Presentation on Tariff Order 2009-10

8/12/2019 Presentation on Tariff Order 2009-10

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Vikas K. Gupta, Sr. A. O./ Reg. 1

HARYANA POWER GENERATIONCORPORATION LIMITED

28 TH MAY 2009

PTPS, PANIPAT


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RELATED PROVISIONS

OF

THE ELECTRICITY ACT, 2003


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The Government of India enacted The Electricity Act, 2003 and it came into forceon 10th June 2003.

The State Government, however, deferredits applicability in the State of Haryana fora period of six months under Section 172(d) of the Act.

The applicability of the Act to the State ofHaryana is w.e.f. 10.12.2003


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Section 62(1):

Provides that the Appropriate Commissionshall determine the tariff in accordancewith the provisions of the The Electricity

Act, 2003 for supply of electricity by agenerating company to a distribution

licensee.

In our case Appropriate Commission isHERC.


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Section 62 (2)

The Appropriate Commission may requirea licensee or a generating company tofurnish separate details, as may bespecified in respect of generation,transmission and distribution fordetermination of tariff.


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Section 64 (1)

An application for determination of tariffunder section 62 shall be made by agenerating company or licensee in such

manner and accompanied by such fee, asmay be determined by regulations.

Keeping in view of above HERC Notified

the Fee Regulations on 6th

January 2005 &Tariff Regulations on 19 th December 2008.


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Section 64 (3)

The Appropriate Commission shall, withinone hundred and twenty days from receiptof an application under sub section (1) and

after considering all suggestions andobjections received from the public, -

issue a tariff order accepting theapplication with such modifications orsuch conditions as may be specified inthat order;


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Section 64 (3)

reject the application for reasons to berecorded in writing if such application isnot in accordance with the provisions ofthis Act and the rules and regulationsmade there under or the provisions of anyother law for the time being in force:

Provided that an applicant shall be given areasonable opportunity of being heardbefore rejecting his application.


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REGULATORY PROCEDURES


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Tariff Filing Procedure


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As per The Electricity Act, 2003 HPGCLcan file a Generation Tariff Application by30 th November 2008 as commission has toissue the order within 120 days. But HERCduring October 2008 had directed HPGCLto file the Generation Tariff Application forFY 2009-10 by 1 st November 2008.

From now onwards every year HPGCL hasto file Generation Tariff Application by 1 st November for the consideration andapproval of HERC.


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HERC had notified the Tariff Regulationson 19.12.2008 and also notified someperformas, which are to be filled by theHPGCL. These are voluminous and requireinformation relating to technical andcommercial aspects from plants as well asHead quarter. Earlier there were no suchperformas. HPGCL is filling the TariffApplications since 2004-05 without theseperformas. We will file the TariffApplication in these performs for the firsttime.


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After receiving the Tariff Application theCommission conducts a preliminaryanalysis of the petition and soughtclarification/ additional information on anumber of issues.

This year HERC sought clarification onstatus of DCR TPP (Unit 1 & 2), coal transitloss, internal audit, backlog of audit account(s), tariff design, actual shutdown of HPGCLgenerating stations vis a- vis plannedshutdown, rate and methodology of


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computing depreciation, updated actual performance of HPGCLs generatingstations, cost of short term borrowings,delivered cost of coal, R&M activities etc.

After collecting information from the plants

& HQ., HPGCL submits its reply to theobservations of the Commission.

Then Commission issues public notices innewspapers informing the public & interestedpersons/ organizations intimating the date, time &venue of the public hearing.


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Before Public Hearing Commission receivesobjections/ suggestions to the petition & these

objections are to be replied and filed by theHPGCL in writing with the Honble Commissionin stipulated time and that too before the publichearing.

After obtaining additional information andclarification as well as HPGCLs response to theobjections filed with the Commission, a public

hearing is held, in order to provide furtheropp ortunity to the objectors to present theirviews in person before the Commission.


