cerc regulation 09-14
TRANSCRIPT
1
(Commercial)WRHQ Mumbai
Recent Commercial Developments & Insights into Tariff
VSTPS Date: 10-07-2009
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(Commercial)WRHQ Mumbai
Structure of presentation
• CERC regulatory developments w.e.f. 01-04-2009.- UI regulations- Capitalization before cut off date- New tariff norms 2009-14
• Recent developments taking shape in regulations
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(Commercial)WRHQ Mumbai
Regulations on UI Charges• Regulations effective from 01.04.2009• Objective:
– To maintain grid discipline through commercial mechanism of UI by controlling users of grid in scheduling, dispatch & drawal of electricity
• Applicability:– Generating Stations – Beneficiaries– Sellers – Buyers
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(Commercial)WRHQ Mumbai
Applicability • ‘Generating station’ means a generating station whose
tariff is determined by the Commission under clause (a) of sub-section (1) of Section 62 of the Act.
• ‘Beneficiary’ means the person purchasing electricity generated from the generating station.
• ‘Seller’ / ‘Buyer’ means a person, other than a generating station supplying / buying electricity through a transaction scheduled in accordance with the regulations specified by the Commission for open access, medium term access and long term access.
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(Commercial)WRHQ Mumbai
New UI Vector
• Frequency Range - – Narrowed to 50.3 to 49.2 Hz against 50.5 to 49.0 Hz
earlier
• UI Rate - – Minimum 0 paisa / KWh at 50.3 Hz – Maximum 735 paisa / KWh at 49.20-49.22 Hz step– Each 0.02 Hz step equivalent to
12.0 paisa / kWh in 50.3-49.5 Hz range 17.0 paisa / kWh in 49.5-49.2 Hz range
– Rate at 50.02-50 Hz step: 180 paisa / KWh
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(Commercial)WRHQ Mumbai NEW UI Rate (w.e.f 01.04.2009)
Avg. Freq of Time Bock UI Rate
Avg. Freq of Time Bock UI Rate
Avg. Freq of Time Bock UI Rate
Not Below Below Not Below Below Not Below Below
(Hz.) (Hz.)(Paisa / KWH) (Hz.) (Hz.)
(Paisa / KWH) (Hz.) (Hz.)
(Paisa / KWH)
49.20 49.22 735 49.58 49.60 432 49.96 49.98 204
49.22 49.24 718 49.60 49.62 420 49.98 50.00 192
49.24 49.26 701 49.62 49.64 408 50.00 50.02 180
49.26 49.28 684 49.64 49.66 396 50.02 50.04 168
49.28 49.30 667 49.66 49.68 384 50.04 50.06 156
49.30 49.32 650 49.68 49.70 372 50.06 50.08 144
49.32 49.34 633 49.70 49.72 360 50.08 50.10 132
49.34 49.36 616 49.72 49.74 348 50.10 50.12 120
49.36 49.38 599 49.74 49.76 336 50.12 50.14 108
49.38 49.40 582 49.76 49.78 324 50.14 50.16 96
49.40 49.42 565 49.78 49.80 312 50.16 50.18 84
49.42 49.44 548 49.80 49.82 300 50.18 50.20 72
49.44 49.46 531 49.82 49.84 288 50.20 50.22 60
49.46 49.48 514 49.84 49.86 276 50.22 50.24 48
49.48 49.50 497 49.86 49.88 264 50.24 50.26 36
49.50 49.52 480 49.88 49.90 252 50.26 50.28 24
49.52 49.54 468 49.90 49.92 240 50.28 50.30 12
49.54 49.56 456 49.92 49.94 228 50.30 0
49.56 49.58 444 49.94 49.96 216
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(Commercial)WRHQ Mumbai
New UI Vector….Contd
• UI Cap Rate of 408 paisa per kWh for all generating stations using coal or lignite or gas supplied under Administered Price Mechanism as the fuel, when actual generation is higher or lower than scheduled generation in frequency range between 50.3 Hz and up to 49.2 Hz
• Additional UI Charge @ 40% of the UI Cap Rate ( i.e. 163 paisa per KWh) in case of under-injection by generating stations using coal or lignite or gas supplied under Administered Price Mechanism as fuel, when frequency is below 49.2 Hz.
• Review of UI charges, UI Cap Rate and Additional UI charge by the Commission on a 6 monthly basis or earlier and revision, if necessary.
UI Cap Rate made symmetrical for both over & under injection KAWAS, GANDHAR do not come under UI caps
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(Commercial)WRHQ Mumbai
Limits on UI Volume
• Over drawal by Beneficiary / Buyer not to exceed 12 % of its scheduled drawal or 150 MW (whichever is lower) during a time block when frequency is below 49.5 Hz, and 3% on daily aggregate basis.
