M/s DSL Hydrowatt Ltd. entered into two (2) No.

Power Purchase Agreements (long term) with HPSEB

Ltd. for sale/purchase of power from its Sarbari-I (4.50 MW) HEP and Sarbari-II (5.40 MW). The Power
Purchase Agreement for Sarbari HEP (4.50 MW) was executed on 18-03-2006 at tariff of Rs. 2.50 per
kWh.

The Company had filed a petition bearing No. 29 of 2010 before Hon’ble HPERC for seeking
determination of tariff for sale of power from Sarbari-II HEP (5.40 MW) to HPSEBL Regulation 6 of the
Himachal Pradesh Electricity Regulatory Commission (Power Procurement from Renewal Sources and
Co-generation by Distribution Licensee) Regulations, 2007. As an interim measure, the Hon’ble
Commission vide interim order dated 07-07-2010 passed by the Hon’ble HPERC in I.A. No. 134 of 2010 in
Petition No. 29 of 2010 allows the Company to execute PPA with HPSEBL at provisional tariff of Rs. 2.95
per kWh. Accordingly, the PPA was entered into between HPSEBL and Company on 23-08-2010 for sale/
purchase of power from Sarbari-II HEP at provisional tariff of Rs. 2.95 per kWh. Further, the Hon’ble
Commission vide order 07-07-2010 ibid further granted the petitioner company a period of six months
reminded on 20-05-2013 to file a tariff petition for determination of tariff for sale of power from Sarbari-
II HEP. In response, the company filed petition for the same before Hon’ble HPERC during 2013. On 28-
04-2016, the Hon’ble Commission passed final order in Petition No. 29/2010 determined the project
specific tariff of Rs. 2.92 per kWh (with benefit of 1% LADF) in respect of Sarbari-II HEP (5.40 MW) and
the same is being considered by HPSEBL for sale/ purchase of power since commissioning of Sarbari-II
HEP (5.40 MW).

In both the above PPAs, the interconnection point is defined at 33/11 kV sub-station of HPSEBL at Kullu.
Presently, the power from both the above project are being evacuated through 33 kV line in joint mode
upto 33/11 kV sub-station of HPSEBL at Kullu in accordance with the approval of Hon’ble HPERC given
vide its order dated 04-04-2009 passed in Petition No. 278/ 2008 titled as M/s DSL Hydrowatt Ltd vs
HPSEB.

As brought out at Para No.__________, the interconnection point of both the project shall be changed
from 33/11 kV Kullu sub-station to 33/11 kV Bhutti sub-station of HPSEBL, which need to be
incorporated in PPA by way of signing supplementary PPA with prior approval of Hon’ble Commission.

The tariff of Rs. 2.50 per kWh of Sarbari HEP (4.50 MW) is firm and fixed and shall not be changed due to
any reason whatsoever as per the terms of PPA dated 18-03-2006. Whereas, the tariff of Sarbari-II HEP is
project specific which has been determined by the Hon’ble HPERC in its order dated 28-04-2016 and the
same shall be necessitated to be re-determine on account of reduction in line losses as well as capital
cost & its associated factors in consequence to take over of 33 kV project line by the HPSEBL from
switchyard of Sarbari-I HEP to 33/11 kV Kullu s/stn.