1.1 State Hydro Stations.
1.2 State Thermal Stations.
1.3 Central Generating Stations.
1.4 Captive Generating Power Plants.
1.5 Renewable Energy.

1.1.2  Machhkund :
The Design Energy of Machhkund HPS assumed by OHPC is 525 MU. Considering Orissa share of 50%, procurement by GRIDCO from this Station is estimated at 265.00 MU for FY 2009-10.

1.2     STATE THERMAL STATIONS:

1.2.1 Orissa Power Generation Corporation Limited (OPGC): 

The projection of net energy availability from OPGC is taken as per the generation plan submitted by OPGC for FY 2009-10 (ED –IB). OPGC made a projection for generation availability of 3265.92 MU. Considering projected Auxiliary Consumption of 10%, the Ex-Bus availability of energy is proposed at 2939.25 MU during FY 2009-10. As per the Power Purchase Agreement signed between GRIDCO and OPGC, the Auxiliary Consumption is taken as 9.50%. Accordingly, GRIDCO proposes net generation availability of 2955.66 MU from OPGC considering Aux. Consumption of 9.50% at a projected PLF of 88.77% against that of 2939.25 MU at Aux. Consumption of 10% as proposed by OPGC in its Generation Plan for FY 2009-10.

Talcher Thermal Power Station (TTPS) of NTPC:

1.3       Central Generating Stations (CGSs):

1.3.1    For the purpose of actual availability, the System Loss for ER System is considered as 3.88% based on the actual energy flow data tabulated from Regional Energy Account of Eastern Regional Power Committee (ERPC) (ED- II).

1. Talcher Super Thermal Power Station (TSTPS) – Stage -I : 

Based on the GRIDCO’s share of 31.80% from TSTPS Stage-I (1000 MW), Auxiliary Consumption of 7.50%, PLF of 80% and Central Transmission Loss of 3.88%, the availability to GRIDCO from TSTPS Stage-I is estimated as 1981.42 MU. Accordingly, 1981.42 MU is projected to be procured by GRIDCO from TSTPS-Stage-I for FY2009-10.

1. Talcher Super Thermal Power Station (TSTPS) – Stage -II : 

GRIDCO has been allocated 200 MW from TSTPS Stage-II (10% of Installed capacity: 2000 MW) towards State Quota. Considering Auxiliary Consumption of 7.50% and energy availability at 80% PLF and Central Transmission Loss of 3.88%, the availability to GRIDCO from TSTPS Stage-II is projected as 1246.18 MU for FY 2009-10.

1. Farakka Super Thermal Power Station (FSTPS): 

GRIDCO has a share allocation of 13.63% from FSTPS (1600 MW). Considering the auxiliary consumption of 7.56%, PLF at 80% and the Central Transmission Loss of 3.88%, the availability of power to GRIDCO, is estimated at 1357.95 MU fro FY 2009-10.

1. Kahalgaon Super Thermal Power Station-Stage-I (KhSTPS-I) : 

Earlier GRIDCO has been allocated a share of 15.24% (128 MW) in KhSTPS Stage-I. With the commencement of all the six Units of Tala HEP, Ministry of Power (MoP) vide its Order dated 07.07.06 (ED- III A), revised the  share allocation of KhSTPS-I to 10.08%  (84.6 MW) from 15.24 % (128 MW) as allocated earlier.

Further, Ministry of Power vide its Order Dated 18.07.2008 (ED- III B) has notified the restoration of share allocation of GRIDCO in Kahalgaon Stage-I and Farakka by equivalent diversion of share of power from Kahalgaon Stage-II in phases as and when with the commercial operation of the three Units of KhSTPS Stage-II. GRIDCO has been allocated 4.93% share in each of three units of. Kahalgaon stage – II, which roughly works out to be 74.1 MW (24.7 MW per each Unit). At present one unit of KhSTPS – II is been under commercial operation since 1ST Aug’08. Accordingly, the allocated power of 24.7 MW from KhSTPS stage – II has been added with earlier GRIDCO’s allocation of 84.6 MW from KhSTPS Stage-I. This resulted in change of  share of GRIDCO from 10.08% to13.02% in KhSTPS Stage – I. It is anticipated that the commercial operation of the 2nd Unit of KhSTPS Stage-II may commence during the April’09. Hence out of 24.7 MW share of GRIDCO in the 2nd unit of KhSTPS stage – II, 18.63 MW would be reallocated to GRIDCO in KhSTPS Stage-I in order to restore the allocation to 128 MW and rest 6.072 MW would be available from KhSTPS stage-II. Accordingly, share allocation of GRIDCO from KhSTPS Stage-I would be modified from 13.02% to 15.24 %, which implies that two units of KhSTPS Stage-II will be in operation by April’09 and in toto 43.4 MW of power will be diverted from KhSTPS Stage-II to KhSTPS Stage-I.

1.3.6      Kahalgaon Super Thermal Power Station-Stage-II (KhSTPS-II) : 

            GRIDCO is allotted a share of 4.93% (equivalent to 74.1 MW) in all the three Units of KhSTPS Stage-II. Presently, one unit of KhSTPS-Stage-II of 500 MW is under commercial operation since August, 2008. GRIDCO holds a share allocation of 4.93% in this Unit. The share of GRIDCO is adjusted with the share allocation in KHSTPS Stage-I. With such adjustments, the allocation from KhSTPS Stage-I has been increased from 10.08% to 13.02%. In other words, with the GRIDCO’s entitlement of 24.7 MW from KhSTPS-II being met from KhSTPS-I, the net share from the Unit-I of KhSTPS Stage-II becomes Zero.

            GRIDCO is hopeful that the 2nd Unit of KhSTPS-II may start commercial operation during the April 2009 and the last & the 3rd Unit to begin in the midst of FY 2009-10.

            As stated earlier, out of GRIDCO’s entitlement of 24.7 MW (@ 4.93% share) from the 2nd Unit of Stage-II, only 6.072 MW would be available as the balance of 18.628 MW would be re-allocated to GRIDCO from KhSTPS-I.

            GRIDCO would get its due share of 24.7 MW (@4.93% share) from the 3rd Unit of KhSTPS-II as & when the Unit commences the operation.

