BEFORE THE GUJARAT ELECTRICITY REGULATORY...
Transcript of BEFORE THE GUJARAT ELECTRICITY REGULATORY...
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BEFORE THE GUJARAT ELECTRICITY REGULATORY COMMISSION
GANDHINAGAR
Suo-Motu Proceedings in
Order No. 1 of 2012
In the Matter of:
Determination of tariff for procurement of power by distribution licensees and
others from Solar Energy Projects for the State of Gujarat – Rehearing in order
No.1 of 2012 as per the directions of the Hon’ble APTEL vide Judgment dated
17.04.2013 in Appeal No. 75 of 2012.
Respondent No.1: Gujarat Urja Vikas Nigam Limited,
Sardar Patel Vidyut Bhavan,
Race Course Circle, Vadodara – 390007.
Represented By: Learned Advocate Shri Anand Ganeshan with Shri
V.T.Patel.
Respondent No.2: Gujarat Energy Transmission Corporation Limited,
Sardar Patel Vidyut Bhavan,
Race Course Circle, Vadodara – 390007.
Represented By: Smt. Venu Birappa.
Represented No.3: Dakshin Gujarat Vij Company Limited,
Nana Varachha Road,
Kapodara Char Rasta, Surat – 395006.
Represented By: Nobody was present.
Respondent No.4: State Load Despatch Centre (Gujarat),
132 KV Gotri Sub Station Compound,
Near T.B. Hospital, Gotri Road,
Vadodara- 390021, Gujarat.
Ph. No. (0265) 2352103.
Represented by: Shri D.N.Shah.
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Respondent No.5 Torrent Power Limited,
Electricity House, Lal Darwaja,
Ahmedabad-380001.
Represented by: Shri Chetan Bundela.
Respondent No.6: The Under Secretary,
Energy and Petrochemicals Department,
Block No. 5, 5th Floor, New Sachivalaya,
Gandhinagar, Gujarat.
Represented by: Nobody was present.
Respondent No.7: Rudraksh Energy,
R-15A, Yudhisthir Marg,
C-Scheme, Jaipur, Rajasthan.
Represented by: Nobody was present.
Respondent No.8: The Director,
Gujarat Energy Development Agency,
4th
Floor, Block No. 11 & 12,
Udyog Bhavan, Sector-11,
Gandhinagar, Gujarat.
Represented by: Nobody was present.
Respondent No. 9: Essar Power Gujarat Limited,
Essar house, 11- Keshavrao Khadye Marg,
Mahalaxmi, Mumbai - 400 034.
Represented by: Nobody was present.
Respondent No.10: Jaihind Projects Limited,
3rd
floor, Venus Atlantis Corporate Park,
Nr. Prahlad Nagar AUDA, Garden Satellite,
Ahmedabad – 380015.
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Represented by: Nobody was present.
Respondent No.11: Acme Tele Power Limited,
A-509, Smita Tower, opposite Vishramnagar,
Gurukul Road, Ahmedabad.
Represented by: Nobody was present.
Respondent No.12: Moserbaer Clean Energy Limited,
43B, Okhla Industrial Estate,
New Delhi - 110020, India.
Represented by: Learned Advocate Shri Hemant Sahai with Advocate
Ms. Mazag Andrabi.
Respondent No.13: Abellon CleanEnergy Limited,
10th floor, Sangeeta Complex, Nr. Parimal Railway
Crossing, Ellisbrige, Ahmedabad – 380006.
Represented by: Shri Kaushik Patel.
Respondent No.14: Welspun Renewables Energy Limited,
Welspun House, 7th Floor,
Kamala City, Senapati Bapat Marg, Lower Parel,
Mumbai – 400013.
Represented by: Nobody was present.
Respondent No.15: Kiran Energy Solar Power Private Limited,
3, Advani Chambers, August Kranti Road,
Mumbai – 400036.
Represented by: Nobody was present.
Respondent No.16: Solarfield Energy Private Limited,
3, Advani Chambers, August Kranti road,
Mumbai – 400036.
Represented by: Nobody was present
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.
Respondent No.17: EMCO Limited,
Corporate Division
Plot No.F-5, Road No. 28,
Wagle Industries Estate,
Thane – 400604.
Represented by: Nobody was present.
Respondent No.18: Joseph Mathews,
ENAM Holdings Private Limited,
11th floor, Express Towers,
Nariman Point, Mumbai – 400021.
Represented by: Nobody was present.
Respondent No. 19: Yantra eSolar India Pvt. Limited,
D # 8-2-596/C/1, Ascent Towers,
First Floor, Road # 10, Banjara Hills,
Hyderabad – 500034.
Represented by: Nobody was present.
Respondent No.20: Atulkumar and Kalidas Patel,
27-B, Mayurvila Residency,
Berna Road, Himatnagar
Dist: Sabarkantha.
Represented by: Nobody was present.
Respondent No.21: Rajkot Municipal Corporation,
Commissioner office, Dr. Ambedkar Bhavan,
Dhebarbhal Road, Rajkot – 360001.
Represented by: Nobody was present.
Respondent No.22: Lanco Solar Energy Private Limited,
Office Plot - 229, Udyog Vihar,
Phase – 1, Gurgaon – 122016,
Haryana, India.
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Represented by: Nobody was present.
Represented No.23: Adani Power Limited,
Achalraj, Opp. Mayor Bunglow,
Law Garden, Ahmedabad – 380009.
Represented by: Nobody was present.
Represented No.24: Cargo Solar Power (Gujarat) Private Limited,
Cargo House, Opp. Gandhi Ashram,
Ashram Road, Ahmedabad.
Represented by: Nobody was present.
Respondent No.25: Surat Municipal Corporation,
Main office building,
Muglisara, Surat – 395003.
Represented by: Nobody was present.
Respondent No.26: Applied Materials India Private Limited,
9th Floor, Tradex Tower II
B-4, Commercial Strip
(Facing Jaypee Green Golf Course)
Sector Alpha - I
Greater NOIDA – 201306,
Uttar Pradesh, India
Tel: (91) 120-2320082 / (9) 120-3921400.
Represented by: Nobody was present.
Respondent No.27: Senior Research Associate,
Prayas Energy Group,
Athawle Corner, Karve Road,
Pune – 411004.
Represented by: Nobody was present.
Respondent No.28: SunEdison Energy India Private Limited,
Menon Eternity, 10th Floor New # 165,
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Old No # 110, St. Marys Road,
Alwarpet Chennai – 18.
Phone No. : 91-(44)42923800.
Represented by: Nobody was present.
Respondent No.29: Solar Energy Society of India
A-14, Mohan Operative Industrial Estate,
Mathura Road, New Delhi – 110044.
Represented by: Learned Advocate Shri Hemant Sahai with Advocate
Ms. Mazag Andrabi.
CORAM:
Shri Pravinbhai Patel, Chairman
Dr. M. K. Iyer, Member (Finance)
Date: 07/07/2014.
ORDER
[1] The Commission passed Order No. 1 of 2012 and decided the tariff for
procurement of power by Distribution Licensees and others from Solar Energy
Projects.
[2] Being aggrieved of the said order, the Solar Energy Society of India filed an
Appeal No. 75 of 2012 before the Hon’ble Appellate Tribunal for Electricity.
[3] The Hon’ble Appellate Tribunal for Electricity passed the judgment date
17.04.2013 in said appeal and remanded back the matter to the Commission
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and directed the Commission to pass appropriate order in terms of the
observations and directions of the Hon’ble APTEL as recorded in the
Judgment dated 17.04.2013. The summary of findings recorded by the Hon’ble
Tribunal stated below:
“…18. Summary of our findings
i) Operation & Maintenance Expenses: The State Commission should
have maintained O&M expenses in absolute value at least at the same
level as approved for FY 2010-1 i.e. Rs. 8.25 Lakhs/MW. Accordingly,
we direct the State Commission to redetermine the O&M cost and allow
at *least 0.825% of the capital cost.
ii) Inverter replacement cost: We do not want to interfere with the
assessment of cost reduction for inverter @ 10% p.a. made by the State
Commission for the reason indicated in paragraph 9.4 of the judgment.
