APTEL Directs DERC to adjust the PPAC (Hike in Tariff)

The Appellate Tribunal for Electricity (APTEL) in its judgment dated 25th May 2015 has directed the DERC (Delhi Electricity Regulatory Commission) to determine the Power Purchase Adjustment Cost (PPAC) for the 3rd and 4th quarter of the previous financial year (FY 14-15).

The Judgement came after Tata Power Delhi Distribution Ltd. Filed a petition in the tribunal requesting for directing the DERC to implement the PPAC for 3rd and 4th quarter of Financial Year 2014-15 immediately.

The tribunal after hearing both the parties, in its summary stated that:

“In the hierarchy of the Courts, there is a committing of discipline and such discipline should be maintained by all, otherwise that would lead to chaos in the whole Country particularly, in the Power Sector if such trend of slackness or arbitrariness is allowed to the State Commission like DERC in the present case”.

And the judgment:  

“We direct the Delhi Commission to determine the PPAC for the above said 3rd and 4th quarter within three weeks from today otherwise face the consequences and action will be taken by this Tribunal”.

This decision of APTEL has come as a relief for the distribution licensees, who have been facing financial crunches and revenue gaps. This move will result in increase in tariff hike in the state. The capital is likely to see tariff hike of 5% to 20%.

The order can be reached here.

Related article on Indian Express and NDTV

Solar Rooftop & Net Metering

In recent months many states have formulated ‘Net metering’ policies. These polices herald an exciting phase in the development of solar sector in the country as they will enable every household to become a power generator.
In this article, we have compared the various net-metering approached adopted by states. Some states have formulated regulations, while other have declared policies. While regulations are specific and binding, policies are more directional and state-ments of intent. Further, it is important to study and understand the fine-print of the regulations or poli-cies, as the way the policy works will have a signifi-cant impact on the return made by investors of roof-top projects.
A key difference is in the tariff paid for power ex-ported to the grid. Some states have adopted a ‘feed-in-tariff’ (FIT) approach, while other will al-low carryover of excess power to the next month – implying that the tariff is equal to the retail tariff be-ing paid by the consumer. FITs range from Rs 8.15 to Rs 9.56 per unit – these are significantly higher from the recently discovered prices of MW scale solar

projects of Rs 6- 7 per unit. In the case of offset with retail tariffs, projects will benefit from annual escala-tions, and therefore will see increasing savings over the life of the project.
We believe that net-metering regulations are im-portant to make solar of every roof a reality. How-ever, a key shortcoming in the existing regulations is that the procedure to get net-metering going are missing. Any net-metering project will involve an agreement with the Discom, and this is where pro-cedural and operational challenges will crop up. Simple, yet detailed and time-bound procedures need to be laid out on how to make a roof-top pro-ject a reality. Only Delhi has made some headway in laying down detailed procedures that projects can follow to get net-metering in place.
Table below compares each policy with the other.

 

Report on Delhi Net Metering Policy

DERC Finalizes Net Metering Regulations, 2014

Delhi Electricity Regulatory Commission (DERC) in its notification dated 2nd Sep 2014, has announced net metering regulations for Renewable Energy, which will in turn allow many households and organizations in Delhi to generate and supply power to the grid and avail the benefits of units supplied in their electricity bills.

A brief summary of the Regulation is given in table below:

The new regulation is definitely a major initiative taken by DERC to promote the Solar Energy Generation in the state. It will help DISCOM’s to fulfill their RPO, which they were not able to meet in the previous years.

In a state like Delhi, this policy may bring positive changes, where the tariff for non-domestic consumers varies between 7-8 Rs. Per unit, such consumers may come forward and avail the benefits of the new regulation.

The tariffs for procuring power has not been defined yet, but it is expected to come out soon. When that happens, consumers will be able to determine viability of the projects.

The Net Metering Regulation can be accessed here.

Our previous blog post on DERC Tariff hike can be read here.

