presentation at merc public hearing for case 13 0f 2010 dated 28 6 2010 n.
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Presentation at MERC Public Hearing for case 13 0f 2010 dated 28-6-2010

Presentation at MERC Public Hearing for case 13 0f 2010 dated 28-6-2010

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Presentation at MERC Public Hearing for case 13 0f 2010 dated 28-6-2010

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  1. Presentation at MERC Public Hearing for case 13 0f 2010 dated 28-6-2010 by N. Ponrathnam

  2. The Presentation is By an Electrical Engineer , a spirited Indian having Adequate knowledge of Electricity As a consumer of Electricity for residence / works in Chembur (in Mumbai Suburb ) and for Agriculture (in India) as defined in 2(15) of EA2003 As Consumer Representative appointed by MERC U/S 93(4) of EA2003 and As amicus curie for this issue. 10/23/2014 2

  3. The issues for Public Hearing • Requirement of PPA • Regulation of Purchase by MERC • Black Marketing of Electricity • Manipulation by distribution companies Examples • Tariff • Suggestion

  4. Power Purchase Agreement (PPA) Power Procurement plan (long term short term / standby etc ) to be in place to supply uninterrupted power to the Consumers as enumerated in MAHARASHTRA ELECTRICITY REGULATORY COMMISSION (TERMS AND CONDITIONS OF TARIFF) REGULATIONS 2005. Have been deliberately not place in any of the ARR tariff by few distribution companies and MERC has also failed to notice while determining the tariff. 10/23/2014 4

  5. Power Procurement Plan 23.1 The Distribution Licensee shall prepare a five-year plan for procurement of power to serve the demand for electricity in his area of supply and submit such plan to the Commission for approval: Provided that such long-term power procurement plan shall be an annual rolling plan and the first plan period shall commence on April 1, 2006: Provided further that the long-term power procurement plan shall be submitted along with the application for determination of tariff, in accordance with Part B of these Regulations. 10/23/2014 5

  6. Power Procurement Plan 23.2 The long-term power procurement plan of the Distribution Licensee shall comprise the following: (a) A quantitative forecast of the unrestricted demand for electricity, within his area of supply, from each tariff category over the plan period; (b) An estimate of the quantities of electricity supply from the approved sources of generation and power purchase; (c) Standards to be maintained with regard to quality and reliability of supply, in accordance with the Standards of Performance Regulations; 10/23/2014 6

  7. Power Procurement Plan (d) Measures proposed to be implemented as regards energy conservation and energy efficiency; (e) The requirement for new sources of power generation and/ or procurement, including augmentation of generation capacity and identified new sources of supply, based on (a) to (d) above; (f) The plan for procurement of power including quantities and cost estimates for such procurement: 10/23/2014 7

  8. 23.9 The Commission shall review the long-term power procurement plan of the Distribution Licensee, or any proposed modification thereto, and upon such review being completed, the Commission shall either- (a) pass an order approving the long-term power procurement plan, or modifications thereto, subject to such modifications and conditions as it may deem appropriate; or (b) reject the long-term power procurement plan or application for modification thereto, for reasons recorded in writing, if such plan is not in accordance with the guidelines contained in this Part and directing the Distribution Licensee to submit a revised plan based on such considerations as it may specify: Provided that the Distribution Licensee shall be given reasonable opportunity of being heard before his long-term power procurement plan is rejected. 10/23/2014 8

  9. Regulation at Power Procurement 86. (1) The State Commission shall discharge the following functions, namely: - (a)…………… (b) regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State; 10/23/2014 9

  10. Average Cost of Supply Should be The Actual Cost of supply This issue have been unnoticed by the Watchdog (MERC) and the consumer is made to bleed deliberately by the Distribution Companies. Issues unnoticed by MERC is Explained taking example of RINFRA. 10/23/2014 10

