mseb policies on wind energy: deviations from the policies of gom

WIND PROJECT TARIFF ORDER 03-04 ANNEXURE 1

MERC, Mumbai Page 106 of 176

MSEB POLICIES ON WIND ENERGY: DEVIATIONS

FROM THE POLICIES OF GOM & GUIDELINES OF MNES

Reference to the: documents considered

1) MSEB policy regarding generation based on wind and solar energy detailed in Annexure – B Section – 9 of the Petition for Tariff Revision proposed for the year 2001 – 02 submitted to MERC.

2) GOM Order G.R. No. NCP 1097/ CR. 57/ energy 7 dated 12.03.1998.

3) GOM Order NCP1099/CR.319/ energy 7 dated 09.07.1999.

1) Letter of MNES dated 07.09.1993 addressed to State Governments.

2) Supplementary Guidelines issued from time to time.

Sr No.

Item Deviation from GOM Policy Deviation from MNES Guidelines

1 Rate payable by MSEB for energy purchase

1) 5% escalation every year in the rate of purchase of energy allowed by the GOM policy has been limited by the MSEB in its policy to 5% on the base year rate of Rs. 2.25 which means that the rate for purchase of energy will be increased by 11.25 paise / unit every year.

2) MSEB has imposed a further condition that the purchase rate will have a ceiling of 90% of HT industrial base energy tariff, which is not provided in the GOM policy.

• GOM Policy allows for escalation @5% every year on the purchase rate as per the guidelines of MNES. MSEB however has limited this 5% escalation to 5% on the base year rate of Rs. 2.25 instead of on the previous year’s purchase rate.

• Ceiling limit imposed by the MSEB to limit the purchase rate to 90% of HT base energy tariff is also not as per MNES guidelines.

2 Transmission loss

The GOM policy provides that T&D loss for the first 3 years shall be borne by the MSEB and thereafter T&D loss will be leviable @1%. MSEB policy however provides for levy of T&D loss on the basis of distance involved in wheeling at the following rate.

0 to 50 km 2% 51 to 200 km 4% Over 200 km 6%

This levy is not provided in the MNES guidelines.

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3 Wheeling GOM policy provides for levy

of 2% as wheeling charges. MSEB policy however provides for levy of wheeling charges on the basis of distance involved in wheeling at the following rate.

0 to 50 km 2% 51 to 200 km 4% Over 200 km 6%

MNES guidelines provide for levy of wheeling charge at a standard rate of 2% irrespective of the distance involved. MSEB however has linked this levy to distance.

4 Third Party Sale

GOM policy permits the Developer to sell the exportable power to any two (industrial or commercial) consumers/MW, MSEB policy however stipulates following further conditions, which are not provided in the GOM Policy. 1) NOC will be issued for

self-use and / or third party sale.

2) Developer selling a part or whole of the generated energy to a third party will be treated as a Merchant Generator. MSEB will no longer buy any energy from Merchant Generators.

3) MSEB will not buy the energy fed into grid but not availed by the third party purchaser.

4) Energy banked with the Board but not availed by the third party purchaser within the financial year will also not be purchased by the Board.

5) If the consumption is metered on TOD basis, credit for such sale/self-use will be computed for adjustment at the lowest slab first and so on.

The conditions imposed by the MSEB on third party sale are not provided in the MNES guidelines.

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5 Evacuation arrangement

GOM policy provides that MSEB initially will bear the cost of facilities to be created in the EHV/HV system for evacuation of power and MEDA shall recover 50% of this expenditure from the Developers and pay it to the MSEB. MSEB policy however provides that 50% of the cost of facilities to be created in the EHV/HV system should be paid by the Developer directly to MSEB. As regards cost of HV line to be laid and equipments to be installed to connect the project to the grid sub-station the cost will have to be borne by the developer according to the GOM and MSEB policies.

MNES guidelines provide that cost of facilities to be developed in EHV system is to be borne by the Board fully. MSEB policy however provides that 50% of this cost shall be paid by the producer to the Board.

6 Sale of power • MNES guidelines provide that generated energy will be purchased by the Board without any restriction on time or quantity. MSEB policy however provides that the Board will not buy any energy from the producer who sells a part of whole energy generated to a third party when the energy fed to the grid is not availed by the purchaser.

• Supplementary guidelines of MNES provide that escalation in purchase rate will be allowed @5% every year. MSEB policy however provides that escalation @5% of base year rate of Rs. 2.25/unit will be allowed every year for the first 10 years, the rate will remain constant for next 3 years and escalation @5% on base year rate will be allowed every year for the next 7 years.

• The MSEB Policy provides that the purchase rate will be subject to a ceiling limit of 90% of HT base energy tariff.

• The MNES guidelines suggests for security of payment for the electricity sold. The MSEB policy does not provides for this requirement.

• MNES guidelines provide that all transaction involving wheeling, banking or sale of power will be settled on monthly basis. The MSEB policy however provides that payment for electricity purchased by the Board will be made once in every quarter within 45 days from the date of receipt of bill.

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Before the

MAHARASHTRA ELECTRICITY REGULATORY COMMISSON

13th Floor, Centre No. 1, World Trade Center,, Cuffe Parade, Mumbai – 400 005. Phone 022 216 3964 / 216 3965, Fax 022 2163976

Case Nos. 3,4 & 5 of 2002

In the matter of applications filed by (i) Shri Pratap G. Hogade

(ii) Renewable Energy Developers Association of Maharashtra (REDAM), and, (iii) Indian Wind Energy Association (IWEA)

for procurement of wind energy & wheeling for third party sale by the Maharashtra State Electricity Board (MSEB)

Shri P. Subrahmanyam, Chairman

Shri Jayant Deo, Member Shri (Dr) Pramod Deo, Member

Dated – June 03, 2002

Interim Order

In the background of the admissibility hearing held on 24th May 2002 at 11.00 hrs in the matter of applications filed before the Commission by (i) Shri Pratap G Hogade, (ii) Renewable Energy Developers Association of Maharashtra (REDAM), and (iii) Indian Wind Energy Association, (IWEA) for (a) maintaining statusquo as regards to providing “energy credits to wind energy developers for supply of energy to the MSEB grid and/or wheeling for captive consumption / third party sale, (b) fixing up the rate for third party sale of such energy and (c) to look in to the process of prevailing Government directives on the procurement of such energy and thereby rationalizing the same in the State of Maharashtra.

I. The Respondent, Maharashtra State Electricity Board (MSEB) has submitted its parawise comments on the above applications and also submitted its application under affidavit on 16th May 2002, in pursuance of the directives of the Commission issued vide its letter dated 4th May 2001 and 2nd April 2002, for approval of Energy Purchase Agreement (EPA) for Wind / Solar power (i) for sale to the MSEB and/or for self use, (ii) for self use and/or to third party, under Section 22(1)(c) of the Electricity Regulatory Commissions (ERC) Act, 1998.

II. Since the matter of approval of the Respondent’s application have to fulfill the process

enumerated in the MERC (Conduct of Business) Regulations, 1999 and will take sometime for completion, the Respondent (MSEB) has submitted a proposal for providing interim credit which is accepted by the wind farm developers.

III. During the intervening period (till the completion of approving the MSEB’s application

on Energy Purchase Agreement (EPA) / Energy Wheeling Agreement (EWA) as mentioned in point No.I above, the Respondent agreed to give credit for:

a. 85% of energy, meant for captive consumption or third party sale only, received

for wheeling in all such cases where credit is yet to be given to the respective wind farm developers, and

b. 70% credit shall be released against valid NOCs issued to such wind farm developers meant for sale to the MSEB only in absence of any third party identification.

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IV. Therefore, the Commission directs as follows:

1. The Respondent Board, during the intervening period, shall maintain the status existing as on 27th December 1999 (i.e. the date of notification of MERC (Conduct of Business) Regulations, 1999). This should be read along with the clauses III(a) and (b) as narrated above.

2. PPAs entered into, subsequent to 27th December 1999, though having doubtful legal validity, will continue to operate during the intervening period without prejudice to the final order of the Commission in this regard. They will also get credits as agreed by the MSEB and narrated in the clauses III (a) and III (b). However, the MSEB should strictly refrain from entering into any PPA as such without the prior approval of the Commission as contemplated in the ERC Act, 1998.

3. The MSEB shall, in furtherance to the MSEB’s application under affidavit dated 16.5.2002, take appropriate action to submit detailed calculations and data/information under affidavit on or before 30th June, 2002, on the following issues:

a. Detailed break-up of all NOCs issued for different purposes (e.g. self-use, sale to MSEB etc., along with data of NOC.

b. Impact of these NOCs on the MSEB’s revenue in the next five years, assuming the tariff mentioned in the NOC, at the prevailing HT tariff, and

c. To what extent the MSEB would buy energy / power from non-conventional energy projects c considering least cost power purchase plan, impact on MSEB’s finances, etc.

4. The Government of Maharashtra shall submit under affidavit on or before 30th June

2002, its policy framework for inviting comments of the Commission after due public process.

5. The Applicants (i) REDAM and (ii) IWEA, shall approach the Commission on or before

30th June 2002 to seek approval of the Commission for the third party sale agreement before entering into the EWA [Model PPA submitted by the MSEB as directed earlier vide its letter No.0302 dated April 02, 2002] with the Respondent.

Sd/

Sd/

Sd/

(Dr Pramod Deo) (Jayant Deo) (P. Subrahmanyam) Member Member Chairman, MERC

Sd/-

(Sanjay Kumar) Secretary, MERC

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Record of Technical Validation Session held on August 14, 2002 at 11.30 hrs in the matter of MSEB’s proposal for approval of model Energy Purchase Agreement with Wind

/ Solar Power Plant for (i) Sale to MSEB and or wheeling for self use and (ii) Wheeling for self-use and or sale to third party.

File No.17 (3) of 2002 As scheduled the Technical Validation Session in the matter of MSEB’s proposal for approval of model Energy Purchase /Wheeling Agreement (EPA /EWA) for Wind / Solar Power Plant for (i) Sale to MSEB and or wheeling for self use and (ii) Wheeling for self use and or sale to third party was held on 14th August 2002 at 11.30 hrs. Representatives of (i) wind developers association like REDAM and IWEA, (ii) consumer representatives u/s 26, (iii) Director General, MEDA, (iv) Adviser & Head Power Group, MNES, (v) Objectors (Shri Pratap Hogade & Shri P. Kaul) were present. Since no senior officer of the MSEB, the Applicant, was present at the scheduled time of the Session, the proceedings were adjourned till 12.00 hrs. Chairman directed the Applicant’s (MSEB) representative, who appeared late for submission, to submit an unconditional apology for the delay on his part, making all Respondents/ Objectors/other invited participants to wait. Shri Varade, Dy Chief Engineer, Corporate Planning, MSEB tendered an unconditional apology. MSEB presentation: 2. The MSEB official submitted that the MSEB vide its letter No. Co-Ord. Cell/MERC/ Wind/ 8147 dated 6th March 2002 had approached the Commission for approval of Energy Wheeling Agreement (EWA) to be executed with developers. In response to the MSEB letter dated 6th March 2002, the Commission, vide its letter No. MERC/EWA/2002/302 dated 2nd April 2002 directed the MSEB to give details in the form of affidavit and in such Case the MSEB will be the Petitioner / Applicant and developers as Respondent/non-applicant. However, in case of third party sale Developer will be Applicant/Petitioner and MSEB/Transmission Utility will be Respondent /Non-applicant. Accordingly, the MSEB submitted its proposal, dated 16th May 2002, on affidavit, for approval of two Model Draft of (i) Energy Purchase Agreement and (ii) Energy Wheeling Agreement for: Sale of power to the MSEB and or wheeling for self use with permission of banking of power and utilisation upto 31st March every year; and Sale to third party where wheeling will be through infrastructure of the MSEB. 3. MSEB official submitted that further to the MERC directives vide its interim Order dated June 3, 2002, in the matter of application by the respondents and Shri Hogade, the Board has submitted its affidavit dated 5th July 2002 giving details such as (i) Impact on Board’s revenue due to self-use

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and third party sale of wind power, (ii) impact on Board’s revenue due to sale of wind power to the Board, considering MNES rate of Rs.2.25/kwh for the base year of 1994-95 with 5% simple escalation basis, and (iii) impact on Board’s revenue due to sale of wind power to Board considering a ceiling of 90% of HT base energy tariff i.e. Rs.2.80 x 90% = Rs.2.52 per kwh. 4. He submitted that objections those are raised by respondents (REDAM & IWEA) are mostly on the basis of the Government policy of 1998. Further, he mentioned that wind farm developers were insisting only on GoM policy, whereas the Board has passed a Resolution in this matter accepting the rate of Rs.2.25 per kwh with 5% simple escalation subject to a ceiling of 90% HT base tariff. As such this is bearable burden for the MSEB. The Government policy on transmission on the basis of distance, 50% evacuation cost to be borne by the MSEB and 2% wheeling charges have also been accepted. The Board has also submitted its financial loss on account of such conditions. He maintained that the MSEB would like to support the renewable energy promotional activity, but this would definitely have a bearing on the tariff. 5. The Commission observed that the Board has not complied with the directives given during the last hearing held on 24th May 2002 with regard to submission of detailed calculation and data in respect of impact of such NOCs on its revenue in the next five years assuming the rate mentioned in Board’s Resolution, neither it has spelt out clearly upto what extent the MSEB would buy energy from non-conventional sources considering least cost power purchase plan, impact on MSEB’s finances, etc. 6. The Commission observed that the MSEB has not complied with the directives to submit financial impact and further drew attention to the Board’s affidavit stating, “As such no impact has been worked. It is to submit that the wind energy being an in-firm power will not appear in the Merit Order Despatch. Further, it is a promotional activity and MSEB has to permit sale to MSEB, self-use and sale to 3rd party. As such no financial impact bas been worked out.” The MSEB representative submitted that it is a promotional activity and is going to have an impact on the tariff ultimately. Renewable Energy Developers Association of Maharashtra (REDAM) 7. Shri Chetan Mehta, President, REDAM submitted that it is an association of wind farm developers / owners in Maharashtra. With regard to the compliance of the directives of the Honourable Commission, he submitted that they are yet to get some relevant & valid field data from it’s hundred odd members, which will be compiled and summary of the analysis will be submitted to the Commission shortly.

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8. The Commission observed that though the Commission is foreseeing the need of sustainable forms of energy, the wind developers are not forthcoming in disclosing relevant information. Therefore, today’s session for technical validation becomes almost unproductive and ineffective. The Commission directed them to submit data within ten days, to which both Section 26 representatives and objector will get ten days to submit their comments for validating the proposal. 9. Dr Harne, of IL & FS, representing REDAM, submitted that the viability of the wind energy projects depend upon three factors: (i) wind potential, (ii) GoM power purchase policy and (iii) fiscal incentives offered. On compliance of Commission’s order he submitted the details of calculation and basis of assumption. 10. He submitted that during the earlier hearings the REDAM has made a detailed presentation, which is still valid. However, additionally he would like to emphasize on the potential of wind energy to conserve water level for hydel generation during peak season. The generation of wind energy during windy season (May to September) is in the range of 75% to 80% of annual generation. The installed capacity of wind farm projects in Maharashtra by March 31, 2002 is around 396 MW and expected generation during windy season could be around 470 Mus @ 18% capacity utilisation. Wind Energy cannot be stored which has to be exploited during the windy season itself. Hence against these many units the water level at Koyna could be reserved, which could be equivalent to 18% of additional westward diversion (67.5 TMC) i.e. this can be used for peak load generation during peak season (October-April). 11. The Commission observed that though Dr Harne has tried to project energy balance equation, power balance is also required, for which State’s wind generation profile on hourly basis is required for validation of his argument. 12. MNES guidelines for power purchase do not take into account the variations of wind potential of different States. Therefore, it was necessary for the GoM to offer additional incentives in the form of Sales Tax benefits to encourage investments in the Sector. 13. Shri Abhay of REDAM, while explaining the model on `Cost of Generation’, submitted that assuming capacity utilisation of 18%, and capital cost of Rs.5 crore per MW, three different models have been worked out, which is a representative figure of the wind energy sector in Maharashtra [Annexure I, II and III of the additional submission during the proceedings held on 14.8.2002]. While Annexure-II deals with Cost of Generation for IPP format [who do not get any incentives], the Annexure-III is a cost work out for internal project

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development [who enjoys fiscal incentives like ST, depreciation, etc.]. He further clarified that the assumption of project cost of Rs.5 crore is based on the tender floated by MEDA for its wind farm project. 14. Commission enquired whether was there any quotation from the international agency since most of the machinery parts are imported and what is the project cost/MW? REDAM representative and wind mill manufacturers submitted that most of the items are indigenously manufactured in India and only electronic parts are imported at present. The design of the machinery is standardized, with a slight variation according to site of the project. Regarding project cost/MW, it is one million US dollar ($) in Europe as reflected in reputed overseas journals like Elsevier. On the question of PLF, he submitted that it would be site specific and varies from location to location. Shri Pillai (MEDA) interjected at this point mentioning that due to high degree of diversity in machines, it will be ideal to consider project cost in per kWh base. 15. REDAM representative submitted that most of the wind farm projects in Maharashtra are located in seismic zones. Besides, the technology obsolescence rate is very high. This involves higher insurance coverage, high O&M and low PLF. He submitted that risks taken by developer is manifold in the form of:

a) No pass through in tariff b) Change of tax structure and law during PPA tenure of 20years and its

adverse impact c) Inherent risk in capacity utilisation, and d) Major machinery failure.

Indian Wind Energy Association (IWEA) 16. M/s ICRA Advisory Services, appearing on behalf of IWEA made a detailed presentation (hard copy circulated). He submitted that IWEA has filed the petition on 28th June 2002 requesting approval of the Commission to (i) Model Third Party Sale Agreement (Attachment-1) or alternatively proposed Third Party Sale Agreement (Attachment – 2). 17. Regarding the compliance of the Record of Proceedings held on 24th May 2002 and Order dated 3rd June 2002; he submitted that the required information / data would be submitted to the Commission within ten days.

18. He submitted with the existing system, when the energy generated and fed to the grid system and till the payment received by the generator, generally the developer has to wait for approximately about 78 to 140 days to realize the energy credit. As currently no standard procedure being followed by the MSEB (O&M) for application of transmission losses and wheeling charges, while determining the energy credit entitlement, the developer is not able to know

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about exact quantum of energy credit that it will receive. There are other constraints like (i) off-take risk for developer is high because of dependence on one/two consumers, (ii) the process of change of Third Party consumer is laborious and time consuming, and (iii) banked energy is permitted to carry forward only for 12 months and accounts are settled on fiscal year basis. He suggested the following terms and conditions of Agreement:

• In case of default in timely payments, the Seller to have option to

terminate the agreement without prejudice to its other rights. • The Agreement to be valid for period of three years and may be renewed

on mutually acceptable terms & conditions. • The Buyer may terminate the Agreement by giving three months prior

notice. However, buyer cannot terminate for at least one year from date of execution.

• Obligation under the Agreement shall be subject to Force Majeure conditions.

• Any dispute or difference or claim that cannot be settled by mutual agreement shall be referred to MERC for arbitration and the award of MERC to be final and binding.

