Computation of tariff under open
access for bulk customer in a state
S.C. Saxena
National Load Despatch Center
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
System Operator Training
2
Presentation Outline
• Introduction
• Model Terms and Conditions of Intra-State Open
Access Regulations, September 2010
• Case Studies
• Issues in Intra – State Open Access
System Operator Training
3
Introduction
System Operator Training
4
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
5
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
6
EA 2003: Provisions for Grant Of Open Access
Section 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.
7
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.
System Operator Training
8
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…….”
System Operator Training
9
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 noncaptive 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
System Operator Training
10
Status of Open Access Implementation (source: FOR)
S. No.
SERC
Notification of
OA Regulations
Determination of
Surcharge
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
TOTAL
APERC
AERC
BERC
CSERC
DERC
GERC
HERC
HPERC
J&KSERC
JSERC
KERC
KSERC
MPERC
MERC
MsERC
OERC
PSERC
RERC
TNERC
TERC
UPERC
UERC
WBERC
JERC-M&M
JERC-Uts
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
No
22
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
No
20
Determination of Determination of
Wheeling Charges
Transmission
Charges
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
No
NA
Yes
No
Yes
Yes
Yes
Yes
No
Yes
Case to case basis
Yes
No
No
17
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
No
22
11
Model Terms and Conditions of Intra-State
Open Access Regulations,
September 2010
Forum of Regulators
System Operator Training
12
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
System Operator Training
13
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.
System Operator Training
14
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
System Operator Training
15
Categories of Open Access Consumers
Consumer
STU
Inter-State
STOA
MTOA
20/04/2011
Connection
Point
DISCOM
Intra-State
LTA
STOA
MTOA
LTA
Intra-State
(within DISCOM)
Location of
drawal Point
Any OA
Period of OA
Nodal
Agency
16
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)
Consumer connected to Distribution System
Short -Term Open Access
Period
Inter-se location of
drawal and
injection point
Nodal agency
Both within the
same Distribution
licensee
Concerned
Distribution
Licensee
Both within the
same State but in
areas of different
Distribution
Licensees
SLDC
Injection point in
the intra-State
transmission
system within the
State
SLDC
In different States
RLDC of the
region where
consumer is
located
20/04/2011
Application
fee (Rs.)
Documents to accompany the
application
Regulation 12
Time frame for disposal of
application (days from the receipt of
application)
2000
 7 working days in case STOA
applied for first time.
Proof of payment of Application fee,
 3 working days on subsequent
STOA applications.
5000
 7 working days in case STOA
Proof of payment of Application fee,
applied for first time.
Consent from concerned Distribution
 3 working days on subsequent
licensees
STOA applications.
5000
 7 working days in case STOA
Consent from concerned Distribution
applied for first time.
licensee,
 3 working days on subsequent
Proof of payment of Application fee,
STOA applications.
5000
Consent from concerned SLDCs and
Distribution licensees as applicable,
Proof of payment of Application fee,
As per Central Commission’s
Regulation
18
Application procedure and approval (2)
Consumer connected to Distribution System
Medium-Term Open Access
Inter-se location of
Period
drawal and
Nodal agency
injection point
Application
fee (Rs.)
Both within the
same Distribution
licensee
Concerned
Distribution
Licensee
50000
Both within the
same State but
different
Distribution
Licensees
STU
100000
Injection point in
the intra-State
transmission
system within the
State
STU
100000
In different States
20/04/2011
CTU
100000
Documents to accompany the application
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
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
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
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
Regulation 12
Time
frame
for
disposal of application
(days from the receipt
of application)
20
40
40
As per Central
Commission’s
Regulation 19
Application procedure and approval (3)
Consumer connected to Distribution System
Perio
d
Inter-se location of
drawal and
injection point
Long-Term Access
Both within the
same Distribution
licensee
Both within the
same State but
different
Distribution
Licensees
Injection point in
the intra-State
transmission
system within the
State
In different States
20/04/2011
Nodal agency
Concerned
Distribution
Licensee
STU
STU
CTU
Applicati
on fee
(Rs.)
