CERC restructuring of UI regime: The right foot forward…

We very often do hear about grid indiscipline, over drawl and under drawl, grid collapse in power sector. Power can not be stored and can not be blocked as it flows across the grid. This is the reason distribution utilities do resort to overdrawl of power when in need but the pressure it exerts to the grid system is enormous and sometimes there is a danger of grid collapse. Electrical equipments malfunction at times due to non synchronization of frequency and sometimes failed in operation.

In my perceptions, the distribution utilities drawing more than their scheduled plan are direct theft under the sun. They keep on complaining theft of power by the consumers and non payment by them. There are stringent laws for power theft but why we do not have similar kind of penalties and laws for the utilities which indulge in overdrawl and under drawl.

The UI (Unscheduled Interchange) mechanism is a fantastic concept to induce some kind of discipline to the system but the big question is that whether the way it functions is right or not. There is opposition from the utilities when UI rates are too high. Definitely, it should be high or else it will not serve any purpose. When the UI rate is similar to the power purchase cost, it is quite evident that the utilities will overdraw and will be ready to pay the penalty. Similarly a small variation at the upper side will not make any significant change.

There is one problem in trading of power in the exchanges. The demand supply mismatch at times take the trading of power at a very high rate, a considerable high price than the UI rates so utilities find it easier to overdraw power from the grid. Similarly, very so often, the utilities are not paying the UI charges at regular intervals as they themselves are bankrupt.

We Indians are very smart and can never be self disciplined so laws and rules are made to make us discipline But then we find enormous ways how to nullify all rules in favour of us.

CERC in its effort to induce a strict discipline has notified new regulations on UI for electricity grid operations and also amended the IEGC (Indian Electricity Grid Code).It is operational from April 1, 2009.It rationalizes the UI rates for the entities who abide by the specified grid operation parameters. It also narrowed down the operational frequency range to improve the quality of supply.

The permissible operating range for the grid has been narrowed down by 0.4 Hz. Now the operating range is in between 49.2Hz to 50.3Hz (Earlier it was 49 – 50.5 Hz).The rates are also structured. Differential rates are proposed for drawl of power at normal permissible limits and for excessive overdrawl. So now there is a clear identification of normal operator and habitual defaulter.

The clear signal is that UI mechanism is not for trading of power; rather it is a method to make grid secure and supply quality power to one and all. But utilities tend to take it otherwise and use it for their own benefit.

The other features of the new regulation are:

• Overdrawl below 49.2Hz will pay additional UI charge at a higher rate
• Overdrawl beyond the permissible range would make the entities and the officer in charge such as CEO or MD liable for penal action under sections 142 and 149 of the electricity act,2003.
• The UI rates for generation made symmetrical for over generation and under generation. This step is a welcome move as it will not provide any scope for gaming by the generation companies.
• Review of UI charge every 6 months subjected to fuel price and grid discipline
• Surplus amount in UI pool to be used for strengthening the grid in strategic important area.

In my view, these regulations if implemented in proper manner will go a long way in inducing the much desired grid discipline. Further, the band width should be narrowed down so as to make the grid function in an optimal way and there should not be any scope of overdrawing beyond what is planned. They may resort to load shedding if they wish. Any deviation should be dealt with stringent punishment. Its high time to think beyond the limits so as to make Indian power sector an example for the rest of the world.

Please pour in your thoughts on this issue..