• The Act provides that:1. Any licensee or generator can seek open access; and2. Any consumer can also seek as and when provided by

the State Commission on payment of surcharge as may be specified by the state commission.

• The Act specifies who can seek open access.

• The Act puts no restriction on the type of transactions that can be facilitated.

Who can seek access

• The consultation paper states to facilitate only certain types of transactions. It excludes Trader-Trader transactions and also transactions involving any generator seeking access for selling at consumer door step.

• Once the Act has provided that who can seek open access, why to limit the types of transactions that are to be facilitated.

• Whether surcharge will be applicable in case of transactions involving any generator seeking access for selling at consumer door step.

Types of transactions to be facilitated

• Transmission pricing must include the capital costs and O&M costs incurred in providing the services.

• The concept based on congestion rent should not be applied because it gives incentive to transmission provider for having constraints in his system.

Tranmission Pricing

• The existing regional postage stamp type transmission tariff was developed when TEC process of CEA was taking care of optimization of generation & transmission expansion plans.

• With TEC process gone, there is urgent need to revise transmission pricing so that it has

1. Distance sensitivity 2. Locational sensitivity3. Remove pancaking. In the existing regional system, a

beneficiary utility which may not be actually using or getting benefited from part of regional system, still has to share the total regional transmission charges.

The above correction are needed not only for open access tariff, but also for basic transmission service charges.

Need for distance sensitivity in transmission pricing

1. Distance sensitivity 2. Locational sensitivity3. Directional sensitivity

• Based on pattern of flows as conceived at the time of expansion planning because this would correctly reflect the costs towards sunk capital.

• The above correction are needed not only for open access tariff, but also for basic transmission service charges.

Need for distance sensitivity in transmission pricing

• Congestion should be resolved based on pre-fixed priorities of transactions.

Committed Customers: Level-IOpen Access – Long-term: Level-IIOpen Access – Short-term: Level-

IIIDay-long & Part-day: Level-

IV

Lower priority level transactions to be affected only after full curtailment of all higher level transaction constraining the corridor.

Proportionate curtailment in same priority level.

Resolving Congestion

Margins in existing transmission are limited. Open access charges should be seen not only in comparison with current level of TSC but also with reference to incremental investment in transmission system that is needed for new generation capacities.Open access wheeling charges should encourage economic transactions, but should not discourage TSC based commitments. Else no one would commit for TSC and the process of building the National Grid would suffer.

A matter of concernA matter of concern

A total solution for

– Open Access Charges as well as – Transmission Service Charges

From To Notional Transmission Distance in 100 kms.States A B C D E F G H I J K L M N

JK,Pb,HP A 4 5 5 5 5 5 7 7 10 10 12 12 14 4

Ch,Hy,De B 6 4 6 5 5 5 7 7 10 10 12 12 14 4

Raj C 7 6 4 5 5 5 7 7 10 10 12 12 14 4

UP,Utchl D 7 6 6 4 5 5 7 7 10 10 12 12 14 4

Bihr,Jhar E 12 10 10 7 4 5 6 9 11 11 9 11 14 4WB,DVC, Sikkim

F 14 12 12 9 6 4 6 9 11 11 9 11 14 4

Orrisa

G 14 12 12 9 6 5 4 7 9 9 7 9 12 4

MP,Chatt H 12 10 10 7 5 5 6 4 7 7 7 8 10 4

Gujrat I 11 9 9 7 5 5 5 5 4 6 7 9 11 4

Mah,Goa J 11 9 9 7 5 5 5 5 6 4 7 6 8 4

Andhra K 11 9 9 7 5 5 5 5 7 6 4 6 7 4

Karnatak L 11 9 9 7 5 5 5 5 7 6 5 4 6 4

TN,Kerla M 11 9 9 7 5 5 5 5 7 6 5 6 4 4

NER N 16 14 14 12 9 7 9 12 14 14 12 14 16 *

NERNERAssam Nagaland,

Ar.Pd.

Tripura,

Mizoram, Manipur, Meghalaya

Assam 4 5 6

Nagaland,

Ar.Pd.6 4 6

Tripura,

Mizoram, Manipur, Meghalaya

6 5 4

Notional distancesNotional distances Notional distances have relation to the incremental

transmission costs.

When power transfer would take place through displacement, notational distances have been adjusted towards lower side. This way directional sensitivity has been incorporated.

Frequent change in table not required. Revision once in three to four years may be reasonable.

Same table can be used for incremental losses. In most cases it would give reasonably close values.

