Introduction

The case of National High Power Test Laboratory Pvt. Ltd. (NHPTL) versus Central Transmission Utility Power Grid Corporation of India Limited (CTU PGCIL) was adjudicated by the Central Electricity Regulatory Commission (CERC) on April 4, 2018. NHPTL, a joint venture comprising entities like NTPC, NHPC, PGCIL, DVC, and CPRI, sought connectivity with the national grid for the purpose of conducting short circuit tests essential for commissioning its high-power laboratory. The crux of the dispute revolved around the applicability and calculation of Reliability Support Charges (RSC) levied by CTU PGCIL on NHPTL, particularly concerning the period before the commencement of commercial operations.

Summary of the Judgment

The CERC examined whether NHPTL should be subjected to RSC before its laboratory commenced commercial operations on July 1, 2017. The Commission referenced its prior order dated May 16, 2016, which allowed NHPTL to operate connected to the grid while refraining from drawing substantial power. Despite NHPTL not utilizing significant grid power during pre-commercial testing phases, CTU PGCIL levied RSC from July 2016 onward. The CERC concluded that full RSC should commence from the date of the first commercial test. However, recognizing the grid support provided during the testing phase, a nominal RSC of 5% based on a notional 50 MW was deemed appropriate for the period preceding commercial operations.

Analysis

Precedents Cited

The judgment primarily relied on the Electricity Act, 2003 and the pertinent CERC Regulations, including:

• Regulation 8: Pertaining to the grant of connectivity and access in interstate transmission.
• Regulation 10: Detailing the accounting of charges, including RSC.
• Regulation 11: Governing the billing mechanisms for such charges.

While no specific judicial precedents were cited, the decision was anchored in the regulatory framework established by CERC.

Legal Reasoning

The CERC's decision was built upon interpreting the conditions stipulated in the Connection Agreement and the earlier order from May 2016. Key points in the reasoning included:

• Effectiveness of Connection Agreement: The agreement was to be effective from the date of commercial operation, indicating that significant grid interactions commence post this date.
• Notional Calculations: RSC was calculated based on a notional short circuit rating (10,000 MVA) multiplied by power factor (.005), equating to a notional 50 MW.
• Grid Dependency: Even though NHPTL did not draw substantial power, its connection to the grid inherently relied on grid stability, justifying nominal RSC charges for support rendered.
• Pro-Rata Charges: For the pre-commercial phase, a reduced RSC based on 5% of the standard rate was deemed fair, reflecting minimal grid dependency.

Impact

This judgment sets a clear precedent regarding the applicability of RSCs to entities connected to the grid but not yet in full commercial operation. Future cases involving similar entities can reference this decision to determine when and how RSCs should be levied, ensuring that charges are proportional to actual grid usage and dependency.

Complex Concepts Simplified

Reliability Support Charges (RSC)

RSC are fees charged to entities connected to the power grid to account for the reliability and stability support provided by the grid operators. These charges ensure that grid reliability is maintained even when connected entities do not draw significant power.

Short Circuit Rating (MVA)

The Short Circuit Rating in Mega Volt-Amperes (MVA) refers to the maximum current that can flow through the grid during a short circuit condition. It's a measure of the grid's ability to handle fault conditions without compromising stability.

Power Factor (pf)

Power Factor is the ratio of real power used to do work and the apparent power flowing in the circuit. In this case, a pf of 0.005 was used to calculate the notional RSC.

Connection Agreement

A Connection Agreement is a contract between the power producer (or consumer) and the grid operator outlining the terms of grid connectivity, including technical and financial obligations.

Conclusion

The CERC's judgment in the NHPTL v. CTU PGCIL case underscores the importance of aligning financial charges with actual grid dependency. By determining that full Reliability Support Charges should commence from the onset of commercial operations, and instituting a nominal charge for pre-commercial grid support, the commission ensures fairness and proportionality. This decision not only clarifies the regulatory expectations for similar entities but also fortifies the framework governing grid connectivity and associated financial obligations, thereby promoting a balanced and sustainable power sector.