“Telangana has turned power surplus”

Interview with Ismail Ali Khan, Chairman, TSERC

How does TSERC ensure integrated planning of the generation, transmission and distribution companies in the state?

In a regulated market where competition is minimal, the regulator’s role is to ensure that consumers receive reliable and safe supply of electricity at reasonable prices while balancing investors’ interest. To this end, it is essential to undertake integrated planning and development of all the three power segments. The unbundled utilities for generation, transmission and distribution are facing significant uncertainty in electricity demand, resource costs and environmental norms. Thus, TSERC encourages utilities to closely coordinate their plans and carry out the evaluation of their resource costs through integrated resource planning to ensure the optimal utilisation of resources.

What is the current state of renewable purchase obligation (RPO) compliance in the state?

The commission had set an RPO target of 5 per cent for 2016-17 and the discoms are reported to have complied with this target. Although this is lower than the RPO trajectory suggested by the Ministry of New and Renewable Energy, the utilities are likely to achieve the trajectory in the coming years.

What are the steps taken by the commission to bring down the AT&C losses of discoms?

The commission has specified a voltage-wise trajectory for the distribution segment for the control period 2014-19 and the loss levels reported by the utilities are within the specified roadmap. The transmission and distribution losses of the discoms stood at 14.91 per cent and 14.21 per cent for 2016-17 and 2017-18 respectively. The commission monitors the improvement in loss reduction on a regular basis by conducting energy audits for feeders as well as audits to monitor pilferage.

What is the status of open access implementation in the state? What are the hurdles being faced?

The state discoms are granting open access to applicants who are duly complying with the regulations and amendments notified by the Central Electricity Authority, the Central Electricity Regulatory Commission and Andhra Pradesh Electricity Regulatory Commission The hurdles in the implementation of open access include reluctance of discoms to comply with the regulatory process due to the fear of losing high-paying consumers and the high level of cross-subsidy charge. For open access to be successful there is a need to create suitable market conditions such as competitive pricing of open access power delivered to the consumer. Since the availability of electricity has improved and prices have fallen significantly in recent times, the volume of open access power trading may increase in the near future.

What are some of the immediate challenges for TSERC?

From the acute shortage of power faced at the time of bifurcation, Telangana has turned power surplus within two years of its inception due to the proactive policies of the state government. Given its ambitious capacity addition plans, through conventional as well as renewable sources, the state will soon be compelled to explore options to effectively manage its surplus power, failing which would impact discom finances and consumer tariffs. Another challenge is to deal with short-term power procurement by discoms in spite of being power surplus. Besides, ensuring that the discoms achieve targets under Ujwal Discom Assurance Yojna and the 24×7 Power for All programme is a key priority. Metering of agricultural consumers is also a concern of the commission.

What are some of the key regulations that the commission intends to introduce in the state in the near future?

TSERC is focusing on reframing the adopted regulations, aligning them with the needs of the state. As the share of renewable energy in Telangana is expected to increase in the coming years, the commission will focus on providing a suitable regulatory framework to meet the challenges of mandatory despatch of renewables. The commission has already initiated steps to frame regulations in this context including intra-state availability-based tariff regulations.

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