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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 175
Unit 7 Notes
__________________
__________________
Pricing and Regulatory Aspects __________________
Introduction
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 177
n There is a need to introduce energy audits to help Notes
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(Rs. Crore)
1991-92 2000-01 2001-02 2001-02 2002-03
(Prov.) (AP) (RE) (AP)
A.(i) Subsidy
involved on
account of sale of
electricity to
(a) Agriculture 5,938.00 24,074.13 29,461 25,571.10 26,959.30
(b) Domestic 1,310.00 9,968.04 11,267 10,894.14 11,651.01
(c) Inter-state sales 201.00 385.51 510 247.36 225.89
Gross subsidy 7,449.00 34,427.68 41,238 36,712.59 38,836.20
Contd.
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 179
Notes
(ii) Subventions 2,045.00 8,820.33 8,370 10,099.16 7,980.84
received from state __________________
governments.
__________________
(iii) Net subsidy 5,404.00 25,607.35 32,868 26,613.43 30,855.36
__________________
(iv) Surplus 2,173.00 3,434.93 5,526 3,614.88 7,499.00
generated by sale __________________
to other sectors
__________________
(v) Uncovered 3,231.00 22,172.42 27,342 22,998.56 23,356.37
subsidy __________________
Note:
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 181
n The Accelerated Power Development Programme Notes
(APDP) scheme was initiated in 2000-01 with the __________________
objective of giving a flip to reforms in the distribution __________________
segment. The scheme is now proposed to be modified as __________________
the Accelerated Power Development and Reform __________________
Programme (APDRP), which is a critical investment for
__________________
providing distribution reforms. Under the modified
__________________
scheme, there would be an element of incentive linked
__________________
to achievement of certain reform-based parameters
besides provision for investment in the distribution __________________
sector. __________________
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 183
Private Sector Notes
__________________
The initial response of domestic and foreign investors to the
__________________
policy of private participation in the power sector had been
__________________
encouraging. However, many projects have encountered
unforeseen delays in the finalization of power purchase __________________
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Notes the target. The achievement ratio for the central and state
__________________ sectors comparatively was higher at 38 per cent and 88 per
__________________ cent respectively. The main impediments have been:
__________________
n The chronic financial weakness of SEBs.
__________________
__________________ n Unviable tariffs to IPPs, due to factors such as high cost
__________________ of liquid fuels, risk factors involved and slow growth in
__________________ demand for future power below the expected levels, etc.
__________________ n The absence of an enabling regulatory, legislative and
__________________ market environment.
__________________
n The slow pace of reform in the power sector and related
sectors such as coal, transport.
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 185
In accordance with the guidelines issued by the Ministry of Notes
Power, the following categories would be eligible to install __________________
captive power plants: __________________
__________________
n A consumer of electricity.
__________________
n· A group comprising more than one consumer as a joint __________________
venture.
__________________
n An actual user of power but not a consumer. __________________
__________________
n A group of actual users of power, but not consumers, as
__________________
a joint venture.
__________________
n A group comprising both consumers and actual users of
power as a joint venture but excluding `Generating
Company' as defined under Section 2 (4A) of the
Electricity (Supply) Act, 1948.
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 187
construction of EHV transmission lines by them transcending Notes
state boundaries, the development of regional grids was __________________
further accelerated. This has necessitated the formation of __________________
a National Power Grid to fulfill the following objectives: __________________
Regions inter-
Name of the link Capacity (MW)
connected
HVDC Links
AC Links
Total 4850
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Total 3000
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 189
The existing and new approved inter-regional links are Notes
indicated in Figure-1 on next page. __________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
Future Programme
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Notes
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 191
n 400 kV Sasaram-Sarnath-Allahabad line between NR & Notes
ER. __________________
__________________
With the above concerted efforts, energy exchange from
__________________
Eastern Region has increased to the tune of about 6,790 MUs
in 2000-2001 as against 5500 MUs in 1999-2000, registering a __________________
growth of more than 23%. However total transfer of only 1100 __________________
MW is possible currently. Inter-regional links to increase __________________
the transfer to 4400 MW in short run involving an __________________
investments of Rs.17,600 crores are proposed. __________________
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 193
sector participation. One route is through Joint Venture of Notes
POWERGRID and private investor. The other route called __________________
IPTC (Independent Power Transmission Corporation) shall __________________
facilitate private investor including investors coming __________________
through FDI to invest 100% by themselves. __________________
__________________
Preparation of Manual on Disaster Management
__________________
Power is an essential service and it is one of the first to be __________________
affected by natural disasters like the earthquake in Gujarat
__________________
in January, 2001 and the cyclone in Orissa in October, 1999.
__________________
It is, therefore, necessary to have a clear-cut action plan
__________________
ready for managing major breakdown of essential power
supply posing wide-spread and protracted problems.
Ministry of Power has directed all power sector utilities and
State Electricity Boards to prepare contingency plans to
meet situations arising out of breakdown of machinery and
equipment and disruption of power system due to any reasons
including natural calamities. Such action plans have already
been drawn by a number of State Electricity Boards and
Central Power Sector Undertakings such NTPC, NHPC,
PGCIL, BBMB.
Transmission Pricing
The transmission system in the country consists of the
regional networks, the inter-regional connections that carry
electricity across the five regions, and the State networks.
The national transmission network in India is presently
under development. Development of the State networks has
not been uniform and capacity in such networks needs to be
augmented. These networks will play an important role in
intra-state power flows and also in the regional and national
flows. The tariff policy, insofar as transmission is concerned,
seeks to achieve the following objectives:
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 195
through transmission tariffs. Investment may be invited Notes
on the basis of bids in which the investor will get the __________________
annuity for making his transmission asset available __________________
according to laid down operational norms. The Central __________________
Government will issue guidelines in the three months __________________
for bidding process for developing transmission
__________________
capacities through annuity based tariffs determined
__________________
competitively.
__________________
6. As far as possible consistency should be maintained in __________________
transmission pricing framework in inter-State and intra- __________________
State systems. Accordingly, after the implementation
__________________
of the proposed framework for the inter-State
transmission system, a similar approach should be
implemented by SERCs in next two years for the intra-
State transmission system, duly considering factors like
voltage, distance, direction and quantum of flow.
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 197
n Retail tariff to be determined by regulatory commissions. Notes
__________________
n Open access in Transmission from outset.
__________________
n Open access in Distribution to be allowed by SERCs in __________________
phases. __________________
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UNIT 7 Pricing and Regulatory Aspects of Transmission Lines 199
with its intractable problems. The salient features of Notes
the Act are: __________________
__________________
i. The Central Government to prepare a National
__________________
Electricity Policy in consultation with State
Governments. (Section 3) __________________
__________________
ii. Thrust to complete the rural electrification and
__________________
provide for management of rural distribution by
__________________
Panchayats, Cooperative Societies, non-
__________________
Government organizations, franchisees, etc.
(Sections 4, 5 & 6) __________________
__________________
iii. Provision for licence free generation and
distribution in the rural areas. (Section 14)
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