WELCOME

1. WELCOME PRESENTATION ON AVAILABILITY BASED TARIFF Power Grid Corporation of India Limited Southern Regional Load Despatch Centre BANGALORE – 560 032 24TH JUNE 2009

2. FOCUS AREAS • PRE ABT SCENARIO • AVAILABILITY BASED TARIFF (ABT) • SCHEDULING PROCEDURE UNDER ABT • ENERGY ACCOUNTING

3. PRE ABT SCENARIO • POWER MARKET • TARIFF & ITS COMPONENTS • PROBLEMS PREVAILED

4. POWER MARKET (PRE ABT) • THE POWER MARKET WAS OF CLOSED NATURE. • CENTRAL SECTOR GENERATING STATIONS AND STATE ELECTRICITY BOARDS ARE THE ONLY MAJOR PLAYERS IN THE POWER MARKET • STATE ELECTRICITY BOARDS ARE MONOPOLISTIC SUPPLIER IN THEIR STATE • STATE ELECTRICITY BOARDS ARE THE LONG TERM CUSTOMERS OF CENTRAL SECTOR GENERATING STATIONS

5. COMPONENTS OF INTER-UTILITY TARIFF(Pre – ABT) • Fixed charges • Interest on loans • Depreciation • O & M charges • Return on equity • Interest on Working Capital • Energy charges (fuel cost) • Incentives on PLF • Surcharge & other levies • No charge for reactive energy

6. THE PROBLEMS EARLIER…. • NON MERRIT ORDER DESPATCH • ERRATIC FREQUENCY • LOW VOLTAGES • FREQUENT DISTURBANCES • OVER/UNDER DRAWALS CAUSING CONSTRAINTS • INDISCIPLINED SYSTEM OPERATION • ARCHAIC SETTLEMENT SYSTEM

7. AVAILABILITY BASED TARIFF(ABT) A RATIONAL & UNIQUE TARIFF STRUCTURE WITH SCIENTIFIC SETTLEMENT SYSTEM, TAILORMADE DESIGN FOR INDIAN SCENARIO OF POWER SECTOR.

8. AVAILABILITY BASED TARIFF(ABT) • EXPECTATIONS • BASIC CONCEPT • MAJOR CHANGES • SOME BENEFITS

9. WHAT ABT WAS EXPECTED TO DO? TO ARREST LARGE DEVIATIONS IN FREQUENCY. REDUCE EQUIPMENT DAMAGE DISCOURAGE OVERDRAWALS DURING LOW FREQUENCY …. GIVE INCENTIVE FOR ENHANCED OUTPUT CAPABILITY STREAMLINE OPERATION OF REGIONAL GRIDS MECHANISM FOR HARNESSING CAPTIVE AND CO-GENERATION AND OTHER UNHARNESSED GENERATION FACILITATE BI-LATERAL TRADING ENCOURAGE MERRIT ORDER DESPATCH SELF CONTROL OF COSTLY GENERATION AT INSTANCES WHEN GRID DEMAND IS LESS

10. AVAILABILITY TARIFF(ABT) (a)CAPACITY CHARGE (b) ENERGY CHARGE • ADJUSTMENT FOR DEVIATIONS (UI CHARGE) • = a function of Ex-bus MW availability of power plant for the day declared before the day starts x SEB’s % share. • = MWh for the day as per ex-bus drawl schedule for the SEB finalized before the day starts x Energy charge rate • =Σ(Actual energy interchange in a 15 min time block – scheduled energy interchange for the time block) x UI rate for the time block. TOTAL PAYMENT FOR THE DAY = (a) + (b)± ( c)

11. Changes due to ABT Approach

12. Changes due to ABT Approach

13. MULTI TASKS OF ABT • PROMOTING TRADE • COMPETITIVE ENVIRONMENT • OPEN ACCESS • BALANCING/SPOT MARKET • ROBUST SETTLEMENT MECHANISM • OPEN AND FAIR MARKET PLACE • WHO HELPS THE GRID GETS REWARDED AND WHO HURTS THE GRID GETS PENALISED

14. SCHEDULING PROCEDURE • POWER MARKET INSTRUMENTS • CONTROL AREA • SCHEDULING PHILOSOPHY OF IEGC • SCHEDULING & DESPATCHING CODE • DAY AHEAD SCHEDULING • REVISION OF SCHEDULE

