KARNATAKA POWER TRANSMISSION CORPORATION LIMITED

Bangalore
( Draft )
Procedure for reservation of transmission capacity to short-term
Open Access Customers

(Revision No. : 2 Dated: 19.04.05)

1.0 OUTLINE

1.1 This procedure is being issued in compliance to the provisions of the

“Karnataka Electricity Regulatory Commission (Open Access in Intra-
State Transmission) Regulations, 2004” dated 12.11.2004 which was
notified in Karnataka Gazette on 16.02.2004 page numbers 2200-2206.

1.2 These procedures have been framed with the objective of enabling use of
the surplus capacity available in the regional Transmission systems, State
Transmission System and intra-regional links from time to time by short-
term Open Access Customers while ensuring security and stability of the
integrated operations of the power system in the Region(s) / State.

1.3 In terms of the provisions under Para 4 of the KERC’s Regulations on

Open Access, all short term Open Access transactions undertaken on or
after 10.6.2005 shall comply with these procedures.

1.4 These procedures have been prepared pragmatically considering the

avenues available and the intricacies involved. However, some teething
problems may still be experienced. The various implications would be
known only after practical experience is gained by way of implementing
these procedures. In order to resolve the same these procedures would be
reviewed, if necessary, after a period of three months. Till such time the
procedures are reviewed, the approvals to short-term Open Access
Customers (issued by the nodal SLDCs), shall be for a period not
exceeding six months from the date from which these procedures shall
come into force.
 1.5 The applications received from eligible open access consumer as per para
4 of the regulation on Open Access shall be processed by the nodal
SLDCs as per processing time provided in para 9 (6) of the regulation
2004 on Open access.

1.6 In terms of the provisions under para 7 (4) of the Regulation on Open
Access, 2004 the bidding procedure given herein is not intended to be an
“Auction Process”.

1.7 In terms of the provisions of para 10 (3) the Regulations on Open Access,
2004, the SLDCs reserve the right to review / revise / modify/amend the
provisions of these procedures prospectively as and when considered
necessary.

2.0 APPLICATION AND ITS ENCLOSURES

2.1 A separate application shall be submitted for each transaction to the nodal
SLDC as per the enclosed format. The application shall be submitted in a
cover marked ‘Application for Short-term Open Access’.

2.2 A copy of the application shall be endorsed by the applicant to the

following:
i) SLDC
ii) Each ESCOMs involved in the transaction.
iii) Director (Technical), KPTCL, Kaveribhavan, Bangalore.
iv) Managing Director, ESCOMs concerned.
v) Chief Engineer (Electy), Transmission Zone, KPTCL.
vi) Chief Engineer (Electy), SLDC, KPTCL
vii) Each Transmission Service Provider/transmission/Distribution
licensee involved in the proposed transaction.

2.3 Applications are received upto 10.00 Hrs of 19th day of the month for short
term open access is commencing from the subsequent month. All the
 application received upto 10.00 Hrs of the 19th day of the month shall be
considered together on 20th day of the month for advance reservation.

2.4 An incomplete / vague application and an application not found to be in

conformity with these procedures/Regulations shall be rejected.

2.5 The following shall be enclosed along with the application:

i) Copies of the agreements/MOUs entered by the buyer / seller /

trader.
ii) Advance payment (for the intended transaction) remitted through
a bank draft or electronic transfer covering the following:

a) Applicable Transmission charges / Wheeling Charges /

Surcharges / Additional Surcharges / Backup Charges / Grid
Support Charges / Two months charges as the security deposits
(One time)/ transaction charges payable to the respective
Distribution Licensee / Transmissions Licensee by SLDC.
b) Applicable Short Term Open Access Charges of STU system
payable to KPTCL/ESCOMs.
c) Scheduling and system operation charges payable to the SLDCs
d) Two months charges as the security deposits (One time) to be
retained at SLDC.
e) Non-refundable fee payable to the Nodal SLDC.

The rates for the above shall be in accordance with the Regulations
on Open Access, 2004 dated 22.02.05 (Amended) by CERC /
KERC Regulation 2004 dated 12.11.04.

3.0 PROCESSING/APPROVAL OF APPLICATIONS

3.1 The processing time provided under para 9 (6) of the KERC Regulations
on Open Access dated 12.11.04, as amended from time to time, shall be
reckoned as a working day (excluding holidays) for each day provided
therein. Each day shall be reckoned as a working day (excluding
holidays) of 24 hours.
 3.2 While processing the applications, the Nodal SLDC shall seek the consent
of each of the ESCOMs/STU involved in the transaction. A non-receipt of
a timely consent from the ESCOMs/STU shall be deemed to have
accepted by the concerned ESCOMs/STU.

