Professional Documents
Culture Documents
Submitted by:
Himanshu Arora
Roll No : 35
MBA Power Management
August 2013
i
Certificate
ii
Declaration
I, Himanshu Arora, Roll no:, student of MBA Power Management (2012-14) at National Power
Training Institute, Faridabad hereby declare that the Summer Training Report entitled Study of
Open Access and Cost Benefit Analysis of Open Access over Grid Power is an original work and
the same has not been submitted to any other institute for the award of any other degree.
Presentation in-charge
Signature of Candidate
Countersigned
Director / Principal of the Institute
iii
Acknowledgement
Apart from the efforts of the person doing the project, the success of any project largely depends 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 this project.
I would like to thank Mr. Amit Kumar, Sr.Vice President, and Global Energy Pvt.Ltd for giving me
this opportunity to execute my Summer Internship project. I would like to extend my thanks to my
guide, Mr.Dipanshu Gupta, Sr.Manager, Global Energy for showing me the right path and approach
towards the project. I would also like to thank Mr.Niraj Kumar, VP, Global Energy and Mr.
Himanshu Chandrakar, VP, Global Energy for their support during my project.
I feel deep sense of gratitude towards Mr. J.S.S.Rao, Principal Director , Corporate Planning , NPTI ,
Mr.S.K. Chaudhary , Principal Director , CAMPS , Mrs.Manju Mam , Director , NPTI and Mrs.Indu
Maheshwari , Dy. Director , NPTI for arranging my internship at Global Energy Private Limited,
New Delhi and being a constant source of motivation and guidance throughout the course of my
internship.
A special thanks to my Project-in-charge, Dr. Rohit Verma, Dy.Director, NPTI for his support and
guidance throughout the summer internship.
I also record my sincere thanks to Mr. Rahul Sharma (Jay Pee Group) and Mr. Rohit Bhutani (TCS)
for their support during my project and showing me right path and approach towards the project.
I also extend my thanks to all my faculties and my batch mates in CAMPS, NPTI for their support
and guidance.
Himanshu Arora
(MBA Power Management)
iv
Table of Contents
Certificate ............................................................................................................................................. ii
Declaration ........................................................................................................................................... iii
Acknowledgement ............................................................................................................................... iv
Executive Summary .......................................................................................................................... viii
Abbreviations ....................................................................................................................................... x
List of Table ........................................................................................................................................ xii
List of Figures .................................................................................................................................... xiii
Chapter 1: Introduction ...................................................................................................................... 1
1.2 Problem Statement...................................................................................................................................... 3
1.3 Scope of the project .................................................................................................................................... 3
1.4 Objective of the project .............................................................................................................................. 3
1.5 Significance of the project .......................................................................................................................... 4
1.6 Organizational Profile: ............................................................................................................................... 5
1.6.1 About the Organization ....................................................................................................................... 5
1.6.2 Services................................................................................................................................................ 5
vii
Executive Summary
Power is a critical infrastructure component for the countrys economic development. The Ministry
of Power has given a major thrust to speed up the development and reforms of the power sector. It
has set an agenda of providing power to all by 2012. The Ministry seeks to achieve this objective
through a comprehensive and holistic approach to power sector development at the national, state,
SEB, distribution, feeder and consumer levels.
The Electricity Act, 2003 provides for Open Access for private generators and bulk consumers. Open
Access is a mechanism that allows generator to sell power to the highest bidder while consumers can
source their needs from the most economic seller. One of the greatest achievements of this over haul
in the power industry can be considered is the freedom to buy and the freedom to sell the
electricity
As mentioned above, the freedom to buy and sell the electricity thereby creating or tending towards a
perfect market in the sector , which was previously almost a monopoly market run and maintained by
SEBs , is now widely opened up for a greater private participation. Trading is now considered as a
distinct activity. Open Access thus finds its own niche in supporting this activity. . However, even
nine years of the Act coming into force, the issue still evokes strong reactions from all the stake
holders with some resisting the idea while others welcoming it.
Open access transactions of energy should be promoted. Some of the high potential states have been
reluctant to allow open access to consumers and third party sales by captive generators because of
concerns of losing large high-paying consumers and the resultant impact on utility finances. The
high incidence of cross-subsidy surcharges and wheeling charges imposed on the direct sale of
power to consumers, reduces the competitiveness of energy in an otherwise potentially high-demand
market. It would also put competitive pressure on utilities to improve the quality of supply. Central
Transmission Utility (CTU) and State Transmission Utility (STU) are obliged to allow their facilities
for the purpose. Thus the timing of allotment , charges to be taken from users , amount of capacity to
be allotted like cross subsidy, extent of subsidy, method of calculation of surcharge, etc. are to be
addressed by the quasi judiciary entities.
This report gives a clear insight about the concept of Open Access and regulations issued by CERC
and various SERCs. Also, the detailed procedure laid out for grant of connectivity, Long-term,
medium-term and short-term Open Access by the CTU is studied.
viii
This report highlights the cost benefit analysis of using Open Access against Grid power for
consumers with demand above 1MW for states such as, Andhra Pradesh, Gujarat, Maharashtra,
Punjab and Uttar Pradesh having high potential for Open Access. It would help in understanding the
benefit one can get by availing the facility of OA and explains various charges levied on Open
Access.
As a student of MBA in Power Management from National Power Training Institute (NPTI),
Faridabad, I had this opportunity to work as a summer intern with Global Energy Private Limited. It
lasted for 8 weeks and I was assigned a project to work on it.
This report includes study of existing CERC regulations for Inter State Open Access, 2008 for
eligible consumers. It also highlights the issues and recommendations highlighted by Forum of
Regulators (FOR) for successful implementation of Open Access. This report will help in
understanding the power market regulations. This project would help the eligible consumers
(demand above 1MW) in these states to decide upon their electricity provider and hence help them
in making substantial benefits out of the same. The vital information helps consumer to understand
the cost implications of OA in the state.
ix
Abbreviations
1.
APCPDCL
2.
APEPDCL
3.
APERC
4.
APNPDCL
5.
APPC
6.
APSEB
7.
APSPDCL
8.
APTRANSCO
9.
ARR
10.
AT&C
12.
CEA
13.
CERC
14.
CSS
15.
CTU
16.
Discom
Distribution Company
17.
EA
Electricity Act
18.
EHT
19.
FOR
Forum of Regulators
20.
HT
High Tension
21.
IEX
22.
kWh
23.
LT
Low Tension
24.
LTOA
25.
MAHADISCOM
26.
MERC
27.
MSEDCL
28.
MSETCL
29.
MTOA
30.
MU/MUs
Million Units
31.
MYT
32.
NLDC
33.
OA
Open Access
34.
PGCIL
35.
PLF
36.
PSEB
37.
PSERC
38.
PXIL
39.
RLDC
40.
SLDC
41.
STOA
42.
STU
43.
ATC
44.
TTC
45.
TOA
Transmission OA
46.
DOA
Distribution OA
xi
List of Table
Table 1- Open Access Provision ........................................................................................................................ 12
Table 2- Stages of Evolution of OA ................................................................................................................... 15
Table 3- UI Rates for Average Frequency of Time Block (Hz) ......................................................................... 25
Table 4- Assumptions for OA analysis............................................................................................................... 26
Table 5- OA consumers in Punjab ...................................................................................................................... 28
Table 6- PSPCL analysis .................................................................................................................................... 28
Table 7- STOA in Gujarat .................................................................................................................................. 29
Table 8- STOA network in Gujarat .................................................................................................................... 29
Table 9- MTOA in Gujarat ................................................................................................................................. 29
Table 10: UGVCL Analysis ............................................................................................................................... 30
Table 11: PGVCL Analysis ................................................................................................................................ 30
Table 12: MGVCL Analysis .............................................................................................................................. 31
Table 13: DGVCL Analysis ............................................................................................................................... 31
Table 14: Torrent Power Analysis ...................................................................................................................... 32
Table 15: PuVVNL Analysis.............................................................................................................................. 33
Table 16: MVVNL Analysis .............................................................................................................................. 33
Table 17: PVVNL Analysis................................................................................................................................ 34
Table 18: DVVNL Analysis ............................................................................................................................... 34
Table 19: KESCoL Analysis .............................................................................................................................. 35
Table 20: NPCL Analysis ................................................................................................................................... 35
Table 21: MSEDCL Analysis ............................................................................................................................. 36
Table 22: Rinfra Analysis ................................................................................................................................... 37
Table 23: TPC Analysis...................................................................................................................................... 37
Table 24: NPDCL Analysis ................................................................................................................................ 38
Table 25: SPDCL Analysis ................................................................................................................................ 39
Table 26: EPDCL Analysis ................................................................................................................................ 39
Table 27: CPDCL Analysis ................................................................................................................................ 40
Table 28: Energy Shortage in UP ....................................................................................................................... 60
Table 29: Peak shortage in UP ........................................................................................................................... 61
Table 30: OA at IEX........................................................................................................................................... 62
xii
List of Figures
Figure 1-Services of Global Energy....................................................................................................... 5
Figure 2-Research Methodology.......................................................................................................... 10
Figure 3 : Category of OA ................................................................................................................... 16
Figure 4- Allotment Priority ................................................................................................................ 19
Figure 5- Volume traded at IEX .......................................................................................................... 56
xiii
Chapter 1: Introduction
The Indian power sector has made significant progress over the years. The installed capacity of the
industry grew manifold from 1,361 MW in 1947 to 225 GW till July 2013. The sector has also
undergone substantial structural changes. Regulatory policies have played a predominant role in
changing the landscape of the Indian power sector. Though the sector has come a long way from its
humble beginnings, it is still lagging on several fronts, such as power shortages, T&D losses, and
Grid instability among others, and has a long way to go.
