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Agenda
Overview of Regulatory SetupOverview of Regulatory Setup
Determination of Regulated TariffDetermination of Regulated Tariff
Tariff setting Through CompetitiveTariff setting Through Competitive
Bidding processBidding process
2
Short Term Trading of PowerShort Term Trading of Power Key RegulationsKey Regulations
Commercial IssuesCommercial Issues
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Capacity charges consists ofCapacity charges consists of
ReturnReturn on equity (ROE)on equity (ROE)
Interest on LoanInterest on Loan
DepreciationDepreciation
O&M CostO&M Cost
Generation TariffGeneration Tariff
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Interest on WorkingInterest on Working CapitalCapital
Cost of Secondary fuelCost of Secondary fuel
Compensatory allowanceCompensatory allowance
Energy Charges consists ofEnergy Charges consists of
Reimbursement of cost of primaryReimbursement of cost of primary
fuel at normative Heat Ratefuel at normative Heat Rate
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Tariff NormsTariff Norms20092009--1414
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Norms for
Annual Capacity Charges Recovery
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Return on EquityReturn on Equity
BasicBasic RateRate ofof ReturnReturn willwill bebe 1515..55%% forfor existingexisting stationsstations
ForFor newnew projectsprojects itit cancan bebe 1616%% subjectsubject toto completioncompletion ofof CoDCoDfromfrom investmentinvestment approvalapproval asas followsfollows::
200200//210210//250250//300300//330330 MWMW -- 3333 monthsmonths atat 44 mthsmths intervalinterval
500500//600600//660660 MWMW -- 4444 monthsmonths atat 66 mthsmths intervalinterval
660660//800800 MWMW -- 5252 monthsmonths atat 66 mthsmths intervalinterval
GasGas StationsStations >>100100MWMW -- 3030 mthmth atat 44 mthsmths intervalinterval
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x ens onx ens on ro ec sro ec s -- mon smon s essess
HydroHydro ProjectsProjects asas perper TECTEC
PrePre TaxTax ReturnReturn toto incentiviseincentivise investmentinvestment inin sectorsector
DebtDebt:: EquityEquity forfor newnew projectsprojects toto 7070::3030 oror actualactual whicheverwhichever isishigherhigher
Actual equity in excess ofActual equity in excess of 3030% will be treated as normative loan% will be treated as normative loan
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RepaymentRepayment equalequal toto depreciationdepreciation irrespectiveirrespective ofof actualactualrepaymentrepayment
ToTo bebe chargedcharged fromfrom 11stst yearyear ofof CoDCoD irrespectiveirrespective ofofmoratoriummoratorium
ActualActual WtWt.. AvAv .. RateRate ofof interestinterest atat thethe be inninbe innin ofof
Interest on LoanInterest on Loan
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eacheach yearyear
GeneratorGenerator toto attemptattempt rere--financingfinancing forfor benefitbenefit NetNetBenefitBenefit ofof refinancingrefinancing toto bebe sharedshared inin thethe ratioratio ofof 11(gen)(gen)::22 (beneficiaries)(beneficiaries)
RefinancingRefinancing costcost isis toto bebe borneborne byby thethe beneficiariesbeneficiaries
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Secondary Fuel Oil in Annual Fixed Cost.Secondary Fuel Oil in Annual Fixed Cost.
NormativeNormative SecondarySecondary FuelFuel OilOil consumptionconsumption
uptoupto TargetTarget AvailabilityAvailability levellevel
LandedLanded costcost ofof oiloil basedbased onon actualactual ofof thethe
11
threethree monthsmonths..
SecondarySecondary FuelFuel OilOil expensesexpenses willwill bebe subjectsubjecttoto annualannual adjustmentadjustment onon annualannual basisbasis basedbasedonon thethe weightedweighted averageaverage landedlanded costcost ofof oiloil
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Capital CostCapital Cost
CapitalCapital costcost forfor tarifftariff basebase toto includeinclude
ForFor existingexisting stationsstations capitalcapital costcost admittedadmitted upup toto
3131..33..20092009..
