ANDHRA PRADESH ELECTRICITY REGULATORY COMMISSION

 

 
GUIDELINES FOR LOAD FORECASTS, RESOURCE PLANS,
AND POWER PROCUREMENT

 

DECEMBER 2006

 

CHAPTER I - GENERAL

 

These guidelines are to be followed by the APTRANSCO and Distribution Licensees as provided in their respective licenses issued by the AP Electricity Regulatory Commission,

(a)    while forecasting the demand for power within their area of supply pursuant to paragraph 17.12 of the Transmission and Bulk Supply License issued to APTRANSCO and paragraph 19.2 of the Distribution and Retail Supply License issued to DISCOMS; and

(b)    while formulating resource plans and schemes to meet their obligations under paragraph 17.1 of the Transmission and Bulk Supply License issued to APTRANSCO and paragraphs 19.2, 19.3 and 19.4 of the Distribution and Retail Supply License issued to DISCOMs.

 

CHAPTER II - LOAD FORECASTS

 

2.1 Load forecasts to be submitted to the Commission by Transmission Licensees and Distribution Licensees pursuant to paragraph 17.12 of the Transmission and Bulk Supply Licence or paragraph 19.2 of the Distribution and Retail Supply Licenses shall contain a forecast of future energy (in megawatt-hour, or MWh) and demand (in megawatt, or MW) in the respective areas of supply of each Licensee for 2 (two) Control Periods (“Control Period” means a multi-year period fixed by the Commission from time to time, usually 5 years, for which the principles for determination of revenue requirement will be fixed. The licensees shall submit a detailed load forecast for each year of a Control Period under consideration for tariff review purpose and a simple forecast for the subsequent Control Period.

The Licensees shall demonstrate to the Commission’s satisfaction the consistency and robustness of the forecasts submitted. The load forecast to be submitted to the Commission will be divided into three categories as detailed hereunder:

(a)    A detailed forecast for the Control Period under consideration for tariff review purpose, which shall include

(i)                                                Forecast of energy in MWh, demand in MW and number of consumers for each class of consumers (other than Scheduled consumers)category-wise, voltage-wise and slab-wise, supplied by the distribution licensee;
(ii)                                              Forecast of energy in MWh, demand in MW and number of consumers (category-wise, voltage-wise) supplied by the distribution licensee to the scheduled consumers or licensees or traders within the state of Andhra Pradesh and outside the State through open access;
(iii)                                             Forecast of energy in MWh, demand in MW and number of consumers for each class of consumers (category-wise, voltage-wise) supplied by a person other than the distribution licensee of his area of supply through open access;
(iv)                                            Forecast of energy in MWh and demand in MW for each class of consumers (category-wise, voltage-wise) utilized from captive generating plants of an aggregate capacity of 1 MW and above ;
(v)                                              Forecast of standby or backup support in terms of energy and demand;
(vi)                                            Load profiles for consumer categories for representative days including the load factors, non-coincident and coincident peak demand for each category of consumers and the entire AP power system;
(vii)                                           Technical and Commercial losses for each voltage and category of consumers in the distribution system and Transmission losses;
(viii)                                         Clear description and explanations of reasonable assumptions;
(ix)                                            Developing scenarios to show the impact of Government policies;
(x)                                              Considering alternative approaches (viz. simple trend approach, behavioral approach linking with key drivers, etc.,) for the forecast during the Control Period;
(xi)                                            Demonstrating criticality of the assumptions through a sensitivity analysis; and

(xii) Inputs from consultation with major consumers (large HT Industrial consumers, other Licensees, RESCOs, Railway Traction, etc) that could affect Load Forecast.

(b)   A simple forecast for the subsequent Control Period as specified by the Commission from time to time, which shall include:

(1)            Forecast of energy in MWh, demand in MW for each class of consumers (category-wise) supplied by the distribution licensee;
(2)            Forecast of energy in MWh, demand in MW for each class of consumers (category-wise) supplied by a person other than the distribution licensee of his area of supply through open access;
(3)            Forecast of energy in MWh and demand in MW for each class of consumers (category-wise, voltage-wise) utilized from captive generating plants of aggregate capacity of 1 MW and above;
(4)            Forecast of standby or backup support in terms of energy and demand;
(5)            Total distribution losses in the distribution system and transmission losses in the intra-State transmission system; and

 (vi)      Clear description of, and explanations for, reasonable assumptions.