The Electricity Act, 2003 aims at bringing about competitions with the ultimate objective of
ensuring efficiency gains from competition for the consumers. Competition with regulatory
oversight is the hallmark of the legislations and it recognises the important role of the regulatory
commissions in the wake of the challenges that opening of the sector poses for consumers and other
stake holders.
In the context of competition, Open Access is the corner-stone of the Act. OA has been conceived as
an important tool of introducing competition in the electricity industry and ensuring choice to buyers
and suppliers of electricity.
The Act envisages OA in Transmission and distribution network. OA in transmission has been
allowed from the very beginning and without any fetter, however in so far as OA in distribution is
concerned, the law envisages introduction of such OA in phases with due consideration of the
operational constraints and existence of cross subsidy between consumer categories . This
responsibility of phased introduction of OA in distribution has been bestowed on SERCs. Though an
amendment in the Act, it has, however been provided that the state commissions shall provide by
January, 2009 OA to all consumers with load exceeding 1MW.
The issue of OA for consumers with load exceeding 1 MW has been under discussion in recent past
in view of the various interpretations floated in the context. The Govt.of India( Ministry of Power
and Ministry of Law) in its latest interpretation on 31.11.2011 has been anticipated that section 42 of
the act makes it mandatory for all consumers with load exceeding 1 MW to be OA consumers and
that the tariffs for such consumers shall not be regulated by SERCs.
Even as the Central Government is pushing states for mandatory implementation of OA for bulk
1
power consumers, an analysis by a regulators body has revealed that contrary to expectations, the
consumers in 12 states have had to pay more for power under the new regime.
OA at various levels is the hallmark of electricity reforms and the regime has been effective in 20
states since Jan09 on an optional basis. Under the OA regime, bulk consumers enter into bilateral
deals with discoms and stay outside the ambit of the regulated tariff system.
The Electricity Act defines Open Access as non-discriminatory provision for the use of
transmission lines or distriburion system or associated facilities with such lines or system by any
licensee or consumer or a person engaged in generation in accordance with the regulation specified
by the appropriate Commission. As compared to the earlier legal and regulatory regime, the strategic
intent of the act is to promote competition by freeing up possible avaenues of procurement and sale
of power. The provisions of the act relating to delicensing of generation, open access, elimination of
cross-subsidy, dedicated tranmsission lines and definition of captive generating stations are desinged
to allow the freedom to purchase and sell electricity. However, this freedom has little meaning
without the capabitlity to carry the energy from the generating plant to the point of consumption.
This makes the entire arrangements reliant on the transmission and the distribution companies to
transmit the energy, and on regulatory commissions to facilitata the process through adequate
regulations and mechanism to enable non-discriminatoy open access.
Ideally, the net effect of subsidy and cross subsidy should need to be zero but in reality, it is
not zero due to AT&C losses and theft has not been considered in case of CSS formula.
Need to define, who will pay the cross subsidy of renewable? If its obligation has been
removed from paying CSS for its promotion.
To determine open access charges based on economic principles and methodologies adopted
3
by various SERCs.
Find out that whether the customers would really be benefitted through OA or they have
more benefit by retaining with existing licensees.
To understand OA provision outlined in EA 2003 for wheeling of electricity for captive use
and third-party sale.
Enactment of the EA, 2003 has forced for promotion of OA to develop competition in the
market but actual competition is possible only when there is perfect market available like
number of buyers and sellers and most importantly surplus of commodity. When we are
deficit in power and talk about competition, then it creates number of flaws which affects the
interest of consumers.
While implementation of OA, the loss of Discom has not been taken into consideration
though there may be number of surcharge available like CSS to compensate the loss of
Discom but it is not up to the mark to recover the full loss. Due to improper implementation
of OA under the name of Promotion to Competition, now almost all discoms are in losses,
hence it is very important to look into this matter and take some revolutionary steps to
recover the losses of discoms.
Also the theft of Power has not been taken into consideration into CSS which Discom has to
bear although they have taken number of steps to stop theft of electricity.
Besides, DE licensing generation and removing controls on captive generation, the provision
regarding availability of non-discriminatory OA in transmission from the very beginning and
distribution in phased manner is the core of the act.
However, a full fledged competitive electricity structure at distribution side with the quality
and reliable supply at competitive price and choice to consumer to select his supplier is yet to
take off.
The project assumes greater significance to bridge the gap between existing vertically
centralized monopoly system in power sector to a more market oriented decentralized and
competitive system and beneficial to enter into a more globalized and market oriented
economy.
4
1.6.2 Services
Power
Trading
Clean
Energy
Power
Generation
Certificate
Trading
Power
Advisory
Power Trading: Power Trading powered by analytics directed towards equitable growth.
o Analytics driven methodology
o Renewable power transactions and Non Renewable power transactions
o Power supply via OA
Power Generation: Generating energy through renewable sources for a cleaner and greener
tomorrow.
Clean Energy Initiatives: Helping provide for India's burgeoning energy needs.
Energy Certificate trading: Contribution towards the above effort lies in helping clients build their
RE Certificates sales portfolio at the optimum price range through:
Power Advisory: Share knowledge and expertise in the energy sector for a brighter future.
o
o
o
o
The existing long-term transmission agreements should be honoured until modified; else the
issue of stranded assets would arise.
To begin with only spare transmission capacity can be made available for OA.
Since, RLDCs will have a key role to play in the OA related issues; neutrality in their
functioning is expected.
In the new scenario, original beneficiaries will also be treated as OA 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.
Contract Path Method and Incremental Postage Stamp Method have been suggested for OA
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 described by the
Commission.
Special Energy Meters will be installed by the OA customers 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 OA 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 OA under Section 42 of the act so far and in fact in many states the provisions of the Act
7
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 21(1)(a) to make it
explicit that supply of electricity by a generating company to as distribution licensee includes
through an electricity trader. The Task Force also recommended that since no case of OA 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 operationalizing the scheme f 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 OA to consumers.
In 2005, Mr.Nayak, R.N. (PGCIL, Gurgaon) etal describes Indian Power system and the reforms
being undertaken to restructure it. Introduction of OA in transmission has been deliberated in detail.
Various issues arising due to liberalized electricity market and the need of change in power system
planning methods has been mentioned. Need of suitable mechanism for sharing of transmission
charges in the de regulated regime is also deliberated.
Shafqat Mughal [2010] in National Power Engineering Conference presented a paper on The
Changing Scenario of Electricity Trading and Power Market Mechanism in India described
the significance of OA in the power market. He describes OA as the key to a free and fair electricity
market. Power producers (sellers) and dealers/customers (buyers) have to share a common
transmission network for wheeling the power from the point of generation to point of consumption.
The OA provided non-discriminatory use of the inter state and intra state transmission system,
facilitating the trading of power from one utility to other. It also facilitates setting up of Independent
Power Producers (IPPs), Captive Power Producers (CPPs) and merchant power plants. After
implementation of OA, the experience gained has been providing signals for identification of
congested corridors and expansion planning.
S.K. Soonee (C.E.O. POSCO) in his paper [Open Access in Inter-state Transmission] cites the
significance of OA in Trading Market Evolution. It describes various products of Trading, accounts
the short trade in various financial periods.
Tushar Giri Nath in his paper [OPEN ACCESS: UNFINISHED AGENDA OF POWER SECTOR
REFORMS IN INDIA] described Open Access Regulations in transmission and distribution as a
must for the development of private sector power generation and in the development of market for
8
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.
N. Balavenkata Muni et al in journal [ADVANCED OPEN ACCESS PRICING
METHODOLOGIES IN ECONOMICALLY ADAPTED ELECTRIC POWER SYSTEM]
[IJART, Vol.2 Issue 2, 2012, 33 42] describe Open Access as the key to free and fair electricity
market. Under Open Access, transmission acts as a Gate Keeper. It can be closed in defence of
regulated market place or opened to support a greater number of participants.
Ravinder, Talegaonkar Ajay in his journal [Developing Power Exchanges in India : Issues and
challenges] [2008, Vol. 65, Issue 3] discussed the introduction of open access for inter-state
transmission as per the new electricity legislation in India has facilitated bilateral trading resulting in
better resource optimization within an overall deficit scenario. While the volume of traded electricity
is tiny compared to the total consumption, nonetheless it has electrified an otherwise grim scenario.
As a result, the Indian power sector has started at tracing private investment in hydro and thermal
generation at an unprecedented scale.
K. Sarkar S. in his journal [Competition in the electricity sector: tracing recent developments]
[2006, Vol. 12, Issue: 23] described that the Electricity Act 2003 is bold enough to set its objectives
to promote competition in the electricity sector. It has obligated the distribution licensee to allow
non-discriminatory
Open access to various consumers subject to technical requirements and payment of certain
charges. The National Electricity Policy 2005 and the NTP (National Tariff Policy) 2006 have
contained elaborate provisions to meet these objectives. The electricity regulators at the central level
and in more than 12 states have framed the open access regulations. These enabling frameworks are
supposed to bring in many players seeking open 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.
