7/28/2019 Regulatory Freame Work in Inida

1/25

Electricity RegulatoryElectricity Regulatory

Frame Work in IndiaFrame Work in India

Anil Kumar KAnil Kumar K

AO, KPTCLAO, KPTCL

7/28/2019 Regulatory Freame Work in Inida

2/25

In this sessionIn this sessionWhy Regulator ?Why Regulator ?

What is Regulation ?What is Regulation ?What is the Role of Regulator ?What is the Role of Regulator ?

The Regulatory bodiesThe Regulatory bodies Few Regulations Governing SystemFew Regulations Governing System

OperationOperation Cursory LookCursory Look

Case IncidentCase Incident

7/28/2019 Regulatory Freame Work in Inida

3/25

Pre Regulatory EraPre Regulatory Era SEBs were the mastersSEBs were the masters

Deteriorating Financial HealthDeteriorating Financial Health Poor Operational efficiencyPoor Operational efficiency

The Need for Regulator came fromThe Need for Regulator came from

-- LPG PolicyLPG Policy

-- CMNAPP ( Demand Supply Gap and increasingCMNAPP ( Demand Supply Gap and increasinglosses)losses)

-- Immediate Competition not possibleImmediate Competition not possible-- Immediate Mechanism Required to controlImmediate Mechanism Required to control

losses, rationalize tariffs and improve serviceslosses, rationalize tariffs and improve services

7/28/2019 Regulatory Freame Work in Inida

4/25

RegulationRegulationRegulationRegulation Dictionary meaningDictionary meaning

AnAn authoritativeauthoritative rulerule

The state ofThe state ofbeing controlledbeing controlledoror

governedgoverned The act ofThe act ofcontrolling or directingcontrolling or directing

according to ruleaccording to rule

7/28/2019 Regulatory Freame Work in Inida

5/25

RegulationRegulation

RegulationRegulation is "controlling human oris "controlling human orsocietal behavior by rules or restrictions.societal behavior by rules or restrictions.

EgEg: Norms for T & D loss reduction: Norms for T & D loss reduction

One can consider regulation as actions ofOne can consider regulation as actions of

conduct imposingconduct imposing sanctionssanctions (such as a(such as afinefine).).

EgEg; penalty for violation of grid code; penalty for violation of grid code

7/28/2019 Regulatory Freame Work in Inida

6/25

Basic Objectives of RegulationBasic Objectives of RegulationProtect interests of consumersProtect interests of consumers

Protect interests of serviceProtect interests of service

providersproviders

Provide transparency,Provide transparency,independency and publicindependency and public

participationparticipation

Prevent exploitation, restrictivePrevent exploitation, restrictiveand unfair practicesand unfair practices

Ensure quality of service toEnsure quality of service toconsumersconsumers

7/28/2019 Regulatory Freame Work in Inida

7/25

Regulatory BodiesRegulatory Bodies Electricity is a subject matter of concurrent listElectricity is a subject matter of concurrent list

The Electricity Regulatory Commissions Act 1998The Electricity Regulatory Commissions Act 1998paved the way for Electricity Regulation in thepaved the way for Electricity Regulation in theCountryCountry

Central Electricity Regulatory Commission (CERC)Central Electricity Regulatory Commission (CERC)

State Electricity Regulatory Commission (SERC)State Electricity Regulatory Commission (SERC)

Joint Commission ( JERC)Joint Commission ( JERC)

Appellate Tribunal for Electricity ( ATE)Appellate Tribunal for Electricity ( ATE)

Forum of Regulators ( FOR)Forum of Regulators ( FOR)

7/28/2019 Regulatory Freame Work in Inida

8/25

Electricity RegulationElectricity Regulation ERC Act 1998ERC Act 1998 RepealedRepealed

Electricity Act 2003Electricity Act 2003 1010thth June 2003June 2003

Sections 76Sections 76--90 of Electricity Act90 of Electricity Act

2003 deals with Constitution, Power2003 deals with Constitution, Power

and Functions of the Central andand Functions of the Central and

State CommissionState Commission

7/28/2019 Regulatory Freame Work in Inida

9/25

Composition of CERC, SERC & JCComposition of CERC, SERC & JC Composition ofComposition of Central CommissionCentral Commission

((SnSn 76(5)76(5)-- Chairperson and 3 members appointed by CentralChairperson and 3 members appointed by CentralGovernmentGovernment

-- Quasi Judiciary bodyQuasi Judiciary body

Composition ofComposition ofState CommissionState Commission

-- Chairperson and 2 membersChairperson and 2 members

-- Quasi Judiciary bodyQuasi Judiciary body

Composition ofComposition ofJoint CommissionJoint Commission

-- One member from each StateOne member from each State-- One among them will be a chairperson or by rotationOne among them will be a chairperson or by rotation

