PUNJAB STATE ELECTRICITY REGULATORY COMMISSION

SCO NO. 220-221, SECTOR 34-A, CHANDIGARH

 

 

                                        Petition No.25  of 2008

                                                                            Date of Order: 27-05-2009

 

 

In the matter of:       Petition for direction to PSEB, under Reg.28 of PSERC (Open Access) Regulations, 2005,  to carry out the process of evacuation of power, produced from renewable resources, under the open access for banking and wheeling for captive consumption and third party sale.

                                               

AND

 

In the matter of:     M/s Winsome Yarns Limited  (WYL),  Regd. Office: SCO  # 191-192, Sector 34-A, Chandigarh.

                                                    

Versus

 

       Punjab State Electricity Board, The Mall, Patiala (PSEB).

 

 

Present:                 Shri Jai Singh Gill, Chairman

                  Smt. Baljit Bains, Member

                            Shri Satpal Singh Pall, Member

 

For petitioner:                  Shri K.V.Singhal, DGM & CS         

      Shri C.S.Pasricha, Advocate

 

For PSEB:           Shri S.D.Kattal, Director/Open Access

                                          Shri Davinder Pal Sethi, Dy.Director/Open Access

                                        

For PEDA:            Shri Balaur Singh, Director

                                           Shri Devinder Singh, Sr. Manager

    

 

ORDER

 

 

1.         M/s Winsome Yarns Limited has filed this petition praying therein that the Punjab State Electricity Board (Board) may be directed to evacuate power proposed to be generated by the NRSE Mini Hydel Projects  (MHPs) of the petitioner, that the petitioner may be allowed to  bank power and to wheel it for captive consumption at the manufacturing units of the petitioner-company located in the State of Punjab at Dera Bassi and Mohali and that the petitioner may also be allowed to sell the power to  third party as and when required.

 

2.      The petitioner has stated that the Punjab Energy Development Agency (PEDA) had allotted 12 sites on the Sidhwan Branch Canal for development of  MHPs on BOO basis through  competitive bidding. On detailed engineering, some adjacent sites have been suitably combined to develop 5 MHPs, the total capacity of which is 3900 KW. The petitioner stated that PEDA approved DPRs of these projects on 31.3.2006 and thereafter an Implementation Agreement was first signed with PEDA followed by a Tripartite Agreement with the Punjab Irrigation Department (PID) and PEDA. The petitioner further stated that as per the State Government’s NRSE Policy 2006, wheeling of power for captive use  or third party sale in the State  are allowed at a uniform rate of 2% of the energy fed to the grid irrespective of distance from the generating station. The petitioner has in this respect also referred to Reg. 16(1)(a) of the PSERC Open Access Regulations as amended by  notification dated 31.8.2007.

             

The petitioner has contended too that in addition to banking the power produced and wheeling it for captive consumption at their manufacturing units, the petitioner also intends to sell power to third parties as and when required. When approached in this regard, the Board in its letter No.78776 dated 17.11.2008 stated as under:-

“The PSERC in its notification dated  9.08.2005 and 31.08.2007 has allowed open access to customers having capacity of 1 MW & above only after 1st April, 2008. As such, lower power injection and subsequent open access may require a specific approval from PSERC which may kindly be obtained. If the approval has already been obtained, copy of the same may be forwarded to this office at the earliest..”

           

The petition was admitted and notice was issued to the Board. The Board filed its reply to the petition stating therein that as per MOU signed between PEDA and the petitioner, the Board has first option to purchase the whole or part of the power generated from the projects at the rates mentioned in the NRSE Policy 2001 but the petitioner has not come forward to sign the PPA with PSEB for sale of power. Moreover, in view of the condition of minimum 1 MW laid down in the Open Access Regulations, the petitioner can wheel power generated from the plant within the State of Punjab only if allowed by the Commission. The Board further states that “if Open Access is granted to consumer, it is evident that consumer will use own generated power through Open Access as well as Board’s power through the same meter, as the power consumption of the consumer is on very higher side than generation. So, even if scheduling is applied by the consumer and is granted by PSEB, the pricing mechanism in such case is required to be advised by Hon’ble Commission, in view of non-compatibility of Large Supply tariff with U.I. based pricing mechanism”. In addition, banking of power produced from the projects is not acceptable to the Board on account of the following reasons:-

   a)         The petitioner has not made clear that on what grounds banking has been demanded by the petitioner since there is no excess generating capacity available with them. The total capacity of this Micro Hydel Project is 3.9 MW, which is much less than the connected load of L.S. connection of the petitioner where this power is to be consumed after wheeling through Open Access.

b)                 The power generation from these Micro Hydel Projects will be dependant on the PID indent for requirement of water. Accordingly, the discharge of water in the canal will vary but the petitioner has not clarified how scheduling will be managed for application of banking.

c)                  As these Micro Hydel Plants will be generating power on basis of fluctuating discharge of water in the canal, so banking of this power with PSEB is not suitable in an ABT regime.

