Open Access in Interstate Transmission System Regulations: Evolution and Market Overview

1. Open Access In Interstate Transmission system Principal Regulation 2008( 25th Jan’2008) Amendment Regulation 2009(20th May’2009) Order-Removal of difficulties,(28th June,2011) Order-Amendment to CTU procedure 28th Oct,2009

2. Evolution of Power Market in India Capacity Market Ancillary Market PX 2008 Open Access 2004 ABT 2002-03 IEGC Feb.’2000

3. Open Access (LTA/MTOA/STOA) Connection Point CTU Consumer Location of Drawal point STU DISCOM Intra-State Inter-State Intra-State (within DISCOM) Period of O A STOA MTOA LTA STOA MTOA LTA All OA Nodal Agency RLDC CTU SLDC STU DISCOM

4. Present Market at a Glance Short Term Open Access Transactions Long Term Market Medium TermMarket Bilateral Contingency Collective (PXs) Bilateral Advance Bilateral Day Ahead Bilateral FCFS 12-25 Yrs 3months to 3Years For the current month (after Advance) Day Ahead/ Term Ahead 3 month Ahead (each appln. for seperate month) On the day of operation After clearance of PX Schedules Balancing Market ( UI ) ( Real Time Operation )

6. DEFINITION OF “OPEN ACCESS” IN THE ELECTRICITY ACT, 2003 .“Open Access” means the non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee, or consumer, or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission”. • Section 2(47) of Electricity Act 2003

7. Legal Framework(Sections 38/39/40/42) CTU / STU/ Distribution licensee / Transmission licensee-functions & duties • To provide non-discriminatory open access to its transmission system for use by- (i) any licensee or generating company on payment of the transmission charges; or (ii) any consumer as and when such open access is provided by the State Commission under sub-section (2) of section 42, on payment of the transmission charges and a surcharge thereon, as may be specified by the Central Commission:. • CTU can not engage in generation/trading. • STU can not engage in trading • Transmission Licensee can not engage in trading

8. Regulation 2: Definitions • “Bilateral Transaction” means a transaction for exchange of energy (MWh) between a specified buyer and a specified seller, directly or through a trading licensee or discovered at power exchange through anonymous bidding, from a specified point of injection to a specified point of drawl for a fixed or varying quantum of power (MW) for any time period during a month • “Collective transaction” means a set of transactions discovered in power exchange through anonymous, simultaneous competitive bidding by buyers and sellers; • “Regional entity” means a person whose metering and energy accounting is done at the regional level; • “Intra-State entity” means a person whose metering and energy accounting is done by the State Load Despatch Centre or by any other authorized State utility;

9. Regulation 2: Definitions….contd • “short-term customer” means a person who has availed or intends to avail short term open access • “short-term open access” means open access for a period up to one (1)month at one time • Short term market means a market with contracts for a period not exceeding one year from :: Power markets 2010 Regs • Short term access applications allowed upto 3 months in advance considering visibility & ATC/TTC issues.

10. Regulation 2: Definitions….contd • “State network” means network owned by the State Transmission Utility, distribution licensee or any other person granted licence by the State Commission to construct, operate and maintain the transmission system; • “State utility” means a State Transmission Utility, or a State Electricity Board,or Electricity Department of the State, or a State Government organization authorized to sell or purchase electricity on behalf of the State; • “time block” means 15 minutes time period specified in the Grid Code for the purposes of scheduling and despatch; and

11. Regulation 3: Scope • The long-term-customer and the medium-term customer shall have priority over the short-term customer for use of the inter-State transmission system. • The short-term customer shall be eligible for short-term open access over the surplus capacity available on the inter-State transmission system after use by the long-term customer and the medium-term customer, by virtue of • inherent design margins; • margins available due to variation in power flows; and • Margins available due to in-built spare transmission capacity created to cater to future load growth or generation addition.

12. Regulation 5: Nodal Agency • The nodal agency for bilateral transactions shall be the Regional Load Despatch Centre of the region where point of drawal of electricity is situated and in case of the collective transactions, the nodal agency shall be the National Load Despatch Centre.

13. CTU PROCEDURES NODAL AGENCY • For Short-Term Customers • RLDC of the Region in which the drawal point is located. • For Long & Medium Term Customers • Central Transmission Utility (CTU), if its system is used • Transmission Licensee/ STU of the region in which the drawl point is located when CTU system is not involved.