50000
100000
Documents to accompany the application
Proof of payment of Application fee, PPA or Salepurchase 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
Proof of payment of Application fee, PPA or Salepurchase 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
Regulation 12
Time frame for disposal of
application (days from the
receipt of application)
20
120 days where augmentation of
transmission system is not
required
150 days, where augmentation of
transmission system is required.
100000
Proof of payment of Application fee, PPA or Salepurchase 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
required
150 days, where augmentation of
transmission system is required.
100000
Proof of payment of Application fee, PPA or Salepurchase 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
As per Central Commission’s
Regulation
20
Application procedure and approval (4)
Consumer connected to Intra-State Transmission System
Short -Term Open Access
Perio
d
Inter-se location
of drawal and
injection point
Both within the
same State (in
the intra-State
transmission
system)
Application
Nodal agency
fee (Rs.)
Documents to accompany the
application
Time frame for disposal of
application (days from the
receipt of application)

SLDC
5000
Proof of payment of
Application fee,


Injection point in
the distribution
system within
the State
SLDC
In different
States
RLDC of the
region where
consumer is
located
20/04/2011
5000
Consent from concerned
Distribution licensee,
Proof of payment of
Application fee,
5000
Consent from concerned SLDCs
and Distribution licensee as
applicable,
Proof of payment of
Application fee,
Regulation 12

7 working days in case
STOA applied for first
time.
3 working days on
subsequent
STOA
applications.
7 working days in case
STOA applied for first
time.
3 working days on
subsequent
STOA
applications.
As per Central Commission’s
Regulation
21
Application procedure and approval (5)
Consumer connected to Intra-State Transmission System
Medium-Term Open Access
Perio
d
Inter-se location
of drawal and
injection point
Both within the
same State (in
the intra-State
transmission
system)
Injection point
in the
distribution
system within
the State
In different
States
20/04/2011
Nodal
agency
STU
STU
CTU
Regulation 12
Application
fee (Rs.)
Documents to accompany the application
Time frame for
disposal
of
application (days
from the receipt
of application)
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
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
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 SLDCs and Distribution
licensee as applicable
As per Central
Commission’s
Regulation
22
Application procedure and approval (6)
Consumer connected to Intra-State Transmission System
Long-Term Access
Period
Inter-se location
of drawal and
injection point
Nodal agency
Applicati
on fee
(Rs.)
Both within the
same State (in
the intra-State
transmission
system)
STU
200000
Injection point
in the
distribution
system within
the State
STU
200000
In different
States
CTU
200000
20/04/2011
Documents to accompany the application
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
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
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
Regulation 12
Time frame for disposal of
application (days from the
receipt of application)
 120
days
where
augmentation
of
transmission system is not
required.
 150
days,
where
augmentation
of
transmission
system
is
required.
 120
days
where
augmentation
of
transmission system is not
required.
 150
days,
where
augmentation
of
transmission
system
is
required.
As per Central Commission’s
Regulation
23
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 access
 RLDC 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 access
 A 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 basis
27
Possible Scenarios
Scenario Connectivity
of Generator
1
Transmission
System
2
Distribution
System
3
Transmission
System
4
Distribution
System
Connectivity
of Consumer
Distribution
System
Transmission
System
Transmission
System
Distribution
System
Applicable
Charges
Transmission +
Wheeling
Transmission
Transmission
Wheeling
Source: MPERC Order on Determination of Wheeling Charges and Cross Subsidy
Charges (SMP 101/10)
System Operator Training
28
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
System Operator Training
37
Sample Surcharge calculation for FY 2010-11
Tariff range
(Average billing
rate)
S. No.
power
Average
Purchase Wheeling Wheeling
Cost of
cost of loss (%)
charges
Supply
top 5%
Surcharge (As per
Median
Tariff policy)
(Surcharge)
State
T
ACS
Rs./Unit
Minimum
C
Rs./Unit Rs./Unit
L
D
S1=T-[C* (1+L)+D]
%
Rs./Unit
Rs./Unit
Maximu
m
Rs./Unit
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
19.00%
0.39 to
0.05
-2.20
-1.85
-1.85
10
Uttarakhand
20/04/2011
4.17
4.18
3.68
5.02
38
Calculation for open access charges – Gujarat (1)
Short Term Open Access
Particular
Contracted Capacity
Total Consumption in a
Month(Units)
Cross Subsidy Surcharge
Units at T>D grossing up wheeling
loss
Wheeling Charges
Units at G>T grossing up
Transmission loss
Transmission Charges
Operating Charge (SLDC Charges)
OA Application Registration Fee
Net Open Access Charge
Effective Open Access Charge(per
Unit)
Value
5
Net value
5
Unit
MW
-
3600000
Kwh
0.51 Rs./unit
1836000
10.01%
4000444
Rs.
