‘S ORDER ON AVAILABILITY BASED TARIFF PRESENTATION BY C.V.ANAND Sr.Supdt (Comml)

NEED FOR ABT LOW FREQUENCY DURING PEAK HOURS ( HZ) HIGH FREQUENCY DURING OFF PEAK HOURS ( HZ) RAPID & WIDE FREQUENCY CHANGES OF 1 HZ WITHIN 5 TO 10 Mts. FOR MANY HOURS IN A DAY VERY FREQUENT GRID DISTURBANCES,CAUSING TRIPPING OF GENERATING STATIONS IN 2 PART TARIFF FC+VC IS BEING CHARGED TO BENEFICIARIES IN PROPORTION TO ACTUAL ENERGY DRAWN

TERMINOLOGY TWO PART ABT 1.FIXED COST*CAPACITY CHARGES 2.VARIABLE COST*ENERGY CHARGES 3.MONTHLY DATA*15 Mts TIME BLOCK 4.JMR READINGS*SEMS READINGS OTHER TERMS kDECLARED CAPABILITY kSCHEDULED ENERGY kUNSCHEDULED INTERCHANGE (UI)

FEATURES OF ABT RLDC WILL REVISE THE SCHEDULE IN CASE OF UNIT OUTAGE.IT WILL BE EFFECTIVE FROM THE 4TH TIME BLOCK COUNTING THE TIME BLOCK IN WHICH REVISION IS ADVICED BY THE GENERATOR TO BE 1ST ONE. IN CASE OF TRANSMISSION LINE BOTTLENECK RLDC WILL REVISE THE SCHEDULE. IT WILL BE EFFECTIVE FROM THE 4TH TIME BLOCK REVISION BY GENERATORS WILL BE EFFECTIVE FROM THE 6TH TIME BLOCK IN CASE OF GRID DISTURBANCE,SCHEDULES OF GENERATION AND DRAWAL SHALL BE DEEMED TO HAVE BEEN REVISED TO ACTUALS.GRID DISTURBANCE & IT’S DURATION WILL BE CERTIFIED BY RLDC IN ABT,TRANSMISSION LOSSES WILL BE APPORTIONED IN PROPORTION TO DRAWALS

TWO PART TARIFF CONCEPTS FIXED PART RECOVERY PLFRECOVERY 0%50% OF FIXED COST 0%-62.78%50%-100% FIXED COST %DEAD BAND >68.48%INCENTIVE STARTS INCENTIVE AT 1 Ps/Kwh FOR EVERY 1% INCREASE IN PLF RISE ABOVE 68.48% (WHICH INCLUDES DEEMED GENERATION )

TWO PART TARIFF CONCEPTS FIXED PART TARIFF INCLUDES 1.RETURN ON EQUITY (ROE)16% 2.DEPRECIATION7.84% 3.INTEREST ON WORKING CAPITAL 4.MISC TAXES 5.O&M COST- WHICH INCLUDES a)EMPLOYEE COST b)REPAIR& MAINTENANCE COST c)OVERHEADS

TWO PART TARIFF CONCEPTS VARIABLE PART RECOVERY AS PER NORMS 1.AUX.POWER CONSPN8.43% 2.COAL HEAT RATE Kcal/kWh 3.OIL HEAT RATE34.28 Kcal/kWh PRICE ESCALATION OF FUEL IS PROTECTED WITH FUEL PRICE ADJUSTMENT. FUEL COST= BASE COST+FUEL PRICE ADJ (FPA) BASE COST AS DETERMINED IN 1992 IS Ps/kWh

APPLICABLE NTPC STATIONS APPLICABLE TO FOLLOWING STATIONS OF NTPC –NR NCTPP-DADRI (4*210 MW) FGUTPS UNCHAHAR (2*210 MW) DADRI GAS ( MW) ANTA GAS ( MW) AURAIYA GAS (663.36) SINGRAULI STPS (2000 MW) RIHAND STPS (1000 MW) –WR KORBA STPS (2100 MW) VINDHYACHAL STPS (1260 MW) KAWAS GAS ( MW) JHANOR GANDHAR GAS ( MW)

APPLICABLE NTPC STATIONS SR –RAMAGUNDAM STPS (2100 MW) ER –FARAKKA STPS (1600 MW) –KAHALGAON STPS (840 MW) –TALCHAR STPS (1000 MW)

