Punjab notifies Draft for amendment in RPO regulation

Punjab state Electricity regulatory Commission (PSERC) has notified a draft along with a staff paper for amendment in RPO regulation. Through public notice the commission has invited comments and suggestions on or before 20th March 2015.

The new regulation proposes RPO obligation of 7.0% (4.5% Non-solar & 2.5% Solar) by 2019-20. The details of the proposed targets (in %) are mentioned in the graphs below:

 

Punjab is among those few states that have taken strict action on RPO compliance by imposing heavy penalties on obligated entities, albeit most other states have allowed Discoms to carry forward their RPO to next FY. As can be seen from the graphs above, the state has proposed ambitious targets for Solar, which will meet the National Tariff Policy (NTP) 2006 Solar target set for 2019-20, albeit proposed Non-Solar targets are much lower. The proposed total RPO targets are also significantly lower than the targets set by NAPCC.

Apart from this the commission has also proposed some changes in the amendment. The commission has proposed new definition for the “obligated entity” which can be read as:

‘obligated entity’ means the ‘distribution licensee(s)’, ‘captive user(s)’ of the electricity generated in a Captive Generating Plant and ‘Open access customer(s)’ which are mandated under clause (e) of sub-section (1) of Section 86 of the Act to fulfill the renewable purchase obligation;”

Previous definition by the commission, did not include any consumer or licensee.

The draft can be accessed here.

The stern order given by PSERC on pending RPO of PSPCL can be read here.

PSERC order on RPO of PSPCL

Punjab State Power Corporation Limited (PSPCL) had earlier filed a petition under Punjab State Electricity Regulatory Commission (PSERC) RPO Regulation 2011, pleading that net shortfall in RPO compliance in FY2013-14, be allowed to be carried forward to FY 2014-15.

The net shortfall of PSPCL RPO compliance was 7.1 % in Non-Solar and a staggering 36.5% in Solar. RPO compliance specified by the commission for FY 2013-14 was, 3.37 % for Non-Solar & 0.13 % for Solar, which PSPCL did not meet. RPO compliance for current FY 2014-15 is 3.81% in Non-Solar and 0.19% in Solar, much higher than previous FY. PSPCL stated several reasons for the shortfall, which the commission reviewed thoroughly.

The commission finally ordered Punjab Energy Development Agency (PEDA) to speed up development of some delayed RE projects, mainly Hydro, which was the main reason for the non-compliance of RPO by PSPCL.

Considering that some of the reasons for the non-compliance were beyond the control of PSERC, it has allowed the net shortfall to be carried forward to FY 2014-15, but has clearly stated that the RPO of FY 2014-15 along with previous year shortfall have to be strictly complied with by 31st December, 2014 or else heavy penalties will be imposed.

The details can be accessed here.

Punjab Declares Distribution & Transmission Tariff for FY 14-15

Punjab state Electricity Regulatory Commission (PSERC) has determined its Tariff for FY 14-15. The tariff has been declared on 22nd August 2014 for the Distribution Company PSPCL & transmission Company PSTCL.

Brief Details of the approved Distribution Tariff is given below:

It is worth noticing that Tariffs have not increased much for general industrial consumers, while it has reduced by approx. 3% for large industries, and has reduced by more than 6% for Commercial category. The Commission has increased the MMC by 2.74% compared to previous year.

Open Access Charges:

The Transmission Tariff and SLDC charges approved is as below:

  • The Cross Subsidy Surcharge for large supply industrial consumers has been calculated at 95 paisa/kWh, while the same for Commercial Consumer has been computed at 92 paisa/kWh.
  • The Commission has determined Wheeling charges at Rs. 1.21/kWh, applicable for all categories of OA consumers. It is relatively high compared to other states.
  • For Renewable Power (consumption within the state), the transmission and wheeling charges  shall be levied at 2% of energy injected into the grid, while in case of wheeling of Renewable power outside the state normative wheeling and transmission charges shall be payable.

The Open Access Consumer shall bear transmission and distribution losses as given below:

The PSERC Distribution Tariff can be accessed here.

The PSERC Transmission Tariff can be accessed here.

Our Previous blog post on PSERC Net Metering Policy can be read here.

Contributed by Dheeraj Babariya.

Punjab pushes PSPCL for RPO compliance by December’13

Punjab state power corporation limited (PSPCL) has been asked to comply with its stipulated RPO target for FY12, FY13 and FY14 cumulatively. In an order dated 12 August 2013, Punjab regulator allowed PSPCL to carry forward 114.80 non solar MUs and 25.8 solar MUs to FY14, which is the cumulative shortfall for FY12 and FY13.

For the current fiscal (FY14), the Punjab Discom has to purchase around 400,000 RECs and the shortfall of 114800 will eventually entail over 500,000 RECs to be purchased by end of December 2013.

PSPCL/PEDA FY13
in MUs Shortfall (+/-) in MWh RECs required
Non Solar Obligation 114.8 114800 114800
Solar Obligation 25.8 25800 25800
  140.6 140600 140600

With Maharashtra and Delhi also pushing for RPO on similar lines, it is expected that the buy side participation  will improve in the  poorly performing REC market.

For the copy of the order – Click Here

Punjab roll-forwards RPO to next year

PSPCL recently petitioned the Punjab Electricity Regulatory Commission to amend its RPO from 2.4% (including 0.03% solar) to 1.65%. This is inline with the extent of RPO achieved in the state (1.67% non-solar and 0.0075% solar). The reasoning behind the request for reduction was that PSPCL suffered due to reduced RE generation (delays and closures of RE facilities), and its efforts to procure RE power from the market did not bear fruit. PEDA supported PSPCL’s petition.

The commission rejected the request [DOC file]. Instead, it allowed PSPCL to carry forward the RPO to next year. PSPCL will now have to meet the shortfall this year in addition to the current year RPO (2.9%).

In our analysis, a few things stand out in the petition:

  • PSPCL did not mention efforts to procure RECs from the market as a step it took to try and meet its RPO
  • The commission did mention it as one of the steps it can consider to meet its RPO in the current year. The order states: ” This carry forward shortfall in RPO compliance during 2011-12 to 2012-13 shall be in addition to the RPO specified in the RPO Regulations for that year, to be made good separately for non-solar and solar power as specified by the Commission, through purchase/generation of electricity from RE Projects on best efforts or in case of non-availability of such electricity, through purchase of RECs from the Power Exchange(s)”
  • It is unclear whether the waiver will also apply to open access and captive consumers. The order is specific to PSPCL, but this may open a way for a carry-forward for open access and captive consumers also

Overall, the order from the commission is in the right direction. Given the nascent stage that REC markets are in, it will be difficult to enforce full penalties due to non-compliance. However, waiver or retrospective change in RPO % would send a wrong signal to the market and obligated entities.

 

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