Venue: HPERC

1. In the Matter ofFiling of the Aggregate Revenue Requirement (ARR) for the third Control Period (FY 2014-15 to FY 2018-19) under section 62,64 and 86 of the Electricity Act 2003SubmissionsObjections/Suggestions on behalf of HPSEB Ltd. Venue: HPERC Date: 02-May-2014

2. Index • Background • Integrated Operations of SLDC/ DISCOM(ALDC)/Users • Statutory Functions of SLDC • Functions of DISCOM (ALDC) • Present Structures/Facilities and the Ownership • Suggestions in the matter of ARR Filed by HPLDS • Our Prayers

3. Background • In exercising the provisions of Section 131(2), 132 & 133 and other provisions of Electricity Act, 2003, the Govt. of H.P. made the transfer scheme. • Clause 4 (Section 6) of transfer scheme notified by the Government of Himachal Pradesh (GoHP) under “Himachal Pradesh Power Sector Reforms, 2010” stipulates • “The statutory functions of State Load Dispatch Centre shall be undertaken by an entity under the Directorate of Energy, Government of Himachal Pradesh. It has further been provisioned that to undertake the economic dispatch of electricity from the generating stations to various load centres, including the on-line real time monitoring and control of supply of electricity in the area of supply, HPSEB Ltd. shall run its Area Load Dispatch Centre. The present State Load Despatch Centre shall also include the HPSEB Area Load Dispatch Centre, each with their independent functions”.

4. Background Contd.. • Hon’ble HPERC in its Second APR Order for the MYT Period (FY09–FY11) and Tariff Determination for FY11 dated 10.06.2010 had directed : • “The Commission, keeping in view the Ministry of Power, GOI recommendations, in its last tariff order, had issued directions for ring fencing the SLDC. The SLDC at present, in the unbundled set up, has been performing inter alia the task of scheduling of power, coordinating with NRLDC, regulating the drawals by the distribution utility and imposing restrictions on various feeders, as and when necessary. With the imminent unbundling of the Board, the successor distribution company needs to set up on priority Area Load dispatch Centre(s) (ALDC(s)) to co-ordinate with the SLDC and undertake the related functions falling under the purview of the distribution utility. The distribution licensee is directed to submit a comprehensive plan in respect of establishment of ALDC(s), within four months.”

5. Background Contd.. • In compliance to above mentioned directions of GoHP & Hon’ble HPERC and subsequent creation of HPLDS vide GoHP order dated 8.11.2010, HPSEBL established ALDC of HPSEBL on 16.06.2011 • Also services of certain officers/officials put at the disposal of HPLDS on the secondment basis along with posts facilitating HPLDS to carryout its statutory functions. • To facilitate HPLDS to carryout its independent functions under EA, 03 and real time operations smoothly, it was decided that HPSEBL shall charge 20% of the total charges being billed annually by POWERGRID to HPSEBL and the utilization of infrastructural facilities and other associated assets of HPSEBL on average annual charge basis till appropriate division of assets.

6. Market Structure after Electricity Act, 2003 Generation Transmission Distribution GENCO GENCO GENCO TRADER OPEN ACCESS : Transmission DISCOM DISCOM DISCOM OPEN ACCESS : Distribution TRADER Customer Customer Customer 6

7. Integrated Operations of SLDC/ DISCOM(ALDC)/Users(Section 5.4.2 & Section 6.4 of IEGC) • That the responsibility of Distribution Licensee(ALDC) and SLDC as per Indian Electricity Grid Code (IEGC) are intimately related and needs perfect coherence with regard to safe operation of the Grid e.g. for controlling over drawals in low frequency regime etc. and thus avoiding the Grid collapse. • That the responsibility of ALDC of HPSEB Ltd. being sole distribution licensee in the State is of paramount importance as that of the SLDC for effective demand management in its area of supply throughout the State and to ensure control over Grid parameters. Therefore both SLDC and ALDC need to complement and supplement each others functions. • Further the responsibility of ALDC to carry load & demand management through real time operations for ensuring availability of quality and uninterrupted power to its consumers, in the State warrants continuation of ALDC functions as per the existing practices except for the Statutory Functions which are required to be carried out by SLDC exclusively.

8. Statutory Functions of SLDC Section 32 of EA 2003 • SLDC shall be the apex body to ensure integrated operation of the power system in a State. • SLDC shall be responsible for optimum scheduling and dispatch of electricity within a State, in accordance with the contracts entered into with the licensees or the generating companies operating in that State; • Monitoring of grid operations; • Keeping accounts of the quality of electricity transmitted through the State grid; • Supervision and Control over the intra-state transmission system and be responsible for carrying out real time operation for grid control; • Levy and collection of fee and charges from the generating companies and distribution licensees engaged in intra-State transmission of electricity.