• Under injection by Generating station / Seller not to exceed 12 % of its scheduled injection during a time block when frequency is below 49.5 Hz, & 3% on daily aggregate basis.
• Additional UI Charge @ 40% of UI Rate corresponding to frequency of 49.2 Hz applicable for over-drawal or under-injection of electricity for each time-block when grid frequency is below 49.2 Hz.
• Additional UI Charge for over-drawal / under-injection when frequency is below 49.5 Hz and up to 49.2 Hz may be prescribed by CERC from time to time, if necessary.
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(Commercial)WRHQ Mumbai
Limits on UI Volume• Payment of UI Charges and Additional UI Charge shall be without
prejudice to any action that may be considered appropriate under section 142 and section 149 of the Act for contravention of the over-drawal and under-generation limit specified, for a time block when frequency is below 49.5 Hz.
• Any over-drawal and under-injection of electricity shall be computed in accordance with the methodology used for preparation of ‘Regional Energy Accounts’.
• Compliance with instructions of RLDC Notwithstanding anything specified in the Regulations, the generating station, seller, beneficiary and buyer shall follow the instructions of the RLDC on generation and drawal.
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(Commercial)WRHQ Mumbai
CERC • Penalties on 3 State Utilities for grid indiscipline - These penalties have been imposed for violation of the
Indian Electricity Grid Code (IEGC) provisions which require the constituents (State Utilities) to undertake manual load shedding for curtailing the overdrawl whenever the grid frequency goes below 49 Hz.
- Tamil Nadu Electricity Board (TNEB) has been ordered to pay Rs.1.5 crore while the Karnataka Power Transmission Corporation Limited (KPTCL) and Rajasthan Rajya Vidyut Prasaran Nigam Limited (RRVPNL) have been ordered to pay penalties of Rs.17 lakhs and Rs.5 lakhs respectively.
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(Commercial)WRHQ Mumbai
Capitalization before cut off date
KEY CHANGES IN APPROACH
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(Commercial)WRHQ Mumbai Capital Cost
Capital cost for tariff base to include • For existing stations capital cost admitted up
to 31.3.2009.• For new stations on actual cash expenditure
incurred plus projected expenditure upto CoD.• IDC on normative loan (70%)• Gain or loss on account of FERV• Initial Spares - Coal: 2.5%, Gas: 4.0%, Hydro: 1.5%
• Plus Estimated Capital Expenditure on cash basis for the respective years of the tariff period 2009-14
14
(Commercial)WRHQ Mumbai Capital Cost Truing up exercise based on actual CAPEX upto
31.03.2014 to be done in 2014-15• Generators permitted additionally one more time during
2009 -14 prior to 2013-14 for truing up• Difference between tariff allowed and revised after
Truing-up to be adjusted with simple interest @ SBI PLR as on 1st April of respective year
Capital Cost prudence check w.r.t benchmark norms as & when published.
Estimated Capital Expenditure for the respective years of the tariff period 2009 -14 to include
Additional Capital Expenses upto Cut Off Date Expenditure allowed as per 2009-14 Regulation
beyond Cut Off Date
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(Commercial)WRHQ Mumbai Issues
• Tariff for the existing stations will be determined only after settlement of additional capitalization up to 31.03.2009
• Since fixed charge as per new Regulation will comprise pre tax return, R&M, secondary oil, increased O&M, fixed charges will increase
• Tariff needs to be determined at the earliest to avoid large arrear billing (approx 4000 Cr/yr)
• Add Cap petitions to be filed by July 2009 after finalisation of accounts in May 2009 for the period up to 31.03.2009.
• Since Capital Cost for tariff shall include projected capital expenditure for the period 2009-14 and subject to truing up with SBI PLR, there is need for reasonably accurate estimate for projected Capex on cash basis
• Capital Cost to include add cap only up to cut off date. Completion of all works within the cut off date will be crucial for servicing of capex.
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(Commercial)WRHQ Mumbai Cut Off Date Cut-Off Date – “means 31st March of the year closing
after two years of the year of commercial operation of the project, and in case the project is declared under commercial operation in the last quarter of a year, the cut-off date shall be 31st March of the year closing after three years of the year of commercial operation”.
• Following capital expenditure within the original scope of work actually incurred or projected to be incurred after COD and up to the Cut-Off Date is allowed:
– Deferred liabilities– Works deferred for execution– Procurement of initial capital spares within the original scope of
work– Liabilities to meet award of arbitration or for compliance of the
order or decree of a court– On account of change in law
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(Commercial)WRHQ Mumbai
Additional Capitalization Beyond Cut Off Date
• Following capital expenditure actually incurred after the cut-off date, may be admitted by the Commission, in its discretion, subject to prudence check:– Liabilities to meet award of arbitration or for compliance
of the order or decree of a court– On account of change in law– Deferred works relating to ash pond or ash handling
system in the original scope of work.
