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BEFORE THE MADHYA PRADESH ELECTRICITY
REGULATORY COMMISSION, MADHYA PRADESH
PETITION NO .•..• OF 2020
I .. ·"' ,
IN THE MATTER OF: Petition under Section 62 and Section 86(1) (a) of the Electricity
Act, 2003 read with Madhya Pradesh Electricity Regulatory
Commission (Terms and Conditions for determination of
Generation Tariff) Regulations, 2020 ("MPERC Tariff
Regulations, 2020") for determination of Generation Tariff for the
period from 01.04.2019 to 31.03.2024 in respect of 1 x 600 MW Coal
Based Power Project at Barela-Gorakhpur, Dist. Seoni, Madhya
Pradesh.
AND, IN THE MA TIER OF:
VERSUS:
Jhabua Power Limited Unit No. 303 & 307, 'Third Floor, ABW Tower M.G. Road Gurgaon -122002, Haryana
----Petitioner
1. Madhya Pradesh Power Management Company Ltd.
(Erstwhile Madhya Pradesh Power Trading Company Ltd.)
Shakti Bhawan, Vidyut Nagar, Rampur,
Jabalpur (M.P.) - 482008 India
2. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Co. Ltd.
Jabal pur
Shakti Bhawanl Vidyut Nagar, Rampur, Jabalpur (M.P.) - 482008
India
3. Madhya Pradesh Madhya Kshetra Vidyut Vitaran Co. Ltd
Bhopal
Bijli Nagar Colony, Nishtha Parisar, Govindpura., Bhopal- 462023
4. Madhya Pradesh Paschim Kshetra Vidyut Vitaran Ltd. Indore
,..
----R~spondcnts
.i.· l "• -. 601 . . .
Affidavit ·. Indian-Non Judicial Stamp Haryana Government
.~ • aaz Date : ~ OB/0612020 Certificate No. GOH2020F680 1~u1m I IJrnlr~~ ~1~1mn
lll~l ~~ ~m~lil~~ll~I~IHit~~
Stamp Duty Paid : ~ 1 01
GRN No. 64973624
Deponent
(Ks Only)
Penalty : (A5 z-~)
~0
Name : Janmejaya Mahapatra
H.No/Fioor : 3rdfloor Sector/Ward: 29 Landmark : Abw tower jhabua power limited
State : Haryana Crty!Village : Gurugram District ; Gurugram
Phone: 98U*"**86
r~L · : Purpose : Affidavit by Janmejaya Mahapatra for filing MYT petition to be submitted at Madhya pradesh electricity
regulatory commission
The authenticity of this document can be verified by scanning this QrCode Through smart phone or on the website https://egrashry .nic.in
AFFIDAVIT
t Janmejaya Mahapatra S/ o Late Shri B D Mahapatra aged about 49 Years, working as
Chief Executive Officer for Jhabua Power Limited and presently residing at B 1·204,
PWO Society, Gurgaon -122002.
AND
[, Abhilash Lal, S/ o Shri Raj Kumar Lat aged about 55 Years, appointed as Resolution
Professional for Jhabua Power Limited (appointed vide Hon'ble NCLT, Kolkata order
dated 24th Ju ly 2019), R/o C-192, Belvedere Towers DLF Phase U Gurgaon -122002,
Haryana do hereby state on solemn affirmation as under:
a) The Hon'ble CommU;sion vide i~ Order dated 30.11.2018 has determined the final
Capital Cost and Tariff for the Generating station for the period from the date of
Commercial Operation (03.05.2016) till thE:? end of the previous Control Period i.e FY
2018-19.
· ~ .
ua b) Aggrieved by the above order, the Petitioner filed a Review Petition No. 12 of 2019. The
Hon'ble Commission vide its Order dated 27.12.2019, disposed off the review petition
and allowed review on the following issues:
1) Revenue realization from sale of infirm power taken as Rs. 15.40 Crore instead of Rs.
9.10 Crore.
2) Erroneous interpretation of the rate of depreciation calculation.
3) Additional transportation charges for 2.5 km distance from Binaiki Railway Station
to power station when coal is transported by road.
c) The Commission vide the above referred Order dated 27.12.2019 also approved the
revised capital cost along with the Annual Charges from COD to FY 2018-19.
d) During the pendency of the above Review Petition, JPL also filed true up Petition for FY
2017-18 i.e., Petition No. 26 of2019.
e) Subsequent to the Review Order dated 27.12.2019, the Hon'ble Commission vide order
dated 04.01.2020 approved truing up for FY 2017-18 taking into account issues allowed
in its Review Order.
f) JPL filed true up Petition for FY 2018-19 on March 6, 2020, based on Audited Accounts
for FY 2018-19.
g) The Hon'ble Commission notified MPERC Tariff Regulations, 2020 dated 28.02.2020 for
the control period FY 2019-20 to FY 2023-24 and according to the same the Petition for
determination of Generation Tariff for the period FY 2019-20 to FY 2023-24 was to be
filed within 60 days from the date of notification i.e., by 28.04.2020.
h) However, the Hon'blc Commission vide ito:; Order dated 06.05.2020 in the Petition filed
for seeking extension of time to file Petitions for determination of Multi-year Tariff by
Generating Companies and MP Power Transmission Company Ltd. permitted to file the
Review Order dated 27.12.2019, the Petitioner is filing this instant Petition for
determination of Generation Tariff for the period FY 2019-20 to FY 2023-24 in accordance
with Regulation 6.2 of the MPERC Tariff Regulations, 2020.
j) The Petitioner submits that it has compiled the information to the best of its knowledge
and capabilities and craves leave to submit any additional information that may be
required by the Commission during the course of processing this petition.
On behalf of Jhabua Power Limited
Deponent
iv I ; .:· (l
VERIFICATION
I, Janmejaya Mahapatra S/ o Late Shri B D Mahapatra aged about 49 years, presently residing at
Bl-204, PWO Society, Gurgaon-122002 working as Chief Executive Officer
AND
f , Abhilash Lal, Sf o Shri Raj Kwnar Lal, aged about 55years, appointed as Resolution
Professional for Jhabua Power Limited (appointed vide Hon'ble NCLT, Kolkata order dated 24th
July 2019), R/o C-192, Belvedere Towers DLF Phase H, Gurgaon ·.122002, the Petitioner, do
hereby verify that the contents of this Affidavit are true to our knowledge (as derived from
DEPONENT
Solenmly affirm at Gurgaon, on the 91h Day of June 2020 that the contents o£ the above affidavit
are true and correct to the best of my knowledge and belief, no part of it is false and nothing
material has been concealed there from.
Verified by me on this 9th day of June, 2020 at Gurr,aon.
~~ DEPONENT
R.N. ALIK, ADVOCATE NOTARY, GURUGRAM, ~IR. (INDIA)
OOi
081 Table of Contents
1. Brief about the Project and the Petition: ......... ................ ............ ........ .......................... .... ...... ......... !
2. Brief about the Parties ........................................................................................................................ 3
3. Approval of Capital Cost and Final Tariff from COD to FY 2018-19 for the Generating Station .......................................................................................................................................................... 4
4. Submission of Current Petition and relevant Documents .......................................................... ..4
5. Capital Cost of the Project .................................... ............................................................................. S
6. Generation Tariff for the period FY 2019-20 to FY 2023-24 .......................................................... 7
7. Brief Overview of Component Wise Annual Charges and Variable Charges: .......................... 8
8. Gross Fixed Asset and Additional Capitalisation ................................. ......................................... 9
9. Debt-Equity Ratio for truing up of Additional Capital Expenditure ........................................ 18
10. Determination of Capacity Charges and Energy Charges ...................................................... 20
A. Capacity Charges .............................................................................................................................. 20
a) Return on Equity (RoE): ......................................................................................................... 20
b) Interest and Financing Charges ............................................................................................ 23
c) Depreciation: ............................................................................................................................ 25
d) Operation and Maintenance Expenses for Generating Sta tion: ........................ ............... 27
e) Interest on Working Capital: ................................................................................................. 29
f) The annual capacity (fixed) charges: ............. ........................................................................ 31
B. Energy Charges for the pedod FY 2019-20 to FY 202.~-24 ........................................................... 31
11. Statutory Charges ......................................................................................................................... 39
12. Prayer ........... .... ............ .......... ................................. ...................... ................................................. 40
UG7
List of Tables
Table 1: Statement of Capital cost for the period till FY 2018-19 (Rs. in Crore) ............................ 6
Table 2: Additional capital expenditure proposed during the period FY 2019-20 to FY 2023-24
..................................................................................................... ................................................................ 16
Table 3: GFA for the period FY 2019-20 to FY 2023-24 .... .. : ........... .................. ........... ..................... .. 18
Table 4: Computation of Return of Equity for the period FY 2019-20 to FY 2023-24 .................. 23
Table 5: Computation of Interest on Normative Loan for the period FY 2019-20 to FY 2023-24
... ................ .................................................................................. ............................................. ..... ...... ........ 24
Table 6: Computation of Depreciation for the period FY 2019-20 to FY 2023-24 ......................... 27
Table 7: Computation of O&M Expenses for the period FY 2019-20 to FY 2023-24 .................... 28
Table 8: Computation of Interest on Working Capital for the period FY 2019-20 to FY 2023-24
... .................................................................................................................................................................. 30
Table 9: Computation of Annual Fixed Cost for the period FY 2019-20 to FY 2023-24 ............... 31
Table 10: Details of FSA of Jhabua Phase-1 .................... ....................................................... ........... 35
Table 11: Computation of Landed cost of coal for determination of Tariff for the .................... 37
Table 12: Invoice wise details of LDO for determination of Tariff for the period FY 2019-20 to
FY 2023-24 ................. .................. .......... ........ ............................................... .............................................. 38
Table 13: Computation of Energy Charges for the period FY 2019-20 to FY 2023-24 .... .............. 38
~ , -
vU I .
