True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

BEFORE THE
MADHYA PRADESH ELECTRICITY REGULATORY COMMISSION
BHOPAL

Filing No

Petition No. 03 of 2023

IN THE MATTER Petition for True up of Tariff of Unit-1 (45 MW) for FY 2016-
OF 17, FY 2017-18 & FY 2018-19 of M/s B L A Power Pvt. Ltd. for
Sale of Contracted Capacity to M. P. Power Management
Company Ltd.,

PETITONER B L A Power Pvt. Ltd.

84, Maker Chambers III,
Nariman Point, Mumbai
Maharashtra - 400021.

RESPONDENT 1. Madhya Pradesh Power Management Co. Ltd., Jabalpur

2. Madhya Pradesh Poorva Kshetra Vidyut Vitran
Company Ltd., Jabalpur
3. Madhya Pradesh Madhya Kshetra Vidyut Vitran
Company Ltd., Bhopal
4. Madhya Pradesh Paschim Kshetra Vidyut Vitran
Company Ltd., Indore

The above-named Petitioner, B L A Power Pvt. Ltd., Mumbai, respectfully submits as under:

FACTS LEADING TO FILING OF THE PRESENT PETITION FOR TRUE UP OF

UNIT-1:

1. B L A Power Pvt. Ltd., Mumbai, hereinafter referred as the “Petitioner”/ “Company”, a

company incorporated under Companies Act, 1956 and having its registered office at 84,
Maker Chambers III, Nariman Point, Mumbai – 400021, was incorporated in the month
of November 2006. The Petitioner entered into a Memorandum of Understanding
(“MoU”) with State of Madhya Pradesh (“GoMP”), on 10 August 2007 for setting up of
a thermal power station at Tehsil Gadarwara, Dist. Narsinghpur in the State of Madhya
Pradesh. Subsequently, as envisaged by the terms of the MoU, GoMP and the Petitioner
entered into an Implementation Agreement on 1 September 2008.

2. According to the terms of the MoU and the Implementation Agreement, GoMP or its
nominated agency has the first right to purchase up to thirty percent (30%) of the
aggregate capacity of the generating units for a period of twenty (20) years, at a rate to

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

be approved by appropriate commission, in this case the Ld. Madhya Pradesh Electricity
Regulatory Commission (“Ld. MPERC” / “Ld. Commission”).

3. Furthermore, the MoU and the Implementation Agreement provide that GoMP or its
nominated agency has a right to purchase five percent (5%) of the net power generated
by the power stations (i.e. electrical energy generated less auxiliary energy consumption
in kWh) of the Petitioner, at a price equivalent to Variable Charge / Cost only, which
shall be determined by Ld. MPERC.

4. In accordance with the above terms of the Implementation Agreement and upon the
GoMP exercising its right as aforesaid, the Petitioner, in compliance with its obligations,
entered into the following Power Purchase Agreements:

a. A Power Purchase Agreement (“27MW PPA”) was executed on 5 January 2011

between the Petitioner with Respondent No. 1, pursuant to GoMP nominating
Respondent No.1 as the nominated agency under the Implementation
Agreement. The said 27MW PPA is for sale of thirty percent (30%) of Installed
Capacity of the Petitioner’s power station at Tehsil Gadarwara, Dist.
Narsinghpur in the State of Madhya Pradesh, having 2 units each of 45 MW, for
a period of 20 years. As per the said 27MW PPA, the Tariff for the capacity so
supplied comprises of Capacity Charge, Variable Charge and any other charges
as determined by Ld. MPERC. The three Discoms (Respondent Nos. 2, 3 and
4) are Confirming Parties to the 27MW PPA.

b. A Power Purchase Agreement (“Concessional Energy PPA”) was executed on

4 May 2011 between the Petitioner with GoMP. By and under the said
Concessional Energy PPA, the GoMP nominated MP Power Management
Company Ltd, Jabalpur (“MPPMCL”) (erstwhile M.P. Power Trading Co.
Ltd.), an undertaking of GoMP to purchase the 5% power referred to in the
Implementation Agreement on its behalf.

5. In accordance with Article 10.1.1 of the 27 MW PPA, the “… Tariff shall comprise
Capacity Charge, Variable Charge and any other charges as may be determined by the
Appropriate Commission under law and as per the norms contained in the tariff
regulations notified by the Appropriate Commission.” In Article 1.1 of the 27 MW PPA
“Appropriate Commission” is defined as Ld. Madhya Pradesh Electricity Regulatory
Commission.

6. The Ld. Commission approved the 27 MW PPA vide its order dated 7 September 2012
in Petition no. 10/2012 read with order dated 7 February 2013 in review Petition No.
85/2012.

7. Vide order dated 14 December 2022 in Petition No. 52 of 2022, the Ld. Commission
determined true up of tariff for FY 2014-15 & FY 2015-16 and MYT Tariff for FY 2016-
17 to FY 2018-19 for Unit-1 of the Petitioner’s Generating Station based on actual data
and figures as per Annual Audited Accounts.

8. The Petitioner is filing the present petition for the true up of the tariff for FY 2016-17 to
FY 2018-19 for Unit-1 of its Generating Station.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

Capital Cost of Project

9. The Ld. Commission vide its Order dated 14 December 2022 has admitted the following
Capital Cost of Rs. 302.33 Crore as on 31 March 2016 of Unit-1 of the Petitioner’s
Generating station in Petition No. 52 of 2022.