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(Commercial)WRHQ Mumbai
Issues
• Need to complete entire works within the original scope of work by Cut Off Date
• No add cap permitted during life of the station• Undercharged liability beyond cut off date is also not
allowed• NTPC to take appropriate action for procurement of
initial spares by cut off date
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(Commercial)WRHQ Mumbai
Generation Tariff Beyond 2009 – Emerging Commercial Issues
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(Commercial)WRHQ Mumbai
Annual Fixed Cost
Return on Equity Interest on Loan Capital Depreciation Interest on Working Capital Operation and Maintenance Expenses Cost of Secondary Fuel Oil Compensatory Allowance for coal based
stations upto 25 years of life Special Allowance in lieu of R&M beyond 25
years
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(Commercial)WRHQ Mumbai Return on Equity Debt: Equity for new projects to 70:30 or actual whichever is higher Existing Projects – as already allowed by CERC during 2004-09 Pre Tax Return to incentives investment in sector Rate of Return will be 15.5% for existing stations For new projects it can be 16% subject to completion of CoD from
investment approval as follows: 200/210/250/300/330 MW - 33 months at 4 mths interval
Extension projects - 31 mths at 4 mths interval 500/600 MW - 44 months at 6 mths interval
Extenson projects - 42 mths at 6 mths interval 660/800 MW - 52 months at 6 mths interval
Extension projects - 50 mth at 6 mths interval Gas Stations >100MW - 30 mth at 4 mths interval
Extension projects - 28 mths at 4 mths interval Pre Tax return will be grossed up with the normal tax rate as
applicable for the concerned company for the year 2008-09 and trued up in the next tariff period based on actual tax rate as per relevant Finance Acts for the respective years
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(Commercial)WRHQ Mumbai Return on EquityIssues ROE will be 23.481% for the companies paying normal
tax and 17.481% for the companies paying MAT existing stations
For new projects ROE can be 24.238% subject to completing CoD as per normative schedule
Tax benefit available from new projects will be with the generating company
It will be preferable to add all future capacity under NTPC Ltd
Hydro stations being developed by NTPC Hydro Limited should be owned by NTPC and NHL can be EPC contractor for such projects
Loss of ROE for every 1000 Cr equity investment will be Rs 80 Cr per annum if tax holiday is not availed.
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(Commercial)WRHQ Mumbai
Repayment equal to depreciation irrespective of actual repayment
• To be charged from 1st year of CoD irrespective of moratorium @ Actual Wt. Avg. Rate of interest at the beginning of
each year• If there is no actual loan available in any particular year,
last available weighted average rate of interest shall be considered
• If there is no actual loan, then weighted average rate of interest of the company shall be considered
Generator to attempt re-financing for benefit Net Benefit of refinancing to be shared in the ratio of 1 (gen):2 (beneficiaries)
• Refinancing cost is to be borne by the beneficiaries
Interest on Loan
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(Commercial)WRHQ Mumbai FERV• Generator to attempt to hedge FERV • Cost of hedging as pass-through on normative loan on
year on year basis• To the extent loans are not hedged, FERV allowed as
pass-through, as an expense on year-to year basis
• Depreciable value 90% (except land);• Depreciable life:
• Thermal - 25 years for both coal and gas station• Hydro - 35 years
• As per Companies Act for the 12 years after commercial operation and balance shall be spread over balance life
• No provision of AAD
Depreciation
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(Commercial)WRHQ Mumbai Interest on Working Capital• Coal Based Stations
– 1.5 months fuel expenses for pit head and 2 months for non pit head– Secondary fuel oil for 2 months– Maintenance spares @ 20% of O&M– Receivables for 2 months– O&M 1 month
• Gas Based Stations– 1 month fuel expenses – Liquid fuel stock for ½ month– Maintenance spares @ 30% of O&M– Receivables for 2 months– O&M 1 month
• Cost of fuel wrt Price & GCV of preceding 3 months • Rate of interest will be SBI PLR as on 1.4.2009 and no
fuel escalation will be permitted in working capital.