087
I PETITION
1. Brief about the Pro ject and the Petition:
1.1 M/s Jhabua Power Limited (11the Petitioner'' or "JPL"), is a generating company within
the meaning of Section 2 (28) of the Electricity Act, 2003 ("the Act") operating a Coal Based
Power Project with Installed Capacity of 1 x 600 MW at Barela-Gorakhpur, Dist. Seoni,
Madhya Pradesh ("Generating Station or Project") and is supplY.ing power to the
Respondents as per terms of PPA executed.
1.2 Government of Madhya Pradesh (GoMP) vide Notification No. 3474/FRS/17 /XIII2002,
dated 03.06.2006 notified the M.P. Elec tricity Reform Transfer Scheme Rules 2006 for
regulating transfer and vesting the functions, properties, interest, right and obligation of
Madhya Pradesh State Electricity Board ("MPSEB") relating to Bulk Purchase and
Supply of Electricity along with related agreement/ arrangements in the State
Goverrunent and transfer andre-vesting thereof by the State Government in MP Tradeco,
authorizing MP Tradeco to buy power for and on behalf of the three Distribution
Companies ("Licensees") of the State.
1.3 GoMP on 10.04.2012 notified MP Tradeco as the Holding Compan y of all Distribution
Licensees within the state of Madhya Pradesh ("Respondent No.2, 3 & 4") and renamed
the same to Madhya Pradesh Power Management Company Ltd (herein referred to as
"Respondent No. 1" or "MPPMCL").
1.4 By virtue of the aforesaid Notifications the Respondent No.1, has been authorized to sign
the PPA with the Petitioner, for purchase of power on behalf of Respondent No.2, 3 & 4,
who are the Distribution Licensees within the state of Madhya Pradesh under Section 14
of the Act, who are also the confirming parties to the PP A.
1.5 The Commission has issued Madhya Pradesh Electricity Regulatory Conunission (Terms
and Conditions for determination of Generc1tion Tariff) Regulations, 2020 (RG-26 (lV) of
2020) dated 28.02.2020 spe
"6. Application for det.ermination ofTariff.
6.1 ....
6.2 In case of an existing generating station or unit thereof, the application for
determination of Multi-year Tariff shall be made by the generating company within a
period of 60 days from the date of notification of these Regulations or as directed by the
Commission whichever is earlier, based on admitted capital cost including additional
capital expenditure already admitted in last true-up order of the Commission and estimated
additional capital expenditure for the respective years of the tariff period 2019-24 in
accordance with the MPF.RC (Terms and Ccmditions for determination of Generation
Tariff) Regulations, 2020:
Provided that the application shall contain details of underlying assumptions for projected
capital cost and additional capital expenditure, where applicable.
6.3 In case of emission control system is required to be installed in existing generating
station or unit thereof to meet the revised emission standards, an application/ petition shall
be filed for determination of tariff (capacitt; charges or ener:51; charge or both) after
installation of such system based 011 the actual capital expenditure incurred duly certified
by the Auditor along with all necessan; details and documents."
1.6 In accordance with the above, the Petitioner is filing this Petition for determination of
Generation Tariff for the period FY 2019-20 to FY 2023-24 based on Capital cost admitted
by the Hon'ble Commission vide its Order dated 27.12.2019, admitted additional
capitalization for FY 20'17-18 vide Order dated 04.01.2020 and the additional capital
expenditure claimed in true up Petition for FY 2018-19 in accordance with the principles
laid down in the MPERC Tariff Regulations, 2020.
1.7 The Petitioner would like to humbly submit that as per Regulation 6.2 of the MPERC
Tariff Regulations, 2020 the Petition for determination of Generation Tariff is to be filed
within 60 days from the notification (28.02.2020) of the same i.e ., by 28.04.2020. However,
as per the Hon'ble Commission Order dated 6th May 2020, the Hon' ble Commission has
OG
Oil 2. Brief about the Parties
2.1 The Petitioner Company, Jhabua Power Ltd., incorporated under the Companies Act,
1956 having its Registered office at Macmet House, 7th Floor, l OB 0 C Ganguly Sarani,
Kolkata- 700020, West Bengal, India and Corporate office at Unit No. 303 & 307, Third
Floor ABW Tower M.G. Road, Gurgaon-122002 to develop and execute coal based
thermal power Project in Seoni district of the State of Madhya Pradesh.
2.2 The Respondent No. 1 is a government company as defined under Section 617 of the
Companies Act, 1956. It is an unbundled entity of the erstwhile Madhya Pradesh State
Electricity Board and also a deemed trading licensee, entitled to undertake transaction of
sale and purchase of bulk power. Vide notification dated 10.04.2012, the Respondent No.
1 has been made the Holding Company of all Distribution Licensees within the State of
Madhya Pradesh. The Petitioner on 05.01.2011 entered into a PPA with the respondent
No. 1 for sale of 30% of power to be generated from the Petitioner's unit No. 1 of the
Project on regulated tariff wherein respondent No.2 to 4, who are Distribution Licensees,
are confirming parties and also the ultimate beneficiaries of the PP A.
2.3 The Respondent No. 2 is Madhya Pradesh Poorv Kshetra Vidyut Vitaran Co. Ltd., a
Company incorporated under the Companies Act, 1956 having its registered office at
Shakti Bhawan, Rampur, Jabalpur (herein referred to as "Discom 1") is a Power
Distribution Company of specific area of the M.P. State and also a deemed 'Dish·ibution
Licensee' within the proviso of the Act
2.4 The Respondent No.3 is Madhya Pradesh Madhya Kshetra Vidyut Vitaran Co. Ltd, a
company incorporated under the Companies Act, 1956 having its registered office at
Nishta Parissar, Govindpura, Bhopal (herein referred to as "Discom 2") is a Power
Distribution Company of specific area of the M.P. State and also a deemed ' Distribution
Licensee' within the proviso of the Act.
2.5 The Respondent No. 4 is Madhya Pradesh Pa-ich im Kshetra Vidyut Vitaran Ltd, a
company incorporated under the Companies Act, 1956 having its registered office at Polo
'3"1 -
OJ
Qll specific area of the M.P. State and also a deemed 'Distribution Licensee' within the
proviso of the Act.
2. 6 The Respondent No. 2, 3 & 4 are confirming parties under the aforementioned PP A dated
05.01.2011 and 27.06.2011 are collectively referred to as "Discoms".
3. Approval of Capital Cost and Final Tariff from COD to FY 2018-19 for the Gen erating
Station
3.1 The Hon'ble Commission vide its Order dated 30.11.2018 (in Petition No. 28/2019} had
de termined the Capital Cost as on COD, additional capitalization for FY 2016-17 and
Tariff of the Generating station for the period commencing from the date of Commercial
Operation (03.05.2016) till the end of the Control Period i.e. 31.03.2019.
3.2 Aggrieved by the above order of the Hon'ble Commission , the Petitioner had fi led a
Review Petition No. 12 of 2019 before the Hon'ble Corrunission on 01.02.2019. The
Hon'ble Commission issued a Review Order dated 27.12.2019 on the aforesaid review
Petition and approved the revised Capital Cost as on COD along with revised annual
charges for th e period till31.03.2019.
3.3 Subsequently, the Hon'ble Commission carried out truing up for FY 2017-18 vide its
Order dated 04.01.2020 (in Petition 26 of 2019) w herein it approved the additional
capitalization for FY 2017-18.
3.4 The Petitioner in this instant Petition has claimed Tariff in accordance with the principles
laid down in the MPERC Tariff Regulations, 2020, considering the Capital cost as
admitted bv the Hon'blc Commission vide itc; Order dated 27."12.2019, admitted J
additional capitalization for FY 2017-18 vide Order dated 04.01.2020 and the additional
capitalisation claimed in true up Petition for FY 2018-19.
4. Submission of Current Pet ition and relevant Documents
4.1 The in .. -;tant petition filed by the Petitioner is for determ.ination of Generation Tariff for
(Onsiderin
QlZ Commission till FY 2017-18 and after considering additional capitalisation in FY 2018-19
as per the Audited Accounts for FY 2018-19 and as submitted in true up Petition for FY
2018-19 before the Hon'ble Commission.
4.2 The Petitioner has also projected scheme wise additional capital expenditure which shall
be capitalized in the Control Period i.e. FY 2019-20 to FY 2023-24 along with discharge of
liabilities for works already executed in the previous Control Period along with all
relevant details.
4.3 The Petitioner is submitting the actual data for the quantum of coal and secondary fuel
oil utilized along with the details of cost incurred towards the transportation and other
charges for the months of January 2019 to March 2019. Further, the Petitioner is also
submitting the calculation for weighted average rate of Interest on the basis of actual loan
portfolio for FY 2018-19 after deduction of Penal interest from the same as the same is
considered for the period FY 2019-20 to FY 2023-24.
5. Capital Cost of the Project
5.1 In Petition No. 28 of 2018, based on Annual Audited Accounts for FY 2016-17, the
Petitioner had claimed the capital cost of Unit-1 on accrual basis, as on its COD (i.e.
03.05.2016) as Rs. 4698.66 Crore including IDC of Rs.l434.76 Crore. The corresponding
Auditor Certified Cash Capital expenditure was Rs. 4330.08 Crore including IDC of Rs.
1332.63 Crore. Accordingly, the claimed capital cost (on cash basis) as on COD of Unit-1
was Rs. 4.330.08 Crore. Further, the Petitioner had also claimed Additional Capital
Expenditure (Cash Basis), amounting toRs. 15.78 Crore for the period from COD of Unit-
1 to 31.03.2017 pertaining to Unit-1 of the Project.
