Presentation by Mr. Harry Dhaul at the 20th MERC SAC meeting (30 dec 2011)

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The Great endless Saga….

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Presentation by Mr. Harry Dhaul at the 20th MERC SAC meeting (30 dec 2011)

  1. 1. 20th Meeting of State Advisory Committee: Maharashtra Electricity Regulatory Commission Open Access; The Great endless Saga…. By: Harry Dhaul Director General IPPAI December 30, 2011
  2. 2. Open Access – Concept & UnderstandingStakeholder’s Perspective Consumer DISCOMs RegulatorMinistry of Power Letter on Open AccessNecessary Regulatory interventionsOur recommendation Harry Dhaul - Director General, IPPAI
  3. 3. Open Access The non-discriminatory provision for the use of transmission lines or distribution system or a associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission” – Sec. 2(47) of Electricity Act, 2003 Generic Understanding: Enabling of non-discriminatory sale/purchase of electricity between two parties utilizing the system of an in-between (third party), and not blocking it on any unreasonable (?) grounds” Harry Dhaul - Director General, IPPAI
  4. 4. Open Access – The Concept OA under The EA 2003 opens the power sector to a number of players by laying down provisions for development of power market and competition – Trader, Power Exchange Allow choice of power supply to the consumer Consumers’ Expectation – Lower tariffs / better service / more OPEN CHOICE ACCESS efficiency / quality OPTIONS Gives generator-buyers’ choice – Options to switch Harry Dhaul - Director General, IPPAI
  5. 5. Open Access – Consumer Perspective Cheaper Consumer Power Choice Harry Dhaul - Director General, IPPAI
  6. 6. Open Access – Consumer Reality Exorbitant Discriminatory Open Access behavior Charges Open Access - Denied Standby Supply ? Harry Dhaul - Director General, IPPAI
  7. 7. Open Access – DISCOMs Perspective Relief from buying expensive Sourcing Income power at margin Cheaper through OA Power for Charges Supply Poaching other DISCOMs customers Harry Dhaul - Director General, IPPAI
  8. 8. Open Access – DISCOMs Reality Forced USO Revenue Loss Cross – Cherry Subsidy picking Surcharge ? UI Exposure due to OA consumer flip-flop Harry Dhaul - Director General, IPPAI
  9. 9. Open Access – Regulatory Perspective Tariff Rationalization Improved Efficiency Competition “emPowered Consumer” Harry Dhaul - Director General, IPPAI
  10. 10. Open Access – Regulatory Reality Unending tussle; DISCOM vs. CONSUMERs Harry Dhaul - Director General, IPPAI
  11. 11. Ministry of Power Letter on Open Access 1MW and above – beyond regulatory control……..beyond USO ? Terms and Conditions of Supply & Tariff – Between buyer’s & seller’s ? Uncertainty of Demand & Revenue for DISCOMs ? Frequent consumer flip-flop: Challenging Big chunk of DISCOM revenue lost ! Existing consumer (<1MW) Tariff ? ? ? ? ? addional subsidy burden on State Government This would Create Competition, but at What Cost --- Tariff for existing consumers (mostly the subsidized one) would shoot up DISCOM Business would get segregated into Wire and Supply Business Harry Dhaul - Director General, IPPAI
  12. 12. DISCOMs Retaliation: Denial of Open Access • DISCOMS within the state have their own interpretation and implementation methodology (e.g. MSEDCL Circular No-147, 146) • Delays in granting Open Access • Unlawful holding back of applications in the name of system constraints (?) • Denying Stanby supply / Sabotage by means of FBSM/ISBM • Higher Wheeling charges, Cross Subsidy Surcharge, Distribution losses • Onerous and time consuming redressal mechanism Need of hour; Streamlined and Transparent procedures for grant of OA Harry Dhaul - Director General, IPPAI
  13. 13. DISCOMs Retaliation: MSEDCL’s Circular 147 Scheduling of RE Power in 15 min time block Adjustment of consumption in 15 min time block Non-availability of infrastructure to forecast RE generation Consumer would be disallowed for incentives like Load Factor incentive, Power Factor Incentive etc. Contract demand of consumer to be reduced, and over drawl than scheduled to be handled by stand by charges (Temporary tariff) OA Harry Dhaul - Director General, IPPAI
  14. 14. Regulatory Interventions Formulating a transparent procedure for grant of non-discriminatory OA Impose & ensure strong penalties & prosecution for non-compliance of regulatory provisions Encourage multiple power exchanges & competition amongst themselves Fix a firm return for DISCOMs in case of partial supply case i.e separate Wire & Supply business Regulator needs to put a Intra-state unscheduled balancing mechanism in sync with Inter-state unscheduled balancing mechanism Redress metering issues Harry Dhaul - Director General, IPPAI
  15. 15. Harry Dhaul - Director General, IPPAI
  16. 16. Our Recommendation…. Harry Dhaul - Director General, IPPAI

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