FAQs on Transmission

Question :

Q: Who is the Central Transmission Utility (CTU) and what are its functions ?
Q: What is Empowered Committee and what are its functions ?
Q: What is Transmission Service Agreement (TSA) and how payment of transmission service is made ?
Q: What is RLDC and NLDCand under which organization these bodies are working?
Q: How the Transmission projects are monitored ?
Q: What is payment security management ?
Q: What is Bid Process Coordinator (BPC)?
Q: Brief description about bidding process for transmission projects under TBCB ?
Q: Who is Transmission Service Provider ?

Answer :

Who is the Central Transmission Utility (CTU) and what are its functions?

Power Grid Corporation of India Limited (PGCIL) is the Central Transmission Utility (CTU). CTU have the key responsibility of network planning and development based on the National Electricity Plan in coordination with all concerned agencies as provided in the Act. Section 38(2) of the Electricity Act, inter alia, provides the following:

The functions of the Central Transmission Utility shall be

To undertake transmission of electricity through inter-State transmission system;
To discharge all functions of planning and co-ordination relating to inter-state transmission system with

State Transmission Utilities;
Central Government;
State Governments;
Generating companies;
Regional Power Committees;
Authority;
Licensees;
Any other person notified by the Central Government in this behalf

What is Empowered Committee and what are its functions ?

An Empowered Committee is constituted by the Ministry of Power. The Committee is chaired by Member (Power System) from the CEA. It shall have Member (E&C) from the CEA as member. Besides the above, the Committee shall have representatives from the Ministry of Power, the Planning Commission, the CTUand two experts from the power sector to be nominated by the Ministry of Power.

The functions of the Empowered Committee will be the following:

To identify projects to be developed under the Scheme.
To facilitate evaluation of bids.
To facilitate development of projects under this Scheme.

What is Transmission Service Agreement (TSA) and how payment of transmission service is made?

A Transmission Service Agreement (TSA) will be signed among the SPV and the concerned utilities for payment of the transmission charges finalized on the basis of competitive bidding. TSA will come in force after a license is granted to the developer, if not a deemed licensee. TSA shall, inter alia, include an arrangement for payment security, which will consist of revolving letter of credit of required amount and escrow arrangement.

What is RLDC and NLDCand under which organization these bodies are working?

National Load Despatch Centre (NLDC) supervises over the functioning of Regional Load Despatch Centre (RLDCs) and for scheduling and dispatch of electricity over the inter-regional links in accordance with grid standards specified by the authority and grid code specified by central commission in coordination with RLDC. NLDC and RLDCs are working under the overall supervision of POSOCO whose main function is to monitor the operations and grid security of the National Grid.

How the Transmission projects are monitored?

To ensure the timely completion of the transmission projects by the successful bidder, the Central Electricity Authority and Ministry of Power monitors the progress of the execution of the project as per the conditions of the license issued by the Central Electricity Regulatory Commission.

What is payment security management?

Adequate payment security shall be made available to the TSP by the user of transmission services being provided by the TSP. The payment security may constitute:

Letter of Credit (LC)
Letter of Credit (LC) backed by credible escrow mechanism

What is Bid Process Coordinator (BPC)?
A Bid Process Coordinator (BPC) is responsible for coordinating the bid process for procurement of required transmission services for each inter-state Transmission Project to be implemented under tariff-based competitive bidding. At present, RECTPCL (Rural Electricity Corporation Transmission Projects Company Limited, a 100% subsidiary of REC) and PFCCL (Power Finance Corporation Consulting Limited, a 100% subsidiary of PFC) are the BPCs for the transmission projects. These BPCs are required to complete the bidding process within 145 days. However, BPCs can extend time-frame based on the circumstances. For the procurement of transmission services as per prevailing guidelines, BPC may at its option either adopt a two-stage process featuring separate Request for Qualification (RFQ) and Request for Proposal (RFP) or adopt a single stage two envelope tender process combining the RFP and RFQ processes. RFQ or combined RFQ and RFP notice should be published in at least two national newspapers, website of the BPC and the appropriate Government and preferably in trade magazines also, so as to accord it wide publicity. The bidding shall necessarily be by way of International Competitive Bidding (ICB). For the purpose of issue of RFQ minimum conditions to be met by the bidder shall be specified in the RFQ notice. BPC shall provide only written interpretation of the tender document to any bidder / participant and the same shall be made available to all other bidders. All parties shall rely solely on written communication and acceptances from the bidders.

Brief description about bidding process for transmission projects under TBCB?

An indicative time lines for the bidding process is given below. The BPC may give extended time-frame indicated herein and such alterations shall not be construed to be deviation from TBCB guidelines.

Event	Elapsed Time from Zero date
Publication of RFQ (Request for Qualification)	Zero Date
Submission of Responses to RFQ	30 days
Short listing based on responses and issuance	60 days
Bid clarification, conferences, Final clarification	85 days
Technical and price bid submission	120 days
Short listing of bidder and issue of LOI (Letter of Intent)	135 days
Signing of Agreements	145 days

Who is Transmission Service Provider?

The successful bidder shall be designated as the Transmission Service Provider (TSP),after executing the TSA and acquiring the SPV (Special Protection Vehicle). The TSP shall seek transmission license from the appropriate Regulatory Commission. The successful bidder shall be designated as the Transmission Service Provider (TSP), after executing the Transmission Service Agreement (TSA) and acquiring the Special Protection Vehicle (SPV). The TSP shall seek transmission license from the appropriate Regulatory Commission, if it is not a deemed licensee. The TSA shall be effective from the date of grant of license from the appropriate Regulatory Commission.

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