CASE No. 120 of And. Miscellaneous Application No. 16 of 2016

Transcription

1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: CASE No. 120 of 2016 In the matter of Petition of Maharashtra State Electricity Distribution Co. Ltd. for modification in approved Load Shedding Protocol for certain periods between September and December, 2016 And Miscellaneous Application No. 16 of 2016 Application of Maharashtra Veej Grahak Sanghatana for Intervention in Case No. 120 of 2016 Coram Shri. Azeez M. Khan, Member Shri. Deepak Lad, Member Maharashtra State Electricity Distribution Co. Ltd. Petitioner Appearance For Petitioner: For Intervener: For Consumer Representative: Shri. Satish Chavan Shri. Pratap Hogade Dr. Ashok Pendse, TBIA ORDER Dated: 20 June, Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) has filed a Petition on 6 September, 2016 for a modification in the approved Load Shedding Protocol for a limited period. Order in Case No. 120 of 2016 Page 1 of 12

2 2. The prayers of MSEDCL are as follows: 1. To admit the Petition as per the provisions of Regulation 94 of the MERC (Conduct of Business) Regulations, 2004; 2. To expedite the matter & conduct an early hearing; 3. To allow MSEDCL to revise the Load Shedding Protocol for the period September 2016 to November 2016 to the extent of Agriculture Supply Hours; 4. To allow revised norms for 3-phase availability of power supply to Agricultural pumps as 12 hours during day and 12 hours during night on rotation basis subject to subsidy from GoM U/S 65 of E.A. 2003; 5. To allow MSEDCL to implement the existing Load Shedding Protocol as per Circular 46 dated 14th January 2013 for AGLM Feeders in case of critical System condition; 6. To consider the submission made by the Petitioner and consider the same positively while deciding the Petition; 7. To condone any error/omission and to give opportunity to rectify the same; 8. To permit the Petitioner to make further submissions, addition and alteration to this Petition as may be necessary from time to time. 3. The Petition states as follows: 3.1 The Commission, in its Order dated 9 May, 2011 in Case No. 81 of 2010, had ruled as follows: Accordingly, the norms for power supply to Agricultural pumps shall remain 8 hours per day only. Whenever there is surplus power in the System, power supply up to 10 hours per day shall be given at night starting from hours and 8 hours per day power supply shall be given during day time (excluding peak load hours) on rotational basis. In case of critical System condition, the power supply to Agricultural Pumps shall be restricted to 8 hours per day only. 3.2 Further, vide its subsequent Order in Case No. 41 of 2012 concerning the revision and violation of the Principles and Protocol of Load Shedding with regard to MSEDCL s Circular No. 43 and 44, the Commission directed MSEDCL to approach it whenever there is need to change the approved Load Shedding Protocol. It also directed MSEDCL not to issue any Circular altering the Load Shedding Protocol without consultation with the Commission. 3.3 Minister (Energy), Govt. of Maharashtra (GoM), vide letter dated 27 August, 2016, informed MSEDCL that there is a possibility of burning of crops in some areas due to the absence of rain in the last few weeks. Although water can be made available for irrigation through pumping, the 3-phase power availability to agricultural pumps is not adequate to irrigate standing crops. Some local representatives also demanded an Order in Case No. 120 of 2016 Page 2 of 12

