Case: NTPC Limited Vs Madhya Pradesh State Electricity Board and Ors.. Central Electricity Regulatory Commission
| Judges | Bhanu Bhushan and R. Krishnamoorthy, Members |
| Issue | Electricity Law |
| Judgement Date | November 02, 2007 |
| Court | Central Electricity Regulatory Commission |
Order:
1. The petitioner, NTPC Limited, had filed this petition for approval of tariff in respect of Kawas Gas Power Station (656.2 MW) (hereinafter referred to as "the generating station") for the period from 1.4.1998 to 31.3.2001. On completion of pleadings and after hearing the parties, final tariff in respect of the generating station was awarded vide the Commission's order dated 18.5.2004, based on Government of India, Ministry of Power notification dated 30.4.1994. The summary of the annual fixed charges awarded is given hereunder:
(Rs. in lakh)
| Particulars | 1.4.1998 to 31.10.1998 | 1.11.1998 to 31.3.1999 | 1999-2000 | 2000-01 |
| Interest on Loan | 2503 | 2503 | 1389 | 341 |
| Interest on Working Capital | 1780 | 1888 | 1763 | 1680 |
| Depreciation | 10740 | 10740 | 11299 | 11001 |
| Return on Equity | 9120 | 12160 | 12304 | 12122 |
| O & M Expenses | 3086 | 3086 | 3395 | 3734 |
| TOTAL | 27229 | 30378 | 30150 | 28878 |
2. The petitioner filed an application, taken on the file of the Commission as Review Petition No 86/2004, to seek review of the above order. The application for review was admitted limited to the following two aspects, namely:
(a) non-inclusion of stock of Naptha/NGL fuel in calculation of working capital, and
(b) provision of heat rate of 3190 kCal/kWh in place of 3150 kCal/kWh, considered in the above order.
3. The application for review was disposed of vide order dated 23.3.2005. The heat rate of 3150 kCal/kWh was inadvertently specified in the Monthly Operating Pattern Adjustment (MOPA) for open cycle operation instead of 3190 kCal/kWh with NOx control. This error was corrected by substituting word "3150 kCal/kWh (without NOx control)" with "3190 kCal/kWh (with NOx control)" in MOPA adjustment. Besides, working capital was corrected as under, by including Naptha stock of Rs. 249 lakh:
(Rs. in lakh)
|
| 1.4.1998 to 31.10.1998 | 1.11.1998 to 31.3.1999 | 1999-2000 | 2000-2001 |
| Fuel Cost (Gas) | 2886 | 2886 | 2886 | 2886 |
| Liquid fuel stock | 249 | 249 | 249 | 249 |
| O & M expenses | 257 | 257 | 283 | 311 |
| Spares | 464 | 464 | 464 | 464 |
| Receivables | 10315 | 10840 | 10802 | 10590 |
| Total Working Capital | 14171 | 14696 | 14684 | 14500 |
| Working Capital Margin (WCM) | 2030 | 2030 | 2030 | 2030 |
| Total Working Capital allowed | 12141 | 12666 | 12654 | 12470 |
| Rate of Interest | 13.00% | 13.00% | 12.00% | 11.50% |
| Interest on allowed Working Capital | 1578 | 1647 | 1518 | 1434 |
| Interest on WCM | 112 | 112 | 113 | 113 |
| Return on WCM | 122 | 162 | 162 | 162 |
| Total Interest on Working capital | 1812 | 1921 | 1793 | 1709 |
4. Consequently, the annual fixed charges in respect of the generating station were revised as under:
(Rs. in lakh)
| Particulars | 1.4.1998 to 31.10.1998 | 1.11.1998 to 31.3.1999 | 1999-2000 | 2000-01 |
| Interest on Loan | 2503 | 2503 | 1389 | 341 |
| Interest on Working Capital | 1812 | 1921 | 1793 | 1709 |
| Depreciation | 10740 | 10740 | 11299 | 11001 |
| Return on Equity | 9120 | 12160 | 12304 | 12122 |
| O & M Expenses | 3086 | 3086 | 3395 | 3734 |
| TOTAL | 27261 | 30410 | 30180 | 28907 |
5. The petitioner filed an appeal, Appeal No 96 of 2005 before the Appellate Tribunal for Electricity (hereinafter "the Tribunal"). The Tribunal disposed of the appeal vide its judgment dated 14.11.2006, holding as under:
38. In view of the above, we allow the appeal and set aside the impugned order to the extent indicated above and direct as follows:
(a) The Central Commission shall adopt normative debt repayment methodology for working out the interest on loan liability for the period 01.04.1998 to 31.03.2001. The adjustment arising out of this be made in the future years.
(b) The effect of the increased working capital amount by Rs. 2.49 crores due to inclusion of liquid fuel (Naphtha/NGL/HSD) shall also be considered by the Central Commission for being passed to two other elements namely one month's revised "fuel expenses" and 'two months' receivables which are also determining factors for the working capital.
(c) The Central Commission shall recompute the O&M expenses if the balance sheet figure of the O&M expenses for Kawas GPS is different than Rs. 2806 lakhs for the year 1997-98.
6. Accordingly, we proceed to revise the annual fixed charges in respect of the generating station for the period 1.4.1998 to 31.3.2001 in keeping with the above judgment of the Tribunal.
7. The Commission, vide its order dated 18.5.2004 had computed interest on loan as under:
(Rs. in lakh)
|
| 1998-1999 | 1999-2000 | 2000-2001 |
| Gross loan-Opening | 74070 | 77927 | 75867 |
| Cumulative repayments of Loans up to previous year | 47750 | 59077 | 69709 |
| Net loan-Opening | 26320 | 18851 | 6158 |
| Increase/ Decrease due to FERV | 2967 | -2097 | -255 |
| Increase/ Decrease due to Additional Capitalisation | 890 | 37 | 47 |
| Total | 30177 | 16790 | 5951 |
| Repayments of Loans during the year | 11327 | 10632 | 5951 |
| Net loan-Closing | 18851 | 6158 | 0 |
| Average Net Loan | 22585 | 12504 | 3079 |
| Rate of Interest on Loan | 11.08% | 11.11% | 11.09% |
| Interest on loan | 2503 | 1389 | 341 |
8. Interest on loan calculated based on the normative repayment in accordance with the judgment of the Tribunal works out as under: Interest on loan
Interest on loan
(Rs. in lakh)
|
| 1998-1999 | 1999-2000 | 2000-2001 |
| Gross loan-Opening | 74070 | 77927 | 75867 |
| Cumulative repayments of Loans up to previous year | 47750 | 51665 | 55611 |
| Net loan-Opening | 26320 | 26263 | 20256 |
| Increase/ Decrease due to FERV | 2967 | -2097 | -255 |
| Increase/ Decrease due to Additional Capitalisation | 890 | 37 | 47 |
| Total | 30177 | 24202 | 20048 |
| Repayments of Loans during the year | 3915 | 3946 | 4722 |
| Net loan-Closing | 26263 | 20256 | 15327 |
| Average Net Loan | 26291 | 23259 | 17791 |
| Rate of Interest on Loan | 11.08% | 11.11% | 11.09% |
| Interest on loan | 2914 | 2583 | 1973 |
9. The Tribunal has, in its judgment dated 14.11.2006 decided that the effect of increase in working capital due to considering the cost of Naphtha at Rs. 249 lakh is to be considered for revision of...
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