1. CERC (Power System Development Fund) Regulations 2010

2.  Background  Constitution of Fund  Utilization of fund  Managing Committee, PSDF 2 Power System Development Fund (PSDF) Brief Outline

3.  Loose Pool accounts  Unscheduled Interchange Charges account  Congestion Charges account  Power Market Congestion Charge account  Reactive Energy Charges account  Accounts operated by RLDCs/ NLDC  Utilization for Regional benefits  CERC formed Power System Development Fund (PSDF) vide notification dated 4 th June, 2010  Utilization for Power System Development of National/ Regional Importance 3 Background Power System Development Fund (PSDF)

4. Constitution of Fund Other charges as may be notified by commission 4 Power System Development Fund (PSDF) Account Constituent Charges Source Transfer of Payments to the Fund Unscheduled Interchange (UI) Charges Account Unscheduled Interchange (UI) Charges Amount raised after final settlement of claims of UI charges Latest by 15th of subsequent month Congestion charge Account Congestion Charges Amount raised after release of charges payable to regional entities entitled to receive congestion Latest by 15th of subsequent month Power Market Congestion Charge Account Congestion amount Amount rising from the differences in the market prices of different regions as a consequence of Market Splitting in Power Exchanges Latest by 15th of subsequent month Reactive Energy Charges account RLDC Reactive Energy Charges Amount raised after settlement of Reactive Energy Charges Latest by 30th day of April of the subsequent Financial Year

5. 5 Utilization of Fund  Schemes as governed by the respective charges regulations  Other Schemes benefiting large number of utilities  Schemes having far reaching effect for Power System Development Power System Development Fund (PSDF)

6. 6 Utilization of Fund…. Power System Development Fund (PSDF) Account NameGoverned RegulationUtilization Unscheduled Interchange (UI) Charges Account Central Electricity Regulatory Commission (Unscheduled Interchange Charges and related matters) Regulations, 2009 1. Servicing of Investments for the transmission schemes of strategic importance a. Cost recovery of scheme from the users after reaching optimum level of utilization of the scheme 2. Providing Ancillary Services Congestion charge Account Central Electricity Regulatory Commission ( Power Market) Regulations, 2010 1. Utilization to relieve congestion 2. System Studies to optimize the utilization of Inter- Regional and Inter-State Links 3. SPS installation on ISTS and Deemed ISTS 4. Installation of Shunt Capacitors

7. 7 Utilization of Fund…. Account NameGoverned RegulationUtilization Power Market Congestion Charge Account Central Electricity Regulatory Commission ( Measures to relieve congestion in real time operation) Regulations, 2009 1. Installation of VAR compensators, Series compensators and other reactive energy generators 2. Additional transmission capacity creation for relieving congestion 3. Technical Studies of Grid for congestion reduction 4. Capacity Building measures and training of participants of Power Exchanges 5. To develop information dissemination mechanism for the participants of Power Exchanges 6. Parked with a financial institution for grant of loans at concessional rates to the congestion relieving projects Power System Development Fund (PSDF)

8. 8 Utilization of Fund…. Account Name Governed Regulation Utilization Reactive Energy Charges account Central Electricity Regulatory Commission ( Indian Electricity Grid Code), 2010 - Annexure-1, Sec-6.1d 1. Training of SLDC operators 2. Capacity Building in the respective Region as provided in Grid Code a. Up to a limit of ` 2 Crore per Year or 30% of the outstanding balance as at the beginning of FY, whichever is less – Require approval of RPC only b. Proposals beyond the limit – Require approval of Commission through Managing Committee Power System Development Fund (PSDF)

9. 9 Managing Committee, PSDF  Constituted vide CERC order dated 14.09.2010  Constitution Power System Development Fund (PSDF) Position in the Managing CommitteePerson Nominated ChairmanCEO, POSOCO Member ConvenorGM NLDC Representative of RPC MS- NRPC MS-ERPC MS-WRPC MS-SRPC MS-NERPC Representative of RLDC GM NRLDC GM ERLDC ED WRLDC GM SRLDC AGM NERLDC Independent External Member (Finance)Ex. ED (Finance), NLC Independent External Director (Power Sector Expert) Addl. Director, CPRI SecretaryDGM NLDC TreasurerDGM F&A, POSOCO

10. 10 Meetings of Managing Committee, PSDF  At least four meetings in a year shall be convened  Interval between any two meetings shall not, preferably, exceed six months  Secretary of the Fund may at any time convene a meeting of the Managing Committee by notice in writing of fourteen (14) days  A special meeting of the Managing Committee may be convened at any time by the Chairperson of the Managing Committee in case of urgency  Managing Committee may constitute Committees or sub- Committee(s) out of its own members to look after day-to-day operations or for any other specific purpose Power System Development Fund (PSDF)

11. 11 Functions of Managing Committee, PSDF  Opening accounts titled “Power System Development Fund” or by such other name with any of the Scheduled Banks/Nationalised Banks  Main account at New Delhi  Subsidiary accounts at such other branches of the said bank  Maintaining proper accounts and manage the Fund as an independent fund  Scrutinization of project proposals having regard to the objects of the Fund, the importance of the projects and quantum of fund required for such projects  Investing the money lying in the Fund in securities authorized under the Indian Trusts Act, 1882  Framing guidelines from time to time with the approval of the Commission for the investment of balance funds Power System Development Fund (PSDF)

12. 12 Functions of Managing Committee, PSDF…  Submitting its recommendations in writing to the Commission for approval for disbursement from the Fund, after scrutinizing the proposals  An independent system for concurrent monitoring and evaluation of the projects, schemes and activities shall be evolved to ensure effective and proper utilization of the Fund  Power to withhold or suspend the release of balance sanctioned fund or part thereof, in case of fraudulent utilization Power System Development Fund (PSDF)

13. 13 Operation of the Fund  Any two persons designated as authorized signatories by the Managing Committee from time to time shall operate bank accounts  Authorized signatories shall not make any withdrawal from the accounts of the Fund except through proper authorization and/or after sanction from the Managing Committee Power System Development Fund (PSDF)

14. 14 Property and Income of the Fund, Audit of Accounts Property and Income of the Fund  All properties of the Fund, whether movable or immovable, shall vest in the name of the Fund  No part of the Fund shall be used directly or indirectly by way of dividend, bonus etc. Audit of Accounts  registered chartered accountant firm/ Chartered Accountant shall be appointed to audit the accounts of the Fund annually  Shall prepare an annual statement of accounts in such form as may be decided by the Managing Committee in consultation with the auditor appointed Power System Development Fund (PSDF)

15. 15 Annual Reports, Dissolution of Fund  Shall prepare the annual report of the Fund including the work undertaken during the year, together with balance sheet and audited account  Submission of Report to the Commission  shall prepare summarized quarterly reports of funds utilization which will be displayed on the website of the Commission  Commission may direct by notification on Official Gazette to dissolve the Fund from such date and for such period  all funds and other properties vested in the Fund shall during the period of dissolution, vest with such entity to be nominated by the Commission in this behalf  Fund shall be reconstituted after expiry of dissolution period Power System Development Fund (PSDF)