Table 1: Capital Cost for Unit-1 (Rs. in Crore)

Particulars Capital cost of Unit-1 approved as
on 31 March 2016
Total Cost of Land & Site Development 6.05
Total Plant & equipment including Taxes 212.26
and duties
Civil Works 84.03
Total 302.33

10. The funding of the capital expenditure, as per order dated 14 December 2022 of this Ld.
Commission is mentioned in the table given below:

Table 2: Sources of Funding for Unit-1 (Rs. in Crore)

Particulars Approved by Ld. Commission on
14 December 2022
Debt as on 31 March 2016 217.58
Equity as on 31 March 2016 84.75
Total 302.33

11. It is humbly submitted before the Ld. Commission to kindly permit the same.

12. It is further submitted that during FY 2016-17, FY 2017-18 and FY 2018-19, the
Petitioner is not claiming any additional capitalization in the present true up Petition for
Unit-1 for FY 2016-17, FY 2017-18 and FY 2018-19.

13. It is further submitted that Ld. MPERC has worked out Energy Charges vide order dated
14 December 2022 in Petition No. 52 of 2022, as follows:

“225. Accordingly, Energy Charges for the period from FY 2016-17 to FY 2018-
19 are worked out as given below:

Table 45: Energy Charges determined in this order

FY FY FY
Particular Unit
2016-17 2017-18 2018-19
Capacity MW 45 45 45
NAPAF % 85% 85% 85%
Gross Station Heat Rate kCal/kWh 2792.00 2792.00 2792.00
Sp. Fuel Oil Consumption ml/kWh 0.50 0.50 0.50
Aux. Energy Consumption % 10.50% 10.50% 10.50%

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Transit Loss % 0.80 0.80 0.80

Weighted average GCV of Oil kCal/ltr. 10000.00 10000.00 10000.00
Weighted average GCV of
kCal/kg 4507.00 4507.00 4507.00
Coal
Weighted Average landed
Price of Coal (prior to
Rs./MT 5079.00 5079.00 5079.00
normative transit & handling
losses)
Weighted Average landed
Rs/ KL 49794.00 49794.00 49794.00
Price of Oil
Heat Contributed from HFO kCal/kWh 5.00 5.00 5.00
Heat Contributed from Coal kCal/kWh 2787.00 2787.00 2787.00
Specific Coal Consumption kg/kWh 0.618 0.618 0.618
Sp. Coal Consumption
kg/kWh 0.623 0.623 0.623
including Transit Loss
Rate of Energy Charge Rs./kWh 3.191 3.191 3.191
Rate of Energy Charge at ex
Rs./kWh 3.565 3.565 3.565
bus

226. The base rate of the energy charges as determined above shall however,
be subject to month to month adjustment of actual fuel price and actual
GCV of coal. For the period FY 2016-17 to FY 2018-19, the recovery of
energy charges shall be made in accordance with Regulations 36.6 to
36.8 of MPERC (Terms and Conditions for determination of Generation
Tariff) Regulations, 2015.”

14. It is submitted that Unit-1 and Unit-2 of the Petitioner’s Generating Station have achieved
commercial operation on 3 April 2012 and 20 March 2017 respectively. The present
petition is for true up of Tariff of Unit-1 for the period from FY 2016-17 to FY 2018-19.
The Ld. Commission is requested to kindly determine the true up of tariff for Unit-1 for
the period from FY 2016-17 to FY 2018-19.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

BEFORE THE M.P. ELECTRICITY REGULATORY COMMISSION

BHOPAL

Filing No.:

Case No.:

IN THE MATTER OF: Petition for True up of Tariff of Unit-1 (45 MW) of M/s B L
A Power Pvt. Ltd. for FY 2016-17 to FY 2018-19 for Sale of
Contracted Capacity to M. P. Power Management Company
Ltd.

PETITIONER: B L A Power Pvt. Ltd.

84, Maker Chambers III,
Nariman Point, Mumbai
Maharashtra – 400021

RESPONDENT: 1. Madhya Pradesh Power Management Co. Ltd.,

Jabalpur

2. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Co.

Ltd., Jabalpur

3. Madhya Pradesh Madhya Kshetra Vidyut Vitaran Co.

Ltd., Bhopal

4. Madhya Pradesh Paschim Kshetra Vidyut Vitaran Co.

Ltd., Indore

AFFIDAVIT

I, Manoj Sahu, S/o of Shri K. L. Sahu, aged 44 years, R/o A-59, Nirupam Royal Palm,
Hoshangabad Road, Bhopal, Madhya Pradesh, do hereby solemnly affirm and state as follows:

1. I am working as General Manager (Commercial) in B L A Power Private Limited, placed

at Gadarwara and I have been appointed as the Officer-in-charge in the above case and I
am duly authorised by B L A Power Private Limited, Mumbai to make this affidavit.

2. That, the statement made in paragraphs of the Petition and enclosures herein shown to
me are true to my knowledge and the statement made are based on information and I
believe them to be true.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

3. Solemnly affirmed at Bhopal on this 1st day of February 2023 that the contents of the
above affidavit are based on available documents and true to my knowledge and no part
of it is false and nothing material has been concealed there from.

DEPONENT

VERFIFICATION

I, Manoj Sahu, the above named deponent, do hereby verify that the contents of above affidavit
are true and correct to the best of my knowledge and belief.

Signed and verified by me at Bhopal on 1st day of February, 2023.

