THE UTTAR PRADESH ELECTRICITY … respect of 2 X 45 MW thermal power plants of Bajaj Energy Pvt. Limited Barkhera Khambarkhera ... Shri J. P. S. Gangwar, SE (PPA), UPPCL 11. Shri Nadeem

Approval of Final Capital Cost, True up FY 12-14 and Multi Year Tariff of BEPL for FY 15-19

Approval of final capital cost, True up for the period from the COD up to 31.03.14 and Approval of MYT tariff for the period from FY 2014-15 to FY 2018-19in respect of 2 X 45 MW thermal power plants of Bajaj Energy Pvt. Limited

Barkhera

Khambarkhera

Kundarki

Maqsoodapur

Utraula

Lucknow

Dated: 24th May, 2017

THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION

LUCKNOW

Petition Nos. 973 of 2014, 1036,1037,1038,1039 &1040 of 2015

1079, 1080, 1081, 1082 &1083 of 2016

FILED BY

Bajaj Energy Private Ltd (BEPL)

IN THE MATTER OF:


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Table of Contents

1. FOREWORD

2. BACKGROUND

3. APPROVAL OF FINAL CAPITAL COST

4. APPROVAL OF PARAMETERS FOR DETERMINATION OF ARR

5. METHODOLOGY FOR TRUING UP

6. FINAL TRUE UP FOR FY 2011-12, FY 2012-13 AND FY 2013-14

7. MULTI YEAR TARIFF PETITION FOR FY 2014-15 TOFY 2018-19

8. TARIFF DESIGN AND APPROACH FOR DETERMINATION OF MYT

9. APPROVED MULTI YEAR TARIFF AND ARR

10. OTHER PROVISIONS

11. COMMISION’S DIRECTIVES

12. IMPLEMENTATION OF ORDER


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Petition Nos.973 of 2014, 1036,1037,1038,1039 &1040 of 2015

1079, 1080, 1081, 1082 &1083 of 2016

BEFORE

THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION

LUCKNOW

Date of Public Hearing: 29.02.2016, 16.03.2016 and 16.08.2016

Date of Order: 24.05.2017

PRESENT:

1. Hon’ble Shri Desh Deepak Verma, Chairman

2. Hon’ble Shri Suresh Kumar Agarwal, Member

IN THE MATTEROF:

Approval of final capital cost, True-up for the period from the COD up to 31.03.14 and

Approval of MYT tariff for the period from FY 2014-15 to FY 2018-19 in respect of 2 X 45

MW thermal power plants of Bajaj Energy Pvt. Ltd.

BETWEEN

M/s Bajaj Energy Pvt. Ltd, B-10 Sector 3, Bajaj Bhawan, Jamnalal Bajaj Marg, Noida 201301(UP)

--------------- Petitioner

AND

Uttar Pradesh Power Corporation Ltd. (UPPCL) Shakti Bhawan, 14-Ashok Marg, Lucknow-226001 &Others

--------------- Respondent(s)


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The following were present:

1. Shri Vinay Kumar Bonkuti, President, Bajaj Energy Pvt. Ltd.

2. Shri S. N. M. Tripathi, Director, Bajaj Energy Pvt. Ltd.

3. Shri Arun Garg, GM (F P&A), Bajaj Energy Pvt. Ltd.

4. Shri Anant Swaroop, VP, Bajaj Energy Pvt. Ltd.

5. Shri Amrendra, Sr. Manager, Bajaj Energy Pvt. Ltd.

6. Shri VKS, President (OM), Bajaj Energy Pvt. Ltd.

7. Shri Suth, Director, Bajaj Energy Pvt. Ltd.

8. Shri PradeepTandon, President, Bajaj Energy Pvt. Ltd.

9. Shri V. P. Srivastava, CE (PPA), UPPCL

10. Shri J. P. S. Gangwar, SE (PPA), UPPCL

11. Shri Nadeem Khan, EE, PPA, UPPCL

12. Shri VivekDikshit, EE, UPPCL

13. Shri Rajiv Srivastava, Advocate, UPPCL

14. CA Manish Garg, Consultant, UPPCL

15. Shri BhushanRastogi, Consultant, UPPCL

16. Shri Shafiullah, UPRVUP, Consumer Representative

17. Shri LaljiYadav, UPRVUP, Consumer Representative

18. Shri Rama Shankar Awasthi, Consumer Representative

19. Shri Avdhesh Kumar Verma, Chairman, UPRVUP, Consumer Representative


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Order

1. FOREWORD :

1.1 The Bajaj Energy Private Limited (BEPL) filed petitions for Approval of Capital Cost and for True

up for Barkhera, Khambarkhera, Maqsoodapur, Kundarki and Utraula Thermal Power Stations for

F.Y. 2011-12 to 2013-14 on 25.08.2015. The petitions were admitted by the Commission vide

order dated 07.01.2016 The Petitioner got the details published in newspapers on 20.01.2016

and 21.01.2016. The Petitioner was also directed to put the petitions along with the relevant

documents on its website and to make available hard copies of the same for inspection by any

person during office hours at its Registered Office.

1.2 Subsequently the Petitioner filed petitions vide affidavit dated23.01.2016for determination of Multi

Year Tariff (MYT) for FY 2014-15 to FY 2018-19. The petition was admitted by the Commission

vide order dated 04.02.2016.

1.3 A Public Notice was given to the stakeholders and interested parties to give opportunity to submit

comments/ objections/ suggestions to petitions in writing directly to the Commission’s Office with

an advance copy to the Petitioner, personally or by post. The Public Notice for hearing was

published on 05.02.2016 and hearing in the matter was held in the office of the Commission on

29.02.16 at 11:30 hrs. During the hearing, the representative of the Petitioner summarized the

contents of the petitions, on which specific comments against the petitions were raised by

Respondents.

1.4 UPPCL filed comments on the petition on 06.11.2015 to which the Petitioner filed a rejoinder on

06.01.2016.UPPCL raised an objection that the agreed capital cost of the Bajaj energy plants as

on CoD was Rs. 2511.82 Crores, on which the Petitioner has claimed a significant additional

capitalization of Rs. 155 Crores after CoD. BEPL submitted that the additional capitalization of

Rs.85.21 Crores out of this Rs.155 Crores claimed in its Petitions has already been accepted as

deferred liability in the Expert Committee Report on the approval of capital cost for its plants.

1.5 UPPCL also raised objection that plant wise audited annual accounts and plant wise audited

details of deferred liabilities have not been submitted by the Petitioner to substantiate its claims of

additional capitalization.

1.6 Since there was no representation from the public; on request of Shri Rama Shankar Awasthi,

Consumer representative, the Commission allowed some additional time for filing of objections on

the Petitions and fixed a date for second public hearing on 15.03.2016 at 11:30 Hrs. However, a


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corrigendum was issued later that the public hearing shall be held on 16.03.2016 instead of

15.03.2016.

1.7 Shri Awasthi also brought to the notice his written submissions filed during the Public Hearing on

Petition No. 852, 853, 854, 855, 856 & 869 of 2012. These include the following points:

1. The Commission should take up review of operating norms based on performance test report

(PG report) submitted by supplier and actual performance report since CoD.

2. The Commission should prepare benchmark study report for operating parameter for

45 MW thermal generating station before reviewing the operating parameters

3. The Commission should not amend or add this stabilization period for generating plant of 45

MW based on CFBC technology

4. CFBC technology is newer and an improved technology. Therefore in any case operating

parameter should not be more than operating parameter as decided by MPERC in M/s BLA

Power Pvt. Ltd. passed on Order dated 24.07.2012

1.8 The objections raised by the Consumer representatives in second public hearing have been

detailed in the following sections:

A. Shri Avadhesh Kumar Verma, Chairman, U.P Rajya Vidyut Upbhokta Parishad raised objection

that BEPL has uploaded the petitions and other related documents on www.bajajgroup.org

instead of Bajaj Energy Pvt. Ltd. website. He further raised objection that UPPCL had not

uploaded their expert committee report on the agreed capital cost of BEPL on the website and

that BEPL had not provided the report on the subletting of the contract by BIDCO (EPC

Contractor) to other contractors.

B. During the public hearing Shri Verma also brought to the notice his written submissions filed

during the Public Hearing on Petition No. 852, 853, 854, 855, 856 & 869 of 2012. He had

submitted that the Consumer’s interest must be taken care of by the Hon’ble Commission and

that private power producers in the State are already getting very high tariff which is evident from

the annual revenue requirements as submitted by UPPCL. The issue of such high tariff is

required to be examined thoroughly so that the reasons for difference in tariff in comparison to

State or Central sector generating plants may be ascertained. He further propounded that the

Hon’ble Commission may form a high level committee to probe the issue of higher cost power as

supplied through the MoU route by the power producers in the state of Uttar Pradesh (UP). He

added that a competent expert committee should be formed by the Hon’ble Commission to review

the actual performance of the petitioner plants and only on the basis of the report any decision

may be taken. Shri Verma, stressing again upon the already higher tariff as being paid to the


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company, vehemently opposed any further allowance which may impact increase in tariff and

which would ultimately further burden the consumer of the State.

C. Shri Verma also submitted a letter of objections along with the findings of CAG report which

states the following points:

1. Faulty planning of Generation plants

2. Faulty installation of Power plant by BEPL

3. Default in informing Commission about the criteria of DPR

4. Discrepancies in Petition filed by BEPL related to power purchase

5. Consideration of wrong value of Debt and Equity

6. Consideration on increased IDC during construction period

7. Permission granted for increased rate on equity

8. Non-Monitoring of activities by GoUP

D. Shri Shafiullah, another Consumer representative, raised objection that M/s Bajaj Hindustan Ltd.

(BHL) had signed EPC contract for all the 5 projects with M/s Bajaj Infrastructure Development

Company (BIDCO) on 28.12.2009, much before the date of MoU signed between BHL and GoUP

on 22.04.2010 and the finalization of EPC contract by BHL prior to signing of MoU and PPA. This

implies that BHL has taken up the 5 thermal Power Projects (2X45 MW) at Barkhera,

Khambarkhera, Maqsoodapur, Kundarki and Utraula on their own which were subsequently

brought under MoU route by signing of MoU with the BHL on 14.01.2012. He further submitted

that the existing 5 projects of (2X45 MW) thermal Power Project at Barkhera, Khambarkhera,

Maqsoodapur, Kundarki and Utraula are said to have been installed under UP Government Co-

Generation policy, declaring these units as Co-Generation Plants installed by the Co-Generator,

BHL. Further, the Consumer representative raised objection that as per Regulation 11 of UPERC

Generation Tariff Regulations 2009, BHL was required to submit the Detailed Project Report

(DPR) of the Projects and scheduled Commercial Operation Date (CoD) etc. in respect of the

proposed Projects to the Commission. However, the Commission was not even aware of the fact

that BHL was in advance stage of the project by the time the approval for PPA was sought by

UPPCL.

E. Shri Shafiullah raised objection that while approving the PPA , the Commission had not

considered the issue of procedures for selection of BHL as developer and also the following facts:

1. The guidelines issued by GoI for Case-2 bidding in selection of BHL as developer

2. Specifications for the establishment of the Plant were not approved from the Commission

and Standard Bidding Documents (SBDs) framed by the Government of India (GoI) were

not followed. He added that higher O&M charges, fixed charges and variable charges had


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been provided to the petitioner as compared to those already declared vide Schedule-1 in

UPERC Tariff Regulations dated 22.03.2010 and requested the Commission for recovery of

excess payment from the Petitioner.

F. Further he raised an objection on BEPL regarding setting up of plants without Railway siding and

requested the Commission to institute enquiry through an appropriate agency to examine the

circumstances of deciding 45 MW units with CFBC boilers as an IPP utility and locating the same

at forlorn places of Bajaj Sugar Factories without any Railway siding.

G. Shri Shafiullah submitted that the Expert Committees had practically not carried out any check of

the Capital Cost and did not verify the details related to IDC. He further submitted that the Expert

Committee appointed by the Commission did not examine the detailed cost structures and relied

on the figures indicated by UPPCL, thereby reducing the cost by Rs.13.85 Crore.

H. Shri Shafiullah requested the Commission to determine the correct capital cost of the 5 projects

of BEPL through some other outside agency.

I. Shri Avdhesh Kumar Verma, requested the Commission to hold another Public hearing in this

matter.

J. On the above submissions made by the Consumer representatives, Shri S.N.M.Tripathi, Director,

BEPL submitted that the softcopies of the petition and other documents were easily available on

their group company’s website. However, if the Commission thinks that it should be on their

generating company’s website, then they have no problem in uploading the documents on that

website. Further he submitted that the projects were conceived under GoUP Energy Policy on

coal based power generation to meet the gap in demand. The projects have undisputed status of

IPP and have started operations in record time. He requested the Commission to approve their

final tariff.

K. Subsequent to the public hearing, BEPL vide letter dated 12.05.2016 submitted their response to

the observations made by Consumer representative Shri Shafiullah. The submissions are given in

the following:

1. The Petitioner submitted that the observations by Consumer representative pertaining to

recommendations of the operating parameters of Bajaj Thermal Power Plant are not the

subject matter of the petition of BEPL in the current instance.

2. The Petitioner submitted that in the Petition, the observations/ submissions are made

against UPPCL and Expert Committee appointed by Hon’ble Commission and BEPL is not

the respondent intended.


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3. The Petitioner further submitted that the determination of operating parameters for 45MW

IPP units was disposed of by the Hon’ble Commission vide order dated 27.07.2011 after

due diligence and based on submission and deliberations of all stakeholders in public

hearing. The Consumer representative had opportunity to file objection during that time. To

raise objection now after five years seems to harass the associated parties and the Hon’ble

Commission.

4. The Petitioner further submitted that the Hon’ble Commission had decided to fix

parameters of 45MW separately by an order and by necessary amendments in the

regulations as the same were not described in UPERC (Terms and Conditions of

Generation tariff, 2009).

5. The Petitioner submitted that the Hon’ble Commission had followed the due procedure and

had invited comments from all stakeholders on its discussion papers after uploading it on

its website on 24.02.2011 and also copies of the same were forwarded to CEA, CERC and

other regulatory commissions and other stakeholders.

6. The Petitioner also submitted that prior to passing the order dated 27.07.2011, Hon’ble

Commission had reviewed all aspects in details including available benchmarks,

precedence by that time, contention related to category of plant (viz. CPP or IPP or Co-

gen) SHR, O&M, APC etc. and had also sought clarifications and details from CEA, CERC

and also held public hearing before final determination of operating parameters.

7. The Petitioner further submitted that the Hon’ble Commission had also appointed an Expert

Committee to review operating parameters after one year of continuous successful

operation. The Committee after review of data and on ground verification had

recommended the operating parameters.

L. The Petitioner vide letter dated 17.03.2016 informed the Commission that the petitions and other

related documents had been uploaded on the website of Bajaj Energy Private Limited.

M. The issues raised by Consumer representatives can be broadly classified in three categories

namely increase in quantum in PPA from 90% to 100% of the power, operating parameters and

capital cost. Regarding the increase in quantum, the Commission vide its Order on Petition Nos.

662, 663, 664, 665, 666, 689 and 701 of 2010 dated 07.12.2010 read with Order on Petition Nos.

662, 663, 664, 665, 666, 689 and 701 of 2010 dated 18.11.2010 approved the purchase of 90 %

of the power from each of the aforementioned power stations. Subsequently the Commission in

its Order on Petition Nos. 830, 833, 838, 839, 840, 842, 845, 859 of 2012 and 897 of 2013 dated

03.11.2014 approved the revised quantity of 100% power in case of the power stations of BEPL

after due diligence, considerations and public hearings.


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N. In the matter of determination of operating parameters for 45MW IPP units, the Commission has

taken a view vide order dated 27.07.2011 after due diligence and based on submission and

deliberations of all stakeholders in public hearing. The Commission notified the UPERC (Terms

and Conditions of Generation Tariff Regulations) (First Amendment Regulations) 2012 which

firmed up the operating parameters for thermal power plants with installed capacity up to 50 MW.

The Commission had issued an order dated 31.03.2014 on the petition filed by BEPL on review of

parameters determined for 45 MW capacity coal based generating plant based on CFBC

technology. In line with the directions in the aforesaid Order an expert Committee comprising of

Shri N. B. Mathur, Retired General Manager (Engg.), BHEL and Shri Rajiv Goyal, Retired Chief

Engineer, UPRVUNL was constituted for verifying the operational data of the IPP plants of the

Petitioner and propose the normative values for operating parameters like-Station Heat Rate and

Auxiliary Power Consumption. The matter of operational parameters considered for the true up

period FY 2011-12 to FY 2013-14 has been dealt with in detail in Section 4 of this Order. Further

operating parameters for the MYT Control Period FY 2014-15 and FY 2018-19 have been

considered as per the norms specified in the UPERC (Terms and Conditions of Generation Tariff

Regulations) 2014.

O. As per directions of the Commission, UPPCL had appointed a Committee for verification of the

actual incurred capital costs of the thermal power plants. The Committee after due audit and

verification process had recommended a capital cost of Rs. 2535.13 Crore to UPPCL in its report

dated 12.05.2014 as against an incurred cost of Rs. 2569.80 Crore submitted by BEPL. UPPCL

and BEPL after further deliberation had submitted a mutually agreed cost of Rs. 2511.82 Crore

before the Commission vide letter dated 10.10.2014.

P. For verification and prudence check of capital cost, an Expert Committee comprising Shri V. K.

Garg, Ex-Chairman, JERC and Shri P.K. Agarwal, Ex Director (Technical) UPRVUNL was

constituted by the Commission. The Committee submitted its report on 29.06.2015 in which it has

verified the Capital Cost of Rs. 2497.97 Crore. The matter of capital expenditure additional capital

expenditure has been dealt with in detail in Section 3 of this Order.

Q. The Commission conducted the third hearing on the subject petition on 16.08.2016.

R. Vide order dated 19.08.2016, the Commission had directed UPPCL, Shri A.K. Verma and Shri

R.S. Awasthi to provide written objections/ comments to the petitioner within fifteen days of the

hearing which was conducted on 16.08.2016 and the Petitioner was directed to submit responses

to these objections/ comments within the next 10 days.


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S. Shri Shafiullah filed objections before the Hon’ble Commission as rejoinder on 17.08.2016, which

are given in the following sections and has prayed before the Commission for appropriate action

1. Shri Shafiullah raised objection that M/s Bajaj Hindustan had started construction of the 5

nos. of 2x45 MW Plants in the year 2009 as Captive Power Plants and had already placed

the orders for Supply, Erection, Testing Commissioning and Operation of BTG for one year

on 26.12.2009 and finalized all the contracts through BIDCO during the year 2009. The

objector alleged that these Plants have not been designed and constructed under the MoU

dated 22.04.2010 and accordingly are deemed to be Captive Plants for which the Hon’ble

Commission has issued MYT Regulations in 2010 and in 2015. The Plants of BEPL fall in

the category of Captive Plant and hence the exercise for sanction of exclusive tariff for

these Plants is unlawful.

