SUMMER INTERNSHIP REPORT

ON
Developing a Power Procurement Plan for NPCL
At

(NOIDA POWER COMPANY LIMITED)

Submitted by:
GAURAV KUMAR
MBA (Power Management)
III Semester, College Roll No.23

Sector-33, Faridabad 121003, Haryana

(Under the Ministry of Power, Govt. of India)

August, 2009

MAHARISHI DAYANAND UNIVERSITY, ROHTAK

HARYANA, (INDIA)
1

ACKNOWLEDGEMENT
I am having great pleasure to present this report entitled Developing a Power Procurement
Plan for NPCL. I take this opportunity to express my sincere thanks to all who contributed to
make this a success.

I would like to express a deep sense of gratitude to Mr. R. C. Agarwala (CEO), Mr. Gautam
Gosh (General Manager), Mr. Sharad Sinha (Company Secretary), Mr. Rajiv Goyal (Sr. Mgr.
- Operation), Mr. S. Ganguly (Sr. Manager, Projects), and Mr. Sandeep Rai (HRD) for giving
me the opportunity for doing the project and providing all the necessary resources and expertise
for this purpose. I would like to express my sincere thanks to my guide Miss. Sudeepta
Mohapatra (Management Trainee, Operations) for her innovative and experienced hands on my
report without which I would not have been able to successfully accomplish this report.

I wish to make a special mention of Mr. A.V. Chaoji, (Principal Director-CAMPS), Mr. S.K.
Choudhary, (Director-CAMPS), Mr. J.S.S. Rao, (Director-CP) , N.P.T.I for providing me an
opportunity to do my summer internship at Noida Power Company Limited, Greater Noida,
which was a great learning for me.
I wish to thank my internal project guide Mrs. Indu Maheswari, (Deputy Director) NPTI for
her valuable inputs.

GAURAV KUMAR

DECLARATION
I, Gaurav Kumar, Roll No.23, Class MBA (Power Management) 2008-10 batch of the
National Power Training Institute, Faridabad here by declare that the summer training report
entitled Developing a Power Procurement Plan For NPCL is an original work and the same
has not been submitted to any institute for the award of any other degree. A seminar presentation
of the Training report was made on __________________and the suggestions as approved by the
faculty are duly incorporated.

Presentation In Charge

Gaurav Kumar

(Faculty)

(Signature of Candidate)

Counter signed:
Principal Director, N.P.T.I
Faridabad

INDEX
1. Acronyms6
2. Executive summary....7
3. Introduction of Power Sector of INDIA...........8
4. About Organization
4.1. Organization profile...........18
4.2. Business of the Organization..............20
4.3. Future prospects of the organization25
4.4. NPCL at Glance..........27
.

4.5. Challenges Ahead...29

4.6. Suggestion & Recommendation to the Organization..29
4.7. SWOT Analysis...........30

5. Executed Project
5.1. Objective of the Project.............31
5.2. Scope of the Project...................31
5.3. Significance of the Study...........31
5.4. Review of Literature..............32
5.5. Conceptualization...................32
6. Project Description
6.1. Procurement Period..........33
6.2. Procedure for Scheduling for Bilateral Transaction..................33
7. Power Procurement Process.48
8. Demand Estimation................50
9. Current Power Procurement Scenario of NPCL............51
10. Power Procurement Plan.................52
11. Demand Supply Scenario.................53
12. Charge involved in Power Procurement Process...........54
12.1. Transmission Charges..54

12.2. Operating Charges......55

12.3. Energy Charges...55
12.4. Landed Cost Calculation....56
13. Case Study..................59
13.1. Objective..59
13.2. Observation Table...59
13.3. Assumptions60
13.4. Analysis60
13.5. Conclusion...63
14. Recommendation...64
15. Limitation...................64
16. Annexure
16.1 Transmission Rate Sheet................66
16.2. Regional Sheet................67
16.3. State Loss Percentage................67
16.4 Contact Details of Various traders68
16.5 Sample of Acceptation Letter69
16.6 Open Access (Bilateral Transaction) - Application Formats
for Scheduling.........................70
17. References.79

ACRONYMS
UPPCL

Uttar Pradesh Power Corporation Limited

NPCL

Noida Power Company Limited

CERC

Central Electricity Regulatory Commission

KWh

Kilo-Watt-Hour

SEB

State Electricity Board

SLDC

State Load Despatch Center

RLDC

Regional Load Despatch Center

SCADA

Supervisory Control And Data Acquisition.

SAP

Systemanalyse und Programmentwicklung

GIS

Geographic Information System

NR

Northern Region

SR

Southern Region

WR

Western Region

ER

Eastern Region

NER

North-Eastern Region

HVDS

High Voltage Differential Signaling

FY

Financial Year

MU

Million Units

KV

Kilo Volt

Sq. Km.

Square Kilometer

EXECUTIVE SUMMARY
The training in this esteemed organization NPCL, deals with determining the landed cost
of power for the distribution licensee from any generating company and the detail procedure for
scheduling for bilateral transaction.
The Electricity Act 2003 has already brought forth numerous changes in the electricity
sector. Enactment or the implementation of the act brought the opportunity of open access in
distribution and transmission. Customers having a choice in selection of their distributors under
open access provisions. This in turn requires distribution utility processes to undergo major
changes to evolve as a more customer friendly organization. And the business model would also
have to change from being an asset and engineering intensive business to a commercially driven
customer oriented businesses, which derive their value from their ability to attract and retain
customers.
The main aim is to determine landed cost which is the main part of the tariff as it become
important to providing reliable and quality power at affordable tariffs to meet the demand. The
summer internship report comprises of two section .The first section of the report provides an
overview of POWER SECTOR OF INDIA & also an overview of NPCL and the second
section of the report dwells completely with the overview of Power Procurement procedure
and also calculation of landed cost of power for NPCL from any generating company.
Landed cost calculation includes calculation of open access charge and energy charge
taking the transmission losses en route into consideration. The open access charge includes the
calculation of transmission charge and operating and scheduling charge. Transmission Charges
for use of each regional & state network involved shall be payable @ Rs. 80 per MWh
respectively vide Para 16 (3) CERC (Open Access in inter-State Transmission) Regulations,
2008 dated 25.01.2008) & Subsequent (Amendment) Regulations, (2009 dated 20.05.2009) ,
in case the transmission rate for various states are not declared by the state commissions.

INTRODUCTION TO THE POWER SECTOR OF INDIA

The power sector has been in the forefront of lightning up the India growth story. As the
economy continues to surge ahead, electrification and electricity services have been expanding
concomitantly to support the growth rate. Today, the Indian power system with its extensive
regional grids--fast maturing in to an integrated national grid-- and its millions of kilometers of
transmission and distribution lines criss-crossing the country, are truly symbolic of the successes
of India's economic growth.

3.1 Capacity
India's electricity generation capacity has been increasing continuously to meet the needs
of the rapidly growing economic activity of the country. Total installed capacity of electricity
generation has expanded from 1,05,045.96 MW at the end of 2001-02 to 1,43,311.01 MW by
2007-08 and further to 1,50,323.41MW at the end of June 2009. In fact, India ranks sixth
globally in terms of total electricity generation.
Total Installed Capacity (As on June 30, 2009)
Sector

MW

Per cent

State Sector

76,364.67

52.2

Central Sector

48,970.99

34.0

Private Sector

24,987.75

13.8

1,50,323.41

100

Total
Source: Ministry of Power, India.

Source-wise, thermal power plants accounted for an overwhelming 63.8 per cent of the total
installed capacity. Within this group, coal, gas and oil based thermal power plants accounted for
52.2 per cent, 10.9 per cent and 0.8 per cent, respectively. Hydel power plants come next with an
installed capacity of 36,916.76 MW, accounting for 24.6 per cent of the total installed electricity
generation capacity. Simultaneously, the total transmission lines network has been growing at a

robust pace to expand the transmission network. Total transmission lines have increased from
150642-circuit km (ckm) at the end of 2001-02 to 198089 ckm at the end of 2006-07.

3.2 Growth Potential

While this capacity addition is commendable, there is still huge scope for growth. With a
targeted GDP growth rate of 8-10 per cent and an estimated energy elasticity of 0.80 per cent,
India's energy requirement is expected to grow at 6.4-8 per cent, implying an almost five fold
increase in India's energy requirement in the next 25 years. Consequently, there is a need to
increase the electricity generation capacity to sustain the growth momentum. According to report
by KPMG and CII, India's energy sector will require an investment of around US$ 120-150
billion over the next five years. Moreover, while the annual per capita electricity consumption
has increased from 566.4kwh in 2002-03 to 665 kwh in 2005-06, it is still low compared to the
world average of 2596 kwh. Consequently, the government has fixed a target of adding 78,577
MW capacity during the eleventh five year plan (2007-12) to sustain the growth momentum of
the economy. While the Centre and States are expected to account for 50.7 per cent and 35.5 per
cent respectively, the private sector is expected to account for the rest, adding 10,760 MW.
Segment-wise, thermal and hydro-based power projects are expected to account for 74.6 per cent
(58,664 MW) and 21.1 per cent (16,553 MW) respectively. While these are huge planned
capacity additions, there is still considerable potential to grow beyond these.

