ET_HR_Fin_Civil 2008 Batch 20 Nov08

7/31/2019 ET_HR_Fin_Civil 2008 Batch 20 Nov08

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Commercialand

RegulatoryMechanism

Sandeep Naik, Sr Manager (Commercial), NTPCLtd

20th November

2008


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NTPC Limited

CORPORATE VISION:

A WORLD CLASS INTEGRATED POWER MAJOR, POWERING

INDIAS GROWTH, WITH INCREASING GLOBAL PRESENCE

CORE VALUES:

B - BUSINESS ETHICS

C - CUSTOMER FOCUS

O - ORGANIZATIONAL & PROFESSIONAL PRIDE

M - MUTUAL RESPECT AND TRUST

I -INNOVATION & SPEED

T - TOTAL QUALITY FOR EXCELLENCE


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In this Presentation

Indian Power Sector

Electricity Regulation in India Electricity Act 2003 and its provisions

Regulatory Framework in Indian PowerSectorRole of Electricity Regulatory Authorities

NTPCRole of Commercial functions

Challenges ahead


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Indian Power Sector


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Indian Power Sector

Installed Capacity: 1,45,555MW

(As on 30.09.2008)

Central Sector

48,470 MW

State Sector

75,838 MW

Private Sector

21,247 MW

GENERATION

DISTRIBUTION

TRANSMISSION

100% with Government owned utilities.

> 95% with State Discoms , rest with Privateutilities.


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Indian Power Sector

PEAK DEMAN

108886

152786

218209

298252

2007-08 2011-12 2016-17 2021-22

Base Bemand (BU)

737

968.6

1392

1915

2007-08 2011-12 2016-17 2021-22

Year BaseDemand (BU)

AnnualPeak

Demand(MW)

2007-08

737 108886

2011-12

968.6 152786

2016-17

1392 218209

2021-22

1915 298252


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Indian Power Sector

In the year 2007-08, the total electricity

generation was about 704.4 billion units of

energy with a growth of 6.3% over the previous

year.India faces Energy shortage of 26407 MU,

(10.4 %) and Peak shortages of 15560 MW

(14.6%) in the year 2008-09 (till Oct08).

The per capita electricity consumption in the country was 704

KWhr in 2007-08, Ministry of Power projected per capita electricity consumption

is 1000 KWh by the year 2012.


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Electricity Industry Structure

State

Joint

Private

SEBs

DVC,

Under MOP: NTPC, NEEPCO

Other Ministries: NLC,Central

State

CTU-Power GridCentral

STUs- SEBs

State STUs- SEBs

Private Licensees

Power Trading: PTC, NVVVNL Financing: PFC, REC

IPPs

/State GenCos

, Pvt DisComs

/State DisComs

/State TransCosTransmission

Distribution

Generation

Distribution


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Power Utilities

Following 8 states still operating with SEB structure: Punjab, Himachal Pradesh, Chhattisgarh, Kerala, Tamil

Nadu, Bihar, Jharkhand, & Meghalaya. Restructured status of other states is as given below :-

State Generation Transmission Distribution Sale & Purchase

Haryana 2 Discoms Discoms

Rajasthan 3 Discoms Discoms

Delhi 5 Discoms Discoms

UP 5 Discoms Trading Co.

Uttaranchal Trading Co.

Gujarat 4 Discoms Trading Co.

Maharashtra 1 Discom Discom

MP 4 Discoms Trading Co.

AP 4 Discoms Discoms

Karnataka 5 Discoms Discoms

Orissa (2) 4 Discoms Trading Co.

West Bengal 1 Discom Discom

Assam 3 Discoms ASEB


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Power Sector development

PRINCIPLES

Availability 24/7 Power to all consumers.

Accessibility

Universal service obligation

Reliability No load shedding, adequate peakingcapacity & spinning reserve.

Quality Stable Voltage & Frequency.

Efficiency Delivered power to the consumer to reflectmost efficient Kw hr consumed by user toK-Cal fed as fuel.

