Role of Electricity Regulatory Commissions By S C Shrivastava Joint Chief (Engg) Central Electricity...
-
Upload
edwin-gilbert -
Category
Documents
-
view
218 -
download
2
Transcript of Role of Electricity Regulatory Commissions By S C Shrivastava Joint Chief (Engg) Central Electricity...
Role of Electricity Regulatory Commissions
ByS C Shrivastava
Joint Chief (Engg)
Central Electricity Regulatory Commission
In this presentation…
• Overview
• Legal/Policy framework
• Regulatory framework
• Regulatory scope/activities
• Market Development - CERC
initiatives & impact
04/21/23 2CERC
OVERVIEW
04/21/23 3CERC
Sectoral ParametersUnelectrified rural households (2001 Census)
77.8 million(57%)
Power Supply Position during July 2010
- Energy shortages- Peaking deficit
8.3%12.1%
Generating plants – PLF (2009-10) All India
77.53%
Generation performance (2009-10) 771 BUs (7.0 % growth over corresponding period of previous year)
Cumulative High Voltage Transmission links (220 KV and above) (upto April 2010)
2,26,458 ckt km
04/21/23 4CERC
Installed Generation Capacity in India (as on 31.01.2011)
04/21/23 5CERC
Installed Renewable Generation Capacity in India (end December’10)
604/21/23 6CERC
Power Infrastructure in India (as on 31.01.2011)
04/21/23 7CERC
Ownership Status of Transmission and Distribution
• Almost 100% of Electricity Transmission
in India is owned by public sector.
• About 13 % of Electricity Distribution in
India is owned by private sector.
04/21/23 8CERC
Electricity Requirement 2031 - 32
8% 9%
Total Energy Requirement 3880 4806
Energy Requirement at Bus Bar 3628 4493
592 733
778 960
Billion kWh
Projected Peak Demand (GW)
Installed Capacity Requirement (GW)
GDP Growth Rate
Source: Integrated Energy Policy
04/21/23 9CERC
LEGAL/POLICY FRAMEWORK
04/21/23 10CERC
Basic Legal Framework
• Electricity – a concurrent subject as per
Constitution of India.
• Both Centre and States can legislate.
• In case of repugnancy, Central
legislation prevails.
04/21/23 11CERC
Legal Framework under old laws• Regulatory authorities under IE Act, 1910 and E(S)
Act, 1948• Central Government
• State Government
• CEA
• SEB
• Central Government – Powers to fix capital ceiling for TEC clearance etc.
• State Government – Powers to grant licence etc.
• CEA – TEC of generation projects, technical norms etc.
• SEB – Several powers as main advisor of State Govt.
04/21/23 12CERC
Legal Framework Contd…
• Regulatory authorities under ERC Act, 1998 • CERC• SERCs• JERC
• Objective – distancing of Govt./Govt. organization from regulation.
04/21/23 13CERC
Legal Framework – Electricity Act, 2003
• Consolidates laws of electricity relating to generation,
transmission, distribution and trading of electricity.
• Creates environment conducive for development of
electricity industry.
• Introduction of competition.
• Constitution of Central and State Regulatory
Commissions to rationalize electricity tariffs.
04/21/23 14CERC
Electricity Act 2003 -Key Features
• Open Access to Transmission /Distribution Systems
• De-licensing of power generation
• Trading in electricity permitted
• Liberal provisions for captive power generation
• Rural generation and distribution freed from licensing
• Expanded role for the Regulatory Commissions
• Envisages unbundling of transmission and distribution.
• Regulatory Commissions to develop electricity markets.
04/21/23 15CERC
The Electricity Act, 2003……
• Clear demarcation of role and responsibility of
• Government (policy making)
• Independent Regulatory Commission (powers of
regulation)
• Other statutory bodies – like Central Electricity
Authority (as expert body on technical matters)
04/21/23 16CERC
Government
• Formulation of
– National Electricity Policy
– Tariff Policy
– National Electricity Policies on rural electrification.
