National Training Programme For C&D Employees

(Variant 3-Financial Management ,Store Accounting and Office Admininstration)

INTRODUCTION TO DISTRIBUTION
DISTRIBUTION SYSTEM Distribution is a network of lines, receiving Power at 66 kV or 33 kV and derating to 11 kV, and 440 volts and supplying Power to customers Distribution can be broadly divided into two: 1.Primary Distribution: Primary Distribution is the network at 11 KV emanating from 33/11 Kv SS or 66/11 KV SS 2.Secondary Distribution: It is the network operating at utilization voltage i.e. 440v/220 volts at consumer premises.

INTRODUCTION TO DISTRIBUTION
CUSTOMER: One who receives Power supplied by Licensee (Power Co) at appropriate tariff. At what voltages customer gets Power in a Distribution: 33KV 22KV 11 KV 440/215 volts
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General Terms Used in Distribution

1. CURRENT: Current is measured in Amps. The Ampere is the basic unit of electric current. It is that current which produces a specified forces between two parallel wires.
2 VOLTAGE: It is measure of electric potential. A potential of one volt appears across a resistance of one ohm when current one Amp flow through that resistance. 3. RESISTANCE: Voltage Current The unit of resistance is ohm () 4. KILOVOLT AMPERE: (KVA): It is the product of Kilovolts and Amps. This measures the electrical Load on a Circuit or a System. For Single Phase Circuit KVA: Voltage x Amps/1000 For Three Phase Circuit KVA: 13 x Voltage x Amps/1000
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General Terms Used in Distribution

KILOWATT (KW) ACTIVE POWER`:

It is the active power producing work For Single Phase: Power (KW): Volts x Amps x Power Factor 1000 For 3 Phase: Power (Kw): 3 x Volts x Amps x Power Factor 1000 POWER FACTOR: it is the ratio between KW and KVA : = kW 5 kVA

General Terms Used In Distribution

KILOWATT HOUR: (Kwh): It is the energy consumed by 1000 watts in one hour. If 1 kw of electrical equipment is operated for one hour, it would consume 1 kwh of energy (one unit) MAXlMUM DEMAND: It is highest average KVA recorded with in a month. The demand is measured using trivector meter( Digital Meter).

General Terms Used In Distribution

POWER TRANSFORMER: 33/11 or 66/11kV It receives Power at 33 KV and derate to 11 KV Normal Capacities of 33/11KV Power Transformers: 10 MVA, 8 MVA, 5 MVA, 3.15 MVA, 1.6 MVA DISTRIBUTION TRANSFORMER: It receives Power at 11 KV and derates to 433 Volts Normal Capacities of 11kV/433v Power Transformers: 315, 250, 100,63,25,16 kVA
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ELECTRICITY DISTRIBUTION COMPANY What is Electricity Distribution Company It is a company having license to distribute Electric power to various categories of customers in the area at tariff fixed by Electricity Regulatory Commission and responsible for energy purchased, and sold. Who will be the Head of Distribution Company Distribution Company will be headed by Chairman - Managing Director with 3-4 Directors.
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ELECTRICITY DISTRIBUTION COMPANY

What is the role of Distribution Company Distribution Company purchases power from Generation Companies (Government &Private Developers) and sell to Customers, maintain quality and reliable supply to Customers. Transmission company(Transco) facilitates transmission of power through its wires. SLD/RLD/NLD centres manage the operation & Control of power system 9

ELECTRICITY DISTRIBUTION COMPANY

Administration of Distribution Company Distribution Company is divided in to Zones headed by Chief Engineer Zone Each Zone is divided into Circles, headed by Superintending Engineers Each Circle is divided in to Divisions, headed by Divisional Engineer/Executive Engineers
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ELECTRICITY DISTRIBUTION COMPANY

Each Division is divided into Sub-Divisions, headed by Asst. Divisional Engineer/SubDivisional Engineer Each sub-division is divided into sections headed by Assistant Engineer/junior Engineer. Each section comprising of average 6000-7000 connections.
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Functions of Electricity distribution company

Purchase of Power from Transco/ National Grid Distribution of Power to Customers Accounting of Energy (input Units) purchased Accounting of Energy (Sales) sold to customers Maintaining company assets i.e. No. of 33/11 KV Sub-Stations, 33 KV network length, Power Transformer Capacity, 11 KV network, Distribution Transformers, LT network, Customer metering. Planning for Expansion of substation Capacity New sub-stations, lines, additional transformers etc. Customer Service with emphasis on Customer relationship management

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Functions Of Distribution Company Periodical review of Distribution System covering: -Line Losses - Overloaded Distribution Transformers -Overloaded HT Lines -Over loaded Substations - Revenue Collections -System Defects -Low Voltage Pockets -Purchase of Line material, and Equipment -Erection of new Sub-Stations, Lines -Providing Quality Metering to Customer -Maintaining Quality and reliable Power supply to Customer
-Providing training to employees for upgrading their skills

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Electricity Act 2003 Distribution Reforms

14

Background
Three erstwhile Acts that regulated the electricity

sector:

The Indian Electricity Act, 1910

The Electricity (Supply) Act, 1948 The Electricity Regulatory Commissions Act, 1998

15

Contd..

