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ToD Tariff in Maharashtra: Need for FurtherRefinement to Ensure

Adequate Demand ResponseOmkar S. Pawaskar and Prof. Mrs. Swati. S. More

Abstract--DSM is a technique used to influence consumptionpattern of consumers to reduce burden on supply side. One suchDSM option is ToD tariff. MERC has introduced this tariffstructure to HT industrial consumers since year 2000. In order tostudy the overall impact of this tariff structure on utility and onconsumers a study was carried out for HT consumers underMSEDCL including literature review and field research. Thetariff for these consumers in various years was also studied.Along with ToD tariff RC has also introduced some incentivesand disincentives to those consumers. A review of one suchincentive known as power factor incentive was also taken. Theresults of this study indicated that the ToD tariff needs to berefined to ensure adequate demand response.Index Terms-- Demand Side Management, MaharashtraElectricity Regulatory commission, Maharashtra, Time of Daytariff, tariff incentives and disincentives.

I. INTRODUCTION

Demand side management (DSM) is a technique used toinfluence the consumption pattern of consumers ondistribution side. In country like India and particularly thestates like Maharashtra which are facing severe shortage ofpower, DSM options attain large significance. One importantDSM option is time of use (ToU) also called as time of day(ToO) tariff structure. In this, per unit consumption ofelectricity at different time of use in a day will be chargedifferently. [2] Maharashtra Electricity RegulatoryCommission (MERC) has implemented this type of tariffstructure for the first time to all HT industrial consumers underMaharashtra State Electricity Board (MSEB) since year 2000.National Electricity Policy of the Ministry of power alsorecommends introduction of ToO tariff. [3]

II. OBJECTIVEThis paper is based on the Dissertation work done during

ME course. To ensure desirable impact of DSM options, it isO. S. Pawaskar is with th-, Department of Electrical Engineering,. Pune

Vidyarthi Grihas College of Engineering, Pune. India (e-mail.omkarl73@gmail.com).

Mrs. S. S. More is with the Department of Electrical Engineering, BharatiVidyapeeth University, Pune, India (e-rnail: ssmore@gmail.com).

necessary to evaluate the results of already implemented DSMoptions. As a contribution in this process, the objective of thework was to analyze, based on various tariff orders and limitedfield survey, the approach of Regulatory Commission (RC)towards this tariff structure and consumers response for thesame. Along with ToO tariff, RC has also introduced powerfactor incentive to HT consumers and hence the impact of suchincentive is also analyzed.

Dissertation work covers the overall tariff structure, 100tariff concept, and ToO tariff design for HT industrialconsumers (especially under MSEB). The approach ofregulatory commission towards ToO tariff, various problemsfaced by utility while introducing such tariff is also discussedin the report. Tariff orders mainly give tariff signals to utilityand to consumer to utilize the available power in moreefficient manner. The overall tariff rates from various orders,reasons behind change in such rates and its impact on utilitiesrevenue collection as estimated by MERC for suchmodifications in tariff are discussed.

III. METHADOLOGYThe study methodology consisted of three steps. First

available literature such as a survey carried out by Jyoti Parikhet al in year 1992-94 for HT industries and tariff structure inMaharashtra to estimate the potential & cost of different DSMoptions was reviewed to understand the potential ofToD tariffimpact, key barriers in implementing ToO tariff etc. (4) Afterthis literature review, as the second step, detailed analysis oftariff orders issued by MERC was undertaken. In the thirdstep, field survey was carried out. In the field survey, usingsurvey questionnaire, data such as past consumption trends,load profile, specific actions by industry in response to ToOtariff structure was compiled. Survey covered seven HTconsumers, around Pune. These include continuous as well asnon-continuous process industries, hospitals; engineeringindustry etc. a questionnaire was prepared and filled byinteraction with consumers in order to check the approach ofconsumers towards this tariff Sample electricity bills werecollected from different industries for various years to analyzethe load patterns. Various types of load curves such as monthlyaverage, seasonal, yearly average etc were plotted tounderstand the effect of introduction of such tariff. In order tosupport this, analysis was done to find the percentage of peak

