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BEFORE THE HARYANA ELECTRICITY REGULATORY COMMISSION BAYS No. 33-36, SECTOR-4, PANCHKULA- 134112, HARYANA
Case No. HERC/PRO – 46 of 2018
DATE OF HEARING : 17.12.2018 DATE OF ORDER : 07.01.2019
IN THE MATTER OF:
Petition under section 86(1)(b) of the Electricity Act, 2003 seeking approval of the
Hon’ble Commission for procurement of 400MW power through Transparent e-
bidding process under DEEP Portal conducted by PFCCL for the 2500 MW Pilot
scheme in accordance with the guidelines issued by the Central Government and
adoption of the tariff under section 63 of the Electricity Act, 2003.
Petitioner
Haryana Power Purchase Centre, Panchkula (HPPC)
Present On behalf of the Petitioner (Public Hearing)
1. Shri O.H. Sharma, Director/UHBVNL
2. Shri. Amit Diwan, CEO/UHBVNL
3. Shri R.K. Sharma, CE/HPPC
4. Shri Randeep Singh, SE/HPPC.
5. Shri Ravi Juneja, AEE/HPPC.
6. Shri Pawan Bains, XEN/HPPC
QUORUM
Shri Jagjeet Singh, Chairman Shri Pravindra Singh Chauhan, Member
ORDER
Brief Background of the Case
1. Haryana Power Purchase Centre (HPPC) on behalf of the distribution licensees i.e.
UHBVNL and DHBVNL, has filed the present petition for approval of procurement of
400 MW power under Pilot Scheme of Govt. of India and adoption of tariff under
Section 63 of the Electricity Act, 2003 discovered through e-bidding under Pilot
Scheme.
2. HPPC has submitted as under:-
a) That Ministry of Power (MoP), GOI notified a Pilot Scheme dated 06.04.2018 for
procurement of 2500 MW aggregate power on behalf of the willing DISCOMS in
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India for three years (under Medium Term) through PFC Consulting Limited
(PFCCL) as Nodal Agency and facilitated by an Aggregator.
b) That MoP issued bidding documents comprising of (i) Standard Bidding Document
which include the Model Pilot Request for Qualification (“MPRFQ”) and the Model
Pilot Request for Proposal (“MPRFP”); (ii) Model Pilot Agreement for Procurement
of Power (“MPAPP”); (iii) Model Pilot Power Supply Agreement (“MPPSA”)
(collectively, the “Model Pilot Bidding Documents”) to be adopted by the Nodal
Agency for procurement of power from the Power Producers through a process of
open and transparent competitive bidding through the electronic platform of
Ministry of Power, Government of India (DEEP e-Bidding Portal).
c) That MoP issued Guidelines in this regard vide Resolution dated 10.04.2018,
wherein PTC India Limited was designated as Aggregator to sign Agreement for
Procurement of Power with the Successful Bidder(s) and back to back Power
Supply Agreements with the Distribution Licensee(s). In the Model MoP Guidelines,
this Scheme has been referred to as “Pilot Scheme” and shall be referred as such
hereinafter.
d) It has been submitted that the tariff determined through the DEEP e-Bidding
process based on aforesaid Guidelines for the purpose of Agreement for
Procurement of Power and Power Supply Agreement shall be adopted by the
appropriate Commission in pursuance of the provisions of Section 63 of the Act.
e) That the objectives of the Pilot Scheme as submitted by the Petitioner are as under:
a. To enable DISCOMS to meet their deficits and/ or replace their costly
generation with cheaper and reliable power without any short term market
volatility.
b. To enable successful bidder (Generator) to start their loan servicing and
honouring the financing agreements signed with the lenders.
c. To enable Lenders to recover their debt and reduce NPAs which eventually
helps entire banking system.
d. Power purchased from successful bidders shall be sold to the States in need
of cheaper power or replace costly power from inefficient vintage plants.
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f) That Haryana Purchase Center (HPPC) gave in-principle consent for procurement of
400 MW power for a period of three years under the Pilot Scheme on 29.05.2018
after taking concurrence from Steering Committee for Power Planning (SCPP).
g) That PFC Consulting Limited (PFCCL) issued the tender document on May 1, 2018
on DEEP Portal. In response, eight bidders submitted their Bids. The financial bids
were opened on 06.07.2018. The total quantum of 1900 MW Power was qualified
after L1 matching at the tariff of Rs 4.24/kwh (for scheduling at 55%) which
includes fixed charge component of Rs 0.01/kwh.
h) That the Tariff is fixed for a period of 3 years without any escalation and Discoms
shall be required to schedule a minimum of 55% of the contracted Capacity.
Generator/Aggregator shall have the option to sell the power, if not scheduled by
the Discoms, to power Exchange/third party. In the event of Discoms failing to
schedule the minimum 55% Power in any month, the Discoms shall be liable to pay
compensation for such shortfall in energy, corresponding to 55% of the Contracted
Capacity, at the rate of the difference between the tariff payable and the monthly
average MCP price for RTC Power at Power Exchange (IEX) for such month.
i) That Discoms would get discount in tariff in case scheduling of power is more than
55% of the contracted Capacity. The slab-wise discounted tariff would be as under:
S. No. Off-take of Contracted Capacity
Tariff (Rs/kwh) (1% discount in tariff applicable for
incremental 5% off-take beyond 55%) 1 Up to 55% 4.240 2 >55% up to 60% 4.198 3 >60% up to 65% 4.155 4 >65% up to 70% 4.113 5 >70% up to 75% 4.070 6 >75% up to 80% 4.028 7 >80% up to 85% 3.986 8 >85% up to 90% 3.943 9 >90% up to 95% 3.901
10 >95% up to 100% 3.858
The above tariff is at Generator-CTU Interconnection Point and Discoms shall be
required to obtain Open Access for evacuation of Power. Trading margin of 5
paise/kWh of aggregator (PTC) for this Pilot Scheme will be extra subject to the
approval of the Commission.