9. Statutory Functions of SLDC Contd.. Section 33 of EA 2003 • To ensure integrated grid operation economically and efficiently. • Every distribution licensee, generating company, generating station, substation and any other person connected with the operation of the power system shall comply with the direction issued by the SLDC under subsection (1). • SLDC shall comply with the directions of the RLDC. • If any licensee, generating company or any other person fails to comply with the directions issued under sub-section (1), he shall be liable to penalty not exceeding rupees five Lacs.

10. Functions of DISCOM (ALDC) • Scheduling of power available from various sources on the basis of information received from SLDC in time blocks of 15 minutes on day ahead basis and revision thereof from time to time on day to day basis. • To run Load Forecasting Model and predict the demand in the distribution area on daily, weekly, and monthly basis. • To operate, monitor and control of power flows on real time basis with respect to the distribution area under the jurisdiction of ALDC.

11. Functions of DISCOM (ALDC) Contd.. • To monitor & exercise control on the Unscheduled Interchange (UI) of power within the stipulated frequency regime. • To ensure operational maintainability of Grid Discipline. Trading of Power: • Day Ahead Market: For selling/buying power to take care of surpluses/shortages in the State on day ahead basis. • Term Ahead Market: • Day Ahead Contingency: For selling/buying power on day ahead basis, once the period of day ahead market has expired. • Intra-Day Market: For selling/buying power to meet the surpluses/shortages that may be there on the same day. • Week Ahead Market: For selling/buying power when weekly surpluses/shortages are available.

12. Functions of DISCOM (ALDC) Contd.. • State Estimation, contingency analysis & security enhancement. • Bus Load Forecast. • Optimal Power Flow for power system model. • To deal with all the CERC Petitions regarding tariff finalization issues concerning CPSUs/CTU for generation and transmission projects. • OCC/TCC/NRPC Meetings at NRPC level (ALDC shall be the representing body for DISCOM).

13. Functions of DISCOM (ALDC) Contd.. • To undertake the above functions in an effective manner, the following daily activities shall be carried out by ALDC: • Receipt of Entitlement in respect of Central Sector Shares, Bilateral Shares and Anticipated Generation of IPPs at 11:30 Hrs. from SLDC. • Receipt of various Shares and anticipated generation schedules from by 10:00 Hrs. through Fax/Telephone. • Passing on generation schedules to SLDC by 11:00 Hrs. • Working out the availabilities vis.-a-vis. demand forecast for next day for working out acceptance/surrender by 14:00 Hrs • Passing of acceptance/surrender of Shares to SLDC for passing on to RLDC by 14:15 Hrs. • Receipt of Drawal schedule Rev-0 in respect of Central Sector Shares by 17:30 Hrs. from SLDC. • Preparation of Day Ahead Schedule by DISCOM (ALDC) • Receipt of Rev.I by SLDC to DISCOM (ALDC) by 23:40 Hrs.

14. Contd.. Functions of DISCOM (ALDC) • Monitoring of Over Drawal/Under Drawal of power from the Grid on real time basis w.e.f. 00:00 Hrs. till 24:00 Hrs. of next day on round the clock basis by ALDC staff, and adhering to instructions from SLDC. • As HPSEB Ltd. is a direct member of Indian Energy Exchange Ltd. (IEX), the ALDC operators shall carry out the following functions also: • The surplus/shortages on day-ahead basis shall be worked out and accordingly bids shall be made for selling/buying power on the platform of the exchanges between10:00 Hrs to 12:00 Hrs on the Day ahead market. • Obligation report from the power exchanges is received at ALDC by 16:00 Hrs. • Based on the power actually sold/bought, the surpluses/shortages are revisited. • If surpluses/shortages still exist in the power supply position for the next day, bids are made for selling/buying power between 15:00 Hrs to 17:00 Hrs on Day ahead contingency market. • If due to certain unforeseen circumstances, there are shortages/surpluses on the 17:00 Hrs to 24:00 Hrs of the same day, bids are made for buying/selling power on the energy exchanges between 12:00 Hrs to 17:00 Hrs. • Power Supply Position will be forecasted on daily, weekly, monthly, and annual basis at ALDC. If there is certainty of surpluses/shortages on weekly basis, bids shall be made for selling/buying power on weekly basis in the week ahead market.

