CERC - 2014-19 Tariff Regulations

CERC Tariff Regulations
2014-19
Corporate Commercial Department
CERC Tariff Regulation 2014-19
Tariff Determination of Generating Stations

Controlled by Central Govt.
As per Section 62 of the Electricity Act, 2003, tariff for supply of
electricity by a generating company to a distribution licensee to be
determined by Appropriate Commission
As per Section 79, Central Electricity Regulatory Commission
(CERC) has the jurisdiction to regulate tariff for the generating
companies owned & controlled by the Central Government
CERC from time to time notifies the Regulations for determination
of tariff which specify the principles and methodology for working
out the tariff of generating companies under its jurisdiction.
CERC has notified the Tariff Regulation applicable from 1.4.2014 to
31.3.2019
2
Tariff Framework in Electricity Act 2003
Commission
Section 62
(Tariff Determination)
Section 63
(Tariff Adoption)
Bulk Tariff Gencos

to Discoms
Transmission Tariff
Retail Tariff
Competitive Bidding
Process of Tariff Determination

I - Tariff
Regulations
CERC issues Tariff
Regulations
II - Petition by
Generator
Petition filed by
generator.
Copy to
beneficiaries
Hosting petition
on website
Guided by the Tariff Posts entire petition on the

Policy issued by GOI website
Contains Financial Publishes notice in 2 newspapers
and Operational
so that consumers can peruse
norms
the tariff application and submit
Framed after
their comments/
Consultative
suggestions/objections to
process through
Regulator
public hearing
III - Tariff Order
Hearings
conducted by
CERC and
Tariff orders
issued
Prudence check
conducted by the
CERC
Oral hearings
conducted where
the stakeholders
can participate
4
Timelines of 2014-19 Tariff Regulations

CERC issued order
for data. NTPC
submitted data.
(July 2013)
Draft Regulations
issued- 6th Dec
2013
NTPCs comments on
Draft Regulations
submitted- 29th
January 2014
Applicable from
01.04.2014
Process for
formulation of
Regulations starts
Approach paper
issued by CERC,
comments
submitted (Aug 13)
Public Hearing
conducted on 15th16th January
Final Regulations
issued on 21st
February 2014
Tariff of Thermal Stations
Tariff Basics
Cost-Plus Tariff
Two-part tariff
Capacity Charge (for recovery of annual fixed cost
components)
Energy Charge (for recovery of primary and
secondary fuel costs)
Incentive allowed separately
Capital cost for tariff
Capital Cost
Capital Cost of the Station (Rs. Lakhs) (Cash Basis)
As on
Date of
31.03.2014 Last Order
TTPS
15.05.2014
As approved by
As per Final
CERC
True up Petition
100159.35
102633.18
Capital Cost
Capital cost for tariff base for an existing

station Capital cost admitted by the Commission prior to
1.4.2014 duly trued up by excluding liability;
Add-Cap and De-cap for the respective year of tariff;
only for the category of works listed in the Regulation
on projection basis (described in Add-cap slide)
expenditure on account of renovation and
modernisation after end of useful life (if Special
Allowance is not claimed)
Capex on PAT on case to case basis will be allowed
(sharing of benefits due to PAT)
10
10
Capital Cost
Capital Cost for tariff base for a new station All the expenditure incurred or projected to be
incurred till COD
IDC/ IEDC
Capitalized initial spares
Additional capitalisation/ de-capitalisation
Adjustment of revenue due to sale of infirm power
prior to COD
11
11
Prudence check of Capital Cost for new stations
Capital Cost prudence check w.r.t benchmark norms

specified/ to be specified by Commission from time to
time.
CERC has already issued an order on Benchmarking
of capital cost for different unit size and unit
configurations.
BENCHMARKS NORMS AS ON DECEMBER 2011
Unit Size in
MW
500
(Greenfield)
500
(Extension)
600
(Greenfield)
600
(Extension)
No of
units
1 to 4
Total Hard cost

(Rs. Cr/ MW)
5.08 -4.34
1 to 2
4.92-4.53
1 to 4
4.87-4.01
1 to 2
4.47-4.19
Unit Size in MW
660
(Greenfield)
660
(Extension)
800
(Greenfield)
800
(Extension)
No of units Total Hard cost

(Rs. Cr/ MW)
1 to 4
5.37-4.37
1 to 2
4.95-4.67
1 to 4
4.96-4.44
1 to 2
4.63-4.44
12
12
IDC/ IEDC- in case of delay in projects

