Transmission Tariff V.Balaji Chief Manager SRLDC

All about Transmission Charges Introduction Historical perspective of Transmission tariff Two distinct aspects –Tariff determinationTariff determination –Sharing of Transmission charges Point of Connection charges Transmission charges for application –Long Term Access/ Medium Term Open Access –Short Term Open Access Billing and collection of Tr. charges Regulation of power supply in case of default Future trends in Tr. tariff

Introduction Transmission Transmission system is an Infrastructure asset Transmission Cost is A Sunk cost To be shared for peak usage Transmission tariff works out to about 2- 3% of power purchase cost (typically of the order of paisa/u) No Financial Transmission Rights (FTR) in Indian context

2/23/2016 POWERGRID 4 Transmission Pricing : Historical Perspective and Appreciation of Regulatory Initiatives & Policies

Evolution of Transmission Pricing Stage I Cost of Transmission clubbed with Generation Tariff Implicit Stage II Apportioned on the basis of energy drawn (Usage Based) Stage III Apportioned on the basis of MW entitlements (Access Based) Stage IV Hybrid Methodology (Point of Connection) Upto onwards 2/23/2016 राष्ट्रीय भार प्रेषण केंद्र 5

 Notified on and came into force from  Transmission charges for the Assets of POWERGRID shall continue to be determined by CERC  Postage Stamp Methodology for Sharing of Transmission Charges is replaced (Regulation 33 of Terms & Conditions of Tariff, 2009 : Repealed )  Sharing based on Point of Connection (PoC) Tariffs based on load flow analysis  PoC are identified against all the USERS of the ISTS network known as Designated ISTS Customers (DICs) Salient features of PoC Regulations 1)Generating Stations 2)SEBs/STUs 3)Bulk consumer directly connected with ISTS 4)Any designated entity representing aforementioned physically connected entity Effect of PoC Regualtions (Sharing of Inter state Transmission charges and losses)

Generation Access zones Demand Access zones Based on PoC Hybrid method Marginal participation method & Average Method National Game ISTS charges (POWERGRID, Reliance, Adani etc.) PoC: Indicative only in Rs.Lakh/MW/Annum Initially NEW and SR seperately 1000MW 2000MW 800MW 600MW 500MW 900MW Rs.2.98Rs Rs Rs.7.69 Rs.7.32 Rs.8.25 Based on forecast commitments of  Total ATC  Demand & Generation in MW  Total network For A Set Period New Regulation on Sharing of Transmission Charges

Competitive Bidding - Tariff Policy 2006  Provisions of “Tariff Policy” of Jan 2006 state:  “Even for the Public Sector Projects, tariff of all new generation and transmission projects should also be decided on the basis of competitive bidding after a period of five years or when Regulatory Commission is satisfied that the situation is ripe to introduce such competition.”  “Tariff of the projects to be developed by CTU/STU after the period of five years or when the Regulatory Commission is satisfied that the situation is right to introduce such competition would also be determined on the basis of Competitive Bidding.” Competitive Bidding in :  Power plant setup  Transmission system construction

Regulation of Power Supply (DRAFT)  Reducing the drawl schedule of the defaulting entity  The surplus power so available, to be sold to other beneficiaries or other buyers in the market to make good the default amount  Balance, if any is proposed to be passed on to the defaulting entity  Capacity charges for its original share in the generating station shall remain with the Regulated entity No provision for physical regulation of power supply in view of  Difficulties in opening transmission lines/ICTs as power would find alternative paths  Could impact grid security. Regulation of power supply is envisaged through the following commercial arrangements :

Tariff Competitive Bidding For Old projects, tariff will be continued to be fixed. For New projects awarded under Competitive Bidding, Quoted Tariff as per final award will be used got payment of charges

Future Tr. Pricing Location Marginal Pricing (LMP) Each node in the gird will have a distinct Cost of power for drawl or injection Cost of Power inclusive of –transmission cost at that node –and transmission loss attributed to that node