New tariff norms ensure grid discipline

The fear of penalties under the new availability based tariff order has forced the states to ensure grid discipline, thereby lowering the possibilities of grid collapses.

The percentage of time when the grid frequency remained within the permissible band of between 49 and 50.5 hertz has shot up to nearly 90 per cent in the northern region since December 2002, as against an average of around 75 per cent in the pre-ABT era.

Breaching of the upper limit of 50.5 per cent or the lower limit of 49 per cent increases the possibilities of a grid collapse.

As in the northern region, the other four zones of the country have also witnessed a marked improvement in grid discipline, largely due to penal provisions prescribed under the norms.

Under the ABT regime, apart from the fixed and variable costs, a third component in the tariff structure -- called unscheduled interchange -- has been incorporated.

Any state which resorts to overdrawing of power from the grid when the grid frequency is low or underdraws power when the grid frequency is high has to pay up this charge.

This acts as a deterrent for states resorting to breaking grid discipline to meet domestic demand.

In case of the northern region, the extent to which the penal provisions have been effective is evident in the case of all months since December last, especially during the three summer months.

For instance, while the grid frequency remained in the prescribed range of 49-50.5 hertz only 81.7 per cent of the time in the northern region during December 2001 (pre-ABT), it shot up to 88 per cent in December 2002.

During the three summer months of May, June and July, when the states generally resort to overdraw from the grid to meet domestic demand, the comparison is even more stark.

During May 2002, the grid frequency was maintained only 70.4 per cent of the time, as against 88.8 per cent during May this year, when the ABT regime came into effect.

Similarly in June 2002 the grid frequency norm was maintained only 68.8 per cent of the time, as against 88.7 per cent during this June.

In July too, this trend was witnessed while in August 2003, the portion of time when frequency was maintained within permissible limits was as high as 91.4 per cent, as against 80 per cent last August.