Incentive for efficiency improvement &increase in competition


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Electricity Regulation in India


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The Electricity supply industry wasearlier governed by three Acts, namely

Indian Electricity Act, 1910

Electricity (Supply) Act, 1948Electricity Regulatory CommissionsAct, 1998

The above three Acts now repealed in

Electricity Act, 2003.

History of ElectricityRegulation In India


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Electricity Regulation in India

Regulatory Milestones

1910 1948 1975 1998 2003

IE Act ES Act EACentral Utilities ERC ACT

British India-

agglomeration of provincesIndian Union

Isolated Private LicenseesIsolated

SEBs

Regional

SystemCentral Utilities Central Utilities, IPPs,

CTU, SEBs

Early British Model State Govt Central Govt Regulator

Country

Status

Sectoral

Makeup

Institutional

Structure


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Growth of the sector through licensees. Licence by

State Govt. Provision for licence for supply of electricity in aspecified area. Legal framework for laying down of wires and otherworks.

Provisions laying down relationship betweenlicensee and consumer.

Indian Electricity Act, 1910

The supply of electricity was limited to urban areasand most of the country was deprived of electricity.

The situation was so grim that after independence nota single private organization was competent toadminister the power supply in the country, thereby,

making way for state participation in the power sector.

Indian Electricity Act 1910 laid down the basicframework for the power sector in the countryalong with all the policies governing the electricity

supply in India.


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The Act concentrated on increasing statemonopoly over the sector by

Mandated creation of SEBs.

Need for the State to step in (throughSEBs) to extend electrification (so farlimited to cities) across the country

As a result of this, 19 SEBs (StateElectricity Boards) were formed underthe Act which enjoyed monopoly overgeneration, transmission and distributionat the intra-state level.

However the power situation lacked inquality, security and reliability.

Electricity (Supply) Act, 1948


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Electricity (Supply) Act, 1948

In 1975, the Electricity (Supply) Act 1948

was amended to improve the financial

position of the state controlled power

sector by allowing central government toparticipate in generation and transmission

of electricity.

As an outcome of these amendments, the

GoI set up National Thermal PowerCorporation Ltd. (NTPC) and National

Hydroelectric Power Corporation Ltd.

(NHPC) to supplement the effort of states in

generation and strive for greater capacityeneration.


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In order to strictly implement reforms andrestructure of the tariff structure, secondgeneration reforms were introduced.

In 1998 the GoI implementedThe ElectricityRegulatory Commission Act, 1998 .

It emphasized on the establishment of state andcentral level electricity regulatorycommissions( ERCs) for rationalizing the tariffstructure, creating transparency in the system andto frame and promote environmentally benign

policies.

Electricity Regulatory CommissionsAct, 1998

The SEBs incurred heavy loses and failed to make thenecessary payments to the CPSUs. Owing to their bulkydesign these utilities were inevitably becomingcumbersome to manage. Therefore, the administrationdecided to unbundle the utilities into more 'manageable'

size which paved the way for the Electricity Act 2003


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The Electricity Act, 2003


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The Electricity Act, 2003

This Act seeks to consolidate The laws relating to generation, transmission,

distribution, trading and use of electricity Taking measures conducive to development of

electricity industry, promoting competition, Protecting interest of consumers and supply of

electricity to all areas, Rationalization of electricity tariff ensuring

transparent policies regarding subsidies, Promotion ofefficient and environmentally benign

policies,

Constitution of Electricity Regulatory Commissionsand establishment of A ellate Tribunal and for

Electricity Act, 2003 - enacted June 10th 2003,envisages developmentin an open, nondiscriminatory, competitive, market drivenenvironment in the interest of the consumers/ suppliers of power.