DEPONENT

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

1. DETAILS OF THE PETITIONER

1.1. Name and Address

B L A Power Private Limited

1.1.1. Registered Office:

Address:
84, Maker Chamber III, Nariman Point,
Mumbai – 400 021.

Phone: +91 22 40600700

Email: powersales@bla.co.in

1.1.2. Generating Station:

Address:
Village Niwari, P.O. Khursipar,
Tehsil Gadarwara, District Narsinghpur,
Madhya Pradesh - 487551

1.2. Representatives

Name Email

S. Samajder – Director ssamajder@bla.co.in

Manoj Sahu – General Manager (Commercial) manoj@bla.co.in

Kapil Gurwani – Dy. Manager (Commercial) kapil.g@bla.co.in

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2. INTRODUCTION TO BLA POWER PVT. LTD. AND THE PROJECT

2.1. B L A Power Pvt. Ltd., Mumbai, hereinafter referred as the “Petitioner” / “Company”, a
company incorporated under Companies Act, 1956 and having its registered office at 84,
Maker Chamber III, Nariman Point, Mumbai, was incorporated in the month of
November 2006. The Petitioner entered into a Memorandum of Understanding with
GoMP on 10 August 2007 for setting up of a thermal Generating Station at Tehsil
Gadarwara, Dist. Narsinghpur in the State of Madhya Pradesh. Subsequently, as
envisaged by the terms of the MoU, GoMP and the Petitioner entered into an
Implementation Agreement on 01.09.2008.

2.2. According to the terms of Implementation Agreement, GoMP or its nominated agency
has the first right to purchase up to thirty percent (30%) of the aggregate capacity of the
generating units for a period of twenty (20) years, at a rate to be approved by the Ld.
MPERC.

2.3. The MoU and the Implementation Agreement further provide that the GoMP or its
nominated agency has a right to purchase five percent (5%) of the net power generated
by the Generating Station (i.e. electrical energy generated less auxiliary consumption in
kWh) of the Petitioner), at a price equivalent to Variable Charge / Cost only, which shall
be determined by Ld. Madhya Pradesh Electricity Regulatory Commission.

2.4. In accordance with the above terms of the Implementation Agreement and on the GoMP
exercising its right as aforesaid, the Petitioner, in compliance with its obligations, entered
into the following Power Purchase Agreements:

a. A Power Purchase Agreement was executed on 5 January 2011 between the

Petitioner with Respondent No.1, pursuant to GoMP nominating Respondent No.1
as the nominated agency under the Implementation Agreement. The said 27MW
PPA is for sale of thirty percent (30%) of Installed Capacity of the Generating
Station, having 2 units each of 45 MW, for a period of 20 years. As per the said
27MW PPA, the Tariff for the capacity so supplied comprises of Capacity Charge,
Variable Charge and any other charges as determined by Ld. MPERC. The three
Discoms (Respondent Nos. 2, 3 and 4) are Confirming Parties to the 27MW PPA.

b. A Power Purchase Agreement was executed on 4 May 2011 between the Petitioner
with GoMP. By and under the said Concessional Energy PPA, the GoMP
nominated MP Power Management Company Ltd, Jabalpur (earlier being M.P.
Power Trading Co. Ltd.), an undertaking of GoMP (hereinafter referred to as
Respondent No.1), to purchase the 5% power referred to in the Implementation
Agreement on its behalf.

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2.5. The Ld. MPERC approved the 27MW PPA vide its order dated 7 September 2012 (read
with order dated 7 February 2013 in Petition No. 85/2012) for sale of capacity to
MPPMCL.

2.6. Pursuant to the above agreements, the Petitioner installed and commissioned its first and
second unit of 45 MW each at Village Niwari, in Tehsil Gadarwara, in Narsinghpur
District of Madhya Pradesh. Unit-1 successfully achieved its COD on 3 April 2012.
Unit-2 has successfully achieved its COD on 20 March 2017 (in terms of the 27MW
PPA). The present petition is for True up of tariff order for Unit-1 for the FY 2016-17 to
FY 2018-19.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

3. LEGAL PROVISION

3.1 ELECTRICITY ACT 2003

3.1.1 B L A Power Pvt. Ltd., Mumbai is a “Generating Company” as defined under

Section 2(28) of the Electricity Act, 2003 whereby the clause states that:

"2(28) - generating company" means any company or body corporate or

association or body of individuals, whether incorporated or not, or
artificial juridical person, which owns or operates or maintains a
generating station”;

3.1.2 Also, section 62 of the Electricity Act 2003 provides for determination of tariff
by the Appropriate Commission for supply of electricity by a generating
company. Some relevant clause of the Act is as stated below:

“62. Determination of tariff

(1) The Appropriate Commission shall determine the tariff in accordance

with the provisions of this Act for--

(a) supply of electricity by a generating company to a distribution

licensee:
…
(2) The Appropriate Commission may require a licensee or a generating
company to furnish separate details, as may be specified in respect of
generation, transmission and distribution for determination of tariff.”

3.1.3 The Ld. Commission, under Section 86(1) (a) of the Electricity Act 2003, is
vested with the jurisdiction to regulate the tariff of the Generating Companies
within the State.

“86. Functions of State Commission

(1) The State Commission shall discharge the following functions,
namely:-
(a) determine the tariff for generation, supply, transmission
and wheeling of electricity, wholesale, bulk or retail, as
the case may be, within the State:”

3.2 STATE REGULATIONS

3.2.1 The Ld. Commission has notified the MPERC Generation Tariff Regulations
2015, which specifies the terms and conditions and methodology of tariff
determination under Section 62 of the Electricity Act 2003.

