computation of tariff under open access for bulk customer in a state s.c. saxena national load...

Computation of tariff under open access for bulk customer in a state

S.C. SaxenaNational Load Despatch Center

System Operator Training 2

Acknowledgement

• FOR Secretariat – Detailed inputs regarding Model Terms and Conditions

for Intra State Open Access

– Case Studies for calculation of Open Access Charges

• Power Exchanges– Case Studies for calculation of Open Access Charges


Presentation Outline

• Introduction

• Model Terms and Conditions of Intra-State Open Access Regulations, September 2010

• Case Studies

• Issues in Intra – State Open Access


Introduction

5

DEFINITION

• Electricity Act 2003: Open Access is defined as

“Open access” means the non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission.”

5

6

EA 2003: Provisions for Grant Of Open Access

• Section 38(2)(d): CTU and functions

• Section 39(2)(d): STU and functions

• Section 40(c): Duties of Transmission Licensees

• Section 42(2): Duties of Distribution Licensees and Open Access

7

EA 2003: Provisions for Grant Of Open AccessSection 42(2) Distribution Licensee

(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 also that the State commission shall, not later than five years from the date of commencement of the Electricity (Amendment)Act, 2003, by regulations, provide such open access to all consumers who require a supply of electricity where the maximum power to be made available at any time exceeds one megawatt.


National Electricity Policy, 2005 – Section 5.4.5

The Electricity Act 2003 enables competing generating companies and trading licensees, besides the area distribution licensees, to sell electricity to consumers when open access in distribution is introduced by the State Electricity Regulatory Commissions. As required by the Act, the SERCs shall notify regulations by June 2005 that would enable open access to distribution networks in terms of sub-section 2 of section 42 which stipulates that such open access would be allowed, …. ……Section 49 of the Act provides that such consumers who have been allowed open access under section 42 may enter into agreement with any person for supply of electricity on such terms and conditions, including tariff, as may be agreed upon by them. ……. While making regulations for open access in distribution, the SERCs will also determine wheeling charges and cross-subsidy surcharge as required under section 42 of the Act.


Tariff Policy

• Section 8.5.1 provides “A consumer who is permitted open access will

have to make payment to the generator, the transmission licensee whose transmission systems are used, distribution utility for the wheeling charges and in addition, the cross subsidy surcharge.

The computation of cross subsidy surcharge, therefore, needs to be done in a manner that

while it compensates the distribution licensee, it does not constrain introduction of competition through open access…….”


Tariff Policy

• Section 6.3: Harnessing Captive Generation– Wheeling charges and other terms and conditions for

implementation should be determined in advance by the respective State Commission, duly ensuring that the charges are reasonable and fair.

– Grid connected captive plants could also supply power to non-captive users connected to the grid through available transmission facilities based on negotiated tariffs. Such sale of electricity would be subject to relevant regulations for open access

• Section 6.4: – Non-Conventional Energy Sources, including co-generation

• Section 8.5: – Calculation of Cross Subsidy Surcharge and Additional Surcharge

for Open Access

Status of Open Access Implementation (source: FOR)

11

S. No. SERC Notification of OA Regulations

Determination of Surcharge

Determination of Wheeling Charges

Determination of Transmission

Charges1 APERC Yes Yes Yes Yes2 AERC Yes Yes Yes Yes3 BERC Yes Yes Yes Yes4 CSERC Yes Yes Yes Yes5 DERC Yes Yes Yes Yes6 GERC Yes Yes Yes Yes7 HERC Yes No Yes Yes8 HPERC Yes Yes Yes Yes9 J&KSERC Yes Yes No Yes

10 JSERC Yes Yes Yes Yes11 KERC Yes Yes Yes Yes12 KSERC Yes Yes No Yes13 MPERC Yes Yes NA Yes14 MERC Yes Yes Yes Yes15 MsERC Yes No No Yes16 OERC Yes Yes Yes Yes17 PSERC Yes Yes Yes Yes18 RERC Yes Yes Yes Yes19 TNERC Yes Yes Yes Yes20 TERC No No No No21 UPERC Yes Yes Yes Yes22 UERC Yes Yes Case to case basis Yes23 WBERC Yes Yes Yes Yes24 JERC-M&M No No No No25 JERC-Uts No No No No

TOTAL 22 20 17 22


Model Terms and Conditions of Intra-State Open Access Regulations, September 2010

Forum of Regulators


Contents

• Preliminary• Connectivity• General Provisions for Open Access• Application Procedure and Approval• Open Access Charges• Scheduling, Metering, Revision and Losses• Imbalance and Reactive Energy Charges• Commercial Matters• Limited Short Term Open Access• Information System• Open Access to Generator Connected to Distribution System• Miscellaneous


Definition of Open Access, OA Customer

“Open access” means the non discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a generating company in accordance with these regulations and includes long term access, medium-term open access and short-term open access.

