BEFORE THE MADHYA PRADESH ELECTRICITY

REGULATORY COMMISSION, MADHYA PRADESH

PETITION NO .•..• OF 2020

I .. ·"' ,

IN THE MATTER OF: Petition under Section 62 and Section 86(1) (a) of the Electricity

Act, 2003 read with Madhya Pradesh Electricity Regulatory

Commission (Terms and Conditions for determination of

Generation Tariff) Regulations, 2020 ("MPERC Tariff

Regulations, 2020") for determination of Generation Tariff for the

period from 01.04.2019 to 31.03.2024 in respect of 1 x 600 MW Coal

Based Power Project at Barela-Gorakhpur, Dist. Seoni, Madhya

Pradesh.

AND, IN THE MA TIER OF:

VERSUS:

Jhabua Power Limited Unit No. 303 & 307, 'Third Floor, ABW Tower M.G. Road Gurgaon -122002, Haryana

----Petitioner

1. Madhya Pradesh Power Management Company Ltd.

(Erstwhile Madhya Pradesh Power Trading Company Ltd.)

Shakti Bhawan, Vidyut Nagar, Rampur,

Jabalpur (M.P.) - 482008 India

2. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Co. Ltd.

Jabal pur

Shakti Bhawanl Vidyut Nagar, Rampur, Jabalpur (M.P.) - 482008

India

3. Madhya Pradesh Madhya Kshetra Vidyut Vitaran Co. Ltd

Bhopal

Bijli Nagar Colony, Nishtha Parisar, Govindpura., Bhopal- 462023

4. Madhya Pradesh Paschim Kshetra Vidyut Vitaran Ltd. Indore

,..

----R~spondcnts

.i.· l "• -. 601 . . .

Affidavit ·. Indian-Non Judicial Stamp Haryana Government

.~ • aaz Date : ~ OB/0612020 Certificate No. GOH2020F680 1~u1m I IJrnlr~~ ~1~1mn

lll~l ~~ ~m~lil~~ll~I~IHit~~

Stamp Duty Paid : ~ 1 01

GRN No. 64973624

Deponent

(Ks Only)

Penalty : (A5 z-~)

~0

Name : Janmejaya Mahapatra

H.No/Fioor : 3rdfloor Sector/Ward: 29 Landmark : Abw tower jhabua power limited

State : Haryana Crty!Village : Gurugram District ; Gurugram

Phone: 98U*"**86

r~L · : Purpose : Affidavit by Janmejaya Mahapatra for filing MYT petition to be submitted at Madhya pradesh electricity

regulatory commission

The authenticity of this document can be verified by scanning this QrCode Through smart phone or on the website https://egrashry .nic.in

AFFIDAVIT

t Janmejaya Mahapatra S/ o Late Shri B D Mahapatra aged about 49 Years, working as

Chief Executive Officer for Jhabua Power Limited and presently residing at B 1·204,

PWO Society, Gurgaon -122002.

AND

[, Abhilash Lal, S/ o Shri Raj Kumar Lat aged about 55 Years, appointed as Resolution

Professional for Jhabua Power Limited (appointed vide Hon'ble NCLT, Kolkata order

dated 24th Ju ly 2019), R/o C-192, Belvedere Towers DLF Phase U Gurgaon -122002,

Haryana do hereby state on solemn affirmation as under:

a) The Hon'ble CommU;sion vide i~ Order dated 30.11.2018 has determined the final

Capital Cost and Tariff for the Generating station for the period from the date of

Commercial Operation (03.05.2016) till thE:? end of the previous Control Period i.e FY

2018-19.

· ~ .

ua b) Aggrieved by the above order, the Petitioner filed a Review Petition No. 12 of 2019. The

Hon'ble Commission vide its Order dated 27.12.2019, disposed off the review petition

and allowed review on the following issues:

1) Revenue realization from sale of infirm power taken as Rs. 15.40 Crore instead of Rs.

9.10 Crore.

2) Erroneous interpretation of the rate of depreciation calculation.

3) Additional transportation charges for 2.5 km distance from Binaiki Railway Station

to power station when coal is transported by road.

c) The Commission vide the above referred Order dated 27.12.2019 also approved the

revised capital cost along with the Annual Charges from COD to FY 2018-19.

d) During the pendency of the above Review Petition, JPL also filed true up Petition for FY

2017-18 i.e., Petition No. 26 of2019.

e) Subsequent to the Review Order dated 27.12.2019, the Hon'ble Commission vide order

dated 04.01.2020 approved truing up for FY 2017-18 taking into account issues allowed

in its Review Order.

f) JPL filed true up Petition for FY 2018-19 on March 6, 2020, based on Audited Accounts

for FY 2018-19.

g) The Hon'ble Commission notified MPERC Tariff Regulations, 2020 dated 28.02.2020 for

the control period FY 2019-20 to FY 2023-24 and according to the same the Petition for

determination of Generation Tariff for the period FY 2019-20 to FY 2023-24 was to be

filed within 60 days from the date of notification i.e., by 28.04.2020.

h) However, the Hon'blc Commission vide ito:; Order dated 06.05.2020 in the Petition filed

for seeking extension of time to file Petitions for determination of Multi-year Tariff by

Generating Companies and MP Power Transmission Company Ltd. permitted to file the

Review Order dated 27.12.2019, the Petitioner is filing this instant Petition for

determination of Generation Tariff for the period FY 2019-20 to FY 2023-24 in accordance

with Regulation 6.2 of the MPERC Tariff Regulations, 2020.

j) The Petitioner submits that it has compiled the information to the best of its knowledge

and capabilities and craves leave to submit any additional information that may be

required by the Commission during the course of processing this petition.

On behalf of Jhabua Power Limited

Deponent

iv I ; .:· (l

VERIFICATION

I, Janmejaya Mahapatra S/ o Late Shri B D Mahapatra aged about 49 years, presently residing at

Bl-204, PWO Society, Gurgaon-122002 working as Chief Executive Officer

AND

f , Abhilash Lal, Sf o Shri Raj Kwnar Lal, aged about 55years, appointed as Resolution

Professional for Jhabua Power Limited (appointed vide Hon'ble NCLT, Kolkata order dated 24th

July 2019), R/o C-192, Belvedere Towers DLF Phase H, Gurgaon ·.122002, the Petitioner, do

hereby verify that the contents of this Affidavit are true to our knowledge (as derived from

DEPONENT

Solenmly affirm at Gurgaon, on the 91h Day of June 2020 that the contents o£ the above affidavit

are true and correct to the best of my knowledge and belief, no part of it is false and nothing

material has been concealed there from.

Verified by me on this 9th day of June, 2020 at Gurr,aon.

~~ DEPONENT

R.N. ALIK, ADVOCATE NOTARY, GURUGRAM, ~IR. (INDIA)

OOi

081 Table of Contents

1. Brief about the Project and the Petition: ......... ................ ............ ........ .......................... .... ...... ......... !

2. Brief about the Parties ........................................................................................................................ 3

3. Approval of Capital Cost and Final Tariff from COD to FY 2018-19 for the Generating Station .......................................................................................................................................................... 4

4. Submission of Current Petition and relevant Documents .......................................................... ..4

5. Capital Cost of the Project .................................... ............................................................................. S

6. Generation Tariff for the period FY 2019-20 to FY 2023-24 .......................................................... 7

7. Brief Overview of Component Wise Annual Charges and Variable Charges: .......................... 8

8. Gross Fixed Asset and Additional Capitalisation ................................. ......................................... 9

9. Debt-Equity Ratio for truing up of Additional Capital Expenditure ........................................ 18

10. Determination of Capacity Charges and Energy Charges ...................................................... 20

A. Capacity Charges .............................................................................................................................. 20

a) Return on Equity (RoE): ......................................................................................................... 20

b) Interest and Financing Charges ............................................................................................ 23

c) Depreciation: ............................................................................................................................ 25

d) Operation and Maintenance Expenses for Generating Sta tion: ........................ ............... 27

e) Interest on Working Capital: ................................................................................................. 29

f) The annual capacity (fixed) charges: ............. ........................................................................ 31

B. Energy Charges for the pedod FY 2019-20 to FY 202.~-24 ........................................................... 31

11. Statutory Charges ......................................................................................................................... 39

12. Prayer ........... .... ............ .......... ................................. ...................... ................................................. 40

UG7

List of Tables

Table 1: Statement of Capital cost for the period till FY 2018-19 (Rs. in Crore) ............................ 6

Table 2: Additional capital expenditure proposed during the period FY 2019-20 to FY 2023-24

..................................................................................................... ................................................................ 16

Table 3: GFA for the period FY 2019-20 to FY 2023-24 .... .. : ........... .................. ........... ..................... .. 18

Table 4: Computation of Return of Equity for the period FY 2019-20 to FY 2023-24 .................. 23

Table 5: Computation of Interest on Normative Loan for the period FY 2019-20 to FY 2023-24

... ................ .................................................................................. ............................................. ..... ...... ........ 24

Table 6: Computation of Depreciation for the period FY 2019-20 to FY 2023-24 ......................... 27

Table 7: Computation of O&M Expenses for the period FY 2019-20 to FY 2023-24 .................... 28

Table 8: Computation of Interest on Working Capital for the period FY 2019-20 to FY 2023-24

... .................................................................................................................................................................. 30

Table 9: Computation of Annual Fixed Cost for the period FY 2019-20 to FY 2023-24 ............... 31

Table 10: Details of FSA of Jhabua Phase-1 .................... ....................................................... ........... 35

Table 11: Computation of Landed cost of coal for determination of Tariff for the .................... 37

Table 12: Invoice wise details of LDO for determination of Tariff for the period FY 2019-20 to

FY 2023-24 ................. .................. .......... ........ ............................................... .............................................. 38

Table 13: Computation of Energy Charges for the period FY 2019-20 to FY 2023-24 .... .............. 38

~ , -

vU I .