For example, the total hydro power potential in India is a whopping 1, 50,000 MW. In
fact, the potential for growth is not confined to only conventional sources of power
supply/generation but is present in the renewable segment as well. In fact, India has the fourth
largest installed capacity on wind in the world.
Source/System

Estimated Potential

Achievement (as on 31
March 2009)

Wind Power

48,500

9587.00

Small Hydro Power

15,000

2429.77

Bio Power

16,881

1677.00

Total Grid-interactive renewable

84,776

13,242.41

power
Source: Ministry of New and Renewable Energy, India.

Significantly, to realize the Eleventh plan period target with respect to capacity additions,
already both the government and private players have been moving fast. As on 31 January 2008,
7263 MW of generation capacity has been commissioned and a whopping 50,860 MW of
capacity generation is under construction.

10

GENERATION & POWER SUPPLY POSITION

3.3.1 Generation
The overall generation in the country has increased from 264 Billion Units (BUs) during
1990-91 to 662.52 BUs during 2006-07. The overall generation (Thermal+ Nuclear + Hydro) in
public utilities in the country over the years are as under:

BILLION UNITS

GENERATION (BU)
752.4
800
662.52
700
617.5
586.4
558.3 587.4
531.6
600
515.2
499.5
500
380.1
400
264.3
300
200
100
0

GENERATION

11

3.3.2 PLANT LOAD FACTOR (PLF)

The all India PLF of thermal utilities during 2007-08 was 76.8%. The comparative
sector-wise PLF in percentage over the years are as under:

100
90
80

69

70
60

69.6

72.1

72.7

74.8

73.6

76.8

77.7

63
53.8

CENTRAL

50

STATE

40

PRIVATE
OVERALL

30
20
10
0
1990-91 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

3.3.3 POWER SUPPLY POSITION

12

3.3.4 PEAK DEMAND

13

CAPACITY ADDITION PROGRAMME IN THE XITH PLAN

1. Has to play a decisive and positive role. While shortages are presently being experienced by
each region, it is much more acute in the case of some regions and a large number of States are
affected.
2. The National Electricity Policy envisages demand for power to be fully met by 2012 and
energy and peaking shortages to be overcome. This entails provision of adequate reliable power,
at affordable cost with access to all citizens. Electricity is in the Concurrent List in the
Constitution and the primary responsibility of structuring its availability and distribution is that
of the States. However, both the Centre and the States
3. The all India installed power generation capacity as on 30.06.2009 was 150323.41 MW
comprising of 96044.24MW thermal, 36916.76 MW hydro,4120.00 MW nuclear and 13242.41
MW R.E.S. The Central Sectors share in generation has gradually increased from 12% in 1979
to 34% as on 30.06.2009. On the other hand the share of the State Sector has declined from
82.5% to 52.2% while the share of private sector has gone up from5.2% to 13.8% during the
same period.
4. The National Electricity Policy (NEP) stipulates power for all by 2012 and annual per capita
consumption of electricity to rise to 1000 units from the present level of 631 units. To fulfill the
objectives of the NEP, a capacity addition of 78,577 MW has been proposed for the 11th plan.
This capacity addition is expected to provide a growth of 9.5 % to the power sector. The break
up of the capacity addition target shown in chart below:

14

Break up Capacity Addition Target

58644

60000
50000
40000
30000
20000

26800

Hydro

24347

Thermal

16553
9685

10000

3380

3605

7497
3263

Nuclear
3380

0
central

state

private

total(c+s+p)

3.4.1 Capacity addition Programme during 2008-09

14000
12039.2
12000
9007.2

10000
8000
6000
4000

6449.2
4840

4767.2

state sectro
private sector

3490
2372
1682
690

2000

central sector

660

660

0
Thermal

Hydro

Nuclear

Total

15

3.4.2 Achievement 2008-09 (April, 2008 to 31st March, 2009)

5. The investment climate in the country is buoyant and as shown above large capacity is
currently under execution. Between 1st April 2008 to 31st January 2009 orders in respect of 22
projects aggregating 20245 MW were placed. Out of this 17 projects aggregating 18385 MW
pertain to thermal segment and 5projects aggregating 1860 MW pertain to hydro segment.

16

3.4.3 Capacity Addition (Last Five Years)

In the last five years including 2008-09 (April 2008 31st March, 2009), the
following new Capacities have been added:

4783

5000
4500
3890

4000
3500

3035

3000

2710
2230

2500
2000
1500
1000
500

1210
1100.1
548

1168.92
816.62
100

1488
1420

1671
1291.8

CENTRAL
STATE

660.8
70

PRIVATE
250

17

ORGANISATION PROFILE
Noida Power Company Limited (hereafter referred to as NPCL) is the first
private distribution company formed in India post 1991 power reforms vides
Memorandum of Understanding between Greater Noida Industrial Development
Authority and CESC Ltd. (RPG Group) to supplying electricity to the consumers in
Greater Noida area.
The Company is a joint venture between the RPG Group, a leading business house in
India and Greater Noida Industrial Development Authority, an autonomous body of U.P.
Government responsible for town planning and infrastructure development. The venture marks
the strategic entry of the Group into privatized distribution of electricity in North India.
The Company started its operations in December 1993 under a 30-year license from U.P.
Government. While the Government of Uttar Pradesh through Greater Noida Industrial
Development Authority holds 27% stake in the company, CESC (RPG Group) is
majority stake holder (73%) of the company with management control. NPCL obtained
a license from Govt. of Uttar Pradesh for carrying out distribution in the area of
Greater Noida as a private sector player in the distribution of electricity on 30 th
August 1993, which was subsequently amended on 18 th July 1996.

4.1.1 Vision
By 2012, we shall be the best electricity service provider in the country in terms of
Customer Perception.

4.1.2 Mission
To create the most exciting workplace for our employees, the best service environment
for our customers and the most preferred business enterprise for our partners.

18

4.1.3 Values & Beliefs

1. Good ethics is good business.
2. Customer is always the king.
3. The climate will be one of mutual respect and collaborative practices.
4. Our success depends on the enterprise and excellence of all employees.
5. The workplace will foster a learning organization, which believes in being the best-inclass.

4.1.4 Quality Policy

We shall continuously improve upon our delivery systems, innovate to reduce cost and
cycle times, and endeavor to exceed the expectations of our customers, employees, shareholders
and all partners

19

BUSINESS OF ORGANISATION
Noida Power Company Limited distributes power in Greater Noida, near Delhi in Uttar
Pradesh, which is being developed as an industrial hub and urban settlements. The Company
reaches out to a population of about 2-lakh spread across hamlets, villages and a new township
spanning an area of 335 sq. km, which is one of the fastest growing industrial districts in
the region.

20

The Company recorded a sharp growth of 23% in energy sales owing to better
capacity utilization/ new capacity addition by the industries and also rising energy
consumption of other metered categories; the growth being particularly high i.e. 41%
in the domestic segment due to combined effect of increased occupancy in the urban
sectors and enhancement of power infrastructure in rural areas.

The power value chain starts from UPPCL transmission system, which
transmits power through its state transmission system to the 132/33 kV, Surajpur
substation where it is step down to 33 kV voltage level for evacuation by NPCL
through 7 feeders. These feeders supply power to 12 nos. 33/11 kV substations spread
over as per the load requirement in the licensed area. The Company has implemented
cutting edge technologies available in Distribution sector like Underground network,
HVDS and Aerial Bunched Conductors to arrest the T&D losses. Also State-of-Art IT
system involving SCADA, GIS and Automated Meter Reading system to improve
distribution efficiency, strengthen MIS and data collection and plug the system
deficiencies. Keeping in line with the improvement in efficiency and best possible
service to its consumers the Company has envisioned capacity augmentation.
Power transmission in India is typically associated with high distribution losses. The
distribution losses of NPCL at 8.53% were lower as compared to those of other large power
utilities in the country. The utility proposed to further reduce these transmission and distribution
losses, stop pilferage and increase the speed of commercialization of sale of power to all its
consumers. The company therefore decided to upgrade its distribution infrastructure, undertake
metering of unmetered consumers and demand side management measures to achieve significant
energy savings.

4.2.1 Operation
The Company executed an Agreement with the erstwhile U.P. State Electricity Board
(now U.P. Power Corporation Limited) in November 1993 for transfer of the supply

21

arrangements and sourcing of bulk power. In December 2008, the peak load served is 108.97
MVA as against 18 MVA in 1994-95, reflecting a steady increase in consumer demand.
The customer base has expanded from 4677 in 1993 to 44434 in December 2008. The
rural population provided with subsidized electricity consumes 15% of the energy demand and
has agriculture as the main source of income. Otherwise, the load profile is dominated by large
and heavy industries that constitute 65% of energy sale and contribute as much as 76% of the
Companys income. Urban, institutional and smaller industrial consumers account for the
balance business
The customer profile is as follows:

No. of Connections as on
Category of Consumers
15.12.93

31.12.08

Large & Heavy Industry

38

274

Small & Medium Industry

201

946

Domestic Light, Fan & Power

3224

38443

Institutions

135

Private Tube well Connections

1188

1241

Commercial Establishments

1297

State Tube well Connections

25

53

Street Lighting Supply

220

Temporary Supplies

1784

Total

4677

44434

Supply

22

In December 2008, sales turnover is Rs.168.77 cr., having moved up from Rs.19 cr. in
1994-95. As business expands, the growing need is to redefine the strategies and meet the
demand for service with in-built people and process capabilities.
The Company has been posting steady profits as permissible under the regulatory and
legal framework. Accumulated losses associated with initial operations have been wiped out and
the net worth at the end of 2003-04 stands at Rs.20.39 cr.
The cutting edge is provided by a lean organization with an employee headcount of 110.
Employee costs account for less than 1.5% of revenue. In terms of productivity rates, the number
of consumers serviced per employee stands at 402 and the revenue per employee at Rs.1.5 cr.

