1. OVERVIEW OF THE REGULATORY STRUCTURE IN THE ELECTRICITY SECTOR IN WEST BENGAL Mr. C.R.Bhowmik, Adviser West Bengal Electricity Regulatory Commission 1

2. BACKGROUND After independence, enforcement of The Electricity (Supply) Act, 1948 led to the creation of State Electricity Boards (SEBs) who were responsibility for planning and implementing the power development programmes at the State level. The Central Electricity Authority was also constituted under the Act to deal with planning issues related to generation, transmission and distribution of electricity at the national level. In addition, as per the Electricity Supply Act 1910, private licensees were allowed to distribute and/or generate electricity in specific areas designated by the concerned State Government/ SEB. Till 1991, power generation, transmission and distribution functions were mainly discharged by SEBs enjoying monopoly power in the respective areas. 2

3. BACKGROUND …..(contd.) The key thrust of the governments (States and Central), during this period, was to supply low cost electricity to the consumers and ensure universal access and connect all villages to the grid. But, it became difficult for the Governments to provide the necessary infrastructure for supplying electricity at low cost. As a result, most of the SEBs ran into irrecoverable loss and huge deficits. The commercial losses with subsidy for all SEB increased from Rs. 4,117 crore in 1991 to Rs. 28,445 crore in 2001 (Economic Survey, 2000-01, Govt of India). Major policy changes were made by the Government of India to trigger on the reform process in the electricity sector. 3

4. The Electricity Act 2003 (The Act) replaced all earlier Acts relating to power sector. One of the main objectives of the Act was also to promote efficient and environmentally benign policies in the electricity sector. The Act envisaged for promoting competition in the sector with the following important provisions - – Unbundling SEBs into Generation, transmission and distribution corporations – De-licensing the generation business – Creation of Independent (Electricity) Regulatory Commissions Provide Open Access to the transmission and distribution network to promote competition – Thrust on Non-Conventional (RE) sources and promotion of energy conservation through tariff and other mechanisms – Rationalization of tariff structure and progressively reduction of cross-subsidies In addition the Electricity Act, 2003 also emphasized on developing a National Electricity Policy and a National Tariff Policy to provide the SERCs the roadmap for chalking out appropriate regulations. BACKGROUND …..(contd.) 4

5. The Electricity Act, 2003 and Functions of the STATE COMMINNSIONS Major functions of the State Commission (WBERC) - Section 86 to frame Regulations pertaining to – Determine Electricity Tariff – Regulate Electricity Purchase and Sale – Promote cogeneration and generation of electricity from renewable sources by providing suitable measures for connectivity with the grid – Specify or enforce standards with respect to quality, continuity and reliability of service by licensees The State Commission shall ensure transparency while exercising its powers and discharging its functions Formation of a State Advisory Committee under Section 87 to advise the commission on – Major questions on Policy – Matters relating to quality, continuity and extent of service provided by the licensees – Compliance by licensees with the conditions and requirements of their licensee – Protection of consumer interest – Electricity supply and overall standards of performance by utilities 5

6. DISTRIBUTION LICENSEE ELECTRICITY CONSUMERS ELECTRICITY ELECTRICITY BILL against USAGE ELECTRICITY REGULATORY COMMISSION Framing regulations Determination of tariff Conduct of Business by the Licensee Quality of Service Components of Electricity Bill Grievance Redressal Seek consumer participation in framing regulations and Tariff 6

7. Notification No. & Date Some selected Regulation 9/WBERC dated 08.08.2003 This is a Notification constituting West Bengal State Advisory Committee in terms of section 87(1) of the Electricity Act, 2003. 22/WBERC dated 28.09.2005 West Bengal Electricity Regulatory Commission (Recovery of Expenditure for Providing New Connections) Regulation 2005. 23/WBERC dated 18.10.2005 West Bengal Electricity Regulatory Commission (Miscellaneous Provisions) Regulation, 2005. 27//WBERC dated 17.01.2006 West Bengal Electricity Regulatory Commission (Guidelines for Establishment of Forum for Redressal of Grievances of Consumers and Time and Manner of Dealing with such Grievances by the Ombudsman) Regulations, 2006. 30/WBERC dated 20.07.2006 West Bengal Electricity Regulatory Commission (Phasing For Open Access in Distribution / Sale of Electricity) Regulations, 2006. 33/WBERC dated 05.03.2007 West Bengal Electricity Regulatory Commission (Conduct of Business) Regulations, 2007. 35/WBERC dated 12.04.2007 West Bengal Electricity Regulatory Commission (Open Access) Regulations, 2007. 42/WBERC dated 22.05.2009 West Bengal Electricity Regulatory Commission (Balancing and Settlement Code) (Amendment) Regulations, 2009. 45/WBERC dated 22.05.2009 West Bengal Electricity Regulatory Commission (Open Access) (Amendment) Regulations, 2009. 46/WBERC dated 31.05.2010 West Bengal Electricity Regulatory Commission (Standards of Performance of Licensees Relating to Consumer Services) Regulations, 2010. 47/WBERC dated 10.08.2010 West Bengal Electricity Regulatory Commission (Cogeneration & Generation of Electricity from Renewable Sources of Energy) Regulations, 2010. 48/WBERC dated 25.04.2011 West Bengal Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2011. 7