COMPONENTS OF AVAILABILITY BASED TARIFF CAPACITY CHARGES: –ANNUAL FIXED CHARGES (AFC)REMAINS UNALTERED TILL NEW NOTIFICATION ON NORMS. (INCLUDING 16 % ROE) –CAPACITY CHARGES AS PER DECLARED EQUIVALENT AVAILABILITY –FROM TO – 0-80 % AV-ANNUAL CAPACITY CHARGES =AFC* AV(%)/ 80 % –EACH BENEFICIARY SHALL PAY AS PER GOI ALLOCATED SHARE.UNALLOCATED SHARE WILL ALSO BE ALLOCATED BY GOI TO THE BENEFICIARIES FROM TIME TO TIME. –ALLOCATION CAN BE SURRENDERED OR TRADED IF NEEDED. –WEIGHTED AVERAGE OF CUMULATIVE CAPACITY CHARGES AS PER DRAFT NOTIFICATION AND ADJUSTED AT END OF FINANCIAL YEAR.

COMPONENTS OF AVAILABILITY BASED TARIFF INCENTIVES: BASED ON SCHEDULED GENERATION ( NO DEEMED GENERATION) FROM TO ABOVE 77 %PLF- 50% OF FIXED CHARGES/Kwh AND ABOVE 90% PLF, RECOVERY WILL BE 50% OF ELIGIBLE INCENTIVE. –PAYABLE AS PER THE INDIVIDUAL ALLOTTED CAPACITY. PAYMENT ON MONTHLY BASIS,YEARLY ADJUSTED.

COMPONENTS OF AVAILABILITY BASED TARIFF ENERGY CHARGES: AS PER EX-BUS :SCHEDULED ENERGY. ENERGY CHARGES=Rate of Energy Charges X Scheduled Generation(Ex-Bus)

Proposed operational norms for energy charges Gross Heat rate –GROSS HEAT RATE OF TURBINE GENERATOR CYCLE:(GHR) –The comparison of norms with actual is given below for Ramagundam:in kcal/kWh at loading of UnitsSteam Pr100%80 %60 %50 % Stg I 150 kscNorms Actual Stg II 170kscNorms Actual

Proposed operational norms for energy charges STEAM GENERATOR EFFICIENCY:(SGE) –SG EFFICIENCY:(SGE) –SGE % = (50A+630(M+9H)) GCV A-ASH CONTENT%,M-MOISTURE%,H-HYDROGEN% GCV= GCV(AS RECEIVED)-100 kcal/kWh M is increased by 1% to take into account heat lost. DAILY NET HEAT RATE:(DNHR) DNHR= GHR*100 * AEC SGE AEC=NORMATIVE AUX.ENERGY CONSUMPTION

Proposed operational norms for energy charges –AUX.ENERGY CONSUMPTION: –For Ramagundam unit with run of mines coal and closed cycle cooling using wet cooling tower the norms given are: –Stage I9.0 % instead of 9.5 % earlier –Stage II 7.5 % instead of 8.0 % earlier –Station AEC7.93% instead of 8.43% earlier.

COMPONENTS OF AVAILABILITY BASED TARIFF UNSCHEDULED INTERCHANGES (UI): –UI GEN / DRWAL = (ACTUAL GEN / DRAWL - SCHEDULED GEN / DRAWL) –CALCULATED WITH 15 MIN TIME BLOCK. –RATES BASED ON AV.FREQUENCYOF THE TIME BLOCK AVG..FREQUENCY( HZ)UI RATE ( PS / kWh) 50.5 AND ABOVE0.00 BETWEEN AND BETWEEN AND BELOW BETWEEN AND 50.5 LINEAR IN 0.02 HZ STEP. 5.6 Ps/kWh TO BE CALCULATED

OTHER ISSUES IN AVAILABILITY BASED TARIFF SCHEDULING : AS PER IEGC CODE. DEMONSTRATION OF DECLARED CAPABILITY: RLDC MAY ON ITS OWN OR REQUESTED BY BENEFICIERIES ASK FOR DEMONSTRATION OF DECLARED CAPABILTY. PENALTY ON FAILING TO DEMONSTRATE / MIS DECLARATION: –TWO DAYS FIXED CHARGES FOR FIRST TIME. –FOUR DAYS FIXED CHARGES FOR SECOND TIME. –SAME WAY IN GEOMETRICAL PROGRESSION. –CONTINUED GAMING BEYOND FIVE TIMES IN A YEAR CAN BE DEALT AS PER SECTION 45 OF ERC ACT.