 

   It is further stated in the reply that in case the Commission considers the request of the petitioner for banking of power generated from these MHPs, the Board may be allowed to maintain a rupee based account of the company by converting UI of energy on the basis of pricing mechanism specified by the Commission for open access customers on frequency based  tariff. 

 

3.     The petitioner filed a rejoinder to the reply of the Board wherein besides reiterating the earlier submissions, it is stated that it is not possible for the petitioner to give a definite scheduling with regard to injection of power to be generated from the MHPs. It is also urged that the petitioner needs to be exempted from payment of UI charges as they are liable to a penalty when contract demand is exceeded while minimum charges are payable for less usage. It is further mentioned that metering procedure/devices for the purpose of evacuation of power may be the same as in the case of sale of power to the Board and that the conditions of establishing despatch load centres with more stringent specifications may also be waived in the case of  MHPs as the same would be impracticable for projects of capacity of  less than 1 MW.

 

4.         The petition was taken up for hearing on 19.2.2009 when the Commission ordered that PEDA be impleaded as respondent in the petition. Notice was consequently issued to PEDA also and in reply it has indicated that the MOU with M/s Winsome Yarns Limited was executed on 8.9.2005 which was followed on 7.3.2006 by an Implementation Agreement and that Implementation Agreement superceded the MOU. As per Clause 4.4 (ii) of the Implementation Agreement, PSEB was obliged to purchase whole of the power offered from the project at the terms & conditions agreed in the PPA to be signed by the company with the Board.

 

5.         Arguments of parties were heard when they reiterated their respective pleas as indicated above. The Commission has carefully considered the pleadings of the petitioner, taken into account the views of the Board and the clarifications given by PEDA. Its findings on each issue are discussed in the succeeding paras.

 

6.         The Board has contended that it has the first option to purchase whole or part of the power generated by the petitioner. The Commission however notes the clarification given by PEDA that the implementation agreement subsequently signed supercedes the earlier MOU executed between PEDA and the petitioner. Clause 4.4 (ii) of the implementation agreement clearly states that PSEB will purchase whole or part of the power offered from the project on mutually agreed terms. Accordingly, there is no force in the Board’s contention that it is entitled to purchase the entire quantity of power generated by the petitioner. Moreover in its subsequent filing, the petitioner has also established that the electricity generated from these projects will be captively consumed by the company for its manufacturing facilities at Dera Bassi.

7.         Section 9 (2) of the Electricity Act provides that every person who has constructed a captive generating plant and maintains and operates such plant shall have the right to open access for the purpose of carrying electricity from his captive generating plant to the destination of his use with the stipulation that such open access shall be subject to the availability of adequate transmission facility and such availability of transmission facility shall be determined by the State Transmission Utility. Since the Board which at present is working as State Transmission Utility and a licensee has not pointed out any operational constraint in this case, the Commission allows open access to the petitioner for carrying the electricity from its captive generating plant to the destination of its use.

 

8.         So far as the petitioner’s prayer regarding exemption from scheduling is concerned, the Commission observes that Regulation 12 (1) of PSERC (Open Access) Regulations provides that an open access customer is required to furnish along with the application details such as capacity needed, generation planned or power generated, point of injection, point of drawal, duration of availing open access, peak load, average load etc. He is also required to abide by the Indian Electricity Grid Code, State Grid Code and instructions given by the State Transmission Utility and State Load Despatch Centre as applicable from time to time as stipulated under Regulation-26 of the Open Access Regulations. Further as provided in Section-8.3 of the State Grid Code, SLDC will issue dispatch instructions required to regulate generation and imports from IPPs/CPPs according to 15 minute day ahead generation schedule. This implies that IPPs/CPPs will have to furnish 15 minute day ahead schedule to the SLDC. However owing to generation of MHPs varying in accordance with the discharge of water, the Commission is of the view that it is not possible for such MHPs to provide  day ahead scheduling of power generation. Accordingly, the Commission in exercise of its powers under Regulation 33 of these Regulations directs the Board/SLDC to exempt the open access customers in such cases from furnishing the schedule for injection of power. With the exemption from scheduling, the question of levy of UI charges etc. does not arise.