Kwh
0.1348
Rs./unit
539260
4.20%
4175829
603
Rs./MW/Day
2000 per day
5000.00
90450
60000
5000
Rs.
2530709.92
G=A*603*30
H=2000x30
I
J=C+E+G+H
+I
Rs./Unit
0.70
K=J/B
Rs.
Kwh
Rs.
Rs.
Rs.
Formulae
A
B=Ax10^3x3
0x24
C=Bx0..51
D=A/(110.01%)
E=Dx.1348
F=D/(14.20%)
39
Calculation for open access charges – Gujarat (2)
Long-Term Access
Particular
Value
Contracted Capacity
5
Total Consumption in a
Month(Units)
Cross Subsidy Surcharge
0.51 Rs./unit
Units at T>D grossing up wheeling
10.01%
loss
0.1348
Wheeling Charges
Rs./unit
Units at G>T grossing up
4.20%
Transmission loss
2410
Transmission Charges
Rs./MW/Day
Operating Charge (SLDC Charges) 2000 per day
OA Application Registration Fee
5000.00
Net Open Access Charge
Effective Open Access
Charge(per Unit)
Net value
5
Unit
MW
3600000
Kwh
1836000
Rs.
Kwh
4000444
539260
Rs.
Kwh
Formulae
A
B=Ax10^3x3
0x24
C=Bx0..51
D=A/(110.01%)
E=Dx.1348
Rs.
2801759.92
F=D/(14.20%)
G=A*2410*3
0
H=2000x30
I
J=C+E+G+H
+I
Rs./Unit
0.78
K=J/B
4175829
361500
60000
5000
Rs.
Rs.
Rs.
40
Calculation for open access charges-Haryana
Particular
Value
Net value
Contracted Capacity
5
5
MW
A
Total Consumption in a
Month(Units)
-
3600000
Kwh
B=Ax10^3x30x2
4
Cross Subsidy Surcharge
Units at T>D grossing up wheeling
loss
0.72 Rs./unit
2592000
Rs.
Kwh
C=Bx0.72
6.00%
3829787
Wheeling Charges
Units at G>T grossing up
Transmission loss
0.26 Rs./unit
995745
2.10%
3911938
Transmission Charges
0.28 Rs./unit
1095343
Rs.
G=F x .28
Operating Charge (SLDC Charges)
2000 per day
60000
Rs.
H=2000x30
5000.00
5000
Rs.
I
Rs.
4748087.30
J=C+E+G+H+I
Rs./Unit
1.32
K=J/B
OA Application Registration Fee
Net Open Access Charge
Effective Open Access
Charge(per
Unit)
20/04/2011
Unit
Formulae
D=A/(1-6%)
Rs.
