ANDHRA PRADESH
ELECTRICITY REGULATORY COMMISSION
11-4-660, 4th & 5th
Floors, Singareni Bhavan, Red Hills,
Between
M/s.
Bio-mass Energy Developers Association
M/s. Sree Rayalaseema
Hi-strength Hypo Ltd. ….
Petitioner
AND
Transmission Corporation of A P Limited ….Respondent
Andhra Pradesh Electricity Regulatory
Commission (hereinafter the Commission) initiated suo-motu proceedings for
determination of tariff applicable to
Non-Conventional Energy (NCE) Projects of Andhra Pradesh to take effect
from
2) The Commission passed the order dated
20-03-2004 in R.P.No.84 / 2003 in O.P. No. 1075/2000, wherein the Commission
determined the tariff terms and conditions for purchase of energy by
Transmission Corporation of Andhra Pradesh (hereinafter APTRANSCO) from the
following categories of Non-Conventional Energy based Power Projects.
i)
Biomass based
energy and Biomass-based co-generation
plants
ii)
Bagasse based
Co-generation plants
iii)
Mini-Hydel
Power projects
iv)
Wind
Electricity Generators
v)
Industrial
Waste based Energy projects
vi)
Municipal Waste
based Energy projects.
3) While deciding the purchase price and
other terms in respect of different categories of NCE Projects, the Commission
adopted a “Cost plus” approach and allowed a fair amount of return instead of
the adhoc price earlier fixed based on the guidelines of Ministry of Non-
Conventional Energy Sources (MNES) issued in 1993. While rationalizing the tariffs and adopting
the cost plus approach, the tariff for some categories of NCE Developers
underwent a revision leading to reduction in the tariffs which they were
enjoying earlier. Aggrieved by some of
the provisions of the said order, the
following developers of NCE projects filed writ petitions in the Hon’ble High Court of Andhra Pradesh:
i)
M/s. Bio-mass
Energy Developers’ Association
ii)
M/s. Small
Hydro Power Developers’ Association
iii)
M/s. Sree Rayalaseema Hi-Strength Hypo Ltd (Bio-mass Developer)
iv)
M/s. Vensa Bio-Tek Limited
v)
M/s. Active
Power Corporation
vi)
M/s.
vii)
M/s. Raus Power Pvt. Ltd
viii)
M/s. Sai
Renewable Power Pvt. Ltd.
Out of the above, for the present
order dealing with Biomass Energy developers, those listed at serial numbers (i) and (iii) only are relevant. The Commission is passing
separate orders on other categories of developers such as Mini Hydel, Bagasse,
Waste to energy.
4) The Hon’ble
High Court by order dated
“The
Petitioner-Association is permitted to file review petition against the
impugned order dated 20-03-2004 before APERC as contemplated under section 94
(1) (f) of the Electricity Act, 2003 within a period of ten days from the date
of issue of the order (27-04-2004) and on such filing, the respondent Regulatory Commission is directed to dispose of the same within a period of eight
weeks thereafter. Till passing of such
order, as per the interim orders passed by the Court on
5) Following the directions of the Hon’ble High Court, the Bio-mass Energy Developers’
Association in R.P.No. 3 / 2004 and M/s. Sree
Rayalaseema Hi-Strength Hypo Ltd in
R.P. No. 4 / 2004 filed petitions before
the Commission for review of the impugned order dated 20.3.2004. The APTRANSCO, Sri. M.Venugopala Rao,
Correspondent, Prajashakthi and Peoples Monitoring Group on Electricity
Regulation also filed petitions for review of the impugned order dated 20.3.2004
passed by the Commission, for downward revision of the tariffs. The other
parties were given opportunities to file replies to the review petition by NCE
developers or APTRANSCO etc., as the case may be. The copies of the review petition of APTRANSCO
was also served on NCE Developers who had earlier participated in the
proceedings for determination of the tariffs, terms and conditions leading to
the passing of the impugned Order dated 20 March 2004 by the Commission. The Commission conducted a hearing on
6) The
issues raised by the parties for the review of the impugned order dated
20.3.2004 and the decision of the Commission on the review sought are as under:
ISSUES
RAISED BY BIOMASS ENERGY DEVEOPERS’ ASSOCIATION
AND M/s. SREE RAYALASEEMA
HI-STRENGTH HYPO LTD. (PETITIONERS)
7) Capital Cost :
The
Petitioners submitted that the Commission had proceeded to determine the
capital cost without considering the increases in the price of some of the
components of the project cost. The project cost cannot be determined on the
basis of prices of these components as prevailing earlier. The project cost for
old and new projects should be
different. The Petitioners stated that
there has been in the recent years significant increase in the prices of steel,
copper, cement and labour. The increases
have also been on account of withdrawal of Central Excise exemptions on many of
the equipments. These have not been factored by the Commission while determining
the project cost. The project cost
determined by the Commission at Rs. 4 crore per MW is therefore low and should
be revised upwards at least by Rs. 50 to 70 lacs.
