ANNEX

 

ANNEX REFERRED TO IN REPLY TO PARTs (a) TO (c) OF UNSTARRED QUESTION NO.  2910 TO BE ANSWERED IN THE RAJYA SABHA ON 29.08.2011.

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1.         De-licensing of power generation

Generation has been delicensed and captive generation is permitted.  Hydro projects would, however, need approval of the State Government and concurrence from the Central Electricity Authority for a scheme estimated to involve a capital expenditure exceeding such sum as may be fixed by the Central Government, from time to time, by notification.

Electricity generation in the country from the conventional sources and import of energy from Hydro Power Stations located in Bhutan increased from approximately 530 Billion Unit (BU) in 2003-04 to 771.5 BU in 2009-10. 

 

2.         Competition in power generation

 

Guidelines for competitive bidding for procurement of Power by distribution licensees under the Electricity Act have been issued on 19.1.2005 by the Central Government. Based on these guidelines, large coal based Ultra Mega Power Projects of 4000MW each are being developed though private sector participation. UMPPs will use more efficient super critical technology for generation of power. Tariff based International Competitive Bidding has been followed for selection of project developer. Four UMPP projects have been awarded – two pit head based viz. Sasan UMPP (6x660 MW) in Madhya Pradesh &Tilaiya UMPP (6x660 MW) to M/s Reliance Power Limited in Jharkhand and two coastal viz. Mundra UMPP (5x800 MW) in Gujarat &Krishnapatnam UMPP (5x800 MW) in Andhra Pradesh to M/s Tata Power Company and M/s Reliance Power Limited respectively.

 

The States are also actively involved in procurement of power through tariff based competitive bidding under Case-I based on the above guidelines.

 

3.         Liberal provisions for captive power generation:

 

Captive generation has been liberalised in order to promote investment. Captive power generation has benefitted immensely from this and has reached 19,509MW as on 31.03.2010 as per the information of Central Electricity Authority. A number of captive power plants have been selling surplus power through the power exchanges. Thus, a lot of latent capacity has come into the market. These are positive developments leading to an increase in the availability of power and the consequent depth of the power market.

4.         Mandatory setting up of Regulatory Commissions and formulation of their role and functions:

Electricity Regulatory Commissions have been established in  most States and Union Territories  to  regulate the sector including award and revoking of licences, tariff setting consistent with National Electricity Policy and Tariff Policy defining and enforcing performance standards and quality of service to consumers.

 

5.         Unbundling of State Electricity Boards (SEBs)

 

Under Section 131 of Electricity Act 2003, it has been mandated to reorganize the State Electricity Boards in the country to separate entities of Generation, Transmission and Distribution segments with the purpose of making them self sustaining. As on date 18 numbers of SEBs have been reorganized. This has helped in more accurate accounting of different businesses in power sector and brought about a commercial orientation among the unbundled utilities.

6.         Open Access to Transmission /Distribution Systems

The Open Access at inter-state level is fully operational. With regard to Open Access at Inter-State level, during the financial year 2009 - 10, the total number of transactions under Open Access was 18128 as against 778 in 2004-05.  As per information available with Forum of Regulators Secretariat, 24 SERCs have notified terms and conditions of Open Access Regulations, 20 SERCs have determined cross subsidy surcharge, 25 SERCs have allowed Open Access up to 1 MW   and above, 22 SERCs have determined transmission charges and 18 SERCs have determined wheeling charges.

7.         Power Trading recognized as a licensed activity

 

Power Trading has been recognized as a licensed activity, apart from generation, transmission and distribution and the Appropriate Regulatory Commissions have been empowered to fix the trading margins, if considered necessary.   About 40 inter-state trading licensees are there and the volume of traded electricity in 2009-10 was 33.91 BUs as against only 11.85 BUs in 2004-05. CERC has given approval to power exchange based transactions involving sale and purchase of electricity. Indian Energy Exchange and Power Exchange of India Limited are the two operational power exchanges in the country. Electricity trade through bilateral trading constitutes about 4 % of traded power and about 1 % is traded through power exchanges. 

8.         Regulatory Commissions to develop electricity markets  

The Central Commission has issued power market regulations. With this, the market structure in the electricity sector has been codified. The regulations have defined various types of contracts and the roles and responsibilities of various market players. Through new trading margin regulations, long-term agreements have been exempted from trading margin in order to facilitate innovative products and contracts for new capacity addition which involves higher risk in transaction. Provisions have also been made to ensure that traders do not circumvent the ceiling of trading margin by routing the electricity through multiple transactions.

9.         Establishment of Appellate Tribunal 

 

An Appellate Tribunal has been established for disposal of appeals against the decision of the CERC and State Electricity Regulatory Commissions so that there is speedy disposal of such matters. 

10.       Constitution of Forum of Regulators

The Forum of Regulator was constituted vide Notification in February 2005 in pursuance of the provisions under Section 166 (2) of the Electricity Act, 2003. to provide a common platform to Regulatory commissions across the nation for deliberation on Regulatory issues in order to harmonize regulatory practices in the best possible manner.

