BEFORE THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION LUCKNOW

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1 BEFORE THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION LUCKNOW Petition no. 646/10 IN THE MATTER OF: AND IN THE MATTER OF Adoption of tariff obtained through competitive bidding process for 2x660 Sangam Power Generation Company Ltd. Petitioner: U.P. Power Corporation Limited ( through CMD) Shakti Bhawan, 14, Ashok Marg, Lucknow Respondent: Jaiprakash Associates Limited, Sector 128, Noida The following were present: 1. Mr. S.K.Agarwal, Director (Finance), UPPCL. 2. Mr B.L.Garoo, GM, Jaiprakash Associates Ltd. 3. Mr. Anil Sharma, Jaiprakash Associates Ltd. 4. Ms. M.N. Hasan, Consultant, Jaiprakash Associates Ltd. 5. Mr V.K.Verma, CE (Planning), UPPCL 6. Mr. S.A.Faruqi, EE, UPPCL 7. Mr. Deepak Raizada, Sr. AE, UPPCL 8. Mr. Kamal Dhawan, DGM, Jaiprakash Associates Ltd. 9. Mr. S.K.Agnihotri, AGM, NTPC. 10. Mr. K.B.Singh, DGM, NTPC. 11. Mr. Prashant Chaturvedi, Deputy Manager, NTPC. ORDER (Date of hearing ) This petition has been filed on for adoption of tariff for 2x660 MW Sangam Power Generation Company Ltd (SPGCL), Karchana, Distt. Allahabad under section 63 of the Electricity Act, The Petitioner has also submitted Power Purchase Agreement (PPA) for approval of the Commission. 1

2 The Government of U.P. has identified SPGCL, a Special Purpose Vehicle (SPV) created under Companies Act 1956, as the Nodel Agency for development of 2X660 MW Thermal Power Project at Karchana, Distt. Allahabad. It has been authorized by the Distribution Companies owned by UPPCL viz. Pashchimanchal Vidyut Vitran Nigam Limited (PaVVNL), Purvanchal Vidyut Vitran Nigam Limited (PVVNL), Madyanchal Vidyut Vitran Nigam Limited (MVVNL), Dakshinanchal Vidyut Vitran Nigam Limited (DVVNL), Kanpur Electricity Supply Company Limited (KESCO) (jointly referred to as Procurers ), to initiate Competitive Bidding Process for selection of developer as per Case-II Competitive Bidding Guidelines (CBG) issued by the Central Government. The Request for Qualification (RFQ) documents were approved by the Commission vide order dated UPPCL has submitted that SPGCL initiated the two stage bidding process as envisaged in the CBG. Total Fourteen (14) bidders participated in the RFQ stage and all of them were declared qualified after evaluation. The Request for Proposal (RFP) documents were approved by the Commission vide orders dated and UPPCL has submitted that only four bidders viz. M/s Jaiprakash Associates Ltd., M/s Adani Enterprises Ltd., M/s Lanco Infratech Ltd. and M/s Reliance Power Ltd. had submitted RFP responses till scheduled submission date i.e All the four technical bids were found responsive and therefore their financial bids were opened on The levelized tariffs per kwh quoted by four qualified bidders were Rs. 2.97, Rs , Rs and Rs respectively. Based on Meetings of the Bid Evaluation Committee constituted by U.P. Government, held on , and , a Letter of Intent (LOI) dated was issued by SPGCL to M/s Jaiprakash Associates Ltd. who emerged as the lowest bidder with levelized tariff of Rs. 2.97/kwh. The GoUP in its order no. 03-THA-676/ /07 dated states as follows: 2