15. LONG TERM BENEFICIARY CAPACITY ALLOCATION POWER PURCHASE AGREEMENTS CAPACITY COMMITTMENT SHORT TERM AGREEMENTS DAY-AHEAD SCHEDULING & POWER EXCHANGE SHORT TERM AGREEMENTS SAME DAY SCHEDULING REAL-TIME SPOT/BALANCING MARKET REAL TIME 15 MT BLOCKS > 5 YEARS 1-5 YEARS DAY AHEAD - 3 MONTHS SAME DAY THE INDIA ELECTRICITY MARKETTIME LINE

16. CONTROL AREAS CS - 2 CS - 1 CS -3 REGIONAL GRID RLDC COORDINATES SEB - A SEB -B SEB -C STATE IPP STATE GENR CENTRAL SHARE SEB’S GRID SLDC COORDINATES DIRECTS DISTR - A • DISTR • B DISTR - C

17. Scheduling Philosophy of IEGC The Regional grids shall be operated as loose power pools (with decentralized scheduling and dispatch), in which the States shall have full operational autonomy, and SLDCs shall have the total responsibility for • Scheduling/dispatching their own generation (including generation of their embedded licensees), • Regulating the demand of their customers, • Scheduling their drawal from the ISGS (within their share in the respective plant’s expected capability), • Arranging any bilateral interchanges, and • Regulating their net drawal from the regional grid as per guidelines.

18. SCHEDULING & DESPATCHING CODE Each Region is a loose power pool and each state is a notional Control Area. (Decentralized Scheduling and Dispatch) RLDC can direct SLDCs / ISGSs in case of system contingencies, to change drawal/injection and if time permits, RLDC will ascertain whether situation has arisen due to Deviations from schedule AND/OR Bilateral Exchange or Short Term Open Access (These can be terminated by RLDC). All joint / bilateral agreements to be filed with RLDC/REB Secretariat SEMs to be installed by CTU at all interconnection points for recording Actual Interchanges and MVARh drawals. Regional Energy Accounting to be done by REB Sectt.based on metered and processed data (Actual net injection of ISGS and actual net drawal of each beneficiary) received from RLDC .

19. DAY AHEAD SCHEDULING • Schedules are made for each 15 minute time block wise on day ahead basis i.e. 96 time blocks in a day. • Participating agencies are ISGS and States. • Bilaterals / STOAs (Advance & FCFS) are also included in the preparation of schedules. • RLDC prepares and coordinates the schedules. • On the day of operation the schedules can be revised with prior intimation i.e. 4 to 6 time blocks.

20. SCHEDULING NLDC ATC Declaration At 11:00hrs Collective Transactions at 16:00hrs Time S L D C R L D C I S G S Availability Declaration Entitlements Requisition & Bilateral Agreements Injection Schedule Drawal Schedule Revision in DC Revision in Requisition Final Injection Schedule Final Drawal Schedule 0 to 24 hours Revisions during Current day Revisions during Current day

21. TIME TABLE FOR EXCHANGE OF INFORMATIONIN RESPECT OF SCHEDULING GRAPH

22. SRLDC INTER STATE GENERATING STATIONS BY 10: 00 HRS SAMPLE DC SHEET ISGSs shall advise SRLDC the Station-wise MW and MWh capabilities Back

23. SRLDC BENEFICIARIES SAMPLE ENT. OF STATES BY 11: 00 HRS SRLDC shall advise the States / Beneficiaries the Station wise MW & MWh entitlements. Back

24. SRLDC BENEFICIARIES BY 15: 00 HRS SLDCs/ Beneficiaries shall communicate the Station-wise requisitions and details of bilateral exchanges to SRLDC. Back

25. SRLDC SAMPLE SCHD OF ISGS BY 17: 00 HRS SAMPLE SCHD OF STATES SRLDC shall convey the net drawal schedule to each State / Beneficiary SRLDC shall convey the ex-power plant despatch schedule to each ISGS The details of unrequisitioned surpluses shall also be intimated. Back

26. SRLDC BY 22 00HRS ISGSs / States / Beneficiaries shall inform the modifications, if any, for incorporating in the final schedule Back

27. SRLDC BY 23 00HRS SRLDC shall issue the final ex-power plant despatch schedule to each ISGS SRLDC shall issue the final net drawal schedule to each State / Beneficiary Back

