Post on 26-Dec-2015
Discussion on Power Tariff in Delhi
Jointly organized by
Rajiv Gandhi Institute for Contemporary Studies (RGCIS)
&
energywatch6th May 2003, New Delhi
BySunder Lal
energywatch
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Overview of presentation Regulation of Electricity in India : a
background Budding Period Period of fast growth
Experience : Independence till pre-reform period
Post-reform Period Experience : Post-reform Period (Delhi) Issues : Formulation of Electricity Supply
Tariff Mandate of the Acts (Apex Court’s judgment) Suggestions for Power Tariff
energywatch
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Regulation of Electricity in India : a background -I
Budding period ( 1910-1947) Regulation by Indian Electricity Act 1910
Objective : Licensing of Electricity Regulations of rates Protective clauses
Important Principles: Bars undue preference to any consumer Advocates Tariff to be based on :
load factor; or power factor ; or total consumption of energy during any stated period; or the hours at which the supply of energy is required
energywatch
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Regulation of Electricity in India : a background -II Period of fast growth (1947- upto reforms ) Regulation by Indian Electricity Act 1910 & Electricity (Supply) Act
1948 Objective :
Industrial development advent of grid systems Development in semi-urban and rural areas
Principles: SEBs formed as autonomous bodies; quasi-commercial
to Control generation, grid systems Act as bulk licensees & licensees in areas not served by
licensees ‘Act as they deem fit’ to formulate tariff
Given un-guided and arbitrary powers
energywatch
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Experience : Independence till pre-reform period- I
Achievements: Generating capacity increased from 1712
MW to 1,04,000 Gross generation 515 Billion KWh (2000-1)-
4th largest in world Transmission lines from 2708 ckm in 1950
to ~ 200,000 ckm 90% village electrified from a negligible
figure in 1947 key role in Green Revolution- 63% pump-
sets energized
energywatch
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Experience : Independence till pre-reform period
Failures: SEBs lost the objective
never autonomous they usurped distributing licensees the very aim of cheapening of rates only in undeveloped areas lost loss of important sources of revenue Arbitrary Tariff formulations influenced by political considerations Became Cash starved Infrastructure became fragile for want of overhaul
Alarmed legislators amended Supply Act in 1978 and 1983 SEBs and the Electricity Sector as a whole became unviable
energywatch
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Post-reform Period- I
Electricity Regulatory Commissions Act, 1998
State Electricity Regulatory Commission established to regulate & determine Tariff based on:
consumers’ interests efficiency economic use of resources performance
optimum investment
energywatch
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Post-reform Period- II Delhi Reforms Act 2000
DERC established DVB unbundled into :
Generation & Transmission ( Transco) Distribution (BSES & Tata with other licensees)
Tariff to be determined by DERC on new principles
energywatch
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Experience : Post-reform Period (Delhi)
Old wine in new bottle Change reflected neither in tariff nor in functioning of
DVB/ DISCOMS Irrelevant and obsolete provisions that encouraged
corruption and theft continued: Sanction of load ( e.g. requirement of MCD Licence) Misuse charges Connected Load Change from LT to HT Normative Charges Minimum Charges Surcharge Billing demand
Categorization of consumers (Commercial, residential etc) violative of Reform Act
energywatch
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Issues : Formulation of Electricity Supply Tariff - I
Characteristics of Electricity To be generated as used Can’t be stored Peak demand provisions Cost (Running cost & Standing cost) Hopkins Principle Load factor/ Power factor/ manner & quantum of
consumption
energywatch
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Issues : Tariff formulation of Electricity - II
Two part Tariff Block Rate Tariff Flat Rate Tariff Power Factor Tariff
KVA Max. Demand Sliding Scale Power Factor Tariff KWH and KVArh/ KVAhTariff
energywatch
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Mandate of the Acts (Apex Court’s judgment)
No discrimination among consumers; No cross subsidization
Tariff formulation is duty of Regulatory Commission Return on investment to be weighed against
efficiency parameters While formulating Tariff Commissions should take
into account that : Central and State ERCs Commission is not bound by the accounts submitted by
utilities Utilities to also bear for inefficiency Losses can’t be transferred entirely to consumers Watch consumer interests
energywatch
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Suggestions for Power Tariff - IPremiseBecause :
The Act bars differentiation on use of electricity supply; Pattern of use changed dramatically; Present
categorization no more based on specified electrical characteristics;
Continuous measurement of electrical characteristics possible ‘cause of Electronic meters Especially by govt. bodies or SEBs
Choice of Consumer to either purchase or hire from utility Generating companies have adopted ‘Availability Based
Tariff’
energywatch
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Suggestions for Power Tariff - II
Suggestions for Power Tariff - IINeed to develop tariff :
which automatically works out different rates for different characteristics specified in Act irrespective of
the present categories. fulfills the requirement of the Law encourages consumers towards better management of
their use of energy improve efficiency of the system.
energywatch
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Thank you
You are welcome to see details of energywatch’s
response on ARR’s of DISCOMS and
suggestions forwarded to DERC on Tariff
at : http://www.energywatch.org.in
energywatch