Tariff Regulations 2019
Tariff Regulations 2019
Tariff Regulations 2019
NEW DELHI
NOTIFICATION
In exercise of powers conferred under section 178 of the Electricity Act, 2003 (36
of 2003) read with Section 61 thereof and all other powers enabling it in this behalf, and
after previous publication, the Central Electricity Regulatory Commission hereby makes
CHAPTER – 1
PRELIMINARY
1. Short title and commencement. (1) These regulations may be called the Central
(2) These regulations shall come into force on 1.4.2019, and unless reviewed earlier
or extended by the Commission, shall remain in force for a period of five years from
1.4.2019 to 31.3.2024:
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Provided that where a generating station or unit thereof and transmission system
or an element thereof, has been declared under commercial operation before the date of
commencement of these regulations and whose tariff has not been finally determined
by the Commission till that date, tariff in respect of such generating station or unit
thereof and transmission system or an element thereof for the period ending 31.3.2019
(Terms and Conditions of Tariff) Regulations, 2014 as amended from time to time.
2. Scope and extent of application. (1) These regulations shall apply in all cases
where tariff for a generating station or a unit thereof and a transmission system or an
Provided that any generating station for which agreement(s) have been
executed for supply of electricity to the beneficiaries on or before 5.1.2011 and the
financial closure for the said generating station has not been achieved by 31.3.2019, such
projects shall not be eligible for determination of tariff under these regulations unless
(a) Generating stations or transmission systems whose tariff has been discovered
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issued by the Central Government and adopted by the Commission under
(Terms and Conditions for Tariff determination from Renewable Energy Sources)
Regulations, 2017.
projected to be incurred after the date of commercial operation of the project by the
generating company or the transmission licensee, as the case may be, in accordance
(4) ‘Admitted capital cost’ means the capital cost which has been allowed by the
Commission for servicing through tariff after due prudence check in accordance with
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(5) 'Auxiliary Energy Consumption' or 'AUX' in relation to a period in case of a
the generating station, such as the equipment being used for the purpose of operating
plant and machinery including switchyard of the generating station and the
transformer losses within the generating station, expressed as a percentage of the sum
of gross energy generated at the generator terminals of all the units of the generating
station;
Provided that auxiliary energy consumption shall not include energy consumed
for supply of power to housing colony and other facilities at the generating station and
the power consumed for construction works at the generating station and integrated
coal mine;
emission standards, sewage treatment plant and external coal handling plant (jetty and
licensee, as the case may be, in accordance with the provisions of sections 224, 233B and
619 of the Companies Act, 1956 (1 of 1956), as amended from time to time or Chapter X
of the Companies Act, 2013 (18 of 2013) or any other law for the time being in force;
(7) ‘Bank Rate’ means the one year marginal cost of lending rate (MCLR) of the State
Bank of India issued from time to time plus 350 basis points;
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(8) ‘Beneficiary’ in relation to a generating station covered under clauses (a) or (b) of
trading licensee, the arrangement shall be secured by the trading licensee through back
Provided further that beneficiary shall also include any person who has been
(9) ‘Capital Cost’ means the capital cost as determined in accordance with Regulation
19 of these regulations;
(a) enactment, bringing into effect or promulgation of any new Indian law; or
Indian law; or
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any consent or clearances or approval or licence available or obtained for the
project; or
equipment, services and works in which bids are invited by the project developer by
open advertisement covering the scope and specifications of the equipment, services
and works required for the project, and the terms and conditions of the proposed
contract as well as the criteria by which bids shall be evaluated, and shall include
(14) ‘Cut-off Date’ means the last day of the calendar month after thirty six months
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(15) ‘Date of Commercial Operation’ or ‘COD’ shall have the same meaning as
relation to any time-block of the day as defined in the Grid Code or whole of the day,
duly taking into account the availability of fuel or water, and subject to further
(17) ‘De-capitalisation’ for the purpose of the tariff under these regulations, means
corresponding to inter-unit transfer of assets or the assets taken out from service;
after it is certified by the Central Electricity Authority or any other authorized agency,
either on its own or on an application made by the project developer or the beneficiaries
or both, that the project cannot be operated due to non-performance of the assets on
these factors;
(19) 'Design Energy' means the quantum of energy which can be generated in a 90%
dependable year with 95% installed capacity of the hydro generating station;
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(20) ‘Element’ means an asset which has been distinctively defined under the scope of
including line bays and line reactors, substations, bays, compensation device,
Interconnecting Transformers;
(21) ‘Existing Project’ means a project which has been declared under commercial
(22) ‘Expansion project’ shall include any addition of new capacity to the existing
generating station or augmentation of the transmission system, as the case may be;
(23) ‘Expenditure Incurred’ means the fund, whether the equity or debt or both,
actually deployed and paid in cash or cash equivalent, for creation or acquisition of a
useful asset and does not include commitments or liabilities for which no payment has
been released;
(24) ‘Extended Life’ means the life of a generating station or unit thereof or
transmission system or element thereof beyond the period of useful life, as may be
(25) ‘Force Majeure’ for the purpose of these regulations means the events or
complete the project within the time specified in the Investment Approval, and only if
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such events or circumstances are not within the control of 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,
(b) Any act of war, invasion, armed conflict or act of foreign enemy, blockade,
(c) Industry wide strikes and labour disturbances having a nationwide impact in
India; or
(d) Delay in obtaining statutory approval for the project except where the delay
(26) ‘Fuel Supply Agreement’ means the agreement executed between the generating
company and the fuel supplier for generation and supply of electricity to the
beneficiaries;
(27) ‘Generating Station’ shall have the same meaning as defined under sub-Section 30
of Section 2 of the Act and for the purpose of these regulations shall also include stages
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(28) 'Generating Unit’ or ‘Unit' in relation to a thermal generating station (other than
heat recovery boiler, connected steam turbine- generator and auxiliaries, and in relation
(29) ‘Grid Code’ means the Central Electricity Regulatory Commission (Indian
(30) ’Gross Calorific Value’ or ‘GCV’ in relation to a thermal generating station means
the heat produced in kCal by complete combustion of one kilogram of solid fuel or one
litre of liquid fuel or one standard cubic meter of gaseous fuel, as the case may be;
(31) ‘GCV as Received’ means the GCV of coal as measured at the unloading point of
the thermal generating station through collection, preparation and testing of samples
from the loaded wagons, trucks, ropeways, Merry-Go-Round (MGR), belt conveyors
and ships in accordance with the IS 436 (Part-1/ Section 1)- 1964:
Provided that the measurement of coal shall be carried out through sampling by
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Provided further that samples of coal shall be collected either manually or
through hydraulic augur or through any other method considered suitable keeping in
Provided also that the generating companies may adopt any advance technology
for collection, preparation and testing of samples for measurement of GCV in a fair and
transparent manner;
(32) ‘Gross Station Heat Rate’ or ‘SHR’ means the heat energy input in kCal required
station;
(33) ‘Implementation Agreement’ means any agreement or covenant entered into (i)
between the transmission licensee and the generating company or (ii) between
transmission licensee and developer of the interconnected transmission system for the
down the project implementation schedule and mechanism for monitoring the progress
of the projects;
Governments of State (where the project is located) and any ministry or department or
India;
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(35) ‘Infirm Power’ means electricity injected into the grid prior to the date of
Regulations, 2009;
(36) ‘Input Price’ means the price of coal or lignite sourced from the integrated mines
at which the coal or lignite is transferred to the generating station for the purpose of
computing the energy charges for generation and supply of electricity to the
(37) ‘Installed Capacity' or 'IC’ means the summation of the name plate capacities of
all the units of the generating station or the capacity of the generating station reckoned
at the generator terminals, as may be approved by the Commission from time to time;
(38) ‘Integrated Mine’ means the captive mine (allocated for use in one or more
identified generating station) or basket mine (allocated to a generating company for use
in any of its generating stations) or both being developed by the generating company
for supply of coal or lignite to one or more specified end use generating stations for
(39) ‘Inter-State Generating Station’ or ‘ISGS’ has the meaning as assigned in the
Grid Code;
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(40) ‘Investment Approval’ means approval by the Board of the generating company
other competent authority conveying administrative sanction for the project including
funding of the project and the timeline for the implementation of the project:
Provided that the date of Investment Approval shall reckon from the date of the
resolution of the Board of the generating company or the transmission licensee where
the Board is competent to accord such approval and from the date of sanction letter of
(41) ‘Landed Fuel Cost’ means the total cost of coal (including biomass in case of co-
firing), lignite or the gas delivered at the unloading point of the generating station and
shall include the base price or input price, washery charges wherever applicable,
transportation cost (overseas or inland or both) and handling cost, charges for third
(42) 'Long-Term Customer' shall have the same meaning as ‘Long Term Customer’ as
term Access and Medium-term Open Access in inter-State Transmission and related
thermal generating station means the maximum continuous output at the generator
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block of a combined cycle thermal generating station means the maximum continuous
output at the generator terminals, guaranteed by the manufacturer with water or steam
injection (if applicable) and corrected to 50 Hz grid frequency and specified site
conditions;
(44) ‘New Project’ means the generating station or unit thereof and the transmission
expenditure incurred for operation and maintenance of the project, or part thereof, and
consumables, insurance and overheads and fuel other than used for generation of
electricity;
(46) ‘Original Project Cost' means the capital expenditure incurred by the generating
company or the transmission licensee, as the case may be, within the original scope of
(47) ‘Plant Availability Factor’ or ‘(PAF)' in relation to a generating station for any
period means the average of the daily declared capacities (DCs) for all the days during
the period expressed as a percentage of the installed capacity in MW less the normative
(48) ‘Plant Load Factor’ or ‘(PLF)’ in relation to thermal generating station or unit for a
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given period means the total sent out energy corresponding to scheduled generation
installed capacity in that period and shall be computed in accordance with the following
formula:
N
PLF = 10000 x ΣSGi/ {N x IC x (l00-AUXn)} %
i=1
Where,
SGi = Scheduled Generation in MW for the ith time block of the period,
energy generation;
station and includes integrated coal mine, biomass pellet handling system,
ii) in case of hydro generating station, all components of the hydro generating
station and includes dam, intake water conductor system, power generating
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station, as apportioned to power generation; and
communication system;
(52) 'Pumped Storage Hydro Generating Station' means a hydro generating station
which generates power through energy stored in the form of water energy, pumped
(53) 'Rated Voltage' means the manufacturer’s design voltage at which the
transmission system is designed to operate and includes such lower voltage at which
any transmission line is charged or for the time being charged, in consultation with
long-term customers;
(54) ‘Revised Emission Standards’ in respect of thermal generating station means the
revised norms notified as per Environment (Protection) Amendment Rules, 2015 or any
(55) ‘Run-of-River Generating Station’ means a hydro generating station which does
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station with sufficient pondage for meeting the diurnal variation of power demand;
(57) ‘Scheduled Commercial Operation Date or ‘SCOD’ shall mean the date(s) of
(58) ‘Scheduled Energy’ means the quantum of energy scheduled by the concerned
Load Despatch Centre to be injected into the grid by a generating station for a given
time period;
(59) ‘Scheduled Generation’ or ‘SG’ at any time or for any period or time block means
Centre;
Note:
For open cycle gas turbine generating station or a combined cycle generating station if
the average frequency for any time-block, is below 49.52 Hz but not below 49.02 Hz and
the scheduled generation is more than 98.5% of the declared capacity, the scheduled
generation shall be deemed to have been reduced to 98.5% of the declared capacity, and
if the average frequency for any time-block is below 49.02 Hz and the scheduled
generation is more than 96.5% of the declared capacity, the scheduled generation shall
be deemed to have been reduced to 96.5% of the declared capacity. In such an event of
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reduction of scheduled generation of gas turbine generating station, the corresponding
2010;
(61) ’Small Gas Turbine Generating Station' means and includes open cycle gas
turbine or combined cycle generating station with gas turbines in the capacity range of
50 MW or below;
(62) ‘Start Date or Zero Date’ means the date indicated in the Investment Approval
for commencement of implementation of the project and where no such date has been
indicated, the date of Investment Approval shall be deemed to be Start Date or Zero
Date;
(63) ‘Statutory Charges’ comprises taxes, cess, duties, royalties and other charges
(64) ‘Storage Type Generating Station’ means a hydro generating station associated
demand;
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(65) ‘Thermal Generating Station’ means a generating station or a unit thereof that
generates electricity using fossil fuels such as coal, lignite, gas, liquid fuel or
combination of these as its primary source of energy or co-firing of biomass with coal;
(66) ‘Transmission Line’ shall have the same meaning as defined in sub-section (72) of
(67) 'Transmission Service Agreement' means the agreement entered into between the
transmission licensee and the Designated ISTS Customers in accordance with the
Sharing Regulations and shall include the Bulk Power Transmission Agreement and
(68) 'Transmission System' means a line or a group of lines with or without associated
under the scheme as per the Investment Approval(s) and shall include associated
communication system;
(69) ‘Trial Operation’ in relation to transmission system shall have the same meaning
(70) ‘Trial Run’ in relation to generating station shall have the same meaning as
(71) ‘Sub-Station’ shall have the same meaning as defined in sub-section (69) of section
2 of the Act;
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(72) ‘Unloading Point’ means the point within the premises of the coal or lignite based
thermal generating station where the coal or lignite is unloaded from the rake or truck
transmission system and communication system from the date of commercial operation
Provided that the extension of life of the projects beyond the completion of their
(74) The words and expressions used in these regulations and not defined herein but
defined in the Act or any other regulations of the Commission, shall have the meaning
assigned to them under the Act or any other regulations of the Commission.
