CENTRAL ELECTRICITY REGULATORY COMMISSION (TERMS AND CONDITIONS OF TARIFF) REGULATIONS 2004
(1) These regulations may be called the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2004.
(2) These regulations shall come into force on 1.4.2004, and unless reviewed earlier or extended by the Commission, shall remain in force for a period of 5 years.
Provided that where a project, including a part thereof, has been commissioned before the date of commencement of these regulations and whose tariff has not been finally determined by the Commission till that date, tariff in respect of such a project or part thereof, as the case may be, for the period ending 31.3.2004 shall be determined in accordance with the Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulations, 2001.
(3) Words and expressions used in these regulations
(1) Where tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government, the Commission shall adopt such tariff in accordance with the provisions of the Act.
(2) These regulations shall apply in all other cases where tariff is to be determined by the Commission based on capital cost.
Provided that the Commission may prescribe the relaxed norms of operation, including the norms of target availability and Plant Load Factor contained in these regulations for a generating station the tariff of which is not determined in accordance with the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2001, and the relaxed norms shall be applicable for determination of tariff for such a generating station.
For removal of doubts, it is clarified that the norms of operation specified under these regulations are the ceiling norms and this shall not preclude the generating company or the transmission licensee, as the case may be, and the beneficiaries from agreeing to improved norms of operation and in case the improved norms are agreed to, such improved norms shall be applicable for determination of tariff.
(1) Tariff in respect of a generating station under these regulations shall be determined stage-wise, unit-wise or for the whole generating station and tariff for the transmission system shall be determined line-wise, sub-station-wise and system-wise, as the case may be, and aggregated to regional tariff.
(2) For the purpose of tariff, the capital cost of the project shall be broken up into stages and by distinct units forming part of the project. Where the stage-wise, unit-wise, line-wise or sub-station-wise break up of the capital cost of the project is not available and in case of on-going projects, the common facilities shall be apportioned on the basis of the installed capacity of the units and lines or sub-stations. In relation to multi-purpose hydro electric projects, with irrigation, flood control and power components, the capital cost chargeable to the power component of t
(1) The generating company or the transmission licensee, as the case may be, may make an application for fixation of tariff in respect of the completed units of the generating station or the lines or sub-stations of the transmission system.
(2) In case of the existing generating station or the existing transmission system, the generating company or the transmission licensee, as the case may be, shall make an application for determination of tariff as per Appendix I to these regulations.
(3) In case of a generating station or the transmission system declared under commercial operation on or after 1.4.2004, an application for fixation of tariff shall be made in two stages, namely:
(i) A generating company or a transmission licensee may make an application as per Appendix I to these regulations,
For the purpose of these regulations, core business means the regulated activities of generation or transmission of electricity and does not include any other business or activity, like consultancy, telecommunication, of the generating company or the transmission licensee.
(1) Tax on the income streams of the generating company or the transmission licensee, as the case may be, from its core business, shall be computed as an expense and shall be recovered from the beneficiaries.
(2) Any under-recoveries or over-recoveries of tax on income shall be adjusted every year on the basis of income-tax assessment under the Income-Tax Act, 1961, as certified by the statutory auditors.
Provided that tax on any income stream other than the core business shall not constitute a pass through component in tariff and tax on such other income shall be payable by the generating company or transmission licensee, as the case may be.
Provided further that the generating station-wise profit before tax in the case of the generating company and the region-wise profit before tax in case o
(1) The beneficiaries shall maintain an interest-bearing tax escrow account in a scheduled bank, to which all amounts of interest shall be credited .
(2) The tax liability shall be estimated two months before the commencement of each year and intimated to the beneficiaries. The generating company or the transmission licensee shall endeavour to minimize its liability on account of taxes recoverable from the beneficiaries.
(3) The generating company or the transmission licensee shall be authorised to withdraw the amounts for settling the income-tax liability on presentation to the escrow holder, a certificate from their statutory auditors that the amounts are immediately due and payable to the taxing authority.
