AVAILABILITY BASED TARIFF- UI MECHANISM

By S.KEJRIWALExecutive Engineer(Commercial)

ERPC, KOLKATA

Sequence of Events

• Two part Tariff since 1992 (K.P.Rao Committee Report)

• Till late 90’s Govt of India determined tariff as per Section 43A(2) of the Electricity Supply Act, 1948

• Deficiences of tariff regime• Govt appoints M/s ECC,USA in 1994 to

prepare and submit a report

• The study funded by ADB• M/s ECC,USA submits report in Nov,1994• Suggests implementation of ABT• Govt constitutes NTF/RTFs in 1995 to study the

report• CERC established under Electricity Regulatory

Commissions Act,1998 to regulate tariff owned by Gencos owned and controlled by central govt w.e.f 15.05.1999

Sequence of Events.....contd

• Govt pursued its efforts, held due consultations and finally forwarded the ECC report alongwith NTF minutes and a note on ABT to CERC in May 1999

• The matter was heard in CERC from 26-28th of July,1999

• CERC issued ABT order dated 04.01.2000• Order stayed various High courts of the country due to

objections/apprehensions expressed by various SEBs/GENCOs

• Hon’ble Supreme court finally vacated the stay

Sequence of Events.....contd

Implementation of ABT:

ABT was finally implemented in India in the following manner:

• From 01.07.2002 in WR• From 01.10.2002 in NR• From 01.01.2003 in SR• From 01.04.2003 in ER• From 01.11.2003 in NER

Basic Problems in Pre-ABT regime

• Low freq during peak time• High freq during off-peak time• Rapid and wide changes in freq ( apprx 1 Hz in

5-10 minutes)• Frequent grid disturbance resulting in tripping

of generating stations, interruption of supply to large blocks of consumers and disintegration of regional grid

• Damages caused at both load and generation ends remained unquantified and unevaluated

• Operational/Commercial disputes/disagreements amongst various utilities due to conflict of interest

• Absence of suitable incentives and disincentives for those responsible for the problem

• Lack of adequate generation, transmission and distribution capacity

Basic Problems in Pre-ABT regime

Possible Solution

• Maximization of generation along with load curtailment during peak hours

• Backing down of generation to match low demand during off-peak hours

• Imposing suitable incentives/disincentives to ensure efficient grid operation

• Enhancing generation and transmission capacity• Demand side management

PRE-ABT TARIFF STRUCTURE:TWO PART TARIFF:FIXED CHARGE:• Return on equity• O & M expenses• Interest on loan• Interest on Working capital• Depreciation• Income Tax

2. VARIABLE CHARGE:• Primary fuel – Coal/gas• Secondary fuel – Oil

Both Fixed Cost as well as Variable Costs were charged to the beneficiaries in the proportion of actual energy drawn by them during a period

PRE-ABT TARIFF STRUCTURE:

ABT TARIFF STRUCTURE: THREE PART TARIFF:

1. FIXED CHARGE:• Generators assigned target availability• Total fixed cost payable to a generator over the year is linked

to the average annual availability. Hence the name Availability Based Tariff

• Charged to beneficiaries in the proportion of their share in the generating station

2. VARIABLE CHARGE:• Charged to beneficiaries to the extent of their drawal schedule

ABT TARIFF STRUCTURE: THREE PART TARIFF:3. UNSCHEDULED INTERCHANGE(UI) CHARGE:• Actual Generation – Scheduled Generation (For

Generators)• Total Actual Drawal – Total Scheduled Drawal (For

Beneficiaries)• Worked out for each 15 min time block • Based on average frequency of the relevant time

block

ABT TARIFF STRUCTURE: THREE PART TARIFF:3. UNSCHEDULED INTERCHANGE(UI) CHARGE:• Overdrawal/Underinjection under low freq

(Penalty)• Overinjection/Underdrawal under high freq (Nil

or low reward)• Overdrawal/Underinjection under high freq (Nil

or low Penalty)• Overinjection/Underdrawal under low freq

(Reward)

ADVANTAGES OF ABT:

• Incentivises generators to maximise generation during peak hours

• No financial loss due to backing down of generation during off peak hours

• Facilitates merit order despatch• Better system operation • Ensures grid discipline

ADVANTAGES OF ABT:

• Introduces transparency and works as vigilance

• Opens avenue for interstate, inter-regional bilateral trading of power

• Harness surplus captive generation• Embedded generators can sell surplus

power to other SEBs

UI ACCOUNTING – PRELIMINARY PROCESS AND ROLE OF RLDCs:

SCHEDULING:• Each day of 24 hours starting from 00.00 hours be

divided into 96 time blocks of 15 minutes each• Each generating station is to make advance

declaration of its capacity for generation in terms of MWh delivery ex-bus for each time block of the next day

• Based on the above declaration, concerned RLDC shall communicate to the various beneficiaries their respective shares of the available capability

UI ACCOUNTING – PRELIMINARY PROCESS AND ROLE OF RLDCs:

SCHEDULING:• After the beneficiaries give their requisition for power

based on the generation schedules, the RLDC shall prepare the generation schedules and drawal schedules for each time block after taking into account technical limitations and transmission constraints

• The schedule of actual generation shall be quantified on ex-bus basis for generators

• scheduled drawals shall be quantified at their respective receiving points for beneficiaries

UI ACCOUNTING – PRELIMINARY PROCESS AND ROLE OF RLDCs:

SCHEDULING:• In case of any forced outage of a unit, or in case of any

transmission bottleneck, RLDC will revise the schedules.Revision will be effective from 4th time block

• Any beneficiary/generator may also request RLDC for revision of Schedule. Revision will be effective from 6th time block

• RLDC is also entitled to revise (if need be), the schedules during the day in the interest of better system operation.Revision will be effective from 4th time block

• In the event of any grid disturbance, the schedules of both generation and drawal shall be deemed to have been revised to be equal to their actual generation/drawal

UI ACCOUNTING – PRELIMINARY PROCESS AND ROLE OF RLDCs:

METERING AND METERDATA PROCESSING: ABT complaint Special Energy Meters (SEM of appropriate

accuracy class) to be installed by CTU at : • HV side of GT (For Generators)• All outgoing feeders (For Generators)• Auxiliary and Station Transformers (For Generators)• CTU-State interface including state end (For

States/beneficiaries)• Both ends of inter-state tie lines (For States/beneficiaries)• Inter-regional interfaces

UI ACCOUNTING – PRELIMINARY PROCESS AND ROLE OF RLDCs:

METERING AND METERDATA PROCESSING:

Special Energy Meter (SEM) records :

• 15 min time block wise Actual energy drawal/injection starting from 00 hrs for 96 blocks

• Cumulative Whr• Reactive energy drawal/injection for the entire day at HV

condition• Reactive energy drawal/injection for the entire day at LV

condition

UI ACCOUNTING – PRELIMINARY PROCESS AND ROLE OF RLDCs:

METERING AND METERDATA PROCESSING:

• All Regional entities including beneficiaries/generators are responsible for downloading raw meterdata and sending it to RLDC

• RLDC to further process the data and transmit the processed data to RPC for accounting purpose

• RLDC to also send time block wise frequency for each day of the week along with time block wise schedule for each regional entity for each day of the week

• RLDC to also intimate any discrepancy with respect to addition/outage of any line in the network of any entity, outage of any generating unit, any erroneous metering, and any other information having commercial implication

UI ACCOUNTING –ROLE OF RPCs:

• Design program as per the relevant CERC Regulation incorporating various rate/volume cappings and UI rate vector for accounting

• Every week download the processed meterdate along with schedules and frequency sent by RLDC

• Incorporate the changes/discrepancies in the network and metering with respect to the previous week

• Feed inputs(Actual, Schedule and frequency) to the program

UI ACCOUNTING –ROLE OF RPCs:

• Calculate Total Actual drawal/injection, Schedule drawal/injection and UI/Deviation charges including additional UI/Deviation charges for each regional entity for each day of the week

• Calculate Total Actual drawal/injection, Schedule drawal/injection and UI/Deviation charges including additional UI/Deviation charges for each regional entity for entire week

• Apportion any pool surplus/deficit among the beneficiaries• Issue the final weekly account and publish in the website• Revise the account as and when required

UI Rate Vector

In 2000 CERC ABT order, Frequency band fixed at 50.5 Hz to 49.5 Hz

UI Rates : • For f > 50.5, R=0• For 49<f<50.5, R increases at 4.8 p/u for every 0.02

Hz decrease• At f=49, R= 360p/u (subsequently revised to 420 p/u)• Maximum UI rate linked to price of diesel generated

power

UI Rate Vector

In 2004 CERC Tariff regulation effective from 01.04.2004:UI Rates : • For f > 50.5, R=0• For 49<f<50.5, R increases at 8 p/u for every 0.02 Hz

decrease• At f=49, R= 600p/u (subsequently revised to 570 p/u

w.e.f 01.10.2004)• For Central Sector generating stations, Actual generation

restricted to 105% of DC in a time block and 101% of DC over a day

UI Rate Vector NRLDC filed a petition in CERC in 2006 praying

for increase in UI rate alongwith imposition of volume capping:

Reasons: • Consistent low freq• Deliberate disabling of UFR• Non requisitioning of liquid fuel generation• Payment defaults

UI Rate Vector• On 26.04.2007 CERC issued notification for UI charges where

maximum UI rate was 930p/u.• Challenged by UPPCL in Allahabad High court• Suo moto petition in june 2006 UI Rates:• For f > 50.5, R=0• For 49.8<f<50.5, R increases at 6 p/u for every 0.02 Hz decrease• At f=49.8, R= 210p/u• For 49.5<f<49.8, R increases at 9 p/u for every 0.02 Hz decrease• At f=49.8, R= 345p/u• For 49<f<49.5, R increases at 16 p/u for every 0.02 Hz decrease• At f=49.8, R= 745p/u