5.2 The Hon'blc Commission after scrutiny of the Petition has approved the Capital Cost of
the Project as Rs. 3876.31 Crore (excluding un-discharged liability) including the IDC of
Rs. 945.48 Crorc. Further, the Commission as on COD has allocated an amount of Rs.
3662.42 Crorc including IDC of Rs. 906.62 Crorc towards Phase T of the Project. The
Commission vide its Order dated 30.11.2018 and in the matter of Capital Cost has stated
as under:
5 l- ··~ ...
012
Ull "In view of tlu~ above, the actual capital expenditure as on COD of Rs. 3662.42 Crore or
Unit 1 x600MW under Phase 1 in the subject petition is consid~~red for determination of
tariff in this order."
5.3 Subsequently, aggrieved by the aforesaid Order, the Petitioner had filed review Petition
No. 12 of 2019. Vide Order dated 27.12.019, the Hon'ble Comntission approved the
revised capita l cost of Rs . 3668.73 Crore as on COD for Phase-1 of the Project.
5.4 The Hon'ble Commission vide Order dated 04.01.2020 also approved the true up of FY
2017-18 incorporating consequential impact of the review Order dated 27.12.2019 in
review Petition No. 12 of 2019.
5.5 Abstract of the capital cost admitted by the Commission for Unit-1 of the Project along
with additional capital expenditure is as under:
Table 1: Statement of Capital cost for the period till FY 2018-19 (Rs. in Crore)
Capital Cost Capital Cost Capital Cost approved in
Particulars approved in approved in True-Up order Order dated Review Order 30.'11.2018 dated 27.12.2019
dated 04.01.2(}20
Opening Ca pital Cost as on
COD of Unit-1 3662.42 3668.73 3668.73
Additional capitalization in FY
2016-17 (for Unit-1) 252.06 252.06 252.06
Closing Capita] Cost (i.e. as on 3914.48 3920.79 3920.79
31.03.2017)
Additional capita liw tion in FY 0.00 0.00 12.81
2017-lR (for Unit-1)
Closing Capital Cost (i.e. as on ,-,1 • ~? 3914.48 3920.79 3933 .• {"-
3l .03.2018)
Additional capita l expenditure
incurred in f Y 2018-'19 (as 0.00 0.00 18.82
considered in True-up r~~ ti tion
for fY 2018-·19)
Closing Capital Cost (i.e. as on 3914.48 3920.79 3952.40
31.03.2019)
5.6 The Petitioner in lhe instant Petilion has considered lhc opening capita l cost of Rs. :3952.40
fY 2023-24.
6 , . .•
01
.. .
6. Generation Tariff for the period FY 2019-20 to FY 2023-24
6.1 Regulation 9 of MPERC Tariff Regulations, 2020 specifies the following for determination
of Generation Tariff:
"9.1 T11e Commission shall define Tariff period for the generating company from time to
time. The principles for Tariff determination shall be applicable for the duration of the Tariff period. The principles that guide Tariff determination for the next Tariff period shall be
valid for a period from 1st April, 2019 up to 31st March, 2024.
9.2 Tariff in respect of a generating company under these Regulations shall be determined
Unit-wise or for a group of Units. However, when a new generating Unit is added on or
after 1.4.20'l9, the· Commission shall determine separate Tariff for such new Unit(s). The
generating company shall submit separate calculations in respect of each generating
station giving break- up for Units prior to 1.4.2019 and Units added thereafter.
9.4 A generating company shall file a petition at the beginning of the Tariff period. A
review shall be undertaken by the Commission to scrutini.ze and true up the Tariff on the
basis of the capital expenditure and additional capital expenditure actually incurred in the
Year for which the true up is being requested. The generating company shall submit for the
purpose of truing up, di>.tails of capital expenditure and additional capital expenditure
incurred for each year of the period from 1.4.2019 to 31 .3.2024, duly audited and certified
by tl~e auditors.
9.5 The Multi Year Tariff filing for existing generating stations in hard and soft copy shall
be in the formats prescribed with these Regulations within 60 days of notification of these
Reguh1tions."
6.2 Accordingly, the Petitioner is seeking for determination of Generation Ta riff for supply
of power from Unit-1 (600 MW) of its Project for the period FY 2019-20 to FY 2023-24,
considering the capital cost as discussed in earlier section and projected Additional
Capital Expenditure (ACE) for the period FY 2019-20 to FY 202:'3-24.
6.J The Petitioner hereby h
7 1 •.•
014
- . .
6.4 The Petitioner also submits Audited Accounts for FY 2018-19 in support of additional
capitalisation considered for FY 2018-19 as ANNEXURE -2.
7. Brief Overview of Component Wise Annual Charges and Variable Charges:
7.1 The components of Tariff for Thermal Power Generating Sta tions have been stipulated in
the Chapter 4 of MPERC Tariff Regulations, 2020 which is reiterated as under:
'' 16. Components ofTarift:
16.1 The tariff for supply of electricihJ from a thermal generating station shall comprise
two parts, namely, capaci~J charge (for recovery of annual fixed cost consisting of the
components as specified in Regulation 17 of these Regulations) and energy charge (for
recoven1 of priman1 and secondanJ fuel cost as specified in Regulation 18 of these
Regulations).
16.2 The capacitJj charges for additional capitalization and energy charges, on account of
implementation of revised emission standards in existing generating station or new
generating station, as the case may be, shall be determined by the Ctmtmissicm separately.
16.3 The tariff for supply of electricihJ from a hydro generating station shall comprise
capacity charge and energy charge to be derived in the manner specified in Regulation 47
of these Regulations, for recovenJ of armual fixed cost consisting of the components referred
to in Regulation 17 of these Regulations.
17. Capacity Charges:
17.1 The CapacihJ charges shall be cferi·ved on the bruis of annual fixed cost. The annual
fixed cost (A FC) of a generating station shall consist of the following components:
(a) Retum em equity;
(b) interest on loan capital;
(c) Uepn~ciation;
(d) [n.tere . .:;t em working capitnl; and
(e) Operation and maintenance expenses:
Provided that spedal allowance iTZ lieu of R&tvl, where opted in accordance with
Regulation 30 of these Re ulntio11.s ..:;hall hr>. renmered seporately mul shall not be t'OitSidered
. '
015
18. Energy Charges:
18.1 Energtj charges shall be derived on the basis of the Landed Fuel Cost (LFC) of a
generating station (excluding hydro) and shall cont,1st of the following cost:
(a) Landed Fuel Cost of primanJ fuel; and
(b) Cost of secondanJ fuel oil consumption; and
(c) cost of Lime-stone or any other regent as applicable;
Provided that any refund of taxes and duties along with any amount received on account
of penalties from fuel supplier shall have to be adjusted in fuel cost:
Provided further that the energtj charges, if any, on account of meeting the revised emission
standards in case of a thermal generating station shall be determined separately by the
Commission."
7.2 In terms of above, the generation tariff shall include Capacity Charges and Energy
Charges which shall be determined in terms of norms stipulated under the MPERC Tariff
Regulations, 2020.
7.3 The Capacity Charges of the generating station is computed on the basis of Capital Cost
as on COD admitted by the Hon'ble Commission and subsequent additional
capitalization approved. On the basis of the above admitted capital cost and additional
capitalization following components forming capacity charges for generating station
shaU be computed in accordance with Regulation 17.1 of MPERC Tariff Regulations, 2020.
(a) Return on equity;
(b) Interest on loan capital;
(c) Depreciation;
(d) Interest on working capital; and
(e) Operation and maintenance expenses:
The Petitioner has detailed below its approach while claiming capacity charges in terms of
MPERC Tariff Regulations, 2020.
8. Gross Fixed Asset and Additional Capitalisation
R.l The Opening GFA as on 01.04.2019 for the purpose of determination of Generati.on Tariff
91
01
\
GF A as on 31.03.2018 in the Order dated 04.01.2020 and additional capitalisation in FY
2018-19 as submitted in true up Petition. As submitted above, the capital cost considered
by the Petitioner as on 01.04.2019 is Rs. 3952.40 Crore.
Projected Additional Capital Expenditure:
8.2 Regulation 26 of MPERC Tariff Regulations, 2020 deals with the grounds under which
additional capitalization pertaining to works which were in the Original Scope of work
and have been capitalized by the cut-off date can be allowed. Further, Regulation 27 of
MPERC Tariff Regulations, 2020 states grounds under which works which were in the
Original Scope of work but incurred after cut-off dated can be approved.
8.3 Regulation 3.1 (14) of MPERC Tariff Regula tions, 2020 defines cut-off date as follows:
"(14) 'Cut-off Date' means the last date of the calendar month after thirtlj-six months from
the date of commercial operation of the project;"
It is observed that the above definition is general to all and does not state dearly whether
it shall be applicable to only new generating station commissioned post 01.04.2019. The
Cut-Off date as per the new MPERC Tariff Regulations, 2020 happens to be 2nd May 2019.
However, Cut-off date of the Generating station as defined in Regulation 4.1 (1) of the
MPERC Tariff Regulations, 2015 is as under:
"Cut-off Date' means 31~1 March of the year closing after two years of the year of
comrru.-rcial operation of whole or part of the project, and in case the whole or part of tf1e
project is declared under commercial operation in the last quarter of a year, the cut- off date
shall be 31st March of the year closing after three years of the year of comnwrcial operation:
Provided that Hte cut-off date may be extended by tlre Commission if it is proved on the
basis of documentary evidence that the capitalization could not be nuuie within tire cut-off
date for reasons beyond the control of the project developer;"
Therefore, in accordance with the MPERC Tariff Regulations, 2015, the Cut-off date of the
generating sta ti.on is 31.03.2o-J 9.
017 - ..