087

I PETITION

1. Brief about the Pro ject and the Petition:

1.1 M/s Jhabua Power Limited (11the Petitioner'' or "JPL"), is a generating company within

the meaning of Section 2 (28) of the Electricity Act, 2003 ("the Act") operating a Coal Based

Power Project with Installed Capacity of 1 x 600 MW at Barela-Gorakhpur, Dist. Seoni,

Madhya Pradesh ("Generating Station or Project") and is supplY.ing power to the

Respondents as per terms of PPA executed.

1.2 Government of Madhya Pradesh (GoMP) vide Notification No. 3474/FRS/17 /XIII2002,

dated 03.06.2006 notified the M.P. Elec tricity Reform Transfer Scheme Rules 2006 for

regulating transfer and vesting the functions, properties, interest, right and obligation of

Madhya Pradesh State Electricity Board ("MPSEB") relating to Bulk Purchase and

Supply of Electricity along with related agreement/ arrangements in the State

Goverrunent and transfer andre-vesting thereof by the State Government in MP Tradeco,

authorizing MP Tradeco to buy power for and on behalf of the three Distribution

Companies ("Licensees") of the State.

1.3 GoMP on 10.04.2012 notified MP Tradeco as the Holding Compan y of all Distribution

Licensees within the state of Madhya Pradesh ("Respondent No.2, 3 & 4") and renamed

the same to Madhya Pradesh Power Management Company Ltd (herein referred to as

"Respondent No. 1" or "MPPMCL").

1.4 By virtue of the aforesaid Notifications the Respondent No.1, has been authorized to sign

the PPA with the Petitioner, for purchase of power on behalf of Respondent No.2, 3 & 4,

who are the Distribution Licensees within the state of Madhya Pradesh under Section 14

of the Act, who are also the confirming parties to the PP A.

1.5 The Commission has issued Madhya Pradesh Electricity Regulatory Conunission (Terms

and Conditions for determination of Generc1tion Tariff) Regulations, 2020 (RG-26 (lV) of

2020) dated 28.02.2020 spe

"6. Application for det.ermination ofTariff.

6.1 ....

6.2 In case of an existing generating station or unit thereof, the application for

determination of Multi-year Tariff shall be made by the generating company within a

period of 60 days from the date of notification of these Regulations or as directed by the

Commission whichever is earlier, based on admitted capital cost including additional

capital expenditure already admitted in last true-up order of the Commission and estimated

additional capital expenditure for the respective years of the tariff period 2019-24 in

accordance with the MPF.RC (Terms and Ccmditions for determination of Generation

Tariff) Regulations, 2020:

Provided that the application shall contain details of underlying assumptions for projected

capital cost and additional capital expenditure, where applicable.

6.3 In case of emission control system is required to be installed in existing generating

station or unit thereof to meet the revised emission standards, an application/ petition shall

be filed for determination of tariff (capacitt; charges or ener:51; charge or both) after

installation of such system based 011 the actual capital expenditure incurred duly certified

by the Auditor along with all necessan; details and documents."

1.6 In accordance with the above, the Petitioner is filing this Petition for determination of

Generation Tariff for the period FY 2019-20 to FY 2023-24 based on Capital cost admitted

by the Hon'ble Commission vide its Order dated 27.12.2019, admitted additional

capitalization for FY 20'17-18 vide Order dated 04.01.2020 and the additional capital

expenditure claimed in true up Petition for FY 2018-19 in accordance with the principles

laid down in the MPERC Tariff Regulations, 2020.

1.7 The Petitioner would like to humbly submit that as per Regulation 6.2 of the MPERC

Tariff Regulations, 2020 the Petition for determination of Generation Tariff is to be filed

within 60 days from the notification (28.02.2020) of the same i.e ., by 28.04.2020. However,

as per the Hon'ble Commission Order dated 6th May 2020, the Hon' ble Commission has

OG

Oil 2. Brief about the Parties

2.1 The Petitioner Company, Jhabua Power Ltd., incorporated under the Companies Act,

1956 having its Registered office at Macmet House, 7th Floor, l OB 0 C Ganguly Sarani,

Kolkata- 700020, West Bengal, India and Corporate office at Unit No. 303 & 307, Third

Floor ABW Tower M.G. Road, Gurgaon-122002 to develop and execute coal based

thermal power Project in Seoni district of the State of Madhya Pradesh.

2.2 The Respondent No. 1 is a government company as defined under Section 617 of the

Companies Act, 1956. It is an unbundled entity of the erstwhile Madhya Pradesh State

Electricity Board and also a deemed trading licensee, entitled to undertake transaction of

sale and purchase of bulk power. Vide notification dated 10.04.2012, the Respondent No.

1 has been made the Holding Company of all Distribution Licensees within the State of

Madhya Pradesh. The Petitioner on 05.01.2011 entered into a PPA with the respondent

No. 1 for sale of 30% of power to be generated from the Petitioner's unit No. 1 of the

Project on regulated tariff wherein respondent No.2 to 4, who are Distribution Licensees,

are confirming parties and also the ultimate beneficiaries of the PP A.

2.3 The Respondent No. 2 is Madhya Pradesh Poorv Kshetra Vidyut Vitaran Co. Ltd., a

Company incorporated under the Companies Act, 1956 having its registered office at

Shakti Bhawan, Rampur, Jabalpur (herein referred to as "Discom 1") is a Power

Distribution Company of specific area of the M.P. State and also a deemed 'Dish·ibution

Licensee' within the proviso of the Act

2.4 The Respondent No.3 is Madhya Pradesh Madhya Kshetra Vidyut Vitaran Co. Ltd, a

company incorporated under the Companies Act, 1956 having its registered office at

Nishta Parissar, Govindpura, Bhopal (herein referred to as "Discom 2") is a Power

Distribution Company of specific area of the M.P. State and also a deemed ' Distribution

Licensee' within the proviso of the Act.

2.5 The Respondent No. 4 is Madhya Pradesh Pa-ich im Kshetra Vidyut Vitaran Ltd, a

company incorporated under the Companies Act, 1956 having its registered office at Polo

'3"1 -

OJ

Qll specific area of the M.P. State and also a deemed 'Distribution Licensee' within the

proviso of the Act.

2. 6 The Respondent No. 2, 3 & 4 are confirming parties under the aforementioned PP A dated

05.01.2011 and 27.06.2011 are collectively referred to as "Discoms".

3. Approval of Capital Cost and Final Tariff from COD to FY 2018-19 for the Gen erating

Station

3.1 The Hon'ble Commission vide its Order dated 30.11.2018 (in Petition No. 28/2019} had

de termined the Capital Cost as on COD, additional capitalization for FY 2016-17 and

Tariff of the Generating station for the period commencing from the date of Commercial

Operation (03.05.2016) till the end of the Control Period i.e. 31.03.2019.

3.2 Aggrieved by the above order of the Hon'ble Commission , the Petitioner had fi led a

Review Petition No. 12 of 2019 before the Hon'ble Corrunission on 01.02.2019. The

Hon'ble Commission issued a Review Order dated 27.12.2019 on the aforesaid review

Petition and approved the revised Capital Cost as on COD along with revised annual

charges for th e period till31.03.2019.

3.3 Subsequently, the Hon'ble Commission carried out truing up for FY 2017-18 vide its

Order dated 04.01.2020 (in Petition 26 of 2019) w herein it approved the additional

capitalization for FY 2017-18.

3.4 The Petitioner in this instant Petition has claimed Tariff in accordance with the principles

laid down in the MPERC Tariff Regulations, 2020, considering the Capital cost as

admitted bv the Hon'blc Commission vide itc; Order dated 27."12.2019, admitted J

additional capitalization for FY 2017-18 vide Order dated 04.01.2020 and the additional

capitalisation claimed in true up Petition for FY 2018-19.

4. Submission of Current Pet ition and relevant Documents

4.1 The in .. -;tant petition filed by the Petitioner is for determ.ination of Generation Tariff for

(Onsiderin

QlZ Commission till FY 2017-18 and after considering additional capitalisation in FY 2018-19

as per the Audited Accounts for FY 2018-19 and as submitted in true up Petition for FY

2018-19 before the Hon'ble Commission.

4.2 The Petitioner has also projected scheme wise additional capital expenditure which shall

be capitalized in the Control Period i.e. FY 2019-20 to FY 2023-24 along with discharge of

liabilities for works already executed in the previous Control Period along with all

relevant details.

4.3 The Petitioner is submitting the actual data for the quantum of coal and secondary fuel

oil utilized along with the details of cost incurred towards the transportation and other

charges for the months of January 2019 to March 2019. Further, the Petitioner is also

submitting the calculation for weighted average rate of Interest on the basis of actual loan

portfolio for FY 2018-19 after deduction of Penal interest from the same as the same is

considered for the period FY 2019-20 to FY 2023-24.

5. Capital Cost of the Project

5.1 In Petition No. 28 of 2018, based on Annual Audited Accounts for FY 2016-17, the

Petitioner had claimed the capital cost of Unit-1 on accrual basis, as on its COD (i.e.

03.05.2016) as Rs. 4698.66 Crore including IDC of Rs.l434.76 Crore. The corresponding

Auditor Certified Cash Capital expenditure was Rs. 4330.08 Crore including IDC of Rs.

1332.63 Crore. Accordingly, the claimed capital cost (on cash basis) as on COD of Unit-1

was Rs. 4.330.08 Crore. Further, the Petitioner had also claimed Additional Capital

Expenditure (Cash Basis), amounting toRs. 15.78 Crore for the period from COD of Unit-

1 to 31.03.2017 pertaining to Unit-1 of the Project.

