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Figure 2: Discoms, drawing more power than scheduled
All UI payments are made into and from a regional UI (overdrawing), has to pay for the excess energy at a rate
pool account (REA), operated by the concerned RLDC. according to the above curve. The high UI rate during
However, there is also provision of rescheduling two low-frequency conditions (` 8.24 per kWh at a frequency
hours (eight time blocks) ahead on same day depending 49.7 Hz or below) would induce all Discoms to reduce
on actual system demand trend. their drawal from the grid, by maximizing their available
UI mechanism was first introduced in Western Region on generation and/or by reducing the load. On the contrary,
01st July 2002. Gradually, it was implemented in all the if the Discom draws less power than scheduled, it pays for
other regional grids. In Eastern Region, UI mechanism scheduled energy quantum at the normal energy charge
was introduced on 01st April 2003. Intrastate ABT was rate and gets paid back for the energy not drawn at a
implemented on 01st January 2008 and CESC came under much higher UI rate. During high-frequency conditions,
ABT purview. Discom can draw more power than scheduled at a
The Unscheduled Interchange (UI) was redefined as low rate, and is thus encouraged to back down its own
Deviation Settlement Mechanism (DSM) and was introduced costlier generation.
on 17.02.2014.The typical frequency related DSM rate curves
from the year 2009 to 2018 have been shown in Figure 2. An under-drawal during high-frequency conditions
As per the latest curve, the typical charges for deviation for means that the Discom would not get paid back for t h e
each step of 0.01 Hz is equivalent to 35.60 Paise/kWh in the energy not drawn although it pays for the scheduled
frequency range of 50.05-50.00 Hz, and 20.84 Paise/kWh in energy quantum. It should either reduce its schedule, or
frequency range 50 Hz to 49.70 Hz with a maximum rate increase its drawal.
of 824.04 Paise/kWh below 49.7 Hz. The DSM rate being 0.0
Paise/KWh at a frequency above 50.05 Hz. Likewise, if the actual energy supplied were higher than
scheduled, the generating company would be entitled to
Figure 3: UI Rate vector curve from 2009 to 2018; frequency receive a payment for the excess energy at DSM rate. If the
band narrowed down from 50.3-49.2 Hz to 50.05-49.7 Hz energy actually supplied is less than what is scheduled,
the generating station shall have to pay back for the
energy shortfall, at the DSM rate. When the frequency is
50.05 Hz or higher, the DSM rate is zero, which means that
the generating station would not get any payment for the
extra energy supplied. It would burn fuel for producing
this extra energy, but would not get reimbursed for it at
all. Conversely, if the actual energy supplied were less
than scheduled energy, the generating company would
still be paid for the scheduled energy (at its energy charge
rate) without having to pay back anything for the energy
shortfall. It would thus be able to save on fuel cost (for
the energy not generated) and retain the energy charge
as net saving.

However, the charges for the Deviation for the generating
companies, when actual injection is higher or lower
than the scheduled generation, is capped to 303.04
Paise/kWh (at a frequency below 49.94 Hz). During low
frequency condition (below 49.94 Hz), any extra energy
sent into the grid would get the generating companies

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