8.4 lt is submitted that the Petitioner has considered the cut-off date for its plant as 31sl March
2019 based on the assumption that the Petitioner achieved COD for the generating station
on May 3, 2016 and therefore cut-off provision as specified in the Madhya Pradesh
Electricity Regulatory Commission (Terms and Conditions for determination of
' Generation Tariff) Regulations, 2015 ("MPERC Tariff Regulations, 2015") shall be applicable.
8.5 As the cut-off date has ended, the Petitioner in this Petition has therefore claimed
additional capitalisation on account of the works which are part of original scope of work
but are proposed to be executed after the Cut-off date in terms of various provisions of
Regulation 27 of MPERC Tariff Regulations, 2020 which states as follows:
#27. Additional Capitalization within the original scope and after the cut-off
date:
27.1 The additional capital expenditure incurred or projected to be incurred in respect of
an existing project or a new project on the following counts within the original scope of
work and after the cut-off date may be admitted by the Commission, subject to prudence
check:
(i) Liabilities to meet award of arbitration or for compliance of the directions or order of any statutory authoritlj, or order or decree of any court of law;
(ii) Change in law or compliance of any existing law:
(iii) Deferred works relating to ash pond or ash handling system including ash
transportation focilihj in the original scope of work;
(iv) LiabilihJ for works executed prior to the cut-off date;
(v) Force majeure events;
(vi) LiabilihJ for works admitted by the O'mmission after the cut-off date to the extent of
discharge of such liabilities by actual payment; and
(vii) Additional capitalization on account ofmising of ash dyke as a part of ash disposal
t " sys em.
8.6 Anticipating the spill over of works due to uncon trollable reasons, the Petitioner filed a
Petition (No. 19 of 2019) for Extension of cut-off date by 2 years (from 31.03.2019 till
31.03.2021) on the grounds of spilling over of works under original scope beyond the cut-
despite regular moni
01
UlS its Order dated May 30, 2019 in the ~ubject matter disposed off the Petition and ruled as
follows:
"7. From the aforesaid provisions under MPERC (Terms and Conditions for determination
of Generation Tariff) Regulations, 2015, it is observed that for considering the actual
additional capitaliztztion beyond cut-off date of the project, detailed examination of actual
capital expenditure of ead1 work beyond cut-off date and the reasons for delay in
capitalization of all such works beyond cut-off dilte shall be required by the Commission in
terms of Regulation 4.1 (1) and 20.2 of MPERC Tariff Regulations, 2015. Hence, the subject
petition cannot be examined and decided by the Commission at this stage. Therefore, the
petitioner is directed to approach the Commission with actual additional capitalization of
all works beyond cut-off date as per the Annual Audited Accounts along with all details
and documents in terms of aforesaid Regulations while filing the true-up petition for
respective financial year."
8.7 As the Petitioner is required to project additional capital expenditure as per MPERC Tariff
Regulations, 2020, the Petitioner has projected the same and has submitted detailed
justification for spilling over of balance works beyond cut-off date which is as submitted
below.
8.8 It is submitted that the Petitioner could not complete some of the works which are under
original scope of work before the cut-off date on account of uncontrollable reasons. These
works have to be deferred for execution after the cut-off date for reasons beyond the
control of the Petitioner. The detailed reasons causing delay in completion of work before
the cut-off date is submitted in the following section.
8.9 The Petitioner submits that the Petitioner is under Insolvency and Bankruptcy Code, 2016
("I&BC") Proceedings with effect from 271" March 2019 vide an Order passed by the
Hon'ble National Company Law Tribunal, Kolkata Bench in C.P.(IB) NO. 634/KB/2017
as per which a Resolution Professional for Jhabua Power Limited has been appointed vide
Hon'ble NCLT, Kolkata order dated 24th July 2019.lt is further submitted that even before
the commencement of I&BC Proceedings, the Petitioner's company was under the control
of lenders (Committee of Creditors- CoC) and the complete operational conh·ol was not
with the manay,emcnt o£ the company. The timeline of events leading to delay in
01
(i) Due to of non-availability of funds post commercial operation of the unit (due to
retention of money by the Respondent from the monthly raised invoices by the
petitioner on various accounts such as Liquidated Damages & On-Off bar issue,
poor scheduling by the Respondent), the progress of balance works was severely
affected leading to delay in work which was otherwise envisaged to be completed
by March 2018. Also, since there were no revenue inflows, company was not able
to service its debt obligations and it defaulted on its monthly interest payment'i to
bankers in June'2017. Post which, lenders tried to restructure company's debt but
the effort remained unsuccessful. Also, in the interim period, all the payments had
to be approved lenders and considering the strained financial position of the
company, they did not allow company to incur any capex expenditure.
Subsequently, the lenders also invoked the pledge on the shares of the company
and took control of 60% of the promoter's equity.
(ii) The RBI Circular dated 12th February 2018 for stressed assets forced the lenders to
classify the project of the petitioner as a Non-Performing Asset (NPA). The
Petitioner's Plant was identified as one of the 34 stressed thermal coal-based
power plants in the 40th report of the Standing Committee on Energy (2017-18),
Ministry of Power.Thereafter, the lenders stopped the process of debt
restructuring in line with the above RBI circular and initiated the process of due-
diligence for change of ownership further delaying the works to be executed
before the cut-off date.
(iii) The lenders decided to stop all capital expenditure required to complete the
balance project works and to meet a number of undischarged liabilities. This step
was taken under the assumption that the amount and course of capital
expenditure would be decided by the new management post resolution of the
asset, which was expected to be completed by August 201R, in line with the above
RBI Circular. However, the process of resolution of the asset got delayed due to
various factors like:
• Longer than expected timeline for the process of due diligence in view of
the various project
i%1 • Failure ot the identified bidder to achieve financial closure to proceed with
the resolution.
• Stay order by the Hon'ble Supreme court on the process of resolution of
the stressed assets in the power sector under Insolvency and Bankruptcy
Code.
(iv) The Petitioner was constantly pursuing with the lenders (Committee of Creditors
- CoC), regarding the matter of allowing the capital expenditure, at least for the
Railway works from the operational flow as the same results in increase in
reliability of coal, decrease in landed cost of fuel. Recognizing the same, the COC
agreed to allow the same in October, 2018. However, due to long interruption and
delay, all the awarded contracts, for supply as well as execution, had to be re-
negotiated and re-ordered adding further to the delay in execution of works.
(v) It is further submitted that the petitioner has not been able to purchase and stock
critical & costly insurance spares like Generator rotor, HP module, LPT last stage
blades, Turbine Governing System Spares, Generator Stator Spares, DCS Spares
etc. in view of the paucity of funds. Further, the other miscellaneous balance
activities like construction of township, service building, roads & drains etc. also
could not be completed on account of the same.
8.10Further, one of the capex creditors had filed the case against the company in NCLT for
non-payment of its dues. The company finally got admitted into CIRP (corporate
Insolvency Resolution process) on 27th Mar'2019.
8.11 The Petitioner submits that the I& BC Proceedings may very well take another 6-8 months
considering the nationwide lockdown imposed by the Gol in response to COVTD 19
pandemic. It is further submitted that the balance works and procurements can resume
only after the Resolution Proceedings are complete and accordingly, the balance works
are expected to be completed by 31.03.2022.
8.12The Petitioner accordingly in the instant petition has pha.!:led out the additional capital
expenditure du.ring FY 2021 & FY 2022 as per the present status of the TBC Proceedings.
the additional capital expenditure beyond FY 2022 in view of the extra ordinary
circumstances prevailing in the company.
8.13The Petitioner respectfully submits that the additional capital expenditure projected to be
incurred during the period FY 2019-20 to FY 2021-22 is on account of the following:
(i) Additional capitalisation of Rs. 130.52 Crore in accordance to Regulation 27.1 (iv)
towards discharge of liabilities of the works executed prior to the cut-off date. It
is submitted that these works have already been approved by the Hon'ble
Commission and only balance payments are projected to be incurred towards
discharge of its outstanding liabilities. The Hon'ble Commission is therefore
requested to allow the same.
(ii) Additional capitalisation of Rs. 5.70 Crore in accordance with Regulation 27.1 (iii)
towards execution of the deferred works related to ash handling system and ash
silo including ash transportation facility which are part of the original scope of
work. As these works are permissible under the said provision the Hon'ble
Commission is requested to kindly approve the same.
(iii) Additional capitalisation of Rs. 17.25 Crore in accordance to Regulation 27.1 (vii)
towards raising of the ash dyke as a part of ash disposal system. As these works
are permissible under the said provision the Hon'ble Conunission is requested to
kindly approve the same.
(iv) Addi tional capitalisation of Rs. 182.09 Crore towards works which are part of
original scope of work but could not be completed within the cut-off date due to
uncontrollable reasons as stated earlier. lt is submitted that, with the issuance of
RBI Circular dated 12th February 2018 the Petitioner had to comply with the
provisions of the Circular. Subsequently, the Insolvency and Bankruptcy Code,
2016 proceedings got initiated which tantamount to Change in Law. Therefore,
the Petitioner requests the Hon'ble Commission to appmve the same in
accordance with Regu lation 27.1 (ii) of MPERC Tariff Regulations, 2020.
oz
Q% Petitioner to run the plant more safely and efficiently. It is also submitted that additional
capital cost due to spilling over of expenditure beyond the cut-off date is indirectly
advantageous to the Respondent. This is because prior to incurring of the expenditure
power is being supplied at a comparatively lower rate since the price of power is a
fu nction of the actual expenditure incurred as on date. Therefore, no additional burden
is imposed on the beneficiaries due to such additional capitalization beyond the cut-off
Date and therefore the same may be allowed.
