LEGAL FRAMEWORK, POLICIES AND LEGAL FRAMEWORK, POLICIES AND REGULATIONS AND ORGANIZATIONAL SET REGULATIONS AND ORGANIZATIONAL SET UP IN INDIA UP IN INDIA -Dr. Aditi Raja -Dr. Aditi Raja Director, Finance , KPTCL Director, Finance , KPTCL 5.7.2011 5.7.2011
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LEGAL FRAMEWORK, POLICIES AND REGULATIONS AND ORGANIZATIONAL SET UP IN INDIA -Dr. Aditi Raja Director, Finance, KPTCL 5.7.2011.
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LEGAL FRAMEWORK, POLICIES AND LEGAL FRAMEWORK, POLICIES AND REGULATIONS AND ORGANIZATIONAL REGULATIONS AND ORGANIZATIONAL
• SCALE ECONOMIES NO LONGER REQUIREDSCALE ECONOMIES NO LONGER REQUIRED
• CO-ORDINATION CAN BE BETTER DONE BY CO-ORDINATION CAN BE BETTER DONE BY THE MARKETTHE MARKET
• REGULATION SHOULD BE THROUGH REGULATION SHOULD BE THROUGH PERFORMANCE INCENTIVESPERFORMANCE INCENTIVES
• EFFICIENT CONSUMPTION WILL BE EFFICIENT CONSUMPTION WILL BE PROMOTED AUTOMATICALLYPROMOTED AUTOMATICALLY
• PUBLIC, PRIVATE AND PUBLIC-PRIVATE PUBLIC, PRIVATE AND PUBLIC-PRIVATE OWNERSHIP POSSIBLEOWNERSHIP POSSIBLE
STEPS FOR FURTHER STEPS FOR FURTHER LEGISLATIONLEGISLATION
• GOVERNMENT OF INDIA GOVERNMENT OF INDIA RESOLUTION-POLICY ON PRIVATE RESOLUTION-POLICY ON PRIVATE PARTICIPATION IN THE POWER PARTICIPATION IN THE POWER SECTOR, 1991SECTOR, 1991
• MEGA POWER POLICY,1995MEGA POWER POLICY,1995
• COMMON MINIMUM NATIONAL COMMON MINIMUM NATIONAL ACTION PLAN FOR POWER,1997ACTION PLAN FOR POWER,1997
IN THE CENTREIN THE CENTRE
• CENTRAL GOVERNMENT OVERALL POLICY CENTRAL GOVERNMENT OVERALL POLICY MAKER FOR THE COUNTRYMAKER FOR THE COUNTRY
• MINISTRY OF POWER AT THE HELM OF MINISTRY OF POWER AT THE HELM OF AFFAIRSAFFAIRS
• EXISTENCE OF A CENTRAL ELECTRICITY EXISTENCE OF A CENTRAL ELECTRICITY AUTHORITYAUTHORITY
• LARGE FINANCIAL INSTITUTIONS AT THE LARGE FINANCIAL INSTITUTIONS AT THE CENTRECENTRE
• LARGE GENERATION AND TRANSMISSION LARGE GENERATION AND TRANSMISSION BODIESBODIES
IN THE STATESIN THE STATES
• MONOLITHIC UTILITIES BROKEN MONOLITHIC UTILITIES BROKEN DOWN DOWN
• DEGREE OF AUTONOMY VARIESDEGREE OF AUTONOMY VARIES
• PRIVATE SECTOR VERY ACTIVEPRIVATE SECTOR VERY ACTIVE
• LOAD DESPATCH CENTRES LOAD DESPATCH CENTRES DEVELOPED AS INDEPENDENT UNITSDEVELOPED AS INDEPENDENT UNITS
• EVEN BEFORE THE ELECTRICITY ACT EVEN BEFORE THE ELECTRICITY ACT FORMALLY CAME INTO FORMALLY CAME INTO EXISTENCE…….EXISTENCE…….
STEPS TOWARDS RESTRUCTURING STEPS TOWARDS RESTRUCTURING
OF EXISTING UTILITIESOF EXISTING UTILITIES
• DE-INTEGRATE SEBs INTO DE-INTEGRATE SEBs INTO GENERATION, TRANSMISSION AND GENERATION, TRANSMISSION AND DISTRIBUTIONDISTRIBUTION
• FURTHER DE-INTEGRATE EACH OF FURTHER DE-INTEGRATE EACH OF THESE UNITSTHESE UNITS
• OWNERSHIP TO BE MODIFIEDOWNERSHIP TO BE MODIFIED
• REGULATION TO BE INTRODUCED AS REGULATION TO BE INTRODUCED AS A SURROGATE FOR COMPETITIONA SURROGATE FOR COMPETITION
ELECTRICITY ACT, 2003ELECTRICITY ACT, 2003
• COMPETITION IS THE BUZZ WORDCOMPETITION IS THE BUZZ WORD• OPEN ACCESSOPEN ACCESS• INDEPENDENT LOAD DESPATCH CENTRESINDEPENDENT LOAD DESPATCH CENTRES• PRIVATE TRANSMISSION LICENSEESPRIVATE TRANSMISSION LICENSEES• EMPAHSIS ON RURAL ELECTRIFICATIONEMPAHSIS ON RURAL ELECTRIFICATION• DECENTRALIZED MANAGEMENT OF DECENTRALIZED MANAGEMENT OF
DISTRIBUTIONDISTRIBUTION• ATTENTION TO EFFICIENCYATTENTION TO EFFICIENCY• THEFT TO BE CURTAILEDTHEFT TO BE CURTAILED
-GUIDELINES AND REGULATIONS CAN -GUIDELINES AND REGULATIONS CAN BE ISSUED BY THE CERC AND STATE BE ISSUED BY THE CERC AND STATE ERCsERCs
RELEVANT PROVISIONSRELEVANT PROVISIONS
• SEC 11-IN CONJUNCTION WITH SEC 40cSEC 11-IN CONJUNCTION WITH SEC 40c
• SEC 39-TRANSMISSION AGENCY SEC 39-TRANSMISSION AGENCY SHOULD NOT TRADE SHOULD NOT TRADE
• SEC 65-SUBSIDYSEC 65-SUBSIDY
• SEC 135- THEFT OF ELECTRICITYSEC 135- THEFT OF ELECTRICITY
• SEC 150-ABETMENTSEC 150-ABETMENT
• SEC 178-IN CONJUCTION WITH SEC SEC 178-IN CONJUCTION WITH SEC 28(4)28(4)
LOAD DESPATCH CENTRESLOAD DESPATCH CENTRES
• SEC 26 FOR SETTING UP LDC AT CENTRE.SEC 26 FOR SETTING UP LDC AT CENTRE.