3.2.2 Regulation 8.4 of the aforesaid Regulations provides that for every provisional
tariff order issued by the Ld. Commission, the Petitioner shall file a true up
petition of Capacity Charges based on the Audited Statements after completion
of the respective financial year. The clause is reproduced below:

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

“8.4 A Generating Company shall file a petition at the beginning of

the Tariff period. A review shall be undertaken by the
Commission to scrutinize and true up the Tariff on the basis of
the capital expenditure and additional capital expenditure
actually incurred in the Year for which the true up is being
requested. The Generating Company shall submit for the
purpose of truing up, details of capital expenditure and
additional capital expenditure incurred for the period from
1.4.2013 to 31.3.2016, duly audited and certified by the
auditors”.

3.2.3 In accordance with the provisions contained in this regulation and the tariff order
issued by Ld. Commission on 14.12.2022, B L A Power Pvt. Ltd. (the Petitioner)
is submitting its request for determination of generation tariff for the control
period FY 2016-17 to FY 2018-19 for Unit No 1.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

4 PROJECT COST AND FUNDING FOR TRUE UP OF UNIT NO. 1 (FY 2016-17 TO
FY 2018-19)

4.1 Project Cost

4.1.1 Ld. Commission has considered the closing capital cost of Rs 302.33 Crore as on
31st March’ 2016 as admitted in last tariff order dated 14th December’ 2022 in P
No 52 of 2022.

4.1.2 Therefore, Closing Capital Cost of Rs 302.33 Crore as on 31st March’ 2016 is
considered as opening capital cost as on 1.04.2016.

4.1.3 Additional Capitalization during FY 2016-17 to FY 2018-19: The Petitioner

submits that it is not claiming any capital expenditure during the control period
FY 2016-17 to FY 2018-19 in the present true up Petition.

4.2 Funding:

4.2.1 Debt – The Ld. Commission had approved debt of Rs. 159.93 Crore towards
funding the capital cost of Unit-1.

4.2.2 Weighted average rate of interest is calculated on the basis of the actual loan
portfolio is as under:

Table 3: Weighted Average Rate of Interest

Particulars FY 2016-17 FY 2017-18 FY 2018-19
Weighted Average Rate of
12.70% 12.70% 12.86%
Interest

4.2.3 Equity – Similarly, the Ld. Commission had approved equity of Rs. 84.75 Crore
to fund the capital cost of Unit-1.

4.2.4 Thus, the Ld. Commission is requested to approve opening capital cost as on 1
April 2016 for Unit-1 as Rs. 302.33 Crore and funding through debt of Rs.217.58
Crore and balance from equity of Rs. 84.75 Crore. It may be seen that for funding,
debt equity ratio is well with the limits permitted by applicable tariff regulations.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

5. TARIFF STRUCTURE

5.1 Regulatory Provisions

5.1.1 The Tariff Regulations, 2015 specify a two-part tariff for sale of electricity from
a generating station as follows:

 Capacity (fixed) Charges : for recovery of annual fixed charges

 Energy (variable) Charges : for recovery of primary and secondary fuel cost

5.1.2 The annual Capacity (fixed) Charges consists of costs which are independent of
actual generation. They are as under:
 Return on Equity
 Interest on Loan Capital
 Depreciation
 Interest Charges on Working Capital
 Operation and Maintenance Expenses

5.1.3 Energy charges shall be derived on the basis of the Landed Fuel Cost (LFC) of a
generating station and shall consist of the following cost:

(a) Landed Fuel Cost of primary fuel; and

(b) Cost of secondary fuel oil consumption

5.2 Return on Equity

5.2.1 Some relevant clauses of the regulation of the Ld. Commission are reproduced
below:

“30. Return on Equity:

30.1 Return on equity shall be computed in rupee terms, on the equity base
determined in accordance with Regulation 25.

30.2 Return on equity shall be computed at the base rate of 15.50% for thermal
generating stations and hydro generating stations:

31. Tax on Return on Equity:

31.1 The base rate of return on equity as allowed by the Commission under
Regulation 30 shall be grossed up with the effective tax rate of the respective
financial year. For this purpose, the effective tax rate shall be considered on
the basis of actual tax paid in the respective financial year in line with the
provisions of the relevant Finance Acts by the concerned generating
company. The actual income tax on other income stream including deferred
tax i.e., income of non-generation business shall not be considered for the
calculation of “effective tax rate”.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

31.2 Rate of return on equity shall be rounded off to three decimal places and
shall be computed as per the formula given below:

Rate of pre-tax return on equity = Base rate / (1-t)

Where “t” is the effective tax rate in accordance with Clause 31.1 of
this Regulation and shall be calculated at the beginning of every financial year based
on the estimated profit and tax to be paid estimated in line with the provisions of the
relevant Finance Act applicable for that financial year to the company on pro-rata
basis by excluding the income of non-generation business and the corresponding tax
thereon. In case of generating company paying Minimum Alternate Tax (MAT), “t”
shall be considered as MAT rate including surcharge and cess.”