IDC- Interest During Construction, IEDC- Incidental Expenses During Construction
Additional IDC due to delay beyond Scheduled COD will

be allowed only after prudence check.
Additional IDC & IEDC will be allowed only for delay due
to uncontrollable factors such as:
Force Majeure
Change in Law
If the delay is attributable to agencies or contractors, no

IDC/ IEDC will be allowed for the delay period.
When time-over run is not allowed by CERC, the cost
escalation in that period may be excluded from
capitalization
13
Controllable/ Uncontrollable factors

Controllable Factors
Variations in capital expenditure on account of time and/or
cost over-runs on account of land acquisition issues;
Efficiency in the implementation of the project not involving
approved change in scope of such project, change in statutory
levies or force majeure events; and
Delay in execution of the project on account of contractor,
supplier or agency of the generating company or transmission
licensee.
Uncontrollable Factors
Force Majeure events
Change in Law
14
Additional Capitalisation
15
Cut Off Date

Date by which all works within the original scope of work
are required to be completed.
means 31st March of the year closing after two
years of the year of commercial operation of the
project, and in case the project is declared under
commercial operation in the last quarter of a year,
the cut-off date shall be 31st March of the year
closing after three years of the year of commercial
operation.
COD of Station
Cut off Date
1.4.2014 to 31.12.2014
31.3.2017
1.1.2015 to 31.12.2015
31.3.2018
16
16
Add cap allowed upto cut-off date

new stations
Following Capex projected to be incurred after COD and
up to the Cut-Off Date is allowed:
Deferred liabilities
Works deferred for execution
Procurement of initial capital spares within the original
scope of work
Liabilities to meet award of arbitration or for
compliance of the order or decree of a court
On account of change in law or compliance of an
existing law
CERC has asked for the details of works asset wise/
work wise to be submitted along with tariff application
17
Initial spares
Initial spares as a % of the plant and machinery cost
upto cut-off date are as follows:
Coal-based/lignite-fired thermal stations

Gas Turbine/Combined Cycle thermal stations
Hydro generating stations
Transmission system
4.00%
4.00%
4.00%
- 3.5%~6.00%
Earlier Initial Spares allowable amount was linked to the

total Capital cost
2.5% for Coal stations
4.0% for Gas stations
18
Add cap allowed beyond cut-off dateexisting stations

Liabilities to meet award of arbitration or for compliance of the
order or decree of a court
On account of change in law or compliance of an existing law
Deferred works relating to ash pond or ash handling system in
the original scope of work for coal stations.
Expenses on account of higher safety and security of the plant
as directed by appropriate government
Discharge of liability on admitted works
Capex necessitated on account of modification in fuel receiving
system on account of non- materialisation of the fuel linkage
Gas Stations: Capex necessary for efficient operation,
deterioration of assets, obsolescence of technology, upgradation of capacity for technical reason such as increased
fault level.
19
Projected/ Actual Capex

Capital cost is determined based on the projected cost.
If the projected cost is more than the actual capital
cost on yearly basis by more than 5%, the excess
tariff will refunded along with interest rate of 1.20
times the bank rate
If the projected cost is less than the actual capital cost
on yearly basis by more than 5%, the shortfall in tariff
will recovered along with interest rate of 0.8 times the
bank rate
Tariff Petitions have been filed based on the projected
Capex given by the projects/ stations.
20
Truing up
Truing up exercise based on actual CAPEX upto

31.03.2019 to be done in 2019-20
Interim True up to be done in 2016-17
Difference between tariff allowed and revised after
Truing-up to be adjusted with simple interest at the
bank rate as on 1st April of respective year in six equal
monthly installements.
21
21
Issues in Additional Capitalisation

Add-Cap is allowed based on the projections
Regulations allow add-cap only on limited grounds
(Regulation 14 (3)), other Capital expenses are
expected to be financed through Compensation
Allowance
The projections should be backed by proper
justifications (documents, letters, statutory requirements,
guidelines, directives etc.)
Projection should be based on capitalisation and not
cash expenses
Implication in case of failure to meet the projected capex
Interest liability
Credibility
22
22

Add-Cap allowed/ disallowed in 2009-14 Period
Major Items
Allowed Items
Item
Regulation
Item
Regulation
Ash Handling Related Reg 9(2)(iii) R&M Ph-II works

Works. (Rs. 3.85 Crs)
(Rs 9.42 Crs)
Reg(10)
Environment System
and Change of Law
(Rs. 6.13 Crs)
Reg(10)
Reg 9(2)(ii) R&M Ph-III works