For new stations onFor new stations on actual cash expenditureactual cash expenditure
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not include commitments & liabilities for which nonot include commitments & liabilities for which nopayment has been made)payment has been made)
InitialInitial SparesSpares -- CoalCoal:: 22..55%%,, GasGas:: 44..00%%,, HydroHydro::
11..55%%
PlusPlus EstimatedEstimated CapitalCapital ExpenditureExpenditure onon cashcash basisbasis
forfor thethe respectiverespective yearsyears ofof thethe tarifftariff periodperiod 20092009--1414
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Capital CostCapital Cost
TruingTruing upup exerciseexercise basedbased onon actualactual CAPEXCAPEX uptoupto
3131..0303..20142014 toto bebe donedone inin 20142014--1515 GeneratorsGenerators permittedpermitted additionallyadditionally oneone moremore timetime duringduring
20092009 --1414 priorprior toto 20132013--1414 forfor truingtruing upup
DifferenceDifference betweenbetween tarifftariff allowedallowed andand revisedrevised afterafter TruingTruing--upup
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ofof respectiverespective yearyear
CapitalCapital CostCost prudenceprudence checkcheck ww..rr..tt benchmarkbenchmark normsnorms asas &&whenwhen publishedpublished..
EstimatedEstimated CapitalCapital ExpenditureExpenditure forfor thethe respectiverespective yearsyears ofof
thethe tarifftariff periodperiod 20092009 --1414 toto includeinclude AdditionalAdditional CapitalCapital ExpensesExpenses uptoupto CutCut OffOff DateDate
ExpenditureExpenditure allowedallowed asas perper 20092009--1414 RegulationRegulation beyondbeyondCutCut OffOff DateDate
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Cut Off DateCut Off Date
DateDate byby whichwhich allall worksworks withinwithin thethe originaloriginal
scopescope ofof workwork areare requiredrequired toto bebe completedcompleted..meansmeans 3131stst MarchMarch of of thethe yearyear closingclosing afteraftertwotwo years years of of the the yearyear of of commercialcommercialoperationoperation of of thethe project,project, andand inin casecase thethe
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operationoperation inin thethe lastlast quarterquarter of of aa year,year, thethecutcut--offoff datedate shallshall bebe 3131stst MarchMarch of of thethe yearyearclosingclosing afterafter threethree yearsyears of of thethe yearyear of ofcommercialcommercial operationoperation..
COD of StationCOD of Station Cut off DateCut off Date
1.4.2012 to 31.12.20121.4.2012 to 31.12.2012 31.3.201531.3.2015
1.1.2013 to 31.03.20131.1.2013 to 31.03.2013 31.3.201631.3.2016
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60.0
80.0
100.0
120.0
140.0
NUALFIXEDC
HARGE
INCENTIVE DISINCENTIVE
108108..88%%
117117..66%%
91.2%91.2%
60.0
80.0
100.0
120.0
140.0
NUALFIXEDC
HARGE
INCENTIVE DISINCENTIVE
108.8%108.8%
1010 yrs oldyrs old
70708585
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FixedFixed ChargesCharges (inclusive(inclusive ofof incentive)incentive) payablepayable onon calendarcalendar
monthmonth basisbasisForFor stationsstations >> 1010 yearsyears
== (AFC(AFC xx NDMNDM // NDY)NDY) xx (PAFM(PAFM // NAPAF)NAPAF)
==
Recovery of Fixed ChargeRecovery of Fixed Charge Thermal StationsThermal Stations
== (AFC(AFC xx NDMNDM // NDY)NDY) xx 00..55 ((11..00 ++ PAFMPAFM // NAPAF)NAPAF)
EvenEven ifif plantplant availabilityavailability forfor aa particularparticular monthmonth isis nil,nil, stationstation willwill
recoverrecover 5050%% ofof fixedfixed chargecharge
ProvidedProvided InIn casecase thethe plantplant availabilityavailability factorfactor achievedachieved duringduring
aa yearyear
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Norms for
Energy Charges Recovery
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Operating NormsOperating NormsHeatHeat RateRate Existing StationsExisting Stations
ExistingExisting 200200//210210//250250 MWMW 25002500
500 MW Sub critical Units (for TDBFP 40 Kcal less)500 MW Sub critical Units (for TDBFP 40 Kcal less) 24252425
Kcal/kWh
BTPSBTPS 28252825
TTPSTTPS 29502950
TandaTanda 28252825
Anta, Dadri, KawasAnta, Dadri, Kawas 2075 /30102075 /3010
Faridabad, KayamkulamFaridabad, Kayamkulam 2000/29002000/2900
AuriyaAuriya 2100/30452100/3045
GandharGandhar 2040/29602040/296021
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AuxiliaryAuxiliary PowerPower ConsumptionConsumption
Without cooling towerWithout cooling tower With cooling towerWith cooling tower
200 MW200 MW 8.58.5 9.09.0
22
.. ..
