RAJASTHAN ELECTRICITY REGULATORY COMMISSION
Petition No. RERC/257/11, RERC/323/12
In the matter of determination of ARR & Tariff for FY 2010-11 (20 days), FY
2011-12 & 2012-13 in respect of Giral Lignite Thermal power Station(RVUN)
Unit-2 (125 MW).
Coram
:
Sh. D.C. Samant, Chairman
Sh. S. Dhawan, Member
Petitioner (RVUNL) :
M/s Rajasthan Rajya Vidyut Utpadan Nigam Ltd
Respondents
:
Dates of Hearings
:
19.08.2011, 15.11.2011, 13.04.2012, 15.05.2012,
29.05.2012, 14.06.2012, 07.08.2012, 04.10.2012,
08.01.2013
Present
: 1.
2.
3.
4.
5.
6.
7.
8.
9.
Sh. N.C. Gupta, MD, GLPL, Barmer
Sh. R.K. Gaur, ACE (PPC&F), RVUN, Jaipur
Sh. M.K. Khandelwal, CAO (W&M), RVUN, Jaipur
Sh. Ashok Parakh, XEn, GLPL, Barmer
Sh. Dinesh Singh, XEn (Commercial), RVUNL, Jaipur
Sh. K.K. Yadav, AEn, GLPL, Barmer.
Sh. G.L. Sharma, Stakeholder
Sh. R.L. Chechani, Consultant, RVUNL
Sh. Piyush Lohia, Consultant, RVUNL
Date of Order
Jaipur Vidyut Vitran Nigam Ltd. (JVVNL)
Ajmer Vidyut Vitran Nigam Ltd. (AVVNL)
Jodhpur Vidyut Vitran Nigam Ltd. (JdVVNL)
:
24.02.2014
ORDER
SECTION-I
1.
Background:Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUNL) filed petition no.
257/11 on 15.04.2011 for determination of Tariff for FY 2010-11 (20 Days), FY
2011-12 and ARR for MYT Control Period from FY 2010-11 to FY 2013-14 and
petition no. 323/12 on 19.04.2012 for determination of Tariff for FY 2012-13
(1)
in respect of Unit-2 (1 X 125 MW) of Giral Lignite Thermal Lignite Power
Station, Barmer.
2.
The petitioner also prayed for allowing provisional tariff in respect of GLTPS
(RVUN) Unit-2 to be applicable immediately after actual COD
w.e.f.12.03.2011 as proposed in the petition till final tariff order was issued.
3.
Public Notice with salient features of the petitions inviting objections/
comments/ suggestions from any desirous person in respect of petition
no.257/11 was published in Rajasthan Patrika and Rashtradoot on
08.06.2011 and Times of India on 09.06.2011 and in respect of petition
no.323/12 was published in Rajasthan Patrika and Rashtradoot on
04.09.2012 and Times of India on 05.09.2012.
4.
The petitions were made available in the RERC Office as well as in the
office of the petitioner. These were also placed on the websites of
Commission and the petitioner. Comments/ suggestions were required to
be furnished within 21 days from the date of public notice.
5.
The audio-visual presentation in respect of the petition no. 257/11 & 323/12
was made on 13.06.2011 and 10.09.2012 respectively at Vidyut Bhawan,
Jaipur.
6.
All the three members of the Commission were present during the
hearings. However, one member namely Sh. S.K.Mittal has since demitted
office on completion of his tenure. This order, therefore, is being passed by
two members, including Chairman of the Commission.
7.
The objections/ comments/ suggestions were received from following
stakeholders:
(1) Ajmer Vidyut Vitran Nigam Ltd. (AVVNL)
(2) Sh. G.L. Sharma
(3) Jaipur Vidyut Vitran Nigam Ltd. (JVVNL)
(4) Sh. D.P.Chirania
(5) Rajasthan Vidyut Vikas Sansthan (R.V.V.S.)
(6) Samta power
RVUN vide letter dt. 13.07.2011 again requested the Commission to allow
provisional tariff w.e.f. 12.03.2011, as proposed in the petition, as detailed
below:
Table No.1: Interim Tariff as proposed
8.
Parameter
FY 2010-11
FY 2011-12
Fixed Charges (Rs./unit)
2.2276
2.2101
Variable Charges (Rs./unit)
1.0748
1.1822
Total Tariff (Rs./unit)
3.3024
3.3923
(2)
9.
The Commission pointed out some data gaps in the petition no.257/11
vide letter dt. 19.07.2011 and in respect of the petition no.323/12 vide
letter dt. 31.07.2012 and directed the petitioner to submit the required
information/clarifications. The petitioner submitted its response vide their
letter dt. 03.08.2011 in respect of the petition no.257/11and vide their letter
dt. 27.09.2012 in respect of the petition no.323/12.
10.
The petitioner submitted supplementary petition on 09.08.2011 for FY 201011 & 2011-12 after revising fixed cost on account of Special O&M expenses
and Insurance charges and requested for approval of tariff, ARR and
provisional tariff in respect of GLTPS (RVUN) Unit-2 after considering the
revised data. RVUN requested the Commission to allow the revised tariff as
per supplementary petition as under:
Table No.2: Interim Tariff as proposed (As per supplementary petition)
Parameter
FY 2010-11
FY 2011-12
Fixed Charges (Rs./unit)
2.2686
2.2553
Variable Charges (Rs./unit)
1.0748
1.1822
Total Tariff (Rs./unit)
3.3434
3.4375
11.
Objections were received from Sh. G.L. Sharma on the supplementary
petition vide letter dt.16.08.2011.
12.
Public hearing was held on 19.08.2011in respect of interim tariff. It was
seen that the capital cost considered in the petition (Rs. 901 cr.) was much
higher than the cost envisaged in the DPR (Rs. 618 cr.). The Commission,
thus, considered 65% and 85% of fixed and variable charges respectively
for allowing ad-hoc interim tariff.
13.
Accordingly, the Commission vide its order dt. 13.09.2011 approved the
interim tariff as under:
Table No.3: Interim Tariff as approved
Parameter
FY 2010-11
FY 2011-12
Fixed Charges
1.4746
1.4659
Variable Charges
0.9136
1.0049
Total Tariff
2.3882
2.4708
14.
The next public hearing was held on 11.10.2011. The Commission observed
that the apportionment of common assets between two units is not clear
due to which capital cost of units could not be finalised. The petitioner
was directed to furnish some additional information within three weeks
and the matter was listed for hearing on 15.11.2011.
15.
The next public hearing was held on 15.11.2011. The petitioner requested
to allow some time enabling them to submit replies and further data. The
Commission vide order dated 16.11.2011 allowed one month time to RVUN
(3)
for furnishing all the replies and information. It was also decided that the
matter shall be listed for hearing after having received replies and
information.
16.
The next public hearing was held on 13.04.2012. The petitioner prayed to
allow tariff as petitioned and also that the interim tariff allowed for FY 201112 be extended for FY 2012-13. The Commission observed that the
information sought earlier regarding apportionment of common assets
between two units with proper justification, reasons and justification for
abnormal delay in commissioning of the plant and liquidated damages
charged/ proposed to be charged from suppliers etc. have not yet been
furnished by the petitioner and therefore, the Commission, vide order dt.
17.04.2012 allowed one month time to furnish the required information as
sought by the Commission and stakeholders.
17.
The next public hearing was held on 29.05.2012. The petitioner again
prayed to allow tariff as petitioned and also requested for the interim tariff
allowed for FY 2011-12 to be extended for FY 2012-13. The Commission
vide order dated 31.05.2012 allowed the same interim tariff for the year
2012-13 as already allowed for the year 2011-12 vide order dated
13.09.2011 as under subject to adjustment as per final order on the
petition:Table No.4: Provisional Tariff, as approved, for the year 2012-13:
Parameter
FY 2012-13
Fixed Charges
1.4659
Variable Charges
1.0049
Total Tariff
2.4708
18.
The case was again heard on 14.06.2012. The Commission observed that
capital expenditure actually incurred up to the date of commercial
operation duly audited and certified Statutory Auditors have yet not been
furnished by the petitioner and the commission allowed one month time
to furnish the same.
19.
The case was again heard on 07.08.2012. The Commission, vide its order
dated 08.08.2012 adjourned the proceedings due to non submission of
information regarding capital cost actually incurred up to the COD duly
certified by Statutory Auditors, as sought earlier.
20.
The petitioner vide its letter dated 30.08.2012 submitted the statement of
actual capital expenditure up to 11.03.2011, duly certified by the Statutory
Auditors.
21.
The case was heard on 04.10.2012. The Commission observed that the
petition for determination of ARR and tariff for Giral II for FY 13 have also
been filed by petitioner and many issues are common in petitions for FY 12
(4)
& FY 13, therefore it would be appropriate to hear the petitions for FY 12 &
FY 13 together. Meanwhile, the petitioner was directed to analyze the
reasons for disproportionate increase in IDC and finance charges and also
to examine as to why part of these charges is not recoverable from the
suppliers/ contractors. The case was adjourned for next date of hearing.
22.
The Petitioner vide its letter dated 06.12.2012 also submitted the reasons for
delay in commissioning of the unit and disproportionate increase in IDC.
23.
In the meantime, during the hearing for petition no. 352/12 for
determination of ARR and tariff for FY 13-14, one of the stakeholder Sh. G.
L. Sharma, vide its letter dated 23.09.2012, raised certain issues and
submitted that the COD of GLTPS Unit-2 had not been declared strictly as
per provision of RERC Tariff Regulations, 2009. The Commission, therefore,
decided to first finalize the issue of COD and pending that, this order was
kept on hold. The Commission, considering the importance of the issue of
COD, heard the matter on 15.10.2013 & 05.12.2013 and decided the same
vide its order dated 23.12.2013 wherein the Commission has decided not
to interfere with the COD declared by the petitioner. As the COD issue
stands finalized, this order is now being issued.
24.
In the process of prudent checking of capital cost, the Commission
observed that the details of actual capital expenditure as per the
certificate of statutory auditor and allocation of common assets between
unit-I and II was not complete. In view of the incomplete details, the
representative of RVUN and GLPL were called to explain the matter and
furnish the requisite details.
25.
Written submissions of the stakeholders on the proposal with their
elaboration during hearing and reply as well as oral submissions by the
petitioner are discussed in subsequent paras. The abbreviations used in this
order are as per “Annexure-1”
26.
The Commission under this order has taken up determination of tariff and
ARR for FY 2010-11, 2011-12 and 2012-13 only. For FY 2013-14, since
separate petition has been filed by the petitioner based on updated data
for determination of tariff and ARR, the same will be decided through
separate order. The subject matters dealt with in subsequent sections are
as under:
Section-II -Summary of objections/ comments/ suggestions, petitioner’s
response and Commission’s views.
Section-III – Determination of ARR & Tariff.

(5)
SECTION-II
Summary of objections/ comments/ suggestions, petitioner’s response and
Commission’s views:
27.
28.
29.
30.
31.
32.
Annual Audited Accounts:
Comments of stakeholders/objectors:
AVVNL & JVVNL submitted that the petitioner should provide the audited
annual accounts for last three years i.e. FY 08-09, FY 09-10 and FY 10-11.
Petitioner’s response:
The petitioner provided the audited annual accounts for FY 2007-08, FY
2008-09 and 2009-10 and a statement of actual capital expenditure up to
(11.03.2011),duly certified by the Statutory Auditors.