However, the State Commission has incorrectly computed the inverter
replacement cost at 3.81% of the capital cost in the 13th year. With
annual reduction of 10% in inverter cost the cost in the 13th year would
work out to 4.24% of the capital cost and not 3.81%. Accordingly, the
State Commission shall correct the inverter replacement cost.
iii) Working Capital: We do not find any infirmity in the State
Commission’s order in determining the working capital.
iv) Return on Equity: The State Commission is not bound to adopt the
RoE as provided in the Central Commission’s Regulations. If the State
Commission has decided to allow post tax RoE of 14% to renewable
energy projects as applicable to power projects of conventional energy
sources, we cannot find fault with the same. However, the State
Commission should have followed the principle of grossing up of the
income tax as decided by this Tribunal in Appeal no. 174 of 2009, 68 of
2009 and Review Petition no. 9 of 2010 in Appeal no. 68 of 2009.
Accordingly, directed.
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v) Discount factor: We do not find any infirmity in the State Commission
adopting a discount factor of 10.74% as per the Central Commission’s
notification dated 7.10.2011.
vi) Annual degradation of Solar Plant: We feel that the issue raised by
the Appellant needs to be considered to examine if the levelising tariff
allowed by the State Commission ensures recovery of the revenue
permissible to the Developers in the life cycle of the solar plant at the
energy sent out with degradation. Accordingly, the matter is remanded
to the State Commission.
vii) Tariff for first 12 years: We find that the State Commission has
balanced the interests of the project developer and the consumer by
allowing a tariff of only about 8.5% higher than the levellised tariff
during the first 12 years. We do not find any reason to interfere with the
findings of the State Commission in this regard.
viii) Successive revision in tariff: This issue does not survive as the
learned counsel for the Appellant during the rejoinder submission
decided not to press the issue.
ix) Clean Development Mechanism: In view of the clarification given by
the State Commission that the CDM benefit has to be shared by the
Project Developer with GUVNL on cash basis, the issue would not
survive.
x) Project specific tariff: We do not find force in the argument of the
Appellant regarding option for project specific tariff. The findings of the
Tribunal in Techman case (Appeal nos. 50 & 65 of 2008) for hydro
projects will not be applicable to the present case.
19. In view of above, the Appeal is partly allowed to the extent as
indicated above. The State Commission shall pass the consequential
order in terms of the observations and directions referred to above. No
order as to costs….”
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[4] In the aforesaid judgement, the Hon’ble APTEL directed the Commission to
pass consequential order with respect to finding stated in para 18 (i), (ii), (iv)
and (vi) of the judgement dated 17.04.2013 in Appeal No. 75 of 2013. The
Commission decided to kept the hearing and pass a consequential order after
hearing of the concerned parties.
[5] Thereafter, the matter was kept for hearing on 10.01.2014, 01.02.2014,
04.03.2014 and finally on 05.04.2014.
[6] The Hon’ble APTEL in the aforesaid order remanded matter back for
reconsideration of the following parameters considered by the Commission in
its Order No. 1 of 2012 dated 27.01.2012.
(i) Operation and Maintenance Charges,
(ii) Inverter Replacement Cost;
(iii) Returns on Equity;
(iv) Annual Degradation of Solar Power Plant and recovery of revenue
permissible to the developers in the life cycle of Solar PV Power
Plant at the energy sent out with degradation.
As the Hon’ble APTEL has directed to revisit on above parameters and pass
the consequential order based on the decision and directives given in its
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judgement dated 17.04.2013 in Appeal No. 75 of 2013, we decide the above
parameters one by one.
[7] Now, we deal with Issue No. 1 which pertains to Operation and maintenance
charge. The Hon’ble APTEL in its order dated 17.04.2013, in para 8.7, 8.8,
8.9, and 8.10 decided about the O&M Charges as under:
“……8.7 We find that at the reduced the capital cost of Rs. 10
crores/MW, the O&M expenses at 0.75% of the capital cost
work out to Rs. 7.5 Lakhs/MW. As against this, in the order
dated 29.1.2010, the State Commission allowed O&M expenses
at 0.5% of the capital cost of Rs. 16.5 crores/MW which works
out to Rs. 8.25 Lakhs/MW for FY 2010-11. In the discussion
paper the State Commission had proposed O&M expenses at
0.75% of the capital cost of Rs. 11 crores/MW i.e. Rs. 8.25
Lakhs/MW, which is the same level as decided for 2010-11 by
order dated 29.1.2010.
8.8 As rightly pointed out by the Appellant and also indicated by the
State Commission in the discussion paper, the employees’
expense is a major component of O&M expenses of solar power
project. The reduction in cost of Solar Power Projects is
basically for the solar power module only. Therefore, the
reduction of the capital cost should not impact the O&M cost
appreciably. The intention of the State Commission in the
discussion paper was also by providing O&M at 0.75% of the
proposed capital cost of Rs. 11 crores/MW i.e. at Rs. 8.25
lakhs/MW. However, the State Commission decided to reduce
the capital cost to Rs. 10 crores/MW in the impugned order but
maintained the O&M cost at Rs. 0.75% only. No explanation
was given in the impugned order for effectively reducing the
O&M expenses. We feel that the State Commission should have
maintained O&M expenses in absolute value atleast at the same
level as approved for the FY 2010-11 i.e. at Rs. 8.25
Lakhs/MW. Accordingly, we direct the State Commission to
reconsider the O&M cost and allow atleast 8.25% of the capital
cost.
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8.9 Learned counsel for GUVNL has argued that the State
Commission has also allowed insurance cost in addition to
O&M cost in the impugned order. We find that in the earlier
order dated 29.1.2010 also the State Commission had allowed
0.35% of the net assets of the project as insurance charges in
addition to O&M charges. Therefore, there is no force in the
arguments of the Respondent no. 2 regarding insurance
charges.
8.10 Accordingly, the State Commission is directed to re-determine
the O&M charges…..”
Thus, in the aforesaid findings, the Hon’ble APTEL directed the Commission
to re-determine the O& M Charges as directed by the Hon’ble APTEL.
[7.1] Learned Advocate Shri Hemant Sahai, on behalf of the Solar Energy Society
submitted that the Commission had considered the O & M charges as Rs. 8.25
Lakhs /MW per year for FY 2010–2011 and the same be escalated at the rate
of 5% as decided by the Commission in its Order No. 02 of 2010 dated
29.01.2010. Based on the above calculation, the O & M charges works out to
Rs. 9.10 Lakhs/MW per Year. The O & M charges stated atleast Rs. 8.25
Lakhs/MW in the Order of the Hon’ble APTEL relates to the project which
were commissioned during FY 2010-2011. Therefore, the projects which were
commissioned during FY 2010-2011 should receive the O & M Charge of Rs.
9.10 Lakhs/MW for FY 2012 – 2013, while as per Order No. 1 of 2012 dated
29.01.2012 of the Commission, it works out Rs. 7.50 lakhs/MW only. The
Hon’ble APTEL decided and directed the Commission to consider the O&M
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charges at Rs. 8.25 Lakhs/MW and re-determine the O & M Charges. If, the O
& M expenses are allowed at the rate of Rs. 8.25 Lakhs/MW, it would amounts
to different O & M expenses allowed for FY 2012-2013 for the project which
were commissioned under previous control period i.e. Order No. 2 of 2010
dated 29.01.2010 i.e. 9.10 Lakhs/ MW and those under the impugned order
No. 01 of 2012 dated 27.1.2012 would be paid O & M charges at the rate of
Rs. 8.25 Lakhs/MW, which is a discrimination amongst the two project
developers. Based on the above submissions, he submitted that the
Commission may allow O & M expenses for FY 2012-2013 at Rs. 9.10
Lakhs/MW and the same may be escalated at 5.72% as per GERC order.
