Mr. Harry Dhaul Director General, IPPAI at RPR 2012, 23-26 August, Goa, India

1. The Regulators & Policymakers Retreat 2012
Practical Problems in
Implementation of Open Access
The Grand Hyatt, Goa
Harry Dhaul 23-26 August 2012
Director General, IPPAI

2. Open Access – DISCOMs Challenges
Cross
Forced USO Subsidy
Surcharge ?
Revenue Loss UI Exposure
– Cherry due to OA
picking consumer flip-
flop
OA DISCOM
Workforce
(?)
Harry Dhaul - Director General, IPPAI

3. Open Access – Regulatory Dilemma
 Are they Independent enough ???
 Do they have enough Willpower ???
 Striving hard to maintain DISCOMs sustainability vs. Consumer choice
 Upsetting revenue balance of State – low end consumers to bear the
brunt of increased tariff to compensate for loss of OA consumers
 Determining the REAL cross subsidy surcharge
 Handling Reforms envisaged under EA-03’ thru
 Under-staffed Commissions &
 Un-skilled operational staff
Domestic/A
HT/Commerc griculture
ial Consumer
Consumers
Harry Dhaul - Director General, IPPAI

4. Open Access – Traders’ Issues
 Future of Power Trading ??
 Very low margins
 Incapability in managing commercial risk due to very low margins
 Major buyers; Utilities with “NO” financial credibility
 High risk of commercial defaults
 Corridor availability Issues in Day-Ahead market: Biggest gainers are
Exchange(s)
 Small players without market vision playing deterrent role,
and causing under-development of market
 Players competing on margin rather than in better &
innovative product offerings
Harry Dhaul - Director General, IPPAI

5. Open Access – Consumer Reality
Exorbitant Irrational
Cross Subsidy Temporary
Surcharges Charges
Undesirable
hold up of
Deemed reduction OA approval
of Contract Demand
Harry Dhaul - Director General, IPPAI

6. A few examples: States’ Vision for Open Access
 Maharashtra:
 Deemed reduction in Contract Demand- consumer reluctant to give up
this right
 Temporary charges on Over-drawl/Under injection of units -charges are
unreasonably high and absurd
 Lapsing of energy in Under-drawl/Over injection -not easy for consumers
to adhere to schedule due to varying machine cycle and load mix.
 Special Energy Meter- MSEDCL empanelled vendor not approved by
MSETCL
 Cross Subsidy Surcharge – no trajectory of progressive reduction,
complying with EA’03
 Punjab:
 Imposition of CSS has STIFLED OA transactions
 Wheeling charges applicable for even STU connected OA customer
Harry Dhaul - Director General, IPPAI

7. Ministry of Power Letter on Open Access
GO !
OK Maybe Why
Implement
Ministry’s Letter: State ERCs have their own view point and
Consumer choice act accordingly, does that mean SERCs
or Compulsion
don’t want REFORMS ?
Harry Dhaul - Director General, IPPAI

8. MoP Letter on Open Access : Unanswered Questions
 Can MoP give directives to SERCs on matters of electricity ?
 What motivated MoP to seek clarification, and who asked for it ?
 Does that mean it will give Consumer a choice or put Consumers in an
unending tussle between DISCOMs & SERCs
 Will this lead to separation between wires and supply?
 What will happen to DISCOMs’ viability & their future;
 What will happen to thousands of DISCOM/SEB employees? Will they
be absorbed elsewhere?
 Would this lead to phasing out of DISCOMs?
 Do DISCOMs have any plans/roadmap to bail themselves out?
Harry Dhaul - Director General, IPPAI

9. MoP Letter on Open Access : Unanswered Questions
 What will happen to existing long term PPAs due to sudden load reduction
of DISCOMs
 Does Cross Subsidy Surcharge hold any legal sanctity for consumers
having no Contract Demand with DISCOMs
 If some consumers do not want to opt for such a scheme what will be the
future of such consumers
How dare
 What will be future of such UMPPs & IPPs you ask for
Open
Pls., I Access
won’t ask
for Open
Access C
D
Harry Dhaul - Director General, IPPAI

10. Open Access : Possible way forward
 SERCs should implement concept of Deemed O.A approval for consumers
with specific timelines in case of abnormal delay in grant of necessary
permissions by SLDCs/DISCOMs
 UI may be implemented on intra-state basis across states to counter
absurd Temporary charges
 Forum of Regulators may intervene to rationalize CSS across India to
promote consumer OA
 CERC should extend support to SERCs for time bound implementation of
Open Access reforms in states
 SERCs–DISCOMs should work hand-in-hand to create “Consumer Choice”
and a win-win situation for all stakeholders
Harry Dhaul - Director General, IPPAI

11. The issue is “Choice” of Open Access as enshrined
in EA 2003 versus “Mandatory” Open access
Let the deliberations begin…
Harry Dhaul - Director General, IPPAI