(Rs. 105.79 Crs)
R&M of Switchyard
(Rs 29.17 Crs )
Reg(10)
23
23

Add-Cap allowed/ disallowed in 2009-14 Period
Major Items
Disallowed Items
Items
Remarks
R&M Ph-IV
(Rs. 32.11 Crs)
Disallowed Rs. 19.11 Crs pertaining to Stage I Units

and Items executed under O&M
Capital spares
(Rs 27.95 Crs)
Capital spares allowed earlier

Crossing the limit of 2.5% allowable as per Regs.
MBOA items
(Rs. 3.83 Crs)
No provision in Regulations.
24
24
Capacity Charge
25
Capacity Charge
Based on the Annual Fixed Cost (AFC)
Servicing of Capital Cost

1.Return on Equity
2.Interest on Loan Capital
3.Depreciation
Other Fixed Expenses

4.Interest on Working Capital
5.Operation and Maintenance Expenses
6.Compensation Allowance (for units 10 ~ 25 years old)
7.Special Allowance (for units more than 25 years old)
Cost of Secondary Fuel Oil has been removed from AFC and made a
part of the Energy Charge
Compensatory Allowance for coal based stations upto 25 years of life
or Special Allowance in lieu of R&M beyond 25 years will not be
considered for Working Capital
26
26
Typical AFC Break up (%)
ROE
Old
stations
35~38%
New
Stations
28~ 30%
Gas
Stations
35~37%
Interest on Loan
5%
20%
3%
O&M Cost
40~ 45%
20~25%
27%
Interest on
Working Capital
10%
8%
23%
Depreciation
5%
20%
10~12%
27
27
AFC Break up <TTPS-2014-15>

Rs. Lakhs
ROE
10409.64
Interest on Loan
O&M Cost
Interest on Working Capital
543.14
18818.60
2594.44
Depreciation
4564.42
Compensation Allowance
Special Allowance
TOTAL
37937.03
28
28
Return on Equity (ROE)
29

Equity Base of a Project:
New projects: Based on Debt: Equity ratio of 70:30 for
new projects
Existing Projects: as already allowed by CERC prior to
31.3.2014
Actual Debt in excess of 70% would be allowed
Actual Equity in excess of 30% will be treated as
normative loan
Basic rate of Return on Equity (ROE) will be 15.5% during
2014-19 Tariff Period.
30
30

ROE for new projects allowed is 15.5%
Additional 0.5% ROE would be allowed subject to
completion of CoD from investment approval/Zero Date
within the defined timeline of CERC.
Hydro Projects
as per TEC
200/210/250/300/330 MW
33 months at 4 mths interval
500/600 MW
660/800 MW
Gas Stations >100MW
30 mth at 4 mths interval
Extension Projects
2 months less than above time

period
31
31
Return on Equity- treatment of tax

ROE of 15.5% is Base Rate of Return
Tax to be paid by the generator
Mechanism of recovery of tax to be paid is through
grossing up of the Base Rate of Return
Actual effective tax rate to be used for grossing up
purpose.
Example:
If estimated effective Income Tax rate is 25%, then Pre-Tax Grossed
up ROE would be 15.5%/(1-25%) = 20.67%
Grossed up ROE will be trued up at the end of each financial year
based on actual income tax paid
32
32
Other elements of AFC
33
Interest on Loan
Normative loan as on 1.4.2014 after considering the cumulative

repayment upto 31.3.2014
Repayment equal to depreciation irrespective of actual repayment
To be charged from 1st year of CoD irrespective of moratorium @

Actual Wt. Avg. Rate of interest at the beginning of each year
If there is no actual loan available in any particular year, last

available weighted average rate of interest shall be considered
If there is no actual loan, then weighted average rate of interest of

the company shall be considered
Generator to attempt re-financing - Net Benefit of refinancing to be

shared in the ratio of 1 (Gen):2 (beneficiaries) ; Refinancing cost is
to be borne by the beneficiaries
34
34

Coal Based Stations
o Coal stock for 15 days for pit head stations, 30 days for non-pit
head stations
o Cost of coal for 30 days generation
o Secondary fuel oil for 2 months
o Maintenance spares @ 20% of O&M
o Receivables for 2 months (capacity charge and energy charge)
o O&M expenses for 1 month
Cost of fuel based on Price & GCV of preceding 3 months of the
1st month for which tariff is decided and no fuel escalation allowed
Rate of interest will be bank rate as on 1.4.2014 or 1st of April of the
year in which the station is declared under commercial operation
35
35

