BEFORE THE JHARKHAND STATE ELECTRICITY … Final Petition.pdf · Petition for Approval of Final Capital Cost of 540 MW (2 x 270) coal based thermal power plant in Jharkhand, True-up

Petition for Approval of Final Capital Cost of 540 MW (2 x 270) coal based thermal power plant in Jharkhand, True-up of ARR for FY 2012-13 and FY 2013-14, Annual Performance Review for FY 2014-15 and ARR and Tariff Determination for FY 2015-16.

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BEFORE THE JHARKHAND STATE ELECTRICITY REGULATORY COMMISSION,

JHARKHAND

CASE No. ____ of 2015

IN THE MATTER OF Approval of Final Capital Cost of 540 MW (2 x 270) coal based

thermal power plant in Jharkhand, True-up of ARR for FY 2012-13

and FY 2013-14, Annual Performance Review for FY 2014-15 and

Final ARR and Tariff Determination for FY 2015-16.

AND

IN THE MATTER OF

THE APPLICANT

Adhunik Power and Natural Resources Limited (“APNRL”)-

Corporate office: C/o Adhunik Group of Industries, 9B, 9th Floor,

Hansalaya, Barakhamba Road, Connaught Place, Connaught Place,

New Delhi-110001, India (Petitioner)

RESPONDENTS

1. Jharkhand Urja Vikas Nigam Limited(JUVNL), Engineering

Building, HEC, Dhurwa, Ranchi-834004, Jharkhand

2. Jharkhand Bijli Vitran Nigam Limited (JBVNL), Engineering

Building, HEC, Dhurwa, Ranchi-834004, Jharkhand

ADHUNIK POWER AND NATURAL RESOURCES LIMITED (“The Petitioner”)

RESPECTFULLY SUBMITS AS FOLLOWS:

Adhunik Power and Natural Resources Limited (APNRL) is a Company incorporated under the

provisions of the Indian Companies Act, 1956 with its registered office at Adhunik Group, 14, N. S.

Road, 2nd

Floor, Kolkata 700001 and Corporate Office: 9B, 9th Floor, Hansalaya, Barakhamba Road,

Connaught Place, Connaught Place, New Delhi-110001, India.


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“Adhunik Power and Natural Resources Ltd” was originally incorporated as “Adhunik Thermal

Energy Ltd.”(ATEL). ATEL has signed the MoU with Government of Jharkhand to develop a 1,000

MW coal based thermal power plant in the year 2005. In the year 2007, ATEL was renamed to

“Neepaz Thermal Energy Limited” (NTEL) and subsequently renamed as “Adhunik Power & Natural

Resources Ltd.” in the year 2008 after complying with the applicable provisions of the Companies

Act, 1956. The Chronological order of the events in the modification of the company’s name from

ATEL to APNRL is mentioned hereunder:

“Adhunik Thermal Energy Ltd.”(ATEL) was incorporated in the year 2005

“Adhunik Thermal Energy Ltd “renamed as “Neepaz Thermal Energy Ltd” (NTEL) in the year

2007,

“Neepaz Thermal Energy Ltd”(NTEL) further renamed as “Adhunik Power and Natural

Resources Ltd” (APNRL) in the year 2008,

Accordingly, APNRL has set up a 540 MW coal based power plant in Stage-1 and is planning to

develop an additional 540 MW coal based power plant in Stage-2. Thus, in the Petition hereinafter all

the references to “ATEL” or “NTEL” or “APNRL” are referring to one and the same entity i.e.

“APNRL”.

As per MoU and its extension’s conditions, JUVNL/JBVNL [erstwhile JSEB] will have first right of

claim on purchase upto 25% of power delivered to the system, out of which 12% power will be made

available to the state at variable cost only.

In this regard, APNRL in accordance with the provisions of Section 62 of the Electricity Act, 2003 and

under the JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010

had filed the Petition for approval of the Capital Cost, Business Plan and Multi–Year Tariff for

supplying the regulated Contracted Capacity of 122.85 MW for both the Units 1 & 2 to Jharkhand

Urja Vikas Nigam Ltd. (JUVNL) /Jharkhand Bijli Vitran Nigam Limited (JBVNL) (erstwhile JSEB)

(25% of 491.4 MW, i.e., Gross Capacity of 2 Units of 270 MW each, totaling to 540 MW less

Normative Auxiliary Consumption) for the Control Period from FY 2012-13 to FY 2015-16 based on


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the Power Purchase Agreement entered into with JSEB (now JUVNL/JBVNL) for the said contracted

capacity dated September 28, 2012.

The Hon’ble Commission in its Order dated May 26, 2014 approved the provisional capital cost and

tariff for FY 2012-13 to FY 2015-16 for Unit 1 and Unit 2 of APNRL. The Commission in the

mentioned Order also directed APNRL to file a petition for approval of final capital cost of the plant

along with the audited accounts for the power plant for FY 2013-14 and auditor’s certificate for actual

cost incurred upto COD. The relevant extract of the Order is given below:

“5.10…..The Commission directs the Petitioner to file a petition for approval of final capital

cost of the plant along with the audited accounts for the power plant for FY 2013-14 and

statutory auditor’s certificate for actual cost incurred upto COD. The Petitioner is also

required to submit details of the final capital cost of the plant in the format specified in

Annexure 2 for prudence check by the Commission.”

The Commission also directed APNRL to file the True-up Petition for FY 2012-13 and APR Petition

for FY 2014-15. The relevant extract of the Order is given below:

“Filing of True Up Petition

8.10 The Commission directs the Petitioner to file the true up for the FY 2012-13 and APR

petition for FY 2014-15 within two months from the date of issuance of this order.”

In this regard, APNRL in accordance with the provisions of Section 62 of the Electricity Act, 2003

and under the JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations,

2010 is submitting this Petition for approval of the Final Capital Cost of 540 MW (2 x 270) coal based

thermal power plant in Jharkhand, approval of True-up of ARR for FY 2012-13 and FY 2013-14,

Annual Performance Review for FY 2014-15 and Determination of ARR and Tariff for FY 2015-16

for supplying the regulated Contracted Capacity of 122.85 MW for both the Units 1 and 2 to

Jharkhand Urja Vikas Nigam Ltd. (JUVNL) /Jharkhand Bijli Vitran Nigam Ltd. (JBVNL) (25% of

491.4 MW, i.e., Gross Capacity of 2 Units of 270 MW each, totaling to 540 MW less Normative

Auxiliary Consumption) based on the Power Purchase Agreement entered into with JSEB (now

JUVNL/JBVNL) for the said contracted capacity dated September 28, 2012.


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The details related to the Capital cost, Fixed Charges and Energy Charge from FY 2012-13 to FY

2015-16 are given in the subsequent sections of this Petition. Further, the duly filled in formats

stipulated by the Hon’ble Commission are also enclosed along with this Petition. APNRL humbly

submits that it has furnished the information / details as required under the aforesaid Formats to the

extent the same is available with it and is relevant for a new Generating Station.

Prayers to the Hon’ble Commission

The Applicant respectfully prays that the Honourable Commission may:

i. Accept the Petition for Approval of Final Capital Cost of 540 MW (2 x 270) coal based

thermal power plant in Jharkhand, True-up of ARR for FY 2012-13 and FY 2013-14, Annual

Performance Review for FY 2014-15 and ARR and Tariff Determination for FY 2015-16 for

supplying the regulated Contracted Capacity of 122.85 MW from both the Units 1 & 2 to

JUVNL/JBVNL [erstwhile JSEB] as proposed by APNRL.

ii. Approve the True-up of ARR for 540 MW (2 x 270) Stage-1 coal based thermal power plant in

Jharkhand, for supplying the regulated Contracted Capacity of 122.85 MW to JUVNL/JBVNL

[erstwhile JSEB] for FY 2012-13 and FY 2013-14.

iii. Approve the Annual Performance Review of ARR for supplying the regulated Contracted

Capacity of 122.85 MW to JUVNL/JBVNL) [erstwhile JSEB] for FY 2014-15.

iv. Approve the tariff for supplying the regulated Contracted Capacity of 122.85 MW to

JUVNL/JBVNL [erstwhile JSEB] for FY 2015-16.


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v. Approve the recovery of upward and downward variation in fuel prices and calorific value

including fuel mix through Fuel Price Adjustment as part of monthly Energy Charges.

vi. Condone the delay in filing the Petition.

vii. Condone any inadvertent omissions, errors, short comings and permit APNRL to add/ change/

modify/ alter this filing and make further submissions as may be required at a future date; and

viii. Pass such other and further Orders as deemed fit and proper in the facts and circumstances of

the case.

Petitioner

Ranchi

_____________, 2015


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Details of Enclosures:

(i) Petition along with Affidavit

(ii) Formats for the Control Period from FY 2012-13 to FY 2015-16

(iii) Annexure A – Copy of Hon’ble Supreme Court Judgment dated September 24, 2014

(iv) Annexure B – Copy of Audited Annual Accounts for FY 2012-13 and FY 2013-14

(v) Annexure C – Copy of Chartered Accountant Certificates for the Project Cost till COD

(vi) Annexure D– Copy of the Final Capital Cost of the plant as per the format specified by the

Hon’ble Commission in the Provisional Order

(vii) Annexure E – Copy of Detailed Project Report and Cost Benefit Analysis of each of the

schemes

(viii) Annexure F - Copy of Chartered Accountant Certificates for the landed cost of coal.

(ix) Appendix 1 – Lender’s Engineer Report


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Affidavit

BEFORE THE JHARKHAND STATE ELECTRICITY REGULATORY COMMISSION

Case No. ________ of 2015

IN THE MATTER OF: Approval of Final Capital Cost of 540 MW (2 x 270) coal based thermal

power plant in Jharkhand, True-up of ARR for FY 2012-13 and FY 2013-14, Annual Performance

Review for FY 2014-15 and ARR and Tariff Determination for FY 2015-16 as proposed by APNRL

(having generating station in district Saraikela Kharsawan, Jharkhand).

AND

IN THE MATTER OF:

Adhunik Power and Natural Resources Limited (APNRL),

Corporate office: c/o Adhunik Group of Industries,

9B, 9th

Floor, Hansalaya,

Barakhamba Road, Connaught Place,

New Delhi-110001 …………….The Petitioner

I, M. N. Ravi Shankar, son of Shri M. Ramakrishna Rao, am working as C.E.O. (BD & PT) in the

office of the Respondent- Adhunik Power and Natural Resources Limited (APNRL) aged 48 years


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residing at B-2/202, Uniworld City, Sector 30, Gurgaon-122001 Police Station Sector 40, Gurgaon

District Gurgaon,do hereby solemnly affirm and states as follows:

1. That I am working as C.E.O. (BD & PT) with the Petitioner- Adhunik Power and Natural

Resources Limited (APNRL) at its Corporate Office at 9B, 9th Floor, Hansalaya, Barakhamba

Road, Connaught Place, Connaught Place, New Delhi-110001.

2. That I solemnly affirm at New Delhi on this day of ___________that

(i) The contents of the above Petition are true to my knowledge and I believe that no part

of it is false and no material has been concealed there from.

(ii) That the statements made in paragraphs 1.1 to 3.12of the Petition are true to my

knowledge and those made in paragraphs 4.1 to 7.15are based on information derived

from the records of the case, which I believe to be true and rest of the paragraphs are by

way of submissions.

Deponent

Identified before me by:


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Table of Contents

A1. Introduction ................................................................................................................................. 12

A2. Salient Features of the Project and Description of the Plant ...................................................... 17

Salient Features of the Project ......................................................................................... 17

Turbine Generator Unit .................................................................................................... 21

Condensing Equipment & Accessories ............................................................................ 22

Demineralisation Plant & Heat Cycle Make-up System: .............................................. 22

Coal Handling System ....................................................................................................... 22

Ash Handling System ........................................................................................................ 23

Fire Protection System ...................................................................................................... 23

Miscellaneous Auxiliaries: ................................................................................................ 23

Turbine Oil Purification System: ..................................................................................... 23

Chemical Feed System: ..................................................................................................... 23

Cranes & Hoisting Equipment: ........................................................................................ 23

Electrical System ............................................................................................................... 24

Generation System & Power Evacuation: ....................................................................... 24

Transmission System: ....................................................................................................... 24

A3. Overall Approach for Filing........................................................................................................ 30

MOU between Government of Jharkhand & APNRL .................................................. 30

Power Purchase Agreement between JUVNL/JBVNL (erstwhile JSEB) and APNRL31

Jharkhand State Electricity Regulatory Commission (Terms and Conditions for

Determination of Generation Tariff) Regulations, 2010 ................................................ 33

A4. Capital Cost of the Project and Means of Finance ...................................................................... 40

Breakup-of Capital Cost ................................................................................................... 40

Land and Site Development ............................................................................................... 40

Preliminary & Preoperative Expenses ............................................................................... 40

Plant and Machinery .......................................................................................................... 40

Steam Generator ................................................................................................................. 41

Turbine Generator .............................................................................................................. 41

Balance of Plant –Mechanical ........................................................................................... 41


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Balance of Plant – Electrical ............................................................................................. 41

Civil Works & Infrastructure ............................................................................................. 42

Interest During Construction and Financing Charges .................................................... 42

Summary of Capital Cost ................................................................................................. 42

Optimisation of Capital Cost ............................................................................................ 43

CERC Order on Benchmarking Capital Cost (Hard cost) for Thermal Power Stations with

Coal as fuel ......................................................................................................................... 44

Means of Finance ............................................................................................................... 44

A5. True-up for FY 2012-13 and FY 2013-14 .................................................................................. 46

Truing up of Energy Charges ........................................................................................... 46

Truing up of Annual Fixed Charges ................................................................................ 49

Depreciation......................................................................................................................... 49

Interest on Debt ................................................................................................................... 52

Return on Equity ................................................................................................................. 55

O&M Expenses .................................................................................................................... 57

Interest on Working Capital................................................................................................ 58

Cost of Secondary Fuel Oil Consumption .......................................................................... 62

Additional Water Charges ................................................................................................... 64

Annual Fixed Charges ........................................................................................................ 65

True up for FY 2012-13 and FY 2013-14 for the power Supply to JUVNL/JBVNL ....... 67

Tariff for Supply of Regulated Capacity to JUVNL/JBVNL ............................................. 67

Incentive for higher Plant Availability Factor ................................................................... 68

Interest on under recovered amount................................................................................... 69

Net Entitlement and Resultant (Gap)/ Surplus for Unit-1 and Unit-2 .............................. 71

A6. Annual Performance Review for FY 2014-15 and ARR & Tariff Determination for FY 2015-16

72

Operational Performance Parameters ................................................................................ 72

Fuel Cost .............................................................................................................................. 73

Energy Charges ................................................................................................................... 76

Fuel Price Adjustment......................................................................................................... 80


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Depreciation......................................................................................................................... 81

Interest on Debt ................................................................................................................... 83

O&M Expenses .................................................................................................................... 85

Return on Equity ................................................................................................................. 86

Interest on Working Capital................................................................................................ 87

Cost of Secondary Fuel Oil Consumption .......................................................................... 88

Additional Water Charges ................................................................................................... 90

Tariff for Supply of Regulated Capacity to Jharkhand State Electricity Board ............... 92

A7. Compliance to Commission Directives ...................................................................................... 96

Capital Cost ........................................................................................................................ 96

Additional Capitalization.................................................................................................. 97

7.6.1 Reservoir Construction Scheme ........................................................................... 97

7.6.2 Grated Weir Construction Scheme .................................................................... 100

7.6.3 Critical Spares Scheme ....................................................................................... 102

7.6.4 Brick Making Plant Scheme .............................................................................. 104

7.6.5 Bottom Ash Handling System including Dewatering Bin to feed HCSD System105

Technical Specifications: ................................................................................................. 106

7.6.6 Railway Siding .................................................................................................... 108

7.6.7 Additional Ash Dyke ........................................................................................... 108

Coal Block development and usage of imported coal .................................................. 108

Dedicated Transmission System ..................................................................................... 110

Landed Cost of Coal ........................................................................................................ 112


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A1. Introduction

1.1. “Adhunik group is a US $ 1 billion aggressively growing business house. Adhunik group has

interests in Integrated Steel manufacturing, Mining, Power Generation, etc. in addition to some

other industries. We are running three integrated steel plants which are located in the states of

Orissa, Jharkhand and West Bengal with current capacities of 1 Million Ton Per Annum

(MTPA) is under expansion to reach 2 MTPA. Our group company M/s Orissa Manganese and

Minerals Ltd. (OMML) has merchant Iron ore and Manganese Mines in Jharkhand & Orissa.

The flagship company of the group M/s Adhunik Metaliks Limited (AML) is listed on

country’s leading Stock Exchanges - BSE and NSE. Adhunik Group has forayed into the

power generation sector through Adhunik Power and Natural Resources Limited (APNRL).

APNRL has developed a coal based thermal power plants in the state of Jharkhand.

1.2. APNRL (formerly ATEL) has entered into a Memorandum of Understanding (“MoU”) with

the State Government of Jharkhand on October 31, 2005 and amendments thereof for

facilitation of the 1000 MW coal based thermal power project. Further in January 2007,

APNRL and Government of Jharkhand agreed to extend the validity period of the MOU further

for a period of 12 months. In February 2008, APNRL and Government of Jharkhand agreed to

extend the validity period of the MOU further for a period of three years upto October 31,

2010. Subsequently in May 2011, the validity of the MOU was again extended for a period of

three years from November 1, 2010 to October 31, 2013. Subsequently in November 2013, the

validity of the MOU was again extended for a period of three years from November 1, 2013 to

October 31, 2016. As a first step towards this, APNRL has set up a 2 x 270 MW (Stage -1) and

is also planning to develop additional 540 MW (approximately) coal based power plant in

Stage-2 at Saraikela-Kharsawan, in the State of Jharkhand. Unit 1 of the power plant was

synchronized on November 13, 2012 and COD for the same was declared on January 21, 2013.

Unit 2 of the power plant was synchronized on March 29, 2013 and COD for the same was

declared on May 19, 2013.


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1.3. Further, as per the provisions of the MOU, the Government of Jharkhand or Distribution

Licensees authorized by it will have the first right of claim on purchase upto 25% of power

delivered to the system by the proposed power station. Further, the extension of the MoU

dated: 18th

January 2007, stipulates that the Government of Jharkhand (GoJ) moved to

Government of India (GoI) for the policy decision through suitable arrangements for making

available to the State 12% of the total power generated at variable cost by APNRL. APNRL

has yet not been provided with any such approval from GoJ or JUVNL/JBVNL (erstwhile

JSEB). As per MoU and its extension’s conditions, JUVNL/JBVNL [erstwhile JSEB] will have

first right of claim on purchase upto 25% of power delivered to the system, out of which 12%

power will be made available to the state at variable cost only.

1.4. Pursuant to the MoU signed between Government of Jharkhand and APNRL, APNRL signed a

Power Purchase Agreement (hereinafter also referred to as “the PPA”) with Jharkhand State

Electricity Board (now “JUVNL”/”JBVNL”) on September 28, 2012 for supplying contracted

capacity of 122.85 MW (25% of 491.4 MW, i.e., Gross Capacity of 2 Units of 270 MW each,

totalling to 540 MW less Normative Auxiliary Consumption) from Stage 1 of the Project on

long term basis.