3 increase in 3-phase availability from 8 hours to 12 hours. Therefore, the Minister (Energy) directed MSEDCL to provide sufficient power to Agricultural consumers for the next 3 months. 3.4 As per the present Load Shedding Protocol, the norm for power supply to agricultural pumps is 8 hours per day. Whenever there is surplus power in the system, power supply up to 10 hours per day is given at night starting from hours, and 8 hours during the day time (excluding peak load hours) on a rotational basis. 3.5 The load of Agriculture Feeders (Single Phasing and separated Agriculture Feeders) is about 9900 MW. It is divided into two parts of 4950 MW each for supply in day time and night hours. 3.6 In August, 2016, MW was the day peak load and MW was the evening peak load. It is expected that, in September and October, 2016, the day peak load will reach MW MW and evening peak up to MW. MSEDCL is presently catering to around MW demand. 3.7 If Agricultural consumers are provided 12 hours power supply in two shifts, i.e. the existing period of 8 hours in the day time is extended to 12 hours, and the existing 10 hours at night is extended to 12 hours, the peak demand in the evening hours, i.e hours to hours, may increase by 3000 MW. 3.8 Presently, around 2600 MW capacity of Generating Units is under Zero Schedule. This power can be utilized for meeting the additional demand from Agricultural consumers. Also, the Koyna Hydro Power Station (HPS) of 1920 MW is available for peaking generation and would be used as and when required. In addition, 920 MW of the Parli Thermal Power Station (TPS) has been kept off since the last one year due to unavailability of water. There is also backing down of about MW at various hours of the day. Thus, even without considering Parli TPS and Koyna HPS, the available generation to meet the additional requirement of Agriculture consumers is between 3100 MW to 4100 MW. 3.9 There is no additional financial burden on MSEDCL except the power purchase cost. If the Agricultural consumers are provided 12 hours power supply in two shifts, the input energy to them will increase by 33.3%, thereby increasing the input cost. This additional burden due to the increase in input energy to Agricultural consumers can only be recovered partly from metered Agricultural consumers through billing. In case of unmetered Agricultural consumers, the additional cost due to the increased hours of power supply cannot be recovered as these consumers are billed on fixed Horse Power (HP) tariff irrespective of consumption GoM will be requested to provide subsidy for the additional financial burden for providing 12 hours supply to Agricultural pumps. Therefore, the impact will not be Order in Case No. 120 of 2016 Page 3 of 12

4 passed on to other consumers. This will safeguard the standing crops which are otherwise likely to be lost due to the prevailing dry spell of the monsoon. It will also help in utilizing the backed down generation capacity and thereby also reduce the burden on consumers In case of any critical system condition due to additional Agricultural load, MSEDCL shall reduce the availability of the concerned Agriculture Load Management (ALM) Feeder depending on the system conditions Considering these submissions and no adverse impact on other consumers, the Commission may allow MSEDCL to revise the Load Shedding Protocol for the three months of September to November, 2016 and thereby allow revision in the 3-phase power availability to Agricultural pumps to 12 hours during day time and 12 hours at night on rotational basis. 4. Vide its letter dated 8 September, 2016, MSEDCL informed the Commission that, in order to save standing crops, from 8 September, 2016 it had increased the power availability to Agricultural pumps from 8/10 hours per day to 12 hours per day. 5. In his submission dated 14 September, 2016, Dr. Ashok Pendse, on behalf of the Thane- Belapur Industries Association (TBIA, an Authorised Consumer Representative) stated as follows: 5.1 Presently, 8 hours power supply is being provided to agricultural pumps in two segments during the period 0.00 hours to hours. No power supply is given during hours to hours, which includes the evening peak. 5.2 MSEDCL has proposed to provide 12 instead of 8 hours of power, which means that power needs to be supplied during the evening peak hours also. From the Maharashtra State Load Despatch centre (MSLDC) Load Curve, it can be seen that load relief obtained during the period of hours to hours is around 2000 MW. Once 12 hours power supply is provided to agricultural pumps, the demand during these hours will increase by 1000 MW, and will decrease by 1000 MW during the period from 0.00 hours to hours. 5.3 The Load Shedding Protocol in Circular No. 46 dated 14 January, 2013 provides Feeder-wise Load Shedding hours depending upon the Distribution and Collection Loss (DCL) level of the respective Feeders. Load Shedding was implemented because of supply constraints, which is not the case today. 5.4 However, MSEDCL has not submitted the financial implications of procuring additional 1000 MW power, how much can be recovered from Agricultural Order in Case No. 120 of 2016 Page 4 of 12