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j) That the total 7 projects with cumulative capacity of 1900 MW were successful
bidders. The name of the projects are as follows:
S. No. Name of Project Capacity offered (MW)
1 RKM Powergen, (Chhattisgarh) 550
2 Jhabua Power Ltd. (MP) 100
3 MB Power (Madhya Pradesh) Ltd. 175
4 SKS Power (Chhattisgarh) 300
5 Jindal India Thermal (JITPL) (Orissa) 125
6 IL&FS Energy (Tamilnadu) 550
7 JP Power Ventures Ltd (MP) 100
k) That PTC, in response to HPPC query regarding offtake of power for eight months
instead of full year, informed that developers are ready to relax compensation
liability on state utility for 4 months if state surrenders the power completely for
those months. To save transmission charges, it has been agreed that Medium Term
Open Access (MTOA) shall be obtained for 8 months only in a year. However,
Discoms shall have option to schedule the Power for 12 months in case of any
exigency or otherwise and in that case, the power for remaining 4 months will be
scheduled under STOA.
l) That tariff of this power will remain fixed for the next three years. So there will be
no cost escalation except for change in law.
m) That the State Thermal Plants as also CLP and APCPL (NTPC) could not run to their
full capacity during this year because of shortage of coal despite the high demand in
the State. At present also, there is continued shortage of coal in NTPC/CLP Plants
due to which one of the units is under forced outage.
n) That this power will help to cope up with the peaking season requirement as well as
daily peak due to flexibility in scheduling Power from 55% to 100% of the
contracted capacity.
o) That during the current year, the purchase prices in power exchange have been
extremely high and may continue to do so because of surge in demand in view of
ensuing Lok Sabha elections.
p) That there is possibility of disruption of Power from M/s Adani Power Plants (1424
MW) and CGPL plant (380 MW) (both Case-I Projects) in the near future, if no
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solution is found by High Power Committee constituted by Govt. of Gujarat for
resolution of their alleged financial hardship.
q) That, in view of above, Haryana is in the urgent need of procurement of 400 MW
power under this Pilot Scheme. The tariff emerged through competitive bidding
undertaken by MoP, GoI through PFCCL is quite reasonable and it will further
safeguard the interests of the consumers of Haryana to continue getting assured
supply. The demand supply position without considering Adani Power & CGPL
power has been supplied.
r) That SCPP in its 48th meeting held on 06.10.2018 approved the purchase of 400
MW Power under this Pilot Scheme for eight months a year (i.e. April to November).
However, Discoms shall have option to schedule the Power for 12 months in case of
any exigency or otherwise. The SCPP has recommended to file a petition before the
Commission for approval of the source under section 86(1)(b) and for adoption of
tariff for procurement of 400 MW Power under Pilot Scheme as per Section 63 of
the Electricity Act 2003.
s) That in view of the above, the Commission is requested as under:
i) Approval of the Commission for procurement of 400MW under Pilot
Scheme of Govt. of India, under section 86(1)(b) of the Electricity Act, 2003.
ii) Adoption of tariff under section 63 of the Electricity Act, 2003 as
determined for the successful bidders following the process of e-Bidding
under Pilot Scheme.
iii) Approval of trading margin of 5 paise/kWh for aggregator (PTC) as per
MoP Resolution dated 10.04.2018.
iv) Approval of deviations such as scheduling of Power for eight months in a
year except in case of exigencies in Power Supply Agreement (PSA) from
the Model Pilot Bidding Documents to be executed between Discoms and
Aggregator for procurement of 400 MW Power under this Pilot Scheme.
v) Pass such order as deemed fit by the Commission.
Proceedings in the Case
3. After preliminary scrutiny of the Petition, the Commission sought certain additional
information from HPPC vide memo no. 2112/HERC/Tariff dated 12.10.2018. HPPC,
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vide memo no. Ch-62/CE/HPPC/XEN/CTP-II/Pilot Scheme dated 17.10.2018
replied as under:-
Sr. No. HERC Observation HPPC Reply
1. The Demand Supply position
has been estimated without
considering Adani Power &
CGPL Power. However, No
evidence regarding refusal of
power by Adani Power &
CGPL has been submitted
along with the petition.
The Demand Supply has been estimated
without considering Adani (1424 MW) &
CGPL (400 MW) due to uncertainty of Adani
and CGPL power. It is matter of record that
Adani Power had stopped supplying power to
Haryana citing financial hardships from
11.03.2018 to 21.05.2018 during the current
year. Further, Govt. Of Gujarat on a reference
from Government of India (GoI) has set up a
High Power Committee (HPC) to mitigate the
financial hardship being faced by APL & CGPL.
The CEO of M/s APL informed In the meeting
held on 03.10.2012 at Panchkula that if
financial hardship issue is not resolved, APL
will not be in position to supply power
beyond a few months.
It is further added that Short Term Power
Purchase Cost has already touched up to Rs.
16.49 per kWh in the month of Sept.-2018.
2. Further, Status of supply of
Power by state owned power
projects has not been
supplied.
State owned power projects including APCPL
& JPL, Jhajjar are facing acute shortage of coal.
During FY 2017-18, HPGCL projects have only
been able to generate on an average 43%
(1170 MW out of 2720 MW) of installed
capacity. Further, one uit of JPL Jhajjar has
remained under forced shutdown multiple
times due to shortage of coal (Annexure-I).
Similarly, APCPL has also shut down its units
because of shortage of coal from time to time.
Coal stock in HPGCL planrs, JPL and APCPL
Jhajjar has remained critical since June 2018
and almost never exceeded 7 days. Present
coal stock is merely sufficient for generation
for 3 to 5 days (Annexure-II).
In case Power is discontinued by Adani &
CGPL, state owned plants will not be able to
meet the shortage of 1824 MW due to paucity
of coal.
3. It is also directed to submit
status report on the review of
HPPC has reviewed the PPAs to explore the
possibility for cancellation of non-economical
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non-economical PPAs for
cancellation including details
of stranded power capacity
for which fixed charges are
being paid while energy is
being under drawn and
disposed of on short term
basis.