19. He further submitted that there is an urgent need for innovative mechanism, which could eliminate avoidable delay and administrative work & resources on the part of the MSEB for maintaining energy accounts. He proposed Energy Credit Arrangement (“Green Credit Note”). Detailed presentation also covered distinctive features & advantages of the Green Credit Note that:

• The proposed GCN mechanism would address the concerns of the industry in realising energy credits.

• GCN system would also facilitate MSEB to conserve its administrative resources

• GCN system is the first step towards the free access of electricity to consumers and lead to competition amongst generators

• GCN system would provide much needed impetus to attract investment in the wind energy sector and facilitate the capacity additions in the sector.

20. He prayed that the Hon. Commission may approve proposed Greed Credit Note mechanism for all utilities in the State or alternatively, may approve Model Third party Sale Agreement based on Existing Credit Report Mechanism. He mentioned that IWEA has more than 200 developers and their financial structures are varied, thereby making standard modeling difficult.

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Consumer Representative u/s 26 Vidarbha Industries Association (VIA) 21. Shri Goenka representing on behalf of VIA submitted that nothing has been stated or clarified either by MSEB or wind farm developers about

• Whether these wind farms are pumping harmonics into the grid-system:

• On Reactive Power drawal, what is the basis of calculation for charging 25 paise per unit? In case of excess reactive power supply the EPA / EWA is silent.

• On third party sale and self consumption, MSEB’s proposal is contradictory

• Wheeling charges: is the wheeling charges to be levied when it is not working, and what is the basis of arriving at proposed wheeling charges.

• PF Incentives: whether applicable to third party. • ToD Tariff – whether it would be paid by the developer or retained by

the MSEB. What will be the tariff that will be applicable for TOD and peak hours and night hours?

• For Third Party sale, what will be rate applicable if the banking is negative?

• Payment of Electricity Duty, if it is made applicable then who will be responsible, whether the third party or the developer.

22. Regarding, Green Credit Note, he submitted that this is a good idea. However, it should address the issues of (a) fixation of wheeling charges, (b) the rate applicable to different consumers and clear definition of consumers for GCN purposes, and (c) responsibility of payment of electricity duty, if made applicable in future, and by whom, (d) ToD applicability, and (e) Reactive Power treatment, etc. Prayas, Pune 23. Shri Girish Sant of Prayas submitted that while simplicity of the process is essential to bring clarity in the policy directives, the varied stand of the GoM including that of the MSEB has made it complex to comprehend. He felt that there should be a possibility to make it mandatory for all the utilities to purchase a percentage of its power requirement from renewable source and the burden should not be the MSEB’s alone. 24. He questioned the failure of the developers in furnishing the data as required by the Commission and requested the Commission to separate out the past projects from that of future projects to account for the diversity in capital

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structure, technology and financing means, since the aggregate capacity already added in the State is more than sufficient as seeding capacity. On the concept of Green Credit Note, he opined that the administrative hassles though have been brought out; solution to it may be possible in a much simplistic manner through the present administration. He felt that the solution proposed should not create another burden or structure within the utility that will encroach on retail tariff issues. 25. He submitted that MEDA is the nodal agency in Maharashtra and they may be having cost details contained in the proposals submitted by the developers. Without the cost details, and other financial data, it will not be possible to assess, comment and validate the same. There should be a least cost analysis for renewable energy. He further submitted that the tariff should be determined for transmission and wheeling, as well as the TOD slab-wise credit to be extended by the MSEB. It should not adversely affect the consumer, the MSEB and Developer. He requested the Commission to keep these points in mind while initiating further discussion in the matter. Mumbai Grahak Panchayat 26. The developers have not taken into account the Sales Tax benefits while projecting the model on cost of generation into consideration, which is necessary. Shri Pratap Hogade, Objector. 27. Shri Pratap Hogade, objector, submitted that neither the MSEB nor the developers have complied with the directives of the Honourable Commission in its order dated 30th June 2002 and during the hearing held on 24th May 2002. Therefore, it is very difficult to offer any comments on the issues in a substantive manner. He drew Commission’s attention in the matter of approval of PPA for Bagasse co-generation project, wherein the Commission obtained the technical analysis done through expert bodies, which were again vetted through experts and made available for public hearing before passing its orders. He further submitted that the same principle should be adopted in the matter of approval of model EPW / EWA for Wind / Solar energy. He, therefore, requested the Commission to direct the MSEB and the developers to provide the required cost / financial data to him and others present. He further requested that he might be permitted at least ten days to submit his comments. 28. He further objected to the casual approach adopted by the developers citing that they ignored to submit all the documents on affidavit as per the procedures laid down under MERC (Conduct of Business) Regulations. The

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Government of Maharashtra has also not provided any documents to him as per the directives of the Commission. Shri Pradhyumna Kaul, Objector. 29. Shri Kaul submitted that first of all he would like to clarify to the gathering that both himself and Shri Hogade are not against the wind energy / other renewable energy sources. He submitted that his first objection is that the developers have not submitted their documents (that also presented during the hearing) on affidavit, which is against the procedures laid down by the MERC (Conduct of Business) Regulations. Because of this due process of law itself has been suffered. He further submitted that the consultant, who prepares the documents, should also be asked to sign the documents so that the past experience, like what happened in case of Dabhol Power Project, will not be repeated again. Therefore, the technical validation session remain incomplete without valid cost/financial data analysis.

30. He observed, while giving the clearance under Section 44, the developers must have submitted their DPR to the MSEB, and it is beyond his comprehension, why the same is not submitted before the Honourable Commission. The Board should also submit its working on the impact of the capital cost of all incentives the GoM gives, pay back period, return on equity. He clarified while referring to Annexure 3 (Model of IL&FS for REDAM) that, for the first year, they have a negative cost of generation, which means that the payback period is less than one year. If the payback period of a particular project is one year, the Commission should lay down certain principles as to how to deal with the projects wherein the capital cost in the first year is zero, its impact on return on equity whereas there will be no equity at all and hence no burden of interest. The depreciation has been claimed in the first year itself. The cash flow statement should reflect all these and other related data of the project. He submitted that without such modeling and presentation of data, the sanctity of Technical Validation itself would be denigrated. 31. Shri Kaul further submitted that, as far as he is aware, Income Tax has been waived for all IPPs and other infrastructure projects; hence this point needs a clarification. With regard to rate of obsolesce, if it is so rapid, then whether such projects should at all be taken up? Whether certain incentives could be given to them for introduction of new and efficient technology for replacement, which would benefit not only the grid but also the developers, Board and its consumers. The State, in turn, will also benefit.

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Ministry of Non-conventional Energy Sources (MNES) 32. Shri Ajit Gupta, Advisor & Head Power Group, MNES submitted that MNES steps in at three points:

(1) It conducts national wind resource study for identification of sites and issues a state-wise list of windy sites. At present there are 219 sites in the country, which are suitable for wind power projects. Earlier, the gross estimate for wind power potential was 20000 MW that has been revised to 45000 MW. However, taking in account different grid capacity, current potential is 13,000 MW. Taking the grid and wind potential, the Maharashtra has a potential of 2,500 MW. The 1998 order of the GoM probably is based on earlier 20,000 MW capacities.

(2) The MNES has issued certain technical guidelines (on sizing /

micrositing / DPR preparation / quality norms / O & M / Performance monitoring, etc.) for implementation. These are fairly comprehensive and to be followed by developers, State Governments, State Electricity Boards, Financial Institutions, etc., before deciding to set up a wind power project. These guidelines are generally updated and the Ministry stands by these guidelines for the viable implementation of the proper wind power projects.

(3) Regarding the policy guidelines, the Ministry had issued a set of policy

guidelines on tariff, and according to which the present rate is Rs.3.32 per kwh. If the projects are set up as per above guidelines, the projects will be viable and the Ministry would like to stand by its recommendations even for the projects in Maharashtra. The Ministry firmly believes that the policy guidelines would hold good for Maharashtra State also. The Ministry did not recommend any sales tax relief or sales tax incentives, which may be purely a decision of the State Government. The Ministry does not recommend setting up a wind power project, which is unviable.

33. Regarding the Project Report, he suggested that if the Commission wishes it could approach the IREDA, the corporate financing arm of the MNES, who have assisted several wind projects in Maharashtra. If the Commission desires, the Ministry even could ask the IREDA to give summary of assumptions made in the DPRs, capital costs, IRRs, ROE, etc. 34. The Commission enquired with Shri Gupta as to (i) what extent the grid in question could absorb such in-firm power, and (ii) are there any guidelines, as to how much economic capacity could be added, the system for the country as a whole or any particular State. The Commission requested the Ministry to provide any calculations or any guidelines in this regard, for perusal.

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35. Shri Gupta submitted that at present the renewable energy couldn’t displace the conventional energy, which is only complimentary to the conventional source. 20% capital investment is required for transmission of such power. In future, it is going to be only renewable energy and will be a combination/integration of various renewables. He emphasized that with the upgradation of the technologies the renewable energy could provide firm power through hybrid system adoption, though it is infirm power severally today. Considering the growing awareness and importance of the sector, the multinational companies like ABB, Shell, BP, and Siemens are making huge capital investments in industrialized countries in this sector. He further requested that the Commission may ignore this temporary phase and look at the larger picture, where renewables will play a major role. Government of Maharashtra 36. Smt Lakshmi Gopalan, Joint Secretary (Energy) submitted that the GoM has submitted its policy details to the Commission vide affidavit date 19th June 2002. She further assured the Commission that all the required details would be submitted to the objectors, developers within ten days. 37. The Commission enquired as to what steps has been initiated for converting such energy into a firm source and the steps contemplated by MEDA in Maharashtra? Maharashtra Energy Development Agency (MEDA) 38. Shri G.M. Pillai, Director General of MEDA submitted that MEDA has established its own wind farms, with a capital cost of around Rs.5 crore per MW, which has been determined through competitive bidding process. MEDA has also submitted copies of the DPRs to the Commission, and it will share all relevant information / data with anybody interested. 39. He further submitted that from April-September Maharashtra has abundant Wind Energy, and while from October to April there is non-fossil fuel (bagasse) based cogeneration power. With proper integration and planning, the renewable energy can become a viable and firm energy option. 40. The Commission concluded the Session with the following observations:

(i) The Applicant (MSEB) shall submit within ten days, all the relevant data / DPR / information on affidavit to the Commission with a copy each to (i) respondent developers, (ii) consumer representatives u/s 26 of the ERC Act, 1998, (iii) objectors.

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(ii) The Respondents (developers i.e. REDAM and IWEA) shall submit

within ten days, all the relevant data / DPR / information on affidavit including its consultant’s reports duly signed, to the Commission with a copy each to (i) MSEB (ii) consumer representatives u/s 26 of the ERC Act, 1998, (iii) objectors.

(iii) The Government of Maharashtra shall forward within ten days the copy of affidavit submitted to the Commission to (i) MSEB (ii) consumer representatives u/s 26 of the ERC Act, 1998, (iii) objectors.

(iv) The objectors and consumer representatives u/s 26 of the ERC Act, 1998 shall submit, within ten days from the date of receipt, their rejoinder, if any, to the Commission with a copy to the Applicant and the Respondents, for their perusal.

41. On receipt of the above compliance, the Commission shall take further steps leading to public hearing.

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Record of reconvened Technical Validation Session held on 6th January 2003 in the matter of

Approval of EPA/EWA for (i) Sale to MSEB and/or wheeling for self-use and (ii) Wheeling for self -use and/or sale to third party.

As scheduled, subsequent to the earlier Session in the matter [14th August 2002] further Technical Validation Session was held on 6th January 2003 at 11.00 hours on the MSEB’s proposal for approval of model Energy Purchase /Wheeling Agreement (EPA /EWA) for Wind / Solar Power Plant for (i) Sale to MSEB and or wheeling for self use and (ii) Wheeling for self use and or sale to third party. Representatives of (i) wind developers association like REDAM and IWEA, (ii) consumer representatives u/s 26, (iii) Director General, MEDA, (iv) Advisor & Head - Power Group, MNES, (v) Objectors (Shri Pratap Hogade & Shri P. Kaul) were present. The Chairman directed the Developers to make their presentation followed by the consumer representatives / objectors / GoM. On completion the Board will be directed to answer specific queries. Dr Kane of Indian Wind Energy Association (InWEA) Dr Kane, representing Indian Wind Energy Association (InWEA) submitted that the GoI / GoM have earlier framed a policy to attract private sector in the field of non-conventional & renewable sources of energy projects. Accordingly many industrialists have invested in wind power projects in the State of Maharashtra based on its attractive policy of 1991. There are two major groups of projects that the Commission needs to keep in mind while dealing in this matter:

(i) The projects, which have been set up, are based on the policies prevalent prior to the period of enactment of ERC Act, 1998; and consequent formation of the Commission itself

(ii) The projects, which have come up after the ERC Act, 1998 and expected to come up in future depending on the future direction in policy matters

He further submitted that it would be unfair at this stage to reopen the

earlier cases and fix up the energy purchase rate with retrospective effect, since most of such projects have been set up based on the policies prevailing at that period. Any private sector investor shall take into account the pros and cons of the prevalent investment policies before arriving a conclusive decision to invest in a particular State.

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Government of Maharashtra:

On a query from the Commission, the GoM representative submitted that the Government has not declared any new policy in the matter, subsequent to the lapse of previous policy in March ’02. Though series of discussions were held at various concerned department levels on the draft policy, it is yet to be finalized and under process. Ministry of Non-conventional Energy Sources (MNES), Government of India.

Shri Ajit Gupta, Advisor (Power Group), MNES mentioned that, based on prevailing situation, the GoI had issued a common set of guidelines in 1993-94 for all NRSE systems. Further in the context of new Draft Electricity Bill, cleared by the Parliamentary Affairs Committee and likely to be placed before the Parliament in its coming Budget Session, new tariff guidelines are being worked out for the country. InWEA Presentation

Shri Ajit Pandit of ICRA representing InWEA, explained briefly the

background of the case. In pursuance of the MSEB’s petition, the Commission held a technical validation session on 14th August 2002. During this Technical Validation Session the Commission had directed the developers to file further financial details that have been duly complied through supplementary petition. He made further detailed slide-presentation [hard copy circulated] covering various aspects such as:

i) History of wind farm development in India, with specific reference to Maharashtra.

ii) Policy guidelines issued by the Government of India and Government of Maharashtra, prior to the formation of the MERC and thereafter [fiscal incentives, tariff fixation, sale to third party, banking, wheeling charges, payment security mechanism, etc.]

iii) The Regulatory issues involved iv) What are the rationale of fiscal incentives for 100% depreciation, sales

tax exemption and/or deferment and its impact on the wind farm projects,

v) Capital cost of the project on the basis of type and size of Plant & Machinery, location, and other specific configurations.

vi) PLF factor, site specifications for wind speed, vii) Different type of project combinations like project that enjoys 100%

sales tax exemption, depreciation, (ii) projects set up for 100% sale to MSEB, (iii) sale to MSEB and/or third party, etc.

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He further submitted that out of the 45,000 MW potential in the country,

3,300 MW potential are available in Maharashtra against which 395 MW have been commissioned during last 4-5 years. The GoM had identified certain sites for installation of wind power stations and also came out with a policy in March 1998, specifying the rate @ Rs.2.25 with 5% escalation, permission for banking, etc. The GoI has given income tax benefit under section 80 I A and accelerated depreciation. The GoM had also granted Sales Tax incentives (exemption or deferment). For providing other infrastructure facilities, the developer has been asked to share 50% of the cost. Based on all the above parameters, the Association had calculated a sample calculation on cost of generation, which have been submitted to the Commission.

In reply to a query as to what technology improvement, calling for premium on capital cost, has taken place in the interim period, he submitted that PLF is not only the function of the technology, but also site specific and is taken as 16.8% on average based on sample based actual observation for the year 2001-02. While making the calculations, the factors like emission norms of three different fuel cycles, comparison of wind power with that of thermal generation, have been kept in mind. He further submitted that though the MSEB is purchasing the power from the wind power generators, the developers at present are not getting the payment on time. He therefore, suggested and recommended a mechanism of issuing Green Card by the Board, which can be tradable by the developers. He therefore requested the Commission to segregate the projects and remove the regulatory uncertainty currently prevailing to pave the way for long-term policy framework and financial guarantee.

Shri S.V. Deo of InWEA further explained the technical parameters like mechanism of distribution of T & D loss, matters related to the wind energy generation, quantity and quality of energy, ToD based generation allocation, synchronization with the grid network system. He requested the Commission to appoint an expert team to verify the same. Renewable Energy Developers Association of Maharashtra (REDAM)

Dr Ashok Harne of IL&FS speaking on behalf of REDAM submitted as follows: Out of the total purchase of power by the MSEB the % of wind energy delivered of energy input of MSEB constitutes about 0.22% in the year 2000-01 and the impact of its cost on the pooled average cost would be minimal. He also made a slide presentation [copy circulated] and drew Commission’s attention to slide Nos.10, 11, 12, 13, and 14 which give details of impact of Wind energy on the MSEB system. He further submitted that as wind energy’s impact on overall energy and revenues is insignificant, any downward deviations from the existing

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GoM policy is unlikely to achieve any significant positive impact on the MSEB but would hamper the capital investment flow in this sector.

He further submitted that the increase in average cost of supply is likely to be 0.30 paise per unit, based on 2001-02 datum, only. On the T&D loss matters, he referred the MERC order dated 16th August 2002 on Bagasse based Co-generation Projects wherein the TERI, New Delhi had opined that all such power plants act like a distributed generation centres and in fact reduce the loss in the local area. He further elaborated that if one links up wheeling and transmission losses to a percentage of units, where the unit rate is going to increase, the T&D losses are going to increase while the cost of investment is going to be the same. He then drew attention to a slide that shows the procedure adopted by the Andhra Pradesh and submitted that the developers have not experienced any problem there. Metering is done eight days in advance so that the SEB could compile all information before metering the HT consumers. This enables the SEB to issue / set off the claim in a particular month itself.

The Commission queried whether the developers opt for exemption or deferment of Sales Tax benefits and what is the basis considered for arriving at Cost of Generation. Dr Harne submitted that exemption would be the preferred option but workout is shown on the basis of deferment option. He summarized his presentation stating that:

• The MSEB proposal may be considered only after taking into consideration the impact on all the stakeholders.

• Existing investment in the Sector is made on the basis of GoM policy of 1998 and any adverse alteration at this juncture would be a great injustice to the projects, which have committed investment based on this policy.

• Wheeling and Banking facilities in Licensee’s area should be as per GoM policy.

Reply by the MSEB:

Shri Gurucharan Singh, Technical Director (Corporate Planning), MSEB submitted that, though wind based generation is an infirm power, the Board would like to extend all possible support for the promotion of the wind energy in the State. However, the wind developers should also pass on the benefits that they get it either from GoM or GoI. This will help the MSEB to reduce the prevailing high prices for promoting such wind generators. Considering the overall responsibility entrusted on the MSEB to supply the electricity network through out the State, the Board has fixed certain minimum wheeling charges on distance basis, which is justifiable. He further clarified to a query from the

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Commission that whether the energy fed into the grid is consumed in the local area or otherwise wheeled to some other areas, since the Board has to maintain the dedicated EHV system for the wind generators, the transmission loss is bound to occur. He further added that whether the impact in the MSEB system is negligible or otherwise, the loss is a commercial loss to the MSEB. He submitted that compared to the MSEB’s system, the wind power contribution at best can be considered as infirm support only. And the capacity to pay must be kept in mind while deciding the tariff.