APTRANSCO
objected to the above plea of the Petitioners and stated that the project cost
determined by the Commission at Rs.4 crores is appropriate. Other objectors,
Sri. M. Venugopala Rao and
Peoples Monitoring Group, contended that
the project cost of Rs. 4 crs / MW is on the higher side. APTRANSCO stated that
the project cost of some of the Biomass projects which are now at the threshold
of financial closure such as the project of M/s Amaravati Textiles Limited is
around Rs. 4 crores only. Therefore the claim of the Petitioners for increase
in the project cost is not justified.
While
determining the Capital cost of the projects, the Commission in its order dated
20.3.2004 (paragraph 49) had considered the views of the developers, NEDCAP and
APTRANSCO and come to the conclusion that the project cost should be Rs.4
crores per MW. Paragraph 49 of the Commission’s said order reads as under:
“The developers in their initial filings submitted that Rs.4 Crs. / MW of the
project cost adopted by APTRANSCO is lower, compared to the actual cost
incurred which is in the range of Rs.4.00 Crs to 4.11 Crs /
MW. APTRANSCO submitted that the
benchmark of capital cost as submitted by them (APTRANSCO) is based on the
information provided in the DPRs and the cost would
actually decrease further if capital subsidy provided by the State Government
to these projects is also considered.
M/s. NEDCAP replied that no capital subsidy is provided by the State
Government for Biomass projects and the indicative project cost is Rs. 4 Crs.
per MW only.
During the hearing with the developers, after detailed deliberations,
the Biomass Energy Developers Association (BEDA) agreed for consideration of
the project cost at Rs. 4 Crs/ MW.
One Developer, namely M/s. R.R. Bio-Energy Ltd, stated that he proposed
to set up a 12 MW power plant based on integrated gasification combined cycle
technology whose capital cost according to them worked to out Rs.9 Crs /
MW. The cost of the generation
therefore was estimated at Rs. 4.35 / unit.
While the Commission appreciates the efforts of the developer in the
implementation of new technology, it is of the opinion that the burden of such
abnormal tariffs cannot be passed on the consumers.
Based on the above, the
Commission accepts the benchmark capital cost of Rs. 4 Crs / MW for Biomass
projects”.
Thus
the Commission adopted the benchmark capital cost of Rs. 4 crores per MW for all
projects existing, under commissioning
and new. The project cost in some
of the projects and in particular the existing projects commissioned in or
prior to 2001 may be lower than Rs.4 crores per MW. In the affidavit dated
Hence,
the Commission considers that there is no case for review of its order dated
8) Plant Load Factor (PLF):
The
Petitioners have challenged the determination of the threshold PLF in the
impugned order dated 20-03-2004 at 80% on the ground that the same is not based
on any scientific data and the ability of the Petitioners to achieve. The
Petitioners suggest a threshold PLF of 70% only. The Petitioners have stated
that the difficulty in achieving the PLF above 70% is on account of various
factors such as the use of mixed fuels, the fibrous nature of some of Biomass
fuels, presence of sodium salts, due to which the calorific value of the fuel
used changes continuously and that these factors affect the machine and its
performance. The Petitioners have, however stated that the PLF even above 80%
has been possible now since all biomass plants are new but the problem will
arise when the plants get old. One of the objectors viz., Peoples Monitoring
Group contended that PLF of 80% as allowed is on the lower side and would lead
to super profits to the developers.