29. REVISION OF SCHEDULES/REQUISITIONS OUTAGE OF GENERATING UNIT REVISED DECLARATION OF AVAILABILITY BY ISGS OUTAGE OF A TRANSMISSION ELEMENT UNFORESEEN LOAD-CRASH TAKES EFFECT FROM 4TH TIME BLOCK IN CASE OF FORCED OUTAGE OF A GENERATING UNIT TRANSMISSION CONSTRAINT GRID DISTURBANCE SUO MOTO BY RLDC B) 6TH TIME BLOCK IN CASE OF REVISION OF DECLARED AVAILABILITY BY ISGS - REVISION OF REQUISITIONS BY BENEFICIARIES

30. Entitlement of Beneficiary Each State shall be entitled to a MW dispatch upto (foreseen expower plant MW capability for the day) x (State’s share in the station’s capacity) for all such stations. In case of hydro-electric stations, there would also be a limit on daily MWh dispatch, equal to (MWh generation capacity for the day) x (State’s share in the station’s capacity).

31. Ramping Up / Down While finalizing the above daily dispatch schedules for the ISGS, RLDC shall ensure that the same are operationally reasonable, particularly in terms of ramping-up/ramping-down rates and the ratio between minimum and maximum generation levels. A ramping rate of upto 200 MW per hour should generally be acceptable for an ISGS and for a regional constituent (50 MW in NER), except for hydro-electric generating stations which may be able to ramp up/ramp down at a faster rate.

32. To discourage frivolous revisions, an RLDC may, at its sole discretion, refuse to accept schedule/capability changes of less than two (2) percent of the previous schedule/capability.

33. ABT MECHANISM FOR DISCOMS • GENCO GIVES STATION WISE AVAILABILITY FOR DAY AHEAD • TRANSCO RECIEVES ISGS AVAILABILITY FOR THE DAY AHEAD • TRANSCO BROADCASTS THE SAME TO DISCOMS • DISCOMS REVERT BACK WITH REQUISITIONS • TRANSCO FINALISES AFTER DUE CONSIDERATION (SECURITY ASPECT) • INFORMS ISGS REQUISITIONS TO RLDC. • BROADCASTS FINAL SCHEDULE TO DISCOMS • REVISIONS IF ANY

34. THANK YOU

35. Settlement Systems* • . Accounting on weekly basis • . Capacity and Energy Charges billing on monthly basis • Billing of adjustments for deviations on weekly basis • RLDC to furnish data to REB Secretariat by Thursday noon for week ending Sunday • . REB Secretariat to finalize and issue REA by Tuesday, for seven day period ending on penultimate Sunday • . All data to be retained for 15 days (for RLDC & REB) for verification. • Commercial Mechanism * • Availability Based Tariff • ( a) Capacity Charge • (b) Energy Charge • (c) Adjustment for Deviations SRLDC/Comml/IEGC/34

36. Time Line For Settlement 0.04 % per day interest on defaulters Three day grace period For Bank processing Settlement week Monday 0000 Sunday 2400 Tuesday2400 Thursday 1200 Friday 2400 Saturday 2400 Tuesday2400 Tuesday2400 Monday 2400 Meter Data download & receipt at RLDC & preliminary checks Disbursement to utilities from the pool account Data validation and processing at RLDC. Forwarded to Regional Power Committee Secretariat Account Settled within 21 days Data cross checking & Computation by Regional Power Committee Secretariat, And Issue of Pool Account Unscheduled Interchange Account Reactive Energy Account Payment by utilities to the pool account managed by System Operator (RLDC)

37. REACTIVE ENERGY CHARGE : PAYABLE FOR : 1. VAR DRAWALS AT VOLTAGES BELOW 97% • VAR INJECTION AT VOLTAGES ABOVE 103% RECEIVABLE FOR: 1. VAR INJECTION AT VOLTAGES BELOW 97% • VAR DRAWAL AT VOLTAGES ABOVE 103% APPLIED FOR VAR EXCHANGES BETWEEN : A) BENEFICIARY SYSTEM AND ISTS - THROUGH A POOL ACCOUNT B) TWO BENEFICIARY SYSTEMS ON INTER-STATE TIES - BY THEMSELVES RATE: APPLIED @ 4 paise/kvArh ( UPTO 31.3.01 ) WITH 5% ESCALATION PER YEAR