31.3 The actual tax paid together with any additional tax demand including
interest thereon, duly adjusted for any refund of tax including interest
received from the income tax authorities pertaining to the tariff period 2016-
17 to 2018-19 on actual gross income of any financial year shall be trued-
up every year. However, penalty, if any, arising on account of delay in
deposit or short deposit of tax amount shall not be claimed by the generating
company . Any under-recovery or over-recovery of grossed up rate on return
on equity after truing up, shall be allowed to be recovered or refunded to
beneficiaries on year to year basis.”

5.2.2 The Petitioner is not claiming any additional capitalisation during control period
from FY 2016-17 to FY 2018-19 under Unit-1. Thus, return on equity is requested
on the equity of Rs. 84.75 Crore already approved vide order dated 14.12.2022.

5.2.3 The RoE is proposed @ 15.50% only, as detailed in the table below. Further, in
first year of operation of Unit-1, i.e., FY 2016-17, there was loss of Rs. 61.38
Crores to the Petitioner. In second and third year there was also a loss of Rs 48.60
Cr and Rs 56.90 Cr respectively. Though it is a natural phenomenon for any
generating plant to have losses in initial few years and there are always chances
for the Company to earn profit in later years. Hence, grossing up of the tax has
not been done on RoE. The RoE is being claimed @ 15.50%. The claim of RoE
as submitted by the Petitioner for the period of FY 2016-17 to FY 2018-19 is as
under:

Table 4: Return on Equity for FY 2016-17 to FY 2018-19

S.No Particulars FY 2016-17 FY 2017-18 FY 2018-19
1 2 Approved Proposed Approved Proposed Approved Proposed

1.1 Opening Equity 84.75 84.75 84.75 84.75 84.75 84.75

Add: Increase due to
1.2 addition during the 0.00 0.00 0.00 0.00 0.00 0.00
year/period
Less: Decrease due to
1.3 de-capitalisation during 0.00 0.00 0.00 0.00 0.00 0.00
the year/period
Less: Decrease due to
1.4 reversal during the 0.00 0.00 0.00 0.00 0.00 0.00
year/period

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

Add: Increase due to

1.5 discharges during the 0.00 0.00 0.00 0.00 0.00 0.00
year/period
1.6 Closing Equity 84.75 84.75 84.75 84.75 84.75 84.75

1.7 Average Equity 84.75 84.75 84.75 84.75 84.75 84.75

1.8 Rate of ROE 15.50% 15.50% 15.50% 15.50% 15.50% 15.50%

1.9 Return on Equity 13.14 13.14 13.14 13.14 13.14 13.14

5.3 Interest and Finance Charges on Loans

5.3.1 The interest charges are to be computed as per the Regulation 32 of the Tariff
Regulations, 2015.

“32. Interest on Loan Capital:

32.1 The loans arrived at in the manner indicated in Regulation 25 shall be

considered as gross normative loan for calculation of interest on loan.

32.2 The normative loan outstanding as on 1.4.2016 shall be worked out by

deducting the cumulative repayment as admitted by the Commission up to 31.3.2016
from the gross normative loan.

32.3 The repayment for each of the year of the tariff period 2016-19 shall be
deemed to be equal to the depreciation allowed for the corresponding year/period. In
case of de- capitalization of assets, the repayment shall be adjusted by taking into
account cumulative repayment on a pro rata basis and the adjustment should not
exceed cumulative depreciation recovered upto the date of de-capitalisation of such
asset.

32.4 Notwithstanding any moratorium period availed by the generating company,

the repayment of loan shall be considered from the first year of commercial operation
of the project and shall be equal to the depreciation allowed for the year or part of
the year.

32.5 The rate of interest shall be the weighted average rate of interest calculated
on the basis of the actual loan portfolio after providing appropriate accounting
adjustment for interest capitalized:

Provided that if there is no actual loan for a particular year but normative loan is still
outstanding, the last available weighted average rate of interest shall be considered:

Provided further that if the generating station does not have actual loan, then the
weighted average rate of interest of the generating company as a whole shall be
considered.

32.6 The interest on loan shall be calculated on the normative average loan of the
year by applying the weighted average rate of interest.

32.7 The generating company shall make every effort to re-finance the loan as
long as it results in net savings on interest and in that event the costs associated with

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

such re-financing shall be borne by the beneficiaries and the net savings shall be
shared between the beneficiaries and the generating company in the ratio of 2:1.

32.8 The changes to the terms and conditions of the loans shall be reflected from
the date of such re-financing.”

5.3.2 Considering the Regulations as discussed above, the interest and finance charges
have been computed as per the following table. The Petitioner requests the Ld.
Commission to approve the same.

Table 5: Interest and finance charges on Loan for FY 2016-17 to FY 2018-19

S.No Particulars FY 2016-17 FY 2017-18 FY 2018-19
Approved Proposed Approved Proposed Approve Proposed
d
1 2 3 4 5 6 7 8
Gross Normative loan –
1 217.58 217.58 217.58 217.58 217.58 217.58
Opening
Cumulative repayment of
2 Normative Loan upto 57.65 57.65 72.28 72.28 86.91 86.90
previous year
Net Normative loan –
3 159.93 159.93 145.30 145.30 130.67 130.68
Opening
Add Increase due to ACE
4 0.00 0.00 0.00 0.00 0.00 0.00
during the Year
Less Decrease due to
5 Decapitalisation during the 0.00 0.00 0.00 0.00 0.00 0.00
Year
Less Decrease due to
6 14.63 14.63 14.63 14.63 14.63 14.63
repayment
Add Increase due to
7 0.00 0.00 0.00 0.00 0.00 0.00
Discharges during the Year
Net Normative loan -
8 145.29 145.30 130.66 130.68 116.03 116.05
Closing
9 Average Normative Loan 152.61 152.62 137.98 137.99 123.35 123.36
Weighted average Rate of 12.70 12.86
10 12.70% 12.70% 12.70% 12.86%
Interest of actual Loans % %
11 Interest on Normative loan 19.38 19.38 17.52 17.52 15.86 15.86

