Escolar Documentos
Profissional Documentos
Cultura Documentos
Organized by
Indian Institute of Technology, Kanpur
VARIOUS MODELS OF TARIFF
DETERMINATION
• Embedded Cost
• Marginal Cost
• Normative Cost
• RPI minus X
• Tariff based on Competitive bidding
• Hybrid Method
• Market based Tariff
VARIOUS ISSUES IN
TARIFF DETERMINATION
(Contd….)
• Rate Base
- Gross Fixed Assets or Net Fixed Assets
• Return
- Return on capital employed or Return on equity
+ interest on Debt
• Rate of Return
- Post tax or Pre tax
• Interest on working capital
- Normative working capital or an additional
ROCE/ROE
• O&M expenses
- Based on Actual or Normative (% of capital cost
VARIOUS ISSUES IN
TARIFF DETERMINATION
(Contd….)
• Depreciation
- Repayment of loan or Recovery of Asset or
Replacement of Asset
• Incentives
- Thermal
- Hydro
- Transmission systems
• Other Issues
- Tariff period
- Peak & off peak tariff in bulk generation
• Performance based regulation
VARIOUS ISSUES IN
TARIFF DETERMINATION
• Thermal
- Availability/PLF
- Station Heat Rate
- Secondary fuel oil consumption
- Auxiliary energy consumption
• Hydro
- Capacity Index
- Auxiliary energy consumption
- Rate of primary and Secondary Energy
• Transmission
- Availability
TARIFF DETERMINATION
IN INDIAN POWER SECTOR
• Single part tariff
• Two part tariff for Generation as per K.P.
Rao Committee - 1992
• GOI two part tariff notification for
Generation Companies - 30.3.92
• Transmission tariff notification dated
16.12.97 effective from 1.4.97
• CERC Tariff Notification 26.3.2001 for
Tariff Period 2001-04
• CERC Tariff Notification 26.3.2004 for
Tariff Period 2004-09
CREATION OF CERC and SERCs
Electronic Media
Consultation Publicity
Paper/ Staff
Paper
Print Media
Public hearing
Discussions
Comments/
Suggestions
Draft
Regulations
Previous Publication
Regulations Comments
Publication
PROCEDURE FOR PETITION
Petitioner Respondent
Petition Copy
Petition
Admission Reply
Arguments
Option for Review
Order Option
Appeal to Appellate
Tribunal
CERC (TERMS & CONDITIONS OF
TARIFF) REGULATIONS,2004
(Contd….)
• Fixed Charges
– Interest on Loan
– Depreciation
– Advance against Depreciation
– Return on Equity
– Operation & Maintenance Expenses
– Interest on working capital
- O&M Expense
- Maintenance spares
- Receivables
- Cost of Coal and Secondary Fuel Oil linked to target
availability (only in thermal generation)
- Energy (variable) Charges
GENERATION TARIFF: THERMAL
OPERATION NORMS
80%
Target Availability for recovery of full Capacity (Fixed) charges
Gross Station Heat Rate of coal-based 200/210/250 MW sets 500 MW and above sets
thermal power generating stations Stabilization Period 2600 2550
(kCal/kWh) Afterwards 2500 2450
Gross Station Heat Rate of gas turbine/ Open cycle Combined cycle
combined cycle generating stations Advanced machines 2685 1850
(kCal/kWh) E/EA/EC/E2 machines 2830 1950
Small gas turbine 3125 2030
Auxiliary Energy Consumption: coal With cooling tower Without cooling tower
based 200 MW series 9.0% 8.5%
500 MW: steam driven 7.5% 7.0%
500 MW: electrically driven 9.0% 8.5%
Depreciation Based on straight line method over the useful life of the asset on 90% value of
historical cost
Advance against Depreciation Loan repayment subject to ceiling of 1/10th of loan minus depreciation
Operation and Maintenance 1.5% of the actual admitted capital cost in the year of COD with annual escalation
expenses of 4% per annum
Rate of Interest on working capital Short-term PLR of SBI as on 1.4.2004 or on 1st April of the year of COD,
whichever is later.
Incentive 0.65 x annual fixed charges x (capacity index achieved – normative capacity
index)
Depreciation Based on straight line method over the useful life of the asset on 90% value of
historical cost
Advance against Depreciation Loan repayment subject to ceiling of 1/10th of loan minus depreciation
Rate of Interest on working capital Short-term PLR of SBI as on 1.4.2004 or on 1st April of the year of COD,
whichever is later.
• ULDC Tariff
TANDA TPS
• FACTS OF THE CASE
– Tanda TPS transferred on 14.1.2000 by UP to NTPC at
Rs.1000 crores
– though the original cost was Rs.607 crores
– depreciated book value of the plant on the date of
transfer was Rs.431.09 crores as depreciation of
Rs.175.91 crores was recovered before the transfer of
the plant
• CERC ORDER
– capital cost of Rs.607 crores as recommended by
Special Bench was considered for determining the tariff
by the Commission.
– depreciation of Rs.175.91 crores charged up to the date
of transfer was considered for limiting the cumulative
depreciation amount claimed to 90% of the project cost
of Rs.607 crores.
CHANDRAPUR HVDC (BACK TO BACK PROJECT
BETWEEN SR & WR) TRANSMISSION LINE
(Contd….)
Method II
Balance Sheet
Sources of Funds (Rs.) (Rs.) Aplication of Funds (Rs.) (Rs.)
Shareholders Funds Fixed Assets
Equity 300 Gross Block 1000
Grant in Aid 200 Depreciation 60 940
Less Deductions during the year 12 188
Loan Funds 500 Profit & Loss Account 48
Total 988 Total 988
Profit & Loss Account
Expenditures (Rs.) Income (Rs.)
Depreciation 60 Deferred Income (Transferred from Capital Reserve on a/c of Grant-in-aid) 12
Balance transferred to Balance Sheet 48
Total 60 Total 60
ULDC PROJECTS