ring fencing of system operation and independent functioning of load despatch centres

62
Ring Fencing of System Operation and independent functioning of Load Despatch Centres by Western Regional Load Despatch Centre, Mumbai PSTI Bengaluru 20 th April 2011

Upload: kristen-wong

Post on 02-Jan-2016

43 views

Category:

Documents


0 download

DESCRIPTION

Ring Fencing of System Operation and independent functioning of Load Despatch Centres. by Western Regional Load Despatch Centre, Mumbai PSTI Bengaluru 20 th April 2011. Outline. Unbundling………rationale Ring fencing of System Operation Milestones & Achievements - PowerPoint PPT Presentation

TRANSCRIPT

Page 1: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

Ring Fencing of System Operation and

independent functioning of Load Despatch Centres

byWestern Regional Load Despatch Centre, Mumbai

PSTI Bengaluru20th April 2011

Page 2: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

2

Outline

• Unbundling………rationale

• Ring fencing of System Operation

• Milestones & Achievements

• The ultimate mantra to functional autonomy

Page 3: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

3

Unbundling…………rationale

Source: Sally Hunt: Making Competition Work in Electricity

Page 4: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

4

Unbundling…………rationale

Source: Sally Hunt: Making Competition Work in Electricity

Page 5: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

5

Unbundling…………rationale

Source: Sally Hunt: Making Competition Work in Electricity

Page 6: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

6

Unbundling…………rationale

Source: Sally Hunt: Making Competition Work in Electricity

Page 7: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

7

Ring fencing of system operation & transmission (1)

• The major locus of conflict of interest in the short term is the system operator. As we have stated before, the system operator has to have complete control over the short-term operations of the generating plant and interface with the transmission system. He has a hundred subtle ways of influencing access to transmission, which are hard to police, because the system operator’s judgment is relied on at very short notice to resolve problems on the transmission system by telling generators what to do. If he is employed by a company that also owns generation, he is not independent, he is a competitor: no one will trust him. In a competitive world, the system operator needs to be independent of all generators, and indeed all traders, buyers, and sellers. Everyone agrees on this and independence of the system operator is always a central objective of restructuring.

Source: Sally Hunt: Making Competition Work in Electricity

Page 8: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

8

• A second source of conflict is the responsibility for expanding the transmission system—the short-term problem of transmission access translated into the long term. If a competing generating company or utility owns the transmission system and has responsibility for maintaining and expanding it, there are many subtle ways in which it can thwart competitors by being dilatory about construction and maintenance of the transmission assets. This is not so immediately apparent, since any bad results are longer term, not day by day, as with the system operator. Competitive generators also complain about delays and costs involved in connection of their generators to a transmission system that is under the control of a competitive company.

Source: Sally Hunt: Making Competition Work in Electricity

Ring fencing of system operation & transmission (2)

Page 9: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

9

Other areas necessitating functional autonomy• Non-discriminatory open access

• Outage planning

• Backing down or re-scheduling

• Switching instructions

• Availability certification

• Real time data availability at LDCs

• Metering and settlement system

• Incident investigation and analysis

• Proper feedback to planners and regulators

Page 10: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

10

Milestones and achievements

• Pre 1994: RLDCs were operated by CEA with budgetary support from Govt. of India.

• 1994-1996: RLDCs transferred in a progressive manner to POWERGRID. Budgetary support from GOI stops.

• July 1998: CEA finalizes an adhoc arrangement for reimbursement of RLDC expenses.(Rs. 12 Crores for 1996-97)

Page 11: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

11

Milestones and achievements…..contd/-

• 8th May 2003: CERC approves RLDC fees and charges from 2000-2001 ( Rs. 21.52 Crs. in the starting year)

• 2005 onwards: ULDC scheme charges merged with RLDC fees & charges and approved by CERC

• 5th Nov 2007: Interactive session convened by Ministry of Power with Forum of Regulators and State Government. Pradhan Committee on Ring fencing of LDCs constituted in Feb 2008 after this meeting.