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(Commercial)WRHQ Mumbai
O&M Expenses for 2009-10 2008-09
Coal Based stations: in Rs Lac/MW 200 MW - 18.2 Lac/MW – (12.17lac/MW) 300/330/350 - 16 Lac/MW 500 MW - 13 Lac/MW – (10.95 lac/MW) 660 MW - 11.7 Lac/MW TTPS - 32.75Lac/MW – (22lac/MW) BTPS - 31.35Lac/MW –
(20.24lac/MW) Tanda - 26.25Lac/MW – (19.53lac/MW) Gas Based stations: Rs 14.8 Lac/MW - (9.12lac/MW)
Escalation @ 5.72% is given thereafter - 4%
O&M Expenses for 2009-10
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(Commercial)WRHQ Mumbai
O&M Expenses ….. contd. Additional units which will be commissioned
after 1.4.2009 in the same station 200/210/250 MW
90% of above for Unit 5 & 6 85% of above for 7th onwards
300/330/350 MW 90% of above for Unit 4 & 5 85% of above for 6th onwards
500 MW and above 90% of above for Unit 3 & 4 85% of above for 5th onwards
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(Commercial)WRHQ Mumbai
Secondary Fuel Oil in Annual Fixed Cost.• Normative Secondary Fuel Oil consumption upto
Target Availability level• Landed cost of oil based on actual of the
weighted average price of the preceding three months.
• In absence of landed cost for three months, latest procurement price for the station
• = SFC x LPSFi x NAPAF x 24 x NDY x IC x 10 • Secondary Fuel Oil expenses will be subject to
annual adjustment on annual basis based on the weighted average landed cost of oil
• SFC x NAPAF x 24 x NDY x IC x 10 x (LPSFy – LPSFi)
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(Commercial)WRHQ Mumbai
• CERC has provided following Compensatory Allowance for coal based stations for meeting small expenses which are capital in nature in lieu of any additional Capex beyond Cut Off Date
Yrs of Opn
Comp. Allowance (in Rs. Lac/MW/yr) for coal stations only
0 – 10 Nil
11 - 15 0.15
16 – 20 0.35
21 - 25 0.65
Compensatory Allowance
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(Commercial)WRHQ Mumbai
Renovation and Modernization (R&M)For extension of life beyond the useful life of generating station or a unit thereof
- No capitalisation of R&M is allowed upto 25 years for both coal and gas based stations/units
- GENCO to make an application before CERC for approval of R&M proposal with a DPR giving • Complete scope & justification, estimated completion cost including foreign
exchange component, if any, • Financial package & phasing of expenditure, cost-benefit analysis, • Schedule of completion & estimated life extension from a reference date,• Record of consultation with beneficiaries
– Any expenditure towards R&M for life extension will be allowed in tariff after considering reasonableness of cost estimate, cost benefit analysis, efficient technology etc and after deducting the accumulated depreciation already recovered from the original project cost.
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(Commercial)WRHQ Mumbai
Renovation and Modernization (R&M)Issues
- Need for approval of CERC before investment instead of CEA
- Need for discussion with beneficiaries- Regulation envisages R&M can be done unit wise also,
whereas, R&M capex will be treated after deducting accumulated depreciation of station from original project cost - When R&M is unit wise, accumulated depreciation of the unit should
only be adjusted- If R&M capex is claimed we need to go for full scale R&M at a time
- Gas stations life has also been considered as 25 years – need to check whether proposed O&M cost will be sufficient to meet R&M expenses also.
- We need to develop strategy to meet technology obsolescence as no R&M is allowed before 25 years
- Need for urgent look into the various R&M proposal under approval
A Committee has been constituted to look into this
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(Commercial)WRHQ Mumbai Special R&M Allowance Alternatively, NTPC may, avail a ‘special allowance’ for coal based station @ Rs. 5 lakh / MW / year along with annual escalation of 5.72% during the tariff period 2009-14 as compensation for meeting the requirement of expenses including R&M beyond the useful life,
o unit-wise from the respective date of the completion of useful life (25 years) w.r.t. COD of respective units of the generating station
o This shall be in addition to normal O&M which is being allowedo No relaxation in applicable operational normso Revision of the capital cost shall not be considered
Such option shall not be available for a generating station for which R&M has been undertaken and the expenditure has been
admitted by the Commission before commencement of these Regulations or unit which is in a depleted condition or operating under relaxed operational and performance norms Whether applicable for stations where some R&M has already been
admitted (even if it is not for life extension) Whether BTPS Stage 1 will be considered as in depleted condition
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(Commercial)WRHQ Mumbai
Renovation and Modernization (R&M)Issues
Case: Singrauli Capital Cost Rs 1140 Cr Depreciation recovered Rs 1016 Cr ROE allowed presently on Rs 570 Cr @
23.481%i.e, Rs 133.82 Cr If NTPC wants to claim R&M for life extension,
CERC will consider capital cost of Singrauli as Rs 124 Cr (1140 Cr- 1016 Cr) which will reduce ROE to Rs 29 Cr
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(Commercial)WRHQ Mumbai
Cost Benefit AnalysisCase: Singrauli
2000 MW
LOSS OF ROE 105
LOSS OF R&M ALLOWANCE 100.00
TOTAL 205.00
2009-10 2010-11 2011-12 2012-13 2013-14
R&M All (L/MW) 5.00 5.29 5.59 5.91 6.25
Implication – Special allowance for R&M
If R&M Capex per annum is less than 205 Cr, on present value basis Special Allowance will be beneficial.