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p ow er co nsumed by industry w ith respect to tot al co nsumptionin a mont h. In order to improve system quality, consumers aremotivated by introducing various incentives such as powerfactor incentive etc. The sur vey of HT indus tries show s th eva rio us steps taken up by industr ies to im prove power fa ctorand for fla tte nin g 'O f load curve. The overview of tarif fstructure in othe r st ate s was taken in orde r to analyz e theapproach of various re gul atory comm iss ions tow ard s tarif fstructure .

IV . ToO T ARlFFANDPOWER FACTORINCENTIVEINMAHARASHTRA

Con struction of new power gener ation plan ts an d su ppl yingthe power at reasonable cost are th e limiting factors of Supp lySide M anag ement and hence MERC had in an tici patio nintroduce d ToO tar iff structu re for the fir st tim e in the co untry,to all I-IT industr ia l co nsumers un der MSEB sin ce ye ar2000 .[5 ], [6] Following tab le sho w s th e c om p aris on of ToOta riff rates along with the base tariff rate s fo r different tim eperiods of th e da y.

TABLE ICo lPARISON OF ToO TARIFF RATES FOR NON-CONTI. UOUS INDUSTRlES

Order Charges for different time periods in paisaIKWh forNon-Continuous industriesforyear 22hrs- 6hrs- 9hrs- 12hrs- l Shr s-6hrs 9hrs 12hrs 18hrs 22hrs2000- 275 325 355 325 385012001- 205 280 330 280 370022003- 125 2JO 270 210 31005 I2006- I07 200 285 365 285 395

2007- 255 340 42008 340 4502008- 310 395 47509 395 5052009- 375 460 54010 460 570SOURCE:VARJOUS TARJFF ORDERS OF MERC

2---_._------------ lITariff Orders wise Peak / Off Peak Rates

=

20000 i200 1-0:: 20030S2f)OG a72(10h;8200809200,)lOT .1 1Iff O. d I'

Fig. IGraphical representation of tariff orders Vs peak to off peak ratioFrom ta ble I it is seen tha t the re is dec rease in rate s for

co nsumpt io n during off pea k tim e period i.e. 22 hrs to 06 hrsan d increase in rate s, for peak power consumption i.e. from18hr s to 22 hrs .D eman d an d energy ch arges fo r non -co ntin uous in du stries

from di ff eren t tarif f orders are also tab ula ted in tab le II. Thetable II show s that there is increase in demand charges anddecrea se in ene rgy charges till the tar if f order 2006-07 . In theTariff ord er for ye ar 2008-09 the com mission h as d ec id ed andreduce d fixed and demand charg es. It was considered to beun fair to burden consumers who were af fe cted by severe loadshedd in g, and thus MSEDCL now recovers a greater portionof its demand charge s th ro ugh va riable energy charges. Ene rgycharges as a co nsequence hav e been increasedco rr esponding ly. [5 ]

TJti5LE IlCOMPARISONOF DEMANDA.NDENERGYCHARGESFORNON-CONTINUOU SINDU STRIES.Order for Non-Continuous industryyear

Demand charges Energy charges(R KVA) (paisalKWh)

2000-01 280 3252001-02 300 2802003-05 330 2102006-07 350 2852007-08 300 3402008-09 150 3952009-10 150 460SOURCE :VARIOUSTARlFFORDERSO FMERC

Due to this variatio n in charges, co nsumers tend to shif tthe ir loa d from peak to off peak tim e which results in tore du ction in their elec tr icity bill and load curve of M SEDC Lflattens to certain ex tend.Along w ith implem ent ation of To O tariff to I- IT consumers,

comm ission also provided the m pow er factor incentive anddi sin ce nt ive such as pow er fa ctor penalty . Th e tariff o rd er fo ryea r 2009 -1 0 describes th ese as follow s:

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Power Factor Incentive: Whenever the average powerfactor is more than 0.95, an incentive given is at the rate of 1%of the amount of the monthly energy bill (excluding Fueladjustment cost, demand charge, and electricity duty) for every1% improvement in the power factor above 0.95. For PF of0.99, the effective incentive amounts to 5% reduction in theenergy bill. For unity and leading PF effective incentive wouldbe maximum 7% reduction in the energy bill.