• 4th July 2008: Ministry of Power directed POWERGRID for formation of POSOCO

Page 12: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

12

• 11th August 2008: Gireesh B. Pradhan Committee Report on” “ Manpower, Certification and Incentives for System Operation and Ring fencing Load Despatch Centres” submitted. Report accepted and a meeting called on 7th Oct 2008 by Secretary Power.

• 15th Nov 2008: Forum of Regulators (FOR) approves formation of ‘Forum of Load Despatchers (FOLD) and approves FOLD charter in Jan 2009

• 20th March 2009: Power System Operation Corporation Ltd. incorporated as a 100% subsidiary of POWERGRID with authorized share capital of Rs.200 crores.

Milestones and achievements…..contd/-

Page 13: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

13

• March 2009: Satnam Singh Task force report on on “Capital Expenditure and Issues Related to Emoluments for Personnel in Load Despatch Centres “ submitted.

• June 2009: Rakesh Nath Committee Report on “Manpower Selection, Recruitment Procedure and Tenures for Personnel in SLDCs”

• 18th Sept’ 2009: CERC notifies Regulation on Fees and Charges of Regional Load Despatch Centres for the control period 2009-2014.

Milestones and achievements…..contd/-

Page 14: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

14

• 19th March 2010: Dhiman Committee Report on “Training and Certification of System Operators” submitted.

• March 2010: All RLDCs and NLDC file petitions with CERC for the Fees & Charges for the control period 2009-2014

• 23rd March 2010: Certificate of commencement of Business obtained for POSOCO.

• 1st June 2010: Transfer of manpower from POWERGRID to POSOCO on secondment basis.

Milestones and achievements…..contd/-

Page 15: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

15

• 9th June 2010: Ministry of Power designated National Power Training Institute (NPTI) as the Certification Authority for executives of SLDCs , RLDCs and NLDC for an initial period of 3 yrs i.e up to 31st March 2013

• 26th Sept 2010: Gazette notification by Central Govt. of India that the POSOCO a wholly owned subsidiary of POWERGRID shall operate RLDCs/NLDC wef 1st Oct 2010.

• Feb/March 2011: CERC notifies the fees and charges for NLDC and all five RLDCs

Milestones and achievements…..contd/-

Page 16: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

16

Ultimate mantra for ensuring functional autonomy

• Technical and managerial excellence

• Comprehensive set of regulations by the ERCs covering system operation

• Minimizing discretion

• Ensuring high level of transparency in Operations

• Any exercise of judgment by operator in few cases……..beyond question or reproach

• Devote more time to participation in rule making rather than disputes after notification of rules

• International benchmarking with other system operators

Page 17: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

17

Thank you

Discussion………

Page 18: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

18

MoP Communication to POWERGRID

• MoP has directed POWERGRID vide letter dated 4th July 2008 the following :

1.To set up a wholly owned subsidiary company of PGCIL responsible for independent system operation with separated accounting and Board structure.

2.This company will gradually made independent from PGCIL over a period of 5 yrs.

Page 19: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

19

MoP Communication to POWERGRID –Structure and Functions

STRUCTURE• The wholly owned subsidiary of the PGCIL will be called Power System

Operation Corporation (POSOCO)• CMD of POWERGRID will be non-executive Chairman of the new