9
StudyStudy
of detailed
procedures
of CTU
of FOR
Model Intra
State for
OAOpen
Access
Regulations
10
The Act envisages Open Access in transmission and distribution network. Open Access in
transmission has been allowed from the very beginning and without any fetter. However, in so far as
Open Access in distribution is concerned, the law envisages introduction of such Open Access in
11
phases with due consideration of the operational constraints and existence of cross subsidy between
consumer categories. This responsibility of phased introduction of open access in distribution has
been bestowed on State Electricity Regulatory Commissions. Through an amendment in the Act, it
has, however been provided that the State Commissions shall provide by January, 2009 open access
to all consumers with load exceeding 1 MW.
The issue of open access for consumers with load exceeding 1 MW has been under discussion in
recent past in view of the various interpretations floated in the context. The Government of India
(Ministry of Power and Ministry of Law) in its latest interpretation on 30.11.2011 has articulated that
Section 42 of the Act makes it mandatory for all consumers with load exceeding 1 MW to be open
access consumers and that the tariffs for such consumers shall not be regulated by SERCs.
Open access enables consumers to obtain their supply of electricity from a generating company or
any licensee, other than the distribution licensee for the area. The distribution licensee will be paid a
wheeling charge; a surcharge to meet the current level of cross-subsidy within the area of supply; and
an additional surcharge to meet the fixed costs of the distribution licensee arising out of his obligation
to supply. The regulator will determine only the wheeling charges and surcharge, not the tariff. The
surcharge is not payable by a captive generation plant.
SECTION 9 (2)
CAPTIVE GENERATION
FUNCTIONS OF CTU
FUNCTIONS OF STU
SECTION 42
SECTION 43
SUPPLY ON REQUEST
Source: ElectricityAct2003
12
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 o transmission facility.
To provide non-discriminatory Open Access to its transmission system for use by Any licensee or generating company on payment of the transmission
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 utilisation 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.
(d) To provide non-discriminatory Open Access to its transmission system for use by:
(i) Any licensee or generating company on payment of the transmission charges.
(ii) Any consumer as and when such Open Access is provided by the State Commission under subsection (2) of section 42, on payment of the transmission charges and a surcharge thereon, as may be
specified by the State 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
13
cross subsidies shall be progressively reduced in the manner as may be specified by the State
Commission.
Provided also that the manner of payment and utilisation 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.
(1) It shall be the duty of a distribution licensee to develop and maintain an efficient, co-ordinated
and economical distribution system in his area of supply and to supply electricity in accordance with
the provisions contained in this Act.
(2) 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.
(1) 1[Save as otherwise provided in this Act, every distribution] licensee, shall, on an application by
the owner or occupier of any premises, give supply of electricity to such premises, within one month
after receipt of the application requiring such supply: Provided that where such supply requires
extension of distribution mains,
Or commissioning of new sub-stations, the distribution licensee shall supply the electricity to such
premises immediately after such extension or commissioning or within such period as may be
specified by the Appropriate Commission:
14
Where the Appropriate Commission has allowed Open Access to certain consumers under
section 42, such consumers, notwithstanding the provisions contained in clause (d) of subsection (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.
Table 2- Stages of Evolution of OA
Stage of evolution
Description
Figure 3 : Category of OA
Long Term Open Access Customers: Period exceeding 12 yrs. but less than 25 yrs.
Medium Term Open Access Customers: Period between 3 months and 3 yrs.
Scheduling
Inter-State: Intra-State Open Access transactions shall be specified by CERC
Intra-State: Intra-State Open Access transactions in respect of load 5MW and above and all
generating stations irrespective of the capacity shall be scheduled by SLDC in accordance with the
provisions of State Grid Code.
No scheduling required in respect of open access consumer having load of less than 5MW and
Captive Power Plants.
2. Person who constructed, maintained, operates or intends to in the state for its own use
3. Distribution Licensee or a person who has applied for a licensee to distribute electricity
Trading Licensee or a person applied for trading in electricity shall be eligible for open access to
intra-state transmission system in accordance with these regulations.
18
Provided that the fee of ` 1 lakh paid by the applicant shall be adjusted against the actual expenditure
to be reimbursed.
LTOA
MTOA
STOA
Existing OA Customer
New OA Customer
19
(2) The Regional Load Dispatch Centre shall be operated by a Government company or any
authority or corporation established or constituted by or under any Central Act, as may be
notified by the Central Government. Provided that until a Government company or authority or
corporation referred to in this sub-section is notified by the Central Government, the Central
Transmission Utility shall operate the Regional Load Dispatch Centre.
Note: Provided further that no Regional Load Dispatch Centre shall engage in the business of
generation of electricity or trading in electricity.
for the purposes of exercising the powers and discharging the functions under this Part.
(2) The State Load Dispatch Centre shall be operated by a Government company or any authority
or corporation established or constituted by or under any State Act, as may be notified by the
State Government. Provided that until a Government company or any authority or corporation
is notified by the State Government, the State Transmission Utility shall operate the State
Load Dispatch Centre.
Note: Provided further that no State Load Dispatch Centre shall engage in the business of
trading in electricity.
(1) The State Government may notify the Board or a Government company as the State
Transmission Utility.
Note: Provided that the State Transmission Utility shall not engage in the business of trading in
electricity.
One of the functions of State Transmission Utility is to provide non-discriminatory open access to its
transmission system for use by
(i) any licensee or generating company on payment of the transmission charges ; or
(ii) any consumer as and when such open access is provided by the State Commission under sub21
section (2) of section 42, on payment of the transmission charges and a surcharge thereon, as
may be specified by the State Commission. The Load Dispatch Centres, transmission utilities are
barred from trading n power in order to ensure non-discriminatory open access to all the
generators/ consumers.
Distribution charges are those charges which are paid to distribution licensee for the use of
distribution system and associated facilities by another person for the conveyance of electricity.
The licensees, generating stations, captive generating plants and consumers shall be eligible for open
access to distribution system of a distribution licensee on payment of the wheeling charges as may be
determined by the Commission
Applicability: These charges are applicable to generating stations, captive generating plants and
consumers who are connected to Discom network i.e., at 11 and 33 kV.
2.
Distribution losses are the technical losses for the distribution system. It is determined by the
Commission for various voltage levels for the applicable year, based on prudence check of the
submissions of the Distribution Licensee during their Tariff determination process and shall be
apportioned in proportion to the actual energy drawl by the Open Access consumers and shall be
payable in kind at relevant voltage level.
Applicability: This loss is applicable to generating stations, captive generating plants and consumers
who are connected to Discom network i.e., at 11 and 33 kV.
3.
Transmission charges are those charges which are paid to transmission licensee for the use of
transmission system and associated facilities by another person for the conveyance of electricity.
22
Applicability: These charges are 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.
4.
Transmission losses are those losses which are there in the transmission system. The buyers and
sellers shall absorb apportioned energy losses in the transmission system in accordance with the
provisions specified by the Central Commission.
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.
5.
It is a transmission charge pricing methodology introduced for sharing of Inter State Transmission
Systems (ISTS) charges and Losses among the Designated ISTS Customers (DICs) depending on
their location and sensitive to their distances from load centres (generators) and generation
(customers) and the direction of the node in the grid.
Applicability: This charges and losses are applicable to generating stations, captive generating plants
and consumers who are connected to central transmission network or to state transmission network
i.e., at 66 or 132 kV and Discom network i.e., at 11 and 33 kV.
6.
If open access facility is availed of by a subsidising consumer of a distribution licensee of the State,
then such consumer, in addition to transmission and/or wheeling charges, shall pay cross subsidy
surcharge determined by the Commission. Cross subsidy 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. The amount of surcharge shall be paid to the distribution
licensee of the area of supply from whom the consumer was availing supply before seeking open
access.
Applicability: This charge is paid by open access consumers irrespective of voltage or connectivity
level.
23
Application Fees
A person seeking Open Access shall make an application in the prescribed format to the Distribution
Licensee to which it is connected. The application fees in general for short term open access
consumer is ` 5000/application.
8.
SLDC Charge
A composite operating charge @ ` 2, 000/- per day in general or part of the day shall be payable by a
short-term open access customer for each transaction to the SLDC or as determined by the
Commission from time to time. The operating charge includes fee for scheduling and system
operation, energy accounting, fee for affecting revisions in schedule on bonafide grounds and
collection and disbursement of charges.
Applicability: This charge is payable to both injecting and drawing SLDC.
9.
RLDC Charge
24
1. NLDC Application Fees: ` 5000/ (No. of Successful bidders), applicable for power
exchange transactions.
2. NLDC Scheduling and Operating Charges: ` 5,000.00 x (Regional Entity Buyers +
Regional Entity Sellers) / (No. of Successful Portfolios), applicable for power exchange
transactions.
3. Trading Margin: trading margin exceeding seven (7.0) paisa/kWh in case the sale price is
exceeding Rupees three (3.0)/kWh and four (4.0) paisa/kWh where the sale price is less than
or equal to Rupees three (3.0)/kWh.
4. Exchange Charges: Rs 20/Mwh, applicable for power exchange transactions.
5. Service Tax: 12.36% of Exchange Charges (`/Mwh), applicable for power exchange
transactions.
3.9
The mismatch between the scheduled and the actual drawl/ scheduled and the actual injection
at the interface points may be met from the grid, which shall be governed by UI pricing
mechanism.