Background

(contd..)

The Indian Electricity Act, 1910

Provided basic framework for electric supply industry in India. Growth of the sector through private licensees. Licence by State Govt. Provision for licence for supply of electricity in a specified area. Legal framework for laying down of wires and other works. Provisions laying down relationship between licensee and consumer.

The Electricity (Supply) Act, 1948

Mandated creation of SEBs. Need for the State to step in (through SEBs) to extend electrification (so far limited to cities) all across the country.
16

Contd..

Background

(contd..)

Main amendments to the existing Acts

Amendment in 1975 to enable generation in Central sector

Amendment to bring in commercial viability in the

functioning of SEBs
Section 59 amended to make the earning of a minimum return of 3% on fixed assets a statutory requirement (w.e.f 1.4.1985)

Amendment in 1991 to open generation to private sector and establishment of RLDCs

Amendment in 1998 to provide for private sector

participation in transmission, and also provision relating to Transmission Utilities.
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Contd..

Background

(contd..)

The Electricity Regulatory Commissions Act, 1998

Provision for setting up of Central / State Electricity
Regulatory Commission to with powers to determine tariffs. Constitution of SERC optional for States. . Distancing of Govt from tariff determination.

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Electricity Act 2003

Electricity Act 2003 along with National Electricity Policy are said to be culmination of Power Sector Reforms in India which started in 1991 by opening up of Indian Power Sector thereby promoting entry of private players into power generation (IPPs)through MOU route Power Sector Reforms aimed at ensuring the sector to become more efficient ,lowering the cost and delivering better results

Common features of State Acts

Independent Regulatory Mechanism
Constitution of SERC Powers of tariff fixation, licensing, regulation or working of licensees, performance standards etc. to SERC

Reorganisation of SEB
TRANSCO as successor entity Single buyer model Separation of generation, transmission & distribution
20

Contd..

Electricity Act 2003

Year Milestones
1991 IPP Process 1995 Competitive Bidding Mandatory for Generation Projects and Orissa Reform Act 1996 Orissa Electricity Regulatory Commission formed and Common Minimum Action Plan for Power Sector 1998 Central Electricity Regulatory Commission Act and Private Sector Participation in Power Transmission 1999 State Regulatory Commissions formed in many States Privatisation of Distribution in Orissa 2001 Accelerated Power Development and Reform Programme (APDRP) 2002 Privatisation of Distribution Business in Delhi 2003 Electricity Act 2003 2004 Open Access in Inter-State Transmission Regulation 2005 National Electricity Policy 2006 Rural Electrification Policy

and

Common features contd..

Powers of State Governments to give policy directions to SERCs.

Policy directions also on subsidy

State Governments to compensate licensee affected by direction regarding subsidy

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Electricity Act 2003 Objective:

Competition, Protection of consumers interest &Power for all areas

Creates liberal framework for power development Creates competitive environment. Facilitates private investment Delicences generation Multiple Licensing in Distribution Rural Areas: Stand alone generation and distribution delicenced

Need for the new legislation

Requirement of harmonizing and rationalizing the provisions in the existing laws to

Create competitive environment for benchmark competition which will result in enhancing quality and reliability of service to consumer.
distancing regulatory responsibilities of Govt.

Reform legislation by several States separately.

Obviating need for individual States to enact their own reform laws. Requirement of introducing newer concepts like power trading, open access, Appellate Tribunal etc. Special provision for the Rural areas.
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Electricity Act 2003

Stringent provision for controlling theft of energy Obligates states to restructure SEBs Mandates creation of Regulatory Commissions Tariff to be determined by Regulatory Commissions Open access in Transmission from outset Open access in Distribution to be allowed by SERCs in phases Gradual phasing out of cross subsidies Trading a distinct licensed activity to promote development of Electricity market Appellate Tribunal of Electricity to hear appeals against orders of CERC/SERCs

Electricity Act 2003

Rural Electrification: Relevant provisions of Electricity Act 2003 Section 4. The Central Govt. shall, after consultation with the State Govts. prepare and notify a national policy, permitting standalone systems( including those based on renewable source of energy and nonconventional sources of energy for rural areas Section 2(63). stand alone system means the electricity system set up to generate power and distribute electricity in a specified area without connection to Grid