3 **eq[; vfhk;ark] fu;kstu] m0iz0 ikoj dkjiksjs ku fy0 ds i= eq0v0¼fu0½ 2009 fnukad 19 Qjojh 2009 ds lanhkz esa le;d fopkjksijkur kklu }kjk fu.kz; fy;k x;k gs S fd buthz VkLd QkslZ dh lalrqfr;ksa ds vk/kkj ij djnuk rkih; ifj;kstuk ds fy, esllz t;izdk k, kksfl,v~l fy0 }kjk izlrqr : izfr ;wfuv ds ysfcykbtm VSfjQ dks Lohdkj djrs gq, bl ifj;kstuk dh LFkkiuk dk dk;z djus ds fy, esllz t; izdk k, kksfl,v~l fy0 dks fodkldrkz ds :Ik esa p;fur dj fy;k tk;a** Further as per the RFP conditions and in accordance to the UPERC order dt , the Share Purchase Agreement (SPA) was signed on by the Procurers with M/s Jaiprakash Associates Ltd. (JAL) and their affiliate M/s Jaiprakash Power Ventures Ltd. (JPVL). The PPA has been signed between the Procurers and the selected bidder SPGCL in accordance with the terms & conditions as finalized in the RFP bid documents on wherein Allocated Contracted Capacity for respective procurer is as below: Name of the Procurer Allocated Contracted Capacity (%) PaVVNL 40% MVVNL 20% PVVNL 20% DVVNL 15% KESCO 5% The details of the bids and signed PPA have been made public by Procurers by posting it on their web site. The signed PPA along with copies of Bid Evaluation Committee s MoM has been forwarded by the Petitioner for approval of the Commission. Although, as provided under clause 6.2 of CBG, the Petitioner had not filed with the petition the certificate of conformity confirming that the bid process has been carried out as per the guidelines but on direction of the Commission, the Petitioner has submitted the certificate of conformity dated

4 During the hearing, the Commission also enquired about the present status of the following activities: 1. Environmental clearance for the power station. 2. Handing over of possession of land. 3. Status of transmission system. 4. Right of way for the development of railway tracks and sidings. 5. Status of water lifting and pumping station. Sri S.K.Agarwal, Director (Finance), UPPCL stated that most of the clearances from Central and State Authorities have been obtained. The construction of evacuation system has been taken up through Public Private Partnership (PPP) and would be completed within two and half years. The handing over of land would also be completed very shortly. Sri Kamal Dhawan, DGM, Jaiprakash Associates Ltd. stated that they have set up an office at Allahabad and have placed orders for detailed design and BTG for the project. The Commission also enquired whether the Respondent would be able to complete the project within the specified period as timely completion of project is necessary for the benefit of the State. Sri Kamal Dhawan asserted that they would try their best to bring the project well within stipulated time. He added that they would start mobilization of material to the site within one month. Sri S.K. Agarwal suggested that the Respondent should make a PERT chart to properly monitor the progress of work as per schedule and to submit quarterly progress of work to the Commission. Sri S.K. Agarwal further requested for adoption of tariff and approval of PPA. The Share Purchase Agreement (SPA) has been signed on As per clause 1.1 of PPA, according to the provisions of SPA, the date of acquisition of 100% equity share holding of the Seller by the selected Bidder i.e shall be considered as Effective Date. The Petitioner has linked the Commercial Operation Dates (COD) of the units with Effective date, whereas, the Commission s order dated in Pet. no. 560/08 and dated in Pet. no. 502/07 categorically specifies that the COD shall be linked to the date of Letter of Intent (LOI). Hence, it requires modification. 4

5 Under clause A (i) of PPA, the Procurer has to obtain approval of the Commission for adopting the tariff and quantum as per section 63 of the Electricity Act, 2003 which stipulates that the Commission shall adopt the tariff if such tariff has been determined through transparent bidding process in accordance with the guidelines issued by the Central Government. In light of above, the Commission concludes that the Petitioner has followed the guidelines issued by the Central Government under CBG for procurement of power under Case-II through transparent process of bidding and submitted the certificate of conformity to these guidelines. Therefore, the Commission adopts the levelized tariff of Rs. 2.97/kwh for a period of 25 years from the respective CODs of the two units of 660 MW each of SPGCL. The date of LOI is The Commission approves the PPA with following COD: 1. The COD of first unit shall be considered not later than 54 months from the date of LOI. As such the COD of first unit shall be on or before The COD of second unit shall be considered not later than 59 months from the date of LOI i.e. on or before The petition is disposed of. ( Rajesh Awasthi ) Chairman Lucknow; Dated: 27 th August,

Petition No 768 of 2011 BEFORE THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION LUCKNOW. Date of Order :

Petition No 768 of 2011 BEFORE THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION LUCKNOW Date of Order : 04.11.2011 IN THE MATTER OF: Approval of determined transfer price of fuel and revised Request