APERC notifies Multi Year Tariff order – wheeling tariff for distribution companies

Andhra Pradesh Regulatory Commission has recently notified the new tariffs for wheeling of distribution companies for the financial years 2019-2020 & 2023-2024. The commission came up with the following results & changes post reviewing the comments & suggestions from the stakeholders.

Issues like providing waivers of cross-subsidy surcharge for Firm Renewable Energy (FRE) off-take to Open Access consumers and other such issues were discussed. The commission is of the opinion that according to the Electricity Act 2003 & the APERC (Terms and Conditions of Open Access) Regulation 2 of 2005 in clause 17.1 (iii) also makes open access users in the transmission and/or distribution system liable to pay to the distribution licensee the cross-subsidy surcharge as determined by the Commission from time to time under Section 42 (2) from which captive generation plants for own use are exempted. The commission will, however, reduce such surcharge & cross subsidies gradually as specified in the clauses above.

The distribution loss trajectory FY 2019-2020 to 2023-2024

The loss percentage is based on the estimated energy handled & losses at respective voltage levels with respect to the total input for each year of the control period & the capacity of the existing network.

Key points for the transmission & wheeling charges and losses

  • All the distribution system users shall pay wheeling charges and bear losses in kind.
  • If the entry and exit points are of the same voltage, the wheeling charges corresponding to that voltage shall be collected. If the entry and exit points are at different voltages, the wheeling charges corresponding to the lowest voltage shall be collected.
  • The wheeling tariffs payable and energy losses to be borne shall be related to the contracted capacity in KW at the entry point. For the purpose of collection of wheeling charges, 1 kVA is equal to 1 kW.

Financial Restructuring plan for DISCOMs almost ready

The readiness of Financial Restructuring Plans (FRP) in some states is heralding good times ahead for present cash-strapped distribution companies.

Distribution companies of Rajasthan, Uttar Pradesh and Tamil Nadu have proactively finalized the process and have already issued bond to lenders, while Haryana is in the process of issuing such bonds. According to data provided in an article of Business Standard, these  four states (out of 7) constitute major chunk of debt (1.9 lakh crore INR).

As per a senior PFC official –  UP will overcome its short-term liabilities by 2014 and TN by 2017. This is expected to bring liquidity in the market and strengthen a timely financial settlement mechanism for power generators.

To encourage reduction of AT&C losses, a transitional financial mechanism has been put in place. The mechanism provides liquidity support equal to the value of additional energy saved through loss reduction. Going forward the emphasis needs to be on increasing tariffs for subsidized consumers rather than subsidizing consumers.


Order on APPC of Chhattisgarh declared

Order on Average Pooled Purchase Cost (APPC) by Chhattisgarh State Power Distribution Company Ltd., Bhilai Steel Plant and Jindal Steel and Power Ltd. for the year 2010-11 and 2011-12 was declared recently. The order specified the pooled cost of power purchase for the year 2010-11 and 2011-12 based on actual power purchase cost for the year 2009-10 and 2010-11 is shown below.

Name of DISCOM APPC for FY 2010-11 ( Rs. / Kwh) APPC for FY 2011-12 ( Rs. / Kwh)
CSPDCL 1.62 1.67
BSP-TEED 4.02 3.26
JSPL 3.00 3.00

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