            With the above adjustments / reallocations between the Stage-I & II, the net share from KhSTPS St-II is calculated as 1.47% (instead of 4.93%). Considering 80% PLF, Auxiliary Consumption of 7.5 % and Central Transmission Loss of 3.88%, the net availability from KhSTPS-II to GRIDCO for FY 2009-10 works out tobe 114.79 MU.

            The details of GRIDCO’s drawal for FY 2009-10 from Central Sector Generating Stations (CGSs) as per revised allocation are given in the Table below:

*The net availability from KhSTPS St-II has been considered taking into account of the two Units of KhSTPS St-II under commercial operation during FY 2009-10 and the 3rd Unit to be operational during Sept’09.

1. Chukha (Bhutan) :

Share allocated to GRIDCO from Chukha HEP now stands at 15.19%. Accordingly, GRIDCO proposes to draw 265.00 MU of energy from Chukha HEP (after discounting for Central Sector Loss of 3.88%) during the FY  2009-10.

1. Tala HEP (Bhutan) :

GRIDCO has an allocated share of 4.25% from Tala HEP. Presently, six units of Tala HEP, each having installed capacity of 170 MW, are already in commercial operation. During the first six moths of FY 2008-09, GRIDCO could be able to draw 121.24 MU. Going by the trend of drawal during FY 2007-08 from this Station, GRIDCO expects to draw less during the fag end of this year and also in the initial months of the ensuing year. Thus, GRIDCO hopes to procure 174 MU of energy (after discounting for Central Sector Loss of 3.88%) from all the six units of Tala HEP during FY 2009-10.

1. Teesta –V HEP (Bhutan)

Ministry of Power, Govt. of India vide their Order dated 28.02.2008 (ED-IV) allocated a share of 20.59% of power from the Installed Capacity of Teesta-V HEP to GRIDCO. Accordingly, GRIDCO has a share of 105 MW of the total Installed Capacity of 510 MW (3X170 MW). GRIDCO hopes to draw 490 MU from Teesta- V during FY 2009-10 as per the trend of drawal during FY 2008-09 after Central Sector Loss of 3.88%.

1. Captive Generation Plants(CGPs) :

The drawal of power from CGPs is not based on long term PPAs and hence, infirm in nature. GRIDCO has no lien on the capacity of the CGPs. CGPs supply the power to the system as and when they have surplus generation. Of late, driven by the lure to get a lucrative price, CGPs are in the habit of exerting pressure to allow them the Open Access Route in order to enable them to sell the surplus power to the deficit areas / States. In order to balance the interest of State as well as to address the concern of CGPs, the Board of Directors of GRIDCO have approved a reasonable remunerative rate for procurement of surplus power from the CGPs in the State. GRIDCO is also taking steps to harness more power from CGPs in accordance with the CGP Pricing Policy approved by OERC in their Order dated 14.03.2008 in Case No. 72 of 2007.

In the past years, the actual availability from CGPs varied widely from the quantum approved by the Commission. During first six months of FY 2008-09, there has been drawal of 329.48 MU from CGPs. GRIDCO received generation plan of NALCO and IMFA for FY 2009-10 (ED-I.D). GRIDCO proposes to draw 450 MU during FY 2009-10. The following Table gives the details of drawal of Power from various CGPs during the 1st six months of FY 2008-09 and that pertaining to the projection for FY 2009-10.

1. Renewable Energy:

The Hon’ble Commission, in their Order dtd. 20.08.2005 in Case No. 14 of 2005, have directed that GRIDCO should procure power from Non-Conventional and Renewable Energy Sources upto 3% of the total power purchase during the year 2007-08 FY and it should increase at the rate of 0.5 % per annum for each subsequent years to reach a level of 5 % per annum by FY 2011-12.

Presently, GRIDCO is drawing power (Energy generated from waste heat and as such, considered as co-generation) from M/s. NINL, M/s. AARTI Steel Ltd. & M/s. TATA Sponge Iron Ltd. 

Besides, GRIDCO is hopeful that Samal Small Hydro Project and Minakshi Small Hydro Project will commence their generation in the beginning of FY 2009-10. It is estimated that GRIDCO would be able to procure 100 MU and 150 MU of energy respectively from these two stations. Thus, in all, GRIDCO may be able to procure a total of 530 MU of energy from Renewable & Non-Conventional sources during FY 2009-10.

1. Summary of Power Procurement for FY 2009-10:

With inclusion of the estimated procurement from all sources as stated above, it is projected that GRIDCO could be able to procure 19619.11 MU of energy during FY 2009-10 as tabulated in the following Table:

                       * There is 5MW allocation from HPS i.e. 16.60 MU in favour of CSEB

1. ENERGY SALE AND DEMAND ESTIMATION:

         Energy Demand & Availability
:
The projected availability of power to GRIDCO during FY 2009-10 as per the existing share from different sources / Power Stations is only 19619.11 MU. After considering the proposed Intra State Transmission Loss 4.50% (equivalent to 882.86 MU), the sale to DISCOMs & Emergency Sale to CGPs would be of the order of 18736.15 MU of which 10 MU is earmarked for sale to CGPs. Thus, energy available to DISCOMs would be 18726.15 MU. The following Table shows the details of power available to DISCOMs.

2.1       Energy Demand of DISCOMs and CGPs:

GRIDCO requested the four Distribution Companies (DISCOMs) to submit their Energy Demand and Simultaneous Maximum Demand for FY 2009-10 in order to arrive at the Aggregate Demand of power in the State to be projected in the Annual Revenue Requirement for FY 2009-10.However, none of the DISCOMs except NESCO submitted the Energy Projection for FY 2009-10.

In the absence of any data pertaining to projection of Demand for FY 2009-10 by the DISCOMs, GRIDCO has allocated the availability of energy of 18726.15 MU amongst the DISCOMs on pro-rata basis based on the projected consumption of DISCOMs during FY 2008-09.

2.2       Emergency Power Supply to Captive Generating Plants (CGPs) for FY 2009-10 is projected as 10 MU based on the Hon’ble OERC approval for FY 2008-09.