• Powers to issue directions to the Regulatory
Commissions on issues involving public
interest.
04/21/23 17CERC
National Electricity Policy • Total village electrification by year 2010
By year 2012 :
• Per capita availability 1000 units.
• Installed capacity over 200,000 MW.
• Spinning reserves 5% .
• Minimum lifeline consumption of 1 unit per household per
day.
• Inter-regional transmission capacity 37,000 MW.
• Energy efficiency/ conservation savings about 15%.
04/21/23 18CERC
Tariff Policy• Mandates competitive procurement of power and transmission
services – transitional window of 5 years period given to public
sector companies.
• Encourage efficiency in operations by sharing of gains between
licensees and consumers.
• Promote Multi-Year Tariff (MYT) framework.
• Encourage loss reduction Strategies.
• Tariff design : Linkage of tariffs to cost of service
• gradual reduction in cross subsidy (+/- 20% of average cost of
supply)
• Progressive reduction in Cross-subsidy surcharge for open access.
04/21/23 19CERC
REGULATORY FRAMEWORK
04/21/23 20CERC
Regulatory Commissions • At the Center – CERC
• Powers to regulate centrally owned generating companies
and companies having composite scheme for generation and
sale of electricity in more than one State.
• To regulate inter-State transmission/Trading.
• In the States – SERCs
• Powers to regulate intra-State generation, transmission and
distribution.
– CERC vis a vis SERCs
• No hierarchical relationship. However, SERCs are to be
guided by the principles of tariff determination specified by
CERC.04/21/23 21CERC
Functions of CERC• to regulate the tariff of inter-state generating companies
• to regulate the inter-State transmission of electricity
• to determine tariff for inter-State transmission of electricity
• to issue licenses for inter state electricity transmission and
trading.
• to adjudicate upon inter-State disputes
• to specify Grid Code
• to specify and enforce the standards with respect to quality,
continuity and reliability of service
• to fix the trading margin
04/21/23 22CERC
Functions of CERC…
• Advisory Functions:
– formulation of National electricity Policy and tariff policy;
– promotion of competition, efficiency and economy in the activities of
the electricity industry;
– promotion of investment in electricity industry;
– any other matter referred to the Central Commission by the Central
Government
04/21/23 23CERC
Functions of SERCs• determine the tariff for generation, supply, transmission and wheeling
of electricity, wholesale, bulk or retail within the State
• regulate electricity purchase and procurement process of distribution
licensees
• facilitate intra-State transmission and wheeling of electricity
• issue licences for intra state transmission, distribution and trading.
• promote co-generation and generation of electricity from renewable
sources of energy
• adjudicate upon the intra-state disputes
• specify or enforce standards with respect to quality, continuity and
reliability of service by licensees;
• fix the trading margin in the intra-State trading of electricity
04/21/2304/21/23 24CERC
Functions of SERCs…
• Advisory Functions:
– promotion of competition, efficiency and economy in
activities of the electricity industry;
– promotion of investment in electricity industry;
– reorganization and restructuring of electricity industry in
the State;
– matters concerning generation, transmission ,
distribution and trading of electricity or any other matter
referred to the State Commission by that Government.
04/21/2304/21/23 25CERC
Mission Statement-CERC• The Commission promotes competition, efficiency and economy in
power markets, protects the interests of consumers and promotes
investments in power sector. In pursuit of these objectives the
Commission aims to –
• Formulate an efficient tariff setting mechanism which ensures economy and
efficiency in the pricing of bulk power and transmission services and leads to
least cost investments,
• Promote development of power market by creating a market structure, facilitating
open access in inter-State transmission, facilitating interstate trading,
• Improve the operations and management of the inter-State transmission systems
through Indian Electricity Grid Code (IEGC), Availability Based Tariff (ABT),
04/21/23 26CERC
Regulatory Commission - a quasi judicial body
• Powers of Civil Court for the purposes of
inquiry or proceedings under the Act.