Unless specified otherwise by the State Commission concerned, the UI rate for intra-State
entity shall be 105% (for over-drawls or under generation) and 95% (for under-drawls or over
generation) of the UI rate at the periphery of regional entity.
Each 0.02 Hz step is equivalent to 16.50 Paisa/KWh in 50.2-50.00 Hz frequency range, 28.50
Paisa/KWh in 50 Hz to 49.80 Hz and 28.12 Paisa/KWh in frequency in the below 49.8 Hz to 49.5 Hz
range.
25
4.1 Assumptions
Voltage at Generation End Injection Point
132 kV
5 MW
Load Factor
Cost of Generation
APPC method
Type of Consumer
Industrial Consumer
Table 4- Assumptions for OA analysis
26
The format used by MERC for calculation of OA charges has been considered for the ease of
analysis.
4.3 Punjab
Open Access office under Chief Engineer/SLDC, PSTCL, and Patiala is a nodal agency in
state power utilities for grant of short term open access to all eligible customers & consumers
of PSPCL. Open Access is being granted in discriminatorily by PSTCL to all the eligible
open access customers embedded in Transmission and Distribution system of PSTCL &
PSPCL as per provisions of Electricity Act-2003 and Open Access Regulations issued by
Punjab State Electricity Regulatory Commission (PSERC) and Central Electricity Regulatory
27
Commission (CERC) from time to time. Presently Open Access for interstate sale of power
has been granted to three embedded power plants for third party sale of power through power
exchange/bi-lateral agreements. (Total 59.8 MW approx.)
Open Access has already been granted to 316 no. Large supply consumers of PSPCL
(Powercom) for purchase of power through power exchange. (Total 1360 MW approx.) 293
no. consumers are presently purchasing power through power exchange as per their
requirement against a total permission of purchase granted for 1287 MW. Open Access
office also deals with the energy accounting of UI based energy of Open Access customers
and reactive energy accounts and records are maintained for UI, reactive energy and
assessment of open access charges.
There are 373 OA consumers in Punjab with a combined load of 1569.26 MW.
132 KV
66KV
33 KV
11 KV
No. of OA
customers
5
104
3
261
CBC
Ludhiana
CBC
Jalandhar
CBC
Patiala
CBC
Bathinda
No. of OA
customers
283
35
32
23
Table 5- OA consumers in Punjab
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Cost Benefit
Case 1
132 kV
2.88
` 3.67
2.50 %
` 0.27 / unit
N.A.
N.A.
` 1.14/unit
N.A.
` 5.18 / unit
` 6.38/unit
Case 2
33kV
2.88
` 3.67
2.50 %
` 0.27 / unit
4.76%
` 1.19 / unit
` 1.14/unit
N.A.
` 6.57 / unit
` 6.38 / unit
Case 3
11kV
2.88
` 3.67
2.50 %
` 0.27 / unit
8.53%
` 1.19 / unit
` 1.14/unit
N.A.
` 6.75 / unit
` 6.38 / unit
` 1.2/ unit
` - 0.19/ unit
` - 0.37/ unit
28
373
373
4.4 Gujarat
GERC Gujarat Electricity Regulatory Commission
GETCO Gujarat Energy Transmission Corporation Limited (Transco)
UGVCL Uttar Gujarat Vij Company Ltd.
MGVCLMadhya Gujarat Vij Company Ltd.
PGVCL Paschim Gujarat Vij Company Ltd.
DGVCL Dakshin Gujarat Vij Company Ltd.
Torrent Power - Ahmedabad
The GERC notified MYT Regulations 2011 on 22nd March, 2011. All Discoms submitted the
True up of FY 2011-12 and calculation of revenue estimates for FY 2013-14.
STOA consumers in Gujarat for the month of August, 2013 are:
No.of
STOA
consumers
UGVCL
PGVCL
MGVCL
DGVCL
Torrent
Total
63
92
40
97
29
321
STU
118
Discom
203
STU
14
Discom
1 (MGVCL)
29
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Time of use Charges
Final Tariff
Cost Benefit
Case 1
132 kV
2.88
` 4.49
4.81 %
` 0.13 / unit
N.A.
N.A.
` 0.45 /unit
N.A.
` 5.35 / unit
` 5.27/unit
` 0.25 / unit
` 5.52 / unit
Case 2
11 kV
2.88
` 4.49
4.81 %
` 0.13 / unit
10 %
` 0.3 / unit
` 0.45 /unit
N.A.
` 6.01 / unit
` 5.27 / unit
` 0.25 / unit
` 5.52 / unit
Case 3
LT
2.88
` 4.49
4.81%
` 0.13 / unit
10.82 %
` 1.15 / unit
` 0.45 /unit
N.A.
` 6.37 / unit
` 5.27 / unit
` 0 / unit
` 5.27 / unit
` 0.17/ unit
` - 0.49/ unit
` - 1.1/ unit
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Time of use Charges
Final Tariff
Cost Benefit
Case 1
132 kV
2.88
` 4.54
4.81 %
` 0.13 / unit
N.A.
N.A.
` 0.45 /unit
N.A.
` 5.35 / unit
` 5.48/unit
` 0.25 / unit
` 5.73 / unit
Case 2
11 kV
2.88
` 4.54
4.81 %
` 0.13 / unit
10 %
` 0.3 / unit
` 0.45 /unit
N.A.
` 6.01 / unit
` 5.48 / unit
` 0.25 / unit
` 5.73 / unit
Case 3
LT
2.88
` 4.54
4.81%
` 0.13 / unit
10.82 %
` 1.15 / unit
` 0.45 /unit
N.A.
` 6.37 / unit
` 5.48 / unit
` 0 / unit
` 5.48 / unit
` 0.38/ unit
` - 0.28/ unit
` - 0.89/ unit
30
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Time of use Charges
Final Tariff
Cost Benefit
Case 1
132 kV
2.88
` 4.54
4.81 %
` 0.13 / unit
N.A.
N.A.
` 0.45 /unit
N.A.
` 5.35 / unit
` 5.67/unit
` 0.25 / unit
` 5.92 / unit
Case 2
11 kV
2.88
` 4.54
4.81 %
` 0.13 / unit
10 %
` 0.3 / unit
` 0.45 /unit
N.A.
` 6.01 / unit
` 5.67/unit
` 0.25 / unit
` 5.92 / unit
Case 3
LT
2.88
` 4.54
4.81%
` 0.13 / unit
10.82 %
` 1.15 / unit
` 0.45 /unit
N.A.
` 6.37 / unit
` 5.67/unit
` 0 / unit
` 5.67 / unit
` 0.57/ unit
` - 0.09/ unit
` - 0.7/ unit
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Time of use Charges
Final Tariff
Cost Benefit
Case 1
132 kV
2.88
` 4.54
4.81 %
` 0.13 / unit
N.A.
N.A.
` 0.45 /unit
N.A.
` 5.35 / unit
` 5.86/unit
` 0.25 / unit
` 6.11 / unit
Case 2
11 kV
2.88
` 4.54
4.81 %
` 0.13 / unit
10 %
` 0.3 / unit
` 0.45 /unit
N.A.
` 6.01 / unit
` 5.86/unit
` 0.25 / unit
` 6.11 / unit
Case 3
LT
2.88
` 4.54
4.81%
` 0.13 / unit
10.82 %
` 1.15 / unit
` 0.45 /unit
N.A.
` 6.37 / unit
` 5.86/unit
` 0 / unit
` 5.86 / unit
` 0.76/ unit
` 0.10/ unit
` - 0.51/ unit
31
Case 1
132 kV
2.88
` 4.49
4.81 %
` 0.13 / unit
N.A.
N.A.
` 0.29 /unit
N.A.
` 5.14 / unit
` 6.39 /unit
` 0.25 / unit
` 6.64 /unit
Case 2
11 kV
2.88
` 4.49
4.81 %
` 0.13 / unit
3%
` 0.28 / unit
` 0.29 /unit
N.A.
` 5.57 / unit
` 6.39 /unit
` 0.25 / unit
` 6.64 /unit
Case 3
LT
2.88
` 4.49
4.81%
` 0.13 / unit
3%
` 0.28 / unit
` 0.29 /unit
N.A.
` 5.57 / unit
` 4.39 /unit
` 0 / unit
` 4.39 /unit
` 1.50/ unit
` 1.07/ unit
` - 1.18 / unit
The Commission has issued UPERC Open Access Regulation, 2004 to operationalize long
term and short term OA in the state. The regulations also provide that effective from April 1,
2008 any consumer with demand above 1 MW can avail OA of T&D systems.
There was no authentic data available for OA consumers in the state. According to IEX
source there were no industrial participants for OA at IEX.
32
Case 1
132 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
N.A.
N.A.
Nil
N.A.
` 3.73 / unit
` 6.05/unit
Case 2
> 11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
7%
` 0.078 / unit
Nil
N.A.
` 4.09 / unit
` 6.05/unit
Case 3
11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
8%
` 0.124 / unit
Nil
N.A.
` 4.18 / unit
` 6.16 unit
` 2.32/ unit
` 1.96/ unit
` 1.98/ unit
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Cost Benefit
Case 1
132 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
N.A.
N.A.
Nil
N.A.
` 3.73 / unit
` 6.05/unit
Case 2
> 11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
7%
` 0.078 / unit
Nil
N.A.
` 4.09 / unit
` 6.05/unit
Case 3
11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
8%
` 0.124 / unit
Nil
N.A.