Corporation.• There will be three functional Directors ie MD, Dir(Per &Engg),

Dir(Comml & Fin)• Five part time directors one each from each region nominated by

respective RPC.• One independent Director from PGCIL• Chief Executive of the five RLDCs will be special permanent invitee on

the Board

Page 20: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

20

Structure and Functions..Cont.• FUNCTIONS

1. To supervise and control all aspect concerning operations and manpower requirement of RLDCs and NLDC.

2. To act as apex organization for HR requirement of NLDC and RLDCs.

3. To ensure planning and implementation of infrastructure required for smooth operation and development of NLDC.

4. To advise assist SLDCs including specialized training etc.

5. To perform any other function entrusted by MoP

Page 21: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

21

Recommendation 1The Committee recommends that the LDCs should be

ring-fenced suitably to ensure their functional autonomy by taking the following steps:

a) The Appropriate Government should take suitable steps to facilitate independent functioning of the Load Despatch Centres in line with the Electricity Act 2003 and National Electricity Policy. To begin with, the State Governments are urged to create a separate representative board structure for governance of LDCs on the lines of wholly owned subsidiary being created for the independent System Operation of RLDCs and NLDC.

b) The financial accounts should be separated for all LDCs by 31st March 2009 with the appropriate Electricity Regulatory Commissions (ERC) specifying the fees and charges payable.

Page 22: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

22

Recommendation 1 (contd/-)

c) Capital Expenditure (CAPEX) plans for modernization of all LDCs during 2009-12 should be submitted and the approval of the respective Electricity Regulatory Commission (ERC) should be obtained by 31st March 2009. The Central Transmission Utility (CTU) and Regional Load Despatch Centres (RLDCs) should extend the necessary assistance to SLDCs in this area.

d) In the next stage, rolling 5-year CAPEX plans should be prepared by each LDC and got approved by the respective ERCs to take care of the system expansion, associated real-time data requirements as well as technological innovations and obsolescence of control centre equipment. ERCs may examine CAPEX proposal considering a shorter life cycle of 7-10 years for such equipment.

Page 23: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

23

Recommendation 2For making LDCs financially self-reliant, the Electricity Regulatory

Commissions (ERCs) should recognize the three distinct revenue streams:

a) Fees and charges for system operation

b) Tariff for decision support system and IT infrastructure (currently only ULDC tariff)

c) Operating charges for scheduling, metering and settlement for market players.

d) All Generating Companies and licensees using the services of the LDCs would make all the above payments. In addition the LDCs could provide value added services (studies, manpower development, reports, access to data archives etc), on chargeable basis.

Page 24: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

24

Recommendation 3The Committee recommends

a) Introduction of a system of certification of System Operators by an independent Central body, similar to the system followed in case of Air Traffic Controllers.

b) Establishment of a Central Institute for training of System Operators. Initially the National Power Training Institute (NPTI) may be entrusted with the responsibility of training and certification.

c) Within the next one year, all the course material, systems and procedures required for administering a “basic level” of training and certification should be developed.

Page 25: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

25

Recommendation 3 (contd/-)The Committee recommends

d) All LDCs must ensure that all the personnel of LDCs undergo this ‘basic level’ training and certification and only certified personnel staff the LDCs within two years from the release of this report. The appropriate Electricity Regulatory Commissions would be furnished with an Annual Compliance Report of this requirement. Subsequently advanced level training and certification programme must be introduced.

e) Fresh recruitment at regular intervals for lowering the average age of the work force in the LDCs.

f) Introduction of suitably designed courses in the Indian Institutes of Technology and National Institutes of Technology for ensuring availability of skilled manpower.

g) Active collaboration of LDCs with educational institutes for research and development related to Indian power system and electricity market operation.

Page 26: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

26

Recommendation 4The highly specialized and technical nature of LDC function necessitates a suitable compensation structure to attract and retain talent. The Committee recommends

a) The compensation structure for LDC personnel should be substantially higher than comparable companies in the power sector both in the public as well as private.

b) Apart from the compensation structure, innovative incentive schemes, such as sabbaticals for higher learning and opportunities for Professional Engagement (PE) in the form of attending seminars/workshops and conferences both in India and abroad must be provided.

c) Once the certification system is introduced, monetary incentives similar to Air Traffic Controllers can be provided to the System Operators based on their ratings.

