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1. 1. The Uttar Pradesh Electricity Regulatory Commission (UPERC) in exercise of powers entrusted to it by
the Uttar Pradesh Electricity Reforms Act, 1999, hereby proposes these Practice Directions on Captive Power Generation. The objective of these practice directions is to provide reliable and quality power to industries in UP and to bridge the gap between demand and supply of power. At present Uttar Pradesh Power Corporation Limited (UPPCL), the distribution and retail supply license, may not be in a position to meet the demand for energy (both in quality and quantity), particularly that of Industrial consumers. The endeavor of UPERC will be that the licenses develop electricity distribution in an organised way and provide electricity to all consumers in an efficient manner, while meeting the essential standards of performance. This may however take some tin. e. Mean while, industry and industrial development in the State should not suffer on account of non-availability of electricity, particularly where the entrepreneur is in a position to set up a captive generation unit. Captive power plants may be encouraged on account of the above factor as a short-term solution. This practice direction also strives to promote efficient utilization of energy and promote green power through renewable resources. Further these practice directions attempt to balance the commercial interest of both the industry and the license.

2. These Practice Directions will be in force for a period of five years. As and when the licensee is in a
position to organise the distribution and supply of electricity in a proper manner there will be a review of this policy and the Commission would be free to make amendments subject to the existing consent holders not being affected adversely.

3. Section 21 (4) of the Act empowers UPERC to give consent for all types of generating stations to whom
the provisions of section 44 of the Electricity (Supply) Act, 1948 are applicable. UPERC can withdraw the consent at any point of time by giving one month notice, if the CPP owner fails to abide by the directives or guidelines of the UPERC. UPERC can also take action under sections 28 and 37 of the Reforms Act, against persons who fail to comply with the provisions of the Act, Regulations or Directives of the UPERC.

4. The Decision to grant consent will be based on the nature of the industry, need for efficient utilization of
energy, the ability of the licensee to provide good quality power and revenue loss to the licensee due to consumers taking recourse to electricity sources other than those of the licensee. Continuous process industries, frequency, sensitive industries and industries where licensee is unable to supply power, would merit special consideration.

5. The technical terms with reference to this document have been defind in annexure-I. The practice
directions for various categories of CPP envisaged in this documents are summarized in annexure-II.

6. The commission would be free to amend these practice directions at any time subject to the existing
consent holders not being affected adversely.

2. Existing consent holders: 1. All existing CPP owners who had taken consent from the erstwhile UPSEB or the State Government
need not renew their consent for the existing validity period. Status quo will be observed for their earlier agreements with the erstwhile UPSEB, regarding sale of power, banking and wheeling, during the validity period of the agreements. However they will have to send details to the Commission about capacity date of commissioning and copy of consent & agreement.

3. New Captive Power Plants (CPP):

New captive power Plants and applicant seeking capacity addition will have to abide by the following procedures:

1. Persons in this category interested in captive generation/enhancement of capacity should apply in

triplicate to UPERC for consent, on the prescribed form, which can be obtained from its office. The UPERC may require the applicant to file an affidavit in support of this application, as prescribed in its Business Regulations 2000. The CPP owner should also forward two copies of the application to the

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2. The CPP owner shall pay Rs. 2500 for capacity requested up to 1 (one) MW and Rs. 5000 for capacities
above 1 (one) MW as a processing fee to UPERC along with the application form. The licensee may charge processing fee separately, if any, from the CPP owner for their part of examination and recommendation.

3. The CPP owners who are permitted sale of electricity shall pay an annual fee at the rate of Rs. 10,000
per 10 MW or part thereof, as prescribed in Chapter-II regulation 5 and 6 of the duly amended UPERC (Fee and Fines) Regulation, 2000.

4. The Licensee should send his views to the UPERC within 45 days from the receipt of the applicant's
proposal. If UPERC does not receive the comments of the Licensee within 45 days, UPERC shall be entitled to presume that the Licensee has no objection to grant of consent and shall proceed to decide the matter. UPERC may at its discretion grant further time to the Licensee if it considers it necessary.