2. Shri Shafiullah mentioned that State Bank of India (SBI) while arranging the loan for the

Projects had prepared a DPR and had also determined the Capital Cost, Energy Cost and

the Tariff for 10 years for the recovery period of loan. As per the report of SBI, the total tariff

was Rs.2.93/kWh and with this the Bank had projected a return of 16% RoE and some

surplus amount besides the recovery of loan with interest, IWC cost of consumables and

the liability of taxes. He mentioned that the quoted DPR is available in public domain in

internet and has requested the Hon’ble Commission to take reference of the same before

sanction of exorbitantly higher tariff of Rs 6.82/kWh excluding Taxes.

3. Shri Shafiullah raised objection that BIDCO was appointed by BHL as Project Management

Company and not as EPC contractor through any bidding process as mentioned by BEPL

in their Petitions and therefore there has been absolutely no financial control over pricing of

the Project.

4. He further mentioned that the BTG suppliers have given guaranteed GSHR and Auxiliary

Consumptions with stringent Liquidated Clauses and accordingly the Operating Parameters

approved in favour of BEPL need to be modified in line with the terms and conditions of the

BTG contracts.

5. He submitted that from the available coal dispatch record of Coal India Limited, BEPL had

received 90.3% of their FSA quantity against their PLF of 69.8% and hence the claim that

coal was procured from the open market is not true as submitted by the Petitioner. He

requested the Hon’ble Commission to restrain UPPCL from approving such energy

charges.

6. He mentioned that the revised GoUP Power Policy had authorized only for increase in

capacity of Co-generation/ Captive Plants up to 100 MW and had allowed use of Coal/Gas

as Fuel and Ground Water and for IPP it had been permitted upto units of 250 MW and

above. Therefore all actions taken to declare these 2x45 MW Plants as IPP are unlawful.


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7. Shri Shafiullah objected that the RoE admissible for these Plants as per CERC regulations

is 15.5% and therefore the considerations of 0.5% incentive for these plants is unlawful.

8. Shri Shafiullah mentioned that GoUP Power Policy has authorized UPERC to determine

the tariff for these Plants, which cannot be extrapolated as power for declaring these plants

as IPP. The UPERC has already determined the tariff for such plants and the same ought

to be applicable to these plants of BEPL also.

9. Shri Shafiullah mentioned that the fee submitted by the Petitioner along with the Petition is

not as per latest revised fee regulations notified vide notification no. 429/24 dated

27.04.2010. He requested that the Petition should not be accepted for hearing without the

submission of requisite fee by the Petitioner.

10. Shri Shafiullah mentioned that the amount of additional capital cost of Rs. 112.38 Cr

mentioned in Petition No. 1079 to 1083 by the Petitioner has not been detailed either in

Petition or in Annexures and hence are arbitrarily assumed figures and hence should not

be admissible.

11. Shri Shafiullah also submitted that the start date of project given in Form 5E is not correct

as application for coal linkage, orders for supply of boilers, contract for civil works were

placed before the date mentioned in Form 5E. He requested that the earliest possible date

should be considered as the date for start of project.

12. Shri Shafiullah mentioned that the amount of equity shown in Form-6 of Petition no. 1079 to

1083 is not correct as in the report prepared by SBI, the equity is given as 25%.

13. Also, he mentioned that the amount of Capital shown in Form-5D of the Petition no. 1079 to

1083 are arbitrary and different from that submitted by UPPCL and as claimed by BEPL.

14. He mentioned that the Petitions submitted by the Petitioner neither contain the Common

Loan Agreement (CLA) nor the amount and dates of drawdown and BEPL has calculated

the interest at SBI PL rates which is normally higher than the CLA rates. Hence neither the

IDC nor interest on long term loan can be ascertained.

15. Further, Shri Shafiullah mentioned that as per the report prepared by SBI, the cost of the

project was Rs. 2320 Cr and the RoI on the loan is 11.5% as against 14% and 13.83%

claimed by BEPL.

16. Shri Shafiullah claimed that the capital cost figures mentioned in the SBI report are based

on actual work order values and include head wise scope of work. He objected that both

UPPCL and the Expert Committee appointed by the Hon’ble Commission for prudence

check did not take reference of the SBI report nor the costs were analyzed from value of

work orders. He mentioned that the Committee followed Reductio ad Absurdum technique

of reducing some amounts from the cost data of BEPL.

17. He further mentioned that the cost of Boilers and Generators mentioned in SBI report taken

from work orders is Rs. 949.53 Crore as against the amount of Rs. 1119.45Crore assumed


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by BEPL and certified by UPPCL which is arbitrary and inflated. Similarly, the total cost of

overhead charges, margin money, cost of BOP (Mechanical and Electrical) switchyard etc.

as claimed by Petitioner are inflated from that considered by SBI in its report.

18. Shri Shafiullah requested the Hon’ble Commission to ensure that the Generator does not

get undue opportunity to recover more tariff by way of manipulating the fuel price and GCV.

19. Shri Shafiullah further mentioned that there are error in the fixed cost calculations in

Hon’ble Commission’s order dated 20.05.2013 which resulted in passing of higher tariff. He

further objected that higher tariff was calculated by wrongful consideration of Equity and

Return of Equity.

20. Shri Shafiullah requested the Commission to examine the tariff as the determined tariff has

been calculated even with reduction in capital cost in petition no. 1036 to 1040. He

specifically highlighted the amounts considered for AAD in Maqsoodapur, Increase in

Interest of Working Capital etc. He also alleged that BEPL has not provided any data of

coal prices and GCV in any of the Petition which amounts to irregularity.

21. He further mentioned that, as per ARR 2016-17 of UPPCL, the average power purchase

rate from NTPC plants is around Rs. 3.47/kWh and as per SBI report it is Rs. 3.25/kwh.

Therefore the tariff calculated for BEPL is fallacious.

22. Shri Shafiullah objected that there has been an unusual trend of prices of Coal and SFO as

mentioned in the petition which needs scrutiny. He has supported his objection by providing

comparable prices from other plants and based on rates taken in SBI report.

23. Shri Shafiullah mentioned that operating norms for all type/ sizes were already available in

GoI notification of 1999 but reference of the same was not included by the Commission in

their discussion paper. For finalization of operating norms for 45MW units.

24. Shri Shafiullah also requested the Commission for amending the GSHR and Auxiliary

consumption of the plant

25. Shri Shafiullah also requested the Commission for consideration of O&M charges at 2.5%

of the capital cost which was initially proposed in the discussion paper and as per GoI

notification of 1999.

26. Shri Shafiullah mentioned that the Hon’ble Commission in its order dated 11.06.2010 had

declared the plants of BEPL as increasing capacity of captive plants being established in

accordance with revised GoUP Power Policy dated 24.12.2009. Since the Commission has

already declared tariff for all captive power plants vide Schedule 1 of its CNCE Regulations

dated 22.03.2010, the same should also be applicable to BEPL and no separate tariff

calculation should be carried out. He further mentioned that the Hon’ble Commission has

further revised the CNCE regulations on 20.01.2015 and has declared for the MYT period

2014-15 to 2018-19 and same should be applicable for BEPL plants also.


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27. Shri Shafiullah also mentioned that the declaration of the BEPL plants as IPP is also

fallacious as the revised Power Policy of GoUP 24.12.2009 permits IPP only with units of

250 MW and above and for plants operated by coal for capacity up to 100MW as increase

in capacity of captive plant. Hence the 5 nos. of BEPL plants with 2x45MW capacity should

be considered under increase in capacity of captive plants and CNCE Tariff should be

applicable.

28. Shri Shafiullah requested the Commission to use power provided under Electricity Act 2003

regarding enforcing Commercial Principles, Economy, and Efficient and Optimum use of

resources to reduce the burden on the consumers and take action against profiteering.

T. On 22.08.2016, Shri R.S. Awasthi filed an application requesting copies of (i) enclosures of Shri

V.K. Garg, Committee (ii) enclosures of Shri Rajeev Goyal and Shri N.B. Mathur Committee (iii)

Unit wise financial statement. The copies of the enclosures were handed over to Shri R. S.

Awasthi on 05.10.2016 except unit wise financial statement which was not available with the

Commission.

U. Shri A.K. Verma vide letter dated 30.08.2016 filed written objections before the Commission

which are given below

1. He mentioned that due to incorrect consideration of auxiliary consumption, higher tariff has

been determined. Upto March 2013, Bajaj got a benefit of Rs. 115 Crore and in the next 24

years, the benefit accrued will be Rs. 2464 Crore.

2. The submitted capital cost of Rs. 2511 along with Rs. 155 of Additional Capitalisation

submitted by Bajaj is not correct. CAG in its report has highlighted many irregularities which

the expert committee appointed by the Commission should look into.

3. He requested the Commission to investigate the type of works awarded to BIDCO by BEPL

as BIDCO is a concern company of the Bajaj group. He objected that BIDCO was offered

works at higher rates by BEPL which subsequently were awarded by BIDCO to other

companies for execution.

4. He highlighted that the tariff of Rs. 6.82/kWh determined for Bajaj Energy is very high which

is increasing the electricity bills of the consumer wherein cheaper power is available in

power agencies.

5. He requested that his interim objection may be sent to BEPL and UPPCL for their reply.

The Commission vide letter UPERC/Secy/D(G)/2016-976 dated September 2016 had

forwarded the same to BEPL and UPPCL for their replies.

V. Shri. R. S. Awasthi filed written objections vide letter dated 15.09.2016 which are given as under


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1. Shri Awasthi mentioned that BEPL has not provided required documents to the Committee

for prudence check of operational parameters and capital cost and requested the

Commission to not accept the Committee recommendations. He requested the

Commission to disallow an amount of Rs. 262.95 Crore as BEPL has not submitted

requisite documents before the expert Committee.

2. He submitted that there is large scale irregularity and deviations from standard bidding

procedure in awarding contract to group concern BIDCO as EPC contractor. He requested

the Commission to constitute a high power committee/ independent agency for verification

of actual capital cost, enquiry on bidding process and to determine amounts routed to

group concern.

3. He objected that payment terms were changed in LOA to favor BIDCO and thereby

BHL/BEPL paid excess amount as initial advance. He requested the Commission to not

allow IDC on the excess initial advance.

4. Shri Awasthi requested the Commission to direct BEPL to clarify whether BIDCO was

appointed as EPC or PMC contractor.

5. Shri Awasthi requested the Commission to examine the actual COD date of each unit from

test certificates as prescribed in article 6.3.1 of PPA as there are irregularities in the dates

mentioned in various committee reports.

6. Shri Awasthi requested the Commission to issue specific directions to all the Committees

for submitting detailed expenditure of around Rs. 438 Crore with supporting documents

before the Commission and also to clarify in which year the expenditure has been incurred

and whether BEPL has capitalized that amount in its books or not. He mentioned that the

Commission should not allow the expenditure until details are clarified.

7. He objected that the claim of Rs. 13.94 Crore towards land claimed by BEPL should be

disallowed

8. He requested the Commission to verify the cost of spares amounting to Rs. 63.50 Cr

claimed by BEPL in capital cost whereas the same should have been included under O&M

head in case purchased before the cutoff date. Also Commission should verify if the spares

were part of the total cost of OEM supplier as the original list was not available for review.

9. Shri Awasthi mentioned that the available 132 KV transmission line is inadequate to

evacuate power from the plant when running in full load due to capacity constraints and

hence has requested the Commission to look into the issue.

10. Shri Awasthi requested the Commission to verify the amounts deducted by BEPL under

Liquidated Damages from BTG/BOP suppliers/ contractors through sister concern due to

delay of supply or non-completion of work on time. He mentioned that such deductions

should not be considered in the amount claimed by BEPL.


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11. He requested the Commission to verify the pre-operative expenses amount of Rs. 65.28

Crore which has been claimed by BEPL

12. He mentioned that as per details available and shareholding pattern, both the companies

BEPL and BIDCO are related parties and requested the Commission to investigate the

accounts of BIDCO and pending enquiry, to restrict tariff to 80% of approved capital cost.

13. He requested the Commission to direct UPPCL and BEPL to submit details of energy

scheduled, coal procurement/ consumption records, secondary oil consumption and in-

house energy consumption.

14. He requested the Commission to disallow higher GSHR, Auxiliary consumption and

Secondary Fuel Oil Consumption and fix the norms as per actuals.

15. He requested the Commission to not accept the recommendation of the Committee for

additional SHR of 100 kCal/kWh during the stabilization period.

16. He mentioned that BEPL has failed to submit technical specifications of BTG as supplied

by OEM and performance test reports to the Committee due to which the Committee had to

rely on whatever information was available. He requested the Commission that till

submission of all documents, the parameters should not be approved.

17. Shri Awasthi also requested the Commission to stop payment for both the Committees due

to nonperformance of their duties.

18. The Commission vide letter UPERC/Secy/D(G)/2016-1164 dated 05.10.2016 had

forwarded the copy of interim objection letter of Shri R. S. Awasthi to BEPL and UPPCL for

their reply.

W. UPPCL vide affidavit dated 02.11.2016 has submitted their replies on the comments/

observations of the Consumer representatives. UPPCL submitted the following

1. That the mandate of section 64 (3) of the Electricity Act, 2003 is restricted to “considering

all suggestions and objections received from the public…” Inputs from Consumer

representatives do not confer upon them the right to get their views made a part and parcel

of the tariff determination process.

2. That the Consumer representatives may not be allowed to arrogate to themselves and at

best can point out a specific violation of Section 61 of the Act, in a tariff determination

exercise undertaken by a Commission. UPPCL objected that the Consumer

representatives have not spared the sanctity attached with the functioning of the

Commission by being critical about the decisions taken by the Commission on various

aspects.

3. UPPCL further mentioned that from the comments of the Consumer representatives, it

appears that they are seeking to get the entire process reversed.


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4. UPPCL strongly denies any wrong doing on its part as alleged in the comments of the

Consumer representatives and mentioned that it has always complied with all directions

and orders of the Commission.

5. UPPCL further stated that the role assigned to them as licensee under provisions of

Section 61 of the Electricity Act, 2003 is of much higher order than the claims made by the

Consumer representatives and therefore is not willing to cede to the observations made by

the Consumer representatives.

X. In reply to the suggestions/ comments of the Shri R. S. Awasthi, BEPL filed their responses

before the Commission vide affidavit dated 06.03.2017. BEPL submitted the following:

1. BEPL submitted that the expert committee report related with determination of Operating

Parameters was already disposed of by Hon’ble commission earlier. Also the information

memorandum was prepared for the limited purpose of fund raising only and the same

should also be referred only where relevant.

2. BEPL in their submission also mentioned that many of the objections raised by the

Consumer representative has already been settled by the Hon’ble Commission.

3. BEPL mentioned that it had provided all relevant documents as sought by the referred

Committee for Prudence check of Capital Cost. Further, the report(s) were submitted by

Expert committee to the Hon’ble Commission directly and hence BEPL is not in a position

to comment regarding the sufficiency of documents referred by Expert Committee based on

which report was prepared.

4. BEPL further mentioned that the bidding procedure adopted was already reviewed and

thoroughly scrutinized by Expert committee appointed for the purposes. Subsequently such

observations were submitted before Hon’ble Commission. BEPL reiterated that it had

strictly followed standard commercial procedures for bidding and applied reasonable

prudence considering magnitude and size of project and in optimum interest of time and

cost involved. Regarding the contention related with steel consumption, Expert Committee

had already reviewed thoroughly all aspects related with design, engineering, BOQ,

consumption etc. and has found it satisfactory. So any contention of public representative

based on his presumptive approach was baseless and is not tenable.

5. BEPL had invited prospective bidders and gave full opportunity to reach at minimum

competitive price. After various round of negotiations, BIDCO emerged as lowest bidder.

Further, to reduce contract price, payment terms were re-casted further. Such justifications

were also appraised by Expert Committees and were found satisfactory in line with

industrial practice.

6. BEPL mentioned that it does not want to comment on the concerns raised by learned

Consumer representative pertaining to the functioning, procedure adopted and prudence of


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Expert Committees. It further mentioned that the Consumer representative by requesting

for constitution of another high power Committee is trying to create unnecessary hindrance

and delay in the instant tariff petition.

7. With respect to the concern for IDC, the Expert Committee appointed by UPPCL, has

already addressed this issue in its report and recommended for disallow the part of IDC

pertaining to initial advance payment to BIDCO. Hence, the request of Consumer

Representative in this regard is not relevant is already settled.

8. BEPL submitted that it had appointed M/s BIDCO as EPC Contractor and scope of same

also included services as Project Coordination and Management consultancy services

apart from Supplies, Civil Construction, Erection etc. This aspect was also duly addressed

in detailed reviewed by Expert Committees.

9. With regards to determination of COD, BEPL submitted that the Article 6.3.1 of the Power

Purchase Agreement (PPA) duly prescribed the method and procedure to determine COD.

Accordingly, COD was determined and considered based on Certificate of Independent

Engineer duly appointed by UPPCL. The issued certificate was duly endorsed and

communicated as COD to BEPL by UPPCL. Such declared COD was put on record as

COD for respective station for all purposes and question of any doubt in this regard is

baseless and not tenable.

10. BEPL submitted that M/s BHL had entered into a MoU with GoUP to implement 450 MW

TPP which was later with due permission of GoUP, assigned in favor of the SPV M/s BEPL.

BHL, being promoter, initially incurred the expenditure and which was subsequently

transferred on assignment and accordingly, the same was considered as a part of capital

cost. This was appraised in detail by Expert Committees and found to be in order. The

Expert Committees had also reviewed and scrutinized all related supporting documents,

financial statements in detail. Hence, the request of the Consumer representative to form

another Committee appears as intent of causing hurdle and delay in the tariff

determination.

11. BEPL submitted that the Capital Cost of Rs. 2511 Crore is mutually agreed and the Cost of

Land is not included as part of agreed capital cost. The concern of the representative in this

regard is already settled in the agreed cost and hence is not tenable.

12. BEPL submitted that the mandatory spares supplied by OEM with the main equipment

were fast consuming items required for plant stabilization during the warranty period of two

years and cannot be considered distinctly as initial spares as provisioned in the Regulation.

These spares are different from the critical spares which are required as backup for usage

in the medium and long term. The Regulation 17 of UPERC Regulations 2009 and 2014,

after taking an overall view on the aforesaid and having considered the requirement of

medium and long term delivery provides to procure initial spares subject to ceiling of 2.5%


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of capital cost and accordingly the initial spares of Rs.63.50 crore have been considered.