5 consumers and the extent of GoM subsidy that is expected. Hence, the increase in the hours of power supply to Agricultural pumps proposed by MSEDCL should be allowed only if GoM is ready to compensate cost implications. Further, in case of any contingency, the existing Load Shedding Protocol should be implemented. 6. Maharashtra Veej Grahak Sanghatana (MVGS), Ichalkaranji, Distt. Kolhapur, through its President Shri. Pratap Ganpatrao Hogade, vide dated 9 September, 2016 sought to intervene in the present matter. The Commission allowed the intervention of MVGS (Miscellaneous Application No. 16 of 2016). The Commission also notes that MVGS was associated with the formulation of the Load Shedding Protocol in its early stages. Thereafter, vide its submission dated 17 September, 2016, MVGS stated as follows: 6.1 This is an important issue for the 38 lakh Agricultural consumers in the State. The Commission also knows its importance and had earlier directed that the standing crop should not suffer. Hence, MSEDCL s Petition should be admitted and allowed. 6.2 Instead of day and night rotation, it is suggested that the rotational power supply should be from 12 noon to 12 midnight and from 12 midnight to 12 noon. This will ensure that all the 38 lakh farmers in the State will get a minimum of 6 hours day time supply, which would be much more beneficial to them. 6.3 The supply quality should be improved. The supply should be at proper voltage and consistent without any interruptions. 6.4 The additional power requirement due to additional power supply to farmers should be met through the cheapest power source, i.e. through Power Exchanges or such other cheaper source, so as to reduce the additional subsidy burden on the Government to the lowest possible level. 6.5 Due to 12 hours supply, demand during morning and evening peak hours will increase. If additional power is purchased on round-the-clock (RTC) basis, it will have a huge impact on subsidy. Hence proper planning of load management and power procurement from the cheapest sources is essential to implement the proposal. 6.6 It is also necessary that other consumers should not have to bear any additional Load Shedding due to this change. 7. At the hearing held on 22 September, 2016: 7.1 MSEDCL stated that, as per the approved Load Shedding Protocol, Agriculture Load Management Feeders were getting 3-phase power supply for 8/10 hours. There was low rainfall in August, Considering the high risk of losing standing crops, GoM directed MSEDCL to provide 12 hours power supply to agricultural pumps. The present Petition has been filed accordingly. Order in Case No. 120 of 2016 Page 5 of 12

6 7.2 MSEDCL further stated that, in order to save the standing crops, it has implemented the change in power supply to 12 hours for agricultural pumps since 8 th September, 2016, after the Petition was filed, and informed the Commission by its letter on the same day. 7.3 Dr. Ashok Pendse (TBIA) stated that the increased hours of supply will lead to increase in power demand in the evening peak hours. MSEDCL s plan to meet such increase in demand and its financial implications are not mentioned in the Petition. Such quantification is also important for arriving at the GoM subsidy required for funding the additional cost due to increased power supply to Agriculture. The expenses for providing such additional power supply cannot be allowed to be loaded on the Aggregate Revenue Requirement (ARR) of MSEDCL and thereby impact other consumers. 7.4 MVGS stated that it is yet to receive a copy of MSEDCL s Petition. While it supported MSEDCL s prayer to approve an increase in the number of hours of supply to Agriculture consumers, required details such as its financial implications and MSEDCL s plan for sourcing and managing the increased supply are not set out in its proposal. MVGS suggested that the Commission schedule a hearing after MSEDCL submits these and, in the meantime, the increased power supply of 12 hours may be continued. MVGS also suggested that the timings of power supply should be designed in such manner that every farmer gets 6 hours of power supply during the day time. MVGS also raised the issue of quality of supply and suggested that over-loading and failure of distribution transformers should be minimized. 7.5 MSEDCL stated that the ALM Feeders are switched on/off in a graded manner in the span of 2 hours from 10 to 12 hrs / 22 to 24 hrs. Thus, out of 12 hours of supply, farmers are getting at least 4-6 hours of supply in the day time. Regarding sourcing and managing power, MSEDCL stated that sufficient power is available to feed the increased power requirement of Agriculture consumers. There are some pockets where increased power supply is causing over-loading of the network. Field officers in such areas have been instructed to take appropriate actions. In case of any critical system condition due to the additional Agriculture loads, MSEDCL will reduce the loads on the ALM Feeders so that other consumers will not be affected. 7.6 The Commission observed that details such as the plan for procuring additional power and its financial implications, the ability of the network to feed such additional power, and the quantification and timing of subsidy proposed to be sought from GoM to ensure that there is no impact on other consumers need to be provided. MSEDCL was directed to file such details within two weeks. Order in Case No. 120 of 2016 Page 6 of 12