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(Commercial)WRHQ Mumbai
Renovation and Modernization (R&M)
Need to re look at R&M strategy in view of the new regulation
We may have to create R&M fund to carry out future R&M
Every station need to carry out cost benefit analysis before carrying out large scale R&M for life extension
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(Commercial)WRHQ Mumbai Operating Norms
• Target Availability (NAPAF) for recovery of fixed charges and incentive
• 85% for all stations except• Talcher TPS,Badarpur TPS- 82%
• Auxiliary Power Consumption • 200 MW units: 9%; 500 MW units & above: 6.5%
• W/O CT: less 0.5%; with MDBFP: 2.5% extra
• Talcher TPS- 10.5%; Tanda TPS- 12%; Badarpur TPS- 9.5%• CCGT: 3.0%; Open-cycle: 1.0%
• Specific Oil• Specific Oil 1 ml and 50% of saving w.r.t actual to be shared
with beneficiaries
•
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(Commercial)WRHQ Mumbai Issues• Gas Station Availability has been made 85%.• ‘declared capacity’ or ‘DC' has been defined as the
capability to deliver ex-bus electricity in MW duly taking into account the availability of fuel or water, and subject to further qualification in the relevant regulation
• Regulation also provides that in case of fuel shortage, the generating company may propose to deliver a higher MW during peak-load hours by saving fuel during off-peak hours. The concerned Load Despatch Centre may then specify a pragmatic day-ahead schedule for the generating station to optimally utilize its MW and energy capability, in consultation with the beneficiaries. DC in such an event shall be taken to be equal to the maximum peak-hour ex-power plant MW schedule specified by the concerned Load Despatch Centre for that day – It may amount to peaking operation
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(Commercial)WRHQ Mumbai
Operating Norms – Heat RateExisting 200/210/250 MW 2500 No change
500 MW Sub critical Units (for MDBFP 40 Kcal less)
2425 Less by 25
BTPS 2825 Less by 60
TTPS 2950 Less by 25
Tanda 2825 Less by 25
Anta, Dadri, Kawas 2075 /3010 Same
Faridabad, Kayamkulam 2000/2900 Same
Auriya 2100/3045 Same
Gandhar 2040/2960 Increase by 40
The Commission may on its own revise the norms of Station Heat Rate in respect of any of the generating stations for which relaxed norms have been provided
Kcal/kWh
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(Commercial)WRHQ MumbaiOperating Norms – Heat RateNew coal based stations after 1.4.2009 6.5% margin over design Heat Rate
New gas based stations after 1.4.2009 5% margin over design Heat Rate
New liquid fuel based stations after 1.4.2009 7.1% margin over design Heat Rate
Maximum Heat Rate for new 200 MW – 2450, 500 MW – 2443, 660 MW – 2380Kahalgaon U # 7- 2425, Sipat 1 # 2350, Barh 1 # 2370, Shimhadri 2 # 2380
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(Commercial)WRHQ Mumbai
Recovery of Fixed Charge -Incentive/ Disincentive
Fixed Charges (inclusive of incentive) payable on calendar month basis
– For stations > 10 years = (AFC x NDM / NDY) x (PAFM / NAPAF) – For stations <= 10 years = (AFC x NDM / NDY) x 0.5 (1.0 + PAFM / NAPAF)
• Even if plant availability for a particular month is nil, station will recover 50% of fixed charge
– Provided In case the plant availability factor achieved during a year < 70%, total fixed charge for the year shall be restricted to
AFC x (0.5 + 35/ NAPAF) x (PAFY /70)– In case of shortage of main fuel; the generator may propose to deliver a
higher MW during peak load hours by saving fuel during off peak hours. RLDC may then specify pragmatic day ahead schedule after consultation with beneficiaries.
– In all such cases, the maximum MW scheduled during peak hours shall be taken as the DC for the day.
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(Commercial)WRHQ Mumbai
Rate of incentive/ disincentve for stations > 10 years – same as capacity charge and for others half the capacity charge rate
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(Commercial)WRHQ Mumbai
ESTIMATED TARIFFS
StationsAFC 08-09
Estimated AFC
Incentive Rate
Dis-incentive below 70% AVAIL
Dis-incentive below TA up to 70%
Incentive above TA
(Rs Cr.) (Rs Cr.)