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4. Interpretations:- In these regulations, unless the context otherwise requires:
(1) ‘Day’ means a calendar day consisting of 24 hours period starting at 0000 hours;
(2) ‘kCal’means a unit of heat energy contents in mineral, measured in one kilo
kilowatt or one thousand watts of power produced or consumed over a period of one
hour;
(4) ‘Quarter’ means the period of three months commencing on the first day of
April, July, October and January of each financial year in case of existing project, and in
case of a new project, in respect of the first quarter, from the date of commercial
operation to the last day of June, September, December or March, as the case may be;
(5) ‘Year’ means a financial year from 1st April to 31st March in case of an existing
project, and from date of commercial operation to 31 st March in case of a new project;
(6) Reference to any Act, Rules and Regulations shall include amendment or
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CHAPTER – 2
licensee is ready for commercial operation but the interconnected generating station or
the transmission system of other transmission licensee as per the agreed project
licensee may file petition before the Commission for approval of the date of commercial
Provided that the transmission licensee seeking the approval of the date of
commercial operation under this clause shall give prior notice of at least one month, to
the generating company or the other transmission licensee and the long term customers
of its transmission system, as the case may be, regarding the date of commercial
operation:
Provided further that the transmission licensee seeking the approval of the date
of commercial operation of the transmission system under this clause shall be required
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(a) Energisation certificate issued by the Regional Electrical Inspector under
(b) Trial operation certificate issued by the concerned RLDC for charging
systems;
(e) Notice issued by the transmission licensee as per the first proviso under this
(f) Certificate of the CEO or MD of the company regarding the completion of the
respects.
the date of commercial operation of the generating station and the transmission system,
(a) Where the generating station has not achieved the commercial operation as on
not before the SCOD of the generating station) and the Commission has
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of clause (2) of the Regulation 5 of these regulations, the generating company
commercial operation:
(b) Where the associated transmission system has not achieved the commercial
station or unit thereof (which is not before the SCOD of the transmission system),
the transmission licensee shall make alternate arrangement for the evacuation
from the generating station at its own cost, failing which, the transmission
commercial operation.
(2) In case of mismatch of the date of commercial operation of the transmission system
and the transmission system of other transmission licensee, the liability for the
operation of the transmission system (which is not before the SCOD of the
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interconnected transmission system) and the Commission has approved the
commercial operation:
(b) Where the transmission system has not achieved the commercial operation as
system of other transmission licensee (which is not before the SCOD of the
7. Sale of Infirm Power: Supply of infirm power shall be accounted as deviation and
shall be paid for from the regional deviation settlement fund accounts in accordance
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Provided that any revenue earned by the generating company from supply of
infirm power after accounting for the fuel expenses shall be applied in adjusting the
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CHAPTER - 3
8. Tariff determination
(1) Tariff in respect of a generating station may be determined for the whole of the
generating station or unit thereof, and tariff in respect of a transmission system may be
determined for the whole of the transmission system or element thereof or associated
communication system:
Provided that:
(i) In case of commercial operation of all the units of a generating station or all
transmission licensee, as the case may be, shall file consolidated petition in respect
provisions of the Procedure Regulations, combining all the units of the generating
station or all elements of the transmission system which are anticipated to achieve
commercial operation during the next two months from the date of application:
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system which has achieved commercial operation prior to 1.4.2014 shall be as per
(2) Where only a part of the generation capacity of a generating station is tied up for
supplying power to the beneficiaries through long term power purchase agreement, the
units for such part capacity shall be clearly identified and in such cases, the tariff shall
be determined for such identified capacity. Where the unit(s) corresponding to such
part capacity cannot be identified, the tariff of the generating station may be determined
with reference to the capital cost of the entire project, but tariff so determined shall be
applicable corresponding to the part capacity contracted for supply to the beneficiaries.
(3) In case of expansion of existing generating station, the tariff shall be determined
utilized for the expanded capacity and the benefit of new technology in the expanded
(4) Assets installed for implementation of the revised emission standards shall form
part of the existing generation project and tariff thereof shall be determined separately
(5) Energy charge component of tariff of the generating station sourcing coal or lignite
from the integrated mine shall be determined based on the input price of coal or lignite,
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as the case may be, from such integrated mines:
Provided that the generating company shall maintain the account of the
integrated mine separately and submit the cost of integrated mine, in accordance with
(6) Tariff of generating station using coal washery rejects developed by Central or
State PSUs or Joint Venture between a Government Company and company other than
Company other than Government Company, the shareholding of the company other
than Government Company either directly or through any of its subsidiary company or
associate company shall not exceed 26% of the paid up share capital:
Provided further that the energy charge component of the tariff of such
generating station or unit thereof shall be determined based on the fixed cost and the
Provided also that the Gross Calorific Value of coal rejects shall be as measured
(7) In case of multi-purpose hydro schemes, with irrigation, flood control and power
components, the capital cost chargeable to the power component of the scheme only
(8) If an existing transmission project is granted licence under section 14 of the Act
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read with clause (c) of Regulation 6 of the Central Electricity Regulatory Commission
electricity and related matters) Regulations, 2009, the tariff of such project shall be
applicable from the date of grant of transmission licence or from the date as indicated in
the transmission licence, as the case may be. In such cases, the applicant shall file
petition as per Annexure-I (Part III) to these regulations, clearly demarcating the assets
which form part of the business of generation and transmission, the value of such
assets, source of funding and other relevant details after adjusting the cumulative
(1) The generating company or the transmission licensee may make an application for
determination of tariff for new generating station or unit thereof or transmission system
or element thereof in accordance with the Procedure Regulations within 60 days of the
Provided that where the transmission system comprises various elements, the
transmission licensee shall file an application for determination of tariff for a group of
elements on incurring of expenditure of not less than 70% of the cost envisaged in the
Investment Approval or Rs. 200 Crore, whichever is lower, as on the anticipated date of
commercial operation:
Provided further that the generating company or the transmission licensee, as the
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case may be, shall submit Auditor Certificate and in case of non-availability of Auditor
the level of Director of the company, indicating the capital cost incurred as on the date
of commercial operation and the projected additional capital expenditure for respective
Provided also that where interim tariff of the generating station or unit thereof
and the transmission system or element thereof including communication system has
transmission licensee shall submit the Auditor Certificate not later than 60 days from
element thereof, the application shall be made by the generating company or the
transmission licensee, as the case may be, by 31.10.2019, based on admitted capital cost
additional capital expenditure for the respective years of the tariff period 2019-24 along
with the true up petition for the period 2014-19 in accordance with the CERC (Terms
station or unit thereof to meet the revised emission standards, an application shall be
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made for determination of supplementary tariff (capacity charges or energy charge or
both) based on the actual capital expenditure duly certified by the Auditor.
(4) Where the generating company has the arrangement for supply of coal or lignite
from an integrated mine(s) to one or more of its generating stations, the generating
company shall file a petition for determination of the input price for determining the
energy charge along with the tariff petitions for one or more generating stations in
(1) The generating company or the transmission licensee, as the case may be, shall file
petition before the Commission as per Annexure-I to these regulations containing the
details of underlying assumptions for the capital expenditure and additional capital
(2) If the petition is inadequate in any respect as required under Annexure-I to these
transmission licensee, as the case may be, for resubmission of the petition within one
month after rectifying the deficiencies as may be pointed out by the staff of the
Commission.
(3) If the information furnished in the petition is in accordance with these regulations
and is adequate for carrying out prudence check of the claims made, the Commission
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may consider granting interim tariff in case of new projects.
(4) In case of the existing projects, the generating company or the transmission
licensee, as the case may be, shall continue to bill the beneficiaries or the long term
by the Commission and applicable as on 31.3.2019 for the period starting from 1.4.2019
Provided that the billing for energy charges w.e.f. 1.4.2019 shall be as per the
(5) The Commission shall grant final tariff in case of existing and new projects, after
considering the replies received from the respondents, and suggestions and objections,
if any, received from the general public and any other person permitted by the
(6) The Commission may hear the petitioner, the respondents and any other person
final tariff.
(7) The difference between the tariff determined in accordance with clauses (3) and (5)
above and clauses (4) and (5) above, shall be recovered from or refunded to, the
beneficiaries or the long term customers, as the case may be, with simple interest at the
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rate equal to the bank rate prevailing as on 1st April of the respective year of the tariff
(8) Where the capital cost considered by the Commission on the basis of projected
incurred on year to year basis by more than 10%, the generating company or the
transmission licensee shall refund to the beneficiaries or the long term customers as the
case may be, the tariff recovered corresponding to the additional capital expenditure
not incurred, as approved by the Commission, along with interest at 1.20 times of the
(9) Where the capital cost considered by the Commission on the basis of projected
additional capital expenditure falls short of the actual additional capital expenditure
incurred by more than 10% on year to year basis, the generating company or the
transmission licensee shall recover from the beneficiaries or the long term customers as
the case may be, the shortfall in tariff corresponding to difference in additional capital
expenditure, as approved by the Commission, along with interest at the bank rate as
law events or force majeure conditions may file petition for in-principle approval for
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incurring such expenditure after prior notice to the beneficiaries or the long term
customers, as the case may be, along with underlying assumptions, estimates and
justification for such expenditure if the estimated expenditure exceeds 10% of the
12. Truing up of tariff for the period 2014-19: The tariff of the generating stations and
the transmission systems for the period 2014-19 shall be trued up in accordance with the
Conditions of Tariff) Regulations, 2014 along with the tariff petition for the period 2019-
24. The capital cost admitted as on 31.3.2019 based on the truing up shall form the basis
of the opening capital cost as on 1.4.2019 for the tariff determination for the period 2019-
24.