7 7.7 In the meantime, considering the objective and purpose of the Petition, i.e. providing 12 hours power supply to agricultural pumps for the standing crops, as an interim measure and for a limited period, the Commission allows MSEDCL to continue to provide 12 hours power supply as it has started doing. MSEDCL should publicise the revised timings and duration for the information of Agriculture consumers. 8. In pursuance of these directives, MSEDCL stated as follows in its written submission dated 29 October, 2016: 8.1 Plan for procuring additional power At present MSEDCL is in a surplus power situation. As on 26 September, 2016, MSEDCL has an operational contacted capacity of MW. An additional 1410 MW capacity will be added by the end of FY , resulting in a total contracted capacity of MW Due to additional power supply to Agriculture consumers from the existing 8/10 hours to 12 hours, MSEDCL s demand may rise by about 1000 to 1200 MW and the average load in months of October and November, 2016 may reach MW. MSEDCL will be in position to meet this additional power requirement through its contracted capacities. 8.2 Quantification and timing of subsidy from GoM A meeting was held on 6 September, 2016 under the Chairmanship of Chief Minister of Maharashtra regarding 12 hours 3-phase supply to Agricultural consumers. The Chief Minister directed that the additional cost for providing increased power availability for Agricultural consumers be provided for by GoM in the form of subsidy Vide its letter dated 18 October, GoM has enquired about the financial implication of increased power availability to Agricultural consumers upto 15 November, vide its reply dated 21 October, 2016, MSEDCL has submitted the information to GoM. 8.3 Financial Implications For providing additional power supply to Agricultural consumers from 8 September to 15 November, 2016, MSEDCL has estimated a financial impact of Rs crore. Order in Case No. 120 of 2016 Page 7 of 12

8 8.4 Ability of network to feed such additional power Out of a total of 7645 feeders, 1724 feeders have faced some technical difficulties in supplying 12 hours 3-phase supply to Agricultural consumers. In these areas, MSEDCL shifted the Agricultural supply timing in 3 slots so as to avoid overloading and maintain 12 hours supply. Accordingly, 3-phase supply for Agricultural consumers shall start in the early morning hours to avoid the overloading of transformers and sub-stations in the evening peak period All powers and authority to address any technical issues are vested with the Chief Engineer (O&M). He can also change the timings depending on the local conditions and technical constraints where necessary. Further, any breakdowns of more than 2 hours are allowed to be compensated on subsequent days. 9. Vide its letter dated 16 November, 2016, MSEDL informed the Commission that increased power availability of 12 hours to Agricultural consumers has been provided from 8 September to 15 November, From 16 November, 2016 onwards, Agricultural consumers will get 8/10 hours of power supply as per Circular No. 46 dated 14 January, Thereafter, vide its letters dated 21 November and 5 December, 2016, MSEDCL informed the Commission that, as instructed by the GoM, Agricultural consumers were again provided increased power availability of 12 hours from 21 November, 2016 to 15 December, At the hearing held on 3 January, 2017: 10.1 MSEDCL stated that: a. The Petition has been filed for approval of increased availability to Agriculture Feeders from 8/10 hours to 12 hours. At the last hearing on 22 September, 2016, as an interim measure and for a limited period, the Commission allowed MSEDCL to provide 12 hours power supply to Agriculture Feeders. While doing so, the Commission directed MSEDCL to submit certain further details. These details have been submitted vide letters dated 29 October and 31 December, b. As directed by the GoM, increased power availability of 12 hours was provided to Agriculture Feeders from 8 September to 15 November, 2016 and from 21 November to 15 December, From 16 December, 2016 onwards, 8/10 hours of power is being supplied to Agriculture Feeders and MSEDCL has restored the Load Shedding Protocol earlier approved by the Commission. c. Barring a few occasions of reduced availability of power on account of breakdown of Generating Units, the increased power supply to Agriculture Feeders has been sourced through existing contracted Power Purchase Agreements (PPAs). Reduced Order in Case No. 120 of 2016 Page 8 of 12