1.5. As per the terms of the PPA 63.882 MW capacity, i.e., 13% of Net Capacity of Stage 1 is being

supplied to JUVNL/JBNVL at total tariff and the balance 58.968 MW capacity, i.e., 12% of

total Net Capacity of Stage 1 is being supplied at variable cost only.

1.6. As per Schedule 3.1 (ii) and (iii) of the PPA entered into by APNRL and JSEB (now

JUVNL/JBVNL) the tariff payable shall be determined by the Hon’ble Commission. The

relevant clause of the PPA is also reproduced below:

“3.1(ii)“The tariff for sale of power by seller to procurer for the contracted capacity of

63.882 MW shall be payable by the procurer as determined by JSERC in accordance

with the “Jharkhand State Electricity Regulatory Commission (Terms and Conditions

for Determination of Tariff ) Regulations, 2010 as amended from time to time or any


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other competent authority authorized from time to time. The annual fixed charges

determined in accordance with the “Jharkhand State Electricity Regulatory

Commission (Terms and Conditions for Determination of Tariff) Regulations, 2010

shall be recoverable from the net saleable capacity of 432.432 MW (i.e. Gross capacity

minus auxiliary consumption minus 12% power to be supplied to procurer at energy

charge)”.

3.1(iii) The energy charge for sale of power by seller to procurer for the contracted

capacity of 59.968 MW shall be payable by the procurer as determined by the JSERC

in accordance with the “Jharkhand State Electricity Regulatory Commission (Terms

and Conditions for Determination of Tariff ) Regulations, 2010”, as amended from time

to time.”

1.7. APNRL filed the Petition for approval of the Capital Cost, Business Plan and Multi–Year

Tariff for supplying the regulated Contracted Capacity of 122.85 MW for both the Units 1 & 2

to JUVNL/JBVNL (erstwhile JSEB) (25% of 491.4 MW, i.e., Gross Capacity of 2 Units of 270

MW each, totalling to 540 MW less Normative Auxiliary Consumption) for the Control Period

from FY 2012-13 to FY 2015-16.

1.8. The Hon’ble Commission vide its Order dated May 26, 2014 approved the provisional capital

cost and tariff for FY 2012-13 to FY 2015-16 for Unit 1 and Unit 2 of APNRL and directed

APNRL to file a petition for approval of final capital cost of the plant along with the audited

accounts for the power plant for FY 2013-14 and auditor’s certificate for actual cost incurred

upto COD and also directed APNRL to file the True-up Petition for FY 2012-13 and APR

Petition for FY 2014-15.

1.9. In compliance to the Hon’ble Commission’s directions, the APNRL in accordance with the

provisions of Section 62 of the Electricity Act, 2003 and under the JSERC (Terms and

Conditions for Determination of Generation Tariff) Regulations, 2010 is submitting this


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Petition for approval of the Final Capital Cost of 540 MW (2 x 270) coal based thermal power

plant in Jharkhand, approval of True-up of ARR for FY 2012-13 and FY 2013-14, Annual

Performance Review for FY 2014-15 and Determination of ARR and Tariff for FY 2015-16.

1.10. Though the Commission directed the Petitioner to file the Petition for approval of true-up for

FY 2012-13 within two months from the date of Order dated May 26, 2014, but, since the

Annual Accounts for FY 2013-14 was not finalized by the time, the Petitioner requested the

Hon’ble Commission to extend the date for submission of Petition and the Hon’ble

Commission granted extensions till November 30, 2014.

1.11. The Hon’ble Commission in its Provisional Order dated May 26, 2014 directed that the

injection charges must be paid by JUVNL/JBVNL. The relevant extract of the Order is

reproduced below:

Quote:

“4.41 With regards to the non-payment of injection charges by JUVNL, the

Commission notes that as per the prevalent practice in the industry,

transmission charges for procurement of power under the long term contract

are to be borne by the procurer. The Commission directs that the injection

charges must be paid by JUVNL.”

:Unquote

However, JUVNL/JBVNL (erstwhile JSEB) vide its letter no. 877 dated 6th

August 2014

submitted that Hon’ble JSERC has not given any direction regarding transmission losses. The

relevant extract of the letter is reproduced below:

Quote:

“……Further, Hon’ble JSERC has not given any direction regarding

transmission losses. JUVNL deducts transmission losses and unit for billing is

considered as per bilateral REA issud by ERPC, which is unit at delivery point.”

:Unquote


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JUVNL/JBVNL (erstwhile JSEB) denied paying PoC Injection losses towards power sold by

the Petitioner. Therefore, the Petitioner filed another Petition with Hon’ble Commission with

Case No. 13 of 2014, which was in continuation to the Provisional Order issued by Hon’ble

Commission and letter from JUVNL (erstwhile JSEB). The Petitioner vide its letter no. 462,

dated 24th

November 2014, requested Hon’ble Commission for early disposal of case No. 13 of

2014 and requested for grant of 1 month time after disposal of Case no. 13 of 2014, so that the

Petitioner can file the Petition fulfilling the directives of Hon’ble Commission, as fulfilling the

directives is contingent on the outcome of the review petition filed vide Case No. 13 of 2014.

The Petitioner is submitting this Petition including truing up for FY 2012-13 and FY 2013-14.

As the annual accounts for FY 2014-15 are yet to be audited, the Petitioner will submit the

Petition for truing up for FY 2014-15 once the audited accounts are available. As the order on

Case No. 13 of 2014 is yet to be issued by Hon’ble Commission, APNRL is submitting this

petition with cost of injection charges considered as part of in Energy Charge computations.


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A2. Salient Features of the Project and Description of the Plant

2.1. This Section details the salient features of the Project, main plant and equipment, current status

of the project and brief description of the plant including the major aspects of Power plant such

as design philosophy and technical details of the major equipment / system installation.

Salient Features of the Project

2.2. The salient features of the main plant and equipments are as follows:

Table 2.1:Turbine Generator & Auxiliaries

Type : Single Reheat multi-cylinder tandem compound,

condensing steam turbine.

Capacity : 270 MW at 33° C Condenser cooling water

requirement

Inlet Steam: Parameters: Main Steam Re-heat Steam

Pressure, kg/cm2 at 100%

BMCR

155 37.35

Temperature, Deg C 540° C 540° C

Steam Flow at 100% BMCR

TPH (approx)

865 749.48

Type of Governing system : Electro-Hydraulic

Condensing Equipment : Shell and Tube flow Surface Condenser

Regenerative feed heating

arrangement

: Three stages of LP heaters (shell and tube design)

Boiler Feed Pumps

Condensate Extraction Pumps

: 3 X 50% capacity horizontal, Barrel type construction

: 2 X 100% capacity vertical, centrifugal CAN type

construction Electric motor driven


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Table 2-2: Steam Generator & Auxiliaries

Type :Pulverized fuel, natural circulation, two-pass, balance

draft, outdoor type, pulverized coal fired unit with

associated auxiliaries

Capacity at 100% BMCR : 865 TPH

Outlet Steam Parameters at

BMCR:-

Pressure : 155 Kg/cm2 (g)

Temperature, Deg C : 540° C

Steam Flow, kg/hr (approx) : 796500

Steam Temperature Control

Range

: 60-100% BMCR

Superheater/ Reheater

Temperature Control

: Spray Water and/or burner control

Air Heaters : 2 X 60% regenerative or 100% tubular type

Draft Fans : 2 X 60% capacity axial flow forced draft fans with

variable blade pitch control

: 2 X 60% capacity centrifugal induced draft fans with

variable speed fluid coupling

: 2 X 60% capacity centrifugal primary fans with inlet

vane control

Electrostatic Precipitator : Multi-field, multi-path electrostatic type suitable for

limiting dust emission below 50 mg/Nm3 at outlet with

one field out of service with worst coal at 100% BMCR

Pulverised Mills : Bowl Mill

Coal Firing System : Direct suspended firing with low NOx burners giving

stable fire above 30% and upto 100% BMCR without

oil firing.


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Start-up/ Auxiliary Fuel : Light Diesel Oil for cold start, coal flame stabilization

and for flame stabilization support

Ash Removal :Bottom Ash-

Extraction in wet condition and disposed in slurry from

ash pond

Fly Ash-

In dry form, fly ash will be evacuated by closed trucks

and given to prospective entrepreneurs

2.3. Unit 1 of the power plant was synchronized on November 13, 2012 and COD for the same was

declared on January 21, 2013. Unit 2 of the power plant was synchronized on March 29, 2013

and COD for the same was declared on May 19, 2013. As per the audited accounts the total

Capital cost of the Project as on COD is Rs. 3,344.20 Crore combined for Unit-1 and Unit-2

with a Debt: Equity structure 74.79 : 25.21 for both the units. The fuel requirement of the

Project was planned to be fulfilled from the captive Ganeshpur coal block, which was allotted

to APNRL and Tata Steel on a 50:50 Joint Allocation basis. The Hon’ble Supreme Court in its

Judgment on September 24, 2014 has cancelled the captive mine allocation to APNRL (Copy

of Hon’ble Supreme Court Judgment enclosed as Annexure-A). APNRL has received

tapering coal linkage for 540 MW (2 x 270 MW) from Coal India Ltd. and FSAs have been

signed with Central Coalfields Ltd. (CCL). As per Tapering Linkage Policy of Ministry of

Coal, Coal is to be supplied on tapering basis, i.e. 75%, 50%, 25%, 0% in 1st, 2

nd, 3

rd, 4

th year

from year of normative date of production of coal respectively. The coal supplied herein was

supplied at 40% premium to the price of coal of CCL which was subsequently revised to 20%

premium. Further, pursuant to the cancellation of coal blocks by Hon’ble Supreme Court,

Ministry allowed 50% coal to be supplied at 20% premium, which has been further extended

till June 2015 only. Therefore, APNRL is forced to meet its coal requirement through


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combination of tapering linkage, spot market, washery rejects, imported, etc. which has been

detailed in subsequent sections of the Petition.

Plant Layout

2.4. The plant layout of the Project is similar to the conventional layout for any thermal generating

station. Generator axis is transverse to the boilers and the main plant area contains the turbine

building, steam generator and the associated parts are 400 kV switchyard, circulating water

system, water treatment and DM plant, incoming coal conveyer from the remote coal yard and

the ash disposal system.

Steam Generators

2.5. The steam generator units for the project are natural circulation, pulverised coal fired, balanced

draft, single drum, dry bottom type with two-pass configuration. Steam Generators have a

nominal capacity of 865 TPH at 100% BMCR and generates steam of temperature 155 kg/cm2

(g) and at a temperature of 540° C operating with accessories and auxiliaries to regulate the

steam flow matching with TG set requirement in turns are guided by the load requirement. The

major parts of the steam generators are discussed below:

a. Economiser section of the boiler would be non-steaming type with provision for

recirculation during start-up and Chemical Cleaning, etc.

b. Superheater section is divided in convection and radiant zones and designed so as to

maintain rated steam temperature of 540° C (+ 5° C) at the outlet over a control range

of 60% to 100% of MCR load.

c. Reheater section is in convective zone and designed to maintain rated steam

temperature of 540° C (+ 5° C) at the outlet over a control range of 60% to 100% of

MCR load.

d. Steam generator receives coal through coal supply chain, which comprises of

pulverised coal firing arrangement comprising of coal bunkers, gravimetric raw coal

feeders, pulverizing mills, primary air fans and seal air fans, fuel and air pipes, burner,

etc., as necessary.


21

e. Economiser section of the boiler would be non-steaming type with provision for

recirculation during start-up and Chemical Cleaning, etc.

f. Superheater section is divided in convection and radiant zones and designed so as to

maintain rated steam temperature of 540° C (+ 5° C) at the outlet over a control range

of 60% to 100% of MCR load.

g. Reheater section is in convective zone and designed to maintain rated steam

temperature of 540° C (+ 5° C) at the outlet over a control range of 60% to 100% of

MCR load.

h. Steam generator receives coal through coal supply chain, which comprises of

pulverised coal firing arrangement comprising of coal bunkers, gravimetric raw coal

feeders, pulverizing mills, primary air fans and seal air fans, fuel and air pipes, burner,

etc., as necessary.

Turbine Generator Unit

2.6. The steam turbine is standard multi-stage, multi-cylinder, tandem compound, single reheat,

condensing type machine operating at 3000 rpm with six (6) uncontrolled extractions for

regenerative feed heating. The turbine is designed for main steam inlet parameters of 166.7

kg/cm2 (a) and (at 100% BMCR 155 kg/cm

2 g) pressure and 540°C (+ 5° C) temperature

before the emergency stop valves of the HP turbine, reheat steam temperature of 540° C (+

5°C), IP turbine inlet with a design exhausting condenser pressure of 76 mm Hg (abs.) with

design condenser cooling water temperature 33° C. The turbo-generator set would be designed

for a maximum throttle steam flow at turbine Valve Wide Open (VWO) condition of 105% of

turbine Maximum Continuous Rating (MCR) flow.

2.7. The electric generator is a three–phase, directly coupled, two-pole machine capable of

generating 270MW (TMCR) at generator terminals after meeting power requirement for

brushless excitation system at a power factor of 0.85 (lag). The rotor and stator windings are

hydrogen cooled.


22

Condensing Equipment & Accessories

2.8. The condenser is transverse mounted to T- G set and comprises of following features:

a. It requires the input cooling water at a temperature of 330C for condensing the exhaust

steam. The condenser unit is transverse mounted and condenses exhaust steam by

circulation of cooling water.

b. The outlet condensing water temperature is designed to be maintained within 42.4 °C.

c. The condenser operates on re-circulation based wet type cooling tower principle and river

water would be utilised as cooling liquid in the condenser.

Demineralisation Plant & Heat Cycle Make-up System:

2.9. The existing set of steam generator is supposed to be operated using 3% make up water for

every 6 hours of regenerative heat cycle. To support this make up requirement, the provision of

two (2) demineralising chains each of 90 m3/hr capacity has been installed in both the Units of

the station.

2.10. For DM water requirement, the river clarified water shall be used. For demineralisation, the

river water will be pumped to DM plant, which will follow the process of filtration through

dual-media filters and activated carbon filter units to screen the impurities, the filtered water

will then be subsequently passed through cotton resin beds, de-gassifier towers, anion resin

beds and mixed bed exchangers to generate the DM water, which will thereafter stored in the

DM water storage tanks. The DM water pumps will pump the DM water from storage tanks to

steam generator for steam requirement and make up water depending upon the load on the T-G

sets.

Coal Handling System

2.11. The Coal Handling Plant (CHP) is designed to operate with coal from mine block of Jharkhand

coal fields to be transported from the mine rail by BOX-N wagons. The design capacity of

Coal Handling System both at receiving and handling plant is 1500 TPH. Crushed coal would

be received in the coal yard. For coal unloading and stacking purposes, a stacker/reclaimer

capacity of 1500 TPH has been installed.


23

Ash Handling System

2.12. The system comprises of the wet extraction system by jet pumps for Bottom Ash (BA) to be

collected in Bottom Ash hoppers and subsequent disposal through slurry disposal. For fly ash

(FA) extraction and pneumatic handling from hoppers upto fly ash intermediate surge hopper

and pressurised conveying of Fly Ash to terminal ash silo has been provided. Ash from silos

will be evacuated in closed trucks and ash will be used for manufacturing of bricks, cement and

balance will be used for filling abandoned open cast mines.

Fire Protection System

2.13. The fire protection system installed at generating station has been designed in accordance with

the recommendations of Tariff Advisory Committee (TAC) of the Insurance Association of

India. While designing the Fire Protection System, all the applicable standards and codes of

National Fire Prevention Association (NFPA), USA has been complied with.

Miscellaneous Auxiliaries:

Turbine Oil Purification System:

2.14. In order to remove the water and other impurities from the system to maintain the turbine oil at

the optimum condition, centrifuge or turbine oil purification plant is installed as an auxiliary of

the turbo-generator to condition the turbine oil continuously.

Chemical Feed System:

2.15. In order to maintain the chemical concentration in the drum water and feed water within

permissible limits, Chemical feed system is provided for feeding tri-sodium phosphate

(Na3PO4) in the boiler drum and neutralising amines and/or hydrazine in the condensate pump

discharge/boiler feed suction line.

Cranes & Hoisting Equipment:

2.16. Two (2) EOT cranes having 90/25 T capacity each are provided in the turbine hall for the

purpose of erection/maintenance of the TG hall equipment. For clarified water pump house, a


24

crane of 10 Tons capacity (pendant operated) and for circulating water pump house a pendant

operated 30/5 Tons capacity electric travelling crane have been considered.

Electrical System

Generation System & Power Evacuation:

2.17. The generating station has 2 x 270 MW STG Units generating power at 16.5 kV. These Units

are connected to 400 kV outdoor switchyard in the plant for evacuation of generated power.

The bus bar configuration is appropriate for one and half circuit breaker arrangement for better

reliability, comprising four (4) circuits with following circuits :

a. Two (2) – 400 kV circuits for generator transformers

b. Two (2) – 400 kV circuits for outgoing lines

2.18. A control room is located in the switchyard premises to house switchyard control, metering and

protective equipment. For reliable communication, FO communication is laid from APNRL

switchyard to PGCIL substation.

2.19. In the powerhouse, each generator is directly coupled to the respective steam turbine and has a

nominal rating of 270 MW at 0.85 p.f. (lag). Generation voltage will be 16.5 kV with variation

of ±5%, 50 Hz ±5%, 3-phase. The excitation system will be brush-less type and will be

selected for an ideal rate of response, accuracy and sensitivity during normal as well as

transient state of operation. The generating unit will be connected to 400 kV switchyard

through 330 MVA, 16.5/420 kV generator transformer (GT).

Transmission System:

2.20. Article 9 of the MoU dated October 31, 2005 stipulates as follows:

“The State Government will facilitate connecting the proposed power station to PGCIL Grid at

a convenient point for evacuation of power from the proposed power station”.

2.21. Accordingly, APNRL approached PGCIL being Central Transmission Utility (CTU) for

connectivity with CTU at 400 KV for 450 MW from its 2x270 MW Thermal Power Plant. The


25

same was discussed in various meetings of various forums like Regional Power Committee

(RPC), Standing Committee, etc. and after discussion with the members, consensus was

achieved to grant connectivity to APNRL and APNRL signed Bulk Power Transmission

Agreement (BPTA), Connectivity Agreement and Transmission Service Agreement (TSA)

with PGCIL for 450 MW from its 2x270 MW Thermal Power Plant. APNRL developed a

dedicated Transmission Line for injecting power into the 400 KV “PGCIL Sub-station at

Ramchandrapur, Jharkhand” in Eastern Region. Further, in accordance with the PPA signed

with JSEB (now JUVNL/JBVNL), APNRL is undertaking a feasibility study of developing a

Dedicated Transmission System (transmission system including 400 kV transmission line from

Power Station Bus-Bar upto the JUVNL’s Ramchandrapur 220 kV sub-Station).

2.22. As regard to construction of the Dedicated Transmission System (DTS), the Hon’ble

Commission in its Order dated May 26, 2014 had observed that the proposed dedicated

transmission line has to be constructed because JUVNL/JBVNL has insisted upon this. The

cost of this line will, necessarily, have to be passed on to the consumer. Accordingly, the

Commission had directed JUVNL to carry out a cost benefit analysis of routing the power from

the power station through the Dedicated Transmission System vis-à-vis routing the power

through the CTU as is being done currently and submit a report regarding the same to the

Commission within two months of issuance of this Order. The Commission considered this

exercise necessary in the interest of minimizing the cost to the consumer.