TwoTwo JCsJCs Manipur,Manipur, MizoramMizoram andand GoaGoa & other& otherUTsUTs

7/28/2019 Regulatory Freame Work in Inida

10/25

CERCCERC Functions of the Commission (Functions of the Commission (SnSn 79)79)

-- To regulate the tariff of Generation andTo regulate the tariff of Generation andTransmissionTransmission ( Interstate Transactions)( Interstate Transactions)

-- To issue licenses to Transmission and TradingTo issue licenses to Transmission and Trading

ActivitiesActivities

-- To specify Grid CodeTo specify Grid Code

-- To adjudicate Disputes betweenTo adjudicate Disputes between TrTr licensee andlicensee and

Generating CompaniesGenerating Companies

-- To fix trading margin for interstate trading ofTo fix trading margin for interstate trading ofelectricityelectricity

7/28/2019 Regulatory Freame Work in Inida

11/25

POWERS OF CERC/SERC/JCPOWERS OF CERC/SERC/JC

Same power as that of a Civil CourtSame power as that of a Civil Court

Summoning and enforcing the attendance of anySummoning and enforcing the attendance of anyperson and examining him on oathperson and examining him on oath

Discovery and production of any document or otherDiscovery and production of any document or other

material object producible as evidence;material object producible as evidence;

Receiving evidence on affidavits;Receiving evidence on affidavits;

Requisitioning of any public record;Requisitioning of any public record;

Reviewing its decisions, directions and ordersReviewing its decisions, directions and orders;;

7/28/2019 Regulatory Freame Work in Inida

12/25

Appellate Tribunal for ElectricityAppellate Tribunal for Electricity ( ATE)( ATE) Constituted in terms of Section 110 of Electricity ActConstituted in terms of Section 110 of Electricity Act

2003. in April 2004 and commenced its operations2003. in April 2004 and commenced its operationson 21st July 2005on 21st July 2005

Consists of Four members, of which two are judicialConsists of Four members, of which two are judicialmembers and two are non judicial members. Eachmembers and two are non judicial members. Eachbench shall have one Judicial member.bench shall have one Judicial member.

PurposePurpose is to hear appeals against theis to hear appeals against the ordersorderspassed by adjudicating officer or order passed bypassed by adjudicating officer or order passed by

Appropriate Commission.Appropriate Commission. ( note : No jurisdiction on( note : No jurisdiction onregulations issued by Commission)regulations issued by Commission)

Appeal to be filed within 45 days of receipt of theAppeal to be filed within 45 days of receipt of theOrder. And ATE to pass final Orders within 180 daysOrder. And ATE to pass final Orders within 180 daysfrom the date of receipt of appeal. ;from the date of receipt of appeal. ;

7/28/2019 Regulatory Freame Work in Inida

13/25

Central Electricity Authority ( CEA)Central Electricity Authority ( CEA)

Was constituted under section 3 ofWas constituted under section 3 of

Electricity ( supply) Act 1948 butElectricity ( supply) Act 1948 butcontinued under section 70 of EAcontinued under section 70 of EA

2003.2003.

Shall consist of not more than 14Shall consist of not more than 14

members.members.

7/28/2019 Regulatory Freame Work in Inida

14/25

Central Electricity Authority ( CEA)Central Electricity Authority ( CEA)FunctionsFunctions ((to name a few)to name a few)

specify the technical standards forspecify the technical standards forconstruction of electrical plants, electricconstruction of electrical plants, electriclines and connectivity to the grid;lines and connectivity to the grid;

specify the safety requirements forspecify the safety requirements forconstruction, operation and maintenance ofconstruction, operation and maintenance ofelectrical plants and electric lines;electrical plants and electric lines;

specify thespecify the Grid StandardsGrid Standards for operationfor operationand maintenance of transmission lines;and maintenance of transmission lines;

advise the Central Government on anyadvise the Central Government on anymattermatter

7/28/2019 Regulatory Freame Work in Inida

15/25

Forum of Regulators ( FOR)Forum of Regulators ( FOR) The Forum of Regulators (FOR) wasThe Forum of Regulators (FOR) was

constituted vide Notification dated 16thconstituted vide Notification dated 16thFebruary, 2005 in pursuance of theFebruary, 2005 in pursuance of theprovision under section 166(2) of theprovision under section 166(2) of theElectricity Act, 2003.Electricity Act, 2003.

The Forum consists of Chairperson ofThe Forum consists of Chairperson ofCentral Electricity Regulatory CommissionCentral Electricity Regulatory Commission

(CERC) and Chairpersons of State(CERC) and Chairpersons of StateElectricity Regulatory CommissionsElectricity Regulatory Commissions(SERCs).(SERCs).

