8/10/2019 Role of Electricity Regulatory Commision
1/51
8/10/2019 Role of Electricity Regulatory Commision
2/51
In this presentation
Overview
Legal/Policy framework
Regulatory framework
Regulatory scope/activities
Market Development - CERC
initiatives & impact
12/8/2014 2CERC
8/10/2019 Role of Electricity Regulatory Commision
3/51
OVERVIEW
12/8/2014 3CERC
8/10/2019 Role of Electricity Regulatory Commision
4/51
Sectoral Parameters
Unelectrified rural households (2001Census)
77.8 million
(57%)
Power Supply Position during July2010
- Energy shortages- Peaking deficit 8.3%12.1%
Generating plantsPLF (2009-10) AllIndia
77.53%
Generation performance (2009-10) 771 BUs(7.0 % growth over
corresponding period ofprevious year)
Cumulative High Voltage Transmissionlinks (220 KV and above) (upto April2010)
2,26,458 ckt km
12/8/2014 4CERC
8/10/2019 Role of Electricity Regulatory Commision
5/51
Installed Generation Capacity in India(as on 31.01.2011)
Total Installed Capacity(as on 31.01.2011)
12/8/2014 5CERC
8/10/2019 Role of Electricity Regulatory Commision
6/51
Installed Renewable Generation Capacity in India
(end December10)
6
Total Installed Capacity(as on 31.12.2010)
Contributes 4% of total ElectricityGeneration
12/8/2014 6
70%
16%
5%8%
1%
Renewable Energy Installed Capacity (MW)
Wind Power
Small Hydro Power
Biomass Power
Bagasse Cogeneration
Waste to Power
Solar Power (SPV)
CERC
8/10/2019 Role of Electricity Regulatory Commision
7/51
Power Infrastructure in India
(as on 31.01.2011)
Total Installed Capacity(as on 31.01.2011)
48%
31%
21%
State CENTRAL SECTOR PRIVATE SECTOR
12/8/2014 7CERC
8/10/2019 Role of Electricity Regulatory Commision
8/51
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.
12/8/2014 8CERC
8/10/2019 Role of Electricity Regulatory Commision
9/51
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
12/8/2014 9CERC
8/10/2019 Role of Electricity Regulatory Commision
10/51
LEGAL/POLICY
FRAMEWORK
12/8/2014 10CERC
8/10/2019 Role of Electricity Regulatory Commision
11/51
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.
12/8/2014 11CERC
8/10/2019 Role of Electricity Regulatory Commision
12/51
Legal Framework under old laws
Regulatory authorities under IE Act, 1910 and E(S)Act, 1948
Central Government State Government CEA
SEB Central GovernmentPowers to fix capital ceiling for
TEC clearance etc.
State GovernmentPowers to grant licence etc. CEA TEC of generation projects, technical norms
etc.
SEB Several powers as main advisor of StateGovt.
12/8/2014 12CERC
8/10/2019 Role of Electricity Regulatory Commision
13/51
Legal Framework Contd
Regulatory authorities under ERC Act,1998
CERC
SERCs JERC
Objective distancing of Govt./Govt.organization from regulation.
12/8/2014 13CERC
8/10/2019 Role of Electricity Regulatory Commision
14/51
Legal FrameworkElectricity 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.
12/8/2014 14CERC
8/10/2019 Role of Electricity Regulatory Commision
15/51
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.
12/8/2014 15CERC
8/10/2019 Role of Electricity Regulatory Commision
16/51
8/10/2019 Role of Electricity Regulatory Commision
17/51
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.
12/8/2014 17CERC
8/10/2019 Role of Electricity Regulatory Commision
18/51
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%.
12/8/2014 18CERC
8/10/2019 Role of Electricity Regulatory Commision
19/51
Tariff Policy Mandates competitive procurement of power and
transmission servicestransitional 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.12/8/2014 19CERC
8/10/2019 Role of Electricity Regulatory Commision
20/51
REGULATORY FRAMEWORK
12/8/2014 20CERC
8/10/2019 Role of Electricity Regulatory Commision
21/51
Regulatory Commissions
At the CenterCERC 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 StatesSERCs
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.12/8/2014 21CERC
8/10/2019 Role of Electricity Regulatory Commision
22/51
8/10/2019 Role of Electricity Regulatory Commision
23/51
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
12/8/2014 23CERC
8/10/2019 Role of Electricity Regulatory Commision
24/51
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
12/8/20112/8/2014 24CERC
8/10/2019 Role of Electricity Regulatory Commision
25/51
8/10/2019 Role of Electricity Regulatory Commision
26/51
8/10/2019 Role of Electricity Regulatory Commision
27/51
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
12/8/2014 27CERC
8/10/2019 Role of Electricity Regulatory Commision
28/51
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.