(Rs Cr/% availability) Paise/kwh Paise/kwh Paise/kwh
KSTPS 416.93 669.16 7.87 42.80 42.80 42.80
VSTPS-I 303.14 512.84 6.04 54.66 54.66 54.66
VSTPS-II 400.40 545.90 6.43 73.31 73.31 73.31
VSTPS-III 606.93 794.81 4.68 53.37 53.37 53.37
SIPAT-II 700.50 887.46 5.22 119.18 59.59 59.59
KAWAS 264.26 333.16 3.92 68.19 68.19 68.19
GANDHAR 367.00 430.56 5.07 87.96 87.96 87.96
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(Commercial)WRHQ Mumbai
AFC Comparison 04-09 Vs 09-14
StationExisting FC
Estimated New FC
Difference (New FC-Old FC) % increase
KSTPS 416.00 669.16 253.16 161%
Vin-1 303.00 512.84 209.84 169%
Vin-2 400.00 545.90 145.90 136%
Vin-3 606.00 794.81 188.81 131%
Sipat 700.00 887.46 187.46 127%
Kawas 264.26 333.16 68.90 126%
Gandhar 367.00 430.56 63.56 117%
Total 3056.26 4173.89 1117.63 137%
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(Commercial)WRHQ Mumbai
Miscellaneous Provisions• Approved CDM projects- proceeds from carbon credits
– 100% of the gross proceeds to be retained by developer in the 1st yr– To be reduced @10% every year for the next 4 yrs– To be shared 50:50 from 6th year onwards
• Norms of operation to be ceiling norms• Tax on Income
– Not pass through – Deferred tax liability excluding FBT upto 31.03.2009 will remain
with beneficiaries– Beneficiaries may demand refund of FBT
• Recovery of Income-tax for prior period, cost of hedging Foreign Exchange Rate Variation, etc.- NTPC can directly bill to beneficiaries– Income tax liability for 2004-09 period billed after 2009
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(Commercial)WRHQ Mumbai
Recent developments taking shape in regulations
Standard bidding document developments
• Ministry of Power has recently (on 27th March) issued SBD for Procurement of Power under Case -I.
• Case –II documents were already there which are being used in UMPPs.
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(Commercial)WRHQ Mumbai
Recent developments taking shape in regulations
Following approach papers have been put up by CERC :
- Approach paper on formulating pricing methodology for inter-state transmission. - Draft Regulations on tariff for renewable energy.
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(Commercial)WRHQ Mumbai
Thank you
48
(Commercial)WRHQ Mumbai
Declaration, Scheduling & Elimination of Gaming
• Provisions as per IEGC & CERC Open Access in Interstate Transmission Regulations 2008 applicable
• Provision of revision in generation schedule on day of operation as per IEGC
• Provision of generation up to 105% of DC in a time block and averaging up to101% of Avg. DC over a day not to be considered as gaming -Retained.
• Flexibility in Scheduling of Hydro stations retained in new Regulations.
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(Commercial)WRHQ Mumbai
UI Charges Accounting
• All payments on account of UI charges including Additional UI Charges & interest on late payment thereof shall be credited to “UI Pool Account Fund”,
• Fund to be maintained and operated in accordance with provisions of IEGC.
• Schedule of Payment – All payments for UI charges including Additional UI Charge to be
made to within 10 days of issue of UI account statement by Regional Power Committee.
– Simple interest @ 0.04% for each day of delay shall be payable for any payments made beyond a period of 12 days of issue of UI account statement
– All payments to entities shall be made within 5 days of crediting of the amount to “UI Pool Account Fund”.
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(Commercial)WRHQ Mumbai
Application of Fund Collected through UI
• Balance after settlement of claims of UI charges shall be utilized, with prior approval of the Commission for– Servicing of investment for transmission schemes of
strategic importance not utilized up to optimum level– Providing ancillary services including but not limited to
‘load generation balancing’ during low grid frequency as identified by RLDC, to ensure grid security and safety:
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(Commercial)WRHQ Mumbai
Computation of Energy Charge• Computation of Energy charges (EC)
– EC covering primary fuel cost shall be payable for total ex-bus energy scheduled to be supplied to the beneficiary during the calendar month, at the specified energy charge rate.
– Energy charge rate (ECR) in Rs. per kWh on ex-power plant basis: • For coal or lignite fired based stations
ECR = (GHR – SFC x CVSF) x LPPF x 100 / {CVPF x (100 – AUX)}• ECR is arrived at after reducing GHR by heat from 1 ml secondary fuel• Sharing of actual secondary oil consumption will be as per formula below• (SFC x NAPAF x 24 x NDY x IC x 10 -ACsfoy) x LPSFy x 0.5• Need for re determination of ECR at the end of year based on actual
sharing• Actual secondary oil consumption should correspond to 85%
generation or actual generation• For gas or liquid fuel based stations
ECR = GHR x LPPF x 100 / {CVPF x (100 – AUX)}
– Landed Cost of Coal – • Price of coal corresponding to the grade and quality inclusive of
royalty, taxes and duties applicable & transportation cost• Considering normative transit and handling losses :• Pit head stations : 0.2% ; Non-Pit head stations : 0.8%
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(Commercial)WRHQ Mumbai
Billing and Payment• Rebate
– For payment of bills through LC on presentation, a rebate of 2% shall be allowed.
