Approach Paper 30.09
Transcript of Approach Paper 30.09
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Approach Paper
Determination of Various Charges for Open Access
Including Cross Subsidy Surcharge and Additional Surcharge
UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION
2nd Floor, Kisan Mandi Bhawan, Vibhuti Khand, Gomti Nagar, Lucknow
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BACKGROUND
In order to promote competition in the power sector and to provide
consumers an option of procuring power at competitive rates, the Electricity
Act 2003 (hereinafter referred to as the Act) has enabling provisions in the
form of Open Access (OA) to transmission and distribution networks. The Act
and the National Electricity Policy formulated therein by the Central
Government mandates the State Electricity Regulatory Commissions to frame
regulations specifying the terms and conditions and timeframe for
introduction of Open Access in distribution. The Commission has specified
the terms and conditions for Open Access and its phasing under the UPERC
(Terms and Conditions for Open Access) Regulations 2004, notified on 7th
June, 2005, and the methodology for the determination of TransmissionCharges, Wheeling Charges, Surcharge and Additional Surcharge, under the
Terms and Conditions for Determination of Transmission and Distribution
Tariff Regulations-2006.
In accordance with the provisions of the Act, Open Access consumers are
required to pay the Transmission Charges, Wheeling Charges (if connected to
the distribution network), Surcharge and Additional Surcharge, as may be
specified by the State Commission. The Surcharge (herein after referred as
Cross Subsidy Surcharge) and the Additional surcharge have been provided
under the Act to safeguard the interest of the incumbent distribution licensee.
The Cross Subsidy Surcharge is meant to compensate the incumbent
distribution licensee for loss of cross-subsidy on account a migration of a
cross-subsidizing consumer from his area of operation and additional
surcharge to meet the fixed cost of such a licensee as may arise out of his
obligation to supply.
Therefore, to operationalise Open Access within the State the Commission has
to determine following charges for an Open Access consumer in accordance
with the provisions of the Act, regulations made under it:
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i. Transmission Chargesii. Wheeling Charges.iii. Cross-subsidy Surchargeiv. Additional Surcharge
In addition to above charges the Commission has also specify the standby
arrangement charges in the light of clause 8.5.6 of the Tariff Policy which
states as below:
In case of outages of generator supplying to a consumer on open access, standby
arrangements should be provided by the licensee on the payment of tariff for
temporary connection to that consumer category as specified by the AppropriateCommission.
The Commission had determined the applicable transmission charges on per
unit basis in its tariff order for the FY 2004-05 stating:
UPPCL has mentioned in its filings and subsequent submissions that metering of
interface points with Special Energy Meters of the required accuracy class is in
progress. Once these meters and the associated information technology tools for
reading the meters and aggregating such readings to generate the demand and energy
readings are available, suitable tariff design based on the actual demand placed by the
distribution licensees on the transmission system can be implemented. However at
present, in the absence of historical data, there is no history available to determine the
peak and average demand of each of the licensees. Neither is any contracted demand
been determined (or allocated) by UPPCL for each of the distribution licensees.
Accordingly a demand based transmission tariff is not feasible to implement
at this juncture. In these circumstances the Commission has decided to implement
energy based transmission charges.
It was also indicated by the Commission in the above Tariff order that the
charges so determined could be utilized for the purposes of Open Access to
the transmission network.
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Regarding Surcharge and Additional Surcharge, UPERC (Terms and
Conditions for Open Access) Regulations 2004 provided that:
Surcharge
(a) In addition to transmission charges and wheeling charges, a consumer
availing open access to the transmission system/distribution system not being
a captive consumer shall pay a surcharge;
(b) Surcharge shall be determined by the Commission separately in the concerned
tariff order. In absence of such determination, the surcharge shall be
specified by the Commission on a case to case basis for a specified
period based on an application moved before it in this behalf.
Provided that the applicant shall pay surcharge as determined as per these
regulations post the expiry of the period specified above under regulation 15(2)
(b).
(c) The amount of surcharge shall be so calculated as to meet the current level of
cross subsidy from that category of consumers and shall be paid to the
distribution licensee of area of supply where the consumer is located.
(d) The surcharge shall be reduced and eliminated in the manner as determined bythe Commission in respect to reduction and elimination of cross subsidies in
terms and conditions of tariff of transmission/distribution licensees.
(e) The consumers availing exclusively interstate transmission system shall pay
such amount of surcharge as determined by the Commission by regulations in
this regard.
Additional Surcharge
(a) A consumer availing open access and receiving supply of electricity from a
person other than the distribution licensee of his area of supply shall pay to the
distribution licensee an additional surcharge, in addition to wheeling charges
and surcharge, to meet the fixed cost of such distribution licensee arising out
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of his obligation to supply as provided under sub-section (4) of section 42 of
the Act;
(b) The distribution licensee shall submit to the Commission an account
of fixed cost, which the licensee is incurring towards his obligation to
supply;
(c) The Commission shall scrutinize the statement of account submitted
by the licensee and objections, if any, and determine the amount of
additional surcharge payable by the consumer to the licensee,
(d) The additional surcharge shall be leviable for such period as the Commission
may determine.
Since, the data in the ARR/Tariff filing was not adequate for the
determination of surcharge or the additional surcharge and further since no
application, from any consumer, for grant of Open Access was filed, the
Surcharge and Additional Surcharge were not determined by the
Commission.
Transmission charges and Wheeling Charges were again determined in the
Tariff Order for the FY 2006-07. Surcharge and Additional Surcharge however
again could not be determined in absence of data required for the purpose.
However, considering the importance of Open Access in promoting
competition and private investment in the sector the Commission now feels it
necessary to determine the various applicable charges for Open Access
including the Cross-subsidy surcharge and the Additional Surcharge, based
on the data available with it and making certain assumptions. Accordingly,
under this Approach Paper some interim calculations of various applicable
charges for Open Access have been done. The idea behind this Approach
Paper is to determine the various charges for Open Access in consultation
with the utilities linked and other stakeholders. It is felt that giving consumers
as well as utilities some idea of various applicable charges for Open Access
will facilitate implementation of Open Access within the State.
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It is to clarify that the debate and discussions on the approach paper will not
be limited to the issues linked with the determination of applicable charges
for Open Access only. Utilities and other stakeholders may feel free to raise
any other issues which they feel are relevant for the immediate and effective
implementation of Open Access within the State. It is further clarify that the
views and opinions expressed in this paper are only to initiate a discussion on
the topic and do not necessarily reflect the Commissions views or opinions in
the matter.