Contributed by Chetan Adhikari.

DERC to Finalize Solar Tariff Soon

According to an article in Times of India, it is expected that the DERC (Delhi Electricity Regulatory Commission) may soon finalize Solar Tariff Regulation, by the end of this month. It will define the regulation for net metering and solar rooftop in the state.

This will allow private entities and individuals to setup rooftop solar for their use and feed the excess power to the grid, with settlement done using Net Metering.

The net metering proposal is at an advanced stage. It’s likely to be released this month. It’s meant for anyone who plans to supply renewable energy to the grid. For large private players, the tariff will be decided on a case-by-case basis depending on capital cost and the solar regulations we have. For individuals, the energy they produce can offset their electricity bills“, said DERC chairperson P D Sudhakar.

DERC is also working on the subsidies and the incentives to be given.

According to our analysis, in a state like Delhi, where RE generation is still lacking, this regulation will fuel up the RE generation and may bring a positive changes. Also recent tariff hike in Delhi may lead to domestic and commercial consumers to switch to Rooftop Solar, with Net Metering. This Regulation may also help Discom’s, which are currently suffering from poor RPO compliance. We expect the Solar Tariffs to be equivalent to the tariffs prescribed by CERC, or maybe higher, so as to encourage small consumers to go for solar rooftops.

The Media article can be read here.

Our previous blog on DERC tariff hike can be read here.

DERC hikes power tariff in Delhi

DERC in its order dated 17th July, 2014, approved a tariff hike of 8.32% for three DISCOMs, namely BSES Yamuna Power (BYPL), BSES Rajdhani Power (BRPL) and Tata Power Delhi Distribution Ltd (TPDDL), while the tariff for NDMC has been hiked by 9.52%. Since Delhi has recently notified the open access charges in December, 2013 the tariff hike would increase the leverage to an open access consumer (1 MW and above) to procure cheaper power from the open market.

The other major features of the order include:

  • As a move to help DISCOMs to liquidate the principal of their accumulated deficit, DERC has decided to continue with the surcharge of 8% for all the four DISCOMs including NDMC.

ToD tariff extended for all consumers. This would enable utilities to adopt various DSM measures that would help in lowering the peak demand and thereby reducing costly power purchase.

  • Also an additional surcharge, varying from Rs 0.30/kWh to Rs 3.00/kWh has been levied on purchase of power through open access, there is still potential for an open access consumer in Delhi to purchase power through Power Exchanges such as IEX for six months in a year.
  • The purchases of energy from renewable sources through open access has been exempted from wheeling, transmission and additional surcharge. Thus, the open access consumers can avail green power to procure cheaper power. Many large consumers in Delhi have already started filing open access applications for availing open access.
  • It is anticipated that the recent tariff hike would act as a catalyst in promoting open access in Delhi and large industrial and commercial consumers would flock to PXs and bilateral transactions to reduce the impact of the tariff hike.

The orders can be accessed here.

Contributed by Mithun Dubey

Delhi discoms request to waive RPO of FY13

Delhi discoms have requested to DERC, to waive RPO targets of FY13. This request was put forward by discoms in their respective ARR petitions for FY15. The discoms contend that RPO regulations were introduced in Delhi only in October 2012 and as such there was little time in that year to meet the targets. The request can be read as (Petitioner – Delhi discom)-

“In this regard the Petitioner would like to submit that since the Regulations were issued in the mid of FY 2012-13 and the Renewable Energy Generation in Delhi was not fully developed, it was not possible to meet the RPO Targets during FY 2012-13. The Petitioner appreciates the fact that the energy generation through Renewable Energy Sources is required to be promoted by achieving the RPO Targets but at the same time the Renewable Energy Sector is also required to be developed in Delhi for fulfilment of RPO. The Petitioner has invited competitive bids for procurement of Renewable Power for both Solar and Non-Solar plants. The details about the bidding process and shortlisted bidders have already been submitted to the Hon’ble Commission. The Hon’ble Commission would appreciate the fact that RE Generation in Delhi is at nascent stage and will gradually develop in the coming years. The Petitioner in the meeting with the Hon’ble Commission held on October 9, 2012 also highlighted the difficulty in mobilising resources to meet the RPO announced by the Hon’ble Commission.”