With regards to the non-payment of injection charges by JUVNL/JBVNL, the Hon’ble

Commission in its Order dated May 26, 2014 had observed that as per the prevalent practice &

regulatory framework in the industry, transmission charges for procurement of power under the

long term contract are to be borne by the procurer. Accordingly, the Hon’ble Commission had

directed that the injection charges must be paid by JUVNL/JBVNL. However, JUVNL/JBVNL

is denying to make any payment corresponding to the injection losses citing that the Hon’ble

Commission has not directed JUVNL/JBVNL for making payment corresponding to the

injection losses. In this regard, Regulation 8(6) of the CERC (Sharing of Inter State

Transmission Charges and Losses) Regulations, 2010 stipulates as under :


26

“For Long Term customers availing supplies from inter-state generating stations, the charges

payable by such generators for such Long Term supply shall be billed directly to the respective

Long Term customers based on their share of capacity in such generating stations. Such

mechanism shall be effective only after “commercial operation” of the generator.”

In accordance with the above provisions of the Regulations, the transmission charges and losses

are borne by long term customers based on their share of capacity in such generation stations.

2.23. Further, APNRL in the review petition dated July 24, 2014(Case No. 13 of 2014) most

respectfully submitted that during the public hearing APNRL has requested the Hon’ble

Commission to kindly extend the payment of Transmission Charges and Losses of CTU for

another two years till the Dedicated Transmission System is ready and operational. JUVNL

filed its counter affidavit on November 7, 2014. In this regard, APNRL in its submission dated

December 1, 2014 humbly requested the Hon’ble Commission to direct JUVNL/JBVNL to

make the payment of amounts corresponding to Injection Losses which are being denied to

APNRL. Accordingly, APNRL humbly requested the Hon’ble Commission to kindly

review the Directions in case of payment of Injection Charges issued in Clause 4.41 of the

Hon’ble Commission’s Order and include the payment of amount corresponding to

Injection Losses in the same direction and direct the JUVNL/JBVNL to bear the

transmission charges and losses (Injection charges and losses as well as Withdrawal

charges and losses).

2.24. Further, the Hon’ble Commission in its Order dated May 26, 2014 had directed the Petitioner

and JUVNL to constitute a Joint Committee to resolve all the issues regarding the transmission

of power from the power station to JUVNL/JBVNL. The Hon’ble Commission’s directions and

observations in this regard are reproduced below :

“The Commission directs the Petitioner and JUVNL to constitute a joint committee to resolve

all the issues regarding the transmission of power from the power station to JUVNL. The


27

committee should look into the need for the proposed Dedicated Transmission System, the

technical configuration of the proposed line and the sharing of costs of the transmission line.

The Petitioner and JUVNL should, after mutual discussions and agreement, arrive at a way

forward vis-à-vis the issue of the Dedicated Transmission System, and should submit a status

report regarding the same to the Commission within two months of issuance of this Order.

The Commission believes that both the parties should work towards resolution of issues and

ensure that the end consumer is not harmed. The costs attributable to delay in construction of

the Dedicated Transmission System shall not be passed onto the consumers.”

2.25. A Committee in this regard was constituted before the Provisional Order, wherein, APNRL

have nominated its officials on 28th

Jan.’13 and JUVNL/JBVNL (erstwhile JSEB) on 25th

February 2013. Subsequent to which several meetings were organized between APNRL and

officials of JUVNL/JBVNL (erstwhile JSEB).

2.26. APNRL submitted its draft proposal for developing Dedicated Transmission System to

JUVNL/JBVNL on May 3, 2013 and requested for comments on the proposal. In this regard,

APNRL sent reminder letter dated June 3, 2013, etc. Further, APNRL vide its letter dated July

20, 2013 requested JUVNL/JBVNL for certain data. In this regard, APNRL further sent

reminder letters dated October 24, 2013, October 31, 2013, etc. to JUVNL/JBVNL. Further,

APNRL updated the status of DTS to JUVNL/JBVNL and informed that it had floated enquiry

for quotations for the same. APNRL also requested certain technical details from

JUVNL/JBVNL vide its various letters dated November 20, 2013, April 23, 2014, July 25,

2014, August 22, 2014, September 12, 2014, September 17, 2014, October 13, 2014, etc.

Accordingly, APNRL vide its letter dated March 6, 2014 requested for extension of timeline

for DTS due of lack of data. With regard to lack of data, C&R department of JUVNL/JBVNL

vide its letter dated August 25, 2014 also requested the concern department of JUVNL/JBVNL

to facilitate data.


28

2.27. The series of meetings were held between the officials of JUVNL/JBVNL and APNRL on

August 7, 2014, August 20, 2014, October 17, 2014, November 4, 2014 and January 22, 2015.

JUVNL/JBVNL provided certain data to APNRL in the meeting dated October 17, 2014.

APNRL vide its letter dated November 4, 2014 also requested JUVNL/JBVNL to provide

vendor details of JUVNL/JBVNL so that the order can be placed to same vendor for bay at

both the end. However, JUVNL/JBVNL has not provided the vendor details to APNRL. In

Committee Meeting dated March 20, 2015, scope of work by each of the parties were finalized.

Thus, both the parties is completing its part of assignment from its side.

2.28. Accordingly, the implementation of DTS has been delayed because of lack of data and

confirmation from JUVNL/JBVNL. Therefore, APNRL humbly requests the Hon’ble

Commission to kindly give extension of implementation of DTS by another 2 years from the

date of approval of DTS by JUVNL/JBVNL and accordingly instruct JUVNL/JBVNL to pay

Transmission Charges & Losses (Injection Charges & Losses and Withdrawal Charges &

Losses) for the power supply by APNRL.

2.29. The estimated project cost of DTS as submitted to the Hon’ble Commission during the public

hearing held in Case No. 27/2012 with break-up is detailed as under:

Table 2-3: Hard Cost for construction of DTS (Rs. Crore)

S. No. Particulars Value

1.1

Extension of existing 400 kV Switchyard by addition of 400 kV

GIS Substation consisting of Incoming Bay, Transformer Bay &

Bus Coupler and associated 400 kV SF6 Bus Duct for connection to

existing 400 kV Switchyard and Transformers

80.00

1.2 2 Nos. 315 MVA, 400/220 kV Inter Connecting Transformer 34.00

1.3 220 KV GIS Switchyard at APNRL end for evacuation of power 20.00


29

S. No. Particulars Value

1.4 220 kV Double Circuit Transmission line/ Cable to connect APNRL

Switchyard to JSEB Switchyard 12.00

1.5 Extension of 2 Nos. bay at 220 kV JSEB Ramchandrapur Substation

for receiving of power 8.00

1.6 Civil Works 24.00

TOTAL *

178.00

* Above mentioned cost is only the hard cost.

Once the work on the Project initiated after approval by JUVNL/JBVNL, APNRL will recover

the complete cost of this DTS from JUVNL/JBVNL as it is exclusively being developed for

supply of power within the State of Jharkhand and APNRL will include the same in its ARR

and Tariff Petition for FY 2016-17 for the approval of Hon’ble Commission.


30

A3. Overall Approach for Filing

3.1. This Section details the key provisions of Electricity Act, 2003, Memorandum of

Understanding signed between Government of Jharkhand and Adhunik, Power Purchase

Agreement executed with Jharkhand State Electricity Board (JSEB) (now JUVNL/JBVNL)

and appropriate Regulations related to approval of True-up of ARR for FY 2012-13 and FY

2013-14, Annual Performance Review of ARR for FY 2014-15 and ARR & Tariff

determination for FY 2015-16 for 540 MW (2 x 270) Stage-1 coal based thermal power plant

in Jharkhand, for supplying the regulated Contracted Capacity of 122.85 MW to Jharkhand

State Electricity Board (JSEB) (now JUVNL/JBVNL).

MOU between Government of Jharkhand & APNRL

3.2. In October 2005, APNRL originally named as ATEL, has signed MOU with Government of

Jharkhand. As per Clause 10 of the MOU for Sale Of Power, the Government of Jharkhand

(GoJ) or Distribution Licensees authorised by GoJ will have the first right of refusal on 25% of

power of the power plant. Further, Clause 10.0 of the above said MOU also states that the tariff

for such purchase of power shall be determined by the appropriate Regulatory Commission.

The relevant clause of the MOU is reproduced as under:

“10.0 SALE OF POWER

The Government of Jharkhand or distribution licensees authorised by it will have the first right

of claim on purchase up to 25% of power delivered to the system by the proposed Power

Station under terms of a Power Purchase Agreement to be mutually agreed on the basis of

existing laws and regulations in force and the tariff for such power purchase will be

determined by the appropriate Regulatory Commission.”

Further in January 2007, APNRL and Government of Jharkhand agreed to extend the validity

period of MOU further for a period of 12 months with the additional clause that APNRL

understands that the Government of Jharkhand has moved Government of India for the policy

decision through suitable arrangements for making available to the State, 12% of the total


31

power generated at variable cost by APNRL for which APNRL is yet to receive any such

approval from GoJ or JUVNL/JBVNL (erstwhile JSEB). The relevant extract is reproduced

below:

“10.5ATEL further understands that the Government of Jharkhand has moved Government of

India for the following policy support: namely:-

(a) A policy decision through suitable arrangements for making available to the State 12% of

the total power generated at variable cost by ATEL operating within its territory"

3.3. Further in February 2008, APNRL and Government of Jharkhand agreed to extend the validity

period of MoU further for a period of three years upto October 31, 2010. Subsequently in May

2011, the validity of MoU has again been extended for a period of three years from November

1, 2010 to October 31, 2013.Subsequently in November 2013, the validity of the MoU was

again extended for a period of three years from November 1, 2013 to October 31, 2016.

Power Purchase Agreement between JUVNL/JBVNL (erstwhile JSEB) and APNRL

3.4. Pursuant to the MoU signed between Government of Jharkhand and Adhunik, APNRL and

JSEB (now JUVNL/JBVNL) have signed a Power Purchase Agreement (PPA) for supplying

Contracted Capacity of 122.85 MW (25% of 491.4 MW, i.e., Gross Capacity of 2 Units of 270

MW each, totalling to 540 MW less Normative Auxiliary Consumption) from Stage 1 of the

Project on long term basis. The details of the Contracted Capacity, Capacity to be supplied at

Energy Charge (including FPA) and Capacity to be supplied at total Tariff (both fixed and

energy charges including FPA) to JSEB (now JUVNL/JBVNL) is mentioned in the Table

below:


32

Table 3-1: Details of the Contracted Capacity

S. No. Capacity to be supplied to JUVNL/JBVNL Tariff

Total Contracted Capacity to be supplied to JUVNL from Stage 1 is 122.85 MW

1 63.882 MW ( 13% of total Net Capacity of

Stage 1)

Total Tariff (both Fixed Charge and

Energy charge including FPA as

approved by JSERC)

2 58.968 MW (12% of total Net Capacity of

Stage 1)

Variable cost (Energy Charge including

FPA as approved by JSERC.)


33

Jharkhand State Electricity Regulatory Commission (Terms and Conditions for Determination

of Generation Tariff) Regulations, 2010

3.5. The Hon’ble Commission notified the Terms & Conditions for Determination of Generation

Tariff, Regulations, 2010 on October 28, 2010 in exercise of the powers conferred by Section

61 and Section 62 read with Section 181 of the Electricity Act, 2003. These Regulations are

valid during the Control Period from FY 2012-13 to FY 2015-16 with FY 2011-12 as the Base

Year and FY 2010-11 as Previous Year. These Regulations defined FY 2011-12 as the

Transition Period.

3.6. Accordingly, the principles and norms laid down in the Generating Tariff Regulations 2010

have been followed for preparation of the Petition for approval of Capital Cost and Business

Plan and Multi Year Tariff Petition for supplying the regulated capacity to JSEB (now

JUVNL/JBVNL) from Unit 1 and Unit 2 for the Control Period from FY 2012-13 to FY 2015-

16 .

3.7. Further, the Generation Tariff Regulations, 2010 provides guiding principles for MYT

Framework. In accordance with the Regulations, the Hon’ble Commission shall determine the

Tariff for the Control Period under MYT framework based on the Business Plan, forecast of

expected tariff, trajectory of performance parameters and annual review of performance. The

relevant Part of the Regulations is reproduced below:

“A6: GUIDING PRINCIPLES FOR MYT FRAMEWORK

6.1 The Commission in specifying these Regulations shall be guided by the principles

contained in Sections 61 and 62 of the Act to encourage competition, efficiency, economical

use of resources, good performance and optimum investments.

6.2 The Commission shall adopt Multi Year Tariff Framework for determination of tariff for

each year of the Control Period.

6.3 The Multi Year Tariff framework shall be based on the following:


34

(a) Business Plan of the Generating Company (plant wise separately) for the entire Control

Period to be submitted to the Commission for approval, prior to the start of the Control

Period;

(b) Applicant’s forecast of expected tariff for sale of power for each year of the Control Period,

based on reasonable assumptions of the underlying financial and operational parameters, as

submitted in the Business Plan;

(c) Trajectory for specific parameters stipulated by the Commission, where the performance of

the Applicant is sought to be improved through incentives and disincentives;

(d) Annual review of performance which shall be conducted vis-à-vis the approved forecast;”

3.8. Further, the Generation Tariff Regulations, 2010 provides the norms and guiding principles to

determine tariff for new generating stations. The relevant Part of the Regulations is reproduced

below:

“A7: PRINCIPLES FOR DETERMINATION OF TARIFF

...

7.2 New Generating Station:

Where the generating station has been declared under commercial operation from the date of

issue of these Regulations or on or after April 1, 2011, the tariff for supply of electricity by the

Generating Company shall be decided in accordance with these Regulations.”

Capital Cost of the Project

7.3 Capital cost for a Project shall include:

(a) the expenditure incurred or projected to be incurred, including interest during construction

and financing charges, any gain or loss on account of foreign exchange risk variation during

construction on the loan - (i) being equal to 70% of the funds deployed, in the event of the

actual equity in excess of 30% of the funds deployed, by treating the excess equity as normative

loan, or (ii) being equal to the actual amount of loan in the event of the actual equity less than

30% of the funds deployed, - up to the date of commercial operation of the project, as admitted


35

by the Commission, as admitted by the Commission after prudence check shall form the basis

for determination of tariff;

(b) capitalised initial spares subject to the ceiling norms specified as under:

i. Coal-based/lignite fired thermal generating stations – 2.5 % of original project cost

...

(c) additional capital expenditure determined under clause 7.5 and 7.6 of these Regulation

Provided that the assets forming part of the Project, but not in use shall be taken out of the

capital cost:

7.4 The capital cost admitted by the Commission after prudence check shall form the basis for

determination of tariff:

Provided that in case of the thermal generating station prudence check of capital cost may be

carried out based on the benchmark norms to be specified by the Central Commission from

time to time:

Provided further that in cases where benchmark norms have not been specified by the Central

Commission, the Commission may specify the benchmark norms or allow the capital cost on

the basis of a prudence check which shall include scrutiny of the reasonableness of the capital

expenditure, financing plan, interest during construction, use of efficient technology, cost over-

run and time over-run, and such other matters as may be considered appropriate by the

Commission for determination of tariff:

...

Provided also that where the power purchase agreement entered into between the Generating

Company and the Beneficiaries, provide for a ceiling of actual expenditure, the capital

expenditure admitted the Commission shall take into consideration such ceiling for

determination of tariff:

...


36

Additional Capitalisation

7.5 The capital expenditure incurred or projected to be incurred, on the following counts

within the original scope of work, after the date of commercial operation and up to the cut-off

date may be admitted by the Commission, subject to prudence check:

(i) Undischarged liabilities;

(ii) Works deferred for execution;

(iii)Procurement of initial capital spares within the original scope of work, subject to the

provisions under clause 7.3, 7.4 of these Regulations;

(iv)Liabilities to meet award of arbitration or for compliance of the order or decree of a court;

and

(v) Change in law.

Provided that the details of works included in the original scope of work along with estimates

of expenditure, undischarged liabilities and the works deferred for execution shall be submitted

along with the application for determination of tariff.

7.6 The capital expenditure incurred on the following counts after the cut-off date may, in its

discretion, be admitted by the Commission, subject to prudence check:

(i) Liabilities to meet award of arbitration or for compliance of the order or decree of a court;

(ii) Change in law;

(iii) Deferred works relating to ash pond or ash handling system in the original scope of work;

(iv) Any additional works/services which have become necessary for efficient and successful

operation of the generating station, but not included in the original project cost;

...


37

Provided that in respect sub-clauses (v) above, any expenditure on acquiring the minor items

or the assets like tools and tackles, furniture air conditioners, voltage stabilizers, refrigerators,

coolers, fans, washing machine, heat convectors, mattresses, carpets etc. brought after the cut-

off date shall not be considered for additional capitalization for determination of tariff w.e.f.

1.04.2012 for the Control period.

3.9. Further, the Generation Tariff Regulations, 2010 provides the methodology for recovery of

capacity charge and energy charge for the generating station. The relevant Part of the

Regulations is reproduced below:

“Recovery of Capacity Charge

8.10 The fixed cost of a thermal generating station shall be computed on annual basis, based

on norms specified under these Regulations, and recovered on monthly basis under capacity

charge. The total capacity charge payable for a generating station shall be shared by its

Beneficiaries as per their respective percentage share / allocation in the capacity of the

generating station.

8.11 Full Capacity Charges shall be recoverable at Normative Annual Plant Availability

Factor (NAPAF) specified in clause 8.4, 8.6 of these Regulations. Recovery of Capacity

Charges below the level of Normative Annual Plant Availability Factor (NAPAF) will be on a

pro-rata basis. At zero availability, no Capacity Charges shall be payable.

8.12 The capacity charge (inclusive of incentive) payable to a thermal generating station for a

calendar month shall be calculated in accordance with the following formulae :

(a) Generating stations in commercial operation for less than ten (10) years on 1st April of the

financial year:

= (AFC x (NDM / NDY) x (0.5 + 0.5 x PAFM / NAPAF) (in Rupees) ;


38

Provided that in case the plant availability factor achieved during a financial year (PAFY) is

less than 70%, the total capacity charge for the year shall be restricted to:

=AFC x (0.5 + 35 / NAPAF) x (PAFY / 70) (in Rupees)

...”

Energy Charge

8.16 The energy (variable) charge shall cover primary fuel costs and shall be payable by every

Beneficiary for the total energy scheduled to be supplied to such Beneficiary during the

calendar month on ex-power plant basis, at the specified energy charge rate of the month (with

fuel price adjustment).

8.17 Total Energy charge payable to the Generating Company for a month shall be:

= (Energy charge rate in Rs. /kWh) x {Scheduled energy (ex-bus) for the month in kWh.}

8.18 Energy charge rate (ECR) in Rupees per kWh on ex-power plant basis shall be

determined to three decimal places in accordance with the following formulae:

(a) For coal based stations

ECR = (GHR – SFC x CVSF) x LPPF x 100/ {CVPF x (100 – AUX)}

3.10. Accordingly, APNRL submitted a Petition for Approval of Capital Cost of 540 MW (2 x 270)

coal based thermal power plant in Jharkhand, and Business Plan and Multi-Year Tariff for the

Control Period from FY 2012-13 to FY 2015-16 under Sections 62 and 86 of the Electricity

Act, 2003, to the Hon’ble Jharkhand State Electricity Regulatory Commission.