 

 

 

9.         The petitioner has also prayed for banking of power. The Board is not in favour of banking of power for the reasons mentioned in para 2 above. However, clause 4(ii) of Appendix II of the NRSE Policy 2006 clearly provides that banking of power generated from NRSE projects shall be allowed by the Board for a period of one year. In view of the clear stipulation in the NRSE policy, the Commission is inclined to allow banking of power for one year. The monthly energy injected into the grid after accounting for wheeling charges and T&D losses will be subtracted from the total energy drawal of the petitioner and the balance shall be charged as per prevalent PSEB tariff. If the energy injected after accounting for wheeling charges & T&D losses is more than the total units consumed by the petitioner, the excess energy shall be credited to the accounts of the petitioner for subsequent drawal. At the end of the year if there is still some surplus injection, the same will be paid for by the Board at the applicable NRSE rate approved by the Commission for that year. Electricity consumption for essential services/start up, if drawn by the customer, will also be accounted for while calculating the injection in the grid.

 

10.       The petitioner has finally prayed for third party sale. In view of the provisions of clause 4(ii) of Appendix II of the NRSE Policy 2006, the Commission allows the petitioner to sell power to third parties subject to applicable conditions under the Open Access Regulations framed by the Commission.

 

This petition is disposed of accordingly.

 

 

 

 

          Sd/-                                              Sd/-                                           Sd/-

(Satpal Singh Pall)                         (Baljit Bains)                              (Jai Singh Gill)

 Member                                            Member                                      Chairman

 

 

Chandigarh

Dated: 27-05-2009

6.         The Board has contended that it has the first option to purchase whole or part of the power generated by the petitioner. The Commission however notes that clarification given by PEDA that the implementation agreement subsequently signed supercedes the earlier MOU executed between PEDA and the petitioner. Clause 4.4 (ii) of the implementation agreement clearly states that PSEB will purchase whole or part of the power offered from the project on mutually agreed terms. Accordingly, there is no force in the Board’s contention that it is entitled to purchase the entire quantity of power generated by the petitioner. In its subsequent filing, the petitioner has also established that the electricity generated from these projects will be captively consumed by the company for its manufacturing facilities at Dera Bassi.

7.         Section 9 (2) of the Electricity Act provides that every person who has constructed a captive generating plant and maintains and operates such plant shall have the right to open access for the purpose of carrying electricity from his captive generating plant to the destination of his use with the stipulation that such open access shall be subject to the availability of adequate transmission facility and such availability of transmission facility shall be determined by the State Transmission Utility. Since the Board which at present is working as State Transmission Utility and a licensee has not pointed out any operational constraint in this case, the Commission allows open access to the petitioner for carrying the electricity from his captive generating plant to the destination of his use.

8.         So far petitioner’s prayer regarding exemption from scheduling is concerned, the Commission observes that Regulation 12 (1) of PSERC (Open Access) Regulations provides that an open access customer is required to furnish along with the application details such as capacity needed, generation planned or power generated, point of injection, point of drawal, duration of availing open access, peak load, average load etc. He is also required to abide by the Indian Electricity Grid Code, State Grid Code and instructions given by the State Transmission Utility and State Load Despatch Centre as applicable from time to time as stipulated under Regulation-26 of the Open Access Regulations. Further as provided in Section-8.3 of the State Grid Code, SLDC will issue dispatch instructions required to regulate generation and imports from IPPs/CPPs according to 15 minute day ahead generation schedule. This implies that IPPs/CPPs will have to furnish 15 minute day ahead schedule to the SLDC. However owing to generation of MHPs varying in accordance with the discharge of water, the Commission is of the view that it is not possible for such MHPs to provide  day ahead scheduling of power generation. Accordingly, the Commission in exercise of its powers under Regulation 33 of these Regulations directs the Board/SLDC to exempt the open access customers in such cases from furnishing the schedule for injection of power. With the exemption from scheduling, the question of levy of UI charges etc. does not arise.