13. Truing up of tariff for the period 2019-24: (1) The Commission shall carry out
truing up exercise for the period 2019-24 along with the tariff petition filed for the next
truing up:
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(2) The generating company or the transmission licensee, as the case may be, shall
make an application, as per Annexure-I to these regulations, for carrying out truing up
exercise in respect of the generating station or a unit thereof or the transmission system
(3) The generating company or the transmission licensee, as the case may be, may
make an application for interim truing up of tariff in the year 2021-22, if the annual
fixed cost increases by more than 20% over the annual fixed cost as determined by the
Provided that if the actual additional capital expenditure falls short of the
regulations, the generating company or the transmission licensee, as the case may be,
shall not be required to file any interim true up petition for this purpose and shall
refund to the beneficiaries or the long term customers, as the case may be, the excess
incurred at the bank rate as on 1st April of the respective years, under intimation to the
Commission:
Provided further that the generating company or the transmission licensee shall
submit the complete details along with the calculations of the refunds made to the
beneficiaries or the long term customers, as the case may be, at the time of true up.
(4) After truing up, if the tariff already recovered exceeds or falls short of the tariff
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approved by the Commission under these regulations, the generating company or the
transmission licensee, shall refund to or recover from, the beneficiaries or the long term
customers, as the case may be, the excess or the shortfall amount along with simple
interest at the rate equal to the bank rate as on 1st April of the respective years of the
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CHAPTER – 4
TARIFF STRUCTURE
14. Components of Tariff: (1) The tariff for supply of electricity from a thermal
generating station shall comprise two parts, namely, capacity charge (for recovery of
regulations) and energy charge (for recovery of primary and secondary fuel cost and
cost of limestone and any other reagent, where applicable as specified in Regulation 16
of these regulations).
standards in existing generating station or new generating station, as the case may be,
(3) The capacity charge and energy charge of a generating station shall be
input price of coal or lignite from the integrated mine as determined in accordance with
the provisions of Chapter 9 of these regulations shall form part of energy charge of the
generating station.
(4) The tariff for supply of electricity from a hydro generating station shall comprise
capacity charge and energy charge to be derived in the manner specified in Regulation
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(5) The tariff for transmission of electricity on inter-State transmission system shall
comprise transmission charges for recovery of annual fixed cost consisting of the
15. Capacity Charges: The capacity charges shall be derived on the basis of annual
fixed cost. The Annual Fixed Cost (AFC) of a generating station or a transmission
(c) Depreciation;
with Regulation 28 of these regulations, shall be recovered separately and shall not be
16. Energy Charges: Energy charges shall be derived on the basis of the landed fuel
cost (LFC) of a generating station (excluding hydro) and shall consist of the following
cost:
Provided that any refund of taxes and duties along with any amount received
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on account of penalties from fuel supplier shall be adjusted in fuel cost:
meeting the revised emission standards in case of a thermal generating station shall be
17. Special Provisions for Tariff for Thermal Generating Station which have
of a thermal generating station that has completed 25 years of operation from the date
of commercial operation, the generating company and the beneficiary may agree on an
addition to the energy charge, capacity charges determined under these regulations
(2) The beneficiary shall have the first right of refusal and upon its refusal to enter into
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CHAPTER – 5
CAPITAL STRUCTURE
18. Debt-Equity Ratio: (1) For new projects, the debt-equity ratio of 70:30 as on date
than 30% of the capital cost, equity in excess of 30% shall be treated as normative loan:
Provided that:
i. where equity actually deployed is less than 30% of the capital cost, actual
ii. the equity invested in foreign currency shall be designated in Indian rupees
iii. any grant obtained for the execution of the project shall not be considered as
transmission licensee, as the case may be, 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
(2) The generating company or the transmission licensee, as the case may be, shall
submit the resolution of the Board of the company or approval of the competent
authority in other cases regarding infusion of funds from internal resources in support
of the utilization made or proposed to be made to meet the capital expenditure of the
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generating station or the transmission system including communication system, as the
(3) In case of the generating station and the transmission system including
equity ratio allowed by the Commission for determination of tariff for the period
communication system which has completed its useful life as on or after 1.4.2019, if the
equity actually deployed as on 1.4.2019 is more than 30% of the capital cost, equity in
the debt: equity ratio shall be governed as per sub-clause (ii) of clause (2) of Regulation
72 of these regulations.
(4) In case of the generating station and the transmission system including
where debt: equity ratio has not been determined by the Commission for determination
of tariff for the period ending 31.3.2019, the Commission shall approve the debt: equity
tariff, and renovation and modernisation expenditure for life extension shall be
42
CHAPTER - 6
COMPUTATION OF CAPITAL COST
19. Capital Cost: (1) The Capital cost of the generating station or the transmission
system, as the case may be, as determined by the Commission after prudence check in
accordance with these regulations shall form the basis for determination of tariff for
(2) The Capital Cost of a new project shall include the following:
(b) Interest during construction and financing charges, on the loans (i) being
equal to 70% of the funds deployed, in the event of the actual equity in
normative loan, or (ii) being equal to the actual amount of loan in the event
(c) Any gain or loss on account of foreign exchange risk variation pertaining to
(e) Capitalised initial spares subject to the ceiling rates in accordance with these
regulations;
43
(g) Adjustment of revenue due to sale of infirm power in excess of fuel cost
these regulations;
generating station but does not include the transportation cost and any other
(n) Expenditure on account of change in law and force majeure events; and
44
(3) The Capital cost of an existing project shall include the following:
(a) Capital cost admitted by the Commission prior to 1.4.2019 duly trued up by
station but does not include the transportation cost and any other
(4) The capital cost in case of existing or new hydro generating station shall also
include:
(a) cost of approved rehabilitation and resettlement (R&R) plan of the project in
conformity with National R&R Policy and R&R package as approved; and
(b) cost of the developer’s 10% contribution towards Rajiv Gandhi Grameen
45
Vidyutikaran Yojana (RGGVY) and Deendayal Upadhyaya Gram Jyoti
(5) The following shall be excluded from the capital cost of the existing and new
projects:
(a) The assets forming part of the project, but not in use, as declared in the tariff
petition;
concerned assets.
(d) Proportionate cost of land of the existing project which is being used for
(e) Any grant received from the Central or State Government or any statutory
body or authority for the execution of the project which does not carry any
liability of repayment.
46
20. Prudence Check of Capital Cost : The following principles shall be adopted for
(1) In case of the thermal generating station and the transmission system, prudence
check of capital cost shall include scrutiny of the capital expenditure, in the light of
capital cost of similar projects based on past historical data, wherever available,
during construction, use of efficient technology, cost over-run and time over-run,
procurement of equipment and materials through competitive bidding and such other
Provided that, while carrying out the prudence check, the Commission shall also
examine whether the generating company or transmission licensee, as the case may be,
has been careful in its judgments and decisions in execution of the project.
(2) The Commission may, for the purpose of vetting of capital cost of hydro
Provided that the Designated Independent Agency already appointed under the
(Terms and Conditions of Tariff) Regulations, 2009 shall continue till completion of the
assigned project.
(3) Where the power purchase agreement entered into between the generating
company and the beneficiaries provides for ceiling of actual capital expenditure, the
Commission shall take into consideration such ceiling for prudence check.
(4) The generating company or the transmission licensee, as the case may be, shall
47
furnish the capital cost for execution of the existing and new projects as per Annexure-I
to these regulations along with tariff petition for the purpose of creating a database of
Construction (IEDC)
(1) Interest during construction (IDC) shall be computed corresponding to the loan
from the date of infusion of debt fund, and after taking into account the prudent
(2) Incidental expenditure during construction (IEDC) shall be computed from the
account of interest on deposits or advances, or any other receipts shall be taken into
(3) In case of additional costs on account of IDC and IEDC due to delay in achieving
the COD, the generating company or the transmission licensee as the case may be, shall
be required to furnish detailed justifications with supporting documents for such delay
including prudent phasing of funds in case of IDC and details of IEDC during the
delay.
(4) If the delay in achieving the COD is not attributable to the generating company or
the transmission licensee, IDC and IEDC beyond SCOD may be allowed after prudence
48
check and the liquidated damages, if any, recovered from the contractor or supplier or
agency shall be adjusted in the capital cost of the generating station or the transmission
(5) If the delay in achieving the COD is attributable either in entirety on in part to the
in such cases, IDC and IEDC beyond SCOD may be disallowed after prudence check
condoned and the liquidated damages, if any, recovered from the contractor or supplier
controllable and uncontrollable factors for deciding time over-run, cost escalation, IDC
(1) The “controllable factors” shall include but shall not be limited to the following:
(2) The “uncontrollable factors” shall include but shall not be limited to the following:
49
b. Change in law; and
23. Initial Spares: Initial spares shall be capitalised as a percentage of the Plant and
Provided that:
i. Plant and Machinery cost shall be considered as the original project cost
excluding IDC, IEDC, Land Cost and Cost of Civil Works. The generating
50
company and the transmission licensee for the purpose of estimating Plant and
Machinery Cost, shall submit the break-up of head wise IDC and IEDC in its
tariff application;
ii. where the generating station has any transmission equipment forming part of
the generation project, the ceiling norms for initial spares for such equipment
shall be as per the ceiling norms specified for transmission system under these
regulations.
51
CHAPTER – 7
24. Additional Capitalisation within the original scope and upto the cut-off date
project incurred or projected to be incurred, on the following counts within the original
scope of work, after the date of commercial operation and up to the cut-off date may be
(c) Procurement of initial capital spares within the original scope of work, in
capitalization shall be worked out after adjusting the gross fixed assets and cumulative
(2) The generating company or the transmission licensee, as the case may be shall
submit the details of works asset wise/work wise included in the original scope of
52
work along with estimates of expenditure, liabilities recognized to be payable at a
25. Additional Capitalisation within the original scope and after the cut-off date:
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:
(c) Deferred works relating to ash pond or ash handling system in the
(f) Liability for works admitted by the Commission after the cut-off date to
(2) In case of replacement of assets deployed under the original scope of the existing
project after cut-off date, the additional capitalization may be admitted by the
Commission, after making necessary adjustments in the gross fixed assets and the
(a) The useful life of the assets is not commensurate with the useful life of the project
53
and such assets have been fully depreciated in accordance with the provisions of
these regulations;
(d) The replacement of such asset or equipment has otherwise been allowed by the
Commission.
incurred on the following counts beyond the original scope, may be admitted by the
(d) Need for higher security and safety of the plant as advised or directed by
(e) Deferred works relating to ash pond or ash handling system in additional to
54
Provided also that if any expenditure has been claimed under
O&M expenses, the same shall not be claimed under this Regulation;
(f) Usage of water from sewage treatment plant in thermal generating station.
licensee, as the case may be, the original cost of such asset as on the date of de-
capitalisation shall be deducted from the value of gross fixed asset and corresponding
loan as well as equity shall be deducted from outstanding loan and the equity
(1) The generating company or the transmission licensee, as the case may be,
or unit thereof or transmission system or element thereof for the purpose of extension
of life beyond the originally recognised useful life for the purpose of tariff, shall file a
petition before the Commission for approval of the proposal with a Detailed Project
completion, reference price level, estimated completion cost including foreign exchange
55
Provided that the generating company making the applications for renovation
and modernization (R&M) shall not be eligible for Special Allowance under Regulation
28 of these regulations;
obtain the consent of the beneficiaries or the long term customers, as the case may be,
for such renovation and modernization (R&M) and submit the same along with the
petition.