– Where payments are made other than through LC within a period of one month of presentation of bills, a rebate of 1% shall be allowed.
• Late payment surcharge. – In case the payment of any bill is delayed beyond a
period of 60 days from the date of billing a late payment surcharge at the rate of 1.25% per month shall be levied.
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(Commercial)WRHQ Mumbai
Operation & Maintenance lakhs
Station 2007-08 2007-08 2008-09 2009-10
Actual Allowed Allowed Allowed
KORBA 28592 22800 23727 30420
VSTPS-I 14742 15334 22932
VSTPS-II 10520 10950 13000
VSTPS-III 10520 10950 13000
Total 33811 35782 37234
SIPAT-II 10950 13000
KAWAS 10714 5755 5985 9708.8
GANDHAR 10876 5765 5995 9723.6
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(Commercial)WRHQ Mumbai
COMMERCIAL PERFORMANCESEB Outstanding
as On 28.02-
09
Reba table bill
Non Reba table Bill
Total Billing Real. Outstanding as On 31.03-
09
LC Requi
redwef
01.01.2009
LC Availability
MARCH--2009
MPPTCL 82.28 217.06 -8.90 208.16 218.00 72.44 212.90 218.00
MSEDCL 0.00 377.88 2.12 380.00 380.00 0.00 328.30 328.60
GUVNL** 4.69 278.27 -5.94 272.33 272.33 4.69 203.40 203.40
GOA 0.00 32.50 -0.36 32.14 32.14 0.00 29.44 32.00
DD 0.00 20.89 -0.27 20.62 20.62 0.00 22.10 23.40
DNH 0.00 52.63 -0.25 52.38 52.38 0.00 52.40 52.50
PGCIL 0.34 0.38 0.01 0.39 0.73 0.00 0.41 0.09
CSEB*** 0.00 63.32 0.76 64.08 64.08 0.00 42.60 48.00
SEZ IND. 0.00 1.14 0.05 1.19 1.19 0.00 0.71 2.50
TOTAL 87.31 1044.07 -12.78 1031.29 1041.47 77.13 892.26 908.49
UI* 12.42 18.02 22.52 7.92
G. TOTAL 99.73 1049.31 1063.99 85.05
55
(Commercial)WRHQ Mumbai
COMMERCIAL PERFORMANCESEB Outstanding as
On 31.03-08Rebatable
billNon
Rebatable Bill
Total Billing
Real. Outstanding as On 31-03-09
% Realisation
Up to MARCH -09
MPPTCL 43.11 2222.29 245.19 2467.48 2438.15 72.44 98.81%
MSEDCL 0 3969.10 277.78 4246.88 4246.88 0.00 100.00%
GUVNL** 0 2811.68 142.33 2954.01 2949.32 4.69 99.84%
GOA 0 361.34 41.90 403.24 403.24 0.00 100.00%
DD 0 257.17 13.88 271.05 271.05 0.00 100.00%
DNH 0 623.09 41.75 664.84 664.84 0.00 100.00%
PGCIL 0 3.57 0.82 4.39 4.39 0.00 100.00%
CSEB 0 549.79 40.25 590.04 590.04 0.00 100.00%
SEZ IND. 0 8.92 1.46 10.38 10.38 0.00 100.00%
TOTAL 43.11 10806.95 805.36 11612.31 11578.29 77.13 99.71%
UI* 35.84 284.11 312.03 7.92
G. TOTAL 78.95 11896.42 11890.32 85.05 99.95%
56
(Commercial)WRHQ Mumbai
Commercial performance 30-06-09SEB Outstanding
as On 31.05-09
Rebatable bill
Non Reba table Bill
Total Billing
Real. Outstanding as On
30.06.09
LC Requiredwef 01.01.09
LC Availabili
ty
JUNE--2009
MPPTCL 113.83 207.78 -179.31 28.47 142.50 -0.20 212.90 218.00
MSEDCL 0.00 314.13 -165.02 149.11 149.11 0.00 328.30 328.60
GUVNL** 4.69 231.93 -143.02 88.91 88.91 4.69 203.40 203.40
GOA 0.00 35.29 -22.82 12.47 23.45 -10.98 29.44 32.00
DD 0.00 18.36 -10.06 8.30 16.97 -8.67 22.10 23.40
DNH 0.00 40.69 -16.26 24.43 38.68 -14.25 52.40 52.50
PGCIL** 0.31 0.32 -0.02 0.30 0.46 0.15 0.41 0.09
CSEB 0.00 66.16 -17.29 48.87 48.87 0.00 42.60 60.00
SEZ IND. 0.00 1.14 -0.01 1.13 1.13 0.00 0.71 2.50
TOTAL 118.82 915.80 -553.81 361.99 510.08 -29.27 892.26 920.49
UI* 11.32 16.49 18.54 9.27
G. TOTAL 130.14 378.48 528.62 -20.00
57
(Commercial)WRHQ Mumbai
Commercial performance 30-06-09SEB Outstanding as
On 31.03-09Rebatable
billNon
Rebatable Bill
Total Billing
Real. Outstanding as On
30.06.09
% Realisation
Up to JUNE -09
MPPTCL 72.44 610.18 -104.32 505.86 578.50 -0.20 114.36%
MSEDCL 0.00 1108.29 -55.99 1052.30 1052.30 0.00 100.00%
GUVNL 4.69 776.97 -78.09 698.88 698.88 4.69 100.00%
GOA 0.00 108.39 -10.88 97.51 108.49 -10.98 111.26%
DD 0.00 64.72 -3.44 61.28 69.95 -8.67 114.15%
DNH 0.00 152.36 -0.14 152.22 166.47 -14.25 109.36%
PGCIL 0.00 1.32 0.17 1.48 1.34 0.14 90.53%