8.15The detailed head wise proposed additional capital expenditure for the period FY 2019-
20 to FY 2023-24 is shown below:
Table 2: Additional capital expenditure proposed during the period FY 2019-20 to FY 2023-24
Rs. in Crore
s. Head of Work I Regulations FY 2019- FY 2020- FY 2021- FY2022- FY2023-under which No. Equipment
c:laimed 20 21 22 23 24
1 fOP I I Modification 27.1 (ii} - - 0.74 - -2
BTG-"A" Row 27.1 (ii) 1 .00
Vt:!ntilation System - - - -3 Service Building 27.1 {ii) - - 2.50 - -4 AHP & Main Silo 27.1 (iii) - 3.99 l .71 - -5 Fire sta tion 27.1 (ii) - 0.82 - - -6 Boundary wall 27.1 (ii) - 0.70 0.32 - -7 CPU 27.1 (ii) - 2.'14 - - -8 Admn. Building 27.1 (ii) - - 2.00 - -9 Ba l Ma ndatory Spares 27.1 (ii) 10.20 20.00 16.83 - -
10 Railway Related Works 27.1_(ii) - 72.32 - - -Road & Drainage
11 includ ing s ite level & 27.1 (ii) 6.87 7.50 '19.16 - -lnfrastru ctu re
12 CCTVCe~mera 27.1 (ii) - - - - -13
Chemica l & Electrical 27.1 (ii) 2.00 0.50
Lab - - -Miscllaneous
14 I\II(K hanical & Electrical 27.1 (ii) - 2.00 - - -Works
15 R.1in Wa ter H arvestin g
27.1 (ii) - - l.SO - . System 16 CH P Ba lance Works 27.1 (ii) - 9.99 - -
Expansion of Ash 17 Dyke & Ash Handling 27.1 (vii) - 3.50 13.75 - -
P1a nl
18 P.SP /Boile r flooring I
27.1 (ii) - - 3.00 - -Mise: c iv il works -19 Di~c: ha rge of Liabilities ~\\-\:1-:AS/.}~ -4.05 27.62 102.90 0.00 0.00
Total ~~J o2- •JE)3.58 'Hi4.9.1 0.00 0 /'I' 0.00 l 8f1fi>A-col o. ) 'F>.Poo344 * 9, 7. .v ~ ·18!tDf>4s ~ ~~?8151-~ .. . ~-~: 02 -
~'t - • * (.) -
3
Additional Capitalization on account of Revised Emission Standards:
8.16It is submitted that on 7.12.2015, Ministry of Environment, Forest and Climate Change,
Government of India ("MoEF&CC") notified the Environment (Protection) Amendment
Rules, 2015 ("2015 MoEF&CC Notification") which mandatorily require all Thermal
Power Plants to comply with the revised norms of the 2015 MoEF&CC Notification.
Further, as per implementation plan prepared by Central Electricity Authority (CEA), the
existing Thermal Power Plants are required to comply with the new emission standards
by the year 2022.
8.17Further, Regulation 31 of MPERC Tariff Regulations, 2020 provides as follows:
"31. Additional Capitalizati011 on account of Revised Emission Standards:
31.1 A generating company requiring to incur additional capital expenditure in the
existing generating station for compliance of the revised emission standards shall share its
proposal with the beneficiaries and file a petition before Commission for undertaking such additional capitalization.
31.2 The proposal under clause above sftall contain details of proposed technolog~j as
specified by the Central ElectricihJ Autlwrihj, scope of the work, phasing of expenditure,
schedule of completion, estimated completion cost including foreign exchange component,
if any, detailed computation of indicative impact on tariff to the beneficiaries, and any other information. considered to be relevant by the generating company.
31.3 Where the generating company makes an application for approval of additional
capital erpenditure on account of implementation of revised emission standards, the
Commission may grant approval after due consideration of the reasonableness of the cost
estimates, fi11an.cing plan, schedule of completion, interest during construction, use of
efficient technologtj, and such other factors as may be considered relevant by the
Commission .
.11.4 After completion oftlre implementation ofre7.,ised ernission staruianis, the generating
company shall file a petition for determination of tariff Any expenditure incurred or
projected t.o be incurred and admitted by tire Commission after pn.ul~.-'11ce check based on
17 ~
024
8.18Keeping in view of the above, the Petitioner being a Thermal Power Plant built with its
design based on norms for emission of environmental pollutants provided in Schedule I
of the Environment (Protection) Rules, 1986 is required to comply with the 2015
MoEF&CC Notification and accordingly the Petitioner is required to install necessary
equipment's viz. Flue Gas De-Sulfurization ("FGD") etc. which involves significant
additional capital expendi ture. The Petitioner submits that the Petitioner is in the process
of planning for the same shall approach the Hon' ble Commission separately for approval
of the same in terms of the above Regulation.
8.19In accordance with the above, Gross Fixed Asset (GFA) considered for the purpose of this
Petition, is as shown below:
Table 3: GFA for the period FY 2019-20 to FY 2023-24
Rs. in Crore
Particulars FY2019-20 FY2020-21 FY2021-22 FY 2022-23-
OpeningGFA 3952.40 3965.42 4119.00 4283.91
Add: Addition during the year/ 17.07 1.25.96 62.01 0.00 period Less: Dec a p ttaliza tion
0.00 0.00 0.00 0.00 during the year I period Less: Reversal during the 0.00 0.00 0.00 0.00 year I period 1\dd: Discharges during the -4.05 27.62 102.90 0.00 year I period Closing GfA 3965.42 4119.00 4283.91 4283.91
Average GFA 3958.91 4042.21 4201.45 4283.91
9. Debt-Equity Ratio for truing up of Additional Capital Expenditure
9.1 Regulation 33 of the MPERC Tariff Regulations, 2020, provides as follows:
"33. Debt-Equity Uatio:
FY2023-24
4283.91 .
0.00
0.00
0.00
0.00
4283.91 4283.91
33. ·1 For new J7mjects, tlte ckbt-t!quity raLio of 70:30 as on dat1~ of colllmercial uperntion
shnll be considered. If tlw eqw'n; actually deployed is more tlum 30% of' the capital cost,
18 I
811 Provided tluzt:
(a ) where equihJ actually deployed is less than 30% of the capital cost, actual equihJ shall
be considered for determination of tariff;
(b) the equitlj invested in foreign currenClJ shail be designated in Indian rupees on the
date of each investment; and
(c) any grant obtained for the execution of the project shall not be considered as a part of
capital strncture for the purpose of debt :equity ratio:
Explanation: The premium, if any, raised by the generating company while issuing share capital and investment of internal resources created out of its free reserve, for the
funding of the project, shall be reckoned as paid up capital for the purpose of computing
return on equity, only if such premium amount and internal resources are actually
utilised for meeting the capital expenditure of the generating station.
33.2 The generating company shall submit the resolution of the Board of the company
regarding infusion of fund from internal resources in support of the utilization made or
proposed to be made to meet the capital expc.>nditure of the generating station.
33.3 Tn case of the generating station declared under commercial operation prior to
1.4.2019, debt- equihJ ratio allowed by the Commission for determination of tariff for the
period ending 31.3.2019 shall be considered:
Provided tlrat in case of a generating station which has completed its useful life as on or
after 01 .04.2019, if the equity actually deployed as on 01.04.2019 is more than 30% of the
capital cost, equii:Jj in excess of30% shall not be taken into account for tariff determination.
33.4 Tn case of the generating statr:on declared under commercial operation prior to
1.4.2019, but where debt: equihJ ratio has not been determined by the Commission for
detc7minntion of tariff for the pen'od ending 31.3.2019, the Commission shall approve the
debt: equihj in accordance with Regulaticm 33.1 of these Regulations.
33.5 1\.ny expenditure incurred or projected to be incurred on or afb.~r 1.4.2019 as may be
admitted by the Commission as additional capital expenditure fi'r determination of tariff,
and Retwvation rmd Modemisntion expenditure for lifo extension :;hall be serviced in the
mauner specified in Regulation 33.1 of these Regulations."
Petitioner in terms of Regulation 33.5 of MPERC Tariff Regulations, 2020, has considered
the normative debt-equity ratio of 70:30 for the proposed additional capital expenditure
to be incurred during the control period FY 2019-20 to FY 202.1-24. It is submitted that the
additional capital expenditure shall be funded through internal accruals of the Petitioner.
9.3 With regard to approval of the proposed additional capital expenditure, Regulation 33.2
of MPERC Tariff Regulations, 2020 states as follows:
"33.2 The generating company shall submit the resolution of the Board of the company
regarding infusion of fund from internal resources in support of the utilization made or
proposed to be made to meet the capital expenditure of the generating station."
In this regard, the Petitioner submits that it already has investment approval from BoD
for completed capital cost of Rs. 4950 Crore wherein the capital structure of the project
has already been approved as 70:30. As the works proposed to be capitalised in the next
control period pertains to original scope of works and further since the Completed cost
of the project including the proposed additional capitalisation is well within the limit of
Rs. 4950 Crore therefore additional BoD approval is not required. The Copy of the
Investment Approval accorded by the BoD is attached as ANNEXURE -3 of this Petition.
10. Determination of Capacity Charges and Energy Charges
A. Capacity Charges
a) Return on Equity (RoE):
10.1Regulation 34 & 35 of the MPERC Tariff Regulations, 2020, provides as follows:
"34. Return on Equity:
34.1 Return on equity shall be computed in rupee terms on the equihJ base determined in
accordance with Regulation 33 of these Regulations.
34.2 Return on equity slwll he computed at the base rate of1 5.50% fiJY thermal generating
stations and hydro generating ~tatiom; and at the base rate of 16.50% fiw the pumped
storage hydro generating :;lations and run-of river generating stations with pondage:
Provided that:
(i) in cnse of a new project, the rate of retum of a new project shall be reduced 11y tOO%
027
liZ be declared under commercial operation without commissioning of any of the Restricted
Governor Mode Operation (RGMO)/ Free Governor Mode Operation (FGMO):
(ii) in case of existing generating station any of the above requirements are found lncking
based on the report submitted by the respective SLDC/RLDC, RoE shall be reduced by 1%
for the period for which the deficiency continues;
(iii) in case of a thermal generating station, with effect from 1.04.2020:
(a) rate of return on equitLJ shall be reduced by 0.25% in case of failure to achieve the ramp
rate ofl% per minute:
(b) an additional rate of return on equity of0.25% shall be allowed fo r even; incremental
ramp rate of 1% per minute achieved over and above the ramp rate of 1% per minute,
subject to ceiling of additional rate of return on equihJ ofl.OO%:
Provided that the detailed guidelines in this regard shall be issued by National Load
Despatch Centre.