Commission’s Views:
Regulation 44(5) of RERC Tariff Regulations,2009 reads as under: “A
generating company shall make a fresh petition as per these Regulations,
for determination of final tariff based on actual capital expenditure
incurred up to the date of commercial operation of the generating station
duly certified by the Statutory Auditors based on audited annual
accounts” whereas the petitioner has furnished the annual accounts for
FY 2008-09 and FY 2009-10 and a certificate of the Statutory Auditors
certifying the capital expenditure incurred up to 11.03.2011.
As per Regulation 12(2) of RERC (Terms and conditions for determination
of Tariff) Regulations 2009, the information for the previous year should be
based on audited accounts and in case audited accounts for previous
year are not available, audited accounts for the year immediately
preceding the previous year should be filed along with unaudited
accounts for preceding year as far as for determination of tariff for FY 1213 is concerned. RVUN has failed to provide the audited accounts of
previous year or the year immediately preceding the previous year. The
Commission directs RVUN to ensure that the provisions of Regulation 12(2)
of RERC (Terms and conditions for determination of Tariff) Regulations,
2009 should invariably be complied with while filing the next tariff petition.
Delay in declaration of Commercial Operation Date (COD):
Comments of stakeholders/objectors:
AVVNL and JVVNL submitted that the petitioner should provide the
Scheduled Date of Operation (Date of Manufacturing of Plant) and
Scheduled COD as approved by the sanctioning authority.
Sh. G.L. Sharma submitted that the COD has been declared after a period
of 2 years & 9 months from the original scheduled date. It is not
understood as to why such a long time was taken to declare the COD.
(6)
The petitioner may provide the capital cost that would have been in case
the COD of the unit would have been in Dec., 2008 itself. The amount of
IDC as on 31.12.2008, as shown originally in DPR and year wise addition
thereafter may also be provided. Sh. G.L.Sharma also requested to
provide the information of year wise quantum of energy loss. He further
submitted that the petitioner should also provide the amount of
Liquidated Damages (L.D.) recovered or to be recovered as per the
decision of BoD.
33.
Sh. G.L. Sharma further submitted that the petitioner should indicate
whether the plant, after being commissioned on 26.12.2008, has ever
attained full installed capacity during the trial run continuously for 72 hours
or more. If so, the petitioner should provide the dates when full capacity
was achieved. Further, the petitioner should also submit the defects
(manufacturing defect in any of the BTG or construction work) that were
noticed for declaring the COD and the costs to rectify the defects.
34.
Sh. G.L. Sharma further submitted that the petitioner has not stated
whether any notice was given to Discoms prior to demonstrating MCR or
IC through successful trial run of 72 hours. Further, the declaration of COD
has been done by GLPL and not by RVUN.
35.
Petitioner’s response:
The petitioner submitted the following details regarding the Scheduled
Date of Operation and COD.
Table No.5: Details regarding scheduled & actual dates
Particulars
Zero Date (Date of LOI to BHEL)
Scheduled Date of Commissioning (30 months from LOI)
Actual Commissioning Date
COD
Date
30.11.2005
29.05.2008
26.12.2008
12.03.2011
36.
The petitioner submitted that the delay in commissioning of the plant was
due to delay in environment clearance which was issued on 5.1.2006 and
the subsequent consent to establish which was given on 28.1.2006. The
actual physical work started thereafter only. Further, the construction work
of the plant was also delayed due to heavy rains and flood in Barmer
District in the year 2006 due to which the road approaching the plant site
was blocked.
37.
The petitioner submitted that GLTPS Unit-2 was synchronized on dt.
26.12.2008 and on a/c of high content of sulphur in lignite and increasing
lime quantity; full load operation was not possible due to choking of back
pass, where major heat transfer tubes were located. After various
modifications carried out by M/s BHEL, consistent full load was achieved
just before the COD on dt.12.03.2011. Till such date, the Unit was operated
on part load for which lignite & lime was consumed. The capital cost
(7)
would have been Rs. 750 cr., if the unit would have started in Dec., 2008.
The amount of IDC in DPR was Rs. 45.44 crores. The petitioner also
submitted that there was no energy loss as unit could not be started on
commercial operation due to technical reasons. Energy generated after
commissioning up to COD was sent to the Grid / Discoms.
38.
It was also submitted that Rs. 14.36 cr. had been withheld from M/s BHEL
bills and Rs. 25.14 cr. from bills of BoP contractors on a/c of L.D., as per
provisions of the contract. Details of L.D. withheld are, as under:
Table No. 6: Details of L.D. Withheld
S. No.
1
2
3
4
5
6
Name of Package
BHEL
TPL
Zubery
K.S. Construction
J.R. Construction
I.L. Kota
Total
Amount (Rs. Lakhs)
1436
2432
81.59
0.64
3950.23
39.
The petitioner further submitted that this project is based on CFBC
technology which is useful for fuel of low calorific value and high sulphur
content. However, due to high variation in sulphur and ash content found
in lignite, boiler was not found to be adequately compatible. Hence, BHEL
had to make many modifications such as addition of 8 high pressure Soot
Blower, adjustment in back-pass dome to separate fly ash and clinkers,
etc. to run the unit on full load capacity. Since, these modifications were
carried out by BHEL at their own cost; penalties on account of deficiencies
were not imposed. However, L.D. has been withheld, as explained above.
The petitioner also submitted that there were some pending works which
were attended by M/s BHEL free of cost. No other major defects were
noted during COD period & no additional cost was required to rectify the
defects.
40.
The petitioner further submitted that GLTPP is a part of RVUN and
employees of GLTPP are part of RVUN employee. The COD has been
declared as per RERC regulation, 2009 after 72 hours of trial run as
mentioned in the said annexure also.
41.
42.
Commission’s Views:
The matter related to declaration of COD stands decided vide
Commission’s order dt. 23.12.2013.
The Commission noted that there was a delay of 7 months in
synchronization/commissioning of the project due to delay in obtaining
environment clearances and road blockage due to heavy rainfall in
Barmer District in August, 2006. The Scheduled date of synchronization/
(8)
commissioning was May 2008. The Commission observed that obtaining of
environmental clearances in time was responsibility of the petitioner
although delay by concerned agency cannot be ruled out and hence
cost overrun on account of the same cannot be passed entirely on to the
consumers. Further, delay due to heavy rainfall is beyond the control of
the petitioner.
43.
The Commission also observes that there was abnormal delay in declaring
COD after commissioning of the unit on dt. 26.12.2008. As per DPR, sulphur
content of lignite was envisaged to be in the range of 3-6%. Also, as per
Fuel Supply Agreement, sulphur content was envisaged to be between 35%. Actual sulphur content as per the certificate of sample analysis by M/s
Mitra SK Pvt. Ltd. was found to be 6.04% which is close to the highest value
envisaged in the DPR and the fuel supply agreement. Although, the
choice of appropriate equipment to cater to the available fuel supply is
the responsibility of the petitioner, but the fact that the sulphur content
was high in the lignite cannot be overlooked. Hence, delay on this
account, cannot be entirely attributable to the petitioner. The matter
related to delay in declaring COD and treatment of IDC for delayed
period has been dealt with in the Section for “determination of capital
cost”.
44.
The Commission observed that the L.D. amount has been withheld
provisionally. The petitioner has not finally determined the amount
recoverable from suppliers/contractors. The BoD of RVUN has also issued
directions, in its meeting held on dt. 14.12.2011 to recover the L.D. amount
as per provisions of the contract. The Commission directs RVUN to finally
determine the amount to be recovered from the suppliers/contractors
and report the compliance to the Commission in petition for
determination of final capital cost and tariff for FY 2010-11. The
Commission provisionally reduced 50% amount of Misc. deposit on
account of L.D. & other reasons while determining the provisional capital
cost.
45.
Capital Cost:
Comments of stakeholders/objectors:
Sh. G.L. Sharma, JVVNL & AVVNL submitted that the petitioner should
provide the audited figures of item wise capital expenditure including
yearly details of Capital Work in Progress (CWIP) starting from 01.04.2006.
46.
Sh. G.L. Sharma also submitted that petitioner should provide the details of
the common facilities used by GLPL Unit-1 and GLTPS (RVUN) Unit-2.
47.
Sh. G.L. Sharma further submitted that the capital cost for GLTPS (RVUN)
Unit-2 includes cost of raw water reservoir (8.83 cr.) but as the objector
understands, the water would be brought through water conductor
(9)
system laid down for GLPL Unit-1. Hence, the petitioner should provide a
justification regarding the same. It is also not clear from the petition as to
from which source and by what means, the water will be brought for
power station.
48.
Sh. G.L. Sharma also submitted that the petitioner should provide
information regarding approval of capital cost by the Commission. He
further submitted that capital cost of Rs. 901.92 cr. implies cost of Rs. 7.21
cr./MW, which is very high as compared to capital cost of Rajwest (Rs.4.80
cr./MW) and Neyveli (Rs.6.5cr./MW) power plants. The petitioner should
provide a clarification regarding the same.
49.
Sh. G.L. Sharma submitted that the petitioner should provide details
regarding the following:
 Break-up of the capital cost of Rs. 618 cr., 650 cr., 750 cr., 908 cr., &
901.92 cr.
 Dates on which orders of the equipment were placed, cost at which
they were placed, date of supply and whether there were any delays
in supply of equipment.
 Whether the cost of equipment was inclusive of the spares and any
additional spares were purchased?
 What were the terms & conditions for supply of these plants? The dates
on which the supplies were received and in case of delay, what is the
period of delay?
 Whether any deductions/ refund have been made as per instructions
of BoD in their resolution?
 Whether there was any clause regarding penal charges in case of
delay in supply of equipment and amount of penal charges recovered
from suppliers, if any?
 Whether the cost of equipment increased due to delay in supply of
equipment?
 Whether the delay in commissioning of the project was due to delay in
supply of equipment and what its implication on overall project cost
was?
50.
Sh. G.L.Sharma further submitted that the major civil works & that of
colony, which will be a common colony for both the units, have already
been carried out under the works of GLPL unit-1. Thus, the cost of the same
is to be proportionately apportioned. Hence, justification for the provision
of Rs. 5.43 cr. for Misc. civil works is required.
51.
Sh. G.L. Sharma further submitted that as per DPR, the capital cost of Unit2 is Rs. 618 crores. The State Govt. has approved the revised cost of Rs. 650
crores with equity contribution of Rs. 185 crores. As per petitioner, the final
(10)
cost as on COD approved by their BoD IS Rs. 901.92 crores while as per
chartered Accountant, it is Rs. 900.49 crores and as per Statutory Auditors’
statement, it is only Rs. 744.38 crores. As we are to go as per Statutory
Auditors, the capital cost is to be taken as Rs. 744.38 crores only.
52.
Sh. G.L.Sharma further submitted that as per project schedule given in
DPR, the commissioning of the Unit has been 33 months from the Zero date
reckoned from the date of L.O.I. for main SG & TG packages. The date of
L.O.I. of SG & TG packages is 30.11.2005 and accordingly date of
commissioning comes as 29.8.2008. As per agreement dated 30.04.2005,
28.09.2006 and 07.06.07 executed by RVUN with Discoms, it is June,2008,
whereas RVUN unit has declared COD as on 12.03.2011 i.e after a period
of about more than 2 ½ years from the scheduled commissioning date.
This has resulted in increase in cost and IDC.
53.
Sh. D.P.Chirania submitted that the capital cost of the Unit has increased
to Rs. 901.92 crores from the revised cost of Rs. 750 crores, mainly due to
loading of IDC. Thus, the loading of IDC of an amount of Rs. 149.10 crores
due to delay in declaring of COD should be disallowed.
54.
Sh. R.G. Gupta of RVVS submitted to clarify about the following points :
 Whether in principle approval of the capital cost has been obtained by
the petitioner from the Commission?