Further, to have a meaningful debate on all the issues related to effective and
early implementation of Open Access in the State, the Commission desires the
utilities and other stake holders to actively participate in the discussions to be
held and submit their comments in writing within 30 days of issuance ofnotice to this effect.
The Commission may also conduct public hearings for the purpose for which
separate notices shall be issued. Based on the objections/suggestions/
comments received form various stakeholders and public at large, the
Commission shall determine the various applicable charges for Open Access
and issue appropriate orders in the matter. The charges as may finally be
determined by Commission based on this approach paper shall remain in
force till the Commission re-determines them along-with the next tariff order.
Before detailing the method and procedure for determining the various
applicable charges for Open Access including cross subsidy surcharge and the
additional surcharge, the Commission would like to quote relevant provisions
of Open Access under the Act, the National Electricity Policy, the Tariff Policy
and the regulations framed by the Commission.
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PROVISIONS RELATED TO OPEN ACCESS UNDER THE ACT, THE
TARIFF POLICY, THE NATIONAL ELECTRICITY POLICY AND
REGULATIONS FRAMED BY THE COMMISSION
A. PROVISIONS RELATED TO OPEN ACCESS UNDER THE ACT
i) Provisions related to Open Access relevant to STU
Section 39 (2)
The functions of the State Transmission Utility (STU) shall be-
(a) .(b) .(c) .
(d) Provide non-discriminatory open access to its transmission
system for use by-
(i) any licensee or generating company on payment of thetransmission charges ; or
(ii) any consumer as and when such open access is providedby the State Commission under sub-section (2) of
section 42, on payment of the transmission chargesand a surcharge thereon, as may be specified by the
State Commission:
Provided that such surcharge shall be utilized for the purpose of
meeting the requirement of current level cross-subsidy:
Provided further that such surcharge and cross subsidies shall
be progressively reduced and eliminated in the manner as may
be specified by the State Commission:
Provided also that such surcharge may be levied till such time
the cross subsidies are not eliminated*:
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Provided also that the manner of payment and utilization of the
surcharge shall be specified by the State Commission.
Provided also that such surcharge shall not be leviable
in case open access is provided to a person who has
established a captive generating plant for carrying theelectricity to the destination of his own use.
ii) Provisions Related to Open Access for a TransmissionLicensee
Similar provisions also exist under Section 40 (c) of the Act for a
Transmission licensee.
iii) Provisions Related to Open Access for a Distribution LicenseeSection 42 (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 that such open access may be allowed before the cross
subsidies are eliminated*on payment of surcharge in addition to
the charges for wheeling as may be determined by the State
Commission:
Provided further that such surcharge shall be utilized to meet the
requirements of current level of cross subsidy within the area of supplyof the distribution licensee:
Provided also that such surcharge and cross subsidies shall be
progressively reduced and eliminated* in the manner as may be
specified by the State Commission:
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Provided also that such surcharge shall not be leviable in case open
access is provided to a person who has established a captive generating
plant for carrying the electricity to the destination of his own use.
*Note: It may however be noted that Government of India has
vide notification dated 28th May 2007 issued the Electricity(Amendment) Act 2007 to amend certain provisions of the
Electricity Act 2003. Under the amended provisions the word
eliminated used in connection of elimination of cross-
subsidies has been removed from Section 38 (2) (d), Section 39
(2) (d), Section 40 and Section 42 (2) and accordingly third
proviso from Section 38 (2) (d), Section 39 (2) (d) and Section
40 has been removed.
iv) Power of the Commission under the Act to frame regulations
for Open Access and determine applicable charges including
surcharge
Section 181 read with Section 86 of the Act empowers the
Commission to frame regulations and determine tariffs for
supply of electricity by a generating company to a distribution
licensee, transmission of electricity, wheeling of electricity and
retail sale of electricity as well the surcharge.
It is further provided under the Act that these tariffs are to be
determined by the concerned Electricity Regulatory
Commissions in accordance with the provisions of the Act and
the regulations for tariff determination framed by them.
Section 86 (1) (a) of the Act provides that:
The State Commission shall discharge the following functions, namely:
(a) determine the tariff for generation, supply, transmission and
wheeling of electricity, wholesale, bulk or retail, as the case
may be, within the State:
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Provided that where open access has been permitted to a
category of consumers under section 42, the State Commission
shall determine only the wheeling charges and surcharge
thereon, if any, for the said category of consumers;
B. PROVISIONS RELATED TO OPEN ACCESS UNDER THE TARIFFPOLICY
Government of India has prescribed a formula for the calculation of
cross-subsidy surcharge under Clause 8.5 of the Tariff Policy.
Clause 8.5.1
National Electricity Policy lays down that the amount of cross-subsidy
surcharge and the additional surcharge to be levied from consumers who are
permitted open access should not be so onerous that it eliminates competition
which is intended to be fostered in generation and supply of power directly to
the consumers through open access. 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. A consumer would avail of open access only
if the payment of all the charges leads to a benefit to him. While the interest of
distribution licensee needs to be protected it would be essential that this
provision of the Act, which requires the open access to be introduced in a time-
bound manner, is used to bring about competition in the larger interest of
consumers. Accordingly, when open access is allowed the surcharge for the
purpose of sections 38, 39, 40 and sub-section 2 of section 42 would be
computed as the difference between (i) the tariff applicable to the relevant
category of consumers and (ii) the cost of the distribution licensee to supply
electricity to the consumers of the applicable class. In case of a consumer
opting for open access, the distribution licensee could be in a position to
discontinue purchase of power at the margin in the merit order. Accordingly,
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the cost of supply to the consumer for this purpose may be computed as the
aggregate of (a) the weighted average of power purchase costs (inclusive of
fixed and variable charges) of top 5% power at the margin, excluding liquid
fuel based generation, in the merit order approved by the SERC adjusted for
average loss compensation of the relevant voltage level and (b) the distribution
charges determined on the principles as laid down for intra-state transmission
charges.
Surcharge 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
L - is the system losses for the applicable voltage level, expressed as
a percentage.
The cross-subsidy surcharge should be brought down progressively and, as far
as possible, at a linear rate to a maximum of 20% of its opening level by the
year 2010-11.