• SEC 27 FOR SETTING UP REGIONAL LDCs. SEC 27 FOR SETTING UP REGIONAL LDCs.
• SEC 28 FUNCTIONS OF REGIONAL LAOD SEC 28 FUNCTIONS OF REGIONAL LAOD DESPATCH CENTRES ( SUB-SEC 4 OF DESPATCH CENTRES ( SUB-SEC 4 OF PARTICULAR IMPORTANCE) PARTICULAR IMPORTANCE)
• SEC 31 LDCs IN THE STATEsSEC 31 LDCs IN THE STATEs
• SEC 32 FUNCTIONS OF LDC IN THE STATEsSEC 32 FUNCTIONS OF LDC IN THE STATEs
NATIONAL ELECTRICITY NATIONAL ELECTRICITY POLICYPOLICY • ACCESS TO ELECTRICITY TO ALL ACCESS TO ELECTRICITY TO ALL
HOUSEHOLDSHOUSEHOLDS• AVAILABILITY OF POWER FOR PEAK LOADSAVAILABILITY OF POWER FOR PEAK LOADS• ENHANCING PER CAPITA AVAILABILITYENHANCING PER CAPITA AVAILABILITY• FINANCIAL TURNAROUND OF THE SECTORFINANCIAL TURNAROUND OF THE SECTOR• CONSUMER INTERESTS TO BE PROTECTEDCONSUMER INTERESTS TO BE PROTECTED• RURAL ELECTRIFICATION IMPORTANTRURAL ELECTRIFICATION IMPORTANT• ENERGY CONSERVATIONENERGY CONSERVATION• INDEPENDENCE OF LOAD DESPATCH INDEPENDENCE OF LOAD DESPATCH
CENTRESCENTRES
INDEPENDENCE OF LOAD INDEPENDENCE OF LOAD DESPATCH CENTRESDESPATCH CENTRES
• RING FENCING OF THE LDCsRING FENCING OF THE LDCs
• INDEPENDENCE TO LDCsINDEPENDENCE TO LDCs
• CREATION OF NATIONAL LOAD CREATION OF NATIONAL LOAD DESPATCH CENTREDESPATCH CENTRE
• FORMATION OF POSOCO (POWER FORMATION OF POSOCO (POWER OPERATION SYSTEM COMPANY)OPERATION SYSTEM COMPANY)
BIRTH OF POSOCOBIRTH OF POSOCO
• RLDCs AND SLDCs WERE SET UP UNDER RLDCs AND SLDCs WERE SET UP UNDER THE UNIFIED LOAD DESPATCH AND THE UNIFIED LOAD DESPATCH AND COMMUNICATIONS PROJECT.COMMUNICATIONS PROJECT.
• NATIONAL LOAD DESPATCH CENTRE NATIONAL LOAD DESPATCH CENTRE (NLDC) CONSTITUTED IN 2009(NLDC) CONSTITUTED IN 2009
• POSOCO CREATED BY MERGING NLDC POSOCO CREATED BY MERGING NLDC WITH THE RLDCs in March 2010WITH THE RLDCs in March 2010
• CERC REGULATORY COMMISSION (FEES CERC REGULATORY COMMISSION (FEES AND CHARGES OF REGIONAL DESPATCH AND CHARGES OF REGIONAL DESPATCH CENTRE AND OTHER RELATED MATTERS) CENTRE AND OTHER RELATED MATTERS) REGULATIONS, 2009.REGULATIONS, 2009.
NATIONAL TARIFF NATIONAL TARIFF POLICYPOLICY • EMPAHSIS ON COMPETITIONEMPAHSIS ON COMPETITION• PROMOTE INVESTMENT IN THE SECTOR PROMOTE INVESTMENT IN THE SECTOR • CAPTIVE GENERATION TO BE CAPTIVE GENERATION TO BE
ENCOURAGEDENCOURAGED• MULTI YEAR TARIFFMULTI YEAR TARIFF• TWO PART TARIFFTWO PART TARIFF• ALL POWER PURCHASE COSTS TO BE ALL POWER PURCHASE COSTS TO BE
LEGITIMATELEGITIMATE• OPEN ACCESSOPEN ACCESS• CDM BENEFITS TO BE TAKENCDM BENEFITS TO BE TAKEN