Documente Academic
Documente Profesional
Documente Cultură
8/24/2010
Agenda
1. 2. 3.
22
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Intervention Instruments
Traditional Providing public services Direct provisions Market-based Competitive tendering User choice Trading schemes Self-regulation
44
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Efficiency Efficiency
prices ~ cost
Productive
cost minimization
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rules implementing of the game agencies in an institutional Formal (policy, laws, regulations) framework
Informal
77
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balances
88
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99
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Regulatory Governance
Pricing Models
Regulatory Economics & Policy n Market power n Interest group & Opportunism n Competition n Information Asymmetry n Principal Agent Theory Other Concepts n Averch-Johnson Effect n Regulatory Capture & 8/24/2010 Revolving Door
1010
Agenda
1. 2. 3.
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Electricity
Low
Capacity Addition
Environmental
Discussions
Perform,
around opening up of coal sector National Mission for Enhanced Energy Efficiency
achieve, and trade (PAT) scheme Energy Efficiency Services Ltd. (EESL)
Renewable
National
Energy
on intensifying exploration
Including
coal bed methane and shale gas Open Acreage Licensing System (OALP) from NELP National Data Repository (NDR)
Refining
and Processing
of refinery capacity
Transportation Distribution
and Storage
and Marketing
fuel, RGGLVY
1313
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Telecom
Second
largest wireless network after China Issues in allotment of UAS and 2G spectrum 3G and BWA license Mobile Number Portability (MNP) Telecom Policy 2012
Delinking
National
1414
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Water
State
water policies Independent water commissions JNNURM and 74th Constitutional Amendment
1515
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Roads
National
shortfall Slow progress of National Highway Development Programme (NHDP) PPP envisaged under DBFO model Plans for Expressway Authority of India Increasing liability in (BOT)-toll or the BOT annuity projects
1616
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Ports
Low
efficiency levels Maritime Policy not finalized development of state policies Proposed maritime agenda 2020
Landlord
ports & corporatization Multimodal connectivity Maritime finance corporation TAMP to Major Port Regulatory Authority (MPRA)
Prevention
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Rail
Declining
Low
financial position
freight growth iron ore issues and competition from roads Sixth pay commission
Railways
Cost
sharing-freight rebate model Full contribution-apportioned earning model Special purpose vehicle (SPV) model Private line model
Accounting
(i)
Reforms to be implemented
fixed infrastructure, (ii) passenger operations, (iii) freight operations, (iv) suburban operation systems, and (v) other non-core activities
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1818
Civil Aviation
Slow
(AERA)
Absence
1919
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Electricity
CERC/ APTEL
SERCs Regulators
Telecom
TRAI
Natural Gas
PNGRB APTEL
(additional Bench)
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2020
DG Hydrocarbons licenses and regulated exploration and optimal exploitation of hydrocarbons Controversy over city gas distribution networks
2121
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2222 8/24/2010
TRAI
Regulate
telecom and internet service operators Tariff setting and interconnection for cable operators
2323
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TAMP
Tariff Authority for Major Ports Has sole function of tariff setting Investors and users have no recourse to an independent regulator on other matters such as
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acts as the regulator as well as operator act as operator and regulator exists
Railways
Railways
Posts
Proposal
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Many utilities cover 2 sectors Only a few - Vivendi and Suez Lyonnaise des Eaux cover 4 sectors
India, Reliance ADAG Brazil, Companhia Forca e Luz CataguazesLeopoldina: Energipe, Teleserv, Telecabo
Australia, TXU Australia Holdings: Eastern Energy, Westar-Kinetik Energy Argentina, SEMPRA Energy: Empresa Distribuidora de Energia Atlantica, Camuzzi Gas Pampeana, Camuzzi Gas del Sur
Source: 2626 World Bank company: Legend: Country, Parent Subsidiaries
India, Reliance ADAG. BSES, BSES TeleCom: Orissa Brazil, Eletropaulo Metropolitana Eletricidade de Sao Paulo: Eletropaulo Telecomunicacoes Estonia, Eesti Energia: Eesti Energia Televirk Spain, Endesa: AUNA Republic of Korea, Korea Electric Power Company:Powercom Malaysia, Tenaga Nasional Berhad: Fibrecomm
Agenda
1. 2. 3.
2727
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Energy mix in India is expected to be dominated by 2828 8/24/2010 Coal, Oil & Gas.
12 10 8 6 4 2 0 Plans
Source : Annual Report 2011-12, Planning Commission
0.8
2929 21st November
Regulatory commissions at Centre and States with Extensive powers. Regulation of refining, processing, storage, transportation, distribution and marketing of petroleum products. Director General of Hydrocarbons licenses and regulates the exploration of hydrocarbons. No regulatory authority. Control by ministry and through nationalised corporations.