3.3 The Nodal SLDC shall issue transaction-wise approvals (as per enclosed
format) from:
a) The point of injection of a seller to the injecting ESCOMs /
KPTCL Periphery (control area boundary) as confirmed by the concerned SLDC, and
b) From the periphery (control area boundary) of injecting KPTCL up
to the periphery (control area boundary) of the drawee of KPTCL as confirmed by the
concerned SLDCs.
c) From the periphery (control area boundary) of the drawee
KPTCL / ESCOMs to the point of drawal of buyer as confirmed by the concerned
SLDC/ESCOMs.
3.4 Upon receipt of the Nodal SLDC’s approval, the Applicant shall confirm
his acceptance/refusal immediately to the Nodal SLDC in case of short
term open-access period upto one week. In case the approved period
exceeds one week, the acceptance/refusal shall be confirmed within two
days. Only after receipt of the acceptance and requisition from the
concerned ESCOMs/STU, the “Day-ahead scheduling” shall be started.
A non-receipt or a delayed receipt of the acceptance shall be considered as
a refusal by the Applicant. The acceptance shall be furnished to the nodal
SLDC as per the enclosed format.
4.0 SCHEDULING

4.1 The customer’s coordinator, shall coordinate with each of the other
Utilities involved, and furnish the transaction details to each of the
ESCOMs and STU involved, on a daily basis, so as to enable the SLDCs
to incorporate the transaction in the day-ahead schedules and revisions
thereof for the 96 block periods. In case mismatches are found in the
transaction details it will not be possible for SLDC to schedule the same
and the customer shall be intimated accordingly.
4.2 SLDCs shall advise the RLDCs, by 15:00 hours each day regarding their
proposed Open Access transactions, transaction-wise for the next day.
 Modification / changes, if any, shall be conveyed latest by 20:00 hrs of the
same day.
4.3 The ramp-up/ramp-down, if required, in the daily schedules on account of
such transactions, shall commence at the time of commencement of the
transaction and shall end at the time of termination of the transaction.
4.4 The ‘Daily Schedules’ finalized / issued by the SLDCs shall incorporate
the intra-State Open Access transactions in the drawal schedules of the
ESCOMs and/or the injection schedules of the concerned generators for
the 96 block periods. The concerned SLDCs shall incorporate such intra-
State transactions to / from the point of injection / drawal in their
respective Daily schedules issued by the SLDC.
4.5 During the course of the day of operation, requests for revisions of the
schedules of the short-term Open Access transactions shall not be
entertained, by the SLDCs .
5.0 Non-Utilisation of open access service by Open Access Customer

5.1 In accordance with provisions contained in para 10 (1), in the event of inability of the
short-term open access customer to utilize for more than four hours, full or
substantial part of the capacity allocated to him, such a short-term open access
customer shall inform the respective SLDC of his inability to utilise the capacity,
along with reasons therefore and may surrender the use of capacity allocated to
him. However, such short-term customer shall bear full transmission and /or
wheeling charges based on the original reserved capacity and the period for which
such capacity was reserved. The Nodal SLDC shall issue the revised approval to
the customers to this effect. The surrender of reserved transmission capacity shall
be effective from the next day of the request received.
5.2 In accordance with the provisions contained in para 10 (2), a long-term customer shall
not relinquish or transfer his rights and obligations specified in the open access
agreement without prior approval of the nodal agency. The relinquishment or
transfer of such rights and obligations by a long-term customer shall be subject to
payment of compensation, as per the terms of the open access agreement.
5.3 In accordance with the provisions contained in para 10 (3), the SLDC may cancel or
reduce the capacity allocated to a short-term open access customer to the extent it
is underutilized, when such a short-term open access customer under-utilizes the
allocated capacity for more than 2 times in a month with duration of
underutilization exceeding 2 hours each time or fails to inform the distribution
licensee of his inability to utilise the allocated capacity. Such cancellation shall be
resorted to after giving due notice to the affected parties.
5.4 In accordance with the provisions contained in para 10 (4), the surplus capacity
available as a result of its surrender by the short-term open access customer under
clause (5.1) above or reduction or cancellation of capacity by the SLDC under
 clause (5.3) above, may be allocated to any other short-term open access customer
in the order of pending applications based on the point of injection and drawal.

6.0 Advance payments by short term Open Access Applicants

6.1 The Applicant shall make the following advance payment to the Nodal SLDC
along with the application:
A. Open Access desired for the period upto thirty one (31) days.
a) Open Access charges
Full amount for the entire applied period, in respect of the
following:
i) Transmission charges
ii) Additional Transmission Charges.
iii) Wheeling Charges,
iv) Surcharges
v) Additional Surcharges
vi) Backup charges.
vii) Grid Support Charges.
viii) Security Deposit (2 Months Charges)
ix) Transaction Charges.

b) Scheduling & Operating charges.

