From THE EXECUTIVE DIRECTOR'S DESK!
Wishing you all a very Happy New Year and Bihu 2020.
As we are aware that the young Indian power system will be
witnessing the entry of more and more power market
products in the near future and already many have started
delivering benefits to Indian consumers. Concomitant to
every addition comes not only new Regulations &
procedures but also multiple interpretations & implications
till it gets fine tuned. Aspects like operational discipline,
financial discipline etc., in power sector becomes the engine
to drive towards Vision India. This issue of Regulatory
Tracker sprinkles orders on Payment Security Mechanism,
Amendments in CERC Regulations facilitating Real time
market, draft Regulation on sharing of PoC Charges & losses
etc., on your desk.
With a request for your valuable feedback, on behalf of
NERLDC team, let me take this opportunity again to wish
you and your team a very Bright and Successful New year
filled with Happiness.
Best Wishes Regards,
V. Suresh
Executive Director, NERLDC
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• Owing to the mounting DISCOM dues with the generators, the MoP had vide order dated
28.06.2019 made it mandatory for the DISCOMs to maintain sufficient LC as payment
security mechanism. On 17.07.2019 MoP had issued the Procedure for scheduling of power to
these DISCOMs in the event of non-maintenance of LC.
• The said procedure provides for exclusion of the defaulting DISCOM from STOA transactions
as well as from procuring power from Power Exchanges.
• After POSOCO received a letter from MNRE on 06.09.2019 that highlighted that most
renewable power companies had not been given LCs by various DISCOMs, POSOCO vide its
letter dated 10.10.2019 requested the SLDCs for the implementation of MoP’s orders
requiring the opening of LCs in favor of the wind and solar power developers by October 15
to avert the situation of losing the right to transact in power exchange and short term open
access.
• In response to this, the DISCOMs in the south namely, Southern Power Distribution Company
of Andhra Pradesh Limited and Eastern Power Distribution Company of Andhra Pradesh
Limited had approached the Andhra Pradesh High Court challenging the proceedings of the
Ministry of New and Renewable Energy (MNRE) in this regard stating that it is not possible
to issue LCs to the solar and wind power producers in the wake of financial crisis in the
DISCOMs.
• The primary contention raised by the DISCOMs in the petition was that the wind and solar
power generators have waived their right to enforce the LC clause of the PPA by not insisting
on the compliance of the terms of the PPA obligating the DISCOMs to issue LCs.
• In the latest development, the Andhra Pradesh high court has in its interim order dated
15.10.2019 imposed a stay on power ministry from disallowing AP-based discoms to buy
power through the open access system and on the power exchanges.
JANUARY 2020 | ISSUE NO.02
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The petitioner (DSPPL) has a Solar plant of 40 MW in Jaisalmer, Rajasthan which sells power to
Adani Electricity Mumbai Ltd. (a DISCOM, in Mumbai – the erstwhile R-Infra Mumbai prior to
takeover by Adani in 2018). As per the provisions of the Energy Purchase Agreement (EPA), the LC
to be provided by AEML was required to be unconditional and revolving in nature. Allegedly, AEML
has issued an amended LC on 01.08.2019 which is a conditional one since it makes the encashment of
LC subject to AEML’s confirmation which is not in line with the EPA. The said LC is also alleged to
be not in consonance with the MOP order dated 28.06.2019 & clarification dated 09.08.19 related to
adequate payment security mechanism (PSM) required to be ensured by DISCOMs for scheduling
power from generators.
Accordingly the instant petition has been filed by DSPPL to ensure compliance to the MoP Order on
PSM & the terms of EPA for opening un-conditional LC in favour of the generator wherein MoP had
directed DISCOMs to provide “unconditional” LCs to generators. Thus aggrieved by AEML’s breach
of EPA terms and non-compliance with the said MoP orders DSPPL has prayed that in the interim
period, AEML be barred from procuring power under STOA bilateral & PX until a requisite LC is
opened by them.