35. Tax on Return on Equity:
35.1 The base rate ofreturn on equity as allowed by the Commission under Regulation 34
shall be grossed up with the effictive tax rate of the respective financial year.
For this purpose, the effictive tax rate shall be considered on the basis of actual tax paid in
the respective financial year in line with the provisions of the relevant Finance Acts by the
concerned generating company. The actual income tax on other income stream including
deferred tax liability (i.e., income from nongeneraticm business) slwll be excluded for the
calculation of"effective tax rate".
3S.2 Rate of return on equihJ shall be rounded off to three decimal places an.d shall be
computed as per the forrnula given below:
Rate of pre-tax return on equi~J = BaHe rate I (1 -t)
V\t1wre "t" is the effective tax rate in accord~nce with l
company paying Minimum Alternate Tax (MAT), "t" shall be considered as MAT rate
including surcharge and cess.
lltustration.-
(a) In case of the generating company paying Minimum Alternate Tax (MAT)@ 21.55
% including surcharge and cess:
(b) Rate ofreturn,on equity= 15.50/(1-0.2155) = 19.758%
(c) ln case of generating company paying normal corporate tax including surcharge and
cess:
(i) Estimated Gross Income from generation business for F¥2019-20 is Rs 1000 crore,
(ii) Estimated Advance Tax for the year on above is Rs 240 crore, (iii) Effective Tax Rate
for the year 20.19-20 == Rs 240 Crore /Rs 1000 Crore =24%,
(iv) Rate of return on equihj = 15.50/ (1-0.24) = 20.395%.
35.3 The generating company shall true-up the gmssed up rate of return on equihj at the
end of every financial year based on actual tax paid together with any additional tax
demand including interest thereon, duly adjusted for any refund of tax including interest
received from the income tax autiU>rities pertaining to the tariff period 201920 to 2023-24
on actual gross income of any financial year. However, penalty, if any, arising on account of delay in deposit or short deposit of tax amount shall not be claimed by the generating
company. Any under-recovenJ or over-recovenJ ofgmssed up rate on return on equihj after
truing up, sJUJll be allowed to be recovered or refunded to beneficiaries on year to year
basis."
10.2The Opening Equity as on 01.04.2019 has been arrived considering approved Closing
Equity as on 31.03.2018 in the Order dated 04.1}1.2020 and equity addition corresponding
to additional capital expenditure in FY 2018-.19 as submitted in true up Petition. The
Petitioner has claimed return on equity on the average equity considering the equity
infused to fund the proposed additional capital expenditure in the period FY 2019-20 to
FY 2023-24. Further, keeping b.1. view of the existing financial situation of the Petitioner
221 _. -
02 . .
Table 4: Computation of Return of Equity for the period FY 2019-20 to FY 2023-24
Amounts Rs. in Crore s.
Particulars FY 2019- FY2020- FY2021- FY2022- FY 2023-
No 20 21 22 23 24 1 Gruss Opening Equity (Normal) 988.10 992.00 1038.07 1087.55 1087.55 2 Less: Adjustment in Opening
0.00 0.00 0.00 0.00 0.00 Equity
3 Adjustment during the year 0.00 0.00 0.00 0.00 0.00 4 Net Opening Equity (Normal) 988.10 992.00 1038.07 1087.55 1087.55 5 Add: Increase in equity due to
addition during the 3.90 46.07 49.47 0.00 0.00 year/ period
6 Less : Decrease due to De-capitalization during the 0.00 0.00 0.00 0.00 0.00 year I period
7 Less: Decrease due to reversal 0.00 0.00 0.00 0.00 0.00
during the year I period 8 Add: Increac;c due to discharges
0.00 0.00 0.00 0.00 0.00 during the yearjperiod
9 Net Closing Equity (Normal) 992.00 1038.07 1087.55 1087.55 1087.55 10 Average Equity (Normal) 990.05 1015.04 1062.81 1087.55 1087.55 11 Rate of RoE (%) 15.50% 15.50% 15.50% 15.50% 15.50% 12 Total RoE 153.46 157.33 164.74 168.57 168.57
b) Interest and Fin ancing Charges
10.3Regulation 36 of the MPERC Tariff Regulations, 2020, provides as follows:
"36. Interest on Loan Capital:
36.1 The loans arri:ved at in the manner indicuted in Regulation 33 of these Regulations
shall be considered as gross normative loan for calculation of interest on loa H.
36.2 The normative loan outstanding as em 1.4.2019 slmll be W01'ked out fn; deducting tire
cr.unulative repayment as ndnn:tted by the Commission up to 31.3.2019 from the gros:;
normative loan. The repayment fur each of the year of the tariff period 201924 shall be
deemed to be equal to tile depreciation allmoed for the corresponding ynrr/period. ln case of
de- capitalization of t1.ssets, the repaymen t shall be adjusted by taking in.to nccmmt
n.l/11/.llal'ive repayment on a pm rata basis and tile adjustment should n.ot ext(~~tl cu nwlative
depreci(lfion recovered upto tlte date of Jecapitalisation of such n.sset.
36.3 Notwithstmuting any n1~wnloriu:m puriod flmiled by the gtm.emL'ing COIIIJ.Inll:rJ, tire
..
36.4 The rate of interest shall be the weighted average rate ofinterest calculated on the
basis of the actual loan portfolio after providing appropriate accounting adjustment for
in terest capitalized:
Provided that if there is no actual loan for a particular year but normative loan is still
outstanding, the last available weighted average rate of interest shall be considered:
Provided further that if the generating station does not have actual loan, then the weighted
average rate of interest of the generating comparty as a whole shall be considered.
36.5 The interest on loan shall be calculated on the normative average loan of the year by
applying the weighted average rate of interest."
10.4 The Opening Loan as on 01.04.2019 has been arrived considering approved Closing Loan
as on 31.03.2018 in the Order dated 04.01.2020 and loan addition corresponding to
additional capital expenditure in FY 2018-19 as submitted in true up Petition. Regulation
36 of MPERC Tariff Regulations, 2020 stipulates that the rate of interest shall be weighted
average rate of interest calculated on the basis of the actual loan portfolio after providing
appropriate adjustment for interest capitalized . Accordingly, the Petitioner has
con8idered the actual Weighted Average Rate of Interest (hereinafter referred as
'WAROI') of FY 2018-19 i.e., 14.12% after deducting the Penal Interest for computing
interest charges for the period FY 2019-20 to FY 2023-24. It is further submitted that the
W AROI has been computed as per Form 13 of the Tariff Forms. The repayment for the
year is being considered equal to the Depreciation calculated for the respective year. The
intere8t on loan claimed has been computed as shown below:
Table 5: Computation of Interest on Normative Loan for the period FY 2019-20 to FY 2023-24
Rs. in Crore s.
Particulars FY 2019- FY 2020- FY 2021- FY2022- FY 2023-
No 20 21 22 23 24
'1 Gross Normative loan-
2,964.31 2,973.42 3,080.93 3,196.37 3,196.37 0 enin Cumulative repayment of
2 Normative Loan up to 57R.28 781 .30 992.25 1,211.38 1,430.51
3 2,386.03 2,192.13 2,088.68 1,984.99 1,765.85
24 I.
s. Particulars FY2019- FY2~ FY 2021- FY 2022- FY 2023-No 20 21 22 23 24
Add: Increase due to 4 addition during the 9.11 107.50 115.44 - -
year/ period Less: Decrease due to de-
5 capitalization during the - - - - -year/ period Add: Increase due to
6 discharges during the - - - - -year/ period J .ess: Decrease due to
7 reversal/repayment during 203.02 210.95 219.13 219.13 219.13 the year/ period
8 Net Normative loan -
2192.13 2,088.68 1,984.99 1,765.85 1,546.72 Closing
9 Average Normative Loan 2,289.08 2,140.40 2,036.83 1875.42 1,656.29
10 Weighted average Rate of
14.12°/.• 14.12'V., 14.12'1
Provided further that the capital cost of the assets of the hydro generating station for the
purpose of computation of depreciated value shall correspond to the percentage of sale of
electricihJ under long-tenn power purchase agreement at regulated tariff
Provided also that any depreciation disallowed on account of lower availability of the
generating station or generating unit shall not be allowed to be recovered at a later stage
during the useful life or the extended life: Provided also that the salvage value fo r IT
equipment and software shall be considered as NIL and 100% value of the assets sho.ll be
considered depreciable.
37.4 Land other than the land held under lease and the land for reservoir in case of hydro
generating station shall not be a depreciable asset and its cost shall be excluded from the
capital cost while computing depreciable value of the asset.
37.5 Depreciation shall be calculated annually based on 'Straight Line Method' and at
rates specified in Appendix-[ to these Regulations for the assets of the generating station.
37.6 Depreciation shall be chargeable from the first Year of commercial operation. ln case
of commercial operation of the asset for part of the Year, depreciation shall be charged on
pro rata basis:
Provided that the n:.>maining depreciable 11alue as on 31st March of the year closing after a
period of 12 years from the effective date of commercial operation of the station shall be
spread over the balance useful life of the asHets.
37.7 In case of the existing projects, the balance depreciable value as on 1.4.2019 shall be
worked out by deducting the cumulative depreciation as admitted by the Commission up to
31.3.2019 from the gross depreciable value of the assets.
