MERC Regulations 23Chapter D · Electricity Purchase and Procurement

Section 23 · Long-term power procurement plan

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- 23.1 The Distribution Licensee shall prepare a five-year plan for procurement of power to serve the demand for electricity in his area of supply and submit such plan to the Commission for approval:Provided that such long-term power procurement plan shall be an annual rolling plan and the first plan period shall commence on April 1, 2006:Provided further that the long-term power procurement plan shall be submitted along with the application for determination of tariff, in accordance with Part B of these Regulations.

23.2

The long-term power procurement plan of the Distribution Licensee shall comprise the following:

(a)

A quantitative forecast of the unrestricted demand for electricity, within his area of supply, from each tariff category over the plan period;

(b)

An estimate of the quantities of electricity supply from the approved sources of generation and power purchase;

(c)

Standards to be maintained with regard to quality and reliability of supply, in accordance with the Standards of Performance Regulations;

(d)

Measures proposed to be implemented as regards energy conservation and energy efficiency;

(e)

The requirement for new sources of power generation and/or procurement, including augmentation of generation capacity and identified new sources of supply, based on (a) to (d) above;

(f)

The plan for procurement of power including quantities and cost estimates for such procurement:
Provided that the forecast/estimate contained in the long-term procurement plan shall be separately stated for peak and off-peak periods, in terms of quantities of power procured (in millions of units of electricity) and maximum demand (in MW/MVA):Provided further that the forecasts/estimates shall be prepared for each three month period over the plan period:Provided also that the long-term procurement plan shall be a cost-effective plan based on available information regarding costs of various sources of supply.Explanation - for the purpose of this Regulation, the term "peak period" shall mean such block of three (3) continuous hours during a twenty-four (24) hour period representing maximum demand for power by the Distribution Licensee.
23.3The forecasts/estimates shall be prepared using forecasting techniques based on past data and reasonable assumptions regarding the future:Provided that the forecasts/estimates shall take into account factors such as overall economic growth, consumption growth of electricity-intensive sectors, advent of competition in the electricity industry, trends in captive power, impact of loss reduction initiatives, improvement in generating station Plant Load Factors and other relevant factors.
23.4The forecasts/estimates submitted to the Commission as part of the long-term power procurement plan shall be consistent with the forecasts of power generation, power purchase and demand for electricity prepared and submitted under Regulation 15.
23.5Where the Commission has stipulated a percentage of the total consumption of electricity in the area of a Distribution Licensee to be purchased from cogeneration and renewable sources of energy, the long-term power procurement plan of such Distribution Licensee shall include the plan for procurement from such sources at least upto the stipulated level.
23.6The Commission shall forward a copy of the long-term power procurement plan submitted by the Distribution Licensee to the State Transmission Utility for verification of its consistency with the transmission system plan for the intra-state transmission system, prepared in accordance with the Transmission Open Access Regulations:Provided that the Distribution Licensee may separately consult the State Transmission Utility at the time of preparation of the long-term power procurement plan to ensure consistency of such plan with the transmission system plan.
23.7The Distribution Licensee may, as a result of additional information not previously known or available to him at the time of submission of the long-term procurement plan under Regulation 23.1, apply for a modification in the long-term procurement plan, for the remainder of the control period, as part of the annual performance review under Regulation 17:Provided that the Distribution Licensee may be allowed a modification of the long-term power procurement plan under this Regulation not more than once in each control period.
23.8The Commission may, as a result of additional information not previously known or available to the Commission at the time of submission of the long-term procurement plan under Regulation 23.1, if it so deems, either suo motu or on an application made by any interested or affected party, modify the long-term procurement plan of the Distribution Licensee, for the remainder of the control period, as part of the annual performance review.Provided that the Commission may modify the long-term power procurement plan under this Regulation not more than once in each control period.
23.9The Commission shall review the long-term power procurement plan of the Distribution Licensee, or any proposed modification thereto, and upon such review being completed, the Commission shall either-
(a)pass an order approving the long-term power procurement plan, or modifications thereto, subject to such modifications and conditions as it may deem appropriate; or
(b)reject the long-term power procurement plan or application for modification thereto, for reasons recorded in writing, if such plan is not in accordance with the guidelines contained in this Part and directing the Distribution Licensee to submit a revised plan based on such considerations as it may specify:
Provided that the Distribution Licensee shall be given reasonable opportunity of being heard before his long-term power procurement plan is rejected.

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