5.2 The Hon'blc Commission after scrutiny of the Petition has approved the Capital Cost of

the Project as Rs. 3876.31 Crore (excluding un-discharged liability) including the IDC of

Rs. 945.48 Crorc. Further, the Commission as on COD has allocated an amount of Rs.

3662.42 Crorc including IDC of Rs. 906.62 Crorc towards Phase T of the Project. The

Commission vide its Order dated 30.11.2018 and in the matter of Capital Cost has stated

as under:

5 l- ··~ ...

012

Ull "In view of tlu~ above, the actual capital expenditure as on COD of Rs. 3662.42 Crore or

Unit 1 x600MW under Phase 1 in the subject petition is consid~~red for determination of

tariff in this order."

5.3 Subsequently, aggrieved by the aforesaid Order, the Petitioner had filed review Petition

No. 12 of 2019. Vide Order dated 27.12.019, the Hon'ble Comntission approved the

revised capita l cost of Rs . 3668.73 Crore as on COD for Phase-1 of the Project.

5.4 The Hon'ble Commission vide Order dated 04.01.2020 also approved the true up of FY

2017-18 incorporating consequential impact of the review Order dated 27.12.2019 in

review Petition No. 12 of 2019.

5.5 Abstract of the capital cost admitted by the Commission for Unit-1 of the Project along

with additional capital expenditure is as under:

Table 1: Statement of Capital cost for the period till FY 2018-19 (Rs. in Crore)

Capital Cost Capital Cost Capital Cost approved in

Particulars approved in approved in True-Up order Order dated Review Order 30.'11.2018 dated 27.12.2019

dated 04.01.2(}20

Opening Ca pital Cost as on

COD of Unit-1 3662.42 3668.73 3668.73

Additional capitalization in FY

2016-17 (for Unit-1) 252.06 252.06 252.06

Closing Capita] Cost (i.e. as on 3914.48 3920.79 3920.79

31.03.2017)

Additional capita liw tion in FY 0.00 0.00 12.81

2017-lR (for Unit-1)

Closing Capital Cost (i.e. as on ,-,1 • ~? 3914.48 3920.79 3933 .• {"-

3l .03.2018)

Additional capita l expenditure

incurred in f Y 2018-'19 (as 0.00 0.00 18.82

considered in True-up r~~ ti tion

for fY 2018-·19)

Closing Capital Cost (i.e. as on 3914.48 3920.79 3952.40

31.03.2019)

5.6 The Petitioner in lhe instant Petilion has considered lhc opening capita l cost of Rs. :3952.40

fY 2023-24.

6 , . .•

01

.. .

6. Generation Tariff for the period FY 2019-20 to FY 2023-24

6.1 Regulation 9 of MPERC Tariff Regulations, 2020 specifies the following for determination

of Generation Tariff:

"9.1 T11e Commission shall define Tariff period for the generating company from time to

time. The principles for Tariff determination shall be applicable for the duration of the Tariff period. The principles that guide Tariff determination for the next Tariff period shall be

valid for a period from 1st April, 2019 up to 31st March, 2024.

9.2 Tariff in respect of a generating company under these Regulations shall be determined

Unit-wise or for a group of Units. However, when a new generating Unit is added on or

after 1.4.20'l9, the· Commission shall determine separate Tariff for such new Unit(s). The

generating company shall submit separate calculations in respect of each generating

station giving break- up for Units prior to 1.4.2019 and Units added thereafter.

9.4 A generating company shall file a petition at the beginning of the Tariff period. A

review shall be undertaken by the Commission to scrutini.ze and true up the Tariff on the

basis of the capital expenditure and additional capital expenditure actually incurred in the

Year for which the true up is being requested. The generating company shall submit for the

purpose of truing up, di>.tails of capital expenditure and additional capital expenditure

incurred for each year of the period from 1.4.2019 to 31 .3.2024, duly audited and certified

by tl~e auditors.

9.5 The Multi Year Tariff filing for existing generating stations in hard and soft copy shall

be in the formats prescribed with these Regulations within 60 days of notification of these

Reguh1tions."

6.2 Accordingly, the Petitioner is seeking for determination of Generation Ta riff for supply

of power from Unit-1 (600 MW) of its Project for the period FY 2019-20 to FY 2023-24,

considering the capital cost as discussed in earlier section and projected Additional

Capital Expenditure (ACE) for the period FY 2019-20 to FY 202:'3-24.

6.J The Petitioner hereby h

7 1 •.•

014

- . .

6.4 The Petitioner also submits Audited Accounts for FY 2018-19 in support of additional

capitalisation considered for FY 2018-19 as ANNEXURE -2.

7. Brief Overview of Component Wise Annual Charges and Variable Charges:

7.1 The components of Tariff for Thermal Power Generating Sta tions have been stipulated in

the Chapter 4 of MPERC Tariff Regulations, 2020 which is reiterated as under:

'' 16. Components ofTarift:

16.1 The tariff for supply of electricihJ from a thermal generating station shall comprise

two parts, namely, capaci~J charge (for recovery of annual fixed cost consisting of the

components as specified in Regulation 17 of these Regulations) and energy charge (for

recoven1 of priman1 and secondanJ fuel cost as specified in Regulation 18 of these

Regulations).

16.2 The capacitJj charges for additional capitalization and energy charges, on account of

implementation of revised emission standards in existing generating station or new

generating station, as the case may be, shall be determined by the Ctmtmissicm separately.

16.3 The tariff for supply of electricihJ from a hydro generating station shall comprise

capacity charge and energy charge to be derived in the manner specified in Regulation 47

of these Regulations, for recovenJ of armual fixed cost consisting of the components referred

to in Regulation 17 of these Regulations.

17. Capacity Charges:

17.1 The CapacihJ charges shall be cferi·ved on the bruis of annual fixed cost. The annual

fixed cost (A FC) of a generating station shall consist of the following components:

(a) Retum em equity;

(b) interest on loan capital;

(c) Uepn~ciation;

(d) [n.tere . .:;t em working capitnl; and

(e) Operation and maintenance expenses:

Provided that spedal allowance iTZ lieu of R&tvl, where opted in accordance with

Regulation 30 of these Re ulntio11.s ..:;hall hr>. renmered seporately mul shall not be t'OitSidered

. '

015

18. Energy Charges:

18.1 Energtj charges shall be derived on the basis of the Landed Fuel Cost (LFC) of a

generating station (excluding hydro) and shall cont,1st of the following cost:

(a) Landed Fuel Cost of primanJ fuel; and

(b) Cost of secondanJ fuel oil consumption; and

(c) cost of Lime-stone or any other regent as applicable;

Provided that any refund of taxes and duties along with any amount received on account

of penalties from fuel supplier shall have to be adjusted in fuel cost:

Provided further that the energtj charges, if any, on account of meeting the revised emission

standards in case of a thermal generating station shall be determined separately by the

Commission."

7.2 In terms of above, the generation tariff shall include Capacity Charges and Energy

Charges which shall be determined in terms of norms stipulated under the MPERC Tariff

Regulations, 2020.

7.3 The Capacity Charges of the generating station is computed on the basis of Capital Cost

as on COD admitted by the Hon'ble Commission and subsequent additional

capitalization approved. On the basis of the above admitted capital cost and additional

capitalization following components forming capacity charges for generating station

shaU be computed in accordance with Regulation 17.1 of MPERC Tariff Regulations, 2020.

(a) Return on equity;

(b) Interest on loan capital;

(c) Depreciation;

(d) Interest on working capital; and

(e) Operation and maintenance expenses:

The Petitioner has detailed below its approach while claiming capacity charges in terms of

MPERC Tariff Regulations, 2020.

8. Gross Fixed Asset and Additional Capitalisation

R.l The Opening GFA as on 01.04.2019 for the purpose of determination of Generati.on Tariff

91

01

\

GF A as on 31.03.2018 in the Order dated 04.01.2020 and additional capitalisation in FY

2018-19 as submitted in true up Petition. As submitted above, the capital cost considered

by the Petitioner as on 01.04.2019 is Rs. 3952.40 Crore.

Projected Additional Capital Expenditure:

8.2 Regulation 26 of MPERC Tariff Regulations, 2020 deals with the grounds under which

additional capitalization pertaining to works which were in the Original Scope of work

and have been capitalized by the cut-off date can be allowed. Further, Regulation 27 of

MPERC Tariff Regulations, 2020 states grounds under which works which were in the

Original Scope of work but incurred after cut-off dated can be approved.

8.3 Regulation 3.1 (14) of MPERC Tariff Regula tions, 2020 defines cut-off date as follows:

"(14) 'Cut-off Date' means the last date of the calendar month after thirtlj-six months from

the date of commercial operation of the project;"

It is observed that the above definition is general to all and does not state dearly whether

it shall be applicable to only new generating station commissioned post 01.04.2019. The

Cut-Off date as per the new MPERC Tariff Regulations, 2020 happens to be 2nd May 2019.

However, Cut-off date of the Generating station as defined in Regulation 4.1 (1) of the

MPERC Tariff Regulations, 2015 is as under:

"Cut-off Date' means 31~1 March of the year closing after two years of the year of

comrru.-rcial operation of whole or part of the project, and in case the whole or part of tf1e

project is declared under commercial operation in the last quarter of a year, the cut- off date

shall be 31st March of the year closing after three years of the year of comnwrcial operation:

Provided that Hte cut-off date may be extended by tlre Commission if it is proved on the

basis of documentary evidence that the capitalization could not be nuuie within tire cut-off

date for reasons beyond the control of the project developer;"

Therefore, in accordance with the MPERC Tariff Regulations, 2015, the Cut-off date of the

generating sta ti.on is 31.03.2o-J 9.

017 - ..