Delhi discoms BYPL and BRPL mde reference to MERC’s order dated 7th August 2009, where the RPO targets from FY08 to FY10 were exempted due to shortfall in projected RE capacity addition.

While it is left on DERC to decide on this matter, any decision in favour of the request would further dent the ongoing positive enforcement efforts in other states.

The ARR petitions are available on DERC’s website.

Our recent blog-post highlighting projections by discoms for meeting RPO of Fy15 can be read here.

Relevant media article – Times of India.

Delhi discoms likely to comply with RPO by purchase of RECs

Delhi discoms – BRPL, BYPL and TPDDL have all filed a petition to Delhi electricity regulatory commission (DERC) for approval of annual revenue requirement (ARR) of FY 2014-15.

In terms of renewable energy resource capacity, Delhi is indeed poor as compared to other states. Therefore, to comply with RPO targets obligated entities in the state have lesser options than to buying RECs from the markets.

Following are the cost estimates for purchase of RECs submitted by discoms (for FY2014-15)-

BRPL – Rs 28.3 cr (Solar RPO) & Rs 90.7 cr (Non-Solar RPO)

BYPL – Rs 15.4 cr (Solar RPO) & Rs 56.2 cr (Non-Solar RPO)

TPDDL – Rs 17.54 cr (Solar RPO) & Rs 74.71 cr (Non-Solar RPO)

 

The petitions can be downloaded from DERC’s website.

Delhi discoms build RPO compliance costs into their tariff

According to the most recent tariff orders, the Delhi Electricity Regulatory Commission (DERC) has allowed Tata Power Delhi Distribution Limited, BSES Yamuna Power Limited, BSES Rajdhani Power Limited, New Delhi Municipal Council to incorporate the cost of Renewable Purchase Obligation (RPO) for FY2013-14 in their tariff.

The details of their obligation are given below:

in MWh Tata Power BSES Yamuna BSES Rajdhani NDMC Total
Non Solar Obligation 342190 255070 454710 61956 1113926
Solar Obligation 14880 11090 19770 2964 48704

We see this as a good starting point. By including in its tariff order, a Discom’s is essentially starting to recover the cost of RPO as part of the tariff it charges. This should pave the way for RPO compliance (like in the case of Punjab). However, it is too early to count compliance by Delhi Discom’s as a certainty. Eventually, DERC will have to enforce compliance. We will come to know of that after March 2014. In the tariff order, the Discom’s and DERC are silent regarding the extent of compliance in 2012-13.

Subsidy of 1 rupee per unit on consuming less power in Delhi

With the power prices going up in the capital regularly and a 26% tariff hike which made by the Delhi Electricity Regulatory Commission (DERC) last week, Delhi Chief Minister Sheila Dikshit announced a subsidy of Re 1 per unit for those who consume less than 200 units in a month . In yesterday’s article of Tehelka.com she said that, “The DERC has hiked the tariff. We have nothing to do with it. There is no alternative but to increase the rate as cost of power purchase has gone up significantly. We will continue to provide Rs 1 subsidy per unit to those who limit their consumption up to 200 unit per month”.

This facility was available earlier also but it was discontinued in March 2012. It is estimated that around 20 lakh domestic consumers (59 % of total domestic consumers) will benefit from the scheme . The government will release an amount of Rs 222.40 crore for this purpose.

If the consumption if less than 200 units in a month one would pay Rs 2.70 per unit. But if it goes beyond 200 units it will be charged as Rs 4.80 per unit for the entire consumption.

With increasing demand such steps will attract consumers to save power.

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