 The petitioner has not mentioned the approved capital cost by the
Commission and has submitted the petition on the basis of capital cost
which has been approved by their BoD or by the Government which is
not lawfully valid as per Tariff Regulations.
 Whether the petitioner has ever submitted project feasibility report to
the Commission and whether the Commission has done the prudent
check? If so, what was the capital cost of the project in the initial
project feasibility report?
 As per regulation 8(7)(a), variation in the capital expenditure on
account of time/cost overrun is to be considered as a controllable
factor and accordingly as per regulation 10, 50% of the loss can only
be transferred to be borne by other than petitioner.
55.
Petitioner’s response:
The petitioner provided the break-up of capital cost including details of
original project cost, revised project cost as on COD, and a statement of
actual capital expenditure up to 11.03.2011, duly certified by the Statutory
Auditors, as under:
(11)
Table No.7: Break up of capital cost as per petition
Revised
Govt.
Approved
Cost
As per
DPR
Name of the package
Preliminary Investment including
land and site development
Main plant BTG Package
Initial/Capital Spare (BHEL)
Station C&I (IL)
Mech. Package
Electrical Package
Civil Works
Oil
handling
plants
and
equipment’s, material handling
equipment
bulldozer,
miscellaneous civil works, etc.
Consultancy & Engineering
Administrative and other charges
L/L Augmentation work
Raw water reservoir and external
water supply system
IDC and Financing charges
Project Cost
(Rs. cr.)
Revised
project cost
as on COD
(11.03.2011)
Project cost up to
11.03.2011 as per
Statutory Auditor
Statement*
6.88
0.02
364.80
20.00
14.54
121.00
53.92
61.92
624.88
310.00
-
364.80
20.00
13.85
251.80
243.27
-
25.24
18.00
10.59
1.75
9.00
-
1.43
6.00
21.50
1.43
35.16
21.50
0.96
12.77
21.58
-
-
8.83
10.87
45.44
617.99
54.00
750.09
173.94
901.92
62.70
744.37
* IDC has been considered up to 31.03.2009
56.
Further, the petitioner also submitted the year-wise details of CWIP (Rs. in
cr.) starting from FY 2005-06, as provided below:
Table No.8: Details of CWIP
Year
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Opening
0.00
12.90
187.20
534.64
697.76
730.87
Addition
12.90
174.29
347.44
163.11
33.11
2.45
(Rs.cr.)
Closing
12.90
187.20
534.64
697.76
730.87
733.32
57.
The petitioner clarified that the capacity of reservoir for Unit-1 was not
sufficient to store water for Unit-1 (GLPL) and Unit-2 (RVUN) both. So,
additional reservoir was required for Unit-2.
58.
The petitioner submitted that RERC had provisionally approved the capital
cost as Rs. 618 cr. vide its order dt. 21.03.2007. Further, capital cost of Rs.
750 cr. was approved by the State Govt. on 11.08.2009. The final capital
cost of Rs. 901.92 cr. considering IDC up to COD (12.03.2011) is under
process of approval. The petitioner also submitted that enhancement in
the capital cost was mainly due to the rise in IDC which was beyond the
control of the petitioner. It was also mentioned that GLTPS (RVUN) is the
first plant in the world which is utilizing lignite with high sulphur content
because of which the unit required some modifications. It was only after
(12)
that, the full load could be achieved. This led to increase in the project
cost.
59.
The petitioner furnished the copies of work orders with terms and
conditions for supply along with date of placement of orders and price at
which they were placed. The petitioner also submitted that in most of the
cases, cost of spares was included in work package but in case of M/s
BHEL, initial spares were not included. Hence spares amounting to Rs 20 cr.
were purchased. There was delay in scheduled completion of BTG and
BoP packages due to which Rs 14.36 cr. and Rs 24.32 cr. have been
withheld on a/c of L.D. due to delay in commissioning of the unit from M/s
BHEL for BTG package and M/s TPL for BoP package, respectively. Further,
an amount of Rs 82.23 lakhs has also been withheld from other
contractors. The petitioner also submitted that the cost of equipment did
not increase due to delay in supply and all the payments have been
made as per the terms and conditions stipulated in respective contracts.
The petitioner also submitted that mobilization advance was given to M/s
BHEL & TPL @ 10% of order value. The petitioner further submitted that in
the 159th meeting of BoD held on dt. 29.07.2009, a decision was taken not
to deduct 10% amount from running bills on a/c of delay in completion of
work from BoP contractor till 31.03.2010. Hence, no refund has been made
to the contractor.
60.
The petitioner submitted that there are two colonies in Barmer.
Expenditure of 1st colony (Vidyut Vihar) has been booked in cost of GLPL
Unit-1 and Expenditure of 2nd colony (Urja Vihar) has been booked in cost
of GLTPS Unit-2.
61.
The petitioner submitted that the increase in capital cost of GLTPP Unit-2 is
mainly attributed to delay in commissioning by BTG contractor M/s. BHEL
and BOP contractors due to various reasons for failure to adhere
completion schedule in terms of their respective contracts. This has
resulted in cost escalation of preoperative expenses comprising of
establishment, administrative and contingency expenses, frequent trial for
lighting and synchronization till the period up to final COD of the unit.
62.
The petitioner submitted that the details of the project are submitted
along with the data gap of the original petition FY 2011-12 as detailed
project report which contain all the information needed by the objector.
The petitioner further submitted investment approval of the project cost
has not been taken. The determination of capital cost is under
consideration of the Commission and the petitioner had submitted all the
required documents/data as desired by the Commission for their prudent
checking.
(13)
63.
64.
65.
The petitioner, in response to the meeting with Commission provided the
details of adjusted capital cost of Unit-1 and Unit-2 after bifurcation of cost
of common assets utilized by both the units, as mentioned here as under:
Table No.9: Adjusted capital cost after allocation of common facilities as
furnished by petitioner:
(Rs.cr.)
Description
Unit-1
Unit-2
Preliminary Expenses
1.3057
0.4712
Main Plant (BTG) Package including Taxes,
Duties, Freight, Price Variation
340.52
364.80
Mechanical Package
92.52
124.40
Electrical Package
Control & instrumentation
Civil Work
Water Supply system including reservoir
Augmentation works
Total
Pre- Operative Expenses, contingency,
audit and accounts, legal expenses,
development & adm. charges
IDC & Financing Cost
Total project cost
29.68
10.07
71.58
45.13
11.50
602.30
63.12
14.54
73.95
35.17
21.40
698.15
1.87
13.6869
115.38
719.56
62.6989
774.53
Commission’s Views:
The petitioner had submitted a statement of package-wise actual capital
expenditure (Rs. 744.37 cr. including IDC of Rs. 62.70 cr. (charged up to
31.03.2009)) incurred up to 11.03.2011 duly, certified by the Statutory
Auditors. The matter related to determination of capital cost of the unit
has been dealt with in the relevant section.
The petitioner has submitted a certificate by the Statuary Auditors of
actual capital expenditure incurred up to 11.03.2011 and audited
accounts for FY 2009-10. The Commission observed that in the certificate,
the IDC has not been included up to COD and the details of item wise
capital expenditure are not matching with the package wise capital
expenditure furnished by the petitioner. The petitioner, however, submitted
the bifurcation of the hard cost as certified by the Statuary Auditor in
major heads as provided in DPR. It has been observed that bifurcation of
the hard cost is certified by the whole time Directors of GLPL & RVUN but
the same is not certified by the Statutory Auditor. In view of the above,
prudent check of package wise capital cost on the basis of actual
expenditure certified by the statutory auditor is not possible. The
determination of capital cost of the unit has been dealt with in the
relevant section keeping in view the said position.
(14)
66.
Lignite Price:
Comments of stakeholders/ objectors:
Sh. G.L. Sharma submitted that the petitioner should provide details
regarding approval of lignite price by the State Govt. or approval of
mechanism used for determination of lignite prices. He further submitted
that the petitioner should provide reasons for not filing necessary petition
for seeking approval of lignite prices to the Commission as per Regulation
No. 12(7) of Tariff Regulations, 2009, in case the lignite prices were not
approved by the State Govt. nor estimated on the basis of Govt.
approved mechanism.
67.
Sh. G.L. Sharma also submitted that the petitioner should provide the
details for calculation of lignite prices of Rs. 765.93 per MT and Rs. 842.523
per MT for FY 2010-11 and FY 2011-12, respectively.
68.
Sh. G.L. Sharma further submitted that the lignite price for FY 2010-11 has
been escalated by 10% for taking the price for next FY 2011-12. Such
practice should not be adopted as the escalation is covered under F.A.C.
clause.
69.
Petitioner’s response:
The petitioner submitted that price of lignite is based on recommendations
of Sh. Shyamal Ghosh, IAS (Retd.), appointed by GoR for evaluation of
base lignite transfer price for GLPL Unit-1 and GLTPS Unit-2 both.
70.
The petitioner also submitted that the price of lignite for FY 2010-11 was
estimated as Rs. 765.93 per MT on the basis of average receipt of lignite
during previous three months i.e. Dec 2010, Jan 2011 and Feb 2011.
However, in the FSA, basic rate was calculated considering Diesel rate @
Rs. 31.43 per liter and service tax, royalty and VAT were added to the base
rate. The price for FY 2010-11 was escalated by10% to estimate the price
for FY 2011-12 as Rs. 842.52 per MT.
71.
The petitioner also submitted that escalation has been considered in MYT
in view of anticipated rise of the lignite. However, tariff for every FY is to be
got approved by RERC subject to F.A.C. clause.
72.
Commission’s Views:
It may be observed that the Giral lignite thermal power project does not
have a captive mine. In view of this, lignite transfer price under Regulation
12(7) of RERC Tariff Regulations, 2009 is not required to be determined by
the Commission. However, as part of prudent check, the Commission has
looked at the reasonability of lignite price claimed by the petitioner.
(15)
73.
The petitioner has submitted that the lignite prices were based on
recommendations of Sh. Shyamal Ghosh, IAS (Retd.) appointed by GoR
for evaluation of base lignite transfer price. A Memorandum of
Understanding (MoU) was entered into between Rajasthan State Mineral
Development Corporation Limited (now merged with RSMML) and RVUNL
for development of the Giral Lignite deposits for the Giral Lignite power
project in January, 2003. According to clauses of the MoU, the lignite
price was to be determined by a committee consisting of Chief Secretary,
GOR as Chairman and Mines Secretary and Energy Secretary (GOR) and
the CMD’s of RSMDC and RVUNL. The committee took a view that the
committee could take a decision based on the report of an expert who
would recommend the price based on the objective assessment of claims
made by both RSMML and RVUNL. Accordingly, Sh. Shyamal Ghosh and
former Chairman of Telecom Commission of India and former Chairman of
Gujarat State Petroleum Corporation was appointed as an expert for
advising on the price of lignite for supply by the RSMML to RVUNL. Sh.
Shyamal Ghosh vide his letter dated 21.11.2005 addressed to Principal
Secretary Finance submitted his report on transfer price of lignite.
Subsequently, a Fuel Supply Agreement (FSA) was entered into between
RSMML and RVUNL based on the transfer price recommended by Sh.
Shyamal Ghosh.
74.
The Commission has looked at the reasonability of prices as agreed by the
petitioner & RSMML based on the recommendation by the expert Sh.
Shyamal Ghosh. Shri Ghosh has arrived at sale/transfer price of Lignite
based on the mining cost discovered through competitive tendering
process. Shri Ghosh in his report at page 27 has stated that the price of Rs.