"Open access customer" means a consumer, trader, distribution licensee or a generating company who has been granted open access under these regulations.


Regulation 11: Categories of Open Access Consumers

The application procedure, application fee and the time frame of processing request by eligible consumers seeking Open Access shall be based on the following criteria

• (1) System to which connected– (a) Intra-State transmission system– (b) Distribution system

• (2) Inter-se location of drawal and injection points– (a) Both within the same distribution system– (b) within the State but in different distribution systems– (c) In different States

• (3) Duration of Open Access– (a) Long term access– (b) Medium-term open access– (c) Short-term open access

Categories of Open Access Consumers

20/04/2011 16

Consumer

STU DISCOM

Intra-StateInter-State

STOA MTOA LTA

RLDC CTU CTU

STOA MTOA LTA

SLDC STU STU

Intra-State(within DISCOM)

Any OA

DISCOM

Connection Point

Location of drawal Point

Period of OA

Nodal Agency

Eligibility for Open Access

• Open access shall be permissible to the customers seeking for open access capacity upto which SERC has introduced open access and – connected through an independent feeder emanating from

a grid substation of licensee or – industrial feeder provided that all the customers on such

industrial feeder opt for open access and having simultaneous schedule of drawal under such open access.

• Consumers who are not on independent feeders, shall be allowed open access subject to the condition – that they agree to rostering restrictions imposed by utility

on the feeders serving them.17

Application procedure and approval (1)

20/04/2011 18

PeriodInter-se location of

drawal and injection point

Nodal agency Application fee (Rs.)

Documents to accompany the application

Time frame for disposal of application (days from the receipt of application)

Short -Term Open

Access

Both within the same Distribution

licensee

Concerned Distribution

Licensee2000 Proof of payment of Application fee,

7 working days in case STOA applied for first time.

3 working days on subsequent STOA applications.

Both within the same State but in areas of different

Distribution Licensees

SLDC 5000Proof of payment of Application fee, Consent from concerned Distribution

licensees



Injection point in the intra-State transmission

system within the State

SLDC 5000Consent from concerned Distribution

licensee,Proof of payment of Application fee,



In different States

RLDC of the region where consumer is

located

5000Consent from concerned SLDCs and Distribution licensees as applicable,

Proof of payment of Application fee,

As per Central Commission’s Regulation

Consumer connected to Distribution System Regulation 12


20/04/2011 19

PeriodInter-se location of

drawal and injection point

Nodal agency Application fee (Rs.) Documents to accompany the application


Medium-

Term Open

Access


licensee


Licensee50000

Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of MTOA

20

Both within the same State but

different Distribution

Licensees

STU 100000

Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of MTOA, consent from concerned distribution licensees

40



STU 100000

Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of MTOA, Consent from concerned Distribution licensees

40

In different States CTU 100000

Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of MTOA, Consent from concerned SLDCs and Distribution licensees as applicable

As per Central Commission’s

Regulation



20/04/2011 20

Period

Inter-se location of drawal and

injection pointNodal agency

Application fee (Rs.)

Documents to accompany the applicationTime frame for disposal of application (days from the receipt of application)

Long-

Term

Access


licensee


Licensee50000

Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of LTA

20

Both within the same State but

different Distribution

Licensees

STU 100000

Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of LTA, consent from concerned distribution licensees

120 days where augmentation of transmission system is not required150 days, where augmentation of transmission system is required.



STU 100000

Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of LTA, Consent from concerned Distribution licensee

120 days where augmentation of transmission system is not required150 days, where augmentation of transmission system is required.


Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of LTA, Consent from concerned SLDCs and Distribution licensees as applicable




20/04/2011 21

Period

Inter-se location of drawal and injection point

Nodal agency Application fee (Rs.)