3.11. The Hon’ble Commission in its Provisional Order dated May 26, 2014 approved the

provisional capital cost and provisional tariff for FY 2012-13 to FY 2015-16 for Unit 1 and

Unit 2 of APNRL. The Commission in the mentioned Order also directed APNRL to file a

petition for approval of final capital cost of the plant along with the audited accounts for the


39

power plant for FY 2013-14 and auditor’s certificate for actual cost incurred upto COD. The

Commission also directed to file the True-up and APR Petition.

3.12. As the annual accounts for FY 2012-13 and FY 2013-14 of APNRL has been audited (Copy of

audited annual accounts for FY 2012-13 and FY 2013-14 are enclosed as Annexure-B),

APNRL in accordance with the provisions of JSERC (Terms and Conditions for Determination

of Generation Tariff) Regulations, 2010 and directions of the Hon’ble Commission is filing

this Petition for approval of True-up of ARR for FY 2012-13 and FY 2013-14, Annual

Performance Review for FY 2014-15 and Final ARR & Tariff determination for FY 2015-16

for supply of regulated Contracted Capacity of 122.85 MW to JUVNL/JBVNL. The final

capital cost of the project as on COD and additional capitalisation after COD has been

considered as per the Annual Accounts of FY 2012-13 and FY 2013-14 duly audited by the

Statutory Auditor.


40

A4. Capital Cost of the Project and Means of Finance

4.1. The COD of Unit 1 and Unit 2 of the power plant of capacity 540 MW (2 x 270) Stage-1 were

declared on January 21, 2013 and May 19, 2013 respectively. The actual Capital Cost of the

Project as on COD based on the Annual Accounts duly audited by the Statutory Auditor is Rs.

3,344.21 Crore. (Copy of Chartered Accountant Certificates for the Project Cost till COD

are enclosed at Annexure-C).

Breakup-of Capital Cost

4.2. The following Sections details out the break-up of capital cost of the project under various

heads.

Land and Site Development

The expenditure under this head is incurred for purchase of land, Rehabilitation and

Resettlement and preliminary site investigation. The total expenditure under this head is Rs.

49.12 Crore for Unit-1 and Unit-2 each, with the total expenditure of Rs. 98.24 Crore.

Preliminary & Preoperative Expenses

The expenditure under this head is incurred for appointment of owner’s and lender’s engineer,

conceptual studies, consideration payable to the Project Company, appointment of legal

counsel etc. Further, the expenditure to be incurred on start up fuel and start up power is

included under this head. The total expenditure under this head for Unit-1 is Rs. 156.66 Crore

and Rs. 168.63 Crore for Unit-2 with the total expenditure of Rs. 325.29 Crore.

Plant and Machinery

The expenditure under this head is incurred for the equipment and machineries includes steam

generator, turbine generator, balance of plant- Mechanical and Electrical. The expenditure

incurred under this head for Unit-1 is Rs. 990.31 Crore and Rs. 981.60 Crore for Unit-2 with

the total expenditure of Rs. 1,971.91 Crore. The following are the main equipments and

machineries of the generating station:


41

Steam Generator

The expenditure under this head covers equipment such as Boiler drum, Super-heater coils and

walls and its components, lining and insulation material, Boiler Supporting structure, Galleries

and Stairways, Duct dampers and Expansion joints, Booster feed pump , Hydraulic coupling

and other equipment.

Turbine Generator

The major equipments include Turbo Generator & Auxiliaries, HP Turbine with Accessories,

IP Turbine with accessories, LP turbine and outer casing, condenser and auxiliaries, condenser,

Air Evacuation package, Boiler Feed pump suction and circulating water piping.

Balance of Plant –Mechanical

The following systems are included under this head of expenditure:

a. CW system

b. DM water Plant

c. Fuel Handling & Storage system

d. Ash Handling System

e. Coal Handling Plant

f. Air Compressor System

g. Air Condition & Ventilation System

h. Fire fighting System

i. HP/LP Piping

Balance of Plant – Electrical

The following are the major equipment included under this head:

a. Switch Yard Package

b. Transformers Package

c. Switch gear Package

d. Cables, Cable facilities & grounding


42

e. Lighting

Civil Works & Infrastructure

The cost under this head includes cost for the works carried out for Steam Generator

foundation, Turbine Generator Foundation, Turbine Generator building, Mill and Bunker,

foundations for Fans, Switchyard and relay rooms, RCC chimney, Raw water reservoir, Ash

Silo, Circulating Water System and other structures for Cable Trenches BFP, Trestle

Foundation, BA Hopper Foundation, CST and Boiler Area Paving. The Cost under this head is

Rs. 171.14 Crore for Unit-1 and Unit-2, each, with the total expenditure of Rs. 342.27 Crore.

Interest During Construction and Financing Charges

The Interest during construction has been worked out on the basis of debt investments made in

the project. The interest and financing charges including amount paid on the actual loans for

the project till till COD is Rs. 295.44 Crore for Unit 1 and Rs. 311.04 Crore for Unit-2 with the

total expenditure of Rs. 606.49 Crore under this head.

Summary of Capital Cost

4.3. The summary of the actual capital expenditure till COD of the Project is shown as under:

Table 4.1:Break-up of Capital Cost (Rs. Cr.)

Particulars Cost till COD of the Project Total Cost till COD

of the Project Unit-1 Unit-2

Land and Land Development 49.12 49.12 98.24

Preoperative Expenses 156.66 168.63 325.29

Plant and Machinery 990.31 981.60 1,971.91

Civil Work and Infrastructure 171.14 171.14 342.27

Total Project Hard Cost 1,367.23 1,370.49 2,737.72

Interest during construction (IDC)

and Financing Charges 295.44 311.04 606.49


43



Total Project Cost (including IDC) 1,662.68 1,681.53 3,344.21

4.4. The Capitalisation in the books of accounts, i.e., creation of Gross Block requires allocation of

other expenses such as Interest During Construction & Financing Charges and pre-operative

expenses to the class of assets as per depreciation schedule. The details of the Unit wise

proposed capital cost of the project are shown in the Table below:

Table 4.2: Summary of total project Capital Cost after apportionment of Soft Costs (Rs. Crore)



Land & Site Development 49.12 49.12 98.24

Plant and machinery in generating

stations including plant

foundations

1,330.46 1,351.12 2,681.58

Building & civil engineering works

of a permanent character, not

mentioned above:

283.10 281.29 564.39

Total Project Cost 1,662.68 1,681.53 3,344.21

Optimisation of Capital Cost

4.5. APNRL would like to bring to the kind notice of the Hon’ble Commission that it has

endeavoured to optimise the Capital Cost of the Project. For implementation of the Project,

APNRL has opted for EPC and Non EPC mode of awarding Contract to optimise the project

cost, as implementing project through only EPC route leads to the higher cost because there is

a higher degree of risk of non-completion of project on scheduled time. Further, APNRL

endeavoured to optimise the project cost through negotiation with various BOP vendors to


44

award the Contract on best competitive rates instead of placing an Order for entire BoP to a

single Contractor. Further, APNRL has made a sincere effort to implement the Project on

schedule. However, the implementation of the Project was delayed due to the reasons not

attributable to APNRL project implementation planning, such as change in plant configuration

due to adoption of proven technology and delay due to Land Acquisition which has been

detailed in the earlier Petition filed by APNRL.

CERC Order on Benchmarking Capital Cost (Hard cost) for Thermal Power Stations with Coal

as fuel

4.6. CERC, vide its Order dated June 04, 2012, approved the benchmark norms as on

December,2011 for the Thermal Power Station/Unit size (s) 500/600/660/800 MW. In the

Order, it is stated that the Commission will review and update the benchmarking cost provided

in the Order on 6 monthly basis or at such intervals as determined by the Commission. The

Order states that the Hard Cost of the 500 MW to 800 MW Unit size varies from Rs. 4.30

Crore / MW to Rs. 5.40 Crore/MW project.

4.7. In this regard, it is important to note that the Hard Cost (Total Cost excluding IDC and

Financing Charges) of the APNRL Project works out to around Rs. 5.07 Crore/MW, which is

well within the range of Hard Cost of the 500 MW to 800 MW Unit size as approved by

Hon’ble CERC.

Means of Finance

4.8. JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010,

allows normative Debt-Equity Ratio of 70:30. APNRL has financed its total project cost in the

Debt-Equity ratio of 74.79 : 25.21 which is applicable for both the Units.

4.9. JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010 has

limited the equity investment up to 30%. Equity more than 30% has to be considered as

normative debt. Equity invested in Unit-1 and Unit-2 lies within the limit specified by the

JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010.


45

Therefore, while calculating tariff, actual Debt-Equity ratio has been considered by APNRL.

The Debt-Equity ratio for Unit-1, Unit-2 and total project is shown as under:

Table 4.3: Debt- Equity Ratio

Particulars Unit-1 Unit-2 Total Project Cost

Rs. Crore % Rs. Crore % Rs. Crore %

Debt 1,243.53 74.79% 1,257.63 74.79% 2,501.17 74.79%

Equity 419.14 25.21% 423.90 25.21% 843.04 25.21%

Total 1,662.68 100.00% 1,681.53 100.00% 3,344.21 100.00%


46

A5. True-up for FY 2012-13 and FY 2013-14

5.1. This Section details the approach followed for the approval of True up of ARR for FY 2012-13

and FY 2013-14 and has been prepared and analyzed under the following heads:

a) Truing up of Energy Charges

b) Truing up of Capacity Charges

c) Truing up of Total ARR and Revenue Receivable

Truing up of Energy Charges

5.2. The energy charges of Rs. 2.134/kWh and Rs. 2.071/kWh was approved by the Commission

for Unit 1 for FY 2012-13 and FY 2013-14 in Provisional Order dated May 26, 2014. The

energy charges considering the normative performance parameters and actual fuel prices and

calorific value are in variation with the energy charges approved by the Commission. Such

variation in the energy charges approved by the Commission and as claimed for the purpose of

Truing up is only due to the variation in the actual prices and GCV of the fuel, which are not

attributable to APNRL. Though the actual performance parameters were higher than the

normative performance parameters, the Petitioner has computed the energy charges for truing

up based on actual generation, actual auxiliary consumption, normative heat rate and normative

secondary fuel oil consumption. The computation of energy charges as approved by the

Commission and as claimed by APNRL is shown in the table below:

Table 5.1: Computation of Energy Charge for FY 2012-13 and FY 2013-14 – Unit-1

Particulars Unit

FY 2012-13 FY 2013-14

Provisional

Order May

2014

APNRL

Claim

Provisional

Order May

2014

APNRL

Claim

Operational Parameters

Gross Generation MU 380.05 284.09 2,010.42 1,368.20

Aux Consumption %

10.85%

9.30%


47

Table 5.1: Computation of Energy Charge for FY 2012-13 and FY 2013-14 – Unit-1

Particulars Unit

FY 2012-13 FY 2013-14

Provisional

Order May

2014

APNRL

Claim

Provisional

Order May

2014

APNRL

Claim

Net Generation MU

253.26

1,241.02

Station Heat Rate kCal / kWh 2,450.00 2,387.00 2,387.00 2,387.00

Coal Consumption (Actuals):

GCV of Coal kCal / kg 3,566.00 3,565.64 3,674.00 3,570.87

Specific Coal Consumption kg / kWh 0.67

0.67

Quantity of Coal MMT/ year

0.19

0.91

Transit Loss %

0.80%

0.80%

Secondary Oil Consumption kl/ year

284.09

1,368.20

ml / kWh 1.00 1.00 1.00 1.00

Coal Cost:

Rate Rs / MT 2,913.00 2,913.69 2,913.00 3,084.78

Generation Rs Cr

55.17

281.00

Transit Loss Rs Cr

0.44

2.27

Total Rs Cr

55.61

283.26

Energy Sent Out (Normative) MU

258.52

1,245.06

Fuel Cost (including coal cost only) Rs Cr

55.61

283.26

Rs./kWh

2.20

2.28

Injection Losses (based on CERC

notified PoC losses) %

1.39%

1.15%

Total Variable Charge

considering the injection losses Rs./kWh 2.13 2.23 2.07 2.31

Total Variable Charge considering

the injection losses Rs. Crore

56.39

286.57


48

Table 5.2: Computation of Energy Charge for FY 2013-14 – Unit-2

Particulars Unit

FY 2013-14

Provisional

Order May 2014 APNRL Claim


Gross Generation MU 1,740.53 1,157.26

Aux Consumption %

9.41%

Net Generation MU

1,048.32

Station Heat Rate kCal / kWh 2,387.00 2,387.00


GCV of Coal kCal / kg 3,674.00 3,618.47

Specific Coal Consumption kg / kWh

0.66

Quantity of Coal MMT/ year

0.76

Transit Loss %

0.80%


1,157.26

ml / kWh 1.00 1.00

Coal Cost:

Rate Rs / MT 2,913.00 3,047.04

Generation Rs Cr

231.68

Transit Loss Rs Cr

1.87

Total Rs Cr

233.55


1,053.10

Fuel Cost (including coal cost only) Rs Cr

233.55

Rs./kWh 2.07 2.23

Injection Losses (based on CERC notified PoC

losses) %

1.15%

Total Variable Charge considering the

injection losses Rs./kWh

2.25


injection losses Rs. Crore

236.27


49

Truing up of Annual Fixed Charges

5.3. This Section explains in detail the components of Annual Fixed Charges, the relevant norms

specified in JSERC (Terms and Conditions for Determination of Generation Tariff)

Regulations, 2010 and the detailed computation of each of the components. The Fixed Charges

comprise of:

a. Depreciation

b. Interest on Debt

c. O&M Expenses

d. Return on Equity (Pre-Tax)

e. Incentive

f. Interest on Working Capital

g. Cost of Secondary Fuel Oil

The detailed computation of each of the above components of the Annual Fixed Charges is

detailed in the subsequent paragraphs.

Depreciation

5.4. The depreciation has been computed on the basis of the JSERC (Terms and Conditions for

Determination of Generation Tariff) Regulations, 2010. Depreciation rate has been considered

same as notified in the Appendix-I of the Regulations. The relevant sections of JSERC (Terms

and Conditions for Determination of Generation Tariff) Regulations, 2010 are reproduced

below:

“7.28 Depreciation shall be calculated for each year of the tariff period, on the amount of

Capital Cost of the assets admitted by the Commission;

Provided that depreciation shall not be allowed on assets funded by any capital subsidy / grant

7.29 The salvage value of the asset shall be considered as 10% and depreciation shall be

allowed up to maximum of 90% of the capital cost of the asset.

…


50

7.31 Depreciation shall be calculated annually based on ‘Straight Line Method’ and at rates

specified in Appendix-I to these Regulations for the assets of the generating station:

Provided that, the remaining depreciable value as on 31st March of the Year closing after a

period of 12 Years from the Date of Commercial operation shall be spread over the balance

Useful life of the assets.

…

7.33 Depreciation shall be chargeable from the first Year of commercial operation. In case of

commercial operation of the asset for part of the Year, depreciation shall be charged on pro

rata basis.”

5.5. As only the Unit 1 of the project has been commissioned in FY 2012-13 i.e. on January 21,

2013 the depreciation has been computed only for Unit 1 on pro-rata basis based on the

number of days of operation in FY 2012-13. Similarly, depreciation for Unit 1 and Unit 2 has

been computed as per the above methodology based on the number of days of operation in FY

2013-14. The detailed computation of Depreciation for Unit 1 and Unit 2 for FY 2012-13 and

FY 2013-14 has been shown in the following Table:

Table 5.3: Computation of Depreciation for FY 2012-13 and FY 2013-14 – Unit 1 (Rs. Crore)

Asset Class Description

Asset Class

Depreciation

Rate

Capitalized

Cost

Depreciation

FY 2012-13 FY 2013-14

Provisional

Order

May 2014

APNRL

Provisional

Order May

2014

APNRL

Land owned under full title 0.00% 38.40 0.00 0.00 0.00 0.00

Land held under lease 3.34% 10.73 0.07 0.07 0.37 0.36

Plant and machinery in

generating stations

including plant

foundations

5.28% 1,330.46 13.11 13.47 69.34 70.25


51

Table 5.3: Computation of Depreciation for FY 2012-13 and FY 2013-14 – Unit 1 (Rs. Crore)

Asset Class Description

Asset Class

Depreciation

Rate

Capitalized

Cost

Depreciation

FY 2012-13 FY 2013-14

Provisional

Order

May 2014

APNRL

Provisional

Order May

2014

APNRL

Building & civil

engineering works of a

permanent character, not

mentioned above:

3.34% 283.10 1.82 1.81 9.61 9.46

Total

1,662.68 15.00 15.35 79.33 80.06

Table 5.4:Computation of Depreciation for FY 2013-14 – Unit 2

Asset Class Description Asset Class

Depreciation Rate

Capitalized

Cost

Depreciation for FY 2013-14

Provisional

Order May

2014

APNRL

Land owned under full title 0.00% 38.40 0.00 0.00

Land held under lease 3.34% 10.73 0.36 0.31


generating stations including

plant foundations

5.28% 1,351.12 57.84 61.96

Building & civil engineering

works of a permanent

character, not mentioned

above:

3.34% 281.29 8.42 8.16

Total 1,681.53 66.63 70.43


52

Interest on Debt

5.6. JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010

allows normative Debt-Equity Ratio of 70:30. The relevant clauses of Regulations are

reproduced below:

“7.3 Capital cost for a Project shall include:

(a) the expenditure incurred or projected to be incurred, including interest during construction

and financing charges, any gain or loss on account of foreign exchange risk variation during

construction on the loan - (i) being equal to 70% of the funds deployed, in the event of the

actual equity in excess of 30% of the funds deployed, by treating the excess equity as normative

loan, or (ii) being equal to the actual amount of loan in the event of the actual equity less than

30% of the funds deployed, - up to the date of commercial operation of the project, as admitted

by the Commission, as admitted by the Commission after prudence check shall form the basis

for determination of tariff;

…

7.14 For the project declared under commercial operation on or after 1.04.2011, if the equity

actually deployed is more than 30% of the capital cost, equity in excess of 30% shall be treated

as normative loan:

Provided that where equity deployed is less than 30% of capital cost, the actual equity shall be

considered for determination of tariff:

Provided further that the equity invested in foreign currency shall be designated in Indian

rupees on the date of each investment:

…”

5.7. Regarding repayments of loan, JSERC (Terms and Conditions for Determination of Generation

Tariff) Regulations, 2010, states that the repayment for the year shall be allowed equal to the

Depreciation for the year. For calculation of interest on term loan, JSERC (Terms and

Conditions for Determination of Generation Tariff) Regulations, 2010 do not allow any

moratorium period for determination of tariff. Regulations also allow only the weighted


53

average interest rate for the calculation of the interest on term loan. The relevant Clauses of the

JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010 have

been reproduced below:

“7.19 The loans arrived at in the manner indicated in clause 7.13, 7.14 of these Regulations

shall be considered as gross normative loan for calculation of interest on loan.

…

7.21 The repayment for any year during the Tariff Period shall be deemed to be equal to the

depreciation allowed for that Year.