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Scheme of Electricity Act 2003

I : Introduction (# 1 & 2)

II : National Electricity Policy & Plan (# 3-6)

III : Generation (# 7-11)

IV : Licensing (# 12-24)

V : Transmission (# 25-41)

VI : Distribution (# 42-60)VII : Tariff(# 61-66)

VIII : Works (# 67-69)

IX : CEA (# 70-75)

X : CERC & SERCs (# 76-109)

XI : Appellate Tribunal (# 110-125)

XII : Investigation & Enforcement (# 126-130)XIII : Reorganization of SEBs (# 131-134)

XIV : Offence & Penalties (# 135-152)

XV : Special Courts (# 153-157)

XVI : Dispute Resolution/Arbitration (#158)

XVII : Other Provisions (#159-165)

XVIII : Miscellaneous(#166-185)


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Government only to formulate policies.

Regulatory Commissions to regulate tariffand issue of licenses.

SEBs will no longer exist in the existingform, they will be restructured intoseparate generation, transmission anddistribution licensees. Regulatory function

has been taken away.

Power trading recognised as a distinct legalactivity.

Generation free from licensing. Capacity

Salient features of theElectricity Act, 2003


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Hydro requires concurrence of theAuthority and Government for optimumutilisation of water resources.

Captive generation has been liberalisedand no permission required.

Captive plants can sell extra power to grid.

Tariff will be subject to regulatorycommission.

Transmission utilities not to engage in thebusiness of generation/trading/distribution

of power and to provide open access to



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Tariff for sale of power to be regulated onlyfor sale by generating company todistribution licensee.

Direct power supply to consumers permittedas and when open access is allowed by stateregulator.

Initially open access will be with surchargein lieu of cross subsidies. Surcharge to begradually reduced in phased manner.

The act has enabling provisions.Government policies will have to spell outthe requirement of the sector and guiding



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Anti-theft legislation made stringent withpenalties for each offence clearly spelt out.

Provision for more than one licensee in same

area of supplyNo requirements for license in generation anddistribution for rural areas, and forcooperatives, Panchayat etc.

No tariff fixation by ERC if competitive biddingfollowed, or where consumers allowed openaccess enter into agreement withgenerators/traders

Consumer tariffs to reduce and move towards



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Role of Government Generation Transmission

Distribution Open Access Trading / Market Development Regulatory Commission / Appellate

Tribunal Tariff Principles Consumer Protection Measures against Theft of

electricity Restructurin of SEBs



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National Electricity Policy and Plan

Central Govt. to prepare National Electricity Policy and Tariff

Policy in consultation with State Govt. and Central ElectricityAuthority. (Clause 3(1)).

National Electricity Plan for a period of 5 years to be issued by

Authority in accordance with National Electricity Policy (Clause

3(4)).

National Policy on rural electrification including stand alone

systems to be issued by Central Government in consultation with

State Government (Clause 4 & 5).

Role of GovernmentRole ofGovernment


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Electricity Act, 2003

Provisions to Promote PowerGeneration

1. Generation Delicensed

2. Liberal captive generation

provisions3. Open access for supply to direct

consumers

4. Trading

5. Tariff based competitive bidding


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1. Generation Delicensed

Earlier TEC from CEA was a pre-

condition for setting up generatingcapacity

CEA used to take considerable time in many cases, 1-1 years for

giving TEC. Before TEC, even the beneficiaries

were required to be identified. All these requirements have been

dis ensed with.

Electricity Act, 2003Provisions to Promote PowerGeneration


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1. Generation Delicensed (contd) Generating company can set up a power

plant without any TEC from CEA providedthey have availability of

Land Fuel linkage Water linkage Environmental clearance

There is no pre-condition for identifyingcustomers.

Even the financial institutions areprepared now to finance the project based

on its cost of power, without having a pre-condition of lon term PPAs with



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2. Liberal Captive Generation Provisions

Clause 2(8)

Captive generating plant means a power plant

set up by any person to generate electricityprimarily for his own use and includes a powerplant set up by any co-operative society orassociation of persons for generating electricity

primarily for use of members of such co-operative society or association.