8.4 lt is submitted that the Petitioner has considered the cut-off date for its plant as 31sl March

2019 based on the assumption that the Petitioner achieved COD for the generating station

on May 3, 2016 and therefore cut-off provision as specified in the Madhya Pradesh

Electricity Regulatory Commission (Terms and Conditions for determination of

' Generation Tariff) Regulations, 2015 ("MPERC Tariff Regulations, 2015") shall be applicable.

8.5 As the cut-off date has ended, the Petitioner in this Petition has therefore claimed

additional capitalisation on account of the works which are part of original scope of work

but are proposed to be executed after the Cut-off date in terms of various provisions of

Regulation 27 of MPERC Tariff Regulations, 2020 which states as follows:

#27. Additional Capitalization within the original scope and after the cut-off

date:

27.1 The additional capital expenditure incurred or projected to be incurred in respect of

an existing project or a new project on the following counts within the original scope of

work and after the cut-off date may be admitted by the Commission, subject to prudence

check:

(i) Liabilities to meet award of arbitration or for compliance of the directions or order of any statutory authoritlj, or order or decree of any court of law;

(ii) Change in law or compliance of any existing law:

(iii) Deferred works relating to ash pond or ash handling system including ash

transportation focilihj in the original scope of work;

(iv) LiabilihJ for works executed prior to the cut-off date;

(v) Force majeure events;

(vi) LiabilihJ for works admitted by the O'mmission after the cut-off date to the extent of

discharge of such liabilities by actual payment; and

(vii) Additional capitalization on account ofmising of ash dyke as a part of ash disposal

t " sys em.

8.6 Anticipating the spill over of works due to uncon trollable reasons, the Petitioner filed a

Petition (No. 19 of 2019) for Extension of cut-off date by 2 years (from 31.03.2019 till

31.03.2021) on the grounds of spilling over of works under original scope beyond the cut-

despite regular moni

01

UlS its Order dated May 30, 2019 in the ~ubject matter disposed off the Petition and ruled as

follows:

"7. From the aforesaid provisions under MPERC (Terms and Conditions for determination

of Generation Tariff) Regulations, 2015, it is observed that for considering the actual

additional capitaliztztion beyond cut-off date of the project, detailed examination of actual

capital expenditure of ead1 work beyond cut-off date and the reasons for delay in

capitalization of all such works beyond cut-off dilte shall be required by the Commission in

terms of Regulation 4.1 (1) and 20.2 of MPERC Tariff Regulations, 2015. Hence, the subject

petition cannot be examined and decided by the Commission at this stage. Therefore, the

petitioner is directed to approach the Commission with actual additional capitalization of

all works beyond cut-off date as per the Annual Audited Accounts along with all details

and documents in terms of aforesaid Regulations while filing the true-up petition for

respective financial year."

8.7 As the Petitioner is required to project additional capital expenditure as per MPERC Tariff

Regulations, 2020, the Petitioner has projected the same and has submitted detailed

justification for spilling over of balance works beyond cut-off date which is as submitted

below.

8.8 It is submitted that the Petitioner could not complete some of the works which are under

original scope of work before the cut-off date on account of uncontrollable reasons. These

works have to be deferred for execution after the cut-off date for reasons beyond the

control of the Petitioner. The detailed reasons causing delay in completion of work before

the cut-off date is submitted in the following section.

8.9 The Petitioner submits that the Petitioner is under Insolvency and Bankruptcy Code, 2016

("I&BC") Proceedings with effect from 271" March 2019 vide an Order passed by the

Hon'ble National Company Law Tribunal, Kolkata Bench in C.P.(IB) NO. 634/KB/2017

as per which a Resolution Professional for Jhabua Power Limited has been appointed vide

Hon'ble NCLT, Kolkata order dated 24th July 2019.lt is further submitted that even before

the commencement of I&BC Proceedings, the Petitioner's company was under the control

of lenders (Committee of Creditors- CoC) and the complete operational conh·ol was not

with the manay,emcnt o£ the company. The timeline of events leading to delay in

01

(i) Due to of non-availability of funds post commercial operation of the unit (due to

retention of money by the Respondent from the monthly raised invoices by the

petitioner on various accounts such as Liquidated Damages & On-Off bar issue,

poor scheduling by the Respondent), the progress of balance works was severely

affected leading to delay in work which was otherwise envisaged to be completed

by March 2018. Also, since there were no revenue inflows, company was not able

to service its debt obligations and it defaulted on its monthly interest payment'i to

bankers in June'2017. Post which, lenders tried to restructure company's debt but

the effort remained unsuccessful. Also, in the interim period, all the payments had

to be approved lenders and considering the strained financial position of the

company, they did not allow company to incur any capex expenditure.

Subsequently, the lenders also invoked the pledge on the shares of the company

and took control of 60% of the promoter's equity.

(ii) The RBI Circular dated 12th February 2018 for stressed assets forced the lenders to

classify the project of the petitioner as a Non-Performing Asset (NPA). The

Petitioner's Plant was identified as one of the 34 stressed thermal coal-based

power plants in the 40th report of the Standing Committee on Energy (2017-18),

Ministry of Power.Thereafter, the lenders stopped the process of debt

restructuring in line with the above RBI circular and initiated the process of due-

diligence for change of ownership further delaying the works to be executed

before the cut-off date.

(iii) The lenders decided to stop all capital expenditure required to complete the

balance project works and to meet a number of undischarged liabilities. This step

was taken under the assumption that the amount and course of capital

expenditure would be decided by the new management post resolution of the

asset, which was expected to be completed by August 201R, in line with the above

RBI Circular. However, the process of resolution of the asset got delayed due to

various factors like:

• Longer than expected timeline for the process of due diligence in view of

the various project

i%1 • Failure ot the identified bidder to achieve financial closure to proceed with

the resolution.

• Stay order by the Hon'ble Supreme court on the process of resolution of

the stressed assets in the power sector under Insolvency and Bankruptcy

Code.

(iv) The Petitioner was constantly pursuing with the lenders (Committee of Creditors

- CoC), regarding the matter of allowing the capital expenditure, at least for the

Railway works from the operational flow as the same results in increase in

reliability of coal, decrease in landed cost of fuel. Recognizing the same, the COC

agreed to allow the same in October, 2018. However, due to long interruption and

delay, all the awarded contracts, for supply as well as execution, had to be re-

negotiated and re-ordered adding further to the delay in execution of works.

(v) It is further submitted that the petitioner has not been able to purchase and stock

critical & costly insurance spares like Generator rotor, HP module, LPT last stage

blades, Turbine Governing System Spares, Generator Stator Spares, DCS Spares

etc. in view of the paucity of funds. Further, the other miscellaneous balance

activities like construction of township, service building, roads & drains etc. also

could not be completed on account of the same.

8.10Further, one of the capex creditors had filed the case against the company in NCLT for

non-payment of its dues. The company finally got admitted into CIRP (corporate

Insolvency Resolution process) on 27th Mar'2019.

8.11 The Petitioner submits that the I& BC Proceedings may very well take another 6-8 months

considering the nationwide lockdown imposed by the Gol in response to COVTD 19

pandemic. It is further submitted that the balance works and procurements can resume

only after the Resolution Proceedings are complete and accordingly, the balance works

are expected to be completed by 31.03.2022.

8.12The Petitioner accordingly in the instant petition has pha.!:led out the additional capital

expenditure du.ring FY 2021 & FY 2022 as per the present status of the TBC Proceedings.

the additional capital expenditure beyond FY 2022 in view of the extra ordinary

circumstances prevailing in the company.

8.13The Petitioner respectfully submits that the additional capital expenditure projected to be

incurred during the period FY 2019-20 to FY 2021-22 is on account of the following:

(i) Additional capitalisation of Rs. 130.52 Crore in accordance to Regulation 27.1 (iv)

towards discharge of liabilities of the works executed prior to the cut-off date. It

is submitted that these works have already been approved by the Hon'ble

Commission and only balance payments are projected to be incurred towards

discharge of its outstanding liabilities. The Hon'ble Commission is therefore

requested to allow the same.

(ii) Additional capitalisation of Rs. 5.70 Crore in accordance with Regulation 27.1 (iii)

towards execution of the deferred works related to ash handling system and ash

silo including ash transportation facility which are part of the original scope of

work. As these works are permissible under the said provision the Hon'ble

Commission is requested to kindly approve the same.

(iii) Additional capitalisation of Rs. 17.25 Crore in accordance to Regulation 27.1 (vii)

towards raising of the ash dyke as a part of ash disposal system. As these works

are permissible under the said provision the Hon'ble Conunission is requested to

kindly approve the same.

(iv) Addi tional capitalisation of Rs. 182.09 Crore towards works which are part of

original scope of work but could not be completed within the cut-off date due to

uncontrollable reasons as stated earlier. lt is submitted that, with the issuance of

RBI Circular dated 12th February 2018 the Petitioner had to comply with the

provisions of the Circular. Subsequently, the Insolvency and Bankruptcy Code,

2016 proceedings got initiated which tantamount to Change in Law. Therefore,

the Petitioner requests the Hon'ble Commission to appmve the same in

accordance with Regu lation 27.1 (ii) of MPERC Tariff Regulations, 2020.

oz

Q% Petitioner to run the plant more safely and efficiently. It is also submitted that additional

capital cost due to spilling over of expenditure beyond the cut-off date is indirectly

advantageous to the Respondent. This is because prior to incurring of the expenditure

power is being supplied at a comparatively lower rate since the price of power is a

fu nction of the actual expenditure incurred as on date. Therefore, no additional burden

is imposed on the beneficiaries due to such additional capitalization beyond the cut-off

Date and therefore the same may be allowed.