Full amount for the entire applied period in respect of the
following:
i) Operating Charges @Rs.1000/- per day or as may be revised by
the regulator.

c) Non refundable Application fee : Rs. 1,000/- or as may be

revised by the regulator
 B. Open Access desired for the period exceeding thirty one (31) days.
a) Open Access charges
Full amount for the entire applied period, in respect of the
following:
i) Transmission charges
ii) Additional Transmission Charges.
iii) Wheeling Charges,
iv) Surcharges
v) Additional Surcharges
vi) Backup charges.
vii) Grid Support Charges.
viii) Security Deposit (2 Months Charges)
ix) Transaction Charges.

b) Scheduling & Operating charges.

Full amount for the entire applied period in respect of the
following:
i) Operating Charges @Rs.1000/- per day. or as may be revised by
the regulator.

c) Non refundable Application fee : Rs. 1,000/- or as may be

revised by the regulator.

6.2 Fortnightly payments:

In case of transaction for a period, exceeding 31 days, the customer shall
make fortnightly payment to the Nodal SLDC as per the para 6.1 (b) as
indicated in the “schedule of fortnightly payments” enclosed with the
approval (issued by the Nodal SLDC). No separate bills shall be issued by
the Nodal SLDC for the fortnightly payments. The advance payments
 shall be adjustable in the last fortnight and applicable refunds, if any, shall
be made on the expiry of the approved period of transaction.
6.3 None of the charges payable by Short-term Open Access customers and/or
any other Utilities involved in the transaction shall be adjusted by them
against any other payments/charges.
6.4 In case of a force majeure condition (as determined and notified by the
ESCOMs/ SLDC in Annexure - A), ESCOMs/ SLDCs may
curtail/suspend a scheduled transaction. The decision of the ESCOMs/
SLDC s as to the existence of a force majeure condition shall be final and
binding.
6.5 The energy losses shall be applied as provided under para 16 of KERC’s
regulations ‘Open Access’ dated 12.11.2004 as amended from time to
time.

7.0 Commercial Conditions for the Short-term open access customers

In terms of the provisions under para 18 of the Regulations on Open Access, 2004
the following is hereby specified.

7.1 Terms of payment

7.1.1 All payments associated with short term Open Access shall be made by
the Applicant/customer to the Nodal SLDC.

7.1.2 Payments shall be made transaction-wise.

7.1.3 Fortnightly payments shall be made as per the ‘schedule of fortnightly

payments’ enclosed to the approval issued by the Nodal SLDC.

7.1.4 All payments shall be remitted Transfer Teller / Demand draft / Electronic
Transfer drawn in favour of “_________SLDC short term Open Access
Account” payable at par at the location of the Nodal SLDC.

7.1.5 The alternative of remittance of payments through a irrevocable revolving

letter of credit instead of bank draft shall be considered, during the future
reviews of these Procedures, after gaining practical experience.
 7.1.6 In case an approval is issued consequent to bidding, the difference of the
advance payments thus payable and the advance payment remitted along
with the application shall be deposited with the Nodal SLDC within two
(2) days of the issue of the acceptance by the applicant / customer.
Refunds if any, on account of above, shall be adjusted in the subsequent
fortnightly payments.

7.1.7 In case of a payment default the Nodal SLDC shall suspend the transaction
forthwith and the transaction shall be scheduled only after the outstanding
payments have been made in full. In case of persistent payment defaults,
new applications from such a customer may not be entertained by the
SLDCs for a period upto twelve months.

7.1.8 In case an applicant relinquishes / abandons an approval issued as a result

of bidding, the entire advance payment shall be forfeited.

7.1.9 In case an approval is issued, without a modification of the applied

transaction by the SLDC, and the same is then relinquished /abandoned by
the applicant / customer, the entire advance payment shall be forfeited.

7.1.10 In case the Nodal SLDC issues an approval with curtailments to the
applied transaction, and the same is then relinquished by the applicant /
customer, the Nodal SLDC shall retain only the non-refundable
application fee and refund the balance advance payment.