(c)    Information relevant to the load forecast

(i)                                          Historical consumer category-wise, slab-wise, voltage-wise data of energy in MWh, demand in MW, number of consumers for the last 5 years
(6)               Existing and proposed Demand Side Management (DSM) programmes and their impact on energy and demand, together with the cost-benefit analysis in brief;
(7)               Historic data on standby or back-up support availed of by the consumers in energy and demand terms;
(8)               Historic data on technical and commercial losses in the distribution system and transmission losses in the intra-State transmission system; and
(9)               Energy utilisation, peak load, power factor data and annual load factors for the previous 5 years.

Unless otherwise permitted by the Commission, the Licensees shall follow the Commission-approved methodology for estimating consumption for LT agriculture category, appropriately incorporating policy directions of the State Government, if any.

The APTRANSCO shall collect and consolidate the Distribution Licensee load forecasts and submit load forecast for the Andhra Pradesh power system after making suitable adjustments, if any, and recording the reasons therefor.

2.2              For purposes of the Load Forecasts, the year shall begin on 1st April and end on the following 31st March. Each Licensee shall submit its Load Forecast to the Commission on April 1st in the year preceding the first year of the Control Period under consideration for the tariff review purpose, and/or at such other times as the Commission may require.

2.3              The Commission may from time to time specify particular matters, which should be dealt with in the Load Forecasts, and may also require the Licensees to provide any other data that the Commission might need to independently assess, verify and validate the Load Forecast.

2.4              Commission's Review

2.4.1      In reviewing each Load Forecast submitted to it, the Commission may call for clarifications, additional information and data as necessary. A Licensee shall furnish any additional information within fifteen (15) days or within such longer period as the Commission may allow.

2.4.2      The Commission may appoint or direct the Licensee to appoint an independent consultant to prepare a separate Load Forecast using the inputs provided by the Licensee. In case of divergence between the two forecasts, the Commission may seek explanations from the Licensees and may accept the most prudent Forecast.

2.4.3           The Commission may communicate its approval of a Load Forecast to the Licensee concerned within four months from the date it was first submitted to the Commission, or within three months of the receipt of the additional information requested, if any under paragraph 2.4.1, to the satisfaction of the Commission.

2.4.4           Within this time schedule, the Commission may, at its discretion, initiate consultation process and also conduct hearing(s) if required, to determine any issues arising out of a Load Forecast. When steps taken by the Commission under paragraphs 2.4.2 and 2.4.3 have been completed to its satisfaction, or if the Commission takes no such action within the specified time schedule, the Licensee may adopt the Load Forecast for any appropriate purpose, on a provisional basis.

 

 

CHAPTER III - RESOURCE PLANS

 

3.1       General

 

3.1.1        Each Licensee shall formulate Resource Plans for a period of 2 (two) Control Periods in co-ordination with others for the promotion of generation, transmission, distribution and supply of electricity that shall generally conform to the following provisions.

3.1.2        Each Licensee must be able to demonstrate to the Commission that its resource planning will ensure, to the maximum extent of its own control and influence, that all consumers connected to its transmission or distribution system will receive an adequate, safe, and economical supply of electricity, having regard to quality, continuity and reliability of service.

3.1.3            Each Licensee must be able to demonstrate, through a process of integrated resource planning, that it has examined the economic, technical, system and environmental aspects of all available reasonable options to satisfy the load and energy service needs of its consumers in its area of supply, and that such examination has been carried out in accordance with these Guidelines.