  11. Categorisation at the time of Bombay Suburban Electric Supply Limited LF1- Light & Fan Applicable to residential, religious, Charitable and educational institution DS- heating, cooking & refrigeration Applicable to residential, religious, Charitable and educational institution LF2- Light & Fan Applicable to commercial, club, hotel restaurant business premises CS- heating, cooking & refrigeration Applicable to commercial, club, hotel restaurant business premises Temporary supply 10/23/2014 11

  12. Categorisation at the time of Bombay Suburban Electric Supply Limited C-1 Cinemas and theaters LTP-1 Motive Power up to 15BHP Connected Load LTP-2 Motive Power above 15BHP up to 50BHP Connected Load LTP-3 Motive Power above 50BHP Connected Load Charged with Demand Charges. High Tension supply did not exist 10/23/2014 12

  13. Categorisation at the time of B S E S Limited and first Tariff order 2004 There was tariff hike in 01-08-1994 & 01-03-1997 High Tension supply did not exist There was no HT Housing Colonies MERC had violated section 61 (g) of EA 2003 by creating this subsidised tariff category. 10/23/2014 13

  14. Categorisation as on 2004 TPC categories for low tension Residential LT1- non residential upto 100kW LT2- non residential above 100kW (demand based Tariff) {LT1&LT2} of TPC and {LTP1& LTP2} of REL had identical rate Residential & commercial tariff had max 10% difference 10/23/2014 14

  15. Categorisation of LTP2 as on 2004 REL had Forced the consumers to pay demand charges on consumers below 50 BHP blaming MERC for the tariff shock. MERC reverted the order in retroscopic effect considering the wind fall revenue made by REL. however REL did not refund to some of the consumers arbitrarily Violating MERC direction. Changed the category from LF2 (commercial to Industrial) to LTP2 for some consumers 10/23/2014 15

  16. Categorisation of LTP2 as on 2006 MERC decides to levy Demand charges to above 15BHP against its own decision in the previous year. This illegality was uniformly inducted in other Distribution company also. Levy of demand charges above 100kW for TATA Levy of demand charges above 50kW for MSEDCL Changed to 15BHP violating its own Regulation. 10/23/2014 16

  17. Categorisation as on 2006 Advertisement & hoarding category created not complying to EA2003 Temporary religious / other purposes created not complying to EA2003 BPL category was also created Residential tariff of REL & TATA was same The industrial tariff of REL marginally higher than TATA (within 10% ) 10/23/2014 17

  18. Issue of Educational and Charitable Organisation The tariff for residential above 300 units were raised from 440 Paise to 575 Paise 30% raise. Increasing the cross subsidy & violating section 61 (g) of EA 2003 in the order passed by MERC. Residential category Educational & Religious institution which have to consume more than 300units became subsidising category. 10/23/2014 18

  19. Issue of BPL Below poverty line consumers are not benefited as envisaged by NTP. The consumption is always more than 30 units. This category has been used to manipulate the accounts by REL for better recovery. The issue of high Aggregate Technical & commercial losses is also used to recover more from the consumers. 10/23/2014 19

  20. Categorisation as on 2007 LT9 Multiplexes and Shopping Malls category created not complying to EA 2003 The limit of 15BHP changed to 20kW for levy of Demand charges and charges reduced from 374Rs/kVA/month to 60% of 300Rs/kVA/month still most of the consumers have not able recover the Tariff Shock. 10/23/2014 20

  21. Reliability Charge Reliability Charge created not complying to EA2003 Reliability Charge collected have to be refunded once Supreme Court decides that reliability charge do not complying to any of the provision of EA2003 upholding the decision of the ATE order. 10/23/2014 21

  22. Black marketing of Electricity Government of India created Electricity Act 2003 for development of electricity by Private Participation. Captive power plants supply electricity to grid at abnormally high cost and the source of generation is concealed and normally transacted by a trading company. The existing power plants who gives power at the regulated price sells at marginal price if given through a trader. 10/23/2014 22