14. Regulation 6:Submission of STOA Application • A short-term customer or the power exchange (on behalf of buyers and sellers) intending to avail of STOA for use of the transmission lines or associated facilities for such lines on the ISTS, shall make an application to the nodal agency • The application for a bilateral transaction shall contain the details, such as • names and location of supplier and buyer, • contracted power (MW) to be scheduled and interface at which it is referred to, • point of injection, • point of drawal, • starting time block and date, • ending time block and date, and • such other information that may be required in the detailed procedure. • The application for a collective transaction shall contain the requisite details in accordance with the detailed procedure.

15. Regulation 7: Application Fee • An application made for each bilateral transaction or the collective transaction shall be accompanied by a non-refundable fee of Rupees five thousand (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.

16. Regulation 8: Concurrence of SLDC for bilateral and collective transactions • When a Proposed bilateral transaction has a State utility or an intra-State entity as a buyer or a seller • concurrence of the SLDC shall be obtained in advance and submitted along with the application to the nodal agency in the form as in the detailed procedure. • When a State utility or an intra-State entity proposes to participate in trading through a power exchange, it shall obtain • a “no objection” or a prior standing clearance from the SLDC in the form as in the detailed procedure, specifying the MW up to which the entity may submit a buy or sell bid in a power exchange.

17. Regulation 8: Concurrence of SLDC for bilateral and collective transactions…..contd 3(a) For obtaining concurrence or ‘no objection’ or prior standing clearance • Application before the SLDC • Acknowledgement receipt of the application, either by e-mail or fax, or any other recognised mode , • within twenty four hours • At the time of submission in case submitted in person 3(b) SLDC shall verify the following, namely- • existence of infrastructure necessary for time-block-wise energy metering and accounting in accordance with the provisions of the Grid Code in force, and • availability of surplus transmission capacity in the State network. 3(c) SLDC to concur ‘no objection’ / prior standing clearance • Within three (3) working days if infrastructure exists • Within seven (7) working days for a first time STOA Customer • Within two (2) working days for a defective/incomplete application

18. Regulation 8: Concurrence of SLDC for bilateral and collective transactions…..contd • In case of SLDCs refusal ( Application is in order) • To be communicated, within the period of three (3) working days or seven (7) working days • Reasons for such refusal: • In case of no Communication by SLDC • STOA shall be deemed to have been granted: • In case of deemed STOA grant by SLDC • the applicant while making application shall submit to the nodal agency an affidavit (in the format provided in the detailed procedure), duly notarised, declaring that – • (a) the SLDC has failed to convey any deficiency or defect in the application or its refusal or concurrence or ‘no objection’ or prior standing clearance

19. CTU PROCEDURES SUBMISSION OF APPLICATION • SLDC concurrance • Concerned SLDCs concurrence in advance (Format - II-Concurrance from SLDC) • In case of deemed concurrance the applicant alongwith the application shall submit duly notarized affidavit (Format-IIA-Affidavit-Deemed concurrance from SLDC • RLDC concurrance - Bilateral Transaction having a State Utility or an intra-state Entity as a Buyer/Seller in other region:: concurrence of the concerned Regional Load Despatch Centre(s). - Nodal applications to be considered first before giving other concurrance - Reasons for refusal

20. Regulation 9: Procedure for Advance Scheduling for bilateral transactions

21. ADVANCE SCHEDULING • Advance Scheduling – 3 months in advance • Separate Application – • Month wise - each transaction • Time Line for submission • Last date for submission ( -10 / -5 / 0 days prior to end of current month MO – for transaction in M1, M2, M3) • Cut-off time of application: 17:30 Hrs. of last day (Day 0) • Request for concurrence (RLDC) – by 12:00 Hrs.(Day 1) (Format- III) • Concurrence - by 20:00 Hrs(Day 1) • Congestion Information to Applicant – 12:00 Hrs(Day 2)-Format-IV(Congestion information-Advance scheduling) • Revised Request/re-routing – 11:00 HRs.(Day3)-Format-V-Request for revision due to congestion) • E-bidding – in case of Congestion (Day 4) • Acceptance/Refusal of Scheduling Request – (Day5)-Format-VI-Acceptance for scheduling

22. Application for advance scheduling Current month M0 Advance month M2 Advance month M1 Advance month M1 Last day -10 days -5 days Application Separate application shall be made for each month, and for each transaction.

23. Application for advance scheduling M0 (current) M2 M1 M3 -5 days last day +5 days Processing/ Approval Separate application shall be made for each month, and for each transaction.