(4) The generating company or the transmission licensee shall pay into the tax escr
(1) Extra rupee liability towards interest payment and loan repayment corresponding to the normative foreign debt or actual foreign debt, as the case may be, in the relevant year shall be permissible provided it directly arises out of Foreign Exchange Rate Variation and is not attributable to the generating company or the transmission licensee or its suppliers or contractors. Every generating company and the transmission licensee shall recover Foreign Exchange Rate Variation on a year to year basis as income or expense in the period in which it arises and Foreign Exchange Rate Variation shall be adjusted on a year to year basis.
Recovery of Income-tax and Foreign Exchange Rate Variation shall be done directly by the generating company or the transmission licensee, as the case may be, from the beneficiaries without making any application before the Commission.
Provided that in case of any objections by the beneficiaries to the amounts claimed on account of income-tax or Foreign Exchange Rate Variation, the generating company or the transmission licensee, as the case may be, may make an appropriate application before the Commission for its decision.
(1) Tariff for sale of electricity by a generating company may also be determined in deviation of the norms specified in these regulations subject to the conditions that:
(a) The overall per unit tariff of electricity over the entire life of the asset, calculated on the basis of the norms in deviation does not exceed the per unit tariff calculated on the basis of the norms specified in these regulations; and
(b) Any such deviation shall come into effect only after approval by the Commission.
(2) In case of the existing generating stations, TPS-I and TPS-II (Stage I & II) of Neyveli Lignite Corporation Ltd, whose tariff was initially determined by following Net Fixed Assets approach based on mutual agreement between Neyveli Lignite Corporation Ltd and the beneficiaries, tariff shall continue to
If any difficulty arises in giving effect to these regulations, the Commission may, of its own motion or otherwise, by an order and after giving a reasonable opportunity to those likely to be affected by such order, make such provisions, not inconsistent with these regulations, as may appear to be necessary for removing the difficulty.
The Commission, for reasons to be recorded in writing, may vary any of the provisions of these regulations on its own motion or on an application made before it by an interested person
Unless the context otherwise requires, for the purpose of this chapter, :-
(i) Act means the Electricity Act, 2003;
(ii) `Additional Capitalisation' means the capital expenditure actually incurred after the date of commercial operation of the generating station and admitted by the Commission after prudence check subject to provisions of regulation 18;
(iii) Authority ' means Central Electricity Authority referred to in Section 70 of the Act;
(iv) 'Auxiliary Energy Consumption' or 'AUX' in relation to a period means the quantum of energy consumed by auxiliary equipment of the generating station and transformer losses within the generating station, and shall be expressed as a percentage of the sum of gross energy generated at the generator terminals
(1) Tariff for sale of electricity from a thermal power generating station shall comprise of two parts, namely, the recovery of annual capacity (fixed) charges and energy (variable) charges.
(2) The annual capacity (fixed) charges shall consist of:
(a) Interest on loan capital;
(b) Depreciation, including Advance Against Depreciation;
(c) Return on equity;
(d) Operation and maintenance expenses; and
(e) Interest on working capital.
(3) The energy (variable) charges shall cover fuel cost.
Norms of Operation
The norms of operation as given hereunder shall apply:
(i) Target Availability for recovery of full Capacity (fixed) charges
(a) All thermal power generating stations, except those covered under clause (b) below --80%
(b) Thermal power generating stations of Neyveli Lignite Corporation Ltd. (TPS-I, TPS-II, Stage I & II and TPS-1 Expansion). --75%
Note :
Recovery of capacity (fixed) charges below the level of target availability shall be on pro rata basis. At zero availability, no capacity charges shall be payable.