Documents to accompany the application


Short -

Term

Open

Access

Both within the same State (in the intra-State transmission

system)

SLDC 5000 Proof of payment of Application fee,



Injection point in the distribution system within

the State

SLDC 5000

Consent from concerned Distribution licensee,Proof of payment of

Application fee,



In different States

RLDC of the region where consumer is

located

5000

Consent from concerned SLDCs and Distribution licensee as

applicable,Proof of payment of

Application fee,


Consumer connected to Intra-State Transmission System Regulation 12


20/04/2011 22

Period

Inter-se location of drawal and injection point

Nodal agency

Application fee (Rs.) Documents to accompany the application


Medium-

Term Open Acce

ss


system)

STU 100000

Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station or consumer not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of MTOA

20

Injection point in the

distribution system within

the State

STU 100000

Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station or consumer not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of MTOA, Consent from concerned Distribution licensee

20


Proof of payment of Application fee, PPA or Sale-purchase agreement of power, In case of generating station or consumer not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of MTOA, Consent from concerned SLDCs and Distribution licensee as applicable

As per Central Commission’s

Regulation



20/04/2011 23

PeriodInter-se location

of drawal and injection point

Nodal agencyApplicati

on fee (Rs.)

Documents to accompany the applicationTime frame for disposal of application (days from the receipt of application)

Long-Term Acce

ss


system)

STU 200000

Proof of payment of Application fee, Bank Guarantee, PPA or Sale-purchase agreement of power, In case of generating station or consumer not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of LTA

120 days where augmentation of transmission system is not required.

150 days, where augmentation of transmission system is required.

Injection point in the

distribution system within

the State

STU 200000

Proof of payment of Application fee, Bank Guarantee, PPA or Sale-purchase agreement of power, In case of generating station or consumer not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of LTA, Consent from concerned Distribution licensee

120 days where augmentation of transmission system is not required.

150 days, where augmentation of transmission system is required.


Proof of payment of Application fee, Bank Guarantee, PPA or Sale-purchase agreement of power, In case of generating station or consumer not already connected to grid, documentary evidence for completion of the connectivity showing that the same shall be completed before intending date of LTA, Consent from concerned STU and Distribution licensee as applicable



Charges Payable for Open Access

• Transmission charges • Scheduling and system operation charges payable

to State Load Dispatch Centre (SLDC)• Wheeling charges• Cross subsidy surcharge• Additional Surcharge• Standby charges• Imbalance and Reactive Energy Charges (as

applicable)

24

Transmission charges

• Inter State – As per CERC Regulations• Intra-State :– Transmission charges shall be payable on the basis of contracted

Capacity/ Scheduled Load or actual power flow whichever is higher.

– Transmission Charges = ATC/(PLS T X365) (in Rs./MW-day)

Where,ATC= Annual Transmission Charges determined by the Commission for

the State transmission system for the concerned year.PLST= Peak load projected to be served by the State transmission

system in concerned year.

– For Open Access for a part of a day, the transmission charges shall be payable on pro-rata basis

25

Scheduling and system operation charges payable to State Load Despatch Centre (SLDC)

• In respect of inter-State open access– Long term access or Medium term open access

RLDC fees and charges as specified by the Central Commission.SLDC fees and charges as specified by the Commission under sub-section (3)

of section 32 of the Act.

– Short-term open accessRLDC and SLDC charges as specified by the Central Commission.

• In respect of intra-State open access– Long term access or Medium term open access

SLDC fees and charges as specified by the Commission under sub-section (3) of section 32 of the Act.

– Short-term open accessA composite operating charge @ Rs.2,000/- per day 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.

26

Wheeling charges• Wheeling charges shall be payable on the basis of contracted

Capacity/ Scheduled Load or actual power flow whichever is higher. • Wheeling Charges = (ARR – PPC – TC) /(PLSD X365) (in Rs./MW-Day)

Where,– ARR=Annual Revenue Requirement of the distribution licensee in the

concerned year– PPC=Total Power Purchase Cost of distribution licensee in the concerned

year– TC =Total transmission charges paid by distribution licensee for State and

Inter-State transmission system for the concerned year– PLSD=Total Peak load projected to be served by the concerned distribution

system in the concerned year• For Open Access for a part of a day, the wheeling charges shall be

payable on pro-rata basis27


Possible Scenarios

Scenario Connectivity of Generator

Connectivity of Consumer

Applicable Charges

1 Transmission System

Distribution System

Transmission + Wheeling

2 Distribution System

Transmission System

Transmission

3 Transmission System

Transmission System

Transmission

4 Distribution System

Distribution System

Wheeling

Source: MPERC Order on Determination of Wheeling Charges and Cross Subsidy Charges (SMP 101/10)