[7.2] Learned advocate Shri M.G. Ramchandran, on behalf of the GUVNL,
submitted that the O & M expenses proposed in the draft discussion paper was
o.75% of the capital cost of Rs. 11 cores/MW which works out to Rs. 8.25
Lakhs/MW. The Commission in earlier order dated 29.01.2010 approved the
O& M expenses as Rs. 8.25 Lakhs/MW which is 0.5% of the capital cost of
Rs. 16.5 crores/MW. The submissions of Solar Energy Society and other
respondents that the O & M expenses should be allowed at the rate of Rs. 9.10
Lakhs/MW by accelerating the previously allowed the expenditure of Rs.8.25
Lakhs/MW at the rate of escalated 5 % p.a. However, the above claims of the
appellant (Solar Energy Society) before the Hon’ble Tribunal was rejected by
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the Tribunal and held that the O& M expenses should not have been reduced in
absolute terms. In the discussion papers also, the Commission had propose O
& M expenses as Rs. 8.25 Lakhs/MW. Therefore, the Commission should
maintain the O&M expenses of Rs. 8.25 Lakhs/MW and need not reduced it
further. The Hon’ble Tribunal has directed the Commission to re-determine the
O & M expenses and allowed at least 8.25 Lakhs/MW of capital cost. The
claims of the Solar Energy Society and Other respondents that the Commission
allows escalation on O & M expenses of Rs. 8.25 Lakhs/MW have not been
allowed by the Hon’ble Tribunal. Therefore, the Solar Energy Society and
other respondents cannot reagitate the same again before the Commission. The
contentions of the Solar Energy Society & others to provide higher O & M
Expenses over and above RS. 8.25 Lakhs/MW is misconceived. The O & M
amount of Rs. 8.25 Lakhs per MW is adequate considering that the O & M
expense (spares etc.) is directly related to capital cost. Therefore, the claims of
the Solar Society and Others are liable to be rejected.
[8] We have carefully considered the submissions made by the parties. The issue
emerged for the decision of the Commission is as to whether the project which
are commissioned during the control period of the Order No. 1 of 2012 dated
27.01.2012 are entitled for O & M expenses as Rs. 8.25 Lakhs/MW or Rs. 9.10
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lakhs/MW. It is therefore necessary to refer the para 8.7 to 8.10 of the Hon’ble
APTEL order as stated above.
[8.1] According to the aforesaid decision, the O&M cost is required to re-
determined atleast at 0.825% of the Capital Cost which works out to Rs. 8.25
Lakhs/MW. The Commission has in Order No. 1 of 2010 considered the
Capital Cost as Rs. 10 crores/MW. Therefore, the 0.825% of the said capital
cost works out to Rs. 8.25 Lakhs/MW. The aforesaid amount is an absolute
value of Rs. 8.25 Lakhs/MW as considered by the Commission in earlier Order
No. 2 of 2010 dated 29.01.2010.
[8.2] The contentions of the Solar Energy Society and Others that O & M expenses
be allowed Rs. 9.10 Lakhs/MW for FY 2012-13 by escalating Rs. 8.25
Lakhs/MW for FY 2010-11 for two years at the rate of 5 % per annum as
decided by the Commission in its earlier Order No. 2 of 2010 dated 29.01.2010
is concerned, the same issue was raised by the above parties before the
Hon’ble APTEL and it was recorded by the Hon’ble Tribunal in Para 8.1 of its
order dated 17.04.2013 in Appeal No. 75 of 2012 which reads as under:
“…..8.1 According to the learned Senior counsel for the Appellant, the
State Commission has reduced O&M cost from Rs. 8.25 Lakh/MW in
2010-11 to Rs. 7.5 Lakh/MW in 2012-13 whereas O&M cost ought to
have been increased to Rs. 9.09 Lakh/MW for 2012-13 by escalating Rs.
8.25 Lakh/MW for 2010-11 for two years @ 5% per annum as approved
by the State Commission in its earlier tariff order dated 29.01.2010…..”
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The above submission of the Solar Energy Society of India was already raised
before the Hon’ble APTEL and Hon’ble APTEL has after considering the
submissions of the Solar energy Society has decided in para 8.7, 8.8 as stated
above that the Commission may re-consider the O & M expenses atleast to the
extent of 0.825% of the capital cost which works out to Rs. 8.25 lakhs/MW
with consideration of Rs. 10 Crores/MW capital cost.
[8.3] The principle of associating O &M expenses to the capital cost has not been
disturbed by the Hon’ble APTEL but decided that the O & M expenses should
be at least the same amount as was existing before the impugned order.
Moreover, the cost of spares which is a part of the O & M expenses has also
reduced significantly. Hence, the O& M expenses can be kept at the rate of Rs.
8.25 Lakhs/MW. The contentions raised by the GUVNL are not acceptable.
The O & M expenses consists of administrative expenses, maintenance spares,
etc. which remain same for the project commissioned/operating during the
same period. The project which were commissioned during the control period
of Order No. 2 of 2010 dated 29.01.2010 were receiving O & M expenses
during the FY2012-2013 @ Rs. 9.10 Lakhs/MW with consideration of the O &
M expenses of Rs. 8.25 Lakhs/MW for FY 2010-2011 and escale it by 5% per
annum. While the project which was commissioned during the FY 2012-2013
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onward i.e. control period of Order No. 1 of 2012 dated 27.01.2012 receive the
O & M expenses @ Rs. 8.25 Lakhs/MW which is lower than Rs. 9.10
Lakhs/MW received by the project developers who commissioned the plant
during the control period of Order No. 2 of 2010 dated 29.01.2010. Thus, O &
M expenses which consist of the same components of Administrative
expenses, repair and maintenance expenses, spares etc allowed different by the
Commission for some project commissioned during different control period is
a discriminatory amongst different Solar PV Power Project Developers which
is not permissible. We therefore, decide that the O & M expenses for tariff
determination of Order No. 1 of 2012 dated 27.01.2012 at Rs. 9.10 lakhs/MW
for tariff determination purpose and the same may be escalated at the rate of
Rs. 5.72 per annum thereafter.
[9] Now we deal with the issue of the inverter replacement cost. The Commission
has considered the inverter replacement cost in the 13th year, which work out to
Rs. 3.81 % while the Solar Society has disputed that the same stating that it
works out to 4.24% of the capital cost. The Hon’ble APTEL has in its order
dated 17.04.2013 in para 9.4 to 9.6 recorded as under:
“……9.4 We notice that the State Commission for the first time has proposed to
include inverter replacement cost in the 13th
year of operation while
working out the levellised tariff for the solar power projects. However,
considering the reduction in cost of electronics and current cost trend
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of photovoltaic modules, the State Commission decided to consider an
annual reduction in cost of inverters at 10% and replacement cost of
3.8% of the capital cost in the 13th
year. The impugned order indicates
that some developers had pleaded that the projected cost of inverter
replacement is too low and it should be considered atleast 5 to 6% of
the capital cost.
9.5 The State Commission has allowed an additional cost of inverter
replacement over and above the O&M cost and inverter replacement
cost was not allowed in the earlier tariff order dated 29.1.2010. At the
moment, it is not possible to predict what would be the actual cost of
inverter replacement in the 13th
year of operation of solar power plants.
However, the State Commission has made an estimation based on the
rate of reduction in cost of electronics and current cost trend of
photovoltaic inverters at 10% per annum. The State Commission has
tried to provide an additional expenditure with a view to compensate
the project developers for the replacement of the inverter which
according to the State Commission could be required in the 13th
year.
The Appellant has also not suggested on alternate methodology for
estimation of the inverter replacement cost with relevant supporting
material. In any case inverter replacement cost is an additional cost
which has been allowed and which was not provided in the previous
tariff order dated 29.1.2010. We, therefore, do not want to interfere
with the assessment of cost reduction made by the State Commission at
10% per annum.