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HPGCL is also invited to make their generalpresentation and was directed to reply tothe specific issues raised by the objectors.

Generally the Managing Director of HPGCLmakes detailed presentation and alsoresponds to queries and clarificationssought by the objectors and theCommission.

The Chief of Operation (COO) as well asFA/HQ. HPGCL deal with the technical andCommercial aspects respectively.


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Before finalization of the Tariff Order, State AdvisoryCommittee (SAC) constituted by the Commission

under section 87 of the Electricity Act 2003. The Chairperson of the Commission shall be the ex-

officio Chairperson of the SAC. Members of thecommission, the secretary to State Government incharge of the Ministry or department dealing withConsumer Affairs and Public Distribution System,M.D. of state transmission Utility, M. D. of HPGCLand M.D of Distribution licensee(s) shall be the ex-officio Members of the SAC. The total no should notbe more than 21.


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SAC also deliberates on the Generation TariffApplication of HPGCL and a detailed

presentation is also given by the MD, HPGCLbefore the Honble Commission and SACmembers.

After considering all the objections of Public,

SAC Members and staff of the Commission &replies thereof by the HPGCL, HERC issues theTariff order.

This year the order was issued on 18 th May

2009, which is applicable w.e.f. 1st

April 2009.


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GENERATION TARIFF NORMS FORFY 2009-10


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CAPACITY & GENERATION

Particulars PTPS, Panipat

Units 1 Units 2 Units 3 Units 4 Unit 5 Unit 6 Unit 7 Unit 8

Capacity(MW)

117.8 110 110 110 210 210 250 250

GrossGeneration(MUs)

826 771 771 771 1471.68 1471.68 1752 1752

Generation(Ex Bus)(MUs)

735 686 686 686 1339 1339 1594 1594


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CAPACITY & GENERATION

Particulars FTPS, Faridab ad DCR TPP, Yamun a Nagar WYC &K ak ro i

Units 1 Unit 3 Units 1 Uni t 2

Capacity(MW)

55 55 300 300 62.7

GrossGeneration(MUs)

241 241 2102 2102 275

Generation(Ex Bus)(MUs)

211 211 1923 1923 274


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PERFORMANCE PARAMETERS

Particulars PTPS, Panip at

Units 1 Units 2 Units 3 Units 4 Unit 5 Unit 6 Unit 7 Unit 8

PLF (%) 80 80 80 80 80 80 80 80

AuxiliaryPowerConsumption(%)

11.00 11.00 11.00 11.00 9.00 9.00 9.00 9.00

Specific OilConsumption(ml/kWh)

2.00 2.00 2.00 2.00 2.00 2.00 1.00 1.00

Station HeatRate(K.cal/kWh)

3100 3100 3100 3100 2600 2600 2500 2500


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PERFORMANCE PARAMETERS

Particulars FTPS, Faridab ad DCR TPP, Yamun a Nagar WYC &K ak ro i

Units 1 Unit 3 Units 1 Uni t 2

PLF (%) 50 50 80 80 -

Auxiliary PowerConsumption(%)

12.50 12.50 8.50 8.50 0.50

Specific OilConsumption(ml/kWh)

4.00 4.00 1.00 1.00 -

Station Heat Rate(K.cal/kWh)

4000 4000 2500 2500 -


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RATES OF COAL, OIL & TRANSIT LOSS OF COALParticulars PTPS, Panipat FTPS,

Faridabad

DCR TPP,

Yamuna Nagar

Rate of Coal (Rs.) 2700 3100 2109

Rate of Oil (Rs.) 30,152 37,187 29,364

Transit loss of coal (%) 1.50 2.50 1.50

GCV of Oil(K.cal/KL)

9991 10,000 9991

GCV of Coal(K.cal/Kg)

4003 4,017 4003


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FIXED COST (Rs. in Millions)

PTPS, Panipat DCRU-1

DCR

U-2 FTPS

U-1&3

WYC&

Kakr oi

Units1-4

Unit 5 Unit 6 Unit 7 Unit 8

O&M Exp.(Inc. R&M,Emp. Cost,Admn. Exp.)