` 4.18 / unit
` 6.16 unit
` 2.32/ unit
` 1.96/ unit
` 1.98/ unit
33
Case 1
132 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
N.A.
N.A.
Nil
N.A.
` 3.73 / unit
` 6.05/unit
Case 2
> 11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
7%
` 0.078 / unit
Nil
N.A.
` 4.09 / unit
` 6.05/unit
Case 3
11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
8%
` 0.124 / unit
Nil
N.A.
` 4.18 / unit
` 6.16 unit
` 2.32/ unit
` 1.96/ unit
` 1.98/ unit
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Cost Benefit
Case 1
132 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
N.A.
N.A.
Nil
N.A.
` 3.73 / unit
` 6.05/unit
Case 2
> 11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
7%
` 0.078 / unit
Nil
N.A.
` 4.09 / unit
` 6.05/unit
Case 3
11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
8%
` 0.124 / unit
Nil
N.A.
` 4.18 / unit
` 6.16 unit
` 2.32/ unit
` 1.96/ unit
` 1.98/ unit
34
Case 1
132 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
N.A.
N.A.
Nil
N.A.
` 3.73 / unit
` 6.05/unit
Case 2
> 11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
7%
` 0.078 / unit
Nil
N.A.
` 4.09 / unit
` 6.05/unit
Case 3
11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
8%
` 0.124 / unit
Nil
N.A.
` 4.18 / unit
` 6.16 unit
` 2.32/ unit
` 1.96/ unit
` 1.98/ unit
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Cost Benefit
Case 1
132 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
N.A.
N.A.
Nil
N.A.
` 3.73 / unit
` 6.05/unit
Case 2
> 11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
2%
` 0.08 / unit
Nil
N.A.
` 3.90 / unit
` 6.05/unit
Case 3
11 kV
2.88
` 3.56
3.67 %
` 0.034 / unit
3%
` 0.13 / unit
Nil
N.A.
` 3.97 / unit
` 6.16 unit
` 2.32/ unit
` 2.15/ unit
` 2.19/ unit
35
4.6 Maharashtra
In Maharashtra, OA started in 2005 with the guideline of MERCs regulations 2005. In
Maharashtra, there are four Discoms namely:
There are 87 STOA consumers in the state as of Jul, 2013 with major consumers being
CPP/IPP consumers.
4.6.1 MSEDCL
Injection Point 132 kV
Parameter
Drawl Point
Energy Injected
(MUs)
Cost of Generation
Transmission Losses
Transmission
Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy
Surcharge
Additional
Surcharge
Effective Rate
Tariff through
Discom
Time of use Charges
Final Tariff
Cost Benefit
Case 1
132 kV
2.88
Case 2
33 kV
2.88
Case 3
11 kV
2.88
Case 4
LT
2.88
` 4.48
4.19 %
` 0.43 / unit
` 4.48
4.19 %
` 0.43 / unit
` 4.48
4.19 %
` 0.43 / unit
` 4.48
4.19 %
` 0.43 / unit
N.A.
N.A.
` 1.20 / unit
6%
` 0.11 / unit
` 0.76 / unit
9%
` 0.60 / unit
` 0.10 / unit
12.50 %
` 1.03 / unit
` 0.73 / unit
N.A.
N.A.
N.A.
N.A.
` 6.31 / unit
` 7.43/unit
` 6.31 / unit
` 7.43/unit
` 6.32 / unit
` 7.43/unit
` 7.60 / unit
` 7.04 / unit
` -0.08 / unit
` 7.35 / unit
` -0.08 / unit
` 7.35/ unit
` -0.08 / unit
` 7.35 / unit
` -0.08 /unit
` 6.96 / unit
` 1.04/ unit
` 1.04/ unit
` 1.03/ unit
`-0.64/unit
36
4.6.2 R-Infra D
Injection Point 132 kV
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy
Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Time of use Charges
Final Tariff
Cost Benefit
Case 1
132 kV
2.88
` 4.48
4.19 %
` 0.43 / unit
N.A.
N.A.
` 2.36 / unit
Case 2
33 kV
2.88
` 4.48
4.19 %
` 0.43 / unit
1.94 %
` 0.76 / unit
` 1.80 / unit
Case 3
11 kV
2.88
` 4.48
4.19 %
` 0.43 / unit
1.94 %
` 0.76 / unit
` 1.80 / unit
Case 4
LT
2.88
` 4.48
4.19 %
` 0.43 / unit
9%
` 1.46 / unit
` 1.00 / unit
N.A.
` 7.47 / unit
` 7.60/unit
` -0.50 / unit
` 7.10 / unit
N.A.
` 7.77 / unit
` 7.60/unit
` -0.50 / unit
` 7.10 / unit
N.A.
` 7.77 / unit
` 7.60/unit
` -0.50 / unit
` 7.10 / unit
N.A.
` 8.08 / unit
` 7.58 / unit
` -0.50 /unit
` 6.94 / unit
` -0.37/ unit
` - 0.67/ unit
` -0.67/ unit
`-1.14/unit
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Time of use Charges
Final Tariff
Cost Benefit
Case 1
132 kV
2.88
` 4.48
4.19 %
` 0.43 / unit
N.A.
N.A.
Nil
N.A.
` 5.11 / unit
` 6.24/unit
` -0.50 / unit
` 5.74 / unit
Case 2
33 kV
2.88
` 4.48
4.19 %
` 0.43 / unit
1.12 %
` 0.89 / unit
Nil
N.A.
` 6.06 / unit
` 6.24/unit
` -0.50 / unit
` 5.74 / unit
Case 3
11 kV
2.88
` 4.48
4.19 %
` 0.43 / unit
1.12 %
` 0.89/ unit
Nil
N.A.
` 6.06 / unit
` 6.24/unit
` -0.50 / unit
` 5.74 / unit
Case 4
LT
2.88
` 4.48
4.19 %
` 0.43 / unit
1.12%
` 1.87 / unit
Nil
N.A.
` 7.04 / unit
` 5.56 / unit
` -0.50 /unit
` 5.06 / unit
` 0.63/ unit
` - 0.32/ unit
` -0.32/ unit
`-1.98/unit
37
4.7.1 NPDCL
Injection Point 132 kV
Parameter
Drawl Point
Energy Injected
(MUs)
Cost of Generation
Transmission Losses
Transmission
Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy
Surcharge
Additional
Surcharge
Effective Rate
Tariff through
Discom
Cost Benefit
Case 1
132 kV
2.88
Case 2
33 kV
2.88
Case 3
11 kV
2.88
Case 4
LT
2.88
` 3.60
4.02 %
` 0.08 / unit
` 3.60
4.02 %
` 0.08 / unit
` 3.60
4.02 %
` 0.08 / unit
` 3.60
4.02 %
` 0.08 / unit
N.A.
N.A.
Nil
3.90 %
` 0.046 / unit
Nil
8.08 %
` 0.50/ unit
Nil
13.14%
` 1.15 / unit
Nil
N.A.
N.A.
N.A.
N.A.
` 3.84 / unit
` 5.04/unit
` 4.01 / unit
` 5.44/unit
` 4.37 / unit
` 5.87/unit
` 4.90 / unit
` 6.18 / unit
` 1.20/ unit
` 1.43/ unit
` 1.50/ unit
` 1.28/unit
38
4.7.2 SPDCL
Injection Point 132 kV
Parameter
Drawl Point
Energy Injected (MUs)
Cost of Generation
Transmission Losses
Transmission Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy
Surcharge
Additional Surcharge
Effective Rate
Tariff through Discom
Cost Benefit
Case 1
132 kV
2.88
` 3.79
4.02 %
` 0.08 / unit
N.A.
N.A.
Nil
Case 2
33 kV
2.88
` 3.79
4.02 %
` 0.08 / unit
3.40 %
` 0.10 / unit
Nil
Case 3
11 kV
2.88
` 3.79
4.02 %
` 0.08 / unit
7.51 %
` 0.64/ unit
Nil
Case 4
LT
2.88
` 3.79
4.02 %
` 0.08 / unit
12.22%
` 1.22 / unit
Nil
N.A.
` 4.04 / unit
` 5.04/unit
N.A.
` 4.22 / unit
` 5.44/unit
N.A.
` 4.62 / unit
` 5.87/unit
N.A.
` 5.11 / unit
` 6.18 / unit
` 1.00/ unit
` 1.22/ unit
` 1.25/ unit
` 1.07/unit
4.7.3 EPDCL
Injection Point 132 kV
Table 26: EPDCL Analysis
Parameter
Drawl Point
Energy Injected
(MUs)
Cost of Generation
Transmission Losses
Transmission
Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy
Surcharge
Additional
Surcharge
Effective Rate
Tariff through
Discom
Cost Benefit
Case 1
132 kV
2.88
Case 2
33 kV
2.88
Case 3
11 kV
2.88
Case 4
LT
2.88
` 3.75
4.02 %
` 0.08 / unit
` 3.75
4.02 %
` 0.08 / unit
` 3.75
4.02 %
` 0.08 / unit
` 3.75
4.02 %
` 0.08 / unit
N.A.
N.A.
Nil
3.39 %
` 0.03 / unit
Nil
7.47 %
` 0.27/ unit
Nil
12.10%
` 0.91 / unit
Nil
N.A.
N.A.
N.A.
N.A.