Clause 8.5.2
No surcharge would be required to be paid in terms of sub-section (2)
of Section 42 of the Act on the electricity being sold by the generating
companies with consent of the competent government under Section
43(A)(1)(c) of the Electricity Act, 1948 (now repealed) and on the
electricity being supplied by the distribution licensee on the
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authorization by the State Government under Section 27 of the Indian
Electricity Act, 1910 (now repealed), till the current validity of such
consent or authorizations.
Clause 8.5.3
The surcharge may be collected either by the distribution licensee, the
transmission licensee, the STU or the CTU, depending on whose facilities are
used by the consumer for availing electricity supplies. In all cases the amounts
collected from a particular consumer should be given to the distribution
licensee in whose area the consumer is located. In case of two licensees
supplying in the same area the licensee from whom the consumer was availing
supply shall be paid the amounts collected.
Clause 8.5.4
The additional surcharge for obligation to supply as per section 42(4) of the
Act should become applicable only if it is conclusively demonstrated that the
obligation of a licensee, in terms of existing 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. The fixed costs
related to network assets would be recovered through wheeling charges.
Clause 8.5.5
Wheeling charges should be determined on the basis of same principles as laid
down for intra-state transmission charges and in addition would include
average loss compensation of the relevant voltage level.
Clause 8.5.6
In case of outages of generator supplying to a consumer on open
access, standby arrangements should be provided by the licensee on the
payment of tariff for temporary connection to that consumer category
as specified by the Appropriate Commission.
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C. PROVISIONS RELATED TO OPEN ACCESS UNDER THE
NATIONAL ELECTRICITY POLICY
National Electricity Policy under clause 5.8.3 while discussing the
surcharges to imposed on Open Access Consumers provides that:
Under sub-section (2) of Section 42 of the Act, a surcharge is to be levied by
the respective State Commissions on consumers switching to alternate
supplies under open access. This is to compensate the host distribution
licensee serving such consumers who are permitted open access under
section 42(2), for loss of the cross-subsidy element built into the tariff
of such consumers. An additional surcharge may also be levied under sub-
section (4) of Section 42 for meeting the fixed cost of the distribution licensee
arising out of his obligation to supply in cases where consumers are allowed
open access. The amount of surcharge and additional surcharge levied
on consumers who are permitted open access should not become so
onerous that it eliminates competition that is intended to be fostered
in generation and supply of power directly to consumers through the
provision of Open Access under Section 42(2) of the Act. Further it is
essential that the Surcharge be reduced progressively in steps with the
reduction of cross-subsidies as foreseen in Section 42(2) of the
Electricity Act 2003.
D. REGULATIONS OF THE COMMISSION
The Commission has specified the terms and conditions for open
access and its phasing under the UPERC (Terms and Conditions for
Open Access) Regulations -2005 and the methodology for the
determination of transmission charges and/or wheeling charges,
surcharge and additional surcharge under the UPERC (Terms and
Conditions for determination of Transmission Tariffs) Regulations and
the UPERC (Terms and Conditions for determination of Distribution
Tariffs) Regulations. The relevant provisions of the above regulations
are discussed below:-
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I) Open Access Regulations of the Commission
The Uttar Pradesh Electricity Regulatory Commission has
notified its Open Access Regulations, 2005 on 21st June 2005
which among other things details the Charges, the Surcharge
and the Additional Surcharge to be paid by Open Access
customers and the phasing of Open Access for distribution.
Under the scheme of things Open Access is to be allowed in
phases as detailed below:
S.No.
Phases Category of consumers Time from which openaccess allowed
1 Phase I Consumers with demand of 20 MWand above and connected on voltage
levels of 33 KV and above
July 1, 2005
2 Phase II Consumers with demand of 10 MWand above and connected on voltagelevels of 33 KV and above
April 1, 2006
3 Phase III Consumers with demand of 5 MWand above and connected on voltagelevels of 11 KV and above
April 1, 2007
4 Phase IV Consumers with demand of above1 MW
April 1, 2008
Regarding Transmission Charges, Wheeling Charges, Cross-subsidy
surcharge and additional surcharge, clause 15 of the above regulations
provides that:
Clause 15 - Charges for open access
(1) Transmission charges and Wheeling chargesThe Transmission charges or Wheeling charges for use of the
Transmission System of a Transmission Licensee or the distribution
system of a distribution licensee shall be regulated as under:
(a) Transmission charges and wheeling charges payable by an open accesscustomer shall be determined by the Commission in terms of the
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regulations framed by the Commission for determination of tariff for
transmission and distribution licensee respectively.
(b) Where a dedicated transmission system or a distribution system usedfor open access has been constructed for exclusive use of an open access
customer, the transmission charges or wheeling charges for suchdedicated system shall be worked out in terms of the regulations for
determination of tariff and shall be borne entirely by such open access
customer till such time the surplus capacity is used for other persons
or purposes.
(c) In case intra state transmission system or distribution system is usedby an open access customer in addition to inter-state transmission
system, transmission charges and wheeling charges shall be payable for
use of intra-state transmission and/or distribution system in addition
to payment of transmission charges for inter-state transmission.
(d) The short-term open access customer shall pay 25% of the annualtransmission or wheeling charges as determined by the
Commission for that year based on average capacities served by such
systems. The average capacity, for transmission system shall be sum of
generating capacities connected to the transmission system and
contracted capacities of other transactions handled by the system of the
Licensee while in case of distribution system, it shall be sum of import
of power at each interface point of exchange of power at electrical
boundary of distribution licensee and generation from captive power
plants, co-generation plants and plants generating electricity from
renewable sources of energy located in the area of such licensee.
Provided that above charges shall be on one-day basis which
transmission / distribution licensee shall declare in Rs. Per MW,
which shall remain fixed for a period of one year.
Provided further that when reservation of capacity has been done
consequent to bidding, the rate shall be taken as decided by bidding.
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(e) 25% of the charges collected in this manner from the short- termcustomers shall be retained by transmission or distribution licensee
and the balance 75% shall be adjusted towards reduction in
transmission/wheeling charges of the transmission/ distribution
licensee respectively chargeable to long terms customers and/or retail
tariff of the consumers of the distribution licensee.
Provided that the price determined under regulation 15(1) shall be the
floor price for the purpose of regulation 9(2) (b).
(2) Surcharge
(a) In addition to transmission charges and wheeling charges, a consumer
availing open access to the transmission system/distribution system
not being a captive consumer shall pay a surcharge;
(b) Surcharge shall be determined by the Commission separately in the
concerned tariff order. In absence of such determination, the surcharge
shall be specified by the Commission on a case to case basis for a
specified period based on an application moved before it in this behalf.