4.2.2 Services
The principal role of Noida Power is that of a service provider to support economic and
lifestyle activity. Building an efficient and reliable delivery system thus assumes top priority to
provide supply dependability. That Greater Noida is witness to the setting up of world-class
manufacturing by multinationals like Honda Cars, Yamaha Motors, New Holland Tractors, LG
Electronics, ST Microelectronics, India Exposition Mart, GSC Toughened Glass etc., and is also
home to an upwardly mobile residential population, underscores this point further.
The Company maintains and operates round-the-clock emergency services to deal with
supply-related complaints and undertake rectification works. Establishing a Call Centre that
provides 24-hour messaging services to consumers and improves trouble call monitoring has
reinforced the facilities. Complaint management is computerized, enabling call tracking from
start to finish and generation of exception reports.
Streamlined administrative procedures, on-time delivery of new supply and billing
consistency are the other facets of service that define the Company's inter-relationships with
customers. Organizational processes and hierarchical responsibilities are designed to meet the
demand for service in every aspect, including settlement of customer claims.

23

In addition to internal measurements, the Company relies on independent surveys as an

annual feature to assess the customers feedback on their perception of service quality. Based on
the findings, process and systemic deficiencies are addressed to bridge the gap between expected
and actual performance levels.

4.2.3 Initiative
It has been our aim to build our core competence around service differentiation and build
a competitive organization on the strength of cost and productive efficiency to ensure long-term
sustenance in an environment that places a premium on both service quality and cost
accountability.
Unleashing innovation and imagination is the key to business success in the competitive
marketplace. A first-time measure has been to introduce social intermediation in villages to
promote the concept of energy conservation and commercialization and facilitate metering of
domestic supplies against the promise of reliable and affordable electricity supply. Consumers
have responded by demonstrating commercial behaviour, resulting in avoidance of energy thefts
and improving the collection of user charges. In December 2008, 39% of the domestic consumer
population in villages is covered under metered supply. A unique intervention has been to
organize basic literacy classes for village women to reinforce the role of electricity in improving
lives and enhancing gender development. Success of the measures is seen from the comments
made by the U.S. Secretary of the Treasury, who visited one such site and stated that seeing
first-hand the tangible quality of life improvements brought by reliable electricity was
memorable. Innovations in network and demand side engineering have paid rich dividends in
curtailing energy losses. A novel concept has been to introduce or agricultural connections and
facilitate energy-efficient pumping so as to conserve both energy and water and avoid
environmental degradation. In addition, introduction of for supply to households in villages has
reduced the propensity of energy thefts while optimizing network performance.
Process interventions in the areas of metering and billing have ensured that the loopholes
for revenue leakages are effectively plugged. The Company follows a fail-safe system of
electronic data transfer of meter readings to the bill-processing module, thereby dispensing with
24

manual entries. Daily collections are monitored on-line via the WAN and LAN infrastructure. In
December 2008, the energy losses stand at 8.53%, the lowest in the country, while the gross
collection rate is 96%.
IT is relied upon to handle the growing size of the business, while retaining the focus on
improving productivity, cycle times and customer relationships. Major initiatives include
integrating network, customer and asset management by leveraging geo-spatial information,
undertaking remote network sensing and operation in real time and improving daily work
management by automating the business processes of billing, collection and human resource
management on SAP platform and financial management on Oracle Apps. Of particular
significance is the GIS-based system, which allows users to undertake complex engineering
analyses, create network designs, generate Bill-of-Materials and manage Trouble Calls at the
Dispatching Centre. All new Sub-stations are presently left unmanned, with the SCADA
software providing the vehicle for remote network management in real time and dispensing with
the need for additional manpower.
Due consideration is necessary to develop the power infrastructure and meet the demand
escalation commensurate with the business growth. New avenues are being explored to procure
power from alternative sources and supplement the current intake arrangement so as to meet the
increase in load demand in the short and medium terms.

4.2.4 Future Prospects of the Company

The Companys principal role is to distribute power across all sections of
consumers, i.e. industrial, IT, commercial, institutional, residential and agricultural,
in Greater Noida for supporting economic and lifestyle activity. In keeping pace with
the developmental activities in NCR, rapid industrialization and well-synchronized
urbanization have been planned for Greater Noida. To support such developmental
plan, infrastructural facilities have already been created in the city.

25

Greater Noida has already become a preferred destination for industrial

investments. Amongst large and heavy consumers the Company is providing
electricity to corporates like LG Electronics, Honda Siel Cars, Honda Power Products,
New Holland Motors, Delphi Automotive, Neelkamal Plastics, Yamaha Motors, Asian
Paints, Inox Air Product and Hindustan Times, Videocon etc., who have already set up
industrial / manufacturing facilities. An Export Promotion Industrial Park (EPIP) has
been set up under the aegis of Uttar Pradesh State Industrial Development Corporation
(UPSIDC).
Multipurpose commercial complexes are under construction making a beeline
along the contours of the residential sectors of the township. Indian Exposition Mart,
which will be, in terms of scale of activities and size, four to five times larger than
Pragati Maidan at New Delhi has already started their operation after completion of
the first phase of construction. Multiplex complexes, shopping Malls have commenced
operations at city centres.
Multistoried residential housing estates are coming up at a fast pace in Greater
Noida to accommodate the exponential population growth envisaged in near future,
Renowned realtors like Ansal, Eldeco, Omaxe, Unitech, ATS, Supertech, Parsvnath,
Senior Citizen, Tisco Housing etc. have constructed huge residential complexes with
modern amenities. NRI city, which will avowedly replicate the ambience of the city of
Singapore, is coming up at the entry point of the township. An 18-hole Jaypee Grouppromoted Golf Course has been functional for the last five years, which is frequented
by golfers of fame. A five star hotel and a sprawling residential campus are under
construction within the Golf Course. Clubs like Stellar Park has been operational in
the city, which will see such many more club establishments very soon.
Academic Institutes have chosen Greater Noida as a place of their preference.
An International Maritime Institute has been functional in the city for the last four
years. Other Academic Institutions include Apeejay Institute, Ishan Institute, Graduate
School of Management, IEC College of Engineering etc. where professional courses

26

are conducted attracting students from all over the country. A Roorkee IIT has been
planned in the city that has been approved by HRD Ministry, Government of India.
Apart from educational institutes, various hospitals e.g. Sharda Group of Hospitals
(1200 bedded), Kailash Hospital (500 bedded) etc. have set up medical facilities at
large scale in Greater Noida.
The Company is envisaging steep growth in the system demand with the
commencement of the construction activities of Gautam budh Nagar University which
is supposed to be the biggest in the country and the Taj Expressway. The construction
of IT Park along proposed Taj Expressway is going on at a very faster pace.
Development of 400 acres as Night Safari, is also in the offing.
Keeping in view the above, the capital expenditure is, therefore, proposed to
ensure enhancement of the system capacity to meet load growth, improvement in the
system reliability and improvement in customer service linked with the Companys
vision of becoming the best electricity service provider in the country in terms of
consumer perception.

27

NPCL AT GLANCE

Area

335 Sq. Km

Population

2-Lakh

No. Of Substation

12

Distribution Length (ckt. Km)

2383.40

T&D Losses

8.53%

Electricity Distributed (Million Units)

336.35 MU

Substation List Of NPCL

S No.

SUBSTATION NAME

1.

Surajpur

2.

Surajpur South

3.

Udyog Kendra

4.

Kasna

5.

EPIP

6.

Alpha

7.

Delta

28

8.

Girdharpur

9.

Sector 37

10.

Builders Area

11.

RC Green

12.

Ghabara (Under Construction)

4.5 Challenges Ahead

The challenge ahead lies in nurturing and retaining talent in an environment of increasing
private sector participation in utility business.
Institutionalizing HR practices will be the major task in building a performance-driven
organization while pursuing the business goal of being the least cost supplier at affordable price
and acceptable quality.
The aim is to build a responsive organization around people, processes and practices so
as to produce the least turn-around time, provide the best in class service to customers and
manage growth with profitability.

4.6 Suggestions and recommendations to organization

Seeing the price volatility in power market the Company. Should move
into power generation as well. This will be helpful in catering to the distribution licensees;
captive demand as well as surplus capacity can be utilized in creating further revenues through
sale of power.

29

SWOT ANALYSIS
4.7.1 Strengths
1. Equipped with pool of well qualified learned and dedicated employees.
2. Excellent work Culture.
3. Management expertise is a valuable asset for the company and is its strength.
4. Proven expertise and technical capabilities in distribution sectors.
5. Customer oriented approach.
6. Dedication for the continuous quality improvement.
7. Driven by values and ethics.

4.7.2 Weakness
1. Relatively new and small organization.
2. Small Workforce.

4.7.3 Opportunities
1. Tremendous Pace of Power Sector Reforms prevailing in the country.
2. Increase in power demand globally.
3. Privatization of Electricity boards.