24. “FIRST-COME-FIRST-SERVED”(FCFS) • Scope • FCFS shall be considered only when transactions are commencing & terminating in the same calender month. • Separate Application for each month • To be submitted 4 days prior to date of Scheduling • Processing time – 3 days on FCFS basis • Applications received during last 10 / 5 days of month of M0 for M1/M2 would be considered only after complete processing of Advance transactions for M1 & M2 • Application Received upto 1730 hrs in a day to be processed together – same priority • Application Received after 17:30 Hrs. - to be considered as received next day • Congestion Management – pro-rata

25. Application for FCFS scheduling 17:30 Hrs M0 M1 D-04 D0 Application -4 days -4 days -5 days 3 days Processing time Separate application shall be made for each transaction.

26. Regulation 12: DAY-AHEAD • Applications received within 3 days prior to the day of Scheduling and up to 15:00 Hrs. of the day immediately preceding the day of scheduling shall be treated as same priority • Processing only after processing of the Collective Transactions of the Power Exchange (s) • Congestion Management – Pro-rata

27. Regulation 13: CONTINGENCY • Buying Utility/Trader on its behalf to make an Application to the Nodal RLDC • To be considered after 1500 hrs of the day immediately preceding the day of scheduling • In case of intra-day/same day – scheduling from 6th time block • Congestion Management – Pro-rata

28. Regulation 14: Revision of Schedule • Only in case of “Advance Scheduling” or “First-Cum-First Served basis” • Accepted schedule for Day-Ahead & Contingency transaction shall not be revised or cancelled except for tripping of generators > 100MW as per Cl.6.5.19 of IEGC. • Revision w.e.f 4th time block of intimation to RLDC • Generator to furnish expected restoration time from which original schedules would become effective. • For period of revision/cancellation upto 2 days: Original transmission/operating charges applicable. • For period of revision/cancellation > two days: Transmission Charges and Operating Charges for the period beyond 2 days shall be payable as per the revised accepted schedule and for the first 2 days as per the original schedule. • Margin Available – released for scheduling of eligible Open Access Transactions

29. Regulation 15:: CURTAILMENT in case of TRANSMISSION CONSTRAINTS • Transmission constraint or to maintain grid security • Curtailed in the manner, which in the opinion of RLDC, would relieve transmission constraints/ enhance grid security • Curtailment priority :: STOA(bilateral)  Collective (PX)  MTOA  LTA • In case of reallocation of GOI share leading to corridor constraints • Rerouting allowed without curtailment of existing transactions • Pro-rata refund of Transmission Charges • No revision of operating charges

30. Regulation 16: Transmission Charges [repealed by 19(1) of Regulations on sharing of iSTS charges-2010] upto 30.06.11

31. Transmission Charges …. contd • The intra-State entities shall pay the transmission charges for use of the State network as fixed by the respective State Commission in addition to the charges specifie • Provided that in case the State Commission has not determined the transmission charges, the charges for use of respective State network shall be payable at the rate of Rs.80/MWh for the electricity transmitted: • Provided further that non-fixation of the transmission charges by the State Commission for use of the State network shall not be a ground for refusal of short –term open access: • Provided also that the transmission charges payable for use of the State network shall be conveyed to the Regional Load Despatch Centre concerned who shall display these rates on its web site: • Provided also that the transmission charges payable for use of the State network shall not be revised retrospectively.

32. Application of POC methodology for STOA transactions

33. Application of POC Transmission Charge methodology for STOA transactions • Nodal POCs zoned to form Zonal POC for each Control area • Slabbing done to fall into either high, Average or Low slab For New Grid: • Converted to High  15paise/unit Average  13 paise/unit Low  11 paise/unit • POC rates applicable are Rs.150/MWH, Rs.130/MWh, Rs.110/MWh for High, average, Low slab respectively For SR Grid : • Slab rates are Rs. 140/MWh, 120/MWh, 100/MWH for High, Average, Low slabs respectively

34. Application of POC Transmission Charge methodology for STOA transactions • Transmission charges for 100MW RTC power • Assume Injecting Entity falls in high injection slab in NEW Grid while withdrawal Entity fall in low withdrawal slab in SR Grid • POC injection  Rs 140/MWH • Withdrawal POC  Rs.110/MWh • Transmission charges payable for injection = 2400MWh x 140 • Transmission charges payable for withdrawal would be: = 2400MWh X 110 • Total charges payable by Trader to Nodal RLDC: = 2400*(140+110) Rs. • STU charges would be payable in addition