7.22 Notwithstanding any moratorium period availed by the Generating Company, the

repayment of loan shall be considered from the first year of commercial operation of the

project and shall be equal to the annual depreciation allowed.

7.23 The rate of interest shall be the weighted average rate of interest calculated on the basis

of the actual loan portfolio at the beginning of each year applicable to the Project:

…

7.24 The interest on loan shall be calculated on the normative average loan of the year by

applying the weighted average rate of interest.”

5.8. In accordance with the above provisions the interest on debt has been computed on the

normative average loan of the year by applying the weighted average rate of interest calculated

on the basis of the actual loan portfolio at the beginning of each year applicable to the Project.

The following Tables represent the detailed computation of Interest on Debt for Unit 1 and

Unit 2 for FY 2012-13 and FY 2013-14.

Table 5.5:Computation of Interest on Debt for FY 2012-13 and FY 2013-14 – Unit-1 (Rs. Crore)

Particulars FY 2012-13 FY 2013-14

Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL


54

Table 5.5:Computation of Interest on Debt for FY 2012-13 and FY 2013-14 – Unit-1 (Rs. Crore)


Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL

Opening Balance 1,211.12 1,243.53 1,196.13 1,228.18

Repayment (Equal to

Depreciation allowed for the

year)

15.00 15.35 79.33 80.06

Closing Balance 1,196.13 1,228.18 1,116.80 1,148.12

Interest on Debt (%) 13.11% 13.11% 13.43% 13.43%

Interest on Debt 29.83 31.07 155.31 159.57

Table 5.6:Computation of Interest on Debt for FY 2013-14– Unit-2 (Rs. Crore)

Particulars

FY 2013-14

Provisional Order May

2014 APNRL

Opening Balance 1,174.74 1,257.63

Repayment (Equal to Depreciation allowed for

the year) 66.63 70.43

Closing Balance 1,108.12 1,187.20

Interest on Debt (%) 13.33% 13.33%

Interest on Debt 131.73 141.52


55

Return on Equity

5.9. As regard the Return on Equity (RoE) the relevant Regulations 7.15, 7.16, 7.17 & 7.18 of

JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010

specifies as below:

“7.15 Return on equity shall be computed in rupee terms, on the equity base determined in

accordance with clause 7.13, 7.14 of these Regulations.

7.16 Return on equity shall be computed on pre-tax basis at the base rate of 15.50%, to be

grossed up as per clause 7.17 of these Regulations.

……………

Provided that in case of Projects commissioned on or after 1st April, 2011, an additional

return of 0.5% shall be allowed if such Projects are completed within the timeline specified in

Appendix-II to these Regulations:

Provided further that the additional return of 0.5% shall not be admissible if the Project is not

completed within the timeline specified above for reasons whatsoever:

7.17 The rate of return on equity shall be computed by grossing up the base rate with the

normal tax rate applicable to the Generating Company as per details shown as under:

(i)……….

(ii) MYT period: Base rate to be grossed by the applicable tax rate for the Year 2011-12

Provided that return on equity with respect to the actual tax rate applicable to the Generating

Company, in line with the provisions of the relevant Finance Acts of the respective year during

the Control period shall be trued up separately for each year of the Control period along with

the tariff petition filed for the next Control period.

7.18 Rate of return on equity shall be rounded off to three decimal points and be computed as

per the formula given below:

Rate of pre-tax return on equity = Base rate / (1-t)

Where ‘t’ is the applicable tax rate in accordance with clause 7.17 of these Regulations.

5.10. APNRL submits that though while calculating Return on Equity, the Petitioner has considered

Post-Tax Return on Equity at 15.50% in line with the approach adopted by the Hon’ble


56

Commission in provisional Order. The Post-Tax Return on Equity is grossed up with the

Minimum Alternative Tax (MAT) rate applicable.

5.11. The detailed computation of Return on Equity (Pre-Tax) for Unit 1 and Unit 2 for FY 2012-13

and FY 2013-14 based on the above rationale has been summarized in the Table below:

Table 5-7: Computation of Return on Equity for FY 2012-13 and FY 2013-14 – Unit-1 (Rs.

Crore)

Particulars

FY 2012-13 FY 2013-14

Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL

Equity (Opening Balance) 451.14 419.14 451.14 419.14

Net additions during the year 0.00 0.00 0.00 0.00

Equity (Closing Balance) 451.14 419.14 451.14 419.14

Average Equity 451.14 419.14 451.14 419.14

Rate of Return on Equity

(pre-tax) 15.50% 15.50% 15.50% 15.50%

Applicable tax rate (t %) 20.01% 20.01% 20.01% 20.01%

Return on Equity 16.54 15.58 87.52 81.22

Table 5-8: Computation of Return on Equity for FY 2013-14 – Unit-2 (Rs. Crore)

Particulars

FY 2013-14


2014 APNRL

Equity (Opening Balance) 449.63 423.90

Net additions during the year 0.00 0.00

Equity (Closing Balance) 449.63 423.90

Average Equity 449.63 423.90


57

Table 5-8: Computation of Return on Equity for FY 2013-14 – Unit-2 (Rs. Crore)

Particulars

FY 2013-14


2014 APNRL

Rate of Return on Equity (pre-tax) 15.50% 15.50%

Applicable tax rate (t %) 20.01% 20.01%

Return on Equity 75.52 71.34

O&M Expenses

5.12. The Commission in its Provisional Order dated 26 May, 2014 has approved the O&M

Expenses for the APNRL Plant with Units size of 270 MW based in the norms specified for

200/210/250 MW in the JSERC (Terms and Conditions for Determination of Generation

Tariff) Regulations, 2010. The relevant extract of the mentioned Order is reproduced below:

“7.79 The Generation Tariff Regulations, 2010 do not specify any norms specifically for 270

MW sets. Accordingly, the Commission has approved the O&M expenses based on the norms

specified for 200/210/250 MW sets. The O&M expenses for the first year after commissioning

have been approved on pro-rata basis.”

5.13. In view of the above, APNRL has also computed the O&M Expenses for FY 2012-13 based on

the norms specified for 200/210/250 MW sets in the JSERC (Terms and Conditions for

Determination of Generation Tariff) Regulations, 2010. Further, as mentioned earlier that Unit-

1 of the project has achieved COD on January 21, 2013 accordingly for Unit-1, O&M expenses

has been computed on pro-rata basis based number of days of operation in FY 2012-13.

5.14. The detailed computation of O&M Expenses for Unit 1 for FY 2012-13 and FY2013-14 based

on the above rationale has been summarized in the Table below:

Table 5-9: Summary of O&M Expenses for FY 2012-13 and FY 2013-14 (Rs. Crore)



58

Provisional

Order May

2014

APNRL

Provisional

Order May

2014

APNRL

O&M Expenses as per JSERC

(Terms and Conditions for

Determination of Generation

Tariff) Regulations, 2010 (Rs

Lakh/MW)

21.51 22.74

O&M Expenses for Unit 1 10.98 11.14 61.40 61.40


Total O&M Expenses for Unit 1

& 2 10.98 11.14 114.56 114.72

Interest on Working Capital

5.15. Regulations 7.34, 7.38 & 7.39 of JSERC (Terms and Conditions for Determination of

Generation Tariff) Regulations, 2010 specify the following norms for Working Capital

requirement and Interest on Working Capital:

“7.34 The Commission shall determine the Working Capital requirement for coal-based

generating stations containing the following components:

(a) Cost of Coal for 1.5 months for pithead generating stations and for 2 months in non-

pithead generating stations for generation corresponding to the Normative Annual Plant

Availability Factor;

(b) Cost of secondary fuel oil for two months for generation corresponding to the Normative

Annual Plant Availability Factor, and in case of use of more than one secondary fuel oil, cost

of fuel oil stock for the main secondary fuel oil;

(c) Maintenance spares @ 20% of operation and maintenance expenses specified in clauses

7.40- 7.47 of these Regulations;

(d) Operation and Maintenance expenses for 1 month; and


59

(e) Receivables equivalent to 2 months of capacity charges and energy charges for sale of

electricity calculated on the Normative Annual Plant Availability Factor.

7.38 Rate of interest on working capital shall be on normative basis and shall be equal to the

short-term Prime Lending Rate of State Bank of India as on April 1, 2011 or April 1 of the year

in which the generating station or a unit thereof, is declared under commercial operation,

whichever is later during Transition period.

During Control Period rate of interest on working capital shall be on normative basis and

shall be equal to the short-term Prime Lending Rate of State Bank of India as on April 1, 2012

or April 1 of the year in which the generating station or a unit thereof, is declared under

commercial operation.

7.39 The interest on working capital shall be payable on normative basis notwithstanding that

the generating company has not taken working capital loan from any outside agency or has

exceeded the working capital loan based on the normative figures.”

5.16. As specified in Regulation 7.38 of JSERC (Terms and Conditions for Determination of

Generation Tariff) Regulations, 2010, Rate of Interest on Working Capital has been taken

prevailing on the date on which the each unit has been declared under commercial operation

i.e. 14.75% for Unit 1 and 14.45% for Unit 2. The detailed computation of interest on working

capital for Unit 1 and Unit 2 for FY 2012-13 and FY 2013-14 based on the above rationale has

been summarized in the Table below:

Table 5-10: Computation of Interest on working Capital for FY 2012-13 and FY 2013-14 -

Unit-1 (Rs. Crore)



60

Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL

Calculation of Cost Elements at Normative Availability

Cost of Coal

88.79

416.23

Cost of Secondary Oil 2.91 12.67

O&M expenses (including

Water Charges 15.32 71.15

Annual Revenue from Tariff

and charges 175.88 855.43

Maintenance Spares 3.06 14.23

Elements of Working Capital

Cost of Coal for 2 months 65.07 77.17 63.15 69.37

Cost of Secondary Fuel Oil

for 2 months 2.13 2.53 2.13 2.11

O&M expenses for 1 month 4.84 6.66 5.12 5.93

Receivables equivalent to 2

months average billing 136.16 152.85 134.34 142.57

Maintenance Spares 2.2 3.06 12.28 14.23

Total Working Capital 210.39 242.26 217.02 234.21

Rate of Interest 14.75% 14.75% 14.75% 14.75%

Interest on Working Capital 5.87 6.85 32.01 34.55

Table 5-11: Computation of Interest on working Capital for FY 2013-14 - Unit-2 (Rs.

Crore)

Particulars FY 2013-14


61


2014 APNRL

Calculation of Cost Elements at Normative Availability

Cost of Coal

405.73

Cost of Secondary Oil

12.64

O&M expenses (including Water Charges)

63.07

Annual Revenue from Tariff and charges

796.32

Maintenance Spares

12.61

Elements of Working Capital

Cost of Coal for 2 months 63.15 77.86

Cost of Secondary Fuel Oil for 2 months 2.46 2.42

O&M expenses for 1 month 5.12 6.05

Receivables equivalent to 2 months average

billing 133.30 152.82

Maintenance Spares 10.63 12.61

Total Working Capital 214.76 251.77

Rate of Interest 14.45% 14.45%

Interest on Working Capital 26.87 31.60

5.17. The following Table gives the summary of Interest on Working Capital for Unit 1 & 2 for the

Control Period from FY 2012-13 to FY 2013-14.

Table 5-12: Summary of Interest on Working Capital for FY 2012-13 and FY 2013-14 (Rs.

Crore)

Particulars

FY 2012-13 FY 2013-14

Provisional

Order May 2014 APNRL

Provisional

Order May

2014

APNRL

Unit 1


62


Crore)

Particulars

FY 2012-13 FY 2013-14

Provisional


Provisional

Order May

2014

APNRL

Working Capital Requirement 210.39 242.26 217.02 234.21


Unit 2



Cost of Secondary Fuel Oil Consumption

5.18. Regulation 7.49 of JSERC (Terms and Conditions for Determination of Generation Tariff)

Regulations, 2010 specifies the norms for Cost of Secondary Oil as below:

“7.49 Expenses on secondary fuel oil in Rupees shall be computed corresponding to normative

secondary fuel oil consumption (SFC) specified in clause 8.4, 8.6 of these Regulations, in

accordance with the following formula:

= SFC x LPSFi x NAPAF x 24 x NDY x IC x 10

Where,

SFC – Normative Specific Fuel Oil consumption in ml/kWh

LPSFi – Weighted Average Landed Price of Secondary Fuel in Rs./ml considered

initially

NAPAF – Normative Annual Plant Availability Factor in percentage

NDY – Number of days in a year

IC - Installed Capacity in MW”


63

5.19. APNRL has procured secondary fuel oil (LDO) through local suppliers at the actual price for

FY 2012-13 and FY 2013-14 as per the audited accounts of Rs. 64,176.41/kL and Rs.

62,997.01/kL. The computation of the secondary fuel oil expenses for Unit-1 for FY 2012-13 is

given in Table below:

Table 5-13: Computation of Secondary Fuel Oil Expenses for FY 2012-13 and FY 2013-14 –

Unit-1

Particulars Unit

FY 2012-13 FY 2013-14

Provisional

Order May

2014

APNRL

Provisional

Order May

2014

APNRL

Unit Capacity MW 270.00 270.00 270.00 270.00

Gross Generation MU 380.05 284.09 2,010.42 1,368.20

Normative Secondary

Fuel Oil Consumption

ml/kWh 1.00 1.00 1.00 1.00

Secondary Oil

Consumption

kl/ year 380.05 284.09 2,010.42 1,368.20

Cost of Secondary Oil Rs / kl 63,503.00 64,176.41 63,503.00 62,997.01

Rs Crore 2.41 1.82 12.77 8.62

Table 5-14: Computation of Secondary Fuel Oil Expenses for FY 2013-14 – Unit-2

Particulars Unit

FY 2013-14

Provisional Order

May 2014 APNRL

Unit Capacity MW 270.00 270.00


Normative Secondary Fuel Oil

Consumption ml/kWh 1.00 1.00


64

Table 5-14: Computation of Secondary Fuel Oil Expenses for FY 2013-14 – Unit-2

Particulars Unit

FY 2013-14

Provisional Order

May 2014 APNRL

Secondary Oil Consumption kl/ year 1,740.52 1,157.26

Cost of Secondary Oil Rs / kl 63,503.00 62,851.21

Rs Crore 11.05 7.27

Additional Water Charges

5.20. Further, the Central Electricity Regulatory Commission (Terms and Conditions of Tariff)

Regulations, 2014 stipulates that Water Charges for thermal generating stations shall be

allowed separately. The relevant Regulation 29(2) has been extracted as follows:

“29. Operation and Maintenance Expenses:

(1)Normative Operation and Maintenance expenses of thermal generating stations......

....

(2) The Water Charges and capital spares for thermal generating stations shall be allowed

separately:

Provided that water charges shall be allowed based on water consumption depending upon

type of plant, type of cooling water system etc., subject to prudence check. The details

regarding the same shall be furnished along with the petition:.....”

An Agreement was signed between Adhunik and Govt. of Jharkhand for supply of water vide

agreement dated: 29th Aug.’08. The required water was to be withdrawn or pumped by the

company from the river Subarnarekha near village Manikui and a pump house was to be

installed. The water which was supposed to be withdrawn under the agreement was directly

from the river Subarnarekha and not from any reservoir (as the pump house is installed after

Chandil Dam, i.e. downstream of the river).

Further, Water department of Govt. of Jharkhand vide its Notification No.: 2/PMC/jalapurti-

175/2007 dated 01.04.2011, devised various categories for water offtake and APNRL was


65

asked to pay @ Rs. 26.40 per thousand gallon. The same was opposed by APNRL and Writ

Petition was filed on 7th Feb.’12, taking further to which, a stay order was issued by Hon’ble

High Court of Jharkhand. Hence, APNRL is paying the water charges at the pre-revised rate of

Rs 4.50 per thousand gallon. Accordingly, APNRL is claiming water charges @ Rs. 4.50 per

thousand gallon only. Once, the decision of Hon’ble High Court is issued, water charges would

be adjusted accordingly in the tariff of APNRL.

Table 5-15: Additional Water Charges for FY 2012-13 and FY 2013-14 - Unit-1 (Rs. Crore)

Particulars

FY 2012-13 FY 2013-14

Provisional

Order May 2014

APNRL

Revised

Submission

Provisional

Order May

2014

APNRL

Revised

Submission

Additional Water Charges 0.00 4.18 0.00 9.75

Table 5-16: Additional Water Charges for FY 2013-14 - Unit-2 (Rs. Crore)

Particulars

FY 2013-14


2014

APNRL Revised

Submission

Additional Water Charges 0.00 9.75

Annual Fixed Charges

5.21. The following Tables provide the summary of Annual Fixed Charges of Units 1 and 2 at the

Normative Plant Availability Factor of 85.00%.

Table 5-17:Annual Fixed Charges for FY 2012-13 and FY 2013-14 (Based on number of days of

operation) for Unit-1 (Rs. Crore)

Particulars

FY 2012-13 FY 2013-14

Provisional

Order May

2014

APNRL

Revised

Submission

Provisional

Order May

2014

APNRL

Revised

Submission


66

Table 5-17:Annual Fixed Charges for FY 2012-13 and FY 2013-14 (Based on number of days of


Particulars

FY 2012-13 FY 2013-14

Provisional

Order May

2014

APNRL

Revised

Submission

Provisional

Order May

2014

APNRL

Revised

Submission

Depreciation 15.00 15.35 79.33 80.06

Interest on Debt 29.83 31.07 155.31 159.57

O&M Expenses (including Water

Charges) 10.98 15.32 61.40 71.15

Return on Equity (Pre-Tax) 16.54 15.58 87.52 81.22


Secondary Fuel Expenses 2.41 1.82 12.77 8.62

Total Annual Fixed Charges 80.63 86.00 428.36 435.16

Table 5-18: Annual Fixed Charges for FY 2013-14 (Based on number of days of operation) for

Unit-1 (Rs. Crore)

Particulars

FY 2013-14

Provisional Order

May 2014

APNRL Revised

Submission

Depreciation 66.63 70.43

Interest on Debt 131.73 141.52

O&M Expenses (including Water Charges) 53.16 63.07

Return on Equity (Pre-Tax) 75.52 71.34

Interest on Working Capital 26.87 31.60

Secondary Fuel Expenses 11.05 7.27

Total Annual Fixed Charges 364.95 385.23

5.22. As per the provisions of MoU executed with Govt. of Jharkhand and PPA executed with JSEB

(now JUVNL/JBVNL), APNRL has to supply the power corresponding to 12% capacity to

JSEB (now JUVNL/JBVNL) at Energy Charge and hence, the Annual Fixed Charges for Unit-


67

1 and Unit-2 are to be recovered from balance 88% of the net capacity. The above approach

has also been approved by the Commission in its Provisional Order dated May 26, 2014.

The relevant extracts of the Commission’s Order dated May 26, 2014 is reproduced below for

reference:

“4.25 Accordingly, the Commission has determined in this Order the Annual Fixed Charges

for Unit 1 and Unit 2, which are to be recovered from balance 88% of the net capacity of the

plant and should be shared by the beneficiaries in proportion to their respective allocation in

the saleable capacity of the generating station.