            The Projection of energy consumption by the DISCOMs and those relating to the CGPs are given in the following Table:

2.3       Simultaneous Maximum Demand (SMD):

The Simultaneous Maximum Demand (SMD) of DISCOMs has been projected based on the actual SMD for the month of September’08.
Of late, it has been observed that there has been recessionary trend in the pace of industrialization in the State arising out of the Global Meltdown. In fact, the drawal of energy by the industries has started decreasing. It is expected that the recession in the economy is going to stay for some more time before the revival sets in.

In view of the above, it is apprehended the SMD experienced during the month of September’2008 may not be even achieved during FY 2009-10. However, since a lot of industries have been set up / are planned to be set up in Orissa including industries having their own CGPs and also due to the implementation of Rural Electrification Programmes under Biju Gramya Jyoti Yojana (BGJY) and Rajiv Gandhi Gramin Vidyutikaran Yojana  (RGVVY), there might be the prevalence of SMD to be at least at the level of Septemeber’08.
 In view of the above, GRIDCO assumes that the SMD experienced during Septemeber’08 may be taken as the projected SMD for the FY 2009-10. The projection of SMD for different DISCOMs for FY 2009-10 are given as under:

SMD in MVA per month

It is proposed that ordinarily there would not be any levy of Demand Charges from the DISCOMs in consonance with the ARR & BSP Order for the previous years. However, when the respective actual SMD of DISCOMs calculated on annual basis exceeds the permitted SMD (110% of the OERC approved SMD for the relevant DISCOM) as defined in the ARR & BSP Order for FY 2008-09, DISCOMs would be required to pay the Demand Charges @ Rs.200 KVA/Month as being proposed by GRIDCO.

3.         Transmission Loss:

The actual Transmission Loss in the OPTCL System for the year FY 2007-08 is calculated as 4.82%. In view of the rising demand for power due to ongoing industrialization & Rural Electrification in Orissa and also stoppage of trading of surplus power, there is an increased flow of power in the OPTCL transmission network contributing to the increased transmission loss.

However, keeping in line with the approval of Hon’ble OERC for FY 2008-09, the Intra State Transmission Loss for FY 2009-10 is projected as 4.50% which is taken in order to compute the quantum of power procurement by GRIDCO for FY 2009-10.

POWER PROCUREMENT COSTS:

4.1       OHPC  

The OERC approved rates of energy from different OHPC Stations for FY 2008-09 are considered in this application for FY 2009-10 provisionally subject to the final concurrence by Hon’ble Commission.
The projected power procurement rate & cost for FY 2009-10 are given in the table below:

Machhkund:

The proposed power procurement, tariff and Cost from Machhkund Hydro station for FY 2009-10 are shown in the table below.

*  O & M Expense for FY 2006-07 ha been considered instead of FY 2007-08 as the O &M Expenses for FY 2007-08 has been low because of the shutdown of the station for a longer period.

4.3       Talcher Thermal Power Station (TTPS)

4.3.1    Capacity Charge:

The Annual Fixed Charge of TTPS for FY 2009-10 is estimated as Rs.197.82 Crore based on the following.

As per the latest Orders available, Hon’ble CERC has fixed Annual Fixed Charges for TTPS for FY 2008-09 at Rs. 183.92 Crore. Earlier R & M Phase-I & II were implemented in TTPS but some of the works were still left.

The left-over / balance work of Stage-I, Stage-II and Common Auxiliaries/ System covering area of SG, TG and Auxiliaries, electrical, C&I & miscellaneous works have been identified to be carried out as R & M Phase-IV by TTPS.  The estimated cost for these works under R&M Phase-IV is considered as Rs. 117.50 Crore by NTPC.

Presently, R&M Phase-III Packages are also under implementation.

TTPS has filed a Petition before the Hon’ble CERC praying for Additional Capitalization of Rs. 85.83 Crore towards the R&M expenses spent during FY 2004-05 to FY 2006-07. The impact of this additional capitalization of Rs.85.83 Crore in the Fixed Cost of Tariff as calculated and prayed by NTPC is Rs. 54.86 Crore for the years from FY 2004-05 to FY 2008-09 inclusive of Additional Capitalization of Rs.13.90 Crore for FY 2008-09. With inclusion of this Rs.13.90 Crore in the Fixed Charge approved for FY 2008-09, the total revised Capacity Charge of TTPS works out to Rs. 197.82 Crore which corresponds to Capital Base of Rs. 781.56 Crore as on 31.03.2007. As per NTPC’s submission beyond 31.03.2007 an amount of Rs. 486.23 Crore (Rs. 1150.29 Crore-Rs. 781.56 Crore+Rs.117.5 Crore) is yet to be considered for additional capitalization. It may be noted that Hon’ble CERC has approved the Capital Cost of Rs.696.01 Crore as on 31.03.2004. The Additional Capitalization of Rs. 85.83 Crore is under consideration before CERC for approval.

It may further be noted that NTPC has not yet moved to CERC for approval of additional capitalization beyond 2006-07 although the R&M Works are continuing.

In absence of any benchmark (Tariff Regulation, 2008 for the period from 01.04.2009 to 31.03.2014 by CERC is under finalization) by the Hon’ble CERC for FY 2009-10, GRIDCO considers it prudent to project the Fixed Cost of TTPS at the level FY 2008-09 at Rs. 197.82 Crore for FY 2009-10.

4.3.2    Variable and FPA Charges:

CERC vide its Order dated 20.08.2007 in Petition No. 59 of 2007, has revised the operational parameters and norms for determination of Tariff in respect of TTPS for FY 2004-05 to FY 2008-09.

           
The revised Norms w.e.f. 01.10.2007 are:

• PLF/Availability- 80%
• Auxiliary Power consumption – 10.5 %
• Specific Fuel Consumption –2 ml/kWh
• Heat Rate – 2975 kcal/kWh

In addition, GRIDCO proposes FPA of 32.40 P/U for FY 2009-10 considering 10% escalation over the actual FPA for Sept’08 i.e. 29.45 P/U.