To a query of the Commission regarding the improvement in the grid network system, the former TM (Shri S.V. Deo), submitted that it was unfortunate that in the past this vital aspect has been overlooked by the Board and improvement in the transmission and distribution system has to go a long way. According to him, the technical losses would be in the range of 20%. To a query of the Commission, the TD(CP) submitted that the MSEB has to install a special EHV sub-station for the wind farm developers at a considerable capital cost. The Board is sharing the actual cost, which can be verified by the Commission, with the developers. Shri Pradyumna Kaul, Objector:

Shri P Kaul submitted that in the last Technical Validation Session, he had raised certain fundamental objection that every generator will have a separate profile, different form of sales tax benefits availed and, therefore, each developer has to make a separate application before the Commission, though the Commission may prefer to pronounce a single order. He further submitted that when each generator will make his individual application, he would give 3 or 4 issues e.g. a) How does sales tax vary with them, b) How does transmission loss vary with them, c) Does he have a load centre nearby or is it 100 kms away from him; d) Does he have a MSEB sub-station wherein the capital cost is incurred or not, e) What is his transmission loss. All these are very relevant issues, which must be taken into consideration by the Commission. He further submitted that the technical validation session is fundamentally flawed in absence of such submission by the developers in compliance to recorded instruction from the Commission. Therefore it should not be taken as complete till each and every individual generator makes a submission and the Commission may avoid being unduly pursued for an early decision without sufficient disclosure on part of even the major developers (industrial houses). However the Commission may give one order, which may be accepted.

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Consumer Representative u/s 26 of ERC Act, 1998:

Shri Dixit of Prayas, Pune submitted that earlier he had written a letter on

30th November 2002 mentioning the unavailability of capital cost and other relevant data. The said issue was discussed during the last Technical Validation Session held on 14th August 2002. However, inspite of the Commission’s directives the developers have not submitted the required data / information (like capital cost per MW, incentives availed) till today. It is essential to have these data in tabular format for computation. He further questioned the wisdom of the developers for not providing such very relevant data as the same may be available with Maharashtra Energy Development Agency (MEDA) since the developers have to furnish these data to the MEDA for obtaining permissions, etc. He further submitted that the regulatory process demands that this data be analysed in a rational and transparent manner in order to understand and arrive at a tariff for these projects. He requested the Commission to call for submission of such data from MEDA under affidavit and examine it before arriving at any conclusion.

Dr Ashok Pendse of Mumbai Grahak Panchayat submitted that the developers have two types of revenue stream incentives (i) capital cost which is coming form the government and (ii) tariff which is coming from consumers. Further, there are three types of projects:

• The GoI policies allow certain incentives like (a) Income tax exemption, (b) 100% depreciation [without sales tax exemption],

• GoM sanctioned Sales tax exemption [currently withdrawn] or deferment benefits [how much weightage to be given]

• Projects set up after withdrawal of Sales Tax incentives.

He further submitted that the developers have rapidly benefited through the structured tariff and other incentives and could recover major portion of their capital cost. The GoM and the GoI have supported these projects for the promotion of such NRSE activities and therefore, no need of giving further support through the tariff exists. Ministry of Non-conventional Energy Sources (MNES)

Shri Ajit Gupta, Advisor (Power Group), MNES stated that: The final report has been submitted by the Standing Committee on Energy to the Parliament on the Electricity Bill 2001 after almost year and half of their own hearings, which they held with various stakeholders of renewable energy sector. Some positive recommendations have been made by the Standing Committee to the Parliament on the Electricity Bill concerning the renewable

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energy. He further stated that three concepts have been kept in mind while making the recommendations: (i) Each State to fix up a minimum power procurement from such NRSE projects; (ii) Preferential tariff and (iii) Trading (Bulk): • Since energy from NRSE is relatively costlier and cannot be treated in

commercial market like conventional energy, • The regulator should fix a minimum percentage of power purchase from

renewable energy sources say 5 to 10% of the total energy consumption. • Preferential tariff be determined for promotion of NRSE • Unrestricted access for 3rd party sale and reduce or lift transmission or

wheeling charges The Committee is further hopeful that Power Trading Corporation, which is already in the business of trading of power, will be able to take up the assignment with full endeavor as trading of Non-conventional energy is a small activity. There is no need to have a separate agency and PTC be entrusted with the responsibility of trading of Non conventional energy also. He further stated that [refer audio transcription] On trading, what the PTC had opined before the Committee on the basis of that, what they have said is that the Committee desired that trading should include purchase of electricity by an appropriate agency for trading in bulk towards meeting sanctity, purchase of renewable energy. What they have said is some States will be deficit; some States will be surplus. PTC has said that we will be willing to bulk trade in renewable energy across States to carry renewable power energy from surplus States to deficit States and if each State fixes a certain percentage, the SERC in that State fixes a certain percentage, then that State will be obligated through the PTC to fulfill that percentage through bulk trading in renewable energy. So all in all, the overall scenario for the development of renewables, the stage has been set and we have a feeling that there is no getting away from the point that renewables probably needs to be encouraged and the government and Parliament are fully behind it. Replying to some of the queries from the Commission Shri Gupta stated as follows: Regarding creation of any fund for concessions by GoI/GoM, Preferential tariff is what they have said and the PTC has said that in case, there is a fixed percentage that is fixed by the State, we will be able to handle the cross subsidization because the quantum that they will trade in renewables will be so negligible that they said we will be able to cross subsidize across the States in carrying out this power from one surplus State to another deficit State to meet their percentage with their SERC.

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Loss to the MSEB is very negligible, it needs to be taken into account -Rs 8 crores in a 10,000 crore revenue and that the increase in the average cost of supply only comes to 0.30 paise per unit. That is another point, which the Commission may like to consider while they fix the tariff. The benchmarking of the cost. Shri Gupta contested the statement of MSEB that it has done a lot for the Non-conventional energy in the State. The Ministry has been repeatedly telling the State Govt. and the MSEB that they need to do plenty to promote the Bagasse Co-generation in the State but now they are saying that they are doing it for wind. The situation is that they have issued NOCs for 450 MWs of capacity and not even One PPA is being honoured. The infirm power: This is an important issue and that it was discussed at length in the last meeting. The concept of integration of various renewable energy sources in the State of Maharashtra needs to be seriously worked into. From May to September, there could be a very good utilization of wind resource and the capacity utilization might go upto 50 to 60% and from October to April about 600-700 MW energy could be available from bagasse based co-generation plants. In addition, small hydropower projects can also be an added advantage. So the overall integrated system-planning needs to be done by the MSEB by suitably factoring in all the renewable energy resources and see on a year-to-year basis the contribution on firm basis that renewables can make. Transmission losses There are no transmission losses with wind except that of substation, which is of a limited number i.e. 2% to 3% at the most and in our guidelines we have said that 2% is acceptable. In fact, GoI guidelines are silent on the issue of transmission losses. The Guidelines have said 2% on wheeling, and the Board should take care of the transmission losses. He opined that some of the generating details and the incentives that have been claimed by the developers should be sent to the Commission, so that at the end of the day, the Commission is able to come out with the rational tariff which would serve across the board, different types of projects and in different situation because it will be difficult perhaps to have a separate tariff for each and every type of project, for each and every site of wind turbine. He further stated that the average CUF in Maharashtra comes to about 20%, which has been supported by IREDA. However, on account of non-availability of proper infrastructure for evacuation of power in place, a large population of wind turbines had to be shut up by rotation. So on the capacity utilization sight

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in Maharashtra also, the wind regimes are not extremely poor. During the months of May to September, fairly good capacity utilization is possible if the grid is available. Impact on tariff: The Commission sought a clarification whether the Ministry has worked out any calculation, with respect to the impact on tariff in case of Maharashtra taking into considertion the income tax benefits of 37%, some 4 to 5% benefit from MEDA., 100% benefits of sales tax exemption put together total of 142% of cash flow from incentives in a period of nine years [the cash flow arising out of these incentives, arithmetically the cash flow is about 142%]. In reply, Shri Gupta stated that the Ministry has not worked it out but going by the projects in Maharashtra that have been funded by IREDA where all the capital cost and the generation details and incentives being offered is taken into account. The kind of IRR that the projects are getting is generally in the range of 25% to 35% for the projects in Maharashtra.

The Commission critically observed that no developer has come up for the technical validation with relevant data as was directed earlier. The Commission took note of the fact that while it tried to facilitate the processing of large number of cases together under the banner of representative associations, relieving them from individual payment of fees, it is the developers who should have approached as envisaged under the Section 22(1)(c). But the developers or its representative associations have failed to keep the faith in bringing in transparency, as mandated under the ERC Act, in the whole process by refusing to divulge details.

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MAHARASHTRA ELECTRICITY REGULATORY COMMISSION 13th floor, Centre No.1, World Trade Centre, Cuffe Parade, Colaba, Mumbai 400 005.

Tel. 022 22163964 / 65 / 69 Fax No.022 2216 3976 E-mail : [email protected]

Website: www.mercindia.com

PUBLIC NOTICE

Petition No. MERC/17(3) 2002 The Maharashtra State Electricity Board (MSEB) have approached the Commission for determination of a reasonable tariff, and terms and conditions for purchase of power from wind power projects. Some agencies involved in the promotion of wind power projects in the State of Maharashtra as well as others have also approached the Commission to rationally determine the tariff, terms and conditions of power purchase as envisaged under Section 22(1)(c) of the Electricity Regulatory Commissions (ERC) Act, 1998. The contentions and views submitted by the MSEB, Developers’ Associations, other stakeholders and Consumer Representatives recognized under Section 26 of the ERC Act, 1998, were considered in the Technical Validation Sessions held on 14th August 2002 and 6th January 2003. The Summary of the proposal under consideration can be obtained free of cost from the office of the Commission or may be downloaded from the Commission’s website www.mercindia.com . The detailed proposal is available for inspection and also for sale on cash payment of Rs.75/-(Seventy Five) per compilation, upto 25th March 2003, from the office of the undersigned or by sending a request alongwith crossed Bank Draft / Pay Order for Rs 150/-(One Hundred and Fifty) payable to Maharashtra Electricity Regulatory Commission, Mumbai on any working day between 10.00 hrs to 17.00 hrs for delivery through Post/Courier. Suggestions / objections on the issues involved, together with supporting material, may be sent to the Secretary, Maharashtra Electricity Regulatory Commission, 13th floor, Centre No.1, World Trade Centre, Cuffe Parade, Mumbai 400 005, so as to reach him on or before 25th March 2003 (upto 17.00 hrs.), along with proof of service of the same on the Maharashtra State Electricity Board, Prakashgad, Bandra (East), Mumbai 400 051. The objections shall be filed in English or Marathi. Any objection filed in any other language shall not be accepted unless it is accompanied by an authentic translation in English. The objection should be filed in six copies and should carry the full name, postal address with pin-code number, fax Number, and email address, if any, of the person sending the objection and should be

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supported by an affidavit or otherwise notarized. It should be indicated whether the objection is being filed on behalf of any organization or any category of consumers. It should also be specifically stated whether the objector wants to be heard in person by the Commission. The Commission shall not consider objections received after the date specified above or which are deficient in any of the above requirements. No documents will be admitted at the hearing if the same are not relied upon in the objection, and unless true copies thereof are furnished along with the objection. The Commission will conduct a Public Hearing on Tuesday, April 22, 2003 between 11.00 hours –13.30 hours and 15.00 hours to 17.30 hours) at Centre No.1, World Trade Centre, Cuffe Parade, Colaba, Mumbai 400 005. The Extracts of Form-II and Regulation Nos. 52, 54 and 55 of the Maharashtra Electricity Regulatory Commission (Conduct of Business) Regulations, 1999 will be available from the Commission’s office or can be downloaded from the MERC Website www.mercindia.com

Sd/-

(A.M. Khan) Secretary, MERC

Mumbai, March 10, 2003.

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MAHARASHTRA ELECTRICITY REGULATORY COMMISSION 13th floor, Centre No.1, World Trade Centre, Cuffe Parade, Colaba,

Mumbai 400 005. Tel. 022 22163964 / 65 / 69 Fax No.022 2216 3976

E-mail : [email protected] Website: www.mercindia.com

PUBLIC NOTICE

Petition No. MERC/17(3) 2002 Further to the Commission’s Public Notice dated 10th March 2003 in the

matter of the determination of tariff and related issues concerning power

purchase from wind power projects in Maharashtra, the Maharashtra Electricity

Regulatory Commission hereby extends the date for inspecting or seeking copies

of the document containing the detailed proposal, and for receipt of

suggestions/objections, upto 1700 hours on 16th April, 2003 so as to facilitate

the consideration of supplementary material added to the document. All other

provisions of the earlier Public Notice shall remain unchanged.

Sd/-

(A.M. Khan), Secretary, MERC

Mumbai, 29th March 2003.

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TARIFF PROPOSAL FOR ENERGY SUPPLIED BY

WIND POWER PROJECTS IN THE STATE OF MAHARASHTRA

SUMMARY In view of limited stock of fossil fuel and ever-rising cost of electricity produced by fossil fuel – world-wide there is a concern to produce as much electricity as possible from renewable sources of energy. Wind energy is considered to be one of the commercially most viable option and there has been significant growth all over the world. Besides being environmentally beneficial – wind energy is in reality cheaper if compared on the basis of life cycle cost. India has substantially large potential of reasonably good windy sites and incidentally highest potential in excess of 3000 MW has been identified in Maharashtra. To encourage private sector participation in this sector, Govt. of Maharashtra declared an attractive Sales Tax Incentive Policy in the year 1997-98 for a period of 5 years. This has resulted in a capacity addition of 397 MW in the State. Agencies involved in promotion of wind power projects in the state of Maharashtra and the Maharashtra State Electricity Board have approached the Commission for determination of a reasonable tariff, terms and conditions for purchase of power from wind power projects. Determination of tariff, terms and conditions of power purchase are functions to be discharged by the Commission U/s 22(1)(c) of the ERC Act 1998. The data submitted by the Stakeholders and objections of the recognized consumers’ representatives were considered in the technical validation sessions held on 14th August 2002 and on 6th January 2003. The Commission has taken into consideration views of consumers – who feel that in view of substantial tax benefit the cost should be low – and also views of Developers who feel that regulatory uncertainties should not affect their projects. The tariff applicable to new wind power projects to be commissioned after 01.04.2003 without sales tax incentives should be different from the tariff for wind power projects, which have availed sales tax incentives and accordingly two different tariffs are necessary.

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The tariff proposed in Part-A (installations upto 31.03.03 with Sales Tax incentive) is based on the MNES guidelines adopted by the Government of Maharashtra (GOM). The GOM policy on Wind Power Generation provides that rate payable shall be Rs.2.25 per unit in the base year 1994-95 with 5% escalation every year for the first 10 years. With 5% escalation on base year rate (simple escalation) every year, rate per unit payable with effect from 01.04.2003 works out to Rs.3.24 (basic assumptions, rational, logic and workings are given in annexure attached). The tariff proposal in Part-B for new installations from 01.04.2003 without any Sales Tax benefit is also based on GOM policy with the difference that the rate of escalation on the base year rate of Rs.2.25 per unit shall be at 5% every year on cumulative basis. Rate per unit payable with effect from 01.04.2003 on this basis works out to Rs.3.50. The tariff proposal has taken into consideration following factors :

- Income Tax benefit available through accelerated depreciation (80% accelerated depreciation in the first year)

- 10 year Income Tax exemption on income from sale of energy U/s 80IA.

- The projects are bankable (means loan is serviced within schedule period of 10 years).

- The Investor’s get reasonable return as per declared national policy (16% ROE).

- The rate payable gets reduced after 10 years (i.e. after repayment of loan) so that the net average cost of energy gets reduced.

- The initial burden on consumer is not heavy.

- The capital investment is directly related to performance and better efficiency and reduction in cost is ensured.

Throughout the world the cost of energy produced by fossil fuel is constantly increasing and similar trend (escalation at compound rate of 10%) has also been observed in Maharashtra. To reduce the impact of ever-rising cost of conventional energy, it is pragmatic to add wind power, which is slightly costly in initial years but cheaper in the long run. On the basis of life cycle cost, the levelized cost of wind energy (as per proposed tariff) would be much lower than the levelized cost of energy from a new Super Thermal Power Station. Targeted purchase through addition of 100 MW of Wind Power per year for next 4 years (upto 10th Plan) would increase the net average cost by 1 paise in the first year and maximum upto 4 paise for State grid. Any addition from conventional sources would reduce the impact on account of wind energy.

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The proposal may be viewed in the background of some of the issues summarized below:

1. Should power be produced using only fastly depleting resources like coal thereby denying natural resources share to future generations?

2. Who should share the higher cost for such environmentally benign power till the technology is matured? The power produced by renewable technology like wind/solar is more expensive in the initial years as the technology for the same is still new and not matured like for conventional coal based generations. Until critical mass is created in this sector, the cost is unlikely to come down.

3. Should consumers support this promotions or only the government? Due to globalization the tax rates have moved southwards thereby reducing the government's ability to provide fiscal incentives for the promotion of such power. To what extent consumers can support these promotions, through higher energy charges? 1 paise, 5 paise, per kilowatt-hour, or any other amount.

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BASIC ASSUMPTIONS FOR DETERMINATION OF THE TARIFF PROPOSED

APPLICABLE TO PROJECTS COMMISSIONED FROM 27.12.1999 to 31.03.2003

(PORJECTS WHICH HAVE AVAILED SALES TAX INCENTIVE)

1) Project Cost : Rs. 5.0 Crore per MW (Average cost of projects developed in

Maharashtra) 2) Capacity Utilization Factor : 18% p.a. (Average CUF of projects in

Maharashtra) 3) Annual Generation : 15.77 lacs units/year/MW derated by 5% after 10 years 4) Cost of O&M : 2% of project cost with 5% annual

escalation. (National and International experience indicates validity of this assumption)

5) Debt Equity Ratio : 70:30 (As per norms followed by major financial institutions including IREDA for infrastructure projects)

6) Interest Rate on Debt : 14% (Subsidized interest rate charged by major financial institutions including IREDA for infrastructure projects varies between 12 – 14%)

7) Loan repayment period : 6 years (S.T. incentive benefit enables

repayment in a period shorter than 10 years)

8) Rate of depreciation : @5.28% as per straight line method for calculation of MAT as per I.T.Act for the life of the project.

9) Income Tax benefit : 100% accelerated depreciation. 10) Sales Tax benefit : 60% of the project cost in 6 years. 11) Return on Equity (ROE) : @16% p.a.

(As per GOI policy for private sector participation in power sector)

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12) Rate of Income Tax : 35% + 5% surcharge (As per prevailing I.T. Rules)

13) MAT : 7.5% + 5% surcharge (As per prevailing I.T. Rules)

14) Working Capital and Interest : Amount ear-marked for O&M out of sale Liability thereon proceeds would meet this need, therefore has not been

considered separately.

