Electricity Regulatory Framework

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Questions and Answers

Who shall develop intra-state transmission projects that cost above a certain threshold?

State Government (correct)

Central Government

Private companies

Independent Power Producers

What group must consult with the Central Electricity Regulatory Commission to frame regulations for tariff determination from coal washery rejects?

Stakeholders

Central Electricity Authority (correct)

State Electricity Regulatory Commissions

Environmental NGOs

Which type of project allows the developer to get the tariff determined by an Appropriate Commission under specific conditions?

Nuclear energy projects

Thermal power projects

Hydroelectric projects (correct)

Solar energy projects

What is the maximum shareholding by a non-Government Company allowed in projects developed under Section 62?

26% Signup and view all the answers

What criteria is NOT mentioned for the prequalification of a hydroelectric project developer?

Environmental impact Signup and view all the answers

What condition must be met for the Appropriate Commission to determine tariffs for hydroelectric projects?

Site must be allotted after a two-stage transparent process Signup and view all the answers

Which body decides the threshold limit for intra-state transmission projects?

State Electricity Regulatory Commissions Signup and view all the answers

Which of the following is NOT a requirement for determining tariffs for hydroelectric projects?

Ability to manage local communities Signup and view all the answers

What factors should the national tariff framework implement according to the National Electricity Policy?

Distance, direction, and quantum of power flow Signup and view all the answers

How are transmission charges under the national tariff framework likely to be determined?

MW per circuit kilometer basis Signup and view all the answers

What should the spread between minimum and maximum transmission rates achieve according to the NEP?

Discourage non-optimal transmission investment Signup and view all the answers

What is not a precondition for network expansion under the National Electricity Policy?

Prior agreement with beneficiaries Signup and view all the answers

Who has specified norms for capital and operating costs in inter-State transmission?

Central Commission Signup and view all the answers

What is the objective of the utilization factor in the tariff framework?

To capture reliability advantages Signup and view all the answers

How will investments by transmission developers be invited according to the guidelines?

Through competitive bids Signup and view all the answers

What is emphasized for the smooth operation of the grid regarding transmission systems?

Development of transmission systems ahead of generation Signup and view all the answers

What should the actual level of retail sales be adjusted for?

Normative level of T&D losses Signup and view all the answers

What could generate the necessary political will to reduce theft in power distribution?

Linking different consumer tariffs to AT&C loss levels Signup and view all the answers

What role does third-party verification play in the context of AT&C losses?

It imposes local surcharges based on loss levels. Signup and view all the answers

Why is improving governance for AT&C loss reduction more complex for government-owned utilities?

They face different regulatory challenges compared to private entities. Signup and view all the answers

What is intended by separating technical loss reduction from commercial loss reduction?

To use different approaches for each type of loss. Signup and view all the answers

What could encourage suitable local incentive schemes for utility staff?

Linking incentives to loss reduction. Signup and view all the answers

What assessments will the SERC undertake for power distribution licensees?

Independent scrutiny of financial and technical data Signup and view all the answers

How does the MYT framework impact tariff adjustments?

It links tariffs to performance levels in reducing losses. Signup and view all the answers

What should the associated cost on the account be factored into?

Fixed cost of the thermal plant Signup and view all the answers

What is a requirement for captive power plants to supply surplus power?

They should be regulated like generating companies Signup and view all the answers

Who decides the wheeling charges and other implementation terms for captive generation?

State Commission Signup and view all the answers

What must be included in the tariff for captive power supply?

Variable cost of generation and capacity charges Signup and view all the answers

What should the Appropriate Commission fix in relation to renewable energy sources?

A minimum percentage of total consumption for renewable energy purchases Signup and view all the answers

What may distribution licensees purchase from captive plants?

Firm supplies complying with guidelines Signup and view all the answers

What does the sale of electricity from grid-connected captive plants to non-captive users depend on?

Negotiated tariffs based on transmission facilities Signup and view all the answers

Which rule's compliance is necessary for open access to power sold by captive plants?

