BIHAR ELECTRICITY REGULATORY COMMISSION

Vidyut Bhawan-II, Bailey Road, Patna 800 021 Petition No. 12/2012 In the matter of : Petition under Clause15 of the BERC (Renewable Purchase Obligation, its compliance and REC Framework Implementation) Regulation 2010 notified in the Bihar Gazette on 18.11.2010 for amendment in the 1st proviso of Clause 4.1 of the above regulation and under clause 39 of BERC(Terms and Conditions for Tariff Determination from Solar Energy Sources) Regulation 2010 notified vide Gazette notification dated 4th August 2010 for amendment of Clause 35 (2) of the said regulation pertaining to minimum purchase obligation for solar energy sources and incorporate provision of procurement of power from renewable energy sources through competitive bidding process under Case-I for long term, review the Generic Levelised tariff determined by the Honble BERC vide order dated 6th August 2010 passed in Suo Motu proceeding no. 1 of 2010 and under section 86 (1) (e) of the Electricity Act-2003 specify Renewable Purchase Obligation(RPO) for the period 2015-16 to 2021-22 and percentage increment per annum over minimum purchase obligation 0.25% from solar energy sources (Solar PV/Solar Thermal) applicable up to 31st March 2013 for the period 2013-14 onwards upto 2021-22. In the matter of : And Petitioner

Bihar State Electricity Board, Patna Present:

1. Sri U. N. Panjiar - Chairman 2. Sri S. C. Jha 3. Sri K. P. Singh - Member - Member

Order
Dated the 29th May, 2012 Petitioner Bihar State Electricity Board (BSEB) filed a petition under clause 15 of the BERC (Renewable Purchase Obligation, its compliance and REC framework implementation) Regulations, 2010 for amendment in the first proviso of clause 4.1 of the above Regulations and under clause 39 of BERC (Terms and conditions for Tariff Determination from Solar Energy Sources) Regulations, 2010 for
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amendment of clause 35 (2) of the said Regulations pertaining to minimum purchase obligation of solar energy sources and incorporate provisions of procurement of power from renewable energy sources through competitive bidding under case I for long term and review the generic levelised tariff determined by the commission vide order dated 6th August,2010 in Suo-Motu proceeding. Petitioner BSEB has made the following prayer: (a) To procure power to meet the minimum purchase obligation from solar energy sources (Solar PV/Solar Thermal) for the period 2013-14 & onwards through competitive bidding process under Case-I SBD (Standard Bidding Document) issued by Ministry of Power, Govt. of India for long term (25 years) with appropriate amendments for procurement of power from solar energy sources after obtaining prior approval of the Honble BERC on the amendments in the SBD for Case-I. (b) Amend the 1st proviso of Clause 4.1 of BERC (Renewable Purchase Obligation, its compliance and REC Framework Implementation) Regulations, 2010 and Clause 35 (2) of the BERC (Terms and Conditions for Tariff Determination from Solar Energy Sources) Regulations 2010 notified in the Bihar Gazette on 2nd August 2010 in the light of the amendment in the Clause 6.4 (1) (i) of the Tariff Policy vide resolution F. No. 23/17/2009-R&R (Vol-III) dated 20th January 2011 and communicated by Honble BERC vide letter no. 69 dated 17th February 2011 to incorporate the provision that the minimum purchase obligation from solar energy sources for BSEB is 0.25% only upto 2012-13 which will further go up to 3% by 2022. (c) Specify the annual increase over the minimum purchase obligation 0.25% from Solar Energy Sources after 2012-13 in order to meet the obligation of procurement of 3% from solar energy sources by the year 2022 so that power procurement

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planning to meet the obligation from solar energy sources can be planned in advance. (d) Honble Commission should specify the Renewable Purchase Obligation (RPO) for distribution licensee in accordance with Section 86 (1) (e) of Electricity Act-2003 for the period beyond 2014-15 so that power procurement planning to meet the obligation from other renewable energy sources can be planned in advance. (e) Review the Generic Levelised tariff determined by the Honble BERC vide order dated 6th August 2010 passed on Suo Motu proceeding no. 1 of 2010 in respect of Solar PV & Solar Thermal. 2. Since the proposals, if approved, are likely to affect consumers was directed to issue public notice inviting

and other stakeholders including solar power project developers, the petitioner objections/suggestions for the proposal of the petitioner. The public notice was accordingly issued inviting

comments/suggestions from the general public and stake holders. The copy of the petition was also made available on BSEB as well as BERC website. Comments/suggestions were filed on behalf of M/s CLARO Energy Pvt. Ltd., Patna, M/s Glat Solution Pvt. Ltd., Patna and M/s Beltron Telecommunication Ltd., Patna. The matter was heard on 22.02.2012, on 28.03.2012 and finally on 08.05.2012. A. Solar Power Purchase Obligation (SPO) 3. 181 In exercise of powers vested under section 61 read with section of the Electricity Act 2003, Bihar Electricity Regulatory