558/- per M.T. compares favorably with prices in other Lignite Projects. The
table at annexure VI of the report shows that sale/ transfer price for Giral
Lignite project even at Rs. 650/- per M.T. demanded by the RSMML is lower
than lignite prices of other projects like NLC, GIPCL, Surat and NLC’s
Barsingsar projects except that of G.M.D.C., where the overburden ratio is
more favorable. To further check the reasonability of the rate
recommended by Shri Shyamal Ghosh, the Commission finds that the
excavation rate per cubic meter of Giral mine works out to Rs. 26.61/cubic
meter as compared to Rs. 45.51/ cubic meter of NLC’s Barsingsar mines. In
the light of the above discussed position, the lignite price claimed is
considered reasonable. Annual escalation of 5% in RSMML expenses such
as Site operating expenses and administrative expenses besides actual
escalation in diesel price considered by Shri Ghosh is also reasonable.
75.
The petitioner has claimed transfer price of lignite as per provisions of Fuel
Supply Agreement. In the price component of the lignite, the Diesel
escalation is admissible as per actual and among the RSMML expenses,
the site operating expenses and administrative expenses are subject to
escalation @ 5% per annum. Service Tax, Royalty & VAT is extra at actual.
The lignite price of Rs. 765.93 per M.T. based on weighted average of the
(16)
lignite price for three months (December 2010 to February 2011) as per Shri
Shyamal Ghosh’s report is considered by the Commission for FY 2010-11.
The Commission has considered the lignite price of Rs. 777.44 per M.T. for
the year 2011-12 & 2012-13.
76.
The Commission has noted that the petitioner has not clarified whether the
petitioner has approached the State Govt. for waival of Royalty and sales
tax in compliance of the Commission’s direction vide order dt. 17.07.2006.
The petitioner is directed to submit a detailed compliance report along
with tariff petition for final determination of tariff for the year 2010-11 &
2011-12.
77.
Interest During Construction (IDC):
Comments of stakeholders/objectors:
Sh. G.L. Sharma submitted that petitioner should provide the amount of
IDC in the original cost of Rs. 618 cr. and year wise details of IDC from the
year of start of work of the project.
78.
Petitioner’s response:
The petitioner submitted that the year wise amount of IDC of GLTPP Unit#2
is given as below:
Table No.10: Details of IDC
Year
Amount
(Lakhs Rs.)
79.
80.
81.
2006-07
0.93
2007-08
2204.84
2008-09
4065.04
2009-10
5479.91
2010-11
5634.95
Total
17394.00
Commission’s Views:
The Commission noted that the petitioner has furnished the details as
desired by the stakeholder. The matter related to treatment of IDC for
determination of capital cost has been dealt with in relevant section of
this order.
Fuel Supply Agreement:
Comments of stakeholders/objectors:
Sh. G.L. Sharma submitted that Fuel Supply Agreement, dt. 19.05.2009,
between RVUN and RSMML is for supply of lignite for Unit-1. Thus, the
petitioner should provide clarification for using supplies of lignite from
RSMML for Unit-2. The petitioner should also clarify as to whether the
quantum of lignite to be supplied by RSMML would be sufficient or the
position of these units will remain as in the case of RGTPS.
Sh. G.L. Sharma further submitted that the petitioner should confirm that as
per FSA Clause No. 3.3(I), the lignite consumed during the infirm power
period was obtained on cost basis.
Petitioner’s response:
(17)
82.
The petitioner clarified that lignite for Unit-2 was proposed to be delivered
from Soneri block and it was proposed to execute FSA for Unit-2 from
Soneri block but due to delay in start of mining activities at Soneri block, it
was decided mutually, between RSMML and RVUN that RSMML will supply
lignite for Unit-2 as well. The petitioner also submitted that RSMML has
sufficient lignite to supply for both the units.
83.
The petitioner further submitted that as per clause 3.3(I) of FSA dt.
19.05.2009,”the seller shall provide on cost the necessary quantity of lignite
and limestone as requested by the buyer for the successful trial operations
of the power plant, before the actual commencement of commercial
generation of power”. Accordingly, RVUNL claim actual fuel cost during
the infirm period from Discoms.
84.
85.
Commission’s Views:
The Commission observed that Fuel Supply agreement dt. 19.05.2009 has
been executed between RVUN & RSMML for unit-1 & no FSA has been
executed, so far, for unit-2. Since, the unit-1 has now been transferred to
GLPL, the FSA for unit-1 should be transferred in favor of GLPL and a fresh
FSA should be entered into by RVUN for Unit-2.
Depreciation:
Comments of Stakeholders/objectors:
Sh. G.L. Sharma submitted that as per form no. 6.1 attached with the
petition, the GFA for Building & civil works has been shown as Rs.113.45 cr.
and other civil works has been shown as Rs. 15.18 cr., thus totaling to
Rs.128.63 cr. Whereas, in the break-up of capital cost of Rs. 901.92 cr., the
amount of civil works is only Rs. 5.43 cr.. The petitioner should justify the two
figures.
86.
Sh. G.L. Sharma also submitted that as per form no. 6.1, the GFA for
furniture & fixtures has been shown as ‘Nil’. The position seems beyond
imagination. The petitioner should clarify.
87.
Sh. G.L. Sharma further submitted that as per form no. 6.1, the cost of
spares has been shown as Rs. 30.99 cr., whereas in the break-up of capital
cost, the same has been shown as Rs. 20.00 cr. only.
88.
Sh. G.L. Sharma further submitted that as per form no. 6.1, available at
page 31 of the petition, it may be perused that at the beginning of FY
2010-11, gross assets were to the tune of Rs. 8.119 crores and addition
during the year has been shown as Rs. 893.803 crores and thus total at the
end of the year has been shown as Rs. 901.922 crores. As per Statutory
Auditor’s certificate, the total expenditure has been shown as Rs.744.38
crores and as such how the RVUN justifies the total gross assets of
Rs.901.922 crores as on 31.03.2011 and has claimed/ calculated the
depreciation accordingly. Further, as per statement at page 31, the
(18)
depreciation to the tune of Rs. 0.798 crore has been claimed in FY 2009-10
i.e. prior to the date of so called COD. RUUN has to clarify the position.
89.
Petitioner’s response:
The petitioner submitted that the heads of break-up of capital cost and
form no.6.1 are different. So, no comparison is possible.
90.
The petitioner also submitted that the Vehicles and furniture & fixtures of
unit-1 are utilized for unit-2 also, no separate Vehicles and furniture was
purchased for unit-2.
91.
The petitioner further submitted that the cost of spares in breakup of
capital cost is only for M/s BHEL initial spares and in form no. 6.1; the
amount is for initial spares of the whole plant.
92.
The petitioner further submitted that the depreciation for tariff
computation has been considered as per RERC Tariff Regulations, 2009.
The depreciation charges are subject to truing up based on actual capital
expenditure as per audited accounts for 2010-11.
93.
94.
Commission’s Views:
As per the RERC Tariff Regulation, 2009, regulation 23 (6), depreciation
shall be chargeable from the first year of commercial operation. Hence
depreciation charged before the COD cannot be allowed.
Station Heat Rate (SHR):
Comments of stakeholders/objectors:
Sh. G.L. Sharma submitted that the petitioner should provide details of
calculation for Station Heat Rate including turbine cycle heat rate, boiler
efficiency rate, and percentage of moisture content in the lignite. He also
submitted that the petitioner should provide basis for calculation of design
heat rate of 2483.9 kcal/ kWh.
95.
Sh. G.L. Sharma also submitted that the petitioner has taken the moisture
content as 40%, but vide its letter dated 25.10.2011 (Para 21 thereof) has
intimated the Moisture content as 31 to 34% on the basis of samples of fuel
received. The fuel being the same, percentage of moisture content of
lignite cannot be changed.
96.
Sh.D.P.Chirania submitted that SHR for FY 2012-13 has been projected as
2602.97 Kcal/Kwh on normative basis as against the actual of 3599.39
Kcal/Kwh for FY 2011-12, which seems hardly to be achievable. As such,
realistic figure should be taken for consideration for approval of ARR.
97.
Petitioner’s response:
The petitioner submitted that the moisture content of lignite is taken as
40% as per Fuel Supply Agreement with RSMML.
(19)
98.
The petitioner provided the detailed calculation of Station Heat Rate as
shown in table below:
Table No.11: Calculation of SHR as per petition
Gross heat rate
Design boiler efficiency
Design turbine heat rate
Design unit heat rate kcal/kwh (Turbine
heat rate/boiler eff.)*100
Gross heat rate
(1.065 x DHR)
99.
100.
101.
102.
Gross heat rate at 100% TMCR
80.30%
1994
2483.9
2645.39 Kcal/kwh
Commission’s Views:
The Commission has allowed station heat rate as per Regulations.
Special O&M charges:
Comments of stakeholders/objectors:
Sh. G.L. Sharma submitted that the special O&M charges are admissible
only when the process water is required to be transported over a distance
of more than 50 K.M. The petitioner should provide the details regarding
source, distance and means for transportation of water.
He also
submitted that the petitioner should provide details regarding
consumption of electricity towards pumping operation up to the distance
of 50 km. and beyond 50 km. of distance.
Sh. G.L. Sharma submitted that petitioner should provide justification for
claiming special O&M charges even though there is no independent
water supply system for Unit-2.
Petitioner’s response:
The petitioner submitted that Giral Lignite Power Plant is transporting water
from IGNP Zero head at Mohangarh by pipeline of 600 NB dia. For this,
pipeline of about 168 km had been laid from Mohangarh to Giral and a
reservoir had been constructed at Mohangarh for collecting water. They
also submitted that there are four pumping stations for transporting water
to Giral namely Mohangarh (as intake) and Kanod, Aakal and Devikot (as
boosting station).
103.
The petitioner submitted that average of electricity consumption had
been considered in tariff petition for all the 4 pumping stations.
104.
The petitioner also submitted that main pumps were in the scope of GLPL
Unit-1 and secondary booster pumps were in the scope of GLTPS Unit-2.
So, there is no independent water transporting system for GLTPS Unit-2. All
the expenditure of transporting of water from Mohangarh to power plant
is distributed in equal parts, so further justification is not required.
(20)
105.
106.
107.
Commission’s Views:
Petitioner has claimed the water charges, manpower for operation &
maintenance and Electricity Charges for pumping station. The
Commission has considered only Electricity Charges for pumping station
beyond the distance of 50 km from water sources. According to the
information the Pump House at Mohangarh and Kanod are within reach
of 33917.24 meters i.e. 33.9 Km. The other two Pump Houses are at a
distance of more than 50 K.M. distance from the water intake point. The
Petitioner has not provided any supporting data for actual expenses for
water pumping all the expenses are on expected basis.
In view of above, the Commission has considered the electricity
consumption at Akalphata and Devikote pumping stations for both the
units collectively and provisionally only 50% charges are being allowed.
Petitioner is directed to provide the actual expenses on this account in the
petition for determination of final capital cost and Tariff for FY 2010-11.
Interest on term loan & finance charges:
Comments of stakeholders/objectors:
AVVNL and JVVNL submitted that as per the agreement between the
petitioner and Power Finance Corporation, the petitioner had to make
annual payments of around Rs. 48 cr. each year starting from 15.04.2009
towards repayment of loan. However, the petitioner had not repaid any
installment in FY 2009-10 and only Rs. 2.47 cr. was repaid in FY 2011-12.
Therefore, the petitioner should provide clarification regarding the same.
108.
AVVNL also submitted that the average rate of interest @ 11.25% has been
considered while calculating the interest on term loan. But from the
sanction letters of loans from banks/ financial institutions, it is observed that
the rate of interest is lower. The petitioner should also provide the details of
steps taken to refinance the loan at less interest rate.