  23. The custodians of the consumer interest failed miserably to protect consumer interest MERC have encouraged escalation of price by allowing Tri-part agreement and extracting money as Reliability Charge. In the transaction consumers loose and generators benefit. In the regulation for ceiling of the maximum price CERC instead of tightening the escalating price have provided a large room for the power players to fleece the consumers 10/23/2014 23

  24. Fuel Adjustment Charge All distribution licensees and the MERC is violating the section 62 (4) of EA2003 by allowing cost variation other than Fuel (Expensive power purchase) as FAC. Expensive power purchase is already included in Reliability Charge 10/23/2014 24

  25. Categorisation as on 2008 Crematoriums and Burial Grounds category created not complying to EA2003 MERC approved for Tariff for REL 50% Higher than TATA. The steep increase in Reliability (Expensive power purchase charge) charge. 10/23/2014 25

  26. Issue of Authorisation to Distribute Electricity to RINFRA MERC vide RTI case no 25 /2008/1291 dated 24th June 2008 gave information that “Commission has not authorised Reliance infrastructure for distribution of Electricity” I fail to understand how MERC has issued specific condition of Distribution License applicable to Reliance Energy Limited Regulation on 20th August 2008. Clarification sought vide letter dated case no 25 of 2008 dated 21.10.2008 still not received from MERC. 10/23/2014 26

  27. Categorisation as on 2009 Residential category Educational & Religious institution which had became subsidising category is further subjected to tariff shock by categorising them as Commercial. 10/23/2014 27

  28. Issues of Demand Charges Two-part tariff has been stipulated for all consumer categories for all distribution licensees. As regards levy of Demand Charges, the same is applicable only for the consumers who have entered into a Contract Demand with the distribution licensee, irrespective of whether the connections have been released on the basis of Sanctioned Load or Contract Demand. Distribution licensees levy Demand Charges without entering into an agreement specifying Contract Demand. 10/23/2014 28

  29. Suggestion to MERC 1 Credibility of RINFRA should be assessed and Authorisation with license in consultation with GOM by MERC. PPP (Power Procurement Plan) should be in placed before MERC along with PPA (Power Purchase Agreement) at the time of ARR. Transmission of electricity from any generator to distributor should not be allowed without a PPA (Power Purchase Arrangement/Agreement) MERC should direct police (law enforcement department) to assist RINFRA in eliminating theft and decrease distribution loss. 10/23/2014 29

  30. Suggestion to MERC 2 MERC Should Penalise Rinfra for the fault / mistake committed because mistakes will be repeated unless dealt with severely. MERC should direct Rinfra to refund Excess amount collected from the consumers once investigation report is received by MERC. Affected consumers should be adequately compensated. MERC strictly enforce Rinfra to comply with the EA2003 and the Regulation framed by MERC. 10/23/2014 30

  31. Suggestion to MERC 3 Government should identify and give direct subsidy to the needy only as per Section 65 of EA2003. Government should make system to eliminate poverty of BPL consumers. MERC should fix Maximum price ceiling for all categories as per 62 (1) of EA 2003. MERC should specify method and principle under section 45[2(a)]to fix charges of electricity consumed such that the consumers willingly opt for efficiency and improvement in contrast to the consumer penalized for the parameters he is unable to maintain. 10/23/2014 31

  32. Suggestion to MERC 4 MERC should direct TATA to absorb the cost of wheeling charges and legitimate wheeling losses so as to remove the difference of TATA consumers on TATA network and TATA consumers on REL/BEST network. Cost of supply should be determined scientifically. Existing tariff category which is arbitral should be changed. New Categories should be created complying to section 62(3) and 61(b) of EA2003. 10/23/2014 32

  33. THANK YOU For more details, please contact: N. Ponrathnam Vel Induction Hardenings 25,Majithia Industrial Estate, Waman Tukaram Patil Marg, Deonar, Mumbai -4000 88 Cell no: 9869468816