No clearance required from CEA or StateGovernment for setting up of captive generatingplant (Clause9(1)).

Captive generating plants are permitted to



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Clause 9(2)

Every person, who has constructed a captivegenerating plant and maintains and operatessuch plant, shall have the right to open accessfor the purposes of carrying electricity from hiscaptive generating plant to the destination ofhis use.

Clause 38 (provision)

Provided also that such surcharge shall not beleviable in case open access is provided to a

person who has established a captivegenerating plant for carrying the electricity to

the destination of his own use.



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Govt. of India vide the Rules issued in May05have further clarified that

Generating stations will quality as a captive

plant provided it has a captive consumption ofmore than 51%.

In case of SPU for setting up captive project acaptive consumer can have equity only upto

26%.

In case of group of members, association ofpersons, all persons together can fulfill abovecriteria.



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3.Open Access for Supply to Direct Consumers

Electricity Act 2003 envisages open access to bulkconsumers in a phased manner to ensure openaccess to consumers having connected load of more

than 1MW by January, 2009.

Open access in transmission and distribution willprovide opportunities for the generating companiesto supply power directly to bulk consumers.

These provisions will provide flexibility to theconsumer in selection of consumers.

Generator will no more be a captive supplier of State

Power Utilities.



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4. Trading

Trading has been recognised as alegal/licensed activity.

After enactment of the Act, almost about 9-10different inter-state trading companies havegot registered.

Trading activities have improved utilisation of

the existing generation capacities.

Operating PLF have now improved to almost74%.

Further, now many of the IPPs are entering intoa reement with tradin com anies for sale of



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There would be Transmission Utility at the Centre and in the States to

undertake planning & development of transmission system. (Sections 38 &

39)

Load despatch to be in the hands of a govt company/organisation. Flexibility

regarding keeping Transmission Utility and load despatch together orseparating them. Load Despatch function critical for grid stability and

neutrality vis a vis generators and distributors. Instructions to be binding on

both. (Sections 26, 27,31, 38, 39)

Private transmission companies to be licensed by the Appropriate

Commission after giving due consideration to the views of the Transmission

Utility. (Sections 15 (5) (b))

The Load Despatch Centre/Transmission Utility / Transmission Licensee not

to trade in power. Facilitating genuine competition between generators.

(Sections 27, 31, 38, 39,41)

Transmission


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Requires licensing (Clause 12).

Commission can issue two or more licenses for distribution

of electricity through their own distribution system in the

same area (Clause(14)).

Distribution licensee can engage a franchisee to undertake

distribution in his area of supply (Clause(14)).

All supply would need to be metered within 2 years.However, State Commission may extend this period for

completing the task of metering (Clause 55(1)).

Distribution


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Every distribution licensee shall establish a forum for redressal

of grievances of the consumers within six months as per

guidelines of the commission (Clause42(5)).

Distribution licensee to provide supply within the period asspecified by the commission or else a penalty upto Rs. 1000 per

day to be paid (Clause 43(3)).

Disconnection of supply in case of default of payment after

giving 15 days notice (Clause 56(1)).

Provision for suspension/revocation of licence by Regulatory

Commission as it is an essential service which can not be

allowed to collapse. (Sections 19, 24)

Distribution


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Open Access

Open access to the transmission lines to beprovided to distribution licensees, generatingcompanies. (Sections 38-40)

This would generate competitive pressures and

lead to gradual cost reduction.Open access in distribution to be allowed by

SERC in phases and to provide open access to allconsumers having requirement of 1 MW or morewithin 5 year(Sections 42)

In addition to the wheeling charges provision forsurcharge if open access is allowed beforeelimination of cross subsidies, to take care of

a)Current level of cross subsidy

b)Licensees obligation to supply. (Section


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Surcharge & cross subsidy to be progressively eliminated

(Clause 42).

In case of captive generating plant carrying the electricity to

the destination of his own use, no surcharge shall be leviable

(Clause 42).