5. UPERC shall generally decide the grant or refusal of the Consent within 30 days of receipt of the views
of the licensee. The procedure to be followed by UPERC for disposal of this application will conform to the procedure laid down in its Business Regulations 2000 for disposal of petitions. It may be noted that this time limit will commence from the date on which all documents and information, as required in the application, and any other information required by the UPERC, have been furnished by the applicant and the licensee.

6. The CPP owner and the licensee should enter into an agreement for matters such a sale of surplus
power, banking, wheeling of electricity etc. if allowed within 30 days after the grant of consent. If there are any dispute or difference on the terms or conditions of such agreement the same shall be decided by UPERC

7. The CPP owner and the licensee should settle the bill in respect of sale of energy on monthly basis. 8. The Applicant must furnish the appropriate documentation to establish that the CPP and the industrial
units consuming its generated electricity are within the same premises and under the same ownership or the generating units is established in special purpose vehicle incorporated only for the purpose of generation and supply of electricity to the applicant. The consortium based power generation plants may be permitted at the discretion of UPERC only if UPERC is satisfied about the need for the same. In such cases the applicant must provide proof of having established a company for captive generation and consumption.

9. Feasibility Report of the proposed project shall be submitted along with the Application. 10. Consolation with Central Electricity Authority (CEA) will be required for capacity above 25 MW.
Guidelines prescribed by CEA will be applicable in such case. The UPERC after considering the comments of the Licensee will forward a copy of the application to CEA. The applicant will provide any additional information that may be required by CEA. In such cases, consent shall generally be granted or withheld by the Commission within 30 days of receipt of the comments of the CEA.

11. The applicant will have to abide by the grid discipline and will not be entitled for any compensation in the
event of grid failure during interruptions etc. The Applicant must make suitable provisions to isolate his installation to ensure that it suffers no harm/damage in the event of inadvertent frequency and voltage variations in the Licensee's system from the specified standards.

12. CPPs that are banking, wheeling or selling power to the Licensee shall submit a monthly statement of
Electricity within 15 days of the end of each month to the Licensee and biannually to UPERC. Other CPPs shall submit statements annually to both the Licensee and the UPERC within one month of the end of financial year.

13. The consent shall be subject to provisions of other laws and regulations of the Union/State Government
in force from time to time.

14. CPP owners will have to abide by relevant guidelines contained in the Grid Code. Operating Standards
etc of the Licensee as approved by UPERC.

4. Capacity :

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1. No consent will be required for a captive power plant having total installed capacity less than or equal to
50 KW. For total installed capacity above 50 KW CPP will have to follow the procedure mentioned in section 3.

2. CPP for dedicated use or consortium based CPP can install a power plant of total capacity not
exceeding 1.5 times the total peak demand.

3. All renewable energy based CPPs and cogeneration plants will not have any capacity limits. 4. The maximum capacity permitted for standby CPP will be equal to the contracted demand. They may
have an additional generating unit/set for every four units/ sets or fraction thereof a capacity not exceeding the individual capacity of the largest permitted individual generating unit/set.

5. Time Limit of Consent : 1. New captive power plants will be given consent for a period of ten years. After ten years the CPP owner
will have to apply for renewal.

2. If an industry is unable to commission the plant within the periods 'given below on as mentioned in
consent order the CPP owner will have to seek extension of time giving reasons for the delay.

a. Gas Turbine (open cycle), Permitted Oil/Gas based generators-18 months. b. Combined Cycle Gas Based Turbines - 24 months. c. Steam Turbine CPPs based on Fossil fuel - 36 months. 6. Sale of Surplus Power: 1. Captive power plants that are renewable energy based or cogeneration plants will be permitted to sell
surplus power to the licensee, regardless of whether they are consumers of the licensee or not.

2. Captive power plants for dedicated use & consortium based CPPs with permitted excess capacity may
sell power to the licensee provided they are its HT consumers.