Cross subsidy surcharge (1/2)

• Surcharge should be computed by the Tariff Policy formula. S= T- [C (1+L/100)+D]

Where– S is the surcharge– T is the Tariff payable by the relevant category of consumers;– C is the Weighted average cost of power purchase of top 5% at

the margin excluding liquid fuel based generation and renewable power

– D is the Wheeling charge in per kWh basis (to be derived from the wheeling charge in Rs./MW-Day referred to in

Regulation 22 )

– L is the system Losses for the applicable voltage level, expressed as a Percentage

29

Cross subsidy surcharge (2/2)• In case the formula gives negative value of surcharge, the same shall be zero.

• The Commission may fix a lower surcharge in the situation of shortages and load shedding by the distribution licensee.

• Cross subsidy surcharge so determined by the Commission shall be reduced by 20% every year at a linear rate.

• In case power supply position or the consumer load seeking open access changes drastically, the Commission may review the Cross Subsidy Surcharge as and when required.

• In order to ensure regulatory certainty to a open access consumer applicant, any change in cross-subsidy surcharge level should be made applicable only to the new applicants and the open access already sanctioned should not be disturbed.

30

Additional Surcharge

• This additional surcharge shall become applicable only if the obligation of the Licensee in terms of power purchase commitments has been and continues to be stranded or there is an unavoidable obligation and incidence to bear fixed costs consequent to such a contract.

• Any additional surcharge so determined by the Commission shall be applicable only to the new Open Access applicants.

31

Standby Charges• Standby arrangements in cases of outages of generator supplying to open access

customer under open access. • Standby arrangements for a maximum period of 42 days in a year, subject to the

load shedding as is applicable to the embedded consumer of the licensee– Standby charges at the temporary rate of charge for that category of consumer subject

to the condition that such tariff shall not exceed the highest consumer retail tariff.• In cases where temporary rate of charge is not available for that consumer

category, – the standby arrangements shall be provided by the distribution licensee for a maximum

of 42 days in a year and on payment of fixed charges of 42 days and energy charges for that category of consumer in the prevailing rate schedule.

• In case of stand by arrangements sought by continuous process industries, the licensee shall charge on the basis of actual costs involved in arranging power.

• Open Access customers would have the option to arrange stand-by power from any other source.

32

Imbalance settlement• With load of less than 10 MW

– The difference between the applicable sanctioned Open Access load and the actual drawal shall be accounted through the Time of Day (ToD) Meters on monthly basis and settled at the rate of the imbalance charge as determined by the Commission (where imbalance charge has not been determined by the Commission, UI rate as determined by the Central Commission shall be applicable).

– In case of under drawal as a result of non availability of the distribution system or unscheduled load shedding, the open access consumer shall be compensated by the distribution licensee at the average power purchase cost of the distribution licensee.

• With load of 10 MW and above – Settled based on the composite accounts for imbalance transactions issued by

SLDC on a weekly cycle based on net metering in accordance with the rates specified by the Commission.

33

Commercial Matters (1/3)• Billing, collection and disbursement• Inter-State transactions:

– Short-term Open Access for use of CTU and STU systems as per CERC Regulations for use of distribution system open access customer shall pay the charges payable to the

distribution licensee within 3 days from the grant of the short-term open access by the nodal agency.

– Long-term access and medium- term open access Billing, collection and disbursement of charges payable to RLDC as per CERC Regulations. Bills towards the charges payable to SLDC shall be raised by the STU/SLDC directly to the open

access customer connected to STU and to the distribution licensee in respect of the customers connected to the distribution system.

Distribution licensee shall raise the bill with the open access customer connected to it within 3 days of receipt of bill from SLDC.

Open access customer connected to the distribution licensee shall pay the charges within five days of receipt of bill from distribution licensee.

The distribution licensee shall disburse the amount payable to STU/SLDC on a monthly basis. Open access customer connected to the STU shall pay the bills within five working days of

receipt of the bill.