Page 27: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

27

Recommendation 5For standardizing and harmonizing the LDCs work, the committee

recommends a) The NLDC in consultation with CEA, would lay down the

“Standard Operating Procedures” (SOPs) which would be adopted by the SLDCs. Suitable Quality Standards and an Integrated Management System (IMS) may also be implemented.

b) A ‘Forum of Load Despatch Centres’ with the secretariat provided by National Load Despatch Centre must be established. This Forum could take up issues of common interest and also formulate a Code of Ethics for the LDC personnel.

c) At a future date, if all the State Governments agree, an umbrella structure of SLDCs integrated with RLDCs and NLDC may be considered.

Page 28: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

28

Task Force: Terms of Reference

• To look into the– Financial aspects for augmentation and

upgradation of State Load Despatch Centres

– Issues related to emoluments (compensation structure, incentives etc.) for the personnel in System Operations

Page 29: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

29

About the Task Force• Members

– CMD, Power Finance Corporation: Chairman– Director (Finance), POWERGRID: Member– Secretary (Power), Haryana Govt.: Member– Managing Director, GETCO: Member– Secretary, CERC: Member Secretary

• Meetings– 17th December, 2008 : New Delhi– 27th February, 2009 : New Delhi

• Report– Submitted on 5th May 2009

Page 30: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

30

Structure of the Report• Part-I

– Financial Aspects for augmentation and up-gradation of Load Despatch Centres

• Functional Autonomy of Load Despatch Centres– Identification & transfer of assets/liabilities to

» NLDC/RLDCs from CTU» SLDCs from CTU/STU

• Financing the above transfer of assets/liabilities• Capital Expenditure (CAPEX) plans and its

financing

• Part-II– Emoluments for personnel

• Study of existing Compensation structure• Proposed structure for compensation and

incentives for personnel

Page 31: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

31

Part-IFinancial Aspects

for augmentation and Upgradation

Page 32: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

32

Past Investments

Page 33: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

33

Past Investment in ULDC project by POWERGRID (2002-2006)

Region Central Sector

(Rs. Crore)

State Specific

(Rs. Crore)

Gross Block(Rs. Crore)

Net Block(Rs. Core)

South 128 417 545 388

North 260 311 571 396

North-east 119 78 197 154

East 142 194 335 289

West 106 71 177 151

Total 755 1072 1826 1378

Outstanding

Source of funds Total(Rs. Crore)

Total(Rs. Crore)

Central Sector

(Rs. Crore)

State Specific

(Rs. Crore)

Equity 264 195 43 152

Grant for North-east

175 147 77 70

Loan 1387 1036 410 626

Total 1826 1378 530 848

Figures rounded off

As on 31st December 2008

ULDC: Unified Load Despatch and Communication

Page 34: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

34

Segregation of Assets and Outstanding liabilities in respect of past investments

• Region-wise and State-wise segregation– Carried out by the Task Force– Details as Annex-III of the Report

• Total Outstanding apportioned into ‘outstanding equity’ and ‘outstanding loan’ for– Remote Terminal Units– Communication System– Control Centre Equipment

Annex-IIIPage 57-71

Page 35: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

35

Transfer of POWERGRID’s existing assets and liabilities under ULDC project: Recommendations

• Central Sector Assets– Control Centre equipment installed at NLDC/RLDCs to be

transferred to the wholly owned subsidiary of POWERGRID– Building/parts of building where NLDC/RLDCs are operational

along with associated facilities like staff quarters to be transferred to NLDC/RLDCs

– Field equipment and communication infrastructure to remain with POWERGRID

– Condemned items to be written off

• State Specific Assets (under ULDC)– Control Centre equipment to be transferred to SLDC– Field equipment and communication infrastructure to be

transferred to STU

• Transfer to be completed by 30th June 2009

Para 4.1, Page 11

Field equipment: Remote Terminal Unit and associated infrastructure

Para 4.8, Page 16

Page 36: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

36

Financing the transfer of existing assetsRecommendations

• Central Sector– Transfer of assets and liabilities pertaining to

NLDC/RLDCs from POWERGRID to the books of accounts of the wholly owned subsidiary