Provided that the applicant shall pay surcharge as determined as per
these regulations post the expiry of the period specified above under
regulation 15(2) (b).
(c) The amount of surcharge shall be so calculated as to meet the current
level of cross subsidy from that category of consumers and shall be paid
to the distribution licensee of area of supply where the consumer is
located.
(d) The surcharge shall be reduced and eliminated in the manner asdetermined by the Commission in respect to reduction and elimination
of cross subsidies in terms and conditions of tariff of
transmission/distribution licensees. *
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*Note: It may however be noted that Government of India has vide
notification dated 28th May 2007 issued the Electricity (Amendment)
Act 2007 to amend certain provisions of the Electricity Act 2003.
Under the amended provisions the word eliminated used in
connection of elimination of cross-subsidies has been removed from
Section 38 (2) (d), Section 39 (2) (d), Section 40 and Section 42 (2) and
accordingly third proviso from Section 38 (2) (d), Section 39 (2) (d)
and Section 40 has been removed.
(e) The consumers availing exclusively interstate transmission system
shall pay such amount of surcharge as determined by the Commission
by regulations in this regard.
(3) Additional Surcharge
(a) A consumer availing open access and receiving supply of electricity
from a person other than the distribution licensee of his area of supply
shall pay to the distribution licensee an additional surcharge, in
addition to wheeling charges and surcharge, to meet the fixed cost of
such distribution licensee arising out of his obligation to supply as
provided under sub-section (4) of section 42 of the Act;
(b) The distribution licensee shall submit to the Commission an account of
fixed cost, which the licensee is incurring towards his obligation to
supply;
(c) The Commission shall scrutinize the statement of account submitted
by the licensee and objections, if any, and determine the amount of
additional surcharge payable by the consumer to the licensee,
(d) The additional surcharge shall be leviable for such period as the
Commission may determine.
II) Terms and condition for determination of transmission tariff
and distribution tariff regulations
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The Commission has notified the Terms and Conditions for
determination of Transmission as well as Distribution Tariffs
Regulations on 6th October 2006.
(i) Terms and Conditions for determination of Transmission
Tariffs Regulations
Clause 3.11, of the above Regulation gives the methodology for
the determination of Transmission/wheeling charges as below:
Clause-3.11 Transmission/Wheeling Charges
1. In case of more than one long term of customers of the
Transmission System (distribution licensee/long term open
access customers) utilizing the transmission system, the
monthly transmission/wheeling charges leviable on such
customers shall be computed as per the following formula:
Transmission/Wheeling charges payable by the long term
customers of the Transmission Systemfor use of transmission
system for a month
= (Net ARR/12)*(CL/SCL)
Where:
Net ARR = Annual Revenue Requirement of the Transmission
Licensee for the ensuing financial year computed in accordance
with these regulations, less Non Tariff Income under
Regulation 5.1.2, which includes such percentage of revenue as
specified in the UPERC (Treatment of income of Other
Businesses of Transmission Licensees and Distribution
Licensee) Regulation 2004, as amended from time to time,
recovered from Short-term open access customers;
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CL = Allotted Transmission Capacity in MW of particular
long term of customers of the Transmission System as per
Transmission Service Agreement.
SCL = Sum of the Allotted Transmission Capacities (in MW)
to all the long-term customers of intra-State TransmissionSystem.
2. It is mandatory for all long-term transmission system
customers and the short-term transmission system customers
including the distribution licensees to enter into an agreement,
in terms of the Open Access Regulations of the Commission,
with the Transmission Licensee.
3. Wheeling charges for short-term open access customers shall be
in accordance with Open Access Regulations of the
Commission as amended from time to time.
III) Terms and Conditions for determination of Distribution
Tariffs Regulations
Clause 2.1 Filing of Annual Revenue Requirement and
Tariff Application
1. The Distribution Licensee shall file the Aggregate
Revenue Requirement (ARR)/Tariff petitions complete
in all respect along with requisite fee as prescribed in
the Commissions Fee and Fine Regulations on or before
30th November of each year. The above ARR petition
shall contain the details of the estimated expenditure
and the expected revenue that it may recover in the
ensuing financial year at the prevailing tariff.
Information as per formats specified in Annexure A to
these regulations shall form part of the ARR filings.
2. ARR/Tariff filing by the Distribution Licensee shall
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separately indicate Aggregate Revenue Requirement
(ARR) for Wheeling function and Retail Supply
function embedded in the distribution function.
3. Till such time complete segregation of accounts between
Wheeling and Retail Supply Business takes place, ARR proposals for Wheeling and Retail Supply Business
shall be prepared based on an allocation statement to the
best judgment of the distribution licensee. Methodology
for such segregation shall in any case form part of the
proposal.
4. The licensee in the ARR filing for the ensuing financial
year shall indicate the manner in which the gap, if any,
between the expenses, which it is permitted to recover
and the expected revenue at the existing tariff for the
ensuing year, shall be bridged. The ARR filing shall
include detailed tariff proposal for Wheeling and Retail
Supply in case it is proposed to bridge the gap through
tariff hike. The proposed wheeling charges shall be
voltage wise. However the distribution licensee may, in
absence of voltage wise data, compute wheeling charges
based on normative distribution losses.
Clause 5.2 Revenue Gap:
1. Tariff for wheeling of electricity shall be computed onthe basis of the costs allocated to the wheeling business
as per the allocation statement and the projected
electricity units to be wheeled through distribution
licensee's network in the ensuing tariff period. The
wheeling cost for electricity units wheeled for retail
supply shall form part of the ARR for the retail supply
business.
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2. The difference between the Expected Expenditure forretail supply business as per allocation statement and
the Revenue from projected sale of power at prevailing
tariff, non-tariff income and other revenues as per
allocation statement for the retail supply business shall
be called the Revenue Gap.
3. The revenue gap shall be bridged by measures such asimprovements in efficiency, tariff hikes and utilization
of contingency reserves etc., as may be approved by the
Commission as well as Government subsidy.
Clause 6.6 Surcharge
1. Till such time the cross subsidies are eliminated, theopen access consumer shall pay to the distribution
licensee a cross subsidy surcharge in addition to
wheeling charges. Surcharge to be levied on the open
access consumer shall be determined by the Commission
keeping in view the loss of cross-subsidy from the
consumers or category of consumers who have opted for
open access to take supply from a person other than the
incumbent distribution licensee.