PPAs. Three such PPAs (Anta, Auraiya and
Dadri Gas Plants) have been identified and
placed before the SCPP, which is under
consideration.
4. The case was heard on 26th October, 2018 wherein the Petitioner reiterated its
written submission, which for the sake of brevity are not being reproduced herein.
The Commission, vide its Interim Order dated 31.10.2018, sought certain additional
information from HPPC and considered it appropriate to elicit public views on the
matter & fixed the public hearing for 17.12.2018.
5. HPPC vide memo no. Ch-68/CE/HPPC /XEN/LTP-II/Pilot Scheme dated 30.10.2018
replied as under:-
a) That the list of pending petitions in HERC for Source
Approval/Signing/Extension of PPA are enclosed. From the perusal of the same, it is
observed that out of total 1900.55 MW offered capacity, 481.75 MW Power is
already flowing to Haryana and is included in the present tied up capacity of 11700
MW. The Hydro power of 358.30 MW which is included in 481.75 MW, is presently
available at APPC under an interim arrangement. The final tariff has to be
determined by the HERO and in case that is not acceptable to the parties, there is an
exit clause without any obligation on either of the parties. So any concern on the
cost of power is taken care of as far as this quantum of power is concerned.
b) That out of the above 1900.55 MW, 950 MW of Solar Power has been
proposed to meet the RPO obligations. The effective percentage of power from these
solar sources @19% CUF shall only be 180.5 MW. The balance 400 MW, which is the
petition under consideration, is medium term power for three years under the Pilot
Scheme of Ministry of Power, GoI through PTC/PFC.
c) That the actual yield against this proposed capacity tie up of 1900.55 MW
shall be approx. 859 MW as per the standard PLF of various sources of power (Solar
@19%, Hydro @55%, Thermal @90%).
d) That in view of the increase in consumption and peak demand on year on
year basis, there is a need of capacity addition of at least 600 to 800 MW every year,
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to meet the power requirement of the State. This will be clearly evident from the
demand supply position of the state during the last 5 years.
e) That Peak power demand of the State increased from 8182 MW during FY
2013-14 to 10295 MW during FY 2018-19 corresponding to a CAGR of 4.7%.
Accordingly, the tentative peak demand in FY 2019-20 shall be approx. 10800 MW.
The power consumption of the State during this period increased from 386049 LUs
to 465285 LUs (CAGR of 4.78%). This is in spite of a comparatively better monsoon
during the FY 2018-19. In view of the increase in consumption and Peak demand on
year on year basis, there is need of capacity addition of at least 600 to 800 MW per
year. On the power availability side, presently, all the thermal power generating
stations located in the State i.e. HPGCL units. APCPL & CLP are facing acute shortage
of coal. In fact the actual capability to generate vis a vis the installed capacity of
HPGCL. JPL and APCPL Jhajjar has drastically reduced to 55% during the current
year against a normative capability of 80% due to shortage of coal. This shortage is
likely to continue going forward for another 2-3 years.
f) That GMR (300MW) and Lanco Amarkantak (300 MW) are also on the
verge of becoming NPAs having reportedly defaulted on payment to lenders.
Moreover, it is a matter of record that Adani Power did not supply power to
Haryana citing financial hardship from 11.03.2018 to 21.05.2018. Further, the CEO
of M/s APL informed in the meeting held on 03.10.2018 at Panchkula that if
financial hardship issue is not resolved. APL will not be able to sustain power
generation for long. Similar views have been expressed by CGPL (400 MW).
g) That in a recent development, Govt. of Gujarat has approached the Apex
Court vide the Impleadment Application, Hon'ble Supreme Court has allowed the
appeal of Govt of Gujarat with the direction to CERC to adjudicate the matter as per
the media reports, as the order is yet to be listed. However, the matter has yet to be
heard in CERC and the outcome of the same decides the future of these projects.
Therefore, due to difference of opinion regarding expectations of Generators and
procurers and as such uncertainty looms large for continuation of supply from CGPL
and APL.
h) That in view of the above developments the Short Term Power Purchase
Cost has already touched up to Rs.16.49 per kWh in the month of Sept.-2018. With
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an increase in demand in the next few months owing to Elections, the power
availability position vis-a-vis the cost is likely to be very tough.
i) That procurement of this 400MW power is for a medium term of 3 years
which is more of a contingency plan rather than a permanent obligation. This power
has been available through a transparent &- bidding process conducted by PFCCL
for the 2500 MW Pilot scheme in accordance with the guidelines issued by the
Central Government. This power has a fixed cost liability of just 1 paise/kwh. The
Haryana Discoms have negotiated that they would be obligated to schedule this
power only for 8 months during April to November and for the remaining months
the Haryana will have the option to source this power. Considering that during these
8 months, the scheduling of this power would be approx. 95%, the effective cost
from this source would come down to Rs. 3.86 per unit against Rs. 4.24 @ 55%
scheduling. Further this power has no cost escalation and the availability of coal is
also assured under the scheme. This power may also be cheaper than the average
power purchase cost of long term power inside the state for last five months (April
— August 2018) which is about Rs 4.78/kwh.
j) It has been further submitted that one unit of CLP was under forced shut
down for 80 days due to non-availability of coal in current fiscal year even after
lifting of more than 5,00,000 MT of coal on “As is where is” basis due to lack of
infrastructure and transporting arrangement of coal companies. Further, with
respect to purchase of 400 MW power through flexibility coal scheme, no bid has
been received in response to HPPC tender even after extension of bid. Moreover, it
was meant for replacement of existing costly power with a cheaper power and is not
a capacity addition.
k) HPPC further submitted that cost of pilot scheme power at Haryana
periphery will be Rs. 0.68/kwh (approx.) (transmission charges, transmission losses
and PTC trading margin) over and above the CTU interconnection point cost i.e. Rs.
