2.
Executive Summary
The Petitioner
along with the information for FY’11, is also submitting the
actual details of the operation during 2009-10 and requests
Hon’ble Commission for truing the approved expenses based on
actual expenses incurred by Petitioner.
Table 1:
Generation Performance (MU)
|
|
2009-10 |
|
2010-11 |
|
|
Petition |
Approved |
Actual |
Petition |
|
Generation (MUs) |
|
|
|
|
|
|
Unit –I |
|
|
1345 |
|
1320 |
|
Unit-II |
|
|
704 |
|
1435 |
|
Total |
2490 |
2088 |
2049 |
|
2755 |
|
Station PLF (%) |
67.68 |
56.75 |
55.68 |
|
74.88 |
|
Auxiliary Consumption
(%) |
9.00 |
9.00 |
9.45
|
|
9.00 |
|
Heat Rate (kCal/kWh) |
3100 |
2500 |
3418 |
|
3000 |
|
Gross Calorific
Value of Coal |
4300 |
4300 |
4300 |
|
4300 |
|
Specific Oil
Consumption (kg/kWh) |
2.5 |
2.0 |
3.296 |
|
2.5 |
|
|
|
|
|
|
|
|
|
With these parameters as base, the actual
fixed costs for the year 2009-10 and projected costs for 2010-11
are summarized below:
Table 2: Summary of
Fixed Costs (Rs.Crores)
|
|
2009-10 |
|
2010-11 |
|
|
Petition |
Approved |
Actual |
Petition |
|
Interest on Loan |
83.15 |
83.06 |
83.06 |
|
83.06 |
|
Depreciation |
45.55 |
46.34 |
45.62 |
|
47.06 |
|
O&M Expenses |
124.10 |
75.68 |
125.34 |
|
97.60 |
|
Interest on Working Capital |
18.05 |
12.90 |
23.76 |
|
21.38 |
|
Return on Equity |
19.43 |
21.82 |
19.99 |
|
23.73 |
|
Income Tax |
- |
- |
- |
|
- |
|
Total |
|
|
297.78 |
|
272.82 |
|
|
Petitioner would also like to state
that the actual heat rate observed in 2009-10 was 3418 Kcal/kWh.
Petitioner is making all efforts to reduce the heat rate and has
therefore targeted to achieve heat rate of 3000 Kcal/kWh for FY
11. Petitioner requests Hon’ble Commission to allow petitioner a
higher heat rate than the approved value for 2009-10.
Petitioner would also like to state that the normative value of
2500 Kcal/kWh is applicable for plants coming after 1.4.2004 as
per terms and conditions for determination of thermal generation
tariff) regulations, 2004 notified by Hon’ble Commission.
For plants existing prior to 1.4.2004, which is applicable for
the Petitioner the tariff order states “In case of existing
generating stations the norms of operation shall be fixed based
on past performance of the generating station and on efficiency
improvement measures, as approved by the Commission.”
Petitioner would therefore request Commission to take cognizance
of the past performance of the Petitioner, which is amongst one
of the best in the region, and thus allow a higher heat rate.
In the mean while, Petitioner is also committed to bring down
the heat rate from present values to 3000 Kcal/kWh.
In the last tariff order, Hon’ble Commission prescribed a cap on
O&M as 2.5% of project cost at the time of CoD, where the
project cost has been taken as Rs.1304.91 Cr. Petitioner would
like to bring into notice of Hon;ble Commission that the notes
in the Form 15 of the Thermal Generation tariff order states
that the base O&M calculated as 2.5% of project cost at the time
of CoD should be escalated at the rate of 10% to bring it to
1999-2000 level and escalation of 6% to be applied. Petitioner
requests the Hon’ble Commission to kindly consider the base cost
of O&M at the level of 1999-2000, for capping the O&M cost. An
illustration of our understanding has been tabulated below.
