ANDHRA PRADESH ELECTRICITY REGULATORY COMMISSION

HYDERABAD.

 

Dated : 04-10-2005

 

Present : Sri K.Swaminthan, Chairman

                 Sri K.Sreerama Murhty, Member

                 Sri Surinder Pal, Member.

 

 

R.P.(S.R) No. 72 of 2005

 

           

 

Between :

 

Transmission Corporation of Andhra Pradesh Limited

Vidyut Soudha, Hyderabad                      ..                                  …. Applicant

 

 

and

 

 

Nil                                                                    ..                               …. Respondent                       

           

This application coming up for admission on 23.09.20005 in the presence of Sri P.M.K.Gandhi, Director(RA & Co-ordination) for the Applicant and the Commission having considered the submissions on behalf of the Applicant and the material available on record, delivered the following :

 

O R D E R

 

            This is an application seeking review of some of the provisions of Regulation No.2 of 2005,  notified by this A.P.Electricity Regulatory Commission on 1st July, 2005 and coming into force from that date. 

 

 

 

2.         Following are the averments made in the application :

 

(a)       The Hon’ble Commission formulated a draft Regulation on the terms and conditions for allowing open access for supply of electricity to consumers and published the same on 04.08.2004 in the Andhra Pradesh Gazette seeking comments / suggestions from the interested persons and also put the same on the website of the Commission.  The Applicant submitted its views and suggestions on the various provisions of the draft Regulation on 10.09.2004 vide its letter No.CE(RAC&Reforms)/SE(RAC)/D.No.410 dated 10.09.2004.  Later, the Commission notified the aforementioned Regulation No.2 of 2005 on 01.07.2005.

 

(b)               The Applicant after reading the said Regulation found that certain clauses of the Regulation called for a review thereof.

 

(c )       In clause 4(a) of the impugned Regulation, the Commission has considered the period of 2 years as minimum tenure for eligibility for an open access user to be categorized as Long-term open access user.  However, it is essential to prescribe the minimum tenure for long-term  open access on the principle of cost recovery, as the long-term open access users guide the investment decisions of the Licensees,  such as those for transmission capacity addition.  Such investments, once made, can be recovered over a much longer period of time than 2 years.  The Central Electricity Regulatory Commission has specified the minimum eligibility tenure for a long-term customer for open access over the Central Transmission Utility network as 25 years.  The Applicant has accordingly pleaded for the minimum tenure for long-term open access to be revised to 25 years.

 

     (d)        Clause 15.3(b) of the impugned Regulation also required a revision. The Regulation prescribes that  a long-term user shall, as a one-time exit fee, pay 25% of the transmission and/or wheeling charges as the case may be, and the scheduling and the system operation in force at that time applied on the capacity, that was not utilized and was surrendered by him and that could not be re-allotted for the remaining period of the agreement.  The Applicant has submitted that as the investments are made by the Applicant to cater to the requirements of the long-term open access users, in the event of such users exiting  and the Applicant not being able to re-allot the capacity surrendered, the Applicant would be forced to bear the fixed cost without commensurate revenue, which may adversely affect the Applicant’s revenue income.  Therefore, it is essential that the Regulation should provide for the user to compensate 100% of the transmission and / or wheeling charges as well as the scheduling and system operation charges in force at that point of time, applied on the capacity that was surrendered by him and could not be re-allotted.

 

(e)       To deter consumers who do not actually utilize at least the minimum threshold capacity that entitles them for open access, some suitable deterrent has to be incorporated in the Regulation. In other words, penalty should be levied for false declaration of contracted capacity by open access users.   Maharashtra Electricity Regulatory Commission in its Regulation on open access has provided for levy of a penalty on an open access consumer on account of his failure to achieve Maximum Demand equal to or greater than eighty (80) percent of the threshold level.

 

(f)         Proviso to Clause 12.2 of the Regulation requires modification as transmission system is always used even in case whether the distribution open access transaction happens in the geographical area of the same Distribution Licensee (at 33 kV voltage level or below), as the source of power is Extra High Voltage (EHV) transmission system in the meshed network.   As such, a tri-partite agreement  will be required between the user, distribution licensee and transmission licensee, unlike the stipulation in the Regulation that open access applicant shall be required to execute agreement only with distribution licensee.

 

(g)       The procedure specified for filing of applications for short-term open access is not clear.   Especially in regard to prioritizing of such applications, it is not clear how the priority should be accorded. Further, as it is not practical to carry out bidding every day as contemplated in the Regulation, the basis for allotment of short-term open access should be the ‘first-come, first-served’ basis.

 

3.         Before admitting the application, a notice was ordered to be issued to the Applicant.

 

4.         The representative of the Applicant appeared before the Commission and reiterated the contentions raised in the application. 

 

5.         The point that arises for consideration is

 

            “whether the application for review is admissible”

 

 

6.         It is clear from the preamble to the Regulation No.2 of 2005 that all the statutory procedure prescribed for issuing the said Regulation was followed including the issue of a draft Regulation for inviting suggestions / comments from interested persons after publishing the draft Regulation in the Andhra Pradesh Gazette, as is even admitted by the applicant.  The representative of the Applicant admitted before the Commission that the contentions raised in the application are mostly the same as were submitted by the Applicant, in their comments on 10.09.2004 vide Letter No.CE(RAC&Reforms)/SE(RAC)/D.No.410. Therefore, the contentions now raised are neither new nor discovered after the Regulation had been notified. It was only after careful consideration of those and other comments / suggestions received from of all other interested persons, that the Commission finalised the Regulation and notified the same.  The Applicant has not shown sufficient ground for review of any of the provisions of the Regulation.  

 

7.         For these reasons, the application is not admitted.

 

 

            This order is corrected and signed on 4th day of October, 2005.

 

 

Sd/-                                            Sd/-                                                     Sd/-

    Surinder Pal                         K.Sreerama Murthy                   K.Swaminathan

      MEMBER                       MEMBER                                        CHAIRMAN