1173.00 382.20 382.20 455.00 455.00 480.00 480.00 360.25 200.00

Depreciation 181.77 83.77 358.96 384.68 384.68 420.98 420.98 26.24 45.92

Interest &Finance

149.99 98.18 403.76 422.11 422.11 1117.88 1117.88 32.30 80.28

W/C interest@ 11%

301.10 119.50 147.80 161.40 161.40 172.9 172.9 71.35 11.13

ROE @ 10% 72.94 19.97 175.74 189.5 189.5 240.03 240.03 10.16 44.91

AAD 98.30 45.30 194.12 208.04 208.04 227.67 227.67 14.19 24.84

Total FixedCost

1977.10 748.92 1662.58 1820.73 1820.73 2659.46 2659.46 514.49 407.08


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GENERATION TARIFF FOR FY 2009-10

Units ( Figures in Rs./kWh ) Energy Charges Fixed Charges Total

Units 1 4, PTPS, Panipat 2.44 0.71 3.15

Unit-5, PTPS, Panipat 2.01 0.56 2.57

Unit-6, PTPS, Panipat 2.01 1.24 3.25

Unit-7, PTPS, Panipat 1.91 1.14 3.05Unit-8, PTPS, Panipat 1.91 1.14 3.05

Units-1 & 3,FTPS, Faridabad

3.75 1.22 4.97

DCR TPP, Yamuna Nagar 1.49 1.38 2.87

WYC Yamuna Nagar &Kakroi - 1.49 1.49

Total HPGCL as a whole 1.94 1.08 3.02


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OBSERVATIONS OF THE HERCPTPS, Panipat:

The main reasons for decline in PLFs are extendedshutdowns of PTPS unit 1 for R&M & unit 4 for annualoverhauling as compared to the planned durations. Asalready advised from time to time, HPGCL need to improvetheir planning and implementation of overhauling and R&M

activities so as to ensure zero gaps in executing the plans. The Commission notes the improvement achieved by HPGCL

as compared to previous year in reducing the auxiliary powerconsumption at PTPS units 1 to 4, 6 & 7 and the oilconsumption in PTPS units 5 to 8. Similar efforts are required

for reducing auxiliary power and specific oil consumption atother Units as well.


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The excessive station heat rates prevailing at PTPS units1 to4 is a cause of concern. As advised from time to time, HPGCLneed to focus on preventive maintenance, reduction in forcedoutages, energy audits and remedial measures accordingly. Itappears HPGCL has not heeded the advice of the

Commission to form an energy audit group of trainedengineers for carrying out energy audits of various units onregular basis.

The Commission has taken note of transit loss of coal atPTPS which is still much higher as compared to HERC normsi.e. 0.80%.


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HPGCL had carried out refurbishment of PTPS unit 2 duringFY 2002-03 through M/s ABB who terminated the contractwithout finishing the works. The balance of works were gotcompleted through M/s BHEL and the desired improvementshave not been achieved.

Subsequently, refurbishment of PTPS unit I has been carriedout through M/s BHEL during FY 2007-08. In this case also,the performance of the unit after refurbishment has not beenup to the mark. The SHR of PTPS unit I which was 3342Kcal/kWh for FY 2006-07 before refurbishment has increasedto 3480 Kcal/kWh for FY 2008-09 against the contractedprovision of around 2346 Kcal/kWh . Although the unit wascommissioned in 11/08, the PG Tests are yet to be completed.


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HPGCL should carry out cost-benefit study with reference tocost incurred on the refurbishment of both the unitsmentioned above and the benefits achieved in financial termsand submit a copy of the same to the Commission forinformation. The status of arbitration case going on for

resolving the disputed claims / counter claims arising out oftermination of contract for Unit 2 by M/s ABB may also beintimated .