Year End Charges:

The total Year-end Charges for FY 2009-10 is projected as Rs. 39.781 Crore based on the actual charges payable by GRIDCO for the first six months of FY 2008-09 and the proposed drawal during FY 2009-10, the details of which are furnished in the Table below:

Considering the above estimate, the per Unit cost of power from TTPS for FY 2009-10 comes to 155.46 P/U, the details of which are furnished in the Table below:

Thus, The total projected power procurement cost from NTPC-TTPS during FY 2009-10 for procurement of 3085.07 MU @155.46 P/U is estimated at Rs. 479.61 Crore.

Orissa Power Generation Corporation Limited (OPGC):

OPGC sold its entire power to GRIDCO through Power Purchase Agreement subsisted between GRIDCO and OPGC. Clause 12.4 of PPA between GRIDCO & OPGC provides that tariff shall be determined based on the operational and financial norms as amended from time to time. As per Sec 62 of the Electricity Act, 2003, Hon’ble OERC shall determine the generation tariff of OPGC. However, OPGC was taking a stand that they are not subject to the jurisdiction of Hon’ble OERC and raised the matter before Hon’ble Orissa High Court.  Hon’ble Orissa High Court upheld the stand of GRIDCO which was challenged by OPGC before Hon’ble Supreme Court of India. In an Interim Order, Hon’ble Supreme Court have stayed the proceedings of OERC for approval of the PPA.
 
OPGC was insistent for determination of tariff based on the norms prevailing at the time of execution of PPA. GRIDCO did not accept the same as it is contrary to the provisions of PPA and thereafter, referred the matter to the Govt. of Orissa (GoO) for a decision. The Govt. of Orissa constituted a Task Force for resolution of the dispute. The Task Force submitted their recommendations to the State Govt. and accordingly Govt. of Orissa have taken the following decision vide Notification No. OPGC-8/2007 7216/E, Bhubaneswar dated 21.06.2008 (ED-V  ), for settlement of the dispute.

• The Normative Plant load Factor (PLF) has been enhanced from 68.49% to 80% for the purpose of calculation of Incentive.
•  All other terms and parameters for determination of tariff for Units 1 & 2 shall be as per the existing PPAs till validity of amended PPA.
• The amended PPA shall be filed before the Hon’ble OERC for consent/approval
• The amended PPA shall be effective with effect from 01.04.2007.
• OPGC will withdraw the SLP filed before the Hon’ble Supreme Court of India against the judgement of Orissa High Court regarding jurisdiction of OERC for approval of PPA for Units 1 & 2.
• OPGC shall take expeditious steps to commission Units 3 & 4 with Installed Capacity of 2 x 600 Mw and shall make half of the power generated from these units available to GRIDCO. In no case, the power share of the State / GRIDCO from the expansion Unit(s) of OPGC shall be less than 420 MW.
• The PPA for the power made available to the State/ GRIDCO shall be subject to approval of OERC and the tariff norms and parameters shall be as per the tariff norms as may be notified by CERC from time to time.

The Board of Directors of GRIDCO have accepted the Settlement Principles approved by the Govt. of Orissa and steps are being taken to execute the amended PPA and the amended Tripartite Agreement which will be submitted to the Hon’ble Commission for approval.

Besides the above, Hon’ble OERC vide their letter dated 05.11.2008 have advised OPGC in terms of Para 5.92 of the Tariff Order for the financial year 2007-08 and Para 304 of the Tariff Order for the financial year 2008-09 to furnish the ARR under Section 62 (2) of the Electricity Act, 2003 for the FY 2009-10.

Meanwhile, GRIDCO is in receipt of a Statement of Tariff Calculation by OPGC for the year 2009-10 in which the per unit cost of energy from OPGC is shown as 193.55 P/U (ED-IB). The Tariff has been proposed considering the impact of use of blended coal (10 % imported coal plus 90 % MCL coal) due to coal shortage   This Unit rate includes Fixed Cost, Variable Cost, and other year end charges such as Incentive and reimbursement of taxes and duties.

However, GRIDCO assumes the total cost of energy per unit from OPGC @ 194.04 P/U instead of 193.05 P/U due to changes in the Capacity Charge and Year End Adjustment Charges. In fact, the Capacity Charge and Year End Adjustment Charges are derived as 53.80 P/U and 8.85 P/U respectively instead of 53.06 P/U and 9.11 P/U as projected by OPGC in its Projected Tariff calculation. The Power purchase cost proposed is based on the settlement approved by the Govt. of Orissa and the Board of Directors of GRIDCO, which is subject to the approval of Hon’ble OERC. The same are given as under:

4.4.1   Fixed Cost:

GRIDCO has assumed the Fixed Cost of OPGC for FY 2009-10 as Rs. 159.023 Crore as projected by OPGC to arrive at the per unit Fixed cost of energy from OPGC. Taking into consideration of the units generated from OPGC during FY 2009-10 as 2955.66 MU, the per Unit Fixed Cost is derived at 53.80 P/U..This is in contrast with the Fixed Cost of 53.06 P/U shown in the Projected Tariff Calculation by OPGC.

4.4.2   Variable Cost:

GRIDCO proposes the variable cost of OPGC for FY 2009-10 based on the projected Tariff Calculations by OPGC as 131.38 P/U.

4.4.3 Year-end Charges:

The total Year-end Charges for FY 2009-10 is projected by GRIDCO as Rs. 26.17 Crore based on the actual expenditure for FY 2008-09 and the proposal for FY 2009-10 which are furnished in the Table below:

Considering the above proposal, the per Unit cost of OPGC comes to 194.04 P/U, the details of which are furnished in the Table below:

Thus, the power purchase cost from OPGC for 2955.66 MU @ 194.04 P/U comes to Rs. 573.51 Crore for FY 2009-10.