4.24/kwh @ 55% scheduling and Rs. 3.68/kwh @ 95% scheduling. The status of
backing down of HPGCL power stations during last six months, done as per their
position in merit order, is enclosed.
6. Public hearing in the matter was held on 17.12.2018. In response to the Public
Notice issued by the Commission in the present case, the stakeholders/general
public as listed below filed their objections/comments:-
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(A) Sh. R.K. Jain, Advisor/ Legal & Power
(B) Sh. Sunil Kumar Nehra
(C) Sh. Manoj Kumar, Yamunanagar
(D) Sh. Mukesh Kumar, Jind
(E) Sh. Dinesh Batra, Sonepat
A summary of the objections filed by the stakeholders, reply filed by the HPPC and
Commission view thereto is as under:-
6.1 Objections filed by Sh. R.K. Jain
The Commission has issued a Public Notice to discuss the Petition filed by the Haryana Power
Purchase Centre (HPPC) seeking approval of the Hon’ble Commission to purchase 400 MW
power against the e-bidding carried out by PFCCL. We are thankful to the Commission for
giving us opportunity to give our views on the proposal as such action of the Distribution
Utility is bound to affect the consumer tariffs and other connected Open Access Charges. We
have tried to study the proposal and our comments are as follows;
1. HPPC has been submitting various proposals to the Hon’ble Commission from time to
time seeking approval for purchase of additional power from different sources. Before
these are considered for approval, we would request the Hon’ble Commission to
verify the following basic parameters,
a) Whether there is need to buy extra power in the State?
b) If yes, then should it be round the clock power or in specific predetermined time
slots?
c) Having established the need, another important parameter will be the tariff at
which the additional power is to be purchased?
d) What will be the impact of this power on the overall tariff of to be paid by the
consumers?
e) How will this power affect the Open Access Charges payable by the consumers for
open access power, i.e. Cross Subsidy Surcharge and the Additional Surcharge?
2. We would try to address the above issues in following paragraphs;
a) Whether there is need to buy extra power in the State?
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In every successive ARRs the Distribution Licensee has been reporting that they have
surplus power and the same has to be sold over the Power Exchange at relatively much lower
rates. The quantum of such surplus power is not a small percentage of sale within the State
but a major share. If we look at the ARRs of the last few years, the figures are quite revealing,
In the recent ARR order date 15.11.2018, Hon’ble Commission observed as under for
such surplus power and resultant need for inter-State sale of this power,
3.2.10 Inter-State sale of Power and Power purchase cost for Distribution licensees
UHBVNL and DHBVNL have indicated interstate sale of 3033.07 MUs and 4025.69 MU
respectively for the FY 2018-19 and revenue from interstate sales has been considered at 80%
of average variable power purchase cost and accordingly have projected revenue from
interstate sale at Rs. 631.56 Crores and Rs. 836.96 Crores for UHBVNL & DHBNVL, respectively.
The Commission has considered the above and is of the considered view that any loss on
account of interstate sale of power for FY 2018-19 ought not to be passed on to the electricity
consumers of Haryana.
The Commission, in its earlier Orders, had directed the licensee to explore the possibility of the
surrendering expensive long-term power that is in excess of its requirement. In case the
licensee is unable to sell its contracted power at the rate of its energy cost, it is expected to
back down the units to that extent so that the loss on account of power purchase is
minimised. It has been observed that, at times, the Licensees are forced to back down its
contracted long term power due to less demand whereas the licensees have been agreeing to
the additional allocation done by the Ministry of Power out of the unallocated portion of the
Central Generating Stations which is not at all justified. Any such allocation must be
surrendered at the earliest and a compliance report be filed in the Commission within one
month.
However, the Commission observes that no such report has been filed by the licensee. The
Commission reiterates its directions and expects the licensee to comply with all directions at
the earliest.
In further analysis of the ARR, Hon’ble Commission found that out of the power
purchased from sources outside the State nearly 45% power was such which had to be sold
outside the State. This was nearly 20% of the total power sold within the State.
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The HPPC has already filed various proposals to buy power from different sources
under Petition Nos. PRO-1, 14, 15, 19, 23, 32, 33, 35, 40, 41, 42, 44, 45 and now 46 of 2018.
These proposals involve over 3500 MW. Hon’ble Commission may kindly have a holistic view
on all these proposals as a single proposal.
b) If yes, then should it be round the clock power or in specific predetermined time
slots?
The Hon’ble Commission has already seen that the Distribution Licensees are having
surplus power especially during off-peak load hours. With this scenario it is necessary that the
Distribution Licensees do not buy RTC power. If need be it may be procured for the time
when the State is short of power.
c) Having established the need, another important parameter will be the tariff at
which the additional power is to be purchased?
The Distribution Licensee has been reluctant to buy RE Power from sources located in
the State at the rate approved by the Hon’ble Commission. Rather the Utilities wrote to the
State Govt. that they could buy such power at the APPC. This is basically in violation of
Regulation 64(3) of the HERC/23/2010/1st Amendment/2011 Regulation, which read as
under:-
64(3) In case the renewable energy generating company offers to sell energy generated by it
from its renewable energy generating station located in Haryana to the distribution licensee
at the rates determined by the Commission, the distribution licensee shall not refuse to
purchase power from such generating company, without prior approval of the Commission.
Thus the power to be purchased by the Distribution Licensee should not be at a tariff
higher than the APPC approved for the respective year.
d) What will be the impact of this power on the overall tariff of to be paid by the
consumers?
It needs to be appreciated that the tariff allowed to any new generator will result in
the consequential increase of the APPC and finally of the tariff to be charged from the
consumers. Moreover on the one hand the Licensee will buy power at higher rate and then
sell a substantial portion outside the State as surplus power. This is bound to harm the
interest of the consumers of the State.
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e) How will this power affect the Open Access Charges payable by the consumers for
open access power, i.e. Cross Subsidy Surcharge and the Additional Surcharge?
