Presentation on Operationalisation of Open Access

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Mr. Ajoy Mehta, IAS, Managing Director, Maharashtra State Electricity Distribution Company Limited at RPR 2012, 23-26 August, Goa, India

Text of Presentation on Operationalisation of Open Access

  • 1. Regulators & Policymakers Retreat, 2012 Date: 24th August 2012 Regulators and Policymakers Retreat-2012Presentation onOperationalisation of Open Access ByAjoy Mehta, IAS,Managing Director, Maharashtra State Electricity Distribution Company Limited

2. Matter has raised important legal issues Opinions of Attorney General of India, Solicitor General Of India Planning commission- working group onOA Operationalisation in Feb-2010 Notification from Ministry of Power on Dt 30.09.2011 Discussions in the Forum of Regulators (FOR) MoP has referred this matter for CERC to form regulations, Comments on Operationalisation of OA has been asked by MERC 2MSEDCL 3. (a) Bulk consumers (above 1 MW) shall be deemed to be open access consumers w.e.f.January 2009.(b) The State Commission has no longer fix the energy charges to be paid by such aconsumer, but will continue to fix the wheeling charges and surcharges.(c) Sec-49 shows that if certain consumers want to have the benefit of the option to buypower from competing sources, then it is logical that DISCOMS/Distribution Licenseesdo not have an obligation to compulsorily supply power to such consumers.(d) Sec-42(3) is not a precondition for the implementation of open access as such anotice is not for seeking permission to use the distribution licensees network, butonly to communicate the open access consumers intention of using such a network. 3 4. Ministry of Power LetterTechnical issues & Operational constraintsFinancial Impact on MSEDCL.Legal issues 5. Letter from MoP refers only legal issues in OpenAccess Operationalisation. Opinion is in isolation with provisions in Act. ( Theyhave not considered technical & operationalConstraints.) Deciding of OA tariff by Utility : Complex issue. Methodology for implementation of OA is notmentioned any where. It requires clarity/Change in regulation CSS decided is not commensurate with migratedconsumers tariff. Infrastructure problems for new consumers. 6. 6 7. ParticularRegulnAction by DL As per MoP CircularRemarks if MoP Circular is implementedApplicationReg.ScrutinyNo Application, Just an MERC (Distribution Open Access)for Open No. 4.2 intimation is required Regulations, 2005, needs to beAccess complied.EligibilityReg. 3 Scrutiny of application for OA Can not ascertain Open access may be granted to a non-criterion capacity (should not be >eligible consumerthan CD)Type of OA Sec. 9 / Ascertainment of applicability Can not ascertain The DL may lose the legitimate revenueCaptive /10 ofof in respect of cross subsidy surchargeGeneral OA ActCSS for General OAGrid Reg.For existing consumer, For existing consumer, Utility has to bear cost of infrastructureConnectivity connectivity is available, but connectivity available for new OA consumer for new consumer,For new, the consumer connectivity will be providedhas to applyArrears /Reg.OA permission may be No controlIn case of arrears OA can not be grantedDispute4.2.7 rejected in case of non settlement of duesInstallation of Reg. 7 AscertainmentNo clear guidelinesSEM is a pre-requisite of open access,SEMmust be complied. If SEM not installed, proper Billing can not be doneOpen AccessWill be grantedPermission is notSLDC has to monitor the fulfillment of allPermissionrequired, Will beregulatory requirements. SLDC has nodeemed to be granted man power neither it is highly equipped to look into all matters. 8. Particular RegulAction by DLAs per MoPRemarks if MoP Circular is n Circular implementedContractReg. CD will be reduced to the extent We cant haveIf CD not reduced, the DL has toDemand4.2.1 / of OA capacityany control over make provision for supply ofReduction / 4.2.2 its usage. Contracted capacityTerminationunnecessarily, resulting into loss.Reg needs to be compliedAgreement Reg. 5 Will be executed between DL,No Agreement, will affect the OA consumer & generator interests of both parties.Reg needs to be compliedJoint Meter JMR will be carried out??? JMR needs to be carried out.ReadingBillingReg. 8 Billing to include wheeling Who will bill OA Reg needs to be compliedcharges, CSS, Losses,standby, PF, Consumer?SLDC???StandbyReg. 9 Will be provided at Temporary ???No contract with DL, nosupplyTariff through Agreement obligation on DL to provide standby supplyInter- stateWill be permitted subject toSLDC toNot mentioned in circular.open access SLDC approval, generation units approveto be given by SLDC/WRLDCOver drawal Reg. 9 Will be charged at Temporary SLDC will charge The DL will decide tariff. Loss toTariffUI consumers in both cases. 9. Details of deemed OA consumers (Contract demand above 1 MW) for FY 2011-12 Migration of Consumers to Consumers below 1 MW Category No. ofSalesRevenueABRwith MSEDCLOpen AccessCons. Mus Rs. Crs Rs./Unit% Sales Revenue ABR Sales Revenue ABRHT & LT14,08158620,114 13,187 6.5630% 6,034 3,9566.569,231 6.56Industries 0HT & LT10.8231888964 10.86 50%444 482 10.86 444482Commercial6PWW63708340 4.800%- -7083404.80Agriculture42329 24 0.740%- -329 240.74Railway43 1,386 945 6.82100% 1,386 945 6.82--Total deemedopen access 196523425154606.60 7864 5383 6.8515561 10077 6.48consumers1.94Total 81,835 38,135 4.66 CrsProportion of 9.6119.02deemed OA 0.01%29%41% 14.12% 26.43%consumers%%9 10. Impact on ARR for embedded consumers Impact on tariff on common consumers Impact on monthly revenue of utility. Assumption of migration of consumers. Fixed cost of Power procurement (Computation ofadditional surcharge on case to case basis) Loss of CSS due to migration of bulk consumers. Increase in loss of utility. Burden of Opex/Capex on consumers of utility 11. 1 MW and above consumers are deemed OAusers OA Category : SERC to fix wheeling charges &surcharge only Dist. Licensee not to have service obligation Notice is not for seeking permission to use theDLs network but only to communicateintention of using such network 12. Planning Commission has formed task force in Feb-2010 SERC should be advised by Govt. for Operationalisation of OA & to specify wheeling charges. Standby charges should not exceed max.UI rate for applicable hrs plus 5% adm.charges thereon. SLDC/RLDC should be separate entity with functional & operational autonomy. Regulators should meet bulk consumers & act proactively. 25% of centers discretionary allocation of 15 % CPSU generating capacity may be made available for direct sale of CPSU to OA consumers. Amendment in Sec.62(1)(a) to make it explicit that supply of electricity by a generating company to DL includes supply through an electricity trader. 13. Not purchase excess energy injected May charge temporary tariff for excessconsumption. Can charge high tariff for standby supply or maynot provide stand supply. O&M activity of consumers feeders. Different negotiated tariff for OA consumers. Can ask to revise CSS & wheeling charges