BEPL has claimed initial spares within ambit of the Regulations and the Expert Committees

have found it in order after reviewing it in detail.

13. BEPL further submitted that the concern raised by the consumer representative regarding

viability of evacuation of BEPL TPP in conjunction with Cogen Power Plants through

existing 132 KV substations was baseless, misconceived and irrelevant. Since almost the

last five years, power is being evacuated uninterruptedly and in full capacity through the

existing 132 KV Transmission System.

14. BEPL stated that there was no delay in the supply/ commissioning by OEMs or EPC

contractor, hence the question of LD does not arise. All the guaranteed operating

parameters were also duly demonstrated in Performance Guarantee (PG) Test to the

satisfaction of all concerned. Hence, the concern raised are baseless and not tenable.

15. With regards to the concern raised for pre-operative expenditure, the Expert Committee

had reviewed the same and found satisfactory. Further, UPPCL has also disallowed the

part of miscellaneous fixed assets cost which was consented by BEPL. Hence the concern

of the representative is denied.

16. BEPL further submitted that the contentions of the Consumer representative pertaining to

relation between the BEPL and the EPC contractor are baseless. Both the organizations

operate under distinct professional management and all transactions were carried out at

arm’s length basis and based on merits. Transparent bidding procedure was adopted while

awarding the EPC Contract. Such concerns although settled has now been raised by the

representative only to cause unnecessary hindrance and delay in determination of tariff.

17. BEPL stated that the IPP’s were established under UP Government Energy Policy 2009

and 100% of its saleable energy is to be procured by the State nominated agency. Hence

concerned of the representative regarding fixed cost issue is misconceived and baseless.

Also, regarding the concern on competitiveness of variable cost and submission of

documents, BEPL clarified that the energy supplied is being scheduled by SLDC as per

competitive variable charges within the ambit of merit order and the relevant records with

regard to energy scheduled, coal procurement, coal consumption, auxiliary consumption,

secondary oil etc. are being regularly submitted to UPPCL with monthly billing for their due

verification.

18. With regards to the concern of the Consumer representative on the Committee’s findings

and recommendations in absence of design data from the manufacturers, BEPL reiterated

that the manufacturers design data is mentioned in the joint PG Test report of boilers and

turbines and were made available to the Committee.

19. BEPL further reiterated that the current petition is for determination of Capital cost and

Tariff and not for determination/ review of Operating Parameters. The Technical Committee


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appointed for the purposes had reviewed all aspects related with the consumption of

Secondary Fuel Oil on materiality basis and found the same to be satisfactory and within

ambit of allowed Normative Parameters.

20. With regards to the relaxation provided in SHR during stabilization, the Hon’ble

Commission had considered the same after due diligence by a Technical Committee and

based on Committee’s recommendations. Hence the concern is already settled.

21. With regards to the concerns of the Consumer representative on the reports of two Expert

Committees, one for verification of capital cost and another for prudence check of operating

parameters appointed by Hon’ble Commission, BEPL does not wish to comment on the

same.

22. BEPL reiterated that the objections/ observations of the learned representative are

baseless, misconceived, misleading, not tenable and irrelevant to the petition under

consideration before the Hon’ble commission and liable to be rejected.

Y. In reply to the suggestions/ comments of Shri Avdhesh Kumar Verma, BEPL filed their responses

before the Commission vide affidavit dated 12.04.2017. BEPL submitted the following:

1. BEPL mentioned that the learned Consumer representative had referred to the CAG report

submitted before the UP Government and filed objections based on it. BEPL submitted that

current petition is for determination of capital cost and for determination of tariff and the

Hon’ble Commission has exercised its prudence procedurally as defined in the

Regulations. Hence the concerns raised at this stage by referring to the CAG report are not

relevant to the Petition.

2. BEPL submitted that the contention of the Consumer representative with regards to

mutually agreed capital cost and additional capitalization is misconceived. The agreed

capital cost has been arrived after due scrutiny of the relevant documents by the Expert

Committee nominated by UPPCL. The Expert Committee appointed by the Hon’ble

Commission had also submitted their findings before the Hon’ble Commission. BEPL

further submitted that the additional capitalization of Rs. 155 Cr for expenditure incurred up

to the cutoff date has been claimed as per the ambit of the Regulations.

3. BEPL further submitted that the concern of the Consumer representative alleging

irregularities in awarding EPC contract to BIDCO is denied. BEPL reiterated that all

transactions were carried out in strict compliance of standard industrial practices and in

transparent manner. The Entire bidding process was also scrutinized in detail by various

Expert Committee and no irregularities were observed in bidding and award pricing. The

allegations are baseless and denied.


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4. With regards to the allegation of high energy charges, BEPL has not submitted any

comment on the same.

Z. Summary and Conclusion by the Commission

The Commission has provided ample opportunities to all the stakeholders to file their

comments and responses regarding the subject Petition. The Commission has considered

and reviewed the submissions/ comments and recommendations of all the stakeholders

and hereby summarizes its views in the following sections

1. Status as an IPP

The Commission has already dealt upon this matter in the order dated 18.11.2010 and

thereby doesn’t find it necessary to again clarify on the matter in the current Petition.

The status of the power plant as IPP has been considered as per the prevalent policies.

2. Detailed Project Report

The Petitioner has not submitted the detailed project reports even after directions from

the Commission. However, the Commission does not see it as a deterrent in the

process of finalizing the tariff as per the Regulations.

3. Capital cost

While approving the final capital cost of the project, the Commission has exercised due

prudence and has considered recommendations of the Expert Committees and the

agreed capital cost of the Petitioner and the Respondent. The Commission has dealt

with the approval of capital cost of the project in a detailed manner in Section 3 of this

order.

4. Operating norms

The Commission has dealt with topic of operating norms in the order dated 31.03.2014.

Also the norms for determination of tariff have been approved as per the relevant

UPERC Generation Tariff Regulations. The Commission has also considered the

recommendations of the nominated Expert Committee for approval of GSHR and

Auxiliary norms for 45 MW thermal power plant of the Petitioner. However, the norms

have been dealt in detail in Section 4 of this order.

5. Additional RoE

The Commission has approved additional RoE of 0.5% in line with its order dated

09.07.2014 and the applicable Regulations.


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6. Fixed Cost

The Commission has determined the fixed cost for the period under True-up and MYT

as per the provisions of the relevant Generation Tariff Regulations and after due

prudence check of the submissions of the Petitioner. During the scrutiny of the Petition,

the Commission had directed the Petitioner to submit additional information in support

of their claims. The Commission has proceeded with the tariff determination of the

thermal power project only after thorough review of the submission of the Petitioner.

7. Variable cost

The variable cost shall be considered as per the norms provided in the Generation

Tariff Regulations.

8. EPC Contract

The Committees nominated by the Commission and by UPPCL for verification and

prudence check of the Capital cost had dealt with the subject topic.

The Expert Committee nominated by UPPCL under section 5 of its report had

mentioned its key observations after evaluating the EPC vendor selection process. The

Committee concluded by mentioning the following

“11) Considering the aforementioned documents and findings highlighted above in Para

1 to 10 above, we have come to the conclusion that the EPC Vendor Selection Process

was not consistent with the standard bidding practices and scope for bias/ errors may

have existed in the process.

12) In the background, we are of the opinion that Company could have adopted a more

detailed exercise in selection of the EPC Contactor.”

The Expert Committee nominated by the Commission in its report had mentioned that

while during verification of the capital cost, the Committee had reviewed various project

related agreements and also mentioned the reasons for increase in value of the EPC

contract

“The Committee also reviewed various Project Contractual Arrangements comprising of

Contract for Engineering services and Project Management awarded to SIJCON,

Contract for Design Engineering services awarded to Powertech Engineering Pvt. Ltd.


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and TPSC (India) Pvt. Ltd., EPC Contract awarded to BIDCO, etc. The Committee also

reviewed scope of work of other sub-contractors including LOA...”

…

The BEPL has demonstrated that the EPC contract on BIDCO was placed based on

the initial drawings, which was prepared by SIJCON, consultant of BEPL and have

been provided to the Committee.

Subsequent to the award of EPC contract, when detailed engineering was done during

project implementation, the drawings and engineering, particularly in CHP area and TG

Area was found to be deficient. …The detailed drawings which have been implemented

at the project sites prepared by M/s. Powertec Engineering Private Limited were also

provided to the Committee.

BEPL has stated that this led to a considerable change, in the scope of the EPC

Contract with BIDCO. This change, along with other changes, in the scope of the EPC

works (as detailed in the Lenders Engineer Report and Section 7.1 of the UPPCL

Expert Committee

Report) lead to a Supplementary Contract for EPC works with BIDCO for Rs 220.05

crores.”

After reviewing the reports of both the Expert Committees, the Commission is of the

opinion that the subject has been dealt with in detail. However, the Commission is

concerned about inability of the Petitioner to adopt a transparent process of

standardized two part process of international competitive bidding for award of EPC

contract. Award of large contracts for such projects should always be undertaken

through a transparent competitive bidding.

9. Filing of Tariff petition

During the review of the Petitions, the Commission had observed a number of

discrepancies in the tariff petition filed by the Petitioner. The Commission had also

directed the petitioner to submit additional/ missing information, bills etc., which was

submitted by the Petitioner in due course.

The Commission is proceeding with its order only after review and due prudence of the

Petitioner’s submission.


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10. Comparative cost of power

The Consumer representatives have highlighted in their submissions that the tariff

calculated for BEPL is on a higher side in respect to the tariffs other generating

stations. The Commission acknowledges the concern of the Public Respondent and

would like to reiterate that the interest of the consumer is paramount and the

Commission considers the same while approving the tariff of the Petitioner.

11. CAG Report

The Consumer representatives have highlighted about the audit and findings by CAG.

The Commission would like to mention that any such findings of CAG having an impact

on tariff will be considered in the subsequent orders of the Commission.

2. BACKGROUND:

(i) Bajaj Energy Private Limited (hereinafter ‘BEPL’ or the ‘Petitioner’) promoted by Bajaj Hindustan

Limited (hereinafter ‘BHL’), has set up 450 MW coal fired Thermal Power Plants subsequent to an

Memorandum of Understanding (hereinafter ‘MoU’) between Government of Uttar Pradesh

(hereinafter ‘GoUP’) and BHL under GoUP Energy Policy 2009.

(ii) In terms of the MoU, the Petitioner has set up 2x45 MW units of coal fired power plants at

Barkhera (District: Pilibhit), Khambarkhera (District: Lakhimpuri Kheri), Maqsoodapur (District:

Shahjahanpur), Kundarki (District: Gonda), Utraula (District: Balrampur), of Uttar Pradesh

(hereinafter collectively referred to as the ‘Thermal Power Project’).

(iii) The Petitioner and the Respondent had entered into a Power Purchase Agreement (hereinafter

‘PPA’) on 10.12.2010 for purchase of 90 % of the power from each of the aforementioned power

stations pursuant to approval of the Commission vide its Order on Petition Nos. 662, 663, 664,

665, 666, 689 and 701 of 2010 dated 07.12.2010 read with Order dated 18.11.2010.

(iv) Subsequently, GoUP vide its Order No-456 dated 26.05.2011 approved for purchase of 100%

power by the State Nominated Agency namely U.P. Power Corporation Limited (hereinafter

‘UPPCL’). Accordingly, the Petitioner entered into a Supplementary Power Purchase Agreement

(hereinafter ‘SPPA’) dated 15.06.2011 with the Respondent for the sale of 100 % saleable power

generated from the Power Stations to the respondent at the power purchase rates to be

determined by the Hon’ble Commission.

(v) The Hon’ble Commission in its Order on Petition Nos. 830, 833, 838, 839, 840, 842, 845, 859 of

2012 and 897 of 2013 dated 03.11.2014 approved the revised quantity of 100% power in case of

the Bajaj Energy Private Limited.


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(vi) The Petitioner filed for grant of provisional tariff based on the estimated capital cost of Rs. 2,564

crore before the Hon’ble Commission vide Petition Nos. 763, 764, 765, 766 and 767 of 2011. The

Hon’ble Commission vide its order dated 22.12.2011 allowed provisional tariff computed at 95%

of the then incurred capital expenditure of Rs. 2,307 crore.

(vii) Subsequently, the Petitioner filed petition nos. 825 to 829 of 2012 for Approval of capital cost and

determination of tariff for 2 x 45 MW coal based Thermal Power Stations situated at Barkhera,

Khambarkhera, Maqsoodapur, Kundarki and Utraula.

(viii) Since the agreed Capital Cost was not submitted, the Commission reiterated vide order dated

20.05.2013 that UPPCL and BEPL will have to arrive on agreed capital cost without further delay.

In the aforesaid order, the Commission, regarding the capital cost of MoU route projects stated:

“Since there are many power projects for procurement of power for the Discoms under MoU with

the GoUP and under PPA with UPPCL, it is necessary to evolve the mode so that the intent of the

Act and the Regulations may not be misunderstood. The reluctance shown by UPPCL in this

matter, which has caused enough delay in initiating the process for prudence check of capital

cost and subsequent determination of tariff by the Commission, hammer the requirement of

making the agreed cost as an essential part of PPA.

Therefore, it is directed that for all MoU Route projects which are under PPA with UPPCL, the agreed

ceiling capital cost shall be brought to the Commission for approval and the approved cost shall

be a part of PPA. The actual capital cost, if it is equal to the approved ceiling capital cost, shall

form the basis for prudence check and determination of tariff by the Commission. If the actual

cost is lower, then the lower cost would be taken and if it is higher, then the additional cost would

first be verified and agreed by UPPCL/GoUP and then shall be taken up by the Commission for

consideration and approval. The necessary changes to remove the ambiguity in the Regulations

shall be made accordingly.”

However, the Commission allowed plant wise revised provisional fixed charges in the order dated

20.05.2013 based on submissions of the parties. Subsequently after submission of agreed

Capital Cost, BEPL was directed to file the petitions for determination of final tariff afresh.

(ix) Accordingly, after the commissioning of the plants, the Petitioner has filed petitions for approval of

final capital cost as on COD, determination of final tariff, approval of additional capitalization and

true up for the period from COD to 31.03.14. In petition no. 973 of 2014, BEPL submitted that the

incurred capital cost of Rs.2569.80 Crore has been scrutinized by UPPCL and both have arrived

on an agreed project cost of Rs. 2511.82 Crore.


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(x) For reviewing the operating norms of the IPP plants of the Petitioner and proposing the normative

values for operating parameters an Expert Committee comprising Shri N. B. Mathur, Retired

General Manager (Engg.), BHEL and Shri Rajiv Goyal, Retired Chief Engineer, UPRVUNL was

constituted. The Committee submitted its report and the same was uploaded on the

Commission’s website.

(xi) The Commission constituted another Expert Committee comprising Shri V. K. Garg, Ex-

Chairman, JERC and Shri P.K. Agarwal, Ex Director (Technical) UPRVUNL for verification and

prudence check of the Capital Cost of the Project. The Committee submitted its report on

29.06.2015 in which it has verified the Capital Cost of Rs. 2497.97 Crore. The Commission

uploaded the report of the Expert Committee on its website.

(xii) On scrutinizing the petition, the Commission observed a number of discrepancies in the

submissions made by the Petitioner and issued first discrepancy note dated 07.10.2015 directing

the Petitioner to submit the additional/missing information, which was submitted by the Petitioner

on 29.10.2015. However, on the basis of scrutiny the additional submission made by the

Petitioner, it was observed that actual sample primary fuel bills had not been submitted by the

Petitioner for calculation of Energy Charge Rate (ECR), hence an additional discrepancy note

dated 06.11.2015 was issued wherein the Petitioner was directed to submit additional

clarifications/ information. The Petitioner submitted its response to the discrepancy note

on16.11.2015.

(xiii) The Commission admitted the true up petitions on 07.01.2016 subject to submission of all the

information to the satisfaction of the Commission, in replies to deficiency notes raised by the

Commission in the process.

(xiv) Subsequently the MYT petition was filed by the petitioner on 19.01.2016 and the same was

admitted on 04.02.2016 and a combined public hearing was fixed on 29.02.2016 instead of

09.02.2016.The Public hearings were further continued on 16.03.2016 and 16.08.2016.

3. APPROVAL OF FINAL CAPITAL COST

(i) The Petitioner had earlier filed for grant of provisional tariff based on the estimated capital cost of

Rs. 2,564 Crore on October 2011. The Commission had allowed provisional tariff computed at

95% of the then incurred capital expenditure of Rs. 2,307 Crore. The Commission had also

directed the Petitioner to submit actual project completion cost to UPPCL for verification, who in

turn, was required to submit the agreed costs to the Commission based on which final tariff shall

be filed by BEPL as per the provisions of the Electricity Act, 2003 and UPERC (Terms and

Conditions of Generation Tariff) Regulations, 2009.


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(ii) Subsequently, in September 2012, after the COD of all the power stations, BEPL submitted

before the Hon’ble Commission petitions for approval of final tariff based on actually incurred

capital costs (totaling Rs.2569.80 crore for all five power stations) up to COD bearing Petition

Nos. 825, 826, 827, 828 and 829 of 2012 ,in respect of each power station,

(iii) As the capital cost was not finalized, the Commission disposed of the aforementioned petitions

by an Order dated 20.05.2013 provisionally allowing 95% of claimed annual fixed costs agreed by

UPPCL and reiterating its earlier directive to UPPCL to submit agreed capital costs of BEPL

stations after due verification.

(iv) First Proviso under Regulation 17 of the Generation Tariff Regulations 2009 specifies that

“where the Power Purchase Agreement entered into between the generating company and the

beneficiaries provides a ceiling on capital expenditure and the actual capital expenditure exceeds

such ceiling, such increase/escalations shall be decided by the Commission on case to case

basis on an application filed by the generating company”

As the project was implemented through MoU route, the PPA should have provided a ceiling

capital cost for the project which may be admitted by the Commission after prudence check, for

the purpose of determination of the final tariff. However, no ceiling towards the capital cost was

agreed in the PPA and hence the same was never brought before the Commission for approval.

Based on this, a time limit of 3 months was provided to UPPCL to complete the verification

process and submit agreed capital costs before the Commission.

(v) In view of above direction of the Commission, UPPCL appointed an independent team of

consultants to carry out the verification of capital expenditure incurred by the BEPL. Subsequently

UPPCL submitted the committee report dated 12.05.2014 to the Commission which provides the

recommended capital cost of Rs.2535.13 crores as against the proposed capital cost of

Rs. 2569.80 claimed by BEPL. Further, the UPPCL reviewed the findings and deducted some

capital costs and communicated the final mutually agreed capital cost at Rs. 2511.82 Crores to

the Commission.