State Reform Acts

Orissa (1995) Haryana (1997) Andhra Pradesh (1998) Uttar Pradesh (1999)

Karnataka (1999)
Rajasthan (1999) Delhi (2000) Madhya Pradesh (2000) Gujarat (2003)
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Salient features of the Electricity Act, 2003

Role of Government Rural Electrification Generation Transmission Distribution Consumer Protection Trading / Market Development Regulatory Commission / Appellate Tribunal Tariff Principles CEA Measures against Theft of electricity Restructuring of SEBs
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Role of Government
Central Government to prepare National Electricity Policy and Tariff Policy.(Section 3)

Central Govt. to notify a National Policy for rural areas

permitting stand alone systems based on renewal and NonConventional energy sources in consultation with States.

(Section 4)
Central Govt. to formulate a National Policy in consultation with the concerned State Govts. for bulk purchase of power and

management of local distribution through Users Association,

Cooperatives, Franchisees and (Section 5) Panchayat Institutions etc.
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Rural Electrification

Appropriate Govt to endeavor to extend supply of electricity to all villages/hamlets. (Section 6) No requirement of licence if a person intends to generate and distribute power in rural area. (Section 14)

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Generation
Generation free from licensing. (Section 7) Requirement of TEC for non-hydro generation done away with. (Section 7)

Captive Generation

is free from controls.

Open access to Captive

generating plants subject to availability of transmission facility. (Section 9) Clearance of CEA for hydro projects required. Necessary due to concern of dam safety and inter-State issues. (Section 8) Generation from Non-Conventional Sources / Co-generation to be promoted. Minimum percentage of purchase of power from renewables may be prescribed by Regulatory Commissions. (Sections 61 (h), 86 (1) (e))
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Transmission
There would be Transmission Utility at the Centre and in the States to undertake planning & development of transmission system. (Sections 38 & 39) Load despatch to be in the hands of a govt company/organisation. Flexibility regarding keeping Transmission Utility and load despatch together or separating them. Load Despatch function critical for grid stability and neutrality vis a vis generators and distributors. Instructions to be binding on both. (Sections 26, 27,31, 38, 39) Transmission companies to be licensed by the Appropriate Commission after giving due consideration to the views of the Transmission Utility. (Sections 15(5)(b)) The Load Despatch Centre/Transmission Utility / Transmission Licensee not to trade in power. Facilitating genuine competition between generators (Sections 27, 31, 38, 39,41) Open access to the transmission lines to be provided to distribution licensees, generating companies. (Sections 38-40) This would generate competitive pressures and lead to gradual cost reduction.
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Distribution
Distribtution to be licensed by SERCs. Distribution licensee free to take up generation & Generating co. free to take up distribution licence. This would facilitate private sector participation without Government guarantee/ Escrow. (Sections 7, 12) Retail tariff to be determined by the Regulatory Commission. (Section 62) Metering made mandatory. (Section 55) Provision for suspension/revocation of licence by Regulatory Commission as it is an essential service which can not be allowed to collapse. (Sections 19, 24) Open access in distribution to be allowed by SERC in phases. (Section 42) In addition to the wheeling charges provision for surcharge if open access is allowed before elimination of cross subsidies, to take care of (a) Current level of cross subsidy (b) Licensees obligation to supply. (Section 42) This would give choice to customer.
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Consumer Protection
Consumer to be given connection within stipulated time. (Section 43(1))

Penalty in the event of failure to give connection (Section 43(3))

Payment of interest on security deposit. (Section 47(4)) Regulatory commission to specify Electricity supply code to be followed by licensees. (Section 50) No sum due from consumers recoverable after a period of two years unless the same was shown recoverable continuously. (Section 56(2))
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Contd

Consumer Protection contd

Redressal forum for redressal of grievances of consumers, to be

appointed by every distribution licensee within six months. Ombudsman scheme (Section 42 )

Standards of performance
Licensees required to meet standards of performance specified by Regulatory Commission. Failure to meet standards makes them

liable to pay compensation to affected person within ninety days.

Licensee to furnish to the Commission periodical information on standards of performance (Section 57) District level committee - (a) to coordinate and review extension of electrification in each district; (b) to review quality of power supply and consumer satisfaction, etc. (Section 166 (5))
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Trading/ Market Development

Trading distinct activity permitted with licencing. (Section 12) Regulatory Commission may fix ceiling on trading margin to avoid artificial price volatility. (Sections 79 (2) (b) & 86 (2) (b)) The Regulatory Commission to promote development of market including trading. (Section 66)

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Regulatory Commissions/Appellate Tribunal

State Electricity Regulatory Commission to be constituted within six months. (Section 82) Provision for Joint Commission by more than one State/UT. (Section 83)

Provision for constitution of Appellate Tribunal consisting of Chairman and three Members. (Section 110, 112)
Appellate Tribunal to hear appeals against the orders of CERC/SERC, and also to exercise general supervision and control over the Central/State Commissions. (Section 111) Appeal against the orders of Appellate Tribunal to lie before the Supreme Court. (Section 125) Appellate Tribunal considered necessary to Reduce litigation and delay in decisions through High Court.