Gas Based Stations
o Fuel expenses for 30 days
o Liquid fuel stock for 15 days

o Maintenance spares @ 30% of O&M
o Receivables for 2 months
o O&M expenses for 1 month

For Fuel expenses, Liquid fuel stock and receivables, mode of
operation is to be considered
Cost of fuel based on Price & GCV of preceding 3 months of the
1st month for which tariff is decided and no fuel escalation allowed
Rate of interest will be bank rate as on 1.4.2014 or 1st of April of the
year in which the station is declared under commercial operation
36
36
Depreciation
Depreciable value 90% (except land);
Depreciable life:
Thermal
- 25 years
Gas
25 years
Hydro
- 35 years
Weighted Average % for the 12 years after commercial operation

and balance shall be spread over balance life
For existing stations the balance depreciable value as on 1.4.2014

shall be worked out by deducting the cumulative depreciation as
admitted by the Commission upto 31.3.2014 from the gross
depreciable value of the assets.
37
37
O&M Expenses
Norm for O&M expenses in 2014-15 is as follows:
Coal Based stations
o 200 MW 23.90 Lac/MW
o 500 MW 16.00 Lac/MW
o 660 MW 14.40 Lac/MW
o TTPS
43.16 Lac/MW
o Tanda
35.88 Lac/MW
o BTPS (unit 1to3)- 35.88 Lac/MW
Gas Based stations: Rs 14.67 Lac/MW
Advanced F class machines Rs 26.55 Lac/ MW
Escalation in the O&M expenses - @ 6.35% thereafter

Water Charges (based on water consumption subject to prudence
check) and Capital spares (actual with justification and should not be
funded through SA/ CA) - shall be allowed separately
38
38
O&M Expenses
.. contd.
Additional units which will be commissioned after

1.4.2014 in the same station
200/210/250 MW
90% of above for Unit 5 & 6
85% of above for 7th onwards
300/330/350 MW
500 MW and above
39
39
Compensatory Allowance
CERC has provided following Compensatory Allowance

for meeting expenses on new assets of capital nature
in lieu of any additional Capex beyond Cut Off Date
Yrs of
Operation
Comp. Allowance (in Rs. Lac/MW/yr) for

coal stations only
0 10
11 - 15
16 20
21 - 25
Nil
0.20
0.50
1.0
No other additional capitalisation, other than the heads

provided in Regulation 14 (Add Cap) shall be allowed.
40
40
Renovation and Modernisation
41
Renovation and Modernisation
R&M provision can be availed by a station/ unit on after

completion of useful life.
CERC would do the prudence check based on the

estimated cost, extension of life, detailed justification etc.
New capital cost will be based of expenditure incurred

after deducting the accumulated depreciation from
original capital cost (Net Fixed Asset).
For Gas stations, renovation is allowed after completion

of 25 years and due to obsolescence of spares
42
42
Special Allowance
Alternatively, the generating company may opt to avail

Special Allowance (SA). In such a case:
There will be no revision of capital cost

No relaxation in operating norms
Will be allowed for units after completing 25 years from COD
Will not be allowed to stations for which expenditure on R&M

has been allowed earlier
Amount of Special Allowance Rs 7.5 Lakh/ MW/ year in

2014-15; thereafter escalated at 6.35% every year (5.72%
for 2009-14 period)
For stations availing SA, the amount for 2014-15 will be

determined by escalating the amount allowed in 2013-14 by
6.35% (~Rs 6.64 Lakh/MW/Year)
43
43
Energy Charge
44
Energy Charges
Computation of Energy charges (EC)
EC covering primary fuel cost shall be payable for total
ex-bus energy scheduled to be supplied to the
beneficiary during the calendar month, at the specified
energy charge rate.
Total Energy Charge payable in a month:
Energy Charge Rate x Scheduled Energy (ex-bus)
45
45
Computation of Energy Charge Rate - Coal

Energy charge rate (ECR) in Rs. per kWh for coal based stations
ECR = {(GHR-SFC xCVSF)xLPPF/ CVPF + SFC x LPSFi}x100/{(100 AUX)}
GHR normative station heat rate
SFC normative Sp oil consumption
AUX normative auxiliary energy consumption
CVSF Calorific value of oil
LPPF Weighted average landed cost of Coal
LPSFi Weighted average landed price of secondary fuel
CVPF Weighted average GCV of coal as received
Landed Cost of Coal

