before the gujarat electricity regulatory commission - GERC

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					        BEFORE THE GUJARAT ELECTRICITY REGULATORY COMMISSION
                            AT AHMEDABAD

                                           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).

                                                     Vs

          Respondent                  :     Gujarat State Electricity Corporation Ltd.
                                            Sardar Patel Vidyut Bhavan, Vadodara.

          Represented by              :     S/Shri B.B.Shah, Addl.CE and R.N.Gangwani

                                                 CORAM

                                      Shri G.Subba Rao, Chairman
                                      Dr. Man Mohan, Member(T)

                                                 ORDER

[1]       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.


[2]       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.


[3]       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
Order in Pet 259.03-7607(pan) \nair                                                      Page 1 of 3
          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
          discharges etc.


[4]       The matter was heard on 8.01.2004, 22.12.2005, 28.9.2006, 11.10.2006, and
          10.01.2007.


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.


[5]       In response to the queries as in para [3] & [4] above, both the petitioner and the
          respondent have made necessary changes in the proposed Power Purchase Agreement.


[6]       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.


[7]       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%

Order in Pet 259.03-7607(pan) \nair                                                      Page 2 of 3
          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
          availability --------------------”


          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.


[8]       We order accordingly.
[9]       With this order, the petition stands as disposed of.

     Sd/-                                                                   Sd/-
[G.SUBBA RAO]                                                          [Dr.MAN MOHAN]
 CHAIRMAN                                                                 MEMBER(T)

Place: Ahmedabad
Date : 27/07/2007

Order in Pet 259.03-7607(pan) \nair                                                       Page 3 of 3

				
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