• State Specific– Three alternatives for financing suggested by Task

Force

Para 4.3, Page 13

Para 4.4, Page 13

Page 37: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

37

Financing transfer of State specific assets from CTU to respective STUs/SEBs and

SLDCs• Alternative-1– Equity liquidated by concerned STU/SLDC

– Loan transferred to STU/SLDC

– Agreement by lenders required

– Capital Recovery Charge specified by SERCs

– Alternative-2• Equity liquidated by concerned STU/SLDC

• Existing loan swapped with fresh loan taken by concerned STU/SLDC

• Capital Recovery Charge specified by SERCs

– Alternative-3• Assets continue to be treated as given on lease

• POWERGRID continue to collect tariff as lease rental

• STU/SLDC make provisions in Annual Revenue Requirement

• Assets transferred to STU/SLDC after full recovery

Preference to alternative-1

Other alternatives to be explored in case of difficulties

Para 4.8, Page 16

Para 4.4, Page 13Para 4.8, Page 16

Page 38: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

38

Past investment in SLDCs by STUs/SEBs

Region Investment in Rs. Crore

Funded by

North 64 State Govt.

East 9 State Govt.

West 7 State Govt.

South 124 State Govt.

North east

13 100 % grant byCentral Governmet

Total 219 Table-2, Page 7

Page 39: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

39

Transfer of existing assets and liabilities of STUs/SEBs under ULDC project

Recommendations

• Investment by STUs/SEBs– Infrastructure with SLDCs to be transferred from

STUs/SEBs to SLDCs– Field equipment and communication infrastructure to

remain with STUs/SEBs

• Assets, liabilities of STUs and SLDCs to be segregated and transferred to the subsidiary or the successor company created in State as the case may be

• To be completed by June 2009

Para 4.1, Page 11

Para 4.8, Page 16

Para 4.5, Page 14

Page 40: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

40

Future Investments

Page 41: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

41

Capital Expenditure plans to cover• Augmentation of Communication System for

data transfer from field units to Control Centre

• Augmentation of Control Centre– Civil Infrastructure– Computer System and peripherals– Specialized Software– Smart Grid– Auxiliary power– Cyber Security and Infrastructure security– Back up Control Centre– Others

Para 5.2 to 5.4Page 18-20

Para 5.1, Page 18

Page 42: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

42

Execution of CAPEX plans• Centralized mechanism adopted in the past as in ULDC no

longer suitable due to – Large diversity in local requirements– Need for capacity building in State Sector– Need for vendor development to reduce monopoly – Implementation and financing is challenging– Fast evolving changes in power system operational needs

• Recommended approach for Control Centre augmentation– Decentralized at each LDC level– Integrated for seamless data flow– Flexible to address changing requirements– Open systems for interoperability

– Load Despatch Centres may harmonize technical specifications through Forum of Load Despatchers

Para 5.5, Page 21

Page 43: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

43

Financing CAPEX and O &M• Plans to be examined by respective ERCs• Fund requirement of moderate range

• Typically Rs. 75 crore per LDC staggered over 5 years (Annex-IV)

• Financial Institutions would be willing to lend if recovery is through ‘Fees and Charges’ approved by respective ERCs

• Regulations are necessary to give comfort to the lenders

• Revenue from Open Access to add to reserves and surplus of LDCs (Margin money for CAPEX)

Para 6, Page 21

Para 8 (iv), Page 26

Page 44: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

44

Methodology for recovery• Fees and Charges

• Charges for servicing of CAPEX– Return on Equity, Interest on Loan, Depreciation

• Charges for Human Resource– Salary, perquisites, incentives, Training,

Certification

• Charges for O&M and General Expenses– Repair, Communication, Travel, Statutory duties,