15) Life of the project : 20 years (As per norms accepted by MNES/ IREDA/ WEG suppliers)

16) Agreement period proposed : 20 years

17) Recovery Clause proposed : To ensure that developer does not remove the machine after availing higher purchase rate for 10 years, an agreement may be signed allowing MSEB to have second charge for first 10 years (when the lender institution shall have first charge on the machine) and subsequently MSEB shall have first charge for the balance 10 years.

18) Benefits : To Investors Reasonable return on investment. Recovery of investment during the life of project. Low operating cost. To Utilities Wind power though slightly costly initially but cheaper in long run helps to reduce the impact of ever-rising cost of energy from conventional sources. Decentralized locations help in improving the overall power system. Extremely low gestation period enables quick capacity addition.

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To the State Perennial source Pollution free. High employment potential. Projects help in creation of infrastructure (road, electricity network etc.) in remote area. Occupies only a small area – and balance land area is available for conjunctive use.

Substantial additional revenue income to the State by the way of electricity duty on energy sale, tax on manufactured goods used in project, inspection fees paid to Electrical Inspector etc.

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BASIC ASSUMPTIONS FOR DETERMINATION OF THE TARIFF PROPOSED

FOR NEW PROJECTS TO BE COMMISSIONED FROM 01.04.2003 (NEW PORJECTS WITHOUT SALES TAX INCENTIVE)

1) Project Cost : Rs. 4.0 Crore per MW

(Reasonable average cost with machines of larger capacity and better efficiency, reduced cost of infrastructure and larger volume of business)

2) Capacity Utilization Factor : 20% p.a. (Based on wind characteristics of 10 different sites in Maharashtra considering reasonably good machine and grid availability)

3) Annual Generation : 17.52 lacs units/year/MW derated by 5% after 10 years

4) Cost of O&M : 2% of project cost with 5% annual escalation (National and International experience indicates validity of this assumption)

5) Debt Equity Ratio : 70:30 (As per norms followed by major financial institutions including IREDA for infrastructure projects)

6) Interest Rate on Debt : 13% (Subsidized interest rate charged by major financial institutions including IREDA for infrastructure projects varies between 12 – 14%)

7) Loan repayment period : 10 years (As per policy of major financial institutions including IREDA for infrastructure projects)

8) Rate of depreciation : @5.28% as per straight line method for calculation of MAT as per I.T.Act for the life of the project..

9) Return on Equity (ROE) : @16% p.a. (As per GOI policy for private sector participation in power sector)

Page 7 of 17



10) Rate of Income Tax : 35% + 5% surcharge

(As per prevailing I.T. Rules) 11) MAT : 7.5% + 5% surcharge (As per prevailing I.T. Rules) 12) Working Capital and Interest : Amount ear-marked for O&M out of

sale Liability thereon proceeds would meet this need,

therefore has not been considered separately.

13) Life of the project : 20 years (As per norms accepted by MNES/ IREDA/ WEG suppliers)

14) Agreement period proposed : 20 years 15) Recovery Clause proposed : To ensure that developer does

not remove the machine after availing higher purchase rate for 10 years, an agreement may be signed allowing MSEB to have second charge for first 10 years (when the lender institution shall have first charge on the machine) and subsequently MSEB shall have first charge for the balance 10 years.

16) Benefits : To Investors Reasonable return on investment. Recovery of investment during the life of project. Modular form of capacity addition corresponding to available resources. Low operating cost. To Utilities Wind power though slightly costly initially but cheaper in long run helps to reduce the impact of ever-rising cost of energy from conventional sources. Decentralized locations help in improving the overall power system. Extremely low gestation period enables quick capacity addition.

Page 8 of 17



To the State Perennial source Pollution free. High employment potential. Projects help in creation of infrastructure (road, electricity network etc.) in remote area. Occupies only a small area – and balance land area is available for conjunctive use. 100% investment by private developers and no burden whatsoever on public exchequer. Substantial additional revenue income to the State by the way of electricity duty on energy sale, tax on manufactured goods used in project, inspection fees paid to Electrical Inspector etc.

Page 9 of 17




WIND POWER PROJECTS IN THE STATE OF MAHARASHTRA Part – A Applicable to Projects commissioned during the period from 27.12.1999 to 31.03.2003

(Projects which have availed Sales Tax Incentive)

Tariff as per GOM/MNES Guideline with simple escalation @ 11 paise per unit

Year Rate Payable 2000-2001 Rs.2.91

2001-2002 Rs.3.02

2002-2003 Rs.3.13

2003-2004 Rs.3.24

2004-2005 Rs.3.35

2005-2006 Rs.3.46

2006-2007 Rs.3.57

2007-2008 Rs.3.68

2008-2009 Rs.3.79

2009-2010 Rs.3.90

2010-2011 Rs.3.00

2011-2012 Rs.3.00

1) Sale to MSEB & other Utilities/Licensees

1.1 Tariff Rs.3.24/unit w.e.f. 01.04.2003. Increase @11 paise/unit every year for the first 10 years from the date of commissioning of the project. The rate per unit shall be reduced and frozen at Rs.3.0 for further period from 11th year from the date of commissioning.

2) Adjustment for Self Use and Third Party Sale

Unit Adjustment as per TOD Tariff time slots for self use and third party sale.

Page 10 of 17




WIND POWER PROJECTS IN THE STATE OF MAHARASHTRA

Part – B Applicable to new Projects to be commissioned during the period of four years

commencing from 01.04.2003 to 31.03.2007 (upto 10th Plan period)

(New Projects without any Sales Tax Incentive) 1) Sale to MSEB & other Utilities/Licensees

1.1 Tariff Rs.3.50/unit for the first year with effect from

1.4.2003 with escalation @30 paise per unit every year for the first 10 years from the date of commissioning of the project. The rate shall be reduced and frozen at Rs.3.25 per unit from 11th year onwards.

1.2 Special Condition Wind power projects to be permitted for sale to

MSEB shall not be more than 100 MW per year

and total 400 MW during the balance period of 4

years of 10th plan ending 31.03.2007.

FOR THE PROJECT COMMISSIONED IN 2003-04

Year of Operation Financial Year Rate per Unit 1st Year 2003-04 Rs.3.50 2nd Year 2004-05 Rs.3.80 3rd Year 2005-06 Rs.4.10 4th Year 2006-07 Rs.4.40 5th Year 2007-08 Rs.4.70 6th Year 2008-09 Rs.5.00 7th Year 2009-10 Rs.5.30 8th Year 2010-11 Rs.5.60 9th Year 2011-12 Rs.5.90

10th Year 2012-13 Rs.6.20 11th Year onwards 2013-14 onwards Rs.3.25

2) Adjustment for Self Use and Sale to Third Party

Unit Adjustment as per TOD Tariff time slots for self use and third party sale.

Page 11 of 17



TARIFF RELATED COMMON ISSUES

S.No. Issue MNES Guidelines GOM Policy MSEB Policy Consultant's Proposal

1. Wheeling charges for self 2% To be levied by 0 - 50 km @2% 2% as per MNES

Use andthird party sale MSEB at the rate to 51-200 km @4% Guidelines

be decided from Above 200 km @6%

time to time

2. T&D Loss charges - Not to be charged 0 - 50 km @2% Not to be charged

for first 3 years. 51-200 km @4% for first 3 years.

Therafter @1% Above 200 km @6% Therafter @1% (as per

GOM policy)

3. Banking Permitted for a Permitted for a Permitted any time Permitted any time

period of 1 year period of 1 year of the day and night. of the day and night.

Balance at the end Balance at the end

of the year will not be of the year will not be

carried over to next carried over to next

year. year.(As per GOM &

MSEB Policy)

4. Payment byMSEB/ Utility/ - - Bills to be raised Bill to be raised once

Licencee forenergy once in a quarter. in a month. Payment

purchased Payment within 45 of bill within 45 days

days from the date of from the date of bill.

receipt of bill. Delay Interest @2% above

beyond 45 days will SBI short-term lending

attract interest at rate for delay in payment. S.B.rate.

5. Charges for kVArh - - 25 paise per unit of 25 paise per unit of consumption from the grid kVArh which may be kVArh which may be

revised from time revised from time to time. to time.(as per MSEB policy)

Page 12 of 17



COMPARISON OF ENERGY COST

YEAR EXISTING PROPOSED NEW T.P.S. AVG. COST TARIFF OF - @7%escalation p.a. (NO CAPACITY WIND (GENERATION COST

ADDITION) - ENERGY + TR. LOSS IN EHV

@3% escalation p.a. SYSTEM ONLY)

in Rs./kWh in Rs./kWh in Rs./kWh

03-04 3.15 3.50 2.83 04-05 3.24 3.80 3.03 05-06 3.34 4.10 3.24 06-07 3.44 4.40 3.47 07-08 3.54 4.70 3.71 08-09 3.65 5.00 3.97 09-10 3.76 5.30 4.25 10-11 3.87 5.60 4.54 11-12 3.99 5.90 4.86 12-13 4.11 6.20 5.20 13-14 4.23 3.25 5.57 14-15 4.36 3.25 5.96 15-16 4.49 3.25 6.37 16-17 4.62 3.25 6.82

17-18 4.76 3.25 7.30

18-19 4.90 3.25 7.81

19-20 5.05 3.25 8.35

20-21 5.20 3.25 8.94

21-22 5.36 3.25 9.57

22-23 5.52 3.25 10.23

23-24 5.68 3.25 10.95

24-25 5.85 3.25 11.72

25-26 6.03 3.25 12.54

Page 13 of 17



COMPARISON OF ENERGY COST

2

4

6

8

10

12

14

Y EA R S

EXISTING AVG. COST (NO CAPACITY ADDITION) - @ 3% escalation p.a.

PROPOSED TARIFF OF W IND ENERGY

NEW THERM AL POW ER - @ 7% escalation p.a.(GENERATION COST + TR. LOSS IN EHV SYSTEM ONLY) NEW TPS

(ONLY GENERATION

COST)

PROPOSED

TARIFF OF

W IND

EXISTING AVG. COST

(NO ADDITION)

Page 14 of 17


MERC, Mumbai

TREND OF INCREASE IN AVG. TARIFF OF MSEB FOR SALE OF ELECTRICITY IN MAHARASHTRA

1.00

1.25

1.50

1.75

2.00

2.25

2.50

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

YEARS

AVERAGE TARIFF FOR SALE OF ELECTRICITY

Compounded Annual Growth rate=10% p a

Source : Planning Commission 2001. Annual Report on the working of SEBs & Electricity Departments.

(Extracted from Teri Energy Data Directory & Year Book) YEAR

AVERAGE TARIFF

FOR SALE OF

ELECTRICITY in Rs./kWh

1991-92 1.078

1992-93 1.369

1993-94 1.505 1994-95 1.611 1995-96 1.690 1996-97 1.990 1997-98 2.088 1998-99 2.156 1999-00 2.297

Page 15 of 17



P R O J E C T S C O M M I S S I O N E D B E F O R E 0 1 . 0 4 . 2 0 0 3 W I T H S A L E S T A X I N C E N T I V E B E N E F I T S 'C A S H F L O W - " S A L E T O S E B "

M O D E O F F U N D IN G E q u i t y ( 3 0 % ) R s . 1 5 0 . 0 0 L a c s D e b t ( 7 0 % ) R s . 3 5 0 . 0 0 L a c s - - - - - - - - - - - - - - - - - - - - - - - T o t a l P r o j e c t C o s t R s . 5 0 0 . 0 0 L a c s - - - - - - - - - - - - - - - - - - - - - - - S a l e s ta x B e n e f i t t o - - - - - - - - - - - - - - - - - - - - - - - P r o m o t o r ( 6 0 % ) i n 6 y r s . R s . 3 0 0 . 0 0 L a c s - - - - - - - - - - - - - - - - - - - - - - - M A T @ 7 .5 % + 5 % s u r c h a r g e , I n c o m e T a x @ 3 5 % + 5 % s u r c h a r g e

A S S U M P T I O N S C o s t o f w i n d f a r m p r o je c t S e l l i n g r a t e f o r 2 0 0 0 - 2 0 0 1 O & M c o s t ( 2 % o f p r o j e c t c o s t ) U n i ts g e n e r a te d p e r M W U n i ts S o l d p e r M W L o a n I n t e r e s t R a t e

R s . 5 0 0 . 0 0 L a c s /M W R s . 2 . 9 1 / u n i t ( In c r e a s e d @ 1 1 p a i s e p . a . u p t o 1 0 t h y r . , d e c r e a s e d & f r o z e n f r o m 1 1 t h y e a r @ R s . 3 / - p e r u n i t ) R s . 1 0 . 0 0 L a c s /M W ( i n c r e a s e d @ 5 % p .a . ) 1 5 .7 7 l a c k W h / M W ( C a p a c i ty f a c t o r = 1 8 % ) d e r a t i n g 5 % a f t e r 1 0 y r s . 1 5 .7 7 l a c k W h / M W 3 5 0 . 0 0 L a c s /M W 1 4 % p .a . ( A l l f i g u r e s i n R s . L a c s )

Y E A R S 0 0 - 0 1

0 1 - 0 2

0 2 - 0 3

0 3 - 0 4

0 4 - 0 5

0 5 - 0 6

0 6 -0 7

0 7 -0 8

0 8 - 0 9

0 9 - 1 0

1 0 - 1 1

1 1 - 1 2

1 2 - 1 3

1 3 - 1 4

1 4 - 1 5

1 5 - 1 6

1 6 - 1 7

1 7 - 1 8

1 8 - 1 9

1 9 - 2 0

1 2

U n i ts S o l d ( i n l a c k W h ) S e l l i n g R a t e

1 5 .7 7 2 . 9 1

1 5 .7 7 3 . 0 2

1 5 .7 7 3 . 1 3

1 5 .7 7 3 . 2 4

1 5 .7 7 3 . 3 5

1 5 .7 7 3 . 4 6

1 5 .7 7 3 . 5 7

1 5 .7 7 3 . 6 8

1 5 .7 7 3 . 7 9

1 5 .7 7 3 . 9 0

1 4 .9 8 3 . 0 0

1 4 .9 8 3 . 0 0

1 4 .9 8 3 . 0 0

1 4 .9 8 3 . 0 0

1 4 .9 8 3 . 0 0

1 4 .9 8 3 . 0 0

1 4 .9 8 3 . 0 0

1 4 .9 8 3 . 0 0

1 4 .9 8 3 . 0 0

1 4 .9 8 3 . 0 0

3 4 5

C A S H IN F L O W S a l e s In c o m e ( [ 1 ] X [ 2 ] ) S a l e s T a x B e n e f i t I n c o m e T a x B e n e f i t ( D e p r e c i a t i o n )

4 5 .8 9 5 0 .0 0 7 2 .5 0

4 7 .6 3 5 0 .0 0 7 2 .5 0

4 9 .3 6 5 0 .0 0

5 1 . 0 9 5 0 .0 0

5 2 .8 3 5 0 .0 0

5 4 .5 6 5 0 .0 0

5 6 .3 0

5 8 .0 3

5 9 .7 7

6 1 .5 0

4 4 .9 4

4 4 .9 4

4 4 .9 4

4 4 .9 4

4 4 .9 4

4 4 .9 4

4 4 .9 4

4 4 .9 4

4 4 .9 4

4 4 .9 4

6 T o t a l I n c o m e 1 6 8 . 3 9 1 7 0 . 1 3 9 9 .3 6 1 0 1 . 0 9 1 0 2 . 8 3 1 0 4 . 5 6 5 6 .3 0 5 8 .0 3 5 9 .7 7 6 1 .5 0 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4

7 8 9

1 0 1 1

C A S H O U T F L O W O p e r a t i o n & M a i n t e n a n c e I n t e r e s t o n L o a n L o a n R e p a y m e n t I n c o m e T a x L i a b i l i t y /M A T R e tu r n o n E q u i t y @ 1 6 %

1 0 .0 0 4 9 .0 0 8 2 .7 9 2 .6 0 2 4 .0 0

1 0 .5 0 3 7 .4 1 9 4 .6 1 3 . 6 1

2 4 .0 0

1 1 .0 3 2 4 .1 6 4 0 .1 7 0 . 0 0

2 4 .0 0

1 1 .5 8 1 8 .5 4 4 6 . 9 8 0 . 0 0

2 4 .0 0

1 2 .1 6 1 1 .9 6 5 4 .7 1 0 . 0 0

2 4 .0 0

1 2 .7 6 4 . 3 0

3 0 .7 4 0 . 0 0

2 4 .0 0

1 3 .4 0 0 . 0 0 0 . 0 0 0 . 9 7

2 4 .0 0

1 4 .0 7 0 . 0 0

1 . 3 8

2 4 .0 0

1 4 .7 7 0 . 0 0

1 . 4 6

2 4 .0 0

1 5 .5 1 0 . 0 0

1 . 5 4

2 4 .0 0

1 6 .2 9 0 . 0 0

1 0 .5 3 2 4 .0 0

1 7 .1 0

1 0 .2 3 2 4 .0 0

1 7 .9 6

9 . 9 2 2 4 .0 0

1 8 .8 6

9 . 5 9 2 4 .0 0

1 9 .8 0

9 . 2 4 2 4 .0 0

2 0 .7 9

8 . 8 8 2 4 .0 0

2 1 .8 3

8 . 5 0 2 4 .0 0

2 2 .9 2

8 . 0 9 2 4 .0 0

2 4 .0 7

7 . 6 7 2 4 .0 0

2 5 .2 7

7 . 2 3 2 4 .0 0

1 2 T o t a l C a s h O u t f l o w 1 6 8 . 3 9 1 7 0 . 1 3 9 9 .3 6 1 0 1 . 1 0 1 0 2 . 8 3 7 1 .8 1 3 8 .3 7 3 9 .4 5 4 0 .2 4 4 1 .0 6 5 0 .8 2 5 1 .3 4 5 1 .8 8 5 2 .4 4 5 3 .0 4 5 3 .6 7 5 4 .3 2 5 5 .0 1 5 5 .7 4 5 6 .5 0

1 3 1 4

1 5

S u r p l u s C a s h I n t e r e s t e a r n e d o n C u m u l a t i v e s a v i n g o f p r e v . y r . { @ 1 0 % } C u m u la t i v e s u r p l u s c a s h

0 . 0 0

0 . 0 0

0 . 0 0 0 . 0 0

0 . 0 0

0 . 0 0 0 . 0 0

0 . 0 0

0 . 0 0 0 . 0 0

0 . 0 0

0 . 0 0 0 . 0 0

0 . 0 0

3 2 .7 6 0 . 0 0

3 2 .7 6

1 7 .9 3 3 . 2 8

5 3 .9 7

1 8 .5 8 5 . 4 0

7 7 .9 5

1 9 .5 3 7 . 7 9

1 0 5 . 2 7

2 0 .4 5 1 0 .5 3

1 3 6 . 2 4

- 5 . 8 8 1 3 .6 2

1 4 3 . 9 9

- 6 . 3 9 1 4 .4 0

1 5 2 . 0 0

- 6 . 9 3 1 5 .2 0

1 6 0 . 2 7

- 7 . 5 0 1 6 .0 3

1 6 8 . 8 0

- 8 . 1 0 1 6 .8 8

1 7 7 . 5 8

- 8 . 7 2 1 7 .7 6

1 8 6 . 6 2

- 9 . 3 8 1 8 .6 6

1 9 5 . 9 0

- 1 0 .0 7 1 9 .5 9

2 0 5 . 4 2

- 1 0 .7 9 2 0 .5 4

2 1 5 . 1 7

- 1 1 .5 6 2 1 .5 2

2 2 5 . 1 3

1 6

L o a n A c c o u n t O u t s t a n d i n g L o a n 3 5 0 . 0 0 2 6 7 . 2 1 1 7 2 . 6 0 1 3 2 . 4 3 8 5 .4 5 3 0 .7 4 0 . 0 0 0 . 0 0 0 . 0 0 0 . 0 0