Captive Generating Plants (CGPs):

GRIDCO proposes to procure 450 MU of energy from different CGPs based on the following:

Earlier OSEB/GRIDCO used to procure surplus power from CGPs at variable cost or at negotiated price very close to the variable cost. Following the promulgations of Inter State Open Access Regulation, CGPs are increasingly interested to sell the surplus power outside the State at market-discovered price which is very much lucrative because of deficit power scenario in the country. In order to avail the surplus power of CGPs, GRIDCO has offered attractive slab rates to all the CGPs except NALCO (which have signed separate 5 Years Long Term Agreements with GRIDCO) and ICCL

(as per MoU dtd. 15.11.1994) as below:

• For supply upto 8 MU in a month                                : Rs. 2.02 per kWh;
• For supply above 8 MU to below 32MU in a month    : Rs. 2.30 per kWh and;
• For supply above 32 MU in a month                           : Rs. 2.50 per kWh

Meanwhile, the Pricing Policy for CGP Power has been notified by Hon’ble OERC vide their Order dated 14.03.2008 in case No. 72/2007 which requires GRIDCO to procure power from CGPs though a Competitive bidding route u/s 63 of the Electricity Act, 2003. GRIDCO has already initiated action for procurement of power from CGPs in accordance with the Pricing Policy enunciated by OERC. The process of determining price of each interested CGPs to supply power will take time. The price will also vary from unit to unit.  

Under the present circumstances, where the availability of power has fallen short of demand and in a scenario where CGPs are pressing hard to get higher rates for their surplus power or else they would prefer to sell the power outside by availing Open Access, it is proposed to procure such surplus power from the CGPs in accordance with the Pricing Policy of OERC. The cost is estimated at Rs.3.00/kWh. Hon’ble Commission may however consider the actual procurement price determined though the bidding route in the ARR for FY 2009-10. The estimated procurement on firm basis, rate and cost of CGP power during FY 2009-10 are given below:

Projected Procurement (MU), Rate (P/U) and Cost (Rs. Crore) of CGP Power
During FY 2009-10

4.6       Renewable Energy :

As stated earlier, procurement of energy from Renewable & Non-Conventional sources by GRIDCO has been a problem because of non-availability. However, during the 1st six months of FY 2008-09, GRIDCO is able to procure 132.32 MU of co-generated energy from Arati Steels, NINL & Tata Sponge. It is expected that during FY 2009-10, these Plants would supply energy to GRIDCO and in addition Small Hydel Plants like, Meenakshi & Samal may also supply hydro energy.

Traditionally, the costs of energy from Renewable & Non-Conventional sources has been very prohibitive.  However, keeping in line with the constraints, GRIDCO hopes to procure about 530 MU of these power at an assumed rate of 264.15 Paise per kWh as shown in the table below:

Projection of Renewable & Non-Conventional Energy, Rate & Cost during FY 2009-10

Central Generating Stations (CGSs):

Chhuka:

Procurement from Chukha is proposed at 265 MU. The Procurement cost from Chukha is taken as per the GoI letter dated 14.02.2008 of the Ministry of External Affairs (ED-VI). As per the letter, the cost has been revised from 150 P/U to 155 P/U w.e.f. 01.04.2008. Further, 5 P/U is added to the above rates towards handling charges.Considering 3.88% Central Sector Transmission loss and the PGCIL Transmission Charges of 20.10 P/U, the effective procurement rate to GRIDCO works out to be 186.56 P/U.

Thus, the power purchase cost from Chhuka Hydro Station for 265 MU @ 186.56 P/U works out to  Rs. 49.44 Crore for FY 2009-10.

4.7.2    Tala HEP (Bhutan):

The tariff for both Primary and Secondary Energy of Tala HEP is fixed at 180 P/U. Power Trading Corporation Ltd (PTC) is the Designated Nodal Agency for evacuation of power from TALA HEP. PTC will charge 4 P/U as Trading Margin as per CERC guideline, which is added to the above rates. Considering 3.88% Central Sector Transmission Loss and the PGCIL Transmission Charges of 20.10 P/U, the effective procurement rate to GRIDCO comes to 211.52 P/U.

Thus, the power purchase cost from Tala HEP for 174 MU @ 211.52 P/U comes to Rs. 36.81 Crore for FY 2009-10.

• Teesta-V Hydro Project(Bhutan)

CERC vide its Order dated 31.03.2008 (ED-VII) calculated the provisional tariff @ 1.62 P/U on the scheduled saleable energy, which is applicable from the date of Commercial Operation. As per the subsisting Order the Per Unit Cost of the energy from Teesta-V is projected at 188.64 P/U including Central Sector Loss of 3.88% and the PGCIL Transmission Charges of 20.10 P/U.

Thus, the power purchase cost from Teesta-V HEP for 490 MU @ 188.64 P/U comes to Rs. 92.43 Crore for FY 2009-10.

Central Sector Stations (TSTPS, FSTPS & KhSTPS):

4.7.4.1 Fixed Cost

Hon’ble CERC is already in the process of finalising the Terms and Conditions of Tariff Regulations, 2008 for the next 5-year period starting from April, 01 2009 to March 31, 2014. However, since the Final Tariff Regulations for the period 2009-2014 is yet to be released, GRIDCO considers it prudent to take the Fixed Cost as approved by Hon’ble CERC for the respective Stations for FY 2008-09 in the tariff proposal for FY 2009-10.

The Fixed Cost For TSTPS Stage-I, for FY 2009-10 has been taken as Rs.397.30 Crore at par with the Fixed Cost for FY 2008-09 as per the CERC Order dated 09.05.2006. Similarly, the Fixed cost of FSTPS for FY 2009-10 is taken as Rs. 520.59 Crore  as per CERC Order dated 09.05.2006 valid for the period from 01.04.2004 to 31.03.2009. CERC has also determined the Fixed cost of KhSTPS Stage-I at Rs. 316.00 Crore for FY2008-09 vide Order dated 23.11.2006 which has also been taken for FY 2009-10. Hon’ble CERC in its Order dated 31.01.2008 in Petition No. 179 of 2004 (ED- VIII)  has determined Annual Fixed Charges at Rs. 863.50 Crore for TSTPS Stage-II. The same has been taken for FY 2009-10 towards the projected Fixed Cost.

For the Fixed Cost projection of KhSTPS Stage-II for FY 2009-10, the same is taken as Rs.252.98 Crore for one Unit as per CERC Order dated 18.12.2007(ED-IX) (Fixed Cost for 3 Units of KhSTPS Stage-II is Rs. 758.94 Crore) as per the CERC Order determining the Fixed Cost of KhSTPS Stage-II for FY 2008-09. 
            The Capacity Charges for different generating stations for FY 2009-10 have been projected by taking into account the approved Fixed Costs of relevant Stations during FY 2008-09. The apportionment of Fixed Costs has been made as per the share of GRIDCO in the pool. With inclusion of Central Transmission Loss (CTL) of 3.88%, the  Fixed Costs applicable to GRIDCO for energy drawal from different Stations are shown in the Table below.