Open Access


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Trading distinct activity permitted with licencing. (Section

12)

Regulatory Commission may fix ceiling on trading margin

to avoid artificial price volatility. (Sections 79 (2) (b) & 86(2) (b))

The Regulatory Commission to promote development of

market including trading. (Section 66)

Trading/ Market development


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Regulatory Commissions/Appellate

Tribunal

State Electricity Regulatory Commission to beconstituted within six months. (Section 82)

Provision for Joint Commission by more than oneState/UT. (Section 83)

Provision for constitution of Appellate Tribunalconsisting of Chairman and three Members. (Section110, 112)

Appellate Tribunal to hear appeals against the orders ofCERC/SERC, and also to exercise general supervisionand control over the Central/State Commissions.(Section 111)

Appeal against the orders of Appellate Tribunal to liebefore the Supreme Court. (Section 125)

Appellate Tribunal considered necessary to-


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Tariff Principles

Regulatory Commission to determine tariff for supply of electricity bygenerating co. on long/medium term contracts. (Section 62)

No tariff fixation by regulatory commission if tariff is determinedthrough competitive bidding or where consumers, on being allowedopen access enter into agreement with generators/traders.

Consumer tariff should progressively reduce cross subsidies andmove towards actual cost of supply. (Section 61 (g))

State Government may provide subsidy in advance through thebudget for specified target groups if it requires the tariff to be lowerthan that determined by the Regulatory Commission. (Section 65)

Regulatory Commissions may undertake regulation includingdetermination of multi-year tariff principles, which rewards efficiencyand is based on commercial principles. (Section 61 (e), (f))

Regulatory Commission to look at the costs of generation,

transmission and distribution separately. (Section 62 (2))


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Consumer ProtectionConsumer Protection

Consumer to be given connection within stipulated time.

(Section 43(1))

Penalty in the event of failure to give connection (Section

43(3)) Payment of interest on security deposit. (Section 47(4))

Regulatory commission to specify Electricity supply code to

be followed by licensees. (Section 50)

No sum due from consumers recoverable after a period of

two years unless the same was shown recoverable

continuously. (Section 56(2))


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Consumers (contd..)Consumers (contd..)

Redressal forum for redressal of grievances of consumers, to be appointed by

every distribution licensee within six months. Ombudsman scheme (Section

42 )

Standards of performance Licensees required to meet standards of performance specified by

Regulatory Commission. Failure to meet standards makes them liable to

pay compensation to affected person within ninety days.

Licensee to furnish to the Commission periodical information on

standards of performance (Section 57)

District level committee - (a) to coordinate and review extension of

electrification in each district; (b) to review quality of power supply and

consumer satisfaction, etc. (Section 166 (5))


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Measures against Theft of electricityMeasures against Theft of electricity

Focus on revenue realisation rather than criminal proceedings.

(Sections 126, 135)

Penalties linked to the connected load and quantum of energy

and financial gain involved in theft. (Section 135) Provisions for compounding of offences. (Section 152)

On the spot assessment of electricity charges for unauthorised

use of electricity by the assessing officer designated by the

State Government. (Section 126)

Theft punishable with imprisonment. (Section 135)

Punishment provision for abetment of theft. (Section 150)

Special Courts (Sections 153-158)


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Restructuring of SEBs

Provision for transfer scheme to create

one or more companies from SEB.

(Section 131) Provision for continuance of SEBs (Section

172)

States given flexibility to adopt reform

model/path.


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Electricity Act, 2003

Stimulus to the sector !DisciplineTransparencyIndependent regulation

distancing Government from Utility &Regulation!

Environment for PSP Market structure !

Power Trading Open Access

Captive


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FUTURE MARKET STRUCTUREFUTURE MARKET STRUCTURE

DISCOsDISCOs

CTU AND

STUsDISCOsDISCOs

CONSUMERSCONSUMERS

GENCOSGENCOS

HOLDING OR

TRADING COHOLDING OR

TRADING CO

TRADERSTRADERS CGS


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Regulatory Framework in Indian

Power Sector


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Regulatory framework

Responsibility for the development of the Power sector

is shared between the Central and State Governments.

