Академический Документы
Профессиональный Документы
Культура Документы
on CERC Discussion
Paper on Tariff
Norms
By
powergrid
CHARGES
POWERGRID views:
Transmission systems associated with Central
Sector energy:
Central generation shall have priority.
Beneficiaries to pay full transmission charges.
Wheeling parties
to settle / share transmission charges amongst
themselves.
to absorb the incremental transmission losses.
to pay fee to RLDCs for the extra efforts.
Transmission elements not associated with
Central generation:
Central generation shall not be assigned a priority
Transmission charges may be shared by all the
beneficiaries.
METHODOLOGY FOR SHARING OF
TRANSMISSION CHARGES
Charges for inter-regional lines
may be shared by two contiguous
regions on 50 : 50 basis.
may not be pooled in the respective
regions.
Charges for the regional assets may be
shared by the regional beneficiaries.
If an inter regional asset is used for
wheeling by a third party the balance
transmission charges may be shared by the
beneficiaries of the contiguous region on
50 : 50 basis.
METHODOLOGY FOR SHARING OF
TRANSMISSION CHARGES Cont…
POWERGRID views:
It will not affect POWERGRID as to how the
tariff is shared. However, in the present
scenario, it would increase the burden of the
ER beneficiaries.
Inter-regional links are established for
transfer of power both ways. Ideally, tariff
for such assets should be shared 1/3rd ,
1/3rd by the beneficiaries of both regions
and remaining 1/3rs as per use.
Charges should not be pooled in the
respective regions.
RATE OF RETURN
or
Administrative simplicity
ROCE approach:
Simple to administer in case
implemented on balance sheet basis.
In case of project-wise basis, normative
D:E ratio may skew the tariff with respect
to actual D:E ratio as ROE is higher than
prevailing rate of IOL.
Uncertainty and instability in the debt
market.
Till the market gets stabilized and is
predictable, the ROCE concept may not
RATE OF RETURN (Contd….)
Administrative simplicity
ROE approach:
ROE approach taking actual equity is more
scientific.
Present method of ROE @ 16% (post tax) and
IOL as per actual may be continued.
Gross Fixed Asset basis may be considered,
because, the Net Worth in the balance sheet
does not depreciate.
Thus return on Net Fixed Asset basis pulls
down the Return on Net Worth and sends
adverse signals to the lenders and investors
RATE BASE
POWERGRID Views:
Retain the existing approach of ROE.
Tariff to be fixed in two stages;
Provisional tariff- based on estimated
completion cost
Final tariff- final cost including remaining minor
works completed after COD.
Any expenditure on new works/services not
included in the approved cost or
replacement of assets/works arising out of
contingencies/accident may be admitted as
FOREIGN EXCHANGE RATE VARIATION
Payment of FERV, arising on account of interest
payments and payments of installments of loan, at
actuals, on quarterly or yearly basis.
Payment of FERV in accordance with Accounting
Standard-11 (AS-11)of Institute of Chartered
Accountants of India.
Payment of FERV in accordance with AS-11 of
Institute of Chartered Accountants of India after
dividing the FERV component into normative Debt
and Equity.
POWERGRID views:
FERV as per existing CERC norms for principal
repayment.
FERV on Interest payment may be made pass
INTEREST ON WORKING CAPITAL
Working Capital covers:
1 month Operation and maintenance
spares @1% of the capital cost less 1/5th of the initial
capitalized spares.
2 months Receivables
As per Tripartite Agreements (TPA) signed with
States under Securitisation Scheme, current dues
payable in not later than 60 days from the date of
billing, or within 45 days of their receipt,
whichever is later.
POWERGRID views:
Working Capital should cover 3 months
receivables.
OPERATION AND MAINTENANCE
CHARGES
As percentage of capital cost OR
As a bench mark cost per bay / per Ckt. KM for a
typical installation based on either average
normative O&M charges of all the regions or
normative O&M charges of the most efficient
region.
POWERGRID views.
• Most efficient region as norms would not reflect
the difficulties being faced in different regions.
• Present methodology of CERC takes care of the
actual expenses and technological advances with
time.
• Frequent failure of Converter Transformers needs
to be taken care of through appropriate provision
DEPRECIATION
CERC vide its tariff notification dated
26.03.2001, have revised the depreciation
rate to around 3%.
POWERGRID views.
Depreciation rate should be as per the
Schedule XIV of Companies Act 1956.
All power sector entities should be treated
as ‘continuous process plant’.
Advance against depreciation (AAD)
should also be allowed so as to cover
loan repayment.
INCENTIVE
Incentive beyond availability of 98%.
POWERGRID Views.
Transmission system is ageing.
Availability of sub station equipments is
comparable to that of generating plant, for which
the availability level is 85%.
Average total system availability should be 95% as
threshold.
Normative availability of converter transformers
should be fixed based on average availability over
last five years.
Concept of incentive is a time-tested
DEVELOPMENT SURCHARGE
Development Surcharge to be used for new
projects on regional basis upto maximum one
third of equity.
POWERGRID views.
Should be allowed for use on national basis for
system strengthening and inter-regional projects
without any conditionality.
Depreciation should be allowed on investment
made through development surcharge
ROE should be allowed on Development
surcharge
The ROE should be post tax.
TARIFF PERIOD & SURCHARGE
TARIFF PERIOD
stable over a longer period of time, preferably for 5
years period
INTEREST ON DELAYED PAYMENT OF
TRANSMISSION CHARGES
Present norm is interest @18% per annum, simple
interest.
In view of the TPA signed with status under
Securitisation Scheme, interest @15% per annum,
compounded quarterly should be introduced to
match with TPA provisions.
Thank
You