2. When open access is allowed the surcharge for thepurpose of sections 38,39,40 and sub-section 2 of
section 42 would be computed as the difference
between (i) the tariff applicable to the relevant
category of consumers and (ii) the cost of the
distribution licensee to supply electricity to the
consumers of the applicable class. In case of a
consumer opting for open access, the distribution
licensee could be in a position to discontinue
purchase of power at the margin in the merit
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order. Accordingly, the cost of supply to the
consumer for this purpose may be computed as
the aggregate of (a) the weighted average of power
purchase costs (inclusive of fixed and variable
charges) of top 5% power at the margin, excluding
liquid fuel based generation, in the merit order
approved by the UPERC adjusted for average loss
compensation of the relevant voltage level and (b)
the transmission and distribution wheeling
charges as determined in accordance with the
UPERC Terms and Conditions for Determination
of Distribution and Transmission Tariff
Regulations as amended from time to time.
Cross Subsidy Surcharge formula:
S = T [C (1+ L / 100) + D]
Where
S is the cross subsidy 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 charges for transmission and
distribution of power.
L is the system Losses for the applicable voltage
level, expressed as a percentage
The cross-subsidy surcharge shall be brought down
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progressively and, as far as possible, at a linear rate to a
maximum of 20% of its opening level by the year 2010-
11.
3. No such surcharge would be required to be paid interms of sub-section (2) of Section 42 of the Act on theelectricity being sold by the generating companies with
consent of the competent government under Section
43(A)(1)(c) of the Electricity Act, 1948 (now repealed)
and on the electricity being supplied by the distribution
licensee on the authorization by the State Government
under Section 27 of the Indian Electricity Act, 1910
(now repealed), till the current validity of such consent
or authorizations.
4. The cross subsidy surcharge may be collected either bythe distribution licensee, the transmission licensee or
the STU, depending on whose facilities are used by the
consumer for availing electricity supplies. In all cases
the amounts collected from a particular consumer
should be given to the distribution licensee in whose
area the consumer is located. In case of two licensees
supplying in the same area the licensee from whom the
consumer was availing supply shall be paid the
amounts.
5. However, in order to facilitate open access, theCommission may adopt a procedure different from the
procedure stated above for the calculation of cross
subsidy surcharge consistent with the provisions of the
EA 2003 and the spirit of the tariff policy after
considering the view points of licensee and the open
access customer.
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Clause 6.7 Wheeling Charge
1. The licensee shall provide non-discriminatory open
access to the consumers within the period as stipulated
by the Commission in UPERC (Terms and Conditions
for Open Access) Regulations, 2005 and amendmentsthereof if any. For the purpose of tariff for wheeling, the
person utilizing wheeling services shall be charged tariff
on both cash and kind basis.
2. The wheeling charge in cash for a consumer category for
the present shall be based on simple postage stamp
method and shall be computed as per regulation 5.2(1).
3. The normative transmission and distribution losses at
the voltage at which the open access is availed shall be
borne by the open access consumer in kind.
Clause 6.8 Additional Surcharge
1. Where a consumer avails open access, the Commissionmay determine the additional surcharge to meet the
fixed costs of distribution licensee arising out of his
obligation to supply and permit collection of such
additional surcharge for the period the fixed cost
remains stranded. For recovery of additional surcharge,
the distribution licensee shall conclusively demonstrate
that his obligation in terms of existing 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. Further, fixed
costs related to electrical network assets should be
recovered through wheeling charges.
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2. The Commission shall determine the amount of
additional surcharge to be paid by the consumer to the
licensee based on the statement of account submitted by
the licensee and objections thereof if any of the
consumer.
3. The additional surcharge shall be leviable for such
period as the Commission may determine.
DETERMINATION OF APPLICABLE CHARGES FOR OPEN ACCESS
First and foremost, before giving the details of the calculation of various
charges for Open access, the Commission would like to discuss the order
dated July 05, 2007 of the Appellate Tribunal of India in the matter of Appeal
Nos. 169,170,171,172 of 2005 & 248 and 249 of 2006, vide which Honble
Appellate Tribunal has interpreted the provisions related to Open Access in
accordance with the spirit of the Act. Commission feels that the same will put
the issues linked with the determination of Open Access in the proper
perspective.
In its above order dated 5th July 2007, highlighting the importance of
purposive interpretation of any enactment Honble Appellate Tribunal of
India has very clearly brought about the intent of the Act:
Para 14
The object and purpose of the Act lies in its preamble, which is for
unshackling the electricity industry. This it seeks to achieve by adopting,
inter alia, measures conducive to the development of the electricity industry
and promoting competition. Competition is a significant factor for
unleashing the electricity sector. Competition in the sector depends upon
various factors. One of the most important factors is the availability of open
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access to the consumer, generator and distributor, as the case may be. Open
access is the back bone of competition. It is the corner stone of the Act.
Further, while interpreting the provisions related to Open Access under the
Act the Appellate Tribunal lays down that -
Para 15
Under the Act, it is no longer necessary that the supplier of energy should be
the owner of delivery system. In theoretical terms, it means that a consumer
should be able to buy electricity from any one and not just the distribution
licensee located within its area of supply.
Para 18
Sub-section (47) of Section 1 of the Act defines open access. It means providing for
non discriminatory open access to any licensee or consumer or a person engaged in
generation or to the use of transmission line or distribution system in accordance with
the Regulations of the appropriate Commission. In other words, it means
providing equal opportunity to any consumer, licensee or generator, as the
case may be, to use open access. It is the duty of the Regulatory Authority to
keep the definition in view and work towards elimination of discrimination
and to promote equality of opportunity in the matter of open access.