Provide technical expertise in decision on appeals.

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Central Electricity Authority

CEA to continue as the main technical Advisor of the Govt. of India/

State Government with the responsibility of overall planning. (Section

70) CEA to specify the technical standards for electrical plants and electrical lines. (Section 73) CEA to be technical adviser to CERC as well as SERCs.(Section 73)

CEA to specify the safety standards. (Section 53)

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Tariff Principles
Regulatory Commission to determine tariff for supply of electricity by generating co. on long/medium term contracts. (Section 62) No tariff fixation by regulatory commission if tariff is determined through competitive bidding or where consumers, on being allowed open access enter into agreement with generators/traders. Consumer tariff should progressively reduce cross subsidies and move towards actual cost of supply. (Section 61 (g), (h))

State Government may provide subsidy in advance through the budget for specified target groups if it requires the tariff to be lower than that determined by the Regulatory Commission. (Section 65)
Regulatory Commissions may undertake regulation including determination of multi-year tariff principles, which rewards efficiency and is based on commercial principles. (Section 61 (e), (f)) Regulatory Commission to look at the costs of generation, transmission 39 and distribution separately. (Section 62 (2))

Measures Against Theft of Electricity

Focus on revenue realisation rather than criminal proceedings. (Sections 126, 135) Penalties linked to the connected load and quantum of energy and financial gain involved in theft. Acts of tapping, or tampering with meter also constitute the offence. Offence punishable with imprisonment up to three years or fine up to six time financial gains assessed or both. (Section 135) Provisions for compounding of offences. (Section 152) Assessment of electricity charges for unauthorised use of electricity by the assessing

officer designated by the State Government. (Section 126)

Theft of electric lines and materials made punishable with imprisonment or fine or both. (Section 136) Punishment provision for abetment of theft. (Section 150)

Special Courts (Sections 153-158)

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Restructuring of SEBs
Provision for transfer scheme to create one or more companies from SEB. (Section 131)

Provision for continuance of SEBs (Section 172)

States given flexibility to adopt reform model/path.

41

New Central Law vis a vis State Reform / Amendment Laws

All licenses, authorisations, permissions, approvals, clearances issued under the repealed laws are saved for a maximum period of one year. (Section 172(b)). Action taken under corresponding provisions of the repealed laws or rules made thereunder are saved to the extent of consistency/correspondence with the provisions of the new Act(Section 185 (2)). Provisions of State Reform laws not inconsistent with provisions of the new Central law will continue to apply in that State (Section 185(3)). State Governments can defer implementation of the new Act by 42 a maximum period of six months. (Section 172(d)).

National Electricity Policy

(under section 3(1) of the Electricity Act, 2003)

Aims and Objectives

Access of Electricity-Available for all households in next five years. Availability of Power -Demand to be fully met by 2012. Energy and peaking shortages to be overcome and adequate spinning reserve to be made available. Supply of Reliable and Quality Power of specified standards in an efficient manner and at reasonable rates. Per capita availability of power to be increased to 1000 units by 2012. Minimum lifeline consumption of 1unit/household/day as a merit good by 2012 Financial Turnaround and commercial viability of sector. Protection of consumers interests.
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Issues Addressed
The policy addresses the following issues: Rural Electrification Generation Transmission Distribution Recoveries of cost of services and targetted subsidies Technology Development and research and development (R&D) Competetion aimed at consumer benefits Financing power sector programmes including private sector participation Energy conservation Environmental issues Training and Human Resource Development Cogeneration and Non conventional Energy sources Protection of consumer interests and Quality standards.

Rural Electrification Policy, 2006

RE policy notified in August-2006 in compliance with Sections 4 and 5 of Electricity Act 2003 Goals Rural (Village) Electrification should be completed by the end of the 10th Plan i.e. by year 2007; Access to all households should be provided by the end of the 11th Plan i.e. by year 2012; At least one unit of electricity per day is provided to all households Below the Poverty Line.

AARQA Goal
Accessibility to electricity: Increase from the currently assessed levels to all households by 2012 Availability of power: Increase from the current limited levels to demand matched by 2012 Reliability of power supply: Increase from the currently low levels to 24 hours by 2012 Quality of power supply: Increase from the currently poor levels to 100% by2012 Affordability of power: Pricing based on the ability of the customer to pay