3. A CPP for standby use will not be permitted to sell power. 4. Surplus power can be supplied to the licensee as per the voltage and capacity given below at the
nearest 132 KV substation. 33 KV - up to 10 MW 132 KV - above 10 MW

5. The cost of laying transmission lines to the sub-station decided by the licensee and synchronization
equipment will be borne by CPP. However in case of renewable and cogeneration plants, 50% cost of construction of 132 KV and above line may be shared by the license. This work will be carried out under the supervision of the licensee.

6. Sale of surplus firm power to the licensee will be allowed only in cases where total installed capacity of
the CPP based on power generation through fossil fuels is more than 5 MW. However, in the case of cogeneration & renewable energy based power plants there shall be no capacity restriction for sale of firm power.

7. The period of any agreement should not extend beyond the validity of the consent for CPP. 8. The licensee can also have infirm power agreement with the CPP as and when it is available or required
without prior permission of UPERC. The agreement, however, should be forwarded to the UPERC.

9. The period of agreement for sale of surplus infirm power should not exceed one year including all
extensions. For period exceeding one year, prior consent of UPERC will be required.

10. Tariff for purchase of infirm power should be less than the Tariff for firm power.

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11. The Licensee may require emergency assistance following an extensive failure in the system. Subject to
technical feasibility, the CPP may, if requested by the licensee, extend power supply from is generation station to the licensee's system. In such circumstances, the tariff for such supply will be the same as for licensee's supply of backup power.

12. The licensee will procure electricity based on merit order dispatch. 7. Third Party Sale: 1. No CPPs shall be entitled as of right to effect sale of surplus electricity to any person other than to the
supply licensee. All CPPs except the standby category shall be allowed third party sale in the specified area neighboring the unit at the discretion of the Commission.

2. For third party sale, eligible CPPs will have to apply separately for appropriate license to the UPERC as
per section 15 of the Act and Business Regulation 2000.

8. Wheeling of Power: 1. Wheeling of energy through the licensee's network will be allowed only if it is renewable energy based or
a consortium based captive power plant, or where third party sale has been permitted.

2. Consumers opting for wheeling will have to make their own arrangements for metering, interfacing and
synchronizing with the grid at both ends i.e. at the dispatcher's as well as the receiver's end.

3. The wheeling charges will be 12 percent of the total energy wheeled. 4. The CPP owner and the licensee, subject to UPERC's approval will sign a wheeling agreement. 9. Banking: 1. Banking will be allowed only for cogeneration plants and CPPs based on renewable sources of energy. 2. CPPs will be allowed to Bank energy only in the peak period or when the system, frequency is less than
49 HZ. CPP will be allowed to withdraw banked energy during off peak period or when system frequency is more than 50.5 HZ.

3. CPP owners opting for banking will have to arrange for metering, interfacing and synchronizing with the

4. CPPs should be allowed to withdraw all the power that was banked during the previous financial year. 5. Banking charges will be 12.5 percent of the energy banked. 6. In the monthly return of electricity generated the CPP owner will have to specify the amount of energy
banked and withdrawn during the month. The CPP owner can provide this information in the monthly return filed to the licensee as per clause 3.9.

7. A banking agreement will be signed by the CPP and the licensee, subject to UPERCs approval. The
agreement should mention off peak and peak period for the CPP depending upon the region in which it is located.

8. Except where it is covered by the above provisions relating to banking, the electricity supplied by the
CPPs to the Licensee shall be paid at the rate specified by the Commission for sale of electricity. For electricity supplied by the Licensee to the CPPs the CPPs shall pay as per clause 10.1

10. Tariff : A. Payable to the Licensee: 1. CPP 's eligible to sell power, may be allowed to choose either of the following two tariffs for buying
power from the licensee:

i. Tariff as per its eligibility in the consumer category, and contracted load. ii. Double the normal tariff for actual units consumed along with the demand charges etc. but
excluding minimum consumption guarantee charge.