` 4.00 / unit
` 5.04/unit
` 4.17 / unit
` 5.44/unit
` 4.59 / unit
` 5.87/unit
` 5.46 / unit
` 6.18 / unit
` 1.04/ unit
` 1.27/ unit
` 1.28/ unit
` 0.72/unit
39
4.7.4 CPDCL
Injection Point 132 kV
Parameter
Drawl Point
Energy Injected
(MUs)
Cost of Generation
Transmission Losses
Transmission
Charge
Wheeling Losses
Wheeling Charges
Cross Subsidy
Surcharge
Additional
Surcharge
Effective Rate
Tariff through
Discom
Cost Benefit
Case 1
132 kV
2.88
Case 2
33 kV
2.88
Case 3
11 kV
2.88
Case 4
LT
2.88
` 3.74
4.02 %
` 0.08 / unit
` 3.74
4.02 %
` 0.08 / unit
` 3.74
4.02 %
` 0.08 / unit
` 3.74
4.02 %
` 0.08 / unit
N.A.
N.A.
Nil
3.96 %
` 0.04 / unit
Nil
7.80 %
` 0.28/ unit
Nil
12.50%
` 0.90 / unit
Nil
N.A.
N.A.
N.A.
N.A.
` 3.99 / unit
` 5.04/unit
` 4.20 / unit
` 5.44/unit
` 4.61 / unit
` 5.87/unit
` 5.46 / unit
` 6.18 / unit
` 1.05/ unit
` 1.24/ unit
` 1.26/ unit
` 0.72/unit
40
directive does not conform with the provisions of the EA 2003 as it overlaps with the
universal obligation of a distribution licensee to supply power under Section 43 with the
rights of a consumer, licensees or generators under Section 42.
4.8.2 Gujarat
The Electricity network in Gujarat is managed by five Discom, 4 of them are owned by
Government (UGVCL, MGVCL, PGVCL and DGVCL) while 1 is a private entity (Torrent
Power). The Average Power Purchase Cost (APPC) method is considered for computation of
effective rate of power supply through OA. Owning to low losses in the states, consumers get
reliable power supply. Transmission charges for using STU network have been kept at
minimal amount. CSS for the 4 Govt. owned Discom is kept high above `1 per unit owning
to increase in tariff rate for OA consumers. While for Torrent Power, Commission has fixed
combined component of Wheeling charge and CSS at ` 0.57 per unit, thus making CSS at `
0.29 per unit in the area.
Considering different voltage level at drawl point, getting supply through STU network at
132 kV proves out to be most economical with saving of varying per unit for the 4 discoms
while this has substantial gain in region of Torrent power with
favouring usage of OA at this network. While for lower voltage network involving Discom
network, OA proves to be a costly affair owning to wheeling losses and charges in the
network. In case of Torrent Power, it still helps the industrial consumers at 11 kV network
with advantage of ` 1 per unit through OA when compared with Discom. At LT network,
OA for industrial consumers is not beneficial due to high difference in tariff when compared
with Discom tariff.
GERC initiatives
GERC notified OA regulations in 2005. State has implemented intra-state ABT w.e.f.
05.04.2010 which is pre-requisite for implementation of OA. Subsequently GERC OA
Regulation 2011 notified as per model regulation of FOR. Gujarat has also been providing
adequate infrastructure support to OA consumers in the state.
42
UPERC initiatives
UPERC was one of the first state regulators to notify them under the terms and conditions of
OA regulations in June 2005. Moreover, amendments to these regulations were released in
June 2009. As per the regulations, any consumer with a load of 1 MW and above with a
minimum connectivity level of 11kV can avail OA. The SLDC is designated as the nodal
agency for STOA. Despite the enabling legislative and regulatory provisions, applications for
OA are yet to be approved. In fact, the UPSLDC was established in January 2011, almost six
years after the notification of OA regulations. It is under resourced and therefore, carrying out
operations to a limited extent.
43
4.8.4 Maharashtra
Maharashtra electricity distribution network is managed by four discoms, with MSEDCL
covering the major portion of the state. With Tata Power, Reliance Infra and BEST covering
the Mumbai region. All charges levied on the discoms are based on their ARR petition and
thus approval from MERC. Time of Day (TOD) usage is effectively implemented in the state
with provision for incentives for usage during the day. MERC implemented MYT regulations
and thus are followed in the second control period as well in 2013-14.
Considering the area under MSEDCL, OA consumers have significant advantage of using
OA over Discom power due to charges levied on the consumers in form of Wheeling and
CSS in the area and also high energy charges in Discom network. This helps OA consumers
using STU network at 132kV can save almost ` 1 per unit and also in case of network at
33kV and 11kV. While drawing power at LT is not favourable due to high cost through OA.
In case of Tata Power, there is No CSS being levied on the users which immensely helps the
OA consumers in reducing their tariff to be charged. While Energy charge in the region is
low, thus advantage of OA over Discom power is reduced. Connectivity at STU network
helps with a gain of ` 0.63 per unit for OA consumers, it is not advantageous at other voltage
levels. At LT level, Discom power is preferable as OA proves costly by almost ` 2 per unit.
In region of Reliance Infra, OA is not at all preferable due to high CSS and thus makes OA
power expensive with loss ranging from ` 0.37 per unit to ` 1.14 per unit w.r.t 132kV to LT
network. Thus, OA doesnt hold significant advantage in this region.
MERC initiatives
The Maharashtra state energy departments principal secretary Mr. Mehta has in a letter dated
31.07.2013, written to MERC (Maharashtra Electricity Regulatory Commission) asking the
regulator to review relevant policies/regulations in context of granting open-access, which
supposedly is impacting the tariff for low-end consumers of the state.
The govt. expressed its concern over the methodology and operationalization of open-access
regulations which as per the govt. is going to jeopardize the financial conditions of low-end
44
consumers in state. The govt. has explicitly mentioned that it wants the chief regulator to
check the grants of OA through exchanges and that to renewable energy generators.
Power guzzlers may now be allowed to buy power directly from any other source, but they
cannot force their previous distribution utility to bail them out in case of non-availability of
power from the new supplier. This has been ruled by the Supreme Court in the special leave
petition moved by the state-owned power distribution company, Mahavitaran.
The utility had moved the Supreme Court after the Bombay high court refused to grant
interim relief to it against the Maharashtra Electricity Regulatory Commissions (MERC)
directive to allow open access a procedure in which a consumer can buy power directly
from other supplier across the country by paying carrying charges to distribution and
transmission companies. At present, open access proposals of 500MW are pending for
approval before the MERC. Of this, Ispat Industries alone wants 300MW from a source other
than the state-owned power distribution company.
this difference is widened and saves ` 1.50 per unit to OA consumers at this voltage. Even at
LT network, Discom power comes up at ` 6.18 per unit when compared OA power at ` 4.90,
thus giving away benefit of ` 1.28 per unit to OA consumers.
For OA consumers in SPDCL region, getting power at 132kV network directly helps them
save ` 1.00 per unit over grid power. At 33kV network, owning to energy charge, ` 1.22 per
unit advantage of OA can be seen over Discom. While at 11kV network, OA is still beneficial
with ` 1.25 per unit saving and at LT network, ` 1.07 per unit can be saved using OA.
In case of EPDCL, similar trend can be observed and in all four networks, OA is
advantageous over Discom power with savings of ` 1.04, ` 1.27, ` 1.28 and ` 0.72 per unit
at 132kV, 33kV, and 11kV and LT network respectively.
CPDCL is now far behind and this also supports OA over Discom. While getting power at
132kV network helps in saving ` 1.05 per unit, ` 1.24 per unit can be saved at 33kV
network. At 11kV network, OA power is cheaper as compared to Discom power by ` 1.26
per unit and at LT network, it is advantageous by ` 0.72 per unit over Discom.
APERC initiatives
CSS has been waived on OA transactions by the commission vide R&C order issued 01-1112. This has been done in view of R&C measures taken by the commission. All the Discom
are directed to take into account 90% of scheduled energy and corresponding demand ,
procured by the consumers through inter-state OA (bi-lateral or through exchange), for the
purpose of provisional monthly settlement for the sake of billed energy/demand from the
discoms side. Even by the erratic power supply standards that Indian industry has had to bear
with for years, factories in Andhra Pradesh have had an unusually tough 2012. Power
shortages in the state had been acute for well over a year and a half, but in August last year,
the state government began implementing a "power holiday" for industrial consumers three
days a week. This has triggered demand for OA in the state thus providing them round the
clock power supply at an affordable cost.
46
service model. For example, in the case of AP, using the average Fully Allocated Costs
(FAC) will the increase the gap from `1434 crores to ` 2718 crores.
The main problem with the cost of service estimation is the non-availability of reliable
consumer category wise consumption data. All agriculture consumption is unmetered. Some
proportion of other consumption is assessed because of non-existent or faulty meters. In some
states, rural domestic consumption is also charged at a flat rate with no incentive for accurate
metering. In Andhra Pradesh, where about 3.5 million new meters have been installed and
about 4 million defective meters replaced during the four years 2000-04, in one of the
DISCOMS almost 20% of the billed units were on assessed basis.
to trade it with other state utilities by availing of open access without payment of the
transmission charges. In this manner, the market for short-term trading in power
would get monopolized by the state utilities.
c) 'Early birds' would take advantage and others would not get open access due to
congestion. Thus, it may result in heart-burning among the long-term open access
customers due to disproportionate usage of the network.
d) Free usage might result in what is referred to as 'tragedy of the commons'. No one
values and cares for a service available free of charge, and this may ultimately result
in slackening of investment in transmission sector.
e) On the same reasoning, any embedded customer while availing of such inter-state
open access would also not be required to pay for using the network of the state utility
in which it is embedded.
f) Similar treatment would be expected for intra-state transactions, more so because the
procedure and methodology adopted by the Central Commission, serves as a guide for
the State Commissions.