15. Functions of DISCOM (ALDC) Contd.. • To operate and control power flows on real time basis within the distribution area of HPSEBL. • To operate and monitor the transactions of power on real time basis by way of trading on the exchanges and banking arrangements as per bilateral agreements. • Scheduling of power available from various sources in 15 minutes time blocks on day ahead basis and revision thereof from time to time. • To monitor & exercise control on the Under/Over drawl of power within the stipulated frequency regime in respect of HPSEBL. • Load Forecasting on a daily, monthly, yearly basis in 15 minute time blocks for operational purposes.

16. Functions of DISCOM (ALDC) Contd.. • Approval of shutdowns on powerhouses with HPSEBL, IPPs connected to HPSEBL system, and 33kV and below lines and substations. • Power System Analysis: State Estimation, contingency analysis & security enhancement, Bus Load Forecast, Optimal Power Flow for power system model, capacitor placement and performance • Open Access Matters. • Maintenance of ALDCs, SCADA, EMS, EMS database, SCADA/ EMS hardware and software, RTUs, Database and displays, Data exchange and processing, Communication system, Auxiliary power supply system, AC system, Fire fighting equipments, PLCC system, etc. • Preparation of schemes for installation of new RTUs, and installations of RTUs thereof • To assist and co-ordinate with SLDC for day to day operation and for maintaining grid security

17. Present Structures/Facilities and the Ownership • At present there are 26 Nos. Remote Terminal Units (RTUs) which are fetching data from • 8 Power Houses - Larji, Bhaba, Giri, Bassi, Andhra, Malana, Baspa & 6 No. SHEPs and 18 Grid Stations – Kunihar, Jeori, Solan, Jutogh, Baddi, Bajoura, Darla, Bagga, Barotiwala, UpperlaNanagal, Kala Amb, Mandi, Hamirpur-I, Hamirpur-II, Dehra, Kangra, Jassore & Kangoo. • With the shifting of CFEs at Control Centre Shimla as stated above, these RTUs are reporting direct to control centre at Shimla and the same is further connected to NRLDC through optical fiber cable.

18.                Indicative Geographical Map of RTUs Larji, Bhaba, Giri, Bassi, Andhra, Malana, Baspa 6 No. SHEPs Kunihar, Jeori, Solan, Jutogh, Baddi, Bajoura, Darla, Bagga, Barotiwala, UpperlaNanagal, Kala Amb, Mandi, Hamirpur-I, Hamirpur-II, Dehra, Kangra, Jassore Kangoo   F0 Control Room ALDC/SLDC, Shimla

19. RTUs on Single Line Diagram BANER GIRI GAJ KHAULI BHABA BASPA BASSI BINWA LARJI ANDHRA KANGRA JEORI UPLA NANGAL BAJAURA DEHRA HMR-I JASOORE AMB BADDI HMR-II BAROTIWALA JUTOGH KUNIHAR SOLAN KANGOO DARLA BAGGA CHABBA SAL-II

20. Communication of Data (Different Stages) CT PT/CVT CB ISO REMOTE CONTROL(CB) TRANSDUCERS DS/SS REMOTE TERMINAL UNIT(RTU) AAU DAU CPU/SAU DOU PLCC AT RTU END PLCC AT S/LDC END MODEM NRLDC MDF SLDC CFE & HUB LDC

21. G E N E R A T I O N G TAGGING N E T W O R K HDR SOE N E T W O R K SCADA LOAD SHED GENCALC I C C P/ O A G H I M TFE CFE SCADA/EMS Functionalities

22. Connectivity Diagram Kangra (PSEB) Jassore JoginderNagar(PSEB) Kangra Dehra Hamirpur-I Bassi Malana Hamirpur-II Khodri (UPSEB) Bajaura Kangoo Mandi Jeori Kunihar Solan Giri Abdullapur (HSEB) Panchkula (HSEB) Bhaba Baddi Jutogh Head Quarter Andhra Nogli

23. Control Room

24. - Connectivity Diagram- Communication Stages Diagram- Network Diagram of Micro RTU • Single Line Diagrams

25. Present Structures/Facilities and the Ownership • Prior to transfer scheme and subsequent establishment of independent HPLDS to carryout the statutory functions of SLDC as per EA, 2003,-Statutory Functions of SLDC and Functions of DISCOM (ALDC) were being carried by DISCOM as its integral operations. • Consequently with the demarcation of above the requisite staff has been placed at the disposal of HPLDS. The present administrative structure under the two designated SEs one from DISCOM i.e. SE(PR&ALDC) and another under HPLDS/GoHP as SE (SLDC) is as under.