MTSC = Monthly Transmission Service Charges pooled for the CTU on all-India basisMLDC = Monthly Load Dispatch Charges also pooled on all-India basis i.e. all RLDCs and also NLDC when it comes

G_MW_N100km = Gross-MW-Notional distance of TSC based generation capacity = All India total of MW-km of all allocated Central Sector and Multi-beneficiary generation capacity for which CTU system is primarily built.

= Capacity * Notional Transmission distance as per table

MethodologyMethodology

HBRTSC = Hourly Base Rate of Transmission Service Charges

= MTSC 30 * 24 * G_MW_N100km

HBRLDC = Hourly Base Rate of Load Dispatch Charges

= MLDC 30 * 24 * G_MW_N100km

Methodology continued...Methodology continued...

Basic Transmission Charges to CTU = MW * (N100km – 1 ) *

HBRTSC *

Compensatory Transmission Charges to CTU = MW * HBRTSC *

Supplementary Transmission Charges to STU = MW * HBRTSC *

Basic Load Dispatch Charges to RLDC = MW * (N100km – 1 ) *

HBRLDC *

Compensatory LD Charges to RLDC = MW * HBRLDC *

Supplementary LD Charges to SLDC = MW * HBRLDC *

If generation wheeling through State system is involved then Wheeling Charges to STU = Av. MW wheeled *HBRTSC * Charges for dedicated system would be separate

where is a factor which would vary for different types of open access customers

Open Access – Basic ChargesOpen Access – Basic Charges

• To CTU MTSC minus amount billed by CTU on Open Access

Customers as Basic Transmission Charges In proportion to MW_N100km of allocated capacity

• To RLDC MTSC minus amount billed by RLDC on Open Access

Customers as Basic Transmission Charges In proportion to MW_N100km of allocated capacity

Charges payable by Charges payable by Long-term Commitment CustomersLong-term Commitment Customers

Types of Open Access Customers and their Types of Open Access Customers and their

 

Customer Type Duration of agreement

Capacity Access duration

Priority Value of

1.

Long-term

Nodal: CTU

12 months or more than 12 months in multiple of months.

Fixed for entire period of agreement.

Level-II 1.2

2. Short-term

Nodal: CTU

One month or more than one month in multiple of months.

Fixed for period of one month but may vary from month to month.

Level-III 2.5

3. Day-long

Nodal:RLDC

One day or more than one day in multiple of days.

Fixed for period of one day but may vary from day to day.

Level-IV 3.5

4. Part-day

Nodal RLDC

Four hours or more than four hours in multiple of hours.

Fixed for blocks of four hours or more. May vary from block to block but no block to be less than four hours.

Level-IV 5.0

Reducing Reducing when margins are available and when margins are available and extent of Open Access business increases extent of Open Access business increases  

Figures are indicative only

Customer

Type

option-1

option-2

reduced

Long-term 1.2 1.0 0.6

Short-term 2.5 1.5 0.8

Day-long 3.5 2.0 1.0

Part-day 5.0 2.5 1.2

P/kwh for different values of P/kwh for different values of and OA % and OA %

Committed Thermal 0.7 14Hydro 0.4 25

OA Long-term Thermal 0.7 1.1 10 17 0.9 25 17

Hydro 0.4 1.1 10 30 0.9 25 29

OA Short-term Thermal 0.8 1.2 10 16 1 25 16

Hydro 0.6 1.2 10 22 1 25 22

OA Day-long Thermal 0.9 1.4 10 17 1.2 25 17

Hydro 0.8 1.4 10 19 1.2 25 20

OA Part-day Thermal 1 2.2 10 24 1.8 25 24

Hydro 1 2.2 10 24 1.8 25 24

Indicative Transmission Charges under the various Indicative Transmission Charges under the various optionsoptions

Regional Stamp

100km x 100km

Zonal Matrix

Intra-regionalNR, WR, ER, SR 13 - 15 2 - 26 10 - 19NER 35 - 85 15 - 120 15

Inter-regionalER to NR/WR/SR 32 - 36 8 - 44 19 - 38NER to NR/WR/SR 80 48 - 84 33 - 43

RLDC should be empowered to curtail any transaction irrespective of priority.

Restoration of priority level curtailment as soon as emergency is over.

Regulatory check on RLDC to ensure that off-priority curtailments are not unduly prolonged on pretext of continued emergency.

Full charges irrespective of curtailments during Grid Emergencies.

Reduced charges when curtailments are due to congestion management other than Grid Emergencies.

Grid EmergencyGrid Emergency

• Transmission tariff related to power flow is desired.

• The rates should be fixed based on pattern of flows as conceived at the time of expansion planning because this would correctly reflect the costs towards sunk capital.

• The rates should be applied on scheduled transactions.

• The rates/tariff should not be based on actual power flows because:

1. The transacting parties have no control over it.2. The cost implication of transaction decision will not be

known in advance.3. The system will be prone to disputes.

