OverviewofIndianPowersector–Institutional,legalandpolicyframeworkPrayas-EGISkill-shareworkshopforTajikistanandKyrgyzstanDelegatesNovember16-18,2010,Pune,IndiaPrayasEnergyGroup@prayaspune.orgPrayas-EGIworkshopPune20102ImplementedReg.Commn,Unbundling(moststates)NotImplementedFullCostRecoveryPartiallyImplementedDistbn-Privatisation(Orissa(99),Delhi(02),UrbanFranchisee-Bhivandi(07),Nagpur(08),MP,Agra-Kanpur(09),Gujarat,Rajasthan(inprogress)Slowincreaseinprivategen&distrbn,Technocratisationofdecisionmaking,Commercial/Efficiencyfocus,EvolvingElectricitymarket-Trading,PowerexchangeReformStatusPrayas-EGIworkshopPune20103PUBLICExecutiveMoPLegislaturePoliciesCERCSERCsRegulations&OrdersTariffCapacityAdditionConsumerServiceE.ActSchematicofinstitutionalandpolicystructurePrayas-EGIworkshopPune20104Institutionalframework-1CentralGovernmentStateGovernmentPrivatesector–IndianandInternational-MinistryofPower,MinistryofNew&RenewableEnergy-PlanningCommission,CentralElectricityAuthority,BureauofEnergyEfficiency-Corporations:Generation,Transmission,Trading,Financing,Manufacturing-NationalandRegionalLoadDispatch-AppellateTribunalforElectricityandCentralElectricityRegulatoryCommission-MinistryofEnergy,StateRenewableEnergyAgency-Corporations:Generation,Transmission,Distribution-StateLoadDispatchCentre-StateRegulatoryCommissionGeneration,Transmission,Distribution,Trading,Financing,Manufacturing,ServicesPrayas-EGIworkshopPune20105Institutionalframework-2MinistryofPowerLegalprovisions(ElectricityAct2003),PolicydirectionssuchasNationalElectricityandTariffPolicy,Guidelinesforcompetitivebidding,etcCentralElectricityAuthorityNationalElectricityplan,monitoringofprojects,maintainingdataandstatistics,demandforecast,feasibilityanalysisofHydroprojects,etcGenerationcompanySubjecttoprovisionsofact,cangeneratepowerbasedoncontractsorindependently.NeedstoabidebyLoadDispatchdirectionsforschedulingitsgenerationTransmissionCompanyBuildsandoperatesthetransmissionnetworkandinfrastructureDistributioncompanyDistributeselectricitytoconsumers,inchargeofmaintainingandbuildingdistributionnetwork,metering,billingandcollectionfromconsumersLoadDispatchStatutoryautonomousbodyentrustedwithschedulingandaccountingofpoweratstatelevel.ResponsibleformaintaininggridstabilityanddisciplineRegulatoryCommissionRegulatesallplayersinthesector,decidestariff,approvescapitalexpenditure,monitorssupplyandservicequalityandensureimplementationofvariousprovisionsofElectricityAct2003MarketOperatorElectricitytraderswhobuy&sellpower;ElectricityExchangesPrayas-EGIworkshopPune20106RegulatorPowerFlowMoneyFlowRegulationMarketInstitutionalFramework-3Generation:Public,PrivateTransmission:Public,PrivateDistribution:Public,Private,BulkconsumersPrayas-EGIworkshopPune20107Legal&PolicyFramework:ElectricityAct2003ACentralActOldnationalActsrepealedIndianelectricityAct1910Electricity(supply)Act1948ElectricityRegulatoryCommissionsAct1998StatereformActprovisionstobevalidprovidedtheyarenotinconsistentwiththeElectricityAct2003Hence,theentireIndianelectricitysectorwillbegovernedbytheElectricityAct2003Prayas-EGIworkshopPune20108ElectricityAct2003EmphasisonBreakingmonopolyofStateElectricityBoardsandpromotingcompetition/tradingCreatingeconomicimperativeforfundamentalchangesAttractingnewinvestmentReductionofcross-subsidyCompetitionforincreasingefficiency(mostlyingeneration)Definesinstitutionalandpolicyframeworkforthewholecountry8Prayas-EGIworkshopPune20109ElectricityAct2003-KeyprovisionsDe-licenseGenerationOpenAccessinTransmission,DistributionPromotetradingandmarketsDe-licenseruraldistributionEstablishesnormsfortransparencyandpublicparticipationRe-definedroleandmandateofStateGovernments,RegulatorsandLicenseesEstablishmentofConsumerGrievanceRedressalForumsPrayas-EGIworkshopPune201010NationalPolices&ProgramsNationalElectricityPolicy-February2005TariffPolicy-Jan06(Amendment–Mar2008)NationalRuralElectrificationPolicy-Aug2006NationalElectricityPlan-Aug2007NationalProgramsRuralElectrification:RGGVYApr2005UrbanDistribution:R-APDRPJuly2008Prayas-EGIworkshopPune201011NationalElectricityPolicy-1Emphasisestheelectricity–developmentlink:“Electricityisanessentialrequirementforallfacetsofourlife.Ithasbeenrecognizedasabasichumanneed.Itisacriticalinfrastructureonwhichthesocio-economicdevelopmentofthecountrydepends”Issuesaddressed:RuralElectrificationGeneration,Transmission,DistributionRecoveryofCostofservices&TargetedSubsidies.TechnologyDevelopmentandResearchandDevelopment(R&D)CompetitionaimedatConsumerBenefitsFinancingPowerSectorProgrammesIncludingPrivateSectorParticipation.EnergyConservation,EnvironmentalIssuesTrainingandHumanResourceDevelopmentCogenerationandNon-ConventionalEnergySourcesProtectionofConsumerinterestsandQualityStandardsPrayas-EGIworkshopPune201012NationalElectricityPolicy-2GenerationPower-Demandtobefullymetby2012Apartofnewgeneratingcapacity(say15%)maybesoldoutsidelongtermPowerPurchaseAgreements(PPAs)Transmission&DistributionDevelopmen