Regarding determination of cross-subsidy surcharge and its quantum the
order interprets Sub-Section (2) of Section 42 of the Act as below:
Para 24
Sub-Section (2) of Section 42 of the Act authorizes the State Regulatory
Commissions to introduce open access in the area of distribution of
electricity. It requires the State Commission to introduce open access in such
phases and subject to such conditions including the cross subsidies and other
operational constraints that may be specified within one year of the
appointed date by it. While determining the charges for wheeling, the
Commission is required to have due regard to all relevant factors including
surcharge and other operational constraints. According to the first proviso to
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Section 42(2), open access can be allowed by the Commission on payment of
surcharge in addition to wheeling charges. The State Commission under first
proviso is also required to determine the surcharge. In terms of second
proviso to Section 42(2), the surcharge determined by the Commission is
required to be utilized to meet the requirements of current level of cross-
subsidies within the area of supply of distribution licensee. It needs to be
noted that neither the first proviso nor the second proviso provides that the
cross subsidy must be so computed that it is equal to or more than the current
level of cross subsidy. All that the second proviso requires is that after the
surcharge is determined by the Commission under the first proviso, the
surcharge collected for providing open access must be utilized towards
meeting the current level of cross subsidy. The dictionary meaning of the
word utilised is to put to use. The appearance of the word utilised in thesecond proviso to Sub-Section (2) of Section 42 before the words to meet the
requirements of current level of cross subsidy is not without significance. It
is a pointer as to how the surcharge will be used. In case the surcharge was
always required to be equal to or more than the current level of cross subsidy,
the second proviso would have stated as follows:-
Provided further that such surcharge shall be equal to or may be more than
the requirements of current level of cross subsidy within the area of supply of
the distribution licensee.
Para 25
In fact the second proviso only deals with mode of utilization of surcharge.
It does not lay down that surcharge should measure up to or be equal to the
current level of cross subsidy.
In this context it is also relevant to quote clause 5.8.3 of the National
Electricity Policy which also holds that:
The amount of surcharge and additional surcharge levied on consumers who
are permitted open access should not become so onerous that it eliminates
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competition that is intended to be fostered in generation and supply of power
directly to consumers through the provision of Open Access under Section
42(2) of the Act. Further it is essential that the Surcharge be reduced
progressively in steps with the reduction of cross-subsidies as foreseen in
Section 42(2) of the Electricity Act 2003.
The Honble Appellate Tribunal further builds up the argument citing acute
shortage of electricity and absence of commensurate build up of generation
capacities to meet the growing demand:
Para 27
It should have adopted such level of cross subsidy surcharge as would have
maintained the right equilibrium between promotion of competition andfinancial security of the utility (distributor). Unless the consumers can avail
of the open access at a reasonable cost not exceeding the rate at which
electricity is available within the area of supply of the distribution licensee,
it will be difficult for the private entrepreneurs to set up generating stations.
The Regulatory Authorities must face the reality. There is no denying the fact
that there are crippling shortages of electricity in the country. The economic
growth which is about 9% of the GDP, cannot be sustained and further
accelerated unless substantial capacity addition takes place. The Regulatory
Commissions need to encourage the entrepreneurs to set up generating
stations by their visionary orders.
In the last para of the order Honble Appellant Tribunal of India directs all the
Electricity Regulatory Commission that:
In future all the Regulatory Commissions while fixing wheeling charges,
cross subsidy surcharge and additional surcharge, if any, shall have regard to
the spirit of the Act as manifested by its Preamble. The charges shall be
reasonable as would result in promoting competition. They shall be worked
out in the light of the above observations made by us.
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From discussions above it becomes quite clear that in no case quantum of
cross-subsidy surcharge and the additional surcharge be such that it
eliminates competitions and renders the provision related to Open Access
under the Act otiose.
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A. Transmission Charges
Section 61of Electricity Act provides that the Appropriate Commission shall,
subject to the provisions of this Act, specify the terms and conditions for the
determination of tariff, and in doing so, shall be guided by the principles and
methodologies specified by the Central Commission for determination of
the tariff applicable to generating companies and transmission licensees;
The Commission has accordingly adopted the same principles for the
determination of Transmission Tariffs as has been specified by the Central
Electricity Regulatory Commission. In accordance with the UPERC (Terms
and Conditions for determination of Transmission Tariff) Regulations 2006
the annual per MW charges for use of Transmission network can be
calculated by dividing the Net ARR of the Transmission licensee by the Sum
of the Allotted Transmission Capacities (in MW) to all the long-term
customers of intra-State Transmission System.:
Annual per MW Transmission Charges = Net ARR / SCL
Where:
Net ARR = Annual Revenue Requirement of the Transmission Licensee for the
ensuing financial year computed in accordance with these regulations,
less Non Tariff Income under Regulation 5.1.2, which includes such
percentage of revenue as specified in the UPERC (Treatment of income
of Other Businesses of Transmission Licensees and Distribution
Licensee) Regulation 2004, as amended from time to time, recovered
from Short-term open access customers;
SCL = Sum of the Allotted Transmission Capacities (in MW) to all the long-
term customers of intra-State Transmission System.
The Net ARR, as approved by the Commission, of UPPCL (Transco) for the
FY 2006-07 is as given below:
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Approved Net ARR of UPPCL (Transco) for the FY 2006-07
ARR Items ARR as approved by the Commissionin Tariff Order FY 2006-07
Employees Expenses 181.64
A & G Expenses 22.80
R & M Expenses 59.31
Depreciation 208.36Interest Charges 316.61
Other Interest and Finance 8.99
Less: Other Income /Non Tariff (16.30)
Special Appropriations 0
Reasonable Return 20.64
ARR (Rs. Crs.) 802.05
Gross Capacity Available to UPPCL
Description/Name of
Agency
UPRVUNL
(Thermal)
UPJVNL
(Hydro)
UPs Share of
Capacity fromCentral Sector Plants
UPs Share of
Capacity fromJV/IPP Plants
Thermal Hydro
Installed Capacity (MW) 4480 522 3387 501 1258
Capacity of plants shutdown (MW)
183 -- -- -- --
Sum of total AvailableCapacity (MW)
4297 522 3387 501 1258
Total System AvailableCapacity (MW)
9965
Station Name InstalledCapacity (MW)
Derated (Shutdown)Capacity (MW)
AvailableCapacity (MW)
Anpara A 630 0 630
Anpara B 1000 0 1000
Harduaganj 440 65 375
Obra A Ext-I 550 108 442
Obra B 1000 0 1000
Panki 220 10 210
Paricha 220 0 220
Paricha Ext. 420 0 420
Total 4480 183 4297
Gross Available Hydro Generating Capacity from UPJVNL Plants
Station Name Capacity (MW
Khara 72
Matatila 30
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Obra (Hydel) 99
Rihand 300
U.G.C. Power Stations (Including Belka & Babail). 21.5
Total 522.5
Gross Available Generating Capacity from CGS and JV Plants
Name of the Central SectorGenerating Station
MW allocations toUP
Anta 104.8
Auriya 231.1
Dadri Thermal 84.0
Dadri Gas 259.4
Rihand-I 361.1
Rihand-II 331.5
Singrauli 824.6
Tanda 440.0
Unchahar I 254.7
Unchahar II 143.8
Unchahar-III 69.6
Chamera 109.5
Chamera-II 74.8
Dhauliganga 65.9
Salal I&II 48.0
Tanakpur 21.3
Uri 96.3
Dulhasti 85.0
NAPP 152.90
RAPP 78.32
Nathpa Jhakri 256 17.1Farakka 23.7
Kahalgaon 12.3
Talchar 14.8
VishnuPrayag 352
Tala Power 300
Tehri Hydro 350
Total Allocation from CGS 5146
Transmission Charges Rs./MW/Year = ARR Transco/ Total MW Allocations
= 802.05 x 10^7/ (4297+ 522.5+ 5146)
=802.05 x 10000000/9965.5
= Rs. 804826.6519 /MW/Year
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Transmission Charges Rs./MW/Month = Rs. 67068.8877 /MW/Month
The above transmission charges are taking into account the costs of entire
transmission network. In absence of voltage wise segregated data it is
assumed that cost of wheeling of power through transmission network
related to 400 kV, (400+220) kV and (400+220+132) kV is 40%, 70% and 100%
respectively of the total costs for the entire transmission network respectively.