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B. Payable by the Licensee:

1. The licensee may purchase power form captive power plants based on renewable sources and co
generators at Rs. 2.25 per unit for the year 199-2000 with a price escalation of 5% for each succeeding year.

2. The tariff for purchase of firm power by the licensee from the other categories of CPP's and for
generating units based on renewable sources/cogeneration solely engaged in sale of electricity and not employing any captive generation, will be on the basis of power purchase agreement to be entered with licensee and approved by the Commission.

11. Reduction in contract demand: 1. CPP's falling in the category of dedicated use, cogeneration or-renewable energy source, may apply
only once for reduction of contracted, load after one year of commissioning of CPP or as prescribed in distribution regulation/code which ever is later.

12. Environmental Clearance: 1. The CPP owner will have to abide by the emission standards set by the Union/State Governments. They
will have to obtain all the required environmental and pollution clearances from the central/State pollution control authorities and submit proof in this respect along with the application to facilitate the completion of project within the stipulated period.

13. Fuel: 1. CPP owner should clearly mention the fuel linkages in his application for CPP Government of India/State
Government guidelines regarding use of fuel shall be complied with. 2 Definitions :

1. The Act is the Uttar Pradesh Electricity Reforms Act, 1999 (Act 24 of 1999) 2. Banking of power is the process under which the captive power plant or a cogeneration supplies power to the
grid not with the intention of selling it to either a third party or to a Licensee, but with the intention of exercising his eligibility to draw back this power from the grid at a prescribed time, during next financial year, after deduction of the banking charge.

3. A captive power plant is defined as a power plant, which is set-up by a particular industry or group of info\dud
tries for their own use.

4. A captive Power Plant for Stand by is a power plant installed and used by the industry, for generation of electric
power when licensee supply is not available.

5. A Captive Power Plant For Dedicated use is a power plant installed by the industry for generation of electric
power for all times except when the plant is not available.

6. A Cogeneration Facility is defined as one which simultaneously produces two or more forms of useful energy
(e.g. electric power and steam electric pore and shaft (mechanical) power etc.). The qualifying requirement for cogeneration will be determined by the Ministry of Power resolution No. A-40/95-IPC-I dt. 06.11.96.

7. A consortium based dedicated captive power plant is a power plant owned by a group of industries for own use
at all times except when this plant is not available.

8. Contracted Demand is the Demand agreed to by the licensee for supply to the industry or any other user. 9. A firm power agreement is and agreement to sell a minimum of 500000 units of power per month per MW of
excess capacity permitted for over a year, between the CPP owner and the licensee.

10. Fossil fuels are fuels such as coal, oil and its derivatives such as naphtha, kerosene, fuel oil etc, or natural gas
etc, that are produced by very gradual decaying of animals or plants over millions of years.

11. HT consumer is one who receives power supply from the licensee at a voltage that is not less than 11 KV

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12. An infirm power agreement is an agreement to sell/buy power between the CPP owner and the licensee for a
period that is less than one year.

13. Licensee is one who holds the license for transmission or supply of electricity granted by UPERC or the Uttar
Pradesh Government.

14. Peak Demand is the maximum level of operating requirement placed on the system through usage by an
industry/any other user.

15. Renewable Energy Sources of Power are those sources such as wind, solar, small hydro (from 2 MW to 25
MW) mini hydro (From 100 KW to 2 MW ) micro hydro (up to 100 KW ) bio-gas, biomass, agro-based fuels or any other new sources as defined by the Ministry of Non-conventional Energy Sources (MNES) that can be used for power generation.

16. Renewable Energy based CPP is defined as a power plant based on only renewable energy sources set-up by
a particular industry or group of industries for their own use.