True up for FY 2012-13 and FY 2013-14 for the power Supply to JUVNL/JBVNL

Tariff for Supply of Regulated Capacity to JUVNL/JBVNL

5.23. In accordance with provisions of MoU with Government of Jharkhand (GoJ) and PPA

executed with JSEB (now JUVNL/JBVNL), out of total Contracted Capacity of 122.85 MW

from Stage 1, APNRL will supply 63.882 MW capacity, i.e., 13% of total Net Capacity of

Stage 1 at total Tariff (both fixed and variable charge) and the balance 58.968 MW capacity,

i.e., 12% of total Net Capacity of Stage 1 at variable cost, i.e., Energy Charge as approved by

Hon’ble JSERC. Accordingly, the tariff for supply of Regulated Capacity to JUVNL/JBVNL

for FY 2012-13 at Normative Availability is summarised in the Table below:

Table 5-19: Tariff for Regulated Capacity for JUVNL/JBVNL for Unit 1 for FY 2012-13 and

FY 2013-14

Particulars Unit FY 2012-13 FY 2013-14


68

Provisional

Order May 2014

APNRL

Claim

Provisional

Order May

2014

APNRL

Claim

Capacity Charges for

13% of Capacity at 85%

Plant Availability Factor

Rs. Crore 11.91 12.70 63.28 64.29

Rate of Energy Charges

(considering the injection

losses)

Rs./kWh 2.13 2.23 2.07 2.31

Table 5-20: Tariff for Regulated Capacity for JUVNL/JBVNL for Unit 2 for FY 2013-14

Particulars Unit

FY 2013-14

Provisional

Order May

2014

APNRL

Claim

Capacity Charges for 13% of Capacity at 85%

Plant Availability Factor Rs. Crore 53.91 56.91

Rate of Energy Charges (considering the injection

losses) Rs./kWh 2.07 2.25

Incentive for higher Plant Availability Factor

5.24. As detailed the above capacity charges has been computed at the Plant Availability Factor

equivalent to Normative Annual Plant Availability Factor i.e. 85%. Further Regulation 8.12 (a)

of JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010

which specifies as follows:

“8.12 The capacity charge (inclusive of incentive) payable to a thermal generating station for

a calendar month shall be calculated in accordance with the following formulae:


69

(a) Generating stations in commercial operation for less than ten (10) years on 1st April

of the financial year:


Provided that in case the plant availability factor achieved during a financial year

(PAFY) is less than 70%, the total capacity charge for the year shall be restricted to:

=AFC x (0.5 + 35 / NAPAF) x (PAFY / 70) (in Rupees)

…

Where,

AFC - Annual fixed cost specified for the year, in Rupees;

NAPAF - Normative annual plant availability factor in percentage;

NDM - Number of days in the month;

NDY - Number of days in the year;

PAFM - Plant availability factor achieved during the month, in percent;

PAFY - Plant availability factor achieved during the year, in percent”

5.25. APNRL have supplied power to JUVNL/JBVNL at an annual PLF of 87.77% and 92.81% for

FY 2012-13 and FY 2013-14 respectively. The revenue billed by the Petitioner to

JUVNL/JBVNL for FY 2012-13 and 2013-14 includes incentive. ,

Interest on under recovered amount

5.26. Regulation 6.16, 6.17, 6.18 of JSERC (Terms and Conditions for Determination of Generation

Tariff) Regulations, 2010 specifies as follows:

“Refund of Excess Amount

6.16 If the Tariff already recovered is more than the Tariff determined after true up, the

Generating Company shall refund to the Beneficiaries the excess amount so recovered along

with simple interest at the rate equal to short term prime lending rate of State Bank of India as

on 1st April of the respective Year.

6.17 Similarly, in case the Tariff already recovered is less than the Tariff determined after true

up, the Generating Company shall recover from the Beneficiaries, the less recovered amount


70

along with simple interest at the rate equal to short term prime lending rate of State Bank of

India as on 1st April of the respective Year/Years subject to adhering to the timelines specified

by the Commission for filling of True-up application. In case, it is found that the filling of True-

up is delayed due to the reasons attributable to the Generating Company, the under recovery

shall not bear any interest expenses.

6.18 The amount under-recovered or over-recovered, along with simple interest, shall be

recovered or refunded by the Generating Company, in six equal monthly instalments starting

within three months from the date of the tariff order issued by the Commission after the truing

up exercise.”

5.27. In accordance with the above Regulations, the detailed computation of the applicable interest

till the expected year of True-up Order i.e. FY 2015-16 is shown in the Table below:

Table 5-21: Net Impact of Truing Up for FY 2012-13 and FY 2013-14 for Unit-1 and Unit-2


Unit-1 Unit-1 Unit-2

Net Energy supplied to JUVNL/JBVNL MU 95.84 473.33 422.81

Rate of Energy Charge Rs/kWh 2.23 2.31 2.25

AFC Entitlement upon true up Rs Crore 12.70 64.29 56.91

Incentive Rs Crore 0.65 4.08 4.08

Energy Charge entitlement upon true up Rs Crore 21.34 109.30 95.29

Total Entitlement Rs Crore 34.69 177.67 156.28

Revenue Billed

AFC Rs Crore 11.91 63.28 53.91

EC Rs Crore 20.45 98.03 87.56

Incentive Rs Crore 0.65 4.08 4.08

Total Revenue Billed to JUVNL/JBVNL Rs Crore 33.01 165.39 145.55


71



Gap/(Surplus) Rs Crore 1.68 12.28 10.73

Rate of Interest % 14.75% 14.75% 14.75%

From COD to 31st March of the

respective FY (considered for half of

the year)

Days 70.00 365.00 317.00

Allowable

Interest (Rs.

Crore)

0.05 0.91 0.69

Remaining period till September 30, 2015

(assuming recovery during FY 2015-16)

Years 2.5 1.5 1.5

Allowable

Interest (Rs.

Crore)

0.62 2.72 2.37

Total Interest (Simple Interest) Rs. Crore 0.67 3.62 3.06

5.28. The applicable interest for FY 2012-13 and FY 2013-14 after the date of True-up Order may be

allowed to be recovered from JUVNL/JBVNL in addition to the gap.

Net Entitlement and Resultant (Gap)/ Surplus for Unit-1 and Unit-2

5.29. The net entitlement and the surplus for the FY 2012-13 and FY 2013-14 on the basis of above

discussions are shown in the table below:

Table 5-22: Computation of Net Amount Payable by JUVNL/JBVNL (Rs. Crore)



Gap/(Surplus) Rs Crore 1.68 12.28 10.73

Total Interest (Simple Interest) Rs Crore 0.67 3.62 3.06

Total Amount payable by JUVNL/JBVNL Rs Crore 2.35 15.90 13.79


72

A6. Annual Performance Review for FY 2014-15 and ARR & Tariff Determination for FY

2015-16

6.1. This Section deals with the Annual Performance Review for FY 2014-15 and approval of final

ARR & Tariff for FY 2015-16, taking into consideration the norms and principles specified in

the JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010

and the Provisional Order dated May 26, 2014. The above has been prepared and analyzed

under the following heads:

a) Computation of Energy Charges

b) Computation of Annual Fixed Charges

c) Computation of total ARR

Operational Performance Parameters

6.2. The Hon’ble Commission in its Provisional Order dated May 26, 2014 has approved the

operational parameters for Unit -1 & Unit-2. The same has been considered by APNRL for

purpose of Annual Performance Review of FY 2014-15 and determination of ARR & Tariff for

FY 2015-16. The Unit wise summary of the performance parameters for FY 2014-15 and FY

2015-16 has been mentioned in the Tables below:

Table 6-1: Operational Performance Parameters for Unit 1 for FY 2014-15 and FY 2015-16



Auxiliary Consumption % 9.00% 9.00%

Net Generation MU 1,829.48 1,834.49

Station Heat Rate kcal/ kWh 2,387.00 2,387.00

Specific Fuel Consumption ml/ kWh 1.00 1.00




73




Auxiliary Consumption % 9.00% 9.00%

Net Generation MU 1,829.48 1,834.49

Station Heat Rate kcal/ kWh 2,387.00 2,387.00

Specific Fuel Consumption ml/ kWh 1.00 1.00

Fuel Cost

6.3. This sub-section detail the approach adopted for projecting the cost of coal during for FY

2014-15 and FY 2015-16. JSERC (Terms and Conditions for Determination of Generation

Tariff) Regulations, 2010, specifies that the landed price of coal includes the following:

“8.19 The landed cost of coal shall include:

(a) Base cost of coal;

(b) Royalty;

(c) Taxes and duties;

(d) Transport cost by rail / ocean / road / pipeline or any other means; and

(e) Clean energy cess as per Ministry of Coal, Govt. of India Notification.”

Further, JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations,

2010, allows 0.8% of transit losses for non-pit head power projects and 0.2% for pit head

power projects. The relevant part of the Regulation is reproduced below:

“8.19

……………..

For the purpose of computing energy charges, landed cost of coal shall be arrived at after

considering normative transit and handling loss of 0.8% on the quantity of coal dispatched by


74

the coal supplier in case of non-pit-head generating stations and 0.2% on the quantity of coal

dispatched by the coal supplier in case of pit-head generating stations.”

6.4. APNRL and Tata Steel had been jointly allocated a captive coal block from which the fuel

procurement for the plant was planned. However, the Hon’ble Supreme Court in its Judgment

dated September 24, 2014 has cancelled the captive mine allocated to APNRL (Copy of

Hon’ble Supreme Court Judgment enclosed as Annexure-A). In such an unanticipated

scenario, APNRL shall be procuring coal from Central Coalfields Limited (CCL) for which it

has a tapering coal linkage. As per Tapering Linkage Policy of Ministry of Coal, Coal is to be

supplied on tapering basis, i.e. 75%, 50%, 25%, 0% in 1st, 2

nd, 3

rd, 4

th year of year of normative

date of production of coal respectively. The coal supplied herein was supplied at 40% premium

to the price of coal of CCL. Further, pursuant to the cancellation of coal blocks by Hon’ble

Supreme Court, Ministry allowed 50% coal to be supplied, at 20% premium, which was further

extended till June 2015 only. Therefore, APNRL is forced to meet its coal requirement through

combination of tapering linkage, spot market, washery rejects, imports, etc. which has been

detailed in subsequent sections of the Petition.

6.5. Further, as regard the GCV and price of coal, JSERC (Terms and Conditions for Determination

of Generation Tariff) Regulations, 2010 specifies as follows:

“8.21 Any variation in fuel prices on account of change in the Gross Calorific Value (GCV) of

coal or gas or liquid fuel shall be adjusted on a monthly basis on the basis of weighted average

GCV of coal or gas or liquid fuel in stock, received and burnt and weighted average landed

cost incurred by the generating company for procurement of coal, oil, or gas or liquid fuel, as

the case may be for a power station.

8.22 Initially, the Base value of price of fuel oils, price of coal incurred by the Generating

Company/ generating station shall be taken based on actuals of the weighted average price of

the three preceding months and in the absence of weighted average landed costs for the three

preceding months, latest respective weighted average procurement price for the generating

station, before the start of the year.


75

Initially the Base value of gross calorific value of fuel oils and gross calorific value of coal

incurred by the Generating Company/ generating Station shall be taken based on actuals of the

weighted average gross calorific value of the three preceding months and in the absence of

weighted average gross calorific value for the three preceding months, latest weighted average

gross calorific value for the generating station, before the start of the year.

8.23 In its bills, the Generating Company shall separately indicate rate of energy charges at

base price of primary and secondary fuel specified by the Commission and the fuel price

adjustment. No separate petition needs to be filed with the Commission for fuel price

adjustment.”

6.6. Accordingly, coal price and the GCV estimated for FY 2014-15 and FY 2015-16 has been

considered as actual weighted average price and GCV of coal for the period from April 2014 to

February 2015 as discussed below:

a) Fuel Supply Agreement (Tapering Coal Linkage from CCL)

This price includes base price of coal, additional mark-up for tapering linkage, breaking &

stowing charges, excise duty, royalties, loading / unloading charges, transportation charges etc.

b) Spot Market Coal

It may be noted that this price includes base price of coal, breaking & stowing charges, excise

duty, royalties, loading / unloading charges, transportation charges etc.

c) Washery Rejects

It may be noted that this price includes base price of coal rejects, excise duty, loading /

unloading charges, transportation charges etc.


76

d) Imported Coal

It may be noted that this price includes base price of coal, excise duty, loading / unloading

charges, transportation charges etc.

6.7. The landed cost of coal from all the sources has been summarised in the table below:

Table 6-3: Landed Price of Coal for Unit-1 (Rs./Tonne)

Sl. No. Source of Coal FY 2014-15 FY 2015-16

1 Domestic Coal- linkage 2,417.66 2,438.26

2 Domestic Coal- Spot Market 3,470.86 3,525.59

3 Washery Rejects 1,766.25 1,719.92

4 Imported Coal 4,184.57 4,212.42

Table 6-4: Landed Price of Coal for Unit-2 (Rs./Tonne)

Sl. No. Source of Coal FY 2014-15 FY 2015-16

1 Domestic Coal- linkage 2,458.87 2,438.26

2 Domestic Coal- Spot Market 3,580.33 3,525.59

3 Washery Rejects 1,673.58 1,719.92

4 Imported Coal 4,240.27 4,212.42

Energy Charges

6.8. Regulations 8.16, 8.17 and 8.18 of JSERC (Terms and Conditions for Determination of

Generation Tariff) Regulations, 2010 specify the norms for computation of Energy Charges for

thermal based generating station. The relevant provisions of the Regulations are reproduced

below:

“8.17 Total Energy charge payable to the Generating Company for a month shall be:

= (Energy charge rate in Rs. /kWh) x {Scheduled energy (ex-bus) for the month in kWh.}


77

8.18 Energy charge rate (ECR) in Rupees per kWh on ex-power plant basis shall be

determined to three decimal places in accordance with the following formulae:

(a) For coal based stations

ECR = (GHR – SFC x CVSF) x LPPF x 100/ {CVPF x (100 – AUX)}

…

Where,

AUX - Normative auxiliary energy consumption in percentage

CVPF - Gross calorific value of primary fuel as fired, in kCal per kg, per litre or per standard

cubic metre, as applicable.

CVSF - Calorific value of secondary fuel, in kCal per ml

ECR - Energy charge rate, in Rupees per kWh sent out.

GHR - Gross station heat rate, in kCal per kWh.

LPPF - Weighted average landed price of primary fuel, in Rupees per kg, per litre or per

standard cubic metre, as applicable, during the month.

SFC - Specific fuel oil consumption, in ml per kWh”

Considering the above norms, APNRL has computed Energy Rates for Unit 1 & 2 of the

project for FY 2014-15 and FY 2015-16. The computation of Energy Charge for Unit 1 & 2 for

FY 2014-15 and FY 2015-16 are given in the Tables below:

Table 6-5: Computation of Energy Charge for FY 2014-15 and FY 2015-16 – Unit-1

Particulars Unit

FY 2014-15 FY 2015-16

Provisional

Order

May 2014

APNRL

Provisiona

l Order

May 2014

APNRL

1) Operational Parameters

Gross Generation MU 2,010.42 2,010.42 2,015.93 2,015.93

Aux Consumption %

9.00%

9.00%

Net Generation MU

1,829.48

1,834.49


78


Particulars Unit

FY 2014-15 FY 2015-16

Provisional

Order

May 2014

APNRL

Provisiona

l Order

May 2014

APNRL

Station Heat Rate kCal /

kWh 2,387.00 2,387.00 2,387.00 2,387.00

Coal Consumption:

Average GCV of Coal kCal / kg 3,674.00 3,377.40 3,674.00 3,348.20


0.70

0.71

Quantity of Coal MMT/

year 1.42

1.43

Transit Loss %

0.80%

0.80%


2,010.42

2,015.93

ml / kWh 1.00 1.00 1.00 1.00

Coal Cost:

Average Coal Price Rs / MT 2913.00 2,862.39 2913.00 2,870.07

Generation Rs Cr

405.12

410.87

Transit Loss Rs Cr

3.27

3.31

Total Rs Cr

408.39

414.18


1,829.48

1,834.49

Fuel Cost (coal cost only) Rs Cr

408.39

414.18

Rs./kWh 2.07 2.23 2.07 2.26



1.15%

1.15%



2.26

2.28

Total Variable Charge considering the Rs. Crore

413.15

419.02


79


Particulars Unit

FY 2014-15 FY 2015-16

Provisional

Order

May 2014

APNRL

Provisiona

l Order

May 2014

APNRL

injection losses


Particulars Unit

FY 2014-15 FY 2015-16

Provisional

Order May

2014

APNRL

Provision

al Order

May 2014

APNRL


Gross Generation MU 2,010.42 2,010.42 2015.93 2,015.93

Aux Consumption %

9.00%

9.00%

Net Generation MU

1,829.48

1,834.49

Station Heat Rate kCal / kWh 2,387.00 2,387.00 2387.00 2,387.00


Average GCV of Coal kCal / kg 3,674.00 3,431.46 3,674.00 3,348.20


0.69

0.71

Quantity of Coal MMT/

year 1.39

1.43

Transit Loss %

0.80%

0.80%


2,010.42

2,015.93

ml / kWh 1.00 1.00 1.00 1.00

Coal Cost:

Average Coal Price Rs / MT 2,913.00 3,005.01 2,913.00 2,870.07

Generation Rs Cr

418.60

410.87


80


Particulars Unit

FY 2014-15 FY 2015-16

Provisional

Order May

2014

APNRL

Provision

al Order

May 2014

APNRL

Transit Loss Rs Cr

3.38

3.31

Total Rs Cr

421.98

414.18


1,829.48

1,834.49

Fuel Cost (coal cost only) Rs Cr

421.98

414.18

Rs./kWh 2.07 2.31 2.07 2.26



1.15%

1.15%



2.33

2.28


injection losses Rs. Crore

426.90

419.01

Fuel Price Adjustment

6.9. The JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010

specify the following regarding the Fuel Price Adjustment in the monthly Energy Charges:

“Energy Charge

8.16 The energy (variable) charge shall cover primary fuel costs and shall be payable by every

Beneficiary for the total energy scheduled to be supplied to such Beneficiary during the

calendar month on ex-power plant basis, at the specified energy charge rate of the month (with

fuel price adjustment).”

6.10. Further, Regulation 8.2 of JSERC (Terms and Conditions for Determination of Generation

Tariff) Regulations, 2010 specifies the detailed methodology for calculating such Fuel Price

Adjustment and recovery of the same through Monthly Billing. Accordingly, while calculating


81

the energy charge, certain assumptions have been considered for fuel mix, calorific value and

the fuel price. APNRL requests the Hon’ble Commission to allow APNRL to recover the

upward and downward variation in energy charges based on actual fuel mix, actual calorific

value and actual fuel price as compared to fuel mix, calorific value and the fuel price

considered while approving the Energy Charge, through Fuel Price Adjustment as part of

monthly Energy Charges in accordance with the provisions of Regulations.