The Ministry of Power (MoP) oversees the operation of

all Central Sector Power Utilities. The Central Electricity Authority (CEA) advises the

MoP on electricity policy and technical matters.

Central Electricity Regulatory Commission (CERC)

regulates the tariff for central power utilities and other

entities with inter state generation or transmission

operations.


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CERC(Central Electricity Regulatory Commission)

Functions of CERC To regulate the tariff of generating companies owned

or controlled by the Central Government. To regulate the tariff of generating companies other

than those owned or controlled by the Centralgovernment if such generating companies enter into orotherwise have a composite scheme of generation andsale of electricity in more than one State.

To regulate the inter-State transmission of electricity. To determine tariff for inter-State transmission of

electricity. To issue licenses to persons to function as transmission

licensee and electricity trader with respect to theirinter State operations.

To levy fees for the purpose of this Act.

To specify Grid code having regard to Grid standards To Fix trading margin in the Inter-State trading of


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Evolution of Tariff and otherRegulations

Central Commission by Notification makeRegulations.

While notifying the Commission presently follows thefollowing procedure:

Prepare concept paper /draft regulationand post in Web site.

Comments/Suggestion invited from allStakeholders and others

Organize open house hearings.

Finalise Regulations and issue detailed

orders giving reasons.


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Important Regulations of CentralCommission

Business Regulations in 1999.

Tariff Regulations, 2001 fordetermination of tariff for the period2001-04.

Tariff Regulations, 2004 fordetermination of tariff for the period

2004-09. Open Access Regulations

Trading Licence

Transmission Licence


TARIFF REGULATIONS FOR THE PERIOD 2009-14 ARE

UNDER PROCESS OF FINALIZATION


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State Electricity Regulatory Commission

(SERC)

Functions of SERCo Determine the tariff for generation, supply,

transmission and wheeling of electricity wholesale,bulk or retail as the case may be within the State.

o Regulate electricity purchase and procurementprocess of distribution licensees for distribution andsupply within the State.

o Facilitate intra State transmission and wheeling ofelectricity.

o Issue license to persons seeking to act as

transmission licensees, distribution licensees andelectricity traders with respect to their operationswithin the State.

o Levy fees for the purpose of the Electricity Act.o Specify State Grid Code consistent with the Central

Grid Code.o Fix the trading margin in the Intra State trading of


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Appellate Tribunal for Electricity (ATE)

oThis Tribunal has been established by the

Ministry of Power, Govt. of India w.e.f. 7th

April, 2004 . This Tribunal shall ordinary sit

at Delhi, came into effect from July 21,2005.

Functions of ATE Appellate Tribunal for Electricity has jurisdiction

through out India to hear appeals or originalpetitions against the orders of the Adjudicating

officer or The Central Regulatory Commission or

State Regulatory Commission or Joint Commission

constituted respectively under the Act of 2003.

The appeal, before the Appellate Tribunal would


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Central Government

Central Government shall prepare

National Electricity Policy

Tariff policy Policy for permitting stand alone system

for rural areas.

National policy for rural electrification

Issue guidelines for tariff basedcompetitive bidding process.

Role of Central Government


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CEA to continue as the main technical Advisor of the

Govt. of India/ State Government with the responsibility

of overall planning. (Section 70)

CEA to specify the technical standards for electricalplants and electrical lines. (Section 73)

CEA to be technical adviser to CERC as well as SERCs.

(Section 73) CEA tospecify the safety standards. (Section 53)

Central Electricity Authority


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NTPC COMMERCIALFUNCTIONS

NTPCs Growth Plan


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NTPCs Growth Plan

PRESENT INSTALLED

CAPACITY

Multi pronged

Growth Strategy Greenfield projects Brownfield expansion Joint ventures /

Acquisitions

(MW)

O B i


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Our Business

Expenses for

Generation

Generation andSales

Energy

Accounting

Realization Billing

O C t


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Our Customers

NTPC sells electricity to BULK

CONSUMERS comprising mainly electricity

utilities owned by state governments.