4.7.4 Threats
1. Poaching of talent by other companies.
2. Strong competitors.

30

EXECUTED PROJECT
5.1 Objective of the Project
1. The present project aims to understand the entire Procedure for Scheduling of Bilateral
Transaction as per CERC (Central Electricity Regulatory Commission) Regulation.
2. To determine various charges like open access charge, Energy charge.
3. To determine Landed Cost of power and developing a Power Procurement Plan for
NPCL.

5.2 Scope of the Project

The scope of the project includes the following:
1. To determine the Demand.
2. To understand the Procedure for scheduling for Bilateral Transaction.
3. To determine the Open Access charge.
4. To determine the Energy charge.
5. To determine Load Flow Estimation.
6. To determine the Landed Cost of Power Procured by Distribution Licensee.

5.3 Significance of Study

Open Access in Distribution and Transmission has created competition in electricity
market and has led to reduction in prices of electricity and in significant benefits for consumers.
The study with the help of a case of NPCL Greater Noida , helps in understanding the entire

31

process for scheduling of bilateral transaction for power procurement by distribution licensee and
help in determining the landed cost in procuring power from any generation company by
distribution licensee.

5.4 Review of Literature

The entire process for Scheduling of Bilateral Transaction was done based on the
guidelines by CERC. The Power Procurement Plan made to determine the landed cost of power
for distribution licensee is made as per CERC norms. The Transmission charge calculation is
based on open access inter-state transmission regulation by CERC. The open access charge
calculation including Transmission charge, Operating & Scheduling charge and Energy charge is
as per regulation by CERC .The Regional Transmission Loss & State Transmission Loss is taken
from Nodal RLDC of Distribution Licensee.

5.5 Conceptualization
NPCL procure power from different sources through open access mechanism .The
concept behind this project is to develop a power procurement plan in such a manner so as to
identify the optimum mix of injecting sources of power based on the landed cost of power for
different quantum, duration, period, states and region. We have utilized the concept of open
access, transmission losses and various regulations in place to arrive at the appropriate method to
calculate the landed cost of the power.

32

PROJECT DESCRIPTION
6.1 Procurement Period
1. Long-term procurement of electricity up to a period of 25 years.
2. Short term procurement of electricity up to a period of 1 year.

6.2 Procedure for Scheduling for bilateral transactions

6.2.1 Outline
1. This Procedure is in accordance with the various provisions of the Central Electricity
Regulatory Commission (Open Access in inter-State Transmission) Regulations, 2008, dated
25.01.2008, and subsequent amendments thereof hereinafter referred to as the Regulations.
2. The Procedures shall apply to the Applications made for scheduling of Bilateral Transactions
by availing of Short-Term Open Access for use of the transmission lines or associated facilities
with such lines on the inter-State transmission system, received by the nodal RLDC on or after
15.06.2009.
3. All Applications received upto the date and time lines specified in the Regulations shall be
taken up together for consideration. For Applications Received before 15.06.2009, the short-term
open access charges shall be applicable as per CERC (Open Access inter-State Transmission)
Regulations, 2008. For Applications Received on or after 15.06.2009, the short-term open access
charges shall be applicable as per CERC (Open Access inter-State Transmission) (Amendment)
Regulations, 2009.

33

4. For the Applications (under Advance Scheduling/ First cum First Served basis) received till
17:30 Hrs of 14.06.2009, the short-term open access charges shall be as per the original CERC
(Open Access inter-State Transmission) Regulations, 2008. Similarly for Day-ahead scheduling,
the applications received till 15:00 HRs of 14.06.2009, the short-term open access charges shall
be as per the principal CERC (Open Access inter-State Transmission) Regulations, 2008. For
Applications (under Contingency category) received till 24:00 HRs of 14.06.2009, the shortterm open access charges shall be as per the principal CERC (Open Access inter-State
Transmission) Regulations, 2008.
5. For example:
An applicant X has submitted an Application on 13.06.2009 for Advance Scheduling of
Short-Term Open Access Bilateral Transaction for the month of August 2009 form 05.08.2009
to 25.08.2009. Another applicant Y has submitted an Application on 15.06.2009 for Advance
Scheduling of Short-Term Open Access Bilateral Transaction for the month of August 2009
form 01.08.2009 to 20.08.2009.The nodal RLDC shall consider both the Applications together.
In case of Applicant X, the short-term open access charges shall be as per CERC (Open
Access inter-State Transmission) Regulations, 2008 and in case of Applicant Y, as per the
Amendment Regulation, 2009.
6 .No retrospective adjustments for short-term open access charges shall be made for the already
approved short-term open access bilateral transactions.

6.2.2 Submission of Open Access Application

1. An Application for scheduling of Bilateral Transaction through Short-Term Open Access in
the inter-State transmission system shall be made to the Regional Load Despatch Centre of the
Region where point of drawal of electricity is situated.
2. The Application for scheduling of a Bilateral Transaction shall contain the details, such as
names and location of Supplier and Buyer, contracted power (MW) at the supplier interface,

34

point of injection, point of drawal, starting time block and date, ending time block and date, and
other information as per the enclosed format [FORMAT-I: Application for Scheduling].
3. An Application made for each Bilateral Transaction shall be accompanied by a non-refundable
fee of Rupees five thousand (Rs.5000/-) only as specified in the Regulations. Provided that the
fee for Bilateral Transaction on the day of the Application or on the day immediately following
the day of the Application may be deposited within three working days of submission of the
Application.
4. A copy of the Application shall be endorsed by the applicant to the following:
a) Each RLDC involved in the transaction.
b) Each SLDC involved in the transaction.

6.2.3 Concurrence of State Load Despatch Centre

1. Wherever the proposed Bilateral Transaction has a State Utility or an intra-State Entity as a
Buyer or a Seller, concurrence of the concerned State Load Dispatch Centre shall be obtained in
advance and submitted along with the Application.
The Concurrence of the concerned SLDCs shall be submitted as per the enclosed format
[FORMAT-II: Concurrence from SLDC].
2 .Where concurrence or no objection or prior standing clearance, as the case may be, is
deemed to have been granted by the concerned SLDC in accordance with clause 4 of the
Regulation 8, the applicant while making application for Scheduling of Bilateral Transactions
shall submit to the nodal agency an affidavit, duly notarized, as per the enclosed
format.[FORMAT-II A:AFFIDAVIT regarding Deemed Concurrence from SLDC]
3 .Application(s) without the concurrence of concerned SLDCs will not be considered, except in
case of Concurrence or No Objection or Prior Standing Clearance, as the case may be, is
deemed to have been granted by the concerned SLDC in accordance with the second proviso to
clause 4 of Regulation 8. In case of deemed concurrence, the Applicant must ensure that all the
35

requirements under Regulation 8 have been duly complied with and submit the Application for
scheduling of Bilateral Transactions alongwith the duly notarized affidavit as per FORMAT
IIA. The Applicant shall serve a copy of the Affidavit alongwith the copy of the Application
being endorsed to the concerned SLDC.

6.2.4 Concurrence of Regional Load Despatch Centre

1. Wherever the proposed Bilateral Transaction has a State Utility or an intra-State Entity as a
Buyer or a Seller in other region, the Nodal RLDC shall obtain concurrence of the concerned
Regional Load Despatch Centre(s). The concurrence of the Regional Load Despatch Centre shall
be as per enclosed format [FORMAT-III: Request/Concurrence from RLDCs].
2. RLDC shall first consider the Applications received by them, as nodal Agency, before giving
concurrence / indicating constraint, to other RLDCs, for the Applications received, by the later.
3. In case of denial of access, the RLDC concerned shall furnish reasons for the same, in writing.

6.2.5 Procedure for Advance Scheduling for bilateral transactions

1. An Application for Advance Scheduling for a Bilateral Transaction may be submitted to the
nodal RLDC up to the fourth month, considering the month in which an Application is made
being the first month.
2. A separate Application shall be made for each month and for each transaction in a month in a
suitable cover marked Application for Short-Term Open Access - Advance Scheduling for <<Month-Years name>>.
3. (a) An Application for inter-State scheduling during the fourth month shall be made up to the
last day of the first month.

36

(b) An Application for inter-State scheduling during the third month shall be made up to the five
(5) days prior to the close of the first month.
(c) An Application for inter-State scheduling in the second month shall be made up to the ten
(10) days prior to the close of the first month.
4. All the Applications received up to 17:30 Hrs on the last day as mentioned above shall be
taken up together for consideration. Applications received after prescribed time shall not be
considered.
5. While processing the Applications, the Nodal RLDC shall seek the concurrence of each of the
other RLDCs involved in the transaction by 12:00 Hrs. on next day of the applicable last date for
submission of Application.
6. The other RLDCs shall give their concurrence/denial latest by 20:00 Hrs on the same day on
which request for concurrence is sent by the nodal RLDC.
7. In case of perceived congestion in transmission corridor, nodal RLDC on next day (i.e. 2nd
day after the applicable last date for submission of Application) will inform the concerned
applicant(s)

as

per

enclosed

format

[FORMAT-IV:Congestion

Information-Advance

Scheduling] latest by 12:00 Hrs. By next day (i.e.; 3rd day after applicable last date for
submission of Application) latest by 11:00 Hrs, the Applicants must inform the nodal RLDC as
per enclosed format [FORMAT-V: Request for Revision of Schedule- Due to Congestion],
the reduced request for Scheduling during the period of Congestion or opt for Scheduling only
for the duration when no congestion is anticipated or opt for Scheduling through the alternate
route. In case of non-receipt of revised request in time, it shall be presumed that the Applicant is
not interested in revising it and nodal RLDC shall process the Application accordingly.
8. In case, the nodal RLDC still anticipates Congestion, it may invite electronic bids for advance
scheduling on 4th day after applicable last date for submission of Application.