109.
Sh. G.L. Sharma submitted that the loan amount of Rs. 565 cr. was
sanctioned by PFC, whereas the petitioner had considered term loan of
Rs. 716.92 cr. in the petition. The petitioner should provide clarifications
regarding the same.
110.
Sh. G.L. Sharma submitted that the petitioner should provide the reasons
for obtaining working capital loans without achieving COD of the plant
and utilizing the same for creation of the fixed assets.
111.
Petitioner’s response:
The petitioner submitted that as per RERC regulations 2009, repayment is
to be considered equal to the depreciation allowed for that year. Thus,
repayment of loan has been considered as equal to the depreciation of
Rs. 2.47 cr. in the petition.
(21)
112.
The interest rate mentioned in the sanction letter is as prevailing at the
time of sanction but the rate is chargeable as per interest rate as
prevailing at the time of actual drawl, which may be lower or higher in
comparison to the rate mentioned in the sanction letter. The petitioner has
also provided the details of actual payment of interest and weighted
average rate of interest of 11.22 % for 2nd quarter of 2012-13.
113.
The petitioner submitted that the short term/working capital loans were
obtained for the purpose of completion of capital works of Giral Unit-2.
Details of State Govt. equity and loans for Unit-2 were also provided as
below:
Table No.12: Details of Govt. equity & loans as per petition
2006-07
Year
Govt. Equity
(A)
Loans (B)
PFC Loan
No.
07301015
PFC Loan
No.
07301022
Short term
Loan
Transitional
Loan
Total Loans
114.
115.
116.
Addition Closing
2007-08
2008-09
(Rs cr.)
2009-10
2010-11
Addition
Closing
Addition
Closing
Addition
Repayment
Closing
Addition
Repayment
Closing
35
35
89
124
61
185
-
-
185
-
-
185
87.51
87.51
194.42
281.94
158.31
440.25
0.74
14.7
426.29
-
29.39
396.89
-
-
-
-
-
-
124
-
124
-
8.55
115.44
-
-
-
-
100.1
100.1
-
86.48
13.62
138.3
-
151.92
87.51
87.51
194.42
281.94
258.41
540.35
14.7
139.44
101.18
14.7
578.61
35.47
173.78
37.95
50.17
714.44
The petitioner submitted that due to delay in COD of Unit-2, working
capital loans have been utilized for up keeping and maintenance of
equipment, land, townships, purchase of coal and fuel, etc. It was
necessary to run the plant to achieve COD and amount was spent to
meet various expenditures to run the plant. It was further submitted that
the petitioner was not receiving any amount against the generation
except fuel cost.
Commission’s Views:
The Commission agrees with the petitioner’s view that loan repayment
amount is to be considered equal to depreciation for the purpose of tariff
determination as per requirement of the regulations and the rate of
interest has been considered as claimed in the petition.
The Commission has considered the long term loan requirement based on
the capital cost determined. The short term loan requirement has been
allowed as per norms prescribed for working capital requirement in the
Regulations.
(22)
117.
118.
119.
120.
121.
Debt-Equity Ratio:
Comments of stakeholders/objectors:
Sh. G.L. Sharma submitted that equity contribution of Rs 185 cr. was
considered in the estimated capital cost of Rs 618 cr. resulting in debt
equity ratio of 70:30. The project cost was further increased to Rs.901.92 cr.
but the amount of equity had remained same resulting in debt-equity ratio
of 79.5: 20.5. The petitioner should provide clarifications regarding the
same.
Petitioner’s response:
The petitioner submitted that initially State Government had granted 70:30
as ratio for debt and equity which had been changed to 80: 20 in 2005.
Thus it was as per the State Government orders.
Commission’s Views:
As per RERC Tariff Regulations 2009, Regulation 17 “in case actual equity
employed is less than 30%, the actual equity shall be considered”. Equity
contribution by the GoR (as approved vide their letter dated 11.04.2005)
has been considered as Rs. 185 cr. for Unit-2 which works out to be 23 % of
the capital cost, approved by the Commission.
Insurance charges:
Comments of stakeholders/objectors:
Sh. G.L. Sharma mentioned that the petitioner had claimed insurance
charges of Rs. 0.04 cr. and Rs. 0.81 cr. for FY 2010-11 and FY 2011-12
respectively but had not submitted any documentary proof in this respect.
He further submitted that as per tariff Regulations, such charges are
admissible only on actual basis and thus requested the petitioner to submit
the information.
Petitioner’s response:
The petitioner submitted that the actual insurance charges for 2012-13 for
Unit-2 is Rs. 0.55 crore and also furnished the copy of plant insurance
policies.
122.
Commission’s Views:
The petitioner in response to the stakeholder’s query has submitted the
documentary proof and the same has been considered.
123.
Cost of Land:
Comments of Stakeholders/objectors:
Sh. G.L. Sharma submitted that the petitioner should provide the
justification of cost of land that was shown as Rs.8.58 cr. for Unit-1 and Unit2 while the land cost was only Rs. 1.7 cr.
(23)
124.
Petitioner’s Response:
The petitioner submitted that while the land cost for Unit-1 and Unit-2 was
Rs. 1.7 cr. only, figure of Rs. 8.58 cr. includes preliminary investment and
land & site development expenses.
125.
Commission’s Views:
The Commission has considered the cost of land as certified by the
statutory auditors.
126.
CSR Activity:
Comments of Stakeholders/objectors:
AVVNL and Sh. G.L.Sharma submitted that the amount claimed under the
head “CSR Activity” is to be met by the petitioner from his normal O&M
Expenses.
127.
Petitioner’s Response:
The petitioner submitted that the expenditure under the head “CSR
Activity” can be considered under O&M expenses.
128.
129.
130.
131.
132.
Commission’s Views:
The Commission is not allowing any expenditure under the head “CSR
Activity”, as the same is to be met from the petitioner’s own sources and
this cannot be added to ARR as additional expenditure.
Auxiliary Consumption:
Comments of Stakeholders/objectors:
AVNNL and Sh. D.P.Chirania submitted that the auxiliary consumption for
FY 2010-11 has been considered @ 19.40 % whereas the Commission has
specified 11.50% in the RERC Tariff Regulations, 2009. It is requested to
consider the same suitably in the ARR of the petitioner.
Petitioner’s Response:
The petitioner submitted that the data for 2011-12 are based on
actual/estimates and are for reference and has no impact on tariff of
2012-`13.
Commission’s Views:
The Commission has considered the percentage of auxiliary consumption
as per norms of the regulations.
Plant Load Factor:
Comments of Stakeholders/objectors:
AVNNL submitted that the PLF for FY 2010-11 has been considered @ 26.54
% whereas the Commission has specified 70.00% in the RERC Tariff
Regulations, 2009. The reasons for not achieving the targeted norms have
not been mentioned in the petition.
(24)
133.
134.
135.
136.
137.
Sh. D.P.Chirania submitted that actual PLF for FY 2011-12 is only 26.54%
and therefore estimating it as 72.60% for FY 2012-13 is not only erroneous
but a deliberate attempt of wrong projection, detrimental to consumer’s
interest.
Petitioner’s Response:
The petitioner submitted that the data for 2011-12 are based on
actual/estimates and are for reference and has no impact on tariff of
2012-`13.
Commission’s Views:
The Commission has considered the percentage of PLF as per norms of the
regulations.
General:
Comments of Stakeholders/objectors:
Sh. G.L.Sharma queried as to whether the petition in question bears the
approval of BoD of RVUN. A copy of BoD’s resolution may be provided by
the petitioner. Further, a copy of resolution passed by the BoD authorizing
the C.M.D. for filing the petition and/or authorizing any person for the
purpose may kindly be made available with the petition.
Sh. B.M. Sanadhya of Samta power submitted the following points:
 Justification for operating of Unit-1 in the name of GLPL and operating
of Unit-2 in the name of RVUN, when both the Units are at same place
and plant & equipment are also common.
 To clarify about the efforts made for improvement of lignite mining
technology to reduce cost as per clause no 5.2 of NEP-2005.
 To clarify about the policy of the petitioner in respect of clause no.
5.2.21, 5.2.22 & 5.2.23 of NEP-2005.
 To clarify about the policy & action plan of the petitioner in respect of
clause no. 5.6 of NEP-2005 “Technology Development and R&D.
 To clarify about the policy & action plan of the petitioner in respect of
clause no. 5.11 of NEP-2005 “Training and Human Resource
Development”.
 To clarify about the efforts made for encouraging the competent &
sincere engineers & employees to be retained in the organization
against offers from private sector.
 To clarify about technical. Managerial and policy efforts made for
improvement in PLF, reduction of the cost and improvement in overall
productivity.
 What are the possible solutions to overcome the problem of high
sulphur content? Whether any R&D and comparative economics study
has been done in respect of the options.
(25)
 To clarify about the possible solutions for reducing the cost of Rs. 2.43
per unit.
 To make available the details about cost of advertisement of public
notices, number of employees & public men present in the
presentation on dated 10/09/2012, numbers of persons who have given
their suggestions/ objections on the petition and efforts for ensuring the
maximum participations in the presentations & hearings.
 Justification for non attendance of Directors/ officers, who are
competent to take policy decisions.
 Justification for ignoring of the request for video-graphing of the
presentation and public hearings.
138.
139.
140.
Petitioner’s Response:
The petitioner submitted that the petition has been filed after the approval
of Whole Time Directors. The Regulations do not provide that the petition
should be filed only after approval of BoD. Further, C.M.D., RVUN has
authorized the C.E. (PP&M) and CAO (W&M) RVUN for filing the petition in
RERC format. A copy of the same is enclosed with the petition.
The petitioner submitted that requisite actions are taken by the petitioner,
but all these matters are administrative and policy related, which do not
pertain directly to the petition under consideration.
Commission’s Views:
It is noted that stakeholder has raised some questions and sought some
information also. The comments relevant for this order have been dealt
with appropriately.

SECTION-III
Determination of Capital Cost
141.
142.
Petitioner’s Submission:
The petitioner submitted that the initial project cost for Unit-2 of GLTPS as
envisaged in the DPR was Rs. 618 cr. and State Govt. conveyed approval
for the same vide letter dt. 11.04.2005. It was subsequently revised to Rs.
650 cr. and the State Govt. provided its approval vide its letter dt.
26.04.2008. The project cost was again revised to Rs 750 cr. and approval
of the State Government was provided vide letter dt. 11.08.2009.
Considering the expected COD as 31.03.2011, the enhanced cost of the
project was revised to Rs. 908 cr. However, the actual COD was declared
on dt.12.03.2011 and hence the revised capital cost is worked out as Rs
901.92 cr., which includes IDC of Rs.173.94 cr. up to the date of
commercial operation. The petitioner has also submitted the capital cost
of Unit-2 after apportionment of common facilities as Rs.905.35 Cr.
(26)
143.
The actual capital expenditure up to 11.03.2011 as per certificate of the
Statutory Auditors is Rs. 744.37 Cr. including IDC. The breakup of capital
cost as petitioned is as follows :
Table No.13: Details of capital cost as per petition
S.
No
Name of the package
As per
DPR
1
Main plant BTG Package(BHEL)
2
3
Initial/Capital Spare (BHEL)
4
A
B
C
Balance of Plant
M/s.TPL Package(Inc.addl.ACW)
Bulldozer
Supply of 100 MT Weighbridge
Modification work of AHP
Capacity increase of Guard Pond, Height
increasing of administrative Building &
other Civil Work.