Price of coal corresponding to the grade and quality inclusive of
royalty, taxes and duties applicable & transportation cost
Considering normative transit and handling losses :
Pit head / non-pit head stations : 0.2%/ 0.8%, imported coal- 0.2%
Coal received through railways system: 0.8%
46
46
Computation of Energy Charge Rate - Gas

Energy charge rate (ECR) in Rs. per kWh for gas or liquid fuel
based stations
ECR = GHR x LPPF x 100 / {CVPF x (100 AUX)}
GHR normative station heat rate
AUX normative auxiliary energy consumption
CVPF Weighted average GCV of primary fuel as received
LPPF Weighted average landed cost of primary fuel
Energy charge rate for a gas/liquid fuel based station shall be adjusted
for open cycle operation based on certification of Member Secretary of
respective Regional Power Committee for the open cycle operation
during the month.
47
47
Other provisions
The generating company shall provide to the beneficiaries
details of parameters of GCV and price of fuel i.e.
domestic coal, imported coal, e-auction coal, lignite,
natural gas, RLNG, liquid fuel etc.
The details of blending ratio of the imported coal,
proportion of e-auction coal and the weighted average
GCV of the fuels as received shall also be provided
separately, along with the bills of the respective month
Copies of the bills and the above shall also be displayed

on the website of the generating company on monthly
basis for a period of three months.
48
48
Other provisions
Prior permission from beneficiaries not a pre-condition for use of
alternative source of fuel unless agreed specifically in the PPA.
The weighted average price of use of alternative source of fuel shall
not exceed 30% of base energy charges.
Prior consultation with beneficiary shall be made not later than three
days in advance in case the :
the energy charge rate exceeds the lower of
30% of base energy charge rate as approved by the
Commission for that year
20% of energy charge rate for the previous month
The Commission shall approve the base energy charge rate at the
start of the tariff period. The same for subsequent years shall be
computed by escalating at the escalation rates for payment
purposes, notified by the Commission under competitive bidding
guidelines.
49
49
Operating Norms
50
Operating Norms
Target Availability (NAPAF) for recovery of fixed
charges 83% (earlier 85%)
The above provision shall be reviewed based on actual
feedback after 3 years from 01.04.2014.
Incentive will be based on PLF (earlier incentive was
linked to Availability)
Normative Annual Plant Load Factor for incentive
85%
Rate of incentive 50 paise/ kwhr beyond Schedule
Generation of 85%
In 2009-14- incentive was @ FC/kWhr for old stations
(>10 yrs old) and @ 50% of FC/kWhr for new stations.
51
Heat Rate norm for existing Coal Stations

HR values in Kcal/kWhr
2009-14
2014-19
Difference
200/210/250 MW Sets
2500
2450
-50
500 MW Sets
2425
2375
-50
BTPS
2825
2750
-75
TTPS
2950
2850
-100
Tanda
2825
2750
-75
52
Heat Rate norm for existing Gas Stations

Station
HR values in Kcal/kWhr
Open Cycle
Combined Cycle
2009-14 2014-19 Difference
2009-14 2014-19 Difference
Anta
2075
2075
No Change 3010
3010
No Change
Auraiya
2100
2100
No Change 3045
3045
No Change
Dadri Gas
2075
2000
(-75)
3010
3010
No Change
Faridabad
2000
1975
(-25)
2900
2900
No Change
Kawas
2075
2050
(-25)
3010
3010
No Change
Gandhar
2040
2040
No Change 2960
2960
No Change
Kayamkulam 2000
2000
No Change 2900
2900
No Change
53
Heat Rate - New Stations

New coal based stations after 1.4.2014
4.5% margin over design Heat Rate
New gas based stations after 1.4.2014
5% margin over design Heat Rate
New liquid fuel stations after 1.4.2014
7.1% margin over design Heat Rate
Pressure Rating (Kg/cm2)
150
170
170
247
SHT/RHT (0C)
535/535
537/537
537/565
565/593
Type of BFP
Electrical
Turbine
Turbine
Turbine
Max Turbine Cycle Heat rate

(kCal/kWh)
1955
1950
1935
1850
Sub-Bituminous Indian Coal
0.86
0.86
0.86
0.86
Bituminous Imported Coal
0.89
0.89
0.89
0.89
Sub-Bituminous Indian Coal
2273
2267
2250
2151
Bituminous Imported Coal
2197
2191
2174
2078
Min.Boiler Efficiency
Max Design Unit Heat rate

