PRESENTATION ON KVAH BILLING PROPOSED TO BE INTRODUCED BY MERC FROM NEXT CONTROL PERIOD OF 2020-2021 TO 2024-2025
The Commission has determined the net revenue gap to be recovered from FY 2016-17 to FY 2019-20 as shown below:
• Thus, as against the total Revenue Gap of Rs. 34646 Crore estimated by MSEDCL which is 23% of its total projected ARR, the Commission has determined lower total Revenue Gap of Rs. 20651 Crore. In order to avoid Tariff shock to the consumers, the Commission has decided to create Regulatory Asset. Accordingly out of approved revenue gap of Rs 20651 crore, only Rs. 8268 crore has been allowed and balance amount of Rs. 12382 crore has been treated as Regulatory Asset and allow deferred recovery of such Regulatory Asset over and beyond the 3rd Control Period alongwith carrying cost, as allowed under the MYT Regulations. • This regulatory asset of Rs.12382 crore along with carrying cost shall be recover in next control period hence there may be another tariff shock to the consumers. • MSEDCL has proposed KVAH billing instead of KWH billing but has postponed this issue due to VIAs objection. •
• VIA SUBMISSION AGAINST KVAH BILLING • Vidharbha Industries Association (VIA) has opposed kVAh billing on several grounds as mentioned below: • 1) Since MYT Regulations are framed considering kWh as a unit for sale of electricity and the entire MTR Petition is filed under MYT Regulations 2015. VIA states that the Commission in Case 94 of 2015 have ruled based on the Hon ’ ble Supreme Court Order that the Orders of the Commission has no jurisdiction to change the unit of measurement of energy. • 2) The Provision of MTR is made with an intention to allow Truing-up of revenue deficit, if any. The proposals including changing billing unit and tariff philosophy falls within the scope of review of Conduct of Business Regulations, 2004. All such proposals are beyond the scope of MTR. • 3) VIA stated that kVAh is a derived quantity. It violates legal metrology Act, which comes under the Consumer Affair Department. • 4) MSEDCL is purchasing power in terms of kWh units and proposed to sale kVAh units which are against the principles of any business.
• 5) kVAh tariffs are never equitable - Reactive power is a locally- generated phenomena. The kVAh drawl by a consumer for the same connected load will vary depending on the voltage at consumer premises. As voltage at which power is delivered to consumers is under control of the Distribution Company and not consumers, it is unethical and unequitable to bill consumers as per their kVAh drawl. kWh drawl by consumers are also affected by voltages, but a consumer does not have to “ adjust ” or “ compensate ” his consumption when voltages are poor and still land himself or herself at a financial disadvantage. • 6) A poor power factor penalty (or demand overshoot) is more appropriate than kVAh based tariffs because penalties generally have two very fair components (i) a limit for which there is no penalty – a warning factor (ii) a penalty for violations beyond the allowable limit – that is a penal component. A kVAh tariff on the other hand does not give any allowable limit as a warning. It is “ impossible to maintain ” magic figure of a perfect unity power factor.
• 7) In availability-based tariffs, maintenance of MW drawl schedules, generation schedules, drawls from the Grid etc. are to be paid based on pre-decided contracts, which are in MW and kWh. The deviation from schedules is to be measured and charged at rates, which are related to the incremental cost of generation in the system, such incremental cost being determined from the grid frequency. It may be noted that here also, the stress (or commercial deterrent) is based on kWh and not kVAh. The voltage linked reactive drawls (in the proposed inter-utility tariffs) are more in nature of a penalty than a tariff. Hence, the Commission is requested not to consider kVAh billing which is non-technical and illegal
• Commission has issued following order. • 2.8.19 The Commission has noted the objections in this regard, and MSEDCL’s replies. The Commission is of the view that the kVAh billing may not appropriate at this juncture of time as it has to be done in a gradual manner to avoid any tariff shock due to such change. MSEDCL may submit its proposal for kVAh billing in next control period. The Commission intends to implement kVAh billing to all HT consumer and LT consumers having load above 20 kW from 1 April, 2020.
• MSEDCL started replacing meters since existing meters are not having independent counter for KVAH & KVA MD. • In existing meters the KVAH is recorded by geared sum of KWH & KVARH and there is reverse block in RKVAH hence for leading PF KWH is equal to KVAH. • But in new meters KVAH & KVA MD is independent meter and shall increase for both leading & lagging PF. Hence KWH MD shall increase compared to MD recorded by existing meter in case of low PF lead or lag. • No penalty & incentive for PF shall be applicable. • Consumer will not know whether his PF is low but only KVAH consumption shall increase in case of low PF lead or lag. • In case KVAH rates are kept same as is KWH rates in existing tariff, consumers energy bills shall increase by about 10% in case PF is not maintained near unity i.e. above 0.99.
• Actions to be taken by consumers • Submit objections to MERC against KVAH metering. • Carry out analysis of installation for PF and harmonics • Install APFC panel to keep leading or laging power factor near unity i.e. above 0.99 • For variable loads fixed capacitors may be installed on base load in such a way that PF should be for base load and APFC panel for variable load preferable thyristerised control panels to reduce the costing. • APFC panels may have VAR compensation with harmonic controlled arrangement.
Thank You.
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