Rajasthan Electricity Regulatory Commission determines CSS for FY 2016-17

Rajasthan Electricity Regulatory Commission (RERC) has calculated the Cross subsidy surcharge to be applicable during FY 16-17. The new CSS will be applicable only for the state of Rajasthan effective till 31st March, 2017.   The new CSS applicable will have significant impact on the open access power market.

The table below depicts the CSS charges defined for year FY 2016-17:

 

The graph below depicts the % change in the CSS over the last four years:

 

The regulation can be accessed here.

Cross-subsidy surcharge continues to rise

A recent article in Business Standard highlighted the disproportionate rise of cross-subsidy surcharge (CSS) in many states. We have been tracking this issue as well and had highlighted the problem in our blog & NL Volume 62.

 

In the past, CSS has been calculated on the basis of the cost of the marginal 5% (in other words the most expensive 5%) of power procured by the state. This results in a bias towards the highest cost paid, resulting in high CSS. The National tariff policy (NTP) has suggested change in this methodology to a weighted average cost model, and also proposed that CSS be restricted to 20% of the tariff. However, recent increases show that states have largely ignored the provisions of the NTP.

 

A big reason for the rise in CSS is also the fact that states continue to shy away from raising tariffs for domestic, agricultural and such categories. According to the Business Standard article, States like Chhattisgarh, UP, Uttarakhand and Bihar have already come up with their tariff orders for the financial year 2016-17, but have not raised retail tariffs. Only Gujarat has allowed a retail tariff increase.

 

With increasing cost of power the burden to foot the bill therefore falls on industrial and commercial consumers. As per the MoP data the below graph depicts change in CSS over the span of 1 year in the major states which varies from 35% to 321%.

 

 

 

 

 

Telangana Regulations for connectivity with the Grid and sale of electricity from the Rooftop Solar Photovoltaic

Telangana recently came up with its net metering regulation for connectivity with the Grid and sale of electricity from the Rooftop Solar Photovoltaic. This Regulation will be applicable to the distribution licensee, an eligible consumer and a third party owner of a Roof Top Solar PV System in the state of Telangana.

 

Following are some of the highlights of the regulations:

 

  • An eligible consumer shall install the grid connected Rooftop Solar PV System of the rated capacity as specified in this Regulation.
  • The tariff payable to an eligible consumer under the net-metering shall be the average power purchase cost of a Distribution Licensee.
  • The net metering facility, as far as possible, of an eligible consumer shall be in three phase service.
  • A single phase consumer is also eligible for net metering up to 3 KW.
  • The capacity of a Rooftop Solar PV System to be installed at the premises of an eligible consumer shall not be less than one Kilo Watt peak (1kWp) and a maximum of One (1) MWp.
  • The quantum of electricity consumed by an Eligible Consumer from the Rooftop Solar PV System under the Net Metering Arrangement shall qualify towards his compliance of Solar RPPO, if such Consumer is an Obligated Entity.
  • The quantum of electricity consumed by the Eligible Consumer from the Rooftop Solar PV System under the Net Metering arrangement shall, if such Consumer is not an Obligated Entity, qualify towards meeting the Solar RPPO of the Distribution Licensee.
  • The unadjusted surplus Units of the solar energy purchased by the Distribution Licensee under the provisions of sub-Para 10.3 shall qualify towards meeting its Solar RPPO.
  • The Rooftop Solar PV System under the net metering arrangement, whether self- owned or third party owned installed on the Eligible Consumer’s premises, shall be exempted from Transmission Charge, Transmission Loss, Wheeling Charge, Wheeling Loss, Cross Subsidy Surcharge and Additional Surcharge.
  • The Rooftop Solar PV System Developer shall retain the entire proceeds of CDM benefits in the first year after the date of commercial operation of the generating station.

 

The regulation can be accessed here.

TSERC Determines CSS for FY2016-17

Telangana Electricity Regulatory Commission (TSERC) has calculated the Cross subsidy surcharge to be applicable during FY 16-17. The new CSS will be applicable only for the state of Telangana effective from 1st July, 2016 to 31st March, 2017.  There was no CSS applicable in the state till last FY 14-15. The new CSS applicable will have significant impact on the open access power market.

The Telangana solar and wind policy which was announced recently clearly states that for Solar Power Plant located within the state and selling power to third parties within the state, 100% exemption shall be provided on the cross subsidy surcharge as determined by TSERC for five years from the date of commissioning of the Power Plant.

The table below depicts the CSS charges defined for year FY2015-16 and FY 2016-17:

The regulation can be accessed here.