IR R = 1 7 .3 % 0 . 2

C a s h o u tf l o w / i n f l o w - 5 0 0 . 0 0

1 5 8 . 3 9 1 5 9 . 6 3 8 8 .3 4 8 9 .5 2 9 0 .6 7 9 1 .8 0 4 2 .9 0 4 3 .9 6 4 4 .9 9 4 5 .9 9 2 8 .6 6 2 7 .8 4 2 6 .9 9 2 6 .0 9 2 5 .1 5 2 4 .1 6 2 3 .1 2 2 2 .0 2 2 0 .8 8 1 9 .6 7

M A T / I N C O M E T A X C A L C U L A T I O N S 1 7 1 8

I n c o m e f r o m s a l e o f e l e c t r i c i t y I n c o m e T a x B e n e f i t ( D e p r e c i a t i o n )

4 5 .8 9 7 2 .5 0

4 7 . 6 3 7 2 .5 0

4 9 .3 6 5 1 .0 9 5 2 .8 3 5 4 .5 6 5 6 .3 0 5 8 .0 3 5 9 .7 7 6 1 .5 0 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4

1 9 T o t a l I n c o m e 1 1 8 . 3 9 1 2 0 . 1 3 4 9 .3 6 5 1 .0 9 5 2 .8 3 5 4 .5 6 5 6 .3 0 5 8 .0 3 5 9 .7 7 6 1 .5 0 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4 4 4 .9 4

2 0 2 1 2 2

E x p e n s e s O p e r a t i o n & M a i n t e n a n c e I n t e r e s t o n L o a n D e p r e c i a t i o n @ 5 . 2 8 %

1 0 .0 0 4 9 .0 0 2 6 .4 0

1 0 .5 0 3 7 .4 1 2 6 .4 0

1 1 .0 3 2 4 .1 6 2 6 .4 0

1 1 .5 8 1 8 .5 4 2 6 .4 0

1 2 .1 6 1 1 .9 6 2 6 .4 0

1 2 .7 6 4 . 3 0

2 6 .4 0

1 3 .4 0 0 . 0 0

2 6 .4 0

1 4 .0 7 0 . 0 0

2 6 .4 0

1 4 .7 7 0 . 0 0

2 6 .4 0

1 5 .5 1 0 . 0 0

2 6 .4 0

1 6 .2 9 0 . 0 0

2 6 .4 0

1 7 .1 0 0 . 0 0

2 6 .4 0

1 7 .9 6 0 . 0 0

2 6 .4 0

1 8 .8 6 0 . 0 0

2 6 .4 0

1 9 .8 0 0 . 0 0

2 6 .4 0

2 0 .7 9 0 . 0 0

2 6 .4 0

2 1 .8 3 0 . 0 0

2 6 .4 0

2 2 .9 2 0 . 0 0

2 6 .4 0

2 4 .0 7 0 . 0 0

2 4 .8 0

2 5 .2 7 0 . 0 0

2 3 T o t a l E x p e n s e s 8 5 .4 0 7 4 .3 1 6 1 .5 9 5 6 .5 2 5 0 .5 2 4 3 .4 7 3 9 .8 0 4 0 .4 7 4 1 .1 7 4 1 .9 1 4 2 .6 9 4 3 .5 0 4 4 .3 6 4 5 .2 6 4 6 .2 0 4 7 .1 9 4 8 .2 3 4 9 .3 2 4 8 .8 7 2 5 .2 7

2 4 2 5 2 6 2 7

P r o f i t /L o s s C u m . P r o f i t /L o s s N e t T a x a b l e I n c o m e f o r M A T N e t T a x a b l e f o r I n c o m e T a x ( I n c o m e -E x p e n s e s w it h o u t D e p re c i a t io n )

3 2 .9 9 3 2 .9 9 3 2 .9 9

4 5 .8 2 4 5 .8 2 4 5 .8 2

- 1 2 .2 3 - 1 2 .2 3

0 . 0 0

- 5 . 4 2 - 1 7 . 6 5

0 . 0 0

2 . 3 1 - 1 5 .3 4

0 . 0 0

1 1 .1 0 - 4 . 2 4 0 . 0 0

1 6 .5 0 1 2 .2 6 1 2 .2 6

1 7 .5 6 1 7 .5 6 1 7 .5 6

1 8 .5 9 1 8 .5 9 1 8 .5 9

1 9 .5 9 1 9 .5 9 1 9 .5 9

2 . 2 6 2 . 2 6

2 8 .6 6

1 . 4 4 1 . 4 4

2 7 .8 4

0 . 5 9 0 . 5 9

2 6 .9 9

- 0 . 3 1 - 0 . 3 1

2 6 .0 9

- 1 . 2 5 - 1 . 5 7

2 5 .1 5

- 2 . 2 4 - 3 . 8 1

2 4 .1 6

- 3 . 2 8 - 7 . 1 0

2 3 .1 2

- 4 . 3 8 - 1 1 .4 7

2 2 .0 2

- 3 . 9 2 - 1 5 .3 9

2 0 .8 8

1 9 .6 7 4 . 2 8

1 9 .6 7

2 8 M A T / In c o m e T a x 2 . 6 0 3 . 6 1 0 . 0 0 0 . 0 0 0 . 0 0 0 . 0 0 0 . 9 7 1 . 3 8 1 . 4 6 1 . 5 4 1 0 .5 3 1 0 .2 3 9 . 9 2 9 . 5 9 9 . 2 4 8 . 8 8 8 . 5 0 8 . 0 9 7 . 6 7 7 . 2 3

Page 16 of 17



@ R s . 3 . 2 5 / - p e r u n i t )

N E W P R O J E C T S T O B E C O M M I S S I O N E D F R O M 0 1 . 0 4 . 2 0 0 3 O N W A R D S W IT H O U T A N Y S A L E S T A X IN C E N T IV E B E N E F I T S 'C A S H F L O W - " S A L E T O S E B "

M O D E O F F U N D I N G E q u i t y ( 3 0 % ) R s . 1 2 0 .0 0 L a c s D e b t ( 7 0 % ) R s . 2 8 0 . 0 0 L a c s - - - - - - - - - - - - - - - - - - - - - - - T o t a l P r o j e c t C o s t R s . 4 0 0 . 0 0 L a c s - - - - - - - - - - - - - - - - - - - - - - - M A T @ 7 .5 % + 5 % s u r c h a r g e , I n c o m e T a x @ 3 5 % + 5 % s u r c h a r g e

A S S U M P T IO N S C o s t o f w i n d f a r m p r o j e c t S e l l i n g r a t e f o r f i r s t y e a r O & M c o s t ( 2 % o f p r o je c t c o s t ) U n i t s g e n e r a t e d p e r M W U n i t s S o l d p e r M W L o a n I n te r e s t R a t e

R s . 4 0 0 .0 0 L a c s / M W R s . 3 . 5 0 / u n i t ( In c r e a s e d @ 3 0 p a is e p . a . u p t o 1 0 t h y r . , d e c r e a s e d & f r o z e n f r o m 1 1 t h y e a r R s . 8 . 0 0 L a c s /M W ( i n c r e a s e d @ 5 % p . a . ) 1 7 . 5 2 l a c k W h / M W ( C a p a c i t y f a c t o r = 2 0 % ) d e r a t i n g 5 % a f t e r 1 0 y r s . 1 7 . 5 2 l a c k W h / M W 2 8 0 . 0 0 L a c s / M W 1 2 . 5 % p .a . ( A ll f i g u r e s i n R s . L a c s )

Y E A R S O F O P E R A T I O N 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0

1 2

U n i t s S o l d ( i n l a c k W h ) S e l l i n g R a te

1 7 . 5 2 3 . 5 0

1 7 . 5 2 3 . 8 0

1 7 . 5 2 4 . 1 0

1 7 . 5 2 4 . 4 0

1 7 . 5 2 4 . 7 0

1 7 . 5 2 5 . 0 0

1 7 . 5 2 5 . 3 0

1 7 . 5 2 5 . 6 0

1 7 . 5 2 5 . 9 0

1 7 . 5 2 6 . 2 0

1 5 . 7 7 3 . 2 5

1 5 . 7 7 3 . 2 5

1 5 . 7 7 3 . 2 5

1 5 . 7 7 3 . 2 5

1 5 . 7 7 3 . 2 5

1 5 . 7 7 3 . 2 5

1 5 . 7 7 3 . 2 5

1 5 . 7 7 3 . 2 5

1 5 . 7 7 3 . 2 5

1 5 . 7 7 3 . 2 5

3

C A S H I N F L O W S a l e s I n c o m e ( [ 1 ] X [ 2 ])

6 1 . 3 2

6 6 . 5 8

7 1 . 8 3

7 7 . 0 9

8 2 . 3 4

8 7 . 6 0

9 2 . 8 6

9 8 . 1 1

1 0 3 . 3 7

1 0 8 . 6 2

5 1 . 2 5

5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 4 T o t a l I n c o m e 6 1 . 3 2 6 6 . 5 8 7 1 . 8 3 7 7 . 0 9 8 2 . 3 4 8 7 . 6 0 9 2 . 8 6 9 8 . 1 1 1 0 3 . 3 7 1 0 8 . 6 2 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5

5 6 7 8 9

C A S H O U T F L O W O p e r a t i o n & M a i n t e n a n c e I n te r e s t o n L o a n L o a n R e p a y m e n t I n c o m e T a x L i a b i l i t y / M A T R e tu r n o n E q u i t y @ 1 6 %

8 . 0 0 3 5 . 0 0 1 8 . 3 2

8 . 4 0

3 2 . 7 1 2 5 . 1 2 0 . 3 4

8 . 8 2

2 9 . 5 7 3 2 . 4 8 0 . 9 7

9 . 2 6

2 5 . 5 1 1 2 . 2 3 1 . 6 7

2 8 . 4 2

9 . 7 2

2 3 . 9 8 1 8 . 0 5 2 . 1 7

2 8 . 4 2

1 0 . 2 1 2 1 . 7 3 2 4 . 5 3 2 . 7 2

2 8 . 4 2

1 0 . 7 2 1 8 . 6 6 3 1 . 7 3 3 . 3 4

2 8 . 4 2

1 1 . 2 6 1 4 . 6 9 3 9 . 7 2 4 . 0 2

2 8 . 4 2

1 1 . 8 2 9 . 7 3

4 8 . 6 3 4 . 7 8

2 8 . 4 2

1 2 . 4 1 3 . 6 5

2 9 . 1 9 5 . 6 3

2 8 . 4 2

1 3 . 0 3

1 . 3 5 2 8 . 4 2

1 3 . 6 8

1 . 2 9 2 8 . 4 2

1 4 . 3 7

1 . 2 4 2 8 . 4 2

1 5 . 0 9

1 . 1 8 2 8 . 4 2

1 5 . 8 4

1 . 1 3 2 8 . 4 2

1 6 . 6 3

4 . 9 6 2 8 . 4 2

1 7 . 4 6

4 . 6 5 2 8 . 4 2

1 8 . 3 4

4 . 3 3 2 8 . 4 2

1 9 . 2 5

4 . 0 0 2 8 . 4 2

2 0 . 2 2 3 . 6 4 2 8 . 4 2

1 0 T o t a l C a s h O u t f l o w 6 1 . 3 2 6 6 . 5 7 7 1 . 8 4 7 7 . 0 9 8 2 . 3 4 8 7 . 6 0 9 2 . 8 6 9 8 . 1 0 1 0 3 . 3 7 7 9 . 2 9 4 2 . 7 9 4 3 . 3 9 4 4 . 0 2 4 4 . 6 9 4 5 . 3 8 5 0 . 0 1 5 0 . 5 3 5 1 . 0 8 5 1 . 6 6 5 2 . 2 7

1 1 1 2

1 3

S u r p l u s C a s h I n te r e s t e a r n e d o n C u m u l a t i v e s a v i n g o f p r e v . y r . { @ 1 0 % } C u m u la t i v e s u r p l u s c a s h

0 . 0 0

0 . 0 0 - 0 . 0 1 0 . 0 0 0 . 0 1 0 . 0 0 - 0 . 0 1 0 . 0 1 - 0 . 0 1 2 9 . 3 3 2 . 9 3

3 2 . 2 6

8 . 4 5 4 . 0 7

4 4 . 7 9

7 . 8 5 5 . 2 6

5 7 . 9 0

7 . 2 2 6 . 5 1

7 1 . 6 4

6 . 5 6 7 . 8 2

8 6 . 0 2

5 . 8 7 9 . 1 9

1 0 1 . 0 7

1 . 2 4 1 0 . 2 3

1 1 2 . 5 4

0 . 7 1 1 1 . 3 3

1 2 4 . 5 8

0 . 1 6 1 2 . 4 7

1 3 7 . 2 2

- 0 . 4 2 1 3 . 6 8

1 5 0 . 4 8

- 1 . 0 3 1 4 . 9 5 1 6 4 . 4 0

1 4

L o a n A c c o u n t O u t s t a n d i n g L o a n 2 8 0 . 0 0

261.68

236.56

204.08 191.85

173.80

149.27

117.54

77.82

2 9 . 1 9

I R R = 1 4 .7 % 0 . 2

C a s h o u t f l o w / i n f l o w - 4 0 0 . 0 0

5 3 . 3 2 5 8 . 1 8 6 3 . 0 1 6 7 . 8 3 7 2 . 6 2 7 7 . 3 9 8 2 . 1 4 8 6 . 8 6 9 1 . 5 5 9 6 . 2 1 3 8 . 2 1 3 7 . 5 6 3 6 . 8 8 3 6 . 1 6 3 5 . 4 1 3 4 . 6 1 3 3 . 7 8 3 2 . 9 1 3 1 . 9 9 3 1 . 0 3

M A T / I N C O M E T A X C A L C U L A T I O N S 1 5 In c o m e f r o m s a le o f

e lec tr ic i ty

6 1 . 3 2 6 6 . 5 8 7 1 . 8 3 7 7 . 0 9 8 2 . 3 4 8 7 . 6 0 9 2 . 8 6 9 8 . 1 1 1 0 3 . 3 7 1 0 8 . 6 2 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5

1 6 T o t a l I n c o m e 6 1 . 3 2 6 6 . 5 8 7 1 . 8 3 7 7 . 0 9 8 2 . 3 4 8 7 . 6 0 9 2 . 8 6 9 8 . 1 1 1 0 3 . 3 7 1 0 8 . 6 2 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5 5 1 . 2 5

1 7 1 8 1 9

E x p e n s e s O p e r a t i o n & M a i n t e n a n c e I n te r e s t o n L o a n D e p r e c i a t i o n @ 5 .2 8 %

8 . 0 0

3 5 . 0 0 2 1 . 1 2

8 . 4 0

3 2 . 7 1 2 1 . 1 2

8 . 8 2

2 9 . 5 7 2 1 . 1 2

9 .2 6

2 5 . 5 1 2 1 . 1 2

9 . 7 2

2 3 . 9 8 2 1 . 1 2

1 0 . 2 1 2 1 . 7 3 2 1 . 1 2

1 0 . 7 2 1 8 . 6 6 2 1 . 1 2

1 1 . 2 6 1 4 . 6 9 2 1 . 1 2

1 1 . 8 2 9 . 7 3

2 1 . 1 2

1 2 . 4 1 3 . 6 5

2 1 . 1 2

1 3 . 0 3

2 1 . 1 2

1 3 . 6 8

2 1 . 1 2

1 4 . 3 7

2 1 . 1 2

1 5 . 0 9

2 1 . 1 2

1 5 . 8 4

2 1 . 1 2

1 6 . 6 3

2 1 . 1 2

1 7 . 4 6

2 1 . 1 2

1 8 . 3 4

2 1 . 1 2

1 9 . 2 5

2 1 . 1 2

2 0 . 2 2 2 1 . 1 2

2 0 T o t a l E x p e n s e s 6 4 . 1 2 6 2 . 2 3 5 9 . 5 1 5 5 . 8 9 5 4 . 8 3 5 3 . 0 6 5 0 . 5 0 4 7 . 0 7 4 2 . 6 7 3 7 . 1 8 3 4 . 1 5 3 4 . 8 0 3 5 . 4 9 3 6 . 2 1 3 6 . 9 6 3 7 . 7 5 3 8 . 5 8 3 9 . 4 6 4 0 . 3 7 4 1 . 3 4

2 1 P r o f i t / L o s s - 2 . 8 0 4 . 3 5 1 2 . 3 2 2 1 . 2 0 2 7 . 5 2 3 4 . 5 4 4 2 . 3 6 5 1 . 0 4 6 0 . 7 0 7 1 . 4 4 1 7 . 0 9 1 6 . 4 4 1 5 . 7 6 1 5 . 0 4 1 4 . 2 9 1 3 . 4 9 1 2 . 6 6 1 1 . 7 9 1 0 . 8 7 9 . 9 1 2 2 M A T / I n c o m e

T a x - 0 . 2 2 0 . 3 4 0 . 9 7 1 . 6 7 2 . 1 7 2 . 7 2 3 . 3 4 4 . 0 2 4 . 7 8 5 . 6 3 1 . 3 5 1 . 2 9 1 . 2 4 1 . 1 8 1 . 1 3 4 . 9 6 4 . 6 5 4 . 3 3 4 . 0 0 3 . 6 4

R e t u r n o n E q u i t y @ 1 6 % 2 3 R O E

1 6 . 0 % 1 9 . 2 0 1 9 . 2 0 1 9 . 2 0

2 4 C u m . R . O . E . 1 2 0 . 0 0

1 3 9 . 2 0 1 5 8 . 4 0 1 7 7 . 6 0 N O T E : # A n n u a l g e n e r a t i o n i s d e r a t e d b y 5 % a f t e r 1 0 y e a r s

L e v e l i s e d 4 . 2 0 4 . 2 6 d i s c o u n t i n g f a c t o r 7 % 1 3 %

NOTE: # Annual generation is derated by 5% after 10 years

Page 17 of 17


MERC, Mumbai

List of Objections received in response to Public Notice dated 10.3.2003 (Wind Farm Project)

Sr. No

Name of Objector Date Under affidavit

Copy served to

Respondent or not

Major Issues raised

01 Prayas, Pune 25.3.03 Yes Yes

02 Mahratta Chamber of Commerce & Agril. Pune

25.3.03 Yes Not mentioned

03

Shri Shriram M. Sane, Pune 24.3.03 Yes Yes

04 Shri Yusuf M. Shaikh, Nashik Road 21.3.03 Yes Yes

05 REDAM, Mumbai 25.3.03 Yes Not mentioned

06 InWEA, Pune 25.3.03 Yes Yes

07 MSEB 25.3.03 Yes Not mentioned

08 K.P. Power Pvt. Ltd. 24.3.03 Yes

Not mentioned

09 M/s Dunil Electric Saver & Maintenance Co Pvt Ltd.

26.3.03 Yes Not mentioned

Objections received without Affidavit –

10 Shri Pratap G. Hogade 24.3.03 Letter Yes

11 Shri S.R. Paranjpe, Kalyan 24.3.03 Letter Not

mentioned

Requested for extending

time limit for filing

objections by 10.4.2003

12 Shri Hiralal Ramdas Jadhav 24.3.03 Letter Yes

13 Indian Wind Turbine Manufacturers Association

26.3.03 Letter Not mentioned

14 Tata Power Co. Ltd. 25.3.03 Letter Not mentioned

Page 1 of 2


MERC, Mumbai

List of Objections received in response to Public Notice dated 29.3.2003 (Wind Farm Project)

Sr. No

Name of Objector Date Under affidavit

Copy served to

Respondent or not

Major Issues raised

15 BF Utilities Limited-Pune 05.04.03 Yes Yes

16 Akhil Bhartiya Grahak Panchayat, Pune 10.04.03 Yes Yes

17 Prayas, Pune 14.04.03 Yes Yes

18 Shri Hiralal R. Jadhav, Electricity Consumer of MSEB, Nashik

16.04.03 Yes Yes

19 Shri Hiralal R. Jadhav, Subordinate Engineers' Ass.

16.04.03 Yes Yes

Objections received without Affidavit -

20 Shri Anandrao N. Yadav 01.04.03

Plain Paper

Not mentioned

21 Shri Bikramaditya Raha 10.04.03 E-mail "

22 Indian Wind Turbines Manufacturers Association

12.04.03 Letter head "

23 Shri S.R. Paranjape, Kalyan 16.04.03

Plain Paper "

Page 2 of 2


MERC, Mumbai

List of Persons who attended the Public Hearing

In the matter of Approval of Energy Purchase Agreement wind / solar power plant for

(i) Sale to MSEB and /or wheeling for self use, and (ii) Wheeling for self use and /or sale to third party

Public Hearing held on 22.04.2003 at 11.00 hrs

FILE NO. 17 (3) of 2002

S.

