Practical Problems in Implementation of Open Access
The Regulators & Policymakers Retreat 2012 Practical Problems in Implementation of Open Access The Grand Hyatt, GoaHarry Dhaul 23-26 August 2012Director General, IPPAI
Open Access – DISCOMs Challenges Cross Forced USO Subsidy Surcharge ? Revenue Loss UI Exposure – Cherry due to OA picking consumer flip- flop OA DISCOM Workforce (?) Harry Dhaul - Director General, IPPAI
Open Access – Regulatory Dilemma Are they Independent enough ??? Do they have enough Willpower ??? Striving hard to maintain DISCOMs sustainability vs. Consumer choice Upsetting revenue balance of State – low end consumers to bear the brunt of increased tariff to compensate for loss of OA consumers Determining the REAL cross subsidy surcharge Handling Reforms envisaged under EA-03’ thru Under-staffed Commissions & Un-skilled operational staff Domestic/A HT/Commerc griculture ial Consumer Consumers Harry Dhaul - Director General, IPPAI
Open Access – Traders’ Issues Future of Power Trading ?? Very low margins Incapability in managing commercial risk due to very low margins Major buyers; Utilities with “NO” financial credibility High risk of commercial defaults Corridor availability Issues in Day-Ahead market: Biggest gainers are Exchange(s) Small players without market vision playing deterrent role, and causing under-development of market Players competing on margin rather than in better & innovative product offerings Harry Dhaul - Director General, IPPAI
Open Access – Consumer Reality Exorbitant Irrational Cross Subsidy Temporary Surcharges Charges Undesirable hold up ofDeemed reduction OA approvalof Contract Demand Harry Dhaul - Director General, IPPAI
A few examples: States’ Vision for Open Access Maharashtra: Deemed reduction in Contract Demand- consumer reluctant to give up this right Temporary charges on Over-drawl/Under injection of units -charges are unreasonably high and absurd Lapsing of energy in Under-drawl/Over injection -not easy for consumers to adhere to schedule due to varying machine cycle and load mix. Special Energy Meter- MSEDCL empanelled vendor not approved by MSETCL Cross Subsidy Surcharge – no trajectory of progressive reduction, complying with EA’03 Punjab: Imposition of CSS has STIFLED OA transactions Wheeling charges applicable for even STU connected OA customer Harry Dhaul - Director General, IPPAI
Ministry of Power Letter on Open Access GO ! OK Maybe Why Implement Ministry’s Letter: State ERCs have their own view point and Consumer choice act accordingly, does that mean SERCs or Compulsion don’t want REFORMS ? Harry Dhaul - Director General, IPPAI
MoP Letter on Open Access : Unanswered Questions Can MoP give directives to SERCs on matters of electricity ? What motivated MoP to seek clarification, and who asked for it ? Does that mean it will give Consumer a choice or put Consumers in an unending tussle between DISCOMs & SERCs Will this lead to separation between wires and supply? What will happen to DISCOMs’ viability & their future; What will happen to thousands of DISCOM/SEB employees? Will they be absorbed elsewhere? Would this lead to phasing out of DISCOMs? Do DISCOMs have any plans/roadmap to bail themselves out? Harry Dhaul - Director General, IPPAI
MoP Letter on Open Access : Unanswered Questions What will happen to existing long term PPAs due to sudden load reduction of DISCOMs Does Cross Subsidy Surcharge hold any legal sanctity for consumers having no Contract Demand with DISCOMs If some consumers do not want to opt for such a scheme what will be the future of such consumers How dare What will be future of such UMPPs & IPPs you ask for Open Pls., I Access won’t ask for Open Access C D Harry Dhaul - Director General, IPPAI
Open Access : Possible way forward SERCs should implement concept of Deemed O.A approval for consumers with specific timelines in case of abnormal delay in grant of necessary permissions by SLDCs/DISCOMs UI may be implemented on intra-state basis across states to counter absurd Temporary charges Forum of Regulators may intervene to rationalize CSS across India to promote consumer OA CERC should extend support to SERCs for time bound implementation of Open Access reforms in states SERCs–DISCOMs should work hand-in-hand to create “Consumer Choice” and a win-win situation for all stakeholders Harry Dhaul - Director General, IPPAI
The issue is “Choice” of Open Access as enshrined in EA 2003 versus “Mandatory” Open access Let the deliberations begin… Harry Dhaul - Director General, IPPAI
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