(2) Where the generating company or the transmission licensee, as the case may be,
makes an application for approval of its proposal for renovation and modernisation
extension, consent of the beneficiaries or long term customers, if obtained, and such
(3) In case of gas/ liquid fuel based open/ combined cycle thermal generating station
after 25 years of operation from date of commercial operation, any additional capital
expenditure which has become necessary for renovation of gas turbines/steam turbine
(R&M) on consumables and cost of components and spares which is generally covered
56
in the O&M expenses during the major overhaul of gas turbine shall be suitably
(4) After completion of the renovation and modernisation (R&M), the generating
company or the transmission licensee, as the case may be, shall file a petition for
by the Commission after prudence check, and after deducting the accumulated
depreciation already recovered from the admitted project cost, shall form the basis for
determination of tariff.
company, instead of availing renovation and modernization (R&M) may opt to avail a
modernisation beyond the useful life of the generating station or a unit thereof and in
such an event, upward revision of the capital cost shall not be allowed and the
applicable operational norms shall not be relaxed but the Special Allowance shall be
Provided that such option shall not be available for a generating station or unit
thereof for which renovation and modernization has been undertaken and the
57
Provided further that special allowance shall also be available for a generating
station which has availed the Special Allowance during the tariff period 2009-14 or
(2) The Special Allowance admissible to a generating station shall be @ Rs 9.5 lakh per
(3) In the event of a generating station availing Special Allowance, the expenditure
incurred upon or utilized from Special Allowance shall be maintained separately by the
generating station and details of same shall be made available to the Commission as
(4) The Special Allowance allowed under this Regulation shall be transferred to a
separate fund for utilization towards Renovation &Modernisation activities, for which
generating station for compliance of the revised emissions standards shall share its
proposal with the beneficiaries and file a petition for undertaking such additional
capitalization.
(2) The proposal under clause (1) above shall contain details of proposed technology
58
beneficiaries, and any other information considered to be relevant by the generating
company.
(3) Where the generating company makes an application for approval of additional
Commission may grant approval after due consideration of the reasonableness of the
cost estimates, financing plan, schedule of completion, interest during construction, use
generating company shall file a petition for determination of tariff. Any expenditure
check based on reasonableness of the cost and impact on operational parameters shall
59
CHAPTER – 8
30. Return on Equity: (1) Return on equity shall be computed in rupee terms, on
(2) Return on equity shall be computed at the base rate of 15.50% for thermal
river hydro generating station, and at the base rate of 16.50% for the storage type hydro
generating stations including pumped storage hydro generating stations and run-of-
date beyond the original scope excluding additional capitalization due to Change in
Law, shall be computed at the weighted average rate of interest on actual loan portfolio
RLDC;
60
requirements under (i) above of this Regulation are found lacking based
shall be reduced by 1.00% for the period for which the deficiency
continues;
31. Tax on Return on Equity. (1) The base rate of return on equity as allowed by the
effective tax rate of the respective financial year. For this purpose, the effective tax rate
shall be considered on the basis of actual tax paid in respect of the financial year in line
with the provisions of the relevant Finance Acts by the concerned generating company
or the transmission licensee, as the case may be. The actual tax paid on income from
other businesses including deferred tax liability (i.e. income from business other than
business of generation or transmission, as the case may be) shall be excluded for the
61
(2) Rate of return on equity shall be rounded off to three decimal places and shall be
Where “t” is the effective tax rate in accordance with clause (1) of this Regulation and
shall be calculated at the beginning of every financial year based on the estimated profit
and tax to be paid estimated in line with the provisions of the relevant Finance Act
applicable for that financial year to the company on pro-rata basis by excluding the
income of non-generation or non-transmission business, as the case may be, and the
paying Minimum Alternate Tax (MAT), “t” shall be considered as MAT rate including
Illustration-
(b) Estimated Advance Tax for the year on above is Rs 240 crore;
62
(c) Effective Tax Rate for the year 2019-20 = Rs 240 Crore/Rs 1000 Crore =
24%;
(3) The generating company or the transmission licensee, as the case may be, shall
true up the grossed up rate of return on equity 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
authorities pertaining to the tariff period 2019-24 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 or the
grossed up rate on return on equity after truing up, shall be recovered or refunded to
beneficiaries or the long term customers, as the case may be, on year to year basis.
32. Interest on loan capital: (1) The loans arrived at in the manner indicated in
(2) The normative loan outstanding as on 1.4.2019 shall be worked out by deducting
(3) The repayment for each of the year of the tariff period 2019-24 shall be deemed
63
de-capitalization of assets, the repayment shall be adjusted by taking into account
cumulative repayment on a pro rata basis and the adjustment should not exceed
the transmission licensee, as the case may be, the repayment of loan shall be considered
from the first year of commercial operation of the project and shall be equal to the
(5) The rate of interest shall be the weighted average rate of interest calculated on
the basis of the actual loan portfolio after providing appropriate accounting adjustment
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 or the transmission system, as the
case may be, does not have actual loan, then the weighted average rate of interest of the
(6) The interest on loan shall be calculated on the normative average loan of the year
(7) The changes to the terms and conditions of the loans shall be reflected from the
33. Depreciation: (1) Depreciation shall be computed from the date of commercial
64
thereof including communication system. In case of the tariff of all the units of a
system for which a single tariff needs to be determined, the depreciation shall be
computed from the effective date of commercial operation of the generating station or
the transmission system taking into consideration the depreciation of individual units:
considering the actual date of commercial operation and installed capacity of all the
units of the generating station or capital cost of all elements of the transmission system,
(2) The value base for the purpose of depreciation shall be the capital cost of the asset
multiple elements of a transmission system, weighted average life for the generating
from the first year of commercial operation. In case of commercial operation of the asset
for part of the year, depreciation shall be charged on pro rata basis.
(3) The salvage value of the asset shall be considered as 10% and depreciation shall be
Provided that the salvage value for IT equipment and software shall be
considered as NIL and 100% value of the assets shall be considered depreciable;
Provided further that in case of hydro generating stations, the salvage value shall
be as provided in the agreement, if any, signed by the developers with the State
Provided also that the capital cost of the assets of the hydro generating station
65
for the purpose of computation of depreciated value shall correspond to the percentage
of the generating station or unit or transmission system as the case may be, shall not be
allowed to be recovered at a later stage during the useful life or the extended life.
(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.
(5) Depreciation shall be calculated annually based on Straight Line Method and at
rates specified in Appendix-I to these regulations for the assets of the generating station
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 assets.
(6) In case of the existing projects, the balance depreciable value as on 1.4.2019 shall be
(7) The generating company or the transmission licensee, as the case may be, shall
submit the details of proposed capital expenditure five years before the completion of
useful life of the project along with justification and proposed life extension. The
66
(8) In case of de-capitalization of assets in respect of generating station or unit thereof
adjusted by taking into account the depreciation recovered in tariff by the de-
34. Interest on Working Capital: (1) The working capital shall cover:
(i) Cost of coal or lignite and limestone towards stock, if applicable, for 10
days for pit-head generating stations and 20 days for non-pit-head generating
(ii) Advance payment for 30 days towards cost of coal or lignite and
availability factor;
(iii) Cost of secondary fuel oil for two months for generation corresponding to
the normative annual plant availability factor, and in case of use of more than
one secondary fuel oil, cost of fuel oil stock for the main secondary fuel oil;
factor; and
67
security expenses, for one month.
(i) Fuel cost for 30 days corresponding to the normative annual plant
availability factor, duly taking into account mode of operation of the generating
(ii) Liquid fuel stock for 15 days corresponding to the normative annual plant
availability factor, and in case of use of more than one liquid fuel, cost of main
liquid fuel duly taking into account mode of operation of the generating
taking into account mode of operation of the generating station on gas fuel and
(c) For Hydro Generating Station (including Pumped Storage Hydro Generating
(iii) Operation and maintenance expenses, including security expenses for one
68
month.
(2) The cost of fuel in cases covered under sub-clauses (a) and (b) of clause (1) of this
Regulation shall be based on the landed fuel cost (taking into account normative transit
station and gross calorific value of the fuel as per actual weighted average for the third
quarter of preceding financial year in case of each financial year for which tariff is to be
determined:
Provided that in case of new generating station, the cost of fuel for the first
financial year shall be considered based on landed fuel cost (taking into account
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 is to be
determined.
(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 the year during the tariff
period 2019-24 in which the generating station or a unit thereof or the transmission
system including communication system or element thereof, as the case may be, is
Provided that in case of truing-up, the rate of interest on working capital shall be
considered at bank rate as on 1st April of each of the financial year during the tariff
period 2019-24.
69
that the generating company or the transmission licensee has not taken loan for
(1) Coal based and lignite fired (including those based on Circulating Fluidised
generating stations or units referred to in clauses (2), (4) and (5) of this
Regulation:
(in Rs Lakh/MW)
200/210/ 300/330/ 800 MW
500 MW 600 MW
Year 250 MW 350 MW Series and
Series Series
Series Series above
FY 2019-20 32.96 27.74 22.51 20.26 18.23
FY 2020-21 34.12 28.71 23.30 20.97 18.87
FY 2021-22 35.31 29.72 24.12 21.71 19.54
FY 2022-23 36.56 30.76 24.97 22.47 20.22
FY 2023-24 37.84 31.84 25.84 23.26 20.93
Provided that where the date of commercial operation of any additional unit(s)of
a generating station after first four units occurs on or after 1.4.2019, the O&M expenses
of such additional unit(s) shall be admissible at 90% of the operation and maintenance
and the transmission system of Bhakra Beas Management Board (BBMB) and Sardar
Sarovar Project (SSP) shall be determined after taking into account provisions of the
Punjab Reorganization Act, 1996 and Narmada Water Scheme, 1980 under Section 6-A
70
of the Inter-State Water Disputes Act, 1956 respectively;
having unit size of less than 200 MW not covered above shall be determined on case to
case basis.
(2) Talcher Thermal Power Station (TPS), Tanda TPS and Chandrapura TPS Unit 3
(in Rs Lakh/MW)
(in Rs Lakh/MW)
Year Gas Turbine/ Small gas Agartala Advance F
Combined Cycle turbine power GPS Class
generating stations generating Machines
other than small gas stations
turbine power
generating stations
FY 2019-20 17.58 36.21 42.85 26.34
FY 2020-21 18.20 37.48 44.35 27.27
FY 2021-22 18.84 38.80 45.91 28.23
FY 2022-23 19.50 40.16 47.52 29.22
FY 2023-24 20.19 41.57 49.19 30.24
(in Rs Lakh/MW)
Year 125 MW Sets TPS-I of NLC
FY 2019-20 31.15 42.91
FY 2020-21 32.24 44.42
FY 2021-22 33.37 45.98
FY 2022-23 34.54 47.59
FY 2023-24 35.76 49.26
71
(5) Generating Stations based on coal rejects:
(in Rs Lakh/MW)
Year O&M Expenses
FY 2019-20 31.15
FY 2020-21 32.24
FY 2021-22 33.37
FY 2022-23 34.54
FY 2023-24 35.76
(6) The Water Charges, Security Expenses and Capital Spares for thermal generating
depending upon type of plant and type of cooling water system, subject to prudence
check. The details regarding the same shall be furnished along with the petition;
Provided further that the generating station shall submit the assessment of the
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 substantiating that the same is not funded through
Provided that till the norms are notified, the Commission shall decide the
72
additional O&M expenses on case to case basis.
(2) Hydro Generating Station: (a) Following operations and maintenance expense
norms shall be applicable for hydro generating stations which have been operational
(in Rs Lakh)
73
Particulars FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
Note: The impact in respect of revision of minimum wage and GST, if any, will be
(b) In case of the hydro generating stations declared under commercial operation on or
after 1.4.2019, operation and maintenance expenses of first year shall be fixed at 3.5%
and 5.0% of the original project cost (excluding cost of rehabilitation & resettlement
works, IDC and IEDC) for stations with installed capacity exceeding 200 MW and for
(c) In case of hydro generating stations which have not completed a period of three
years as on 1.4.2019, operation and maintenance expenses for 2019-20 shall be worked
out by applying escalation rate of 4.77% on the applicable operation and maintenance
years of the tariff period shall be worked out by applying escalation rate of 4.77% per
annum.