37

9. The nodal RLDC shall convey its acceptance or otherwise to the Applicant in five days from
the last date of submission, as per enclosed format [FORMATVI:Acceptance for Scheduling].
In case, the nodal RLDC rejects an application ,it shall convey its reasons to the Applicant in
writing.

6.2.6 e-Bidding Procedure

1. Bids shall be invited, from the concerned Applicants, for only such period during which
congestion is expected to occur and for the Regional transmission system or inter-Regional
corridor, whichever is expected to get over stressed.
2. The decision of the nodal RLDC in respect of an expected congestion shall be final and
binding.
3. Any Applicant intending to participate in bidding for Short-Term Open Access shall register
and obtain the User ID and initial Password in advance from the RLDC for its Authorized
User(s). The Registered Users will be issued a system generated User ID and initial
Password by RLDC to enable them to submit their Bid electronically. Upon receipt of the
User Id and initial password, the User shall immediately change the password. It shall be the
responsibility of such Applicant to maintain its confidentiality/security and to prevent its misuse.
4. The Applicants shall submit their Bid electronically through the web site of the CTU/
RLDCs. Only the Applicants, through their Registered Users, shall be entitled to submit a Bid.
5. The Bids shall be accepted up to the bid closing time as indicated on the website of
CTU/RLDCs, designated for e-bidding. Modification / amendment to a bid, once submitted,
including submission of a second or subsequent bid by an Applicant, shall not be entertained.
6. In case the Applicant does not participate in the e-bidding process, his Application shall be
considered as withdrawn.

38

7. Bidding process and the Approval of the Schedules of the bidders shall be as per following:

a) The bid price shall be in addition to the Transmission Charges for Bilateral ransactions
as specified in the Para 16 of the Regulations.
b) The Bidder shall quote price in terms of Rs./MWh in multiples of 10.The minimum price
a bidder may quote is Rs. 10/MWh.

c) Approval of Short-Term Open Access for Advance Scheduling will be accorded in the
decreasing order of price quoted.
d) In case of equal price quoted by two or more successful bidders, the approval for
scheduling shall be made pro-rata to the scheduling request sought by them.
e) The Applicant, which gets approval for scheduling less than the scheduling request
sought by him, shall pay the charges quoted by him. The Applicant getting approval for
scheduling equal to the scheduling request sought by him shall pay the charges quoted by
the last Applicant getting approval of its full scheduling request.

6.2.7 Procedure for scheduling of bilateral transactions on first-come-firstserved Basis

1. An Application shall be submitted to the nodal RLDC in a cover marked Application for
scheduling on - First-come-first-served basis.
2. Application received under the following categories shall be treated as First-Come-FirstServed application:-

39

a) Application received under First Come First Served category for Short-Term Open
Access shall be considered only when transactionsare commencing and terminating in the
same calendar month.
b) Application for scheduling a Bilateral Transaction which is commencing in the same
month in which Application is made, provided that such Application is received at least
four (4) days in advance from the date of commencement of the Bilateral Transaction. All
such Application shall be processed and decided within three days of their receipt.
c) Application received during the last ten (10) days of the first month, for scheduling of
transactions in the second month. These Applications would be considered after
completeing the process for Advance scheduling of Bilateral Transaction in the second
month. Accordingly, Applications received up to five (5) days prior to the end of the
month shall be processed only after completing the process for Advance Scheduling of
Bilateral Transactions for the second month.
3. All Applications received by the Nodal RLDC in a day up to 17:30 hrs shall be considered
together for processing and shall have same priority. Applications received by the nodal RLDC
after 17:30 hrs of a day shall be treated as having been received on next day.
4. Pro-rata scheduling acceptance shall be given in case scheduling requests of the Applicants is
for more than the margins available.

6.2.8 Procedure for scheduling for day-ahead transactions

1. Applications received within three days prior to the date of scheduling and up to 15:00 Hrs. of
the day immediately preceding the day of scheduling shall be treated as having been received
together for processing and shall have same priority.

40

2. Applications for Day Ahead transactions shall be processed only after processing of the
Collective Transactions of the Power Exchange(s).
3. Pro-rata scheduling acceptance shall be given in case scheduling requests of the Applicants is
for more than the margins available.

6.2.9 Procedure for scheduling of transactions in a contingency

1. In the event of a contingency, the buyer or in its behalf, a trader may locate, and the power
exchange may offer its platform to locate, a source of power to meet short-term contingency
requirement and make an Application to the Nodal RLDC.
2. Nodal RLDC shall accept such Application only after 1500 hrs of the day immediately
preceding the day of scheduling.
3. Nodal RLDC shall take steps to incorporate such Bilateral Transactions in Day Ahead
schedules/Same -Day schedules, as the case may be. In case of Same Day, the transaction shall
be scheduled from the 6th time block, counting the block in which acceptance is accorded as the
first time block.
4. Pro-rata scheduling acceptance shall be given in case scheduling requests of the Applicants is
for more than the margins available.

6.2.10 Procedure for Revision of Schedule

1. The Short-Term Open Access Schedules accepted by the Nodal RLDCs in case of Advance
Scheduling or First-Cum-First Served basis may be cancelled or revised downwards by the
Applicant by giving minimum two (2) days notice. The notice period shall be excluding the day
on which notice is served and the day from which revised schedules are to be implemented.

41

2. The accepted schedules for Day-Ahead transactions and transactions in a Contingency shall
not be revised or cancelled.
3. The Applicant, who has requested for revision or cancellation of the accepted schedule as
above, shall pay the Transmission Charges and Operating Charges as per the originally accepted
schedule, if the period of revision or cancellation is upto two (2) days. If the period of revision or
cancellation exceeds two(2) days, the Transmission Charges and Operating Charges for the
period beyond two (2) days shall be payable as per the revised accepted schedule and for the
first two (2) days as per the original schedule.
For example: Say an Applicant has been scheduled for 10 days from 21st day of a month to
30th day of a month for 100 MW on round the clock basis (i.e. for 2400 MWh per day). If this
Applicant, on or before 18th day of that month, submits request for revision of schedule to
50MW on round the clock basis (i.e. 1200 MWh per day), the revised schedule will get
implemented from the beginning of the transactions (i.e. 21st day of the month). The
Applicant shall pay the Transmission Charges for 2400 MWh per day for the period from 21st
to 22nd day of the month. Whereas for the period from 23rd day to 30th day of the month,
Transmission Charges shall be payable for 1200MWh per day. However, if the Applicant
requests for such revision on 20th day of the month, his request will be implemented from
23rd day of the month. He shall pay Transmission charges for 2400MWh per day for 2 days
i.e. from 23rd to 24th day of the month and for the remaining period he shall pay the
Transmission Charges based on 1200MWh per day.
4. The margins becoming available as a result of such revision or cancellation shall be available
for scheduling to any other Applicant in accordance with relevant provisions of Regulations on
Open Access.
5. The short-term customers granted short-term open access prior to 15.06.2009 shall also be
eligible for Cancellation/downward revision of Schedule by giving two days notice and by
paying minimum two days transmission charges as per Regulation 15.The refund of transmission

42

charges shall be in accordance with the rate at which the transmission charges were paid by the
respective customer.

6.2.11 Commercial Conditions for Bilateral Transaction

The following commercial conditions shall apply for the Bilateral Transaction:
TERMS OF PAYMENT
1. All payments associated with Bilateral Transaction shall be made by the Applicant to the
Nodal RLDC.
2. The Applicant shall make the following payment to the Nodal RLDC within three working
days from the date of acceptance of Bilateral Transactions. The charges for scheduling of
Bilateral Transactions will be worked out on the basis of total MWh approved at the point of
injection.

(a) Application Fees (as per Para 7 of Regulation)

An Application made for each Bilateral Transaction shall be accompanied by a nonrefundable fee of Rupees five thousand (Rs.5000/-) only. Provided that the fee for
Bilateral Transaction on the day of the Application or on the day immediately following
the day of the Application may be deposited within three working days of submission of
the Application.
(b) Transmission charges (as per Regulation 16)
Full amount for the entire period of Bilateral Transaction, in respect of the following:
1. Regional Transmission systems involved
2. STU/SEB/transmission licensees involved
(c) Operating charges (as per Regulation 17)

43

Operating Charges at the rate of Rs.2000/- per day or part of the day of each for the entire
period of Bilateral Transaction in respect of the following:
1. Each RLDC involved
2. Each SLDC involved
3. The Transmission charges for the use of the inter-State network shall be in Rs./MWh
depending upon the type of transaction and shall be payable by the short-term customer for the
energy approved at the point or points of injection.
The rate for transmission charges shall be as follows:
Type of Transaction

Transmission charges (Total)

(Rs./MWh)

(a) Bilateral, intra-regional

80

(b) Bilateral, between adjacent regions

160

(c) Bilateral, wheeling through one or more 240

intervening regions

4. The Transmission charges for the use of the State network shall be in Rs/MWh, as determined
by the respective State Commission and the same shall be intimated to RLDCs by concerned
STU. Provided that in case the State Commission has not determined the Transmission charges,
the charges for use of the respective State network shall be payable at the rate of Rs.80/MWh for
the energy approved.
5. In case a State utility is the Buyer/Seller, the Operating Charges and the Transmission Charges
shall not include the charges for that State network and the Operating Charges for that State Load
Dispatch Center. A certificate in this regard from the concerned STU(s)/SLDCs shall be
submitted by the Applicant.