            * Assumption: Since total allocation from 3 (three) Units of KhSTPS Stage-II has been considered, the Fixed Cost considered is 3 times the Fixed Cost of Rs. 252.98 Crore the 1st Unit as determined by CERC vide its Order dated 18.12.2007 for FY 2008-09.
            Thus, due to implementation of ABT, GRIDCO is to pay about Rs. 340.81 Crore as Capacity Charge (Fixed Charge) towards its share from NTPC Stations irrespective of the drawl from these Stations during 2009-10.

4.7.4.2 Variable Costs:

The Variable Charges for FY 2009-10 is considered on the basis of approval by Hon’ble CERC in the relevant Order as stated above applicable to various Stations.   The same are detailed below in the following Table:                                                             

4.7.4.3 Fuel Price Adjustment (FPA):

Fuel Price Adjustment (FPA) for CG Stations for 1st six months of FY 2008-09 is given below.

GRIDCO proposes 10% escalation in FPA over the actual FPA of Sept’08 considering the increasing trend during the first six month of FY 2008-09 except for KhSTPS Stage-I due to fluctuating variable cost. In case of KhSTPS Stage-I, 10 % escalation on the average FPA of 17.16 P/U i.e. 18.88 P/U has been taken as FPA. Further, by factoring Central Transmission Loss of 3.88%, the FPA for FY 2009-10 is calculated as per the following as shown in the Table below:

4.7.4.4. Year-end Adjustment Charges:

The total Year-end Adjustment Charges (YEA) for FY 2009-10 for CGS Stations are projected in line with the actual for FY 2007-08 and as per the proposal for FY 2009-10. The details of such YEA Charges are furnished in Table below:

Based on the above presumptions, the Projected Power Procurement Cost from different CGS Stations are furnished in the following Table:

5.0       PGCIL Transmission Charges:

Pending finalisation of the CERC (Terms and Condition for determination of Tariff) Regulation for FY 2009-14, the Annual Transmission Charge approved by CERC for different lines of Power Grid Corporation of India Ltd. (PGCIL) for FY 2008-09 has been taken as the Annual Transmission Charge for FY 2009-10. Basing on that the Annual Tariff for Regional Transmission System is projected at as Rs.648.849 Crore and Rs.12.444 Crore for Inter Regional Transmission system.

Thus, GRIDCO is required to pay Rs 100.93 Crore (Rs. 648.849 Cr. X 15.53%) towards Regional Transmission charges and Rs. 2.92 Crore (Rs.12.444 Cr. X 23.50%) towards Inter Regional Transmission Charge for the usage of transmission facility in the Eastern Region.

5.1       Year End Charges

Year-end adjustment for FY 2009-10 is calculated as Rs.10.36 Cr. basing on the Incentive bill & Income tax for FY 2007-08 claimed by PGCIL. The details are furnished in the Table below:

            Proposal for YEA Charges payable to PGCIL during FY 2009-10

Based on the projection for FY 2009-10, GRIDCO is required to pay Rs. 128.40 Crore to PGCIL towards Inter State Transmission Charges. This includes collection of Rs 4.50 Crore by PGCIL towards Short Term Open Access Charges from the relevant Customers. Considering this, GRIDCO projects payment of Rs.123.90 Crore (Rs.128.40 Cr. – Rs.4.50 Cr.) to PGCIL towards transmission charges for FY 2009-10 for transmission of 6413.95 MU. The per unit transmission cost estimated as 20.10 P/U including the Central Transmission Loss of 3.88%. The details are shown in the Table below.

5.2.   Summary of power procurement Costs:

The procurement quantity, total cost and effective rate for FY 2009-10 are summarized in the table given below.

1. PASS THROUGH OF OTHER EXPENSES:

6.1       Special Appropriation for repayment of Loan

            GRIDCO has projected a total loan repayment of Rs.394.09 Cr. during FY 2009-10 as per the schedule shown in TRF-3. With the transfer of transmission assets of GRIDCO to OPTCL along with Load Dispatch assets as per the Transfer Scheme 2005 notified by the State Govt. All the fixed assets have been transferred to OPTCL with effect from 1st April 2005. Subsequent to 1st April 2005 GRIDCO has acquired office equipments and computers only for the official work which are subject to depreciation, but the depreciation amount is very minimal. Therefore, GRIDCO will not have depreciation to cover repayment of the principal loan liability.

During FY 2008-09, Hon’ble Commission allowed repayment of loan Principal of Rs. 315.12 Cr. but did not include the same for pass through in the tariff. It was intended that all such gaps would be met from surplus revenue that may accrue from trading and earning of UI. However, the situation of earning surplus revenue has not materialized as there is no surplus power available in the hand of GRIDCO because of increase in the State demand. Hence, the question of earning of surplus revenue from Trading of power and UI operations to repay the principal amount does not arise.

The Hon’ble Commission in its tariff order for FY 2008-09 mentioned that, the recovery of receivables of Discoms might be utilized by GRIDCO to bridge the gap in the revenue requirement which was synonymous with repayment of principal liability. Hon’ble Commission further stressed that the back-to-back arrangement between Discoms and GRIDCO should be scrupulously followed. Accordingly, Commission has also allowed amortization of regulatory assets to Discoms in order to meet such repayments. As against the arrear receivables from DISCOMs amounting to Rs. 219.83 Cr. (WESCO Rs. 36.83 Cr., NESCO Rs. 65 Cr. & CESU Rs. 118.00 Cr.), Hon’ble Commission included Rs. 219.83 Cr. towards collection of arrear from the 4 DISCOMs during FY 2008-09 as a part of GRIDCO’s Annual Revenue Requirement (ARR). WESCO and NESCO have not paid any amount towards arrear of Rs, 154.83 Cr. (WESCO: Rs. 36.83 Cr. & NESCO: Rs. 118.00 Cr.). NESCO has paid Rs.75.72 Cr. as against Rs. 65.00 Cr. In addition SOUTHCO has paid Rs.5.23 Cr.