Commission hereinafter referred to as commission) has notified the Bihar Electricity Regulatory Commission (Terms and Conditions for Tariff Determination from solar Energy Sources) Regulations, 2010 on 02.08.2010. Clause 35 (1) of the above regulations provide 4.0% Renewable Purchase Obligation (RPO) for F.Y- 2012-13. Clause 35 (2) of the above regulations provides RPO from solar sources to be 0.25
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percent of overall RPO as specified in 35 (1) with an annual increase of 0.25 percent. 4. In exercise of powers conferred under sections 61, 66, 86(1) (e)

and 181 of the Electricity Act, 2003 Bihar Electricity Regulatory Commission has notified the Bihar Electricity Regulatory Commission (Renewable Purchase Obligation, its compliance and REC framework implementation) Regulations, 2010 on 18th November, 2010. Clause 4.1 of this regulations provides: Every obligated entity shall purchase not less than 1.5%, 2.5%, 4%, 4.5% and 5% of its total energy consumption (total energy input minus T&D losses) during 2010-11, 2011-12, 2012-13, 2013-14 and 2014-15 respectively from renewable energy sources under the Renewable Purchase Obligation or until reviewed by the Commission. Provided that 0.25% out of renewable purchase obligation so specified in the year 2010-11 shall be procured from generation based on solar as renewable energy source and shall be increased at a rate of 0.25% every year thereafter till 2014-15 or until reviewed by the Commission. Provided further, such obligation to purchase renewable energy shall be inclusive of the purchases, if any, from renewable energy sources already being made by concerned obligated entity. Provided also that the power purchases under the power purchase agreements for the purchase of renewable energy sources already entered into by the distribution licensees and consented to by the Commission shall continue to be made till their present validity, even if the total purchases under such agreements exceed the percentage as specified hereinabove. Clause 11 of this regulations makes provision for overriding effect of this regulations, if anything contained in the BERC (Terms and Conditions for Tariff Determination from Solar Energy Sources) Regulations, 2010 and any other relevant regulations is contrary to it.
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5.

Thus .25% out of the renewable purchase obligation so specified

in the year 2010-11 shall be procured from generation based on solar as renewable energy source and shall be increased at the rate of .25% every year thereafter till 2014-15 or until reviewed by the Commission. 6. Amendment in Tariff Policy made under section 30 of the

Electricity Act, 2003 notified vide Ministry of Power Resolution dated 20th January, 2011 para 6.4 (1) (i) is reproduced hereunder: 6.4 (1) (i) Within the percentage so made applicable, to start with, the SERCs shall also reserve a minimum percentage for purchase of solar energy from the date of notification in the official Gazette which will go up to 0.25% by the end of 2012-13 and further up to 3% by 2022. 7. As per clause 4.1 of the existing regulations notified on 18th

Nov., 2010 every obligated entity has to purchase not less than 4%, 4.5% and 5% of its total energy consumption (total energy input minus T&D losses) during 2012-13, 2013-14 and 2014-15 respectively from renewable energy sources or until reviewed by the Commission. Out of the above renewable purchase obligation 0.25% in F.Y-2010-11 shall be procured from generation based on solar as renewable energy source and shall be increased at a rate of .25% every year till 2014-15 or until reviewed by the Commission. 8. M/s Moser Baer Clean Energy Ltd. submitted on behalf of M/s

Beltron Telecommunication Ltd that the latest amendment in Tariff Policy has specified 0.25% of purchase of solar power till 2012-13. This minimum level is to be achieved till 2012-13. It nowhere stipulates that the minimum percentage of 0.25% cannot be exceeded. It was requested to consider 0.75% Solar Purchase Obligation (SPO) for F.Y-2012-13 which will be consistent with Govt. of India guidelines and will enable addition of generation capacity in a very short time frame in power starved state.

