Mr. Ajoy Mehta, IAS, Managing Director, Maharashtra State Electricity Distribution Company Limited at RPR 2012, 23-26 August, Goa, India

1. Regulators & Policymakers Retreat, 2012
Date: 24th August 2012
Regulators and Policymakers Retreat-2012
Presentation on
Operationalisation of Open Access
By
Ajoy Mehta, IAS,
Managing Director,
Maharashtra State Electricity Distribution Company Limited

2.  Matter has raised important legal issues
 Opinions of Attorney General of India, Solicitor General Of
India
 Planning commission- working group on OA
Operationalisation in Feb-2010
 Notification from Ministry of Power on Dt 30.09.2011
 Discussions in the Forum of Regulators (FOR)
 MoP has referred this matter for CERC to form regulations,
 Comments on Operationalisation of OA has been asked by
MERC
2
MSEDCL

3. (a) Bulk consumers (above 1 MW) shall be deemed to be open access consumers w.e.f.
January 2009.
(b) The State Commission has no longer fix the energy charges to be paid by such a
consumer, but will continue to fix the wheeling charges and surcharges.
(c) Sec-49 shows that if certain consumers want to have the benefit of the option to buy
power from competing sources, then it is logical that DISCOMS/Distribution Licensees
do not have an obligation to compulsorily supply power to such consumers.
(d) Sec-42(3) is not a precondition for the implementation of open access as such a
notice is not for seeking permission to use the distribution licensee’s network, but
only to communicate the open access consumers intention of using such a network.
3

4. Ministry of Power Letter
Technical issues & Operational constraints
Financial Impact on MSEDCL.
Legal issues

5.  Letter from MoP refers only legal issues in Open
Access Operationalisation.
 Opinion is in isolation with provisions in Act. ( They
have not considered technical & operational
Constraints.)
 Deciding of OA tariff by Utility : Complex issue.
 Methodology for implementation of OA is not
mentioned any where.
 It requires clarity/Change in regulation
 CSS decided is not commensurate with migrated
consumers tariff.
 Infrastructure problems for new consumers.

6. 6

7. Particular Reguln Action by DL As per MoP Circular Remarks if MoP Circular is implemented
Application Reg. Scrutiny No Application, Just an MERC (Distribution Open Access)
for Open No. 4.2 intimation is required Regulations, 2005, needs to be
Access complied.
Eligibility Reg. 3 Scrutiny of application for OA Can not ascertain Open access may be granted to a non-
criterion capacity (should not be > eligible consumer
than CD)
Type of OA Sec. 9 / Ascertainment of applicability Can not ascertain The DL may lose the legitimate revenue
Captive / 10 of of in respect of cross subsidy surcharge
General OA Act CSS for General OA
Grid Reg. For existing consumer, For existing consumer, Utility has to bear cost of infrastructure
Connectivity connectivity is available, but connectivity available for new OA consumer
for new consumer, For new, the consumer
connectivity will be provided has to apply
Arrears / Reg. OA permission may be No control In case of arrears OA can not be granted
Dispute 4.2.7 rejected in case of non
settlement of dues
Installation of Reg. 7 Ascertainment No clear guidelines SEM is a pre-requisite of open access,
SEM must be complied. If SEM not installed,
proper Billing can not be done
Open Access Will be granted Permission is not SLDC has to monitor the fulfillment of all
Permission required, Will be regulatory requirements. SLDC has no
deemed to be granted man power neither it is highly equipped
to look into all matters.

8. Particular Regul Action by DL As per MoP Remarks if MoP Circular is
n Circular implemented
Contract Reg. CD will be reduced to the extent We can’t have If CD not reduced, the DL has to
Demand 4.2.1 / of OA capacity any control over make provision for supply of
Reduction / 4.2.2 its usage. Contracted capacity
Termination unnecessarily, resulting into
loss.Reg needs to be complied
Agreement Reg. 5 Will be executed between DL, No Agreement, will affect the
OA consumer & generator interests of both parties.Reg
needs to be complied
Joint Meter JMR will be carried out ??? JMR needs to be carried out.
Reading
Billing Reg. 8 Billing to include wheeling Who will bill OA Reg needs to be complied
charges, CSS, Losses,standby, PF, Consumer?
SLDC???
Standby Reg. 9 Will be provided at Temporary ??? No contract with DL, no
supply Tariff through Agreement obligation on DL to provide
standby supply
Inter- state Will be permitted subject to SLDC to Not mentioned in circular.
open access SLDC approval, generation units approve
to be given by SLDC/WRLDC
Over drawal Reg. 9 Will be charged at Temporary SLDC will charge The DL will decide tariff. Loss to
Tariff UI consumers in both cases.

9. Details of deemed OA consumers (Contract demand above 1 MW) for FY 2011-12
Migration of Consumers to Consumers below 1 MW
Category No. of Sales Revenue ABR
with MSEDCL
Open Access
Cons.
Mus Rs. Crs Rs./Unit % Sales Revenue ABR Sales Revenue ABR
HT & LT 14,08
1586 20,114 13,187 6.56 30% 6,034 3,956 6.56 9,231 6.56
Industries 0
HT & LT 10.8
231 888 964 10.86 50% 444 482 10.86 444 482
Commercial 6
PWW 63 708 340 4.80 0% - - 708 340 4.80
Agriculture 42 329 24 0.74 0% - - 329 24 0.74
Railway 43 1,386 945 6.82 100% 1,386 945 6.82 - -
Total deemed
open access 1965 23425 15460 6.60 7864 5383 6.85 15561 10077 6.48
consumers
1.94
Total 81,835 38,135 4.66
Crs
Proportion of
9.61 19.02
deemed OA 0.01% 29% 41% 14.12% 26.43%
consumers
% % 9

10.  Impact on ARR for embedded consumers
 Impact on tariff on common consumers
 Impact on monthly revenue of utility.
 Assumption of migration of consumers.
 Fixed cost of Power procurement (Computation of
additional surcharge on case to case basis)
 Loss of CSS due to migration of bulk consumers.
 Increase in loss of utility.
 Burden of Opex/Capex on consumers of utility

12.  1 MW and above consumers are deemed OA
users
 OA Category : SERC to fix wheeling charges &
surcharge only
 Dist. Licensee not to have service obligation
 Notice is not for seeking permission to use the
DL’s network but only to communicate
intention of using such network

13. • Planning Commission has formed task force in Feb-2010
– SERC should be advised by Govt. for Operationalisation of
OA & to specify wheeling charges.
– Standby charges should not exceed max.UI rate for
applicable hrs plus 5% adm.charges thereon.
– SLDC/RLDC should be separate entity with functional &
operational autonomy.
– Regulators should meet bulk consumers & act proactively.
– 25% of centers discretionary allocation of 15 % CPSU
generating capacity may be made available for direct sale of
CPSU to OA consumers.
– Amendment in Sec.62(1)(a) to make it explicit that supply
of electricity by a generating company to DL includes supply
through an electricity trader.

14.  Not purchase excess energy injected
 May charge temporary tariff for excess
consumption.
 Can charge high tariff for standby supply or may
not provide stand supply.
 O&M activity of consumers feeders.
 Different negotiated tariff for OA consumers.
 Can ask to revise CSS & wheeling charges