AVAILABILITY BASED TARIFF

India was demarcated into five regional grids, which operate independently.
KSEB is the part of the Southern Grid comprising Andhra Pradesh, Tamil Nadu,
Karnataka, Kerala and Pondicherry. In order to meet the increasing power requirements
of the states, inaddition to their own generating stations, they have capacity entitlement
on Central Generating stations owned by NTPC, NLC and NPC.

ABT is a rational tariff structure for accounting the transaction of energy from
Interstate Generating Stations in the Central Sector.

The Central Generating Stations covered under ABT in the Southern Region are the
following:

1. Coal based Thermal station of NTPC at Ramagundam. 3*200 + 3*500 MW

Stage III 1*500 MW
Total 2600 MW

2. Lignite based thermal stations of NLC at Neyveli

NLC II Stage I 3*210 MW
NLC II Stage II 4*210 MW
NLC I Exp 2*210 MW
Total 1980 MW

3. Coal based thermal station of NTPC in Talcher (Stage II) in Orissa. (Even
though the station is in Eastern Region it is constructed for Southern Region)
4*500 MW

4. In addition Southern Region beneficiaries are having some share in Eastern

Region NTPC stations at Thalcher I, Kahalgaon and Farakka.

Stations not covered under ABT are

1. Nuclear power station (MAPS) of NPC at Kalpakkam 2*170 MW

2. Nuclear power station (KAPS) of NPC at Kaiga 2*220 MW

Bilateral transaction and inter regional transaction also come under the preview of ABT
ABT has been introduced in Southern Region with effect from 01.01.2003.
Pre – ABT Regime

In the Southern Grid, there is a wide variation between the demand and supply.
The distinct features of the Southern Grid before introducing ABT are
• Low frequency during peak-load hours, with frequency going down to 48.0 –
48.5 Hz for many hours every day.
• High frequency during off-peak hours, with frequency going up to 50.5 – 51.0
Hz for many hours every day.
• Rapid and wide changes in frequency, one Hz change in 5-10 minutes being a
common phenomenon.
• Very low voltages, for substantial period.
• High voltages during off-peak hours, to the extent that even 400 KV trunk
lines are required to be switched off to contain the over-voltages.
• Very frequent grid disturbances, causing tripping of generating stations,
interruption of supply to large blocks of consumers, and disintegration of the
Regional grids.
Before introducing ABT, the two-part tariff system was prevailing, i.e. the fixed
cost and the variable cost are charged from the beneficiary states/SEBs in the
proportion of the actual energy drawn during a particular period.
Before introducing ABT, if a beneficiary over draws a portion of the other
beneficiary’s share of power, there was no penalty on those who get the benefit or
there was no compensation for those who suffered.

ABT Regime

Methodology under ABT includes

1. UI charges: - a payment for deviations from schedule at a rate
dependent on system conditions.
The UI charges are payable /receivable if
(a) a beneficiary overdraws power, thus by decreasing the
frequency
(b) a beneficiary under draws power, thus by increasing the
frequency
(c) a generator generates more than the schedule, thereby
increasing the frequency
(d) a generator generate less than the schedule, there by decreasing
the frequency.
Thus, any of the beneficiaries get undue benefit from
overdrawing from the grid, he shall liable to pay to the
affected parties at the UI rates prevailing at the point of
time.
The UI rates with effect from 1-10-2004 are given below:-
Average frequency UI Rate (paise per KWh)

50.5 Hz and above 0.00

Below 50.5 Hz to 49.8 for every 0.02 Hz decrease 6.00
Between 49.8 Hz to 49 Hz
For every 0.02 Hz decrease 9.00
Below 49.00 Hz 570.00
2. Capacity charges:- towards reimbursement of the fixed cost of plant,
linked to the plants capability to supply MWs,
3. Energy charges:- to reimburse the fuel cost for scheduled generation.
 4. Incentive:- Incentive is payable when actual generation is above target
PLF. It is shared as per scheduled ratio.
5. Wheeling charges:- States to get wheeling charges based on the actual
energy wheeled.
6. VAR charges:- Ideally all reactive load should be compensated locally.
This basically requires installation of sufficient quantity of capacitors at
SEBs end. In ABT regime there is incentive for reactive energy injection
at low voltages and drawal at high voltages. Similarly there is penalty
for reactive energy injections at high voltages and drawal at low
voltages. This mechanism helps to maintain the grid voltage within
permissible limits, thereby ensuring quality supply. The reactive
charges payable at present are 5.105 Ps/KVARh.