(Section 94)
• Powers to impose penalty for non-
compliance of direction of Regulatory
Commissions.
• Powers to adjudicate
04/21/23 27CERC
Accountability of Regulators
• Annual Report to be laid before the Parliament.
• Accounts of Regulatory Commissions to be
audited by CAG.
• Appeal against the orders of Regulatory
Commissions to lie before the Appellate
Tribunal.
04/21/23 28CERC
Procedure for Regulations
04/21/23 29CERC
PROCEDURE FOR PETITIONS
PETITIONER RESPONDANTS
ARGUMENTS
ORDERSREVIEW
PROCEEDINGS
Appeal in Appellate Tribunal
04/21/23 30CERC
Appellate Tribunal• Constitution of Appellate Tribunal consisting of Chairman,
three Members (Technical and Judicial) and one Member with
specialization in Petroleum Sector.
• Appellate Tribunal to hear appeals against the orders of
CERC/SERC/PNGRB.
• The appeal to Appellate Tribunal should be filed within 45
days of order issued by CERC/SERC/PNGRB.
• Appeal against the orders of Appellate Tribunal to lie before
the Supreme Court within 65 days.
• Appellate Tribunal considered necessary to-
• Reduce litigation and delay in decisions through High Court.
• Provide technical expertise in decision on appeals.04/21/23 31CERC
REGULATORY SCOPE/ACTIVITIES
04/21/23 32CERC
Generation
• No requirement of licence.
• Full freedom to captive generation.
• For hydro-generation clearance of CEA is necessary
due to concern of dam safety and inter-State issues.
• Generation from Non-Conventional Sources / Co-
generation to be promoted. Minimum percentage of
purchase of power from renewables may be prescribed
by Regulatory Commissions.
04/21/23 33CERC
Transmission
• Transmission Utility at the Center and in the States to
undertake planning/development of transmission
system.
• Regional Load Despatch Centers to ensure integrated
operation of the power system.
• Flexibility regarding keeping Transmission Utility and
load despatch together or separating them.
• The Load Despatch Centre/ Transmission
Utility/Transmission Licensee not to trade in power.
04/21/23 34CERC
Trading/ Market development
• Trading distinct activity permitted with licensing.
• Regulatory Commission to specify technical
requirement, capital adequacy requirement and credit
worthiness for a trader.
• Regulatory Commission may fix ceiling on trading
margin to avoid artificial price volatility.
• The Regulatory Commission to promote development
of market including trading.
04/21/23 35CERC
Tariff
• Regulatory Commissions to determine tariff for
– Supply by Generating Company to distribution licensee
through long term contract. For short term contracts only
minimum and maximum ceiling of tariff.
– Transmission of electricity.
– Wheeling of electricity
– Retail sale to consumers by Licensee.
04/21/23 36CERC
MARKET DEVELOPMENT - CERC INITIATIVES & IMPACT
04/21/23 37CERC
Market Development - CERC initiatives
• Regulations on
• Short-term Open Access
• Grant of Connectivity, Long-term Access and Medium-
term Open Access in inter-State Transmission.
• Grant of Regulatory Approval for execution of Inter-State
Transmission Scheme to CTU
• Transmission Pricing
• Power Market
04/21/23 38CERC
CERC initiatives…• Special Features of CERC regulations on short-term open
access
• Timelines for concurrence of SLDC in case use of
intra-State system is involved
• Provision of deemed concurrence if SLDC does not
decide within above timelines.
• SLDC to look at only two aspects:
• existence of metering infrastructure, and
• availability of surplus transmission capacity in the
State network.
04/21/23 39CERC
CERC initiatives…• Features of CERC regulations on Grant of Connectivity,
Long-term Access and Medium-term Open Access in inter-
State Transmission
• Enabling transmission products of different varieties, standardization of
procedures, defining time lines and ensuring level playing field among
different categories of market players.
• Introduced medium-term Open Access to inter-State grid - for a period
ranging from 3 months to 3 years.