 

3.2       Standard

3.2.1    Each resource plan prepared by a Licensee shall be

(i)                  Reviewable, that is, it shall contain enough information, clear definition of terms and data, and sufficient explanation to allow the Commission to understand fully the specific objectives, methods and assumptions used by the Licensee to prepare the plan;

(ii)                Robust, that is, firstly it shall identify key uncertainties, the plan's exposure to those uncertainties, and the manner in which those risks are to be managed; and secondly it shall identify sources of finance such that the plan may be judged realistic in those terms; and

(iii)               Viable, that is, it shall be supplemented with the business plan of the licensee approved by the GoAP wherein it is demonstrated that the resource plans can be sustained with licensee’s financial performance, consumer tariffs and government subsidy, if any.

3.2.2    Resource Plans, i.e. Distribution Plan and Power Procurement Plan for the Distribution Licensees and the Transmission Plan for APTRANSCO, as described below shall be prepared for a period of two Control Periods  from the year of commencement, beginning from 1st April and ending on the following 31st  March, and the plans, constituting a detailed plan for the Control Period under consideration for tariff review purpose and an indicative plan for the  subsequent Control Period , shall be submitted to the Commission on April 1st of the year preceding the first year of the Control Period. In any event, Licensees will notify the Commission immediately of any uncontrollable event or development which requires a significant modification to the most recently submitted Plan.

3.3       Power Procurement Planning

3.3.1        The Distribution Licensees shall formulate power procurement plans for a period of two Control Periods for their respective areas of supply, in co-ordination with the Transmission Licensees, Generating Companies, all possible supply sources, and in consultation with the State Government, the Regional Power Committee, the Government of India and the Central Electricity Authority, which shall take into account all the available and possible generation resources, and shall spell out the additional power required to meet the future energy demand of the State as assessed by the Licensee in the Load Forecast (duly factoring the requirement envisaged to be met through distributed generation).

3.3.2        The Power Procurement Plan shall be an optimal least-cost portfolio of long-term and short-term plans (least financial cost, duly taking into account the cost of any DSM measures considered by the Licensee, proximity of generating sources and with adequate risk mitigation measures), with the ultimate objective being to make available secure and reliable power supply at economically viable rates to all consumers while satisfying Power Supply Planning and Security Standards.

3.3.3        Each Power Procurement Plan shall be an optimal portfolio and shall

(i.)                contain contract options of different terms to optimise trade-off between price risk and demand variation;

(ii.)              demonstrate the availability of adequate power to meet its obligation to serve its customers;

(iii.)             encourage fuel diversity in power procurement; and

(iv.)            demonstrate supplier diversity and viability.

3.3.4    Each Power Procurement Plan shall describe

(i)                  existing resources including generating plant exclusively contracted or a part of generating plant capacity contracted to the Distribution companies, allocation from central generating stations(CGSs), surplus capacity from CGSs, contracts with non-conventional energy (NCE) sources, and any other existing sources of bulk power;

(ii)                available data for each supplying source indicating energy and peaking capacity during plan period;

(iii)               annual capacity and energy balance statements for the plan period, showing available net capacity from existing resources, additional net capacity to be procured to meet the full requirement with a certain degree of reliability;

(iv)              the plan for additional power procurement indicating portfolio mix of unit sizes, technology and fuel type, capacity contracted to meet peak / off-peak and seasonal load, year and duration of procurement, any un-contracted load with risks quantified and mitigation measures considered, and expected unit cost (to include energy, capacity and where appropriate transmission costs, the costs of DSM measures if any, and cost of risk coverage). The plan should show the options that were evaluated and the results or expected results of evaluation of alternative options. The plan should justify, in terms of economic advantage, the preferred options for meeting new capacity requirements;

(v)                explicitly the steps the Licensee  intends to take that will enable the acquisition of the resources required in the Power Procurement Plans; and

(vi)              a plan to handle situations of emergencies as referred to and required by the Short-term power procurement Guidelines.

 

3.4              Transmission Planning

 

3.4.1        APTRANSCO being the State Transmission Utility (STU) shall plan the Transmission System in coordination with other transmission licensees, if any, for a period of  two Control Periods in accordance with the provisions of Section 39 of the Electricity Act 2003 and paragraph 17 of the Transmission License.