5.4 Depreciation

5.4.1 Depreciation is computed based on the capital cost of the assets pertaining to
Unit-1 in accordance with the provisions of the Tariff Regulations, 2015. The
Regulation 33 of the Tariff Regulations, 2015 is reproduced below:

“33. Depreciation:

33.1 Depreciation shall be computed from the date of commercial operation

of a generating station or unit thereof. In case of the tariff of all the units
of a generating station for which a single tariff needs to be determined,
the depreciation shall be computed from the effective date of commercial
operation of the generating station taking into consideration the
depreciation of individual units.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

Provided that effective date of commercial operation shall be

worked out by considering the actual date of commercial operation and
installed capacity of all the units of the generating station for which
single tariff needs tobe determined.

33.2 The value base for the purpose of depreciation shall be the capital cost
of the asset admitted by the Commission. In case of multiple units of a
generating station, weighted average life for the generating station shall
be applied. Depreciation shall be chargeable from the first year at the
commercial operation.

33.3 The salvage value of the asset shall be considered as 10% and
depreciation shall be allowed up to maximum of 90% of the capital cost
of the asset:
…..
Provided also that any depreciation disallowed on account of
lower availability of the generating station or generating unit shall not
be allowed to be recovered at a later stage during the useful life and the
extended life.

Provided that the salvage value for IT equipment and softwares

shall be considered as NIL and 100% value of the assets shall be
considered depreciable.

33.4 Land other than the land held under lease and the land for reservoir in
case of hydro generating station shall not be a depreciable asset and its
cost shall be excluded from the capital cost while computing depreciable
value of the asset.

33.5 Depreciation shall be calculated annually based on Straight Line

Method and at rates specified in Appendix-II to these Regulations for the
assets of the generating station:

Provided that the remaining depreciable value as on 31 March of

the year closing after a period of 12 years from the effective date of
commercial operation of the station shall be spread over the balance
useful life of the assets.
……
33.7 The rate of Depreciation shall be continued to be charged at the rate
specified in Appendix-II till cumulative depreciation reaches 70%.
Thereafter the remaining depreciable value shall be spread over the
remaining life of the asset such that the maximum depreciation does not
exceed 90%.

33.8 Depreciation shall be chargeable from the first Year of commercial

operation. In case of commercial operation of the asset for part of the
Year, depreciation shall be charged on pro rata basis.”

5.4.2 Here it is submitted that the Petitioner in its petition has requested for the rate of
depreciation as 4.84%, considering the capital cost as Rs 302.33 Cr. The
Petitioner requests the Ld. Commission to approve the depreciation as computed
in the following table for FY 2016-17 to FY 2018-19.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

Table 6: Depreciation for FY 2016-17 to FY 2018-19

S.No Particulars FY 2016-17 FY 2017-18 FY 2018-19
1 2 Approved Proposed Approved Proposed Approved Proposed
Opening Gross
1 302.33 302.33 302.33 302.33 302.33 302.33
Block
Closing
2 302.33 302.33 302.33 302.33 302.33 302.33
Capital Cost
Average
3 302.33 302.33 302.33 302.33 302.33 302.33
Capital Cost
Rate of
4 4.84% 4.84% 4.84% 4.84% 4.84% 4.84%
Depreciation
Depreciation
5 14.63 14.63 14.63 14.63 14.63 14.63
value

5.5 Operation and Maintenance Expenses

5.5.1 Operation and Maintenance expenses are required to meet out the expenses
towards repair and maintenance of the plant, salaries and wages of the employees,
administration and general expenses for management of the plant.

5.5.2 The Tariff Regulations, 2015 specify the norms of operation for Unit of 45 MW size.
Some relevant provisions of the Regulations are reproduced below:

“35. Operation and Maintenance Expenses:

35.1 Operation and Maintenance Expenses for thermal and hydro power stations
for the Tariff period shall be determined based on normative O&M expenses
specified by the Commission in these Regulations. The normative operation
and maintenance expenses for the thermal generating stations are specified
separately for the thermal power stations commissioned on or before
31.03.2012 and the power stations commissioned on or after 01.04.2012. The
normative operation and maintenance expenses are also specified separately
for the existing and new projects.

35.2 The cost components for employee expenses, repair & maintenance expenses
and administrative and general expenses are considered as per Regulations
35.7 to 35.8 and 35.10 to 35.11 of these Regulations. The Operation and
Maintenance expenses including employee expenses, repair and
maintenance expenses, and administrative and general expenses, for the
power stations commissioned prior to 01.04.2012 are derived by considering
the average of these expenditures for past four years (i.e. FY2010-11 to
FY2013-14) as per Annual Audited Accounts. The average expenditure of the
aforesaid four years is considered as base opening figure for FY 2012-13.
Thereafter, the figures of O&M expenditure are derived upto FY 2015-16 by
applying the annual escalation rate specified for the relevant year in the
applicable Regulations.

