Electricity Regulatory Electricity Regulatory Frame Work in IndiaFrame Work in India

Anil Kumar KAnil Kumar K

AO, KPTCLAO, KPTCL

In this sessionIn this session Why Regulator ? Why Regulator ? What is Regulation ?What is Regulation ? What is the Role of Regulator ?What is the Role of Regulator ? The Regulatory bodies The Regulatory bodies Few Regulations Governing System Few Regulations Governing System

Operation – Cursory LookOperation – Cursory Look Case IncidentCase Incident

Pre Regulatory EraPre Regulatory Era SEBs were the masters SEBs were the masters Deteriorating Financial Health Deteriorating Financial Health Poor Operational efficiency Poor Operational efficiency

The Need for Regulator came from The Need for Regulator came from - LPG Policy- LPG Policy- CMNAPP ( Demand Supply Gap and increasing - CMNAPP ( Demand Supply Gap and increasing

losses) losses)- Immediate Competition not possible- Immediate Competition not possible- Immediate Mechanism Required to control - Immediate Mechanism Required to control

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

RegulationRegulation

RegulationRegulation Dictionary meaning Dictionary meaning An An authoritative authoritative rulerule The state of The state of being controlledbeing controlled or or

governedgoverned The act of The act of controlling or directingcontrolling or directing

according to ruleaccording to rule

RegulationRegulation

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

Eg: Norms for T & D loss reductionEg: Norms for T & D loss reduction

One can consider regulation as actions of One can consider regulation as actions of conduct imposing sanctions (such as a conduct imposing sanctions (such as a fine). fine).

Eg; penalty for violation of grid codeEg; penalty for violation of grid code

Basic Objectives of RegulationBasic Objectives of Regulation

Protect interests of consumersProtect interests of consumers Protect interests of service Protect interests of service

providersproviders Provide transparency, independency Provide transparency, independency

and public participation and public participation Prevent exploitation, restrictive and Prevent exploitation, restrictive and

unfair practicesunfair practices Ensure quality of service to Ensure quality of service to

consumersconsumers

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

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

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

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

Joint Commission ( JERC)Joint Commission ( JERC)

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

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

Electricity RegulationElectricity Regulation

ERC Act 1998 – Repealed ERC Act 1998 – Repealed

Electricity Act 2003 – 10Electricity Act 2003 – 10thth June 2003 June 2003

Sections 76-90 of Electricity Act 2003 Sections 76-90 of Electricity Act 2003 deals with Constitution, Power and deals with Constitution, Power and Functions of the Central and State Functions of the Central and State CommissionCommission

Composition of CERC, SERC & JCComposition of CERC, SERC & JC

Composition of Composition of Central CommissionCentral Commission (Sn 76(5)(Sn 76(5)- - Chairperson and 3 members appointed by Central Chairperson and 3 members appointed by Central Government Government - Quasi Judiciary body - Quasi Judiciary body

Composition of Composition of State CommissionState Commission- - Chairperson and 2 members Chairperson and 2 members

- Quasi Judiciary body- Quasi Judiciary body Composition of Composition of Joint CommissionJoint Commission

- - One member from each StateOne member from each State

- One among them will be a chairperson or by rotation- One among them will be a chairperson or by rotationTwo JCs – Manipur, Mizoram and Goa & other UTsTwo JCs – Manipur, Mizoram and Goa & other UTs

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

- - To regulate the tariff of Generation and To regulate the tariff of Generation and Transmission Transmission ( Interstate Transactions)( Interstate Transactions)

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

- - To specify Grid Code To specify Grid Code

- To adjudicate Disputes between Tr licensee and - To adjudicate Disputes between Tr licensee and Generating Companies Generating Companies

- To fix trading margin for interstate trading of - To fix trading margin for interstate trading of electricityelectricity

POWERS OF CERC/SERC/JCPOWERS OF CERC/SERC/JCSame power as that of a Civil CourtSame power as that of a Civil Court

Summoning and enforcing the attendance of any Summoning and enforcing the attendance of any person and examining him on oathperson and examining him on oath

Discovery and production of any document or other Discovery and production of any document or other material object producible as evidence;material object producible as evidence;

Receiving evidence on affidavits;Receiving evidence on affidavits;

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

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

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

Constituted in terms of Section 110 of Electricity Act Constituted in terms of Section 110 of Electricity Act 2003. in April 2004 and commenced its operations 2003. in April 2004 and commenced its operations on 21st July 2005on 21st July 2005

Consists of Four members, of which two are judicial Consists of Four members, of which two are judicial members and two are non judicial members. Each members and two are non judicial members. Each bench shall have one Judicial member. bench shall have one Judicial member.

Purpose Purpose is to hear appeals against the is to hear appeals against the ordersorders passed by adjudicating officer or order passed by passed by adjudicating officer or order passed by Appropriate Commission. Appropriate Commission. ( note : No jurisdiction on ( note : No jurisdiction on regulations issued by Commission)regulations issued by Commission)

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

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

Was constituted under section 3 of Was constituted under section 3 of Electricity ( supply) Act 1948 but Electricity ( supply) Act 1948 but continued under section 70 of EA continued under section 70 of EA 2003. 2003.