Accordingly, the voltage wise transmission charges shall be as below:
Sl. No. Voltage of Supply Transmission charges
1 400 kV Rs. 321930.6608/MW/Year or
Rs. 26827.5551/MW/month
2 220 kV Rs. 563378.6563/MW/Year orRs. 46948.2214/MW/month
3 132 kV Rs. 804826.6519 /MW/Year or
Rs. 67068.8877 /MW/Month
Transmission chargesfor Short Term Open Access can be calculated from the
above charges in accordance with the provision of UPERC (Terms andConditions for Open Access) Regulations 2004.
B. Determination of Wheeling Charges
Clause 2.1 (2) & (3) of the Terms and Conditions for determination of
Distribution Tariff Regulations provide that ARR/Tariff filing by the
Distribution Licensee shall separately indicate Aggregate Revenue
Requirement (ARR) for Wheeling function and Retail Supply function
embedded in the distribution function and that till such time complete
segregation of accounts between Wheeling and Retail Supply Business takes
place, ARR proposals for Wheeling and Retail Supply Business shall be
prepared based on an allocation statement to the best judgment of the
distribution licensee.
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Since, the above regulation was not in force at the time of filing of ARR/Tariff
petitions for the FY 2006-07 segregated data was not made available by the
licensees. Wheeling charges for open access therefore could not be determined
alongwith the Tariff Order in accordance with the provisions of the above
reguation. However, to initiate a dialogue on the methodology specified in
the regulation, the Commission has, based on the data and information
available in the ARR for the FY 2006-07 and certain assumptions, done the
calculation for wheeling charges for the purposes of Open Access to the
distribution network.
As per the provisions of the Distribution Tariff Regulation:
Wheeling Charges = ARR W / Energy handled by the distribution system
Where:
ARR W - is ARR for Wheeling function
Further,
ARR W = {ARR D PPC TC Annual} * (% of total costs allocated to wheeling
Function)
Where
ARR W - is the ARR for Wheeling function
PPC - Power Purchase Cost
TC Annual - Annual Transmission Charges
The consolidated Net ARR for all the Discoms as approved by the
Commission for FY 2006-07 is as below:
S.No. ARR Heads Approved Costs
1 Power Purchase Costs (PPC) 10779.61
2 Annual Transmission Charges (TC)Annual 802.05
3 Employees Costs 818.51
4 A & G Costs 91.66
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S.No. ARR Heads Approved Costs
5 Repair & Maintenance Expenses 222.87
6 Interest Charges 296.37
7 Other Interest & Finance Charges 57.22
8 Provision for Bad & Doubtful Debts 0.00
9 Depreciation 691.09
10 Special Provisions 0.00
11 Reasonable Return 0.0012 Total Approved Expenses 13759.39
13 Less: Expenses Capitalized (204.99)
14 Employees Costs (122.78)
15 A & G Costs (13.75)
16 Interest & Finance Charges (68.46)
17 Net Approved Expenses 13554.40
18 Less: Other Income (126.00)
19 Less: Committed GoUP Subsidy (1012.00)
20 Net ARR 12416.40
In absence of actual segregation of costs it has been assumed that 80% of the
total costs shall be towards the wheeling function, accordingly:
ARR W = Rs. (13554 10779 802) * 0.8 Crores
= Rs. (1578.4) Crores
Further, in accordance with the Tariff Order for the FY 2006-07, taking energy
handled by the distribution system of 48073 MU, the per unit cost of wheeling
had been worked out as Rs. 0.33 /unit.
The above wheeling charges have been determined taking into account the
costs of entire distribution network. However, cost of wheeling for the
purposes of Open Access (i.e. at 33 and 11 KV), will be much less. It is
accordingly assumed that 50% of the charges so determined shall apply to
Open Access consumers at 33 KV and 60% to Open Access consumers at 11
KV. Accordingly the charges for wheeling of power through distribution
network at different voltages shall be as below:
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Sl.No. Voltage of Supply Wheeling Charges
1. Open Access Consumers drawing power from
the distribution network at 33 KV.
Rs. 0.17/unit
2. Open Access Consumers drawing power from
the distribution network at 11 KV.
Rs. 0.20/unit
However, Open Access Consumer directly connected to the transmission
network need to pay only the transmission charges and no wheeling
charges.
C. Determination of Cross-Subsidy Surcharge
The Formula for the calculation of the Cross Subsidy Surcharge as prescribed
in the Tariff Policy and adopted by the Commission in its regulations is as
below:
Surcharge formula:
S = T - [C *(1+ L / 100) + D]
Where
S - is the cross-subsidy surcharge to be determined.
T - is mentioned as the Tariff payable by the relevant category of
consumers but in view of two part tariffs taken as the average
revenue realized or the through rate of particular category of
consumers as worked out during determination of tariffs.
C - is the Weighted average cost (both fixed and variable) of power
purchase of top 5% at the margin excluding liquid fuel based
generation and renewable power in the merit order approved by
the Commission during determination of tariffs.
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D - has been mentioned as the Wheeling charge but shall include
both the Transmission Charges as well as wheeling charges (if
connected to distribution network).
L - the normative system losses for the applicable voltage level,
expressed as a percentage and shall mean normative
Transmission as well as Distribution losses depending upon
the network (Transmission or Distribution) to which
connected.