Sale of electricity is made through long term

Power Purchase Agreements entered into for

25 years in case of coal based power plants

and 15 years for Gas based power plants inline with expected life of the plants.

NTPC C t B


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SEBs

Very Large Customer Base will be formed with the Unbundling of Utilities into

Discoms, Bulk customers, Trading companies and Merchant Plant customers.

Andhra (4)

Karnataka (5)

Delhi (5)

Rajasthan (3)

WBSEDCL(1)

DISCOMsPowercorp/Nigam/

Tradco.

UPPCL

GUVNL

MPPTCL

MSEDCL

UPCL

HVPN

Gridco

DVC

State PowerDeptt

J&K

Sikkim

ChandigarhGoa

DD/DNH

Puducherry

Nagaland

Bulkcustomers/

Others

Railways

Indore-SEZ

Powergrid

NTPC Customer Base

TNEB

KSEB

CSEB

PSEB

ASEB

HPSEB

MeSEB

JSEB

BSEB


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1. PRICE FOR SALE OF ELECTRICITY

Tariff Policy

Interaction with price fixation agencies onprinciples and parameters

Determination of Tariffs

NTPC COMMERCIAL FUNCTIONSNTPC COMMERCIAL FUNCTIONS


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2. ARRANGEMENTS FOR SALE OF ELECTRICITY

Power Purchase Agreements

Allocation of Power Metering Arrangements

Regional Energy Accounts



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3. REALISATION AGAINST SALE OF ELECTRICITY

Receivables Management

LC / Escrow / State Govt. Guarantee/ CentralAppropriation

Bonds / Securitisation / Special Schemes



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4. MANAGING THE COMMERCIAL ENVIRONMENT

Electricity Legislation

Policy initiatives with Government andRegulatory Agencies

Sectoral Reforms

Regional Power Committees



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Corporate Office - Policy

- Tariffs

- PPAs

Regional Headquarters - Billing

- Realisation

- Regional Power Committees

SEB Headquarters - Customers Interface

- Day to Day Follow-up

THREE TIER COMMERCIAL ORGANISATION


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Billing for 2007-08- Rs. 34255 Crores

Average Monthly Billing - Rs. 2855 Crores

LC coverage as on date - Rs. 3198.1Crores

Realisation for the year 07-08- 100%

All states are making full payments within 30 days ofbilling except UP. UP is making payments within 60

days.

NTPC BILLING AND REALISATION

NTPC T iff


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NTPC Tariff

Least Fixed Charge Coal (Singrauli) : 22.92 Paisa/Unit

Highest Fixed Charge Coal

(Unchahar-III)

: 71.5Paisa/Unit

Least Coal Energy Charge (Korba) : 57.90 Paisa/Unit

Highest Coal Energy Charge(Bardarpur) : 220.53 Paisa/Unit

LNG Energy Charge : 1000.47Paisa/Unit

Naptha Energy Charge : 1378 Paisa/Unit


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1999-2000 - 145.47p/kwh

2000-01 - 157.20p/kwh

2001-02 - 142.84p/kwh

2002-03 - 147.12p/kwh

2003-04 - 146.51p/kwh

2004-05 - 152.06p/kwh

2005-06 - 164.00p/kwh2006-07 - 184.00p/kwh

2007-08 - 197.00p/kwh

Average Tariff Of NTPC Stations

Payment ArrangementPayment Arrangement


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Earlier there was defaults in payments by SEBs and NTPC

realization was around 75-80%.