(vi) Further on 09.12.2014, an Expert Committee was constituted by the Commission to conduct the

prudence check and verification of the capital cost of BEPL. The Expert Committee reviewed

various information & facts and submitted a final capital cost of Rs. 2497.97 Crores by further

reducing the mutually agreed (between UPPCL and BEPL) Capital cost by Rs.13.85 Crores on

29.06.2015.

(vii) The plant wise capital cost recommended by the Expert Committee is shown in the following

table:


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(Rs.Cr.)

Name of Power Station

Project Cost submitted

by BEPL to UPPCL Expert

Committee

Project Cost

Submitted by

UPPCL Expert

Committee

Mutually agreed Project

Cost Submitted by UPPCL

Recommended Capital Cost by Expert

Committee appointed

by the Commission

Khambarkhera 510.50 503.64 499.4 497.78

Barkhera 508.23 501.43 496.6 492.41

Maqsoodapur 504.42 497.58 494.0 492.49

Kundarki 511.42 504.61 499.8 498.11

Utraula 535.23 527.87 522.0 517.18

Total 2569.80 2535.13 2511.82 2497.97

(viii) However, the petitioner filed the current Petition on the basis of mutually agreed Capital cost with

UPPCL in place of recommended capital cost by the Expert Committee appointed by the

Commission.

Commission’s View

(i) While truing up the tariff for FY 2011-12 to FY 2013-14 and for determination of MYT tariff for FY

2014-15 to FY 2018-19, the Commission has considered the Capital cost for BEPL thermal plants

as recommended by the Expert Committee as appointed by the Commission i.e. Rs. 2497.97

Crore less a deduction as mentioned in subsequent para.

(ii) During the tariff determination process, the Consumer representatives have raised various

objections regarding the procedure adopted in awarding Engineering, Procurement and

Construction (EPC) to Bajaj Infrastructure Development Company Limited (BIDCO). According to

them, as per details available in public domain and as per the shareholding pattern, both the

companies BEPL and BIDCO are related parties. Secondly, the consumer representatives have

made submissions that there were large scale irregularities in the bidding procedure for award of

contract to group company BIDCO as EPC Contractor. The Consumer representatives have also

submitted that the payment terms were modified in the LOA to favor BIDCO and thereby BEPL

paid excess amount as initial advance to their group company who was the EPC contractor.

(iii) The Expert Committee(s) nominated by UPPCL and by the Commission respectively for the

verification and prudence check of the Capital cost have also reviewed the procedures adopted

by BEPL. The Committee nominated by UPPCL after review of all the documents concluded that

the EPC Vendor Selection Process was not consistent with the standard bidding practices and


Page 29 of 114

scope for bias/ errors have existed in the process. The Committee were of the opinion that BEPL

could have adopted a more detailed exercise in selection of the EPC Contactor.

(iv) The Expert Committee nominated by the Commission in its report mentioned that during

verification of the capital cost, the Committee had reviewed various project related agreements.

BEPL in response to queries of the aforesaid Committee has stated number of reasons such as

deficient drawing particularly in CHP area and TG area and high water table at plant sites as

reasons for change in scope of work which led to award of a supplementary contract for EPC to

BIDCO by BEPL.

(v) BEPL in their submission before the Commission submitted that the bidding procedure adopted

by them was reviewed and thoroughly scrutinized by the Expert committees appointed for the

purpose. BEPL submitted that it had strictly followed the standard commercial procedures for

bidding and had applied reasonable prudence considering the magnitude and size of the project.

BEPL further submitted that both the organizations are managed professionally and all the

activities were carried out at arm’s length distance. Based on the procedure adopted and in

optimum interest of time and cost involved, BIDCO was selected for executing the EPC contract.

(vi) After reviewing the submissions of all the stakeholders, the Commission is of the opinion that

BEPL has failed to adopt a transparent process for selection of EPC contractor. It is reasonable

to conclude that the procedure adopted by BEPL has not led to efficient price discovery for the

said contract. The excess cost should not be passed on to the end consumers in the form of fixed

cost of the project.

(vii) Regulation 17 of the UPERC (Terms and Conditions of Generation Tariff) Regulations, 2009

specify that:

“Note:

Scrutiny of the project cost estimates by the Commission shall be limited to the

reasonableness of the capital cost, financing plan, interest during construction, use of

efficient technology, and such other matters for determination of tariff.”

(viii) It is also important to note that Regulation 19(6) of the UPERC (Terms and Conditions of

Generation Tariff) Regulations 2014 also specify that:

“(6) Prudence Check of Capital Expenditure: The following principles shall be adopted for

prudence check of capital cost of the existing or new projects:

…………………..

(b) Provided that in cases where benchmark norms have not been specified, prudence

check may include scrutiny of the capital expenditure, financing plan, interest during


Page 30 of 114

construction, incidental expenditure during construction for its reasonableness, use of

efficient technology, cost over-run and time over-run, competitive bidding for procurement

and such other matters as may be considered appropriate by the Commission for

determination of tariff:”

(ix) The Commission after carefully considering the submissions of all stakeholders as well as the

applicable Tariff Regulations has found that BEPL did not strictly observe the competitive bidding

procedure and had a leaning towards awarding the EPC contract to its group company to

promote the business interest of the group at the expense of the consumers of the State. The

Commission is of the view that non observance of a transparent bidding process raises a valid

question about the pricing of the contract. Violation of a clean business practice certainly calls for

a penal action by the Commission. At this stage when the project has been commissioned we

cannot undo the action of the past but the action of the promoter in not ensuring a fair business

practice need to be penalized. Therefore the Commission has decided to deduct 2% of the capital

cost from the recommended capital cost by the Expert Committee appointed by the Commission.

(x) The Plant wise details of the approved Capital cost of BEPL is tabulated below:

(Rs. Cr.)

S.No Name of Power Station

Capital Cost recommended by the

Expert Committee appointed by the

Commission

Capital cost Approved by the Commission after deducting 2% from the Recommended capital

cost

1 Khambarkhera 497.78 487.82

2 Barkhera 492.41 482.56

3 Maqsoodapur 492.49 482.64

4 Kundarki 498.11 488.16

5 Utraula 517.18 506.84

Total 2497.97 2448.02

Additional Capitalization

Petitioner’s Submission

(i) In respect of additional capitalization a total of Rs.155 Crore has been filed by the Petitioner

during the True up and MYT period. The plant wise details of additional capitalization as claimed

by the Petitioner have been provided in the following table:


Page 31 of 114

(Rs.Cr)

(ii) These additional capitalization are for works towards Ash Disposal Area development, Coal Yard

Area development, Machinery spares and other works etc. which are necessary for the efficient

operations of the Power Station.

Commission View

(i) The Expert Committee (appointed by the Commission) for Verification and Prudence Check of the

Capital Cost of BEPL TPP on Page No.6 of its final Report has mentioned that:

“the Committee wrote a letter dated 15th March, 2015 and email dated 24th March, 2015 seeking more clarifications from BEPL on the issues of cost of land, residential colony, subordinate debt, initial spares, etc. BEPL responded to the Committee vide email dated 24th March 2015 and 30th March 2015 and informed the following: . . . Specific comment on the para in point-6 of UPPCL Affidavit: The actual cost incurred till completion of power station COD is under prudence check before your good-self. Besides this, BEPL has deferred the liability of Rs. 85.21 crore falling within the original scope of work (EPC & Non EPC) towards work in progress…..”

(ii) Further Regulation 18(1) of Generation Tariff Regulation 2009 specifies that:

“18. Additional capitalization:

(1) The following capital expenditure within the original scope of work actually incurred after the date of commercial operation and up to the cutoff date may be admitted by the Commission, subject to prudence check:

(i) Deferred liabilities;

(ii) Works deferred for execution;

(iii) Procurement of initial capital spares in the original scope of work, subject to ceiling specified in regulation 17;

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

S.No

Name of Power Station Additional Capitalization

claimed in true up

Additional Capitalization

claimed during MYT

1 Barkhera 3.72 14.42

2 Maqsoodapur 7.06 23.46

3 Khambarkhera 19.75 30.82

4 Kundarki 8.39 20.46

5 Utraula 4.12 23.22

Total 43.04 112.38


Page 32 of 114

(v) On account of change in law.

Provided that original scope of work along with estimates of expenditure shall be submitted along with the application for provisional tariff”.

Provided further that a list of the deferred liabilities and works deferred for execution shall be submitted along with the application for final tariff after the date of commercial operation of the generating station.

(iii) The Commission has undertaken a detailed review of the various submissions and technical

justification submitted by the Petitioner for approval of the additional capitalization claimed by the

Petitioner. While reviewing the submissions of the Petitioner, the Commission has considered the

recommendations of the Expert Committee Report and has been guided by the relevant

provisions in the UPERC Generation Tariff Regulations, 2009.

(iv) The Commission had directed the Petitioner to submit various other details and information as

part of additional information requirement. The Petitioner submitted the following information with

respect to the claimed additional capitalization:

Plant wise audited Capital Cost as on C.O.D

Plant wise audited Additional Capital Expenditure from C.O.D up to 31.03.2014

Plant wise audited Additional Capital Expenditure from 01.04. 2014 to 31.03.2015

Justification Report by independent agency for coal yard augmentation and Ash Dyke

Augmentation

Plant wise Year wise expenditure relating to work deferred for execution

(v) Whereas the Petitioner was directed to submit a report by an independent agency providing

technical justification on the requirement of additional capitalization, the Report submitted by the

Petitioner is certified by the same agency which undertook the Design Engineering Services for

the project.

(vi) The Petitioner has also not submitted satisfactory evidence and verifiable information with respect

to the year wise deferred liabilities relating to works/services within the original scope of work.

(vii) In light of these discrepancies, the Commission has not approved any additional capital

expenditure on account of deferred liabilities at this stage. This may be taken up at a later stage

on submission of a separate Petition with requisite information and as per applicable UPERC

Regulations.


Page 33 of 114

4. APPROVAL OF PARAMETERS FOR DETERMINATION OF ARR

Petitioner’s Submission

(i) The Petitioner has considered the following norms for calculation of the

Annual Fixed Charges for true up and MYT period:

Parameter Norms

Interest on loan Capital Weighted Average rate of Interest

Depreciation including Advance against Depreciation

As per Regulations(Although for the addition during the year, depreciation is calculated for full year)

Return on Equity 16%(15.5% plus 0.5% additional ROE)

Tax on ROE Prevailing Tax rate(Grossed up ROE)

Operation and Maintenance Expenses

As per Regulations

Interest on working Capital As per Regulations

Compensation Allowance Not Applicable

(ii) For calculation of the energy charges, the Petitioner has considered relaxed norms for

Stabilization period for Gross Station Heat Rate i.e. 3000 kcal/kWh and additional Auxiliary

Consumption i.e 0.5% while determining tariff for the True up period based on the UPERC order

dated 31.03.2014.

Commission Analysis

(i) The Commission has allowed the following parameters for calculation of the Capacity Charges for

BEPL plants:

Parameter Norms

Interest on loan Capital Weighted Average rate of Interest for the period

Depreciation including Advance against Depreciation

As per Regulations(Although for the addition during the year, depreciation is calculated for half year)

Return on Equity 16%(15.5% plus 0.5% additional ROE)

Tax on ROE No grossing up is allowed as per the Regulations. The tax will be separately collected in Tax Escrow Account

Operation and Maintenance Expenses

As per Regulations

Interest on working Capital As per Regulations

Compensation Allowance Not Applicable


Page 34 of 114

(ii) The Commission had issued an order dated 31.03.2014 on the petition filed by BEPL on review of

parameters determined for 45 MW capacity coal based generating plant based on CFBC

technology. In Paragraph 16 and 17 of the said Order the Commission has stated that:

“The Commission opines that a committee shall be formed for the review of operating

parameters for these new MoU route generating plants. However since the petitioner has

raised the difficulty faced by them during the initial 180 days of operation of the plant, the

Commission considers that acceptable under its power to remove difficulties as per the

Regulations keeping in view the small capacities of the plants provided that the Petitioner

could establish the fact during initial 180 days it has actually incurred losses and so

requires relaxation in norms.

From the month wise summary submitted and further submitted detailed day wise

performance by the petitioner, it could be considered that the petitioner has operated

above the allowed norms. Therefore the Commission considers allowing additional

GSHR of 100kcal/kwh during the initial 180 days of operation. As far as additional

auxiliary consumption is concerned, it is observed that on many occasions it has been

around 11.5% meaning thereby that it could have been kept to this level with good

operation performance. Therefore only additional 0.5% is allowed during the initial 180

days of operation. The decision has been taken by the Commission as an exception

which shall not be taken as precedence. However, if the expert technical committee

report would not substantiate the claim of the petitioner then it would be

reimbursed along with the prevailing simple rate of interest.

(iii) Thus, in view of the above, the expert Committee comprising of Shri N. B. Mathur, Retired

General Manager (Engg.), BHEL and Shri Rajiv Goyal, Retired Chief Engineer, UPRVUNL was

constituted for verifying the operational data of the IPP plants of the Petitioner and proposing the

normative values for operating parameters like-Station Heat Rate and Auxiliary Power

Consumption. For this the data was provided by the Commission and BEPL. Based on this data,

2 plants were sampled and out of the financial year 2013-14, 2 months were selected for each

plant to verify the data.

(iv) Based on the available data from the Petitioner, the expert Committee proposed the following

operating norms for GSHR and Auxiliary Consumption:

Parameter Norms

Gross Station Heat Rate (GSHR) 2900 kcal/kwh

Auxiliary Consumption 11%


Page 35 of 114

(v) The Expert Committee recommended allowance of an additional provision for GSHR and

Auxiliary Consumption during stabilization period stating the following in its report:

“CERC had made a provision of additional 100 Kcal/KwH vide their order dated

26th March 2004, which was subsequently withdrawn w.e.f. 1.04.2006. The above orders

were for units of 200 MW and above capacity – both the provisions of first providing the

relaxation then its withdrawal. But seeing the thin margin of operations in operation of

smaller units like the ones under consideration, committee is of the view that the BEPL

units could be extended this facility during the stabilization period”

(vi) Additional allowance on SHR of 100kcal /kWh and additional allowance of 0.5% of Auxiliary

consumption has been allowed during the Stabilization period i.e. 180 days after CoD of the

plants.

5. METHODOLOGY FOR DETERMINATION OF TARIFF FOR FY 2011-12 TO

FY 2013-14 :

(i) Tariff in respect of the generating stations has been determined under UPERC (Terms and

Conditions of Generation Tariff) Regulations, 2009. Some of the pre-requisites for a generating

company to file an application for determination of tariff, as provided under Regulations, are as

below:

(1) The application shall be filed for a period of 5 years as per clause - 5 of

Regulation – 2 on the basis of terms and conditions for determination of tariff

approved by the Commission in a Power Purchase Agreement.

(2) In the case of existing generating stations, the generating company shall make

an application for determination of tariff as per Appendix - I of the Regulations.

(3) In the case of generating stations under construction provisional tariff may be

determined in advance based on capital expenditure actually incurred up to the

date of making of the application, duly audited and certified by the statutory

auditors, which shall be applicable from the date of commercial operation. On

commencement of commercial operation of the plant a fresh application shall be

made by the generating company as per Appendix – I for determination of the

final tariff based on actual capital expenditure incurred up to the date of

commencement of commercial operation of the generating station. The over or

under recovery of charges on account of provisional tariff shall be subject to

retrospective adjustment along with simple interest calculated at rate equal to


Page 36 of 114

short term Prime Lending Rate of State Bank of India prevailing as on 1st April of

the relevant year.

Tariff for sale of electricity from a thermal power generating station comprise of

two parts, namely,

(i) The annual capacity (fixed) charges consisting of:

(a) Interest on loan capital;

(b) Depreciation, including Advance Against Depreciation;

(c) Return on equity;

(d) Operation and maintenance expenses including insurance;

(e) Interest on working capital; and

(f) Contribution towards R&M or any compensation allowance,

whichever is permitted

(ii) The energy (variable) charges covering fuel cost.


Page 37 of 114

6. Final True up for FY 2011-12, FY 2012-13 & FY 2013-14

6.1.1 Final True-up Petition submitted by the BEPL:

(i) The Petitioner has filed the petition for the final true- up for FY 2011-12, FY 2012-13

and FY 2013-14 for all the generating stations based on the audited accounts.

(ii) In the Order date 22.11.2012, the Commission had allowed provisional tariff for all

the five generating stations.

(iii) Further, based on further submissions, the Commission had allowed revised

provisional tariff for all the five generating stations in the order dated 20.05.2013.

(iv) A hearing on the matter of admittance of True-up Petition was held with the

Commission on 07.01.2016 in which the True up Petition was admitted. However as

per the Regulation 5(5), of the UPERC Tariff Regulations 2009 as amended from

time to time, the true up shall be carried out along with the petition for ARR and Tariff

for the next tariff period including additional capital expenditure incurred upto

31.03.2014.

(v) Subsequently the Petitioner filed the MYT petition and accordingly admitted the

petition vide its Order dated 04.02.2016.