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Reduction in SPO in the light of the latest amended tariff policy was also opposed by M/s Glat Solution (P) Ltd and M/s Claro energy (P) ltd. 9. It is a fact that the petitioner has not purchased solar energy as

per SPO i.e. 0.25% in 2010-11 and 0.5% in F.Y-2011-12. It is also a fact that not a single solar power unit has come up in the state. States of Andhra Pradesh (0.25%), Delhi (.15%), Himachal Pradesh, Karnatka, Maharastra, Orissa (0.15%) and Punjab (.07%) have different SPO. It is upto 0.5% in Chhatisgarh and Goa. It is more than 0.5% in, Gujrat (1.0%) Jharkhand (1.0%), Madhya Pradesh(1.6%) and Uttar Pradesh(3.0%). Thus SPO for F.Y. 12-13 is 0.25% or less in many of the States. The latest amended tariff policy has specified 0.25% SPO for F.Y-2012-13 and increase in subsequent years upto 3% in F.Y-2021-22 taking into account availability of such sources in the region and its impact on retail tariff. The Commission have powers to amend any provision of the Bihar Electricity Regulatory (Terms and Conditions for Tariff Determination from Solar Energy Sources) Regulations, 2010, as per regulation 39 which is reproduced as hereunder:39 power to amend- The Commission may from time to time add, vary, alter, modify or amend any provisions of these regulations on its own motion or on any application made before it by an interested person The Commission also have powers to amend the regulations under clause 15 of the Bihar Electricity Regulatory Commission (Renewable Purchase Obligation, its compliance and REC framework implementation) Regulations, 2010, which is reproduced hereunder: 15 power to amend The Commission may from time to time add, vary, alter, suspend, modify, amend or repeal any provisions of these regulations

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10.

In view of non-availability of solar power in the state and

amended tariff policy notified by Government of India under section 3 of the Electricity Act 2003 notified vide Ministry of Power Resolution dated 20th January, 2011, the Commission is inclined to revise, SPO from F.Y-2012-13 to F.Y-2021-22 in the following manner: 0.25% of the consumption in the year 2012-13 shall be procured from generation based on solar energy source and shall be increased at a rate of 0.25% every year thereafter till 2019-20 and at a rate of 0.5% in 2020-21 as well as in 2021-22. Amendment to this effect shall be made in clause 4.1 of BERC (Renewable Purchase Obligation, its compliance and REC Framework Implementation) Regulations, 2010 notified on 18th November, 2010and clause 35 (2) of the BERC (Terms and Conditions for Tariff Determination from Solar Energy) of the Regulations, 2010 notified on 4th August, 2010. However, SPO determined by the Commission for FY 2010-11 and FY 2011-12 and not met by the petitioner BSEB shall be carried forward and shall be achieved by the petitioner during current year and subsequent years. B. 11. Power Purchase through Competitive Bidding: The petitioner (BSEB) has proposed power purchase from solar

energy sources to meet solar power purchase obligation from 2013-14 onwards through competitive bidding process based on guidelines of Minister of Power, Govt. of India under case-1. They have argued that number of solar power players is increasing in the state. Cost of solar power is much higher than that from conventional sources and as such it would be prudent to purchase solar power through competitive bidding. Provision under para 6.4 (2) of the amended Tariff Policy under section 3 of the Electricity Act, 2003 notified vide Ministry of Power Resolution dated 20th January, 2011 has also been mentioned, which states: 6.4 Non conventional sources of energy generation including co-generation.
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(2)

Such

procurement

by

distribution

licensee

for

future

requirements shall be done, as far as possible, through competitive bidding process under section 63 of the Act within suppliers offering energy from same type of non-conventional sources. In long term, these technologies would need to compete with other sources in terms of full costs. 12. M/s Beltron Telecommunication Ltd. submitted that no solar

power plant has been set up in the State so far and it is premature to do away with preferential tariff and resort only to competitive bidding to meet SPO. To start with BSEB should purchase solar power at regulated preferential tariff fixed by the Commission till a few plants are set up. Solar projects are being promoted by the Government. No solar plant has come up in Bihar as yet. As such ground reality in Bihar may also be taken care of. M/s Moser Baer Clean Energy Ltd. submitted that the petitioner has relied only on clause 6.4 (1) (i) of the National Tariff Policy as amended vide Resolution dated 20.01.2011 issued by the Govt. of India. The clause 6.4 (1) (iii), as reproduced hereunder, has been completely ignored: It will take some time before non-conventional technologies can compete with conventional sources in terms of electricity. Therefore, procurement by distribution companies shall be done at preferential tariffs determined by the appropriate Commission Accordingly power purchase has to be made at preferential tariffs as stage of development of non-conventional technologies is not mature. Even clause 6.4 (2) of the tariff policy envisages such procurement through competitive bidding in future only and that too at a mature stage, which is clear from the relevant clause 6.4 (2) of Tariff Policy. Extract of clause 6.4 (2) of Tariff Policy as reproduced below:

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(2)

Such

procurement

by

Distribution

Licensees

for

future

requirements shall be done, as far as possible, through competitive bidding process under section 63 of the Act within suppliers offering energy from same type of non-conventional sources. In the long term these technologies would need to compete with other sources in terms of full costs. Similar arguments were advanced on behalf of M/s Claro Energy Pvt. Ltd. The provisions of Act and tariff policy clearly implies that a conducive environment in the state has to be developed so that some projects are developed and put into operation at preferential tariff before future requirements, as far as possible, are met through competitive bidding. According to them the national and international experiences have shown that though competitive bidding has resulted in lowering of the tariff, actual capacity addition has gone down. It was submitted on behalf of M/s Glatt Solutions Pvt. Ltd. that multiple technological options can be used for solar power generation. Therefore, the performance parameters and cost structure could differ significantly from one solar power project to another. As such bidding process can start only after development of a few such projects in the State. Also the Standard Bidding Document notified by Govt. of India essentially refers to procurement of conventional power through competitive bidding. The feasibility of applying such document to RE power needs to be explored. As such competitive bidding cannot be allowed in absence of SBD for procurement of RE Power. 13. The amended tariff policy under para 6.4 (iii) has made

provision for power purchase from non-conventional sources at preferential tariffs determined by the Commission in view of the fact that non-conventional sources will take some time in competing with conventional sources. Para 6.4(2) makes provisions for procurement of future requirements from non-conventional sources as far as possible, through competitive bidding so that they can compete with other
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sources in long term. Types of non-conventional sources have to be identified. The existing competitive bidding guidelines issued by Ministry of Power under section 63 of the Act do not cover procurement of power from Renewable Energy Sources. Ministry of Power has constituted a committee on 13th February, 2012 for evolving guidelines for competitive procurement of power from Renewable Energy Sources. The committee is yet to finalise the bidding document. In BERC (Renewable Purchase Obligation, its compliance and REC Framework Implementation) Regulations, 2010, the Commission have specified solar purchase obligation of 0.25% for F.Y-2010-11, 0.5% for F.Y-2011-12 and 0.75% for F.Y-2012-13. Against this specified SPO, BSEB has not purchased a single unit of energy from solar energy. A number of power projects have been approved by State Investment Promotion Board and various project developers, some of whom are also respondents in the present case, have indicated that they have gone ahead with the implementation of their projects. CERC have also advised that instead of devising divergent methods of procurement of power from the renewable energy sources, the Commission and the distribution licensee should await the finalization of the competitive bidding guidelines for renewable energy power procurement by the Ministry of Power. 14. In view of the circumstances mentioned above, the Commission

is of the view that BSEB may procure solar power existing SPO from solar power projects which are under implementation, at the tariff determined by the commission in the present order. Petitioner BSEB may wait till the competitive bidding guidelines for purchase of power from renewable energy sources are issued by the Ministry of Power and the renewable energy based power may be procured on the basis of competitive bidding.

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C. Solar Power Tariff 15. The petitioner has filed petition for revision of generic levelised

solar power tariff (both solar PV and solar thermal) as the present tariff, applicable vide order dated 06.08.2010 passed in suo-motu proceeding no 1 of 2010, is based on the capital cost and other norms applicable for the projects commissioned in the year 2010-11 on or after the date of notification of the BERC (Terms and Conditions for Tariff Determination from Solar Energy Sources) Regulations, 2010 and for such projects commissioned during the control period i.e. upto 31.03.2013 which is valid for 25 years from the commercial operation date. The capital cost taken by the Commission at that time was Rs. 16.9 crore/MW for Solar PV and Rs.15.30 Crore/MW for Solar Thermal whereas the CERC has specified the normative capital cost for the solar PV power projects as Rs.10.00 Crore/MW and Solar Thermal Power Projects as Rs.13.00 Crore/MW on 06.02.2012. The CERC has determined forbearance and floor price for solar REC from solar PV and Solar Thermal Power Projects as Rs. 13400/MWh and Rs. 9300/MWh respectively for the control period 2012-13 to 2016-17. CAPITAL COST 16. There is provision under Regulation 5 of the aforesaid BERC