Computation of Annual Fixed Charges

6.11. As detailed in the True-up section, APNRL has followed the normative approach as per the

Regulations and the methodology adopted by the Commission in Provisional Order dated May

26, 2014. The Fixed Charges comprise of:

a) Depreciation

b) Interest on Debt

c) O&M Expenses

d) Return on Equity (Pre-Tax)

e) Incentive

f) Interest on Working Capital

g) Cost of Secondary Fuel Oil

Depreciation

6.12. The detailed computation of Depreciation for FY 2014-15 and FY 2015-16 for Unit 1 & Unit 2

of the project has been shown in the following Tables:

Table 6-7: Computation of Depreciation for FY 2014-15 and FY 2015-16 – Unit 1 (Rs. Crore)

Asset Class Description Asset Class

Depreciation

Rate

Capitalized

Cost

Depreciation


82

FY 2014-15 FY 2015-16

Provisional

Order

May 2014

APNRL

Provisional

Order

May 2014

APNRL

Land owned under full title 0.00% 0.00 0.00 0.00 0.00 0.00



generating stations

including plant

foundations 5.28% 0.00 71.20 70.25 73.07 70.25

Building & civil

engineering works of a

permanent character, not

mentioned above: 3.34% 0.00 10.15 9.46 10.70 9.46

Total 0.00 81.73 80.06 84.13 80.06


Asset Class

Description

Asset Class

Depreciation

Rate

Capitalized

Cost

FY 2014-15 FY 2015-16

Provisional

Order

May 2014

APNRL

Provisional

Order

May 2014

APNRL

Land owned under

full title 0.00% 38.40 0.00 0.00 0.00 0.00


Plant and machinery

in generating stations

including plant

foundations

5.28% 1,351.12 66.81 71.34 68.66 71.34


83


Asset Class

Description

Asset Class

Depreciation

Rate

Capitalized

Cost

FY 2014-15 FY 2015-16

Provisional

Order

May 2014

APNRL

Provisional

Order

May 2014

APNRL

Building & civil

engineering works of

a permanent

character, not

mentioned above:

3.34% 281.29 9.73 9.40 10.27 9.40

Total 1,681.53 76.96 81.09 79.34 81.09

Interest on Debt

6.13. As regards the interest on debt, the interest rates have been considered based on prevailing

interest rates. The following Tables represent the detailed computation of Interest on Debt for

Unit 1 & 2 for FY 2014-15 and FY 2015-16.

Table 6-9: Computation of Interest on Debt for FY 2014-15 and FY 2015-16 – Unit-1 (Rs. Crore)


Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL

Opening Balance 1,116.80 1,148.12 1,112.31 1,068.06

Additions 77.25 0.00 0.00 0.00

Repayment (Equal to


year)

81.73 80.06 84.13 80.06

Closing Balance 1,112.31 1,068.06 1,028.18 987.99

Interest on Debt (%) 13.47% 13.43% 13.47% 13.43%


84

Table 6-9: Computation of Interest on Debt for FY 2014-15 and FY 2015-16 – Unit-1 (Rs. Crore)


Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL

Interest on Debt 150.13 148.82 144.16 138.06

Table 6-10: Computation of Interest on Debt for FY 2014-15 and FY 2015-16 – Unit-2 (Rs.

Crore)

Particulars

FY 2014-15 FY 2015-16

Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL

Opening Balance 1,108.12 1,187.20 1,031.16 1,106.11

Additions 0.00 0.00 76.05 0.00

Repayment (Equal to


year)

76.96 81.09 79.34 81.09

Closing Balance 1,031.16 1,106.11 1,027.87 1,025.02

Interest on Debt (%) 13.31% 13.33% 13.31% 13.33%

Interest on Debt 142.37 152.85 137.03 142.04


85

O&M Expenses

6.14. As discussed earlier the Commission in its Provisional Order dated 26 May, 2014 has approved

the O&M Expenses for the APNRL Plant with Units size of 270 MW based in the norms

specified for 200/210/250 MW in the JSERC (Terms and Conditions for Determination of

Generation Tariff) Regulations, 2010.

6.15. In view of the same, APNRL has also computed the O&M Expenses for FY 2014-15 and FY

2015-16 based on the norms specified for 200/210/250 MW sets in the JSERC (Terms and

Conditions for Determination of Generation Tariff) Regulations, 2010. The detailed

computation of O&M Expenses for Unit 1 for FY 2014-15 and FY 2015-16 based on the above

rationale is shown in the Table below:

Table 6-11: Summary of O&M Expenses for FY 2014-15 and FY 2015-16 (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16

Provisional


Provisional

Order May

2014

APNRL

O&M Expenses as per JSERC

(Terms and Conditions for

Determination of Generation

Tariff) Regulations, 2010 (Rs

Lakh/MW)

24.04 25.42



Total O&M Expenses for Unit 1

& 2 129.82 129.82 137.27 137.27


86

Return on Equity

6.16. As detailed in the True-up section of this Petition the Post-Tax Return on Equity is grossed up

with the Minimum Alternative Tax (MAT) rate applicable for FY 2011-12. Accordingly, while

calculating Return on Equity for FY 2014-15 and FY 2015-16, APNRL has considered MAT

rate of 20.01%. Further, as per proviso of Regulation 7.17 of JSERC (Terms and Conditions

for Determination of Generation Tariff) Regulations, 2010, the impact on return on equity with

respect to the actual tax rate applicable for respective year of the Control Period shall be

subject to true up at the end of Control Period. APNRL reserves the right to claim any such

impact along with the tariff petition filed for the next Control period. Further as discussed

earlier, APNRL while calculating Return on Equity, has considered Post-Tax Return on Equity

at 15.50% and additional 0.50% Return on Equity has not been considered. The detailed

computation of Return on equity for FY 2014-15 and FY 2015-16 is shown in the Table below:


Crore)

Particulars

FY 2014-15 FY 2015-16

Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL




Average Equity 465.52 419.14 479.91 419.14


(pre-tax) 15.50% 15.50% 15.50% 15.50%



87


Crore)

Particulars

FY 2014-15 FY 2015-16

Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL

Return on Equity 91.24 82.20 94.06 82.20


Crore)

Particulars

FY 2014-15 FY 2015-16

Provisional Order

May 2014 APNRL

Provisional

Order May

2014

APNRL




Average Equity 449.63 423.90 507.84 423.90


(pre-tax) 15.50% 15.50% 15.50% 15.50%


Return on Equity 88.13 83.13 90.98 83.13

Interest on Working Capital

6.17. Interest on working capital has been computed in accordance with Regulations 7.34, 7.38 &

7.39 of JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations,


88

2010. Further, as specified in Regulation 7.38 of JSERC (Terms and Conditions for

Determination of Generation Tariff) Regulations, 2010, Rate of Interest on Working Capital

has been taken prevailing on the date on which the each unit has been declared under

commercial operation i.e. 14.75% for Unit 1 and 14.45% for Unit 2. The summary of interest

on working capital for Unit 1 and Unit 2 for FY 2014-15 and FY 2015-16 is shown in the

Table below:


Crore)

Particulars

FY 2014-15 FY 2015-16

Provisional


Provisional

Order May

2014

APNRL

Unit 1



Unit 2



Cost of Secondary Fuel Oil Consumption

6.18. The cost of secondary fuel oil consumption has computed based on the norms specified in

Regulation 7.49 of JSERC (Terms and Conditions for Determination of Generation Tariff)

Regulations, 2010. APNRL has considered that secondary fuel would be procured through

local suppliers. The cost of Secondary Fuel Oil is considered equal to Rs. 64,874.11/kL and Rs.

63,380.80/kL for Unit-1 and Unit-2, respectively, based on the prevailing market rates for FY

2014-15 and FY 2015-16.. The computation of the secondary fuel oil expenses for Unit-1 and

Unit-2 is given in Table below:


89


Unit-1

Particulars Unit

FY 2014-15 FY 2015-16

Provisional

Order May

2014

APNRL

Provisional

Order May

2014

APNRL

Unit Capacity MW 270.00 270.00 270.00 270.00


Normative

Secondary Fuel Oil

Consumption

ml/kWh 1.00 1.00 1.00 1.00

Secondary Oil

Consumption kl/ year 2,010.42 2,010.42 2,015.93 2,015.93

Cost of Secondary

Oil

Rs / kl 63,503.00 64,647.69 63,503.00 64,103.97

Rs Cr 12.77 13.00 12.80 12.92


Unit-2

Particulars Unit

FY 2014-15 FY 2015-16

Provisiona

l Order

May 2014

APNRL

Provisional

Order May

2014

APNRL

Unit Capacity MW 270.00 270.00 270.00 270.00


Normative

Secondary Fuel Oil

Consumption

ml/kWh 1.00 1.00 1.00 1.00

Secondary Oil kl/ year 2,010.42 2,010.42 2,015.93 2,015.93


90


Unit-2

Particulars Unit

FY 2014-15 FY 2015-16

Provisiona

l Order

May 2014

APNRL

Provisional

Order May

2014

APNRL

Consumption

Cost of Secondary

Oil

Rs / kl 63,503.00 63,560.24 63,503.00 64,103.97

Rs Cr 12.77 12.78 12.80 12.92

Additional Water Charges

6.19. Further, the Central Electricity Regulatory Commission (Terms and Conditions of Tariff)

Regulations, 2014 stipulates that Water Charges for thermal generating stations shall be

allowed separately. The relevant Regulation 29(2) has been extracted as follows:

“29. Operation and Maintenance Expenses:

(1)Normative Operation and Maintenance expenses of thermal generating stations......

....

(2) The Water Charges and capital spares for thermal generating stations shall be allowed

separately:

Provided that water charges shall be allowed based on water consumption depending upon

type of plant, type of cooling water system etc., subject to prudence check. The details

regarding the same shall be furnished along with the petition:.....”


91

An agreement was signed between Adhunik and Govt. of Jharkhand for supply of water vide

agreement dated: 29th Aug.’08. The required water was to be withdrawn or pumped by the

company from the river Subarnarekha near village Manikui and a pump house was to be

installed. The water which was supposed to be withdrawn or withdrawn under the agreement

was directly from the river Subarnarekha and not from any reservoir (as the pump house is

installed after Chandil Dam, i.e. downstream of the river).

Because of delay in various government clearances the power plant was delayed and we did

not withdraw water from the river. Inspite of not being withdrawing power, bills were raised on

us for water. Further adding to it, water department of Jharkhand vide its Notification No.:

2/PMC/jalapurti-175/2007 dated 01.04.2011, devised various categories for power offtake and

APNRL was asked to pay @ Rs. 26.40 per thousand gallon. The same was opposed by APNRL

and Writ Petition was filed on 7th Feb.’12, taking further to which, a stay order was issued by

Hon’ble High Court of Jharkhand vide its order no. W.P.(C) No. 733 of 2012 dated: 2nd

Apr.’12.

Accordingly, APNRL is claiming water charges @ Rs. 4.50 per thousand gallon only. Once,

the decision of Hon’ble High Court is issued, water charges would be adjusted accordingly in

the tariff of APNRL.


Particulars

FY 2014-15 FY 2015-16

Provisional

Order May 2014

APNRL

Revised

Submission

Provisional

Order May

2014

APNRL

Revised

Submission





92

Provisional

Order May 2014

APNRL

Revised

Submission

Provisional

Order May

2014

APNRL

Revised

Submission


Tariff for Supply of Regulated Capacity to Jharkhand State Electricity Board

6.20. In accordance with provisions of MoU with Government of Jharkhand (GoJ) and PPA being

executed with JSEB (now JUVNL/JBVNL), out of total Contracted Capacity of 122.85 MW

from Stage 1, APNRL will supply 63.882 MW capacity, i.e., 13% of total Net Capacity of

Stage 1 at total Tariff (both fixed and variable charge) and the balance 58.968 MW capacity,

i.e., 12% of total Net Capacity of Stage 1 at variable cost, i.e., Energy Charge as approved by

Hon’ble Commission. Accordingly, the tariff for supply of Regulated Capacity to JSEB (now

JUVNL/JBVNL) for FY 2014-15 and FY 2015-16 at Normative Availability is shown in the

Table below:

Table 6-19: Annual Fixed Charges for FY 2014-15 and FY 2015-16 (Based on number of days of


Particulars

FY 2014-15 FY 2015-16

Provisional


Provisional

Order May

2014

APNRL

Depreciation 81.73 80.06 84.13 80.06

Interest on Debt 150.13 148.82 144.16 138.06

O&M Expenses (including

Water Charges) 64.91 74.66 68.63 78.38






93

Table 6-20: Annual Fixed Charges for FY 2014-15 and FY 2015-16 (Based on number of days of


Particulars

FY 2014-15 FY 2015-16

Provisional


Provisional

Order May

2014

APNRL

Depreciation 76.96 81.09 79.34 81.09

Interest on Debt 142.37 152.85 137.03 142.04

O&M Expenses (including

Water Charges) 64.91 74.66 68.63 78.57





6.21. As APNRL in this Petition has projected the Plant Availability Factor for FY 2014-15 and FY

2015-16 equivalent to Normative Annual Plant Availability Factor, it has proposed the

Capacity Charges as equivalent to Annual Fixed Charges to be recovered at 85% Plant

Availability Factor. However, APNRL requests the Hon’ble Commission to allow APNRL to

raise the bills on monthly basis to now JUVNL/JBVNL for the Capacity Charges as per the

actual availability achieved in accordance with Regulation 8.12 (a) of JSERC (Terms and

Conditions for Determination of Generation Tariff) Regulations, 2010 which stipulates as

follows:

“8.12 The capacity charge (inclusive of incentive) payable to a thermal generating station for

a calendar month shall be calculated in accordance with the following formulae:


94

(a) Generating stations in commercial operation for less than ten (10) years on 1st April of the

financial year:


Where,

AFC - Annual fixed cost specified for the year, in Rupees;

NAPAF - Normative annual plant availability factor in percentage;

NDM - Number of days in the month;

NDY - Number of days in the year;

PAFM - Plant availability factor achieved during the month, in percent;

PAFY - Plant availability factor achieved during the year, in percent”

6.22. APNRL requests the Hon’ble Commission to approve the tariff for supply of Regulated

Capacity to JSEB (now JUVNL/JBVNL) for FY 2014-15 and FY 2015-16 as shown in the

Tables given below:


95

Table 6-21 :Tariff for Regulated Capacity for JUVNL/JBVNL for Unit 1 for FY 2014-15

and FY 2015-16

Particulars Unit

FY 2014-15 FY 2015-16

Provisional

Order

May 2014

APNRL

Revised

Submission

Provisional

Order May

2014

APNRL

Revised

Submission


13% of Capacity at

85% Plant Availability

Factor

Rs. Crore 63.98 63.95 64.47 62.95

Rate of Energy

Charges (considering

the injection losses)

Rs./kWh 2.07 2.26 2.07 2.28

Table 6-22 :Tariff for Regulated Capacity for JUVNL/JBVNL for Unit 2 for FY 2014-15

and FY 2015-16

Particulars Unit

FY 2014-15 FY 2015-16

Provisional

Order

May 2014

APNRL

Revised

Submission

Provisional

Order May

2014

APNRL

Revised

Submission


13% of Capacity at

85% Plant Availability

Factor

Rs. Crore 61.51 64.82 62.09 63.78

Rate of Energy

Charges (considering

the injection losses)

Rs./kWh 2.07 2.33 2.07 2.28


96

A7. Compliance to Commission Directives

7.1. This Section deals with the Compliance to the directives issued by the Hon’ble Commission in

the Provisional Order dated May 26, 2014.APNRL humbly submits that it has furnished the

information / details as required under the aforesaid Formats to the extent the same is available

with it and is relevant for a new Generating Station.

Capital Cost

7.2. As regards the Capital Cost, the Hon’ble Commission in its Provisional Order dated May 26,

2014 gave the following direction.

“The Commission has provisionally approved the capital cost for Unit 1 and Unit 2 at Rs

3286.62 Cr in this order. The Commission however directs the Petitioner to file a petition for

approval of final capital cost of the plant along with the audited accounts for the power plant

for FY 2013-14 and statutory auditor’s certificate for actual cost incurred upto COD. The

Petitioner is also required to submit details of the final capital cost of the plant in the format

specified in Annexure 2 for prudence check by the Commission.”

7.3. The final capital cost of the project as on COD has been considered as per the Annual

Accounts of FY 2012-13 and FY 2013-14 duly audited by the Statutory Auditor. The COD of

Unit 1 and Unit 2 of the power plant of capacity 540 MW (2 x 270) Stage-1 were declared on

January 21, 2013 and May 19, 2013 respectively. The actual Capital Cost of the Project as on

COD based on the Annual Accounts duly audited by the Statutory Auditor is Rs. 3,344.21

Crore. The Copy of Chartered Accountant Certificate for the Project Cost till COD are

enclosed at Annexure-C.

7.4. APNRL is also submitting details of the final capital cost of the plant in the format specified in

the Provisional Order for prudence check to comply with the directives of the Hon’ble


97

Commission. The final capital cost of the plant as per the format specified by the Hon’ble

Commission in the Provisional Order is enclosed at Annexure-D.

Additional Capitalization

7.5. As regards the Additional Capitalisation, the Hon’ble Commission in its Provisional Order

dated May 26, 2014 gave the following direction.

“The Commission has provisionally approved an additional capitalisation of Rs 211.18 Cr for

Unit 1 and Unit 2 during the Control Period. In this regard, the Petitioner is directed to submit

the detailed project report and cost benefit analysis of each of the schemes prior to taking up

the scheme for execution.”

7.6. As per the directive of the Hon’ble Commission specified in the Provisional Order dated May

26, 2014, APNRL is submitting the detailed project report and cost benefit analysis of each of

the schemes prior to taking up the schemes for execution. The Copy of detailed project

report and cost benefit analysis of each of the schemes enclosed as Annexure-E and details

of various schemes proposed are discussed below:

7.6.1 Reservoir Construction Scheme

APNRL intends to carry out essential additional capital expenditure to augment and improve

existing 2x270 MW thermal power project. The aggregate water requirement for the power

station is 3,510 m3 per hour and APNRL has permission to draw 4,064 m3 per hour water from

Subarnarekha River. As on the date, the raw water supply to the plant is made through 8 Km

cross-country pipeline. The water is required for cooling of electrical and mechanical

auxiliaries, steam condenser cooling, fire fighting, ventilation etc.

APNRL intake pump house is strategically located in a manner that it is the first industrial

facility to withdraw water downstream of Subarnarekha River once the same has been released


98

from Chandil dam. The reservoir facility present in main plant area currently caters to storage

of water for 21 days and could not be made bigger on account of scarcity of land at the time of

Financial Closure. Following points necessitate the justification to augment current water

arrangement facilities for the plant:

Excavation of sand from the river by local population has resulted in decline in bed

level of the river which could have impact on pumping operation in near future.

Subarnarekha River feeds many adjacent industries and for irrigation purposes that

water availability at times falls short in lean season.

Availability of water is likely to be interrupted temporarily for repairs or other such

other maintenance works on the basis of jointly signed protocol among M/s. APNRL

and State Govt. of Jharkhand. Such interruption shall not ordinarily exceed fifteen days.

The interruption in release of water shall adversely affect the power generation.

APNRL thus intends to construct additional water reservoir and raw water pumping system to

ensure continued and efficient operation of the plant. The additional water reservoir will also

act as a back-up mechanism for functioning of plant in case of any planned / unplanned

maintenance of existing pipeline.

Construction of storage intervention needed for uninterrupted drawl of water is covered under

the protocol signed between APNRL and the Govt of Jharkhand.

The technical specification as estimated by the Owner’s Engineer is as follows:

Rectangular shaped water reservoir having depth of 8 m would be constructed with

elevated embankment where excavated soil will be utilized. HDPE geomembrane liner

of suitable thickness shall be provided at bottom as well as the embankment surfaces to

arrest the seepage of water into the ground water. A pump house will be constructed for

pumping the water to the raw water reservoir at plant location.