(vi) Based on detailed analysis of the Petitioner’s submission, the Commission’s approval

of Final true up for the years under consideration is deliberated as follows:

Section - 1: Barkhera

Section - 2: Maqsoodapur

Section - 3: Khambarkhera

Section - 4: Kundarki

Section - 5: Utraula


Page 38 of 114

6.1

Section - 1

True up Tariff

For

Barkhera

Thermal Power Station

For

FY 2011-12 to 2013-14


Approved GFA

(Rs. in Crores)

Barkhera Station FY 2011-12 FY 2012-13 FY 2013-14

As claimed by

BEPL As Approved by the UPERC

As claimed by BEPL

As Approved by the UPERC

As claimed by BEPL


Op. GFA 496.61 482.56 496.61 482.56 496.61 482.56

Additions 0.00 0.00 1.39 0.00 3.72 0.00

Deletions - - - - - -

Cl. GFA 496.61 482.56 498.00 482.56 500.33 482.56

Closing Net FA 496.22 481.82 479.70 448.12 464.05 417.78

Financing:

Op. Equity 148.98 144.77 148.98 144.77 148.98 144.77

Additions 0.00 0.00 0.42 0.00 1.12 0.00

Reduction - - - - -

Cl. Equity 148.98 144.77 149.40 144.77 150.10 144.77

Op. Accu Dep 0.00 0.00 0.39 0.38 18.29 17.75

Dep. during the year 0.39 0.38 17.90 17.37 17.99 17.37

A. A. D. 0.00 0.36 16.96 16.33 17.04 12.96

Cl. Accu. Depreciation 0.39 0.38 18.29 17.75 36.28 35.12

Op. Debts 347.63 337.79 347.23 337.05 313.35 303.35

Additions 0.00 0.00 0.97 0.00 1.63 0.00

Less : Repayment 0.39 0.74 34.86 33.71 35.02 30.33

Cl. Debts 347.23 337.05 313.35 303.35 279.95 273.01


Page 40 of 114

Approved Capacity (fixed) cost for FY 2011-12, FY 2012-13 and

FY 2013-14 after True up

Barkhera Power Station

FY 2011-12 FY 2012-13 FY 2013-14

(Rs Crores)

Petition Approved Diff Petition Approved Diff Petition Approved Diff

Fixed Cost

O&M Expenses 0.40 0.40 0.00 19.36 19.36 0.00 20.47 20.47 0.00

Depreciation 0.39 0.38 -0.01 17.90 17.37 -0.53 17.99 17.37 -0.61

Advance Against Depreciation

0.00 0.01 0.01 16.96 16.33 -0.63 17.04 12.96 -4.07

Interest on Loan 1.07 1.04 -0.03 45.78 44.38 -1.40 41.03 39.86 -1.17

Return on Equity 0.65 0.51 -0.15 29.88 23.16 -6.72 30.38 23.16 -7.22

Interest on Working Capital

0.34 0.33 -0.01 17.72 15.46 -2.26 16.84 14.84 -2.00

Total 2.85 2.67 -0.18 147.60 136.07 -9.27 143.74 128.66 -15.08


Page 41 of 114

Comparison of Provisional and Approved Capacity (fixed) cost for FY 2011-12,

FY 2012-13 and FY 2013-14 after True up


2011-12 2012-13 2013-14

(Rs Crores)

Provisional Approved

Now Difference Provisional

Approved Now

Difference Provisional Approved

Now Difference

Fixed Cost

O&M Expenses 0.38 0.40 0.02 18.39 19.36 0.97 19.44 20.47 1.03

Depreciation 0.38 0.38 0.00 17.37 17.37 0.00 17.37 17.37 0.00


0.00 0.01 0.01 16.42 16.33 -0.09 16.42 12.96 -3.46

Interest on Loan 1.04 1.04 0.00 44.90 44.38 -0.52 40.17 39.86 -0.31

Return on Equity 0.63 0.51 -0.13 28.97 23.16 -5.81 28.97 23.16 -5.81

Interest on Working Capital 0.22 0.33 0.11 10.51 15.46 4.95 10.63 14.84 4.22

Total Fixed Cost 2.65 2.67 0.01 136.55 136.07 -0.48 132.99 128.66 -4.33

*Provisional fixed charges as per UPERC Order dated 20.05.2013


6.2

Section - 2

True up Tariff

For

Maqsoodapur


For

FY 2011-12 to 2013-14


Approved GFA

(Rs. in Crores)

Maqsoodapur Station FY 2011-12 FY 2012-13 FY 2013-14

As claimed by


As claimed by BEPL


As claimed by BEPL


Op. GFA 494.01 482.64 494.01 482.64 494.01 482.64

Additions 0.00 0.00 2.18 0.00 7.06 0.00


Cl. GFA 494.01 482.64 496.19 482.64 501.07 482.64

Closing Net FA 493.81 482.27 478.18 448.52 465.24 418.15

Financing:

Op. Equity 148.20 144.79 148.20 144.79 148.20 144.79

Additions 0.00 0.00 0.65 0.00 2.12 0.00

Reduction - - - - - -

Cl. Equity 148.20 144.79 148.86 144.79 150.32 144.79

Op. Accu Dep 0.00 0.00 0.19 0.19 18.01 17.57


A. A. D. 5.51 0.18 16.92 16.37 16.92 13.00


Op. Debts 345.80 337.85 340.10 337.48 306.90 303.73

Additions 0.00 0.00 1.53 0.00 3.42 0.00

Less : Repayment 0.19 0.37 34.73 33.75 35.07 30.37

Cl. Debts 345.61 337.48 306.90 303.73 275.24 273.36


Page 44 of 114



Maqsoodapur Power Station

FY 2011-12 FY 2012-13 FY 2013-14

(Rs Crores)


Fixed Cost

O&M Expenses 0.20 0.20 0.00 19.36 19.36 0.00 20.47 20.47 0.00

Depreciation 0.19 0.19 0.00 17.82 17.38 -0.44 17.99 17.38 -0.62


0.00 0.00 0.00 16.92 16.37 -0.55 17.08 13.00 -4.09

Interest on Loan 0.53 0.52 -0.01 45.60 44.44 -1.16 41.02 39.91 -1.11

Return on Equity 0.32 0.25 -0.07 29.77 23.17 -6.61 30.43 23.17 -7.26


0.15 0.13 -0.02 17.59 15.27 -2.32 17.00 15.03 -1.97

Total 1.40 1.30 -0.10 147.06 135.98 -11.08 143.98 128.94 -15.05


Page 45 of 114

Comparison of Provisional and Approved Capacity (fixed) cost for FY 2011-12, FY 2012-13 and FY 2013-14 after True up


2011-12 2012-13 2013-14

(Rs Crores)



Approved Now


Now Difference

Fixed Cost

O&M Expenses 0.19 0.20 0.01 18.39 19.36 0.97 19.44 20.47 1.03

Depreciation 0.19 0.19 0.00 17.25 17.38 0.13 17.25 17.38 0.13


0.00 0.00 0.00 16.29 16.37 0.08 16.29 13.00 -3.30

Interest on Loan 0.51 0.52 0.00 44.59 44.44 -0.15 39.89 39.91 0.01

Return on Equity 0.32 0.25 -0.06 28.75 23.17 -5.59 28.75 23.17 -5.59


Total Fixed Cost 1.32 1.30 -0.02 135.65 135.98 0.33 132.12 128.94 -3.19



6.3

Section - 3

True up Tariff

For

Khambarkhera


For

FY 2011-12 to 2013-14


Approved GFA

(Rs. in Crores)

Khambarkhera Station FY 2011-12 FY 2012-13 FY 2013-14

As claimed by


As claimed by BEPL


As claimed by BEPL


Op. GFA 499.42 487.82 499.42 487.82 499.42 487.82

Additions 0.00 0.00 1.57 0.00 19.75 0.00


Cl. GFA 499.42 487.82 500.99 487.82 519.17 487.82

Closing Net FA 498.34 485.77 481.90 451.82 481.42 421.28

Financing:

Op. Equity 149.83 146.35 149.83 146.35 149.83 146.35

Additions 0.00 0.00 0.47 0.00 5.92 0.00

Reduction - - - - - -

Cl. Equity 149.83 146.35 150.30 146.35 155.75 146.35

Op. AccuDep 0.00 0.00 1.08 1.06 19.09 18.62


A. A. D. 0.00 1.00 17.06 16.38 17.68 12.99


Op. Debts 349.60 341.48 348.51 339.42 314.54 305.48

Additions 0.00 0.00 1.10 0.00 12.72 0.00

Less : Repayment 1.08 2.06 35.07 33.94 36.34 30.55

Cl. Debts 348.51 339.42 314.54 305.48 290.92 274.93


Page 48 of 114



Khambarkhera Power Station

FY 2011-12 FY 2012-13 FY 2013-14

(Rs Crores)


Fixed Cost

O&M Expenses 1.10 1.10 1.10 19.36 19.36 0.00 20.47 20.47 0.00

Depreciation 1.08 1.08 1.06 18.01 17.56 -0.44 18.66 17.56 -1.10


0.00 0.00 0.06 17.06 16.38 -0.68 17.68 12.99 -4.70

Interest on Loan 2.95 2.95 2.87 45.95 44.69 -1.26 41.87 40.14 -1.73

Return on Equity 1.81 1.81 1.41 30.06 23.42 -6.65 31.53 23.42 -8.11


0.94 0.94 0.90 17.48 15.13 -2.35 16.94 15.05 -1.89

Total 7.88 7.41 -0.47 147.92 136.54 -11.38 147.14 129.62 -17.53


Page 49 of 114

Comparison of Provisional and Approved Capacity (fixed) cost for FY 2011-12, FY 2012-13 and FY 2013-14 after True up


2011-12 2012-13 2013-14

(Rs Crores)



Approved Now


Now Difference

Fixed Cost

O&M Expenses 1.05 1.10 0.06 18.39 19.36 0.97 19.44 20.47 1.03

Depreciation 1.05 1.08 0.01 17.46 17.56 0.10 17.46 17.56 0.10


0.00 0.00 0.06 16.49 16.38 -0.11 16.49 12.99 -3.50

Interest on Loan 2.86 2.95 0.01 45.00 44.69 -0.31 135.25 40.14 -95.12

Return on Equity 1.75 1.81 -0.34 29.10 23.42 -5.69 29.10 23.42 -5.69


Total Fixed Cost 7.32 7.41 0.09 137.04 136.54 -0.50 133.46 129.62 -3.84



6.4

Section - 4

True up Tariff

For

Kundarki


For

FY 2012-13 to 2013-14


Approved GFA

Kundarki Station FY 2012-13 FY 2013-14

As claimed by BEPL


As claimed by BEPL


Op. GFA 499.81 488.16 499.81 488.16

Additions 1.30 0.00 8.39 0.00

Deletions - - - -

Cl. GFA 501.11 488.16 508.20 488.16

Cl. Net FA 484.07 455.86 472.88 424.92

Financing:

Op. Equity 149.94 146.45 149.94 146.45

Additions 0.39 0.00 2.52 0.00

Reduction - - - -

Cl. Equity 150.33 146.45 152.46 146.45

Op. Accu Dep 0.00 36.59 17.04 16.61

Dep. during the year 17.04 16.61 18.28 17.57

A. A. D. 18.04 15.69 17.29 13.37

Cl. Accu. Depreciation 17.04 16.61 35.32 34.18

Op. Debts 349.87 341.71 315.70 309.41

Additions 0.91 0.00 4.96 0.00

Less : Repayment 35.08 32.30 35.57 30.94

Cl. Debts 315.70 309.41 285.09 278.47


Page 52 of 114

Approved Capacity (fixed) cost for FY 2012-13 and FY 2013-14 after True up

Kundarki Power Station

FY 2012-13 FY 2013-14

(Rs Crores)

Petition Approved Diff Petition Approved Diff

Fixed Cost

O&M Expenses 18.30 18.30 0.00 20.47 20.47 0.00

Depreciation 17.04 16.61 -0.43 18.28 17.57 -0.71

Advance Against Depreciation 18.04 14.83 -3.21 17.29 13.37 -3.93

Interest on Loan 43.57 42.62 -0.95 41.54 40.65 -0.89

Return on Equity 28.42 22.15 -6.27 30.86 23.43 -7.43

Interest on Working Capital 16.75 16.30 -0.45 16.96 17.10 0.14

Total 142.11 130.80 -11.31 145.40 132.59 -12.81


Comparison of Provisional and Approved Capacity (fixed) cost for FY 2012-13 and FY 2013-14 after True up


2012-13 2013-14

(Rs Crores)

Provisional Approved Now Difference Provisional Approved Now Difference

Fixed Cost

O&M Expenses 17.33 18.30 0.97 19.44 20.47 1.03

Depreciation 16.48 16.61 0.13 17.49 17.57 0.09


Interest on Loan 42.63 42.62 -0.01 40.47 40.65 0.18

Return on Equity 27.48 22.15 -5.33 29.15 23.43 -5.72

Interest on Working Capital 9.95 16.30 6.35 10.55 17.10 6.55

Total Fixed Cost 131.35 130.80 -0.54 133.63 132.59 -1.04



6.5

Section - 5

True up Tariff

For

Utraula


For

FY 2012-13 to 2013-14


Approved GFA

Utraula Station FY 2012-13 FY 2013-14

As claimed by

BEPL As Approved by

the UPERC As claimed by

BEPL As Approved by

the UPERC

Op. GFA 521.97 506.84 521.97 506.84

Additions 1.36 0.00 4.12 0.00

Deletions - - - -

Cl. GFA 523.33 506.84 526.09 506.84

Cl. Net FA 505.67 473.59 489.50 441.44

Financing:

Op. Equity 156.59 152.05 156.59 152.05

Additions 0.41 0.00 1.24 0.00

Reduction - - - -

Cl. Equity 157.00 152.05 157.83 152.05

Op. Accu Dep 0.00 0.00 17.65 17.10

Dep. during the year 17.65 17.10 18.93 18.24

A. A. D. 18.98 16.15 17.89 13.91

Cl. Accu. Depreciation 17.65 17.10 36.59 35.34

Op. Debts 365.38 354.79 329.70 321.54

Additions 0.95 0.00 1.93 0.00

Less : Repayment 36.63 33.24 36.83 32.15

Cl. Debts 329.70 321.54 294.80 289.39


Page 56 of 114

Approved Capacity (fixed) cost for FY 2012-13 and FY 2013-14 after True up

Utrauala Power Station

FY 2012-13 FY 2013-14

(Rs Crores)

Petition Approved Diff Petition Approved Diff

Fixed Cost

O&M Expenses 18.14 18.14 0.00 20.47 20.47 0.00

Depreciation 17.65 17.10 -0.56 18.93 18.24 -0.69


Interest on Loan 45.10 43.88 -1.22 43.18 42.25 -0.94

Return on Equity 29.42 22.80 -6.63 31.95 24.33 -7.62

Interest on Working Capital 16.47 15.39 -1.07 17.08 17.25 0.18

Total 145.76 132.44 -13.32 149.50 136.45 -13.06


Page 57 of 114

Comparison of Provisional and Approved Capacity (fixed) cost for FY 2012-13 and FY 2013-14 after True up

Utraula Power Station

2012-13 2013-14

(Rs Crores)

Provisional Approved Now Difference Provisional Approved Now Difference

Fixed Cost

O&M Expenses 17.18 18.14 0.96 19.44 20.47 1.03

Depreciation 17.10 17.10 0.00 18.30 18.24 -0.05


Interest on Loan 44.23 43.88 -0.34 42.36 42.25 -0.11

Return on Equity 28.50 22.80 -5.71 30.51 24.33 -6.18

Interest on Working Capital 10.16 15.39 5.24 10.91 17.25 6.34

Total Fixed Cost 135.66 132.44 -3.22 138.80 136.45 -2.36



Page 58 of 114

Summary of Fixed Cost for

FY 2011-12, FY 2012-13 and FY 2013-14 after True up

(Rs Crore)

FY 2011-12 FY 2012-13 FY 2013-14

Provisional Petition Approved Difference Provisional Petition Approved Difference Provisional Petition Approved Difference

Fixed Cost

Barkhera 2.65 2.85 2.67 -0.18 136.55 147.60 136.07 -11.53 132.99 143.74 128.66 -15.08

Maqsoodapur 1.32 1.40 1.30 -0.10 135.65 147.06 135.98 -11.08 132.12 143.98 129.94 -15.05

Khambarkhera 7.32 7.88 7.41 -0.47 137.04 147.92 136.54 -11.38 133.46 147.14 129.62 -17.53

Kundarki - - - - 131.35 142.11 130.80 -11.31 133.63 145.40 132.59 -12.81

Utraula - - - - 135.66 145.76 132.44 -13.32 138.80 149.50 136.45 -13.06


Page 59 of 114

7. MULTI YEAR TARIFF PETITION FOR FY 2014-15 to 2018-19 :

(A) Generation Capacities of BEPL :

(i) The Petitioner Bajaj Energy Private Limited (hereinafter ‘BEPL’) promoted by Bajaj

Hindustan Limited (hereinafter ‘BHL’) has set up 450 MW coal fired Thermal Power Plants

subsequent to an Memorandum of Understanding (hereinafter ‘MoU’) between Government

of Uttar Pradesh (hereinafter ‘GoUP’) and BHL under GoUP Energy Policy 2009.

(ii) In terms of the MoU, the Petitioner has set up 2x45 MW units of coal fired power plants at

Barkhera (District: Pilibhit), Khambarkhera (District: Lakhimpuri Kheri), Maqsoodapur

(District: Shahjahanpur), Kundarki (District: Gonda), Utraula (District: Balrampur), of Uttar

Pradesh (hereinafter collectively referred to as the ‘Thermal Power Project’).

(iii) The Petitioner and the Respondent had entered into a Power Purchase Agreement

(hereinafter ‘PPA’) on 10.12.2010 for purchase of 90 % of the power from each of the

aforementioned power stations pursuant to approval of the Commission vide its Order on

Petition Nos. 662, 663, 664, 665, 666, 689 and 701 of 2010 dated 07.12.2010 read with

Order on Petition Nos. 662, 663, 664, 665, 666, 689 and 701 of 2010 dated 18.11.2010.

(iv) Subsequently, GoUP vide its Order No-456 dated 26.05.2011 approved for purchase of

100% power by the State Nominated Agency namely U.P. Power Corporation Limited

(hereinafter ‘UPPCL’). Accordingly, the Petitioner entered into a Supplementary Power

Purchase Agreement (hereinafter ‘SPPA’) dated 15.06.2011 with the Respondent for the

sale of 100 % saleable power generated from the Power Stations to the respondent at the

power purchase rates to be determined by the Hon’ble UPERC.

(v) The Hon’ble UPERC in its Order on Petition Nos. 830, 833, 838, 839, 840, 842, 845, 859 of

2012 and 897 of 2013 dated 03.11.2014 approved the revised quantity of 100% power in

case of the M/s Bajaj Energy Limited.

(vi) Accordingly the details of Installed Capacity of the generating stations of the Petitioner are

listed in table as below:


Page 60 of 114

Generation Capacities of the BEPL

SN Thermal Power

Station Unit No.

Installed

Capacity Date of Commercial Operation

1

Barkhera

1 45 MW 24-03-2012

2 2 45 MW 24-03-2012

3

Maqsoodapur

1 45 MW 28-03-2012

4 2 45 MW 28-03-2012

5

Khambarkhera

1 45 MW 10-03-2012

6 2 45 MW 10-03-2012

7

Kundarki

1 45 MW 21-04-2012

8 2 45 MW 21-04-2012

9

Utraula

1 45 MW 24-04-2012

10 2 45 MW 24-04-2012

Total 10 450 MW


Page 61 of 114

(B) ARR & Tariff submitted by BEPL :

The Multi Year Tariff (MYT) petition submitted by the Petitioner has average of tariffs and total

ARR for FY 2014-15 to FY 2018-19 for all the generating stations as indicated below:

Table 1: Average Tariff for the MYT Control Period FY14-19 as submitted by the Petitioner (Rs/kWh)

Table 2: ARR for the MYT Control Period FY14-19 as submitted by the Petitioner

(Rs Cr)

8. TARIFF DESIGN AND APPROACH FOR DETERMINATION OF MYT

The tariff is structured on the following basis:

(i) The data of GFA, Debt, Equity on 01.04.14, as approved by the Commission in the true-up of FY

2013-14 in this Tariff Order, has been considered as baseline data for calculation of tariff and

ARR for the Petitioner for the MYT period from FY 2014-15 to

FY 2018-2019.