8.15The detailed head wise proposed additional capital expenditure for the period FY 2019-

20 to FY 2023-24 is shown below:

Table 2: Additional capital expenditure proposed during the period FY 2019-20 to FY 2023-24

Rs. in Crore

s. Head of Work I Regulations FY 2019- FY 2020- FY 2021- FY2022- FY2023-under which No. Equipment

c:laimed 20 21 22 23 24

1 fOP I I Modification 27.1 (ii} - - 0.74 - -2

BTG-"A" Row 27.1 (ii) 1 .00

Vt:!ntilation System - - - -3 Service Building 27.1 {ii) - - 2.50 - -4 AHP & Main Silo 27.1 (iii) - 3.99 l .71 - -5 Fire sta tion 27.1 (ii) - 0.82 - - -6 Boundary wall 27.1 (ii) - 0.70 0.32 - -7 CPU 27.1 (ii) - 2.'14 - - -8 Admn. Building 27.1 (ii) - - 2.00 - -9 Ba l Ma ndatory Spares 27.1 (ii) 10.20 20.00 16.83 - -

10 Railway Related Works 27.1_(ii) - 72.32 - - -Road & Drainage

11 includ ing s ite level & 27.1 (ii) 6.87 7.50 '19.16 - -lnfrastru ctu re

12 CCTVCe~mera 27.1 (ii) - - - - -13

Chemica l & Electrical 27.1 (ii) 2.00 0.50

Lab - - -Miscllaneous

14 I\II(K hanical & Electrical 27.1 (ii) - 2.00 - - -Works

15 R.1in Wa ter H arvestin g

27.1 (ii) - - l.SO - . System 16 CH P Ba lance Works 27.1 (ii) - 9.99 - -

Expansion of Ash 17 Dyke & Ash Handling 27.1 (vii) - 3.50 13.75 - -

P1a nl

18 P.SP /Boile r flooring I

27.1 (ii) - - 3.00 - -Mise: c iv il works -19 Di~c: ha rge of Liabilities ~\\-\:1-:AS/.}~ -4.05 27.62 102.90 0.00 0.00

Total ~~J o2- •JE)3.58 'Hi4.9.1 0.00 0 /'I' 0.00 l 8f1fi>A-col o. ) 'F>.Poo344 * 9, 7. .v ~ ·18!tDf>4s ~ ~~?8151-~ .. . ~-~: 02 -

~'t - • * (.) -

3

Additional Capitalization on account of Revised Emission Standards:

8.16It is submitted that on 7.12.2015, Ministry of Environment, Forest and Climate Change,

Government of India ("MoEF&CC") notified the Environment (Protection) Amendment

Rules, 2015 ("2015 MoEF&CC Notification") which mandatorily require all Thermal

Power Plants to comply with the revised norms of the 2015 MoEF&CC Notification.

Further, as per implementation plan prepared by Central Electricity Authority (CEA), the

existing Thermal Power Plants are required to comply with the new emission standards

by the year 2022.

8.17Further, Regulation 31 of MPERC Tariff Regulations, 2020 provides as follows:

"31. Additional Capitalizati011 on account of Revised Emission Standards:

31.1 A generating company requiring to incur additional capital expenditure in the

existing generating station for compliance of the revised emission standards shall share its

proposal with the beneficiaries and file a petition before Commission for undertaking such additional capitalization.

31.2 The proposal under clause above sftall contain details of proposed technolog~j as

specified by the Central ElectricihJ Autlwrihj, scope of the work, phasing of expenditure,

schedule of completion, estimated completion cost including foreign exchange component,

if any, detailed computation of indicative impact on tariff to the beneficiaries, and any other information. considered to be relevant by the generating company.

31.3 Where the generating company makes an application for approval of additional

capital erpenditure on account of implementation of revised emission standards, the

Commission may grant approval after due consideration of the reasonableness of the cost

estimates, fi11an.cing plan, schedule of completion, interest during construction, use of

efficient technologtj, and such other factors as may be considered relevant by the

Commission .

.11.4 After completion oftlre implementation ofre7.,ised ernission staruianis, the generating

company shall file a petition for determination of tariff Any expenditure incurred or

projected t.o be incurred and admitted by tire Commission after pn.ul~.-'11ce check based on

17 ~

024

8.18Keeping in view of the above, the Petitioner being a Thermal Power Plant built with its

design based on norms for emission of environmental pollutants provided in Schedule I

of the Environment (Protection) Rules, 1986 is required to comply with the 2015

MoEF&CC Notification and accordingly the Petitioner is required to install necessary

equipment's viz. Flue Gas De-Sulfurization ("FGD") etc. which involves significant

additional capital expendi ture. The Petitioner submits that the Petitioner is in the process

of planning for the same shall approach the Hon' ble Commission separately for approval

of the same in terms of the above Regulation.

8.19In accordance with the above, Gross Fixed Asset (GFA) considered for the purpose of this

Petition, is as shown below:

Table 3: GFA for the period FY 2019-20 to FY 2023-24

Rs. in Crore

Particulars FY2019-20 FY2020-21 FY2021-22 FY 2022-23-

OpeningGFA 3952.40 3965.42 4119.00 4283.91

Add: Addition during the year/ 17.07 1.25.96 62.01 0.00 period Less: Dec a p ttaliza tion

0.00 0.00 0.00 0.00 during the year I period Less: Reversal during the 0.00 0.00 0.00 0.00 year I period 1\dd: Discharges during the -4.05 27.62 102.90 0.00 year I period Closing GfA 3965.42 4119.00 4283.91 4283.91

Average GFA 3958.91 4042.21 4201.45 4283.91

9. Debt-Equity Ratio for truing up of Additional Capital Expenditure

9.1 Regulation 33 of the MPERC Tariff Regulations, 2020, provides as follows:

"33. Debt-Equity Uatio:

FY2023-24

4283.91 .

0.00

0.00

0.00

0.00

4283.91 4283.91

33. ·1 For new J7mjects, tlte ckbt-t!quity raLio of 70:30 as on dat1~ of colllmercial uperntion

shnll be considered. If tlw eqw'n; actually deployed is more tlum 30% of' the capital cost,

18 I

811 Provided tluzt:

(a ) where equihJ actually deployed is less than 30% of the capital cost, actual equihJ shall

be considered for determination of tariff;

(b) the equitlj invested in foreign currenClJ shail be designated in Indian rupees on the

date of each investment; and

(c) any grant obtained for the execution of the project shall not be considered as a part of

capital strncture for the purpose of debt :equity ratio:

Explanation: The premium, if any, raised by the generating company while issuing share capital and investment of internal resources created out of its free reserve, for the

funding of the project, shall be reckoned as paid up capital for the purpose of computing

return on equity, only if such premium amount and internal resources are actually

utilised for meeting the capital expenditure of the generating station.

33.2 The generating company shall submit the resolution of the Board of the company

regarding infusion of fund from internal resources in support of the utilization made or

proposed to be made to meet the capital expc.>nditure of the generating station.

33.3 Tn case of the generating station declared under commercial operation prior to

1.4.2019, debt- equihJ ratio allowed by the Commission for determination of tariff for the

period ending 31.3.2019 shall be considered:

Provided tlrat in case of a generating station which has completed its useful life as on or

after 01 .04.2019, if the equity actually deployed as on 01.04.2019 is more than 30% of the

capital cost, equii:Jj in excess of30% shall not be taken into account for tariff determination.

33.4 Tn case of the generating statr:on declared under commercial operation prior to

1.4.2019, but where debt: equihJ ratio has not been determined by the Commission for

detc7minntion of tariff for the pen'od ending 31.3.2019, the Commission shall approve the

debt: equihj in accordance with Regulaticm 33.1 of these Regulations.

33.5 1\.ny expenditure incurred or projected to be incurred on or afb.~r 1.4.2019 as may be

admitted by the Commission as additional capital expenditure fi'r determination of tariff,

and Retwvation rmd Modemisntion expenditure for lifo extension :;hall be serviced in the

mauner specified in Regulation 33.1 of these Regulations."

Petitioner in terms of Regulation 33.5 of MPERC Tariff Regulations, 2020, has considered

the normative debt-equity ratio of 70:30 for the proposed additional capital expenditure

to be incurred during the control period FY 2019-20 to FY 202.1-24. It is submitted that the

additional capital expenditure shall be funded through internal accruals of the Petitioner.

9.3 With regard to approval of the proposed additional capital expenditure, Regulation 33.2

of MPERC Tariff Regulations, 2020 states as follows:

"33.2 The generating company shall submit the resolution of the Board of the company

regarding infusion of fund from internal resources in support of the utilization made or

proposed to be made to meet the capital expenditure of the generating station."

In this regard, the Petitioner submits that it already has investment approval from BoD

for completed capital cost of Rs. 4950 Crore wherein the capital structure of the project

has already been approved as 70:30. As the works proposed to be capitalised in the next

control period pertains to original scope of works and further since the Completed cost

of the project including the proposed additional capitalisation is well within the limit of

Rs. 4950 Crore therefore additional BoD approval is not required. The Copy of the

Investment Approval accorded by the BoD is attached as ANNEXURE -3 of this Petition.

10. Determination of Capacity Charges and Energy Charges

A. Capacity Charges

a) Return on Equity (RoE):

10.1Regulation 34 & 35 of the MPERC Tariff Regulations, 2020, provides as follows:

"34. Return on Equity:

34.1 Return on equity shall be computed in rupee terms on the equihJ base determined in

accordance with Regulation 33 of these Regulations.