9.6 However, we find that the State Commission has incorrectly computed
the inverter replacement cost at 3.81% of the capital cost in the 13 th
year. We also find that at annual reduction in the inverter cost at 10%,
the cost in the 13th
year would work out to 4.24% of the capital cost and
not 3.81% of the capital cost. So the argument of GUVNL that the
inverter has to be replaced from 12 to 14th
year and replacement cost in
the 13th
year will be accounted for tariff in the 14th
year is not valid. The
State Commission has allowed inverter replacement in the 13th
year
and, therefore, the cost of inverter as assessed for the 13th
year alone
has to be considered for determination of tariff. Accordingly,
directed…..”
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As far as the above issue is concerned, the order of the Hon’ble APTEL has
directed the Commission to pass the consequential order and correct the
inverter replacement cost which is not disputed by GUVNL & Others. As the
above findings of the Hon’ble APTEL clearly decided that the inverter cost on
13th year works out to Rs. 4.24% of the capital cost and not 3.81% of the
capital cost, we decide to consider inverter cost as Rs. 4.24% capital cost as a
part of tariff determination in the 13th year and be given effect in the tariff
determination, in compliance to order passed by the Hon’ble APTEL.
[10] Now we deal with the issue with regard to Return on Equity and Income Tax
payable to the Solar Power project Developers. The Hon’ble APTEL has in its
Order para 11 to 11.9 decided as under:
“…….11. The fourth issue is regarding Return on Equity.
11.1 According to the Appellant, the State Commission should have
allowed the Return on Equity as per the Central Commission’s
Regulations and should have grossed up the post tax return to arrive at
pre-tax return and then compute the Income Tax.
11.2 The Respondent no. 2 has contended that the same rate of return as
allowed to Solar Projects in the impugned order has been allowed in the
earlier Solar Tariff Order dated 29.1.2010 as well as for all renewable
energy projects. Regarding grossing up of income-tax, the State
Commission has correctly allowed income tax at 20.008% for 10 years
and corporate tax at 32.445% for 11th
year onwards.
11.3 According to the learned counsel for the State Commission, the
State Commission has allowed income tax at 20.008% (18.5% MAT +
5% surcharge +3% Education cess) per annum for 10 years and
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corporate tax at 32.445% per annum from 11th
year onwards, over and
above 14% ROE to solar power developers which is adequate. Let us
examine the findings of the State Commission regarding ROE.
“24.8 Return on Equity: The Commission has provided in the Multi
Year Tariff Regulation, 2011 Notification No. 1 of 2011 as well as
indicated in the Discussion Paper the return on equity as 14% per
annum. The Commission has also allowed Income Tax at 20.008%
(18.5% MAT + 5% Surcharge +3% Education Cess) per annum for
10 years, and Corporate Tax at 32.445% per annum from 11th
year
onwards. Any further enhancement in the return on equity will
burden the Consumers.
……………………
“Commission’s Ruling:
The Commission has provided in the Multi Year Tariff Regulation,
2011 Notification No. 1 of 2011, indicated in the Discussion Paper,
as well as considers the return on equity for all projects, renewable
and non-renewable, at 14% per annum. Hence, the Commission shall
retain the return on equity at 14% per annum.”
11.4 We notice that the State Commission has allowed post tax RoE of
14% for solar as well as other renewable and non-renewable power
projects. The MYT Regulations, 2011 of the State Commission also
provide for 14% RoE. Even though the Central Commission’s
Regulations for renewable energy projects provide for post tax RoE of
16%, the State Commission is not bound to adopt the same RoE. If the
State Commission has decided to allow post tax RoE of 14% to
renewable energy projects as applicable to power projects of
conventional energy sources, we cannot find fault with the same.
11.5 As regards grossing up of income-tax, this Tribunal in a number of
judgments has decided that the income tax has to be grossed up to
permit the required post tax Return on Equity. This Tribunal in the
judgment in Appeal no. 174 of 2009 dated 14.02.2011 in the matter of
Tata Power Company Limited vs. Maharashtra Electricity Regulatory
Commission has decided as under:
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“18. While the State Commission has computed the tax by
considering the Return on Equity equal to profit before tax, it has
ignored the fact that such allowed income tax would also be
considered as revenue gains and the Appellant would have to pay
tax on the same. In order to rectify the same, the State
Commission ought to have grossed up the tax computed by it and
pass the same to the Appellant. Thus the claim of the State
Commission that it has reimbursed the actual tax and hence there
is no case for allowing post tax Return on Equity is not correct.
Therefore, it would be appropriate to direct the State Commission
to compute income tax entitlement of the Appellant by replacing
Return on Equity by regulatory profit before tax on the basis of
income less permissible expenses. Accordingly ordered.”
11.6 This Tribunal in the judgment in Appeal no. 68 of 2009 dated
23.03.2010 in the matter of Torrent Power Limited vs. Gujarat
Electricity Regulatory Commission has decided as under: “55. In view
of the foregoing discussion and analysis, we set aside order of the State
Commission in this view of the matter and direct that it allows the
income tax by grossing up to ensure the stipulated post tax return by the
State Commission to the Appellant.”
11.7 Learned counsel for Respondent no. 2 has referred to the order
dated 05.01.2011 in Review Petition no. 9 of 2010 in Appeal no. 68 of
2009. The extracts of order dated 5.1.2011 is reproduced as under:
“10. Regulation 7 clearly stipulated that the tax on income stream
of the generating company from its core business shall be
computed as expense and shall be recovered from the
beneficiaries. The adjustment for under or over recovery of any
amount from beneficiary has to be made by the generating
company directly on the basis of income tax assessment under the
Income Tax Act as certified by the statutory auditors. Regulation
66(20) only restricts the income tax to be allowed on the
permissible return subject to actual payment.
11. This is the only difference in the State Commission’s
Regulations with reference to the Regulations of 2004 of the
Central Commission in respect of Income Tax. The Central
Commission’s Regulations of 2004 allow income tax as pass
Page 21
through even on income over and above the permissible return on
equity due to better performance over the generation norms.
However, the State Commission’s Regulations allow the income
tax on the permissible return. The principle of grossed up tax is
applicable to both as decided by this Tribunal in the impugned
judgment and in various other cases referred to by the
Respondent.
12. Conjoint reading of the Regulations of the State Commission
will imply that income tax has to be taken as expense subject to
adjustment as per actual as per audited accounts by the statutory
auditors and to the extent of permissible return. However, tax on
income on permissible return has to be ‘pass through’. Thus the
intent of the Regulations is that income on permissible return on
core business in the hands of the generating company has to be
net of tax. Thus the entire tax inclusive of grossed up tax is
relatable to the core activity of the generating company. However,
if there is any over-recovery of tax, the generating company has to
reimburse the same as the same is adjustable as per actual as per
audited accounts by the statutory auditors.
13. The Tribunal’s judgment dated 23.03.2010 in para 52 clearly
shows that the Tribunal has considered Regulation 7 and
Regulation 66 and Section 195 (A) of the Income Tax Act to arrive
at the decision that grossing up of the tax has to be carried out to
ensure that after paying the tax, the admissible post tax return is
assured to the Appellant (Respondent in Review Petition), Torrent
Power Limited. The Tribunal has also held in the judgment that
the Appellant, Torrent Power Limited should neither benefit nor
loose on account of tax payable which is a pass through in the
tariff. Thus, there is no question of the generating company
making profit on account of income tax. The excess recovery of
income tax if any has to be reimbursed by the generating company
to the distribution company as per the Regulations of the State
Commission. In this case the excess recovery of income tax if any
has to be adjusted in the true up of the financials. Thus the
judgment dated 23.3.2010 needs no review”. According to the
aforesaid para, the return on equity receivable by the project
developer is 14 % and the income tax is required to apply the
principles of grossing up as per the decision of the Hon’ble
Page 22
Tribunal in Appeal Nos. 174 of 2009, 68 of 2009 and Review
Petition No. 09 of 2010 in Appeal No. 68 of 2009.
11.8 In Review order also, the Tribunal has decided that the principle of
grossed up tax is applicable to the Central Commission’s
Regulations as well as the State Commission’s Regulations.