Taxes– Interest on Working Capital

Para 8 (a), (b), (c), Page 25

Page 45: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

45

Revenue streams and sharing of charges

• Services from LDCs– System Operation– Market Operation– System Logistics

– Charges to be shared by beneficiaries of LDC service

– Modus Operandi to be specified by respective ERCs

Para 9, Page 27

Para 11, Page 28

Page 46: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

46

Part-IIEmoluments of Personnel

Page 47: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

47

Major Issues• Problems being experienced in attracting and

retaining talent– Wide variation in emoluments among SLDCs-RLDCs/NLDC

as per organizations managing LDCs• SLDCs managed by respective STU/SEBs• 5 RLDCs and 1 NLDC managed by POWERGRID

– Existing emoluments incommensurate with the job responsibilities and associated physiological and mental stress

• Urgent need for • Broad Harmonization and scaling up of emoluments to facilitate

movement of personnel across different LDCs

• Suitable incentives for personnel

Para 13, Page 32

Para 14, Page 33

Annex-V, Page 75-94

Para 12, Page 30

Page 48: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

48

Recommended Compensation Structure

• Basic pay and perquisites

• Performance Related Pay (PRP)

• Incentive-linked to certification

• Contingency duty allowance

• Special awards

Para 15, Page 36

Page 49: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

49

Performance Related Pay: Recommendations

• Linked to performance of– Load Despatch Centre– Individual concerned

• Performance Indicators for LDCs• System Operation (20 %)• Market Operation (20 %)• System Logistics (20 %)• Documentation (10 %)• Learning and growth perspective (20 %)• Financial (10 %)

Para 15.2, Page 37

Annex-VIII, Page 101

Illustration inAnnex-VI, Page 95

Page 50: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

50

Performance Related Pay: Recommendations contd…

• Performance Indicators for Individuals• Management defined Key Result Areas

• Individual informed in the beginning of assessment period• 70 % weightage

• General competencies, skills and personal traits• 30 % weightage

• 360 degree feedback for assessment of LDC-Head

• Forum of Load Despatchers (FOLD)• To carry out further work • To harmonize Performance Management System

Annex-IX, Page 105

Page 51: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

51

Certification-linked IncentiveRecommendation• Eligibility after Certification

– Basic, Specialist, Management level– Certificates to be renewed periodically

• Lump-sum monthly entitlement– Linked to ceiling basic pay at the middle management level– Subject to certain minimum limits

Certification level Percentage of Ceiling Basic Pay at the middle

management Basic Pay assumed Rs.

50,000

Monthly Incentive(Minimum amount)

Basic level 10 % Rs. 5000

Specialist level 15 % Rs. 7500

Management level

10 % Rs. 5000

Para 15.3, Page 42

Table-8, Page 44

Page 52: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

52

CERC’s Notification for RLDC fees and charges

• Components of annual charges. -

(a) Return on equity

(b) Interest on loan capital

(c) Depreciation

(d) O&M expenses excluding HR expenses

(e) Human resource expenses

(f) NLDC charges and corporate office expenses

(g) Interest on working capital

Page 53: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

53

CERC’s Notification for RLDC fees and charges

• Allocation and apportionment of components of annual charges to system operation function and market operation function:

i)Towards system operation function= 80% of the annual charges.

ii)Towards market operation function=20 % of annual charges.

Page 54: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

54

CERC’s Notification for RLDC fees and charges

• Collection of SOC:

(i) Inter state transmission licensees: 10% of SOC (on the basis of the ckt.-km of the lines owned by them)

(ii) Generating stations and sellers: 45% of SOC (proportion to their installed capacity or contracted capacity)

(iii)Distribution licensees and buyers: 45% of SOC. (proportion to the sum of their allocations and contracted capacities)

Page 55: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

55

CERC’s Notification for RLDC fees and charges

• Collection of Market Operation Charges: equally from all the users except inter state transmission licensees.

• Registration fees. - All users whose scheduling, metering and energy accounting is to be coordinated by RLDC shall register themselves with the RLDC concerned by filing application in the format prescribed

• The application for registration shall be accompanied by a one time fees of Rs 10 lakh.