500 (MDBFP)500 (MDBFP) 8.58.5 9.09.0
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ECEC coveringcovering primaryprimary fuelfuel costcost shallshall bebe payablepayable forfor totaltotal exex--busbus energyenergyscheduledscheduled toto bebe suppliedsupplied toto thethe beneficiarybeneficiary duringduring thethe calendarcalendar month,month,atat thethe specifiedspecified energyenergy chargecharge raterate..
EnergyEnergy chargecharge raterate ((ECECRR)) inin RsRs.. perper kWhkWh onon exex--powerpower plantplant basisbasis::
Computation of Energy ChargeComputation of Energy Charge -- ThermalThermal
ECRECR isis arrivedarrived atat afterafter reducingreducing GHRGHR byby heatheat fromfrom 11 mlml secondarysecondary fuelfuel
VCR = Energy charge rate, in Rupees per kWh sent out.
GHR = Gross station heat rate, in kcal per kWh.
SFC = Specific fuel oil consumption, in ml/kWh CVSF = Calorific value of secondary fuel, in kCal/ml
LPPF = Landed price of primary fuel, in Rupees per kg,
CVPF = Gross calorific value of primary fuel, in kCal per kg,
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Heat RateHeat Rate Existing StationsExisting Stations
ExistingExisting 200200//210210//250250 MWMW 25002500 No changeNo change
500 MW Sub critical Units (for TDBFP 40 Kcal500 MW Sub critical Units (for TDBFP 40 Kcal
less)less)
24252425 Less by 25Less by 25
BTPSBTPS 28252825 Less by 60Less by 60
TTPSTTPS 29502950 Less by 25Less by 25
TandaTanda 28252825 Less b 25Less b 25
Kcal/kWh
Anta, Dadri, KawasAnta, Dadri, Kawas 2075 /30102075 /3010 SameSame
Faridabad, KayamkulamFaridabad, Kayamkulam 2000/29002000/2900 SameSame
AuriyaAuriya 2100/30452100/3045 SameSame
GandharGandhar 2040/29602040/2960 Increase by 40Increase by 40
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TheThe CommissionCommission maymay onon itsits ownown reviserevise thethe normsnorms ofof StationStation
HeatHeat RateRate inin respectrespect ofof anyany ofof thethe generatinggenerating stationsstations forfor whichwhich
relaxedrelaxed normsnorms havehave beenbeen providedprovided
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Heat Rate - New Stations
Pressure Rating (Kg/cm2) 150 170 170 247 247
SHT/RHT (0C) 535/535 537/537 537/565 537/565 565/593
New coal based stations after 1.4.2009 6.5% margin over design HeatRate
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
Type of BFP Electrical Turbine Turbine Turbine Turbine
Max Turbine Cycle Heat rate(kCal/kWh)
1955 1950 1935 1900 1850
Min.Boiler Efficiency
Sub-Bituminous Indian Coal 0.85 0.85 0.85 0.85 0.85Bituminous Imported Coal 0.89 0.89 0.89 0.89 0.89
Max Design Unit Heat rate(kCal/kWh)
Sub-Bituminous Indian Coal 2300 2294 2276 2235 2176
Bituminous Imported Coal 2197 2191 2174 2135 207926
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Sample TariffSample Tariff
a cu a ona cu a on
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Sample Tariff CalculationSample Tariff Calculation
Station Details & AssumptionsStation Details & Assumptions
Coal Station (Coal Station (11XX 500500 MW)MW)
Ant. Completed Cost:Ant. Completed Cost: Rs.Rs. 25002500 CrsCrs
Debt: Equity:Debt: Equity: 7070:: 3030 Loan Repayment: DepreciationLoan Repayment: Depreciation
WtgWtg. Avg. Rate of. Avg. Rate of InttIntt.:.: 99%%
TATA:: 8585%%
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Sample Tariff Calculation ..contd.
YEAR 1 2 3 4 5 6 7 8 9 10
ROE 176 176 176 176 176 176 176 176 176 176
DEPRECIATION 125 125 125 125 125 125 125 125 125 125
INTEREST ONLOAN 152 141 129 118 107 95 84 73 62 50
OILCONSUMPTION 11 11 11 11 11 11 11 11 11 11
IWC 20 20 20 20 20 20 20 20 20 20
CAPACITYCHARGE 549 542 534 527 520 514 507 501 496 490
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Frequency Linked UI Rate
600
700
800
900
1000
0
100
200
300
400
500
50.2 50.1 50 49.9 49.8 49.7 49.6 49.5 49.4 49.3 49.2 49.1 49 48.9