26. Hierarchical Organisational Structure of SLDC

27. Superintending Engineer (Power Regulation & Area Load Despatch Centre) APS/PA Sr. EE (Comm. & DDO) Sr. EE (SCADA/EMS/Comm.) Sr. EE (Power Controller) Sr. EE (Shift A) Sr. EE (Shift B) Sr. EE (Shift C) Sr. EE (Shift D) 4 Posts Vacant AE/AEE AE/AEE AE/AEE (RTU) AE/AEE (SCADA/EMS) AE/AEE (STOA) AE/AEE (STOA) AE/AEE (STOA) JE/AAE JE/AAE JE/AAE JE/AAE JE/AAE JE/AAE Supporting Staff JE/AAE JE/AAE JE/AAE Supporting Staff Supporting Staff Hierarchical Organisational Structure of ALDC

28. Present Structures/Facilities and the Ownership • Entire infrastructure comprising SCADA/Communication system under ULDC-I scheme was provided by POWERGRID. However, HPSEB Ltd. is bearing the following expenditure as per the MOU dated 09.06.1993: Monthly expenditure to the tune of Rs.35.00 Lac on account of equipments installed in HP State, installed in the jurisdiction of Central Sector and O&M cost of equipments at Central Sector on MW entitlement basis. Till date HPSEBL has repaid Rs.66.56 Crore • The expenditure against O&M of SCADA/EMS/RTUs/Communication/Auxiliary Power Supply is being incurred to the tune of tentatively Rs.2.35 Cr. PA. • The monthly expenditure towards ULDC repayment in respect of BBMB portion @ 5.56% being partner State is to the tune of Rs.1.50 Lac. • The expenditure on account of development of civil infrastructure by HPSEBL at its own cost is to the tune of Rs.25.00 Crore. • POWERGRID shall remain the owner of entire assets till the investments including interests etc. are paid in full to POWERGRID by HPSEBL and thereafter the ownership of these assets shall be transferred to HPSEB Ltd. The scheduled year for the same is 15 years i.e. by 31.07.2017 as per MOU entered between POWERGRID and the then HPSEB on dated 09.06.1993.

29. Payment made against ULDC Phase-I Scheme (As on 28.04.2014) Rs. Sixty Six Crore Fifty Five Lacs Eighty One Thousand Forty Six Only

30. Present Structures/Facilities and the Ownership • ULDC-II Scheme • As per the decision of 17th TCC & 18th NRPC meeting ULDC-II scheme for replacement /up gradation of the existing assets in respect of SCADA/EMS/ RTUs/ Communication/Auxiliary Power supply system, stands introduced and the work regarding the replacement of the assets is in progress. The financial implications under ULDC-II scheme is as under:

31. Suggestions in the matter of ARR Filed by HPLDS • Both SLDC & ALDC require assets/ infrastructure to perform independent functions. Presently SLDC/ALDC Units are functional utilizing common Control Centre. • Both units are responsible for optimum and secure operation of State Grid under the direct supervision of NRLDC as per the provisions in the Clause 4.6.2 of IEGC 2010 which categorically stipulates: “Reliable and efficient speech and data communication systems shall be provided to facilitate necessary communication and data exchange, and supervision/control of the grid by the RLDC, under normal and abnormal conditions. All Users, STUs and CTU shall provide system telemeter power system parameter such as flow, voltage and status of switches/transformer taps etc. in line with interface requirements and other guideline made available by RLDC. The associated communication system to facilitate data flow up to appropriate data collection point on CTU’s system shall also be established by the concerned User or STU as specified by CTU in the connection Agreement. All Users/STUs in coordination with CTU shall provide the required facilities at their respective ends as specified in the Connection Agreement.”

32. Suggestions in the matter of ARR Filed by HPLDS • HPLDS has to perform statutory functionsonly as per the provisions contained in the relevant IEGC as well as EA 2003. • The nature of functions to be performed by SLDC with reference to the State is same as that of RLDC with reference to Region. This clearly demarcates the jurisdiction of individual forum to the extent as admissible i.e. SLDC shall require specifically the assets concise to the extent installed/ commissioned in the Control Room whereas ALDC apart from aforesaid assets also requires communication connectivity and Remote Terminal Units (RTUs)/ Substation Automation System (SAS) etc. INSTALLED AT VARIOUS LOCATIONS (26 Nos.) across the Pradesh.