Power Factor Penalty: Whenever the average PF is less than0.9, penalty charges shall be levied at the rate of 2% of theamount of the monthly bill including energy charges, for thefirst I% fall in the power factor below 0.9, beyond which thepenalty charges shall be levied at the rate of I% for eachpercentage point fali in the PF below 0.89. [5] [6]

After such survey, analysis was done to plot various typesof load consumption patterns for different industries. Somesample load curves are shown below.

v. KEY FINDINGS

LoadCurves (2002) -Jndustry A181614

~12~10~- g 8.3 64,= ,2O + r - . . . - r - 1 r r- T . . .- r . . . . - r r - , . . , . . . , . . . , . . . . , T l

4 7 10 13 16 19 22Time (H~)

--Jan--Feb--Mar--Apr--May--Jun-Jul--Aug--Sep--Oct-.- - Nov--Dee

Fig. 2 Monthly average Load Curves - (2002) Industry A

30Load Curves (2007) - Industry A --Jan--Feb

--Mar--Apr--May--Jun--Jul--Aug--Sep--Oct--Nov--Dee

25~ 20e . 15'"0e:.3 10

5 ~iii i i li i i i i i i i i i i i i i i i(

4 7 10 13 16 19 22Time (H~)

Fig 3 Monthly average Load Curves - (2007) Industry ASeasonal load curves are plotted in order to check seasonal

variation in the load pattern. Some of load curves in eachseason are given below.

Load Curves (Apr) - Industry A

2520 __ AprOI

~ 15 __ Apr-02:. :. " 10 __ Apr06": __ Apr07~

5

04 7 10 13 16 19 22

Time (Hrs)Fig 4 Seasonal Load Curves - (Apr) Industry A

Load Curves (Aug) - Industry A

25__ Aug-01__ Aug-02__ Aug-06__ Aug-07

20~ 15- g 10o-I

r\I ,

5i====fUO~~~~~~~~~~~

1 3 5 7 911131517192123Time (Hrs)

Fig 5 Seasonal Load Curves - (Aug) Industry ALoad Curves (Dee I Jan) - Industry A

3025 __ Dec-01

~ 20

~

-_Dec-02~~ 15 __ Dec-06"C' " 10 __ Dec-07-I 5 __ Jan-08

01 4 7 10 13 16 19 22

Time (Hrs)

Fig 6 Seasonal Load Curves - (DeclJan) Industry AAnother type of load curves are plotted known as yearly

average load curves. This helps to check yearly average loadconsumption of each industry. Sample yearly average loadcurve is given below.

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Yearly Avg Load Cu ryes - Industry B2520 --yr2

~ 15 --yr200l~ --yr20 ----' 100... J --yr2005 --yr200

4 7 10 13 16 19 22Time (Hrs)

Fig. 7YearlyAverage LoadCurves -Industry BIt is seen from monthly, seasonal and yearly, load profile

analysis that there is little change in the shape of load curves.The overall trend of load has remained unchanged for last fewyears even after application of ToD tariff. To evaluate thisfurther, analysis was done to find percentage of peak powerconsumption with respect to total consumption. Followinggraphs shows the percentage peak power consumption withrespect to total consumption.

Months Vs % Peak Power ConsumptionIndustry A

100 .. 80 1\. c:; .:0 - 60 __ yr2001e, c..

