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Presentation on Operationalisation of Open Access

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

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Presentation on Operationalisation of Open Access

  1. 1. Regulators & Policymakers Retreat, 2012 Date: 24th August 2012 Regulators and Policymakers Retreat-2012 Presentation on Operationalisation of Open Access By Ajoy Mehta, IAS, Managing Director, Maharashtra State Electricity Distribution Company Limited
  2. 2.  Matter has raised important legal issues  Opinions of Attorney General of India, Solicitor General Of India  Planning commission- working group on OA 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. 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 licensee’s network, butonly to communicate the open access consumers intention of using such a network. 3
  4. 4. Ministry of Power LetterTechnical issues & Operational constraintsFinancial Impact on MSEDCL.Legal issues
  5. 5.  Letter from MoP refers only legal issues in Open Access Operationalisation. Opinion is in isolation with provisions in Act. ( They have not considered technical & operational Constraints.) Deciding of OA tariff by Utility : Complex issue. Methodology for implementation of OA is not mentioned any where. It requires clarity/Change in regulation CSS decided is not commensurate with migrated consumers tariff. Infrastructure problems for new consumers.
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  7. 7. Particular Reguln Action by DL As per MoP Circular Remarks if MoP Circular is implementedApplication Reg. Scrutiny No Application, Just an MERC (Distribution Open Access)for Open No. 4.2 intimation is required Regulations, 2005, needs to beAccess complied.Eligibility Reg. 3 Scrutiny of application for OA Can not ascertain Open access may be granted to a non-criterion capacity (should not be > eligible consumer than CD)Type of OA Sec. 9 / Ascertainment of applicability Can not ascertain The DL may lose the legitimate revenueCaptive / 10 of of in respect of cross subsidy surchargeGeneral OA Act CSS 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 provided has to applyArrears / Reg. OA permission may be No control In case of arrears OA can not be grantedDispute 4.2.7 rejected in case of non settlement of duesInstallation of Reg. 7 Ascertainment No clear guidelines SEM is a pre-requisite of open access,SEM must be complied. If SEM not installed, proper Billing can not be doneOpen Access Will be granted Permission is not SLDC has to monitor the fulfillment of allPermission required, Will be regulatory requirements. SLDC has no deemed to be granted man power neither it is highly equipped to look into all matters.
  8. 8. Particular Regul Action by DL As per MoP Remarks if MoP Circular is n Circular implementedContract Reg. CD will be reduced to the extent We can’t have If CD not reduced, the DL has toDemand 4.2.1 / of OA capacity any control over make provision for supply ofReduction / 4.2.2 its usage. Contracted capacityTermination unnecessarily, 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.ReadingBilling Reg. 8 Billing to include wheeling Who will bill OA Reg needs to be complied charges, CSS, Losses,standby, PF, Consumer? SLDC???Standby Reg. 9 Will be provided at Temporary ??? No contract with DL, nosupply Tariff through Agreement obligation on DL to provide standby supplyInter- state Will be permitted subject to SLDC to Not mentioned in access SLDC approval, generation units approve to be given by SLDC/WRLDCOver drawal Reg. 9 Will be charged at Temporary SLDC will charge The DL will decide tariff. Loss to Tariff UI consumers in both cases.
  9. 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. of Sales Revenue ABR with MSEDCL Open Access Cons. Mus Rs. Crs Rs./Unit % Sales Revenue ABR Sales Revenue ABRHT & LT 14,08 1586 20,114 13,187 6.56 30% 6,034 3,956 6.56 9,231 6.56Industries 0HT & LT 10.8 231 888 964 10.86 50% 444 482 10.86 444 482Commercial 6PWW 63 708 340 4.80 0% - - 708 340 4.80Agriculture 42 329 24 0.74 0% - - 329 24 0.74Railway 43 1,386 945 6.82 100% 1,386 945 6.82 - -Total deemedopen access 1965 23425 15460 6.60 7864 5383 6.85 15561 10077 6.48consumers 1.94Total 81,835 38,135 4.66 CrsProportion of 9.61 19.02deemed OA 0.01% 29% 41% 14.12% 26.43%consumers % % 9
  10. 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 of additional 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. 11.  1 MW and above consumers are deemed OA users OA Category : SERC to fix wheeling charges & surcharge only Dist. Licensee not to have service obligation Notice is not for seeking permission to use the DL’s network but only to communicate intention of using such network
  12. 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. 13.  Not purchase excess energy injected May charge temporary tariff for excess consumption. Can charge high tariff for standby supply or may not provide stand supply. O&M activity of consumers feeders. Different negotiated tariff for OA consumers. Can ask to revise CSS & wheeling charges