33. Suggestions in the matter of ARR Filed by HPLDS • As per the relevant provisions, all users will have to make arrangements to provide real time data at the Control Centre to facilitate SLDC to perform the above stated Statutory functions and out of these the selected user including OA customers are to provide such data to DISCOM (ALDC) for accomplishing the functions of DISCOM (ALDC). Also, the real time data from RTUs installed in area of supply of DISCOM is pre-requisite for DISCOM (ALDC) for optimum flow of power and its regulation by ALDC. Therefore the ownership, operation and maintenance of the assets even beyond the control room are mandatory to be vested with the DISCOM/ALDC/User. • Further, the functions to be performed by HPLDS (SLDC) also indicates/suggests that this unit does not require assets beyond the Control Room which includes RTUs and Communication Connectivity of the Substations/ Power Houses with the Control Room which otherwise are sine quo non for DISCOM (ALDC).

34. Our Prayers • Following is submitted before the Hon’ble HPERC for consideration and appropriate decision • DISCOM (ALDC) requires essentially the assets created under ULDC Phase-I in the shape of RTUs, CFEsHardwares(Optical Fibre, PLCC etc.) Connectivity from RTUs to Control Room. And in addition, the assets available in the Control Room to the extent of Data Acquisition & Supervisory Control System (SCADA/EMS) and the other infrastructure available in the Control Room, including Real Time Displays which are also essentially required by HPLDS (SLDC) to perform its functions.Therefore, Assets which are commonly required by both the parties are practically are the assets installed in the Control Room only. • Presently the above mentioned infrastructure installed under ULDC Scheme-I or being installed under ULDC Scheme-II is the property of PGCIL till such time amount of loan/expenditure incurred as per MOU is paid back by DISCOM (HPSEBL). The total amount of ULDC Scheme-I is to be paid back by July, 2017 and only thereafter the appropriate division of assets can take place. However, it is pertinent to mention here that all the Civil Structures including the Control Room building etc. are the exclusive property of DISCOM (HPSEBL) built at its own cost.

35. Our Prayers • In the transfer scheme dated 10.06.2010 under Clause-4 (Section-6) it has been stipulated that “The present State Load Despatch Centre” shall also include the HPSEBL Area Load Despatch Centre”, each with their independent functions and HPSEBL for independent functioning of HPLDS has provisioned requisite staff as per its order dated 16.06.2011 and also agreed for sharing of costs of assets in the ratio of 20:80 which is being followed since then sancrosantly. • Methodology adopted for filing of instant MYT petition, it appears that HPLDS is not comfortable with the present arrangement and has requested the Hon’ble HPERC to order for transfer of all Assets i.e. RTUs, Communication Front End equipments, infrastructure facilities including the Control Room building etc. which is the exclusive property of HPSEBL.Besides, the additional man power for running the shifts independently and also the manpower for O&M etc. have been asked for. From their submission it is understood that the very premises of utilizing the Assets jointly to reduce the costs and to lessen the direct or indirect burden on the consumer has not been found workable by HPLDS.

36. Our Prayers In this eventuality of things following is proposed: • Either party may have separate Control Room with Projection Screens and SCADA Controls sharing the facilities commonly required i.e. Hardware & Software etc. installed in the Control Centre. • Therefore, it is suggested that out of three floors in the Control Centre building, one floor shall be vacated by HPSEBL for housing the Second Control Room equipped with Projections Screens & SCADA Controls etc. for the purpose of HPLDS (SLDC) or DISCOM (ALDC) as the case may be as deemed fit by Hon’ble Commission. But in no case duplication of common hardware & software may be permitted/allowed for fetching of the data and exercising supervisory controls.

37. Our Prayers • It is pertinent to mention here that establishment of control room in one of the floors of the existing building with infrastructures facility to the extent of Projection Screens, SCADA/EMS Controls and allied peripherals shall cost about Rs.3.00 Cr.with time frame of about one year for its implementationand in case the entire control room is established in a separate outfit including the complete common Hardware and Software the financial implication shall be to the tune of Rs.10.00 Cr. & time frame for its establishment shall be about two years as more detailing shall be required for the purpose. Accordingly, Hon’ble HPERC may look into it and decide about the creation of establishment of separate Control Room in the existing building or in a separate outfit as deemed fit and the enhancement in the respective ARRs of the utilities i.e. DISCOM (ALDC) and HPLDS (SLDC) may be allowed accordingly please.

38. Our Prayers • Consequent upon evaluation of Assets and its bifurcation and transfer to HPLDS (SLDC) to the extent essentially required by the said agency besides the common Hardware/Software, the same may be subsequently handed over to DISCOM (ALDC) for maintenance purposes for which O&M costs shall be paid by HPLDS (SLDC) to DISCOM (HPSEBL) on the analogy of STU in HP which has transferred its assets to DISCOM (HPSEBL) for O&M purposes the charges shall be recovered from all USERS including DISCOM etc on prorate/MW usage basis etc. by HPLDS

39. for sparing your attention & valuable time