(kCal/kWh)
54
54
Norms for Auxiliary Energy Consumption

2009-14
200 MW Series 8.5%
2014-19
Difference
8.5%
No Change
500 MW Series SDBFP 6.0% SDBFP 5.25% - 0.75%

EDBFP 8.5% EDBFP 7.75%
For IDCT Additional 0.5% Additional 0.5%
No Change
Gas Stations
3.0%/ 1.0%
2.5%/ 1.0%
-0.5% for
Combined cycle
TTPS
10.5%
10.5%
No Change
Tanda
12.0%
12.0%
No Change
BTPS
9.5%
8.5%
-1.0%
For Air Cooled Condenser system additional APC of 0.5%/1.0% has been
allowed for direct/ indirect cooling respectively
CERC has excluded Colony consumption from Auxiliary Energy Consumption)

55
Norms for Specific Oil Consumption

2009-14
Coal based
Stations
1.0 ml/Kwhr
2014-19
Difference
0.5 ml/Kwhr
-0.5 ml/kWhr
56
Truing up
Controllable Parameters:
Station Heat rate

Secondary Fuel Oil Consumption
Auxiliary Energy Consumption
Refinancing of Loans
Uncontrollable Parameters
Force Majeure
Change in Law
Primary Fuel Cost
57
Truing up
The financial gains on account of controllable
parameters shall be shared.
Sharing will be done in the ratio of 60:40 between
generating stations and beneficiaries. (sharing on
refinancing of loan will be done in 2:1 ratio)
Sharing on monthly basis with annual reconciliation
Net Gain= (ECRN ECRA) x Scheduled Generation
ECRN Normative Energy Charge Rate

ECRA Actual Energy Charge Rate
58
Commercial Operation Declaration
59
COD of Thermal Station

2009-14 : Successful full load demonstration earlier to COD after
notice to Beneficiaries.
2014-19:
Trial Run : 72 hours successful running on continuous basis
at MCR or IC
7 days prior notice to beneficiaries before trial operation
Self Certification: to the effect meeting technical standards of CEA
Regulations, 2010 and GRID Code
RGMO , Communication System- linked to RoE
Certificate signed by CMD/CEO/ MD after approval of Board of
Directors in the specified format
CEA Tech. Standards for Construction of Elect. Plants & Elect.
Lines Regulation-2010; Reg 3(8) , 5, 7(1), 7(2), 7(3),7(4) & 8
To be submitted to RPC/ RLDC before COD
60
Truing up on
Operational Parameters
61
Other provisions
62
FERV
Generator to attempt to hedge FERV
Cost of hedging as pass-through on normative loan on

year on year basis
To the extent loans are not hedged, FERV allowed as

pass-through, as an expense on year-to year basis
63
63
Rebate/ Late payment surcharge

Rebate of 2% will be allowed for payments made within
2 days of presentation of bills
1% Rebate is to be paid for payments made within 30
days of presentation of bills

Late payment surcharge for a period beyond 60 days will
be at the rate of 1.5% per month.
64
Sharing of CDM benefits

In the 1st year after COD- 100% of the gross proceeds
on account of CDM to be retained by the project
developer
In the 2nd year, the share of the beneficiaries shall be
10%
This shall be progressively increased by 10% every year
till it reaches 50%
Thereafter the proceeds shall be shared equally between
generator and beneficiaries.
65
Issues for discussion
66
Operational aspects
Target Availability for recovery of FC- 83%.
Strategies for allocation of coal:
In case of multi stage stations need to be devised.
After meeting the 83% DC level, more coal may be diverted to
efficient units (less ECR)
Limit of 20% of ECR from the previous month / 30% of

base need to be maintained so that need for consent of
beneficiaries does not arise.
PAT clause can be used for capitalization of Capex for

successful and efficient operation.
67
Operational aspects
Reporting of as received GCV of coal
Reporting of Heat Rate/ APC/ Specific Oil to be shared
in the ratio of 60:40
O&M Cost - Capital spares and water charges spent on
actual basis is to be allowed.