&nb
Subject to prudence check by the Commission, the actual expenditure incurred on completion of the project shall form the basis for determination of final tariff. The final tariff shall be determined based on the admitted capital expenditure actually incurred up to the date of commercial operation of the generating station and shall include capitalised initial spares subject to following ceiling norms as a percentage of the original project cost as on the cut off date:
(i) Coal-based/lignite-fired generating stations - 2.5%
(ii) Gas Turbine/Combined Cycle generating stations - 4.0%
Provided that where the power purchase agreement entered into between the generating company and the beneficiaries provides a ceiling of actual expenditure, the capital expenditure shall not exceed such ceiling fo
(1) The following capital expenditure within the original scope of work actually incurred after the date of commercial operation and up to the cut off date may be admitted by the Commission, subject to prudence check:
(i) Deferred liabilities;
(ii) Works deferred for execution;
(iii) Procurement of initial capital spares in the original scope of work, subject to ceiling specified in regulation 17;
(iv) Liabilities to meet award of arbitration or for compliance of the order or decree of a court; and
(v)On account of change in law.
Provided that original scope of work along with estimates of expenditure shall be submitted along with the application for provis
6[Infirm power shall be accounted as Unscheduled Interchange (UI) and paid for from the regional 7 State UI pool account at the applicable frequency-linked UI rate. Any revenue earned by the generating company from sale of infirm power shall be applied for reduction in capital cost and shall not be treated as revenue.]
6.Substituted by the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) (Fourth Amendment) Regulations, 2007 vide Notification NO. L-7/25(5)/2003-CERC dated 28.12.2007 for the following :-
"Any revenue (other than the recovery of fuel cost) earned by the generating company from sale of infirm power, shall be taken as reduction in capital cost and shall not be treated as revenue. "
(1) In case of the existing generating stations, debt-equity ratio considered by the Commission for fixation of tariff, for the period ending 31.3.2004 shall be considered for determination of tariff.
(2) In case of the generating stations for which investment approval was accorded prior to 1.4.2004 and which are likely to Be declared under commercial operation during the period from 1.4.2004 to 31.3.2009, debt-equity in the ratio of 70:30 shall be considered:
Provided that where deployment of equity is less than 30%, the actual equity deployed shall be considered for the purpose of determination of tariff.
Provided further that the Commission may in appropriate cases consider equity higher than 30% for the purpose of determination of tariff, where the generating company is able to establish t
(1) The capacity charges shall be computed on the following basis and their recovery shall be related to target availability.
(i) Interest on loan capital
(a) Interest on loan capital shall be computed loan wise on the loans arrived at in the manner indicated in regulation 20.
(b) The loan outstanding as on 1.4.2004 shall be worked out as the gross loan as per regulation 20 minus cumulative repayment as admitted by the Commission up to 31.3.2004. The repayment for the period 2004-09 shall be worked out on a normative basis.
(c) The generating company shall make every effort to swap the loan as long as it results in net benefit to the beneficiaries. The costs associated with such swapping shall be borne by the beneficiaries.
&
(i) Generating stations covered under ABT
Energy (variable) Charges shall cover fuel costs and shall be worked out on the basis of ex-bus energy scheduled to be sent out from the generating station as per the following formula:
Energy Charges (Rs) = Rate of Energy Charges in Rs/kWh X Scheduled Energy (ex-bus) for the month in kWh corresponding to scheduled generation.
(ii) Generating stations other than those covered under ABT
Energy (variable) charges shall cover fuel costs and shall be worked out on the basis of ex-bus energy delivered / sent out from the generating station as per the following formula:
Energy Charges (Rs) = Rate of Energy Charges in Rs/kWh X Energy delivered (ex-bus) for the month i
Incentive shall be payable at a flat rate of 25.0 paise/kWh for ex-bus scheduled energy corresponding to scheduled generation in excess of ex-bus energy corresponding to target Plant Load Factor.