Any increase in APPC or Bulk Supply Rate for the Distribution Licensee will have
consequential effect on the Cost of Service (COS) which in turn figures in the determination of
Cross Subsidy Surcharge to the Open Access Consumers.
Another impact of the surplus power would be the direct impact on power backed
down and generation remaining stranded. This will have direct impact on the determination
of Additional Surcharge to be paid by the Open Access Consumers. The State Utility on the
one hand buys extra power and then passes on the adverse impact on the consumers buying
power through open access. Even at present, the Additional Surcharge determined by the
Hon’ble Commission for the year 2018-19 is one of the highest in any State and not based on
factual data but worked out on the half-baked figures supplied by the Licensee for which
Hon’ble Commission has observed as under.
The Additional Surcharge of Rs. 1.13/kWh shall be applicable to the consumers of
Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN)
(form the date of this Order) who avail power under the Open Access mechanism in terms of
Haryana Electricity Regulatory Commission (Terms and Conditions for Grant of Connectivity
and Open Access for Intra-State Transmission and Distribution System) Regulations, 2012,
from any source other than the distribution licensees. The Commission shall review the issue
of calculation of Additional Surcharge upon the receipt of detailed information on the
concern raised by the beneficiaries regarding certain reliefs.
Reply by HPPC:-
a) Whether there is need to buy extra power in the State?
The observation of Sh. R.K. Jain that the proposals of HPPC involving power
procurement of 3500 MW are pending at HERC is factually wrong. As per the details
given in the enclosed Annexure-I, proposals for procurement of only 1965.3 MW of
power are presently pending with the Hon’ble Commission. Out of this, 1328.3 MW
pertain to procurement of RE Power, which Discoms are mandated to procure to meet
RPO, 215.76 MW pertaining to PRO-32 and 41 of 2018 is the power already being
supplied to Discoms from the sources already approved by the Hon’ble Commission and
included in the tied up capacity of 11,700 MW and 16.3 MW is the Hydro power from
Kishan Ganga HEP, the petition in respect of which has earlier been dismissed by the
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Hon’ble Commission. So, in fact, it is only the procurement of 400 MW power through
transparent e-bidding process under DEEP Portal, being conducted by PFCCL (for a total
capacity of 2500 MW under Pilot Scheme) which is presently under consideration of the
Hon’ble Commission. Regarding, the proposals for the RE Power, it is submitted that most
of this power would be available after 2 to 3 years.
It needs to be noted that the State of Haryana has a peculiar demand scenario
different from the other States where the demand during the year varies in narrow band
only. In Haryana, the peak demand exceeds 10,000 MW in peak summer season where as
in the lean season it remains between 5000-6000 MW only. Against tied up capacity of
11,700 MW, the actual availability with all the tied up sources available, works out to
about 8,500 MW. This availability further reduces in case of non-supply of coal as per the
approved coal linkages to the thermal power projects with which Discoms have entered
long term PPAs, which has been the case in the recent past. To face such an eventuality,
the Discoms have to go for purchase of power from power exchange to meet the shortage,
which is costlier, and if it is not available the Discoms will have to resort to power cuts.
The matter was deliberated internally, and it was felt that to mitigate this shortfall in
power during peak season, HPPC should resort to some suitable option where the fixed
charge liability is not there and the power is available at fixed per unit price for the
interim period of three years, after which it is expected that the coal supply will improve
in the presently tied up PPAs. This interim arrangement for three years will not only help
the consumers get continuous supply but would also help the Discoms to manage the
power demand scenario without exposure to the market driven electricity prices.
b) If yes, then should it be round the clock power or in specific predetermined
time slots?
The power being arranged under unforeseen force majeure condition of non-
materialization of linkage fuel is round the clock power for peak season only from April
to November i.e. 8 months in a year. The Discoms would not be required to pay any fixed
charges including POC for the remaining 4 months of the year. Moreover, a provision has
been made in the draft PPA as per which power can also be scheduled in lean season of
four months, in case of any exigency.
c) Having established the need, another important parameter will be the tariff
at which the additional power is to be purchased?
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It is already mentioned in the petition that the price varies from Rs. 4.24 at 55%
PLF to Rs. 3.86 at 95 % PLF, so more the power we schedule lesser will be the per unit
price without any fixed cost liability. Moreover, the price will remain same during the
period of three years as there is no price escalation clause.
d) What will be the impact of this power on the overall tariff to be paid by the
consumers?
All possible efforts are being made to keep the APPC at the same level except that
it is aligned with the escalation allowed by the Hon’ble Commission year-to-year basis on
coal etc. It is felt that there would be no impact on the consumer tariff in terms of
increase in APPC. If at all it is there, it would be negligible.
e) How will this power affect the Open Access Charges payable by the
consumers for open access power, i.e. Cross Subsidy Surcharge and the Additional
Surcharge?
The aggregate availability of power in the State grid remains at the same level, as
the present scheme is to meet the power shortfall, on account of non-materialization of
coal supply against approved coal linkages, through alternate means. It is, therefore, felt
that it may not result in any increase in cross subsidy surcharge or additional surcharge.
It is, however, submitted that Discoms are also bound to keep standby power
arrangement for the open access customers. In case, cheaper option is not there in
market they may fall back to Discoms for power supply. Hence the Discoms are serving
their interest by arranging the power supply during peak hours at affordable rates when
market is trading at higher level.
6.2 Objections filed by Sh. Sunil Kumar Nehra
1st Observation
1. It is very strange as to how a person can submit objection prior to 30.11.2018 when
the public notice itself has been published in the news paper i.e. Tribune on
30.11.2018 and last date for filing objection is also 30.11.2018. What is the purpose
of such public notice issued on the last date is beyond the perception of a prudent
person. Whether this notice is just an eyewash in order to procure/approve the
power procurement without allowing the public to have any effective say and
preventing it from making proper objection due to want of time with regard to
power procurement. Public is the end user and consumers and the burden of this
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unnecessary power procurement is to be borne by the public. It has been stated in
the notice that petition and draft discussion paper are available on the website of
HERC is misleading and false as there is no such document available on website.
