The Government have approved a new scheme on Accelerated Power Development Programme (APDP). During the current financial year (2000-2001) a provision of Rs.1000 crores has been made in the Expenditure Budget of Ministry of Finance (Demand No.30). The amount provided in the Budget is to be released as additional Central Plan Assistance to the State Governments. The scheme will continue till the end of 11th Plan i.e. 2012.
Scope of the Scheme
APDP will finance projects relating to:-
Renovation & Modernization / Life Extension / Up rating of old power plants (thermal and hydel).
Up gradation of sub-transmission & distribution network (below 33 KV or 66 KV) including energy accounting & metering.
3. Funding Mechanism
In the case of special category States (Jammu & Kashmir, Himachal Pradesh, constituent States of the North Eastern Region including Sikkim) entire cost of the project will be met under APDP in the form of 90% grant and 10% loan. In case of non-special States, 50% of the project cost will be met from APDP out of which half will be in the form of grant and half as loan. The remaining 50% of the cost of project can be met by the utility from their internal resources or loans from PFC/REC/FIs/Suppliers' credit.
Funds under APDP will be released as additional Central Plan assistance to the State Governments by Ministry of Finance, GOI under advice from Ministry of Power with the funding modality (combination of grant and loan) as under:-
4. Reform Conditionality
APDP is constituted to leverage reforms in the power sector in the States. Therefore, priority will be given to projects priority will be given to projects from those States who commit themselves to a time bound programme of reforms as given below:-
State to set up State Electricity Regulatory Commission (SERC) and make it operational as envisaged under the law and the State power utilities would have sent the Ist proposal for fixation of tariff to the SERC.
Create separate profit centres / Restructure generation/transmission/distribution to make the system accountable. Dividing the state into a number of zones for the purpose of distribution and privatization of each zone or alternatively giving responsibility of electricity distribution to Panchayats / Users' Association / Co-operatives / Franchises, in case improvement in public sector management is not feasible.
100% of metering to be completed in a planned manner. Under Phase I, all sub-stations upto 11 KV outgoing feeders and all HT / Bulk Consumers will be covered by March 2001. Under Phase II all other consumers will be covered by an agreed date.
APDP funds shall also be available to the States which otherwise achieve high level of operational efficiency and financial viability.
5. Mode of Disbursement
(i) The fund under APDP will be provided to the State Government as a special Central Assistance over and above the normal Central Plan Allocation and it will be scheme specific and hence would be categorized "earmarked".
States receiving APDP assistance will have to open a separate account / sub- account head immediately, for separate accounting classification, both on the receipt and expenditure side, for enabling proper audit certification. Funds required to implement projects under APDP scheme will be released by the Department of Expenditure, Ministry of Finance directly to this separate account. A State which does not open a separate account for this purpose, will not be entitled to receive any fund under APDP.
The State Government shall release the fund provided under APDP to the State Power utility within a week of the said amount being credited to the State Government account and send confirmation to the GOI otherwise it will be treated as diversion of fund.
The State Government shall release the fund to the State utility under the same terms & conditions as they receive from the Central Government.
Funds provided to states under the APDP scheme cannot be diverted for any other scheme or purpose and if any State Govt./State Power Utility diverts or is deemed to have diverted such fund for other purposes, the equivalent amount will be adjusted with 10% penal interest against the next installment of Central Plan Assistance to be released to the State Government in that year or in the subsequent year.
The APDP would be made operative from the Year 2000-2001. It will cover projects to be taken up from 1st April 2000 onwards.
The States/State Power Utilities would be required to submit utilization certificates, indicating utilization of funds on the specific scheme, within 9 months of the completion of the scheme/financial year (whichever is earlier).
Where the State Power Utilities are seeking of loans for the balance amount from PFC/REC, they can send their proposals parallely to these bodies who will consider these as per their respective policies.
APDP fund will be released project-wise as and when they are sanctioned as per the conditions of the sanction.
The loan under the programme will be repayable in twenty equal installments together with interest on the outstanding balance commencing from the following year. However, 50% of the loan will enjoy a five-year initial grace period after which repayment of these loans will be affected in fifteen equal installments. The loans annually payable will be recovered in 10 equal monthly installments commencing from 15th June every year.
6. APDP Cell
An APDP cell with Members from Ministry of Power, CEA, PFC and REC, has been set up in the Ministry of Power. The cell is located in Power Finance Corporation and is headed by Director (Projects), Power Finance Corporation. The State Government / Utility will send project reports to the APDP cell which will techno-economically appraise the projects and submit to the Monitoring Committee for sanction. The APDP cell will act as secretariat for the Monitoring Committee.
7. Guidelines regarding steps required for implementation of projects are annexed with this O.M.
8. No project will receive assistance both under Accelerated Power Development Programme (APDP) and Accelerated Generation & Supply Programme (AG&SP) of the PFC. Energy audit, accounting and system studies, however, can be financed through AG&SP under the Model Distribution Scheme.
R&M/LE Projects costing less than Rs.100 crores will be financed under
APDP, and those costing more than Rs.100 crores will be financed under AG&SP of PFC.