The Commission notes that it has, from FY 2004-05 to FY2007-08, allowed Rs. 2434.93 Millions as O&M expenses andRs. 895.56 Millions as interest / repayments of CapitalExpenditure for PTPS (1-4), similarly Rs. 895.56 Millions & Rs.1162.27 Millions respectively were allowed for PTPS (5) and


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Rs. 927.47 Millions & Rs. 2328.5 Millions respectively wereallowed for PTPS (6). In the light of the Capital Expenditureincluding R&M allowed for different power plants at Panipatand Faridabad, HPGCL is directed to conduct an impactassessment to establish the benefits that accrued in terms of

station wise efficiency gains. The report should be submittedwithin three months from the date of this order.


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OBSERVATIONS OF THE HERCFTPS, Faridabad:

The coal transit loss at FTPS is alarmingly high. A lot needs to bedone by HPGCL to bring the transit loss of coal to the norm of0.8% fixed by HERC as well as CERC by pursuing the matter withthe Central Ministries of Coal and Railways at the level of ChiefMinister.

HPGCL have already phased out FTPS unit 2 on account of poorperformance. The performance of other two units is also goingfrom bad to worse. The annual PLF of 42.61%, auxiliary powerconsumption of 16.32%, specific oil consumption at 9.62ml/kWhand station heat rate at 4518 Kcal/kWh have resulted in very highcost of generation. HPGCL intends to phase out FTPS Units 1 & 3on Commissioning of RGTPP, Hissar. HPGCL may consider earlyphasing out the remaining two units of 55 MW each by makingalternate arrangements and utilize the trained manpower sospared at other projects of HPGCL .


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OBSERVATIONS OF THE HERCDCR TPP, Yamuna Nagar:

The Commission is concerned about the poor performanceand frequent breakdowns of 2x300 MW DCRTPS, YamunaNagar units which were commissioned in FY 2007-08. Theseunits, during FY 2008-09, have achieved very low PLFs of68.66% & 69.53% respectively. The auxiliary power

consumption at 9.34% & 9.32% respectively is on the higherside and specific oil consumption at 6.81 & 5.74 ml/kWhrespectively is alarmingly high. The only redeeming feature isthe achievement of SHR at 2440 Kcal/kWh which is better thanthe norm fixed by the Commission. The CODs of DCR TPSUnit 1 & 2 have been given as 14.04.2008 and 24.06.2008respectively on completion of trial run operations. However,there is abnormal delay in completion of PG tests of theseunits and these Units due to which the Units have not been


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OBSERVATIONS OF THE HERCDCR TPP, Yamuna Nagar:

taken over by HPGCL so far. Detailed report on the reasonsfor poor performance of these units and for abnormal delay intaking over the units may be submitted and the Commissionmay be apprised of the steps being taken to bring theperformance of these units at par with the contractedstandards and the time frame thereof .

The Commission would like to remind HPGCL that thesemilestones were achieved ahead of schedules at 2 x 300 MWDCR TPP, Yamuna Nagar also, but later on the finalcommissioning, stabilization, trial run and takeover of theunits have been delayed. HPGCL is advised to draw lessonfrom their experience at DCR TPP and ensure that all theremaining milestones of RG TPP are satisfactorily completedwell in time.


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OBSERVATIONS OF THE HERCHPGCL:

HPGCL also needs to focus on Human ResourcesDevelopment. Every year a number of trained technicalofficers & subordinate staff are retiring and many newgeneration projects are coming up. HPGCL must have acomprehensive plan to recruit requisite technical personnelon regular basis and get them trained at reputed traininginstitutes as well as at manufacturers works. HERC may beapprised of any plan prepared by HPGCL to meet with thecurrent & future demand of trained manpower .


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Presentation on Tariff Order 2009-10

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