(1) Variation between actual generation or actual drawal and scheduled generation or scheduled drawal shall be accounted for through Unscheduled Interchange (UI) Charges. UI for a generating station shall be equal to its actual generation minus its scheduled generation. UI for a beneficiary shall be equal to its total actual drawal minus its total scheduled drawal. UI shall be worked out for each 15-minute time block. Charges for all UI transactions shall be based on average frequency of the time block and the following rates shall apply from 1.4.2004 to 30.9.2004:
Average Frequency of time block UI Rate (False per kWh)
50.5 Hz and above 0.0
Below 50.5 Hz and up to 50.48 Hz 8.0
Below 49.04 Hz and up to 49.02 Hz 592.0
For payment of bills of capacity charges and energy charges through a letter of credit on presentation, a rebate of 2% shall be allowed. If the payments are made by a mode other than through a letter of credit but within a period of one month of presentation of bills by the generating company, a rebate of 1% shall be allowed.
In case the payment of bills of capacity charges and energy charges by the beneficiary or beneficiaries is delayed beyond a period of 60 days from the date of billing, late payment surcharge at the rate of 1.25% per month shall be levied by the generating company.]
3. Substituted by Notification No. L-7/25(5)/2003-CERC dated 03.09.2004 for the following:-
26. Late Payment Surcharge--
In case the payment of bills of capacity charges and energy charges by the beneficiary (ies) is delayed beyond a period of 1 month from the date of billing, a late payment surcharge at the rate of 1.25% per month shall be levied by the generating company.
Read with the provisions of the Indian Electricity Grid Code, the methodology of scheduling and calculating availability shall be as under:
(i) The generator shall make an advance declaration of capability of its generating station. The declaration shall be for that capability which can be actually made available.
The declaration shall be for the capability of the generating station to deliver ex-bus MW for the next day either as one figure for the whole day or as different figures for different periods of the day. The capability as declared by the generator, also referred to as the declared capacity, shall form the basis of generation scheduling.
(ii) While making or revising its declaration of capability, the generator shall ensure that the declared capability during peak hours is not less
(1) The generating company may be required to demonstrate the declared capability of its generating station as and when asked by the Regional Load Despatch Centre of the region in which the generating station is situated. In the event of the generating company failing to demonstrate the declared capability, the capacity charges due to the generator shall be reduced as a measure of penalty.
(2) The quantum of penalty for the first mis-declaration for any duration/block in a day shall be the charges corresponding to two days fixed charges. For the second mis-declaration the penalty shall be equivalent to fixed charges for four days and for subsequent mis-declarations, the penalty shall be multiplied in the geometrical progression.
(3) The operating log books of the generating station shall be available for review by the Regional Electrici
Metering arrangements, including installation, testing and operation and maintenance of meters and collection, transportation and processing of data required for accounting of energy exchanges and average frequency on 15 minute time block basis shall be organised by the Central Transmission Utility/Regional Load Despatch Centres. All concerned entities (in whose premises the special energy meters are installed), shall fully cooperate with the Central Transmission Utility/Regional Load Despatch Centre and extend the necessary assistance by taking weekly meter readings and transmitting them to the Regional Load Despatch Centre. Processed data of meters along with data relating to declared capability and schedules etc., shall be supplied by the Regional Load Despatch Centres to the Regional Power Committee or the Regional Electricity Board and the Regional Power Committee or the Regional Electricity Board shall issue the Regiona
Billing and payment of capacity charges shall be done on a monthly basis in the following manner:
(i) Each beneficiary shall pay the capacity charges in proportion to its percentage share in Installed Capacity of the generating station.