Power flow based transmission pricing

• Congestion should be resolved based on pre-fixed priorities of transactions.

• Variable or bid based pricing mechanism may not be a practical method for resolving transaction conflicts.

• We disagree with concept of pricing mechanism based on degree of congestion in the transmission system as it gives commercial signals to transmission providers for planning a constrained system.

Resolving Congestion

• Imaginary connectivity not reflecting actual power flow pattern.

• Unfavorable to transactions that take place through displacement.

• Path connectivity based on segment wise transmission capacity allocation to transactions is quite complex.

• Little practical advantage of this complexity because actual power flows may be quite different.

• Not towards true open access.

The Contract Path Method(Alternative-I of consultation paper)

• Requires a demarcation which is artificial and so far non-existent.

• 100km x 100km is not in line with our field configuration of network. The regional networks, mostly 400kV, the line segments are generally of 300 – 400 km length.

• Transaction metering is based on State boundaries and there is no system for the 100km x 100km zones.

• Multiple choice of path connectivity in diagonal transactions.

• Blind to locational merits of transactions.

• Unfavorable to transactions taking place through displacement.

Incremental Postage Stamp Method(Alternative-II of consultation paper)

Focus of development has changed from Regional to National.

In transmission, the objective is to develop National Power Grid.

To facilitate development of National Grid, tariff design in transmission should also change from Regional pool to National pool.

Suggested approachSuggested approach

National approachNational approach

Introduce distance sensitivity through zonal concept.

Use existing State boundaries in zonal demarcation.

Zone to zone notional transmission distances in multiple of 100km.

Notional transmission distances to have directional sensitivity.

Suggested approachSuggested approach

ZonalZonal concept based on State boundariesconcept based on State boundaries

Notional distancesNotional distances Notional distance within the same zone fixed at 400 km. Maximum distance limited to 1600 km so as to limit

maximum transmission charges. This would help in commercial viability of NER hydro projects.

Notional distances have relation to the incremental transmission costs.

When power transfer would take place through displacement, notational distances have been adjusted towards lower side. This way directional sensitivity has been incorporated.

Figures in the table are indicative. These may be fine tuned based on incremental load flow studies.

Could be revised once in five years or so.

RLDC should be empowered to curtail any transaction irrespective of priority.

Restoration of priority level curtailment as soon as emergency is over.

Regulatory check on RLDC to ensure that off-priority curtailments are not unduly prolonged on pretext of continued emergency.

Grid EmergencyGrid Emergency

Charges based on MW_N100km as per access agreed.

Full charges irrespective of curtailments during Grid Emergencies.

Reduced charges when curtailments are due to congestion management other than Grid Emergencies.

Availability based Open Access ChargesAvailability based Open Access Charges

Scheme based on line-wise transmission capacity allocation requiring declaration of TTC and ATC etc. as suggested in consultation paper may not be practical.

Simpler methods should be evolved and adopted.

Need for simple schemeNeed for simple scheme

RLDC can be nodal agency for Day-long and Part-day Open Access customers.

However, for Long-term and Short-term customers seeking access for yearly or monthly basis, CTU should be nodal agency.

Nodal AgencyNodal Agency

We are not convinced of practicability of the scheme based on dynamic declaration of prices by transmission service provider and customers replacing each others through higher price or duration bids in which there is also scope of hoarding of transmission capacities.

These complexities seems to be unnecessary and have potential for completely jeopardizing the purpose of open access.

Para 5.14, 5.15, 5.16 & 5.17 of consultation paperPara 5.14, 5.15, 5.16 & 5.17 of consultation paper

Assessment of incremental energy losses is an important step in optimum generation dispatch.Open access customers cause incremental transactions and therefore should bear incremental losses.Due to current square dependence of losses, incremental losses in percent are double of average losses.Loss apportionment should be based on product of (a) MW (b) Notional distance and (c) incremental loss factor ;In consultation paper is it proposed to be based only on MW, to which we differ.

Apportionment of transmission lossesApportionment of transmission losses

Assuming burden of open access customers to be 10% of committed customers, the incremental loss percentages for committed customers, first entrant open access customer and the last entrant customers would be (approximatly) in ratio of 1:2:2.2

Accordingly, following Incremental Loss Factors are suggested:

Committed Customer 1.0Open Access – Long-term 2.0Open Access – Short-term2.1Day-long and Part-day 2.2

Incremental loss factorIncremental loss factor

Charges based on MW_N100km as per access agreed.

Full charges irrespective of curtailments during Grid Emergencies.

Reduced charges when curtailments are due to congestion management other than Grid Emergencies.

Availability based Open Access ChargesAvailability based Open Access Charges