 

GERC Determines Tariff for Procurement of Power from Wind Energy Projects

Gujarat Electricity Regulatory Commission (GERC) has proposed an increase in tariff for procurement of wind power. The higher tariff is on account of a rise in capital costs of setting up a wind power project in Gujarat.

GERC has come out with a draft discussion paper on tariff fixation and has invited stake holders to file objections before June 10, 2016. According to the draft paper, the capital cost of setting up a wind power project in Gujarat increased from Rs 6.06 crore per MW to Rs 6.13 crore per MW.

The graph below gives a comparison of the wind tariff determined over the few years:

 

 

Cross Subsidy Charges, Transmission and Wheeling Charges:

1.      Cross Subsidy Charges:

According to the earlier orders, the commission had exempted third party sale of wind energy from the cross subsidy surcharge. Also  the cross-subsidy surcharge all open access transactions from wind power projects.

  • 25% of the cross subsidy surcharge as applicable to normal open access consumer shall be applicable.

2. Wheeling of power for Captive Use

a. In Case of wheeling of power to consumption site at 66 kV voltage level and above, normal open access charges and losses as applicable to normal open access consumer.

b.  In case the injection of power is at 66 kV or above and drawl is at 11 kV, normal transmission charges and losses are applicable; however 50% of wheeling charges and 50% of distribution losses of the energy fed into the grid as applicable to normal open access consumers.

 

3.Wheeling of power to more than one locations

Wind power projects owners , who decide to wheel electricity for captive use / third party sale , to more than one location, shall pay 5 Paisa/KWh on energy fed in the grid to the distribution company concerned in addition to transmission charges and losses, as applicable.

 

4. Energy Metering

  • Wind projects shall have to provide ABT compliant meters at the interface points
  • Metering shall be done at interconnection point of the generator bus-bar with the transmission or distribution system concerned. Pricing of Reactive Power
  • 10 paise/kVARh– For the drawl of reactive energy at 10% or less of the net energy exported.
  • 25 paise/kVARh– For the drawl of reactive energy at more than 10% of the net active energy exported

5.Banking of Surplus Wind Energy

As promotional measure, it is proposed to continue the banking facility for 1 billing cycle for the wind power captive projects wheeling electricity for own use.

  • For captive wind energy projects, the surplus energy after one month’s banking is considered for purchase by distribution licensee at 85% of the wind tariff.
  • For third party wind energy sale, the surplus energy after 15 minutes time block is considered for purchase by distribution licensee at the rate of 85% of the tariff declared by the Commission. The order can be accessed here.

KERC Determines tariffs and other norms for Solar Rooftop and Small Photovoltaic Power Plants

This Order is applicable to all new grid connected solar rooftop and small solar photo voltaic power plants, entering into Power Purchase Agreement (PPA) and commissioned on or after 2nd May, 2016 and up to 31st March, 2018.

Sharing of Clean Development Mechanism (CDM) benefits between the generating company and the beneficiaries

  • 100% of gross proceeds on account of CDM benefit are to be retained by the project developer in the first year, after the date of commercial operation of the generating station,
  • In the second year, the share of distribution licensees shall be 10%, which shall be progressively increased by 10% every year till it reaches 50% and thereafter, the proceeds shall be shared in equal proportion by the generating companies and the beneficiaries.

Grid Connectivity for roof-top projects

  • 1 kW to 5 kW – single phase 230 volts
  • 5 kW to 50 kW – 3 phase 415 Volts
  • 50 kW to 1 MW – 11 kV line.

Metering

  • Metering shall be in compliance with the CEA (Installation and Operation of Meters) Regulations 2006 as amended from time to time.
  • In the case of, solar rooftop PV systems connected to LT grid of a distribution company, the concept of net metering shall be adopted and the net energy pumped into the grid shall be billed.
  • In the net -metering, the consumer is paid for the net energy i.e., the difference between energy generated from solar rooftop plant and consumed by his/her installation.
  • This concept allows only surplus energy to be injected into the grid. The Commission had proposed to continue with net-metering concept for all consumers, other than domestic consumers.
  • In the case of domestic consumers, the Commission had proposed to adopt gross metering concept where the entire energy generated by the solar rooftop plant is allowed to be injected into the grid

Note – An amendment to CEA (Installation and Operation of Meters) Regulations 2006 has been issued recently, in which a new definition of “renewable energy meter” has been introduced to extend clarity to net-metering scheme.