Outstanding amount including Surcharge had increased in

2001 to almost Rs.25,000 Crs. In 2002, GOI came out with a Scheme called One Time

Settlement Scheme, under which outstanding dues of

NTPC as on 30.09.2001 were securitized by issuance of

RBI Bonds by State Govt. For ensuring future payments from 01.10.2001 onwards,

Tripartite Agreement was signed between State Govt.,

Central Govt. & RBI.




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Under Tripartite Agreement, in case of default inpayment, NTPC can recover the amount from

States RBI Account by referring the case to Ministry

of Finance.

Present NTPC billing is about Rs.36,000 Cr peryear.

For ensuring timely payments, we have LC

arrangement with each customer.

Tripartite Agreement for payment security is

applicable upto 2016.

Beyond 2016, we will have Escrow arrangement.



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Initiation of Proceedings

Suo-moto or on a petition filed by any affected orinterested person.

CERC has issued detailed procedure for filing of

petitions The Commission issues notices for hearing and

reply and rejoinder by the affected parties. The Petition, thereafter, come up before the

Commission for hearing (which may continue for

one or more number of hearings). Services of legal practitioners are availed onspecific legal issues only, otherwise casepresented by the technical person of thePetitioner.

The Commission, sometime directs various parties

during the hearing for furnishing some additional

NTPCs Current Regulatory

Interface


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Review of Commissions orders

The Commission has the power to

review its decision, direction andorders.

Aggrieved party has to file petitionfor review by the Commission

within 60 days of the making of theorder.

The Commission, generally, allowreview if there is any apparent

error on the face of records.


Interface

NTPC C R l


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AppealCentral Government establishedAppellate Tribunal for electricity

to hear appeals against order ofthe Commission.Aggrieved Party may prefer anappeal to the Appellate Tribunal

within 45 days from the date ofthe order.Second Appeal against the Orderof the Appellate Tribunal can befiled in Supreme Court.


Interface


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N C i lN C i l


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New CommercialNew Commercial

Initiatives (CRM)Initiatives (CRM) Commercial Initiatives for Customers

Setting up of CRM cells in the regional offices

Customer Roster- A systems to strengthen interface with

customers and position Regional ED as the single windowCustomer Relationship Manager.

Customer Support Group - To Strengthen the relationshipbuilding program by providing support services to customers

Customer Dashboard - A system to capture, analyse anddisseminate market intelligence about the state (including

information on customers, competitors etc) within NTPC


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Changes in tariff normsChanges in tariff norms

Stringent normsStringent norms

Prudence check of capital costs, O&MPrudence check of capital costs, O&M

etc.etc.

Construction risks associated withConstruction risks associated with

delay - IDCdelay - IDC

Threat of splitting NTPC MarketThreat of splitting NTPC Market

domination.domination.

RegulatoryRegulatory

EnvironmentEnvironment


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Realisation after TPA IncentivesRealisation after TPA Incentives

Customers healthCustomers health

Supply to multiple Discoms and privateSupply to multiple Discoms and privateDiscomsDiscoms

Direct supply to Bulk ConsumersDirect supply to Bulk Consumers

Fuel SecurityFuel Security

Operating in the competitiveOperating in the competitive

environmentenvironment

COMMERCIALCOMMERCIAL

CHALLENGES AHEADCHALLENGES AHEAD


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THANK YOU


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GENCO GENCO GENCOGENCOGENCOGENCO

TRANSCO TRANSCO

DISCOM DISCOMDISCOMDISCOM

Customer CustomerCustomerCustomer

D

R

EG

U

L

A

T

E

D

G

T

RESTRUCTURED ELECTRICITY MARKET

Power Pool

System Operator

Indian Power Sector is today faced by a


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Indian Power Sector is today faced by a

host of issues .

Capacity

Crunch

Energy CarbonConflict

Energy

Conservation Capacity

Utilization

Fuel Prices Capacity Mix

Rationalization

High T&D losses

Reduction in cost

of supply High Industrial

tariff

Key Sectoral Issues

Documents

ET_HR_Fin_Civil 2008 Batch 20 Nov08