34.2 Return on equity slwll he computed at the base rate of1 5.50% fiJY thermal generating

stations and hydro generating ~tatiom; and at the base rate of 16.50% fiw the pumped

storage hydro generating :;lations and run-of river generating stations with pondage:

Provided that:

(i) in cnse of a new project, the rate of retum of a new project shall be reduced 11y tOO%

027

liZ be declared under commercial operation without commissioning of any of the Restricted

Governor Mode Operation (RGMO)/ Free Governor Mode Operation (FGMO):

(ii) in case of existing generating station any of the above requirements are found lncking

based on the report submitted by the respective SLDC/RLDC, RoE shall be reduced by 1%

for the period for which the deficiency continues;

(iii) in case of a thermal generating station, with effect from 1.04.2020:

(a) rate of return on equitLJ shall be reduced by 0.25% in case of failure to achieve the ramp

rate ofl% per minute:

(b) an additional rate of return on equity of0.25% shall be allowed fo r even; incremental

ramp rate of 1% per minute achieved over and above the ramp rate of 1% per minute,

subject to ceiling of additional rate of return on equihJ ofl.OO%:

Provided that the detailed guidelines in this regard shall be issued by National Load

Despatch Centre.

35. Tax on Return on Equity:

35.1 The base rate ofreturn on equity as allowed by the Commission under Regulation 34

shall be grossed up with the effictive tax rate of the respective financial year.

For this purpose, the effictive tax rate shall be considered on the basis of actual tax paid in

the respective financial year in line with the provisions of the relevant Finance Acts by the

concerned generating company. The actual income tax on other income stream including

deferred tax liability (i.e., income from nongeneraticm business) slwll be excluded for the

calculation of"effective tax rate".

3S.2 Rate of return on equihJ shall be rounded off to three decimal places an.d shall be

computed as per the forrnula given below:

Rate of pre-tax return on equi~J = BaHe rate I (1 -t)

V\t1wre "t" is the effective tax rate in accord~nce with l

company paying Minimum Alternate Tax (MAT), "t" shall be considered as MAT rate

including surcharge and cess.

lltustration.-

(a) In case of the generating company paying Minimum Alternate Tax (MAT)@ 21.55

% including surcharge and cess:

(b) Rate ofreturn,on equity= 15.50/(1-0.2155) = 19.758%

(c) ln case of generating company paying normal corporate tax including surcharge and

cess:

(i) Estimated Gross Income from generation business for F¥2019-20 is Rs 1000 crore,

(ii) Estimated Advance Tax for the year on above is Rs 240 crore, (iii) Effective Tax Rate

for the year 20.19-20 == Rs 240 Crore /Rs 1000 Crore =24%,

(iv) Rate of return on equihj = 15.50/ (1-0.24) = 20.395%.

35.3 The generating company shall true-up the gmssed up rate of return on equihj at the

end of every financial year based on actual tax paid together with any additional tax

demand including interest thereon, duly adjusted for any refund of tax including interest

received from the income tax autiU>rities pertaining to the tariff period 201920 to 2023-24

on actual gross income of any financial year. However, penalty, if any, arising on account of delay in deposit or short deposit of tax amount shall not be claimed by the generating

company. Any under-recovenJ or over-recovenJ ofgmssed up rate on return on equihj after

truing up, sJUJll be allowed to be recovered or refunded to beneficiaries on year to year

basis."

10.2The Opening Equity as on 01.04.2019 has been arrived considering approved Closing

Equity as on 31.03.2018 in the Order dated 04.1}1.2020 and equity addition corresponding

to additional capital expenditure in FY 2018-.19 as submitted in true up Petition. The

Petitioner has claimed return on equity on the average equity considering the equity

infused to fund the proposed additional capital expenditure in the period FY 2019-20 to

FY 2023-24. Further, keeping b.1. view of the existing financial situation of the Petitioner

221 _. -

02 . .

Table 4: Computation of Return of Equity for the period FY 2019-20 to FY 2023-24

Amounts Rs. in Crore s.

Particulars FY 2019- FY2020- FY2021- FY2022- FY 2023-

No 20 21 22 23 24 1 Gruss Opening Equity (Normal) 988.10 992.00 1038.07 1087.55 1087.55 2 Less: Adjustment in Opening

0.00 0.00 0.00 0.00 0.00 Equity

3 Adjustment during the year 0.00 0.00 0.00 0.00 0.00 4 Net Opening Equity (Normal) 988.10 992.00 1038.07 1087.55 1087.55 5 Add: Increase in equity due to

addition during the 3.90 46.07 49.47 0.00 0.00 year/ period

6 Less : Decrease due to De-capitalization during the 0.00 0.00 0.00 0.00 0.00 year I period

7 Less: Decrease due to reversal 0.00 0.00 0.00 0.00 0.00

during the year I period 8 Add: Increac;c due to discharges

0.00 0.00 0.00 0.00 0.00 during the yearjperiod

9 Net Closing Equity (Normal) 992.00 1038.07 1087.55 1087.55 1087.55 10 Average Equity (Normal) 990.05 1015.04 1062.81 1087.55 1087.55 11 Rate of RoE (%) 15.50% 15.50% 15.50% 15.50% 15.50% 12 Total RoE 153.46 157.33 164.74 168.57 168.57

b) Interest and Fin ancing Charges

10.3Regulation 36 of the MPERC Tariff Regulations, 2020, provides as follows:

"36. Interest on Loan Capital:

36.1 The loans arri:ved at in the manner indicuted in Regulation 33 of these Regulations

shall be considered as gross normative loan for calculation of interest on loa H.

36.2 The normative loan outstanding as em 1.4.2019 slmll be W01'ked out fn; deducting tire

cr.unulative repayment as ndnn:tted by the Commission up to 31.3.2019 from the gros:;

normative loan. The repayment fur each of the year of the tariff period 201924 shall be

deemed to be equal to tile depreciation allmoed for the corresponding ynrr/period. ln case of

de- capitalization of t1.ssets, the repaymen t shall be adjusted by taking in.to nccmmt

n.l/11/.llal'ive repayment on a pm rata basis and tile adjustment should n.ot ext(~~tl cu nwlative

depreci(lfion recovered upto tlte date of Jecapitalisation of such n.sset.

36.3 Notwithstmuting any n1~wnloriu:m puriod flmiled by the gtm.emL'ing COIIIJ.Inll:rJ, tire

..

36.4 The rate of interest shall be the weighted average rate ofinterest calculated on the

basis of the actual loan portfolio after providing appropriate accounting adjustment for

in terest capitalized:

Provided that if there is no actual loan for a particular year but normative loan is still

outstanding, the last available weighted average rate of interest shall be considered:

Provided further that if the generating station does not have actual loan, then the weighted

average rate of interest of the generating comparty as a whole shall be considered.

36.5 The interest on loan shall be calculated on the normative average loan of the year by

applying the weighted average rate of interest."

10.4 The Opening Loan as on 01.04.2019 has been arrived considering approved Closing Loan

as on 31.03.2018 in the Order dated 04.01.2020 and loan addition corresponding to

additional capital expenditure in FY 2018-19 as submitted in true up Petition. Regulation

36 of MPERC Tariff Regulations, 2020 stipulates that the rate of interest shall be weighted

average rate of interest calculated on the basis of the actual loan portfolio after providing

appropriate adjustment for interest capitalized . Accordingly, the Petitioner has

con8idered the actual Weighted Average Rate of Interest (hereinafter referred as

'WAROI') of FY 2018-19 i.e., 14.12% after deducting the Penal Interest for computing

interest charges for the period FY 2019-20 to FY 2023-24. It is further submitted that the

W AROI has been computed as per Form 13 of the Tariff Forms. The repayment for the

year is being considered equal to the Depreciation calculated for the respective year. The

intere8t on loan claimed has been computed as shown below:

Table 5: Computation of Interest on Normative Loan for the period FY 2019-20 to FY 2023-24

Rs. in Crore s.

Particulars FY 2019- FY 2020- FY 2021- FY2022- FY 2023-

No 20 21 22 23 24

'1 Gross Normative loan-

2,964.31 2,973.42 3,080.93 3,196.37 3,196.37 0 enin Cumulative repayment of

2 Normative Loan up to 57R.28 781 .30 992.25 1,211.38 1,430.51

3 2,386.03 2,192.13 2,088.68 1,984.99 1,765.85

24 I.

s. Particulars FY2019- FY2~ FY 2021- FY 2022- FY 2023-No 20 21 22 23 24

Add: Increase due to 4 addition during the 9.11 107.50 115.44 - -

year/ period Less: Decrease due to de-

5 capitalization during the - - - - -year/ period Add: Increase due to

6 discharges during the - - - - -year/ period J .ess: Decrease due to

7 reversal/repayment during 203.02 210.95 219.13 219.13 219.13 the year/ period

8 Net Normative loan -

2192.13 2,088.68 1,984.99 1,765.85 1,546.72 Closing

9 Average Normative Loan 2,289.08 2,140.40 2,036.83 1875.42 1,656.29

10 Weighted average Rate of

14.12°/.• 14.12'V., 14.12'1

Provided further that the capital cost of the assets of the hydro generating station for the

purpose of computation of depreciated value shall correspond to the percentage of sale of

electricihJ under long-tenn power purchase agreement at regulated tariff

Provided also that any depreciation disallowed on account of lower availability of the

generating station or generating unit shall not be allowed to be recovered at a later stage

during the useful life or the extended life: Provided also that the salvage value fo r IT

equipment and software shall be considered as NIL and 100% value of the assets sho.ll be

considered depreciable.

37.4 Land other than the land held under lease and the land for reservoir in case of hydro

generating station shall not be a depreciable asset and its cost shall be excluded from the

capital cost while computing depreciable value of the asset.

37.5 Depreciation shall be calculated annually based on 'Straight Line Method' and at

rates specified in Appendix-[ to these Regulations for the assets of the generating station.

37.6 Depreciation shall be chargeable from the first Year of commercial operation. ln case

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

pro rata basis:

Provided that the n:.>maining depreciable 11alue as on 31st March of the year closing after a

period of 12 years from the effective date of commercial operation of the station shall be

spread over the balance useful life of the asHets.

37.7 In case of the existing projects, the balance depreciable value as on 1.4.2019 shall be

worked out by deducting the cumulative depreciation as admitted by the Commission up to

31.3.2019 from the gross depreciable value of the assets.