  • If export>import, ESCOM pays generator at the tariff determined.
  • If import > export; then generators pays to DISCOM at prevailing retail tariff.

 

Applicability of Wheeling and Banking Charges and Cross Subsidy Surcharge:

For solar generators going with intra-state open-access, no wheeling/banking charges or cross- subsidy charges are to be paid.

The copy of the order can be accessed here.

Odisha Declares Open Access Charges for 2014-15

Odisha Electricity Regulatory Commission (OERC) has determined the Open Access charges through a notification dated 11thApril 2016.

The new charges determined are applicable for FY 16-17 with effect from 11th April 2014. The details of the charges are in the table below:

 

 

The normative transmission loss at EHT (3.70%) and normative wheeling loss for HT level (8%) are applicable for the year 2016-17.

Additional Surcharge: No additional surcharge over and above the Cross-Subsidy Surcharge needs to be given to the embedded licensee.

No Cross-subsidy surcharge are payable by the consumers availing Renewable power.

20% wheeling charge is payable by the consumer drawing power from Renewable source excluding Co-generation & Bio mass power plant.

The order can be accessed here.

 

 

RERC determines Additional Surcharge for Open Access Consumers 2016-17

In the recent decision the Rajasthan High Court passed an order against RERC for the levy of Rs.1/kWh as Additional Surcharge on all Open Access Consumers.

On 12.05.2016 Rajasthan Electricity Regulatory commission passed an order for the levy of additional surcharge for all the Open Access consumers. This had negative Implication on any consumer willing to buy power from a third party in the state. The surcharge made all the Open Access transactions in the state highly unviable. Even the Green Power Transactions were not exempted from the surcharge.

In its verdict the High Court has “set aside” the verdict passed on 12.05.2016 and has provided directions to RERC to follow and obtain the desired information in a rightful and transparent manner.

The court has provided following direction to the State Regulatory Commission:

  • The RERC should make a public advertisement to notify the Objectors
  • The requisite advertisement to be made in two Vernacular and one English Newspaper
  • The advertisement will also notify the date of hearing within one week of the last date for collection of material as per advertisement.
  • RERC will hear the objectors and pass orders within ten days. The objectors will not be entitled to any adjournment.
  • The parties agree that the additional surcharge, if any, determined by RERC would be payable effective the date it was payable under the order dated 12.05.2016.
  • The current order has been occasioned only for reason of violation of principles of natural justice in passing the impugned order dated 12.05.2016 and is not reflective of the merits of the levy of additional surcharge or its quantu

The order can be accessed here.

 

 

KERC Tariff Revision 2017

Karnataka Electricity Regulatory Commission in its order dated 30th March 2016, approved the retail supply tariff for 2016-17. The tariff hike proposed by KERC for domestic category and industrial consumers and a comparison of the existing and new tariff approved by the commission can be seen in the table below:

The table below is the cross subsidy charges worked out as per the different the consumer category.

The order can be accessed here.

Tamil Nadu Comprehensive Tariff Order on Wind Energy

The Tamil Nadu Electricity Regulatory Commission issued its fourth Comprehensive Tariff Order on Wind Energy on 30th March, 2016. The Commission’s last comprehensive tariff order was issued in 2012 for a control period for two years which was later extended up to the issuance of next comprehensive tariff order. This order would be applicable on purchase of wind energy by the Distribution Licensee from wind energy generators (WEGs).

Some of the key points of the order are as follows:

 

  • Wind Tariff: This year’s levelized wind tariff has been finalized out to be Rs 4.16/ unit which has increased from the previous tariff of Rs 3.59/ unit.
  • CDM Benefits: The order offers CDM benefits, which will be shared between the distribution licensee and the consumer on gross basis starting from 100% to developers in the first year and thereafter reducing by 10% every year till the sharing becomes equal.
  • Wheeling & Transmission Charges: The WEGs shall have to bear 40% in each of the transmission, wheeling and scheduling and system operation charges as applicable to the conventional power to the wind power.
  • CSS: The WEG will be levied 50% of cross subsidy charges.
  • Banking Charges: This order provides the banking of Energy for a period of 12 month commencing from April 1st, 2016 to 31st March.
    • The Unutilized energy as on 31st March every year would be encashed at the rate of 75% of the respective applicable wind energy tariff rate fixed by the Commission.
    • The WEGs have requested to consider purchase of unutilized energy for the generators under REC scheme at APPC rates and to permit banking of energy and encash the unutilized energy at 75% of the applicable rates notified by the Commission.
  • The order can be accessed here.
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