SN BEPL FY 14 -15 FY 15 - 16 FY 16 - 17 FY 17 - 18 FY 18 - 19

1 Barkhera 6.50 6.44 6.40 6.36 6.33

2 Maqsoodapur 6.61 6.56 6.52 6.48 6.45

3 Khambarkhera 6.74 6.70 6.66 6.62 6.58

4 Kundarki 6.52 6.46 6.42 6.38 6.35

5 Utraula 6.52 6.47 6.43 6.39 6.35

SN BEPL FY 14 -15 FY 15 - 16 FY 16 - 17 FY 17 - 18 FY 18 - 19

1 Energy Sent out (MU)

2982.12 2982.12 2982.12 2982.12 2982.12

2 Fixed Charges (Rs/kWh)

2.29 2.24 2.20 2.16 2.12

3 Energy Charges (Rs/kWh)

4.29 4.29 4.29 4.29 4.29

4 Total Charges (Rs/kWh)

6.58 6.53 6.49 6.45 6.41

5 ARR (Rs Cr.) 1961.52 1945.94 1935.00 1922.95 1911.44


Page 62 of 114

(ii) Return on Equity has been considered as 16.0 % as provided in the UPERC Generation Tariff

Regulations, 2014.

(iii) The rate of the interest shall be the weighted average rate of interest calculated on the basis of

actual loans at the beginning of each year and shall be adjusted based on actual loan each year

accordingly. If there is no actual loan for a particular year but normative loan is still outstanding,

the last available weighted average of interest has been considered.

(iv) The Petitioner has got its loan refinanced therefore the benefits thereof shall be shared between

the beneficiaries and generating company in the ratio of 2:1. The Commission appreciates the

efforts of the Petitioner to refinance its loans and passing of benefits to the beneficiaries in line

with Regulation 25(i) (e). However, as per Regulation 6. (4) (d), the benefits due to re-financing

of loan will be considered during true up of the generating stations. Further, the Commission has

observed that interest rates have shown a declining trend and directs the Petitioner to further re-

negotiate the interest rates for benefit of all stakeholders.

(v) Depreciation has been allowed as provided in Regulation 25 (ii) in the UPERC Generation Tariff

Regulations, 2014.

(vi) The O&M expenditure has been allowed as per the normative values provided in Regulation

25(iv) of the UPERC Generation Tariff Regulations, 2014

(vii) Working capital requirement has been allowed as per Regulation 25 (v) of the UPERC

Generation Tariff Regulations 2014. The rate of interest on working capital has been allowed

on normative basis as the Bank Rate as on 1.4.2014 or as on 1st April of the year during the

tariff period FY 2014-15 to FY 2018-19 in which the generating station or a unit thereof is

declared under commercial operation, whichever is later.

(viii) Thus the MYT for Thermal Power Stations of the Petitioner for FY 2014–2015 to

FY 2018–2019 has been worked out adopting the above elaborated methodology.

9. APPROVED MULTI YEAR TARIFF AND ARR:

Generating station wise approved MYT and ARR for FY 2014 - 15 to FY 2018 - 19 shall be as

detailed in following sections.

9.1 - Section - 1 Barkhera

9.2 - Section - 2 Maqsoodapur

9.3 - Section - 3 Khambarkhera

9.4 - Section - 4 Kundarki

9.5 - Section - 5 Utraula


Page 63 of 114

9.1

Section-1

Multi Year Tariff

For

Barkhera


For

FY 2014 - 15 to FY 2018 - 19


Page 64 of 114

9.1.1 ARR and MYT as according to petition:

In the petition, the Petitioner has proposed the fixed, variable and total charges for the electricity sent out

as given in the table below:

9.1.2 ARR and MYT as determined by the Commission:

i. Capacity (Fixed) Charges:

(a) Provisions under Regulations:

For determination of components of fixed charges for MYT period of FY 2014 - 15 to

FY 2018 - 19, the Commission opines that the parameters provided under UPERC Generation

Tariff Regulations, 2014 shall be considered. Hence, the Commission has decided to allow the

components of fixed charges as below:

Components of Fixed Charge

Value Remark

Return on equity 15.50% + 0.5% = 16 % As per the Regulations and an additional return of 0.5% applicable to projects completed within specified timeline

Interest on Loans

FY15 - 13.43% FY16 - 11.76% FY17 - 11.72% FY18 – 11.67% FY19 – 11.59%

Weighted average of interest on loans for FY 2014-15 to FY 2018-19

O & M Expenses Normative As per the Regulations

Interest on working capital

13.50 % As per the Regulations

Barkhera 2014-15 2015-16 2016-17 2017-18 2018-19

Energy Sent out (MU)

596.42 596.42 596.42 596.42 596.42

Fixed Charges (Rs/kWh)

2.24 2.18 2.14 2.11 2.07

Variable Charges (Rs/kWh)

4.26 4.26 4.26 4.26 4.26

Total Charges (Rs/kWh)

6.50 6.44 6.40 6.36 6.33

ARR (Rs Cr.) 387.69 383.94 381.89 379.62 377.46


Page 65 of 114

(b) Gross Fixed Assets (GFA) and its Components :

For the determination of Return on Equity, Interest on balance Loans and

Depreciation it is essential to determine the value of GFA duly supported with the

financing program and the value of NFA at the end of each financial year. Therefore,

the GFA and NFA at the end of each financial year commencing from FY 2014-15 to

FY 2018-19 has been worked out along with Equity and Debts taking base figures as

allowed in the final True-up for FY 2013-14.

Calculation of GFA & NFA including financing

(Rs Crores)


2014-15 2015-16 2016-17 2017-18 2018-19

Op. GFA 482.56 482.56 482.56 482.56 482.56

Additions 0.00 0.00 0.00 0.00 0.00

Deletions - - - - -

Cl. GFA 482.56 482.56 482.56 482.56 482.56

Cl. Net FA 389.69 361.59 333.50 305.40 277.31

Financing:

Op. Equity 144.77 144.77 144.77 144.77 144.77

Additions 0.00 0.00 0.00 0.00 0.00

Reduction - - - - -

Cl. Equity 144.77 144.77 144.77 144.77 144.77

Op. AccuDep 35.12 63.22 91.31 119.41 147.50

Dep. during the year

28.09 28.09 28.09 28.09 28.09

Cl. Accu. Depreciation

63.22 91.31 119.41 147.50 175.60

Op. Debts 273.01 244.92 216.82 188.73 160.63

Additions 0.00 0.00 0.00 0.00 0.00

Less : Repayment 28.09 28.09 28.09 28.09 28.09

Cl. Debts 244.92 216.82 188.73 160.63 132.54

(c) RoE, Depreciation, O&M and Interest on Loans :

On the basis of decisions of the Commission in the forgoing paragraphs and the

details of GFA, NFA and financing as indicated above the Return on Equity,

Depreciation, O&M expenditure and Interest on Loans, at the end of each financial

year of the control MYT period from FY 2014-15 to FY 2018-19, is worked out as

under:


Page 66 of 114

Details of approved RoE, Depreciation, O&M and Interest on Loans (Rs Crores)

Sl.No. Particular 2014-15 2015-16 2016-17 2017-18 2018-19

1 O&M Expenses

21.51 22.86 24.30 25.83 27.46

2 Depreciation 28.09 28.09 28.09 28.09 28.09

3 Interest on Loan

34.78 27.15 23.77 20.39 16.99

4 Return on Equity

23.16 23.16 23.16 23.16 23.16

Total: 107.55 101.27 99.32 97.47 95.71

(d) Interest on Working Capital:

The amount of working Capital and Interest on working Capital for the control period of F.Y. 2014-15 to FY 2018-19 as determined by the Commission are as under:

Annual Receivables of Barkhera Power Station required for

Calculation of Working Capital: (Rs Crore)

Particulars

2014-15 2015-16 2016-17 2017-18 2018-19

Annual Capacity [Fixed] Charges

122.54 116.21 114.27 112.44 110.70

Cost of Fuel 253.20 253.98 253.98 253.98 253.98

Total Receivables 375.74 370.18 368.25 366.42 364.67


Page 67 of 114

Interest on Working Capital as determined by the Commission

(Rs Crore)

SN Particulars 2014-15 2015-16 2016-17 2017-18 2018-19

1 Cost of Coal for 60 days

41.55 42.02 42.02 42.02 42.02

2 Cost of Secondary Fuel Oil for 2 months

0.79 0.46 0.46 0.46 0.46

3 O & M for 1 month 1.79 1.91 2.03 2.15 2.29

4 Maintenance Spares @20% of O & M Exp.

4.30 4.57 4.86 5.17 5.49

5

Receivables equivalent to 2 months capacity and energy charges for sale of electricity

62.62 61.70 61.38 61.07 60.78

6 Working Capital 111.06 110.65 110.74 110.86 111.03

7 Rate of Interest 13.50% 13.50% 13.50% 13.50% 13.50%

8 I W C 14.99 14.94 14.95 14.97 14.99

(e) Capacity (Fixed) Charge per unit of Generation :

Based on above the capacity charges as claimed by Petitioner and as approved by

the Commission are tabulated herein for the MYT period of F.Y. 2014-15 to F.Y 2018-

19. Ex-bus energy sent out has been taken from the data mentioned in Section 8.1.1:

Fixed Charges as claimed and as approved by the Commission

Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commission

Diff. (if any) As claimed by BEPL

As determined

by the Commission

Diff. (if any)

O&M Expenses 21.51 21.51 0.00 22.86 22.86 0.00

Depreciation 29.46 28.09 -1.36 29.88 28.09 -1.78

Interest on Loan 36.16 34.78 -1.38 28.77 27.15 -1.62

Return on Equity 30.73 23.16 -7.57 31.32 23.16 -8.16


15.26 14.99 -0.27 15.23 14.94 -0.29

Special Allowance on Refinancing of loan

0.51 - -0.51 1.82 - -1.82


Page 68 of 114

Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commission


As determined

by the Commission

Diff. (if any)

Total (Rs Cr) 133.63 122.54 -11.09 129.89 116.21 -13.68

Ex-bus Energy Sent Out (kwh)

596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.24 2.05 -0.19 2.18 1.95 -0.23

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

O&M Expenses 24.30 24.30 0.00 25.83 25.83 0.00

Depreciation 29.97 28.09 -1.87 29.97 28.09 -1.87

Interest on Loan 25.28 23.77 -1.52 21.67 20.39 -1.29

Return on Equity 31.41 23.16 -8.25 31.41 23.16 -8.25


15.24 14.95 -0.29 15.25 14.97 -0.28


1.64 - -1.64 1.45 - -1.45

Total (Rs Cr) 127.84 114.27 -13.57 125.57 112.44 -13.13


596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.14 1.92 -0.23 2.11 1.89 -0.22

Particulars

FY 19

As claimed by

BEPL

As determined

by the

Commission

Difference

(if any)

O&M Expenses 27.46 27.46 0.00

Depreciation 29.97 28.09 -1.87

Interest on Loan 18.06 16.99 -1.07

Return on Equity 31.41 23.16 -8.25

Interest on Working Capital 15.26 14.99 -0.27


Page 69 of 114

ii. Representative calculation of Variable Charges:

Variable charge per unit of Generation – For the purpose of calculation of

normative working capital

Based on the operation norms provided in the UPERC Generation Tariff Regulations,

2014, the variable charge per unit of generation for Barkhera Power Station for the MYT

period of F.Y. 2014-15 to F.Y 2018-19 has been arrived at. The calculation shown below

is representative of the variable cost calculation and has been used to arrive at some of

the components of normative working capital.

Variable charge per unit of generation for Barkhera Power Station

Description Unit 2014-15 2015-16 2016-17 2017-18 2018-19

Capacity MW 90.00 90.00 90.00 90.00 90.00

PAF % 85.00 85.00 85.00 85.00 85.00

Gross generation MU 670.14 670.14 670.14 670.14 670.14

Auxiliary Consumption

% 11.00 11.00 11.00 11.00 11.00

Net units sent out MU 596.42 596.42 596.42 596.42 596.42

Gross station heat rate

Kcal/kWh 2890 2890 2890 2890 2890

Specific oil consumption

ml/kWh 1.00 1.00 1.00 1.00 1.00

Calorific value of secondary fuel

KCal/Lt 10.00 10.00 10.00 10.00 10.00

Weighted average landed price of coal

Rs./Kg 4.26 4.72 4.72 4.72 4.72

Calorific value of Coal

kCal/kg 3312.52 3623.58 3623.58 3623.58 3623.58

Weighted average landed price of secondary fuel

Rs./mL 0.07 0.04 0.04 0.04 0.04

Energy charge rate (ECR)

Rs/kWh 4.25 4.26 4.26 4.26 4.26

Special Allowance on Refinancing of

loan 1.25 -1.25

Total (Rs Cr) 123.41 110.70 -12.71

Ex-bus Energy Sent Out (kwh) 596.42 596.42 0.00

Fixed Cost per Unit 2.07 1.86 -0.21


Page 70 of 114

(a) Cost of alternative coal supply:

Regulation 26 (iv) of the UPERC Generation Tariff Regulations 2014 specifies the norms

for the calculation of cost of alternative coal supply:

“In case of part or full use of alternative source of fuel supply by coal based thermal

generating stations other than as agreed by the generating company and beneficiaries

in their power purchase agreement for supply of contracted power on account of

shortage of fuel or optimization of economical operation through blending, the use of

alternative source of fuel supply shall be permitted to generating station;

Provided further that the weighted average price of use of alternative source of fuel

shall not exceed 30% of base price of fuel computed as per clause (v) of this

regulation;

Provided also that where the energy charge rate based on weighted average

price of use of fuel including alternative source of fuel exceeds 30% of base

energy charge rate as approved by the Commission for that year or energy

charge rate based on weighted average price of use of fuel including alternative

sources of fuel exceeds 20% of energy charge rate based on weighted average

fuel price for the previous month, whichever is lower shall be considered and in

that event, prior consent of the beneficiary shall be taken by the generator by

serving a notice upon the beneficiary in writing not later than seven working

days in advance.

Provided that if the beneficiary does not respond to the notice given by the generator in

writing within the above stipulated time, the beneficiary shall be liable for payment of

fixed charges to generator.

Further Alternative coal supply from CIL beyond the FSA must be done through e-

auction route and for procurement of domestic open market coal and imported coal the

generating companies shall follow a transparent competitive bidding process so as to

identify a reasonable market price.

However the Commission directs that the Committee should be formed for carrying out

the above mentioned process with at least one member of the Beneficiary.

Accordingly the cost of alternative coal supply for FY 2016-17 shall not exceed the

following:

Period Maximum ECR (Rs/kWh)

01.04.2016 to 31.03.2017 5.54

The rates for the subsequent years shall be computed as per the Regulations.


Page 71 of 114

(b) Adjustment of Rate of Energy Charge on Account of Variation in price or

Heat Value of Fuels:

Any variation shall be adjusted on month to month basis on the basis of Gross Calorific

Value of coal or gas or liquid fuel as received and landed cost incurred by the generating

company for procurement of coal, oil, or gas or liquid fuel, as the case may be. No

separate petition needs to be filed with the Commission for fuel price adjustment. In case

of any dispute, an appropriate application in accordance with Uttar Pradesh Electricity

Regulatory Commission (Conduct of Business) Regulations 2004, as amended from time

to time or any statutory re-enactment thereof, shall be made before the Commission.

Provided further that copies of the bills and details of parameters of GCV and price of fuel

i.e. domestic coal, imported coal, e-auction coal, lignite, liquid fuel etc., details of blending

ratio of the imported coal with domestic coal, proportion of e-auction coal shall also be

displayed on the website of the generating company. The details should be available on its

website on monthly basis for a period of three months.

However, UPPCL shall verify the “As Received GCV” and landed cost of coal from

the original coal purchase bills.

BEPL shall be entitled to recover / adjust any change in fuel cost according to the

provisions set out in the relevant UPERC Generation Tariff Regulations.

iii. Summary – Capacity Charges (Cost):

The capacity charges (costs) for Barkhera Thermal Power Station for the MYT period of

FY 2014-15 to FY 2018-19 is summarized in the table below.

Fixed Cost per kWh as claimed with those as allowed by the Commission

Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Fixed Cost (Rs Cr.)

133.63 122.54 -11.09 129.89 116.21 -13.68

F. C. per Unit (In Rs/kWh)

2.24 2.05 -0.19 2.18 1.95 -0.23


Page 72 of 114

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Fixed Cost (Rs Cr.)

127.84 114.27 -13.57 125.57 112.44 -13.13


2.14 1.92 -0.23 2.11 1.89 -0.22

Particulars

FY 19

As claimed by BEPL As determined by the

Commission Diff.

(if any)

Fixed Cost (Rs Cr.)

123.41 110.70 -12.71


2.07 1.86 -0.21


Page 73 of 114

9.2

Section-2

Multi Year Tariff

For

Maqsoodapur


For

FY 2014 - 15 to FY 2018 - 19


Page 74 of 114








FY 2018 - 19, the Commission opines that the parameters provided under UPERC

Generation Tariff Regulations, 2014shall be considered. Hence, the Commission has

decided to allow the components of fixed charges as below:


Value Remark

Return on equity 15.50% + 0.5% = 16 %

As per the Regulations and an additional return of 0.5% applicable to projects completed within specified timeline

Interest on Loans

FY15 - 13.43% FY16 - 11.76% FY17 - 11.72% FY18 – 11.67% FY19 – 11.59%





Maqsoodapur 2014-15 2015-16 2016-17 2017-18 2018-19


596.42 596.42 596.42 596.42 596.42


2.26 2.22 2.18 2.14 2.10


4.34 4.34 4.34 4.34 4.34


6.60 6.56 6.52 6.48 6.45

ARR (Rs Cr.) 393.98 391.09 388.98 386.64 384.40


Page 75 of 114









(Rs Crores)


2014-15 2015-16 2016-17 2017-18 2018-19

Op. GFA 482.64 482.64 482.64 482.64 482.64

Additions 0.00 0.00 0.00 0.00 0.00

Deletions - - - - -

Cl. GFA 482.64 482.64 482.64 482.64 482.64

Cl. Net FA 390.07 361.99 333.91 305.83 277.75

Financing:

Op. Equity 144.79 144.79 144.79 144.79 144.79

Additions 0.00 0.00 0.00 0.00 0.00

Reduction - - - - -

Cl. Equity 144.79 144.79 144.79 144.79 144.79

Op. AccuDep 34.94 63.02 91.10 119.18 147.26


28.08 28.08 28.08 28.08 28.08


63.02 91.10 119.18 147.26 175.34

Op. Debts 273.36 245.28 217.20 189.11 161.03

Additions 0.00 0.00 0.00 0.00 0.00

Less : Repayment

28.08 28.08 28.08 28.08 28.08

Cl. Debts 245.28 217.20 189.11 161.03 132.95






under:


Page 76 of 114

Details of approved RoE, Depreciation, O&M and Interest on Loans (RsCr)

Sl.No.