In the course of hearing, NLDC submitted that as per Ministry of Power order dated 28.6.2019, the
Petitioner is required to approach the NLDC for appropriate relief. However, the Petitioner did not
approach the NLDC in this regard. Therefore, CERC in its order dated 12.12.2019 directed the
Petitioner to approach the NLDC and RLDC for appropriate action in terms of the Ministry of Power
order dated 28.6.2019.
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The Commission, with a view to providing the buyers and sellers an organized platform for energy
trade closer to real time had proposed a regulatory framework for real-time market. Commission
issued the Explanatory memorandum and draft amendments to the Indian Electricity Grid Code,
Power Market Regulation and Open Access in Inter-state Transmission Regulations on 06.08.2019.
Subsequently, on 12.12.2019 the Commission has notified the final amendments to the IEGC, Open
Access and Power Market Regulations. The amended regulations shall come into force from 1st
April, 2020 or such other date as may be notified by the Commission. Highlights of the amended
provisions are listed below-
1. Central Electricity Regulatory Commission (Open Access in inter-State Transmission)
(Sixth Amendment) Regulations, 2019:
• The definition of “Intra-Day Transaction /Contingency Transaction” has been modified
to mean the transaction (not being a collective transaction) which occurs on day (T) after the
closure of day ahead market window for delivery of power on the same day (T) except for
the duration of the specified period of delivery of the real-time market, or for the next
day (T+1) and which are scheduled by Regional Load Despatch Centre or National Load
Despatch Centre.
• The definition of “Real-time transactions” has been added to mean the collective
transactions which occur on the day (T) or (T-1) after the right to revision of schedule ends
for a specified duration of delivery during the day (T)and which are scheduled by Regional
Load Despatch Centre or National Load Despatch Centre
• A new clause has been inserted that provides for scheduling of transaction in Real-time
market (RTM).
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• The bidding mechanism for the real-time market shall be double-side closed bid auction for
each time block of the delivery period.
• The complete timelines for scheduling of the real-time collective transaction is shown in the
table below:
• The Amendment also lays down that while curtailing collective transactions, day ahead
transactions shall be curtailed first followed by real time transactions.
• Further, all transactions for State utilities and for intra-State entities scheduled by the nodal
agency, shall now be accounted for and included in the respective day-ahead net interchange
schedules of the concerned regional entity issued by the Regional Load Despatch Centre
only after accounting the changes in the schedules after the execution of the real-time
market.
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2. Central Electricity Regulatory Commission (Power Market) (Second Amendment)
Regulations, 2019.
• “Real-Time Market” has been defined to mean a market for collective transactions of Real
time Contracts through Power Exchange(s).
• Definition of “Gate Closure” in reference to Real-Time Market has been laid down as the
time after which the bids submitted to the Power Exchange cannot be modified for a specified
delivery period.
• The Amendment makes the Power Market Regulations applicable to Real Time Contracts
transacted on exchange.
• The market design originally prescribed to be followed by Power Exchanges for day ahead
markets in the Regulations is now amended so as to be applicable for Real Time Markets also.
3. Central Electricity Regulatory Commission (Indian Electricity Grid Code) (Sixth
Amendment) Regulations, 2019
• The amendment provides for the Scheduling of Real-time collective transaction.
Any revision in schedule made in odd time blocks shall become effective from 7th time block
and any revision in schedule made in even time blocks shall become effective from 8th time
block, counting the time block in which the request for revision has been received by the
RLDCs to be the first one. The same rule for revision of declared capability and revision of
schedules shall also be applicable in case of forced outages of a unit for those stations who
have a two part tariff based on capacity charge and energy charge for long term and medium
term contracts as well as forced outage of a unit of a generating station (having generating
capacity of 100 MW or more) and selling power under Short Term bilateral transaction
(excluding collective transactions in day ahead market and real time market through power
exchange).
• An ISGS whose tariff is determined by the Commission, under section 62 of the Act, may sell
power from the share of its original beneficiaries in the day-ahead Market with the consent of
such beneficiaries; and in the real-time market without the requirement of consent from the
beneficiaries, before the trading for the real time market for a specified duration commences.
• However, the share of ISGS in the gains shall be restricted to a ceiling of 7 paise/kWh and
•
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the gains over and above 7 paise/kWh shall be to the account of the beneficiary.