No. Name of the Person

Institution / Organisation

1 Shri Gurucharan Singh Maharashtra State Electricity Board (MSEB)

2 Shri S.G. Bharati Maharashtra State Electricity Board (MSEB)

3 Shri V.G. Sohani Maharashtra State Electricity Board (MSEB)

4 Shri A.G. Khonde Maharashtra State Electricity Board (MSEB)

5 Shri J.V. Agavekar Maharashtra State Electricity Board (MSEB)

6 Shri M.N. Meghrajan Maharashtra State Electricity Board (MSEB)

7 Shri A.R. Deshpande Maharashtra State Electricity Board (MSEB)

8 Shri Ashish Tiwari Weizmann Industries Limited 9 Shri S. Parvathinatham Renewable Energy Developers

Association of Maharashtra - (REDAM)

10 Shri Chetan Mehra Renewable Energy Developers Association of Maharashtra -(REDAM)

11 Shri G.N. Kamath Renewable Energy Developers Association of Maharashtra -(REDAM)

12 Shri A.S. Karanth Bharat Forge Ltd; (REDAM) 13 Shri J.N. Malviya Indian Wind Energy Association -

(InWEA) 14 Shri Dr. Anil Kane Indian Wind Energy Association -

(InWEA) 15 Shri Shyam Sunder

Venkatesh Deo Indian Wind Energy Association - (InWEA)

Page 1 of 3


MERC, Mumbai

16 Shri Arijit Maitra, Advocate for Indian Wind Energy Association – (InWEA)

17 Shri S.S. Dasgupta Suzlon Energy Ltd. 18 Shri Chintan Shah Suzlon Energy Ltd. 19 Shri N.M. Kumar Suzlon Energy Ltd. 20 Shri Mukesh Shah Suzlon Energy Ltd. 21 Shri Shankar Ghosh Suzlon Energy Ltd. 22 Shri I.C. Mangal Suzlon Energy Ltd. 23 Shri S.D. Taware Suzlon Energy Ltd. 24 Shri Ajay Dhumal K.P. Power Pvt. Ltd. 25 Shri Dinesh Manek K.P. Power Pvt. Ltd. 26 Shri S.P. Parkar K.P. Power Pvt. Ltd. 27 Shri Arun Kumar Government of Maharashtra,

(Energy Dept.) 28 Shri A.B. Shyamakul Government of Maharashtra,

(Energy Dept.) 29 Shri G.M. Pillai Maharashtra Energy Development

Agency 30 Shri S.R. Chaudhari Maharashtra Energy Development

Agency 31 Shri M.M. Deshpande Maharashtra Energy Development

Agency 32 Shri G.S. Rao Tata Power Company Ltd. (TPC) 33 Shri N.B. Singh Tata Power Company Ltd. (TPC) 34 Shri Vivek Kejriwal Tata Power Company Ltd. (TPC) 35 Shri Shantanu Dixit Prayas 36 Shri Ashok Pendse Mumbai Grahak Panchayat 38 Shri Ajit Pandit ICRA Advisory Services, Consultant 39 Shri Palaniappan ICRA Advisory Services, Consultant 40 Shri M.K.Deb Consolidated Energy Consultant

Limited 41 Shri R. Ramanujam Consolidated Energy Consultant

Limited 42 Shri G. Badrinarayan Liberty Oil Mills Ltd., Shahpur 43 Shri P.S. Vijayaraghavan Liberty Oil Mills Ltd; Shahpur 44 Shri Subramani S. Unique Sugars Ltd. 45 Shri L.J. Jadhav Unique Sugars Ltd. 46 Shri Sadanand Kulkarni New Sahyadri Ind. Ltd. Pune 47 Shri T.S. Nageshwar Rao New Sahyadri Ind. Ltd. Pune 48 Shri N.B. Kulkarani Aurangabad Electricals Pvt. Ltd.

49 Shri C.L. Kale Savita Chemicals LTD. 50 Shri D.J. Shahane Vanaz Engineers Ltd. 51 Shri S.A. Chawla Chawla & Sons 52 Shri Sujithor S. MPERC, Consultant 53 Shri S.P. Ranade Maharatta Chamber of Commerce,

Page 2 of 3


MERC, Mumbai

Ind. & Agriculture, Pune (MCCIA) 54 Shri S.P. Shinde Bajaj Auto Ltd. 55 Shri A.V. Raghavan C.A. Enercons 56 Shri Rakesh Nathwani Ellora Times Ltd. 57 Shri T.R. Sachidanandan Varroc Engg. Pvt. Ltd. 58 Shri R.G. Naik - 59 Shri S.N. Mishra Maharashtra Seamless Ltd., Jindal

Group 60 - (Vice

President) Sagar Agencies Pvt. Ltd.

61 Shri Dr. S.R. Agarwal Shushbindu Pvt. Ltd. 62 Shri S.R. Yerawadene G.B. Rubber Products 63 Shri Ketan Vyas STD Greases 64 Shri Nitin D. Ronghe SEL, Pune 65 Shri Vijaykumar Sarvade

on behalf on Shri S.R. Paranjape

-

66 Shri Pradyumn Kaul - 67 Shri A.S. Karanth BF Utilities Limited, Pune 68 Shri B.R. Khedkar Akhil Bhartiya Grahak Panchayat,

Pune 69 Shri Prafulla Khinvasara Malpani Group 70 Shri S. Balsubramanium IIM Student, Ahmedabad 71 Shri C.R. Baskar I.E.E.L.D.

Page 3 of 3

WIND PROJECT TARIFF ORDER 03-04

MERC, Mumbai

CASH FLOW STATEMENT FOR GROUP-II (OLD) PROJECTS

BASIC ASSUMPTIONSSl.No. Particulars Input Units

1 Project Size 1 MW2 CUF 18.00%

3 Generation 15.768 lac units4 Derating after 10 years 5.00%

5 Wheeling Charges 0.00%

6 Cost of Project 500 Rs. Lacs7 Cost not eligible for IT Benefit 10 Rs. Lacs8 Equity 30.00%

9 Debt 70.00%

10 Interest Rate of Debt 14.00%

11 Loan Type- I=IREDA, F=FIXED,S=SURPLUS S

12 Repayment Period (for fixed only) 10 years13 Moratorium Period (for fixed only) 1 year(s)14 Accelerated Income Tax Benefit 100.00%

15 Period of availing IT Benefit 2 year(s)16 Sales Tax Benefit (Post Tax) 63.25%

17 Period of availing ST Benefit 6 year(s)18 Sales Tax Ceiling Amount 500 Rs. Lacs19 O&M Rate (in %age of project cost) in first yr. 1.50%

20 O&M Rate (in %age of project cost) from 4th yr. 2.00%

21 Annual Escalation of O & M charges from 4th yr. 5.00%

22 Residual/Salvage Value after 20 years 5.00%


24 MAT Rate 7.875%

25 IT Rate 36.750%

26 Dpereciation Method Type=S for SLM, Type=W f s

27 SLM Dpereciation Rate 5.28%

28 WDV Dpereciation Rate 15.33%

29 Return on Equity 16.00%

30 Rate of earning on Cumulative Surplus(post tax) 10.00%

31 Discounting rate for Levelised Cost 13.00%

31 If Section 115JB to be considered then Type "Y" or el Y

32 Project Life for Pendse's statement 13

33 Selling Rate 2.40 Rs.34 Annual Escalation fixed 0.10 Rs.

% 0.00%

35 Period of escalation 10.00 years36 Frozen Rate from 11th yr. 3.30 Rs.

O-18-S-1-2.40

Iteration number 1

Page 1 of 6



Page 2 of 6

C A S H F L O W L O A N R E P A Y M E N T S U R P L U S

M O D E O F F U N D I N G A S S U M P T I O N SE q u i t y R s . 1 5 0 .0 0 L a c s C o s t o f w i n d fa r m p r o j e c t R s . 5 0 0 .0 0 L a c s/ M W C O S T F O R I T B E N E F I T D e b t R s . 3 5 0 .0 0 L a c s S e l li n g r a t e f o r f i r s t y e a r R s . 2 .4 0 / k W h u n it C O S T F O R S T B E N E F I TT o ta l P r o je c t C o s t R s . 5 0 0 .0 0 L a c s O & M c o s t i n f i r s t y e a r R s . 7 .5 0 L a c s/ M W M A T P E R I O D y e a r s

U n it s g e n e r a t e d p e r M W 1 5 .7 7 l a c k W h / M W O U T P U TU n it s S o l d p e r M W 1 5 .7 7 l a c k W h / M W P r o je c tL o a n 3 5 0 .0 0 L a c s/ M W L ifeIn t e r e s t R a t e 1 4 .0 % p .a . 1 3 y r s .

Y e a r s -> 1 2 3 4 5 6 7 8 9 1 0 1 1[1 ] U n it s S o l d ( i n la c k W h ) 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 4 .9 8[2 ] S e l li n g R a t e 2 .4 0 2 .5 0 2 .6 0 2 .7 0 2 .8 0 2 .9 0 3 .0 0 3 .1 0 3 .2 0 3 .3 0 3 .3 0

C A S H I N F L O W[3 ] S a l e s I n c o m e ( [1 ] X [2 ] ) 3 7 .8 5 3 9 .4 3 4 1 .0 0 4 2 .5 8 4 4 .1 6 4 5 .7 3 4 7 .3 1 4 8 .8 9 5 0 .4 6 5 2 .0 4 4 9 .4 4[4 ] In c o m e T a x b e n e f it (D e p r e c ia t i o n ) 7 0 .7 4 7 0 .7 4[5 ] S a l e s T a x b e n e f it 5 2 .7 1 5 2 .7 1 5 2 .7 1 5 2 .7 1 5 2 .7 1 5 2 .7 1[6 ] T o t a l I n c o m e 1 6 1 .3 0 1 6 2 .8 8 9 3 .7 1 9 5 .2 9 9 6 .8 6 9 8 .4 4 4 7 .3 1 4 8 .8 9 5 0 .4 6 5 2 .0 4 4 9 .4 4

C A S H O U T F L O W[7 ] O p e r a t i o n & M a in t e n a n c e 7 .5 0 7 .5 0 7 .5 0 1 0 .0 0 1 0 .5 0 1 1 .0 3 1 1 .5 8 1 2 .1 6 1 2 .7 6 1 3 .4 0 1 4 .0 7[8 ] In t e r e s t o n L o a n 4 9 .0 0 3 7 .6 9 2 4 .5 7 1 9 .3 0 1 3 .4 2 6 .5 7[9 ] L o a n R e p a y m e n t 8 0 .8 0 9 3 .6 9 3 7 .6 4 4 1 .9 9 4 8 .9 4 4 6 .9 5

[1 0 ] In c o m e T a x L i a b i l it y / M A T 0 .1 8 0 .7 8 0 .8 6 0 .9 3 1 .0 1 1 3 .0 0[1 1 ] R e t u r n o n E q u i t y 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0[1 2 ] T o t a l C a sh O u t f l o w 1 6 1 .3 0 1 6 2 .8 8 9 3 .7 1 9 5 .2 9 9 6 .8 6 8 8 .7 2 3 6 .3 5 3 7 .0 1 3 7 .6 9 3 8 .4 1 5 1 .0 7[1 3 ] S u r p lu s C a s h 9 .7 2 1 0 .9 6 1 1 .8 8 1 2 .7 7 1 3 .6 3 -1 .6 3[1 4 ] In t e r e s t e a r n e d o n C u m u la t iv e 0 .9 7 2 .1 6 3 .5 7 5 .2 0 7 .0 9

s a v in g o f p r e v . y r . @ 1 0 .0 %[1 5 ] R e s i d u a l / S a lv a g e V a l u e[1 6 ] C u m u la t iv e s u r p lu s c a s h 9 .7 2 2 1 .6 5 3 5 .6 9 5 2 .0 3 7 0 .8 7 7 6 .3 2

C u m u la t iv e s u r p lu s c a s h i n c l u d in g S a lv a g e V a lu eL o a n A c c o u n t

[1 7 ] O u t s t a n d i n g L o a n 3 5 0 .0 0 2 6 9 .2 0 1 7 5 .5 1 1 3 7 .8 7 9 5 .8 9 4 6 .9 5I N T E R N A L R A T E O F R E T U R N I R R (1 3 y r s . ) = 1 6 .7 % 0 . 2

[ 1 8 ] In f l o w (T o t a l I n c o m e ) 1 6 1 .3 0 1 6 2 .8 8 9 3 .7 1 9 5 .2 9 9 6 .8 6 9 8 .4 4 4 7 .3 1 4 8 .8 9 5 0 .4 6 5 2 .0 4 4 9 .4 4[1 9 ] R e s i d u a l / S a lv a g e V a l u e[2 0 ] O u t f lo w ( O p e r a t i o n & M a i n t e n a n c e ) 7 .5 0 7 .5 0 7 .5 0 1 0 .0 0 1 0 .5 0 1 1 .0 3 1 1 .5 8 1 2 .1 6 1 2 .7 6 1 3 .4 0 1 4 .0 7[2 1 ] C a s h o u t f l o w / in f lo w ( 1 3 y -5 0 0 .0 0 1 5 3 .8 0 1 5 5 .3 8 8 6 .2 1 8 5 .2 9 8 6 .3 6 8 7 .4 2 3 5 .7 3 3 6 .7 3 3 7 .7 0 3 8 .6 4 3 5 .3 7

M A T / I N C O M E T A X C A L C U L A T I O N S[2 2 ] In c o m e f r o m sa l e o f e l e c t r i c it y 3 7 .8 5 3 9 .4 3 4 1 .0 0 4 2 .5 8 4 4 .1 6 4 5 .7 3 4 7 .3 1 4 8 .8 9 5 0 .4 6 5 2 .0 4 4 9 .4 4[2 3 ] T o t a l I n c o m e 3 7 .8 5 3 9 .4 3 4 1 .0 0 4 2 .5 8 4 4 .1 6 4 5 .7 3 4 7 .3 1 4 8 .8 9 5 0 .4 6 5 2 .0 4 4 9 .4 4

L e s s E x p e n s e s[2 4 ] O p e r a t i o n & M a in t e n a n c e 7 .5 0 7 .5 0 7 .5 0 1 0 .0 0 1 0 .5 0 1 1 .0 3 1 1 .5 8 1 2 .1 6 1 2 .7 6 1 3 .4 0 1 4 .0 7[2 5 ] In t e r e s t o n L o a n 4 9 .0 0 3 7 .6 9 2 4 .5 7 1 9 .3 0 1 3 .4 2 6 .5 7[2 6 ] B o o k D e p r e c ia t io n 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7[2 7 ] T o t a l E x p e n s e s 8 2 .3 7 7 1 .0 6 5 7 .9 4 5 5 .1 7 4 9 .8 0 4 3 .4 7 3 7 .4 5 3 8 .0 3 3 8 .6 3 3 9 .2 7 3 9 .9 4[2 8 ] B o o k P r o f i t -4 4 .5 2 -3 1 .6 3 -1 6 .9 4 -1 2 .6 0 -5 .6 4 2 .2 6 9 .8 6 1 0 .8 6 1 1 .8 3 1 2 .7 7 9 .5 0[2 9 ] C u m . P r o f i t / L o s s -4 4 .5 2 -7 6 .1 6 -9 3 .1 0 -1 0 5 .7 0 -1 1 1 .3 4 -1 0 9 .0 7 -9 9 .2 1 -8 8 .3 5 -7 6 .5 2 -6 3 .7 5 -5 4 .2 6[3 0 ] B r o u g h t F o r w a r d L o s s -1 8 .6 5 -2 4 .4 1 -1 5 .4 8 -2 .2 1[3 1 ] U n a b s o r b e d D e p r e c i a t i o n -4 4 .5 2 -7 6 .1 6 -9 3 .1 0 -1 0 5 .7 0 -1 1 1 .3 4[3 2 ] L e s s S e t o f f -1 8 .6 5 -2 4 .4 1 -1 5 .4 8 -2 .2 1[3 3 ] N e t T a x a b le I n c o m e f o r M A T 2 .2 6 9 .8 6 1 0 .8 6 1 1 .8 3 1 2 .7 7 9 .5 0[3 4 ] D e p r e c ia t i o n ( i f A c c l.b e n e f i t n o t a v a i le[3 5 ] In c o m e f r o m o p e r a t i o n -1 8 .6 5 -5 .7 6 8 .9 3 1 3 .2 8 2 0 .2 3 2 8 .1 4 3 5 .7 3 3 6 .7 3 3 7 .7 0 3 8 .6 4 3 5 .3 7[3 6 ] T a x a b le In c o m e -1 8 .6 5 -2 4 .4 1 -1 5 .4 8 -2 .2 1 1 8 .0 2 2 8 .1 4 3 5 .7 3 3 6 .7 3 3 7 .7 0 3 8 .6 4 3 5 .3 7[3 7 ] N e t T a x a b le I n c o m e f o r I . T a x 3 5 .3 7[3 8 ] M A T / I n c o m e T a x 0 .1 8 0 .7 8 0 .8 6 0 .9 3 1 .0 1 1 3 .0 0