L - is system losses at applicable voltage level. However, for Open
Access consumers drawing power directly from the
transmission network the same shall be the normative
transmission losses as approved by the Commission.
For the sample calculation of Cross Subsidy Surcharge for the HV-2 category
of consumers T has been taken as the through rate for the HV-2 category i.e
Rs 4.4/kWh , as approved by the Commission in the Tariff Order for FY 2006-
07.
C the weighted average cost of top 5% power, purchased at the margin
excluding liquid fuel based generation and renewable power has been takenfrom the merit order as approved by the Commission in the Tariff Order for
the FY 2006-07. The information submitted by the licensees in the ARR/Tariff
Filings for the FY 2006-07 indicated that they have purchased 2120 MU of
Power @ Rs. 5.5 /unit through other sources. The Commission was made to
understand that this is the average rate of power procured through the
trading route. Accordingly, the cost of top 5% power (around 2530.15 MU) at
the margin can be fairly assumed as not more than Rs. 5.0/unit.
Further, for wheeling of electricity through transmission network the
commission has determined the average transmission charges irrespective of
voltage level as Rs.0.167/unit in the Tariff Order for the FY 2006-07.
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Substituting these values in the surcharge formula yields negative results
indicating no requirement for any cross-subsidy surcharge:
S = Rs. 4.44 (5.0*(1+5/100) + (0.167))
= Rs. -0.977 /unit
In this context it is also relevant to quote from the order of the Honble
Appellate Tribunal dated 5th July 2005 in which it has been held that:
It is well-known that there is a shortage of electricity and in case a consumer finds
another source of power for its needs, it reduces the burden of the distribution licensee
due to the avoided additional purchase of power at marginal cost. In case the
distribution licensee can meet the demand of electricity and provide quality service at
a reasonable price, there can be no dearth of consumers and in that event there is
hardly any question of loss to the distribution licensee when a consumer moves away
from it.
Meaning thereby that if the consumer mix of a particular licensee is not
changing with the migration of a cross-subsidizing consumer there should not
be any requirement for the cross-subsidy surcharge. The cross-subsidy
surcharge accordingly is determined to be as zero for the present.
D. Determination of Additional Surcharge
Clause 8.5.4 of the Tariff Policy provides that:
The additional surcharge for obligation to supply as per section 42(4) of the Act
should become applicable only if it is conclusively demonstrated that the obligation of
a licensee, in terms of existing power purchase commitments, has been and continues
to be stranded, or there is an unavoidable obligation and incidence to bear fixed costsconsequent to such a contract. The fixed costs related to network assets would be
recovered through wheeling charges.
Accordingly, Additional Surcharge shall be payable by the Open Access
consumers only if licensee demonstrates to the satisfaction of the
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Commission that his obligation in terms of existing 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.
This view has also been upheld by the Appellate Tribunal of India in its order
dated 5th July 2007 in APPEAL Nos. 169,170,171,172 of 2005 & 248 and 249 of
2006.
In view of ever growing demand for power and gap between its demand and
supply, it is felt that there is hardly any reason for any of the obligations of
the licensee, in terms of existing power purchase commitments, to remain
stranded for which licensee has to bear the fixed costs.
Accordingly, for the present, additional surcharge is determined to be zero.
E. Standby Arrangement Charges
In this context, the Tariff Policy notified by the Central Government under
clause 8.5.6 provides that:
In case of outages of generator supplying to a consumer on open access, standby
arrangements should be provided by the licensee on the payment of tariff for
temporary connection to that consumer category as specified by the Appropriate
Commission.
The State Electricity Regulatory Commissions (SERCs) are further required to
be guided by the tariff policy in discharge of their functions as well as framing
of regulations under Section 61 of the Act.
It is however to clarify that though, the tariff order issued by the Commissionprovides for charges to be paid by the consumers requiring temporary
connection, but the supply under the category is to be provided at 230/440
Volts only. Therefore some temporary rates need to be prescribed for such
standby arrangement requiring supply at 11 kV and above voltages in the
Tariff Order.
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It is felt that temporary charges of Open Access consumers can be linked to UI
charges. Accordingly, it is proposed that the temporary charges for Open
Access consumers for drawl over and above his schedule may be UI + 25%.
The detailed scheme is as below:
(i) User of captive generating plant, if not a consumer of distribution
licensee of his area, while receiving supply of electricity from such
plant as well as Open Access Consumers, connected directly or
indirectly with the grid/distribution system, shall ensure to draw
power as per schedule during each 15 minute time block. The drawl
more than the schedule by them shall be considered as temporary
supply from the distribution licensee in whose area they are located.
The temporary supply shall be charged at rate schedule specified bythe Commission for them. No charge has so far been specified for
temporary supply at 11 kV and above. The temporary charges for such
user or consumer shall be frequency linked rate 255 higher than UI rate
specified by CERC from time to time. Such frequency linked rates
based on CERC notification dated 26.4.07 are as follows:
Average frequency of time block (Hz)
Below Not Below
UI Rate (Paise per kWh)
---- 50.50 0.0
50.50 50.48 8.0
50.48 50.46 15.0
---- ---- ----
---- ---- ----
49.84 49.82 255.0
49.82 49.80 263.00
49.80 49.78 274.00
49.78 49.76 285
---- ---- ----
---- ---- ----49.54 49.52 420.00
49.52 49.50 431.00
49.50 49.48 451.00
49.48 49.46 471.00
---- ---- ----
---- ---- ----
49.04 49.02 911.00
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49.02 ---- 931.00
(Each 0.02 Hz step is equivalent to 7.5 Paise/kWh in 50.5 49.8 Hz
frequency range, to 11.2 Paise/kWh in 49.8 49.5 Hz frequency range
and to 20 Paise/KWh in 49.5 49.02 Hz)
(ii) Above charges shall be without prejudice to penalty which may be
imposed by the Commission, for non-compliance of the provision of
the Act, Regulation or Code or order made there under, on
recommendation of State Load Despatch Centre.
(iii) the billing of the standby arrangement charges, under sub-para (i)
above, shall be carried out with the billing of UI charges and paid
accordingly similar to UI payments.
The premium of 25% is required to ensure the grid discipline and protect the
interest of incumbent distribution licensee as well as the consumers in its area
of operation. Higher premium will further force the open access consumer to
think in terms of alternatives sources which can provide power at economical
rates and at shorter notice thereby also promoting competition.