Sub : In the matter of determination of Parallel Operation Charges. MPERC, Bhopal - Petitioner

Transcription

1 MADHYA PRADESH ELECTRICITY REGULATORY COMMISSION, BHOPAL Sub : In the matter of determination of Parallel Operation Charges. Suo-Motu Petition No. 73/2012 ORDER (Date of order 31 st December, 2012) MPERC, Bhopal - Petitioner The MP Power Transmission Co. Ltd., Jabalpur had filed a petition no. 50/2010 in the matter of determination of parallel operation charges in case of intra-state generating units. The Commission had decided that a study for determination of parallel operation charges be conducted through an independent agency and, thereafter, following the procedure, the process for determination of parallel operation charges to be levied in MP, be initiated. Accordingly, the Electrical Research and Development Association (ERDA), Vadodara was awarded the contract for providing consultancy services for evaluation of parallel operation charges. 2. By letter No. ERDA/ESPC/26195 dated ERDA submitted a discussion paper on Evaluation of Parallel Operation Charges. In the discussion paper, it was concluded that due to harmonic generation, negative phase sequence currents, reactive power from grid etc., the captive power plants (CPPs) loads are harmful for smooth and efficient operation without the help of utility grid. Therefore, grid support charges/parallel operation charges are necessary to be recovered from bulk consumers with CPP. ERDA recommended evaluation of parallel operation charges by Base MVA support method. 3. In the report, ERDA worked out the parallel operation charges (Grid Support Rs per KVA. This report of ERDA was placed in the public domain and also uploaded on the website of the Commission. A public notice was issued on for obtaining comments from various stakeholders by A public hearing was also held on The following comments were received:

2 (A) MP Transmission Power Transmission Co. Ltd., Jabalpur (i) (ii) (iii) (iv) (v) The studies and the findings of ERDA exactly substantiate the submission made by the MPPTCL in its petition for determination of parallel operation charges. Therefore, there is every justification for imposing the parallel operation charges on the CPPs/Private Generating Sets. The generation does not bridge the demand-supply gap in the state. The utility does not get advantages of demand charges whereas the CPPs run their generator at optimum load at optimum fuel efficiency. At high voltage the saving in losses of service line is negligible. The power exported to the grid by CPPs does not give any relief to the utility. Therefore, the formula may be modified as under by deleting the component of Power export to the Grid. Factor B = Installed Capacity Contract Demand. (vi) The parallel operation charges should be uniform for all CPPs on the basis of installed capacity and the contract demand with the utility. (B) (C) MP Electricity Consumers Society, Indore and M/s Grasim Industries Ltd., Nagda Any levies in addition to purchase of RECs to fulfil the RPO may threaten survival of the captive plants which is against the provisions of the Electricity Act, Transmission charges fixed and approved by the Commission against each year in ARR include charges incurred on paralleling of captive consumers. Thus levy of charges on captive consumers is an extra income, which cannot be allowed once the ARR for the year is approved. The working made by ERDA indicates that some of the charges arise because of the nature of industries, like ARC furnace, etc. and not due to

3 captive plants. Such charges need to be levied in the tariffs to the industries and not as captive plants paralleling charges. The advantage of full loading the captive plant in parallel operations is offset by minimum charges levied in the tariff and slab charges based on load factor. Thus the captive consumer is paying much higher charges per unit for the power availed from the utility than the average charges recovered through tariff and is already paying a levy. In the above context, additional charges on captive plants for parallel operations are not justified and are against the spirit of the Electricity Act, (D) M/s HEG Ltd., Mandideep. The part of harmonics and zero sequence current gets absorbed by CPPs which help the grid by reducing the pollutant load. The parallel operations help in improving the CPPs plant load factor. The facility is only extended if requested by way of stand-by support, and otherwise utility is under no obligation to extend support. The proposed methodology is based on hypothesis. ERDA recommendations to recover parallel operation charges on the basis of BASE MVA support is commercially and technically not acceptable. As such, there is no need to impose any charges for operating the plant in parallel with grid, since it is against the spirit of Section 9(1) of the Electricity Act, A Suo-Motu Petition No. 73/2012 was registered for determination of parallel operation charges. The due date for submission of comments was A public hearing was also held on The following comments were submitted:

4 (i) M/s Grasim Industries Ltd., Nagda (e) (f) (g) The captive power plant is not running in parallel with the grid and, therefore, the impact at the point of connection is unknown. Hence, parallel operation charges in this case may not be levied. Additional transmission system and transformation capacity will be required if the CPP did not exist and the load were to be supplied by the utility. Additional losses on the existing system will take place if CPPs did not exist. The impact of power shortage due to CPP supply not being available i.e. purchase of expensive power, payment of UI charges etc., has to be kept in mind. The proposed charges are higher compared to those in other State. The charges in Chhatisgarh are Rs per KVA whereas M.P. has very few CPPs associated with steel furnace polluting the system. Wind farms cannot be considered as part of CPPs as these are not located within the premises of any industry. The levy of parallel operation charges is not justified. (ii) M.P. Power Transmission Company Ltd., Jabalpur Parallel operation charges are not applicable if the CPPs are not connected with the grid. The proposal to levy parallel operation Rs per KVA is agreed to. (iii) M/s HEG Ltd.,Mandideep Supply affording charges and standby charges are also being charged. Duplication of levy may be removed.

5 (e) A mere study of two to four hours in respect of fluctuation/harmonics cannot lead to conclusive findings. The sample size is small. The proposed parallel operation charges are too high. It can be a part of transmission charges. 5. On considering the submissions of the respondents, the Commission is of the view that : The parallel operation charges shall not be applicable if the CPPs are not connected with the grid. The purposes of levying supply affording charges and standby charges are different. These are not related to the parallel operation of the CPPs with the grid. Parallel operation charges cannot be made a part of transmission charges as these charges cannot be levied on all consumers. Auxiliary consumption of captive generating plants as a parameter may be deducted from the installed capacity of the plant for computation of parallel operation charges. 6. The Commission also finds that the object of the Electricity Act, 2003 is to delicense generation and to freely permit CPPs. In order to promote CPPs and looking to the facility being availed by CPPs from the grid, the Commission has come to the conclusion that it would be appropriate that parallel operation charges be levied at the rate of Rs. 20/- per KVA per month on the capacity of CPP (after deducting load pertaining to auxiliary consumption) connected to the grid. Ordered accordingly, (Rakesh Sahni) Chairman