RGMO/ FGMO provisions to be kept in service as the
same would lead to loss of ROE.
Target Availability for recovery of FC- 83%.
Separate feeder for colony consumption from grid.
68
Operational aspects
Additional capitalization provisions: proper documentation and
justifications for claiming any additional capitalization under
allowed provisions.
Reasons for deviation from projected capitalization also needs to
be maintained.
Projected Capitalization has to be realistic. In the 2009-14 Tariff
period, actual Capitalization was substantially less than projected
and consequently NTPC had to refund tariff along with interest @
12~14% p.a.
Additional Capitalization to be shown in the year when
Capitalization would take place & the asset shall be ready for
use.
Expenditure incurred from Special Allowance and Compensation
Allowance needs to be maintained properly so that the same can
be furnished as and when asked by the Commission.
69
Project Construction aspects

IDC/IEDC in case of delay would be allowed only for
uncontrollable factors
Proper documentation, record keeping required for
justification in case of delay in project completion
particularly for the reasons if delay is beyond control
of NTPC or its contractors.
Expenditure for the delayed period is unlikely to be
allowed in the Capital Cost (example: Farakka-III)
Transmission Charges are also to be borne by Gencos
for the delayed period
APC will exclude Construction Power, to be tied up with
local Discoms
70
Project Construction aspects-Documentation

Proper documentation must be maintained from day 1 in project
implementation, and specifically for all cases of deviations &
delays from the L2 network.
Any order or communication by any Government agency causing
any delay in execution of work at the project must be recorded
and preserved.
Restriction imposed on use of resources like sand, stone chips etc.,
orders pertaining : to local law and order, deployment of labour,
movement of goods and materials, etc
All communications with government authorities including the

district authorities regarding their delay in consents/ approvals/
permissions.
Abnormal & inclement weather conditions / monsoon data must
be preserved.
71
Project Construction aspects-Documentation

Help/Assistance given to Contractor/ sub-contractor to arrest
delay
Force -majeure event of contractor / sub-contractor
Financial crisis of vendor / contractor
In the cases of delays or anticipated delays, the related
documents/ communications particularly attributable to actions
of governmental agencies/ Railways
Reasons beyond reasonable control of NTPC and its contractors
must be collected and maintained ;
excessive rain/ flood,
geological surprises etc.
The actions identified for collection and maintaining such

documents may also be followed up/ monitored in PRTs.
72

Preparation for COD
Readiness of all the major systems including Balance of Plants,
Coal arrangement etc to ensure Trial run for a continuous period
of 72 hours at maximum continuous rating or installed capacity.
Notice to beneficiaries at least 7 days before Trial run.
Compliance to CEA Regulations (check list to be a part of COD
note)
Commissioning of RGMO/ FGMO before COD (1% to be
deducted if not complied)
Proper record keeping of less schedule during trial run period.
Process should start at least 45 ~60 days prior to the target date
of COD.
Certification of CMD for COD requires Board Approval
73

Prudence check of Capital Cost w.r.t. Benchmark cost Proper justifications are required for any deviations from
specified benchmark norms.
Capitalization before Cut-off date of project Completion of all works in original scope before cut-off
date
Procurement of Initial Spares of allowable amount before
cut-off date
Proper documentation required to justify extension of Cutoff date as beyond the control of generator.
74
THANK YOU
75
ECR Trend (P/Kwh)
Station
Sep
'13
Oct
'13
Nov
'13
Dec
'13
Jan Feb Mar Apr May Jun Jul

'14 '14 '14 '14 '14 '14 '14
Aug
'14
TTPS
109
104
102
101 112 109 112 111 109 115 124 128
76
Operating Parameters
Description Norm 2009-10 2010-11 2011-12 2012-13 2013-14
Heat Rate
2850
(kcal/kwh)
2859
2851
2842
2823
2810
APC
(%)
10.50
10.47
10.56
10.64
10.50
10.52
SOC
(ml/kwh)
0.5
0.63
0.52
0.44
0.38
0.40
DC
(%)
83
90.27
93.58
91.88
95.72
94.56
77
URS of NTPC Coal Stations

IC
Station
Kahalgaon
Simhadri
Farakka
Sipat
Rihand
Mouda
Dadri
Vindhyachal
Badarpur
Tanda
Ramagundam
Talcher
Unchahar
Singrauli
Korba
Talcher TPS
NTPC COAL
June
Apr '14 May '14
'14
MW
2340
2000
2100
2980
3000
1000
1820
4260
705
440
2600
3000
1050
2000
2600
460
July
'14
Aug Sept
'14
'14
2014-15
(Till
Sep'14)
2013-14
(Till
Sep13)
MU
226.85
112.42
125.76
81.78
38.48
233.08
77
126.17
23.68
0.76
63.11
17
5.39
1.31
1.27
0
232.27
188.76
99.69
100.46
75.08
14.95
94.96
183.61
28.88
5.33
141.3
41.02
26.8
0.91
55.39
0
120.93 218.27 75.15 118.24

