Petition No. 40/2004. Case: Badarpur Thermal Power Station Vs Delhi Transco Limited. Central Electricity Regulatory Commission

Case NumberPetition No. 40/2004
JudgesA.H. Jung, Member
IssueElectricity Act, 2003
Judgement DateJuly 07, 2005
CourtCentral Electricity Regulatory Commission

Order:

A.H. Jung, Member

  1. This petition has been filed for approval of tariff in respect of Badarpur Thermal Power Station (BTPS) owned by the Central Government in Ministry of Power, for the period from 1.4.2004 to 31.3.2009. Badarpur Thermal Power Station is presently supplying power only to the respondent, Delhi Transco Ltd. for meeting load requirement of National Capital Territory of Delhi.

  2. Badarpur Thermal Power Station was conceived by Government of India in the year 1967 for meeting the growing demand of power in Northern Region. However, since 1987, the entire power generated from the power station is being utilized for meeting the demand of Delhi. The generating station comprises of three units of 100 MW each in Stage-I (de-rated to 95 MW) and 2 units of 210 MW each in Stage-II. Therefore, the ultimate capacity at present is 705 MW. The dates of commercial operation of the different units in Stage-I and Stage-II are as follows:

    _______________________________________

    Stage I Stage II
    Unit-I: 1.11.1973 Unit-IV: 17.3.1980
    Unit-II: 1.9.1974 Unit-V: 1.4.1982
    Unit-III: 1.4.1975
    _______________________________________

    3. The generating station was designed and engineered by the erstwhile Central Water & Power Commission (predecessor of the Central Electricity Authority) and was being operated by them till March 1978. Government of India entrusted the management of Badarpur Thermal Power Station to National Thermal Power Corporation Ltd. under a contract agreement between Ministry of Power and NTPC w.e.f.1st April 1978 that has expired on 31.3.88. There is no formal contractual arrangement as on date between Government of India and National Thermal Power Corporation Ltd.

  3. Ministry of Energy, Department of Power revised the tariff for Badarpur Thermal Power Station, Government of India vide its letter No.49/16/82-D7/AS dated th March 1987 w.e.f 1st April 1987. The tariff was fixed at 61.38 paise per unit exclusive of excise duty and other taxes, which were to be paid additionally.

  4. The base tariff of 61.38 paise/kWh was computed corresponding to energy sent out of 3168 MUs at 57.08% normative PLF for the rated capacity of the 2 generating station of 720 MW considering 12% Auxiliary Energy consumption. The breakup of base tariff of 61.38 paise/kWh was as follows:

    __________________________________________________________________________________

    (a) Fixed Charges: Rs. Crore Paise/kWh of sent
     out energy
    __________________________________________________________________________________
    (i) Interest on fixed capital @ 8.5% on net 16.71 5.28
     worth as on 1.4.87 of Rs.196.62
     Crore.
    (ii) Interest on working capital. 4.19 1.32
    (iii) Depreciation @ 3.6% on gross block 9.18 2.90
     of Rs. 255 Crore.
    (iv) O&M cost 2.5% of current capital cost 19.98 6.31
     of Rs. 11100 per kW.
    (v) Standard profit @ 3% of net worth as 5.90 1.86
     on 1.4.87 of Rs. 196.62 Crore.
     Total 55.96 17.67 
     
    (b) Energy Charges 
    (i) Coal cost 112.66 35.54 
    (ii) Oil cost 25.82 8.17 
     Total 138.48 43.71
    __________________________________________________________________________________

    6. The fixed charges were computed on Net Fixed Asset concept. The energy charges were based on station heat rate of 3189 kCal/kWh, Specific Fuel oil consumption of 22.5 ml/kWh (21 ml/kWh for furnace and 1.5 ml/kWh for HSD), auxiliary energy consumption of 12%, prevailing prices and GCV of coal and oil. These base energy charges were subject to fuel price variation for price & GCV of coal & oil.

  5. The tariff for sale of electricity from Badarpur Thermal Power Station has not been revised by the Central Government since March 1987. It implies that fixed charge recovery was at 17.67 paise/kWh since 1987. PLF for the year 2003-04 was 87.7% and it resulted in annual fixed charge recovery of the order of Rs. 84.22 Crore, including incentive of 28.26 Crore. Energy charges recovery is based on fuel price variation formula. The energy charge based on the price & GCV of coal and secondary fuel oil given in the petition works out as 214 paise/kWh sent out considering old operational norms. The annual recovery of energy charge corresponding to 87.7% PLF for the year 2003-2004 works out to Rs.1019.97 Crore.

  6. The petitioner has claimed the following fixed charges in the tariff petition, considering additional capitalization due to R&M, and are based on liability side approach (Gross Fixed Asset Concept):

    (Rs. in Crore)

    __________________________________________________________________
     2004-05 2005-06 2006-07 2007-08 2008-09 
    __________________________________________________________________
    Depreciation 12.93 18.48 27.77 35.75 40.24 
    Interest on Loan 21.82 24.07 28.04 29.82 28.46 
    Return on Equity 30.72 37.46 47.50 55.42 59.56 
    Advance against 9.01 8.28 6.16 3.84 2.31 
    Depreciation
    Interest on 32.73 33.19 33.80 34.31 34.65
    working capital
    O&M Expenses 192.94 200.66 208.69 217.04 225.72 
    __________________________________________________________________
    Total 300.15 322.14 351.94 376.17 390.93
    __________________________________________________________________

    9. The energy charge considering the improved operational norms proposed by the petitioner in the petition works out to 168.5 paise/kWh and annual energy charge corresponding to 87.7% PLF works out as Rs.803.12 Crore, excluding incentive.

  7. Initially, the petitioner filed a petition for approval of tariff based on debt-equity ratio of 70:30. Subsequently, an amended petition has been filed wherein tariff has been proposed by taking debt-equity in the ratio of 50:50. Further, in the amended petition, the petitioner has sought approval based on "Gross Fixed Assets" concept, though the tariff earlier approved by the Central Government by its letter dated 7.3.1987 was based on "Net Fixed Assets" concept. The Commission has notified the terms and conditions for determination of tariff applicable from 1.4.2004 to 31.3.2009. However, the operational norms to be applied to BTPS have not been considered in these terms and conditions for the reason that actual operational data in respect of BTPS was not available before the Commission. Therefore, before the Commission takes up the exercise of actual determination of tariff, it is necessary that certain preliminary issues get resolved. For this purpose, Commission decided that all the aspects should be examined by a one Member Bench of the Commission, to make suitable recommendations to the Commission for its consideration. I was...

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