(c) The Security Expenses and Capital Spares for hydro generating stations shall be
Provided further that the generating station shall submit the assessment of the
security requirement and estimated expenses, the details of year-wise actual capital
74
(3) Transmission system: (a) The following normative operation and maintenance
75
Provided that the O&M expenses for the GIS bays shall be allowed as worked
out by multiplying 0.70 of the O&M expenses of the normative O&M expenses for bays;
(i) the operation and maintenance expenses for new HVDC bi-pole schemes
commissioned after 1.4.2019 for a particular year shall be allowed pro-rata on the
(ii) the O&M expenses norms for HVDC bi-pole line shall be considered as Double
O&M expenses for ±500 kV Talchar-Kolar HVDC bi-pole scheme (2000 MW);
(3000 MW) shall be on the basis of the normative O&M expenses for ±800 kV,
(v) the O&M expenses of ±800 kV, Alipurduar-Agra HVDC bi-pole scheme (3000
(v) the O&M expenses of Static Synchronous Compensator and Static Var
operation which shall be escalated at the rate of 3.51% to work out the O&M
expenses during the tariff period. The O&M expenses of Static Synchronous
76
three years.
(b) The total allowable operation and maintenance expenses for the transmission
capacity of the transformer (in MVA) and km of line length with the applicable norms
for the operation and maintenance expenses per bay, per MVA and per km
respectively.
(c) The Security Expenses and Capital Spares for transmission system shall be allowed
Provided that the transmission licensee shall submit the assessment of the
security requirement and estimated security expenses, the details of year-wise actual
(4) Communication system: The operation and maintenance expenses for the
communication system shall be worked out at 2.0% of the original project cost related
to such communication system. The transmission licensee shall submit the actual
77
CHAPTER – 9
COMPUTATION OF INPUT PRICE OF COAL AND LIGNITE
36. Input Price of coal and lignite for energy charges: (1) Where the generating
company has the arrangement for supply of coal or lignite from the integrated mine(s)
allocated to it, for use in one or more of its generating stations as end use, the energy
charge component of tariff of the generating station shall be determined based on the
input price of coal or lignite, as the case may be, from such integrated mines computed
(2) Till the regulation for computation of input price of coal is notified, the generating
company shall continue to adopt the notified price of Coal India Limited commensurate
Provided that after notification of the regulation for input price of coal, the same
shall be applicable from 1.4.2019 or the date of commercial operation of the integrated
mine, whichever is later, and the difference between the input price of coal so decided
and the input price of coal for quantity billed shall be adjusted in accordance with the
regulations to be notified.
(3) Till the regulations for computation of input price of lignite is notified, the input
78
CHAPTER – 10
37. Energy Charge: The energy charge in respect of the thermal generating Stations
shall comprise of landed fuel cost of primary fuel, cost of secondary fuel oil
emission standards.
38. Landed Fuel Cost of Primary Fuel: The landed fuel cost of primary fuel for any
month shall consist of base price or input price of fuel corresponding to the grade and
charges, transportation cost by rail or road or any other means and loading, unloading
process;
Provided further that landed fuel cost of primary fuel shall be worked out based
on the actual bill paid by the generating company including any adjustment on account
station, the Gross Calorific Value shall be measured by third party sampling and the
expenses towards the third party sampling facility shall be reimbursed by the
beneficiaries.
39. Transit and Handling Losses: For coal and lignite, the transit and handling losses
79
shall be as per the following norms:-
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 shall apply;
Provided further that in case of imported coal, the transit and handling losses
40. Gross Calorific Value of Primary Fuel: (1) The gross calorific value for
(2) The generating company shall provide to the beneficiaries of the generating station
the details in respect of GCV and price of fuel i.e. domestic coal, imported coal, e-
auction coal, lignite, natural gas, RLNG, liquid fuel etc. as per the Form 15 prescribed at
Provided that the additional details of the weighted average GCV of the fuel on
as received basis used for generation during the period, blending ratio of the imported
coal with domestic coal, proportion of e-auction coal shall be provided, along with the
Provided further that copies of the bills and details of parameters of GCV and
80
price of fuel such as domestic coal, imported coal, e-auction coal, lignite, natural gas,
RLNG, liquid fuel, details of blending ratio of the imported coal with domestic coal,
proportion of e-auction coal shall also be displayed on the website of the generating
company.
41. Landed Cost of Reagent: (1) Where specific reagents such as Limestone,
emission control system for meeting revised emission standards, the landed cost of
such reagents shall be determined based on normative consumption and purchase price
transportation cost.
(2) The normative consumption of specific reagent for the various technologies installed
81
CHAPTER – 11
Stations:
(1) The fixed cost of a thermal generating station shall be computed on annual basis
based on the norms specified under these regulations and recovered on monthly basis
under capacity charge. The total capacity charge payable for a generating station shall
the capacity of the generating station. The capacity charge shall be recovered under two
segments of the year, i.e. High Demand Season (period of three months) and Low
Demand Season (period of remaining nine months), and within each season in two
parts viz., Capacity Charge for Peak Hours of the month and Capacity Charge for Off-
(2) The Capacity Charge payable to a thermal generating station for a calendar
82
Where,
𝐶𝐶𝑝1
(𝐶𝐶𝑝1 + 𝐶𝐶𝑝2)]}
𝐶𝐶𝑜𝑝1
(𝐶𝐶𝑜𝑝1 + 𝐶𝐶𝑜𝑝2)
𝐶𝐶𝑝1
(𝐶𝐶𝑝1 + 𝐶𝐶𝑝2)
83
CCp5= {(0.20 𝑥AFC)𝑥 𝑥 subject to ceiling of (0.20 𝑥AFC)𝑥 }−
𝐶𝐶𝑜𝑝1
(𝐶𝐶𝑜𝑝1 + 𝐶𝐶𝑜𝑝2)
84
CCop6 = {(0.80 𝑥AFC)𝑥 𝑥 subject to ceiling of (0.80 𝑥AFC)𝑥 }−
𝐶𝐶𝑜𝑝8)
Where,
CCpn= Capacity Charge for the Peak Hours of nth Month in a specific
Season;
Season;
85
PAFMpn = Plant Availability Factor achieved during Peak Hours upto the end
PAFMopn = Plant Availability Factor achieved during Off-Peak Hours upto the
(3) Normative Plant Availability Factor for “Peak” and “Off-Peak” Hours in a
these regulations. The number of hours of “Peak” and “Off-Peak” periods during a
day shall be four and twenty respectively. The hours of Peak and Off-Peak periods
during a day shall be declared by the concerned RLDC at least a week in advance. The
High Demand Season (period of three months, consecutive or otherwise) and Low
region shall be declared by the concerned RLDC, at least six months in advance:
Provided that RLDC, after duly considering the comments of the concerned
stakeholders, shall declare Peak Hours and High Demand Season in such a way as to
coincide with the majority of the Peak Hours and High Demand Season of the region to
across different regions, the High Demand Season and the Peak Hours shall correspond
to the High Demand Season and Peak Hours of the region in which majority of its
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a Season (High Demand Season or Low Demand Season, as the case may be) shall not
Provided that within a Season, the shortfall in recovery of Capacity Charge for
Charge for cumulative Peak Hours derived based on NAPAF, shall not be allowed to be
(5) The Plant Availability Factor achieved for a Month (PAFM) shall be computed in
𝐷𝐶𝑖
PAFM = 1000 𝑥 %
[𝑁 𝑥 𝐼𝐶 𝑥 (100 − 𝐴𝑢𝑥)]
Where,
DCi = Average declared capacity (in ex-bus MW), for the ith day of the period i.e.
the month or the year as the case may be, as certified by the concerned
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N= Number of days during the period
Note: DCi and IC shall exclude the capacity of generating units not declared under
station or unit thereof @ 65 paise/ kWh for ex-bus scheduled energy during Peak
Hours and @ 50 paise/ kWh for ex-bus scheduled energy during Off-Peak Hours
Normative Annual Plant Load Factor (NAPLF) achieved on a cumulative basis within
each Season (High Demand Season or Low Demand Season, as the case may be), as
(7) The provisions under Clauses (1) to (6) of this Regulation shall come into force with
effect from 1.4.2020. Till that date, the capacity charge for a thermal generating station
the condition that the NAPAF and NAPLF shall be taken as specified under these
regulations.
43. Computation and Payment of Energy Charge for Thermal Generating Stations
(1) The energy charge shall cover the primary and secondary fuel cost and limestone
consumption cost (where applicable), and shall be payable by every beneficiary for the
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total energy scheduled to be supplied to such beneficiary during the calendar month on
ex-power plant basis, at the energy charge rate of the month (with fuel and limestone
price adjustment). Total Energy charge payable to the generating company for a month
shall be:
(2) Energy charge rate (ECR) in Rupees per kWh on ex-power plant basis shall be
ECR = {(SHR – SFC x CVSF) x LPPF / (CVPF + SFC x LPSFi + LC x LPL} x 100
/(100 – AUX)
Where,
CVPF = (a) Weighted Average Gross calorific value of coal as received, in kCal per
kg for coal based stations less 85 Kcal/Kg on account of variation during storage
at generating station;
(b) Weighted Average Gross calorific value of primary fuel as received, in kCal
per kg, per litre or per standard cubic meter, as applicable for lignite, gas and
(c) In case of blending of fuel from different sources, the weighted average Gross
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CVSF = Calorific value of secondary fuel, in kCal per ml;
LPPF = Weighted average landed fuel cost of primary fuel, in Rupees per kg, per
litre or per standard cubic metre, as applicable, during the month. (In case of
blending of fuel from different sources, the weighted average landed fuel cost of
Provided that energy charge rate for a gas or liquid fuel based station shall be
(3) In case of part or full use of alternative source of fuel supply by coal based thermal
generating stations other than as agreed by the generating company and beneficiaries
Provided that in such case, prior permission from beneficiaries shall not be a pre-
Provided further that the weighted average price of alternative source of fuel shall
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not exceed 30% of base price of fuel computed as per clause (5) of this Regulation:
Provided also that where the energy charge rate based on weighted average price
of fuel upon use of alternative source of fuel supply exceeds 30% of base energy charge
rate as approved by the Commission for that year or exceeds 20% of energy charge rate
for the previous month, whichever is lower shall be considered and in that event, prior
(4) Where biomass fuel is used for blending with coal, the landed cost of biomass fuel
shall be worked out based on the delivered cost of biomass at the unloading point of
the generating station, inclusive of taxes and duties as applicable. The energy charge
rate of the blended fuel shall be worked out considering consumption of biomass based
whichever is lower.
(5) The Commission through specific tariff orders to be issued for each generating
station shall approve the energy charge rate at the start of the tariff period. The energy
charge rate so approved shall be the base energy charge rate for the first year of the
tariff period. The base energy charge rate for subsequent years shall be the energy
charge computed after escalating the base energy charge rate by escalation rates for
payment purposes as notified by the Commission from time to time under competitive
bidding guidelines.
(6) The tariff structure as provided in this Regulation 42 and Regulation 43 of these
for the nuclear generating stations by specifying annual fixed cost (AFC), normative
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annual plant availability factor (NAPAF), installed capacity (IC), normative auxiliary
energy consumption (AUX) and energy charge rate (ECR) for such stations.