Scheduling and Load Dispatching under ABT

• Each day of 24 hours starting from 0.00 hour is being divided in to 96 time
blocks of 15 minutes duration.
• Each generating station shall make advance declaration of the capacity
available for generation in terms of MW delivery of ex-bus in each time
block. The generator shall also ensure that, the capacity available during
peak hours is not less than the capacity available during off-peak hours.
• Based on the declaration of the generating station, the RLDC shall
communicate to the beneficiary SEBs, their respective share of the
available capacity.
• The beneficiary shall prepare their schedules from the above, based on the
internal generation availability, variable cost of generation of their own
thermal stations, power purchase facility from other sources and the cost,
system constraints and limitations etc.
• Based on the request from the beneficiaries as well as declaration from the
generators, the RLDC shall prepare the generation schedules and drawal
schedules from the CPS for each time blocks after taking into account the
transmission constraints and other systems constraints if any.
• For transmission losses shall be apportioned among the beneficiaries in
proportion of their drawls.
• In the case of any constraints, the RLDC have right to revise the schedule,
which shall become effective from 4th time block.
• The generator and beneficiaries are also allowed to revise their schedule
during a day, but such revisions shall be effective only from the 6th time
block.

ABT regime and UI Mechanism have effectively been utilized by KSEB to

optimize the overall cost of purchase of energy.
With the introduction of ABT, the performance of the grid has improved
considerably. Number of Grid separation and cascading has been reduced considerably.
The operating frequency band is stable with occasional deviation during system
contingencies. The voltage profile has also improved considerably. All these
achievements can be attributed to the UI mechanism under ABT, which penalizes any
activity against grid security.
Presently, KSEB has a total hydel capacity of 1807 MW and has two LSHS based
thermal stations Brahmapuram Diesel Power Plant (BDPP) (106 MW) and Kozhikkode
Diesel Power Plant (KDPP) (128 MW) In addition to this, there are three deemed IPPs
(Independent Power Projects) within the State to meet the power need of the State viz.
BSES Kochi 157 MW, NTPC Kayamkulam – 360 MW and KPCL 20 MW. The present
power allocations from CGS stations are given below.

CGS Share Details As On 31/08/05

Station Installed Capacity % ENTITLEMENT

RSTPS 2100 14.74 309.54
RSTPS U 7 500 15.77 78.85
NLC II Stage I 630 11.63 73.27
NLC II Stage II 840 12.32 103.49
MAPS 340 6.27 21.32
KAPS 440 13.12 57.73
NLC I Exp 420 18.53 77.83
Talcher II 2000 17.52 350.40
FSTPS 1600 3.68 58.88
KHSTPS 840 1.36 11.42
TSTPS 1000 1.96 19.60
TOTAL 1162.32

After the introduction of ABT, KSEB is strictly following the merit order
dispatch based on the variable cost of energy. The present merit order stack of different
sources based on the variable cost is given below.
Station VC/unit

Rs./Kwh

RSTPS 0.94
RSTPS u 7 1.08
TALCHERII #3,4&5 0.69
TALCHER II #6 0.56
NLC II Stage 1 0.74
NLC II Stage 2 1.01
NLC I Expn. 1.32
MAPS 2.03
KAIGA u#1 3.25
KAIGA u#2 3.25
FSTPP 1.36
KHSTPP 1.41
TSTPP 0.65
RGCCPP 5.26
BSES 5.08
KPCL 3.68
BDPP 3.71
KDPP 3.31

KSEB is preparing the daily dispatch based on the expected demand and energy
availability from internal sources, the demand of the previous week and previous day,
climate, water availability in the hydel reservoirs, possibility of spill, machine
availability in the power plants and variable cost of generation of KSEB thermal stations,
BSES, NTPC-Kayamkulam, KPCL and Import power from different sources.
During 2004 - 05 our UI import was 497.892 MU at an average rate of 211
PS/unit and export 158.083 MU at 244 PS/Unit.

DETAILS OF UI ACCOUNT

Scheduled
Energy from UI IMPORT UI EXPORT
CGS &
ER(at SR Bilateral Sale of
periphery) in Trading KYCCPP Rate Rate
Month LU (PTC,GEL) Power Qty in LU Rs./ unit Qty in LU Rs./ unit
Jan 03 to Mar
03 12534.58 329.04 2163.41 2305.76 1.62 -22.68 2.37

2003-04 51444.08 815.91 10308.39 7713.03 1.83 -1106.88 3.12

2004-05 58647.01 0.00 5471.67 4978.92 2.11 -1580.83 2.44

We have been able to exploit the provisions of UI favorably on several occasions.

Low frequency regime prevailed in the southern grid during May 05 due to the outages
RSTPS and subsequently in the AP grid. Our generation was maximized to take
advantage of the situation. To meet the demand, the BDPP, KDPP and IPP’s had to be
scheduled. Our consumption also touched the all time peak of 41.11MU during this
period in the absence of pre monsoon showers. By scrupulous and watchful operation of
the SLDC, we could receive substantial amount as UI charges. We have made a net gain
of about Rs.16crores during this period by the timely action taken by SLDC. It is also to
be noted that KSEB had been the constituent, which aided the grid to the maximum
extent during this period. The effective planning and judicious use of our internal
resources for the entire water year helped us in making this achievement.