Regulations that the benchmark capital cost for these projects may be reviewed annually by the Commission. The CERC under Regulation 57 of the CERC (Terms and Conditions for tariff determination from Renewable Energy Sources) Regulations, 2012 has specified the normative capital cost for the solar PV power projects as Rs. 10 Crore/MW for the F.Y-2012-13. Under Regulation 61, the normative capital cost for the Solar Thermal Power Projects as Rs. 13 Crore/MW for F.Y-2012-13. As per Clause 8.1 of the above-mentioned BERC Regulations, 2010 regarding petition and proceedings for determination of tariff, the Commission may notify the generic preferential tariff on suo-motu

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basis pursuant to issuance of revised norms by Central Electricity Regulatory Commission or Bihar Electricity Regulatory Commission. In view of the above provisions the Commission considers the normative capital cost for the Solar PV Power Projects as Rs. 1000Lac/MW and for Solar Thermal Power Projects Rs. 1300 Lac/MW for F.Y-2012-13 onwards as specified by the CERC till the capital costs are revised by the Commission. INTEREST ON LOAN 17. SBI prime lending rate prevalent during F.Y-2011-12 is as shown in the table below: Period from Period to PLR No. of days

01.04.2011 24.04.2011 13% 24 25.04.2011 11.05.2011 13.25% 17 12.05.2011 10.07.2011 14.0% 60 11.07.2011 12.08.2011 14.25% 33 13.08.2011 31.03.2012 14.75 232 The weighted average PLR for the year 2011-12 comes to 14.40%. As per clause 14 (2) of the Regulations, 2010 the normative interest rate shall be average long term prime lending rate of State Bank of India prevalent during the previous year plus 150 basis points. Interest rate shall thus be taken as 14.40% plus 150 basis points equivalent to 15.90%. Prime lending rate itself has been considered as long term prime lending rate as the same has not been made available by the bank. INTEREST ON WORKING CAPITAL 18. As per clause 17 (2) of the BERC Regulations, 2010 the interest on working capital shall be equivalent to average State Bank of India short term prime lending rate during the previous year plus 100 basis points. Interest rate on working capital shall thus be taken as 14.40% plus 100 basis point equivalent to 15.40%. Prime lending rate itself has been considered as short term prime lending rate as the same has not been made available by the Bank.
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LEVELISED TARIFF FOR SOLAR PV and ROOF TOP PV 19. The cost parameters and technology specific parameters specified in the Bihar Electricity Regulatory Commission (Terms and Conditions for Tariff Determination from Solar Energy Sources) Regulations, 2010 considered by the Commission to determine the generic levelised tariff for power generated from Solar PV, Rooftop Solar PV and small solar plants are summarised below: Parameters Capital cost (Rs. Crore/MW) Capacity utilization factor Useful life of the plant Debt: Equity ratio Loan repayment period Interest on loan Interest on working capital O&M expenses Depreciation Residual value Return on equity (Pre-tax) 20. Norms 10.00 19% 25 yrs. 70:30 10 yrs 15.9% 15.4% 10.63 Lac per MW with annual escalation of 5.72% 1 to 10 yrs.- 7% 11 to 25 yrs.-1.33% 10% of capital cost 1st 10 Yrs.-19% 11th yrs. to 25th yrs.-24%

The generic levelised tariff determined on the basis of above cost

and technology specific parameters for solar PV projects shall be applicable for the such projects which are commissioned during the control period i.e. upto 31.03.2015 and for which PPA is signed upto 31.03.2013. The tariff shall be valid for a tariff period of 25 years from the commercial operation date (CoD). 21. The generic levelised tariff shall be as hereunder: Levelised Tariff Levelised benefit Rs./KWh of accelerated depreciation if available Rs./KWh Net levelised Tariff after adjustment for accelerated depreciation Particulars

Solar PV Power Projects including 10.90 Rooftop Solar PV and Small Power Projects
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1.05

9.85

13

LEVELISED TARIFF FOR SOLAR THERMAL POWER PROJECTS 22. The cost parameters and technology specific parameters as specified in the Bihar Electricity Regulatory Commission (Terms and Conditions for Tariff Determination from Solar Energy Sources) Regulations, 2010 considered by the Commission to determine the generic levelised tariff for power generated from solar thermal power projects are summarized as hereunder: Parameters Capital Cost (Rs. Crore/MW) Capital utilization factor Useful life of the plant Debt: Equity ratio Loan repayment period Interest on Loan Interest on working capital O&M expenses Norms 13.00 23% 25yrs. 70:30 10 yrs. 15.9% 15.4% 15.36 Lac/MW with annual escalation of 5.72% 1 to 10 yrs- 7% 11 to 25 yrs.-1.33% 10% of capital cost 1st 10 yrs.-19% 11th to 25th yrs.- 24% 10%

Depreciation Residual value Return on equity Auxiliary Consumption 23.