44

6. All payments shall be remitted only by Bank draft/cheque drawn in favour of

_________RLDC Short Term Open Access Account payable at par at the location of the
Nodal RLDC or by electronic transfer. No outstation cheques will be accepted.
7. The transaction wise payment details shall be submitted as per enclosed format [FORMATVII: Details of Payment].

6.2.12 Default In Payment of Short-Term Open Access Charges

1. In case of default in payment of the Application fee or the charges specified under the
Regulations specified by CERC, the nodal RLDC, at its discretion may not schedule the
transaction or may cancel the scheduling of already scheduled transaction or may not entertain
any Application of such Applicant in future until such time the default is cured.
2. The Applicant committing default in payment shall pay the simple interest at the rate of 0.04%
for each day of default from the Due Date of Payment.
3. In case a payment made by the Applicant through cheque has been dishonored, the Applicant
shall immediately pay the amount due by demand draft or electronic transfer and no further
cheque payment will be accepted from that Applicant for next three (3) months.

6.2.13 Disbursal of Payment

1. Nodal RLDC will reconcile the Short-Term Open Access Charges collected during the
previous month and disburse the Transmission Charges and Operating Charges within 7 working
days from the issuance of monthly Regional Energy Accounting by the respective Regional
Power Committees.

45

2. The Transmission Charges for use of State network and Operating Charges for SLDCs shall be
disbursed to the State Transmission Utility/SLDC concerned, after receiving the same from the
Applicants.
3. Transmission charges collected for use of the transmission system other than that of the State
network shall be disbursed by nodal RLDC to the RLDCs of the respective Region. The 25% of
the Transmission Charges collected for use of the transmission system other than the State
network shall be disbursed to CTU and balance 75% shall be disbursed to long-term customers
through the RLDC of the respective Region in accordance with Regulation 25.
4. In case of refunds arising due to curtailment/revision of transactions during the previous
month, the same shall also be disbursed to the concerned Applicants by 15th day of the current
month.
5. Nodal RLDC does not have any responsibility towards non-payment as well as dishonoring of
cheque(s) submitted by the Applicants. The amounts actually collected by RLDCs shall only be
disbursed.

6.2.14 General Conditions

1. The Entities which are making Application for the first time or intend to make, must submit
the One- Time information as per enclosed format. [FORMAT VIII: Registration Form] to
the concerned nodal RLDC. In case of any change in the existing information, the same shall be
intimated to the concerned nodal RLDC.
2. The Application for Bilateral Transactions can be submitted through Post/fax.
3. Any amendment/modification to an existing Application, except for reasons specifically
mentioned in the Procedure, shall be treated as a fresh Application.
4. The Nodal RLDC shall issue transaction-wise scheduling acceptance from:

46

a) The point of injection of a Seller to the injecting States periphery (control area
boundary) as confirmed by the concerned SLDC, and
b) From the periphery (control area boundary) of injecting State up to the periphery (control
area boundary) of the Drawee State as confirmed by the concerned RLDCs.
c) From the periphery (control area boundary) of the Drawee State to the point of drawal of
Buyer as confirmed by the concerned SLDC.
5. The Applications of the Applicants, who have not been accorded the Acceptance for
Scheduling of Bilateral Transactions, shall stand disposed off with suitable intimation to the
concerned Applicant(s).
6. All costs/expenses/charges associated with the Application, including Bank Draft, shall be
borne by the Applicant.
7. An incomplete/vague Application, and an Application not found to be in conformity with
these Procedures and Regulations, shall be summarily rejected.
8. None of charges payable by Applicant(s) and/or any other Entities involved in the transaction
shall be adjusted by them against any other payments/charges.
9. The Applicant shall abide by the provisions of The Electricity Act, 2003, Indian Electricity
Grid Code and CERC Regulations, as amended from time to time.

47

POWER PROCUREMENT PROCESS

Steps involved in pre-procurement procedure
Step 1: Estimation of Load Requirement for the concerned period.
Process:
a) Analysis of past data (both peak demand and average availability in previous year for the
concerned month).
b) Analysis of season (climatic, festival, part of fiscal year, completion notice by GNIDA).
c) Estimated load addition to the existing network.
Step 2: Assessment of Transmission & Distribution Network and their Capacity
Process:
a) Break down Analysis ( both transmission and distribution network history)
b) Approved transmission capacity for the distribution utility
Step 3: Enquiry from Power Traders regarding power availability in the market
Process:
a) Enquiry through phone (Annexure 1- important phone nos. / fax nos.)
b) Enquiry through email.
c) Enquiry through advertisement.
Step 4: Inviting offers from power traders / suppliers
Process:
a) Asking the traders to send the offer letter for sourcing of power to NPCL.
Step 5: Evaluation of offers sent by different traders/ suppliers
Process: Annexure 2- offer evaluation work book
Step 6: Selection of best offer
Process: Analysis of the results of offer evaluation work book
Criteria for selection:
i) Landed Cost of power to NPCL should be minimum
ii) Losses & Transmission route
iii) Quantum , Duration and Delivery point
iv) Firm basis should be preferred over Day-Ahead basis.
v) Reliability of Supplier based on past experiences (if any)

48

Step 7: Preparation of Acceptance letter

Annexure 3-contents of the Acceptance letter
Step 8: Sending the Acceptance letter to the trader / supplier
Annexure 1-Important Phone nos. Fax nos. and addresses.

Step 9: Sending the Acceptance letter to the Resident Officer for taking consent from Chief
Engineer (Transmission), UPPCL

49

Demand Estimation
Demand estimates for FY 10 have been prepared by analyzing the past trends and employing
representative, case-specific models to make the future projections.
For preparing demand estimates for FY 10, it has been assumed that apart from present drawl
of 45 MVA from UPPCL the Company would procure additional power of 85 MW
approximately from the market through Open Access. The demand estimates for FY 10
are, therefore, prepared by extending the models deployed in preparing estimates for FY 09
and factoring in the assumption of availability of requisite power for higher specific
consumption.

YEAR

DEMAND (MVA)

2003

45

2004-05

52

2005-06

63

2006-07

72

2007-08

80

2008-09

100

2009-10

132

50

CURRENT POWER PROCUREMENT SCENARIO OF NPCL

S No.

Trader/Supplier

Source

Contracted
Quantum

Transmission

Duration

at Route

Delivery pt.

UPPCL

UPPCL

43

At 132/33 surajpur
substation

PTC india Ltd.

WBSETCL

20

WB-ER-NR-UP

April 09 to
Sept 09

Adani
Ltd.

Enterprises MCPL

10

MP-WR-NR-UP

Madhya

June 09 to
Sept 09

Pradesh

Adani
Ltd.

Enterprises BILT,
HVPNL

Haryana-NR-UP

June 09 to
Sept 09

Haryana

51

Power Purchase Plan

The Company has been procuring 45 MVA power from UPPCL without any upward
review for last several year. In view of the rapid industrialization/ urbanization in Companys
licensed area in Greater Noida, there has been a phenomenal increase in the demand for
electricity. Looking at the so far pending applications, growth in number of consumers and
pattern of load shedding for industrial consumers, the Company envisages the peak demand to
surpass 100 MVA in FY 09 and 132 MVA in FY 10. The Company had, therefore, time and
again requested UPPCL for suitably increasing power supply to meet the growing demand of the
consumers. The Company in this regard, on several occasions also requested UPPCL to provide
Open Access for importing power from alternative sources or in the alternative, supply additional
power to meet the increased demand of the consumers.

Several correspondences were exchanged and meetings were held between the
Company and UPPCL. After much persuasion, the UPPCL agreed to allow open access to NPCL
for importing power from alternative sources. Apart from 45MVA supply from UPPCL, the
Company has been allowed a 20-25 MW transmission capacity at present under open access.

Keeping in view the aforesaid facts, the interest of paying consumers, demand growth
and restricted power of 45 MVA from UPPCL the Company is, therefore, procuring power
through trading arrangement from various traders on short term basis. To cater to increasing load
demand of the area, the Company Procure Power Through Open Access from generators and
traders

52

DEMAND SUPPLY SCENARIO

Availability of
Aug-08

Sep-08

Oct'08

Jan'09

FY

to

to

2009-

Dec'08

Mar'09

2010

Power in MW

No.

from

UPPCL

43

43

43

43

43

PTC

18

18

20

20

10

10

25

25

Not

Not

Not

Not

AEL(Adani
3

Enterprises
Ltd.)

TPTCL(Tata
4

Power Trading
Co. Ltd.)

RPTCL(RPG
5

Trading Co.
Ltd.)

RETL(Reliance
Trading Ltd.)

Available.

