Desc : Open Access; The Great endless Saga….

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. Open Access – Concept & Understanding
Stakeholder’s Perspective
Consumer
DISCOMs
Regulator
Ministry of Power Letter on Open Access
Necessary Regulatory interventions
Our recommendation
Harry Dhaul - Director General, IPPAI

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. 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. Open Access – Consumer Perspective
Cheaper
Consumer Power
Choice
Harry Dhaul - Director General, IPPAI

6. Open Access – Consumer Reality
Exorbitant Discriminatory
Open Access behavior
Charges
Open Access
- Denied
Standby
Supply ?
Harry Dhaul - Director General, IPPAI

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. 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. Open Access – Regulatory Perspective
Tariff Rationalization
Improved
Efficiency
Competition
“emPowered
Consumer”
Harry Dhaul - Director General, IPPAI

10. Open Access – Regulatory Reality
Unending tussle;
DISCOM vs. CONSUMERs
Harry Dhaul - Director General, IPPAI

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. 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. 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. 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. Harry Dhaul - Director General, IPPAI

16. Our Recommendation….
Harry Dhaul - Director General, IPPAI