SCO.220-221 SECTOR 34-A
Petition No. 3 of 2003
Date of hearing : 21.1.2004
Date of Order:
IN THE MATTER OF
Petition for approval of Power Tariff for proposed Mini
Hydro Power Project at Ralla, Distt.
Mansa,
AND
IN THE MATTER OF
Friends Cycles Private Limited
(Now known as DSL Powers Private Limited)
….Petitioner
Vs
Punjab State Electricity Board and others
…..Respondents
Present Sh. R.S.Mann, Chairman
Sh. L.S.Deol, Member
For the Petitioner Sh. Narinder Singh
For the Govt./PEDA Sh. S.S.Sekhon, Director PEDA,
Sh. A.K.Singla and Sh.M.P.Singh
For the PSEB: Sh.B.D.Bansal, Director/Sales
This petition has been filed for approval of power tariff for sale of
power to PSEB for proposed Mini Hydel Power Project
at Ralla on Canal Drop of Kotla
Branch Canal, Distt. Mansa. It is stated in the petition that the petitioner has been allocated the site and MOU has been
signed on
2. The main issue involved in this petition is regarding grant of the benefits and incentives to the petitioner as per the NRSE policy of the Government of Punjab notified in July 2001. This policy was formulated by the State Government for the promotion of energy generation through non-conventional sources of energy. This policy was based on similar policy approved by the Government of India. As per the policy, PEDA is to provide complete project support and facilitation services and it is to act as Nodal Agency.
3. In this connection, the State Government issued directions
to this Commission under Section 39 of the ERC Act, 1998 vide notification
dated
“In continuation to this office DO No.PSIP/2003/74 dated 31.1.2003 and
with reference to order of the Commission dated 3.2.2003 (copy enclosed) the
matter regarding purchase of power from Mini Hydel
projects was reviewed in a meeting held on 11.2.2003.The following decisions
taken in the meeting are reproduced below for reference of the Regulatory
Commission. These decisions would be applicable to all projects set up under
NRSE Policy-2001 through PEDA :-
i) The Commission may permit PSEB to buy power from the Developers at the rates provided in the NRSE Policy of State Government circulated vide Notification dated 24.7.2001 and may be allowed to pass on full cost of the power so purchased in the ARR and loaded to the consumers.
ii) Since the transmission lines/ works required to be laid for evacuating this power to the nearest PSEB Grid Sub station could not be included in the ARR (being capital expenditure), this cost should be borne by the Developers (except for PPAs already signed with PEDA).
iii) All other terms & conditions/ incentives for the Private Projects developed through PEDA shall be same as envisaged in the NRSE policy-2001 of the State Government.
iv) In the changed scenario in which per unit cost of generation is to be determined by the State Regulatory Commission, for future projects the NRSE policy circulated by the State Government needs to be reviewed/recast for which Secretary, Science & Technology, shall bring suitable proposal for consideration of CMM.
v) As per the policy guidelines of the State Government, the developers may be allowed to install suitable metering at their generating end to record the generation made for sale to PSEB and billing done on the basis of readings recorded by the meter installed at the generator end. The power available for sale to PSEB to be included in the ARR shall be units so generated and recorded minus 5% transmission losses.
The above decision of the Government may be considered by the Commission
for tariff fixation. In view of the
above decisions issuing of directions to PSEB under Section 78A of the ESA 1948
is not required.”
4. Vide
Order dated
5. After
hearing the petitioner and PEDA, the petition was admitted on
6. In
reply to the petition, it was stated on behalf of the PSEB that the Government
in its communication dated
7. The petitioner filed rejoinder to the reply filed by the
PSEB. The petitioner stated that the Implementation Agreement has been signed
on
8. The
State Government filed reply to the petition on
9. A
letter was written by the Secretary, PSERC to the Chief Secretary, Punjab,
requesting him to intimate the decision of the Government on review/recast of
NRSE policy and the interpretation of the term ‘future projects’ to enable the
Commission to settle the petitions pending with the Commission. In reply, the Principal Secretary Science
& Technology vide his letter dated January 6, 2004 has stated that the cut off date for extending the
benefits of NRSE policy was fixed as 30.11.2003 and the six pending petitions before the
Commission for approval of tariff may be decided accordingly. It was further stated therein that the
Commission may permit PSEB to buy power from these private developers at the
rates provided in the NRSE policy 2001
and may be allowed to pass on full cost of power so purchased in the ARR
and load it to the consumers. It was
further stated that all other projects whose petitions are filed after November
30, 2003 may be considered as ‘future projects’ and shall be considered for
tariff fixation after review/ recast of NRSE policy by the State Government.
