee, shall pay to the distribution licensee the (crosssubsidy) surcharge as determined by the Commission from time to time under Section
42 (2) of the Act
Provided that no (cross-subsidy) surcharge shall be payable if the open access is
provided to a person who has established a captive generating plant for carrying the
electricity to the destination of his own use.
The Open Access user shall also be liable to pay additional surcharge on charges of
wheeling as may be specified by the Commission from time to time under section
42(4) of the Act, in case open access is sought for receiving supply from a person
other than the distribution licensee of such consumers area of supply, to meet the
fixed cost of the distribution licensee arising out of his obligation to supply.
4.02%
0.08
DRAWAL
SUPPLY
CPDCL (%)
EPDCL (%)
NPDCL (%)
SPDCL (%)
POINT
POINT
33kV
33Kv
3.96%
3.39%
3.90%
3.40%
33kV
11Kv
7.80%
7.47%
8.08%
7.51%
11kV
33Kv
7.80%
7.47%
8.08%
7.51%
11kV
11Kv
4.00%
4.22%
4.35%
4.25%
VOLTAGE
CPDCL
EPDCL
NPDCL
SPDCL
LEVEL
(Rs./kWh)
(Rs./kWh)
(Rs./kWh)
(Rs./kWh)
33Kv
0.05
0.03
0.019
0.04
11Kv
0.32
0.31
0.22
0.28
The annual Transmission Service Charges (TSC) payable by a long-term customer for
use of the State Transmission System shall be determined in accordance with the
terms & conditions of tariff notified under section 61 of the Electricity Act, 2003 by
the Commission from time to time. These charges shall be shared by the long-term
open access customers.
The transmission Charges payable by a short-term customer for the use of intra-state
transmission system shall be calculated in accordance with the following
methodology,
57
The Wheeling Charges (WC) payable by a long-term customer for use of the
Distribution System shall be determined in accordance with the terms & conditions of
tariff notified under section 61 of the Electricity Act, 2003 by the Commission from
time to time. These charges shall be shared by the long-term open access customers.
The wheeling charges payable by a short-term customer for the use of distribution
system shall be calculated on daily basis, and shall be equal to wheeling charges
payable by the long-term open access customer.
58
EAST
3.16%
23%
WEST
3.16%
20%
CENTRAL
3.16%
23%
TRANSMISSION CHARGE
VOLTAGE LEVEL
33Kv
0.18
ABOVE 33 Kv
N.A
INJECTION VOLTAGE
DRAWAL VOLTAGE
CSS (Rs./unit)
EHT
33Kv
0.91
33kV
1.92
1.22
33kV
33Kv
1.21
59
5.7 HARYANA
5.7.1 TRANSMISSION CHARGES AND WHEELING CHARGES:
Open access consumer using inter-State transmission system shall pay the
transmission charges as specified by the CERC from time to time.
Open access consumer using intra-State transmission system shall pay transmission
charges to the STU or the transmission licensee other than STU for usage of their
system as determined by the Commission for the relevant financial year.
Provided that transmission charges shall be payable on the basis of contracted
capacity in case of long term and medium term open access consumers and on the
basis of scheduled load in case of short term open access consumers. For open access
for a part of a day, the transmission charges shall be payable on pro-rata basis.
Provided further that where a dedicated transmission system has been constructed for
exclusive use of or being used exclusively by an open access consumer, the
transmission charges for such dedicated system shall be worked out by transmission
licensee and got approved by the Commission and shall be borne entirely by such
open access consumer till such time the surplus capacity is allotted and used for by
other open access consumers or purposes, after which these transmission charges for
such dedicated system shall be shared in the ratio of loads allotted to the various
users.
Open access consumer using intra-State distribution system shall pay wheeling
charges to the distribution licensee (s) for usage of the distribution system as
determined by the Commission for the relevant financial year.
Provided that wheeling charges shall be payable on the basis of scheduled load /
energy. For open access for a part of a day, the wheeling charges shall be payable on
pro-rata basis.
Provided further that where a dedicated distribution system has been constructed for
exclusive use of an open access consumer, the wheeling charges for such dedicated
system shall be worked out by distribution licensee and got approved from the
Commission and shall be borne entirely by such open access consumer till such time
60
the surplus capacity is allotted and used for by other persons or purposes after which
these charges shall be shared in the ratio of the allotted capacities.
Provided that such surcharge shall not be levied on a person who has established a
captive generation plant and carries the electricity to the destination of his own use.
Cross subsidy surcharge shall also be payable by such open access consumer who
receives supply of electricity from a person other than the distribution licensee in
whose area of supply he is located, irrespective of whether he avails such supply
through transmission / distribution network of the licensee or not.
The consumers located in the area of supply of a distribution licensee but availing
open access exclusively on inter-State transmission system shall also pay the cross
subsidy surcharge.
The cross subsidy surcharge shall be leviable at the rates as determined by the
Commission from time to time.
An open access consumer, receiving supply of electricity from a person other than the
distribution licensee of his area of supply, shall pay to the distribution licensee an
additional surcharge in addition to wheeling charges and cross-subsidy surcharge, to
meet out the fixed cost of such distribution licensee arising out of his obligation to
supply as provided under sub-section (4) of Section 42 of the Act.
61
Provided that such additional surcharge shall not be levied in case open access is
provided to a person who has established a captive generation plant for carrying the
electricity to the destination of his own use.
This additional surcharge shall become applicable only if the obligation of the
licensee in terms of power purchase commitments has been and continues to be
stranded or there is an unavoidable obligation and incidence to bear fixed costs
consequent to such a contract. However, the fixed costs related to network assets
would be recovered through wheeling charges.
The distribution licensee shall submit to the Commission, on six monthly basis the
details regarding the quantum of such stranded costs and the period over which these
remained stranded and would be stranded. The Commission shall scrutinize the
statement of calculation of such stranded fixed costs submitted by the distribution
licensee and determine the amount of additional surcharge.
Provided that any additional surcharge so determined shall be applicable to all the
consumers availing open access from the date of determination of same by the
Commission.
The consumers located in the area of supply of a distribution licensee but availing
open access exclusively on inter-State transmission system shall also pay the
additional surcharge.
Additional surcharge determined on per unit basis shall be payable, on monthly basis,
by the open access customers based on the actual energy drawn during the month
through open access
2.50%
0.17
62
DISCOM
WHEELING
CHARGES
(Rs./kWh)
UHBVNL
27.50%
.70
DHBVNL
20.30%
.70
CONSUMER CATEGORY
CSS (Rs./unit)
HT INDUSTRY
0.53
NDS HT
0.46
BULK
SUPPLIER
OTHER
THAN 0.79
DOMESTIC
RAILWAYS
0.38
5.8 PUNJAB
63
Long term, Medium term and Short term Open Access customers availing supply
at 132/220kv shall be liable to pay full transmission charges;
Where a dedicated transmission system has been constructed for exclusive use of
an Open Access customer, the transmission charges for such dedicated system
shall be recovered entirely from such Open Access customer for such period till
the surplus capacity is used for other persons or purposes;
The transmission charges for a short-term Open Access customer will be levied on
hourly basis in rupees/MWh and will be levied on the quantum in MWh cleared
by the concerned Load Despatch Centre for bilateral transactions and the National
Load Despatch Centre in case of collective transactions;
When capacity has been reserved consequent to bidding, the Open Access charges
will be taken as determined through bidding:
Provided further that the charges so determined under this Regulation will be the
floor price for the purpose of Regulation 18
Wheeling Charges shall be payable by an Open Access customer who utilises the
distribution network for wheeling of electricity.
The distribution licensee shall segregate the accounts for the consumer service (retail
supply) business and its wire business and submit the same to the Commission.
The Annual Wheeling Charges (AWC) will represent the cost of the wires business of
the distribution licensee. The Commission shall determine the prudent level of Annual
Wheeling Charges. While doing so, it shall use its own assumptions for apportioning
the expenses of a licensee for the purpose of computing expenses pertaining to wires
business till such time segregated accounts of the licensee are available.
The wheeling charges payable shall be calculated in accordance with the following
formula:
64
Long term Medium term and Short term Open Access customers availing supply at
33/66 KV, in addition to transmission charges, shall be liable to pay 15% of the
wheeling charges determined by the Commission as per the Tariff Order applicable
for the year; whereas customers availing supply at 11 KV shall be liable to bear 30%
of wheeling charges in addition to transmission charges.
Where a dedicated distribution system used for open access has been constructed for
exclusive use of an open access customer, the wheeling charges for such dedicated
system shall be worked out by distribution licensee and shall be borne entirely by
such open access customer till such time the surplus capacity is allotted and used for
by other persons or purposes.
The wheeling charges for short term open access will be levied on the quantum in
MWh cleared by the concerned Load Despatch Centre for bilateral transactions and
the National Load Despatch Centre in case of collective transactions.
When capacity has been reserved consequent to bidding, the Open Access charges
will be taken as determined through bidding:
Provided further that the charges so determined under this Regulation will be the floor
price for the purpose of Regulation 18.
65
The cross subsidy surcharge shall be determined in accordance with the following
formula:
Surcharge formula S = T - C
where,
S is the cross subsidy surcharge
T is the average per unit realization from the relevant category of consumers
C is the combined average cost of supply of distribution licensee
The surcharge shall be paid to the distribution licensee of area where the premises of
the consumer availing Open Access are located. In case of more than one licensees
supplying in the same area, the licensee from whom the consumer was availing
supply shall be paid the amount of surcharge.
The consumers availing Open Access through dedicated lines even without involving
licensees Transmission and/or Distribution System shall be liable to pay same
surcharge as determined under this Regulation
66
An open access consumer, receiving supply of electricity from a person other than the
distribution licensee of his area of supply, shall pay to the distribution licensee an
additional surcharge on the charges of wheeling, in addition to wheeling charges and
cross-subsidy surcharge, to meet out the fixed cost of such distribution licensee
arising out of his obligation to supply as provided under sub-section (4) of section 42
of the Act.
This additional surcharge shall become applicable only if the obligation of the
licensee in terms of power purchase commitments has been and continues to be
stranded or there is an unavoidable obligation and incidence to bear fixed costs
consequent to such a contract. The distribution licensee shall indicate the quantum of
such stranded costs and the period over which they would be stranded. The
Commission shall scrutinize the statement of calculation of fixed cost submitted by
the distribution licensee and obtain objections, if any, and determine the amount of
additional surcharge:
TABLES FOR VARIOUS OPEN ACCESS CHARGES:
TRANSMISSION LOSSES (%)
TRANSMISSION
CHARGES
(Rs./MW/month)
2.50%
92451
VOLTAGE LEVEL
15.08%
SUPPLY VOLTAGE
LTOA
MTOA
Rs. 383596/MW/month
Rs.0.53/unit
220Kv
132Kv
66Kv
33kv
67
11kv
5.9 BIHAR
In case intra-state transmission system and /or distribution system is used by an Open
Access customer in addition to inter-State transmission system, transmission charges
and / or wheeling charges for use of intra-state transmission system and/or distribution
system shall be payable in addition to payment of transmission charges for inter-State
transmission.
5.9.2 SURCHARGE:
Provided that such surcharge shall not be leviable in case Open Access is provided to
a person who has established a captive generating plant for carrying the electricity to
the destination of his own use.
68
Provided that the applicant shall pay surcharge as determined as per these Regulations
post the expiry of the period specified above.
The amount of surcharge shall be so calculated as to meet the current level of cross
subsidy from that category of consumers and shall be paid to the distribution licensee
of area of supply where the consumer availing Open Access is located.
The surcharge shall be reduced and eliminated in the manner as determined by the
Commission in respect to reduction and elimination of cross subsidies in terms and
conditions of tariff of transmission/distribution licensees.
The consumers availing Open Access through dedicated lines even without involving
licensee's transmission and / or distribution system shall be liable to pay same
surcharge as determined under these Regulations.
A consumer availing Open Access and receiving supply of electricity from a person
other than the distribution licensee of his area of supply shall pay to the distribution
licensee an additional surcharge, in addition to wheeling charges and surcharge, to
meet the fixed cost of such distribution licensee arising out of his obligation to supply
of electricity as provided under sub-section (4) of Section 42 of the Act;
The distributors licensee whose consumer intends to avail Open Access shall submit
to the Commission within 15 days of receipt of application, a detailed calculation
statement of fixed cost which the licensee is incurring towards his obligation of
supply.
The Commission thereafter, shall scrutinize the statement of calculation of fixed cost
and obtain objection, if any, from the Open Access customer and determine the
amount of additional surcharge. The additional surcharge shall be determined by the
Commission on a case-to-case basis
The consumers availing Open Access through dedicated lines even without involving
licensee's transmission and / or distribution system shall be liable to pay same
additional surcharge as determined under these Regulations.
TRANSMISSION CHARGES
LONG TERM OA SHORT TERM OA
4.0%
CONSUMERS
CONSUMERS
(Rs./MW/month)
(Rs./MW/day)
64827
533
VOLTAGE LEVEL
LOSSES (%)
CHARGES (Rs./kWh)
11Kv
6%
0.4096
33Kv
5%
0.3559
70
TYPE OF CONSUMER
CSS (Rs./kWh)
132 Kv
0.22
33Kv
(OTHER
THAN
HTSS
CONSUMERS)
11Kv
(OTHER
0.53
THAN
HTSS
CONSUMERS)
0.44
5.10 KARNATAKA
71
and wheeling charges shall be payable for use of intra state system in addition to
payment of inter-state transmission charges.
According to section 42(2) proviso 1 of the Act, surcharge to meet the current level of
cross subsidy is payable if open access is availed. The open access customer shall be
liable to pay the surcharge so determined by the Commission from time to time. The
Commission would determine the surcharge based on cost of supply of electricity to
various categories of consumers.
Where a dedicated transmission system or distribution system used for open access
has been constructed for exclusive use of an open access customer, the transmission
charges or wheeling charges for such dedicated system shall be borne entirely by such
open access customer till such time the surplus capacity is allotted and used for by
other persons or purposes.
The charges incurred for strengthening the system in order to provide open access for
the exclusive use of an open access customer shall be borne by that open access
customer.
According to section 42(4) of the Act, additional surcharge as may be specified by the
Commission on charges of wheeling are payable by the consumer seeking open access
for receiving supply from a source other than the distribution licensee of his area of
supply to meet the fixed cost of the distribution licensee arising out of his obligation
to supply. The open access customer shall be liable to pay such additional surcharge
as may be determined by the Commission from time to time. However, in the case of
a new open access customer (i.e. if the open access customer was not a consumer of
the licensee), no such additional surcharge is payable. The additional surcharge would
be determined on a case-to-case basis.
72
DISCOM
BESCOM
13.80%
CESC
15.50%
GESCOM
20%
HESCOM
19.00%
MESCOM
11.75%
3.94%
DISCOM
BESCOM
0.3285
CESC
0.68
GESCOM
0.7539
HESCOM
0.6899
MESCOM
0.6767
0.8040
2.5960
HT LEVEL
0.3850
2.177
73
6.2 STATE-WISE
CONCLUSION:
LANDED
COST
SHEET
ANALYSIS
&
I. MAHARASHTRA:
From the cost sheet it can be seen that in Maharashtra has been approved the transmission
loss of 4.24% for Non-Solar generator & 4.19% for Solar based generator. Wheeling loss
increases from 6% & 9% as the drawal voltage decreases from 33Kv to 22 Kv.
74
As can be seen from the sheet the Landed Tariff for the state ranges between Rs.4.99 /unit to
Rs. 8.99/unit and the Tariff after CSS has been applied, it ranges between Rs. 4.98/unit to Rs.
9.96/unit.
CONCLUSION:
DEVELOPERS PERSPECTIVE:
For a developer the maximum per unit increase comes at an Injection voltages of 33
& 22 Kv & Drawal Volatage of 22Kv for Open Access Solar generator with per unit
increase Rs. 2.96/unit where as the least profit is in the case of Group Captive NonSolar which gives a per unit increase of Rs. 0.99/unit.
CONSUMERS PERSPECTIVE:
For a Consumer the least Landed cost in the state comes for the Group Captive
consumers sourcing energy from Non- Solar at an Injection & Drawal voltage of
33Kv while it is most for Open Access Consumers drawing power at 22Kv from NonSolar generation which is Rs. 9.96/unit on account of high CSS of Rs. 0.97/unit.
II. GUJARAT:
All the drawal points in Gujarat are at 11 Kv while injection points are at 33Kv, 22 Kv &
11Kv. The Transmission loss is 4.10% for non-solar generators at all voltage level and 3.85%
for Solar generators.
Similarly the wheeling loss is 10% for Non-Solar category & 3% for Solar generators.
CONCLUSION:
DEVELOPERS PERSPECTIVE:
From a developers perspective the maximum profit will be at a per unit increase of
Rs. 1.33/unit for developers operating at all voltage levels for Open Access Non-Solar
type generator gain least increase in case they are Group Captive and generating
power from Solar which gives an increase of Rs. 0.75/unit.
CONSUMERS PERSPECTIVE:
75
From a Consumers perspective and in general it is not viable to draw power from
Open Access & Group Captive Solar generators which are expensive which charge as
high and over Rs. 7/unit.
The minimum charge comes from Group Captive Non-Solar which charges Rs.
4.89/unit
III. RAJASTHAN:
Rajasthan has single injection point at 33Kv and drawal points at 33Kv & 11Kv.While
Transmission loss stands at 4.20% for all categories of Generator. Wheeling loss has been
approved for 0.32% for Solar categories at 11Kv otherwise it is 3.80% for 33Kv & 12.60%
for 11kv voltage.Banking losses wherever applicable has been put at 2%.
CONCLUSION:
DEVELOPERS PERSPECTIVE:
From a developers perspective the maximum per unit increase can be gained from
generators using source from Non-Solar in both the kinds of Generator which comes
over Rs. 1.3/unit at 11Kv drawal point whereas the least profitable is at 33Kv in the
same category of generators.
CONSUMERS PERSPECTIVE:
From a consumers point of view the landed tariff comes lesser for Non-Solar
categories at 33kV drawal point which comes below Re. 1/unit.
CONCLUSION:
DEVELOPERS PERSPECTIVE:
From a developers perspective an a Open Access generator can expect a better return
which comes around Rs. 3/unit where as for the Captive the increase is less than a
Re./unit irrespective of the voltage level.
CONSUMERS PERSPECTIVE:
The minimum tariff for a consumer comes at Rs. 4/unit for Group Captive Non-solar
category where as for the rest of the categories the Landed Tariff is as high as
Rs.7/unit for a consumer.
V. ANDHRA PRADESH:
The Landed Cost Sheet analysis of Andhra Pradesh has been done at 33kV and 11kV by
taking into account all of its DISCOMS viz. CPCDL, EPCDL, NPCD & SPCDL. The
analysis thus involves not only a comparison between the Open Access and Group Captive
but also amongst the four afore mentioned DISCOMS. The State gives the consumer an
exemption from the CSS and keeps the wheeling charges on Solar comparatively lower than
other sources.
CONCLUSION:
DEVELOPERS PERSPECTIVE:
In Andhra Pradesh a Developer can have a variety of options to weigh by making a
supply to any DISCOMS that earns it a maximum return.
In case of CPCDL an open access solar generator can gain maximum by gaining a
return over Rs.1/unit.
In general a brief look at per unit increase suggests that a Solar power plant
irrespective of Open Access or Group Captive promises a better returns to the
developer.
CONSUMERS PERSPECTIVE:
A consumer in the state has been exempted from paying the CSS and so connecting
with Open Access or Group Captive depends on the Landed Tariff.
A view at landed cost sheet shows that a consumers have to pay a charge of around
Rs. 4/unit for connecting with the Solar plant regardless of consumer type.
77
VII. PUNJAB:
The analysis of Cost sheet of Punjab is based on assumption that all the Injection and drawal
is taking place at voltage level 66Kv & below. The transmission loss at all these level are
2.50% & wheeling loss of 15.08% for solar and 2.39% for non-solar.
CONCLUSION:
DEVELOPERS PERSPECTIVE:
From a developers point of view the state gives a better return to Open Access
consumers in comparison to Captive consumers. Open Access developers gain Rs.
2/unit in the state.
CONSUMERS PERSPECTIVE:
From Consumers perspective the a solar plant is expensive for the consumers which
charges them Rs. 8-9/unit while Non-Solar plant the tariff charges is comparatively
lesser which comes around Rs. 5-6/unit.
78
VIII. BIHAR:
The Cost sheet analysis of Bihar is based on the assumption that the injection takes place at
all possible voltage while drawal takes place at 11Kv and 33Kv.
Transmission loss for the state remains same i.e 4% at both the voltage level while varies
between 5%-8% for different category of consumers and irrespective of generation type.
CONCLUSION:
DEVELOPERS PERSPECTIVE:
From Developers perspective the maximum return comes from Open Access
generator sourcing power from Solar which is around Rs. 1.5 at both the voltage
level.
CONSUMERS PERSPECTIVE:
From a consumers perspective the minimum tariff after CSS comes from the plants
generating power from Non- Solar which comes around Rs. 4/unit.
The State is expensive for the consumers who are sourcing power from the Solar
generation which comes around Rs.8/unit
IX. HARYANA:
The cost sheet analysis of Haryana is based on the assumption that Injection and drawal
happens on all possible voltages and for each of these voltage levels the losses and Open
Access Charges remain same.The analysis has been done on two of its DISCOMS viz.
UHBVNL & DHBVNL.
Transmission losses for the Haryana has been approved at 2.50% while the wheeling losses
for UHBVNL is 27.50% & DHBVNL is 20.30%
CONCLUSION:
79
DEVELOPERS PERSPECTIVE:
From a Developers perspective the UHBVNL gives a better increase compared to
DHBVNL.
The maximum increase comes from Open Access Solar at Rs. 4.6/unit while the
minimum increase comes from Group Captive Non-Solar which is Rs. 2.19/unit.
CONSUMERS PERSPECTIVE:
From Consumers point of view the maximum tariff comes for Solar which is over
Rs. 9/unit while it ranges between Rs.6-7/unit
X. KARNATAKA:
As shown in the Cost Sheet, the analysis of Karnataka has been done for all its DISCOMs
viz. BESCOM, CESC, GESCOM, HESCOM & MESCOM and for the voltage levels 33Kv
& below.
The transmission loss structure for all the DISCOMs are same, i.e 3.94% for Non-Solar
category while for Solar category has been exempted from the loss.
Wheeling loss for Open Access Solar for all the DISCOMs are 5% and it for all other
categories it is 13.80%, 15.50%, 20%,19% & 11.75% for BESCOM, CESC, GESCOM,
HESCOM & MESCOM.
There is no transmission charge in state and the wheeling charge has beem exempted for the
solar category and for others it is fairly low.
As can be seen for HESCOM, the landed tariff for Group Captive consumers is Rs.9.25/unit
regardless of source of power and is same for Open Access consumers sourcing power from
Non-solar. The latter sourcing power from Solar arrives at the tariff of around Rs.8.06/unit.
After levying CSS, the tariff for Open Access comes around Rs.8.17/unit for Solar and
Rs.10.53/unit for Non-solar.
80
.CONCLUSION:
DEVELOPERS PERSPECTIVE:
As seen in the Landed Cost Sheet, from a developers point of view the per unit
increase can be availed from Open Access Non- Solar category which comes over Rs.
2/unit, highest being Rs. 2.76/unit from GESCOM.
The least profit comes generally from Solar Category regardless of the kind of
developer.
CONSUMERS PERSPECTIVE:
From consumers perspective the landed cost after CSS is most for the solar category
irrespective of the type of consumers which is over Rs. 7/unit while it ranges between
Rs. 5- 6/unit
81
Firstly, the high and irrational Open Access charges; the Tariff Policy, 2006 has
provided a formula for the determination of cross subsidy surcharge, however in
82
provided formula for the determination of Cross Subsidy Surcharge however some
of the state commissions have used other formula. The Act calls for gradual
reduction of cross subsidy surcharge, but no such reduction trajectory is found in
any of the states. The National Electricity Policy, 2005 clearly highlights that the
amount of surcharge and additional surcharge levied from consumers who are
permitted open acces should not become so onerous that it eliminates competition.
ii)
Secondly, states like Karnataka, Maharashtra, and Tamil Nadu have invoked
Section 11 of the Act to prevent generators to sell their power outside the State.