Available Available Available

25

53

CHARGES INVOLVED IN POWER PROCUREMENT PROCESS

12.1 Transmission Charges

In case of bilateral transactions, for use of the inter-State transmission System, the transmission
charges at the rate specified hereunder shall be Payable by the applicant for the energy approved
for transmission at the Point of injection:

Type of Transaction

Transmission charges (Total)

(Rs./MWh)

(a) Bilateral, intra-regional

80

(b) Bilateral, between adjacent regions

160

(c) Bilateral, wheeling through one or more

240

intervening regions

The intra-State entities shall additionally pay transmission charges for use of the State network as
determined by the respective State Commission:
Provided that in case the State Commission has not determined the transmission
charges, the same shall not be a ground for denial of open access and charges for use of
respective State network shall be payable for the energy approved at the rate of Rs. 30/ MWh.
Provided further that transmission charges for use of the State network shall be
intimated to the Regional Load Despatch Centre concerned for display on its web site:
Provided also that transmission charges shall not be revised with Retrospective effect.

54

12.2 Operating Charges

1. Operating charges at the rate of Rs. 2,000 /- per day or part of the day for each bilateral
transaction for each of the Regional Load Despatch Centre involved and at the rate of Rs.2,000 /per day or part of the day for each State Load Despatch Centre involved shall be payable by the
applicant.
2. National Load Despatch Centre shall share the operating charges with the Regional Load
Despatch Centres in such manner as may be decided by the Central Transmission Utility.
3. All buyers within a State shall be clubbed together and all sellers within a State shall be
clubbed together by the power exchange (with necessary coordination with the State Load
Despatch Centre) and each of the groups shall be counted as a single entity by National Load
Despatch Centre for levy of operating charges and for scheduling:
Provided that for levy of operating charges for State Load Despatch Centre and
levy of the intra-State transmission charges, each point of injection or drawal in the State
network shall be counted separately.
Note 1
The operating charges include fee for scheduling, system operation and collection and
disbursement of charges.
Note 2
The operating charges collected by the nodal agency shall be in addition to the fees and charges
specified by the Commission under sub-section (4) of Section 28 of the Act.

12.3 Energy Charges

Energy Charge is given by Distribution Licensee to Generating Company or Trading Company
from where they Procure Power.

55

No separate reactive energy charge accounting for open access transactions shall be carried out at
inter-State level:
Provided that the State Utility designated for the purpose shall be responsible for timely
payment of the States composite dues to the regional reactive charge account in accordance with
the provisions of the Grid Code.
The reactive energy drawals and injections by the intra-State entities shall be governed by the
regulations applicable within the State concerned.

12.4 Landed Cost Calculation for STOA Offer Evaluation

12.4.1 Different Charges:Regional Transmission Charge = Rs 80/MWh
Scheduling & System operation charges = Rs 2000/day per LDC
OA Application fees = Rs. 5000 each application
Landed cost = (Total Power Cost) / (Total energy at delivery point transmission losses)
Total Power Cost = Energy cost at delivery points + Transmission charges +Scheduling &
System operation charges + OA Application fees+ SLDC charges

56

12.4.2 An example illustrating the calculation is as follows:-

RPG Offer (JAN'09)

Assumptions in the sample example:

Point of Delivery is at RAJASTHAN STU System.
Tariff upto Delivery Point is Rs.
4

MW RTC for 30 day

5.79
60

/kWh

days

The transmission route is RAJ-NR-UPPCL-NPCL

Cost of Power in RAJASTHAN STU System

MWs

Days

Hours

kWh

Rate

Amount

60

24

5,760,000

579.000

33350400

MWs

Hrs.

Amount

Transmission Charges & Other Expenses

1. Transmission Charges
RAJ

NR

UPPCL

Total

Rs./MWh

Rs./MWh

Rs./MWh

Rs./MWh

131.60

80.00

50.00

261.60

1440

1506816

Days

Amount

2. Scheduling & System Operation Charges

RAJ

WRLDC

NRLDC

UPPCL

Total
Charges/Day

Rs.

Rs.

Rs.

Rs.

Rs.

2000

2000

2000

6000

Rs.
60

360000

3. Open Access Application Fee to Nodal RLDC

Amount
15000

4. Total Charges
Amount
1881816

57

Losses
RAJ

NR

UPPCL

Total

kWh

4.40%

3.50%

5.0%

12.4%

711,861

MWs

Days

Hours

kWh

Rate

Amount

3.505652

60

24

5,048,139

697.92

35232216

Cost of Power at NPCL Bus

Rate per unit = Rs

6.98

58

CASE STUDY
13.1 Objective
To study various Landed Cost at the same unit price of power for different Quantum.
Injecting state
Drawing state

Different state location

Uttar Pradesh

13.2 Observation Table

QUANTUM
STATES

1MW

5MW

10MW

15MW

20MW

ROUTE

25MW

LANDED COST (UNIT PRICE IN RS)

Jammu & Kashmir

5.832

5.596

5.567

5.557

5.552

5.549

J&K-NR-UP

Himachal Pradesh

5.832

5.596

5.567

5.557

5.552

5.549

HP-NR-UP

Punjab

6.194

5.944

5.913

5.902

5.897

5.894

PUNJAB-NR-UP

Delhi

5.921

5.683

5.653

5.643

5.638

5.635

DELHI-NR-UP

Haryana

6.135

5.894

5.864

5.854

5.849

5.846

HARYANA-NR-UP

Uttar Pradesh

5.397

5.315

5.304

5.301

5.299

5.298

UP

Uttaranchal

5.832

5.596

5.567

5.557

5.552

5.549

UTTARANCHAL-NR-UP

Rajasthan

5.835

5.594

5.57

5.56

5.557

5.552

RAJASTHAN-NR-UP

Chandigarh

5.832

5.596

5.567

5.557

5.552

5.549

CHANDIGARH-NR-UP

Gujarat

6.307

5.98

5.94

5.926

5.919

5.915

GUJARAT-WR-NR-UP

Madhya Pradesh

6.627

6.284

6.241

6.227

6.219

6.215

MP-WR-NR-UP

Maharashtra

6.649

6.306

6.264

6.249

6.242

6.238

MAHARASHTRA-WR-NR-UP

Bihar

6.236

5.913

5.873

5.859

5.853

5.849

BIHAR-ER-NR-UP

West Bengal

6.496

6.16

6.118

6.104

6.097

6.092

WB-ER-NR-UP

Jharkhand

6.236

5.913

5.873

5.859

5.853

5.849

JHARKHAND-ER-NR-UP

DVC

6.417

6.085

6.043

6.029

6.023

6.018

DVC-ER-NR-UP

Orissa

6.745

6.407

6.364

6.35

6.343

6.339

ORISSA-ER-NR-UP

Sikkim

6.236

5.913

5.873

5.859

5.853

5.849

SIKKIM-ER-NR-UP

Chhattisgarh

6.302

5.976

5.935

5.921

5.915

5.911

CHHATTISGARH-WR-NR-UP

Karnataka

6.897

6.465

6.411

6.393

6.384

6.378

KARNATAKA-SR-ER-NR-UP

Kerala

6.667

6.249

6.197

6.179

6.171

6.165

KERALA-SR-ER-NR-UP

59

QUANTUM
STATES

1MW

5MW

10MW

15MW

20MW

ROUTE

25MW

LANDED COST (UNIT PRICE IN RS.)

Tamil Nadu

6.615

6.201

6.149

6.132

6.123

6.118

TN-SR-ER-NR-UP

Andhra Pradesh

6.935

6.503

6.449

6.431

6.422

6.416

AP-SR-ER-NR-UP

Mizoram

6.561

6.147

6.096

6.078

6.07

6.065

MIZORAM-NER-ER-NR-UP

Assam

6.561

6.147

6.096

6.078

6.07

6.065

ASSAM-NER-ER-NR-UP

Tripura

6.561

6.147

6.096

6.078

6.07

6.065

TRIPURA-NER-ER-NR-UP

Nagaland

6.561

6.147

6.096

6.078

6.07

6.065

NAGALAND-NER-ER-NR-UP

Arunachal Pradesh

6.561

6.147

6.096

6.078

6.07

6.065

ARUNACHAL P -NER-ERNR-UP

Manipur

6.561

6.147

6.096

6.078

6.07

6.065

MANIPUR-NER-ER-NR-UP

Meghalaya

6.561

6.147

6.096

6.078

6.07

6.065

MEGHALAYA-NER-ER-NRUP

13.3 Assumptions
1. QUANTUM AT
INJECTING POINT

1MW 5MW 10MW 15MW 20MW 25MW

2. SUPPLY DURATION

00:00 Hrs.-24.00Hrs.

3. UNIT PRICE OF POWER

Rs 5/KWh

4. NO. OF DAYS

30 Days

13.4 Analysis
The Analysis of the Procurement of Power is based on the following assumptions:1. The Unit cost of Power is Rs. 5/KWh.
2. Duration of Power supply is 24 Hours.
3. Period of Procurement of Power is 30 days.
On the careful perusal of the per unit landed cost of power in respect of different Region such as
Northern, Western, Southern, Eastern and North-Eastern are listed below based on increasing
order of Price.
60

NORTHERN REGION

S No.

1 MW

Priority

States

5.397

UP

5.832

J&K, HP, Uttaranchal & Chandigarh

5.835

Rajasthan

5.921

Delhi

6.135

Haryana

6.194

Punjab

WESTERN REGION
S No.

1 MW

Priority

States

6.236

Chhattisgarh

6.307

Gujarat

6.627

MP

6.649

Maharashtra

EASTERN REGION
S No.

1 MW

Priority

States

6.236

Bihar, Jharkhand and Sikkim

6.417

DVC

6.496

WB

6.745

Orissa

61

SOUTHERN REGION (ROUTE: SR-ER-NR)

S No.