Rule 3 of the Electricity Rules, 2005 Signup and view all the answers

What happens to the subsidy direction from the State Government if the payment of subsidy is not made to the utilities?

It remains inactive. Signup and view all the answers

What should the State Commission consider when determining the tariff for consumers?

The cost of electricity without considering subsidies. Signup and view all the answers

How should bad debts be recognized according to the guidelines?

As per policies developed and approved by the State Commission. Signup and view all the answers

In what situation can contingency reserves be utilized?

Only with prior approval of the State Commission. Signup and view all the answers

What does Section 61 of the Act mandate regarding tariff determination?

It balances consumer interests and recovery of costs. Signup and view all the answers

What should happen to the existing practice of developing reserves?

It should be discontinued. Signup and view all the answers

How should past losses or profits be treated during the transition period?

Only those caused by uncontrollable factors should be passed through. Signup and view all the answers

According to the guidelines, what should the State Commission recognize regarding working capital?

It should recognize transition issues for utilities. Signup and view all the answers

Study Notes

Intra-State Transmission Projects

State Governments will develop projects through a competitive bidding process for costs exceeding a set threshold determined by State Electricity Regulatory Commissions (SERCs).

Tariff Regulations for Coal Washery Rejects

Central Electricity Regulatory Commission (CERC) will create tariff regulations for coal washery reject projects within six months.
These regulations will also apply to State Electricity Regulatory Commissions.
Procurement allowed under Section 62 of the Act for projects by Central/State PSUs or Joint Ventures with a maximum of 26% non-government company shareholding.

Hydroelectric Project Tariff Options

Developers can have tariffs set by the Appropriate Commission based on performance-based cost service regulations, contingent on a transparent two-stage project allotment process by State Governments.
Allotment criteria include financial strength, past infrastructure experience, and ability to meet performance guarantees.

Captive Generation

Captive generation facilitates competitive power availability.
Appropriate Commission should foster conditions for captive power plants to connect to the grid, allowing surplus power supply under existing regulations.
Distribution licensees may buy firm supplies from captive plants, differentiating prices for peak/off-peak usage and including generation variable costs.

Renewable Energy Source Requirements

Appropriate Commission must set a minimum percentage of electricity consumption from renewable sources based on resource availability and retail tariff impact.
National Electricity Policy advocates a national tariff framework sensitive to factors like distance and power flow.

Transmission Charges Framework

Transmission charges may be set based on MW per circuit kilometer, zonal postage stamp basis, or another variant, ensuring fair sharing of costs.
No prior agreement required for network expansion; planning and execution to align with the National Electricity Plan.

Capital and Operational Norms

CERC has established norms for capital costs, operating costs, and Standards of Performance for inter-State transmission.
Investment in transmission will utilize competitive bidding based on Central Government guidelines.

AT&C Loss Reduction Incentives

Incentives for reducing Aggregate Technical and Commercial (AT&C) losses linked to profitability under Multi-Year Tariff (MYT) frameworks.
Government-owned utilities face unique challenges in achieving loss reduction and require consumer group support for transparency.

Subsidy Compliance

Section 65 mandates State Government subsidy directives for tariff determinations only apply if subsidy payments to utilities are made.
Initial tariff setting by the State Commission must consider consumer needs without initial subsidies.

Working Capital and Past Losses

Recognition of utilities' transitional challenges is necessary, including working capital, bad debts, and the impact of uncontrollable factors on losses.
Contingency reserves require prior approval from the State Commission for activation.

Consumer Interest Safeguarding

The Appropriate Commission’s tariff determination must balance consumer interests and ensure reasonable cost recovery for electricity.

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Description

This quiz covers essential regulations and frameworks related to intra-state transmission projects, tariff regulations for coal washery rejects, and hydroelectric project tariff options. Understanding these concepts is crucial for those involved in the energy sector, particularly in relation to state and central regulatory commissions.