10. Vide
order dated
11. The
PSEB filed its submissions on
“Notwithstanding the objections of PSEB about the higher per unit rate recommended (by Pb.Govt.) to be paid to the Developers of NRSE based projects in the State as per policy & guidelines of the Punjab Govt. and the power of the Hon’ble State Electricity Regulatory Commission to regulate electricity purchase as per section 22 (1) (c) of ERC Act, 1998 & section 86 (1) (b) of EA, 2003; PSEB shall have no objection to purchase this power and make payment to the Power developers at the rate provided in the NRSE policy, provided the same are approved and allowed as expenditure in the annual Revenue Requirement of the Board by the Commission.”
12. The
parties have been heard. The representative of the Board has reiterated the
stand taken by the Board in its submissions filed on
13. The Commission
notes that the two directions issued by the State Government on 28.10.2002 and
18.2.2003 directing the Commission for
compliance of NRSE Policy, 2001 of the Govt. of Punjab are in conformity with
Section 39 of the ERC Act, 1998 as these directions have been issued in writing
and they pertain to matter of policy involving public interest. They are also in line with similar policy
being followed by the Govt. of India and many other states in the country. The
Commission has also followed these directions of the Govt. in other similar
petitions. Further vide letter dated
14. Further, the Commission has noted that the PPAs are normally for 20 years extendable for another 10 years through mutual agreement. The rate of purchase of power in respect of new projects is 301 paise/ unit with base year 2001-02 with annual escalation of 3% on yearly basis upto 5 years. Thereafter, the rate is to remain fixed for the balance years of the contract. The Commission is of the opinion that the rates of purchase of power may appear to be high in the initial years but these may become competitive and beneficial for the Board and the consumers in the later years of the total duration of the PPAs. keeping in view the incremental cost of power involved in subsequent years of purchase. Thus, in all likelihood, the interests of the consumers will be well served by allowing these rates. Moreover, the PSEB is already purchasing power from many co-generation producers and other such sources almost at the same rates. In view of all above, the Commission does not consider the rates allowed as per NRSE Policy of the Govt. to be adverse to the interests of the consumers, especially their long term interests.
15. As per sub clause (v) of Government letter dated February 18, 2003, the Govt. has stipulated that the developers may be allowed to install suitable metering at their generating end to record the generation made for sale to PSEB and billing be done on the basis of readings recorded by the meter installed at the generating end and the power available for sale to PSEB to be included in the ARR, shall be units so generated and recorded less 5% for transmission losses. The Commission feels that it is not desirable for the Govt. to lay down a definite figure for transmission losses to be passed on to the consumers. Transmission losses which the consumers may be required to bear, should be only the actual transmission losses as determined by the Commission. For a particular year, transmission losses may be above or below the figure of 5%. The Commission accordingly determines that the transmission losses to be allowed would be as per the actual losses for each year. The Commission feels that by this modification, the interests of the consumers will be safeguarded and none of the parties in this petition, stands to lose. The Commission has followed the same principles for other similar petitions.
16. In view of the above, it is decided that PPA in this case be approved at the rates as applicable to the new projects as per the NRSE Policy, 2001 and as per the directions of the Government dated October 28, 2002 as amended vide their reference dated February 18, 2003 except that the clause pertaining to 5% losses be amended to state that each year only assessed transmission losses be allowed to the PSEB subject to adjustment based on actuals. PEDA & PSEB may also ensure that during the total period PPA is valid, the petitioner will produce power using only non-conventional source for which the project has been approved. Also, in order to protect the interests of the PSEB and consumers in general, PEDA and State Govt. may take suitable steps to ensure that the petitioner continues to supply agreed quantum of power to the Board at prescribed rates during the entire period of contract under the NRSE policy 2001.
Sd/- Sd/-
(L.S. DEOL) (R.S.MANN)
Member. Chairman.
Place:
Dated: