BESCOM proposes incentive scheme to bring back HT consumers in the new tariff order 2018-’19

BESCOM announced its new tariff order for FY 2018-2019. New points introduced in the order include providing incentives to the HT consumers, for them to return back to state DISCOMs and not purchase power via Open Access.

Since HT consumers have been purchasing power via Open Access, the DISCOMs are deprived of the sales to the paying consumers, in turn impacting the finances of the distribution licensees.

Base consumption:

The monthly average consumption out of energy supplied by BESCOM during the non-peak hours’ period between 10.00 Hours and 18.00 Hours of the day, during the period from 01-04-2017 to 31-03-2018 as recorded in Time of Day (ToD) meter will be reckoned as base consumption.

Incentive scheme:

  • Any excess energy consumed by the eligible consumers during the non- peak period between 10.00 Hours and 18.00 Hours, over and above the average base consumption as stated, will be allowed a discount of Rs.1.00/- per unit in the bill, to the eligible consumers.

  • Further, the eligible consumers will be allowed an incentive of Rs.2.00 per unit in the bill for the energy consumed during the period between 22.00 Hours and 06.00 Hours as against the normal ToD rebate of Re.1.00 per unit.

Consumer

Slabs

Exiting rates (Ps/Unit)

Proposed Incentive rates (Ps/Unit)

HT2a(i)

0-1 lakh units

665

665

above 1 lakh units

695

HT2a(ii)

0-1 lakh units

660

660

above 1 lakh units

680

HT2b(i)

0-2 lakh units

845

845

above 2 lakh units

855

HT2b(ii)

0-2 lakh units

825

825

above 2 lakh units

835

HT2c(ii)

0-1 lakh units

740

740

above 1 lakh units

780

There are also some amendments in the wheeling charges applicable to the renewable generators.

  • The RE generators will be liable to pay 25% of the normal transmission charges and/or wheeling charges.

  • They will be liable to bear the applicable lines losses as decided by the commission.

  • Also be liable to other applicable charges including 2% of banking charges.

RE projects

Time period

Transmission/wheeling charges

Banking

Line losses

Wind projects

10.10.2013 to 0.09.2017

25% normal transmission/wheeling charges

exempted

Solar projects

On or earlier than 31.03.2017

exempted

The RE projects commissioned on or after 1.04.2018 shall be liable to 25% of the normal transmission and/or wheeling charges, in cash, and the applicable line losses and banking charge, in kind, as determined by the Commission in its Tariff Orders, from time-to-time, in addition to the other applicable charges.

The Captive Generators, availing of the benefit of the Renewable Energy Certificate (REC) mechanism, shall be liable to pay the normal Transmission, Wheeling, and other charges, as specified in the Commission’s Order dated 09.10.2013.

The order is in effect since 1.04.2018 until 31.02.2020 unless any other order comes into effect.

REC Trading Results – April 2018

 

April saw trading resume for Solar RECs after a gap of one year, after the ApTel pronounced judgment in the case of REC pricing. Also, after record sale of Non-solar RECs in the last 5 months, there was almost no inventory left of Non-solar RECs. In both Solar and Non-solar RECs, demand was robust, considering that this is the first month of the new financial year.

 

Analysis of Trading:

 

Non Solar – Clearing ratio in exchange stood at 72.6% and 77.2% in IEX and PXIL respectively for Non Solar REC’s.  A total of 187,543 RECswere traded, despite demand being at 1,099,426 (as compared to 538,371 RECs traded April 2017; an increase of 104%). RECs traded at the floor price of Rs 1,000/ REC at PXIL, but increased by a minuscule fraction to Rs 1,001/ REC at IEX. However, this increase in the traded price above the floor price has come after a gap of almost 6 years (last trading above the floor price was in August 2012).
Solar – Demand was robust at 8.75 lakh RECs (3.2X demand of April 2017). Clearing ratio stood good at 23.8% and 10.4% in IEX and PXIL respectively.

CERC Determines fees for issuance of Renewable Energy Certificates

In a recent amendment in the Regulation 11 of the REC Regulations, CERC determined the fees and charges payable by the eligible entities for participation in the scheme for, registration, eligibility of certificates, issuance of certificates, and other matters connected there with.  Following are some of the highlights of the regulation:

 

a)      Fees and charges other than those for issuance of certificates would be continued as they are at present until further orders.

 

b)      The fee for issuance of certificate for the period from 22.4.2013 till the date of issuance of next order by the Commission was determined at the rate of Rs 10/certificate.

 

c)      The fee for issuance of certificate for the period from 1.4.2015 till the date of issuance of next order by the Commission was to be regularized at the rate of Rs 4/certificate.

 

d)      The fees for issuance of certificate for the period from 1.1.2017 until further orders is determined to be Rs 2/- per certificate.

 

The regulation can be accessed here.

CSERC’s order on non compliance of RPO by Discoms for the year 2011-12 & 2012-13

Chhattisgarh State Electricity Regulatory Commission (CSERC) passed an order on 15th October 2014 on non compliance of RPO by DISCOM’s of Chhattisgarh for the year 2011-12 and 2012-13.  In the order CSERC said that they will close this matter of non compliance of RPO by DISCOMs. The questions arises in the order is how, as CSERC has not mentioned about any action to be taken or any penalty to be imposed on the discoms for their non compliance. CSERC in its order have concluded that

“Our attention has been drawn towards the fact that in CSPDCL’s tariff determination, final true up for FY 2011-12 has been completed. Therefore, in our opinion, it would not be appropriate to force them for compliance of RPO for FY 2011-12 at this stage. We are also of the view, that penalizing the other respondents/DISCOM for non fulfillment of their RE obligation for year 2011-12 is unjustified”

Similar order was also given for FY 2012-13. The commission has only asked the Discoms to be more vigilant on fulfillment of RPO in the coming years.