The existing methodology for treatment of transmission losses will also call for a review
simultaneously. At present, average losses are being apportioned in kind to the short-term
open access customers, irrespective of the fact whether they are causing or relieving
congestion. It will be fair that short-term customers are levied incremental transmission
losses if they are causing congestion and are not apportioned any transmission losses in
case they are relieving congestion. Such a differential treatment of transmission losses
will also help in optimal utilization of the transmission network by creating incentive for
relieving congestion.
Open access in transmission will promote competition and in turn lead to availability
of cheaper power. The policy emphasizes that the Regulatory Commissions need to
provide facilitative framework for non-discriminatory open access at the earliest
including technological up gradation of the State Load Dispatch Centres to ensure
Open access in distribution networks, initially for bulk consumers, would increase the
availability of cheaper and reliable power supply. State Regulatory Commissions have
been mandated to notify regulations by June 2005 for laying down the road map for
introducing open access in distribution. It has also been envisaged that amount of
cross-subsidy surcharge and additional surcharge to be levied from consumers who
are permitted open access should not become so onerous that it eliminates
competition.
According to Haryana Vidyut Parishad Nigam (HVPN), these statements by farmers are not
confirmed by the reality on the ground. In spite of significant increase in unmetered tariff and
attractive metered tariffs, farmers still prefer to take unmetered connection. According to
them there are several difficulties encountered in the installation of meters.
i.
It is necessary to house the meter in a safe weather proof place, and farmers are not
ready to construct the room or shed for the meters.
ii.
Farmers apprehend that once the meter is installed they would be questioned for the
extra-consumption for other purpose for the pumping load and their unauthorized load
would be detected;
iii.
Farmers do not own the responsibility of the safe custody of the meters, as these are
not covered under their power supply contract for unmetered connections;
iv.
The utility is neither able to recover the cost of the meter nor charge any meter rental
or maintenance charges;
v.
The cost of reading the meters would be an extra financial burden to the utility;
vi.
There are reports of the meters having been removed by the farmers and damage to
the meters.
According to the HVPN the metering program will be successful only if the unmetered tariff
is totally withdrawn and there is no option for farmers other than to have a metered
connection.
Most farmers organizations have justified resistance to metering and tariff increases given
the poor quality of power supply. Several studies have concluded that farmers are willing to
pay more for power if the supply is reliable and of better quality. Of course, there is no
guarantee that farmers will actually pay more once the supply has improved. Studies have
also found that farmers are unwilling to pay more if the quality of supply is already good. In
any case, it will be easier for politicians to justify and utilities to implement installation of
meters and increase in tariffs if it is accompanied by improvements in quality and reliability.
Elimination of power subsidies for agriculture appears infeasible in the short term given the
critical role of groundwater irrigation in agriculture. The poor condition of canal irrigation
along with flat rate subsidized power tariffs has led to increasing reliance on pumped ground
water. Ground water provides a more flexible and reliable source of irrigation than surface
52
water, in spite of the poor quality of power supply. The increasing reliance on ground water
for irrigation is reflected in the fact that during the period 1990-99 the area under canal
irrigation remained virtually constant at 17-18 million hectares. The share of land under canal
irrigation dropped from 37% to 31% while the share irrigated by wells increased from 51 to
58%. More specifically, the share irrigated by tube wells increased from 30 to 36%.
Given these factors regulators have been largely unsuccessful in dealing with the problems of
power supply to agriculture. Attempts at metering of pump-sets and quantitative restrictions
on the overall supply of power to agriculture have not worked. Farmers have been ignored
attractive metered tariffs and continue to prefer flat rate supply. Hence there is need to work
out structural solutions to the problem.
a social charge to be levied upon non-rural consumers for subsidizing the rural supplies,
whether serviced by a private or a state entity is an option that could be considered along with
budgetary support from the government.
The Expert Committee on State-specific reforms (MoP September2002) recommends a
carving out of the states into concentrated and other zones. The main rationale for
concentrated zoning is to eliminate or at least minimize the problem of misreporting T & D
losses as subsidized agriculture consumption. It is also expected to make the remaining
distribution business attractive for private investors. Considering the distinct characteristics
of electricity supply to rural areas and the international experience the committee
recommends that,
The government would ring-fence the subsidy that is targeted towards the rural zones and
deploys it diligently through a combination of innovative solutions such as minimum subsidy
bidding and involving user cooperatives and local franchisees, and fostering of institutions to
provide quality advice to these franchisees on financial, technical and managerial matters.
Several issues will need to be sorted out in creating a separate organization for supplying
power to agriculture:
i.
Organization form:
This is likely to be a government organization, carved out of the existing SEBs. However, it
would need to use appropriate local organization form such as co-operatives, village
committees and franchisees to perform most of its tasks of routine maintenance and billing
and collection. There is some experience with village committees in Orissa.
ii.
Agriculture metering is likely to be a long drawn out process for rural areas in general, and
agriculture in particular, in the face of resistance of farmers. Therefore, the only way to
determine the exact amount of supply to agriculture is to physically separate the network and
measure the input into the system. Separation of the network is also necessary for controlling
the quality and timing of power supply to agriculture.
iii.
Delivery of subsidies: Mechanisms for delivering subsidies are possible only with
54
II.
III. Urban-rural structure featuring two urban and four rural distribution
companies
55
So at that time, Rao's company decided to obtain clearances from its power distribution
company (Discom), which allowed the company to buy power through "open access". Simply
put, the company could now buy power from any power plant in the country either directly,
or by placing bids on a power exchange, rather than relying on its local Discom. The power
would be routed to the factory through the existing network of lines and feeders. "We buy up
to 2 lakh units a day," says Rao.
In the wake of Andhra's power crisis, scores of other industries have gone down the open
access path. "We have seen many customers from Andhra Pradesh join us over the last year
or so," says Rajesh Mediratta, director of business development at Indian Energy Exchange
(IEX), India's largest power exchange, which has a 27% share of the market for "short-term"
power.
56
NAVIGATING THE MIDDLEMEN While the short-term power market is officially used
to describe transactions where power is supplied for periods of less than a year, in actual
practice the bulk of deals on the IEX is for literally the next day. A power consumer in
Andhra will, for instance, bid to buy power for 11 am to 5 pm the following day. That power
could be supplied by a plant in Chhattisgarh, and routed through a series of lines in the
national grid, and the Andhra state grid, to the consumer's doorstep. But it's along that path
that all the problems and intermediaries lie.
The biggest of them is, of course, the SEBs. Towards the end of last year, the government
proposed yet another package of reforms to bail out SEBs, reeling under hundreds of
thousands of crores of losses accumulated over the years from selling power below cost, or
even free, to domestic consumers and farmers. For an SEB, charging high rates of power to
industries is a quick, politically easy way to offset low rates charged to farmers. Allowing
those consumers to buy power from elsewhere seems tantamount to economic suicide; even if
the SEB gets compensated by charges paid to it, and mandated by the government, to
essentially soften the blow.
"Only if the problem of losses of SEBs, and of cross subsidies (whereby farmers and retail
consumers are effectively subsidised by higher rates charged to industrial consumers) are
removed, will open access become a reality," says SK Chatterjee, deputy chief, regulatory
affairs, Central Electricity Regulatory Commission (CERC), the apex regulator for the sector.
The issue facing most industries (all consumers with a load of more than 1 megawatt are
eligible for open access) was not that they were being charged high rates by their Discom, but
that the power supply was erratic. "To me the issue is not of price but availability," says Rao.
"The price we pay on power exchanges, when adjusted for all the other charges are about the
same as we pay to the Discom."
While the inter State open access market has progressed due to regulatory initiatives taken by
CERC, (on going development of national grid by Power Grid (although congestion is
currently taking place during peak times) and support from NLDC / RLDCs), the intra state
open access is facing constraints on account of delays in implementation of Intra State ABT
by several states. The sources of concern for implementation of Intra State ABT are
assessment / augmentation of intra state transfer capability, advanced infrastructure at State
Load Despatch Centre (SLDC), real time communication and special metering at consumer
level. The progress of reforms at state level, with less intervention by respective State
government, will continue to remain crucial for penetration of such transactions across the
States, to facilitate the development of full fledged short term market.
Open access to the distribution network owned by Discom, however, was to be implemented
in phases on payment of open access charges and charges for cross-subsidy and additional
subsidy if any, which were to be progressively reduced to within 20 per cent of the average
cost of power by 2010-11. Open access is available for power purchase or sale by utilities or
distribution licensees.
However, when it relates to generators and consumers, only some of the States have
permitted limited open access. Some are permitting open access to generators if they are
connected to central transmission network.
Lack of open access in intra-State transmission has affected the development of the power
market, jeopardizing competition. The competition is only feasible if players in the power
market are per-mitted access to both intra and inter-state transmission networks on payment
of reasonable charges. While inter-state open access within the limitation of adequate
available transfer capability (ATC) has been operational, intra-State open access has not
progressed because of slow implementation of certain pre-requisites. Lack of open access has
also restricted transfer of power from surplus to deficit regions and failed to optimize
58
procurement costs.