Addl.LDO tank
Portable Centrifugal Machine
DOT & COT tanks
Revised plans of ESP control Room
Consultancy & Engineering(Design)
D
E
F
G
H
I
5
6
7
A
B
8
(Rs. cr.)
Project Cost for Giral Unit-2
Final as on
Revised
COD
Approved
approved
Cost
by BoD
As per
Statutory
auditor
statement
310.00
364.80
364.80
-
20.00
20.00
11
13.85
14.54
624.879
232.80
243.27+61.24
7.89
0.35
3.5
243.72
7.61
0.25
3.50
8.0614
5.5
0
0
0.25
0.21
0.31
0.35
0.25
0.21
0.30
0.35
Station C&I (IL)
0
0.29
1.43
Administrative & Other charges
Legal Expenses & Development Exp., PreOperative exp., Audit & Accounts,
Contingency, O&M Exp.
L/L Augmentation Work
Misc.Civil Work
Raw Water reservoir
IDC & Financing Charges
Grand Total:
10.64
0.96
7.43
12.792
35.16
53.66
618.00
21.5
6.88
0
54.00
750.00
21.50
5.43
8.83
173.94
901.92
21.59
2.249
10.87
62.698*
744.3894
*IDC has been considered up to 31.03.2009
144.
The petitioner also submitted the bifurcation of the hard cost as certified
by the Statuary Auditor in major heads as provided in DPR and after
bifurcating the common cost between unit-I & unit-II submitted the final
adjusted capital cost. The breakup of capital cost, as petitioned as per
DPR, revised as on COD and adjusted after bifurcating the common cost
is as follows:
Table No.14- Details of project cost as submitted by the petitione
Description
Preliminary Expenses
Main Plant (BTG) Package
including Taxes, Duties, Freight,
Price Variation
Mechanical Package
Electrical Package
Control & instrumentation
Revised project
cost as on COD
(12.03.2011) as
petitioned
As per
DPR
(Rs.in cr.)
Project cost as on
COD after
apportionment of
common
expenditure
0
0
0.47
310
364.80
364.80
116.50
51.00
11.00
243.72
14.54
124.40
63.12
14.54
(27)
Civil Work
External Water Supply
Misc
works
including
L/L
augmentation
Total – Hard cost
PreOperative
Expenses,
contingency,
audit
and
accounts,
legal
expenses,
development,
Design
and
engineering
consultancy
services
&
administrative
charges
IDC & Financing Cost
Project cost
145.
65.30
0
0
8.83
73.95
35.48
0
59.50
21.39
553.80
691.39
698.15
10.64
36.59
13.69
53.56
173.94
62.70
618
901.92
774.54
Commission Analysis:
The Commission observes that the petitioner has submitted the revised
capital cost amounting to Rs. 901.92 cr. on the CoD including the IDC
amounting to Rs. 173.94 cr. up to 12.03.2011. The statement of actual
capital expenditure on COD, duly certified by the Statutory Auditors as
furnished by the petitioner is for Rs.744.37 cr. only. It has been observed
that in the statement of actual capital expenditure on COD, duly certified
by the Statutory Auditors, the IDC amount has been considered only up to
31.03.2009 amounting to Rs.62.70 cr. whereas, in the amount of revised
project cost on COD, as furnished by the petitioner, the IDC amounting to
Rs. 173.94 cr. up to 12.03.2011 has been considered. The Commission has
observed that IDC has not been capitalized in the Annual Accounts of FY
09-10 & onwards till COD.
146.
The petitioner has also submitted that adjusted capital cost of Unit-2 after
apportionment of common facilities being used by both Unit-1 and Unit-2
works out as Rs. 774.53 cr which includes hard cost of Rs. 698.15 cr. As per
the statement of the Statutory Auditors, the capital expenditure incurred
up to 11.03.2011 in respect of Unit-2 is Rs 744.39 crores. As per the
bifurcation of certified capital expenditure incurred up to 11.03.2011,as
submitted by petitioner, the hard cost is Rs. 668 cr.
147.
The Regulation No.44(4) & 44(5) of RERC Tariff Regulations,2009 provides as
under:
44(4): A generating company may make petition for determination of
provisional tariff in advance of the anticipated date of
commissioning of Unit or Stage or Generating Station as a whole,
as the case may be, based on the capital expenditure actually
incurred upto the date of making the petition or a date prior to
making of the petition, duly audited and certified by the
statutory auditors and the provisional tariff shall be charged from
the date of commercial operation of such Unit or Stage or
Generating Station, as the case may be.
(28)
44(5): A generating company shall make a fresh petition as per these
Regulations, for determination of final tariff based on actual
capital expenditure incurred up to the date of commercial
operation of the generating station duly certified by the statutory
auditors based on annual audited accounts.
148.
The Commission observed that the certificate of actual capital
expenditure up to the date of COD issued by the statutory auditor is not
based onannual audited accounts. Further, the certificate issued by the
statutory auditor does not provide the capital expenditure head
wise/package wise as per DPR. The Commission noted that the Statutory
Auditors have certified the lump sum figure of Rs. 624.88 cr. against Main
plant BTG package, Initial/ capital spare (BHEL), Station C&I (ii),
Mechanical package, Electrical package & Civil Works. Also, in the
certificate issued by the statutory auditors, the IDC has been included up
to 31.03.2009 only not up to the date of commercial operation.
149.
In view of above, the Commission is determining the provisional capital
cost subject to furnishing of the certificate of actual capital expenditure
up to COD based on audited accounts as per requirement of the
Regulations for final determination of capital cost. The Commission directs
the petitioner to submit the required details along with the head
wise/package wise as per DPR actual capital expenditure as on the COD
duly certified by the statutory auditors based on audited annual accounts.
150.
151.
Cost of BTG, BoP & other packages:
The petitioner submitted that the main plant (BTG) package was awarded
to M/s. BHEL after series of negotiations for Rs. 262 cr. for supply and Rs.
25.25 cr. for erection, testing & commissioning. The prices were exclusive of
all taxes & duties, WCT, ST, freight & price variation. The petitioner also
submitted that necessary justification of the cost of BTG package had
been examined when the contract on BHEL was awarded by comparing
the corresponding costs of various other contracts bagged by BHEL
through ICB or through negotiations during bidding. The cost of main plant
(BTG) package as per DPR was Rs. 310 crores and the revised cost as on
COD as per petition is proposed as Rs. 364.80 crores and cost on COD
after allocation of common expenditure is Rs. 364.80 crores. The reason for
increase in the cost of BTG package, besides general escalation in the
price of Steel and cement was due to heavy booking of orders with BHEL.
The BoP contract was awarded to M/s. Tata Projects Ltd. at a total cost
of Rs. 139.83 cr. for supply and Rs. 102.67 cr. for erection, testing &
commissioning. The prices were inclusive of all taxes & duties, freight etc.
The estimated cost of BoP packages as per DPR was Rs. 232.80 crores and
as per revised project cost as on COD and cost on COD after allocation of
common expenditure is Rs. 243.72 crores & 261.47 crores respectively.
(29)
152.
153.
154.
155.
156.
Cost of Spares:
The petitioner submitted that the total cost of spares included in the
capital cost is Rs.30.99 cr. As per Regulation no. 18(6)(a) of Tariff
Regulations, 2009, the capital cost may include capitalized initial spares
up to 2.5% of original capital cost in case of coal based/lignite based
generating stations. Thus, the cost of spares to the value of Rs. 18.75 cr.
only is considered in the capital cost. Thus, the balance amount of Rs.
12.24 cr. is reduced from the hard capital cost.
As regards, capital expenditure on external water supply system and raw
water reservoir, the revised cost as on COD is proposed as Rs. 10.87 crores
and cost as on COD after apportionment of common expenditure is
proposed as Rs. 35.47 crores. The statutory auditor in its certificate has
certified total amount of Rs. 10.87 crores for external water supply system.
Treatment of Liquidated damages recovered from Suppliers/Contractors:
Since the Commission has considered 50% liability of additional IDC to be
included in the capital cost, considering the same principle 50% of the LD
amounting to Rs.19.75 cr. recovered by the petitioner is reduced from
capital cost. As discussed earlier, the petitioner is directed to work out the
final amount of LD recoverable from the suppliers/contractors and report
the progress in the petition for determination of final capital cost and Tariff
FY 10-11 for final treatment.
Total hard cost:
The estimated total hard cost (excluding pre-operative & IDC) of the
project as per DPR was Rs. 553.80 crores and the revised hard cost as on
COD is proposed as Rs. 691.39 crores. As per certificate of the statutory
auditors, the hard cost works out to be Rs. 668 crores approximately.
Petitioner has submitted the adjusted capital cost of Rs. 698.15 cr. after
allocation of common cost between unit -1 & 2. After reducing the cost of
initial spares as 12.24 crores and 50% amount of L.D. recovered, the total
hard cost comes to Rs. 666.16 crores.
The adjusted hard cost of Rs. 666.16 crores as on 12.03.2011 is against the
revised hard cost as on COD as Rs. 691.39 crores and estimated hard cost
of Rs. 553.80 cr. as per DPR of June, 2005. It may be noted that external
water supply system and some common assets were not taken into
consideration while preparing the DPR. However, the cost of the external
water supply system and common assets are also included in the cost of
Rs. 666.16 crores. Thus the hard cost of Rs. 666.16 cr. is considered
reasonable and provisionally allowed by the Commission subject to
furnishing of the certificate of package wise actual capital expenditure as
on COD of the statutory auditor along with petition for determination of
final capital cost.
(30)
157.
158.
Preoperative
The petitioner has claimed an amount of Rs.36.59 crores as per final cost
as on COD on account of pre-operative expenses, contingency, audit
and accounts, legal expenses, development, Design & engineering
consultancy and administrative charges. The petitioner submitted that
due to delay in achieving the COD, the same expenses have increased
significantly. In absence of the actual expenditure based on audited
accounts, Commission is considering pre-operative expenses equal to 5%
of hard cost of Rs. 685.91 crores i.e. Rs.34.30 crores.
Treatment of IDC due to delay in COD of the unit:
The Commission noted that there has been a major increase in capital
expenditure on account of increase in IDC due to delay in COD because
of the various factors, as discussed above. The petitioner has submitted
that delay in commissioning is on a/c of delay in obtaining environment
clearances and road blockage due to flood.
159.
The petitioner submitted that Giral Lignite project is based on CFBC
technology, which is useful for low calorific value and significant sulphur
content. However, constraints of such Boiler and variation in Ash and
sulphur contents found in Giral Lignite could not be made adequately
compatible with boiler equipments. BHEL consulted various external
agencies and carried out research on the problems faced to run the unit
on full load capacity and enable GLPL declare Unit on commercial
operation.
160.
The Commission observes from the information furnished by the petitioner
that the entire delay in achieving COD cannot be attributed to the
petitioner. Hence, following the principle laid down by APTEL in its order
dt.27.4.2011; the Commission allows 50% of additional IDC in the capital
cost. As per DPR, the IDC is Rs. 53.56 crores and the petitioner has claimed
IDC of Rs. 173.94 crores as per revised project cost. The Commission
deems it appropriate to allow the IDC amount of Rs. 53.56 crores as
envisaged in DPR. The petitioner has claimed an additional IDC of
Rs.120.38 crores over and above of IDC envisaged in DPR. The Commission
deems it appropriate to further allow as IDC an amount of Rs. 60.19 crores
being the 50% of additional IDC totaling to Rs. 113.75 crores. Thus, an
amount of Rs. 113.75 crores is provisionally considered as IDC.
161.