35.3 The O&M expenses for the subsequent years shall be determined by
escalating the expenses of the base year i.e. FY 2015-16, as determined
above with the escalation factor @ 6.30% and @ 6.64% for thermal power
stations and hydro power stations respectively as considered by the Central
Commission in its Tariff Regulations, 2014 for the respective financial years
to arrive at permissible O&M expenses for each year of the Control Period.

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

Provided that in case, the generating stations which have come in

operation on or after 01.04.2012, the O&M expenses shall be as specified at
Regulation 35.8 for New generating stations.
…
35.8 O&M Norms for the Thermal Generating Units commissioned on or after
01.04.2012:

Rs. in lakhs/MW
Units (MW) FY 2016-17 FY 2017-18 FY 2018-19
45 MW 32.07 34.09 36.24
200/210/250 MW 27.00 28.70 30.51
300/330/350 MW 22.54 23.96 25.47
500 MW 18.08 19.22 20.43
600 MW and above 16.27 17.30 18.38

Provided that water charges shall be allowed based on water consumption

depending upon type of plant, type of cooling water system etc., subject to prudence
check. The details regarding the same shall be furnished along with the petition.”

5.5.3 The Petitioner has computed the O&M expenses for FY 2016-17 to FY 2018-19 as shown
in the following table. The Petitioner requests the Ld. Commission to approve the same.

Table 7: Operation & Maintenance expenses for FY 2016-17 to FY 2018-19

Particular Unit FY 2016-17 FY 2017-18 FY 2018-19
Rate of O&M charges Rs Lakh/MW 32.07 34.09 36.24
Capacity of unit MW 45 45 45
O&M charges Rs Crore 14.43 15.34 16.31

5.6 Interest on Working Capital

5.6.1 The Tariff Regulations, 2015 specify the norms for computation of interest on working
capital. Some relevant Regulation is reproduced below:

“34. Interest on Working Capital:

34.1 The working capital shall cover:

(1) Coal-based thermal generating stations
(a) Cost of coal towards stock, if applicable, for 15 days for pit-head
generating stations and 30 days for non-pit-head generating
stations for generation corresponding to the normative annual
plant availability factor or the maximum coal stock storage
capacity whichever is lower;

(b) Cost of coal for 30 days for generation corresponding to the

normative annual plant availability factor;

(c) Cost of secondary fuel oil for two months for generation
corresponding to the normative annual plant availability factor,
and in case of use of more than one secondary fuel oil, cost of fuel
oil stock for the main secondary fuel oil;

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

(d) Maintenance spares @ 20% of operation and maintenance

expenses specified in Regulation 35;

(e) Receivables equivalent to two months of capacity charges and

energy charges for sale of electricity calculated on the normative
annual plant availability factor; and

(f) Operation and maintenance expenses for one month.

…
34.2 The cost of fuel shall be based on the landed cost incurred (taking into
account normative transit and handling losses) by the generating
company and gross calorific value of the fuel as per actual for the three
months preceding the first month for which tariff is to be determined and
no fuel price escalation shall be provided during the tariff period.

34.3 Rate of interest on working capital shall be on normative basis and shall
be considered as the bank rate as on 1.4.2016 or as on 1st April of the
year during the tariff period 2016-17 to 2018-19 in which the generating
station or a unit thereof, is declared under commercial operation,
whichever is later.

34.4 Interest on working capital shall be payable on normative basis

notwithstanding that the generating company has not taken loan for
working capital from any outside agency.”

Table 8: Interest on Working Capital for FY 2016-17 to FY 2018-19

S.No Particulars Existing FY 2016-17 FY 2017-18 FY 2018-19
Norms
Approved Proposed Approve Proposed Approved Proposed
d
1 2 3 4 5 6 7 8 9
1 Cost of Coal 2 Months 17.44 17.44 17.44 17.44 17.44 17.44
Cost of Main
2 Secondary 2 Months 0.14 0.14 0.14 0.14 0.14 0.14
Fuel Oil
O&M
3 1 Month 1.20 1.20 1.28 1.28 1.36 1.36
Expenses
Maintenance 20% of
4 2.89 2.89 3.07 3.07 3.26 3.26
Spares O&M
5 Receivables 2 Months 28.98 28.98 28.66 28.70 28.64 28.71
Total
6 Working 50.64 50.65 50.59 50.62 50.84 50.91
Capital
Rate of
7 12.80% 12.80% 12.60% 12.60% 12.20% 12.20%
Interest
Interest on
10 Working 6.48 6.48 6.37 6.38 6.20 6.21
Capital

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

5.7 Fixed Charges

5.7.1 In summary of True up proposal as elaborated in the foregoing sections above, Petitioner
respectfully submits before the Ld. Commission to kindly permit:

Table 9: Fixed Charges for FY 2016-17 to FY 2018-19

S.No Particulars FY 2016-17 FY 2017-18 FY 2018-19
Approve Approve Propose
Approved Proposed Proposed
d d d
1 2 3 4 5 6 7 8
Rs.
1.1 Depreciation 14.63 14.63 14.63 14.63 14.63 14.63
Crore
Interest on Rs.
1.2 19.38 19.38 17.52 17.52 15.86 15.86
Loan Crore
Return on Rs.
1.3 13.14 13.14 13.14 13.14 13.14 13.14
Equity Crore
Interest on
Rs.
1.4 Working 6.48 6.48 6.37 6.38 6.20 6.21
Crore
Capital
O&M Rs.
1.5 14.43 14.43 15.34 15.34 16.31 16.31
Expenses Crore
Less: Non-
Rs
1.8 Tariff Income 1.11 1.11 1.95 1.75 1.23 0.82
Crore
Total Fixed Rs.
1.0 66.95 66.95 65.06 65.26 64.91 65.32
Charges Crore