12/8/2014 28CERC
8/10/2019 Role of Electricity Regulatory Commision
29/51
Procedure for Regulations
12/8/2014 29CERC
8/10/2019 Role of Electricity Regulatory Commision
30/51
PROCEDURE FOR PETITIONS
PETITIONER RESPONDANTS
ARGUMENTS
ORDERSREVIEW
PROCEEDINGS
Appeal in
Appellate
Tribunal
12/8/2014 30CERC
8/10/2019 Role of Electricity Regulatory Commision
31/51
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.12/8/2014 31CERC
8/10/2019 Role of Electricity Regulatory Commision
32/51
REGULATORY
SCOPE/ACTIVITIES12/8/2014 32CERC
8/10/2019 Role of Electricity Regulatory Commision
33/51
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.
12/8/2014 33CERC
8/10/2019 Role of Electricity Regulatory Commision
34/51
8/10/2019 Role of Electricity Regulatory Commision
35/51
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.
12/8/2014 35CERC
8/10/2019 Role of Electricity Regulatory Commision
36/51
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.
12/8/2014 36CERC
8/10/2019 Role of Electricity Regulatory Commision
37/51
8/10/2019 Role of Electricity Regulatory Commision
38/51
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
12/8/2014 38CERC
8/10/2019 Role of Electricity Regulatory Commision
39/51
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.
12/8/2014 39CERC
8/10/2019 Role of Electricity Regulatory Commision
40/51
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.
12/8/2014 40CERC
8/10/2019 Role of Electricity Regulatory Commision
41/51
CERC initiatives
Regulations on Grant of Regulatory Approval for executionof 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.
12/8/2014 41CERC
8/10/2019 Role of Electricity Regulatory Commision
42/51
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.12/8/2014 42CERC
8/10/2019 Role of Electricity Regulatory Commision
43/51
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.
12/8/2014 43CERC
8/10/2019 Role of Electricity Regulatory Commision
44/51
Volume of Open Access transactions
(inter-State transmission)
12/8/2014 Source: NLDC
Market Development- Impact
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
11.8514.19 15.02
20.96 21.92
26.82
2.77
7.09
Volume(BUs)
Electricity Transacted by Trading Licensees Electricity Transacted by Power Exchanges
44CERC
8/10/2019 Role of Electricity Regulatory Commision
45/51
8/10/2019 Role of Electricity Regulatory Commision
46/51
Investment promotion:
CTU has received 225 applications from privatedevelopers 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 andBPTA signed Geographical locations
Pit-head coal Orissa, Chhattisgarh, Jharkhand Coastal with port facilities - Andhra Pradesh, Tamil
Nadu Hydel sitesSikkim
12/8/2014
MarketDevelopment-Impact
46CERC
8/10/2019 Role of Electricity Regulatory Commision
47/51
Grid discipline - IEGC
IEGC and UI regulations amended to ensure greater griddiscipline .
Operational frequency band tightened from 50.3 Hz
to 49.2 Hzto 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 griddiscipline and load management, in addition to
SLDCs.
12/8/2014 47CERC
8/10/2019 Role of Electricity Regulatory Commision
48/51
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
12/8/2014 48CERC
8/10/2019 Role of Electricity Regulatory Commision
49/51
Improvement in Grid profile
12/8/2014
0
10
20
30
40
50
60
70
80
90
100
1 6 11 16 21 26
Percentage
Day
NEW Grid Fequency Profile April 10- May10
Frequency Profile in May10 ( 49.5-50.2)
Frequency Profile in April10 ( 49.5-50.3)
Frequency Profile in June10 ( 49.5-
49CERC
8/10/2019 Role of Electricity Regulatory Commision
50/51
Grid discipline - constraints
Disconnection almost impossible in meshed system
Centre-State issues
J&K defaulting in UI payments, difficulties in
disconnection.
12/8/2014 50CERC
8/10/2019 Role of Electricity Regulatory Commision
51/51
Thank Youwww.cercind.gov.in
Top Related