The generic levelised tariff shall be as under Levelised Tariff Rs./KWh 13.11 Levelised benefit of accelerated depreciation, if available Rs. 1 KWh 1.24 Net levelised Tariff after adjustment for accelerated depreciation Rs./KWh 11.87

Particulars

Solar Thermal power Projects 24.

The generic levelised tariff determined on the basis of above cost

and technology specific parameters for Solar Thermal Power Projects shall be applicable for the projects for which PPAs have been signed
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upto 31.03.2013 and are commissioned during the control period i.e., upto 31.03.2015. The tariff shall be valid for a period of 25 years from the commercial operation date (CoD). 25. The detailed computations of the generic tariff are shown in Annexure- I for Solar PV Projects and Annexure-II for Solar Thermal Projects. SUBSIDY/INCENTIVE STATE GOVERNMENT 26. In case Central Government or State Government specifically provides for any incentive, the same shall be factored in the tariff for power generated from such projects, which qualify for availing the incentive 27. declared by the Central Government or the State Government from time to time. With effect from the date of order, BERC (Renewable Purchase 2010, BERC (Terms and conditions for Tariff Obligation, its compliance and REC framework implementation) Regulations, Determination from Solar Energy Sources) Regulations, 2010 and BERC order dated 06.08.2010 in Suo Motu Case No. 1/2010 shall stand amended to the extent provided in this order. Sd/(K. P. Singh) Member Sd/(S.C. Jha) Member Sd/(U. N. Panjiar) Chairman BY CENTRAL GOVERNMENT/MNRE OR

Certified to be the true copy of the original. (Ganesh Prasad) Secretary

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Annexure-1 Template for Solar PV Power Projects

Sl. No. 1. Assessment Head Power Generation Sub-Head (1) Capacity Sub- Head (2) Installed Power Generation Capacity Utilization factor Auxiliary Consumption Useful life 2. 3. Power Cost Financial Assumptions Capital Cost/MW Power Plant Tariff Period Debt Equity Total Debt Amount Total Equity Amount Loan Amount Moratorium Period Repayment Period Interest rate Equity Amount Return on Equity first 10 years th ROE 11 year onwards Discount rate Depreciation rate first 10 years th Depreciation rate 11 year onwards Income Tax Power Unit MW % % Assumptions 1 19.0 0.0

Year Rs. Lac/MW Year % % Rs. Lac Rs. Lac Rs. Lac Year Year % Rs. Lac % p.a. % p.a. % % % % Rs. Lac

25 1000 25 70 30 700 300 700 0 10 15.9 300 19 24 10.62 7 1.33 32.445 10.63

Debt :Equity

Debt Component

Equity Component

Depreciation

4.

Operation Maintenance

&

5.

Working capital

O&M expenses p.a. Escalation for O&M O&M expenses Maintenance Spare Receivables Interest on working capital

% Month % (%O&M expenses) Month %

5.72 1 15 2 15.4

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Annexure-2 Template for Solar Thermal Power Projects

Sl. No. 1. Assessment Head Power Generation Sub-Head (1) Capacity Sub- Head (2) Installed Power Generation Capacity utilization factor Auxiliary consumption useful life Power Plant cost Tariff Period Debt Equity Total Debt Amount Total Equity Amount Unit MW % Assumptions 1 23

% Year Rs. Lac/MW Year % % Rs. Lac Rs. Lac

10 25 1300 25 70 30 910 390

2. 3.

Project Cost Financial Assumptions

Capital Cost/MW Debt :Equity

Debt Component

Loan Amount Moratorium Period Repayment Period Interest rate Equity Amount Return on Equity first 10 years th ROE 11 year onwards Discount rate Income tax Depreciation rate first 10 years Depreciation rate th 11 year onwards

Rs. Lac Year Year % Rs. Lac % p.a. % p.a. % % % %

910 0 10 15.9 390 19 24 10.62 32.445 7 1.33

Equity Component

Depreciation

4.

Operation Maintenance

&

O&M expenses p.a. Escalation for O&M O&M expenses Maintenance Spare Receivables Interest on working capital

Rs. Lac

15.36

5.

Working capital

% Month % Month %

5.72 1 15 2 15.4

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