11.       Safeguarding consumer interests

 

Specific provisions have been made in The Electricity Act, 2003 relating to consumer protection. The Consumer Grievances Redressalfora have been constituted in 29 States and in 25 States, Ombudsman has been appointed.

 

12.       Restructured-Accelerated Power Development and Reforms Programme (R-APDRP)

 

For the reduction of AT&C losses on sustainable basis and improvement in power distribution sector, Government of India has launched Restructured-Accelerated Power Development and Reforms Programme (R-APDRP) during 11th Plan period as a central sector scheme.The focus of R-APDRP Scheme is on actual demonstrable performance by utilities in terms of sustained AT&C loss reduction.

 

R-APDRP: The Government approved The Re-structured APDRP during the XI Five Year Plan as a Central Sector Scheme on 31st July-08. PFC is the nodal agency for operationalising the programme. The focus of the programme is on actual, demonstrable performance in terms of loss reduction. Establishment of reliable and automated systems for sustained collection of accurate base line data, and the adoption of Information Technology in the areas of energy accounting will be necessary pre-conditions before sanctioning any projects for strengthening & up-gradation of sub-transmission and distribution networks .Projects under the scheme to be taken up in Two Parts. The activities to be covered under each part are as follows:

 

Part – A: Preparation of Base-line data for the project area covering Consumer Indexing, GIS Mapping, Metering of Distribution Transformers and Feeders, and Automatic Data Logging for all Distribution Transformers and Feeders and SCADA / DMS system for big cities only It will also include adoption of IT applications for meter reading, billing & collection, energy accounting & auditing, redressal of consumer grievances, establishment of IT enabled consumer service centers etc

 

Part – B: Renovation, modernization and strengthening of 11 kV level Substations, Transformers/Transformer Centers, Re-conductoring of lines at 11kv level and below, Load Bifurcation, Load Balancing, HVDS, installation of capacitor banks and mobile service centers etc. In exceptional cases, where sub-transmission system is weak, strengthening at 33 kV or 66 kV levels may also be considered.

 

Initially 100% funds for Part A and 25% (90% for special category states) funds for Part B projects shall be provided through loan from the Govt. of India. The balance funds for Part B projects shall be raised from financial institutions. The entire amount of loan for Part-A projects shall be converted into grant once the establishment of the required Base-line data system is achieved and verified by an independent agency appointed by MoP.Up-to 50% (90% for special category States) of the project cost of Part-B projects shall be converted into grant in five equal tranches on achieving the 15% AT&C loss in the project area on a sustainable basis for a period of five years. In addition, utility level loss reduction (AT&C losses) @ 3% per annum for utilities with baseline loss levels exceeding 30% and @ 1.5% for utilities with baseline loss levels less than 30% have to be achieved.

 

 

Present status of R-APDRP:

 

·  Under Part-A of the Re-Structured APDRP 1401 projects worth of Rs.5648.58                 (including  18 Nos SCADA Projects worth Rs.471.58 Crore) to cover almost the entire country for  establishment of IT enabled  Baseline System have been approved by the GOI.

 

·  Under Part–B, 775 projects worth Rs.14854.43 Crore for strengthening of sub- transmission distribution system, against 1118 eligible towns in the country have also been sanctioned so far.

 

The Aggregate Technical & Commercial (AT&C) losses in the country have reduced from 30.62% in 2006-07 to 28.44% in 2008-09. 

 

A strategic Blueprint for the 12th Plan has been prepared by the Ministry of Power keeping in view the development of the Power Sector in line with a strategy for low carbon growth.  This would enable environment friendly development of the Sector.  The said Blueprint has been submitted to the Planning Commission.

13.       Renewable Energy Promotion

The promotion of renewable energy is one of the important objectives in the Act.  The National Action Plan for Climate Change (NAPCC) envisages the Renewable Purchase Obligation (RPO) to reach 15% in year 2020.

 

Almost all states have introduced Renewable Purchase Obligations. Renewable Energy Certificates mechanism has been introduced to overcome the geographical limitations of RE generation.

 

CERC has also created a facilitative framework for grid connectivity and evacuation for renewable.

 

Problems Faced and Remedial Action Taken by the Government

1.                  Discom Financial Viability and persisting problems

Tariff revisions are not being done at regular intervals or petitions for revision of Annual Revenue Requirement are not being regularly filed by Discoms. Inadequate tariffs and short term loans for buying power in short term market is deteriorating the financial condition of discoms.

2.                  Implementation of open access at intra-state level

Some states invoked Section 11 of Electricity Act to disallow open access to the generators within the state. As per the Electricity Act 2003, Section 11 is meant to be invoked only in extraordinary circumstances.(e.g. threat to security of state, public order, natural calamity etc.) and is not meant to restrict open access.

 

The Ministry of Power has filed SLP against the Karnataka High Court judgment upholding the Orders issued by the State Government of Karnataka under section 11 of the Act restricting open access.  The matter is sub-judice.

 

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