95.81 62.41 98.49 58.44
101.82 93.14 24.66 81.12
78.5 73.73 34.32 55.84
30.35 45.15 25.93 29.13
150.64 102.45 78.49 253.28
64.35 48.39 31.87 48.37
117.5 192.37 203.61 94.75
26.28 54.91 70.29 28.52
0.13
3.33 2.34
0.11
35.48
28.2 13.93 31.4
22.24 17.95 16.39 19.23
18.56 26.96 43.37 19.15
16.62 32.64 39.43 7.23
5.46
2.98
0 5.27
0
0
0
0
991.71
616.33
526.19
424.63
244.12
832.89
364.94
918.01
232.56
12
313.42
133.83
140.23
98.14
70.37
0
32355 1134.06 1289.41 884.67 1002.88 758.27 850.08
5919.37
1789.03
1302.77
928.17
889.08
782.91
711.37
590.06
565.53
514.91
413.06
396.18
311.16
217.2
214.09
81.83
0
9707.35
78
Force Majeure
Force Majeure for the purpose of these regulations means the event or
circumstance or combination of events or circumstances including those
stated below which partly or fully prevents the generating company or
transmission licensee to complete the project within the time specified in the
Investment Approval, and only if such events or circumstances are not within
the control the generating company or transmission licensee and could not
have been avoided, had the generating company or transmission licensee
taken reasonable care or complied with prudent utility practices:
a) Act of God including lightning, drought, fire and explosion, earthquake,
volcanic eruption, landslide, flood, cyclone, typhoon, tornado, geological
surprises, or exceptionally adverse weather conditions which are in excess
of the statistical measures for the last hundred years; or
(b) Any act of war, invasion, armed conflict or act of foreign enemy, blockade,
embargo, revolution, riot, insurrection, terrorist or military action; or
(c) Industry wide strikes and labour disturbances having a nationwide impact
79
in India;
Change In Law
Change In Law means occurrence of any of the following events:
(a) enactment, bringing into effect or promulgation of any new Indian law; or
(b) adoption, amendment, modification, repeal or re-enactment of any existing
Indian law; or
(c) change in interpretation or application of any Indian law by a competent
court, Tribunal or Indian Governmental Instrumentality which is the final
authority under law for such interpretation or application; or
(d) change by any competent statutory authority in any condition or covenant
of any consent or clearances or approval or licence available or obtained for the
project; or
(e) coming into force or change in any bilateral or multilateral agreement/

treaty between the Government of India and any other Sovereign Government
having implication for the generating station or the transmission system
80
regulated under these Regulations.

CERC - 2014-19 Tariff Regulations

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CERC Tariff Regulations

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Tariff Determination of Generating Stations

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Tariff Framework in Electricity Act 2003

Bulk Tariff Gencos

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CERC Tariff Regulation 2014-19

Process of Tariff Determination

Guided by the Tariff Posts entire petition on the

III - Tariff Order

Corporate Commercial Department

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Timelines of 2014-19 Tariff Regulations

Corporate Commercial Department

Tariff of Thermal Stations

CERC Tariff Regulation 2014-19

CERC Tariff Regulation 2014-19

Corporate Commercial Department

Capital cost for tariff

CERC Tariff Regulation 2014-19

CERC Tariff Regulation 2014-19

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Capital cost for tariff base for an existing

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Prudence check of Capital Cost for new stations

Capital Cost prudence check w.r.t benchmark norms

Total Hard cost

Corporate Commercial Department

No of units Total Hard cost

CERC Tariff Regulation 2014-19

IDC/ IEDC- in case of delay in projects

Additional IDC due to delay beyond Scheduled COD will

If the delay is attributable to agencies or contractors, no

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Controllable/ Uncontrollable factors

Corporate Commercial Department

CERC Tariff Regulation 2014-19

CERC Tariff Regulation 2014-19

Cut Off Date

Cut off Date

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Add cap allowed upto cut-off date

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Coal-based/lignite-fired thermal stations

Earlier Initial Spares allowable amount was linked to the

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Add cap allowed beyond cut-off dateexisting stations

CERC Tariff Regulation 2014-19

Projected/ Actual Capex

Corporate Commercial Department

CERC Tariff Regulation 2014-19

Truing up exercise based on actual CAPEX upto