17. Third Party is a part/person who is any party/person other than the Licensee and the captive power plant

18. Wheeling is the movement of electricity from one system to another over transmission facilities of intervening
systems. Retail Wheeling of electric power is the purchasing of power by a retail consumer from a source other than the purchasers own serving Licensee. CATEGORY FEATURES Capacity Time of consent Sale of surplus power STAND BY Up to contracted demand 10 Yrs. Not allowed DEDICATED CO-GEN RENEWABLE No capacity restriction 10 Yrs. Allowed CONSORTIUM 1.5 times the peak demand 10 Yrs. Allowed To be decided by licensee and CPP owner Not Allowed N.A. N.A. Yes 12% of the energy wheeled As per consumption category and contracted load and/or Double the normal tariff for actual units consumed without the payment of consumption guarantee.

1.5 times the peak No capacity demand restriction 10 Yrs. 10 Yrs. Allowed To be decided by licensee and CPP owner Not Allowed N.A. Allowed Rs. 2.25 per unit in year 1999-2000 with 5% escalation Yes 2 years 12% of the energy Banked N.A.

Tariff of sale of N.A. power to Licensee Banking Banking Period Not Allowed N.A.

Banking charges N.A. Wheeling Not Allowed

Wheeling charges N.A. Tariff payable to the License As per the consumer category and contracted load

Rs. 2.25 per unit in year 1999-2000 with 5% escalation Yes 2 years 12% of the energy N.A. Banked Not Allowed Yes 12% of the energy N.A. N.A. wheeled As per As per As per consumption consumption consumption category and category and category and contracted load contracted load contracted load and/or Double the and/or Double the and/or Double the normal tariff for normal tariff for normal tariff for actual units actual units actual units consumed without consumed without consumed without the payment of the payment of the payment of consumption consumption consumption guarantee. guarantee. guarantee.

UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION IInd Floor, Kisan Mandi Bhawan, Vibhuti Khand, Gomti Nagar, Lucknow-226010 FORM : Consent for Setting up or for Capacity Addition Captive/Cogeneration/Renewable Energy Based Power Plant

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1. GENERAL : i. Name of Company ii. Address of Registered Office: iii. Postal Address for communication iv. Phone No. v. Fax No. vi. E-mail vii. Address of the proposed Captive Power Plant viii. Distribution division's Name & Address ix. *Particulars of processing fees paid (Original evidence to be sent to UPERC with Application) a. Demand Draft No. And Date. b. Amount
* Non refundable processing Fee (Playable by way of bank draft drawn in favour of the Secretary/UPERC on any Nationalized Bank, payable at Lucknow)

i. For power Plants below 1 MW Capacity Rs. 2,500/ii. For power Plants above 1 MW 2. Details of the Industry 1. Purpose of utilization of electricity supply (Names of the industrial products) 2. Brief description of the process of the Industry. iii. Does the industry have an environmental clearance From the Uttar Pradesh Pollution Control Board (If
yes, please enclose copy) Rs. 5,000/-

4. Peak power requirement of the industry. 5. Is the Industry of continuous process industry (If yes, please provide justification and details) 6. Amount of power required for the critical section (s) of continuous process industry. 7. Whether the industry requires stringent tolerance Limits in voltage and frequency (If yes, please provide
justification and details)

8. Amount of power required for the critical section (s) sensitive to voltage and frequency variation. 3. Particulars the existing Generating Units (s) i. Existing capacity of the CPP.

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ii. Capacity unit wise. iii. Dates of installation. iv. Reference of consent obtained from UPSEB/UPERC (Please enclose copy) 4. Particulars of proposed Generating Units (s) (New/Additional) i. Capacity in KVA/MVA. ii. Capacity in KW/MW iii. No. of Units. iv. Capacity of each unit. v. No. of Stand by units & their capacity. vi. Voltage of generation. vii. No. Of Phases. viii. Power Factor. ix. Technical specification of other equipment. x. Fuel (S) proposed to be used. xi. Fuel Linkages. 5. Details of proposed utilization of CPP and other operational details. i. Stand y set to run in emergency only (yes/no) ii. Free use without reference to the availability of supply in the Grid (Yes/no) iii. Is it a renewable energy based CPP? iv. If yes, please state what renewable resources your propose to use. v. Is it a cogeneration based CPP? vi. If yes please state whether it is a topping cycle or a bottoming cycle or both? vii. If it is topping cycle cogeneration plant please indicated the percentage (as a percentage of total input
heat) utilized in the process? Also enclose the process flow chart with heat and mass balances.