4[Note 1
Allocation of total capacity of central sector generating stations is made by Central Government from time to time, which also has an unallocated portion. Allocation of the unallocated portion as made by the Central Government from time to time, for the total unallocated capacity shall be notified by the Member Secretary, Regional Electricity Board/Regional Power Committee in advance, at least 24 hours prior to such change in allocation taking effect. The total capacity share of any beneficiaries would be sum of its capacity share plus allocation out
Unless the context otherwise requires for the purpose of this chapter, :-
(i) Act means the Electricity Act, 2003;
(ii) `Additional Capitalisation' means the capital expenditure actually incurred after the date of commercial operation of the station and admitted by the Commission after prudence check subject to provisions of regulation 34;
(iii) Authority ' means Central Electricity Authority referred to in Section 70 of the Act;
(iv) 'Auxiliary Energy Consumption in relation to a period means the quantum of energy consumed by auxiliary equipment of the generating station, and shall be expressed as a percentage of the sum of gross energy generated at generator terminals of all the units of the generating station;
&
The norms of operation shall be as under, namely:
(i) Normative capacity index for recovery of full capacity charges
(a) During first year of commercial operation of the generating station
(i) Purely Run-of-river power stations - 85%
(ii) Storage type and Run-of-river power stations
with pondage - 80%
(b) After first year of commercial operation of the generating station
(i) Purely Run-of river power stations - 90%
(ii) Storage type and Run-of-river power stations
with pondage - 85%
Subject to prudence check by the Commission, the actual expenditure incurred on completion of the project shall form the basis for determination of final tariff. The final tariff shall be determined based on the admitted capital expenditure actually incurred up to the date of commercial operation of the generating station and shall include initial capital spares subject to a ceiling norm of 1.5% of the original project cost as on the cut off date.
Provided further that where the power purchase agreement entered into between the generating company and the beneficiaries provides a ceiling of actual expenditure, the capital expenditure shall not exceed such ceiling for determination of tariff.
In case of existing generating stations, the project cost admitted by the Commission prior to 1.4.2004 shall form the basis for determination of tar
(1) The following capital expenditure within the original scope of work actually incurred after the date of commercial operation and up to the cut off date may be admitted by the Commission subject to prudence check.
(i) Deferred liabilities,
(ii) Works deferred for execution,
(iii) Procurement of initial capital spares in the original scope of works subject to ceiling specified in regulation 33,
(iv) Liabilities to meet award of arbitration or in compliance of the order or decree of a court, and
(iv) On account of change in law.
Provided that original scope of works along with estimates of expenditure shall be submitted along with the applic
6[Infirm power shall be accounted as Unscheduled Interchange (UI) and paid for from the regional / State UI pool account at the applicable frequency-linked UI rate. Any revenue earned by the generating company from sale of infirm power shall be applied for reduction in capital cost and shall not be treated as revenue.]
6. Core Business--
For the purpose of these regulations, core business means the regulated activities of generation or transmission of electricity and does not include any other business or activity, like consultancy, telecommunication, of the generating company or the transmission licensee.
(1) In case of the existing generating stations, debt-equity ratio considered by the Commission for fixation of tariff for the period ending 31.3.2004 shall be considered for determination of tariff.
(2) In case of the generating stations for which investment approval was accorded prior to 1.4.2004 and which are likely to be declared under commercial operation during the period 1.4.2004 to 31.3.2009, debt-equity in the ratio of 70:30 shall be considered:
Provided that where deployment of equity is less than 30%, the actual equity deployed shall be considered for the purpose of determination of tariff.
Provided further that the Commission may in appropriate cases consider equity higher than 30% for the purpose of determination of tariff, where the generating company is able to establish to the
The two-part tariff for sale of electricity from a hydro power generating station shall comprise of recovery of annual capacity charge and primary energy charges:
(i) Capacity Charges: The capacity charges shall be computed in accordance with the following formula:
Capacity Charges = (Annual Fixed Charge- Primary Energy Charge)
Note
Recovery through Primary energy charge shall not be more than Annual Fixed Charge.
` (ii) Annual Fixed Charges: Annual Fixed Charges shall consist of:
(a) Interest on loan capital;
(b) Depreciation, including Advance Against Depreciation;
(c
The annual fixed charges shall be computed on the following basis:
(i) Interest on loan capital
(a) Interest on loan capital shall be computed loan wise on the loans arrived at in the manner indicated in regulation 36.
(b) The loan outstanding as on 1.4.2004 shall be worked out as the gross loan as per regulation 36 minus cumulative repayment as admitted by the Commission up to 31.3.2004. The repayment for the period 2004-09 shall be worked out on a normative basis.