34

Commercial Matters (2/3)• Intra-State transactions:

– Short-term Open Access The short-term open access customer shall deposit with SLDC the transmission

charges and operating charges within 3 working days of grant of the short- term open access by SLDC.

In addition to the above, the short-term open access customer connected to distribution system of a distribution licensee shall also pay to SLDC, the charges payable to the distribution licensee within 3 days from the grant of the short-term open access by the nodal agency. Such charges would be disbursed to the distribution licensee on a weekly basis.

– Long-term and Medium-Term open access SLDC, transmission licensees and distribution licensee, where applicable, shall

communicate to STU the details of the bills due to them by the 3rd day of the succeeding calendar month.

STU shall separately indicate the above charges and raise the bill with the open access customer, together with the charges receivable by it, if any, before the 5th day of the above month. The open access customer shall pay the charges within 7 days from the date of receipt of the bill. STU shall disburse the charges payable to SLDC, transmission licensee and distribution licensee on a monthly basis.

35

Commercial Matters (3/3)

• Late payment surcharge– Delayed in payment by a open access customer beyond

the due date, a late payment surcharge at the rate of 1.25% per month shall be levied.

• Payment Security Mechanism– In case of long-term access and medium-term open

access, the applicant for open access will open an irrevocable Letter of Credit in favour of the agency responsible for collection of various charges for the estimated amount of various charges for a period of two months.

36


Case Studies

Sample Surcharge calculation for FY 2010-11

20/04/2011 38

S. No. State

Tariff range (Average billing

rate)

Average Cost of Supply

power Purchase

cost of top 5%

Wheeling loss (%)

Wheeling charges

Surcharge (As per Tariff policy)

Median (Surcharge)

T ACS C L D S1=T-[C* (1+L)+D]

Rs./Unit Rs./Unit Rs./Unit % Rs./Unit Rs./Unit Rs./Unit

MinimumMaximu

m Minimum Maximum

1 Bihar 3.52 5.05 4.96 2.91 8.00% 0.32 0.06 1.59 0.85

2 Chhattisgarh 2.53 4.55 3.04 2.93 6.00% 0.17 -0.75 1.27 0.59

3 Gujarat (UGVCL) 4.88 5.31 3.41 3.05 10.01% 0.13 1.40 1.82 1.61

4 Haryana 3.5 4.15 4.93 3.10 6.00% 0.3 -0.09 0.56 0.38

5 Himachal Pradesh 3.47 5.2 4.42 4.24 9.12% 1.01 -2.17 -0.43 -1.62

6 Karnataka (BESCOM) 5.37 7.09 4.66 5.06 2.99% 0.10 0.17 1.78 0.95

7 Madhya Pradesh (East) 3.86 10 4.05 3.23 4.90% 0.49 -0.31 5.83 1.03

8 Maharashtra (MSEDCL-33KV) 5.23 8.43 4.38 4.69 6.00% 0.04 0.22 3.42 1.91

9 Punjab 4.3 5.12 3.87 4.55 10.00% 0.70 -1.41 -0.59 -1.33

10 Uttarakhand 4.17 4.18 3.68 5.02 19.00%0.39 to

0.05 -2.20 -1.85 -1.85

39

Calculation for open access charges – Gujarat (1)

Short Term Open AccessParticular Value Net value Unit Formulae

Contracted Capacity 5 5 MW ATotal Consumption in a Month(Units) - 3600000 Kwh B=Ax10^3x3

0x24 Cross Subsidy Surcharge 0.51 Rs./unit 1836000 Rs. C=Bx0..51Units at T>D grossing up wheeling loss 10.01% 4000444

Kwh D=A/(1-10.01%)

Wheeling Charges 0.1348 Rs./unit 539260 Rs.

E=Dx.1348

Units at G>T grossing up Transmission loss 4.20% 4175829

Kwh F=D/(1-4.20%)

Transmission Charges 603

Rs./MW/Day 90450 Rs. G=A*603*30 Operating Charge (SLDC Charges) 2000 per day 60000 Rs. H=2000x30 OA Application Registration Fee 5000.00 5000 Rs. I

Net Open Access Charge Rs. 2530709.92 J=C+E+G+H

+IEffective Open Access Charge(per Unit) Rs./Unit 0.70 K=J/B

Long-Term AccessParticular Value Net value Unit Formulae

Contracted Capacity 5 5 MW ATotal Consumption in a Month(Units) - 3600000 Kwh B=Ax10^3x3

0x24 Cross Subsidy Surcharge 0.51 Rs./unit 1836000 Rs. C=Bx0..51Units at T>D grossing up wheeling loss 10.01% 4000444

Kwh D=A/(1-10.01%)

Wheeling Charges 0.1348 Rs./unit 539260 Rs.