7.2 Payment Security Mechanism

In terms of the provisions under para 18 of the Regulations on Open

Access, 2004, the “payment security mechanism” specified hereunder is
intended to ensure recovery of the applicable payments in case of a
payment default and not a mechanism for regular payments. The Letter of
Credit provides security against payment defaults in respect of the
“fortnightly payment” to be normally made through bank draft / electronic
transfer. The Bank Guarantee provides security against the payments for
the balance period of an approved transaction in case a customer
relinquishes / abandons the same and defaults in making the applicable
payments in terms of para 18 of the Regulations on Open Access, 2004.
7.3 Letter of Credit.

i) On acceptance of an approval {transaction period more than thirtyone

(31) days}, the customer shall open a fortnightly irrevocable revolving
Letter of Credit (LC) in favour of the SLDC at Bangalore.

ii) The LC shall be opened in a Bank mutually agreed between the customer
and the Nodal SLDC.

iii) The LC shall be opened within ten (10) days of the date of acceptance by
the customer.

iv) The LC shall be valid for the entire duration of the transaction.

v) The LC shall be negotiated by the Nodal SLDC on the basis of the

schedule of the fortnightly payment enclosed with the approval as and
when the customer fails to remit the fortnightly payment, by demand draft,
in full by its due date.

7.3 Bank Guarantee

i) The customer shall also provide a irrevocable Bank Guarantee in favour of

the Nodal SLDC.

ii) The Bank Guarantee shall be as per the prescribed form and shall be for an
amount equal to the amount payable by the customer for the balance
period of the approved transaction.

iii) The Bank Guarantee shall be provided from any Bank as may be mutually
agreed between the Nodal SLDC and the Customer.

iv) The Bank Guarantee shall be submitted in original to the Nodal SLDC
within five (5) days of the date of acceptance by the customer.

v) The Bank Guarantee shall be encashed by the Nodal SLDC :

a) After five (5) days from the previous date of operation of the
LC, if the same is not recouped, and / or
 b) The customer fails to pay the full applicable charges in terms of the
provisions under para 11 of the Regulations on Open Access,
2004.

8.0 BIDDING PROCEDURE

8.1 In terms of the provisions of para 7 (4) of the Regulations on Open Access
whenever the capacity sought to be reserved by the Applicants, for a
particular day, is more than the surplus transfer capacity expected to be
available, the nodal SLDC shall invite snap bids from such Applicants
through FAX / E-Mail.

8.2 Bids shall be invited for only such period (in the multiple of whole day)
during which a congestion is expected to occur.

8.3 The decision of the concerned SLDC, involved in the transaction,

in respect of an expected congestion shall be final and binding.

8.4 The Applicants shall submit their ‘bid’ on-line on the web-site of the
Nodal SLDC.

8.5 Only the Applicants shall be entitled to submit a bid.

8.6 The bids shall be accepted upto the “bid closing time” indicated in the
bidding invitation.

8.7 Modification / amendment to a bid, once submitted, including submission

of a second or subsequent bid by an Applicant shall not be accepted.

8.8 Each of the Open Access Customers intending to participate in bidding

shall be issued a ‘pass-word’ by SLDC to enable them to submit a on-line
bid. It shall be the responsibility of such Open Access Customers to
maintain its confidentiality/security and to prevent its misuse.

8.9 Any Open Access Customers intending to participate in bidding for short-
term Open Access may obtain the ‘pass-word’ in advance from the SLDC.

8.10 Bids sent through fax/post shall not be accepted.

 8.11 The bid price shall be quoted in terms of percentage of points above the
floor price.

8.12 In case any of the Applicants choose not to be submit a bid, his bid
price
shall be deemed to be equal to the floor price.

8.13 No requests for extension of the time/date for submission of the bids
shall
be entertained by the nodal SLDC.

8.14 The SLDCs reserve the right to reject an in-complete/vague bid and/or
not found to be in conformity with these procedures/regulations on Open
Access, 2004.

9.0 GENERAL

9.1 An application sent through E-Mail shall be processed by the SLDCs after
receipt of the advance payments as per para 6.0 above.
9.2 Re-routing of an approved transaction through an alternate transmission
system/network by the customer would be considered on its merits on
receipt of a request if possible.
9.3 Amendment/modification to an existing agreement shall be treated as a fresh
application.
9.4 All costs/expenses/charges associated with Bank Draft/Letter of Credit/Bank
Guarantee shall be borne by the applicant/customer.
9.5 The applicant/customer shall indemnify at all times and shall undertake to
indemnify, defend and save the each of the Distribution System /
Transmission System & SLDCs from any and all damages, losses, claims
and actions including those relating to injury to or death of any person or
damage to property, demands, suits, recoveries, costs and expenses, court
costs, attorney fees, and all other obligations by or to third parties, arising
out of or resulting from the transactions.
Enclosures :

1. Application for grant of short term open access

2. Consent for short term open access
3. Approval for short term open access
4. Acceptance of short term open access
5. Refusal of short term open access.
6. Format for invitation of bids.