The irony is that open access has not been allowed to succeed for various reasons, such as
apprehension of the State utilities about flight of industrial consumers from their net; nonavailability of surplus power at reasonable rates; irrational open access charges; nonavailability of open access infrastructure of metering; and segregation of consumers lines,
among other factors.
Even though the cross-subsidy surcharge on open access transactions is mandated under
Section 39 and 42 of the Act, erecting a high tariff barrier deters customers from purchasing
supplies from outside the jurisdiction of Discoms and runs counter to the tariff envisaged in
the National Electricity Policy and Tariff Policy. For meeting the demand during acute power
shortage, it is observed that some States have misused their powers to block the sale of
surplus capacity of captive generators to other States, by inappropriately invoking Section 11
of the Act. This de-motivates the generators to sell power through the power trading
mechanism, and forces some of them to sell power be-low market rates. It defeats the very
spirit of the Act. It has forced the Union Minis-try of Power to issue direction to Central /
State Regulatory Commissions to allow industrial consumers to buy cheaper power from the
open market under Section 107 of the Electricity Act.
With increasing size and depth of the market, new products are bound to hedge the risks for
the buyers and suppliers, and these could be in the form of options and futures. Also, for
making transparent open access regulations, there is a need for segregating the wires and
59
content business in the distribution segment too. To help facilitate a successful open-access
regime, Discom has to create infrastructure and last mile connectivity.
Energy (MUs)
January
February
March
Requirement
7709
6441
8087
Availability
6388
5366
6387
60
With the state being unable to meet the energy demand, several industries many with a
contracted demand of 1 MW and above- have sought OA in distribution to procure power
from the open market, primarily energy exchanges such as IEX . However, this has not been
allowed, and, as a consequence, the industries continue to face load shedding. The
fundamental right to avail OA has not been implemented even 10 years after the enactment of
the EA 2003.
Capacity (MW)
January
February
March
Demand
12665
12278
12696
Peak met
10745
9363
9949
Other northern states like Punjab, Haryana Rajasthan and Uttarakhand have allowed
consumers with a demand of 1 MW and above to leverage the IEX platform to purchase
power through OA. This has not only facilitated the development of industries in these states,
but has also helped them to reduce energy costs significantly, thereby improving their
profitability and overall competitiveness.
Chhattisgarh
Himachal
Punjab
Haryana
Delhi
Uttar
Pradesh
OA
Uttarakhand
Rajasthan
Pradesh
for
industries
Industrial
Nil
Participants
many
at IEX
industries)
no
industrial
shortage)
loads)
Source: IEX
Nil
125
shortage)
tariffs and 41
121
62
Similarly, the average peak hour price at the IEX for 2013-13 for the N2 region was ` 3.50
per unit. This implies a cost of ` 4.47 per unit (including the applicable losses and charges)
for an industry. Therefore, an industry can save more than ` 2.50 per unit during peak hours
by sourcing electricity from the IEX through OA. According to UPERCs latest tariff order,
the discoms tariff for industries at the 11kV level during peak hours including the regulatory
surcharge is ` 7.03 per unit.
63
Chapter 6: SUMMARY
6.1 CONCLUSION
Making the distribution segment of the power industry efficient and solvent is the key to
success of power sector reforms. Implementation of open access in distribution with
proper market condition by studying its feasibility is the only solution. Though it has
been widely says that Open access in distribution will create a competitive environment
but its improper introduction may create huge losses to distribution and also to consumer.
Subsidy to different segment of consumer is the most challenging part of Open Access
hence it needs to tackle in proper manner because this is the only reason because of
which most of the distribution company are resisting for implementation of Open Access.
However, there are some roadblocks in the successful implementation of open access in
distribution in India.
There are some of positive point which encourage for implementation of Open Access
Some of the benefit of Open Access are :
i) As mentioned above the freedom to buy and sell electricity thereby creating or
tending towards a perfect market in this sector.
ii) It allows the generator with an excess capacity to sell and take part in the trading of
electricity.
As there are some benefit of Open Access, but its improper implementation may lead to
huge hotchpotch so it need to be handle properly.
o Cross Subsidy Surcharge is not adequate to compensate subsidy :Present Cross Subsidy surcharge formula is not compatible to balance the subsidy
with cross subsidy because it will not considered AT & C loss and theft. So finally it
has negative impact but as per the concept of cross subsidy it should neutralize the
effect of subsidy but in actual practice it is not happening. So in present case licensee
64
is bearing all this loss and state government has given assurance of payment.
o Distribution of subsidy is also not proportionate because location has not considered
due to which those who are economically strong are getting same subsidy as that of
economically weak consumer.
o In Open Access there is no surety for all time power availability or backup because
if Open Access seller power plant has gone for shut down then ideally consumer has
also shut down its activity but in actual practice as they are connected with grid they
are consuming power from grid and create power shortage for licensee. In that case
either licensee has to make load shedding or else they have to purchase costlier
power if available. This also one of the major reasons because of which consumer
doesnt want to move in Open Access.
o Renewable generator has exempted from cross subsidy and wheeling charge under
the name of renewable promotion but then who will pay on behalf of renewable is
not clear. Also if renewable energy producer sells powers in Open Access and as we
already know that renewable is not firm power so only because of their grid
connectivity they start consuming power from grid and create power shortage for
licensee. In that case either licensee has to make load shedding or else they have to
purchase costlier power.
o Lot of consumer are also resisting for implementation of Open Access because of
unreliability of generating unit because due to Open Access it has become their
65
6.2 RECOMMONDATION
a) In present scenario of Indian Electricity Sector which is power deficit the
implementation of Open Access are creating huge problems which are given below :
b) Central and State ERCs should be advised by the appropriate governments to comply
with the statutory requirements relating to open access in a time bound manner. There is
challenge for calculation of open access surcharge because of complexity of consumer
even though there is provision in Tariff Policy notified by the Central Government under
Sec. 3 of the Act but states are using their own method to calculate which need to be
standardized.
c) Subsidy are not reaching to right consumer hence it is advisable to have consideration of
location during calculation of subsidy because the needy consumer like consumer from
Vidharbh region of Maharashtra which actually required the subsidy are getting same
subsidy as that of other region which is economically reach. But when load shedding has
to do then first consideration has given to Vidharbh region saying the reason that they
are not paying consumer though this region has less availability of water and has to go
more deep into the soil to get the water hence requirement of electricity is most
important. Interesting part is that most of powers generating units are there in this region
only but still they are not getting enough power for agriculture and industrial sector
because of this there is instability in the state. Cross subsidy is levied equal in all regions
hence it is important for all state holders to consider this issues.
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The theft loss is still present even though Distribution has taken lot of measure to reduce
it like metering and it is counted in subsidised section and all other paying consumer like
domestic and industrial consumer are bearing it. If paying or reach consume are moved
in Open Access then rest of the consumer which is not economically strong has to bear
this loss because there is no provision for this in Cross subsidy surcharge (Even though
State Government has given assurance to pay it but it is uncertain).
Need to take regular customer feedback to understand their difficulties so that consumer
satisfaction can be achieved.
j)
Regulators should meet with the bulk consumers and other stakeholders to address their
concerns with a view to operationalizing the scheme of open access as provided in the
Act.
k) Consumer education and pro-active action by Regulators, both at the Centre and in the
States, is considered vital for encouraging open access to consumers.
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Data collection for all the calculations has been done from regulations and orders of
respective states. There is always a risk of update of tariff during preparation of report.
g) No interaction with the open access consumers. The interaction could have helped to
understand the real time problems faced by them.
For a situation where there is no power cut, SERCs may calculate Cross-Subsidy
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Surcharge based on the estimation that the DISCOM will avoid purchase of the quantum
of power for which open access has been sought.
6.6 BIBLIOGRAPHY
List of Documents
Central Electricity Regulatory Commission (Grant of Connectivity, Long-term
Access and Medium-term Open Access in inter-State Transmission and related
matters) Regulations, 2009
Central Electricity Regulatory Commission (Open Access in inter-State
Transmission) Regulations, 2008.
Central Electricity Regulatory Commission (Grant of Connectivity, Long-Term
Access and Medium-Term Open Access in Inter-State Transmission and related
matters) (Second Amendment) Regulations, 2012.
Forum of Regulators Model Regulations on Terms and Conditions of intra-State
Open Access.
Websites
http://www.cea.nic.in/
http://www.cercind.gov.in/
http://www.powermin.nic.in/
http://www.forumofregulators.gov.in/
http://www.iexindia.com/
https://www.sldcguj.com/
http://www.gercin.org/
http://www.gseb.com/guvnl/index.aspx
http://getco.co.in/getco_new/
http://www.mgvcl.com/
http://www.ugvcl.com/
http://www.pgvcl.com/
http://www.dgvcl.com/dgvclweb/index.php
http://www.pspcl.in/
http://www.pserc.nic.in/
http://www.pstcl.org/
http://www.punjabsldc.org/
http://www.uperc.org/Default2.aspx
http://www.aptransco.gov.in/
http://mahasldc.in/
http://www.mahadiscom.in/
http://www.tatapower.com/
http://www.rinfra.com/
http://www.mahasldc.in/
http://www.mercindia.org.in/
http://www.nldc.in/
http://www.thehindubusinessline.com/
http://www.mahatransco.in/
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Annexure
1. Charges for Maharashtra
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72
II.
Torrent Power
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KESCoL
NPCL
74
75