8. Regulation 33: Conduct of Business Regulation, 2007 Total three chapters Chapter-I (General): 1.Short title, commencement and interpretation. 2.Definitions. 3.Commission’s office, office hour and sittings. 4.Quorum for meeting. 5.Language of the Commission. 6.Secretary of the commission 7.Advisory Committee. 8.Consultant. 9.Assistance of Experts. 10.Investigation 11.Consumer Association 8

9. Regulation 33: Conduct of Business Regulation, 2007 Chapter –II: General Rules concerning the proceedings before the commission The proceedings before the Commission may relate to any of the following matters:- 1.Determination of tariff 2.Issue of license/ amendments/ cancellation 3.Adjudication or resolution of dispute. 4.Open access. 5.Regulation of purchase and procurement process of Electricity. 6.Investigation. 7.Complaint against contravention of Act or Rules or Regulations or Directions or Order of the commission. 8.Any other matter provided under the Act. Quorum The Commission may initiate any proceedings suo motu or on a petition filed by any affected person who can file such petition in terms of the provisions of these Regulations and the Act. Petition and Pleading before the Commission : - All Petitions to be filed before the Commission shall be type written, cyclostyled or printed neatly and legibly on white paper in six copies and every page shall be consecutively numbered. 9

10. Regulation 33: Conduct of Business Regulation, 2007 Chapter –III: Miscellaneous 1. Appeal under Section 127 of the Act - Appeal to be filed before the Appellate Authority by a person aggrieved by the final order of the Commission in Form – 5. 2. Interim order. 3. Review of the decisions, directions and orders. 4. Continuance of proceedings after death etc. 5. Publication of the petitions. 6. Confidentiality. 7. Specified fees. 8. Requisite fees shall be paid in terms of the fees regulations. 9. General order :- The Commission may pass any general order and may direct the same for publication in any news paper for protecting the interest of the consumers, the licensees and the generating companies under the Commission in the state of West Bengal. 10. Saving of inherent power of the Commission. 10

11. Regulation 47: Cogeneration & Generation of Electricity from Renewable Sources of Energy Issuance of Renewable Purchase Obligation (RPO) Fixing the Price caps for electricity from different sources along with the time till such prices shall remain fixed SourcePrice/KwhPeriod of validity of the Price Biomass (A maximum fuel mix of 15% conventional fossil fuel shall be allowed on yearly basis). Rs 4.3610 years WindRs 4.8710 years Small HydroRs 3.645 years Grid Connected Solar PV power plants (100 Kw upto 2 Mw or more ) Rs 16.1325 years Roof top Solar PV sources (2 Kw upto 100 kw)-- Municipal Solid WasteRs 4.5010 years Bio-gasRs 55 years 11

12. Regulation 47: Cogeneration & Generation of Electricity from Renewable Sources of Energy Roof top Solar PV sources (2 Kw upto 100 kw) can be installed for injecting into the distribution system of a licensee only by such institutional consumer(s) like ⁻Government hospitals and health centres, ⁻Hospitals and health centres owned and run by any private charitable organization, ⁻Government and Government aided schools and academic institutions, ⁻Government offices and organizations, ⁻Any housing complex already promoted for this purpose by Government or any Government agency for the development of renewable sources, Such injection from roof-top solar PV sources of the above mentioned consumer(s) shall not be more than 90% of the consumption from the licensee’s supply by the above mentioned consumer(s) in a financial year. Such injection from roof-top solar PV sources of the above mentioned consumer(s) shall be settled on net energy basis at the end of each financial year. 12

13. Regulation 48: Terms and Condition of Tariff and Incentives for Promoting Demand Side Management Time-of-the-Day (TOD) Between 06-00 hours and 17-00 hours - Normal period - Normal Tariff; Between 17-00 hours and 23-00 hours – Peak period – Higher Tariff; Between 23-00 hours of the same day and 06-00 hours of the following day shall be treated as the off-peak period – Lower Tariff. The same tariff scheme could be differentiated based on Period of Year (Summer, monsoon and Winter) applicable only for generating companies, one licensee selling power to another licensee, or any specified class of consumer. If due to such tariff differentiation, any variation in the licensee’s revenue earning exceeds its aggregate revenue requirement, such excess revenue earning shall be treated as an incentive to the licensee. Power factor Rebate / Surcharge Load Factor Rebate / Surcharge 13

14. Scope for Consumer Participation 1.Tariff Determination Process – Step-I: Generators and Licensees submit tariff petition indicating total Aggregate Revenue Requirement (ARR) of the control period as per Tariff Regulations with all necessary supporting documents in the office of the Commission. – Step-II: Gist of the tariff petition with the approval of the Commission then published by the Generators and Licensees at least in three news paper (Bengali,English,Hindi) inviting comments/suggestion within some specified days and time. – Step-III: Comments/suggestions/objections received within due date are considered before tariff determination by the commission. – They are mentioned in brief with comments of the Commission in the tariff order of the Commission. Tariff order is issued within 120 days from receipt of the petition following detailed procedure indicated in the Tariff Rugulations. 14

15. Scope for Consumer Participation 2. Framing Regulations – SERCs frame regulations based on notifications/guidelines/regulations framed by CERC. – The draft regulations are uploaded at the website of the SERC – Comments are sought from the consumers/consumer groups by publishing relevant information in the local dailies (English, Hindi and Bengali) – Comments received are then considered while finalising the Regulation 15

16. THANK YOU 16