R s . L a c s 4 9 0 R s . L a c s 3 1 6 .2 5

1 0

I R R C a s hS u r p lu s

1 6 .7 % 2 5 4 .31 2 1 3

1 4 .9 8 1 4 .9 83 .3 0 3 .3 0

4 9 .4 4 4 9 .4 4

4 9 .4 4 4 9 .4 4

1 4 .7 7 1 5 .5 1

1 2 .7 4 1 2 .4 72 4 .0 0 2 4 .0 05 1 .5 1 5 1 .9 8-2 .0 7 -2 .5 47 .6 3 8 .1 9

1 6 6 .8 08 1 .8 8 8 7 .5 3

2 5 4 .3 3

4 9 .4 4 4 9 .4 41 6 6 .8 0

1 4 .7 7 1 5 .5 13 4 .6 6 2 0 0 .7 3

4 9 .4 4 4 9 .4 44 9 .4 4 4 9 .4 4

1 4 .7 7 1 5 .5 1

2 5 .8 7 2 5 .8 74 0 .6 5 4 1 .3 98 .7 9 8 .0 5

-4 5 .4 6 -3 7 .4 1

8 .7 9 8 .0 5

3 4 .6 6 3 3 .9 33 4 .6 6 3 3 .9 33 4 .6 6 3 3 .9 31 2 .7 4 1 2 .4 7



CASH FLOW STATEMENT AS PER DR. PENDSE'S FORMATPROJECT COST 500 Rs. Lacs LOAN 350 Rs. Lacs

COST IT BENEFIT 490 Rs. Lacs EQUITY 150 Rs. Lacs

COST ST BENEFIT 316.25 Rs. Lacs Project Life 13 Years

O&M RATE 1.50% GENERATION 15.77 Lac kWh

INTT RATE 14.00% DEPRECIAITON RATE 5.28% 25.87 Rs. Lacs

FOR MAT

YEAR INFLOW OUTFLOW SALE INCOME INCOME AS PER OUTSTAN-

IT BENEFIT ST BENEFIT O & M INTEREST LOAN RETURN ON MAT/IT TOTAL NEEDED PROPOSED RATE -DING

ON LOAN REPAYMENT EQUITY EXPENSES (Benefit - Expense) RATE AMOUNT +/- Cum. +/- LOAN

350.00

1 70.74 52.71 7.50 49.00 80.80 24.00 161.30 37.85 2.40 37.84 0.00 0.00 269.20

2 70.74 52.71 7.50 37.69 93.69 24.00 162.88 39.43 2.50 39.42 0.00 -0.01 175.51

3 52.71 7.50 24.57 37.64 24.00 93.71 41.00 2.60 41.00 -0.01 -0.01 137.87

4 52.71 10.00 19.30 41.99 24.00 95.29 42.58 2.70 42.57 -0.01 -0.02 95.89

5 52.71 10.50 13.42 48.94 24.00 96.86 44.16 2.80 44.15 -0.01 -0.03 46.95

6 52.71 11.03 6.57 46.95 24.00 0.18 88.72 36.01 2.90 45.73 9.71 9.69

7 11.58 24.00 0.78 36.35 36.35 3.00 47.30 10.95 20.64

8 12.16 24.00 0.86 37.01 37.01 3.10 48.88 11.87 32.51

9 12.76 24.00 0.93 37.69 37.69 3.20 50.46 12.76 45.27

10 13.40 24.00 1.01 38.41 38.41 3.30 52.03 13.63 58.90

11 14.07 24.00 13.00 51.07 51.07 3.30 49.43 -1.64 57.26

12 14.77 24.00 12.74 51.51 51.51 3.30 49.43 -2.08 55.18

13 15.51 24.00 12.47 51.98 51.98 3.30 49.43 -2.55 52.63

350.00 41.95 545.05 2.95 597.69 52.63

Balance Loan

Generation per year 15.77 (after 13 years)

Average Cost per year 2.66

Page 3 of 6








9 Debt 70.00%










24 MAT Rate 7.875%

25 IT Rate 36.750%










% 0.00%


O-18-S-1-2.50

Iteration number 2 Page 4 of 6



C A S H FLO W L O A N R E P A Y M E N T S U R P L U S

M O D E O F F U N D I N G A S S U M P T IO N SE q u i ty R s. 1 5 0 .0 0 L a c s C o s t o f w i n d fa r m p r o je c t R s. 5 0 0 .0 0 L a c s/ M W C O S T F O R IT B E N E F IT D e b t R s. 3 5 0 .0 0 L a c s S e l li n g ra t e f or fi rs t y e a r R s. 2 .5 0 / k W h u n it C O S T F O R S T BE N EF ITT o ta l P ro je c t C o s t R s . 5 0 0 .0 0 L a c s O & M c o s t i n fi rs t y e a r R s. 7 .5 0 L a c s/ M W M A T P E R I O D y ea r s

U n it s g e n e ra t ed p e r M W 1 5 .7 7 l a c k W h / M W O U T P U TU n it s S o l d p e r M W 1 5 .7 7 l a c k W h / M W P ro je c tL o a n 3 5 0 .0 0 L a c s/ M W L ifeIn te re st R a t e 1 4 .0 % p .a . 1 3 y rs .

Y e a rs -> 1 2 3 4 5 6 7 8 9 1 0 1 1[1 ] U n it s S o l d (i n l a c k W h ) 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 5 .7 7 1 4 .9 8[2 ] S e l li n g R a te 2 .5 0 2 .6 0 2 .7 0 2 .8 0 2 .9 0 3 .0 0 3 .1 0 3 .2 0 3 .3 0 3 .4 0 3 .4 0

C A S H IN F L O W[3 ] S a l e s I n c o m e ([1 ] X [2 ] ) 3 9 .4 3 4 1 .0 0 4 2 .5 8 4 4 .1 6 4 5 .7 3 4 7 .3 1 4 8 .8 9 5 0 .4 6 5 2 .0 4 5 3 .6 2 5 0 .9 4[4 ] In c o m e T a x b e n e fi t (D e p re c ia t io n ) 7 0 .7 4 7 0 .7 4[5 ] S a l e s T a x b e n e fi t 5 2 .7 1 5 2 .7 1 5 2 .7 1 5 2 .7 1 5 2 .7 1 5 2 .7 1[6 ] T o ta l I n c o m e 1 6 2 .8 8 1 6 4 .4 5 9 5 .2 9 9 6 .8 6 9 8 .4 4 1 0 0 .0 2 4 8 .8 9 5 0 .4 6 5 2 .0 4 5 3 .6 2 5 0 .9 4

C A S H O U T F L O W[7 ] O p e ra t io n & M a in te n a n c e 7 .5 0 7 .5 0 7 .5 0 1 0 .0 0 1 0 .5 0 1 1 .0 3 1 1 .5 8 1 2 .1 6 1 2 .7 6 1 3 .4 0 1 4 .0 7[8 ] In te re st on L o a n 4 9 .0 0 3 7 .4 7 2 4 .1 0 1 8 .5 4 1 2 .3 4 5 .1 1[9 ] L o a n R e p a y m en t 8 2 .3 8 9 5 .4 9 3 9 .6 9 4 4 .3 2 5 1 .6 0 3 6 .5 2

[1 0 ] In c o m e T a x L i a bi l it y/ M A T 0 .4 2 0 .9 0 0 .9 8 1 .0 6 1 .1 3 1 3 .5 5[1 1 ] R et u r n o n E q u i ty 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0 2 4 .0 0[1 2 ] T o ta l C a sh O u tfl o w 1 6 2 .8 8 1 6 4 .4 5 9 5 .2 9 9 6 .8 6 9 8 .4 4 7 7 .0 8 3 6 .4 8 3 7 .1 3 3 7 .8 2 3 8 .5 3 5 1 .6 2[1 3 ] S u rp lu s C a s h 2 2 .9 4 1 2 .4 1 1 3 .3 3 1 4 .2 2 1 5 .0 9 -0 .6 8[1 4 ] In te re st ea r n e d o n C u m u l a tiv e 2 .2 9 3 .7 6 5 .4 7 7 .4 4 9 .7 0

s a v in g o f p r ev . y r . @ 1 0 .0 %[1 5 ] R es i d u a l / S a lv a g e V a l u e[1 6 ] C u m u la t iv e s u rp lu s c a s h 2 2 .9 4 3 7 .6 4 5 4 .7 4 7 4 .4 3 9 6 .9 7 1 0 5 .9 8

C u m u la t iv e s u rp lu s c a s h i n c l u d i n g S a lv a g e V a l u eL o a n A c c o u n t

[1 7 ] O u ts ta n d i n g L o a n 3 5 0 .0 0 2 6 7 .6 2 1 7 2 .1 4 1 3 2 .4 5 8 8 .1 3 3 6 .5 2IN T E R N A L R A T E O F R E T U R N IR R (1 3 y r s .) = 1 7 .2 % 0 .2

[1 8 ] In fl ow (T ot a l I n c o m e ) 1 6 2 .8 8 1 6 4 .4 5 9 5 .2 9 9 6 .8 6 9 8 .4 4 1 0 0 .0 2 4 8 .8 9 5 0 .4 6 5 2 .0 4 5 3 .6 2 5 0 .9 4[1 9 ] R es i d u a l / S a lv a g e V a l u e[2 0 ] O u tf lo w ( O p e ra ti o n & M a i n t en a n c e) 7 .5 0 7 .5 0 7 .5 0 1 0 .0 0 1 0 .5 0 1 1 .0 3 1 1 .5 8 1 2 .1 6 1 2 .7 6 1 3 .4 0 1 4 .0 7[2 1 ] C a s h o u tfl o w / in f lo w ( 1 3 y -5 0 0 .0 0 1 5 5 .3 8 1 5 6 .9 5 8 7 .7 9 8 6 .8 6 8 7 .9 4 8 8 .9 9 3 7 .3 1 3 8 .3 1 3 9 .2 8 4 0 .2 2 3 6 .8 7

M A T / IN C O M E T A X C A L C U L A T IO N S[2 2 ] In c o m e fr o m sa le o f e l e c tr i c i ty 3 9 .4 3 4 1 .0 0 4 2 .5 8 4 4 .1 6 4 5 .7 3 4 7 .3 1 4 8 .8 9 5 0 .4 6 5 2 .0 4 5 3 .6 2 5 0 .9 4[2 3 ] T o ta l I n c o m e 3 9 .4 3 4 1 .0 0 4 2 .5 8 4 4 .1 6 4 5 .7 3 4 7 .3 1 4 8 .8 9 5 0 .4 6 5 2 .0 4 5 3 .6 2 5 0 .9 4

L e s s E x p e n s e s[2 4 ] O p e ra t io n & M a in te n a n c e 7 .5 0 7 .5 0 7 .5 0 1 0 .0 0 1 0 .5 0 1 1 .0 3 1 1 .5 8 1 2 .1 6 1 2 .7 6 1 3 .4 0 1 4 .0 7[2 5 ] In te re st on L o a n 4 9 .0 0 3 7 .4 7 2 4 .1 0 1 8 .5 4 1 2 .3 4 5 .1 1[2 6 ] B o ok D ep re c i at io n 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7 2 5 .8 7[2 7 ] T o ta l E x p e n s es 8 2 .3 7 7 0 .8 4 5 7 .4 7 5 4 .4 1 4 8 .7 1 4 2 .0 1 3 7 .4 5 3 8 .0 3 3 8 .6 3 3 9 .2 7 3 9 .9 4[2 8 ] B o ok P ro fi t -4 2 .9 5 -2 9 .8 4 -1 4 .8 9 -1 0 .2 6 -2 .9 8 5 .3 0 1 1 .4 4 1 2 .4 4 1 3 .4 1 1 4 .3 5 1 0 .9 9[2 9 ] C u m . P ro fi t/ L o s s -4 2 .9 5 -7 2 .7 8 -8 7 .6 8 -9 7 .9 3 -1 0 0 .9 1 -9 5 .6 1 -8 4 .1 7 -7 1 .7 4 -5 8 .3 3 -4 3 .9 8 -3 2 .9 9[3 0 ] B ro u g h t F o rw a r d L o s s -1 7 .0 8 -2 1 .0 4 -1 0 .0 6[3 1 ] U n a bs o rb e d D e p re c i a ti on -4 2 .9 5 -7 2 .7 8 -8 7 .6 8 -9 7 .9 3 -1 0 0 .9 1[3 2 ] L es s S e t o ff -1 7 .0 8 -2 1 .0 4 -1 0 .0 6[3 3 ] N e t T a x a b le In c o m e f or M A T 5 .3 0 1 1 .4 4 1 2 .4 4 1 3 .4 1 1 4 .3 5 1 0 .9 9[3 4 ] D e p re c ia t io n (i f A c c l.b e n e fi t n o t a v a i l e[3 5 ] In c o m e fr o m op e ra ti o n -1 7 .0 8 -3 .9 7 1 0 .9 8 1 5 .6 1 2 2 .9 0 3 1 .1 7 3 7 .3 1 3 8 .3 1 3 9 .2 8 4 0 .2 2 3 6 .8 7[3 6 ] T a x a b le I n c o m e -1 7 .0 8 -2 1 .0 4 -1 0 .0 6 5 .5 5 2 2 .9 0 3 1 .1 7 3 7 .3 1 3 8 .3 1 3 9 .2 8 4 0 .2 2 3 6 .8 7[3 7 ] N e t T a x a b le In c o m e f or I . T a x 3 6 .8 7[3 8 ] M A T /In c o m e T a x 0 .4 2 0 .9 0 0 .9 8 1 .0 6 1 .1 3 1 3 .5 5

R s . L a c s 4 9 0 R s . L a c s 3 1 6 .2 5

1 0

IR R C a s hS u rp lu s

1 7 .2 % 2 9 2 .21 2 1 3

1 4 .9 8 1 4 .9 83 .4 0 3 .4 0

5 0 .9 4 5 0 .9 4

5 0 .9 4 5 0 .9 4

1 4 .7 7 1 5 .5 1

1 3 .2 9 1 3 .0 22 4 .0 0 2 4 .0 05 2 .0 6 5 2 .5 3-1 .1 3 -1 .5 91 0 .6 0 1 1 .5 5

1 6 6 .8 01 1 5 .4 5 1 2 5 .4 0

2 9 2 .2 0

5 0 .9 4 5 0 .9 41 6 6 .8 0

1 4 .7 7 1 5 .5 13 6 .1 6 2 0 2 .2 2

5 0 .9 4 5 0 .9 45 0 .9 4 5 0 .9 4

1 4 .7 7 1 5 .5 1

2 5 .8 7 2 5 .8 74 0 .6 5 4 1 .3 91 0 .2 9 9 .5 5-2 2 .7 0 -1 3 .1 5

1 0 .2 9 9 .5 5

3 6 .1 6 3 5 .4 23 6 .1 6 3 5 .4 23 6 .1 6 3 5 .4 21 3 .2 9 1 3 .0 2

Page 5 of 6



CASH FLOW STATEMENT AS PER DR. PENDSE'S FORMATPROJECT COST 500 Rs. Lacs LOAN 350 Rs. Lacs

COST IT BENEFIT 490 Rs. Lacs EQUITY 150 Rs. Lacs

COST ST BENEFIT 316.25 Rs. Lacs Project Life 13 Years

O&M RATE 1.50% GENERATION 15.77 Lac kWh

INTT RATE 14.00% DEPRECIAITON RATE 5.28% 25.87 Rs. Lacs

FOR MAT

YEAR INFLOW OUTFLOW SALE INCOME INCOME AS PER OUTSTAN-

IT BENEFIT ST BENEFIT O & M INTEREST LOAN RETURN ON MAT/IT TOTAL NEEDED PROPOSED RATE -DING

ON LOAN REPAYMENT EQUITY EXPENSES (Benefit - Expense) RATE AMOUNT +/- Cum. +/- LOAN

350.00

1 70.74 52.71 7.50 49.00 82.38 24.00 162.88 39.43 2.50 39.42 0.00 0.00 267.62

2 70.74 52.71 7.50 37.47 95.49 24.00 164.45 41.00 2.60 41.00 -0.01 -0.01 172.14

3 52.71 7.50 24.10 39.69 24.00 95.29 42.58 2.70 42.57 -0.01 -0.02 132.45

4 52.71 10.00 18.54 44.32 24.00 96.86 44.16 2.80 44.15 -0.01 -0.02 88.13

5 52.71 10.50 12.34 51.60 24.00 98.44 45.73 2.90 45.73 -0.01 -0.03 36.52

6 52.71 11.03 5.11 36.52 24.00 0.42 77.08 24.37 3.00 47.30 22.93 22.91

7 11.58 24.00 0.90 36.48 36.48 3.10 48.88 12.40 35.31

8 12.16 24.00 0.98 37.13 37.13 3.20 50.46 13.32 48.63

9 12.76 24.00 1.06 37.82 37.82 3.30 52.03 14.22 62.85

10 13.40 24.00 1.13 38.53 38.53 3.40 53.61 15.08 77.93

11 14.07 24.00 13.55 51.62 51.62 3.40 50.93 -0.69 77.24

12 14.77 24.00 13.29 52.06 52.06 3.40 50.93 -1.13 76.11

13 15.51 24.00 13.02 52.53 52.53 3.40 50.93 -1.60 74.51

350.00 44.34 543.44 3.05 617.95 74.51

Balance Loan

Generation per year 15.77 (after 13 years)

Average Cost per year 2.65

Page 6 of 6



Compilation of data for Wind Energy Projects (based on MSEB Data Submission)

1999 – 00 Actual Generation

Sr.No. Name of Circle and Developer Date of Commissioning

No of Machines

Capacity of each machine in KW

Aggregate Capacity

in KW

Annual Operating

hrs.

Actual Generation in

KWh

hrs of Operation

in p.a.