The Hon’ble Commission may kindly appreciate that the impact of non-repayment of loan has wide ramifications. In an event, GRIDCO fails to repay the loan installments to the Financial Institutions / Bankers, they will recover their dues from GRIDCO through the Escrow Arrangement. Thus, GRIDCO may not be able to pay the power purchase liability resulting in regulation of power. The Financial Institutions / Bankers may also invoke Govt. guarantee. Further non-payment of principal on NTPC bonds (Rs. 1102.00 Cr) issued by the GoO under OTS Scheme will trigger recovery from Central Plan Assistance to the State by RBI which will ultimately affect the State Government Social Welfare Projects / Programmes.

Hon’ble Commission is yet to finalize the Securitisation Order for Discoms to repay the arrear outstanding to GRIDCO over a period of time. Without a proper security mechanism in place, it will be difficult on the part of GRIDCO to collect the arrear from the 4 Discoms mainly due to non-improvement of their performance even though the escrow mechanism is in place. The Hon’ble Commission may therefore consider not to include arrear collection from Discoms as a part of GRIDCO Annual Revenue Requirement. Any collection from the Discoms as per the Securitisation Order as may be passed by the Hon’ble Commission or otherwise may be considered for adjustment against the repayment of principal liability of GRIDCO in the next financial year. This will avoid any default in repayment of principal liability by GRIDCO. Receipt of any arrear dues from DISCOMs may not be adjusted in the Annual Revenue requirement of GRIDCO for FY 2009-10.    

In view of the facts described, GRIDCO respectfully submits before the Hon’ble Commission that the above repayment of principal due of Rs. 394.09 Cr. may be allowed as a Special Appropriation in the ARR so as to enable GRIDCO to meet its contractual liability of repayment of principal amounting to Rs. 394.09 Cr. during the FY 2009-10.    

6.2       Pass Through of Rs. 399.66 Crore to meet the projected gap during FY 2008-09.
           
While approving the ARR & BSP for FY 2008-09 Hon’ble OERC approved an average Bulk Supply Price of 122.15 P/U.The actual operational performance for the first half of the Financial Year (2008-09) shows that the average power purchase cost has gone up to 130.00 P/U due to procurement of costly power to meet the State demand. This, coupled with non-availability of surplus power for trading and UI during FY 2008-09 will result in revenue gap of Rs. 399.66 Crore (Projected).

Compelled under the circumstances, GRIDCO has filed, a Petition dated, 31.10.2007 before Hon’ble OERC under Section 62(4) of the Electricity Act,2003 for revision of Bulk Supply Price for the year 2008-09 for recovery of the projected Revenue Gap of Rs. 399.66 Crore for FY 2008-09.
GRIDCO requests that if the above gap of Rs. 399.66 Crore is not separately considered and approved for recovery during the current financial year, the same may be approved along with the ARR & BSP for FY 2009-10.   

1. Arrear Payment to OPGC:

Pursuant to the settlement approved by the State Government, GRIDCO will execute agreement amending the PPA and Tripartite Agreement which shall be submitted to the Hon’ble Commission for approval. GRIDCO will be liable to pay Rs. 72.57 Crore to OPGC towards arrear dues which were held up because of the dispute with regard to the tariff norms applicable for procurement of power from OPGC. The above amount of Rs. 72.57 Crore is as per the calculation by GRIDCO up to the 2nd quarter of the FY2008-09 (ED-X). GRIDCO, therefore, submits to the Hon’ble Commission that subject to the approval of the Amended Agreements by the Hon’ble Commission, the arrear power purchase dues amounting to Rs. 72.57 Crore may be allowed in the ARR during the FY 2009-10 as Pass Through.

7.0       Summary of other expenses:

The total volume of expenditure under various components excluding cost of power procurement is grouped under the following heads:

1. Interest on Long-term loan.
2. (a) Employee Cost.

(b) Administrative & General Expenses.
(c) ERLDC Charges.
(d) Repair & Maintenance Expenses.

Interest on Long Term Loans: (TRF-13)

The Interest on long-term liabilities on account of the loans mainly related to Power Purchase has been taken as Rs.128.49 Crore in this application. A statement to this effect is annexed as TRF-3 for kind perusal and approval by the Hon’ble Commission. 

1. Employees Cost: (TRF-13)

Based on the actual expenses of Rs.2.00 Crore during FY 2007-08 & approval of Rs.3.33 Crore for FY 2008-09 and keeping in line with the 6th Pay Commission Recommendation for revision of Pay Scales, GRIDCO projects an amount of Rs. 6.8 Crore including arrears towards employees cost during FY 2009-10 by factoring reasonable increases under different sub-components (as provided under OERC TRF-13 Format), for approval by the Hon’ble Commission. Details of such costs are annexed in TRF-13. 

GRIDCO further requests that any amount more than the above projection may be passed through in the subsequent ARR.

7.3       Administrative and General Expenses (A & G Expenses): (TRF-15)

GRIDCO has projected an amount of Rs. 5.14 Crore towards A & G Expenses during        FY 2009-10. Details of such expenses are given in TRF-15.      
                      

7.4       ERLDC / NLDC Fees:

Fees and scheduling charges are leviable by the respective Load Despatch Centres like ERLDC (Eastern Regional Load Despatch Centre) and NLDC ( National Load Despatch Centre) and SLDC scheduling charges to the grid beneficiaries like M/s. Grid Corporation of Orissa Limited ( GRIDCO). The proposed expenditure under this head is Rs. 1.32 Crore.

1. Repair & Maintenance Expenses : (TRF-14)

GRIDCO is projecting Rs. 0.50 Cr. towards the repair maintenance of vehicle, furniture and office equipments for FY 2008-09. The details of such expenses are annexed in     TRF-14.

8.         Summary of other Costs / Expenditures of GRIDCO:
Based on the above projections, GRIDCO proposes to incur about Rs. 142.25 Crore towards expenses on account of Interest payment, Employees Cost, A&G Expenses and ERLDC Fees etc.

Besides, an amount of Rs. 866.32 Crore has also been proposed under pass through expenses.