In
reply to the petitioners, APTRANSCO has contented that the problems outlined by
the petitioners are generic in nature and common for all such plants. APTRANSCO
has stated that as per the data available with APTRANSCO, the PLF of most of the
projects is over 80%.
The
Commission in its impugned order dated
“APTRANSCO has considered a plant load factor of 80% for computation of
the tariff. M/s. NEDCAP also suggested a
PLF of 80%. However the developers
contended that the PLF should be considered at 70% in view of the uncertainties
involved.
The Commission reviewed the PLFs achieved by the Biomass power plants during the past 2
/ 3 years as submitted by APTRANSCO and it appears that these projects can
achieve PLF of 80%.
The Developers during hearing also admitted that the PLF of over 80% is
achievable.
The Commission therefore
considers a PLF of 80% as threshold for fixed cost coverage”.
The
tariffs for the Biomass projects have been fixed as per the performance level
possible during the period of the PPA. The NEDCAP in its affidavit dated
25.5.2004 has confirmed that the PLF at average 80% is achievable for the life
time period of the Biomass power projects. The data available indicates that the
projects as at present are achieving more than 80% PLF. This has also been conceded by the
petitioners. The issue of what should be
the PLF when the projects are old is not relevant at this stage. The project
developers are expected to recover their costs including profits with 80%PLF
determined by the Commission. There is therefore no case for review of the
impugned order dated
9) Auxiliary consumption :
The Petitioners submit that the actual auxiliary consumption is in
the range of 9-15% depending on the type of boiler and the fuel and that the
petitioners had agreed for 9% on the assumption of single-part tariff where
there is no cap on tariff and the developers could recover uniform cost for the
entire generation. With the introduction
of two-part tariff, the fixation of 80% PLF for recovery of full fixed charges
and payment of only variable charge and incentive above 80% PLF, the 9%
auxiliary consumption is not adequate.
In reply to this, APTRANSCO has submitted that the auxiliary consumption
of a plant is a function of its efficiency and the energy conservation methods
and has nothing to do with the type of tariff. The Commission in its impugned
order dated
i)
“APTRANSCO
stated that it considered auxiliary consumption at 9% of the gross generation
based on DPRs.
They further stated that the auxiliary consumption in case of some of
the projects is around 4-5% only.
ii)
NEDCAP
indicated auxiliary consumption at 10%.
iii)
The developers
have stated that the auxiliary consumption of 9% as considered by APTRANSCO is
low and actual consumption is in the range of 9-15%.
The developers during the hearing
accepted for consideration of Auxiliary Consumption at 9%.
Compared to conventional power projects where 9% auxiliary
consumption is allowed the non-conventional power projects have less auxiliary
systems. Further, the Commission is of
the view that these plants should be properly audited and operated efficiently
to minimize losses and maximize production as enunciated by the Energy
Conservation Act. Hence the Commission
considers auxiliary consumption of 9% which is also as per the DPRs of some of the projects”.
The substance of the argument of
the petitioners is that if single-part tariff is maintained, they will be able
to recover higher amounts as the per unit tariff would be available to them in
full for the entire generation which will be at levels higher than 80 %
PLF. Since the petitioners were getting
higher returns, they did not object to lower auxiliary consumption then allowed
at 9%. However if the PLF is fixed at
80% for recovery of full fixed charges, the petitioners will get only variable
charge and incentive beyond 80%. Merely because the petitioners were getting
more fixed charges earlier in the
single-part tariff does not mean that the petitioners should be allowed
higher auxiliary consumption with the two-part tariff adopted now. APTRANSCO is
correct in its submission that the auxiliary consumption is an issue of
efficient functioning of a plant and energy conservation methods adopted and is
not related to either single-part or two-part tariff.
