Ui Mechanism

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Date: 26th December 2005

Action Plan for Implementation of Intra-state Availability Based Tariff (ABT)

1. Introduction

For the purpose of transmission of electricity, India has been divided into five regions namely, Eastern, Western, Southern, Northern and North-Eastern Regions. These regions have been interconnected to form a “National Grid” with a view of bringing reliability and stability in power transmission across the nation along with efficient usage of available resources. Prior to introduction of inter-state ABT, there was a lot of indiscipline in the grid operation in these regions resulting in frequent blackouts and islanding. There was lack of balancing between generation and demand for power on real time basis. This was mainly due to excessive generation in the northern and northeastern regions resulting in higher frequencies in these regions and over loads in western and southern regions resulting in lower frequencies in these regions. In this context M/s ECC, USA, after a study in 1993-94 recommended to GoI to introduce Availability Based Tariff (ABT), in all the regions to bring about grid discipline. However after the constitution of CERC in 1998, the matter came under the purview of the CERC. In 1999, the CERC issued necessary orders and regulation for implementation of Inter-state ABT in India and ABT has been implemented region by region during 2002 and 2003. ABT was implemented in the Southern region with effect from 1st January 2003. The implementation of inter-state ABT has brought about substantial improvement in the grid operation resulting in Grid discipline and optimal utilization of the generation capacities.

The implementation of Inter-state ABT has brought about the following improvements in the operation of the regional grid as indicated in the FOIR sub-committee report: a) Grid frequency has dramatically improved from 48 – 52 Hz range to 49.0 – 50.5 Hz range for most of the time. b) A higher consumer demand is being met, due to built-in incentives to maximize generation in peak-load hours. c) Generation stations are being operated according to real merit order, on region-wide basis, through decentralised scheduling. d) Hydro-electric generation is being harnessed more optimally than done previously. e) State’s share in central generating stations have acquired new meaning and grid discipline is encouraged. f) Open access, wheeling of captive generation and power trading has been enabled by placing in position the mechanism (UI) for handling deviations/ mismatches. g) States meet their occasional excess demand by over drawing from the regional grid and paying applicable UI charges to the under-drawing states.

2. Intra-state ABT
Keeping in view the advantages of ABT, the National Electricity Policy issued under the provisions of the Electricity Act 2003 envisages introduction of intra-state ABT. The said policy, under clause 5.7.1(b) states as follows:

“The ABT regime introduced by CERC at the National level has had a positive impact. It has also enabled a credible settlement mechanism for intra-day power transfers from licensees with surpluses to licensees experiencing deficits. SERCs are advised to introduce ABT regime at the state level within one year”.

The Forum of Indian Regulators (FOIR) constituted a sub-committee to recommend measures for implementation of intra-state ABT and the said sub-committee included Sri Bhanu Bhushan, Member, CERC and Sri S.D.Uklkali, Member, KERC amongst others. The FOIR sub-committee has furnished its recommendations to the FOIR in Nov 2005, a copy of which is enclosed.

KERC is bringing out this Action Plan for implementation of intra-state ABT in the State.

3. Status of energy allocation to ESCOMs
Since KPTCL has been barred from...
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