11.9 The findings of the Tribunal in the above cases will also be
applicable to the present case. Therefore, the issue regarding
grossing up of income-tax is decided in favour of the
Appellant…..”
[10.1] Learned advocate Shri Hemant Sahai, on behalf of the Solar Energy Society of
India, submitted that the appellant had submitted before the Hon’ble Tribunal
that post-tax Return on Equity (RoE) at 14% per annum be allowed by the
Commission. The Commission while passing the impugned order has
computed Income- Tax without grossing up. However, the Commission has
computed tax on 14% Return on Equity which for first 10 years when MAT is
@ 20% and Corporate Tax is 32.455 for next 15 years as applicable would
yield lower post-tax return as Income Tax is computed by the Tax Authorities
on pre-tax returns. Accordingly, the post tax return available to the Solar
Generator for initial 10 years post tax return @ of 13.44% for first 10 years and
for next 15 years it works out to 12.53 %, while the Commission has
considered to allow return on equity 14% per annum for entire 25 years of the
projects. Thus, the Commission has not allowed post tax return @ of 14%. The
Hon’ble Tribunal has in its judgement relied on its earlier judgements in (i)
Page 23
Appeal Nos. 174 of 2009 dated 14.02.2011, (ii) 68 of 2009 dated 23.03.2010
and (iii) Review Petition No. 09 of 2010 in Appeal No. 68 of 2009. Thus, the
issue of the grossing up is decided in favor of the appellant.
[10.2] Moserbaer Clean Energy Limited had reiterated the submissions of the Solar
Energy Society of India.
[11] Advocate Shri M.G. Ramchandran, on behalf of the GUVNL, submitted that
the Hon’ble APTEL had rejected the claim of the appellant to grant higher RoE
than 14% by rejecting the same. The Hon’ble Tribunal while dealing with the
issue of grossing of the tax for post-tax return held that taxes should be
accounted in the tariff and solar generator should be entitled to 14% RoE
exclusive of tax liability. The above is based on the principle that 14% post-tax
return assured to the project developer in case of the conventional energy
project where the actual tax paid by the project developer is to be reimbursed
to ensure that the RoE at the rate of 14 %, if fully paid. The project developer
cannot be allowed to take profit on account of income tax. The Tribunal had
relied on the judgement in Appeal No. 68 of 2010 and Review Petition No. 09
of 2010 in which the Hon’ble APTEL decided that actual income tax is to be
reimbursing to ensure that the project developer shall get 14 % RoE, invested
with ceiling of 30% of equity cost.
Page 24
[11.1] In Review Petition No. 09 of 2010 in Appeal no. 68 of 2009, the Hon’ble
Tribunal held that the only actual tax payable by the project developers can be
allowed in the tariff and that the project developer can neither be benefited nor
lose on account of payment of Income Tax. The Hon’ble Tribunal also held
that the Commission is required to consider the issue in light of the above
decision.
[11.2] The contentions of the Solar Energy Society and Others, the principles decided
by the Hon’ble APTEL cannot be applied as tariff has to be generic and the
same for all irrespective of tax paid and that individual tax payment cannot be
looked is misconceived and also not maintainable in the present proceedings
because the present proceedings are only for carrying out for directions of
Hon’ble Tribunal in remand matter. These proceedings may not be used for the
purpose of reagitating the issue or otherwise contending that the decision of the
tribunal is incorrect, or that it was not the intention of the Hon’ble APTEL in
passing the said judgement or otherwise that the decision ought not to be
followed.
[11.3] It is incorrect on part of the Solar Energy Society and Others that irrespective
as to whether it paid tax or not, it should be entitled for higher tariff on account
of Income Tax adjustment. The decision of the Hon’ble Tribunal is clear that
the project developer pays tax under Income Tax Act, 1961 and can get entitled
Page 25
to reimbursement of such income tax so as to ensure that the RoE @ 14% is
not affected.
[11.4] The GUVNL had called details from the solar developers to provide the details
of actual tax paid to ensure that they are not profiting out of the claim of the
Income Tax without paying the actual income tax. The Solar Energy Society
has refused to provide any such details of Tax paid. Thus, there can be no
claim by the petitioner for reimbursement of income tax. Therefore, the
contentions sought to be raised by the petitioner is misconceived and contrary
to the decision of the Hon’ble Tribunal and the same is liable to be rejected.
[12] We have carefully considered the submissions made by the parties. The
aforesaid issue was decided by the Hon’ble Tribunal in para 11 to 11.9 as
stated above, and summaries the same in para 18 (iv) of the Judgement dated
17.04.2013 in Appeal No. 75 of 2012.
[12.1] According to the above decision, the Hon’ble APTEL has considered the 14%
RoE considered by the Commission seems as per the GERC (MYT)
Regulations, 2011 and allowed the same to all renewable energy projects also.
Now, the issue emerges for decision of the Commission is as to whether
Income Tax paid to the Solar Project developers be allowed post-tax RoE at
the rate of 14% by grossing up or by allowing the actual Income Tax paid by
Page 26
the Solar Power Developers in addition to 14% RoE and the Hon’ble APTEL
has relied on its judgment dated 14.02.2010 in Appeal No. 174 of 2009 in
which the Tribunal has decided that the State Commission ought to have
grossed up Income Tax computed by it and pass the same to the appellant. The
same decision was also reiterated by the Hon’ble APTEL in Appeal No. 68 of
2009 dated 23.03.2010 in the matter of TPL V/s. GERC and Others. The
Hon’ble Tribunal had also considered its decision in Review Petition No. 09 of
2010 in Appeal No. 68 of 2009, order dated 05.01.2011 in which the Hon’ble
Tribunal decided that the Grossing up of tax has to be carried out to ensure that
after paying the tax, the admissible post tax return is assured to TPL. The
Hon’ble Tribunal had also held in its judgments that TPL should neither be
benefited nor lose on account of tax payable which is to pass through in the
tariff. Thus, there is no question of generating company making profit on
account of income tax. The excess recovery of income tax, if any, has to be
reimbursed by the generating company to the distribution company as per the
regulations of the Commission. Thus, the Hon’ble Tribunal decided in the
aforesaid judgement to allow the principle of gross up while deciding the tariff
subject to final adjustment as per the actual payment of income tax by the
generating company.
Page 27
[12.2] The Solar Energy Society & Other project developers have submitted that the
actual return on equity available to the project developer for initial 12 years is
13.44% and 12.53 % for the remaining 13 years. Therefore, RoE available to
the Solar Generator will be less than 14 % granted by the Commission in its
tariff order. We note that the RoE available to the Solar Power Developers if
grossing up of tax not allowed, it works out as under:
“…..a) Allowed by the Commission for first 10 years: Post-tax return = 14.00%
Tax on Post tax return = 14.00% x 20.00%= 2.80%
Pre tax Return = 14.00% +2.80%=16.80%
b) Tax computed by Tax Authorities:
Taxable Income = Pre-tax return = 16.80%
Tax on Taxable Income = 16.80% x 20% = 3.36%
Post- tax return available to Generator = Pre-tax Return – Tax.
= 16.80% - 3.36% = 13.44%
c) Allowed by the Commission for next 15 years:
Post-tax return = 14.00%
Tax on Post tax return = 14.00% x 32.45%= 4.54%
Pre tax Return = 14.00% +4.54% =18.54%
d) Tax computed by Tax Authorities for next 15 years:
Taxable Income = Pre-tax return = 18.54%
Tax on Taxable Income = 18.54% x 32.45% = 6.01%
Post- tax return available to Generator = Pre-tax Return – Tax
= 18.54% - 6.01% = 12.53.
Page 28
From the above calculations, it seems that the plea of the Solar Energy Society
of India and Others seems to be valid that they are not getting the RoE @ 14%
as granted by the Commission if the post-tax RoE @ 14% is not allowed to be
grossed up for Income Tax. The respondent GUVNL raised the issue that the
Solar Project Developers are entitled for the actual tax paid by them and not
eligible for grossing up is not valid because the Hon’ble Tribunal has in para
11.8 of its order dated 17.04.2013 in Appeal No. 75 of 2012 decided that the
principles of Gross Up tax is applicable to the CERC as well as State
Commission regulation also.