Petroleum and Natural Gas Regulatory Board Act 2006. 2.Petroleum Act 1934 3.Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962
1.
Coal
Coal Mines Nationalisation Act 1973 2.Coal Mines Conservation and Development Act 1974
1.
3030
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High usage
Consumer Protection
3131
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3232
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The Electricity Act 2003 has transformed the Key Features of Electricity Market functioning of the Electricity Act, 2003
Generation
No license required for establishing non-hydal plants Distributed generation and renewables encouraged
Transmission
Immediate non-discriminatory open access to transmission Independent power transmission companies allowed
Trading
Introduction of power trading as a separate line of business Unbundling of transmission and trading
Distribution
Allows open access to a bulk consumer drawing more than 1 MW of electricity by January 2009, hence choice to customers Multiple Licensees in distribution allowed Rationalization of tariff Progressive reduction of cross subsidies Metered supply of electricity and strong anti-theft provisions
3333
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34
National Electricity Policy, 2005 notified by Ministry of Power for overall development of power sector National Tariff Policy, 2006 notified by Ministry of Power for ensuring financial viability of the sector Rural Electrification Policy Competitive Bidding Guidelines for Procurement of Power by Distribution Licensees National Electricity Plan rolling 5 year plan developed by Central Electricity Authority
Focus of reforms more on T& D rather than generation Fundamentals have improved significantly with recent regulatory changes and infrastructure development complementing structural reforms through unbundling & privatization Strong reforms with legislation like Electricity Act 2003 & APDRP etc. Transmission & distribution open access allowed Reduce T & D losses
Improve HT / LT ratio Improve billing to realization ratio 100 % metering Restrict on subsidies
Better control & Accountability Benchmarks set for Utilities to imbibe reforms & become financially viable
3434
35
Post -1990s
Power Trading
Franchisee
Retail Companies
Retail
Power
EE
Power generation
Transmission
Distributio n
Trading
3535
US
Australia Germa ny
Industry Maturity
Brazil
OPENING
MATURE
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Industry Maturity
UK Canada Poland China Franc e Indonesi Russia a Turke y India (2012) India (2003) Brazil India (1991)
US
Australia Germa ny
Industry Maturity
OPENING
MATURE
3737
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Future Plans
Demand Estimates (000 MW)
200
0 3838
Railway Infrastructure
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State
State Government
Private/ Joint
Internal
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40
Domestic -Government
PTC, NVVNL
Reliance Energy Transmission Ltd., Tala Delhi Transmission Co (51% Tata Power & 49% PGCIL) Nil
Nil
4040
41
State
WBPDCL
Captive
Merchant
4141
WR
ER
SR
State
WBSETCL (STU)
Joint
Tala Delhi Transmission Co (51% TPC,49% PGCIL) Reliance Energy Transmission Ltd
Private
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Interregional Transmission Capacity in MW NER-NR NER-ER ER-NR ER-WR ER - SR NR-WR WR-SR ALL INDIA 0 1260 7930 2990 3630 4220 1720 21750
4343
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44
SEB
Departments
Goa etc.
WBSEDCL
Punjab and Tamil Nadu CESC, TPCL, RIL, BSES, NPCL, NDPL Torrent Power Bhiwandi Limited, Agra, Nagpur etc.
G-Generation company, T-Transmission Company, D-Distribution Company, HHolding Company, TR-Trading Company, (G+D)-Generation & Distribution combined
4444
IMPORTANCE
VERY HIGH
HIGH
INTEREST
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Issues in Regulations
Combination of powers of judiciary, executive and legislative Absence of inter institutional bargaining Accountability of independent regulations Multi layered and multi agency regulations & state-centre issues Scarcity of regulatory expertise Sectoral regulatory compartments Need for multi sector regulations Overlaps in competition law and regulations
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Recent Trends
Carriage is mostly natural monopoly open access requirements Content is amenable to competition
Emergence of uniform concession frameworks Shift from Command and Control and focus on regulatory reform and governance
Transparency of institutions to support independence and autonomy Setting performance based transfer prices & Differential Pricing Emergence of long term pricing regime Shift towards participatory regulatory process
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Targeted incentive
Overlays incentives on cost plus Identifies cost pass through and risk mitigation elements
Hybrid options
Uses the basic PBR concepts Risk mitigation mechanisms Incentives critical parameters
Annual CoS Regulation Risk Mitigation Regulatory Involvement Incentive Benefit sharing Information Requirement High High Low To Consumers Moderate
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Thank You
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