9 availability during these periods has been mitigated through Power Exchanges for avoiding Load Shedding. d. Out of 7645 Agriculture Feeders, around 1724 Feeders (22%) have faced some technical difficulties in supplying continuous 12 hours power. Chief Engineers of these areas were authorized to change the timings of power supply depending upon technical constraints. To avoid such technical constraints in future, capital works under the Infrastructure Scheme Phase-II are in progress in these areas. e. Regarding the financial implication of increased power supply to Agriculture Feeders, GoM has assured to provide subsidy to mitigate the financial impact. MSEDCL has communicated the estimated financial impact of Rs crore, which was calculated based on 33% increase in Agriculture consumption at the rate of the Average Cost of Supply (ACoS). This estimation of financial impact will change depending on the actual Agriculture consumption. That consumption will be available after completion of quarterly billing for the month of December, 2016, by the end of January, 2017, and thereafter the actual Agriculture consumption can be ascertained Dr. Ashok Pendse, TBIA appreciated that MSEDCL has been able to manage the increased availability to Agriculture Feeders without impacting other consumers. The financial implications of the additional power supply should be calculated based on the cost of the marginal Power Stations in Merit Order Despatch (MOD) stack, and not on the average cost of power purchase. Also, the impact of lower collection efficiency of Agriculture consumers should be factored in while calculating the financial impact for subsidy from GoM The Commission MSEDCL is directed to submit the following: a. Financial implication of increased power availability to Agriculture Feeders based on actual Agriculture consumption. b. Status of GoM s subsidy for mitigating the consequent financial implications. c. Scenario for mitigating the situation if GoM s subsidy is delayed or not provided. Since the actual consumption details will be available by the end of January, 2017, MSEDCL was asked to file its response by 31 January, MSEDCL sought further time for providing the above information, and submitted it vide letter dated 1 March, 2017 as follows: Order in Case No. 120 of 2016 Page 9 of 12

10 11.1 Financial implication of increased power availability to Agriculture Feeders based on actual Agriculture consumption: Considering the actual consumption on account of additional supply to Agricultural consumers, the financial impact works out to Rs crore as shown in the Table below: Particulars Period Consumption (MU) # Unit Rate (Rs/Unit) Total Charges (Rs Crore) Additional supply of 2hrs/4hrs to Agricultural consumers Sep Oct to Dec * Total #Additional power supplied by 11 kv feeders is 2115 MUs and considering 17.76% of Distribution Loss and 9% of wheeling losses as approved by the MERC, the actual consumption is 1930 MU [2115*(1-(17.76%-9%))] *ACoS is considered as Rs 6.50 per unit as per MERC Order dated 3 November, Vide its letter dated 28 February, 2017, MSEDCL has submitted its claim for Rs crore as subsidy for providing additional hours of power to the GoM As it will not receive any cross subsidy from other consumers for providing the additional supply, MSEDCL has claimed the additional burden at the rate of ACoS from the GoM MSEDCL provided 3-phase power for 12 hours to Agricultural consumers from 8 September to 15 December, Metered Agricultural consumers have been billed as per the applicable tariff and the GoM s subsidy will be claimed accordingly. However, un-metered Agricultural consumers were billed considering the applicable tariffs for 9 hours per day usage of electricity for that period. Hence, the subsidy calculated by the computerized billing system to the un-metered consumers does not include the additional subsidy and revenue towards additional power supply. Since the subsidy calculated by the billing system for metered Agriculture consumers includes subsidy on account of additional power supply, the same shall be adjusted against the additional claim of subsidy on account of 12 hours supply to Agriculture consumers. Thus, MSEDCL shall deduct the requisite amount of subsidy and Order in Case No. 120 of 2016 Page 10 of 12