5.7.2 Permit recovery of fixed cost & other charges as elaborated above.

5.8 Other Charges

5.8.1 These expenses are elaborated below:

5.8.1.1 MPERC Fee

The regulation permits the actual expenses paid by the Petitioner to the
Ld. Commission against various submissions as pass through. The
Petitioner had deposited an amount of Rs 1,00,000/-, via RTGS in
favour of “Madhya Pradesh Electricity Regulatory Commission”
towards filing fee of the present true-up Petition for FY 2016-17 to FY
2018-19. Further the Petitioner had also deposited an amount of Rs.
3,15,000/- towards filing fees of MYT for FY 2016-17 to FY 2018-19.

5.8.1.2 Cost of Chemicals / Consumables

The O&M charges also exclude the cost of various chemicals and
consumables consumed by the generating company during the year.
Petitioner has incurred expenditure of Rs. 42,27,426/- during FY 2016-
17, Rs.18,08,577/- during FY 2017-18 and Rs. 19,93,622/- during FY
2018-19 towards Unit-1 & Unit-2, out of which incurred expenditure

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

of Rs. 4,226,786/- during FY 2016-17, Rs. 1,804,446/- during FY

2017-18 and Rs. 1,991,407/- during FY 2018-19 is towards Unit-1.

5.8.1.3 Rent, Rates & Taxes

Rent, rates and taxes actually paid to the statutory bodies are permitted
as pass through. Company has incurred expenditure of Rs.
2,34,19,847/- during FY 2016-17, Rs. 1,27,34,709/- during FY 2017-
18 and Rs. 49,44,382/- during FY 2018-19 towards Unit-1 & Unit-2,
out of which incurred expenditure of Rs. 2,32,70,647/- during FY
2016-17, Rs. 1,26,98,709/- during FY 2017-18 and Rs. 48,72,382/-
during FY 2018-19 is towards Unit-1.

5.8.1.4 Water Charges

Water charges are levied by the Water Resource Department of GoMP

on their notified rates in accordance with the agreement done.

5.8.2 The expenses have duly been extracted from the Annual Statements of Accounts of the
Petitioner, which have been duly audited by the Statutory Auditor and are summarised
below:

Table 10: Other Charges:

Sr. Particulars Unit FY 2016-17 FY 2017-18 FY 2018-19
No. Unit-1 Unit-2 Total Unit-1 Unit-2 Total Unit-1 Unit-2 Total
1 MPERC Fee Rs. 415000 390000 805000
2 Cost of
Chemicals / Rs. 4226786 640 4227426 1804446 4131 1808577 1991408 2215 1993622
Consumables
3 Rates &
Rs. 23270647 149200 23419847 12698709 36000 12734709 4872382 72000 4944382
Taxes
4 Water
Rs. 2675958 2675958 5351916 1540313 1540313 3080625 1772961 1772961 3545921
Charges
Rs. 30173391 2825798 32999189 16043468 1580443 17623911 9051750 2237175 11288925

Lakh
Total 301.73 28.26 329.99 160.43 15.80 176.24 90.52 22.37 112.89
Rs.
Cr.
3.02 0.28 3.30 1.60 0.16 1.76 0.91 0.22 1.13
Rs.

5.8.3 It is humbly requested to kindly permit the same.

5.8.4 It is humbly prayed that this Ld. Commission may graciously be pleased to condone any
inadvertent delay in filing the present true-up petition for FY 2016-17 to FY 2018-19.
Tariff for Unit-1 for the aforesaid control period was determined by the Ld. Commission
by an order dated 14.12.2022. Accordingly, the Petitioner is filing the present true-up
petition with the audited accounts and the accompanying details seeking a true-up for the
relevant control period.

6. Prayer:

In view of the above, the Petitioner respectfully prays that the Ld. Commission may:

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

a) Carry out the truing-up of tariff for Unit-1 of the Project for the period from FY
2016-17 to FY 2018-19 and allow to recover the difference amount;

b) Allow to recover E.D., Water Charges and Cess on auxiliary power consumption
and other taxes, if any, levied by the Statutory Authorities from Respondent No.
1;

c) Allow to recover the fees paid to the Ld. Commission and publication expenses
from Respondent No. 1;

d) Condone any inadvertent delay /omissions/errors/rounding off differences/

shortcomings and permit the Petitioner to add/alter this filing and make further
submissions as may be required by the Ld. Commission; and

e) Pass such Orders, as this Ld. Commission may deem fit and proper, and necessary
in the facts and circumstances of the case, to grant relief to the Petitioner.

For and on behalf of BLA Power Pvt. Ltd.

Date: 01.02.2023 Name: Manoj Sahu

Place: Bhopal Designation: General Manager
(Commercial)

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 True up Petition for Unit-1 (45 MW) for FY 2016-17 to FY 2018-19

List of Annexures:

Annexure – 1: True up Forms.

Annexure – 2: Audited Accounts for FY 2016-17
Annexure – 3: Audited Accounts for FY 2017-18
Annexure – 4: Audited Accounts for FY 2018-19

B L A Power Pvt. Ltd., Mumbai Page 24