Table 3: O&M for 2009-10
|
|
Calculation of O&M Costs |
|
|
Particulars |
|
|
Capital Cost at the time of COD year 1996-97 |
|
1304.91 |
|
|
2.5% of the Capital Cost |
|
32.65 |
|
|
Escalating the cost to bring it to year 2000 level at the
rate of 10% |
|
43.42 |
|
|
Applying 6% escalation from year 2000 to 2010 |
|
77.76 |
|
|
O&M as per norms only on initial project cost for 2011 |
|
82.43 |
|
|
O&M approved including capitalization of 90.46 Cr and
employee expense of 6.50 Cr for 2010 |
|
75.68 |
|
|
Petitioner would also like to submit
that the O&M expenses as being observed are much higher than the
normative value even by the above mentioned calculations and
hence has initiated a diagnostic test for the same. With the
information available as of now, Petitioner considers that
inadvertently certain particulars which should have been under
the head of capital expenditure, has been put in the O&M head
resulting in a higher O&M expense in the past and also lower
return to Petitioner severely impacting its financial position.
This infirmity creeps into the system at the time any item is
bought and not properly tagged. Petitioner is making all efforts
to correct this at the earliest and has also considered the
partial results of the actions already initiated in this
petition, and thus has projected O&M at a lower value than made
in the previous petition. In terms of percentage, Petitioner
projects a reduction of approximately 22% from the actual O&M
cost of 2009-10.
Petitioner had projected the delivered coal price to be Rs.1300
per MT for FY 10, whereas based on actual expenditure the
delivered coal price observed was Rs.1343 per MT. This includes,
transportation (including fuel for dozer), loss at 0.3%.
Petitioner requests Commission to kindly consider the increased
cost while truing the expenses for 2009-10.
The actual coal consumption (including transit loss of 0.3%) was
1547305 MT in FY 10, whereas Commission approved a consumption
of 1207834 MT. As this is directly related to heat rate,
Petitioner requests Commission to take a considerable view.
For FY ’11 Petitioner has assumed an increase of 10% on coal
cost and hence has projected the delivered cost as 1477.70 per
MT and a total consumption of 1934303 per MT.
Petitioner in FY ’10 observed oil price at Rs.38 086 per kL
which is lower than the approved cost of Rs.39.045 per kL. For
FY 11 oil price has been assumed to be at 43,269 per kL which is
an increase of 13.6%. The oil prices have increased in recent
times and thus the assumption made.
Table 4: Summary of Variable Costs (Rs.Crores)
|
|
2009-10 |
|
2010-11 |
|
|
Petition |
Approved |
Actual |
Petition |
|
Coal Cost
|
233.77 |
157.02 |
207.80 |
|
285.75 |
|
Oil Cost
|
24.32 |
16.30 |
25.72 |
|
29.80 |
|
Total Fuel Cost
|
258.09 |
173.32 |
233.52 |
|
315.56 |
|
The non-tariff income of Rs. 9.85
Crores was observed in FY 2011against an approved cost of Rs.
15.83 Crores and hence request Hon’ble Commission to kindly
consider this as the non tariff income while truing the
expenses.
The revenue requirement less other income will be the revenue to
be raised through tariff. This has been worked out in the Table
5 below:
Table
5: Revenue Requirement (Rs. Crores)
|
|
2009-10 |
|
2010-11 |
|
|
Petition |
Approved |
Actual |
Petition |
|
Fixed Charges |
290.28 |
239.80 |
297.78 |
|
272.82 |
|
Energy Charges
|
258.08 |
173.32 |
233.52 |
|
315.55 |
|
Revenue Requirement |
548.36 |
413.12 |
531.30 |
|
588.38 |
|
Other Income |
2 |
15.43 |
9.85 |
|
10.97 |
|
Total |
546.36 |
397.70 |
521.45 |
|
577.41 |
|
The Petitioner has estimated a revenue
requirement of Rs 577.41 Crores after adjusting for its
non-tariff income and derived the following fixed and energy
components of tariff:
Table 6: Proposed Tariff Increase
|
|
2009-10 |
|
2010-11 |
|
|
Petition |
Approved |
Actual |
Petition |
|
Fixed Charges/unit |
1.272 |
1.143 |
1.597 |
|
1.044 |
|
Energy Charges/unit |
1.139 |
0.91 |
1.253 |
|
1.259 |
|
Tariff |
2.411 |
2.053 |
2.85 |
|
2.303 |
|
The Petitioner requests the Honourable
Commission to approve the estimated Rs. 0.25 per unit increase
from the existing tariff of 2.053. |
