CERC for new rules to curb grid indiscipline

To curb utilities’ tendency to overdraw power by using the unscheduled interchange charge (UI) mechanism, the Central Electricity Regulatory Commission (CERC) has proposed stricter rules. Suggestions and objections have been invited by September 10.

It wants a reduction in the UI frequency band to 50.20-49.7 Hz. A deviation below 49.7 Hz would attract additional Ul charges, the previous limit for which was 49.5 Hz. Rates have been proposed for specified frequency bands.

UI rates are chargeable to a generator or a consumer when they inject less or more power than their declared schedules, computed on a day-ahead basis to ensure proper planning for power in the grid. The present charge is Rs 7.35 per unit for such drawal/injection if the grid frequency is 49.5 Hz. The Commission had tried to narrow the permissible frequency range for deviation and modified the UI charges.

CERC chairman Pramod Deo told Business Standard: “Despite repeated rulings that UI should not be used as a route for trading of electricity, the utilities had over a period postponed setting up of power projects and relied on overdrawal from the grid for meeting their consumer demands. Utilities should plan for procurement of power on a long-term, medium-term and short-term basis, instead of resorting to overdrawal through UI.”

He said CERC had taken a strict view of continued grid indiscipline by some state utilities and penalties had been imposed in some cases. “The need is for all stakeholders to desist from overdrawal in the larger interests of grid security and discipline,” he added.

R V Shahi, former Union power secretary, said: “Penal rates for UI is not the solution to grid indiscipline. A long-term solution is partial or full disentitlement of unallocated power to such states as habitually overdraw.”

Jayant Deo, managing director of Indian Energy Exchange, said: “With the proposed regulations, it will be more economical to plan and buy in advance rather than resorting to UI. The proposal takes care of changes in the cost structure of generation and are in line with the power market development endeavour spelt in Section 66 of the Electricity Act. This will also support use of intra-day and contingency contracts available on power exchanges.”