BEFORE THE GUJARAT ELECTRICITY REGULATORY COMMISSION
Petition No.259 /2003
In the matter of:
Application for granting approval for entering into Power Purchase Agreement
with Gujarat State Electricity Corporation Ltd. in respect of proposed 107 MW
Combined Cycle Power Project at Dhuvaran.
Petitioners : Gujarat Urja Vikas Nigam Ltd. (GUVNL)
(erstwhile GEB), Vadodara.
Represented by : Smt.Sailaja Vachhrajani, COA(IPP).
Respondent : Gujarat State Electricity Corporation Ltd.
Sardar Patel Vidyut Bhavan, Vadodara.
Represented by : S/Shri B.B.Shah, Addl.CE and R.N.Gangwani
Shri G.Subba Rao, Chairman
Dr. Man Mohan, Member(T)
 The petitioner has filed the present petition seeking approval of Power Purchase
Agreements with Gujarat State Electricity Corporation Ltd. for 106.617 MW Combined
Cycle Power Project at Dhuvaran.
 The facts mentioned in the petition are briefly as under:
2.1 The petitioner propose to enter into a Power Purchase Agreement with M/s.Gujarat
State Electricity Corporation Ltd. (GSECL) in respect of purchasing power from the
proposed 106.617 MW, Gas based, Combined Cycle Power Project being developed by
the GSECL to bridge the prevailing gap between demand and supply.
 The Commission issued notice to the respondent who filed reply on 8.1.2004 and
suggested some amendments with regard to clauses relating to percentage of ROE,
interest on working capital, recovery of fixed charges in the Power Purchase
Agreement. The Commission also raised some queries according to the suggestions
made by the consultant CEA regarding various clauses pertaining to financial
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parameters i.e. depreciation, capital cost, O&M expenses including insurance, financing
plan and means of finance and technical parameters regarding performance guarantee
test, description of generation station, GETCO system parameters, SHR, auxiliary
consumption and limits on environmental parameters i.e. NOX emissions, plant effluent
 The matter was heard on 8.01.2004, 22.12.2005, 28.9.2006, 11.10.2006, and
4.1 On 8.1.2004, the Commission directed the petitioner to furnish the information like (a)
Techno-economic clearance given by CEA (b) copies of loan sanctioned by the
financial institutions (c) a write up on the components of fixed cost, discussing the
major components item-by-item, ….etc.
4.2 On 10.01.2007, the commission observed that the petitioner should either finalize the
PPA or withdraw it. In response to it, Smt.Sailaja Vachharajani asked for some time.
The Commission directed that matter should be discussed with the management and if
the management permits, they should withdraw the petition and file a fresh petition
after finalization of the Power Purchase Agreement. She also submitted that a High
level committee is already constituted by the Government of Gujarat to resolve the
dispute between two Government companies viz. GUVNL and GSECL. This is in line
with the direction given by the Hon’ble Supreme Court of India in one of the cases
involving Government agencies.
 In response to the queries as in para  &  above, both the petitioner and the
respondent have made necessary changes in the proposed Power Purchase Agreement.
 A copy of the duly signed PPA by both the parties for Dhuvaran CCPP Unit No.7 (as
executed on 29th January,2007) was submitted to the Commission.
 We have carefully considered the submissions made by the representatives of the
parties. We have perused the comments received from the CEA. The auxiliary
consumption stated in clause 9.6.1 of the PPA is (i) 4.0% for open cycle and (ii) 5.5%
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for combined cycle. These are much more than norms of 3%. as specified in the terms
and conditions of Tariff Regulations of the Commission. We, therefore approve the
auxiliary consumption shall be read as 3%. in the PPA.
The Incentive Charges stated in clause No 9.3.2 reads as :
“---------------It shall be payable at a flat rate of 25 Paise per KWh for ex-bus
supplied energy less excess energy in excess of ex-bus energy corresponding to
Normative Plant load Factor. -------------------------”
The aforesaid clause is revised and approved to read as
“------------------------Incentive Charges shall be paid for scheduled generation
above 80% of availability. It shall be payable at a flat rate of 25 Paise per KWh
for ex-bus scheduled energy less ex-bus energy corresponding to 80 % of
In general the operational and financial parameters of the PPA should correspond to
read as in the norms fixed in the Terms and Conditions of Tariff Regulation Notified by
the commission. However, if the parameters as proposed are better than these norms in
that case figure as proposed in the PPA shall be applied.
In view of the prevailing gap between demand and supply of power, the proposed
power plant will cater to the demand to a certain extent and will be helpful in reducing
the gap between demand and supply. We approve the final Power Purchase Agreement
as entered into between GUVNL and GSECL in respect of 106.617 MW GBCCPP at
Dhuvaran. A copy of the approved PPA is attached as Annexure-I with this order.
 We order accordingly.
 With this order, the petition stands as disposed of.
[G.SUBBA RAO] [Dr.MAN MOHAN]
Date : 27/07/2007
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