44. Computation and Payment of Capacity Charge and Energy Charge for Hydro
Generating Stations:
(1) The fixed cost of a hydro generating station shall be computed on annual basis,
based on norms specified under these regulations, and shall be recovered on monthly
basis under capacity charge (inclusive of incentive) and energy charge, which shall be
capacity of the generating station, i.e., in the capacity excluding the free power to the
home State:
Provided that during the period between the date of commercial operation of the
first unit of the generating station and the date of commercial operation of the
generating station, the annual fixed cost shall provisionally be worked out based on the
latest estimate of the completion cost for the generating station, for the purpose of
determining the capacity charge and energy charge payment during such period.
(2) The capacity charge (inclusive of incentive) payable to a hydro generating station
Where,
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NDM = Number of days in the month
(3) The PAFM shall be computed in accordance with the following formula:
i=1
Where
AUX = Normative auxiliary energy consumption in percentage
DCi = Declared capacity (in ex-bus MW) for the ith day of the
month which the station can deliver for at least three (3)
hours, as certified by the nodal load dispatch centre after
the day is over.
IC = Installed capacity (in MW) of the complete generating
station
N = Number of days in the month
(4) The energy charge shall be payable by every beneficiary for the total energy
scheduled to be supplied to the beneficiary, excluding free energy, if any, during the
calendar month, on ex-bus basis, at the computed energy charge rate. Total energy
Energy Charges = (Energy charge rate in Rs. / kWh) x {Scheduled energy (ex-
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(5) Energy charge rate (ECR) in Rupees per kWh on ex-power plant basis, for a hydro
Where,
FEHS = Free energy for home State, in per cent, as mentioned in Note 3 under
(6) In case the saleable scheduled energy (ex-bus) of a hydro generating station during
a year is less than the saleable design energy (ex-bus) for reasons beyond the control of
the generating station, the treatment shall be as per clause (7) of this Regulation, on an
(7) Shortfall in energy charges in comparison to fifty percent of the annual fixed cost
Provided that in case actual generation from a hydro generating station is less
than the design energy for a continuous period of four years on account of hydrology
factor, the generating station shall approach the Central Electricity Authority with
(8) Any shortfall in the energy charges on account of saleable scheduled energy (ex-bus)
being less than the saleable design energy (ex-bus) during the tariff period 2014-19
which was beyond the control of the generating station and which could not be
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recovered during the said tariff period shall be recovered in accordance with clause (7)
of this Regulation.
(9) In case the energy charge rate (ECR) for a hydro generating station, computed as
per clause (5) of this Regulation exceeds one hundred and twenty paise per kWh,
and the actual saleable energy in a year exceeds { DE x ( 100 – AUX ) x ( 100 – FEHS )
/10000 } MWh, the energy charge for the energy in excess of the above shall be billed
(10) In case of the hydro generating stations located in the State of Jammu and
Kashmir, any expenditure incurred for payment of water usage charges to the State
Water Resources Development Authority, Jammu under Jammu & Kashmir Water
beneficiaries as additional energy charge in proportion of the supply of power from the
Provided that the provisions of this clause shall be subject to the decision of the
Hon’ble High Court of Jammu & Kashmir in OWP No. 604/2011 and shall stand
45. Computation and Payment of Capacity Charge and Energy Charge for Pumped
(1) The fixed cost of a pumped storage hydro generating station shall be computed
on annual basis, based on norms specified under these regulations, and recovered on
monthly basis as capacity charge. The capacity charge shall be payable by the
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beneficiaries in proportion to their respective allocation in the saleable capacity of the
generating station, i.e., the capacity excluding the free power to the home State:
Provided that during the period between the date of commercial operation of the
first unit of the generating station and the date of commercial operation of the
generating station, the annual fixed cost shall be worked out based on the latest
estimate of the completion cost for the generating station, for the purpose of
(2) The capacity charge payable to a pumped storage hydro generating station for a
(AFC x NDM / NDY) (In Rupees), if actual Generation during the month is >=
75 % of the Pumping Energy consumed by the station during the month and
{(AFC x NDM / NDY) x (Actual Generation during the month during peak
hours/ 75% of the Pumping Energy consumed by the station during the month)
(in Rupees)}, if actual Generation during the month is < 75 % of the Pumping
Where,
Provided that there would be adjustment at the end of the year based on actual
generation and actual pumping energy consumed by the station during the year.
(3) The energy charge shall be payable by every beneficiary for the total energy
scheduled to be supplied to the beneficiary in excess of the design energy plus 75% of
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the energy utilized in pumping the water from the lower elevation reservoir to the
higher elevation reservoir, at a flat rate equal to the average energy charge rate of 20
paise per kWh, excluding free energy, if any, during the calendar month, on ex power
plant basis.
(4) Energy charge payable to the generating company for a month shall be:
= 0.20 x {Scheduled energy (ex-bus) for the month in kWh – (Design Energy for
the month (DEm) + 75% of the energy utilized in pumping the water from the
lower elevation reservoir to the higher elevation reservoir of the month)} x (100 –
FEHS)/ 100.
Where,
DEm = Design energy for the month specified for the hydro generating station,
in MWh
FEHS = Free energy for home State, in per cent, as mentioned in Note 3 under
Provided that in case the Scheduled energy in a month is less than the Design
Energy for the month plus 75% of the energy utilized in pumping the water from the
lower elevation reservoir to the higher elevation reservoir of the month, then the energy
(5) The generating company shall maintain the record of daily inflows of natural
water into the upper elevation reservoir and the reservoir levels of upper elevation
reservoir and lower elevation reservoir on hourly basis. The generator shall be required
to maximize the peak hour supplies with the available water including the natural flow
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valid reason, is not pumping water from lower elevation reservoir to the higher
elevation during off-peak period or not generating power to its potential or wasting
natural flow of water, the capacity charges of the day shall not be payable by the
beneficiary. For this purpose, outages of the unit(s)/station including planned outages
and the forced outages up to 15% in a year shall be construed as the valid reason for not
pumping water from lower elevation reservoir to the higher elevation during off-peak
period or not generating power using energy of pumped water or natural flow of
water:
Provided that the total capacity charges recovered during the year shall be
adjusted on pro-rata basis in the following manner in the event of total machine
Where,
ATO - Total Outages in percentage for the year including forced and planned
outages
Provided further that the generating station shall be required to declare its
machine availability daily on day ahead basis for all the time blocks of the day in line
(6) The concerned Load Despatch Centre shall finalise the schedules for the hydro
generating stations, in consultation with the beneficiaries, for optimal utilization of all
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the energy declared to be available, which shall be scheduled for all beneficiaries in
(1) The fixed cost of the transmission system or communication system forming part of
basis as transmission charge from the users, who shall share these charges in the
(2) The Transmission charge (inclusive of incentive) payable for a calendar month for
transmission system or part shall be computed for each region separately for AC and
DC system as under:
For AC system:
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Where,
TAFMn = Transmission System availability factor for the nth month, in percent
If,
(iii) For TAFM > 99.75%, then TAFM=99.75% and NATAF= 97.50%.
Where,
NDMn= No of days upto the end of nth month of the financial year
100
NDY = No. of days in the year
TAFMn= Transmission availability factor upto the end of the nth month of the year
in percentage computed in accordance with Appendix –II
TAFY = Transmission availability factor in percent for the year.
(3) The transmission charges shall be calculated separately for part of the transmission
system having different NATAF and aggregated thereafter, according to their sharing
by the long term customers. The charges of the communication system shall be a part of
the transmission charges and shall be shared by the long term customers.
47. Deviation Charges: (1) Variations between actual net injection and scheduled net
injection for the generating stations, and variations between actual net drawl and
scheduled net drawl for the beneficiaries shall be treated as their respective deviations
and charges for such deviations shall be governed by the Central Electricity Regulatory
(2) Actual net deviation of every Generating Station and Beneficiary shall be
metered on its periphery through special energy meters (SEMs) installed by the Central
Transmission Utility (CTU), and computed in MWh for each 15-minute time block by
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CHAPTER - 12
NORMS OF OPERATION
48. Recovery of Tariff and Incentive: (1) Recovery of capacity charge, energy
charge, transmission charge and incentive by the generating company and the
(2) The Commission may on its own revise the norms of Station Heat Rate specified
in Regulation 49 (C) of these regulations in respect of any of the generating stations for
49. The norms of operation as given hereunder shall apply to thermal generating
stations:
(a) For all thermal generating stations, except those covered under clauses (b), (c),
(b) For following Lignite-fired Thermal generating stations of NLC India Ltd:
TPS-I 72%
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Bokaro TPS 75%
(e) For Lignite fired Generating Stations using Circulatory Fluidized Bed Combustion
2. For next year after completion of three years of the date of commercial
operation – 80%
(a) For all thermal generating stations, except those covered under clauses
(b) For following Lignite-fired Thermal generating stations of NLC India Ltd:
TPS –I 75%
Corporation (DVC):
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Bokaro TPS 80%
(i) For existing Coal-based Thermal Generating Stations, other than those covered
2,430kCal/kWh 2,390kCal/kWh
Note 1
In respect of 500 MW and above units where the boiler feed pumps are electrically
operated, the gross station heat rate shall be 40 kCal/kWh lower than the gross station
Note 2
For the generating stations having combination of 200/210/250 MW sets and 500 MW
and above sets, the normative gross station heat rate shall be the weighted average
Note 3
The normative gross station heat rate above is exclusive of the compensation specified
in Regulation 6.3 B of the Grid Code. The generating company shall, based on unit
loading factor, consider the compensation in addition to the normative gross heat rate
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above.
Note 4
The gross station heat rate for the unit capacity of less than 200 MW sets, shall be dealt
generating stations, except for TPS-I and TPS-II (Stage I & II) of NLC India Ltd, the
gross station heat rates specified under sub-clause (i) for coal-based thermal generating
stations shall be applied with correction, using multiplying factors as given below:
For other values of moisture content, multiplying factor shall be pro-rated for
moisture content between 30-40% and 40-50% depending upon the rated values of
multiplying factor for the respective range given under sub-clauses (a) to (c) above.
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(v) TPS-I and TPS-II (Stage I & II) of NLC India Ltd:
(vi) Open Cycle Gas Turbine/Combined Cycle Generating Stations: For the following
Where the Design Heat Rate of a generating unit means the unit heat rate
guaranteed by the supplier at conditions of 100% MCR, zero percent make up,
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Provided that the design heat rate shall not exceed the following
maximum design unit heat rates depending upon the pressure and temperature
Sub-Bituminous Indian
0.86 0.86 0.865 0.865
Coal
Bituminous Imported 0.89 0.89 0.895 0.895
Coal
Max. Design Heat Rate (kCal/kWh)
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Provided further that in case pressure and temperature parameters of a unit are
different from above ratings, the maximum design heat rate of the unit of the nearest
Provided also that where heat rate of the unit has not been guaranteed but
turbine cycle heat rate and boiler efficiency are guaranteed separately by the same
supplier or different suppliers, the design heat rate of the unit shall be arrived at by
Provided also that where the boiler efficiency is lower than 86% for Sub-
bituminous Indian coal and 89% for bituminous imported coal, the same shall be
considered as 86% and 89% for Sub-bituminous Indian coal and bituminous imported
Provided also that maximum turbine cycle heat rate shall be adjusted for type of
Provided also that in case of coal based generating station if one or more
generating units were declared under commercial operation prior to 1.4.2019, the heat
rate norms for those generating units as well as generating units declared under
commercial operation on or after 1.4.2019 shall be lowest of the heat rate norms
considered by the Commission during tariff period 2014-19 or those arrived at by above
based on CFBC technology), maximum design heat rates shall be increased using factor
Provided also that for Generating stations based on coal rejects, the Commission
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shall approve the Station Heat Rate on case to case basis.