1 MW

Priority

States

6.615

TN

6.667

Kerala

6.897

Karnataka

6.935

AP

SOUTHERN REGION (ROUTE: SR-WR-NR)

S No.

1 MW

Priority

States

6.685

TN

6.737

Kerala

6.970

Karnataka

AP

NORTH EASTERN REGION

S No.

1 MW

Priority

6.561

States
Mizoram, Assam, Tripura, Nagaland, Arunachal
Pradesh, Manipur and Meghalaya

62

13.5 Conclusion
On the basis of Analysis involved different combinations and permutations resulted into various
inferences, which lead to the following conclusions.
1. The power is available at different Regions like Northern, Western, Eastern, Southern and
North-Eastern region at varied rates through different routes.
2. The power procurement per unit from Northern Region is cheapest in comparison to all other
regions.
3. The power procurement from Uttar Pradesh in Northern region is cheapest in comparison to
all states from different regions.
4. The power procurement from Southern Region with South-East & Northern route is cheaper
in comparison to South, West & Northern Route.
5. The power procurement from Eastern Region is the second cheapest in comparison to other
regions.
6.

The power procurement from Southern Region routed through South, West & Northern
route is the costliest.

7. All the states of North-Eastern region are having the same rate per unit cost with moderate
per unit cost of Rs.6.561/MW.
8. Four-states of Northern Region namely J& K, Himachal Pradesh, Uttaranchal & Chandigarh
are 2nd cheapest option with same rate to procure the power.
9. The power procurement from Andhra Pradesh in Southern Region routed from South-West &
North is the costliest affair is comparison to all other options.
10. The cost of power per unit gets reduced or cheaper with the increase in quantum of power
procured. Therefore to have power at cheaper rate the quantum of power procured should be
more.

63

14. Recommendations
1. The Power should be booked on firm basis.
2. Advance booking should be preferred over Day Ahead Booking.
3. Long Term Agreements should be entered into directly with the generators rather than through
traders, which would help in saving the extra cost per unit equivalent to the trading margin.
4. Long Term Arrangement should be preferred over short term arrangement

15. Limitations
Every study suffers from certain Limitation and this is no exception. But in spite of that, best
effort has been put to understand the Power Procurement Plan for NPCL. There is always a
difference between a theoretical study and a practical knowledge, and I consider it as the main
limitation and other limitation are as follows:
(1) Transmission Constraints
(2) Non Concurrence from SLDC
(3) Techno Commercials issues
(4) Political issues
(5) Regional transmission Losses Values change from week to week

64

ANNEXURES

65

TRANSMISSION RATE SHEET

STATES

Transmission charge

Jammu & Kashmir

80

Himachal Pradesh

80

Punjab

80

Delhi

57

Haryana

190

Uttar Pradesh

80

Uttaranchal

80

Rajasthan

32.9

Chandigarh

80

DVC

80

Gujarat

34

Madhya Pradesh

80

Maharashtra

51.5

Bihar

80

West Bengal

80

Jharkhand

80

Orissa

210

Sikkim

80

Chhattisgarh

80

Karnataka

80

Kerala

80

Tamil Naidu

28.97

Andhra Pradesh

53.3

Mizoram

Assam

Tripura

Nagaland

Arunachal Pradesh

Manipur

Meghalaya

Dated 19 July 2009

66

REGIONAL LOSS PERCENTAGE

REGION

LOSS%

NR

3.0

ER
WR

3.5
6.0

SR

3.33

NER

4.0

STATE LOSS PERCENTAGE

STATES
Jammu & Kashmir
Himachal Pradesh
Punjab
Delhi
Haryana
Uttar Pradesh
Uttaranchal
Rajasthan
Chandigarh
DVC
Gujarat
Madhya Pradesh
Maharashtra
Goa
Bihar
West Bengal
Jharkhand
Orissa
Sikkim
Chhattisgarh
Karnataka
Kerala
Tamil Naidu
Andhra Pradesh
Mizoram
Assam
Tripura
Nagaland
Arunachal Pradesh
Manipur
Meghalaya

Dated 19 July 2009

LOSS%
0
0.00
5.85
1.50
2.10
5.00
0
4.40
0
1.95
4.10
4.70
4.85
4.50
0
3.10
0
4.50
0
5.00
4.06
0.75
1.75
4.16
0
0
0
0
0
0
0

67

Contact Details of Various Traders

1. Adani Enterprizes Ltd.
bibhudatta.sarangi@adani.in
Address: M/S Adani Enterprizes Limited
Adani House (Power Division),
1st Floor, Plot No. 83,
Institutional Area, Sector 32,
Gurgaon 122 001
Phone Nos.: 0124-2555000, 9953489917 (Rakesh), 9999310874
Fax Nos. : 0124-2555113, 0124-2555342
2. Global Energy Ltd.
globalenergy@gmail.com
Address: M/s Global Energy Limited
GESCO Corporate Centre, 70, Nehru Place
New Delhi 110 066
Phone Nos.: 011-46578071 (Anuj & Praveen)
Fax Nos. : 011-41551294
3. Lanco Electric Utility Ltd.
Address: M/s LANCO ELECTRIC UTILITY LIMITED
Plot No. 229, Phase I, Udyog Vihar, Gurgaon-122016
Address: M/s LANCO ELECTRIC UTILITY LIMITED
Plot No. 229, Phase I,
Udyog Vihar
Gurgaon 122 016
Phone Nos.: 9971695400 (Shishir), 9871002710 (Wasim)
4. PTC India Ltd.
controlroom@ptcindia.com
Address: M/s PTC India Limited
2nd Floor, NBCC Tower,
15 Bhikaji Cama Place
New Delhi 110 066
Phone Nos.: 011-26177536, 011-41595131, 011-41659131
Fax Nos. : 011-41659142
5. Reliance Energy Trading Ltd.
Address: M/s Reliance Energy Trading Ltd.
2/22A, Shanti Niketan
New Delhi 110 021
Phone Nos.: 011-30324444, 9312972645 (D. Nayak)
Fax Nos. : 011-24112383, 011-30322444

68

6. Tata Power Trading Co. Ltd.

jdk@tatapower.com
Address: M/s Tata Power Trading Company Ltd.
Sterling Cinema Building, 4th Floor,
Murzban Road,
Mumbai 400 001
Phone Nos.: 09223355438 (Binoy), 09223326851 (Kundan), 022-25543331
(Control Room), 09223276259 (Mr. J D Kulkarni)
Fax Nos. : 022-66658614

Phone Nos. & Fax Nos. of RLDCs, SLDCs and NPCL LDC
1. NRLDC
Phone Nos.: 011-26519406 (Control Room), 011-26968280 (Commercial)
Fax Nos. : 011-26852747 (Control Room)
2. UP SLDC, Lucknow
Phone Nos.: 0522-2287851 (Control Room)
Fax Nos. : 0522-2287882 (Control Room)
3. Modipuram
Phone Nos.: 0121-2956098 (Control Room)
4. WRLDC
Phone Nos.: 022-28397634 (Control Room)
5. NPCL
Phone Nos.: 9891701259, 9891701260
Fax Nos. : 0120-2326448 (CEO fax m/c), 0120-2326972 (on Computer)

69

Sample Acceptance Letter format

P-90D/119 August 07, 2008
M/s PTC India Limited
2nd Floor, NBCC Tower,
15 Bhikaji Cama Place,
New Delhi 110 066,

Kind Attn.: Mr. Harish Saran

Vice President
Market Development

Dear Sir,
Sub: Offer for supply of power to NPCL
With reference to your Letter No. PTC/MTFG/NPCL/5005 dated 05.08.2008 and the subsequent
discussion with you; we are pleased to accept your offer for supply of power subject to the
following terms and conditions:
The quantum of firm power to be supplied round-the-clock (between 0.00 hr & 24.00 hr) daily
to Noida Power Company Limited would be 5 MW. The power will be delivered from 1st
September 2008 up to 31st December 2008.
The price at which the above power to be supplied at the delivery point being at 66kV bus at
switchyard of hydro plant at Uttarakhand (NR) would be Rs. 6.54 per KWh.
The above price shall be inclusive of all applicable taxes, duties access, Open Access (up to the
delivery point as above) and trading margin.
Open access charges and transmission losses of STUs & CTUs beyond the delivery point will
be to NPCLs account.
M/s PTC India Ltd. shall be responsible for facilitating Open Access for wheeling the requisite
quantum of power as above from the delivery point to NPCLs offtake point at 132/33 kV
Surajpur / RC Green Sub-station, Greater Noida.
All other terms and conditions of your above offer are acceptable.
Thanking you,
Yours faithfully,
For Noida Power Company Limited
S. Ganguly
Senior Manager

70

71

72

73

74

75

76

77

78

REFRENCES
WEBSITES

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.

www.noidapower.com
www.uppcl.org
www.powermin.nic.in
www.cercind.org
www.nrldc.org
www.srldc.org
www.wrldc.org
www.erldc.org
www.nerldc.org
www.cea.nic.in
www.aptranscorp.com
www.mppkvvcl.nic.in
www.msebindia.com
http://orissagov.nic.in
www.psebindia.org
www.rajenergy.com/transco.htm
sikkimpower.nic.in
www.tneb.in

BOOKS

Financial Management (I.M. Pandey)

INDUSTRY JOURNAL

Power Line
Ieema
79