As per this section the State Government has the right to issue directions to
generator in case of extraordinary circumstances. The states use this ambiguity in
the Act to hamper open access. Clarification of the Section 11 is necessary
through an amendment of the Act.
iii)
Thirdly, in a state like Delhi, sheer lack of willingness on the part of the state
commission is evident from the fact that even after pressing requirements for
availing open access, the procedures for availing OA from SLDC has not been
notified as yet. Also in states like Uttar Pradesh, SLDCs are not geared up to
implement and manage open access and lack of infrastructure hinders open access
to be operationalized. There is an urgent need to look into such issues to ensure
implementation of open access.
The provisions in the current inter-state regulations do not encourage open access transitions.
Inter-State open access is granted on monthly basis and maximum up to 3 months. To
guarantee full open access it is required that a user to entitled to avail open access for any
period seamlessly.
7.4 TRANSMISISON CORRIDOR AVAILABILITY:
Transmission congestion is one of the major deterrents in availing open access. The
evacuation systems are planned mainly based on the transmission capacities required to meet
Long-term PPAs but the present transmission system has to meet the firm transmission needs
as well as Open Access requirements arising in the short term. Therefore, transmission
planning should inherently include margins for medium and short-term open access.
84
8.2 RECOMMENDATIONS:
To make Open Access a reality, the utmost need of the hour is to allay the fears of
DISCOMs that they will loose their high paying consumers (Industrial &
Commercial) to other competitive suppliers.
This is because that these Utilities sell their energy at a rate lower than their average
cost of generation which in any case is going to remain lower than the competitive
market rates & hence not all consumers who are into the category of 1MW & above
will migrate to other suppliers.
Certain Regulatory Provisions need clarification such as Section 11 of the EA- 2003
which is vested in state governments that they can prevent the interstate selling of
energy citing extra-ordinary circumstances.
Regulation needs to define clearly what these extra-ordinary circumstances are &
under what conditions a State can stop the intra-state sale of power.
A high CSS has hampered the Open Access growth to a large extent. Even though the
NEP, 2005 calls for a subsequent phasing out of such surcharge, there is no
monitoring mechanism to check if the CSS in s particular state is being gradually
decreased or not.
Thus State Commissions should implement a mechanism to control the CSS and
gradually phase them out.
85
The only belief that Generation, Transmission & Distribution are separate business
cannot help the implementation of Open Access. The belief will be complemented if
Electricity comes to be treated as a product- being made my one utility and the
delivery of this product as a service by another utility and both these being paid
appropriately.
In view of this Generators will be making the electricity and the Transmission &
distribution utilities help delivery of the electricity to the required destination. This
way a consumer has a choice to connect himself to a generator of his choice and at the
same time remain physically connected to DISCOMS.
Further there should be two components of electricity bill
86
BIBLIOGRAPHY
[1] www.cercind.gov.in
[2] www.aperc.gov.in
[3] www.berc.co.in
[4] www.gerc.in.org
[5] www.herc.nic.in
[6] www.kerc.org
[7] www.mperc.nic.in
[8] www.merc.india.org.in
[9] www.pserc.nic.in
[10] www.rerc.gov.in
[11] www.tnerc.tn.nic.in
[12] www.forumofregulators.gov.in
[13] Open Access System Crucial For Power Reforms- PTC Chronicles January 2012
[14] Open Access (Power To Choose POWER)- PTC Chronicles April 2012
[15] Open Access- Demystified- PTC Chronicles April 2012
[16] Open Access- A Legal Imperative- PTC Chronicles April 2012
[17] SEBs Bail Out- A Moral Hazard PTC Chronicles July 2012
[18] Making Open Access A Reality At Retail Level - PTC Chronicles July 2012
[19] Proposed Amendments To Electricity Act-2003 PTC Chronicles July 2012
[20] Implementation Of Open Access- PTC Chronicles January 2013
[21] Open Access Policies & Concerns PTC Chronicles January 2013
87