(c) The generating company shall make every effort to swap the loan as long as it results in net benefit to the beneficiaries. The costs associated with such swapping shall be borne by the beneficiaries.
(d) The changes to the loan terms and
(1) Primary energy charge shall be worked out on the basis of paise per kWh rate on ex-bus energy scheduled to be sent out from the hydro electric power generating station after adjusting for free power delivered to the home state.
(2) Rate of primary energy for all hydro electric power generating stations, except for pumped storage generating stations, shall be equal to the lowest variable charges of the central sector thermal power generating station of the concerned region. The primary energy charge shall be computed based on the primary energy rate and saleable energy of the station.
Provided that in case the primary energy charge recoverable by applying the above primary energy rate exceeds the Annual Fixed Charge of a generating station, the primary energy rate for such generating station shall be calculated by the f
(1) Incentive shall be payable in case of all the generating stations, including in case of new generating stations in the first year of operation, when the capacity index (CI) exceeds 90% for purely run-of-river power generating stations and 85% for run-of-river power station with pondage or storage type power generating stations and incentive shall accrue up to a maximum capacity index of 100%.
(2) Incentive shall be payable to the generating company in accordance with the following formula:
Incentive = 0.65 x Annual Fixed Charge x (CIA CIN)/100
(If incentive is negative, it shall be set to zero.)
Where, CIA is the Capacity Index achieved and CIN is the normative capacity index whose values are 90% for purely run of the river hydro stations and
(1) Variation between actual generation or actual drawal and scheduled generation or scheduled drawal shall be accounted for through Unscheduled Interchange (UI) charges. UI for a generating station shall be equal to its actual generation minus its scheduled generation. UI for a beneficiary shall be equal to its total actual drawal minus its total scheduled drawal. UI shall be worked out for each 15-minute time block. Charges for all UI transactions shall be based on average frequency of the time block and the following rates shall apply from 1.4.2004 to 30.9.2004:
Average Frequency of time block UI Rate (Paise per kWh)
50.5 Hz and above 0.0
Below 50.5 Hz and up to 50.48 Hz 8.0
Below 49.04 Hz and up to 49.02 Hz 592.0
For payment of bills of capacity charge and energy charge through the letter of credit on presentation, a rebate of 2% shall be allowed. If the payments are made by a mode other than through the letter of credit but within a period of one month of presentation of bills by the generating company , a rebate of 1% shall be allowed.
In case the payment of bills of capacity charges and energy charges by the beneficiary or beneficiaries is delayed beyond a period of 60 days from the date of billing, late payment surcharge at the rate of 1.25% per month shall be levied by the generating company.]
4. Substituted by Notification No. L-7/25(5)/2003-CERC dated 03.09.2004 for the following :-
44. Late Payment Surcharge--
In case the payment of bills of capacity charge and energy charge by the beneficiary (ies) is delayed beyond a period of 1 month from the date of billing, a late payment surcharge at the rate of 1.25% per month shall be levied by the generating company .
Read with the provisions of the Indian Electricity Grid Code, the methodology of scheduling and calculating capacity index shall be as under:
(i) The generator shall make an advance declaration of capacity of its generating station. The declaration shall be for that capacity which can be actually made available for a period of time not less than 3 hours within a 24 hours period for pondage and storage type of stations and for the entire day for purely run-of-river type stations.
(ii) The generator shall intimate the declared capacity (MW), for the next day, either as one figure for the whole day or different figures for different periods of the day along with maximum available capacity (MW) and total energy (MWh) ex-bus to the Regional Load Despatch Centre.
The declaration should also include
(1) The generating company may be required to demonstrate the declared capacity of its generating station as and when asked by the Regional Load Despatch Centre of the region in which the generating station is situated. In the event of the generating company failing to demonstrate the declared capacity, within the tolerance as specified by the Central Transmission Utility, the capacity charges due to the generating station shall be reduced as a measure of penalty.