[12.3] Considering the above, we decide that the Solar Power Project Developers are
eligible for RoE available 14% post-tax with grossing up of Income Tax and
accordingly the effect of the same be given in the tariff determination.
[13] Now we deal with the issue raised by the Solar Energy Society with regard to
annual degradation of Solar Plant and the formula for levelised tariff is
concerned and the finding of Hon’ble Tribunal on the above issue is as under:
“…..13. The sixth issue is regarding the consideration of 1%
annual degradation of plant and formula used for levellised tariff.
13.1 According to the Appellant, the State Commission has not
considered degradation of plant as approved by the State
Commission in the impugned order in computing the levelised
tariff.
Page 29
13.2 According to learned counsel for the Respondent no. 2, the
State Commission has already considered the generation that will
be available from the Solar Power Developers after applying
degradation factor.
13.3 Learned Sr. counsel for the State Commission has informed
that performance degradation has been taken into account by the
State Commission while determining the year to year tariff and
the same has also been given effect while determining the
levellised tariff. The State Commission has also furnished
calculation sheet indicating the gross generation after taking into
account the performance degradation.
13.4 We find from these calculations that the State Commission
has taken into account the annual degradation of 1% while
working out the gross in the tariff stream of 25 years. The State
Commission has computed year-wise tariff from year wise
expenses and net generation which has been discounted by taking
annual discount rate. Levellised tariff has been determined by
dividing the arithmetic summation of year wise tariff divided by
the arithmetic summation of discount factor. Learned Senior
counsel for the Appellant argued that with equated levellised
tariff, the cash stream for 25 years is constant only if generation
is assumed to be constant. But since the State Commission has
allowed annual degradation @ 1%, the annual cash flows will
also reduce each year by 1% as tariff is constant. The reduction in
cash flows is solely due to reduction in generation. Hence the
levellised tariff has to be computed with cash flows reducing in
the same proportion as generation. The Appellant in the written
submission gave illustration to explain their point.
13.5 We feel that the issue raised by the Appellant needs to be
considered by the State Commission to examine if the levellising
tariff allowed by the State Commission ensures recovery of the
revenues permissible to the Developers during the life cycle of the
plant at the energy sent out with degradation. Accordingly, the
State Commission shall consider the submissions of the Appellant
and decide the matter…..”
In the aforesaid decision, the Hon’ble Tribunal directed the Commission to
examine if levelised tariff allowed by the Commission ensures recovery of
Page 30
revenue permissible to the developers. Therefore, it is necessary to verify the
degradation considered by the Commission at rate of 1% p.a. and its impact on
levelised tariff.
[13.1] The petitioner contended that the calculation done by the Commission with
regard to levelised tariff with a formula based on absolute value of tariff stream
for 25 years does not correctly captured the impact of degradation of plant
approved by the Commission in the impugned Order. The derivation of formula
to be used for calculating a levellised tariff with generation does not remain
constant for 25 years with an assumption that the Present Value (PV) of
revenues after levelisation is same as that without levelisation. The correct
formula is as under:
(AFCi x Di)
T = ______________
Si x Di (Revenue Stream Formula)
Whereas,
AFCi = Annual Fixed Charges;
Si =Unit Generated respectively for year;
(i) = For 25 Years.
[13.2] The Petitioner further contended that the formula considered by the Commission
is applicable only when the generation is constant for 25 years. In that case only,
the levelisation of tariff would yield the same tariff as that of revenue stream.
Page 31
[13.3] The levellised tariff arrived by using the Commission’s methodology of using
tariff stream levelisation is Rs. 10.37/Unit and that by using revenue stream
proposed by the petitioner works out to Rs. 10.49/Unit. The levellised tariff
formula adopted by the Commission works out with consideration of
degradation is not correct. As a result, the levellised tariff works out by the
formula considered by the Commission and revenue stream formula proposed by
the Solar Energy Society of India are different. The levelised tariff with tariff
stream would not yield the realistic present value equivalent to that without
levelisation unless the levelisation- is done with revenue stream. CERC is
considering the revenue stream for computation of levelisation tariff and
accelerated depreciation benefit as the plant is considered operational for the
second half of the first year and not full year. It is necessary to determine the
revenue for 25 years which has been given by the Commission in yearly
Average Fixed Cost (AFC) is the same as the PV of revenue with levelised
tariff.
[14] Learned Advocate Shri M.G. Ramchandran, on behalf of the GUVNL, submitted
that the Commission has considered the lowering the PV Module capacity of
Solar Power Plant or by progressively reducing the capacity utilization factor
taking into account that the Solar PV System will be degraded and the generation
will be reduced. The Commission has considered the CUF @ of 18% and the
Page 32
energy generation with consideration of degradation of Solar PV Module. Thus,
the Commission had considered the effect of annual degradation of Solar PV
Power Projects. The decision of the Hon’ble APTEL cannot be considered as
directions to the Commission to give double benefit i.e. both the reduction in
CUF and also reduction in capacity of Solar Power Plant for the purpose of
deciding the annual fixed charges to be apportioned amongst the unit generated
for recovery of the Tariff.
[15] We have carefully considered the submissions made by the parties. The issue
emerged for the decision of the Commission is as to whether the Commission has
considered the degradation of the Solar Plant and the effect of the degradation on
gross energy generation, net energy available to the distribution licensees and
effect of the above degradation on levelised tariff while determining the revenue
permissible to the developer in the life cycle of the Solar Power Plant.
[15.1] We note that the Commission has determined the tariff under Order No. 1 of 2012
dated 27.01.2012, with consideration of the degradation of the Solar Power Plant
at the rate of 1 % per annum as per para 2.3.3 of the Order which read as under:
“……2.3.3. Annual Degradation in Performance:
A performance warranty for 25 years on photovoltaic modules is an
industry standard today. Typical warranties guarantee a performance of
more than 90% for the first 10 years, and a performance of more than
80% for the next 15 years, adding to a total of 25 years. This implies an
Page 33
annual degradation rate of 0.9% for the photovoltaic modules. No
substantial degradation is expected in the performance of the balance of
system.
Hence, the Commission decides to consider the annual degradation in
the performance of photovoltaic systems at 1%.......”
Accordingly, the Commission has given effect of the degradation in the tariff
determination by the Commission and considered that the gross generation
reduced on year to year basis after first year up to 25th
year of the Solar Power
Plant. The effect of the same also reflected in the net energy generation available
from the Solar PV Power Plant. The Commission has also determined year to
year tariff component i.e. (i) RoE, (ii) depreciation, (iii) auxiliary consumption,
(iv) interest on working capital, (v) interest on loan, (vi) Income Tax payable and
also considered the discount rate for levelisation of the tariff. Thus, the
Commission has determined year to year tariff which gives Annual fixed charges
available to the project developers. While deciding the levelised tariff, the
Commission has considered the ‘Tariff Stream’ formula for determination of
tariff.
[15.2] According to this formula, the annual tariff and discount rate works out based on
the annual fixed charges. The above formula state that the tariff of every year and
the discount factor is considered for determination of the tariff. While deciding
the revenue, it is necessary to consider the annual fixed charge and generation
Page 34
approved by the Commission and discount rate considered by the Commission
while determining the levellised tariff from the formula proposed by the Solar
Energy Society which is revenue based. It is found that the tariff determined by
the Commission with the formula of levelisation is different from the formula
proposed by the petitioner and levelisation of tariff on revenue stream basis
seems to be higher than the tariff determined by the Commission. Moreover, the
revenue stream based levelised tariff seems to be valid as proposed by the
petitioner in which the annual fixed charge with consideration of degradation of
the Solar Power Project be given effect. We also note that while determining the
present value in case of levellised tariff determined by the Commission, the
present value worked out is different from the tariff determined with the formula
suggested by the Solar Energy Society of India and Others. It works out which is
equal to Present Value without levelisation. We therefore, decide that the
levelised tariff be determined with consideration of revenue based formula
proposed by the Solar Energy Society and Others.