2. There is no need of power procurement which can be seen from the ARR Tariff
Order dated 11.07.2017 and 15.11.2018. As per these orders 7771.8 Millions Units
were available for sale outside the state of Haryana @ Rs 2.42/Unit in 2017-18
while as per order dated 15.11.2018 there is 9857.66 Millions Unit surplus power is
available for sale @ Rs. 2.51 per unit outside the state of Haryana.
3. It is beyond the perception of a consumer that HPPC, Discoms i.e. UHBVN & DHBVN
and Commission is protecting whose interest, surely, the power procurement can
not be in the interest of public as the domestic consumer is made to pay through
nose as he is required to pay Rs. 7.10 per unit besides other charges, whereas
surplus power is being sold at as low as 88 paise per unit. If the surplus power
which is being sold at throw away price is sold to industrial users at prevailing rate
then UHBVN & DHBVN can supply power for free to all the domestics consumers of
Haryana and even thereafter it would have several thousand crores of rupees as
profit. As per order dated 11.07.2018 domestic consumption projection of DHBVN
(4859 MU) and UHBVN (3059.87 MU) was 7918.87 Millions Unit whereas surplus
power available for sale outside Haryana would be 9857 Millions Unit. This year
both the discoms would be selling 27% more power than they had sold last year.
Where is the need for power procurement that to in blatant violation of statutory
provisions.
4. It is pertinent to mention here that debt of DHBVN & UHBVN to the extent of Rs.
25950 Crores had been taken over from public money under UDAY MOU. Whether
public money is meant to be squandered by HPPC, UHBVN & DHBVN.
5. That it is also evident from the sale of surplus power which is sold at throw away
price, there is no need for any power procurement which can be seen from the sale
of surplus power at as low as 88 paise per unit as obtained through RTI is given in
the table below.
Sl No Project Unit (LUS) Amount Rate/Unit 1. TATA 79.9982 17805660 2.23 2. IEX 6873.40468 1366867746 1.99 3. PGCIL UI 3596.48843 315332407 0.88 4. HVPNL UI 343.02819 51804313 1.51
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Total 10892.9195 1751810126 1.61
6. The very purpose for which Commission for which it has been created and Discoms
have been provided autonomy has been frustrated by such move which is in blatant
violation of statutory provisions. Commission is required to protect the interest of
consumers and it is expected that it not only ensure compliance of the statutory
provisions but it also comply with the statutory provisions and regulations framed
by it.
7. Before issuing such notice, commission is required to ensure whether there is any
need for power procurement or not as mandated by Electricity Act, 2003 as well as
conditions 20 & 21 of Licensee Regulations 2004 which are reproduced hereunder
for ready reference:
“20 Load Forecast - The Licensee shall on an annual basis: (a) forecast the demand
for electricity within the Area of Supply in each of the next succeeding 10 years; (b)
prepare and submit such forecasts to the Commission in accordance with the
guidelines issued by the Commission from time to time; and (c) co-operate with the
State Transmission Utility in the preparation of electricity demand forecasts for the
state of Haryana in such manner as the State Transmission Utility reasonably
considers appropriate.
21 Power Procurement Procedure - 21.1 The Licensee shall in all circumstances
purchase electrical capacity and/or energy in an efficient and economical manner
under a transparent procurement process as approved by the Commission and
following the guidelines issued by the Commission from time to time relating to
preparation of load forecasts, power procurement plan and power procurement
procedure. 21.2 The Licensee shall not purchase electrical capacity and/or energy
without approval of the Commission under the terms of condition 21.1 except in the
case of short term purchases for less than 6 months at a rate not more than the bulk
supply rates approved by the Commission. 21.3 An approval required under
condition 21.2 shall be granted when the Licensee has demonstrated to the
Commission's satisfaction that: (a) electrical capacity and/or energy is necessary to
meet the Licensee's service obligation in accordance with the Act and is consistent
with the approved load forecast and power purchase plan (b) the Licensee has
examined the economic, technical, system and environmental aspects of
commercially viable alternatives to the proposals for purchasing electrical capacity
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and/or energy (including arrangements for reducing the level of demand) and such
examination has been carried out- in a manner approved by the Commission. 21.4
The Commission shall dispose of the application within 90 days from the date of
receipt of such application. 21.5 In all circumstances the Licensee shall purchase
electrical capacity and/or energy in a manner (a) which is in compliance with the
State Grid Code (b) the details of contracts entered into for capacity/energy
purchases are furnished to the Commission within one month from the conclusion
of such contracts.”
2nd Observation
It is further brought to your kind notice, that every effort is being made to prevent the
public from accessing the files relating to 46 of 2018. Objector met the Secretary,
Haryana Electricity Regulatory Commission, Smt Veena Hooda on 04 & 10 December
2018 in order to inspect the file PRO 46 of 2018 and related documents. On 04th
December 2018, Secretary HERC intimated that file is with Mr Verma and therefore I was
prevented from inspecting the file that Mr. Verma has left the office. Then on 10
December 2018, I again met Secretry HERC and she asked his PA to get the file and aksed
me to wait. But at about 5 oclock I was intimated by Sanjeev, PA to Secretary that I must
make a written request and when I made application I was not accepted by him. I callled
Secretary HERC thrice but there was no response from her. Rather I was astonished to
learn from her peon who stated that Secretary HERC had ordered him not to allow the
objector to enter into the office of Secretary HERC. It is very strange that a public servant
is denying access to record and office so that power procured by Discoms in
contravention of statutory provisions is not objected by the public and public is debarred
from making objections.