Particular 2014-15 2015-16 2016-17 2017-18 2018-19

1 O&M Expenses

21.51 22.86 24.30 25.83 27.46

2 Depreciation 28.08 28.08 28.08 28.08 28.08

3 Interest on Loan

34.83 27.19 23.81 20.43 17.04

4 Return on Equity

23.17 23.17 23.17 23.17 23.17

Total: 107.58 101.30 99.36 97.51 95.74



Annual Receivables of Maqsoodapur Power Station required for


I

n

t

e

r

est on Working Capital as determined by the Commission

(Rs Crore)

SN Particulars 2014-15 2015-16 2016-17 2017-18 2018-19


42.38 40.78 40.78 40.78 40.78


0.79 0.43 0.43 0.43 0.43

3 O & M for 1 month 1.79 1.91 2.03 2.15 2.29


4.30 4.57 4.86 5.17 5.49

5


63.49 60.38 60.06 59.75 59.46

6 Working Capital 112.75 108.07 108.15 108.28 108.45

7 Rate of Interest 13.50% 13.50% 13.50% 13.50% 13.50%

Particulars

2014-15 2015-16 2016-17 2017-18 2018-19


122.80 115.89 113.96 112.13 110.38

Cost of Fuel 258.12 246.40 246.40 246.40 246.40



Page 77 of 114

SN Particulars 2014-15 2015-16 2016-17 2017-18 2018-19

8 I W C 15.22 14.59 14.60 14.62 14.64


Based on above the capacity charges as claimed by Petitioner and as approved by the

Commission are tabulated herein for the MYT period of F.Y. 2014-15 to F.Y 2018-19.


Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commission


As determined

by the Commission

Diff. (if any)

O&M Expenses 21.51 21.51 0.00 22.86 22.86 0.00

Depreciation 29.73 28.08 -1.65 30.42 28.08 -2.34

Interest on Loan 36.67 34.83 -1.85 29.55 27.19 -2.35

Return on Equity 31.05 23.17 -7.88 31.92 23.17 -8.75


15.51 15.22 -0.29 15.50 14.59 -0.91


0.52 - -0.52 1.87 - -1.87

Total (Rs Cr) 135.00 122.80 -12.20 132.12 115.89 -16.23


596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.26 2.06 -0.20 2.22 1.94 -0.27

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined by the

Commission

Diff. (if any)

O&M Expenses 24.30 24.30 0.00 25.83 25.83 0.00

Depreciation 30.50 28.08 -2.42 30.50 28.08 -2.42

Interest on Loan 25.99 23.81 -2.18 22.31 20.43 -1.88

Return on Equity 32.01 23.17 -8.84 32.01 23.17 -8.84


15.51 14.60 -0.91 15.51 14.62 -0.90


Page 78 of 114

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL


Commission

Diff. (if any)


1.69 - -1.69 1.49 - -1.49

Total (Rs Cr) 130.00 113.96 -16.04 127.66 112.13 -15.53


596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.18 1.91 -0.27 2.14 1.88 -0.26


(a) Variable charge per unit of Generation – For the purpose of calculation of

normative working capital:


2014, the variable charge per unit of generation for Maqsoodapur Power Station for

the MYT period of F.Y. 2014-15 to F.Y 2018-19 has been arrived at. The calculation

shown below is representative of the variable cost calculation and has been used to

arrive at some of the components of normative working capital

Particulars

FY 19

As claimed by

BEPL

As determined

by the

Commission

Difference

(if any)

O&M Expenses 27.46 27.46 0.00






loan 1.29 - -1.29

Total (Rs Cr) 125.43 110.38 -15.04




Page 79 of 114

Variable charge per unit of generation for Maqsoodapur Power Station


Capacity MW 90.00 90.00 90.00 90.00 90.00

PAF % 85 85 85 85 85



% 11.00 11.00 11.00 11.00 11.00



Kcal/kWh 2890 2890 2890 2890 2890


ml/kWh 1.00 1.00 1.00 1.00 1.00


KCal/Lt 10.00 10.00 10.00 10.00 10.00


Rs./Kg 4.43 4.52 4.52 4.52 4.52


kCal/kg 3373.76 3575.43 3575.43 3575.43 3575.43


Rs./mL 0.07 0.04 0.04 0.04 0.04


Rs/kWh 4.33 4.13 4.13 4.13 4.13

(b) Cost of alternative coal supply:








Provided further that the weighted average price of use of alternative source of fuel shall

not exceed 30% of base price of fuel computed as per clause (v) of this regulation;

Provided also that where the energy charge rate based on weighted average price

of use of fuel including alternative source of fuel exceeds 30% of base energy

charge rate as approved by the Commission for that year or energy charge rate

based on weighted average price of use of fuel including alternative sources of

fuel exceeds 20% of energy charge rate based on weighted average fuel price for

the previous month, whichever is lower shall be considered and in that event,

prior consent of the beneficiary shall be taken by the generator by serving a


Page 80 of 114

notice upon the beneficiary in writing not later than seven working days in

advance.

Provided that if the beneficiary does not respond to the notice given by the generator in

writing within the above stipulated time, the beneficiary shall be liable for payment of

fixed charges to generator”


auction route and for procurement of domestic open market coal and imported coal the

generating companies shall follow a transparent competitive bidding process so as to

identify a reasonable market price.

However the Commission directs that the Committee should be formed for carrying out

the above mentioned process with at least one member of the Beneficiary.


following:


01.04.2016 to 31.03.2017 5.37


(c) Adjustment of Rate of Energy Charge on Account of Variation in price or

















Page 81 of 114


provisions set out in the Generation Regulations.

iii. Summary Capacity Charges (Cost):

The total capacity charges (costs) for Maqsoodapur Thermal Power Station for the MYT

period of FY 2014-15 to FY 2018-19 is summarized in the table below.

Fixed Cost per kWh as claimed and as allowed by the Commission

Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Fixed Cost (Rs Cr.)

135.00 122.80 -12.20 132.12 115.89 -16.23


2.26 2.06 -0.20 2.22 1.94 -0.27

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Fixed Cost (Rs Cr.)

130.00 113.96 -16.04 127.66 112.13 -15.53


2.18 1.91 -0.27 2.14 1.88 -0.26

Particulars

FY 19


Commission Diff.

(if any)

Fixed Cost (Rs Cr.)

125.43 110.38 -15.04


2.10 1.85 -0.25


Page 82 of 114

9.3

Section-3

Multi Year Tariff

For

Khambarkhera


For

FY 2014 - 15 to FY 2018 - 19


Page 83 of 114









Tariff Regulations, 2014shall be considered. Hence, the Commission has decided to allow the



Value Remark

Return on equity 15.50% + 0.5% = 16 %


Interest on Loans

FY15 - 13.43% FY16 - 11.76% FY17 - 11.72% FY18 – 11.67% FY19 – 11.59%





Khambarkhera 2014-15 2015-16 2016-17 2017-18 2018-19


596.42 596.42 596.42 596.42 596.42


2.34 2.30 2.26 2.22 2.18


4.40 4.40 4.40 4.40 4.40


6.74 6.70 6.66 6.62 6.58

ARR (Rs Cr.) 402.24 399.82 397.51 394.97 392.54


Page 84 of 114









(Rs Crore)


2014-15 2015-16 2016-17 2017-18 2018-19

Op. GFA 487.82 487.82 487.82 487.82 487.82

Additions 0.00 0.00 0.00 0.00 0.00

Deletions - - - - -

Cl. GFA 487.82 487.82 487.82 487.82 487.82

Cl. Net FA 392.48 363.68 334.89 306.09 277.29

Financing:

Op. Equity 146.35 146.35 146.35 146.35 146.35

Additions 0.00 0.00 0.00 0.00 0.00

Reduction - - - - -

Cl. Equity 146.35 146.35 146.35 146.35 146.35

Op. AccuDep 36.18 64.98 93.78 122.57 151.37


28.80 28.80 28.80 28.80 28.80


64.98 93.78 122.57 151.37 180.17

Op. Debts 274.93 246.13 217.34 188.54 159.74

Additions 0.00 0.00 0.00 0.00 0.00

Less : Repayment

28.80 28.80 28.80 28.80 28.80

Cl. Debts 246.13 217.34 188.54 159.74 130.94






Page 85 of 114

year of the control MYT period from FY 2014-15 to FY 2018-19, isworked out as

under:

Details of approved RoE, Depreciation, O&M and Interest on Loans (Rs Crore)

Sl.No. Particular 2014-15 2015-16 2016-17 2017-18 2018-19

1 O&M Expenses 21.51 22.86 24.30 25.83 27.46

2 Depreciation 28.80 28.80 28.80 28.80 28.80

3 Interest on Loan 34.99 27.25 23.78 20.32 16.85

4 Return on Equity 23.42 23.42 23.42 23.42 23.42

Total: 108.71 102.32 100.30 98.36 96.52



Annual Receivables of Khambarkhera Power Station required for



(Rs Crore)

SN Particulars 2014-15 2015-16 2016-17 2017-18 2018-19


42.99 43.25 43.25 43.25 43.25


0.79 0.46 0.46 0.46 0.46

3 O & M for 1 month 1.79 1.91 2.03 2.15 2.29

Particulars

2014-15 2015-16 2016-17 2017-18 2018-19


124.13 117.63 115.61 113.69 111.87

Cost of Fuel 261.79 261.37 261.37 261.37 261.37



Page 86 of 114

SN Particulars 2014-15 2015-16 2016-17 2017-18 2018-19


4.30 4.57 4.86 5.17 5.49

5


64.32 63.17 62.83 62.51 62.21

6 Working Capital 114.19 113.35 113.43 113.54 113.70

7 Rate of Interest 13.50% 13.50% 13.50% 13.50% 13.50%

8 I W C 15.42 15.30 15.31 15.33 15.35




19.


Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commission


As determined

by the Commission

Diff. (if any)

O&M Expenses 21.51 21.51 0.00 22.86 22.86 0.00

Depreciation 31.03 28.80 -2.23 31.93 28.80 -3.13

Interest on Loan 38.30 34.99 -3.31 31.11 27.25 -3.86

Return on Equity 32.37 23.42 -8.96 33.47 23.42 -10.06


15.78 15.42 -0.37 15.78 15.30 -0.48


0.54 0.00 -0.54 1.97 0.00 -1.97

Total (Rs Cr) 139.54 124.13 -15.41 137.12 117.63 -19.49


596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.34 2.08 -0.26 2.30 1.97 0.33


Page 87 of 114

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL


Commission

Diff. (if any)

O&M Expenses 24.30 24.30 0.00 25.83 25.83 0.00

Depreciation 32.01 28.80 -3.22 32.01 28.80 -3.22

Interest on Loan 27.37 23.78 -3.59 23.51 20.32 -3.19

Return on Equity 33.56 23.42 -10.15 33.56 23.42 -10.15


15.78 15.31 -0.47 15.79 15.33 -0.46


1.77 0.00 -1.77 1.57 0.00 -1.57

Total (Rs Cr) 134.81 115.61 -19.20 132.27 113.69 -18.58


596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.26 1.94 0.32 2.22 1.91 0.31


(a) Variable charge per unit of Generation: For the purpose of calculation of


Particulars

FY 19

As claimed by

BEPL

As determined

by the

Commission

Difference

(if any)

O&M Expenses 27.46 27.46 0.00






loan 1.36 0.00 -1.36

Total (Rs Cr) 129.84 111.87 -17.98


Fixed Cost per Unit 2.18 1.88 0.30


Page 88 of 114


2014, the variable charge per unit of generation for Khambarkhera Power Station for

the MYT period of F.Y. 2014-15 to F.Y 2018-19 has been arrived at. The calculation

shown below is representative of the variable cost calculation and has been used to

arrive at some of the components of normative working capital.

Variable charge per unit of generation for Khambarkhera Power Station


Capacity MW 90.00 90.00 90.00 90.00 90.00

PAF % 85 85 85 85 85



% 11.00 11.00 11.00 11.00 11.00



Kcal/kWh 2890 2890 2890 2890 2890


ml/kWh 1.00 1.00 1.00 1.00 1.00


KCal/Lt 10.00 10.00 10.00 10.00 10.00


Rs./Kg 4.42 4.85 4.85 4.85 4.85


kCal/kg 3318.33 3617.75 3617.75 3617.75 3617.75


Rs./mL 0.07 0.04 0.04 0.04 0.04


Rs/kWh 4.39 4.38 4.38 4.38 4.38











regulation;


Page 89 of 114









days in advance.

Provided that if the beneficiary does not respond to the notice given by the generator

in writing within the above stipulated time, the beneficiary shall be liable for payment of



auction route and for procurement of domestic open market coal and imported coal

the generating companies shall follow a transparent competitive bidding process so as

to identify a reasonable market price.

However the Commission directs that the Committee should be formed for carrying

out the above mentioned process with at least one member of the Beneficiary.


following:


01.04.2016 to 31.03.2017 5.70














Page 90 of 114








iii. Summary - Capacity Charges (Cost):

The total charges (costs) for Khambarkhera Thermal Power Station for the MYT period of



Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commissio

n

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Fixed Cost (Rs Cr.)

139.54 124.13 -15.41 137.12 117.63 -19.49


2.34 2.08 -0.26

2.30 1.97 0.33

Particulars

FY 17 FY 18

As claimed by

BEPL


Commission

Diff. (if any)

As claimed by BEPL


Commission

Diff. (if any)

Fixed Cost (Rs Cr.)

134.81 115.61 -19.20 132.27 113.69 -18.58


2.26 1.94 0.32 2.22 1.91 0.31

Particulars

FY 19


Commission Diff.

(if any)

Fixed Cost (Rs Cr.)

129.84 111.87 -17.98


2.18 1.88 0.30


Page 91 of 114

9.4

Section-4

Multi Year Tariff

For

Kundarki


For

FY 2014 - 15 to FY 2018 - 19


Page 92 of 114












Value Remark

Return on equity 15.50% + 0.5% = 16 %


Interest on Loans

FY15 - 13.43% FY16 - 11.76% FY17 - 11.72% FY18 – 11.67% FY19 – 11.59%





Kundarki 2014-15 2015-16 2016-17 2017-18 2018-19


596.42 596.42 596.42 596.42 596.42


2.28 2.22 2.19 2.15 2.11


4.24 4.24 4.24 4.24 4.24


6.52 6.46 6.42 6.38 6.35

ARR (Rs Cr.) 388.62 385.34 383.18 380.81 378.54


Page 93 of 114









(Rs Crore)


2014-15 2015-16 2016-17 2017-18 2018-19

Op. GFA 488.16 488.16 488.16 488.16 488.16

Additions 0.00 0.00 0.00 0.00 0.00

Deletions - - - - -

Cl. GFA 488.16 488.16 488.16 488.16 488.16

Cl. Net FA 396.08 367.24 338.40 309.56 280.72

Financing:

Op. Equity 146.45 146.45 146.45 146.45 146.45

Additions 0.00 0.00 0.00 0.00 0.00

Reduction - - - - -

Cl. Equity 146.45 146.45 146.45 146.45 146.45

Op. AccuDep 34.18 63.02 91.86 120.70 149.54


28.84 28.84 28.84 28.84 28.84


63.02 91.86 120.70 149.54 178.38

Op. Debts 278.47 249.63 220.79 191.95 163.11

Additions 0.00 0.00 0.00 0.00 0.00

Less : Repayment

28.84 28.84 28.84 28.84 28.84

Cl. Debts 249.63 220.79 191.95 163.11 134.27






under:


Page 94 of 114

Details of approved RoE, Depreciation, O&M and Interest on Loans (Rs Crore)

Sl.No. Particular 2014-15 2015-16 2016-17 2017-18 2018-19

1 O&M Expenses 21.51 22.86 24.30 25.83 27.46

2 Depreciation 28.84 28.84 28.84 28.84 28.84

3 Interest on Loan 35.46 27.66 24.19 20.72 17.23

4 Return on Equity 23.43 23.43 23.43 23.43 23.43

Total: 109.24 102.79 100.76 98.82 96.96



Annual Receivables of Kundarki Power Station required for



(Rs Crore)

SN Particulars 2014-15 2015-16 2016-17 2017-18 2018-19

1 Cost of Coal for 60 days 41.32 39.78 39.78 39.78 39.78


0.80 0.47 0.47 0.47 0.47

3 O & M for 1 month 1.79 1.91 2.03 2.15 2.29


4.30 4.57 4.86 5.17 5.49

5


62.68 59.63 59.30 58.98 58.67

Particulars

2014-15 2015-16 2016-17 2017-18 2018-19

Annual Capacity [Fixed] Charges 124.21 117.15 115.13 113.20 111.37

Cost of Fuel 251.88 240.66 240.66 240.66 240.66



Page 95 of 114

SN Particulars 2014-15 2015-16 2016-17 2017-18 2018-19

6 Working Capital 110.90 106.36 106.43 106.54 106.70

7 Rate of Interest 13.50% 13.50% 13.50% 13.50% 13.50%

8 I W C 14.97 14.36 14.37 14.38 14.40






Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commission

Diff. (if any) As claimed by

BEPL

As determined

by the Commission

Diff. (if any)

O&M Expenses 21.51 21.51 0.00 22.86 22.86 0.00

Depreciation 30.11 28.84 -1.27 30.71 28.84 -1.87

Interest on Loan 37.09 35.46 -1.63 29.75 27.66 -2.09

Return on Equity 31.39 23.43 -7.96 32.17 23.43 -8.74


15.25 14.97 -0.28 15.23 14.36 -0.87


0.52 0.00 -0.52 1.89 0.00 -1.89

Total (Rs Cr) 135.88 124.21 -11.67 132.60 117.15 -15.45


596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.28 2.08 -0.20 2.22 1.96 -0.26

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

O&M Expenses 24.30 24.30 0.00 25.83 25.83 0.00

Depreciation 30.79 28.84 -1.95 30.79 28.84 -1.95


Page 96 of 114

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Interest on Loan 26.16 24.19 -1.97 22.45 22.45 20.72

Return on Equity 32.26 23.43 -8.83 32.26 32.26 23.43


15.24 14.37 -0.87 15.24 15.24 14.38


1.70 0.00 -1.70 1.50 1.50 0.00

Total (Rs Cr) 130.45 115.13 -15.32 128.07 113.20 -14.87


596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.19 1.93 -0.26 2.15 1.90 -0.25

ii. Representative Calculation of Variable Charges:

(a) Variable charge per unit of Generation – For the purpose of calculation of



2014, the variable charge per unit of generation for Kundarki Power Station for the MYT


Particulars

FY 19

As claimed by BEPL


Commission

Difference (if any)

O&M Expenses 27.46 27.46 0.00





Special Allowance on Refinancing of loan 1.30 0.00 -1.30

Total (Rs Cr) 125.80 111.37 -14.43




Page 97 of 114



Variable charge per unit of generation for Kundarki Power Station


Capacity MW 90.00 90.00 90.00 90.00 90.00

PAF % 85 85 85 85 85



% 11.00 11.00 11.00 11.00 11.00



Kcal/kWh 2890 2890 2890 2890 2890


ml/kWh 1.00 1.00 1.00 1.00 1.00


KCal/Lt 10.00 10.00 10.00 10.00 10.00


Rs./Kg 4.38 4.32 4.32 4.32 4.32


kCal/kg 3421.93 3502.61 3502.61 3502.61 3502.61


Rs./mL 0.07 0.04 0.04 0.04 0.04


Rs/kWh 4.22 4.04 4.04 4.04 4.04











regulation;






Page 98 of 114





days in advance.











following:


01.04.2016 to 31.03.2017 5.25

















Page 99 of 114





iii. Summary – Capacity Charges (Cost):

The capacity charges (costs) for Kundarki Thermal Power Station for the MYT period of



Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commissio

n

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Fixed Cost (Rs Cr.)