99

APNRL would be required to acquire 50 acres of land for construction of this reservoir.

Land has already been identified in the village Giddibeda owing to its proximity to the

already laid pipeline of APNRL. Advantage of having proximity to the pipeline shall

avoid Right of Way issues. Identified land is completely private land for single crop

agricultural purpose. The company is in discussion with land owners and does not

foresee any major issues with land acquisition. The summary of total cost of Additional

Water reservoir is given below:

Table 7-1: Construction Cost – Additional Water Reservoir (Rs. Crore)

Particulars Water Reservoir

Land 9.50

Mechanical & Structural Works 3.00

Civil Work 35.00

Electrical Works 2.00

TOTAL 49.50

Table 7-2: Status of Approval for Water Reservoir

Approval/ Consent Status

Land Acquisition for Water

Reservoir

No approval is required for the additional water reservoir. Land

identified for the reservoir is completely private land.


100

7.6.2 Grated Weir Construction Scheme

APNRL is also planning to construct a gated weir facility downstream of intake well for

impounding the water during the period of receding rains and ensuring adequate depth of water

for trouble free pumping operation.

The technical specification as provided by the Owner’s Engineer is as follows:

Pondage for raw water supply is proposed to be created by constructing a gated weir at

about 45 m downstream of existing Intake Well thereby ensuring inflow of water into

the Intake Well sump. Deck level of Road Bridge, located 67 m upstream of Intake

Well, is 141 m and Railway Bridge is about 195 m downstream of Intake Well.

The elevation level for the gated weir is proposed at 131.50 m. Vertical lift gates will

be provided for the whole width of the river bed. Gates will be lifted clear of the High

Flood Level (HFL) of the river during rains so that afflux due to construction of the

weir could be limited to the minimum. Gates will be manually lowered for impounding

water during the period of receding rains.

Following figure shows the schematic diagram of gated weir proposed to be

constructed at Subarnarekha River:


101

Schematic Diagram – Gated Weir

Table 7-3: Construction Cost –Gated Weir (Rs. Crore)

Particulars Gated Weir

Land -


Civil Work 34.14


TOTAL 39.32

Table 7-4: Status of Approval for Gated Weir

Approval/ Consent Agency Status

Grated Weir Water Resource

Department, Government of

Jharkhand

Approval has been

applied for and is in

progress


102

7.6.3 Critical Spares Scheme

Currently each unit of 270 MW of the plant is operating with 1 no. of 16.5/ 400 KV, 340/330

MVA Generator Transformer, 1 no. of 16.5/6.6 KV, 40 MVA Station Transformer and 2 nos.

of 16.5/ 6.6 KV Unit transformer without any spare Transformers. In case of failure of any of

the afore-mentioned transformer, it will substantially affect the generation and supply of

power. The repair and replacement of such critical parts have taken 10-12 months in the past.

Following examples indicate the instances in various thermal power projects of India wherein

mishap has occurred due to Transformer failure and corresponding loss to stakeholders:

Maithon Power Limited - R-Phase of Generator Transformer (GT) for 525 MW (Unit

1) failed on 06-July-2013 resulting in loss of generation from unit for a period of 6

months.

Meja Thermal Power Station - Y-Phase of GT for Unit-8 failed on 30-April-2013 and

BPhase bushing of GT for Unit-7 failed on 09-October-2011.

Bhushan Power and Steel Limited – Failure of 220 MVA Transformer

Adani Power Ltd. – GT of Unit-3 of 5x660 MW Tiroda plant failed. However, due to

availability of spare GT, the operations were resumed in very short duration of time.

Taking into consideration situations as highlighted above, APNRL has identified all Power

Transformers as critical spares.

On November 29, 2013, APNRL GT-I had caught fire wherein the bushing area suffered

damages. APNRL mobilized various agencies and maintenance activities are under progress.

Unit restored operations on 14-February-2014.

On March 3, 2014, Unit II tripped. Testing is being carried out by ABB for analyzing the fault.

The unit has been synchronized & has commenced operation from 2nd week of May 2014.

However, with the long lead time associated with such repairs and replacements, APNRL

intends to procure 1 no. of each 16.5/ 400 KV, 340 MVA Generator Transformer, 16.5/6.6 KV,


103

40 MVA Station Transformer and 16.5/ 6.6 KV Unit transformer as additional capital spare to

meet such exigencies. Certain spares for other major packages such as Coal Handling Plant,

Ash Handling Plant etc. have also been identified.

APRNL expects the completion of supply of spares to happen in 18 months from the Purchase

Order and release of payment, whichever is later.

Table 7-5: Basic procurement cost of additional capital spares as per report from DCPL

Sr. No. Particulars Unit Qty. Value

1 16.5/ 400 KV, 340 MVA Generator Transformer Nos. 1 16.00

2 16.5/6.6KV,40MVAStation Transformer Nos. 1 3.00

3 16.5/6.6KV, 16MVA Unit Transformer Nos. 1 2.00

4 Total Ex-Works for CHP Lot 1 3.29

5 Total Ex-Works for AHP Lot 1 1.29

Total Ex-Works Price 25.58

A Excise Duty @ 12.36% 3.16

B Sales Tax@ 2% 0.58

C Freight & Transit Insurance 1.28

TOTAL 30.59


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7.6.4 Brick Making Plant Scheme

As per the Environment Clearance received from MoEF for 2x270 MW TPP, APNRL has to

utilize 100% fly ash generated from the plant from fourth year of operation.

As estimated by owner’ engineer, APNRL will be setting up 6 nos. of brick making units

producing solid fly ash brick of 250 x 120 x 75 dimension at a capacity of 12,000 bricks per

day on 85% unit availability of operation and 12 hours per day of operational hours. Aggregate

production capacity from 6 units would be ~ 2.6 Crore bricks per annum. Each brick produced

from the facility would weigh 4.20 kg and is expected to sell at a price of Rs. 4.00 per brick.

Primary raw material required for brick making plant is fly ash (60%) which is generated from

the power plant. Other raw materials include sand, lime, gypsum and cement which would be

locally procured by APNRL. Following table highlights the raw material requirement and

corresponding cost for this facility (6 units of brick making plant):

Table 7-6: Raw Material Requirement and Cost Estimate (Qty in Tonne)

Particulars Ratio Daily Req.

(1 Plant)

Yearly

Req. (1

Plant)

Yearly

Req. (6

Plants)

Raw Material

Cost (Rs./

Tonne)

Annual Cost (Rs.

Crore for 6 Plants)

Fly ash 60% 25.20 9,189 55,188 50 0.28

Sand 30% 12.60 4,599 27,594 350 0.97

Lime &

Gypsum

8% 3.36 1,226.40 7,358.40 1,350 0.99

Cement (OPC

53 Grade)

2% 0.84 306.60 1,839.60 7000 1.29

Total Raw

Material

3.52

Manpower

Cost

19,914 4.36

Total 7.88


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With a selling price of Rs. 4.00 per brick, APNRL expects to make operating profit of Rs. 2.63

Crore per annum from this facility.

Following table highlights the hard cost as per report from DCPL for 6 brick making plants:

Table 7-7: Hard Cost – Brick Making Plants (Rs. Crore)

Particulars Value


Civil Work 0.50


TOTAL 4.00

7.6.5 Bottom Ash Handling System including Dewatering Bin to feed HCSD System

In the current system existing at project site, the fly ash generated is extracted in dry form and

stored in fly ash silos while bottom ash is disposed in lean slurry form to ash disposal area

(temporary ash-dyke). Temporary ash dyke facility admeasuring 17 acres was used owing to

challenges in land acquisition. Company has employed pumps to extract the water from the

surface of settled ash slurry and dispose it to the nearby land.

APNRL is in process of setting up permanent ash dyke facility as envisaged at the time of

Financial Closure. Land acquisition of 125 acres in villages of Padampur and Jagnathpur has

been completed for permanent ash dyke construction and work is expected to start at the

earliest.

As per the Environment Clearance obtained from MoEF, APNRL has to establish High

Concentration Slurry Disposal (HCSD) system to dispose fly ash and bottom ash into the ash

pond. As per report from owner’s engineer, implementing a HCSD system would lead to

saving in terms of total land uses for Ash Dyke vís-a-vís existing system of lean slurry


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disposal. Considering station head rate of 2300 kCal / kWh, Coal GCV of 3450 kCal / kg and

Ash content in coal ~46%, the land requirement for lean slurry disposal system for 540 MW

operational plant is 153.15 acres. Land required for corresponding HCSD system is 114.86

acres. Certain other advantages of HCSD system over lean slurry disposal is as under:

Layered ash spreads enables vertical filing thereby requirement less land.

Pumping is done at higher concentration resulting in low water consumption and

correspondingly operating power usage reduces.

Due to concentrated slurry and less water, ground water pollution shall be minimized.

Slurry flow rate is drastically reduced, hence lower pipeline sizes. Further, with lower

velocity the pipe-line life increases.

Reduced leaches at the ash disposal area.

Further, HCSD system was originally designed to take care of only Fly Ash while bottom ash

was disposed directly into a separate ash pond. APNRL intends to use the system for both fly

ash and bottom ash disposal and thus it is required to install dewatering bins, crusher and

conveying system to transfer wet bottom ash to the mixing tank. On installation of HCSD

system with dewatering bins, there would be no requirement of separate ash dyke areas for the

facility.

The complete system will be installed within 18 months from the date of order placement.

Technical Specifications:

Following equipment needs to be installed for setting up the HCSD system with dewatering

bins:

Bottom Ash Slurry Disposal to pump the slurry to de-watering bin through pipes.

Bottom Ash Slurry Dewatering System to convert bottom ash to moist form 2 nos. of

drain pumps (1 working and 1 standby) will be installed to pump the decanted water

dewatering bins. The system will have 3 dewatering bins, one will receive slurry, one

will be under decantation cycle and the last one will be under discharge mode. Each


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dewatering bin will have two outlets, one for direct truck unloading and the other for

feeding the conveyor to HCSD system.

Moist bottom ash conveying system from Dewatering Bin to Mixing tank of HCSD

System – The system will have double-roll clinker grinder to reduce the size of Bottom

Ash to (-) 8mm.

Fly Ash Conveying System from F.A Silo to ART - Below each F.A. Silo, a manual

operated valve will be provided for isolation purpose. Below isolation valve, a

motorized Orifice Feeder will be installed followed by a mass flow meter to control the

fly ash flow. Fly ash from mass flow meter will enter into twin shaft paddle mixer

where ash is mixed with measured quantity of water. After that ash-water mixer will be

poured into Agitator Retention Tank (ART), which will take care of the optimization of

the slurry consistency and homogenization of ash slurry with the help of mechanical

agitator and addition of water with control rate.

Agitator Retention Tank & Control System - Make-up water is added in a controlled

manner through Flow Control valve in the ART to achieve the desired density in the

ART. From the ART concentrated slurry shall be transported through M. S. seamless

pipes and HCSD pump to the designated disposal area.

Following table highlights the hard cost as per report from DCPL for HCSD System with

dewatering bins:

Table 7-8: Hard Cost – HCSD + Dewatering Bins (Rs. Crore)

Particulars Value

Civil Work 9.54


TOTAL 26.54

No additional approval is required for improvements in Ash Handling System.


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7.6.6 Railway Siding

APNRL is in process of setting up private railway siding at the site and has obtained necessary

clearances for construction of railway siding at Captive mine end and at Birajpur (plant end).

Further, AAPL, one of the Adhunik group companies having plant very near to the APNRL

site, is having their private railway siding which can be used for coal unloading. The Company

expects to incur a cost of Rs. 13.82 Crore & Rs. 10.00 Crore for Railway Siding Works (Tori)

& Railway Siding Works (Plant) respectively.

7.6.7 Additional Ash Dyke

Owing to challenges in land acquisition, APNRL is currently using temporary ash dyke facility

admeasuring 17 acres for ash disposal. This facility is expected to remain adequate till 2015, by

when APNRL shall complete the permanent ash dyke construction. Land aggregating to 125

acres required for building permanent ash dyke, has already been acquired for the same and

work on permanent ash dyke is expected to commence at the earliest.

Coal Block development and usage of imported coal

7.7. Regarding coal block development and usage of imported coal, the Hon’ble Commission in its

Order dated May 26, 2014 directed as follows:


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“The Commission directs the Petitioner to expedite the production from the allocated coal

block. Further, pending the commencement of production from the coal block, the Petitioner

should exercise due prudence at the time of procuring coal from alternate sources so as to

minimize the weighted average coal cost.

The Commission also directs the Petitioner to approach the appropriate authority and seek

extension of the coal linkage from CCL-CIL till such time the captive coal block of the

Petitioner is developed. The Petitioner should submit compliance report regarding the same to

the Commission.

The Commission directs the Petitioner that in case where the energy charge rate based on

weighted average price of use of fuel including alternative source of fuel (other than coal

through CCL linkage) exceeds 30% of base energy charge rate as approved by the

Commission in this Order or energy charge rate based on weighted average price of use of fuel

including alternative sources of fuel exceeds 20% of energy charge rate based on weighted

average fuel price for the previous month (whichever is lower), prior consultation with JUVNL

should be made not later than three days in advance.”

7.8. In this regard, APNRL would like to humbly submit that the fuel requirement of the Project

was planned to be fulfilled from the captive Ganeshpur coal block, which was allotted to

APNRL and Tata Steel on a 50:50 Joint Allocation basis. The Hon’ble Supreme Court in its

Judgment in September 24, 2014 has cancelled the captive mine allocation to APNRL (Copy

of Hon’ble Supreme Court Judgment enclosed as Annexure-A). APNRL has also received

tapering coal linkage for 540 MW (2 x 270 MW) from Coal India Ltd. and FSAs have been

signed with Central Coalfields Ltd.

APNRL have requested Ministry of Coal (MoC) for conversion of its Tapering Linkage into

Long Term Linkage vide its various letters. The same was followed up with request for waiver

of premium towards coal supplied under tapering linkage to the company. MoC have


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considered the same and accordingly, decreased the premium from 40% to 20% and have also

increased the quantum of tapering linkage, i.e. 50% from 25% of the contracted capacity and

the tenure of tapering linkage of the Petitioner was also extended till June 2015. The Petitioner

have complied with the Directive of Hon’ble Commission and hereby confirm that, the base

energy charge have not varied by more than 30% in any month and the weighted average price

of use of fuel have never exceeded 20% of the energy charge rate based on weighted average

fuel price for the previous month.

Dedicated Transmission System

7.9. The Hon’ble Commission in its Order dated May 26, 2014 regarding dedicated transmission

system directed as follows:

“With regards to construction of the Dedicated Transmission System (DTS), the Commission

believes that the rationale for construction of the DTS from the power station to JSEB’s

Ramchandrapur 220 KV sub-station should be a net reduction in the cost of power purchase to

the consumers. The Commission directs JUVNL to carry out a cost benefit analysis of routing

the power from the power station through the Dedicated Transmission System vis-à-vis routing

the power through the CTU as is being done currently and submit a report regarding the same

to the Commission within two months

of issuance of this Order.

With regards to the non-payment of injection charges by JUVNL, the Commission notes that as

per the prevalent practice in the industry, transmission charges for procurement of power

under the long term contract are to be borne by the procurer. The Commission directs that the

injection charges must be paid by JUVNL.

The Commission further directs the Petitioner and JUVNL to constitute a joint committee to

resolve all the issues regarding the transmission of power from the power station to JUVNL.

The committee should look into the need for the proposed Dedicated Transmission System, the

technical configuration of the proposed line and the sharing of costs of the transmission line.


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The Petitioner and JUVNL should, after mutual discussions and agreement, arrive at a way

forward vis-à-vis the issue of the Dedicated Transmission System, and should submit a status

report regarding the same to the Commission within two months of issuance of this Order.”

7.10. The Hon’ble Commission in its Order has stipulated that the transmission charges have to be

borne by JUVNL/JBVNL. However, the Hon’ble Commission in the said Order has not

specifically mentioned about the payment corresponding to the injection losses to be made by

JUVNL/JBVNL. Under such circumstances, JUVNL/JBVNL is denying to make any payment

corresponding to the injection losses citing that the Hon’ble Commission has not directed

JUVNL/JBVNL for making payment corresponding to the injection losses. In this regard,

APNRL in its review Petition dated July 24, 2014 humbly requested the Hon’ble Commission

to kindly review the directions in case of payment of injection charges issued in clause 4.41 of

the Hon’ble Commission Order and include the payment of amount corresponding to the

injection losses in the same direction.

7.11. Further, APNRL in the review Petition dated July 24, 2014 most respectfully submitted that

during the public hearing APNRL has requested the Hon’ble Commission to kindly extend the

payment of Transmission Charges and Losses of CTU for another two years till the Dedicated

Transmission System is ready and operational. JUVNL/JBVNL filed its counter affidavit on

November 7, 2014. In this regard, APNRL in its rejoinder dated December 1, 2014 humbly

requested the Hon’ble Commission to direct JUVNL/JBVNL to make the payment of amounts

corresponding to Injection Losses which are being denied to APNRL. Accordingly, APNRL

humbly requested the Hon’ble Commission to kindly review the Directions in case of payment

of Injection Charges issued in Clause 4.41 of the Hon’ble Commission’s Order and include the

payment of amount corresponding to Injection Losses in the same direction and direct the

JUVNL/JBVNL to bear the transmission charges and losses (Injection charges and losses as

well as Withdrawal charges and losses).

7.12. Further APNRL in the rejoinder dated December 1, 2014 prayed before the Hon’ble

Commission to allow two years timeframe from the investment approval by JUVNL/JBVNL


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for executing the DTS as it has direct impact on the consumers. Till such time, PoC charges

and losses are to be borne by JUVNL/JBVNL till such completion of the project.

7.13. As regards to direction towards constitution of a joint committee to resolve all the issues

regarding the transmission of power from the power station to JUVNL/JBVNL, the detailed

status has been discussed in Section A 2 of the Petition.

Landed Cost of Coal

7.14. The Hon’ble Commission in its Order dated May 26, 2014 regarding landed cost of coal

directed as follows:

“The Commission directs the Petitioner to get the month-wise landed cost of coal separately

showing Base cost of coal; Royalty; Taxes and duties; Transport cost by rail /ocean / road /

pipeline or any other means; and Clean energy cess as per Ministry of Coal, Govt. of India

Notification with respect to Unit 1 and Unit 2 certified by the Statutory Auditor of the

Company and submit the same along with the petition for truing up of ARR for FY 2012-13 and

FY 2013-14.”

As per the directives specified by the Hon’ble Commission, APNRL is submitting the month-

wise landed cost of coal separately showing Base cost of coal; Royalty; Taxes and duties;

Transport cost by rail /ocean / road / pipeline or any other means; and Clean energy cess as per

Ministry of Coal, Govt. of India Notification with respect to Unit 1 and Unit 2 certified by the

Statutory Auditor. The copy of Chartered Accountant Certificates for the landed cost of

coal is enclosed at Annexure-F)

Petitioner

Ranchi

April __, 2015

Documents

BEFORE THE JHARKHAND STATE ELECTRICITY … Final Petition.pdf · Petition for Approval of Final Capital Cost of 540 MW (2 x 270) coal based thermal power plant in Jharkhand, True-up