Electricity Regulatory Frame Work in India Anil Kumar K AO, KPTCL.

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Presentation transcript:

Electricity Regulatory Frame Work in India Anil Kumar K AO, KPTCL

In this session  Why Regulator ?  What is Regulation ?  What is the Role of Regulator ?  The Regulatory bodies  Few Regulations Governing System Operation – Cursory Look  Case Incident

Pre Regulatory Era  SEBs were the masters  Deteriorating Financial Health  Poor Operational efficiency The Need for Regulator came from - LPG Policy - CMNAPP ( Demand Supply Gap and increasing losses) - Immediate Competition not possible - Immediate Mechanism Required to control losses, rationalize tariffs and improve services losses, rationalize tariffs and improve services

Regulation Regulation Dictionary meaning  An authoritative rule  The state of being controlled or governed  The act of controlling or directing according to rule

Regulation  Regulation is "controlling human or societal behavior by rules or restrictions.“ Eg: Norms for T & D loss reduction  One can consider regulation as actions of conduct imposing sanctions (such as a fine). Eg; penalty for violation of grid code

Basic Objectives of Regulation  Protect interests of consumers  Protect interests of service providers  Provide transparency, independency and public participation  Prevent exploitation, restrictive and unfair practices  Ensure quality of service to consumers

Regulatory Bodies  Electricity is a subject matter of concurrent list  The Electricity Regulatory Commissions Act 1998 paved the way for Electricity Regulation in the Country  Central Electricity Regulatory Commission (CERC)  State Electricity Regulatory Commission (SERC)  Joint Commission ( JERC)  Appellate Tribunal for Electricity ( ATE)  Forum of Regulators ( FOR)

Electricity Regulation  ERC Act 1998 – Repealed  Electricity Act 2003 – 10 th June 2003  Sections of Electricity Act 2003 deals with Constitution, Power and Functions of the Central and State Commission

Composition of CERC, SERC & JC  Composition of Central Commission (Sn 76(5) - Chairperson and 3 members appointed by Central Government - Quasi Judiciary body  Composition of State Commission - Chairperson and 2 members - Quasi Judiciary body  Composition of Joint Commission - One member from each State - One among them will be a chairperson or by rotation Two JCs – Manipur, Mizoram and Goa & other UTs

CERC  Functions of the Commission (Sn 79) - To regulate the tariff of Generation and Transmission ( Interstate Transactions) - To issue licenses to Transmission and Trading Activities - To specify Grid Code - To adjudicate Disputes between Tr licensee and Generating Companies - To fix trading margin for interstate trading of electricity

POWERS OF CERC/SERC/JC Same power as that of a Civil Court  Summoning and enforcing the attendance of any person and examining him on oath  Discovery and production of any document or other material object producible as evidence;  Receiving evidence on affidavits;  Requisitioning of any public record;  Reviewing its decisions, directions and orders;

Appellate Tribunal for Electricity ( ATE)  Constituted in terms of Section 110 of Electricity Act in April 2004 and commenced its operations on 21st July 2005  Consists of Four members, of which two are judicial members and two are non judicial members. Each bench shall have one Judicial member.  Purpose is to hear appeals against the orders passed by adjudicating officer or order passed by Appropriate Commission. ( note : No jurisdiction on regulations issued by Commission)  Appeal to be filed within 45 days of receipt of the Order. And ATE to pass final Orders within 180 days from the date of receipt of appeal. ;

Central Electricity Authority ( CEA)  Was constituted under section 3 of Electricity ( supply) Act 1948 but continued under section 70 of EA  Shall consist of not more than 14 members.

Central Electricity Authority ( CEA) Functions ( to name a few)  specify the technical standards for construction of electrical plants, electric lines and connectivity to the grid;  specify the safety requirements for construction, operation and maintenance of electrical plants and electric lines;  specify the Grid Standards for operation and maintenance of transmission lines;  advise the Central Government on any matter

Forum of Regulators ( FOR)  The Forum of Regulators (FOR) was constituted vide Notification dated 16th February, 2005 in pursuance of the provision under section 166(2) of the Electricity Act,  The Forum consists of Chairperson of Central Electricity Regulatory Commission (CERC) and Chairpersons of State Electricity Regulatory Commissions (SERCs).

Forum of Regulators ( FOR)  Analysis of the tariff orders and other orders of Central Commission and State Commissions  Laying of standards of performance of licensees as required under the Act.  Undertaking research work in-house or through outsourcing on issues relevant to power sector regulation;  Evolving measures for protection of interest of consumers and promotion of efficiency, economy and competition in power sector;

Few Regulations Governing System Operation  The IEGC Regulations  Grant of Connectivity and Open Access Regulations  UI Charges Regulations  Measures to relieve congestion in real time operation Regulations  Sharing of Interstate Transmission Charge and Losses, Regulations

Impact of Regulatory Mechanism on system operation  Grid Stability – ABT Regime  Better Management of grid through enforcement of Intra State ABT  Facilitation of open access  Move towards Independent System Operation

Karnataka Case  CERC Levied Penalty of Rs. 17 Lakhs for violation of grid code. ( )  The Order was appealed before ATE in appeal No. 94/2009  ATE Passed Order on and quashed the CERC Order  CERC Refunded the Penalty Recovered.

Karnataka Case Grounds  CERC Relied upon SEM Reading instead of SCADA  Action taken by KPTCL ( LDC) for restoring the frequency back to 49 Hz not recognised

Karnataka Case Clause of IEGC “(a) As mentioned above the utilities shall endeavor to restrict their net drawl from the grid to within the respective drawl schedule whenever the system frequency is below 49.5 Hz. When the frequency falls below 49 Hz requisite load shedding (manual) shall be carried out to curtail the over drawl.”

Delhi Case  CERC Adjudication Case 1 of 2009  Delhi SLDC V/s NRLDC  Delhi SLDC failed to comply with the directions of NRLDC  Delhi SLDC Argues that, it is not responsible for overdrawl. Discoms responsible

Delhi Case Facts of the Case   Para (b) of the Indian Electricity (the Grid Code) provides as –   “Further, in case of certain contingencies and/or threat to system security, the RLDC may direct an the State Load Dispatch Centre to decrease its drawal by a certain quantum. Such directions shall immediately be acted upon.”

Delhi Case Facts of the Case

Delhi Case  Adjudicator rejected the argument of Delhi and held Delhi SLDC responsible for the lapse  Imposed fine of Rs. 50,000 per default.