E=Dx.1348

Units at G>T grossing up Transmission loss 4.20% 4175829

Kwh F=D/(1-4.20%)

Transmission Charges 2410

Rs./MW/Day 361500 Rs.G=A*2410*3

0 Operating Charge (SLDC Charges) 2000 per day 60000 Rs. H=2000x30 OA Application Registration Fee 5000.00 5000 Rs. I

Net Open Access Charge Rs. 2801759.92 J=C+E+G+H

+IEffective Open Access Charge(per Unit) Rs./Unit 0.78 K=J/B

40

Calculation for open access charges – Gujarat (2)

20/04/2011 41

Calculation for open access charges-Haryana

Particular Value Net value Unit Formulae Contracted Capacity 5 5 MW A

Total Consumption in a Month(Units)

- 3600000 Kwh B=Ax10^3x30x24

Cross Subsidy Surcharge 0.72 Rs./unit 2592000 Rs. C=Bx0.72Units at T>D grossing up wheeling loss 6.00% 3829787

KwhD=A/(1-6%)

Wheeling Charges 0.26 Rs./unit 995745 Rs. E=Dx.26 Units at G>T grossing up Transmission loss 2.10% 3911938

KwhF=D/(1-2.10%)

Transmission Charges 0.28 Rs./unit 1095343 Rs. G=F x .28

Operating Charge (SLDC Charges) 2000 per day 60000 Rs. H=2000x30

OA Application Registration Fee 5000.00 5000 Rs. I

Net Open Access Charge Rs. 4748087.30 J=C+E+G+H+I

Effective Open Access Charge(per Unit) Rs./Unit 1.32 K=J/B


Typical Example for Power Exchange Trades (1)

Calculation of Landed Cost for Consumers in Punjab (Typical through Power Exchange) 33 kV 132 kV & above

Volume Traded in MW 5 5 Hours Traded 8 8

Total Volume in MWh (at Regional Periphery) 40 40 Rate at Regional Periphery (in Rs per unit)** 2.50 2.50

Losses NR Loss# 4.00% 4.00% 0.00% 0.00% State & Wheeling Losses 10.00% 6.00%

Cost After Losses (in Rs per unit) 2.86 2.76

Charges

State Transmission Charges (in Rs/unit ) 0.03 0.03 Central Transmission Charges per unit @ Rs 100/MWh (in Rs/unit) 0.10 0.10

Wheeling Charges (in Rs/unit) 0.13 0.00 NLDC Operating Charges+ NLDC Application Charges+SLDC Charges* 0.08 0.08 Transaction Charges @ Rs 10 per MW (in Rs/unit) 0.01 0.01 Professional Fees ( If transacted through Member)* * 0.02 0.03 Cross Subsidy Charges (in Rs/unit) 0 0

Rate @ ex Metering Point (in Rs/unit) 3.23 3.00


Typical Example for Power Exchange Trades (2)

Calculation of Landed Cost for Consumers in Gujarat >66 kV

Volume Traded in MW 5 Hours Traded 8

Total Volume in MWh (at Regional Periphery) 40 Rate at Regional Periphery (in Rs per unit)** 2.50

Losses WR Loss 6.00% State Loss 4.29% Wheeling Losses 0.00%

Cost After Losses (in Rs per unit) 2.76

Charges

State Transmission Charges (in Rs/unit ) 0.60 Central Transmission Charges per unit @ Rs 100/MWh (in Rs/unit) 0.10

Wheeling Charges (in Rs/unit)# 0.00 NLDC Operating Charges+ NLDC Application Charges+SLDC Charges* 0.08 Transaction Charges @ Rs 10 per MW (in Rs/unit) 0.01 Professional Fees ( If transacted through Member)* * 0.02 Cross Subsidy Charges (in Rs/unit) 0.51