Based on the above, we decide to determine the levelised tariff by considering
levelised fixed charges and levelised net generation separately.
[16] In view of the above, we decide that the O& M Charges for Solar Power Project
commissioned during the control period of the Order No. 1 of 2012 dated
27.01.2012 as 9.10 Lakhs/MW with escalation of Rs. 5.72% p.a. We also decide
Page 35
that the inverter cost be considered as 4.24% of capital cost in the 13th years
instead of 3.81% of capital cost. We also decide the post-tax RoE of 14% be
entitled by the Solar Power Developers with grossing up of Income tax. We also
decide that the degradation of the Solar Power Plant be considered as @1% and
the revenue steam of the annual revenue determine be levelised as per the
formula stated in para 15.2 above. The other parameters of the tariff which are
normative parameters decided by the Commission in Order No. 1 of 2012 dated
27.01.2012 shall remain unchanged and the same are considered for re-
determination of tariff for the projects which are commissioned during the
control period of Order No. 1 of 2012 dated 27.01.2012 as under:
COMMISSION’S ORDER
The Commission approves the tariff for Procurement by the Distribution
Licensees and others from Solar Energy Projects for the Control Period from 29
January, 2012 to 31 March, 2015 as outlined in the table below:
Period 29 Jan. ’12 to
31 Mar. ’13
1 Apr. ’13 to
31 Mar. ’14
1 Apr. ’14 to
31 Mar. ’15
For megawatt-scale photovoltaic projects availing accelerated depreciation
Levellised Tariff for 25
years
Rs. 9.70 per kWh Rs. 9.02 per kWh Rs. 8.39 per kWh
For first 12 years Rs. 10.52 per kWh Rs. 9.64 per kWh Rs. 8.82 per kWh
For subsequent 13 years Rs. 7.00 per kWh Rs. 7.00 per kWh Rs. 7.00 per kWh
For kilowatt-scale photovoltaic projects availing accelerated depreciation
Page 36
Levellised Tariff for 25
years
Rs. 11.64 per kWh Rs. 10.82 per kWh Rs. 10.07 per
kWh
Levellised Tariff for Solar Thermal
Projects
With accelerated depreciation benefit: Rs. 11.83 per kWh for 25 years
[17] We order accordingly.
[18] With this order, the present petition is disposed of.
Sd/ Sd/-
[DR. M. K. IYER] [PRAVINBHAI PATEL]
MEMBER (F) CHAIRMAN
Place: Gandhinagar.
Date: 07/07/2014.
Page 37
TARIFF CALCULATIONS:
Year Unit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
(Technical)
Gross Generation: MU 1.58 1.56 1.55 1.53 1.51 1.50 1.48 1.47 1.45 1.44 1.43 1.41 1.40 1.38 1.37 1.36 1.34 1.33 1.32 1.30 1.29 1.28 1.26 1.25 1.24
Auxiliary Consumption: MU 0.0039 0.0039 0.0039 0.0038 0.0038 0.0037 0.0037 0.0037 0.0036 0.0036 0.0036 0.0035 0.0035 0.0035 0.0034 0.0034 0.0034 0.0033 0.0033 0.0033 0.0032 0.0032 0.0032 0.0031 0.0031
Net Generation: MU 1.57 1.56 1.54 1.53 1.51 1.50 1.48 1.47 1.45 1.44 1.42 1.41 1.39 1.38 1.37 1.35 1.34 1.33 1.31 1.30 1.29 1.27 1.26 1.25 1.24
(Financial)
Fixed Cost Unit
O&M Expenses Rs. Lakh 9.10 9.62 10.17 10.75 11.37 12.02 12.71 13.43 14.20 15.01 15.87 16.78 17.74 18.75 19.83 20.96 22.16 23.43 24.77 26.18 27.68 29.26 30.94 32.71 34.58
Other Expenses Rs. Lakh - - - - - - - - - - - - 42.40 - - - - - - - - - - - -
Depreciation Rs. Lakh 60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00
Interest on Loan Rs. Lakh 86.83 77.73 68.63 59.53 50.43 41.33 32.23 23.13 14.03 4.93 - - - - - - - - - - - - - - -
Interest on Working Capital Rs. Lakh 1.81 1.80 1.78 1.77 1.76 1.75 1.74 1.73 1.73 1.72 1.71 1.70 1.70 1.69 1.69 1.69 1.68 1.68 1.68 1.68 1.68 1.68 1.69 1.69 1.69
Insurance Cost Rs. Lakh 3.50 3.29 3.08 2.87 2.66 2.45 2.24 2.03 1.82 1.61 1.40 1.33 1.26 1.19 1.12 1.05 0.98 0.91 0.84 0.77 0.70 0.63 0.56 0.49 0.42
Return on Equity Rs. Lakh 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00
Tax Rs. Lakh 10.51 10.51 10.51 10.51 10.51 10.51 10.51 10.51 10.51 10.51 20.17 20.17 20.17 20.17 20.17 20.17 20.17 20.17 20.17 20.17 20.17 20.17 20.17 20.17 20.17
Gross Cost Rs. Lakh 213.74 204.94 196.17 187.43 178.72 170.06 161.42 152.83 144.28 135.78 101.15 101.99 145.27 103.81 104.81 105.87 106.99 108.19 109.46 110.81 112.23 113.75 115.36 117.06 118.87
A.D. Tax Benefit Rs. Lakh 240.09 32.45 (9.08) (17.39) (19.05) (19.38) (19.45) (19.46) (19.47) (19.47) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49) (6.49)
Net Cost Rs. Lakh (26.35) 172.50 205.25 204.82 197.78 189.44 180.87 172.29 163.75 155.24 107.64 108.47 151.76 110.30 111.30 112.36 113.48 114.68 115.95 117.29 118.72 120.24 121.84 123.55 125.35
Discount Factor 10.74% 1.00 0.903 0.815 0.736 0.665 0.600 0.542 0.490 0.442 0.399 0.361 0.326 0.294 0.265 0.240 0.216 0.195 0.177 0.159 0.144 0.130 0.117 0.106 0.096 0.086 9.51
Discounted Net Generation MU 1.57 1.41 1.26 1.12 1.00 0.90 0.80 0.72 0.64 0.57 0.51 0.46 0.41 0.37 0.33 0.29 0.26 0.23 0.21 0.19 0.17 0.15 0.13 0.12 0.11
Discounted Gross Cost Rs. Lakh 213.74 185.06 159.96 138.02 118.84 102.11 87.53 74.83 63.79 54.21 36.47 33.20 42.71 27.56 25.13 22.92 20.92 19.10 17.45 15.95 14.59 13.35 12.23 11.20 10.27
Discounted Net Cost Rs. Lakh (26.35) 155.77 167.37 150.82 131.51 113.75 98.07 84.36 72.40 61.98 38.81 35.32 44.62 29.28 26.68 24.32 22.19 20.24 18.48 16.88 15.43 14.11 12.92 11.83 10.84
Levelised Net Generation MU 1.47
Levelised Gross Cost Rs. Lakh 160.02
Levelised Net Cost Rs. Lakh 142.18
Levelised Gross Tariff Rs./kWh 10.92
Levelised Net Tariff Rs./kWh 9.70
Solar PV Tariff as per APTEL Order- Annexure I
Page 38
TARIFF CALCULATIONS:
Solar Tariff for kW Scale as per APTEL Order - Annexure II