• All generators connected to the grid will be able to participate in the Real Time Market. In
case of forced outages the generator can participate in the Real Time Market and buy power
for the beneficiary to honor its commitment.
• A schematic representation of the changes made to the right to revision of schedule is given
below:
• As per Regulation 6.5.17 of Central Electricity Regulatory Commission (Indian Electricity
Grid Code), Regulation 2010, National Power Committee (NPC) had been directed to
formulate the methodology of settlement of accounts for the period of grid disturbance in
case of transactions related to bilateral short term and collective transaction.
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• NPC had submitted the draft for “Methodology of settlement of accounts for bilateral short
term and collective transactions, for the period of Grid Disturbance" vide its letter dated
27th January 2017 for the approval of the Commission.
• The draft methodology submitted by the NPC has been approved by the Commission in
terms of Regulation 6.5.17 of Grid Code vide its order dated 09.10.2019 in Petition no. L-
1/18/2010-CERC.
• The approved methodology shall come into force from the date of coming into effect of
IEGC Second amendment i.e. 17.02.2014.
The Commission had constituted a taskforce vide CERC’s Office Order dated 10.7.2017 under
Chairmanship of Shri A.S. Bakshi (then Member, CERC) to review the framework of Point of
Connection (POC) Charges and to critically examine the efficacy of the existing PoC mechanism as
well as to identify any deficiency in the existing mechanism. The Task Force submitted its report to
the Commission in March 2019 wherein it suggested two options for transmission pricing viz (a)
modifications in the present PoC method and (b)Uniform charges method.
To formulate the draft Regulations keeping in view the Bakshi Committee Report and future power
scenario, the Commission constituted a Committee under Sh. I.S.Jha, Member-Technical (CERC) in
May 2019. The Committee submitted its Report to the Commission in August 2019 along with
proposed draft Regulations.
Thereafter, the Commission has on 31.10.2019 notified the Draft Central Electricity Regulatory
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Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2019 in
supersession of existing Sharing Regulations 2010.
The highlights of the draft Regulations are as shown in the Table below:
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ISTS charges for generators connected to both ISTS and STU
• Where a generating station is connected to both ISTS and intra-State Transmission System,
the ISTS charges and losses shall be applicable only on quantum of Long Term Access and
Medium Term Open Access connected through ISTS and STU charges and losses shall not
be applicable on such capacity connected through ISTS.
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• Provided that this provision shall be subject to availability of adequate capacity in the intra-State
Transmission System to draw allocated quantum of Long Term Access or Medium Term Access
as certified by the Central Transmission Utility.
Average Transmission loss
• Average loss for all India shall be calculated.
• Average loss shall be used for adjusting schedules at drawal end only. No injection loss shall be
considered as being done currently.
Transmission charges for Short Term Open Access
• It has been proposed that no separate charges shall be levied for STOA including collective
transactions.
Transmission Deviation Rate
• It is proposed that deviation shall be calculated on actual injection /drawl over LTA+MTOA of
a DIC @ 1.2 *Transmission charges for the State.
All RLDCs including NLDC have filed application under subsection (4) of section 28 of Electricity
Act, 2003 and Regulation 10 of the Central Electricity Regulatory Commission (Fees and Charges
of Regional Load Despatch Centre and other related matters) Regulations, 2019 for determining the
Fees and Charges for the control period 01.04.2019 – 31.03.2024.
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Disclaimer: The information contained herein is of a general nature and is not intended to address
the circumstances of any particular individual or entity. Although we endeavour to provide
accurate and timely information, there can be no guarantee that such information is accurate as of
the date it is received or that it will continue to be accurate in the future. No one should act on such
information without appropriate professional advice after a thorough examination of the particular
situation. We request the readers' valuable inputs on the newsletter.
Regulatory Tracker Team, NERLDC
CONTACT US:
NORTH EASTERN LOAD DESPATCH CENTER,
POWER SYSTEM OPERATION CORPORATION LIMITED,
LAPALANG, SHILLONG, MEGHALAYA-793006
PHONE: +8260355617
email : himani@posoco. in