Page 56: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

56

CERC’s Notification for RLDC fees and charges

• LDC Development Fund. – The Power System Operation Company shall create and maintain a separate fund called ‘LDC Development Fund’.

• The charges on account of return on equity, interest on loan, depreciation and other income of the RLDC and NLDC such as registration fee, application fee, short-term open access charges, etc shall be deposited to the LDC development fund.

Page 57: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

57

CERC’s Notification for RLDC fees and charges

• The Power System Operation Company shall be entitled to utilise the money deposited to the LDC development fund for loan repayment, servicing the capital raised in the form of interest and dividend payment, meeting stipulated equity portion in asset creation and margin money for raising loan from the financial institutions and funding R & D projects.

Page 58: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

58

CERC’s Notification for RLDC fees and charges

• The LDC development fund shall not be utilized for any other revenue expenditure.

• Any asset created by the Power System Operation Company out of the money deposited to the LDC development fund shall not be considered for computation of return on equity and interest on loan.

Page 59: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

59

Summary – CAPEX (As per petition)

Particulars 2009-10 2010-11 2011-12 2012-13 2013-14 TOTAL

NLDC* 0 400 200 300 150 1050

NRLDC 26 677 1321 1143 781 3947

ERLDC 48 115 80 1080 1270 2592

WRLDC 6 101 979 1211 1526 3823

SRLDC 40 60 1415 1515 160 3190

NERLDC 36 382 140 1600 1372 3530

TOTAL 155 1735 4135 6849 5259 18132

* - Adcap towards balance works/ payments under NLDC scheme of Rs. 694 Lakhs is also been approved

All figures are in Rs. Lakhs

Page 60: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

60

Summary - Annual charges of RLDCs and NLDC (As per Petition)

Particulars 2009-10 2010-11 2011-12 2012-13 2013-14 TOTAL

NLDC* 2631 3451 4087 4669 4869 19706

NRLDC 7653 7842 5675 6599 7044 34813

ERLDC 3368 4001 3772 3810 4524 19474

WRLDC 2992 3726 4379 5433 6279 22810

SRLDC 3048 3498 3852 4619 5059 20076

NERLDC 1901 2332 2333 2831 4015 13412

TOTAL 18961 21399 20012 23292 26921 110586

Note: The NLDC charges have been apportioned in the RLDC charges for billing to the users of the RLDCs

All figures are in Rs. Lakhs

Page 61: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

61

Summary – CAPEX (As per order) All figures are in Rs. Lakhs

Particulars 2009-10 2010-11 2011-12 2012-13 2013-14 TOTAL

NLDC* 0 400 200 300 150 1050

NRLDC 20 661 1310 1132 16 3139

ERLDC 48 115 20 1000 1270 2452

WRLDC 1 31 669 990 1400 3091

SRLDC 34 44 1399 1514 155 3146

NERLDC 36 87 110 1590 1362 3185

TOTAL 138 1339 3708 6526 4352 16063* - Adcap towards balance works/ payments under NLDC scheme of Rs. 694 Lakhs is also been approved

Page 62: Ring Fencing of System Operation and  independent functioning of Load Despatch Centres

62

Summary - Annual charges of RLDCs and NLDC (As per order)

All figures are in Rs. Lakhs

Particulars2009-

102010-

112011-

122012-

132013-

14 TOTALNLDC* 2351 3067 3595 4076 4341 17431NRLDC 7321 7702 5645 5960 5596 32223ERLDC 3170 3618 3842 3502 4375 18507WRLDC 2666 3233 3624 4179 4750 18453SRLDC 2621 2936 3353 3878 4306 17094NERLDC 965 1076 1204 1600 2238 7084TOTAL 16744 18565 17668 19119 21265 93361

Note: The NLDC charges have been apportioned in the RLDC charges for billing to the users of the RLDCs