3 7.8 The generating company shall submit the details of proposed capital expenditure five

years before the cmnpletion of useful life of the project along with justification and proposed

life extension. The Commission based on prudence check of such submissions shall approve

the depreciation on capital expenditure during the fag end of the project.

37.9 In cnse of de-capitaliza tion of assets in re.

10.6The Petitioner, in accordance with Regulation 37 of lviPERC Tariff Regulations, 2020

submits that it has computed Weighted Average Rate of Depreciation for the period FY

2019-20 to FY 2024-25 considering rates of Depreciation as per Appendix-! to the MPERC

Tariff Regulations, 2020.

10.7The working of Weighted Average Ra te of Depreciation is placed at Form-11 of the Tariff

Forms. The depreciation claimed has been computed as shown below:

s. No 1

2

3 4

5

6

Table 6: Computation of Depredation for the period FY 2019-20 to FY 2023-24

Rs. In Crore

Particulars FY 2019- FY2020-FY 2021- FY 2022- FY2023-

20 21 22 23 24 Opening Capital Cost 3952.40 3965.42 4119.00 4283.91 4283.91 Closing Capital Cost 3965.42 4119.00 4283.91 42.83.91. 4283.91 Average Capital Cost 3958.91 4042.21 4201.45 4283.91 4283.91 Preehold land 55.71 55.71 55.71 55.71 55.71 Rate of depreciation 5.12% 5.12% 5.12% 5.12% 5.12% Depreciation (for the

203.02 210.95 219.13 219.13 219.93 period)

d) Operation and Maintenance Expenses for Generating Station:

10.8Regulation 40.2 of the MPERC Tariff Regulations, 2020, provides as follows:

"40.2 O&M Norms for the Thermal Generating Units achieved COD on or after

01.04.2012

(Rs. In Lakhs /MW)

Units (MW) FY FY FY fY FY 2019-20 2020-21 2021-22 2022-23 2023-24

4SMW 37.51. 38.83 40.19 41 .60 43.06 200/2.10/2.50 MW 32.96 34.:l2 35.31 36.56 37.84 300 1\1W Series 27.74 28.71 29. 72 30.76 3"1.84 500 MW S(~ries 22.51 23.30 24.12 24.97 25.84

600/660 lv1ll\l Scrit:s 20.26 20.97 21.71 22.47 23.26 800 MW Series 18.23 18.87 19.54 20.22 20.93

Pwvided that wlzere the date of cmnmercial operation of any additional unit(s) of a

gmemli11g sta ticm after first four units occurs on or after 1.4.2019, the O&M expeuses vf

such ndJtitimwl 1.mit(s) slmll be admissible at 90% of tlte opemtion. anti mainterumce

-Provided further that wnter charges shall be allowed based on water consumption depending upon h;pe of plant, hjpe of cooling water system etc., subject to prudence check.

The details regarding the same shall be fumislted along with the petition:

Provided also that the generating station shall submit the details of year wise actual capital

spares consumed at the time of truing up with appropriate justification for incurring the

same and s-ubstan tiating tluzt the same is not funded through comptmsatory allowance or

special allowance or claimed as a part of additional capitalization or consurnption of stores

and spares and renovation & modernization."

10.9Accordingly, the Normative O&M expenses have been considered as specified in Clause

40.2 of the MPERC Tariff Regulations, 2020 for new 600 MW Thermal Generating Unit.

10.10 The details of year wise O&M Expenses claimed is as shown below:

Table 7: Computation of O&M Expenses for the period FY 2019-20 to FY 2023-24

s. FY2019- FY2020- FYZ021- FY2022- FY 2023-N Particulars

20 21 22 23 24 0

1 N orm (Rs Lakh/MW) 20 .26 20.97 21.71 22.47 23.26

2 O&M Expenses for Unit I of

121.56 125.82 130.26 134.82 139.56 600 MW (Rs. Crore)

Total O&M 121.56 125.82 130.26 134.82 139.56

10.11 As per second proviso under Regulation 40.2 of MPERC Tariff Regulations, 2020 the

Petitioner is to submit the water charges details. Accordingly, the Petitioner submits that

as per the Agreement for Sale of Water signed between the Petitioner and Governor of

Madhya Pradesh, the Petitioner is permissible to draw a quantum of 16.00 MCM per

year/43835 Cum of water per day. The Petitioner in this in5tant Petition is submitting

that it had paid Rs. 3.00 Crore in FY 20'1.8-19 based on the actual bills received. The copy

of the Agreement is attached as ANNEXURE -4 of the Petition.

Tt is further submi tted that Regulation 65.2 of MPERC Tariff Rer,ulations, 2020 states as

follows:

"65.2 Electricity duty, cess nttd waft~!' chnrges if payable by the Generating Company for

gwerntiou of electricity front t/11! power . ..;trtlion~ lo lite State Coz•erniiHml, shall be

considered

zg I :· 035

•• 10.12 As stated above, the Petitioner, is entitled to claim water charges separately on actual basis, the Petitioner therefore requests Hon' ble Commission to allow water charges to be

recovered separately on actual basis for the period FY 2019-20 to FY 2023-24.

e) Interest on Working Capital:

10.13 Regula tion 38 of the MPERC Tariff Regulations, 2020, provides as follows:

"38. Interest on Working Capital:

38.1 The working capital shall cover:

A. Coal-based thermal generating stations

(i) Cost of coal towards stock, if applicable, for 15 days for pit-head generating stations

and 30 days for non-pit-head generating stations for generation corresponding to the

normative annual plant availability foetor or the maximum coal stock storage capacity

whicfu..-ver is lower;

(ii) Advance payment for 30 days towards cost of wal for generation corresponding to the

normative annual plant availabilitJ; factor;

(iii) Cost of secondary fuel oil for two months for generation corresponding to the

normative annual plant availability factor, and in case ofuse of more than one secondary

fuel oil, cost of fuel oil stock for the main secondary fuel oil;

(iv) Maintenance spares @ 20% of operation and maintenance expenses specified in

Regulation 39 and 40 of these Regulations;

(v) Receivables equivalent to 45 days of capacihj charges and energy charges for sale of

electricity calculated on the normative annual plant availability factor; and

(vi) Operation and maintenance expenses for one month.

38.2 The cost of fuel shall be based on tlw landed fuel cost incurred (taking into account

normative transit and handling losses) by the generating station and gross cnlorific value

of the fuel as per actunl weightage m;erage for the three months preceding the fir5t rrumth

for w/z;ch tariff is to be determined and no fuel prin~ escalation shall be provided during the

tariff period:

-handing losses) and gross calorific value of the fuel as per actual weighted average for three months, as used for infirm power, preceding date of commercial operation for which tariff

i.s to be determined.

38.3 Rate of interest on ·working capital shall be on normative basis and shall be considered

as the bank rate as on 1.4.2019 or as on 1st April of tlze year during the tariff period 2019-

20 to 2023-24 in which the generating station or a unit thereof, is declared under

commercial operation, whichever is later:

Provided thnt in case of truing-up; the rate of interest on working capital sluzll be

considered at bank rate as on "l st April of each of the financial year during the tariff period

2019-24.

38.4 lnterest on working capital shall be payable on normative basis notwithstanding that

the generating company has not taken loan for ·working capital from any outside agency."

10.14 The Petitioner submits that it has computed the Working Capita l in accordance with

Regulation 38.1 (A) of MPERC Tariff Regulations, 2020 for the period FY 2019-20 to FY

2023-24. Further, with regards to interest rate on Working Capital, in line with Regulation

38.3 of the MPERC Tariff Regulations, 2020 the rate of interest on working capital has

been taken on normative basis and has been worked out considering one year MCLR of

SBT as on 1.4.2019 plus 350 bps i.e., 12.05% (8.55% + 3.50%) for the period of FY 2019-20

to FY 2023-24. The calculation of [ntcrest on Working Capital is as shown below:

Table 8: Computation of Interest on Working Capital for the period FY 2019-20 to FY 2023-

24

Rs. in Crore s.

Particulars FY 2019- FY 2020- FY 2021- FY 2022- FY 2023-

No 20 21 22 23 24 1 169.79 169.79 169.79 l69.79 169.79

2 1.90 ] .90 1.90 1.90 1.90 3 10.13 10.49 10.86 11.24 11.63 4 \11a intenance S arcs 24.3l 25.16 26 .05 26.96 27.91 5 Rccc i v

10.15 Charges against Cost of Coal and Receivables in the above Table are bast>d on

computation of 'Energy (variable) charges' as described in Section B of this Petition.

f) The annual capacity (fixed) charges:

10.16 Based on the above, the Annual Fixed Cost I Capacity Charges claimed is as shown below:

Table 9: Computation of Annual Fixed Cost for the period FY 2019-20 to FY 2023-24

Rs. in Crore s. Particulars Ref. FY 2019- FYZ020- FY202l:- FY2022- FY~ No 20 21 22 23 :u 1 Depreciation Form "12 203.02 210.95 219.13 219.13 219.13

2 Interest on FormM 323.33 302.33 287.70 264.90 233.95 Loan

3 Return on

Form 1(II) 153.46 157.33 164.74 168.57 168.57 Equity Interest on

4 Working FormN 52.76 52.91 53.14 53.08 52.85 Capital

5 O&M Add.

121.56 125.82 130.26 134.82 139.56 Expenses Form

6 Total Rs. Crore 854.12 849.33 854.97 840.50 814.06

B. Energy Charges for the period FY 2019-20 to FY 2023-24

10.17 Regulation 43 of MPERC Tariff Regulations, 2020 provides for computation of payment

of Energy Charges for Thermal Generating Station as follows:

"43. Computation and Payment of Energy Charge for Thermal Generating

Stations:

43 .. 1 'L'he energy charge shall cov~r the primnnJ and secondary fuel cost and shall be payable

by every beneficiary for the total energy scheduled to be supplied to such beneficiary during

the calendm- month em. ex-power plant basis, at the energtj charge rate of the month (with

fuel price adjustment). Total Ene1'gy charge payable to the generating company for a month

sltall be:

(l:::nergy charge mte in. Rs.;1

-A UX =Normative auxiliary energtj consumption in percentage. CVPF= Weighted Average Gross calorific value of coal as received, in kCal per kg less 85

Kcal/kg on account of variation during storage at generating station:

Provided tho.t, in case ofblendingofcoal from different sources, the weighted average Gross

Calorific Value of coal (primanJ fuel) shall be arrived in proportion to ble1:lding ratio.