3.4.2        The objective of the plan shall be to install sufficient capacity to evacuate power from generating stations to Grid substations (having regard to the Load Forecast) while maintaining voltage levels within the required limits, containing transmission losses at levels consistent with its Load Forecast and providing for the economic exchange of power with contiguous states. For this purpose, APTRANSCO shall carry out a power system analysis covering load flow, short circuit, transient stability studies and contingency studies.

3.4.3        The Transmission Plan shall use planning criteria consistent with, and shall be designated to meet, the Transmission Planning and Security Standards, Power Supply Planning and Security Standards as approved by the Commission from time to time (adopted pursuant to paragraph 17 of the Transmission License). It shall also be consistent with the Load forecast and Power Procurement Plan of the Distribution Licensees pursuant to paragraph 3.3 above, and shall take account of the potential for transmission investment to contribute to meeting new demand of the distribution licensees, open access consumers, captive power plants, generators, etc.

The APTRANSCO, being STU, shall submit a detailed transmission plan for the Control Period under consideration for tariff review listing out proposed new lines, substations, reactive compensation, and other investment proposals, together with planned years of execution, cost estimate and location. An indicative overall investment plan for the subsequent Control Period shall also be submitted. The Transmission Plan shall clearly demonstrate segregation into:

·        System Expansion Plan: This shall provide the list of schemes whose primary objective is to undertake network reinforcement or expansion to cater to load growth;

·        System Improvement Plan: This shall contain the schemes whose primary objective is Loss reduction or Improvement in quality of supply or Automation of operations; and

·        Generation Evacuation Plan: This shall list out schemes whose primary objective is to evacuate generated power.

3.4.4        The plan shall include interconnections at which power is exported/imported from / to other entities, including neighbouring or other States. It shall take account of any demand on APTRANSCO’s existing or planned transmission capacity arising from projected transmission transactions as submitted in the Load Forecast, including the transport of power through APTRANSCO’s transmission system for delivery to customers outside the State of Andhra Pradesh.

3.4.5        APTRANSCO shall also work out alternate scenarios with different levels of investment and demonstrate the impact on efficiency, quality of service and tariff for the consumers. APTRANSCO shall demonstrate the affordability of these investments by developing Business Plans for the duration of the Plan Period.

The alternate scenarios would include, but not be limited to calculating the investment levels required

·        to maintain quality of service standards as existing at the time of submitting the Resource Plans; and

·        to meet the quality of service standards set by the Commission.

3.5       Distribution Planning

3.5.1        Each holder of a Distribution and Retail Supply Licence shall plan for a period of two Control Periods and develop its Distribution System in accordance with provisions of Section 42 of the Electricity Act 2003 and paragraph 19 of its Distribution and Retail Supply Licence so as to ensure that, subject to the availability of adequate generating and transmission capacity, the system is capable of providing consumers within its area of supply with an adequate, safe and economical supply of electricity, having regard to quality, continuity and reliability of service.

3.5.2        Each Licensee shall formulate a plan for its Distribution System in accordance with the Load Forecast for the plan period (a "Distribution Plan"). The Distribution Plan shall adopt planning criteria consistent with, and be designed to meet, the Distribution System Planning and Security Standards adopted pursuant to paragraph 18 of its Distribution and Retail Supply License.

The Distribution Licensees shall submit detailed distribution plans for the Control Period under consideration for tariff review listing out proposed schemes, and an indicative overall investment plan for the subsequent Control Period. The Distribution Plan shall clearly demonstrate segregation into:

·        System Expansion Plan: This will list schemes whose primary objective is to undertake network reinforcement or expansion to cater to load growth and electrification;

·        System Improvement Plan: This will have schemes whose primary objective is Loss reduction or Improvement in quality of supply or Automation of operations;

·        Generation Evacuation: This will list the schemes required to evacuate generated power

3.5.3        The planning study shall take account of any demand on the Licensee’s existing or planned distribution capacity arising from projected wheeling transactions, that is, the transport of power through the Licensee’s distribution system for delivery to customers.