Kwh
E=Dx.26
F=D/(1-2.10%)
41
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
4.00%
0.00%
10.00%
4.00%
0.00%
6.00%
2.86
2.76
State Transmission Charges (in Rs/unit )
Central Transmission Charges per unit @ Rs 100/MWh
(in Rs/unit)
0.03
0.03
0.10
0.10
Wheeling Charges (in Rs/unit)
NLDC Operating Charges+ NLDC Application
Charges+SLDC Charges*
Transaction Charges @ Rs 10 per MW (in Rs/unit)
Professional Fees ( If transacted through Member)* *
Cross Subsidy Charges (in Rs/unit)
0.13
0.00
0.08
0.01
0.02
0
0.08
0.01
0.03
0
Rate @ ex Metering Point (in Rs/unit)
3.23
3.00
Losses
NR Loss#
State & Wheeling Losses
Cost After Losses (in Rs per unit)
Charges
System Operator Training
42
Typical Example for Power Exchange Trades (2)
Calculation of Landed Cost for Consumers in Gujarat
>66 kV
Volume Traded in MW
Hours Traded
5
8
Total Volume in MWh (at Regional Periphery)
40
Rate at Regional Periphery (in Rs per unit)**
2.50
Losses
WR Loss
State Loss
Wheeling Losses
6.00%
4.29%
0.00%
Cost After Losses (in Rs per unit)
2.76
Charges
State Transmission Charges (in Rs/unit )
Central Transmission Charges per unit @ Rs 100/MWh (in
Rs/unit)
0.60
Wheeling Charges (in Rs/unit)#
NLDC Operating Charges+ NLDC Application Charges+SLDC
Charges*
Transaction Charges @ Rs 10 per MW (in Rs/unit)
Professional Fees ( If transacted through Member)* *
Cross Subsidy Charges (in Rs/unit)
0.00
Rate @ ex Metering Point (in Rs/unit)
4.08
System Operator Training
0.10
0.08
0.01
0.02
0.51
43
Issues in Intra State Open Access
System Operator Training
44
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.
System Operator Training
46
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
System Operator Training
47
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.
System Operator Training
48
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.
System Operator Training
49
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.
System Operator Training
50
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.
System Operator Training
51
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.
System Operator Training
53
Interpretation of Section 11, EA 2003
“Direction to generating companies
11.
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”
System Operator Training
54
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.
55
Open Access Charges vis a vis Tariff
S. No.
State
Net Open Access
Charges (Rs/Kwh)
Net cost of power
from Open Access
(Rs./kWh)**
Tariff (Discom)*
(Rs./kWh)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Assam
Chhattisgarh (Short term)
Haryana
Himachal Pradesh
Karnataka (BESCOM) - ST
Maharashtra (MSEDCL area)
Orissa ( WESCO)
Punjab ( short term)
Rajasthan
Uttar Pradesh ( short term)
Madhya Pradesh
Uttarakhand ( Long term)
Gujarat
West Bengal - short term
Tamil Nadu
Delhi
Andhra Pradesh
Kerala
Bihar ( HTS)
Jharkhand
2.94
1.00
1.03
1.32
1.00
0.84
1.81
0.61
0.97
0.66
1.00
1.47
1.34
2.81
2.47
1.93
0.97
2.38
2.56
1.44
6.94
5.00
5.03
5.32
5.00
4.84
5.81
4.61
4.97
4.66
5.00
5.47
5.34
6.81
6.47
5.93
4.97
6.38
6.56
5.44
3.25
3.38
4.57
3.04
4.15
4.53
2.91
5.09
3.98
4.29
4.57
3.9
7.39
3.95
3.96
4.05
3.49
3.94
4.35
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
4.48
4.35
Jharkhand
Bihar ( HTS)
Kerala
Andhra Pradesh
Delhi
Tamil Nadu
West Bengal - short term
Gujarat
Uttarakhand ( Long term)
Madhya Pradesh
Uttar Pradesh ( short term)
Rajasthan
Punjab ( short term)
Orissa ( WESCO)
Maharashtra (MSEDCL area)
Karnataka (BESCOM) - ST
Himachal Pradesh
Haryana
Chhattisgarh (Short term)
Assam
5.44
6.56
6.38
3.94
3.49
4.05
3.96
3.95
4.97
5.93
6.47
6.81
5.34
5.47
3.9
4.57
5.00
4.29
4.66
3.98
4.97
5.09
4.61
2.91
3.04
3.38
3.25
0.00
1.00
2.00
Tariff (Discom) (Rs./kWh)*
3.00
7.39
4.00
4.53
4.84
4.15
5.00
5.32
4.57
5.03
5.00
5.81
6.94
5.00
6.00
7.00
8.00
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.
57
Cross
Subsidy
Surcharge
in
Different
States
Source:
Forum of
Regulators
System Operator Training
58
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 SLDC
Section 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
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
61
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.
System Operator Training
62
DISCUSSION
saxena.samir@gmail.com
System Operator Training
63