The order can be accessed here ( FY 2011-12) and here ( FY 2012-13).

 

REC Trading Report – June 2014

REC trade session for June 2014 was conducted on 25th June 2014. The following is a summary of results –

The total transactional value of non-solar RECs was INR 208.8 million and for solar RECs it was INR 15.4 million. The closing balance of REC inventory for non solar RECs breached the 7 million mark this  month whereas solar RECs crossed 0.23 million mark.

 

 

Non Solar RECs

In case of non- solar RECs demand almost quadrupled (up by 376%) as compared to last trade session (refer  – May 2014 trade report) and Supply grew by 5.23 %. Non Solar price continued to remain at floor (INR 1,500 per REC). More insights provided in graphical charts below :

Solar RECs

Total solar RECs issued this month was 27,787 and redeemed were 1654 only. In contrast to non-solar RECs, the demand for solar RECs took a beating as it went down by 22%. Supply rose by 11% w.r.t May 2014.  More details can be found in the graphs below –

Solar RECs finished trading at floor for consecutive 12 months.

Relevant media article can be read here.

Madhya Pradesh determines APPC for FY15

Madhya Pradesh Electricity Regulatory Commission (MPERC) has finally unveiled its APPC rate for financial year 2014-15. MPERC follows this definition of APPC  (which is in line with that of CERC) –

for the purpose of these regulations ‘Pooled Cost of Purchase’ means the  weighted average pooled price at which the distribution licensee has purchased the  electricity including cost of self generation, if any, in the previous year from all the energy  suppliers long-term and short-term, but excluding those based on renewable energy  sources, as the case may be.”

i.e. it excludes only renewable energy for APPC rate calculation.

Accordingly the APPC for FY15 has been determined as Rs. 2.66 per unit (up by 5.13% as compared to APPC FY14).

APPC for FY14 was Rs. 2.53 per unit.

More details can be had on Page no. 63 of this Retail Tariff Order.

REC Trading Report – May 2014

Demand and clearing ratios touched one of the lowest points in three years.

Non-solar RECs:

Demand in May was 29,255, compared to 79,354 in April (down 63% over April) and down 45% from May of last year. The last time demand was this low was in August 2011. Clearing ratios at both exchanges were approximately 0.45%. Closing inventory of RECs is in excess of 69.5 lakh.

Solar RECs: Demand improved marginally from 989 RECs last month to 2,120 RECs. As a result, clearing ratios improved as well – 0.26% in IEX and 4.8% on PXIL, albeit on very low demand compared to existing inventory. Inventory currently stands at over 2.1 lakh RECs.

The low demand is continuing despite penalty orders in Uttarakhand and Union Territories. It will be interesting to watch the approach that the regulators take in the next few months if the non-compliance continues despite orders from them.

To get details about previous months trading session – Click Here.

Our online market tracker tool can be accessed here.

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.

REC Trade Report – April 2014

We are pleased to bring the REC trade results and our analysis on REC trade session conducted on 30th April 2014.

Following is a brief of the analysis:

April 2014 was the first month of compliance year FY 2014-15. As expected, the volumes in non-solar and solar REC markets nosedived as compared to last months trading session (Refer – Blog – post on  March 2014 REC Trade).  The REC inventory’s closing balance stood at a mammoth 6.6 million RECs. The total RECs redeemed in April 14 were 80,343 RECs only. The RECs issued this month was again a 7digit number – about 1.1 million RECs. Cumulatively, March’14  and April’14 alone added over 3 million RECs, which is 23% of the total RECs issued till date.  This escalation in supply side and almost no demand side participation sums the state of current Indian REC market place.

Non-Solar RECs

Demand dropped by 88% and supply was up by 3.2% w.r.t March’ 14. Price of non-solar RECs remained at floor price – INR 1,500 per REC. Total non-solar redeemed were 79,354 (as per REC registry).

Solar RECs –

Price of solar REC continued to trade at floor (INR 9,300 per REC) for a consecutive 11th month. Demand fell to less than 1,000 and supply rose by 22%. Clearing ratios at both exchanges were close to half percent (0.5%) only. As per registry, solar RECs redeemed in April14 was 989.

For more details please refer table below – Our online market tracker tool can be accessed here.

 

Karnataka APPC for FY 2014-15

Karnataka electricity regulatory commission (KERC) has finalized the average pooled purchase cost (APPC) for FY 2013-14. The finalized APPC of FY14 is Rs. 3.14 per unit, on the basis of audited accounts data furnished by ESCOMs, which is up by 7 paise. Our previous blog-post on APPC of FY14 can be read here.

In the interim, since ESCOMs will take some time in finalizing power purchase quantum and cost of FY15, the commission has set up Rs. 3.14 per unit as an interim APPC rate to be effective from 1st April 2014 to 30th June 2014. It is expected that by end of June, a new and final APPC rate for FY15 will be declared.

Karnataka, therefore becomes the first state in current FY to declare APPC for FY15. The APPC rates in Karnataka have had an increasing trend, which is good specifically for RE generators wanting to explore REC markets in the state.

A gazetted copy can be accessed here.

KERC had also invited comments and suggestions for finalization of APR Fy13 and ARR of FY15 filed by discoms and KPTCL. The public hearing was scheduled to be conducted during end of April 2014 as per notice.

 

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