The Commission accordingly holds
that no case is made out for any review of the impugned order dated 20.3.2004
in regard to Auxiliary Consumption.
10) O & M expenditure:
The petitioners have challenged
the impugned Order passed by the Commission on the ground that the reference to
the audited accounts of some projects mentioned in the order is vague as the
names of such projects have not been disclosed. The petitioners submitted that
the O&M expenses for biomass projects are more than 4% allowed by the
Commission in the impugned Order. APTRANSCO has also filed a review petition
asking for reduction in O&M expenses to 2.5% as per the norms laid down by
the Central Electricity Authority (CEA) for the thermal projects. One of the objectors Sri. M. Venugopala Rao contended that if
the projects are unable to manage O & M expenses within the allotted norm
it is due to the inefficiency of the developers.
The Commission had examined the
audited accounts of the projects of M/s. Veeraiah
Non-conventional Power Projects and M/s. Gouthami Bio-Energies Limited where the O&M expenses worked out to be
in the region of 4%. Considering the trend from the above projects, the Commission was of the opinion that the
O&M expenses suggested by APTRANSCO at 2.5% based on CEA norms for thermal
plants may not be adequate for Biomass projects when the O&M expenses as
per the data made available by the aforementioned two developers were around
4%. The other Biomass projects should
also achieve similar efficiency in restricting the O&M expenses. The
Commission has therefore fixed a liberalized
norm for O&M expenses at 4%.
The Commission considered the views of NEDCAP, APTRANSCO and the
developers and approved 4% of capital cost as O &M expenses. Hence the
Commission does not find any reason to review this component either for
increase as claimed by the Petitioners or for decrease as claimed by APTRANSCO.
11) Fuel consumption:
The Petitioners claimed that the
Commission had adopted the Expert Committee report numbers without collecting
information from the existing projects.
The Petitioners have challenged the competence and capability of the
expert committee to determine the fuel requirements for projects based on
biomass on the ground that the committee was constituted only for the purpose
of determining the availability of the Biomass and they had no expertise to decide
on the fuel requirement of the power projects based on biomass. APTRANSCO has countered this by stating that
the specific fuel consumption of 1.10 kg/kwh is in
line with the Administrative Staff College of India (hereinafter ASCI) report
issued in February 2002. Further, as per APTRANSCO, this is also in line with
the Detailed Project Reports of the projects available. It is rather unfortunate that the Petitioners
have chosen to raise objections to the report of the Expert Committee and in
that connection use language which could have been avoided, to say the
least. The Expert Committee was
constituted by the Government of Andhra Pradesh vide G.O.Ms.No.5 dated
1.
To assess the District wise availability of biomass.
2.
To assess the local requirement of biomass
3.
To assess the District wise net availability of biomass for
power generation
4.
To assess the district wise potential for generation of
power from biomass
5.
To recommend to the Government if there is a need to limit
the installed capacity at the district level.
The members of the Committee consisted of the following
persons
1.
Member (Generation) APSEB
2.
Joint Director, Industries department
3.
Joint director, Agriculture department
4.
Managing Director, M/s.HCL Agro Power
Limited
5.
Joint Managing director, M/s.Alpha
Energy Systems Ltd.
6.
Senior Consultant, M/s. APITCO Ltd.,
7.
Managing Director, NEDCAP Ltd.
The following persons were also co-opted
-
Sri M.V.Shantharam, Associated
Director of Research ANGR Agricultural University,
-
Dr.L.G.Giri Rao,
Agronomist (Agro-Forestry) ANGRAU,
Thus the committee consisted of
representatives from power, industry and agriculture departments, industrial
units engaged in generation of power,
agro-economist and experts, consultant and in addition the Managing
Director of NEDCAP, a body constituted specially for promotion of
non-conventional energy development. One
of the main tasks of the Committee was to assess the district-wise potential
for generation of power from biomass after considering the availability of
biomass, the local requirement of biomass, etc. This would naturally include
the estimated consumption of biomass for per unit electricity generation. The
Committee assessed a total capacity of
448.5 MW of power generation being possible from the biomass based on
the availability of biomass in the State.