Return on Equity:

GRIDCO proposes allowance of a sum of Rs. 60.62 Cr. Towards Return on Equity @ 14% on its Equity Capital of Rs. 432.98 Crore. GRIDCO respectfully submits before the Hon’ble Commission that disallowance of ROE will affect the long-term financial strength of the company.
10.       Other Income / Miscellaneous Receipts:
GRIDCO expects to earn an amount of Rs. 3.30 crore from proposed sale of 10 MU emergency power to Long Term Customers like NALCO and ICCL as per the MOU signed with these entities.

1. Annual Revenue Requirement of GRIDCO for FY 2009-10:

The Annual Revenue Requirement of GRIDCO for the FY 2009-10 is estimated as Rs.3929.04 Crore based on the following Costs as given in the Table below.

Revenue to be earned by GRIDCO from Sale of proposed energy of 18726.15 MU to DISCOMs for FY 2009- 10 at the existing BSP Rate for FY 2008-09 rate is shown below:

13.       Revenue Requirement (Excess/Deficit) with the existing BSP :

The Net Revenue Requirement of GRIDCO is estimated at Rs. 3929.04 Crore (net of Miscellaneous Receipts). At the existing Average BSP of 122.15 P/U prevalent during FY 2008-09, GRIDCO can only mop up Rs.2288.10 Crore from the proposed sale of 18726.15 MU to the DISCOMs during FY 2009-10 leaving a deficit gap of Rs. 1640.94 Crore. The details of which are shown in the Table below:

Proposal for revision Bulk Supply Price

GRIDCO, with its present Bulk Supply Price Structure, cannot meet its current costs as it results in deficit of Rs. 1640.94 Crore as detailed in the preceding paragraphs. In order to meet this deficit, GRIDCO honourably submits the present ARR & BSP Application before Hon’ble Commission praying for revision of Bulk Supply Price from 1st April,2009.

Design of Bulk Supply Price to meet the proposed Annual Revenue Requirement for FY2009-10:

1.   GRIDCO proposes to recover the net Revenue Requirement of Rs.3929.04 Crore the proposed sale of 18726.15 MU of energy to DISCOMs through a Single Part BSP (Energy Charge) of 209.82 P/U as worked out in the Table below:

The proposed Bulk Supply Price of 209.82 P/U during FY 2009-10 represents an increase of 71.77% from the existing average BSP of 122.15 P/U during FY 2008-09.

2.   Demand Charge:
As stated earlier, GRIDCO proposes that the Demand Charges may be levied @ Rs.200/KVA/Month from DISCOMs when the actual SMDs of DISCOMs exceed the permitted SMDs approved by the Hon’ble Commission during the FY 2009-10 in line with the approval by the Hon’ble Commission during the FY 2008-09.

3.  Surcharges for Late Payment

The Surcharge for delayed payment of bulk power supplies bills i.e., payment after the periods of 30 days from the date of submission of bills, may be retained at 1.25% per month.

4.  Rebate
GRIDCO reaffirms provisions of rebate for early and full payment of the bulk power supply bills, with the following structure:

• 2% rebate on monthly bill if full payment is made within 2 (two) working days (except holidays under Negotiable Instrument Act) of submission of bill.

• 1% rebate on monthly bill if full payment is made within 30 days from submission.

5.  Carry forward of Revenue gap:
GRIDCO prays that the proposed Bulk Supply Price be made applicable from 1st April 2009. However, in case of a gap between the approved revenue requirements for FY 2009-10 and the revenue realized, the Commission may kindly approve to carry forward the gap for adjustment during the future years.
Prayer

GRIDCO requests the Hon’ble Commission to consider pass through of the amount to the extent requested and accordingly approve the ARR and Bulk Supply Price (BSP) for FY 2009-10 of GRIDCO as proposed in this Application and make the same effective from 1st April 2009. GRIDCO requests Hon’ble Commission to allow carry forward of the additional cost, if any for recovery in future BSP and also to allow recovery of additional cost against statutory increase, significant rise in the fuel cost etc. if any, be passed on to GRIDCO on account of OERC / CERC Orders, as surcharge during the year.

BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION
BHUBANESWAR
                                                                                               
Filing No…………                                        
Case No…………

IN THE MATTER OF :      An application for approval of Annual Revenue Requirement (ARR) and determination of Bulk Supply Price (BSP) for the Financial Year 2009-10 under Section 86(1)(b) and all other applicable provisions of the Electricity Act, 2003 read with relevant provisions of OERC (Terms and Conditions for Determination of Tariff) Regulations, 2004, and OERC (Conduct of Business) Regulations, 2004, and other related Rules and Regulations.

AND

• IN THE MATTER OF :       GRIDCO Ltd., Janpath, Bhubaneswar

Affidavit verifying the Application
I, Sri Umakanta Panda, aged about 55 years, S/o Late Mahendra Prasad Panda, Director (Finance & Corporate Affairs), GRIDCO do hereby solemnly affirm and say as follows:
I am the Director (Finance & Corporate Affairs) of Grid Corporation of Orissa Ltd., the applicant in the above matter, and am duly authorised to make this affidavit on its behalf.
The statements made in Para 1 to13 of ARR, 1 to 5 of BSP application herein now are based on information and I believe them to be true.

Bhubaneswar
November 29, 2008                                                                                 DEPONENT

• 2% rebate on monthly bill if full payment is made within 2 (two) working days (excluding holidays under Negotiable Instrument Act) of submission of the bill.

• 1% rebate on monthly bill if full payment is made within 30 days from submission.

e)   Delayed Payment Surcharge:

• The monthly charges as calculated above together with other charges and surcharge on account of delayed payments, if any, shall be payable within 30 days from the date of bill. If payment is not made within the said period of 30 days, delayed payment surcharge at the rate of 1.25% (One point two five percent) per month shall be levied pro-rata for the period of delay from the due date, i.e. from the 31st day of the bill, on the amount remaining unpaid (excluding arrears on account of delayed payment surcharge).

f)    Duty and Taxes :

• The Electricity Duty levied by the Government of Orissa and any other Statutory levy/ Duty/ Tax/ Cess / Toll etc. imposed under any law from time to time shall be charged over and above the Bulk Supply Price.