10. 100% metering only within the identified distribution circles will be financed under APDP. Metering upto 11 kV out-going feeders & HT consumers and 100% metering outside the distribution circles will be financed by PFC under AG&SP.
11. Meters procured by the States under AG&SP and/pr APDP should be only tamper proof meters. Meters suppliers must give a certificates that their meters are tamper proof.
12. In case a State has completed all the stages of reforms/restructuring including privatization of distribution, the Monitoring committee may consider relaxation of eligibility conditions stipulated in the APDP guidelines.
13. This sanction issues with the concurrence of Finance Branch of the Ministry of Power vide their Dy.No.2639/D(F) dated 5th February, 2001.
State utility will identify the plants, which require R&M.
The utility to invite tenders for turnkey contract for implementation of R&M/LE projects or
In case of competitive bidding, the vendors separately but simultaneously assess residual life in case of projects relating to major R&M and Life Extension, during pre-announced annual maintenance shut down period. A team of CEA officials would be associated in the residual life assessment exercise in order to properly freeze the scope to work.
After the residual life assessment is completed, the vendors shall give their offers by guaranteeing a minimum performance pertaining to PLF, Availability and Heat rate and Auxiliary power consumption which are to be determined by CEA officials.
The utility, thereafter, will submit the proposal to the APDP Cell which will appraise the projects and submit to the Monitoring Committee for sanction of assistance under APDP.
In case of R&M / LE projects of old generating stations, incremental benefits in terms of peaking and energy benefits should be quantified. The turnkey contractor who takes up R&M projects would be required to give performance guarantee. After project is completed, the State utility must carry out proper evaluation to assess whether envisaged benefit had actually accrued.
Up gradation of distribution network including sub-transmission.
Short term and Long term measures would be taken up by treating a superintending engineer distribution circle as an unit.
Short term Measures
Adopting LT less/Less LT system of distribution i.e. LT lines (0.4 KV / 400V) to be replaced with HT (11 KV) lines.
Smaller capacity transformers to be used for feeding individual loads or grouping few nearby loads. This alone effectively brings down losses very substantially.
Installation of low capacity distribution transformers at each consumer premises instead of cluster.
Use of such transformers which would result in low copper losses and iron losses with improve design i.e. amorphous metal transformers.
Re-configuration of the distribution transformers, feeders and load to be re-designed keeping in view of future expansion.
Installation of shunt capacitors for improvement of power factors. Capacitors to be installed on agricultural pump sets for reactive KVA compensation. Alternatively, Group compensation could be planned by installing capacitor Banks on the secondary side of the distribution transformers and/or the primary sub-station 33/11KV.
Re-location of transformers in such a way that they are relocated nearer to the load centre.
Putting up additional substation wherever required to improve regulation and reduce losses.
Areas contributing to high losses should be re-designed with conductors of higher cross section as bigger size conductors offer less resistance and thus reduce losses.
Metering on all consumption in the district.
Remote control for load management.
Computerization at the Sub-stations for maintaining energy consumption accounts.
Long term Measures
Mapping of complete primary and secondary distribution system clearly depicting the various parameters such as conductor size, line lengths etc.
Compilation of data regarding existing loads, operating conditions, forecast of expected loads etc.
Carrying out detailed distribution system studies considering the expected load development during the next 8-10 years.
Preparation of long-term plans for phased strengthening and improvement of the distribution system along with associated transmission system.
Estimation of the financial requirements for implementation of the different phases of system improvement works.
Formulation of comprehensive system improvement schemes with detailed investment program so as to meet system requirement for first 5 year period.
b. Following steps would be required to implement the scheme:
The State Government / Utility will submit short term proposal regarding requirements of capacitors, comprehensive metering, reconductoring, installation / replacement of distribution transformers within the identified distribution circle and de-centralized computerized billing. They will also prepare detailed energy audit & accounting report to clearly bring out the requirement of HT lines for replacing existing LT lines, reconfiguration of distribution transformers, number of capacitors and number of transformers, reconductoring wherever required, technical and commercial losses, wastages and energy saving potential.
Energy audit, accounting & system studies by reputed Consultants on the pattern of study conducted in Mehboob Nagar, Kammam and Nalagonda in Andhra Pradesh districts of Andhra Pradesh, should be commissioned in all the identified distribution circles for preparing detailed project reports. The cost of funding could be provided under AG&SP by PFC..
A Detailed Project Report (DPR) prepared on the basis of energy audit, accounting & system studies, and vetted by the State Utilities, would be submitted to APDP cell for appraisal. The cell will submit the appraisal report to the monitoring Committee for approval and sanction of assistance under APDP.
The identified district must be saturated with meters so as to make the entire system of distribution right from the sub-station to all consumers, completely accountable.
After sanction of the project, the utility will invite tenders for turn-key implementation of the project. The energy accounting consultant will guarantee the performance including losses reduction. The consultant could be retained for supervising work.
Energy Secretaries / Power Secretaries of all the States.
Copy forwarded to
Cabinet Secretariat (Shri D.M.M. Rao, Deputy Secretary), Rashtrapati Bhavan, New Delhi.
Ministry of Industry, Department of Heavy Industry, Udyog Bhavan, New Delhi.
LIST OF PROJECTS APPROVED UNDER APDP DURING 2000-2001