3.5.4        The Licensee shall also work out alternate scenarios with different levels of investment and demonstrate the impact on efficiency, quality of service and tariff for the consumers. It shall demonstrate the affordability of these investments by developing Business Plans for the same for the duration of the plan Period.

The alternate scenarios would include, but not be limited to calculating the investment levels required

·        to maintain quality of service standards as existing at the time of submitting the Resource Plans; and

·        to meet the quality of service standards set by the Commission.

3.6       Commission's Review

3.6.1        In reviewing each Resource Plan submitted to it, the Commission may call for any clarification(s), additional information and data as necessary. A Licensee shall furnish the clarification(s) and /or the additional information within fifteen days or within such longer period as the Commission may allow.

3.6.2        The Commission may communicate its approval on a Resource Plan to the Licensee concerned within four months from the date it was first submitted to the Commission, or within three months of  the receipt of clarification(s)/additional information requested under paragraph 3.6.1, to the satisfaction of the Commission

3.6.3        Within this time schedule, the Commission may, at its discretion, initiate consultation process and also conduct hearing(s) if required, to determine any issues arising out of a Resource Plan.

3.6.4        When steps taken by the Commission under paragraphs 3.6.2 and 3.6.3 have been completed to the Commission's satisfaction, or if the Commission takes no such action with in the timescale, the Licensee may adopt the Resource Plan for all appropriate purposes, on a provisional basis.

 

CHAPTER IV - POWER PROCUREMENT

 

4.1       Procedure

 

4.1.1        The power procurement of the Licensee shall be consistent with the detailed power procurement plan submitted by the Licensee to the Commission. Except as otherwise permitted by the Commission by means of any other guidelines or directions etc., the Licensee shall not enter into a power purchase agreement as purchaser or solicit offers for supply of power until 60 days after it has notified the Commission of its proposed purchase and complied with the requirement of paragraph 4.1.2.

4.1.2        The Licensee shall follow the “Guidelines for Determination of Tariff by Bidding Process for Procurement of Power by Distribution Licensees” (for short the Competitive Bidding Guidelines or CBG) issued by Ministry of Power on 19.01.2005 in respect of procurement of power for a period of more than one year. If the Licensee proposes to procure the power by a process other than that specified by the Competitive Bidding Guidelines, it shall, in its filing with the Commission, seek the consent of the Commission and demonstrate to the Commission’s satisfaction that the proposed procurement is the preferred least-cost option, with reference to the economic, technical, system and environmental aspects of commercially viable alternatives, including arrangements for reducing the level of demand. The Licensee shall describe the procurement procedure, proposed to be adopted, including the steps to be taken to ensure that the purchase is made on the best possible terms.

4.1.3        In respect of procurement of power for a period not exceeding one year, the Licensees shall be guided by the Short-term power procurement guidelines as issued by the Commission from time to time

4.2              Commission Review of Filing

4.2.1        The Commission may, at any time during the review process, require the Licensee to provide additional information, explanations or justifications relevant to the Commission’s evaluation of whether the Licensee’s proposals satisfy its obligations in relation to power procurement under the Electricity Act 2003, AP Electricity Reform Act, 1998, and its License. The Commission may order the Licensee not to proceed with the proposed procurement until further order or for a specified period after the Licensee has supplied the required additional information/clarification/justifications.

4.2.2        The Licensee may proceed to implement its proposed procurement process in accordance with the proposals submitted to the Commission when authorised to do so by the Commission; or if the Commission has not communicated its decision in relation to the proposal for 90 days after the Licensee has provided all the information/clarifications/justifications required by the Commission.

4.2.3        The Commission may at any time during the implementation of the procurement process consult with the Licensee to assure itself that the procurement process is being conducted in accordance with the Licensee’s proposals as consented to by the Commission.

4.2.4        The Commission, if so required, may demand the Licensee to provide to the Commission on demand with a copy of the Request for Proposals (RFP), proposals and other documents relevant to the procurement (whether received or issued by the Licensee) including the Power Purchase Agreements (PPAs), and documents reflecting the Licensee’s review and evaluation of the bids received by it and the Licensee shall comply with such demand.

