practical problems in implementation of open access

Practical Problems in Implementation of Open Access

Harry Dhaul Director General, IPPAI

The Regulators & Policymakers Retreat 2012

The Grand Hyatt, Goa

23-26 August 2012

Harry Dhaul - Director General, IPPAI

Open Access – DISCOMs Challenges

Revenue Loss – Cherry picking

Forced USO Cross

Subsidy Surcharge ?

UI Exposure due to OA

consumer flip-flop

OA DISCOM Workforce

(?)


Open Access – Regulatory Dilemma

Domestic/A

griculture

Consumer

HT/Commerc

ial

Consumers

Are they Independent enough ???

Do they have enough Willpower ???

Striving hard to maintain DISCOMs sustainability vs. Consumer choice

Upsetting revenue balance of State – low end consumers to bear the

brunt of increased tariff to compensate for loss of OA consumers

Determining the REAL cross subsidy surcharge

Handling Reforms envisaged under EA-03’ thru

Under-staffed Commissions &

Un-skilled operational staff


Open Access – Traders’ Issues

Future of Power Trading ??

Very low margins

Incapability in managing commercial risk due to very low margins

Major buyers; Utilities with “NO” financial credibility

High risk of commercial defaults

Corridor availability Issues in Day-Ahead market: Biggest gainers are

Exchange(s)

Small players without market vision playing deterrent role,

and causing under-development of market

Players competing on margin rather than in better &

innovative product offerings

Open Access – Consumer Reality

Irrational Temporary

Charges

Exorbitant Cross Subsidy

Surcharges

Undesirable hold up of

OA approval


Deemed reduction of Contract Demand


A few examples: States’ Vision for Open Access

Maharashtra:

Deemed reduction in Contract Demand- consumer reluctant to give up

this right

Temporary charges on Over-drawl/Under injection of units -charges are

unreasonably high and absurd

Lapsing of energy in Under-drawl/Over injection -not easy for consumers

to adhere to schedule due to varying machine cycle and load mix.

Special Energy Meter- MSEDCL empanelled vendor not approved by

MSETCL

Cross Subsidy Surcharge – no trajectory of progressive reduction,

complying with EA’03

Punjab:

Imposition of CSS has STIFLED OA transactions

Wheeling charges applicable for even STU connected OA customer


Ministry of Power Letter on Open Access

GO ! Implement OK Maybe Why

Ministry’s Letter:

Consumer choice

or Compulsion

State ERCs have their own view point and

act accordingly, does that mean SERCs

don’t want REFORMS ?


MoP Letter on Open Access : Unanswered Questions

Can MoP give directives to SERCs on matters of electricity ?

What motivated MoP to seek clarification, and who asked for it ?

Does that mean it will give Consumer a choice or put Consumers in an

unending tussle between DISCOMs & SERCs

Will this lead to separation between wires and supply?

What will happen to DISCOMs’ viability & their future;

What will happen to thousands of DISCOM/SEB employees? Will they

be absorbed elsewhere?

Would this lead to phasing out of DISCOMs?

Do DISCOMs have any plans/roadmap to bail themselves out?


MoP Letter on Open Access : Unanswered Questions

What will happen to existing long term PPAs due to sudden load reduction

of DISCOMs

Does Cross Subsidy Surcharge hold any legal sanctity for consumers

having no Contract Demand with DISCOMs

If some consumers do not want to opt for such a scheme what will be the

future of such consumers

What will be future of such UMPPs & IPPs

Pls., I

won’t ask

for Open

Access

How dare

you ask for

Open

Access

C D


Open Access : Possible way forward

SERCs should implement concept of Deemed O.A approval for consumers

with specific timelines in case of abnormal delay in grant of necessary

permissions by SLDCs/DISCOMs

UI may be implemented on intra-state basis across states to counter

absurd Temporary charges

Forum of Regulators may intervene to rationalize CSS across India to

promote consumer OA

CERC should extend support to SERCs for time bound implementation of

Open Access reforms in states

SERCs–DISCOMs should work hand-in-hand to create “Consumer Choice”

and a win-win situation for all stakeholders


The issue is “Choice” of Open Access as enshrined in EA 2003 versus “Mandatory” Open access

Let the deliberations begin…

practical problems in implementation of open access

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