Shall consist of not more than 14 Shall consist of not more than 14 members. members.

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

Functions Functions ((to name a few)to name a few)

specify the technical standards for specify the technical standards for construction of electrical plants, electric construction of electrical plants, electric lines and connectivity to the grid;lines and connectivity to the grid;

specify the safety requirements for specify the safety requirements for construction, operation and maintenance of construction, operation and maintenance of electrical plants and electric lines;electrical plants and electric lines;

specify the specify the Grid StandardsGrid Standards for operation for operation and maintenance of transmission lines;and maintenance of transmission lines;

advise the Central Government on any advise the Central Government on any matter matter

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

constituted vide Notification dated 16th constituted vide Notification dated 16th February, 2005 in pursuance of the February, 2005 in pursuance of the provision under section 166(2) of the provision under section 166(2) of the Electricity Act, 2003. Electricity Act, 2003.

The Forum consists of Chairperson of The Forum consists of Chairperson of Central Electricity Regulatory Commission Central Electricity Regulatory Commission (CERC) and Chairpersons of State (CERC) and Chairpersons of State Electricity Regulatory Commissions Electricity Regulatory Commissions (SERCs). (SERCs).

Forum of Regulators ( FOR) Forum of Regulators ( FOR) Analysis of the tariff orders and other Analysis of the tariff orders and other

orders of Central Commission and State orders of Central Commission and State Commissions Commissions

Laying of standards of performance of Laying of standards of performance of licensees as required under the Act.licensees as required under the Act.

Undertaking research work in-house or Undertaking research work in-house or through outsourcing on issues relevant to through outsourcing on issues relevant to power sector regulation;power sector regulation;

Evolving measures for protection of Evolving measures for protection of interest of consumers and promotion of interest of consumers and promotion of efficiency, economy and competition in efficiency, economy and competition in power sector; power sector;

Few Regulations Governing Few Regulations Governing System OperationSystem Operation

The IEGC Regulations The IEGC Regulations Grant of Connectivity and Open Grant of Connectivity and Open

Access Regulations Access Regulations UI Charges Regulations UI Charges Regulations Measures to relieve congestion in Measures to relieve congestion in

real time operation Regulationsreal time operation Regulations Sharing of Interstate Transmission Sharing of Interstate Transmission

Charge and Losses, Regulations Charge and Losses, Regulations

Impact of Regulatory Mechanism Impact of Regulatory Mechanism on system operationon system operation

Grid Stability – ABT Regime Grid Stability – ABT Regime Better Management of grid through Better Management of grid through

enforcement of Intra State ABTenforcement of Intra State ABT Facilitation of open access Facilitation of open access Move towards Independent System Move towards Independent System

OperationOperation

Karnataka CaseKarnataka Case

CERC Levied Penalty of Rs. 17 Lakhs CERC Levied Penalty of Rs. 17 Lakhs for violation of grid code. ( 6.5.09)for violation of grid code. ( 6.5.09)

The Order was appealed before ATE The Order was appealed before ATE in appeal No. 94/2009in appeal No. 94/2009

ATE Passed Order on 11.01.2010 and ATE Passed Order on 11.01.2010 and quashed the CERC Order quashed the CERC Order

CERC Refunded the Penalty CERC Refunded the Penalty Recovered. Recovered.

Karnataka CaseKarnataka Case

Grounds Grounds CERC Relied upon SEM Reading CERC Relied upon SEM Reading

instead of SCADA instead of SCADA

Action taken by KPTCL ( LDC) for Action taken by KPTCL ( LDC) for restoring the frequency back to 49 restoring the frequency back to 49 Hz not recognisedHz not recognised

Karnataka CaseKarnataka Case

Clause 5.4.2 of IEGC

“(a) As mentioned above the utilities shall endeavor to restrict their net drawl from the grid to within the respective drawl schedule whenever the system frequency is below 49.5 Hz. When the frequency falls below 49 Hz requisite load shedding (manual) shall be carried out to curtail the over drawl.”

Delhi CaseDelhi Case

CERC Adjudication Case 1 of 2009CERC Adjudication Case 1 of 2009 Delhi SLDC V/s NRLDC Delhi SLDC V/s NRLDC Delhi SLDC failed to comply with the Delhi SLDC failed to comply with the

directions of NRLDC directions of NRLDC Delhi SLDC Argues that , it is not Delhi SLDC Argues that , it is not

responsible for overdrawl. Discoms responsible for overdrawl. Discoms responsibleresponsible

Delhi CaseDelhi CaseFacts of the CaseFacts of the Case Para 5.4.2 (b) of the Indian Electricity (the

Grid Code) provides as – “Further, in case of certain contingencies

and/or threat to system security, the RLDC may direct an the State Load Dispatch Centre to decrease its drawal by a certain quantum. Such directions shall immediately be acted upon.”

Delhi CaseDelhi CaseFacts of the CaseFacts of the Case

Delhi CaseDelhi Case

Adjudicator rejected the argument of Adjudicator rejected the argument of Delhi and held that Delhi SLDC Delhi and held that Delhi SLDC responsible for the lapseresponsible for the lapse

Imposed fine of Rs. 50,000 per Imposed fine of Rs. 50,000 per default. default.