(2) The quantum of penalty for the first mis-declaration for any duration or block in a day shall be the charges corresponding to two days fixed charges. For the second mis-declaration the penalty shall be equivalent to fixed charges for four days and for subsequent mis-declarations, the penalty shall be multiplied in the geometrical progression.
(3) The operating log books of
Metering arrangements, including installation, testing and operation and maintenance of meters and collection, transportation and processing of data required for accounting of energy exchanges and average frequency on 15 minute time block basis shall be organised by the Central Transmission Utility/Regional Load Despatch Centres. All concerned entities (in whose premises the special energy meters are installed), shall fully cooperate with the Central Transmission Utility/Regional Load Despatch Centre and extend the necessary assistance by taking weekly meter readings and transmitting them to the Regional Load Despatch Centre. Processed data of meters along with data relating to declared capability and schedules etc., shall be supplied by the Regional Load Despatch Centres to the Regional Power Committee or the Regional Electricity Board and the Regional Power Committee or the Regional Electricity Board shall issue the Regional Accounts for energy on monthly basis as
Billing and payment of capacity charges shall be done on a monthly basis in the following manner:
(i) Each beneficiary shall pay the capacity charges in proportion to its percentage share in total saleable capacity of the generating station. Saleable capacity shall mean total capacity minus free capacity to home state(s), if any.
5[Note 1
Allocation of total capacity of central sector generating stations is made by Central Government from time to time, which also has an unallocated portion. Allocation of the unallocated portion as made by the Central Government from time to time, for the total unallocated capacity shall be notified by the Member Secretary, Regional Electricity Board/Regional Power Committee in advance, at least 24 hours prior to such change in allocation taking effect. The tot
Unless the context otherwise requires, for the purpose of this chapter, :-
(i) Act means the Electricity Act, 2003;
(ii) `Additional Capitalisation' means the capital expenditure actually incurred after the date of commercial operation of the transmission system and admitted by the Commission after prudence check subject to regulation 53;
(iii) 'Allotted Transmission Capacity' means the power transfer in MW between the specified point(s) of injection and point(s) of drawal allowed to a long-term customer on the inter-state transmission system under the normal circumstances and the expression "allotment of transmission capacity" shall be construed accordingly;
Allotted Transmission Capacity to a long-term
(a) AC System
The charges for auxiliary energy consumption in the AC sub-station for the purpose of air-conditioning, lighting, technical consumption, etc. shall be borne by the transmission licensee as part of its normative operation and maintenance expenses.
(b) HVDC sub-station
For auxiliary energy consumption in HVDC sub-stations, the Central Government may allocate an appropriate share from one or more ISGS . Capacity and energy charges for such power shall be borne by the transmission licensee as part of its normative operation and maintenance expenses.
(1) AC system : 98%
(2) HVDC bi-pole links and HVDC back-to-back stations: 95%
Note 1
Recovery of fixed charges below the level of target availability shall be on pro rata basis. At zero availability, no transmission charges shall be payable.
Note 2
The target availability shall be calculated in accordance with procedure specified in Appendix-III.
(1) Subject to prudence check by the Commission, the actual expenditure incurred on completion of the project shall form the basis for determination of final tariff. The final tariff shall be determined based on the admitted capital expenditure actually incurred up to the date of commercial operation of the transmission system and shall include capitalised initial spares subject to a ceiling norm as 1.5% of original project cost.
Provided that where the implementation agreement or the transmission service agreement entered into between the transmission licensee and the long-term transmission customers provides a ceiling of actual expenditure, the capital expenditure shall not exceed such ceiling for determination of tariff.
(2) In case of the existing projects, the project cost admitted by the Commission prior to 1.4.2004 shall form t
(1) The following capital expenditure within the original scope of work actually incurred after the date of commercial operation and up to the cut off date may be admitted by the Commission, subject to prudence check:
(i) Deferred liabilities;
(ii) Works deferred for execution;
(iii) Procurement of initial capital spares in the original scope of works subject to the ceiling norm specified in regulation 52;
iv) Liabilities to meet award of arbitration or compliance of the order or decree of a court; and
v) On account of change in law.