Rate @ ex Metering Point (in Rs/unit) 4.08


Issues in Intra State Open Access

Open Access in Inter-State Transmission : Key Success Factors

• Control area demarcation & boundary metering• Robust transmission system• Assessment of Transfer Capability• Balancing mechanism• Methodology for transmission charge sharing• Treatment of transmission losses• Streamlined scheduling and settlement mechanism• Transparency and non-discriminatory implementation• Compliance• Dispute redressal mechanism• Congestion management


Calculation of Cross Subsidy Surcharge

• The formula uses the weighted average cost of power purchase of top 5 % as a factor and this leads to a negative cross subsidy surcharge in certain cases

• Allowing consumers to migrate to open access increases the burden of the DISCOM

• The calculation of the cross subsidy surcharge is being done with reference to the average cost of supply instead of the cost of serving the consumer. As a consequence, there is an under-recovery and the concerned utility is under-compensated.

• A trajectory for continuous reduction of the cross subsidy surcharge has to be identified and implemented by the States.


Standby Charges

• The various provisions of Act and Policies mandate the DISCOM of providing standby to OA customers. – Unfair on behalf of DISCOMs to keep non open access

consumers in dark and provide standby without levying reasonable charges for the standby supply arrangements.

• As per the latest FOR guidelines, demand charges for standby supply can be charged for 42 days in a year. – However, some of the States raised the issue that standby

charges should be payable for the entire 365 days.• Solution ?– Purchase from market– Enter into a PPA


Dilemma in Planning for Procurement

• Some States have an ambitious plan of achieve load shedding free power supply in the State by …. – Planned for power procurement by entering in Long term Contracts

or through competitive bidding routes. – In case the bulk consumers are allowed to migrate to open access,

then, this additional capacity being procured may result in stranded assets.

– DISCOMs would be left with burden of fixed charges of Long Term PPAs entered into, to the extent of migrated load resulting in increase in Supply related costs.

• Possible Solution– A vibrant market working in the country– In case a particular State becomes surplus, the surplus as and when

available can be sold in the market.


Development of Intra State Transmission & Distribution Network

• Open access presupposes the existence of a robust transmission or distribution network.

• Many of the States are experiencing a high load growth and commensurate augmentation of the transmission and distribution infrastructure inside the States needs urgent attention to accommodate open access transactions.


Mechanism for Handling Imbalances

• Availability Based Tariff has been implemented at the inter-State level – Implementation of the ABT Mechanism at inter-State

level has been one of the crucial touchstones for the success story of open access at the inter-state level.

• A similar commercial mechanism needs to be implemented at the intra-State level– Should also include a mechanism for handling

imbalances.


Procedural Issues including Metering, Settlement and Accounting Issues

• Clear procedures including the timelines for approval/clearance of open access needs to be clearly defined by the States.

• In order to avoid flip-flop situation, the need for a minimum time period for availing open access was also felt.

• Metering, Settlement and Accounting Systems need to be established and streamlined.

Procedural Clarity

• Imbalance settlement– Treatment of under-drawal and over-drawl by Open Access

Consumer• Metering Arrangements– ToD meter or SEM– Meter specifications– Costs involved

• Billing Arrangements– Procedure for billing– Entities responsible for billing for wheeling, energy

component etc.– Manner of payment of bills


Breach of PPAs

• Breaching an already existing PPA to sell power in the open market.

• Honouring contracts is important– Need to initiate necessary safeguards for this.

• Interplay of the prices in the market also leading to a possibility of gaming.


Interpretation of Section 11, EA 2003

“Direction to generating companies11.The Appropriate Government may specify that a generating company shall, in extraordinary circumstances operate and maintain any generating station in accordance with the directions of that Government. Explanation. - For the purposes of this section, the expression “extraordinary circumstances” means circumstances arising out of threat to security of the State, public order or a natural calamity or such other circumstances arising in the public interest.

The Appropriate Commission may offset the adverse financial impact of the directions referred to in sub-section (1) on any generating company in such manner as it considers appropriate”

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Need for Rationalization of OA Charges

• Several charges levied for Open access in distribution.

• Charges are high in many States.• Charges need rationalization and alignment with

Tariff Policy formulation– FOR has already recommended the principles for cross

subsidy surcharge should be as per the Tariff Policy.• Charges should be such that it facilitates open

access and does not restrict it.