Year Unit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
(Technical) Gross
Generation: MU 1.58 1.56 1.55 1.53 1.51 1.50 1.48 1.47 1.45 1.44 1.43 1.41 1.40 1.38 1.37 1.36 1.34 1.33 1.32 1.30 1.29 1.28 1.26 1.25 1.24 Auxiliary
Consumption: MU 0.0039 0.0039 0.0039 0.0038 0.0038 0.0037 0.0037 0.0037 0.0036 0.0036 0.0036 0.0035 0.0035 0.0035 0.0034 0.0034 0.0034 0.0033 0.0033 0.0033 0.0032 0.0032 0.0032 0.0031 0.0031 Net
Generation: MU 1.57 1.56 1.54 1.53 1.51 1.50 1.48 1.47 1.45 1.44 1.42 1.41 1.39 1.38 1.37 1.35 1.34 1.33 1.31 1.30 1.29 1.27 1.26 1.25 1.24
(Financial)
Fixed Cost Unit
O&M Expenses Rs. Lakh 10.92
11.54
12.20
12.90
13.64
14.42
15.25
16.12
17.04
18.02
19.05
20.13
21.29
22.50
23.79
25.15
26.59
28.11
29.72
31.42
33.22
35.12
37.13
39.25
41.49
Other Expenses Rs. Lakh
-
-
-
-
-
-
-
-
-
-
-
-
50.88
-
-
-
-
-
-
-
-
-
-
-
-
Depreciation Rs. Lakh 72.00
72.00
72.00
72.00
72.00
72.00
72.00
72.00
72.00
72.00
24.00
24.00
24.00
24.00
24.00
24.00
24.00
24.00
24.00
24.00
24.00
24.00
24.00
24.00
24.00
Interest on Loan Rs. Lakh
104.20
93.28
82.36
71.44
60.52
49.60
38.68
27.76
16.84
5.92
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Interest on Working Capital Rs. Lakh
2.17
2.16
2.14
2.13
2.12
2.10
2.09
2.08
2.07
2.06
2.05
2.05
2.04
2.03
2.03
2.02
2.02
2.02
2.02
2.02
2.02
2.02
2.02
2.03
2.03
Insurance Cost Rs. Lakh 4.20
3.95
3.70
3.44
3.19
2.94
2.69
2.44
2.18
1.93
1.68
1.60
1.51
1.43
1.34
1.26
1.18
1.09
1.01
0.92
0.84
0.76
0.67
0.59
0.50
Return on Equity Rs. Lakh
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
50.40
Tax Rs. Lakh 12.61
12.61
12.61
12.61
12.61
12.61
12.61
12.61
12.61
12.61
24.21
24.21
24.21
24.21
24.21
24.21
24.21
24.21
24.21
24.21
24.21
24.21
24.21
24.21
24.21
Gross Cost Rs. Lakh 256.49
245.93
235.40
224.92
214.47 204.07
193.71
183.40
173.14 162.93
121.39
122.38
174.32
124.57
125.77
127.04
128.39
129.83
131.35
132.97
134.68
136.50
138.43
140.47
142.64
A.D. Tax Benefit Rs. Lakh
288.11
38.93
(10.90)
(20.87)
(22.86)
(23.26)
(23.34)
(23.36)
(23.36)
(23.36)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
(7.79)
Net Cost Rs. Lakh (31.62)
207.00
246.31
245.79
237.33 227.33
217.05
206.75
196.50 186.29
129.17
130.17
182.11
132.36
133.56
134.83
136.18
137.61
139.14
140.75
142.47
144.29
146.21
148.26
150.43
Discount Factor 10.74%
1.00
0.903
0.815
0.736
0.665
0.600
0.542
0.490
0.442
0.399
0.361
0.326
0.294
0.265
0.240
0.216
0.195
0.177
0.159
0.144
0.130
0.117
0.106
0.096
0.086 9.51
Discounted Net Generation MU
1.57
1.41
1.26
1.12
1.00
0.90
0.80
0.72
0.64
0.57
0.51
0.46
0.41
0.37
0.33
0.29
0.26
0.23
0.21
0.19
0.17
0.15
0.13
0.12
0.11
Discounted Gross Cost Rs. Lakh
256.49
222.08
191.96
165.62
142.61
122.53
105.03
89.80
76.55
65.05
43.76
39.84
51.25
33.07
30.15
27.50
25.10
22.92
20.94
19.14
17.51
16.02
14.67
13.45
12.33
Discounted Net Cost Rs. Lakh
(31.62)
186.92
200.85
180.98
157.81
136.50
117.69
101.23
86.88
74.38
46.57
42.38
53.54
35.14
32.02
29.19
26.62
24.29
22.18
20.26
18.52
16.94
15.50
14.19
13.00
Levelised Net Generation MU
1.47
Levelised Gross Cost Rs. Lakh
192.02
Levelised Net Cost Rs. Lakh
170.62
Levelised
Gross Tariff Rs./kWh 13.10
Levelised Net Tariff Rs./kWh
11.64
Page 39
TARIFF CALCULATIONS: Solar Thermal Tariff as per APTEL Order - Annexure III
Year Unit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
(Technical) Gross
Generation: MU 2.01 2.01 2.00 2.00 1.99 1.99 1.98 1.98 1.97 1.97 1.96 1.96 1.96 1.95 1.95 1.94 1.94 1.93 1.93 1.92 1.92 1.91 1.91 1.90 1.90
Auxiliary Consumption: MU 0.201 0.201 0.200 0.200 0.199 0.199 0.198 0.198 0.197 0.197 0.196 0.196 0.196 0.195 0.195 0.194 0.194 0.193 0.193 0.192 0.192 0.191 0.191 0.190 0.190
Net Generation: MU 1.81 1.81 1.80 1.80 1.80 1.79 1.79 1.78 1.78 1.77 1.77 1.76 1.76 1.76 1.75 1.75 1.74 1.74 1.73 1.73 1.72 1.72 1.72 1.71 1.71
(Financial)
Fixed Cost Unit O&M
Expenses Rs. Lakh
21.00
22.20
23.47
24.81
26.23
27.73
29.32
31.00
32.77
34.64
36.63
38.72
40.94
43.28
45.75
48.37
51.14
54.06
57.15
60.42
63.88
67.53
71.40
75.48
79.80
Other Expenses
Rs. Lakh
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Depreciation Rs. Lakh
84.00
84.00
84.00
84.00
84.00
84.00
84.00
84.00
84.00
84.00
28.00
28.00
28.00
28.00
28.00
28.00
28.00
28.00
28.00
28.00
28.00
28.00
28.00
28.00
28.00
Interest on Loan
Rs. Lakh
121.56
108.82
96.08
83.34
70.60
57.86
45.12
32.38
19.64
6.90
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Interest on Working Capital
Rs. Lakh
2.61
2.61
2.62
2.63
2.64
2.65
2.66
2.67
2.68
2.69
2.71
2.72
2.74
2.75
2.77
2.79
2.82
2.84
2.86
2.89
2.92
2.95
2.98
3.02
3.06
Insurance Cost
Rs. Lakh
4.90
4.61
4.31
4.02
3.72
3.43
3.14
2.84
2.55
2.25
1.96
1.86
1.76
1.67
1.57
1.47
1.37
1.27
1.18
1.08
0.98
0.88
0.78
0.69
0.59
Return on Equity
Rs. Lakh
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
58.80
Tax Rs. Lakh
14.71
14.71
14.71
14.71
14.71
14.71
14.71
14.71
14.71
14.71
28.24
28.24
28.24
28.24
28.24
28.24
28.24
28.24
28.24
28.24
28.24
28.24
28.24
28.24
28.24
Gross Cost Rs. Lakh
307.58
295.75
283.99
272.31
260.70
249.18
237.74
226.39
215.14
204.00
156.33
158.34
160.48
162.74
165.13
167.67
170.36
173.22
176.23
179.43
182.82
186.41
190.20
194.23
198.48
A.D. Tax Benefit
Rs. Lakh
336.13
45.42
(12.72)
(24.35)
(26.67)
(27.14)
(27.23)
(27.25)
(27.25)
(27.25)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
(9.08)
Net Cost Rs. Lakh
(28.55)
250.33
296.71
296.66
287.37
276.32
264.97
253.64
242.40
231.25
165.42
167.43
169.56
171.82
174.22
176.76
179.45
182.30
185.32
188.52
191.90
195.49
199.29
203.31
207.57