3 7.8 The generating company shall submit the details of proposed capital expenditure five
years before the cmnpletion of useful life of the project along with justification and proposed
life extension. The Commission based on prudence check of such submissions shall approve
the depreciation on capital expenditure during the fag end of the project.
37.9 In cnse of de-capitaliza tion of assets in re.
10.6The Petitioner, in accordance with Regulation 37 of lviPERC Tariff Regulations, 2020
submits that it has computed Weighted Average Rate of Depreciation for the period FY
2019-20 to FY 2024-25 considering rates of Depreciation as per Appendix-! to the MPERC
Tariff Regulations, 2020.
10.7The working of Weighted Average Ra te of Depreciation is placed at Form-11 of the Tariff
Forms. The depreciation claimed has been computed as shown below:
s. No 1
2
3 4
5
6
Table 6: Computation of Depredation for the period FY 2019-20 to FY 2023-24
Rs. In Crore
Particulars FY 2019- FY2020-FY 2021- FY 2022- FY2023-
20 21 22 23 24 Opening Capital Cost 3952.40 3965.42 4119.00 4283.91 4283.91 Closing Capital Cost 3965.42 4119.00 4283.91 42.83.91. 4283.91 Average Capital Cost 3958.91 4042.21 4201.45 4283.91 4283.91 Preehold land 55.71 55.71 55.71 55.71 55.71 Rate of depreciation 5.12% 5.12% 5.12% 5.12% 5.12% Depreciation (for the
203.02 210.95 219.13 219.13 219.93 period)
d) Operation and Maintenance Expenses for Generating Station:
10.8Regulation 40.2 of the MPERC Tariff Regulations, 2020, provides as follows:
"40.2 O&M Norms for the Thermal Generating Units achieved COD on or after
01.04.2012
(Rs. In Lakhs /MW)
Units (MW) FY FY FY fY FY 2019-20 2020-21 2021-22 2022-23 2023-24
4SMW 37.51. 38.83 40.19 41 .60 43.06 200/2.10/2.50 MW 32.96 34.:l2 35.31 36.56 37.84 300 1\1W Series 27.74 28.71 29. 72 30.76 3"1.84 500 MW S(~ries 22.51 23.30 24.12 24.97 25.84
600/660 lv1ll\l Scrit:s 20.26 20.97 21.71 22.47 23.26 800 MW Series 18.23 18.87 19.54 20.22 20.93
Pwvided that wlzere the date of cmnmercial operation of any additional unit(s) of a
gmemli11g sta ticm after first four units occurs on or after 1.4.2019, the O&M expeuses vf
such ndJtitimwl 1.mit(s) slmll be admissible at 90% of tlte opemtion. anti mainterumce
-Provided further that wnter charges shall be allowed based on water consumption depending upon h;pe of plant, hjpe of cooling water system etc., subject to prudence check.
The details regarding the same shall be fumislted along with the petition:
Provided also that the generating station shall submit the details of year wise actual capital
spares consumed at the time of truing up with appropriate justification for incurring the
same and s-ubstan tiating tluzt the same is not funded through comptmsatory allowance or
special allowance or claimed as a part of additional capitalization or consurnption of stores
and spares and renovation & modernization."
10.9Accordingly, the Normative O&M expenses have been considered as specified in Clause
40.2 of the MPERC Tariff Regulations, 2020 for new 600 MW Thermal Generating Unit.
10.10 The details of year wise O&M Expenses claimed is as shown below:
Table 7: Computation of O&M Expenses for the period FY 2019-20 to FY 2023-24
s. FY2019- FY2020- FYZ021- FY2022- FY 2023-N Particulars
20 21 22 23 24 0
1 N orm (Rs Lakh/MW) 20 .26 20.97 21.71 22.47 23.26
2 O&M Expenses for Unit I of
121.56 125.82 130.26 134.82 139.56 600 MW (Rs. Crore)
Total O&M 121.56 125.82 130.26 134.82 139.56
10.11 As per second proviso under Regulation 40.2 of MPERC Tariff Regulations, 2020 the
Petitioner is to submit the water charges details. Accordingly, the Petitioner submits that
as per the Agreement for Sale of Water signed between the Petitioner and Governor of
Madhya Pradesh, the Petitioner is permissible to draw a quantum of 16.00 MCM per
year/43835 Cum of water per day. The Petitioner in this in5tant Petition is submitting
that it had paid Rs. 3.00 Crore in FY 20'1.8-19 based on the actual bills received. The copy
of the Agreement is attached as ANNEXURE -4 of the Petition.
Tt is further submi tted that Regulation 65.2 of MPERC Tariff Rer,ulations, 2020 states as
follows:
"65.2 Electricity duty, cess nttd waft~!' chnrges if payable by the Generating Company for
gwerntiou of electricity front t/11! power . ..;trtlion~ lo lite State Coz•erniiHml, shall be
considered
zg I :· 035
•• 10.12 As stated above, the Petitioner, is entitled to claim water charges separately on actual basis, the Petitioner therefore requests Hon' ble Commission to allow water charges to be
recovered separately on actual basis for the period FY 2019-20 to FY 2023-24.
e) Interest on Working Capital:
10.13 Regula tion 38 of the MPERC Tariff Regulations, 2020, provides as follows:
"38. Interest on Working Capital:
38.1 The working capital shall cover:
A. Coal-based thermal generating stations
(i) Cost of coal towards stock, if applicable, for 15 days for pit-head generating stations
and 30 days for non-pit-head generating stations for generation corresponding to the
normative annual plant availability foetor or the maximum coal stock storage capacity
whicfu..-ver is lower;
(ii) Advance payment for 30 days towards cost of wal for generation corresponding to the
normative annual plant availabilitJ; factor;
(iii) Cost of secondary fuel oil for two months for generation corresponding to the
normative annual plant availability factor, and in case ofuse of more than one secondary
fuel oil, cost of fuel oil stock for the main secondary fuel oil;
(iv) Maintenance spares @ 20% of operation and maintenance expenses specified in
Regulation 39 and 40 of these Regulations;
(v) Receivables equivalent to 45 days of capacihj charges and energy charges for sale of
electricity calculated on the normative annual plant availability factor; and
(vi) Operation and maintenance expenses for one month.
38.2 The cost of fuel shall be based on tlw landed fuel cost incurred (taking into account
normative transit and handling losses) by the generating station and gross cnlorific value
of the fuel as per actunl weightage m;erage for the three months preceding the fir5t rrumth
for w/z;ch tariff is to be determined and no fuel prin~ escalation shall be provided during the
tariff period:
-handing losses) and gross calorific value of the fuel as per actual weighted average for three months, as used for infirm power, preceding date of commercial operation for which tariff
i.s to be determined.
38.3 Rate of interest on ·working capital shall be on normative basis and shall be considered
as the bank rate as on 1.4.2019 or as on 1st April of tlze year during the tariff period 2019-
20 to 2023-24 in which the generating station or a unit thereof, is declared under
commercial operation, whichever is later:
Provided thnt in case of truing-up; the rate of interest on working capital sluzll be
considered at bank rate as on "l st April of each of the financial year during the tariff period
2019-24.
38.4 lnterest on working capital shall be payable on normative basis notwithstanding that
the generating company has not taken loan for ·working capital from any outside agency."
10.14 The Petitioner submits that it has computed the Working Capita l in accordance with
Regulation 38.1 (A) of MPERC Tariff Regulations, 2020 for the period FY 2019-20 to FY
2023-24. Further, with regards to interest rate on Working Capital, in line with Regulation
38.3 of the MPERC Tariff Regulations, 2020 the rate of interest on working capital has
been taken on normative basis and has been worked out considering one year MCLR of
SBT as on 1.4.2019 plus 350 bps i.e., 12.05% (8.55% + 3.50%) for the period of FY 2019-20
to FY 2023-24. The calculation of [ntcrest on Working Capital is as shown below:
Table 8: Computation of Interest on Working Capital for the period FY 2019-20 to FY 2023-
24
Rs. in Crore s.
Particulars FY 2019- FY 2020- FY 2021- FY 2022- FY 2023-
No 20 21 22 23 24 1 169.79 169.79 169.79 l69.79 169.79
2 1.90 ] .90 1.90 1.90 1.90 3 10.13 10.49 10.86 11.24 11.63 4 \11a intenance S arcs 24.3l 25.16 26 .05 26.96 27.91 5 Rccc i v
10.15 Charges against Cost of Coal and Receivables in the above Table are bast>d on
computation of 'Energy (variable) charges' as described in Section B of this Petition.
f) The annual capacity (fixed) charges:
10.16 Based on the above, the Annual Fixed Cost I Capacity Charges claimed is as shown below:
Table 9: Computation of Annual Fixed Cost for the period FY 2019-20 to FY 2023-24
Rs. in Crore s. Particulars Ref. FY 2019- FYZ020- FY202l:- FY2022- FY~ No 20 21 22 23 :u 1 Depreciation Form "12 203.02 210.95 219.13 219.13 219.13
2 Interest on FormM 323.33 302.33 287.70 264.90 233.95 Loan
3 Return on
Form 1(II) 153.46 157.33 164.74 168.57 168.57 Equity Interest on
4 Working FormN 52.76 52.91 53.14 53.08 52.85 Capital
5 O&M Add.
121.56 125.82 130.26 134.82 139.56 Expenses Form
6 Total Rs. Crore 854.12 849.33 854.97 840.50 814.06
B. Energy Charges for the period FY 2019-20 to FY 2023-24
10.17 Regulation 43 of MPERC Tariff Regulations, 2020 provides for computation of payment
of Energy Charges for Thermal Generating Station as follows:
"43. Computation and Payment of Energy Charge for Thermal Generating
Stations:
43 .. 1 'L'he energy charge shall cov~r the primnnJ and secondary fuel cost and shall be payable
by every beneficiary for the total energy scheduled to be supplied to such beneficiary during
the calendm- month em. ex-power plant basis, at the energtj charge rate of the month (with
fuel price adjustment). Total Ene1'gy charge payable to the generating company for a month
sltall be:
(l:::nergy charge mte in. Rs.;1
-A UX =Normative auxiliary energtj consumption in percentage. CVPF= Weighted Average Gross calorific value of coal as received, in kCal per kg less 85
Kcal/kg on account of variation during storage at generating station:
Provided tho.t, in case ofblendingofcoal from different sources, the weighted average Gross
Calorific Value of coal (primanJ fuel) shall be arrived in proportion to ble1:lding ratio.