CVSF = Calorific value of secondanJ fuel, in kCal per ml. ECR. = Energtj charge rate, in Rupees per kWh sent out.

SHR =Gross station heat rate, in kCal per kWh.

LPPF= Weighted average landed price of coal (primary fuel), in Rupees per kg, during the

manth. (In case ofblending of coal from different sources, the weighted average landed price

of coal shall be arri1Jed in proportion to blending ratio).

SFC =Normative Specific fuel oil consumption, in ml per kWh.

LPSFi =Weighted Average Landed Price of Secondary Fuel in Rs. jml during the month"

Accordingly, the Petitioner has considered the methodology specified in the above

Regulation along with norms of operation for thermal generating stations as discussed in

below sections.

N onns of Operation

a) NAPAF:

10.18 Regulation 49.3 (A) & (B) of MPERC Tariff Regulations, 2020 provides as follows:

"49.3 Following norms shall be applicable for all the coal based thermal

genet·ating Units/ stations for all capacities which have achieved COD on or after

01/04/2012:

A. Normative Annual Plant Availability Factor (NAPAF): 85%

B. Normati1Je Annual Plant Load Factor (NAPLF): 85%"

10.19 Accordingly, the Petitioner has considered NAPAF of 85% and NAPLF of 85% for the

purpose of determination of Tariff.

b) Gross Station Heat Rate:

10.20 Regulation 49.3 (C) (ii) of MPERC Tariff Regulations, 2020 provides as follows:

32 r ..

10.21

• (i) Existing Coal-based thermal generating stations lw.ving CoD on or after 1.4.2012 till

31.03.2016, (other than those covered under Regulation 49.2), tlte station heat rate norms

shall be as already approved by the Commission.

(ii) Existing Coal based thermal generating stations having CoD on or after 1.4.2016 till

31.3.2019, the stati.on heat rate for the control period FY 201920 to FY 2023-24 shall be as

given below:

Station Heat Rate= 1.05 X Design Heat Rate (kCaljkWh)

Where the Design Heat Rate of a Unit means the Unit heat rate guaranteed by the supplier

at conditions of 100% MCR, zero percent make up, design coal and design cooling water

temperature/back pressure:

Provided that the design heat rate shall not exceed the maximum de~"ign Unit heat rates

depending upon the pressure and temperature ratings of the Units as provided in

Regulation 39.3 (C)(b) of Madhya Pradesh Electricity Regulatory Commission (Terms and

Conditions for determination of Generation Tariff) Regulations,2015 {RG-26(111) of2015:

Provided further that in case pressure and temperature parameters of a Unit are different

from above ratings, the maximum design Unit heat rate of the nearest class shall be taken:

Provided al!>·o that where Unit heat rate has not been guaranteed but turbine cycle heat

rate and boiler efficienetJ are guaranteed separately by the same supplier or different

suppliers, the Unit design heat rate shall be arrived at by using guaranteed turbine C1Jcle

heat rate and boiler efficiency:

Provided also that if one or more Units were declared under commercial operation prior to

1.4.2016, the Treat rate norms for tlwse Units as well as Units declared unckr commercial

operation Ol'l or after 1.4.2016 shall be lower of the heat rate norms arrived at by abuve

methodology.

Note: ln respect of Units where the boiler feed pwnps are electrically operated, the

luaximum design Unit heat rate shall be 40 kCaljk'vVh lower than the mnxintum design

Unit herrt rate specified above with turbine driven BFP."

33 I

040

-c) Normative Auxiliary Energy Consumption (NAEC):

10.22 Regulation 49.3 (E) of the MPERC Tariff Ret,rulations, 2020 provides as follows:

"E. AuxilianJ Energy Consumption

s. With Natural Draft No

P9weT StatiotL Cooting Tewer or without Cooting Tower

(1) 200 MW Series 8.50% · (2) 300 MW and above

Steam driven boiler feed pumps 5.75% Electrically driven boiler feed

8.00% pumps

(3) 45 MWSeries 10.00%

Provided that for thermal generating stations with induced drafts cooling towers, the

norms shall be further increased by 0.5%:

Provided further that Additional AuxilianJ EnergJJ Consumption as follows may be

allowed for plants with DnJ Cooling Systems

II

st~ (~o o Direct Cooling air cooled condensers with mechanical dra ·. ans Indirect Cooling system employing jet condensers with pressure recovenJ turbi11e and natural dra . tawer

1.00%

0.50%

10.23 It is submitted that the Normative Auxiliary Energy Consumption for 300 MW and above

units having Steam driven Boiler Feed Pumps shall be 5.75%. The Regulations further

provide that in case the station has installed induced drafts Cooling Towers, the norm

shaH be further increased by 0.5%. As the Petitioner's plant has ID Cooling Towers it is

submitted that the Petitioner has therefore considered the same as 6.25%.

d) Transit Loss:

10.24 Regulation 45 of the MPERC Ta1iff Regulations, 2020 provides as follows.

"45. Tran..o;it and Handling Losses:

45.1 For coal, the transit and handling losses shall be ns per the following norms:

11remtal Generatiug Station Trausit and Handling Loss (%) 0.20%

34·1

041

-Provided that in case of pit-head stations, if coal is procured from sources other than the pit-head mines which is transported to the station through rail, transit and handling losses

applicable for non-pit head station sf-rail apply; Provided further tftat in case of imported

coal, the transit and handling losses applicable for pit-head station shall apply."

10.25 Since Petitioner's Plant is non-pit head generating station, normative transit and handling

losses have been considered as 0.80% of the quantity of coal dispatched by the coal

Companies.

e) Specific Fuel Oil Consumption (SFOC)

10.26 Regulation 49.3 (D) of MPERC Tariff Regulations, 2020 provides as follows:

"D. Specific Fuel Oil Consumption

(i) Coal-based generating stations: 0.50 mljkWh

(ii) For Generating Stations based on Coal Rejects: 2.0 ml/kWh"

10.27 Accordingly, the Petitioner has considered SFOC of 0.50 ml/kWh for the purpose of

determination of Generation Tariff.

f) Landed Cost and GCV of Domestic Linkage Coal:

Source of Primary Fuel (Coal)

10.28 It is submitted that the Petitioner has been awarded Coal linkage for its Phase-!, lx600

MW Unit, from the Coal Companies of CIL viz. South Eastern Coal Ltd ('SECL') and

Mahanadi Coal Ltd. ('MCL'). The details of the FSAs are provided below:

Table 10: Details of FSA of Jhabua Phase-1.

FSADetails Unit/Reference Quantum

FSA- Total Qty. Lakh MT 24.50

SECL % 76.40%

MCL ~{, 23.60%

10.29 Regulation 19 & 44 of MPERC Tariff Regulations, 2020 provides as follows:

"19. Latuied Fuel Cost for Tariff Determination:

19.1 Tlte landed fuel cost of pri111ary .fi.tef ami secondary fuel for tariff dderminatirm slutll

35 j

0 2 • J

. . ~

-procurement price of priman; fuel and secondary fuel for the generating station, before the start of the tariff period for existing stations and immediately preceding three months of

COD in case of new generating stations slwll be taken into account.

44. Computation of Landed cost of Coal:

44.1 The energtj charge in respect of the thermal generating Stations shall comprise of

landed cost of coal (primary fuel), cost ofsecmukm; fuel oil consumption and landed cost

of reagents on account of implementation of the revised emission standards.

44.2 71ze landed cost of coal for any month shall consist of base price of coal corresponding

to the grade and quality of coal inclusive of statutory charges as applicable/allowed by the

Commission, washery charges, if any, transportation cost by rail/ road or any other means,

and loading, unloading and handling charges:

Provided that procurement of coal at a price other than Government notified prices may be

considered, if it is based ore competitive bidding through transparent process, for the

purpose of landed coal cost:

Provided further that landed cost of coal shall bL~ worked out based on the actual bill paid

by the generating company including any adjustment on account of quantity and qualitt;:

Provided also that the Gross Calorific Value of coal shall be measured by third partt;

sampling and the expenses towards the third-partt; sampling facilitt; shall be reimbursed

by the beneficiaries."

10.30 It is submitted that the main source of primary fuet Coal, is from SECL and MCL of Coal

India Ltd. According to FSAs, the supply shall in the proportion of 76.4% from SECL and

23.6 % from MCL. The basic price of various grades of coal has last been notified by Coal

India Ltd. on 08.01.2018. Thereon, various taxes, duty, levy, royalty and transportation

cost has been added to arrive at landed coal price as per provision of Regulation 44.2 of

the MPERC Tariff Regulations, 2020. Further, as per Regulation 19.'1 of the MPERC Tariff

Re3ulations, 2020, for the purpose of determination of Tariff the landed fuel cost of Coal

based on actual weighted average cost of primary fuel and secondary fuel of the three

36 I·-

04

.·

. '

10.31 Further, in this regard it is submitted that the Hon'ble Commission vide its Order on

Review Petition No. 12 of 2019 dated December 27, 2019 has considered Petitioner's

prayer for consideration of equivalent cost of transportation of coal through rail against

the present transportation by road between Binaiki and the Plant