In addition to my previous objections it is further brought to your knowledge that
Hon’ble APTEL in its order dated 28 April 2016 has upheld view of the State Commission
regarding surplus power in the state of Haryana. Hon’ble APTEL in its judgment dated 28
April 2016 in Appeal No. 269 of 2014 is very pertinent which says that as noted by HERC
the state of Haryana has surplus power which is in excess of its requirement. Relevant
part of Judgment is reproduced here. “We are happy to note that the State Commission in
a separate review order dated 14.07.2014, seeking review of an earlier tariff order dated
30.03.2013, has expressed its concern that the Discoms have already tied up with power
which is in excess of requirement for at least 5 to 7 years without having a system of
19
power procurement planning and for load optimum power cost and accordingly the State
Commission has rejected the relief sought by the Discoms for recovering its trading loss
from the consumers.” Commission reproduce this observation of the APTEL in every ARR
Order then but the Hon’ble Commission so far has not ensured the compliance of
Regulation 20 & 21 of Licensee Regulation as a result of which public money is being
squandered by the Discoms without there being any check.
We are being governed by rule of law as provided in the Constitution of India and none is
above how high the post one may be holding everyone is subject to law. It has been held
by Hon’ble Apex Court in catena of judgments. Public money can not be squandered,
misappropriated or misuse. Public money by public servants are held as public trust and
there can not be breach of that because beach of trust is an offence punishable under law.
The very purpose of Electricity Act, 2003 has been frustrated by HPPC & SCPP as can be
seen from para 6 of the petition which is reproduced here “Haryana Purchase Center
(HPPC) gave in-principle consent for procurement of 400 MW power for a period of three
years under the Pilot Scheme on dated 29.05.2018 (Annex-C) after taking concurrence
from Steering Committee for Power Planning (SCPP)” The very object of the Electricity
Act was to bring transparency, stop the intereference of government into power
procurement and as consequence of which Commission was empowered to regulate
power procurement. But as can be seen from the act of HPPC & SCPP that commission
power to regulate has been made redundant and ultimately it is the poor consumer who
has to suffer and has to pay through nose.
Therefore, the objector, being debarred from accessing the relevant file and unavailability
of complete petition in the public domain is requesting the Hon’ble Commission to ensure
that no supply is procured unless there is strict compliance to statutory provisions and
particularly conditions 20 & 21 of licensee regulations.
Reply of HPPC
1st Observation
Point 1: The matter does not relate to HPPC. No comments are, therefore, required.
Point 2- 5: It is respectfully submitted that the figures referred to by the stakeholder
have erroneously been taken as units sold outside the state, whereas, the fact is that the
figures referred are related to the Banking, where there is no financial transaction
involved. This banking arrangement helps to manage the power scenario in an optimum
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manner whereby the Discoms are able to meet the peak demand without loading the
consumers by way of additional costlier power purchase in the peak season and at the
same time, it also helps in disposal of surplus power in lean season. With the type of the
load pattern the State has, the banking is the best remedy for meeting the power deficit
during peak season and utilize the surplus power in the lean season. Therefore, the
contention of the stakeholder that the sale has been made at lesser price is not correct.
As already submitted, against the total contracted capacity of 11,700 MW, the
aggregate availability of power in MWs with Discoms at normative availability
considering that all sources are available at a particular time, works out to 8500 MW
approximately. In the current year peak season, the peak demand crossed 10,000 MW
mark and the expected peak demand for next FY is expected to be around 10,800 MW as
per CAGR. This clearly demonstrates the gap in the demand and availability scenario,
which is being met through the forward banking arrangements carried out during lean
season and the banked power being made available in peak season to meet the gap
against the contracted capacity. It is also apparent that with the increase in the peak
demand in the summer season from next year onwards, banking alone would not be
enough to meet the power deficit and hence the need to contract additional power for the
peak (summer) season.
Further, the per unit rate for UI sales under the heading PGCIL /UI pertains to UI
charges levied / received as per operational principle of the grid while managing the
state grid with the National grid. These UI charges for Overdrawal/Underdrawal are
dependent upon the grid frequency at the time of interchange and, given the fact that it is
impossible to exactly match the actual load/ demand with the scheduled drawal, are
beyond the control of Discoms. However, all possible efforts are made to reduce the
impact on the consumers by way of resorting to the options of IEX Sale / backing down of
the Plants to the technical minimum level so as to match load/ demand with the schedule.
In addition to above, it is submitted that DISCOMs are already supplying 24 hours/
round the clock power and, as per the PRM in force, there was no scheduled power cuts
on Industrial category feeders of the state.
Point 6&7: The objections raised by the Stakeholder are vague/ general in nature and
are without any basis/logic as the HPPC/Discoms are bound to abide by the directives of
the Hon’ble Commission as per HERC ( Conditions of License for Distribution and Retail
Supply Business), Regulations 2004.
21
It is further submitted that as per ibid Regulations, the Hon’ble Commission is
supposed to satisfy itself with the demand and supply scenario as per the conditions of
distribution service license before approving the source. In the present matter, the short
supply of coal against approved coal linkages to the Projects with which Discoms have
long term PPAs has resulted into the shortage in availability of power in peak season and
forced the Discoms to resort to the alternative arrangements. In the alternate
arrangement made through the Pilot Scheme of MoP, GoI there is only token liability of
fixed charges (1 paise/unit). Further this power has been negotiated to be supplied for
the medium term i.e. 8 months only and not for full year. This arrangement shall be for a
period of three years after which, it is expected, the coal supplies will increase in present
PPAs.
It is, therefore, clear from the above that there is nothing wrong for HPPC to opt
for the Pilot scheme issued by MoP, GoI, which would help to fill the power gap on
account of deficiency of the coal materialisation in the present PPAs. The Pilot scheme, if
successful, will be a benchmark to bring more such schemes, where the power at fixed
tariff shall be available for longer durations without having any liability for payment of
fixed charges and the issues of backing down and other related matters would be
addressed in an efficient matter.
2ndObservation:
The allegation made by the stakeholder is not correct and denied. As a matter of
fact, the HPPC had given in-principle consent only which was subject to the approval of
the Hon’ble Commission. The SCPP had only deliberated the merits of the case and had
allowed to proceed in the matter by giving in principle consent subject to approval of the
Hon’ble Commission. Hence there is no violation in the matter, as no formal agreement
has been signed till date.