• New regulatory provisions for seeking connectivity to grid.
• Discrimination between public and private sector generators on
connectivity to grid, abolished.
04/21/23 40CERC
CERC initiatives…
• Regulations on Grant of Regulatory Approval for execution
of Inter-State Transmission Scheme to Central
Transmission Utility
• This is to facilitate network expansion keeping in view
the anticipated transmission needs without the
requirement of prior agreement with the beneficiaries
• CERC has granted approval for investment (of about Rs.
58000 Cr. ) to CTU for nine high capacity transmission
corridors.
04/21/23 41CERC
CERC initiatives…
• Regulations on Sharing of Inter State Transmission
Charges and Losses
• National transmission tariff framework – in line with
vision of tariff policy.
• Sensitive to direction, distance and quantum;
• Addresses short-comings of existing system – like
pan-caking of charges, sharing of charges not
being fully sensitive to distance and direction,
pricing not efficient enough to address emerging
market requirements. 04/21/23 42CERC
CERC initiatives…
• Power Market Regulations
• Provide a road map for development of power
market
• Define roles of various players in the market
and phases of introduction of
products/contracts.
04/21/23 43CERC
Volume of Open Access transactions (inter-State transmission)
04/21/23Source: NLDC
Market Development- Impact
44CERC
Market Development- Impact…
04/21/23
Consumer Open Access through Power Exchange - A Snapshot
Details Indian Energy Exchange Ltd
Total Clients 300
Open Access Consumers 160
Nature of Business of these Consumers
Industrial Consumers- Textiles, Spinning mills, Auto Ancillary
Geographical Location of these Consumers
Punjab, Rajasthan , Tamil Nadu, Andhra Pradesh
% of Daily Cleared Volume by OA consumers during Oct 2009 – Feb 2010
25-30 % ( 5-7 MU) of total daily cleared volume of Power Exchange
Nature of purchase Peak , Off Peak
45CERC
• Investment promotion:– CTU has received 225 applications from private
developers for Long Term Open Access amounting to 1,62,898 MW
• Phase 1: 42,108 MW (LTOA granted to 43 applicants )
– Bank guarantee of 875 Cr given by developers and BPTA signed
– Geographical locations
• Pit-head coal Orissa, Chhattisgarh, Jharkhand
• Coastal with port facilities - Andhra Pradesh, Tamil Nadu
• Hydel sites – Sikkim
04/21/23
Market Development- Impact…
46CERC
Grid discipline - IEGC• IEGC and UI regulations amended to ensure greater grid
discipline .
• Operational frequency band tightened from ‘50.3 Hz
to 49.2 Hz’ to ‘50.2 to 49.5 Hz’.
• This is aimed at ensuring better performance of
generating stations and user appliances.
• All users of inter-State grid including distribution
utilities will also now be directly responsible for grid
discipline and load management, in addition to
SLDCs.
04/21/23 47CERC
Grid Discipline - Restructured UI mechanism • UI regulations amended to send a message that UI mechanism should not be
used as a trading tool
• Underdrawls and over injections beyond the permissible quantities,
disincentivised and priced at lower rates
• in order to push more electricity to organized electricity markets and
• to further discourage use of UI mechanism for sale of electricity,
• Additional UI charge of 40% on the normal UI rate (Rs. 8.73 per unit),
applicable at grid frequency below 49.5 Hz instead of 49.2 Hz
• to more effectively curb the tendency of some states to heavily
overdraw
• Additional UI rate has been made 100% on overdrawals when grid
frequency is below 49.2 Hz
• to put further exemplary deterrent on overdrawls
• Improvements in grid frequency profile subsequent to CERC regulation on IEGC
and UI
04/21/23 48CERC
Improvement in Grid profile
04/21/23 49CERC
Grid discipline - constraints
• Disconnection almost impossible in meshed system
• Centre-State issues
• J&K defaulting in UI payments, difficulties in
disconnection.
04/21/23 50CERC
Thank Youwww.cercind.gov.in