The petitioner has not submitted the capital expenditure incurred till the
COD (12.03.2011) based on audited accounts. In absence of actual
capital expenditure up to date of commercial operation duly certified by
the Statutory Auditors based on annual audited accounts as per
regulation 44(5), the final tariff cannot be determined at this stage. Hence
in absence of the sufficient information, the Commission has provisionally
considered the capital expenditure subject to determination of capital
(31)
cost based on audited accounts duly certified by the Statutory Auditors in
the petition for determination of final capital cost & tariff for FY 2011-12.
162.
Thus the capital cost finally determined by the Commission is as under:
Table No15: Capital Cost provisionally allowed by the Commission
Description
Preliminary Expenses
Main Plant (BTG) Package
including Taxes, Duties, Freight,
Price Variation
Mechanical Package
Electrical Package
Control & instrumentation
Civil Work
External Water Supply
Misc
works
including
L/L
augmentation
Less: reduction on a/c of initial
spares
Less: 50% of L.D. recovered
Total – Hard cost
PreOperative
Expenses,
contingency,
audit
and
accounts,
legal
expenses,
development,
Design
and
engineering
consultancy
services
&
administrative
charges
IDC & Financing Cost
Project cost
163.
Revised project
cost as on COD
(12.03.2011) as
petitioned
As per
DPR
0
0
Project cost as
on COD after
apportionment of
common
expenditure
0.47
(Rs. cr.)
Project cost
provisionally
allowed by the
Commission
0.47
364.80
310
364.80
116.50
51.00
11.00
65.30
0
0
14.54
0
8.83
124.40
63.12
14.54
73.95
35.48
59.50
21.39
243.72
0
364.80
0
124.40
63.12
14.54
73.95
35.48
21.39
0
12.24
691.39
0
698.15
19.75
666.16
10.64
36.59
13.69
34.30
53.56
173.94
62.70
113.75
618
901.92
774.54
814.21
0
553.80
0
Financing Plan & Debt/ Equity Ratio:
Out of approved capital cost of Rs. 814.21 cr., an amount of Rs. 185 cr. is
considered as equity and the balance amount of Rs. 629.21 cr. is
considered as term loans. The Debt/Equity ratio of approved financing
plan works out to 77:23, which is provisionally approved as per Tariff
Regulations, 2009.

SECTION-IV
Determination of fixed and variable charges of generation for MYT period:
164.
Fixed charges:
Operation & Maintenance (O&M) Expenses:
Petitioner’s Submission:
Petitioner has claimed O&M expenses including special O&M expenses, as
per RERC Tariff Regulations, 2009, as under:
(32)
Table No. 16: O&M Expenses as claimed in petitions: (Rs. cr.)
Particulars
As claimed in petitions
165.
166.
167.
FY 2010-11
1.26
FY 2011-12
FY 2012-13
24.49
25.99
O&M expenses for 2010-11 have been considered for 20 days considering
COD as 12.03.2011. O&M expenses have been escalated at 5.72% in each
year. Petitioner has also claimed special O&M expenses for water
transportation.
Commission Analysis:
As per Regulation 48 of RERC Tariff Regulations, 2009, O&M expenses for
lignite based generating stations are “Rs. 16 lakh per MW for 2009-10” and
as per Regulation 25 (4) the same shall be escalated @ 5.72% per annum.
The Commission has considered the same for allowing of O&M expenses.
As regards special O&M expenses, the Commission as discussed earlier
allowed electricity consumption at Akalphata and Devikote pumping
stations amounting to Rs. 2.12 cr for both the units collectively. The
Commission considered Rs. 1.06 cr as electricity consumption for unit –II
and provisionally allowed Rs. 0.53 cr being 50% charges. The details of
O&M Expenses including Special O&M allowed by the Commission are as
under:
Table No.17: O&M Expenses allowed by the Commission (Rs.cr.)
Year
Allowed
by
Commission
168.
the
FY 2010-11
FY 2011-12
FY 2012-13
1.19
22.88
24.47
Depreciation:
Petitioner’s Submission:
The depreciation claimed by the petitioner is as under:
Table No. 18: Depreciation as claimed in petitions
169.
170.
(Rs. cr.)
Year
FY 2010-11
FY 2011-12
FY 2012-13
As claimed in
petitions
2.47
45.13
45.13
Petitioner has claimed depreciation on the total project cost of Rs.901.92
cr. at the rates specified in RERC Tariff Regulations 2009 for a period of 20
days during the year 2010-11 considering the commissioning of the unit on
12.03.2011. For the subsequent years, the depreciation has been charged
for the full year.
Commission Analysis:
Depreciation allowed by the Commission is on the basis of provisionally
approved capital cost. In absence of complete details, assets have been
(33)
categorized broadly under Building & Civil works of Power plant, Plant &
machinery and land. The plant and machinery has been depreciated @
5.28% and Building & Civil works of Power plant has been depreciated @
3.34%. Land has not been depreciated as per the RERC Tariff Regulations,
2009. The details of depreciation allowed by the Commission are as under:
Table No. 19: Depreciation allowed by the Commission (Rs. cr.)
Year
Allowed
by
Commission
171.
the
FY 2010-11
2.22
FY 2011-12
40.41
FY 2012-13
40.41
Interest on Term Loan and finance charges:
Petitioner’s Submission:
The Interest on term loan and finance charges claimed by the petitioner is
as under:
Table No.20: Interest on term loan as claimed in petition (Rs.cr.)
Year
As claimed in petitions
172.
173.
FY 2010-11
4.41
FY 2011-12
77.84
FY 2012-13
73.50
Commission Analysis:
As per RERC Tariff Regulations 2009, Regulation 17 “in case actual equity
employed is less than 30%, the actual equity shall be considered”. Equity
contribution by the Government of Rajasthan has been considered as Rs.
185 cr. for Unit-2 which works out to be 22% of the approved capital cost
by the Commission, as discussed above.
Based on this, loan amount has been considered as Rs. 648.96 crores. The
loans were sanctioned with the proviso that actual rate of interest shall be
as prevailing on the date of disbursement. Petitioner has claimed
weighted average rate of interest @11.25% which is accepted by the
Commission. The details of interest on Term Loan and finance charges
approved by the Commission is as under:
Table No. 21: Interest on term loan allowed by the Commission (Rs cr.)
Particulars
Opening Balance
Repayment During the year
Addition during the year
Closing Balance
Average rate of interest
Finance Charges
Int. on loan
174.
As approved by Commission
2010-11
2011-12
2012-13
629.21
626.99
586.52
2.22
40.47
40.47
626.99
586.52
546.05
11.25%
0
3.87
11.25%
0.78
69.04
11.25%
0.74
64.45
Interest on Working Capital Loans:
Petitioner’s Submission:
Petitioner has computed interest on working capital loan as per norms
defined under Regulation 49 of RERC (Tariff) Regulations, 2009. Rate of
(34)
interest on working capital loans has been considered as equal to prime
lending interest rate of SBI as on 1st April of the respective year. Interest on
working capital loans as claimed by the petitioner is as under:Table No. 22: Interest on WCL as claimed in petitions: (Rs. Cr.)
175.
Year
FY 2010-11
FY 2011-12
FY 2012-13
As claimed in petitions
0.23
5.48
6.33
Commission Analysis:
The rate of interest has been claimed @ 11.75% & 13.00% for the year 201011 & 2011-12 respectively and the same is being allowed as per
Regulations.
176.
The rate of interest has been claimed @ 14.75% for the year 2012-13. As
per amendment dated 31.08.2012 in RERC Tariff Regulations, 2009, the rate
of Interest on working capital loan shall be 250 points higher from SBI base
rate prevalent during first 6 months of previous year. Accordingly for
working out interest rate on working capital, weighted rate of interest has
been considered as per admissible rates during the year. The same works
out to be 13.27% p.a. for FY 2012-13.
177.
The interest on working capital as approved by the Commission, has been
provided in the table below:
Table No.23: Interest on WCL allowed by the Commission
178.
(Rs. cr.)
Year
FY 2010-11
FY 2011-12
FY 2012-13
Allowed by the Commission
0.21
4.38
4.53
Recovery of ARR and Tariff Petition Fee:
Petitioner’s Submission:
The ARR and Tariff Petition Fee as projected by the petitioner is as under:
Table No. 24: Recovery of ARR and Tariff Petition Fee as claimed
in petitions
(Rs. cr.)
Year
FY 2010-11
FY 2011-12
FY 2012-13
0.06
0.06
0.06
As claimed in petitions
179.
Commission Analysis:
The ARR and Tariff Petition Fee have been allowed by the Commission as
claimed by the petitioner. The details of AAR and Tariff petition fee
allowed by the Commission are as under:
Table No.25: Recovery of ARR and Tariff Petition Fee allowed by
the Commission
Year
Allowed by the Commission
(Rs. cr.)
FY 2010-11
FY 2011-12
FY 2012-13
0.06
0.06
0.06
(35)
180.
Insurance charges:
Petitioner’s Submission:
The insurance charges as claimed by the petitioner are as under:
Table No.26: Insurance charges as claimed in petition (Rs. cr.)
Year
As claimed in petition
181.
FY 2010-11
FY 2011-12
0.04
FY 2012-13
0.81
0.56
Commission Analysis:
The insurance charges have been allowed by the Commission as per
details provided by the petitioner on 03.01.2013. The details of insurance
charges allowed by the Commission are as under:
Table No.27: Insurance charges allowed by the Commission :(Rs. cr.)
182.
Year
FY 2010-11
FY 2011-12
FY 2012-13
Allowed by the Commission
0.04
0.79
0.51
CSR Activity:
Petitioner’s Submission:
The petitioner has claimed expenditure on account of CSR Activity, as
under;
Table No.28: CSR Activity as claimed in petitions (Rs. cr.)
Year
As claimed in petitions
183.
FY 2010-11
-
FY 2011-12
-
FY 2012-13
0.06
Commission Analysis:
The Commission is not considering any expenditure on account of CSR
Activity for the year 2012-13, as discussed earlier:Table No.29: CSR Activity, as allowed by the Commission (Rs. cr.)
184.
185.
Year
FY 2010-11
FY 2011-12
FY 2012-13
Allowed by the Commission
-
-
0
Return on Equity:
Petitioner’s Submission:
The petitioner has not claimed any Return on Equity.
Commission Analysis:
Regulation 21 of RERC Tariff Regulations, 2009 provides for allowing Return
on Equity Capital. However, as the petitioner has not claimed any Return
on Equity, the Commission has not considered the same while approving
the fixed cost of generation.
(36)
186.
Non Tariff Income:
Petitioner’s Submission:
The non-tariff income as projected by the petitioner is as under:Table No.30: Non Tariff Income as projected in petitions (Rs.cr.)
Year
As projected in the petitions
187.
FY 2011-12
0.10
FY 2012-13
0.05
Commission Analysis:
Since, the petitioner has proposed the Non- tariff income for FY 12-13 as Rs.
0.05 crores and the same has been allowed. Since the Unit has run only for
20 days in FY 10-11, the Non- tariff income, being insignificant has been
ignored. Further for FY 11-12, the amount equal to the amount of FY 12-13
has been allowed. The details of Non- tariff income approved by the
Commission are as under:
Table No. 31: Non-tariff income allowed by the Commission (Rs.cr).
Year
Allowed by the Commission
188.
FY 2010-11
0.05
FY 2010-11
FY 2011-12
FY 2012-13
0.00
0.05
0.05
Total Annual Fixed Charge component of tariff for FY 2010-11, 2011-12 &
2012-13 :
Based on various components of fixed charges as discussed above, the
annual fixed charges proposed by the petitioner and approved by the
Commission for the various years is given in the following table:
Table No.32: Total annual fixed charges allowed by the Commission (Rs. Cr.)