Provided that original scope of work along with estimates of expenditure shall be submitted along with the application
(1) In case of the existing project, debt-equity ratio considered by the Commission for fixation of tariff for the period ending 31.3.2004 shall be considered for determination of tariff.
(2) In case of the transmission system for which investment approval was accorded prior to 1.4.2004 and which is likely to be declared under commercial operation during the period 1.4.2004 to 31.3.2009, debt-equity in the ratio of 70:30 shall be considered:
Provided that where deployment of equity is less than 30%, the actual equity deployed shall be considered for the purpose of determination of tariff.
Provided further that the Commission may in appropriate case consider equity higher than 30% for the purpose of determination of tariff, where the transmission licensee is able to establish to the satisfactio
The tariff for transmission of electricity on inter-state transmission system shall comprise of the recovery of annual transmission charges consisting of the following, namely:
(a) Interest on loan capital;
(b) Depreciation, including Advance Against Depreciation;
(c) Return on equity;
(d) Operation and maintenance expenses; and
(e) Interest on working capital.
The annual transmission charges shall be computed on the following basis, namely:
(i) Interest on loan Capital
(a) Interest on loan capital shall be computed loan wise on the loans arrived at in the manner indicated in regulation 54.
(b) The loan outstanding as on 1.4.2004 shall be worked out as the gross loan as per regulation 54 minus cumulative repayment as admitted by the Commission up to 31.3.2004. The repayment for the period 2004-09 shall be worked out on normative basis.
(c) The transmission licensee shall make every effort to swap the loan as long as it results in net benefit to the long-term transmission customers. The costs associated with such swapping shall be borne by the long-term transmission customers.
&n
Full annual transmission charges shall be recoverable at the target availability stipulated in regulation 51. Payment of transmission charges below the target availability shall be on pro rata basis. The transmission charges shall be calculated on monthly basis.
In case of more than one long-term transmission customer of the regional transmission system, the monthly transmission charges leviable on each long-term transmission customer shall be computed as per the following formula:
Where TCi = Annual Transmission Charges for the ith project in the region computed in accordance with regulation 56
n = Number of projects in the region
TRSC = Total recovery of transmission charges for the month from Short-term transmission customers for the regional transmission system in accord
The transmission charges of the inter-regional assets, including HVDC system , after deducting the recovery from the short-term customers, shall be shared in the ratio of 50:50 by the long-term transmission customers of the regional transmission system of two contiguous regions in accordance with the following formula:
Where
(1) The transmission licensee shall be entitled to incentive @ 1% of equity for each percentage point of increase in annual availability beyond the target availability prescribed under regulation 51, in accordance with the following formula:
Incentive = Equity x [Annual availability achieved - Target availability] /100
(2) Incentive shall be shared by the long-term customers in the ratio of their average allotted transmission capacity for the year.]
2. Substituted by Notification No. L-7/25(5)/2003-CERC dated 03.09.2004 for the following :-
60. Incentive--
(1) The transmission licensee shall be entitled to incentive on achieving annual availability beyond th
For payment of bills of transmission charges through letter of credit on presentation, a rebate of 2% shall be allowed. Where payments are made subsequently through opening of letter of credit or otherwise, but within a period of one month of presentation of bills by the Transmission licensee, a rebate of 1% shall be allowed.
In case the payment of bills of the transmission charges by the beneficiary or beneficiaries is delayed beyond a period of 60 days from the date of billing, late payment surcharge at the rate of 1.25% per month shall be levied by the transmission licensee.]
3. Substituted by Notification No. L-7/25(5)/2003-CERC dated 03.09.2004 for the following :-
62. Late payment surcharge--
In case the payment of bills of transmission charges by the beneficiary (s) is delayed beyond a period of 1 month from the date of billing a late payment surcharge at the rate of 1.25% per month shall be levied by the transmission licensee.
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