~!C C'" ~ 40 __ yr2002< IIe, =0 20;J.U __ yrlOO60 __ y,2007"'1>~.~'1>\.~'1>"\v~\~v~~.~'lI-\>-~'1>\v~\~v~ " '~

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Months Vs PF Graph - Industry E-----~

0.9 ~L..0U 0.8::\Z .L.. 0.7. .~0" - 0.6

0.5

MonthsFig 12 Months Vs PF Graph for Industry EMon ths Vs PF Graph - Industry D

L.. 0.9cU 0.8' "Z .L.. 0.7: . >~0 0.6" - 0.5 . . . . . . on . , . . -0 s : = s : = s : c ; >c ~ c c ~ c. ;: ; ~ ~ ~ ~ -. ~

MonthsFig 13 Months Vs ?F Graph for Industry DIt is observed that after the introduction of power

factor incentive to HT industries, there is improvement inpower factor. As reveled during the survey, this is due toprovision of power factor improving devices such as fixedcapacitor banks, APFC panels etc. The industries recover theirinvestment for such devices within few months implying payback period for such devices is very small.

VI. CONCLUSIONSBased on the survey of few HT consumers it is observed

that ToD tariff has not proved very effective in changing theload pattern of HT consumers. This observation needs to befurther validated based on wider survey, which was beyond thescope of this exercise due to limited financial and manpowerresources. Major conclusions of this study are as follows:I. Considering this experience, for achieving the objective

of flattening load curve using ToD tariff. it is essential toincrease the tariff differential between peak and off-peak tariff.2. Industries have responded very positively to power factor

incentive offered by MERC and most indust.ies surveyed haveimproved the power factor. The pay back period of investmentmade for improving the power factor was found to be less thanone year and is very attractive for industries.3. Further considering the marked improvement in power

factor, and financial viability of investing in power factorimprovement equipment, applicability of power factorincentive could be tightened and the incentive could be madeapplicable for power factor above 0.97 or 0.98 instead of 0.95.

4. To achieve maximum benefit, this tariff structure relatedchanges need to be supplemented by efforts to createawareness amongst consumers.

VII. ACKNOWLEDGEMENTThe authors gratefully acknowledge the kind and !iberal

help rendered by 'Prayas Energy Group' and Mr. ShantanuDixit. We would also like to acknowledge Mr. Jayant Deo(Ex-member - MERC), Dr. S. A. Khaparde and Dr. AbhijeetAbhyankar (lIT - Mumbai) for their valuable guidance incompletion of the dissertation work and thank themsincerely.

VIII. REFERANCES[I) O. S. Pawaskar & Prof Mrs. S. S. More, 'Time of Day Tariff Structure'

Challenges in Electricity Sector under deregulated environment.Organized by Institution of Engineers.

(2) Prayas ' KnO \ your power'(3) National electricity policy(4) J. K Parikh, B. S. Reddy, Rangan Banergy, 'Planning For Demand SideManagement in Electricity Sector' ISBN 0-07-462328-0.(5) Various tariff orders ofMERC (www.mercindia.com)(6) HT tariff booklet 2007- MSEDCL

IX . BIOGRAPHIES

Mr. Omkar Shirishchandra Pawaskar Receivedthe RE. (Electrical) degree from Bharati VidyapeethCollege of engineering under university of Pune andM. E. (Power system) degree from Bharati\'idyapeeth University College of engineering Puneand presently working as a lecturer in Pune VidyarthiGriha's College of Engineering, Pune. He isinterested in doing research in power systems andpower system restructuring.

Prof. Mrs. Swati Shirish More Received theB.E. (Electrical) and M. E. (Power system) degreesfrom Government College of engineering, Pune.Currently she is Professor in department electricalengineering, Bharati Vidyapeeth University Collegeof Engineering, Pune. Her research interest includespower systems, energy efficient systems and powersystem restructuring.