Open Access Charges vis a vis TariffS. No. State Net Open Access

Charges (Rs/Kwh)Net cost of power from Open Access

(Rs./kWh)**Tariff (Discom)*

(Rs./kWh)

1 Assam 2.94 6.94 3.252 Chhattisgarh (Short term) 1.00 5.00 3.383 Haryana 1.03 5.03 4.574 Himachal Pradesh 1.32 5.32 3.045 Karnataka (BESCOM) - ST 1.00 5.00 4.156 Maharashtra (MSEDCL area) 0.84 4.84 4.537 Orissa ( WESCO) 1.81 5.81 2.918 Punjab ( short term) 0.61 4.61 5.099 Rajasthan 0.97 4.97 3.98

10 Uttar Pradesh ( short term) 0.66 4.66 4.2911 Madhya Pradesh 1.00 5.00 4.5712 Uttarakhand ( Long term) 1.47 5.47 3.913 Gujarat 1.34 5.34 7.3914 West Bengal - short term 2.81 6.81 3.9515 Tamil Nadu 2.47 6.47 3.9616 Delhi 1.93 5.93 4.0517 Andhra Pradesh 0.97 4.97 3.4918 Kerala 2.38 6.38 3.9419 Bihar ( HTS) 2.56 6.56 4.3520 Jharkhand 1.44 5.44 4.48

*Tariff for an embedded consumer of 5MW at 11 KV (33 KV in some cases). ** Effective Open Access Charges for consumer of 5MW at 11 KV (33 KV in some cases) in addition with a assumption of power purchase cost of 4 Rs./KwH. 56

Open Access Charges vis a vis Tariff

57

AssamChhattisgarh (Short term)

Haryana Himachal Pradesh

Karnataka (BESCOM) - STMaharashtra (MSEDCL area)

Orissa ( WESCO)Punjab ( short term)

RajasthanUttar Pradesh ( short term)

Madhya PradeshUttarakhand ( Long term)

GujaratWest Bengal - short term

Tamil NaduDelhi

Andhra PradeshKerala

Bihar ( HTS)Jharkhand

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.006.94

5.005.03

5.325.00

4.845.81

4.614.97

4.665.00

5.475.34

6.816.47

5.934.97

6.386.56

5.44

3.253.38

4.573.04

4.154.53

2.915.09

3.984.29

4.573.9

7.39253.953.96

4.053.485

3.944.3493

4.48

Tariff (Discom) (Rs./kWh)* Net cost of power from Open Access (Rs./kWh)**

*Tariff for an embedded consumer of 5MW at 11 KV (33 KV in some cases). ** Effective Open Access Charges for consumer of 5MW at 11 KV (33 KV in some cases) in addition with a assumption of power purchase cost of 4 Rs./Kwh.


Cross Subsidy Surcharge in Different States

Source:Forum of Regulators

State Load Despatch Centers (SLDC)

Section 32(1), Electricity Act 2003:

“The State Load Despatch Centre shall be the apex body to ensure integrated operation of the power system in a State”

Functions of SLDCSection 32 (2), EA 2003:

The State Load Despatch Centre shall -(a) be responsible for optimum scheduling and despatch of electricity within a State, in accordance with the contracts entered into withthe licensees or the generating companies operating in that State;(b) monitor grid operations;(c) keep accounts of the quantity of electricity transmitted through the State grid;(d) exercise supervision and control over the intra-state transmission system; and(e) be responsible for carrying out real time operations for grid control and despatch of electricity within the State through secure and economic operation of the State grid in accordance with the Grid Standards and the State Grid Code

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Ring Fencing of Load Despatch Centers …

• LDCs to be ring fenced suitably to ensure their functional autonomy.

• ERCs to recognize three distinct revenue streams for making LDCs financially self reliant.– Fees and charges for system operation– Tariff for decision support system and IT infrastructure.– Operating charges for scheduling, metering and settlement.

• Introduction of system of certification of system operators by an independent central body.

• Proper compensation structure for LDCs to attract and retain best talent


FOR Recommendations: Way Forward

• Rationalization of various open access charges including surcharge

• Uniform standby arrangement for back-up supply to make open access a reality

• Monitoring of open access transactions by the State Commission

• Display of illustrative examples of charges for open access to help the potential consumer take an informed decision on the open access option.


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computation of tariff under open access for bulk customer in a state s.c. saxena national load...

Documents

extent of open access

grant of open access

distribution system

functions section

terms of subsection

tariff policy section

cogeneration section

supply of electricity