CSEB 0.00 209.36 -5.12 204.24 204.24 0.00 100.00%
SEZ IND. 0.00 3.42 0.76 4.18 4.18 0.00 100.00%
TOTAL 77.13 3035.00 -257.05 2777.95 2884.35 -29.27 103.83%
UI* 7.92 50.25 48.90 9.27
G. TOTAL 85.05 2828.20 2933.25 -20.00 103.71%
58
(Commercial)WRHQ Mumbai
Recent ATE order on common issues of NTPCRecent ATE order on common issues of NTPC
• CERC disallowed part of capital expenditure with respect to (1) Ramagundam (2) Simhadri (3) Rihand (4) Vindhyanchal. While deciding tariff under 2004-09 regulations
• Aggrieved with same ATE was approached by NTPC
59
(Commercial)WRHQ Mumbai
Issues (for all four stations)Issues (for all four stations)
• “Whether the Central Commission was right in excluding committed liabilities in relation to the capital assets established, commissioned and put to use to the extent of the amount which has not been paid and has been retained by the NTPC by way of retention of the money, security deposit or similar such things to ensure performance of the work undertaken by the contractors and others in accordance with the contract and is to be released in due course?”
Deferred liabilities are allowed as per regulation & should be differentiated from deferred payments ATE Accepted the contention
60
(Commercial)WRHQ Mumbai Issues (for VSTPS)Issues (for VSTPS)• “Whether the Central Commission was right in treating
the depreciation as the deemed repayment of loans wherever depreciation is higher than the normative repayment of loan?”
• ATE :• The Central Commission cannot treat depreciation as
the deemed repayment of loan, where the depreciation is higher than the normative repayment of loan. The depreciation amount, unlike advance against depreciation has to be allowed regardless of whether there is any liability to repay the loan or not. The depreciation is admissible notwithstanding any loan is taken or otherwise.
61
(Commercial)WRHQ Mumbai Issues (for VSTPS)Issues (for VSTPS)• “Whether the Central Commission has dealt appropriately the tariff
adjustments for repayment of the Common loan taken by the NTPC in its balance sheet for two or more generating stations in regard to the interest during construction, which should form part of the capital cost?”
• ATE :
• The ‘First in First out’ method cannot be adopted. However, the deployment of internal resources of NTPC which is in addition to the equity contribution should be considered as a deemed loan from the NTPC to the project. NTPC is entitled to claim deemed interest on such loans during construction.
62
(Commercial)WRHQ Mumbai Issues (for Ramagundam)Issues (for Ramagundam)• “Whether the Central Commission was right in disallowing the
amount of Rs. 323.45 lakhs validly incurred by NTPC towards the Central Electricity Authority (CEA) approved Renovation and Modernization Scheme and the Residual Life Assessment Studies to be capitalized on the ground that the actual Renovation and Modernization works have not yet been completed by NTPC?”
• ATE :
• The cost incurred on Renovation and Modernization and Life Extension could only be allowed to be capitalized after decapitalization of the replaced assets. Mere completion of the Residual Life Assessment Studies without the timely implementation of its recommendations does not add any benefit to the plant. Any expenditure admitted by the Commission for determination of tariff on Renovation and Modernization and Life Extension shall be serviced on normative debt equity ratio after writing off the original amount of the replacement assets from the original project cost. So, the finding given by the Central Commission that the expenditure on the completed RLA Study may only be considered along with the cost incurred on R&M works after completion of the said works is perfectly justified.