CAPACITY UTILISATION FACTOR IN

% SATARA 1 Sahani Enterprises Pune 30.10.1998 1 225 225 8760 309400.00 1375.11 15.70 2 Borax Morarji Ltd, Thane 30.03.1998 1 225 225 8760 298900.00 1328.44 15.16 3 Sheth and Sura Engg, Pune 27.10.1998 1 225 225 8760 333600.00 1482.67 16.93 4 HMTD Engg pvt ltd. 23.08.1998 1 225 225 8760 304200.00 1352.00 15.43 5 Borax Morarji Ltd, Thane 25.09.1998 1 225 225 8760 327100.00 1453.78 16.60 5 1125 8760 1573200.00 1398.40 15.96

2000 – 01 Actual Generation SATARA 1 Niskalp Investment 29.03.2000 21 350 7350 8760 8637200 1175.13 13.41 2 Sahani Enterprises Pune 30.10.1998 1 225 225 8760 265600 1180.44 13.48 3 Borax Morarji Ltd, Thane 30.03.1998 1 225 225 8760 232500 1033.33 11.80 4 Sheth and Sura Engg, Pune 27.10.1998 1 225 225 8760 214600 953.78 10.89 5 HMTD Engg pvt ltd. 23.08.1998 1 225 225 8760 236900 1052.89 12.02 6 Borax Morarji Ltd, Thane 25.09.1998 1 225 225 8760 223700 994.22 11.35 7 Sharp Engineers 27.08.1999 1 225 225 8760 390200 1734.22 19.80 8 BG Chitale 15.03.2000 2 225 450 8760 292200 649.33 7.41 29 9150 10492900.00 1146.77 13.09 Page 1 of 6



2001 – 02 Actual Generation

SATARA 1 Niskalp Investment 29.03.2000 21 350 7350 8760 9861800 1341.74 15.32 2 Bajaj auto Ltd. 29.06.2000 28 350 9800 8760 27958300 2852.89 32.57 3 Sahani Enterprises Pune 30.10.1998 1 225 225 8760 164000 728.89 8.32 4 B F Utilities , Pune 22.12.2000 12 230 2760 8760 5786500 2096.56 23.93 5 Borax Morarji Ltd, Thane 30.03.1998 1 225 225 8760 316400 1406.22 16.05 6 Sheth and Sura Engg, Pune 27.10.1998 1 225 225 8760 337100 1498.22 17.10 7 HMTD Engg pvt ltd. 23.08.1998 1 225 225 8760 272000 1208.89 13.80 8 Borax Morarji Ltd, Thane 25.09.1998 1 225 225 8760 326500 1451.11 16.57 9 Sharp Engineers 27.08.1999 1 225 225 8760 269600 1198.22 13.68

10 BG Chitale 15.03.2000 2 225 450 8760 282100 626.89 7.16 69 21710 45574300 2099 23.96 SANGLI 1 Vinyl 20.01.2001 2 230 460 8760 775261 1685 19 2 Pidilite 20.01.2001 1 230 230 8760 561955 2443 28 3 Pidilite II 20.01.2001 1 230 230 8760 523891 2278 26 4 Tex International 6.3.2001 1 230 230 8760 467978 2035 23 5 Overseas Traders 6.3.2001 1 230 230 8760 433033 1883 21 6 Shushbndu 30.03.2001 1 230 230 8760 653306 2840 32 7 Parag Sancheti 30.03.2001 1 230 230 8760 535782 2329 27 8 Sharada 30.03.2001 1 230 230 8760 544370 2367 27 9 Kohinoor 31.03.2001 5 230 1150 8760 2851929 2480 28

10 Parle I 30.03.2001 6 600 3600 8760 5946039 1652 19 20 6820 13293544 1949 22.25 AHMEDNAGAR 1 Tata Finance Ltd 21.03.2001 1 1000 1000 8760 1653558 1654 19 2 Nishkalp 30.12.2000 1 1000 1000 8760 1863153 1863 21

Page 2 of 6



2 2000 3516711 1758 20.07 2002-03 Actual Generation

SATARA 1 Niskalp Investment 29.03.2000 21 350 7350 8760 12.3830 12383000 1684.76 19.23 2 Maharashtra Seamless 13.12.2001 20 350 7000 8760 10.3568 10356800 1479.54 16.89 3 Bajaj auto Ltd. 29.06.2000 28 350 9800 8760 17.8704 17870400 1823.51 20.82 4 Laxmi Metal Pressing Work Aurangabad 27.03.2002 1 350 350 8760 0.5291 529100 1511.71 17.26 5 Bajaj auto Ltd.-Pune 30.03.2002 6 1000 6000 8760 12.2546 12254600 2042.43 23.32 6 Suzlon green Power. Ahmedabad 30.03.2002 1 1000 1000 8760 1.3021 1302100 1302.10 14.86 7 Kulakarni Power Tools Ltd 31.03.2002 1 750 750 8760 0.9266 926600 1235.47 14.10 8 GI Wind Famrs Ltd 19.03.2002 21 600 12600 8760 20.8821 20882100 1657.31 18.92 9 Navlakha Translines Pune 29.09.2001 1 500 500 8760 0.8248 824800 1649.60 18.83

10 Usha Electronics New Delhi 28.09.2001 2 500 1000 8760 1.4028 1402800 1402.80 16.01 11 Laxmi Rikshaw Body Aurangabad 30.03.2002 1 350 350 8760 0.4951 495100 1414.57 16.15 12 Naren Traders Nashik 27.03.2002 1 350 350 8760 0.5237 523700 1496.29 17.08 13 Suzlon green Power Ahmedabad 26.03.2002 8 350 2800 8760 4.1947 4194700 1498.11 17.10 14 Jayshree Rubber Prod Pvt Ltd 29.03.2002 1 350 350 8760 0.5558 555800 1588.00 18.13 15 Yashree Press Compunds 27.03.2002 1 350 350 8760 0.5469 546900 1562.57 17.84 16 Phoenix Enterprises , Pune 28.03.2002 1 350 350 8760 0.5378 537800 1536.57 17.54 17 Narendra Solves P Ltd. Amrawati 13.03.2002 1 230 230 8760 0.3951 395100 1717.83 19.61 18 Deesan Agro Tech Ltd, Dhule 13.03.2002 2 230 460 8760 0.7853 785300 1707.17 19.49 19 Sagareshwar S Soot Girani Sangli 26.03.2002 4 250 1000 8760 0.7729 772900 772.90 8.82 20 Sahani Enterprises Pune 30.10.1998 1 225 225 8760 0.2754 275400 1224.00 13.97 21 B F Utilities , Pune 22.12.2000 12 230 2760 8760 5.8113 5811300 2105.54 24.04 22 B F Utilities, Pune 29.09.2001 11 600 6600 8760 16.3227 16322700 2473.14 28.23 23 Bharat Forge Ltd., Pune 31.12.2001 7 600 4200 8760 9.2362 9236200 2199.10 25.10 24 Borax Morarji Ltd, Thane 30.03.1998 1 225 225 8760 0.2882 288200 1280.89 14.62 25 Sheth and Sura Engg, Pune 27.10.1998 1 225 225 8760 0.2900 290000 1288.89 14.71 26 HMTD Engg pvt ltd. 23.08.1998 1 225 225 8760 0.3032 303200 1347.56 15.38 27 Borax Morarji Ltd, Thane 25.09.1998 1 225 225 8760 0.3011 301100 1338.22 15.28 Page 3 of 6



28 Sharp Engineers 27.08.1999 1 225 225 8760 0.3555 355500 1580.00 18.04 29 BG Chitale 15.03.2000 2 225 450 8760 0.3248 324800 721.78 8.24 30 Superfine Photo Co Pvt Ltd 26.11.2001 1 225 225 8760 0.4136 413600 1838.22 20.98 31 Paranjape Metal Shapers, Pune 15.12.2001 1 230 230 8760 0.4656 465600 2024.35 23.11 32 Pidilite Industrries Mumbai 30.09.2001 7 230 1610 8760 3.4795 3479500 2161.18 24.67 33 Shreem Capacitors Pvt Ltd 09.12.2001 2 230 460 8760 1.0536 1053600 2290.43 26.15 34 Mayura Steels Pvt Ltd 25.09.2001 1 230 230 8760 0.4597 459700 1998.70 22.82 35 Pidilite Industrries Mumbai 27.09.2001 3 230 690 8760 1.5255 1525500 2210.87 25.24 36 Jsons Foundry Pvt Ltd,Sangli 12.11.2001 4 230 920 8760 2.1066 2106600 2289.78 26.14 37 Pidilite Industrries Mumbai 25.09.2001 2 230 460 8760 0.9971 997100 2167.61 24.74 38 Kirloskar Copeland Ltd , Satara 22.09.2001 2 230 460 8760 0.9294 929400 2020.43 23.06 39 Paranjape Autocast, Pune 29.12.2001 1 230 230 8760 0.4604 460400 2001.74 22.85 40 Pidilite Industrries Mumbai 25.09.2001 2 230 460 8760 1.0161 1016100 2208.91 25.22 41 Dhar Automotive Pvt Ltd 31.03.2002 2 500 1000 8760 0.7355 735500 735.50 8.40 42 Balaji Amines Ltd, Solapur 31.03.2002 1 500 500 8760 0.4742 474200 948.40 10.83 43 Snowcem India Ltd, Mumbai 31.03.2002 2 500 1000 8760 1.3568 1356800 1356.80 15.49 44 New Sahayadri Ind , Pune 31.03.2002 4 600 2400 8760 3.9775 3977500 1657.29 18.92 45 New Sahayadri Ind , Pune 31.12.2001 2 600 1200 8760 4.6355 4635500 3862.92 44.10 46 Karama Energy Ltd. 29.09.2001 6 750 4500 8760 8.4426 8442600 1876.13 21.42 47 Uni Deritand Ltd, Mumbai 31.12.2001 4 600 2400 8760 4.9990 4999000 2082.92 23.78 48 Kirloskar Copeland Ltd, Karad 28.12.2001 1 600 600 8760 1.1594 1159400 1932.33 22.06 49 Sun -n-Sand P Ltd, Mumbai 28.12.2001 2 600 1200 8760 2.4657 2465700 2054.75 23.46 50 Birla Yamaha Ltd, Mumbai 30.03.2002 1 600 600 8760 1.3630 1363000 2271.67 25.93 51 Liberty Oil Mill, Mumbai 28.03.2002 5 600 3000 8760 5.8216 5821600 1940.53 22.15 52 Scimitar Investment Mumbai 30.03.2002 1 600 600 8760 0.5403 540300 900.50 10.28 53 Deesan Agro Tech Ltd, Dhule 30.03.2002 1 600 600 8760 1.0997 1099700 1832.83 20.92 218 93525 8760 171025900 1828.67 20.88

Page 4 of 6



SANGLI

1 Vinyl 20.01.2001 2 230 460 8760 1.3187 1318739 2866.82 32.73 2 Pidilite 20.01.2001 1 230 230 8760 0.7172 717181 3118.18 35.60 3 Pidilite II 20.01.2001 1 230 230 8760 0.7252 725188 3152.99 35.99 4 Tex International 6.3.2001 1 230 230 8760 0.6223 622289 2705.60 30.89 5 Overseas Traders 6.3.2001 1 230 230 8760 0.6999 699896 3043.03 34.74 6 Shushbndu 30.03.2001 1 230 230 8760 0.6633 663340 2884.09 32.92 7 Parag Sancheti 30.03.2001 1 230 230 8760 0.5954 595421 2588.79 29.55 8 Sharada 30.03.2001 1 230 230 8760 0.5564 556422 2419.23 27.62 9 Kohinoor 31.03.2001 5 230 1150 8760 2.9755 2975480 2587.37 29.54 10 Parle I 30.03.2001 6 600 3600 8760 6.7484 6748367 1874.55 21.40 11 Parle II 28.04.2001 6 600 3600 8760 5.5949 5594949 1554.15 17.74 12 GI Wind 29.12.2001 14 600 8400 8760 14.8828 14882840 1771.77 20.23 40 18820 36100112 1918.18 21.90 AHMEDNAGAR

1 Bajaj Auto Ltd. 4.7.2001 10 1000 10000 8760 19.6209 19620940 1962 22.40 2 Bajaj Auto Ltd. 16.09.2001 10 1000 10000 8760 18.0180 18017980 1802 20.57 3 San and Sand Hotels Ltd. 28.09.2001 2 1000 2000 8760 3.5970 3597007 1799 20.53 4 Varroc Engg Pvt Ltd 30.03.2002 1 1000 1000 8760 1.4314 1431356 1431 16.34 5 Tata Finance Ltd 21.03.2001 1 1000 1000 8760 1.7706 1770618 1771 20.21 6 Tata Power Company Ltd. 31.12.2001 8 1000 8000 8760 14.0671 14067070 1758 20.07 7 Tata Finance Ltd 14.08.2001 1 1000 1000 8760 1.7723 1772290 1772 20.23 8 Nishkalp 30.12.2000 1 1000 1000 8760 1.6563 1656341 1656 18.91 9 Tata Power Company Ltd. 31.12.2001 9 1000 9000 8760 16.8415 16841510 1871 21.36 10 Jivraj tea Ltd. 29.03.2002 1 1000 1000 8760 2.1354 2135386 2135 24.38 11 Jivraj tea Ltd. 29.03.2002 1 1000 1000 8760 2.2525 2252464 2252 25.71 12 Varroc Engg P Ltd 30.7.2001 1 1000 1000 8760 1.8785 1878467 1878 21.44

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13 Varroc Engg P Ltd 28.09.2001 1 1000 1000 8760 1.8870 1886981 1887 21.54 14 Varroc Engg P Ltd 15.03.2002 1 1000 1000 8760 1.8934 1893446 1893 21.61 15 Anurang Engg P Ltd. 31.12.2001 1 1000 1000 8760 2.0589 2058934 2059 23.50 16 Endurance Systems India P Ltd 30.03.2002 1 1000 1000 8760 1.8071 1807074 1807 20.63 17 San-n-Sand Hotels Ltd. 31.12.2001 1 1000 1000 8760 1.5514 1551431 1551 17.71 18 Aurangabad Electricals P Ltd. 31.12.2001 2 1000 2000 8760 1.5514 1551431 776 8.86 19 Shalimaar Visual P Ltd. 30.03.2002 1 1000 1000 8760 1.9867 1986719 1987 22.68 20 Navalakha Translines 30.03.2002 1 1000 1000 8760 1.9669 1966876 1967 22.45 21 ZF Stearing Gears India Ltd. 29.03.2002 1 1000 1000 8760 1.9305 1930458 1930 22.04 22 Shree Ramdeo Baba 30.03.2002 1 1000 1000 8760 1.8175 1817473 1817 20.75 57 57000 103492251 1815.65 20.73 DHULE

1 Universal Starch Chem 30.03.2002 1 600 600 8760 1.5850 1585000 2641.67 30.16 2 Unique Sugar Ltd 30.03.2002 1 600 600 8760 1.2710 1271000 2118.33 24.18 3 Jaichand Agro Industries 30.03.2002 1 600 600 8760 1.2960 1296000 2160.00 24.66 4 Rajendra Mechanical Ind 30.03.2002 1 600 600 8760 1.7640 1764000 2940.00 33.56 4 2400 8760 5916000 2465.00 28.14

SAMPLE SIZE:322 WIND GENERATORS IN 4 CIRCLES- SATARA, SANGLI, AHMEDNAGAR,

DHULE SOURCE: MSEB / Co.ord.Cell/Wind/021704/

Dated- 01JULY,2003

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Ahmednagar Dhule Sangli Satara

1.a. No. of Developers No. NIL NIL NIL 5 5b Installed capacity in operation for full year MW NIL NIL NIL 1.13 1.13c Actual generation for full year kWh NIL NIL NIL 1573200 1573200.00d Overall CUF % NIL NIL NIL 15.96 15.96

1.a. No. of Developers No. NIL NIL NIL 8 8b Installed capacity in operation for full year MW NIL NIL NIL 9.15 9.15c Actual generation for full year kWh NIL NIL NIL 10492900 10492900.00d Overall CUF % NIL NIL NIL 13.09 13.09

1.a. No. of Developers No. 2 NIL 10 10 22b Installed capacity in operation for full year MW 2 NIL 6.82 21.71 30.53c Actual generation for full year kWh 3516711 NIL 13293544 45574300 62384555d Overall CUF % 20.07 NIL 22.25 23.96 23.33

1.a. No. of Developers No. 22 4 12 53 91b Installed capacity in operation for full year MW 57 2.4 18.82 93.525 171.745c Actual generation for full year kWh 103492251 5916000 36100112 171025900 316534263d Overall CUF % 20.73 28.14 21.9 20.88 21.04

No. of Developers No. 24 4 22 76 126Installed capacity in operation MW 59.00 2.40 25.64 125.52 212.56Actual generation kWh 107008962.00 5916000.00 49393656.00 228666300.00 390984918.00No of Operating Hours hours 1813.71122 2465 1926.429641 1821.824483 1839.452932Overall CUF % 20.70 28.14 21.99 20.80 21.00

ANALYSIS OF CUF OVER FOUR YEARS(BASED ON ACTUAL GENERATION)

2001-2002

2000-2001

Sl. No. TotalMSEB Circles

1999 - 2000

TOTAL FOR CONSIDERATION OF AVG.

UnitDescription

2002-2003

Page 1 of 1



SUMMARY OF MODIFIED CASH FLOW STATEMENT GROUP II (OLD) PROJECTS – COMMISSIONED AFTER 27th DECEMBER, 1999 & BEFORE 31st MARCH, 2003

BASIC ASSUMPTIONS CAPITAL COST Rs. 5 Crores C.U.F. 18 % DEBT EQUITY 70 : 30 O & M 1.5 % fixed for 3 years INTEREST RATE 14% 2.0 % in 4th year

+ Increased @ 5 %

Iteration No Model

Presented in

Option OUTPUT

IRR

RATE IN 1ST YEAR

RATE OF ESCALATION PER ANNUM

FROZEN RATE FROM

10th – 13th YEAR

For 13 Years

SURPLUS at the end of 13th year

Cash Salvage Total

IN RS. / KWh IN PAISE IN

RS./ KWh In

% age Rs. Lacs

Rs. Lacs

Rs. Lacs

1 O-18-S-1-2.40

Annexure 9 Accl. Depr.

in 2 year SLM

2.40 10 3.30 16.7 87.5 166.8 254.3

2 O-18-S-1-2.50

Annexure 9 Accl. Depr.

in 2 year SLM

2.50 10 3.40 17.2 125.4 166.8

292.2

Page 1 of 8



SUMMARY OF MODIFIED CASH FLOW STATEMENT GROUP III (NEW) PROJECTS – COMMISSIONED AFTER 31st MARCH, 2003

BASIC ASSUMPTIONS CAPITAL COST Rs. 4 Crores C.U.F. 20 % / 21% DEBT EQUITY 70 : 30 O & M 1.5 % fixed for 3 years INTEREST RATE 12.5% 2.0 % in 4th year

+ Increased @ 5 %

Iteration No

CUF Model

Presented in

Option OUTPUT

IRR

RATE IN 1ST YEAR

RATE OF ESCALATION PER ANNUM

Increase of rate upto For 13

Years

SURPLUS at the end of 13th year

Cash Salvage Total

IN RS. / KWh IN PAISE Year In

% age Rs. Lacs

Rs. Lacs

Rs. Lacs

1

21 % N-0-S-21

Annexure 12

Accl.Depr. adjusted against revenue

income SLM

3.50 15 13 14.9 154.2 135.4 289.6

2

20% N-0-S-20

Annexure 12

Accl. Depr. Adjusted against revenue

income SLM

3.50 15 13 13.9 65.7 135.4

201.1

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WIND PROJECT TARIFF ORDER 03-04


CASH FLOW STATEMENT FOR GROUP-III (NEW) PROJECTS

BASIC ASSUMPTIONS

Sl.No. Particulars Input Units





9 Debt 70.00%










24 MAT Rate 7.688%

25 IT Rate 35.875%










% 0.00%


N-0-S-21

Iteration Number 1

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CASH FLOW STATEMENT FOR GROUP-III (NEW) PROJECTS






9 Debt 70.00%










24 MAT Rate 7.688%

25 IT Rate 35.875%










% 0.00%


N-0-S-20

Iteration Number 2

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Documents

mseb policies on wind energy: deviations from the policies of gom