APTEL Determines Interim CUF at INR 5.71 Per Unit for ODisha Hydro Project

APTEL Raises Concern Over Unscheduled Power Drawal From Grid By RE Generators

The Appellate Tribunal for Electricity (APTEL) has accepted the plea of Baitarani Power Project Private Limited contending the previous order of the State Commission, which had reduced its project tariff for a 24 MW small Hydro Electric Project to INR 5.03 per unit.

The order had been passed by the Odisha Electricity Regulatory Commission in January, 2023.

The firm had filed the petition against Odisha Electricity Regulatory Commission, GRIDCO Ltd, Department of Energy, Government of Odisha.

The State Commission in its previous order had fixed the levelized tariff for the project for a period of 35 years at INR 5.99/kWh. For a period of 40 years, it stood at INR 6/kWh. The procurer, in this case, GRIDCO, however, had objected to the tariff determined beyond the generic tariff as fixed by the Central Electricity Regulatory Commission (CERC) at INR 5.71 per unit.

Baitarani Power Project, however, opposed this on the ground that the tariff order has to be made effective from the date of commissioning (COD), further stating that as a provisional measure, the tariff rate of INR 5.71/ kWh as has been determined by the Commission may be treated as a provisional order and made effective from the date of COD, that is, August 29, 2020. GRIDCO agreed with this, putting forth the suggestion that  such a provision may be put in place while the Commission determines a new tariff under the remit. The APTEL expressed agreement to this view.

Further, Baitarani Power Project Private Limited pointed that there was an error in the determination of Capacity Utilization Factor (CUF) of 47.55% along with “non–consideration of the actually incurred capital cost of INR 421.59 crores by it and restricting the capital cost to INR 314.84 crores. Additionally, it said there was non consideration of the reasons cited for time overrun and Interest During Construction (IDC). It also stated that there were errors by not considering the report of the Technical Consultant appointed by the State Commission itself;

At the same time, the State Commission, has taken into consideration another report by IIT Bhubaneswar  as submitted by GRIDCO. This report, claims Baitarani Power, has considered fundamental errors such as assuming plant availability at 100% and overall efficiency at 91%. Furthermore, it says that the State Commission has considered the data for 43 years based on average energy instead of design energy on 75% dependability years.

In another observation, the State Commission has reiterated the earlier determined capital cost of INR 314.84 crores, increasing increased the CUF from 40.33% to 47.55%, which resulted into substantial reduction in the tariff of the project of Baitarani Power to INR 5.03 per unit as against the earlier determination of INR 5.99 per unit  to INR 6 per unit.

GRIDCO said that the State Commission had determined the CUF in the original order dated January 15, 2022 on the basis of recommendations of the TC Report which had suggested decrease in rainfall over the years in the Catchment Area of river Baitarani, resulting into decrease of CUF from 48% (in DPR) to 40.33%. It further, referred to the report of Jadavpur University. The APTEL, however, rejected considering this report since the State Commission itself appointed the Technical Consultant for the matter.

The Commission held that it accepted the judgment dated October 17, 2022 where payment was made to Baitarani Power at INR 5.71/kWh with effect from the date of COD. Further to this, GRIDCO is entitled to a refund of close to INR 15.78 Crore excluding interest.

As for the CUF to be accepted for tariff determination, the Commission observed that the Techno Economic Clearance (TEC) which is referred to in the revised PPA states that “The total annual gross energy from the project at 75% dependable year, as estimated by the developer will be taken as 101 MU (saleable energy of 99.99 MU) for
arriving the tariff structure for sale of power.” This results in a CUF of about 47.55%. It also observes that the actual CUF for FY 2021-22 comes out to be about 53.32% (with actual energy of 112.10 MUs procured) whereas the actual CUF of the project since date of commissioning till October 2022 is about 48.57% (with actual energy of 221.31 MUs procured).

Moreover, the report of IIT, Bhubaneswar states that “the available annual energy during first two decades is below
100 MU whereas during the latter two decades there are above 100 MU with a long term average of 43 years is 101 MU.” The expected generation as mentioned by IIT in the report and actual generation for complete FY 2021-22 are more than what had been determined by the TEC of STC.  The Commission considers 100 MUs as the total annual gross generation with saleable energy of 99.00 Mus from the project for 75% dependable year. Accordingly, the CUF considered for the calculation of tariff has been calculated to 47.55%.

The State Commission in original order dated had determined the CUF of 40.33% with overall plant efficiency taken at 86.68% based on turbine efficiency of 91%, generator efficiency of 97.1% and flywheel efficiency of 98%. Finally, the weighted average efficiency of the plant has been arrived at as 86.68% with Plant Availability as 95%, which is the widely accepted norm since no plant can be available 100%.

The APTEL, in its order, said that Baitarani Power is a small hydro project and has already suffered a substantial reduction in tariff of INR 5.71 per unit as against the tariff of INR 5.99 per unit/ INR 6 per unit as determined by the State Commission in the original order. It considered the further reduction to INR 5.03 per unit, which it maintained will cause irreparable injury to the generator. With these considerations, the APTEL has directed that for the electricity generated and supplied by from the generating plant of the firm to GRIDCO, when the matter was pending before the State Commission, for redetermination of CUF would be at INR 5.71 per unit. This is to be an interim arrangement and subject to final adjustment upon determination of tariff for the small hydro plant.

The APTEL has redirected the matter back to the State Commission to determine a new CUF. With reference to capital cost, time overrun and IDC, APTEL has said that the firm can approach it after the State Commission passed the order afresh for determining the CUF.