35. Regulation 16: Transmission Charge as per POC regulations

36. Regulation 16: Transmission Charge as per POC regulations

37. Regulation 16: Transmission Charge as per POC regulations

38. Regulation 16: Transmission Charge as per POC regulations

39. PoC Charges

40. PoC Charges

41. Regulation 17: Operating Charges • Bilateral Transaction • Rs.2000/- per day or part of the day/transaction /RLDC • Rs.2000/- per day or part of the day/transaction /SLDC • Collective Transaction • Rs.5000/-per day to NLDC • Rs.2000/- per day for each SLDCs involved • NLDC to share operating charges with each RLDC • NLDC keeps Rs.2000/- and Rs.3000/- divided amongst 5 RLDCS • Clubbing of buyers & sellers within a state • Each group be considered as single entity for Operating charges and for scheduling by NLDC • Each point of drawal & injection shall be counted separately for the purpose of intra-state transmission charges

42. Regulation 18: Payment of transmission charges and operating charges • Bilateral transaction: • the applicant to deposit with the nodal agency transmission charges and operating charges within three (3) working days of grant of acceptance for scheduling. • Collective transactions: • the power exchange shall deposit with the nodal agency these charges by the next working day falling after the day on which its application was processed • the transmission charges for use of State network and operating charges for SLDC shall be settled directly by the power exchange with respective SLDC.

43. Regulation 19: Default in payment of STOA charges • Default in payment of the application fee or specified charges : • charges the nodal agency may decide not to schedule the transaction, or • to cancel the scheduling of already scheduled transaction or • not to entertain any application of such persons in future until such time the default is cleared • The person committing default in payment • Shall pay simple interest at the rate of 0.04% for each day of default.

44. CTU PROCEDURES INCORPORATION IN DAILY SCHEDULES • Incorporation in Daily Schedules of the Regional Entities • Average energy losses - estimated on weekly basis and converted to Tier I, II, III slabs • RLDCs – ISTS (Inter State Control area) • SLDC – (Intra-State/Control area) • Resolution of 0.01 MW at each State/inter-Regional boundaries. • W.e.f 1st October,2011 losses to apportioned to both buyers & sellers

45. CTU PROCEDURES COMMERCIAL CONDITIONS (SUMMARY) • All Payment related to Open Access Charges • Payment to be made by Applicant to the Nodal RLDC • within 3 working days from the date of acceptance • Payment as per MWh contract value • Application Fee:: (Rs. 5000/-) to Nodal RLDC • Along with application (for Advance/FCFS transaction) • With in 3 working days ( for same day or next day transaction) from the date of application submission. • Operating charges::Rs. 2000/- per day for each RLDCs/SLDCs involved and Rs.5000/- per day per entity for collective

46. CTU PROCEDURES COMMERCIAL CONDITIONS (SUMMARY)CTD.. • If State utility is Buyer/Seller, 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 • The transaction wise payment details shall be submitted as per enclosed format[FORMAT-VII: “Details of Payment”].

47. Regulation 20:: Unscheduled Inter- change (UI) Charges • Any mismatch between the scheduled and the actual drawal at drawal points and scheduled and the actual injection at injection points for the intra-State entities shall be determined by the concerned SLDC and covered in the intra-State UI accounting scheme. • Unless specified otherwise by the concerned State Commission, UI rate for intra-State entity shall be 105% (for over-drawals or under generation) and 95% (for under-drawals or over generation) of UI rate at the periphery of regional entity. • No charges, other than those specified under these regulations shall be payable by any person granted short-term open access under these regulations.

48. Regulation 21: Reactive Energy Charges • The reactive energy drawals and injections by the intra-State entities shall be governed by the regulations applicable within the State concerned.

49. Regulation22: Special Energy Meters Special Energy Meters shall be installed by the Central Transmission Utility for and at the cost of the regional entities and by the State Transmission Utility for and at the cost of the intra-State entities.

50. Regulation23:: Transmission losses • The buyers and sellers of the electricity shall absorb apportioned energy losses in the transmission system as estimated by the Regional Load Despatch Centre and the State Load Despatch Centre concerned, and applied in accordance with the detailed procedure. • The energy losses shall be accounted for by providing a differential between schedules at the points of supply, inter-utility transfer and drawal of electricity. • The applicable transmission losses for the regional transmission system as well as for State network shall be declared in advance and shall not be revised retrospectively.