Note: In respect of generating units where the boiler feed pumps are electrically
operated, the maximum design heat rate of the unit shall be 40 kCal/kWh lower than
the maximum design heat rate of the unit specified above with turbine driven Boiler
Feed Pump.
For RLNG =1.071 X Design Heat Rate of the unit/block for Liquid Fuel
(kCal/kWh)
Where the Design Heat Rate of a unit shall mean the guaranteed heat rate for a unit at
100% MCR and at site ambient conditions; and the Design Heat Rate of a block shall
mean the guaranteed heat rate for a block at 100% MCR, site ambient conditions, zero
(a) For Coal-based generating stations other than at (c) below: 0.50 ml/kWh
(b) (i) For Lignite-fired generating stations except TPS-I: 1.0 ml/kWh
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(d) For Generating Stations based on Coal Rejects: 2.0 ml/kWh
Provided that for thermal generating stations with induced draft cooling
towers and where tube type coal mill is used, the norms shall be further increased by
(% of gross
Type of Dry Cooling System
generation)
Note: The auxiliary energy consumption for the unit capacity of less than 200
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(b) For other Coal-based generating stations:
Provided that where the gas based generating station is using electric motor
driven Gas Booster Compressor, the Auxiliary Energy Consumption in case of Combine
Cycle mode shall be 3.30% (including impact of air-cooled condensers for Steam
Turbine Generators):
shall be allowed for Combine Cycle Generating Stations having direct cooling air
(i) For all generating stations with 200 MW sets and above:
The auxiliary energy consumption norms shall be 0.5 percentage point more than
(a) above.
Provided that for the lignite fired stations using CFBC technology, the auxiliary
energy consumption norms shall be 1.5 percentage point more than the auxiliary
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energy consumption norms of coal-based generating stations at (E) (a) above.
(ii) For Barsingsar Generating station of NLC using CFBC technology: 12.50%
(iii) For TPS-I, TPS-I (Expansion) and TPS-II Stage-I&II of NLC India Ltd.:
TPS-I 12.00%
TPS-II 10.00%
technology:
50. Norms of Operation for Hydro Generating Stations: The norms of operation as
(A) Normative Annual Plant Availability Factor (NAPAF): (1) The following
normative annual plant availability factor (NAPAF) shall apply to hydro generating
station:
(a) Storage and Pondage type plants with head variation between Full Reservoir
Level (FRL) and Minimum Draw Down Level (MDDL) of up to 8%, and where
(b) In case of storage and pondage type plants with head variation between full
reservoir level and minimum draw down level is more than 8% and when plant
availability is not affected by silt, the month wise peaking capability as provided
112
by the project authorities in the DPR (approved by CEA or the State
(c) Pondage type plants where plant availability is significantly affected by silt: 85%.
available/relevant.
under special circumstances, e.g. abnormal silt problem or other operating conditions,
(3) A further allowance of 5% may be allowed for difficulties in North East Region.
(4) Based on the above, the Normative annual plant availability factor (NAPAF) of the
THDC
THDC Stage I Storage 4x250 80
KHEP Storage 4x100 68
NHPC
Bairasul Pondage 3x60 90
Loktak Pondage 3x35 88
Salal ROR 6x115 64
Tanakpur ROR 3x31.4 59
Chamera-I Pondage 3x180 90
Uri I ROR 4x120 74
Rangit Pondage 3x20 90
Chamera-II Pondage 3x100 90
Dhauliganga Pondage 4x70 78
Dulhasti Pondage 3x130 90
Teesta-V Pondage 3x170 87
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Station Type of Plant Plant Capacity NAPAF
No. of Units x MW (%)
Sewa-II Pondage 3x40 89
TLDP III Pondage 4x33 77
Chamera III Pondage 3x77 87
Chutak ROR 4x11 48
Nimmo Bazgo Pondage 3x15 70
Uri II ROR 4x60 70
Parbati III Pondage 4x130 43
NHDC
Indira Sagar Storage 8x125 87
Omkareshwar Pondage 8x65 90
NEEPCO
Kopili I Storage 4x50 69
Khandong Storage 2x25 67
Kopili II Storage 1x25 69
Doyang Storage 3x25 70
Ranganadi Pondage 3x135 88
NTPC
Koldam Storage 4x200 90
SJVNL
Nathpa Jhakri ROR 6x250 90
Rampur ROR 6x68.67 85
DVC
Panchet Storage 2x40 80
Tilaya Storage 2x2 80
Maithon Storage 3x20 80
(B) In case of pumped storage hydro generating stations, the quantum of electricity
required for pumping water from down-stream reservoir to up-stream reservoir shall
be arranged by the beneficiaries duly taking into account the transmission and
distribution losses up to the bus bar of the generating station. In return, beneficiaries
shall be entitled to equivalent energy of 75% of the energy utilized in pumping the
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water from the lower elevation reservoir to the higher elevation reservoir from the
generating station during peak hours and the generating station shall be under
Provided that in the event of the beneficiaries failing to supply the desired level
of energy during off-peak hours, there will be pro-rata reduction in their energy
Provided further that the beneficiaries may assign or surrender their share of
capacity in the generating station, in part or in full, or the capacity may be reallocated
by the Central Government, and in that event, the owner or assignee of the capacity
share shall be responsible for arranging the equivalent energy to the generating station
in off-peak hours, and be entitled to corresponding energy during peak hours in the
AEC
Installed
Type of Station Installed Capacity
Capacity
upto 200 MW
above 200 MW
Surface
Rotating Excitation 0.7% 0.7%
Static 1.0% 1.2%
Underground
Rotating Excitation 0.9% 0.9%
Static 1.2% 1.3%
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(1) AC system: 98.00%;
(2) HVDC bi-pole links 95.00% and HVDC back-to-back stations: 95.00%:
HVDC bi-pole links shall be 85%for first twelve months from the date of
commercial operation.
Provided further that for AC and HVDC system, actual outage hours shall be
considered for computation of availability upto two trippings per year. After two
trippings in a year, for every tripping, additional 12 hours outage shall be considered in
factor of 2.
(1) AC System: The charges for auxiliary energy consumption in the AC sub-
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(2) HVDC sub-station: For auxiliary energy consumption in HVDC sub-stations,
the Central Government may allocate an appropriate share from one or more ISGS.
The charges for such power shall be borne by the transmission licensee from the
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CHAPTER - 13
53. Scheduling: The methodology for scheduling and dispatch for the generating
54. Metering and Accounting: For metering and accounting, the provisions of the
55. Billing and Payment of charges: (1) Bills shall be raised for capacity charge and
energy charge by the generating company and for transmission charge by the
payments shall be made by the beneficiaries or the long term customers directly to the
Provided that the physical copy of the Bill in Original at the office of the
Authorised Person of the beneficiary or long term customer, as the case may be, or the
scanned copy of Original Bill through official email ID of the Authorised Signatory of
the Generating Company or the Transmission Licensee, as the case may be, shall be
Executive Officer of the Company and any change in the list of Authorised Signatory
(2) Payment of the capacity charge for a thermal generating station shall be shared by
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the beneficiaries of the generating station as per their percentage shares for the month
(inclusive of any allocation out of the unallocated capacity) in the installed capacity of
the generating station. Payment of capacity charge and energy charge for a hydro
proportion to their shares (inclusive of any allocation out of the unallocated capacity)
in the saleable capacity (to be determined after deducting the capacity corresponding
Note 1
allocation made out of the unallocated capacity. The shares shall be applied in
percentages of installed capacity and shall normally remain constant during a month.
Based on the decision of the Central Government, the changes in allocation shall be
least three days prior to beginning of a calendar month, except in case of an emergency
calling for an urgent change in allocations out of unallocated capacity. The total
capacity share of a beneficiary would be sum of its capacity share plus allocation out of
the unallocated portion. In the absence of any specific allocation of unallocated power
by the Central Government, the unallocated power shall be added to the allocated
Note 2
The beneficiaries may propose surrendering part of their allocated firm share to other
States within or outside the region. In such cases, depending upon the technical
119
feasibility of power transfer and specific agreements reached by the generating
company with other States within or outside the region for such transfers, the shares
period (in complete months) from the beginning of a calendar month. When such re-
allocations are made, the beneficiaries who surrender the share shall not be liable to
pay capacity charges for the surrendered share. The capacity charges for the capacity
surrendered and reallocated as above shall be paid by the State(s) to whom the
above, the beneficiaries of the generating station shall continue to pay the full capacity
charges as per allocated capacity shares. Any such reallocation and its reversion shall
taking effect.
Note 3
FEHS = Free energy for home State, in percent and shall be taken as 13% or actual
whichever is less.
bidding, the ‘free energy’ shall be taken as 13%, in addition to energy corresponding
to 100 units of electricity to be provided free of cost every month to every project
affected family for a period of 10 years from the date of commercial operation of the
generating station:
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quantification of energy corresponding to 100 units of electricity to be provided free
of cost every month to every month to every project affected family for a period of 10
56. Recovery of Statutory Charges: The generating company shall recover the
statutory charges imposed by the State and Central Government such as electricity
case of the electricity duty is applied on the auxiliary energy consumption, such
the generating station (excluding colony consumption) and apportioned to each of the
system forming part of transmission system shall be shared by the beneficiaries or long
communication system other than that of central portion shall be shared by the
58. Rebate. (1) For payment of bills of the generating company and the transmission
Transfer (NEFT) or Real Time Gross Settlement (RTGS) payment mode within a period
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of 5 days of presentation of bills by the generating company or the transmission
consecutively without considering any holiday. However, in case the last day or 5 th
day is official holiday, the 5th day for the purpose of Rebate shall be construed as the
immediate succeeding working day (as per the official State Government’s calendar,
where the Office of the Authorised Signatory or Representative of the Beneficiary, for
(2) Where payments are made on any day after 5 days and within a period of 30
59. Late payment surcharge: In case the payment of any bill for charges payable
under these regulations is delayed by a beneficiary or long term customers as the case
may be, beyond a period of 45 days from the date of presentation of bills, a late
payment surcharge at the rate of 1.50% per month shall be levied by the generating
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CHAPTER – 14
SHARING OF BENEFITS
60. Sharing of gains due to variation in norms: (1) The generating company or the
(2) The financial gains by the generating company or the transmission licensee, as the
case may be, on account of controllable parameters shall be shared between generating
company or transmission licensee and the beneficiaries or long term customers, as the
case may be on annual basis. The financial gains computed as per the following
formulae in case of generating station other than hydro generating stations on account
Where,
ECRN = Normative Energy Charge Rate computed on the basis of norms specified
for Station Heat Rate, Auxiliary Energy Consumption and Secondary Fuel Oil
consumption.
ECRA = Actual Energy Charge Rate computed on the basis of actual Station Heat
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Consumption for the month.
Provided that in case of hydro generating stations, the net gain on account of
Actual Auxiliary Energy Consumption being less than the Normative Auxiliary Energy
scheduled generation is more than the saleable design energy and shall be shared in the
(i) When saleable scheduled generation is more than saleable design energy on
the basis of normative auxiliary energy consumption and less than or equal
consumption:
(ii) When saleable scheduled generation is more than saleable design energy on
61. Sharing of saving in interest due to re-financing or restructuring of loan :(1) If re-
licensee, as the case may be, results in net savings on interest after accounting for cost
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associated with such refinancing or restructuring, the same shall be shared between the
beneficiaries and the generating company or the transmission licensee, as the case may
(2) In case of dispute, any of the parties may make an application in accordance with
Provided that the beneficiaries or the long term customers shall not withhold
any payment on account of the interest claimed by the generating company or the
transmission licensee during the pendency of any dispute arising out of re-financing of
loan.