Particulars
O&M Expenses (Rs Cr.)
Depreciation (Rs Cr.)
Interest on Term Loans and
Finance Charges (Rs Cr.)
Interest on WCL (Rs Cr.)
Recovery of ARR and Tariff
Petition Fee (Rs Cr.)
Insurance charges (Rs Cr.)
CSR Activity
Total
Capacity
(Fixed)
Charge (Rs Cr.)
Less Non-Tariff Income (Rs
Cr.)
Net
Capacity
(Fixed)
Charge (Rs Cr.)
Unit Sent Out (MU)
Capacity Charge (Rs. per
kWh sent out)
189.
As Per Petition
2010-11 2011-12 2012-13
As per Commission
2010-11 2011-12 2012-13
1.26
2.47
24.49
45.13
25.99
45.13
1.19
2.22
22.88
40.47
24.47
40.47
4.41
78.62
73.50
3.87
69.04
64.45
0.23
5.48
6.33
0.21
4.38
4.53
0.06
0.06
0.06
0.06
0.06
0.06
0.04
0
0.81
0
0.56
0.06
0.04
0
0.79
0
0.51
0
8.47
153.81
151.63
7.59
137.62
134.49
0.05
0.10
0.10
0.00
0.05
0.05
8.42
153.71
151.53
7.59
137.57
134.42
37.17
681.54
703.91
37.17
681.54
703.91
2.27
2.26
2.15
2.04
2.02
1.91
As per Regulation no. 46 of RERC Tariff Regulations, 2009, the norms for
target availability for recovery of full capacity charges for lignite based
thermal power stations are prescribed as under and the same has been
considered:For the First year of operation
: 70%
For second year of operation
: 72.5%
For third year of operation
: 75.0%
(37)
For fourth year of operation
: 77.5%
For fifth year of operation
: 80.0%
Accordingly, the target availability for recovery of full capacity charges
for FY 2010-11, 2011-12 & 2012-13 works out to 70%, 70.10% & 72.60%
respectively.
190.
191.
Determination of Variable Charges of Generation for MYT period:
While determining the variable charges of generation for FY2010-11,201112 & 2012-13, the following factors have been taken into consideration by
the Commission:
The petitioner has claimed the variable charges considering the SHR as
2645.39 kCal/ kWh for FY 2010-11 to FY 2013-14. The Commission has
considered the maximum Design Heat Rate applicable to plants having
temperature and pressure ratings similar to this generating station using
sub-bituminous coal as 2300 kcal/kwh and the moisture content has been
considered as 32.41% as provided in the certificate of sampling and
analysis done by M/s Mitra SK Pvt. Ltd. Detailed calculations are shown
below:
Table No.33: Calculation of SHR approved by the Commission
Description
Unit
As approved by Commission
Design Unit Heat Rate (Turbine Heat
rate/Boiler Eff)*100
kcal/kwh
2300.00
Gross Heat Rate (1.065*DHR)
kcal/kwh
2449.50
%
32.41%
Moisture content
Pro-rated multiplying factor
SHR
1.04723
kcal/kwh
2565.19
192.
The petitioner has considered the price of lignite as Rs. 765.93 per MT for FY
2010-11 & price escalation of 10% has been considered for subsequent
years. The Commission has considered the price of lignite as Rs. 765.93 per
MT for FY 2010-11 and Rs. 777.44 per MT for FY 2011-12 & FY 2012-13.
193.
The cost of primary fuel for FY 2010-11 is considered on the basis of receipts
of previous three months (December 2010- February 2011) and for FY 201112 are considered on the basis of receipts of previous three months
(December 2011- February 2012). The petitioner has considered the price
of lime as Rs. 607.84 per MT for FY 2011-12 & FY 2012-13 on the basis of
receipts of three months during Dec, 11 to Feb, 12. The Commission has
considered the price of lime as Rs. 577.13 per M.T. for FY 2010-11 and Rs.
607.84 per M.T. for FY 2011-12 & FY 2012-13 as claimed by the petitioner.
194.
The petitioner has considered the Gross calorific value (GCV) of lignite for
FY2010-11and 2011-12 as 3063.06 kcal/kg based on the receipts of three
months during Dec., 2010, Jan., 2011 and Feb., 2011. However, in the
petition no. 323/12 for FY 2012-13, the actual GCV for FY 2011-12 has been
shown as 3040 kcal/kg. The Commission has considered the GCV as 3040
(38)
kcal/kg for FY 2010-11 and 2011-12. The petitioner has considered the GCV
of lignite as 2984.06 kcal/kg for FY2012-13, based on the receipts of three
months during Dec. ,2011, Jan.,2012 and Feb., 2012. The Commission has
considered the GCV as 2984.06 kcal/kg for FY 2012-13.
195.
The Commission has approved the PLF and Auxiliary Consumption as per
RERC Tariff Regulations, 2009. Accordingly, the variable charges
determined for FY 2010-11 (applicable w.e.f. 12.03.2011 i.e. after date of
commercial operation), 2011-12 and FY 2012-13 is as under:
Table No.34 : Total annual variable charges allowed by the Commission (Rs.cr.)
Particulars
Capacity
PLF
Gross Generation
Auxiliary Consumption
Auxiliary Consumption
Net Generation
SHR
Specific FO consumption
Specific HSD consumption
Sp. Lignite consumption
Sp. Lime consumption
GCV of FO
GCV of HSD
GCV of Lignite
Heat contributed by FO
Heat contributed by HSD
Heat contributed by Lignite
Price of lime
Price of lignite
Price of FO
price of HSD
lignite Cost
Cost of FO
Cost of HSD
Lime Cost
Total Variable Cost
Variable Cost
196.
Unit
MW
%
MU
%
MU
MU
(kcal/kWh)
ml/kWh
ml/kWh
Kg/kWh
Kg/kWh
Kcal/litre
Kcal/litre
Kcal/kg
(Kcal/KWh)
(Kcal/KWh)
(Kcal/KWh)
(Rs./MT)
(Rs. / MT)
(Rs. / kL.)
(Rs. / kL.)
(Rs. cr.)
(Rs. cr.)
(Rs. cr.)
(Rs. cr.)
(Rs. cr.)
(Rs/KWh
sent out)
FY 2010-11
125
70
42.00
11.5%
4.83
37.17
2565.19
3.00
0.0
0.835
0.275
9010
9500
3040.00
27.03
0
2538.16
577.13
765.93
48212
30536
2.69
0.6
0.0
0.67
3.96
1.0651
FY 2011-12
125
70.10
770.10
11.5%
88.56
681.54
2565.19
3.00
0.0
0.835
0.267
9010
9500
3040.00
27.03
0
2538.16
607.84
777.44
61324
33589.6
50.0
14.2
0.0
12.48
76.63
1.1244
FY 2012-13
125
72.60
795.38
11.5%
91.47
703.91
2565.19
3.00
0.0
0.851
0.272
9010
9500
3040.00
27.03
0
2538.16
607.84
777.44
61324
33589.6
52.6
14.6
0.0
13.13
80.36
1.1416
The total Provisional tariff for FY10-11 to 12-13 is summarized as under:
Table No. 35: Details of Provisional fixed & variable charges
per kWh approved
(Rs.)
Parameter
FY 2010-11
FY 2011-12
FY 2012-13
Fixed Charges (Rs./unit)
2.04
2.02
1.91
Variable Charges (Rs./unit)
1.07
1.12
1.14
Total Tariff (Rs./unit)
3.11
3.14
3.05
(39)
197.
The interim tariff allowed by the Commission vide order dated 13.09.2011
for FY 2010-2011 & 2011-12 and order dated 31.05.2012 for FY 2012-13 shall
stand modified as above. The net revenue surplus/shortfall sustained by
GLPL as per this provisional tariff shall be adjusted in next three months
from the date of this order.
198.
As regard the further course of action and to expedite the process of tariff
determination based on the completed cost the Commission directs GLPL
to file a separate petition for determination of final capital cost and tariff
for FY 2010-11 along with the information indicated in this order based on
actual capital expenditure incurred up to the date of commercial
operation duly certified by Statutory Auditors based on annual audited
accounts in accordance with the provisions of Regulation 44(5) of RERC
(Terms and Conditions of Tariff) Regulations, 2009 within three months of
this order.
199.
Copy of this order may be sent to the petitioners, respondents, CEA and
Government of Rajasthan.
(S. Dhawan)
Member
(D.C.Samant)
Chairman
(40)
Annexure-1
ABBREVIATIONS
AAD
ABT
Act
APR
APTEL
ARR
AS
AVVNL
BHEL
BoD
BoP
BTG
C&AG
CEA
C&I
CHP
COD
cr.
CSR
CTPP
CWIP
DHR
DPR
DCCPP
Discoms
ETC
FPA
FY
GCV
GFA
GoR
GT
GLPL
GLTPS
Advance against Depreciation
Availability Based Tariff
Electricity Act, 2003
Annual Performance Review
Appellate Tribunal for Electricity
Aggregate Revenue Requirement
Accounting Standard
Ajmer Vidyut Vitran Nigam Limited
Bharat Heavy Electricals Ltd.
Board of Directors
Balance of Plant
Boiler, Turbine & Generator
Comptroller & Auditor General
Central Electricity Authority
Control & Instrumentation
Coal Handling Plant
Commercial Operation Date
Crores
Corporate Social Responsibility
CTPP Thermal Power Station
Capital Works in Progress
Design Heat Rate
Detail Project Report
Dholpur Combined Circle Power Station
Distribution Companies
Erection Testing & Commissioning
Fuel Price Adjustment
Financial Year
Gross Calorific Value
Gross Fixed Assets
Government of Rajasthan
Generator Transformer
Giral Lignite Power Ltd.
Giral Lignite Thermal Power Station
GIPCL
HFO
HSD
IDC
I.L.
JVVNL
Jd.VVNL
Kcal
KL
KTPS
KW
kWh
Gujarat Industrial Power Company Ltd.
High Furnace Oil
High Speed Diesel
Interest during Construction
Instrumentation Ltd.
Jaipur Vidyut Vitran Nigam Limited
Jodhpur Vidyut Vitran Nigam Limited
Kilo Calorie
Kilo Liter
Kota Thermal Power Station
Kilo Watt
Kilo Watt Hour
(41)
LD
LOI
LDO
MMH
MT
MU
MW
MYT
MCR
NLC
O&M
PLF
PPA
PV
RSMML
RERC
RGTPS
ROE
RVUN
RVPN
RVVS
SBI
Scm
SHR
SLDC
STPS
TPL
TPS
VAT
WCL
WCT
Liquidated Damages
Letter of Intent
Light Diesel Oil
Mini Micro Hydel Stations
Metric Ton
Million Units
Mega Watt
Multi Year Tariff
Maximum Current Rating
Neyveli Lignite Ltd.
Operation & Maintenance
Plant Load Factor
Power Purchase Agreement
Price Variation
Rajasthan State Mines & Minerals Ltd.
Rajasthan Electricity Regulatory Commission
Ramgarh Gas Thermal Power Station
Return on Equity
Rajasthan Vidyut Utpadan Nigam Limited
Rajasthan Vidyut Prasaran Nigam Limited
Rajasthan Vidyut Vikas Sansthan
State Bank of India
Standard cubic meter
Station Heat Rate
State Load Despatch Centre
Suratgarh Thermal Power Station
Tata Projects Ltd.
Thermal Power Station
Value Added Tax
Working Capital Loan
Works Contract Tax
(42)