135.88 124.21 -11.67 132.60 117.15 -15.45


2.28 2.08 -0.20 2.22 1.96 -0.26

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commissio

n

Diff. (if any)

As claimed by BEPL

As determined

by the Commissio

n

Diff. (if any)

Fixed Cost (Rs Cr.)

130.45 115.13 -15.32 128.07 113.20 -14.87


2.19 1.93 -0.26 2.15 1.90 -0.25

Particulars

FY 19


Commission Diff.

(if any)

Fixed Cost (Rs Cr.)

125.80 111.37 -14.43


2.11 1.87 -0.24


Page 100 of 114

9.5

Section-5

Multi Year Tariff

For

Utraula


For

FY 2014 - 15 to FY 2018 - 19


Page 101 of 114












Value Remark

Return on equity 15.50% + 0.5% = 16 %


Interest on Loans

FY15 - 13.43% FY16 - 11.76% FY17 - 11.72% FY18 – 11.67% FY19 – 11.59%





Utrauala 2014-15 2015-16 2016-17 2017-18 2018-19


596.42 596.42 596.42 596.42 596.42


2.34 2.28 2.25 2.20 2.16


4.18 4.18 4.18 4.18 4.18


6.52 6.47 6.43 6.39 6.35

ARR (Rs Cr.) 388.99 385.75 383.44 380.91 378.49


Page 102 of 114









(Rs Crores)

Utrauala Power Station

2014-15 2015-16 2016-17 2017-18 2018-19

Op. GFA 506.84 506.84 506.84 506.84 506.84

Additions 0.00 0.00 0.00 0.00 0.00

Deletions - - - - -

Cl. GFA 506.84 506.84 506.84 506.84 506.84

Cl. Net FA 411.54 381.64 351.75 321.85 291.95

Financing:

Op. Equity 152.05 152.05 152.05 152.05 152.05

Additions 0.00 0.00 0.00 0.00 0.00

Reduction - - - - -

Cl. Equity 152.05 152.05 152.05 152.05 152.05

Op. AccuDep 35.34 65.24 95.13 125.03 154.93


29.90 29.90 29.90 29.90 29.90


65.24 95.13 125.03 154.93 184.83

Op. Debts 289.39 259.49 229.59 199.70 169.80

Additions 0.00 0.00 0.00 0.00 0.00

Less : Repayment

29.90 29.90 29.90 29.90 29.90

Cl. Debts 259.49 229.59 199.70 169.80 139.90






Page 103 of 114

year of the control MYT period from FY 2014-15 to FY 2018-19, isworked out as

under:

Details of approved RoE, Depreciation, O&M and Interest on Loans

(Rs Crore)

Sl.No. Particular 2014-15 2015-16 2016-17 2017-18 2018-19

1 O&M Expenses 21.51 22.86 24.30 25.83 27.46

2 Depreciation 29.90 29.90 29.90 29.90 29.90

3 Interest on Loan 36.86 28.76 25.16 21.56 17.95

4 Return on Equity 24.33 24.33 24.33 24.33 24.33

Total: 112.59 105.84 103.68 101.62 99.63



Annual Receivables of Utraula Power Station required for


I

n

t

e

r

e

s


(Rs Crore)

SN Particulars 2014-15 2015-16 2016-17 2017-18 2018-19


40.79 41.41 41.41 41.41 41.41


0.80 0.47 0.47 0.47 0.47

3 O & M for 1 month 1.79 1.91 2.03 2.15 2.29


4.30 4.57 4.86 5.17 5.49

5 Receivables equivalent to 2

62.70 61.86 61.50 61.16 60.83

Particulars

2014-15 2015-16 2016-17 2017-18 2018-19


127.49 120.72 118.57 116.51 114.55

Cost of Fuel 248.68 250.45 250.45 250.45 250.45



Page 104 of 114

SN Particulars 2014-15 2015-16 2016-17 2017-18 2018-19

months capacity and energy charges for sale of electricity

6 Working Capital 110.38 110.22 110.27 110.36 110.50

7 Rate of Interest 13.50% 13.50% 13.50% 13.50% 13.50%

8 I W C 14.90 14.88 14.89 14.90 14.92






Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commission

Diff. (if any) As claimed by

BEPL

As determined

by the Commission

Diff. (if any)

O&M Expenses 21.51 21.51 0.00 22.86 22.86 0.00

Depreciation 31.20 29.90 -1.31 31.88 29.90 -1.98

Interest on Loan 38.45 36.86 -1.60 30.92 28.76 -2.16

Return on Equity 32.56 24.33 -8.23 33.43 24.33 -9.10


15.19 14.90 -0.29 15.17 14.88 -0.29


0.54 0.00 -0.54 1.96 0.00 -1.96

Total (Rs Cr) 139.46 127.49 -11.97 136.22 120.72 -15.49


596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.34 2.14 -0.20 2.28 2.02 -0.26

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

O&M Expenses 24.30 24.30 0.00 25.83 25.83 0.00


Page 105 of 114

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Depreciation 31.97 29.90 -2.07 31.97 29.90 -2.07

Interest on Loan 27.19 25.16 -2.03 23.33 21.56 -1.77

Return on Equity 33.52 24.33 -9.19 33.52 24.33 -9.19


15.17 14.89 -0.28 15.17 14.90 -0.27


1.76 0.00 -1.76 1.56 0.00 -1.56

Total (Rs Cr) 133.91 118.57 -15.34 131.38 116.51 -14.87


596.42 596.42 0.00 596.42 596.42 0.00

Fixed Cost per Unit

2.25 1.99 -0.26 2.20 1.95 -0.25

Particulars

FY 19

As claimed by BEPL


Commission

Difference (if any)

O&M Expenses 27.46 27.46 0.00






loan 1.35 0.00 -1.35

Total (Rs Cr) 128.96 114.55 -14.41




Page 106 of 114


(a) Variable charge per unit of Generation: For the purpose of calculation of



2014, the variable charge per unit of generation for Utraula Power Station for the MYT




.Variable charge per unit of generation for Utraula Power Station


Capacity MW 90.00 90.00 90.00 90.00 90.00

PAF % 85 85 85 85 85



% 11 11 11 11 11



Kcal/kWh 2890 2890 2890 2890 2890


ml/kWh 1.00 1.00 1.00 1.00 1.00


KCal/Lt 10.00 10.00 10.00 10.00 10.00


Rs./Kg 4.27 4.41 4.41 4.41 4.41


kCal/kg 3375.82 3440.09 3440.09 3440.09 3440.09


Rs./mL 0.07 0.04 0.04 0.04 0.04


Rs/kWh 4.17 4.20 4.20 4.20 4.20










Page 107 of 114



regulation;









days in advance.











following:


01.04.2016 to 31.03.2017 5.46












Page 108 of 114










iii. Summary - Capacity Charges (Cost):

The total capacity charges (costs) for Utraula Thermal Power Station for the MYT period of


Cost per kWh as claimed with those as allowed by the Commission

Particulars

FY 15 FY 16

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Fixed Cost (Rs Cr.)

139.46 127.49 -11.97 136.22 120.72 -15.49


2.34 2.14 -0.20 2.28 2.02 -0.26

Particulars

FY 17 FY 18

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

As claimed by BEPL

As determined

by the Commission

Diff. (if any)

Fixed Cost (Rs Cr.)

133.91 118.57 -15.34 131.38 116.51 -14.87


2.25 1.99 -0.26 2.20 1.95 -0.25

Particulars

FY 19


Commission Diff.

(if any)

Fixed Cost (Rs Cr.)

128.96 114.55 -14.41


2.16 1.92 -0.24


Page 109 of 114

Summary of Fixed Cost for the MYT period

FY 2014-15 to FY 2018-19

F.C (Rs. Cr) F.C/ Unit (Rs./kWh)

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19

Petition Approved Diff Petition Approved Diff Petition Approved Diff Petition Approved Diff Petition Approved Diff

Barkhera

F.C 133.63 122.54 -11.09 129.89 116.21 -13.68 127.84 114.27 -13.57 125.57 112.44 -13.13 123.41 110.70 -12.71

F.C/Unit

2.24 2.05 -0.19 2.18 1.95 -0.23 2.14 1.92 -0.23 2.11 1.89 -0.22 2.07 1.86 -0.21

Maqsoodapur

F.C 135.00 122.80 -12.20 132.12 115.89 -16.23 130 113.96 -16.04 127.66 112.13 -15.53 125.43 110.38 -15.04

F.C/Unit

2.26 2.06 -0.20 2.22 1.94 -0.27 2.18 1.91 -0.27 2.14 1.88 -0.26 2.10 1.85 -0.25

Khambarkhera

F.C 139.54 124.13 -15.41 137.12 117.63 -19.49 134.81 115.61 -19.20 132.27 113.69 -18.58 129.84 111.87 -17.98

F.C/Unit

2.34 2.08 -0.26 2.30 1.97 0.33 2.26 1.94 0.32 2.22 1.91 0.31 2.18 1.88 0.30

Kundarki

F.C 135.88 124.21 -11.67 132.60 117.15 -15.45 130.45 115.13 -15.32 128.07 113.20 -14.87 125.8 111.37 -14.43

F.C/Unit

2.28 2.08 -0.20 2.22 1.96 -0.26 2.19 1.93 -0.26 2.15 1.90 -0.25 2.11 1.87 -0.24

Utraula

F.C 139.46 127.49 -11.97 136.22 120.72 -15.49 133.91 118.57 -15.34 131.38 116.51 -14.87 128.96 114.55 -14.41

F.C/Unit

2.34 2.14 -0.20 2.28 2.02 -0.26 2.25 1.99 -0.26 2.2 1.95 -0.25 2.16 1.92 -0.24


Page 110 of 114

10. OTHER PROVISIONS

(A) Recovery of Water Cess and Tax on Income etc.

In addition to the above tariff BEPL is allowed to recover the payment of statutory charges like

water cess, cost of water, payment to Pollution Control Board, rates and taxes, FBT and

Regulatory Fee paid to the Commission, on production of details of actual payments made

and duly supported with the certificate of the Statutory Auditors.

(B) Incentive :

Incentive shall be calculated according to Regulations 27 of UPERC (Terms and Conditions of

Generation tariff) Regulations, 2014. Incentive does not form a component of tariff.

(C) Billing & Payment :

Billing and Payment of Capacity Charges shall be done under provisions of Regulation 51 of

UPERC (Terms and Conditions of Generation Tariff) Regulations, 2014.

(D) Additional Capital Expenditure:

The Petitioner shall seek prior approval of the Commission before undertaking additional

capital expenditure on its generation stations.

(E) Truing up of Capital Expenditure and Tariff

(i) The Commission shall carry out true up exercise along with the tariff petition filed for the

next tariff period with respect to the Capital Expenditure incurred up to 31.03.2019, as

admitted by the Commission after prudence check at the time of truing up.

(ii) The generating company shall make an application, as per Appendix II to these

regulations, for carrying out truing up exercise in respect of the generating station or any

of its units or block of units thereof by 31.10.2019.

(iii) The generating company shall submit for the purpose of truing up, details of capital

expenditure and additional capital expenditure incurred duly audited and certified by the

auditors.

Provided the Commission may appoint a separate independent auditor who, under the

supervision of the Commission, shall undertake technical and financial audit of the

generating station at any time

(iv) The Commission shall also carry out truing up of tariff of generating stations based on

the performance of following controllable parameters:

(a) Gross Station Heat Rate;


Page 111 of 114

(b) Secondary Fuel Oil Consumption;

(c) Auxiliary Energy Consumption; and

(d) Re-financing of Loan

(v) The Commission shall carry out truing up of tariff of generating stations based on the

performance of following uncontrollable parameters:

(a) Force Majeure;

(b) Change in Law; and

(c) Primary Fuel Cost

(vi) The financial gains by a generating company on account of controllable parameters

shall be shared between generating company and the beneficiaries. The financial gains

computed as per following formulae in case of generating station on account of

operational parameters contained in Regulation(4) (a) to (c) of Generation Regulation

2014 shall be shared in the ratio of 80:20 between generating company and the

beneficiaries:

Net Gain = (ECRN– ECRA) x Scheduled Generation

(vii) The financial gains and losses by a generating company on account of uncontrollable

parameters shall be passed on to beneficiaries of the generating company.

(viii) Where after the truing up the tariff recovered exceeds the tariff approved by, the

Commission under these regulations the generating company shall refund to the

beneficiaries, the excess amount so recovered along with simple interest at the rate

equal to the Bank Rate prevailing as on 1st April of the respective Year.

(ix) Where after the truing up the tariff recovered is less than the tariff approved by the

Commission under these regulations the generating company shall recover from the

beneficiaries, the under-recovered amount along with simple interest at the rate equal to

the Bank Rate, prevailing as on 1st April of the respective Year.

(x) The amount under-recovered or over-recovered, along with simple interest at the rate

equal to the Bank Rate as on 1st April of the respective Year, shall be recovered or

refunded by the, generating company, in six equal monthly installments starting within

three months from three months from the date of the tariff order issued by the

Commission after the truing up exercise


Page 112 of 114

11. COMMISSION’S ADDIONAL DIRECTIVES

1. The Commission is of the view that it is essential for the project developer to adopt procedures

such that expenses are incurred in a prudent manner to achieve efficiency in costs. As the

fixed costs of the generating station is ultimately passed on to the consumers of the

distribution licensees in the state as part of the tariff, it is essential to always consider the

interest of consumers while awarding such contracts. It has also been observed that due

diligence has not been taken while awarding the EPC contracts. Therefore the Commission

hereby directs that in future, award of contract for procurement of major equipment, services

and works should be done through a transparent process involving a two part competitive bid

process so as to ensure cost efficiency and prudency. For award of major contract

packages the project developer should set up a Committee to manage the bid process.

This Committee shall also include a representative from the procurers to avoid pre and

post bid disputes.

2. The Commission has considered the submission of stakeholders that the power plants of

BEPL do not have railway siding in place for receipt of coal and that this leads to high

transportation cost of coal. This ultimately results in higher variable cost. Due to higher

variable cost, the generation most of the times does not qualify under merit order dispatch and

procurer ends up paying the fixed charges which is actually additional burden passed on to the

end consumers. The Commission is of the view that the end consumer is unnecessarily being

burdened in such a situation which is due to improper planning on the part of the Petitioner. In

view of this, the Commission considers that BEPL and UPPCL should jointly submit a plan to

rationalize the cost of primary fuel for these plants. The plan should specifically lay emphasis

on reducing the variable cost and also explore options for cheaper procurement of coal. The

plan should be submitted within six months of date of issue of this Tariff Order.

3. As per Section 86 of the Electricity Act 2003, the State Commission can determine the tariff for

various utilities in the state for generation, transmission and distribution. As a part of the tariff

determination process, the respective Petitioners are required to submit various information

and data pertaining to capital cost, operational and financial performance and fuel cost etc.

before the Commission.

Section 62 (2) of the Electricity Act 2003 empowers the Commission to seek information and

data from the entities for determination of tariff.


Page 113 of 114

“The Appropriate Commission may require a licensee or a generating company to

furnish separate details, as may be specified in respect of generation, transmission and

distribution for determination of tariff.”

As per Section 2. (7) of the UPERC (Terms and Conditions of Generation Tariff) Regulations,

2014, the Petitioners are required to submit performance report to the Commission in every six

months period as per the format specified in Appendix I of the Regulations.

“(7) The generating company shall submit performance report to the Commission under

Section 10(3) (a) of the Act in the format given in Appendix I to these regulations.”

However, the required data is not submitted by the Utilities periodically before the Commission.

During filing of Petition, the Petitioner is required to submit details as per specified tariff filing

formats. It is observed that the information and data in the required formats are also not

submitted by the Petitioner which hampers and delays the tariff determination process. Many a

times wide discrepancies are observed in the submitted data. The Commission has to give

repeated directions to the Petitioner to submit the details post which it is submitted, if available

with the Petitioner. Moreover in some cases the Petitioner is unable to submit data as it has not

implemented processes to record and maintain such data or information.

During true up also, the Petitioner is required to submit the actual and audited data which forms

the basis for true-up. The inability of the Petitioner to submit the requisite information and data

as sought by the Commission can impact the tariff determination and as a result the end

consumer at large.

Hence it is important that issue is addressed and a mechanism is developed in consultation with

the Utilities, Generators, other stakeholders and the public so that the required data or

information is made available to the Commission on a periodic basis. This will also bring

uniformity transparency in the process.

4. As per the Uttar Pradesh Electricity Regulatory Commission (Compliance Audit) Regulations,

2012

“3.1 The Commission may, at any time, conduct audit of regulated entity for verifying

their compliance with the Act, Rules, Regulations made thereunder, orders and

directions issues by the Commission.”

The regulated entity means Distribution Licensee or Generation Company or Transmission Utility

or Trading Licensee or SLDC. The Commission may by order empanel Consultants/Auditors


Page 114 of 114

required to assist the Commission in discharge of these functions on the terms and conditions as

deemed fit.

Hence, to address the non-compliance on the part of the Generation Companies in providing

data, the Commission would initiate independent audit.

12. IMPLEMENTATION OF ORDER

This order shall be reckoned to have come into effect from 01.04.2014 and shall remain

effective till 31.03.2019 for the Multi Year Tariff period of F.Y. 2014-15 to FY 2018-19. BEPL is

entitled to raise the bills as per the tariff order under provisions of UPERC (Terms &

Conditions of Generation Tariff) Regulations, 2014.

(Suresh Kumar Agarwal) (Desh Deepak Verma)

Member Chairman

Place: Lucknow

Dated: 24.05.2017