viii. What is the quantum of power generated from the topping cycle (KW.MW)? ix. If it is a bottoming cycle cogeneration plant please indicate the temperature and amount of waste heat
(K Cal/H) available (Also enclose process flow chart with heat & mass balances)

x. Will supplementary firing be adopted? xi. What will be the fuel for supplementary firing? xii. What is the quantum of power generated from the bottoming cycle cogeneration plant? (KW/MW) 6. Details of existing supply from Licensee: i. Name of Licensee ii. Date of Agreement

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iii. Contract demand KVA/MVA iv. Date of availing power supply. v. Voltage of Supply vi. Licensee tariff (Category) vii. Whether supply from licensee is in the category of continuous process industry. viii. Whether industry is permitted to draw power in peak hours. 7. Other Technical & Financial Particulars: i. If the capacity of the CPP is higher than the contracted demand please state reasons for such additional

ii. If CPP is proposed to be run only as a standby, what arrangements are proposed. iii. Estimated cost including IDC (interest during construction) iv. Cost per MW/KW of generating capacity. v. Cost per unit of generation a. First year b. Liveliest 6. Fixed cost per unit. 7. Variable cost per unit 8. Planned peak generation in MW 9. Operating Plant Load Factor. 10. Total annual requirement of electricity in millions of units by the industry. 11. Peak requirement of the industry in MW (Please also give actual peak demand met in last four years) 12. Voltage at which interconnection with Licensee system is desired. 13. Name & distance of the nearest sub-station of the Licensee for interconnection at the desired voltage. 14. Arrangements for synchronization, if the Generating units are proposed to be run in parallel. 8. Details regarding Banking/Wheeling/Third Party Sales. 1. What quantum of power in a year do you propose to a. Bank b. Wheel c. Sell to licensee d. Sell to third Party
(Please justify the reasons for banking/wheeling/Sell to licensee/Sell to third Party. If there is any such existing agreement with the licensee enclose the copy) Date : Signature

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Name of the Applicant Designation & Seal

Two Copies along with enclosures indicated below are to be sent to the relevant Licensee for necessary action. UPPCL

1. The Chief General Manager (PPA) UPPCL 14th Floor, Shakti Bhawan Ext. 14, Ashok Marg, Lucknow. 2. The General Manager (Concerned distribution Zone) if flow of power involve lines 33 KV and below. For power
flow on higher voltage, to the General Manager, (Concerned Transmission Area) KESCO : Managing Director, Kanpur Electricity Supply Company Limited, KESA House, 14/71, Civil Lines, Kanpur. NPCL: Chief Executive Officer, Noida Power Corporation Limited, A-46 Sector -26, Noida-201 301 Enclosures : Relevant documents from the following should be enclosed with the application :

1. Site map indicating location. 2. Technical details of Generating Set (S). 3. Single line diagram (details of interconnection at both ends. protection, interlocks. etc. 4. Single line diagram of power evacuation system for sale of power to licensee. 5. Letter of Consent for Establishment issued by Uttar Pradesh Pollution Control Board. 6. Statement of Interruption details. (During the last six months) 7. Statement of voltage and frequency variations during the last six months. (Applicable in case of industries
sensitive to quality of service).

8. In case of existing CPP copy of consent from erstwhile UPSEB under Sec. 44 of ES Act, 1948. 9. Copy of existing wheeling, banking sale of surplus power and third party sale agreement with erstwhile UPSEB. 10. Copy of agreement of supply with licensee. 11. Details of calculation of cost of generation. a. First year b. Liveliest 12. Original demand draft for processing fees. 13. Any other details (Considered necessary by applicant) 14. Process flow chart with heat & mass balances for cogeneration only. 15. Feasibility Report. 16. Copy of last paid electricity bill if consumer of licensee.
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