It is therefore not correct on the part of the Petitioners to claim that
the committee was not in a position to and did not determine the fuel requirement
norm of biomass for power generation. The Ministry of Non Conventional Energy
Sources (MNES), Government of India, had appointed ASCI (a premier institution
based in
“The
Commission is of the opinion that
non-conventional power projects should improve the operational efficiency
notwithstanding the fact that they are a promoted category power projects”.
In view of the above and for the
reasons already mentioned in the order, the fuel consumption of 1.16 kg/unit
considered by the Commission is
reasonable. Hence, the Commission,
considers it not necessary to review this component.
12)
Cost of fuel:
The
petitioners have suggested that the Commission should adopt fuel-mix of husk,
woody bio-mass and coal in the ratio of 60:20:20. The petitioners have also
contended that the cost of raw materials which is variable in nature is
proposed to be frozen for five years by the Commission and requested that the
fuel cost should instead be allowed under the pass-through mechanism. One of
the objectors, Peoples Monitoring Group has contended that the fuel cost
allowed by the Commission is on the higher side. APTRANSCO responded stating
that it is not correct that the fuel cost has been frozen and that the
Commission has in fact provided annual
fuel price escalation @ 5%. The Commission in its impugned order dated
Paragraph 54: - “Cost
of fuel is the most important parameter that determines the cost of generation
in a Biomass power plant. While
APTRANSCO and M/s.NEDCAP
have assumed Rs. 1000 / MT and Rs. 1100 / MT respectively as the cost of
Biomass fuel, the developers projected a cost of Rs.1300/ MT. In view of the
very conflicting projections by the different agencies, the Commission deputed
its officers to some of the Projects, which have been in operation for the past
1 – 2 years to ascertain the factual position.
The Developers during the hearing
on 22.12.2003 submitted that due to increase in the number and capacity of the
Biomass plants in the State, the cost of rice husk has gone up
substantially. Further they are meeting
their fuel requirement to the extent of only around 60% by rice husk, meeting
the balance through other material like woody Biomass, cotton stacks, chilly
stacks etc.
The Commission asked the
developers as to why they cannot use conventional fuels like coal to the extent
permitted by MNES. The developers
submitted that the landed cost of coal is higher than the cost of Biomass fuel
and hence they are using coal to the barest minimum possible.
The details of the price of rice
husk given by the AP Rice Millers Association varied from Rs. 900 – Rs. 1400
depending on the season. The price of
other Biomass fuels as furnished by M/s. NEDCAP varied from Rs. 600 – 900 /
MT. The study team of APERC observed
that the rice husk is utilised up to 50-60% and
balance requirement is met from other fuels.
Considering the weighted average price of rice husk and other materials
(60:40), the price of fuel works out to about Rs.1000 / MT.
The Commission has therefore
adopted a price of Rs. 1000 / MT for the Biomass fuel”.
Paragraph 55 :- “While the developers pleaded for
providing for an escalation of 6% per annum, APTRANSCO and NEDCAP assumed an
annual escalation of 4% and 5% respectively.
The current rate of inflation is
also around 4% per annum but as the fuel is procured from the unorgainised sector, the Commission considers the escalation
of fuel price at the rate of 5%”.
The
Commission has determined the fuel-mix after careful consideration of the
submissions of the developers on consumption of coal and also the report of its
own study team as explained in the order.
Similarly, the rationale behind decisions of the Commission on the price
of fuel and the fuel cost escalation is also fully reasoned out in its impugned
order dated
13) Working capital:
The
petitioner requests for provision of two months’ stock of fuel and the rate of
interest at 15%p.a. APTRANSCO has
replied that one month’s stock of fuel as considered by the Commission is
reasonable and adequate. Further,
APTRANSCO has referred to the working capital interest rate of 10.25% fixed by
the Central Electricity Regulatory Commission (hereinafter CERC) in its tariff
regulations issued on
In
the Regulations notified on
“Rate of interest on working capital shall be on normative
basis and shall be equal to the short-term Prime Lending Rate of State Bank of
India as on 01-04-2004 or on 1st April of the year in which the
generating station or a unit thereof is declared under commercial operation,
whichever is later. Interest on working
capital shall be payable on normative basis notwithstanding that the generating
company has not taken working capital loan from any outside agency”.
It
is pertinent to mention here that the Prime Lending Rate of State Bank of
This
Commission in its impugned order dated
“The developer requested for interest
on working capital at 15% per annum for two months’ stock.
APTRANSCO has replied that the loan repayment and interest
cost in the tariff are recovered by the developers on monthly basis, while the
payments to the lenders are generally
made on quarterly basis, which provides extra cushion to the developers. Further, it is considering 12% as interest
rate on working capital.
The storage
of fuel stock beyond one month is dependent on various factors like
non-availability of stock on continuous basis, storage facilities, the actual
practice followed by the developers and the price during season /
off-season. In the absence of all these
details, the Commission considers only one month’s stock of fuel as
constituting the working capital component. Regarding interest rate on working
capital, the Commission considers 12% as reasonable rate of interest on working
capital.”
The
petitioners have not still provided any details of the various factors
mentioned in the above impugned order. The inability of the project developers
to obtain working capital at the level of interest rate provided by this
Commission cannot be a ground for allowing higher rate of interest, especially
when CERC allows a still lower rate of interest.
There
is thus no case for review of the impugned order passed by the Commission both on the quantum and the interest rate
related to working capital.
14) Depreciation:
The petitioners request for depreciation @ 9.2% as the loan repayment period would be 7 years. APTRANSCO contended that the petitioners did not consider the moratorium period and the loans could also be rescheduled to align with the tariff to mitigate cash flow variations. The Commission in its order had considered the loan repayment period, the rates approved for Independent Power Producers and accordingly determined the depreciation rates. It may be mentioned that the depreciation at 7.84% is itself an accelerated depreciation. Considering that the term of Power Purchase Agreements is 20 years and the plant life is even longer, the depreciation based on the plant life will be less than 4.5%. The depreciation in the power projects is now being approved by the CERC based on the plant life and for thermal projects with plant life of 30 years it is 3.6% as per the tariff regulations effective 01-04-2004. Hence there are no grounds to review this component.
15) Incentive:
The Petitioners contended that
the incentive of 21.5 paise / unit recommended by CERC is for conventional
projects and not for Non Conventional Projects.
As compared to risk-free operations of conventional projects, the
biomass projects are exposed to market fluctuations and other risks. The incentive for generation beyond the
threshold PLF ought to have been fixed at Re.1.00 / kWh.
APTRANSCO submitted that as per the directions of this Commission, these projects have to be treated as “must run” plants. These generating stations therefore enjoy prime advantage of 100% dispatch. While contending that the rate of incentive allowed by the Commission is high, it suggested two alternate methodologies for incentive payment for consideration by the Commission, according to which, the incentive works out to 10 paise/ kwh.
The Commission in its impugned order dated 20.3.2004 (paragraph 63) has stated as under:
“The Commission has noticed that many of the
Biomass projects are generating beyond the threshold level of 80% also. The
Commission is inclined to encourage this efficiency. But at the same time, the
consumers should not be burdened with the same tariff beyond threshold PLF. In
order to encourage the developers and without unduly burdening the consumers,
the Commission allows incentive similar to that of conventional generation
projects. The incentive will be at the rate of 21.5 paise / unit of actual
generation beyond the threshold PLF of 80% as the developers would recover the
entire fixed cost at the threshold level of PLF itself.”
As rightly contended by APTRANSCO, so long as the NCE projects are “must run projects”, the petitioners will get the incentive in any event if there is generation beyond the specified level. If there is no generation to the required level, the question of payment of incentive will not arise. There is therefore no relation to the quantum of incentive and any risk associated with the projects of non-conventional nature. The submissions made by the Petitioners are totally misconceived and have no merit.
Subsequent
to the issue of impugned Order, however, CERC in its notification dated
16) Income-tax:
The Petitioners have submitted
that where a two-part tariff is adopted the income-tax is considered a part of
fixed cost. However, the proposed tariff
has no provision for income-tax as pass-through.
APTRANSCO submitted that
as per the provisions of Income-tax Act, all the power projects enjoy a tax
holiday of 10 years available over a period of first 15 years. The projects can have necessary tax planning
to minimise the tax incidence in the MAT (Minimum
Alternate Tax) or otherwise.
The
Commission fixed 16% return on equity, not accepting APTRANSCO’s submissions
for considering only 14% and 11% for existing and the new plants respectively
due to the declining trend in the interest rates.
The
Commission has duly considered the implication of MAT obligation in determining
the rate of return. There are no grounds
for changing the impugned order on this count.
17) Return on equity (ROE):
The Commission in its impugned
order provided ROE at 16% even though APTRANSCO’s proposal indicated ROE at 14%
for existing projects and 11% for new projects.
APTRANSCO and one of the objectors Sri. M. Venugopala
Rao have requested the Commission to provide ROE at
14% instead of 16% allowed in the order.
Another objector M/s. Peoples Monitoring Group has contended that the
ROE should be 12.5% in line with the ROE of another project viz., M/s.Krishna Godavari Power
Utilities Ltd. Responding to the above,
the Developers Association contended that the returns should be at 23.83% on
pre-tax basis, or post tax return of 16%.
The Petitioners further contended that the ROE at 16% / 14% / 12% may be
considered where fuel cost is pass-through.
APTRANSCO
submitted that the returns asked for by the Petitioners are not as per the
provisions of income-tax holiday available for the projects. It has also submitted that variable cost for
generation has been provided, after considering all the parameters including
fuel cost with necessary escalation.
The
fuel procurement and associated risk if any are controllable by the Petitioners
and need to be mitigated by them. As stated at para (58) of its impugned Order
dated
18) Year of operation:
The Commission in its impugned
Order directed that the existing and new projects shall be entitled to a tariff
with the component of fixed charge based on the year of operation and variable
charge corresponding to the financial year of the operation. The Petitioners submitted that the year of
operation should be reckoned from the commercial operation date of the projects
instead of treating all the projects commissioned during a financial year
alike. The Commission hereby clarifies
that the year of operation shall be reckoned from the date of commercial
operation to arrive at the appropriate fixed charges for each year. The
variable charge shall however be as indicated in the impugned order based on
the corresponding financial year.
19) General :
The APTRANSCO has raised a number
of issues in the petition filed by it for the review of the impugned Order
dated 20.3.2004 and has claimed downward revision of tariff on various aspects.
The Objectors have also claimed downward revision of tariff on different
aspects contending that the tariff allowed to the Petitioners is excessive.
Some of the issues raised by APTRANSCO and the objectors have been mentioned
above while dealing with the issues raised by the Petitioners. The Commission is passing separate orders on
the issues raised by APTRANSCO and other objectors.
20) Conclusion:
The petitions filed by the
Petitioners for review of the impugned order dated 20.3.2004 do not indicate
any error apparent on the face of the record or non-consideration of any
relevant material or document or otherwise
sufficient reason for review of the impugned Order dated 20.3.2004
passed by the Commission. As stated earlier, the Commission in the order
dated
Except for the clarification contained above relating to the year of operation and revision of the incentive beyond the threshold PLF, the Commission hereby rejects the petitions filed by the developers for review as not maintainable and without merit. The petitions are therefore dismissed.
This order is signed by Andhra Pradesh Electricity
Regulatory Commission on
(MEMBER)
(ACTING CHAIRMAN)