CVSF = Calorific value of secondanJ fuel, in kCal per ml. ECR. = Energtj charge rate, in Rupees per kWh sent out.
SHR =Gross station heat rate, in kCal per kWh.
LPPF= Weighted average landed price of coal (primary fuel), in Rupees per kg, during the
manth. (In case ofblending of coal from different sources, the weighted average landed price
of coal shall be arri1Jed in proportion to blending ratio).
SFC =Normative Specific fuel oil consumption, in ml per kWh.
LPSFi =Weighted Average Landed Price of Secondary Fuel in Rs. jml during the month"
Accordingly, the Petitioner has considered the methodology specified in the above
Regulation along with norms of operation for thermal generating stations as discussed in
below sections.
N onns of Operation
a) NAPAF:
10.18 Regulation 49.3 (A) & (B) of MPERC Tariff Regulations, 2020 provides as follows:
"49.3 Following norms shall be applicable for all the coal based thermal
genet·ating Units/ stations for all capacities which have achieved COD on or after
01/04/2012:
A. Normative Annual Plant Availability Factor (NAPAF): 85%
B. Normati1Je Annual Plant Load Factor (NAPLF): 85%"
10.19 Accordingly, the Petitioner has considered NAPAF of 85% and NAPLF of 85% for the
purpose of determination of Tariff.
b) Gross Station Heat Rate:
10.20 Regulation 49.3 (C) (ii) of MPERC Tariff Regulations, 2020 provides as follows:
32 r ..
10.21
• (i) Existing Coal-based thermal generating stations lw.ving CoD on or after 1.4.2012 till
31.03.2016, (other than those covered under Regulation 49.2), tlte station heat rate norms
shall be as already approved by the Commission.
(ii) Existing Coal based thermal generating stations having CoD on or after 1.4.2016 till
31.3.2019, the stati.on heat rate for the control period FY 201920 to FY 2023-24 shall be as
given below:
Station Heat Rate= 1.05 X Design Heat Rate (kCaljkWh)
Where the Design Heat Rate of a Unit means the Unit heat rate guaranteed by the supplier
at conditions of 100% MCR, zero percent make up, design coal and design cooling water
temperature/back pressure:
Provided that the design heat rate shall not exceed the maximum de~"ign Unit heat rates
depending upon the pressure and temperature ratings of the Units as provided in
Regulation 39.3 (C)(b) of Madhya Pradesh Electricity Regulatory Commission (Terms and
Conditions for determination of Generation Tariff) Regulations,2015 {RG-26(111) of2015:
Provided further that in case pressure and temperature parameters of a Unit are different
from above ratings, the maximum design Unit heat rate of the nearest class shall be taken:
Provided al!>·o that where Unit heat rate has not been guaranteed but turbine cycle heat
rate and boiler efficienetJ are guaranteed separately by the same supplier or different
suppliers, the Unit design heat rate shall be arrived at by using guaranteed turbine C1Jcle
heat rate and boiler efficiency:
Provided also that if one or more Units were declared under commercial operation prior to
1.4.2016, the Treat rate norms for tlwse Units as well as Units declared unckr commercial
operation Ol'l or after 1.4.2016 shall be lower of the heat rate norms arrived at by abuve
methodology.
Note: ln respect of Units where the boiler feed pwnps are electrically operated, the
luaximum design Unit heat rate shall be 40 kCaljk'vVh lower than the mnxintum design
Unit herrt rate specified above with turbine driven BFP."
33 I
040
-c) Normative Auxiliary Energy Consumption (NAEC):
10.22 Regulation 49.3 (E) of the MPERC Tariff Ret,rulations, 2020 provides as follows:
"E. AuxilianJ Energy Consumption
s. With Natural Draft No
P9weT StatiotL Cooting Tewer or without Cooting Tower
(1) 200 MW Series 8.50% · (2) 300 MW and above
Steam driven boiler feed pumps 5.75% Electrically driven boiler feed
8.00% pumps
(3) 45 MWSeries 10.00%
Provided that for thermal generating stations with induced drafts cooling towers, the
norms shall be further increased by 0.5%:
Provided further that Additional AuxilianJ EnergJJ Consumption as follows may be
allowed for plants with DnJ Cooling Systems
II
st~ (~o o Direct Cooling air cooled condensers with mechanical dra ·. ans Indirect Cooling system employing jet condensers with pressure recovenJ turbi11e and natural dra . tawer
1.00%
0.50%
10.23 It is submitted that the Normative Auxiliary Energy Consumption for 300 MW and above
units having Steam driven Boiler Feed Pumps shall be 5.75%. The Regulations further
provide that in case the station has installed induced drafts Cooling Towers, the norm
shaH be further increased by 0.5%. As the Petitioner's plant has ID Cooling Towers it is
submitted that the Petitioner has therefore considered the same as 6.25%.
d) Transit Loss:
10.24 Regulation 45 of the MPERC Ta1iff Regulations, 2020 provides as follows.
"45. Tran..o;it and Handling Losses:
45.1 For coal, the transit and handling losses shall be ns per the following norms:
11remtal Generatiug Station Trausit and Handling Loss (%) 0.20%
34·1
041
-Provided that in case of pit-head stations, if coal is procured from sources other than the pit-head mines which is transported to the station through rail, transit and handling losses
applicable for non-pit head station sf-rail apply; Provided further tftat in case of imported
coal, the transit and handling losses applicable for pit-head station shall apply."
10.25 Since Petitioner's Plant is non-pit head generating station, normative transit and handling
losses have been considered as 0.80% of the quantity of coal dispatched by the coal
Companies.
e) Specific Fuel Oil Consumption (SFOC)
10.26 Regulation 49.3 (D) of MPERC Tariff Regulations, 2020 provides as follows:
"D. Specific Fuel Oil Consumption
(i) Coal-based generating stations: 0.50 mljkWh
(ii) For Generating Stations based on Coal Rejects: 2.0 ml/kWh"
10.27 Accordingly, the Petitioner has considered SFOC of 0.50 ml/kWh for the purpose of
determination of Generation Tariff.
f) Landed Cost and GCV of Domestic Linkage Coal:
Source of Primary Fuel (Coal)
10.28 It is submitted that the Petitioner has been awarded Coal linkage for its Phase-!, lx600
MW Unit, from the Coal Companies of CIL viz. South Eastern Coal Ltd ('SECL') and
Mahanadi Coal Ltd. ('MCL'). The details of the FSAs are provided below:
Table 10: Details of FSA of Jhabua Phase-1.
FSADetails Unit/Reference Quantum
FSA- Total Qty. Lakh MT 24.50
SECL % 76.40%
MCL ~{, 23.60%
10.29 Regulation 19 & 44 of MPERC Tariff Regulations, 2020 provides as follows:
"19. Latuied Fuel Cost for Tariff Determination:
19.1 Tlte landed fuel cost of pri111ary .fi.tef ami secondary fuel for tariff dderminatirm slutll
35 j
0 2 • J
. . ~
-procurement price of priman; fuel and secondary fuel for the generating station, before the start of the tariff period for existing stations and immediately preceding three months of
COD in case of new generating stations slwll be taken into account.
44. Computation of Landed cost of Coal:
44.1 The energtj charge in respect of the thermal generating Stations shall comprise of
landed cost of coal (primary fuel), cost ofsecmukm; fuel oil consumption and landed cost
of reagents on account of implementation of the revised emission standards.
44.2 71ze landed cost of coal for any month shall consist of base price of coal corresponding
to the grade and quality of coal inclusive of statutory charges as applicable/allowed by the
Commission, washery charges, if any, transportation cost by rail/ road or any other means,
and loading, unloading and handling charges:
Provided that procurement of coal at a price other than Government notified prices may be
considered, if it is based ore competitive bidding through transparent process, for the
purpose of landed coal cost:
Provided further that landed cost of coal shall bL~ worked out based on the actual bill paid
by the generating company including any adjustment on account of quantity and qualitt;:
Provided also that the Gross Calorific Value of coal shall be measured by third partt;
sampling and the expenses towards the third-partt; sampling facilitt; shall be reimbursed
by the beneficiaries."
10.30 It is submitted that the main source of primary fuet Coal, is from SECL and MCL of Coal
India Ltd. According to FSAs, the supply shall in the proportion of 76.4% from SECL and
23.6 % from MCL. The basic price of various grades of coal has last been notified by Coal
India Ltd. on 08.01.2018. Thereon, various taxes, duty, levy, royalty and transportation
cost has been added to arrive at landed coal price as per provision of Regulation 44.2 of
the MPERC Tariff Regulations, 2020. Further, as per Regulation 19.'1 of the MPERC Tariff
Re3ulations, 2020, for the purpose of determination of Tariff the landed fuel cost of Coal
based on actual weighted average cost of primary fuel and secondary fuel of the three
36 I·-
04
.·
. '
10.31 Further, in this regard it is submitted that the Hon'ble Commission vide its Order on
Review Petition No. 12 of 2019 dated December 27, 2019 has considered Petitioner's
prayer for consideration of equivalent cost of transportation of coal through rail against
the present transportation by road between Binaiki and the Plant