6.3 Objections filed by Sh. Manoj Kumar, Yamunanagar
I am resident of Yamunanagar and frequently visit village such as Mandebar, Mandebri,
Dudhla, Hargarh, Bhutmajra. These villages are facing acute shortage of electricity. Due to
this irrigation has become difficult. Therefore, it is prayed that 24 hour electricity may be
provided in my neighboring villages so that general public does not faces any shortage of
electricity.
Reply of HPPC
22
Need No Comments.
6.4 Objections filed by Sh. Mukesh Kumar, Jind
Same as per objection no. 6.3
Reply of HPPC
Need No Comments.
6.5 Objections filed by Sh. Dinesh Batra, Sonepat
1. I am a resident of Haryana, born and brought up in Haryana. My parents (In-laws)
are senior citizens (both in 70’s), residing alone in Sonepat and need uninterrupted
power supply. I am power sector professional, with over 30 years-experience,
including 20 years with NTPC.
2. To meet the commitment of 24 X 7 power supply to all under UDAY scheme, the
State utility would need spinning reserves to mitigate several uncertainties in the
power generation, as follows:
a. Coal supply crisis: There is an acute coal shortfall being faced by all Generators in
the country. In today’s newspaper, there is an interview published of our Hon’ble
Minister, Sh R K Singh admitting coal supplies as the biggest challenge in meeting
increasing power demand in the country. The Central government has directed all
Generators, including NTPC to re-start import of coal to meet coal shortages.
b. Stressed power assets under insolvency: There are several power Generators,
mainly private, who are under default in payments or declared as NPAs. There are
uncertainties related to their regular power generation and some of them are
supplying power to Haryana.
c. Stringent emission norms: Almost all coal based thermal power plants, including
those owned by NTPC, State Gencos and others need to be either retired or face
disruption in power supplies to install FGD etc. to meet new environmental
regulations over next 3-4 years.
3. The power proposed to be procured by HPPC is under a well thought framework of
Central Government, with following key features, which also justify the tariff:
a. There is no price escalation of coal, including its freight, over 3 years terms of
procurement. Considering regular price increases in Coal in last two years (in May’
23
16 and January, 2018) and recent coal transportation hike (in Nov, 2018) by
Railways, this procurement will insulate the State Utility from future escalations.
b. The tariff comprises of Fixed charge of only 1 paise, thus not giving additional
burden to the State Discom.
c. Commitment to off-take only 55% power over the year shall provide sufficient
flexibility to the State Utility.
With increasing short term price trend in the power market over last one year and
with above submissions, I request for Hon’ble Commission to accept the petition
filed by HPPC in the larger interest of the consumers.
Reply of HPPC
Need No Comments.
Commission’s Analysis & Order
7. The Commission has considered the submission of the petitioner as well as that of
the interveners and observes as under:-
i) The present proposal is as per MoP guidelines through DEEP e-bidding
portal. The basic objective, from DISCOMS perspective, is to meet the deficit
as well as replace costly generation from inefficient vintage power plants.
Hence, the Commission is of the considered view that the Discoms must
identify the vintage plants both inter-state and intra-state that can be
replaced and thereby reduce the average power purchase cost of the
Discoms and ultimately lessen the financial burden of the electricity
consumers of Haryana.
ii) The Commission has taken note of the fact that under the GoI scheme
availability of coal is ensured. Hence, given the requirement and the fact
that some of the power plants with which the Discoms have long term
power purchase agreement are often faced with coal stock below the
critical limits as pointed out by the petitioner.
iii) The commission after due deliberation, observes that at 55% PLF for eight
months, about 1267 MUs shall be available to the Discoms at Haryana
periphery while Discoms as per the data mode available, by them, have
energy deficit during the paddy season and during peak load hours only.
Nonetheless, as the fixed cost obligation is negligible @ 1 Paise/kWh, it
may not impose any significant financial liability given the trade off
24
between the cost of load curtailment or short term procurement from the
open market and the present proposal as a contingency measures pointed
out by the petitioner.
8. The Commission has taken note of the submission of HPPC that Peak power demand
of the State increased from 8182 MW during FY 2013-14 to 10295 MW during FY
2018-19 corresponding to a CAGR of 4.7% and in view of the increase in
consumption and Peak demand on year on year basis, there is need of capacity
addition. DISCOMs may also be able to release around 30000 pending AP tube well
connections, electricity supply to e-vehicles, electric crematorium etc. with the
availability of this power. HPPC has further emphasized that all the thermal power
generating stations located in the State i.e. HPGCL units. APCPL & CLP are facing
acute shortage of coal and this shortage is likely to continue going forward for
another 2-3 years. Thus, in order to ensure continuous & reliable 24x7 power
supply in the State of Haryana, HPPC may require short term power proposed in this
petition, particularly when the power is being sourced with negligible amount of
fixed charges.
9. The Commission observes that the tariff has been determined through a transparent
process of bidding in accordance with the guidelines dated 10.04.2018 issued by the
Central Government vide notification no. 23/17/2013-R&R (VOL IV). Hence, the
Commission approves the adoption of tariff under section 63 of the Electricity Act,
2003, along with trading margin. The approval is granted subject to the condition
that availability of coal is ensured under the Scheme. Accordingly, no future
escalation in tariff shall be granted for whatever reason viz. non availability of coal
and consequent purchase of coal from outside market, imported coal etc. However,
HPPC is directed to coordinate with the Ministry of Coal to ensure that the State gets
its full quota of coal allocation, so that State Generating Power Stations are utilized
to full capacity, in the present circumstances as well as take pro-active steps to
maximize the returns from disposal of surplus power available during winter
months and off peak hours.
10. The Petition is accordingly disposed of.
This order is signed, dated and issued by the Haryana Electricity Regulatory
Commission on 07.01.2019.
Date: 07.01.2019 (Pravindra Singh Chauhan) (Jagjeet Singh) Place: Panchkula Member Chairman