11 revenue towards metered consumers from the claim submitted to GoM. The billed amount of metered consumers will also be refunded to the consumers Status of GoM s subsidy for mitigating the financial implications Vide its letter dated 15 December, 2016, GoM asked MSEDCL to claim the additional subsidy required towards providing 12 hours power to Agricultural consumers Accordingly, based on the actual consumption on account of such additional power supply, the financial impact works out to Rs crore. MSEDCL has submitted this claim for subsidy to GoM vide its letter dated 28 February, Scenario for mitigating situation if GoM s subsidy is delayed or not provided Metered Agricultural consumers have been billed as per the applicable tariffs for the extended hours of supply, and accordingly the GoM subsidy will also be claimed. To that extent, the financial impact of the increased power supply to Agriculture Feeders will be mitigated. However, when the subsidy towards the extended hours of supply is received from the GoM, the billed revenue from Agricultural consumers for the extended hours of supply will be refunded to them The GoM has assured to provide the additional subsidy required. MSEDCL has already submitted its claim for such subsidy vide letter dated 28 February, 2017, and has been following it up with the GoM for early action. Commission s Analysis and Ruling 12. In its original Petition filed on 6 September, 2016, MSEDCL had sought a modification in the approved Load Shedding Protocol to enable it to supply power for 12 hours instead of 8 hours during the day time to Agricultural consumers on separated Agricultural Feeders from September to November, Before the Petition came up for hearing, the proposal was implemented by MSEDCL from 8 September, 2016 considering the emergent need to safeguard standing crops while water was available, and the availability of adequate power, and MSEDCL informed the Commission on the same day. Eventually, the proposal was implemented from 8 September to 15 November, and from 21 November to 15 December, Thereafter, MSEDCL reverted to the original Load Shedding Protocol. 13. The Commission notes that, during this period, 1724 (22%) out of 7645 Agriculture Feeders faced some technical difficulties in providing continuous supply for 12 hours Order in Case No. 120 of 2016 Page 11 of 12

12 in the day time. MSEDCL has stated that it has undertaken capital works through the Infrastructure Scheme Phase-II in these areas to mitigate such technical constraints in future. MSEDCL has also stated that, barring a few occasions of reduced availability of power on account of breakdown of Generating Units, the increased power supply to Agriculture Feeders was sourced from the capacity contracted under existing PPAs. 14. The Commission notes that, as sought by GoM, MSEDCL has submitted a proposal dated 28 February, 2017 to the GoM seeking subsidy of Rs crore to meet the financial impact of providing supply for additional hours to Agricultural consumers, and that GoM had earlier assured MSEDCL that it would provide the required subsidy. MSEDCL shall follow this up with the GoM. However, in case no subsidy is provided by GoM or it falls short of the requirement, the financial impact of this deviation may not be passed on to other consumers through tariff and may have to be borne by MSEDCL itself. MSEDCL shall provide updated details and computations of the financial impact and the extent to which subsidy has been provided by GoM along with its forthcoming Petition for Mid-Term Review. 15. Subject to this qualification, and considering the objective and purpose cited by MSEDCL and the discussions during these proceedings, the Commission approves the deviation from the approved Load Shedding Protocol for the limited period set out above. The Petition of Maharashtra State Electricity Distribution Co. Ltd. in Case No. 120 of 2016 and the Miscellaneous Application No. 16 of 2016 of Maharashtra Veej Grahak Sanghatana stand disposed of accordingly. Sd/- (Deepak Lad) Member Sd/- (Azeez M. Khan) Member Order in Case No. 120 of 2016 Page 12 of 12