4.2.5        After reviewing the Licensee’s filing, the Commission may, at its discretion, issue a notice of inquiry to consider any issues relating to the proposed procurement.

4.3       Licensee Notification of Outcome of Competitive Procurement Process

4.3.1        The Licensee shall notify the public, all bidders and the Commission of the winning bidder not more than seven days after making any binding commitment to the winning bidder to procure power in accordance with that bid. This notification shall include details as asked to be made public by the Competitive Bidding Guidelines, and at minimum, the following information:

(a) Name and address of the signatories to the PPA;

(b) General information on the terms and paragraphs of the PPA;

(c) A brief description of the project including the nature of the technologies employed;

(d) "Nameplate" capacity;

(e) Location and other physical characteristics;

(f) Fuel type; and

(g) Anticipated operational date.

4.3.2        The Licensee shall retain, in clean and legible form, all tender and bid documents, and other documents relevant to the procurement process and outcome received by the Licensee as well as all Licensees records of its review and evaluation, for a period not less than 5 years on the Licensee’s office premises.

 

 

4.4       Intervention in the Procurement Process

 

4.4.1        Once the Licensee has begun to implement a procurement process in accordance with these Guidelines, the Commission shall issue an order interrupting the process prior to the declaration of the winning bidder only

(a)    On grounds of improper conduct; or

(b)   On grounds that the manner in which the Licensee is conducting the procurement process differs materially from its filing as reviewed by the Commission.

4.4.2        The Commission may investigate any procurement of power following completion of the procurement process but before the Licensee commits itself to procuring power from the winning bidder:

(a)    if the winning bid is unreasonably high;

(b)   in response to a complaint lodged with the Commission from a bidder or other interested party on grounds of improper conduct in the procurement process; and/or

(c)    if the Commission has reason to believe that the procurement process was not conducted by the Licensee in accordance with its proposal as reviewed by the Commission.

4.4.3        Any investigation of a procurement process will be initiated by a notice of inquiry and shall be conducted in accordance with the Commission’s Conduct of Business Regulations in force.  The Licensee shall not enter into any commitment to procure power pending the outcome of the investigation.

4.4.4        If the Commission determines that the procurement process was unsatisfactory with reference to the criteria in paragraph 4.4.1, the Commission may order the Licensee to take necessary corrective steps, including requiring it to temporarily suspend the procurement process, or to cancel it and declare the results null and void.

4.4.5        If the results of the procurement process are declared null and void, the Licensee shall so notify the public and the bidders.

 

4.5       Continuing Commission Role

Nothing in this Chapter IV shall prevent the Commission from investigating or taking such other action as it deems appropriate with respect to a completed power purchase agreement in the exercise of its responsibilities under the Act.

 

 

CHAPTER V – STATE ELECTRICITY PLAN

 

5.1  APTRANSCO shall formulate a State Electricity Plan in co-ordination with others for the promotion of generation, transmission, distribution and supply of electricity and notify the same once in the Control Period under consideration for tariff review.

 

5.2  APTRANSCO, in preparing the State Electricity Plan, shall publish the draft State Electricity Plan and invite suggestions and objections thereon from licensees, generating companies, the Commission and the public within such time as may be specified by the Commission:

 

Provided that APTRANSCO shall:

 

(a)               notify the plan after considering the comments of the Commission and all stakeholders, and obtaining the approval of the State Coordination Forum; and

(b)              revise the plan incorporating therein the directions, if any, given by the State Coordination Forum while granting approval under (a) above.

 

5.3  The State Electricity Plan would be for a short-term framework of  a period equal to Control Period under consideration for tariff review while giving a  perspective for two (2) Control Periods (Control Period under consideration for tariff review and subsequent Control period) and shall include:

 

 

5.4  The State Electricity Plan would be used as a reference document by all stakeholders and also assist CEA in planning the National Electricity Plan or any other Plan requiring inputs from the State.

 

 

 

S. SURYA PRAKASA RAO

 

SECRETARY