7/28/2019 Regulatory Freame Work in Inida

16/25

Forum of Regulators ( FOR)Forum of Regulators ( FOR)

Analysis of the tariff orders and otherAnalysis of the tariff orders and otherorders of Central Commission and Stateorders of Central Commission and State

CommissionsCommissions Laying of standards of performance ofLaying of standards of performance of

licensees as required under the Act.licensees as required under the Act.

Undertaking research work inUndertaking research work in--house orhouse orthrough outsourcing on issues relevant tothrough outsourcing on issues relevant topower sector regulation;power sector regulation;

Evolving measures for protection ofEvolving measures for protection ofinterest of consumers and promotion ofinterest of consumers and promotion ofefficiency, economy and competition inefficiency, economy and competition inpower sector;power sector;

7/28/2019 Regulatory Freame Work in Inida

17/25

Few Regulations GoverningFew Regulations Governing

System OperationSystem Operation

The IEGC RegulationsThe IEGC Regulations

Grant of Connectivity and OpenGrant of Connectivity and OpenAccess RegulationsAccess Regulations

UI Charges RegulationsUI Charges RegulationsMeasures to relieve congestion inMeasures to relieve congestion in

real time operation Regulationsreal time operation Regulations

Sharing of Interstate TransmissionSharing of Interstate Transmission

Charge and Losses, RegulationsCharge and Losses, Regulations

7/28/2019 Regulatory Freame Work in Inida

18/25

Impact of Regulatory MechanismImpact of Regulatory Mechanism

on system operationon system operation

Grid StabilityGrid Stability ABT RegimeABT Regime

Better Management of grid throughBetter Management of grid throughenforcement of Intra State ABTenforcement of Intra State ABT

Facilitation of open accessFacilitation of open access Move towards Independent SystemMove towards Independent System

OperationOperation

7/28/2019 Regulatory Freame Work in Inida

19/25

Karnataka CaseKarnataka CaseCERC Levied Penalty ofCERC Levied Penalty ofRsRs. 17. 17 LakhsLakhs

for violation of grid code. ( 6.5.09)for violation of grid code. ( 6.5.09) The Order was appealed before ATEThe Order was appealed before ATE

in appeal No. 94/2009in appeal No. 94/2009 ATE Passed Order on 11.01.2010 andATE Passed Order on 11.01.2010 and

quashed the CERC Orderquashed the CERC Order

CERC Refunded the PenaltyCERC Refunded the PenaltyRecovered.Recovered.

7/28/2019 Regulatory Freame Work in Inida

20/25

Karnataka CaseKarnataka CaseGroundsGrounds

CERC Relied upon SEM ReadingCERC Relied upon SEM Readinginstead of SCADAinstead of SCADA

Action taken by KPTCL ( LDC) forAction taken by KPTCL ( LDC) for

restoring the frequency back to 49restoring the frequency back to 49

Hz not recognisedHz not recognised

7/28/2019 Regulatory Freame Work in Inida

21/25

Karnataka CaseKarnataka CaseClause 5.4.2 of IEGC

(a) As mentioned above the utilitiesshall endeavor to restrict their netdrawl from the grid to within the

respective drawl schedule wheneverthe system frequency is below 49.5Hz. When the frequency falls below

49 Hz requisite load shedding(manual) shall be carried out tocurtail the over drawl.

7/28/2019 Regulatory Freame Work in Inida

22/25

Delhi CaseDelhi CaseCERC Adjudication Case 1 of 2009CERC Adjudication Case 1 of 2009

Delhi SLDC V/s NRLDCDelhi SLDC V/s NRLDC

Delhi SLDC failed to comply with theDelhi SLDC failed to comply with the

directions of NRLDCdirections of NRLDCDelhi SLDC Argues that , it is notDelhi SLDC Argues that , it is not

responsible forresponsible for overdrawloverdrawl.. DiscomsDiscoms

responsibleresponsible

7/28/2019 Regulatory Freame Work in Inida

23/25

Delhi CaseDelhi CaseFacts of the CaseFacts of the Case

Para 5.4.2 (b) of the Indian Electricity (theGrid Code) provides as

Further, in case of certain contingencies

and/or threat to system security, theRLDC may direct an the State LoadDispatch Centre to decrease its drawal bya certain quantum. Such directions shallimmediately be acted upon.

7/28/2019 Regulatory Freame Work in Inida

24/25

Delhi CaseDelhi CaseFacts of the CaseFacts of the Case

7/28/2019 Regulatory Freame Work in Inida

25/25

Delhi CaseDelhi Case Adjudicator rejected the argument ofAdjudicator rejected the argument of

Delhi and held Delhi SLDCDelhi and held Delhi SLDCresponsible for the lapseresponsible for the lapse

Imposed fine ofImposed fine ofRsRs. 50,000 per. 50,000 per

default.default.