62. Sharing of Non-Tariff Income: The non-tariff net income in case of generating
station and transmission system from rent of land or buildings, sale of scrap and
advertisements shall be shared between the beneficiaries or the long term customers
and the generating company or the transmission licensee, as the case may be, in the
ratio 50:50.
(a) 100% of the gross proceeds on account of CDM to be retained by the project
developer in the first year after the date of commercial operation of the generating
(b) In the second year, the share of the beneficiaries shall be 10% which shall be
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progressively increased by 10% every year till it reaches 50%, where after the
64. Sharing of income from other business of transmission licensee: The income from
other business of transmission licensee shall be shared with the long term customer in
revenue derived from utilization of transmission assets for other business) Regulations,
2007.
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CHAPTER 15
MISCELLANEOUS PROVISIONS
regulations are the ceiling norms and shall not preclude the generating company or the
transmission licensee, as the case may be, and the beneficiaries and the long-term
customers from agreeing to the improved norms and in case the improved norms are
agreed to, such improved norms shall be applicable for determination of tariff.
66. Deviation from ceiling tariff: (1) The tariff determined in these regulations shall
be a ceiling tariff. The generating company or the transmission licensee and the
beneficiaries or the long-term customer, as the case may be, may mutually agree to
(2) The generating company or the transmission licensee, may opt to charge a lower
tariff for a period not exceeding the validity of these regulations on agreeing to
(3) If the generating company or the transmission licensee opts to charge a lower tariff
for a period not exceeding the validity of these regulations on account of lower
transmission licensee during useful life shall be allowed to be recovered after the useful
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(4) The deviation from the ceiling tariff specified by the Commission, shall come into
effect from the date agreed to by the generating company or the transmission licensee
and the beneficiaries or the long-term customer, as the case may be.
(5) The generating company and the beneficiaries of a generating station or the
transmission licensee and the long term customer of transmission system shall be
required to approach the Commission for charging lower tariff in accordance with
clauses (1) to (3) above. The details of the accounts and the tariff actually charged under
67. Deferred Tax liability with respect to previous tariff period: Deferred tax
liabilities for the period upto 31st March, 2009 whenever they materialise shall be
then beneficiaries or long term customers, as the case may be. Deferred tax liabilities for
the period arising from 1.4.2009 to 31.3.2014 if any, shall not be recoverable from the
68. Hedging of Foreign Exchange Rate Variation: (1) The generating company or the
transmission licensee, as the case may be, may hedge foreign exchange exposure in
respect of the interest and repayment of foreign currency loan taken for the generating
(2) If the petitioner enters into hedging arrangement(s) based on its approved
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entering into such arrangement(s) within thirty days.
(3) Every generating company and transmission licensee shall recover the cost of
debt, in the relevant year on year-to-year basis as expense in the period in which it
arises and extra rupee liability corresponding to such foreign exchange rate variation
(4) To the extent the generating company or the transmission licensee is not able to
hedge the foreign exchange exposure, the extra rupee liability towards interest payment
and loan repayment corresponding to the normative foreign currency loan in the
69. Recovery of cost of hedging or Foreign Exchange Rate Variation (FERV): (1)
Every generating company and the transmission licensee shall recover the cost of
hedging and foreign exchange rate variation on year-to-year basis as income or expense
(2) Recovery of cost of hedging or foreign exchange rate variation shall be made
directly by the generating company or the transmission licensee, as the case may be,
from the beneficiaries or the long term customers, as the case may be, without making
Provided that in case of any objections by the beneficiaries or the long term
customers, as the case may be, to the amounts claimed on account of cost of hedging or
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foreign exchange rate variation, the generating company or the transmission licensee,
as the case may be, may make an appropriate application before the Commission for its
decision.
70. Application fee and the publication expenses: The following fees, charges and
expenses shall be reimbursed directly by the beneficiary in the manner specified herein:
(1) The application filing fee and the expenses incurred on publication of notices in
the application for approval of tariff, may in the discretion of the Commission,
licensee, as the case may be, directly from the beneficiaries or the long term
(2) The following fees and charges shall be reimbursed directly by the beneficiaries
(3) Fees and charges paid by the generating companies and inter-State transmission
Despatch Centre and other related matters) Regulations, 2009, as amended from
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(4) Licence fees paid by the inter-State transmission licensees (including the deemed
(5) Licence fees paid by NHPC Ltd to the State Water Resources Development
Authority, Jammu in accordance with the provisions of Jammu & Kashmir Water
(6) The Commission may, for the reasons to be recorded in writing and after hearing
considered necessary.
71. Special Provisions relating to NLC India Limited: The tariff of the existing
generating stations of NLC India Ltd, namely, TPS-I and TPS-II (Stage I & II) and TPS-I
(Expansion), whose tariff for the tariff periods 2004-09, 2009-14 and 2014-19 has been
72. Special Provisions relating to Damodar Valley Corporation: (1) Subject to clause
(2), this Regulation shall apply to determination of tariff of the projects owned by
(2) The following special provisions shall apply for determination of tariff of the
(i) Capital Cost: The expenditure allocated to the object ‘power’, in terms of
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sections 32 and 33 of the Damodar Valley Corporation Act, 1948, to the extent of
its apportionment to generation and inter-state transmission, shall form the basis
offices, administrative and technical centers of DVC, after due prudence check,
(ii) Debt Equity Ratio: The debt equity ratio of all projects of DVC
projects of DVC.
(iv) Funds under section 40 of the Damodar Valley Corporation Act, 1948:
73. Special Provisions relating to BBMB and SSP: The tariff of generating station
and the transmission system of Bhakra Beas Management Board (BBMB) and Sardar
Sarovar Project (SSP) shall be determined after taking into consideration, the provisions
of the Punjab Reorganization Act, 1996 and Narmada Water Scheme, 1980 under
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Section 6-A of the Inter-State Water Disputes Act, 1956, respectively.
tariff of generating station and the transmission system of Indira Sagar generation
project and such other inter-state generation projects shall be determined on case to
case basis.
for the transmission projects executed through JV route in terms of Regulation 4.10A of
Regulations, 2001 shall be available for a period of 25 years from the date of issue of the
transmission licence.
76. Power to Relax: The Commission, for reasons to be recorded in writing, may
relax any of the provisions of these regulations on its own motion or on an application
77. Power to Remove Difficulty: If any difficulty arises in giving effect to the
provisions of these regulations, the Commission may, by order, make such provision
not inconsistent with the provisions of the Act or provisions of other regulations
specified by the Commission, as may appear to be necessary for removing the difficulty
Sd/-
(Sanoj Kumar Jha)
Secretary
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Appendix I
Depreciation Schedule
Depreciation Rate
Sr. No. Asset Particulars (Salvage Value=10%)
SLM
A Land under full ownership 0.00%
B Land under lease
(a) for investment in the land 3.34%
(b) For cost of clearing the site 3.34%
(c) Land for reservoir in case of hydro generating station 3.34%
g. Lightning arrestor
(i) Station type 5.28%
(ii) Pole type 5.28%
(iii) Synchronous condenser 5.28%
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Depreciation Rate
Sr. No. Asset Particulars (Salvage Value=10%)
SLM
h. Batteries 5.28%
j. Meters 5.28%
o. Communication equipment
(i) Radio and high frequency carrier system 6.33%
Note: Where life of the particular asset is less than useful life of the project, the useful
life of such particular asset shall be considered as per the provisions of the Companies
Act, 2013 and subsequent amendment thereto.
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Appendix-II
ii) Inter-Connecting Transformers (ICTs): Each ICT bank (three single phase
iii) Static VAR Compensator (SVC): SVC along with SVC transformer shall
form one element;
v) HVDC Bi-pole links: Each pole of HVDC link along with associated
equipment at both ends shall be considered as one element;
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transfer of inter- regional power through HVDC back-to-back station) is
not available, the HVDC back-to-back station block shall also be
considered as unavailable;
Where,
o = Total number of AC lines.
AVo = Availability of o number of AC lines.
p = Total number of bus reactors/switchable line reactors
AVp = Availability of p number of bus reactors/switchable line reactors
q = Total number of ICTs.
AVq = Availability of q number of ICTs.
r = Total number of SVCs.
AVr = Availability of r number of SVCs
u = Total number of STATCOM.
AVu = Availability of u number of STATCOMs
∑ ( ) ∑ ( )
= x 100
∑ ∑
Where
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AVxbp = Availability of xth HVDC pole
block
multiplied by ckt-km;
(b) For each HVDC pole- The rated MW capacity x ckt-km;
(d) For SVC- The rated MVAR capacity (inductive and capacitive);
(e) For Bus Reactor/switchable line reactors – The rated MVAR capacity;
(f) For HVDC back-to-back station connecting two Regional grids- Rated MW
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Secretary, RPC may restrict the deemed availability period to that
considered reasonable by him for the work involved. In case of dispute
regarding deemed availability, the matter may be referred to Chairperson,
CEA within 30 days.
ii. Switching off of a transmission line to restrict over voltage and manual
tripping of switched reactors as per the directions of concerned RLDC.
i) Outage of elements due to acts of God and force majeure events beyond the
control of the transmission licensee. However, whether the same outage is due to
force majeure (not design failure) will be verified by the Member Secretary,
RPC.A reasonable restoration time for the element shall be considered by Member
Secretary, RPC and any additional time taken by the transmission licensee for
restoration of the element beyond the reasonable time shall be treated as outage
time attributable to the transmission licensee. Member Secretary, RPC may
consult the transmission licensee or any expert for estimation of reasonable
restoration time. Circuits restored through ERS (Emergency Restoration System)
shall be considered as available;
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30 days. The above need to be resolved within two months:
Provided further that where there is a difficulty or delay beyond sixty
days, from the incidence in finalizing the recommendation, the Member
Secretary of concerned RPC shall allow the outage hours on provisional basis till
the final view.
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Appendix-III
∑ ( )/
AVo(Availability of o no. of AC lines) = ∑
∑ ( )/
AVq(Availability of q no. of ICTs) = ∑
∑ ( )/
AVr(Availability of r no. of SVCs) = ∑
∑ ( )/
AVp(Availability of p no. of Switched Bus reactors) = ∑
∑ ( )/
AVu(Availability of u no. of STATCOMs) = ∑
( )
AVxbp(Availability of an individual HVDC pole) =
For the new HVDC commissioned but not completed twelve months;
Where,
o = Total number of AC lines;
AVo = Availability of o number of AC lines;
p = Total number of bus reactors/switchable line reactors;
AVp = Availability of p number of bus reactors/switchable line reactors;
q = Total number of ICTs;
AVq = Availability of q number of ICTs;
r = Total number of SVCs;
AVr = Availability of r number of SVCs;.
U = Total number of STATCOM;
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AVu = Availability of u number of STATCOMs;
Wi = Weightage factor for ith transmission line;
Wk = Weightage factor for kth ICT;
Wl = Weightage factors for inductive & capacitive operation of lth SVC;
Wm = Weightage factor for mth bus reactor;
Wn = Weightage factor for nth STATCOM.
Ti, , Tk, Tl, , - The total hours of ith AC line, kth ICT, lth SVC, mth Switched Bus Reactor
Tm, Tn, Tx, Ty & nth STATCOM, xth HVDC pole, yth HVDC back-to-back blocks during
the period under consideration (excluding time period for outages not
attributable to transmission licensee for reasons given in Para 5of the
procedure)
TNAi , TNAk - The non-availability hours (excluding the time period for outages not
TNAl, TNAm, attributable to transmission licensee taken as deemed availability as
TNAn, TNAx, TNAy per Para 5 of the procedure) for ith AC line, kth ICT, lth SVC , mth Switched
Bus Reactor, nth STATCOM, xth HVDC pole and ythHVDC back-to-back
block .
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