OTHER ISSUES IN AVAILABILITY BASED TARIFF METERING AND ACCOUNTING: –METERING -INSTALLATION,TESTING,OPERATION -MAINTENANCE OF METERS AND COLLECTION- TRASNSPORTATIONAND PROCESSING OF DATA REQUIRED FOR ACCOUNTING OF ENERGY CHARGES AND AVAILABILITY, FREQUENCY ON 15 MIN BLOCK SHALL BE PROVIDED BY PGCIL/RLDC. –DATA PROCESSED SHALL BE SUPPLIED BY RLDC TO REB FOR REGIONAL ENERGY ACCOUNTING AND UI CHARGES FOR BILLING ON MONTHLY BASIS.

FINAL ABT ORDER TARGET GENERATION IS SET AT 80% AVAILABILITY INCENTIVE STARTS AT 77% PLF (SCHEDULED GENERATION) NO DEEMED GENERATION CONCEPT INCENTIVE AS 50% OF FIXED CHARGES/Kwh FOR GENERATION BEYOND 77% PLF WITH A CEILING OF 21.5 Ps/Kwh. BEYOND 90% PLF, INCENTIVE WILL BE ONLY 50% OF THE INCENTIVE ELIGIBLE. ROE IS RETAINED AT 16% ALL OPERATIONAL NORMS ARE RETAINED AS OF NOW

FINAL ABT ORDER SETTLEMENT PERIOD PROPOSED - DAILY BASIS (INSTEAD OF 15 MINUTES) SEC.FUEL OIL CONSPN - 2ml/kwh (PROPOSED) (INSTEAD OF 3.5 ml/kwh) AUX.POWER CONSPN - REDUCED BY 0.5% (EARLIER 8.43%) - PROPOSED HEAT RATE CORRECTION - 4% INSTEAD OF 10% AS REQUESTED BY NTPC (PROPOSED) BOILER EFFICIENCY CORRECTION % INSTEAD OF 3.72% AS REQUESTED BY NTPC HEAT RATE,COAL CONSPN,SEC.F.O CONSPN,PLF,AVAILABILITY,AUX.POWER DATA TO BE SUBMITTED TO CERC QUARTERLY TO SET THE NORMS IN THE NEXT REVIEW OF TARIFF FIXATION IN THE YEAR 2004

FIXED COST CALCULATION 1st Month = (1xACC1)/12 2nd Month = (2xACC2-1xACC1)/12 3rd Month = (3xACC3-2xACC2)/12 4th Month = (4xACC4-3xACC3)/12 5th Month = (5xACC5-4xACC4)/12 6th Month = (6xACC6-5xACC5)/12 7thMonth = (7xACC7-6xACC6)/12 8thMonth = (8xACC8-7xACC7)/12 9th Month = (9xACC9-8xACC8)/12 10th Month = (10xACC10-9xACC9)/12 11th Month = (11xACC11-10xACC10)/12 12th Month = (12xACC12-11xACC11)/12 ACC:1-12 REPRESENTS THE AMOUNT OF ANNUAL CAPACITY CHARGES, CORRESPONDING TO THE AVAILABILITY FOR THE CUMULATIVE PERIOD UPTO THE END OF CALCULATED MONTH

CONCERNS FOR NTPC,RAMAGUNDAM: CAPABILITY DECLARATIONS ARE CONSIDERED FOR EQUI.AVAILABILITY.HENCE IT NEED TO BE FAIRLY ACCURATE. UNDER DECALRATION MAY NOT FETCH ANYTHING BUT OVER DECLARTION WILL BE PENALISED HEAVILY DUE TO LOWER FREQUENCY RANGE. INTENTIONAL OVER DECLARATION CAN BE PUNISHED HEAVILY IF WE ARE UNABLE TO DEMONSTRATE WHEN REQUESTED. UNIT TRIPPINGS / OUTAGES WILL ALWAYS ATTRACT UI. NO DEEMED GENERATION ON PLF FOR BACKING DOWN. AS PLF (WITHOUT DEEMED GEN ) IS USED FOR INCENTIVE, DURING HIGH FREQUENCY TIMES,GENERATING ABOVE THE SCHEDULE WILL NEITHER EARN FIXED CHARGES NOR VARIABLE CHARGES.

CONCERNS FOR NTPC,RAMAGUNDAM INCENTIVE PORTION IS REDUCED NORMS IN BOTH CAPACITY AND ENERGY CHARGES ARE YET TO BE REVISED,HENCE PRESENT NORMS REMAINS SAME. ENERGY CHARGES ARE BASED ON SCHEDULED, NOT ON ACTUAL GEN. HENCE STICKING TO SCHEDULE AS PER FREQUNCY IS THE RIGHT WAY. MAJOR EQUIPMENT OUTAGES IN STAGE- II WILL INVITE UI. ONLY IMPROVEMENT IN MARGINAL CONTRIBUTIONS CAN EARN PROFIT

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