TRANSMISSION SERVICE AGREEMENT

Transcription

1 TRANSMISSION SERVICE AGREEMENT

2 INDEX Sl.No. Contents Page No. 1. Definitions and Interpretations 3 2. Parties to the Agreement Effectiveness of the Agreement Description of ISTS Development of New ISTS Schemes Construction of the New ISTS Schemes Connection and Commissioning of the ISTS Schemes Operation and maintenance of the ISTS Schemes Availability of the ISTS Scheme Grant of Connection and Provision of Access to the ISTS Declaration and approval of Contracted Capacity at each node or aggregation of nodes in the ISTS for each designated ISTS Customer(DIC) Transmission Charges Transmission Losses Metering and Accounting Billing, Collection and Disbursment of Transmission Losses Disbursement by CTU to ISTS Licensees Force Majeure Change in Law Event of Default and Termination Assignments and Charges Governing Law and Dispute Resolution Representations and Warranties 53 1

3 AGREEMENT This Agreement is made on this [ ] day of [ ] of [201_] by and between the persons whose names and registered offices are set out in Schedule 1 WHEREAS A. This Transmission Service Agreement (TSA) is entered into between the Designated ISTS Customers (DICs) and the ISTS Licensees, pursuant to and in accordance with CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010, duly reflecting the provision of inter-state transmission services and charging for the same, as approved from time to time. B. The Central Transmission Utility (CTU) is entering into this Transmission Service Agreement with all ISTS Licensees and the Designated Interstate Transmission Customers (DICs) to govern the provision of transmission services and charging for the same from the DICs as per this TSA and disburse the share in the transmission charges collected by the CTU to the respective ISTS licensee as per the Revenue Sharing Agreement (RSA) and in accordance with CERC (Sharing of Inter State Transmission Charges and Losses) Regulations,

4 C. This Transmission Service Agreement shall be the default Transmission Service Agreement and shall mandatorily apply to all Designated ISTS Customers. Signing of this Transmission Service Agreement shall not be a pre-condition for construction of new network elements by the CTU and ISTS Licensees, provided that such network construction is undertaken after due approval of the CERC. D. This Transmission Service Agreement may be amended from time to time by the signatories without the entire agreement being replaced or being rendered infructuous. E. The existing Bulk Power Transmission Agreements or such agreements (including those entered into pursuant to award of any transmission project under competitive bidding), as entered into between CTU or ISTS Licensee and a DIC shall stand modified by this Transmission Service Agreement upon approval of the CERC, to the extent of such provisions as related to sharing of transmission charges by the Designated ISTS Customers, as identified in these agreements. F. The persons listed in Schedule 1 are parties to this Transmission Service Agreement, any new DIC or ISTS Licensee, for the purpose of availing or providing inter state transmission services, as the case may be, shall enter into a Supplementary Agreement (Formats at Exhibits A, B) pursuant to this Transmission Service Agreement thereby binding itself to this Agreement. Articles 1 Definitions and Interpretations 1.1 Definitions The words/expressions used in this Agreement, unless as defined below or repugnant to the context, shall have the same meaning as assigned to them by the Electricity Act, 2003 and the rules or regulations framed there under including those issued/framed by CERC (as defined hereunder), as amended or re-enacted from time to time or the General Clauses Act, failing which it shall bear its ordinary English meaning. The words/expressions when used in this Agreement shall have the respective meanings as specified below: 3

5 "Act" means the Electricity Act, 2003 (36 of 2003) and any amendments made to the same or any succeeding enactment thereof; Application Period means the period of application of the charges determined as per these regulations and shall ordinarily be 12 (twelve) months coinciding with the Financial Year, which shall be further divided into multiple blocks of months representing the seasonal conditions and peak and other than peak conditions; Approved Injection means the injection in MW vetted by Implementing Agency (IA) for the Designated ISTS Customer for each representative block of months, peak and other than peak scenarios at the ex-bus of the generator or any other injection point of the Designated ISTS Customer into the ISTS, and determined based on the generation data submitted by the Designated ISTS Customers incorporating total injection into the grid, considering the long term and medium term contracts; Approved Additional Medium Term Injection means the additional injection, as per the Medium Term Open Access approved by CTU after submission of data to NLDC by the Designated ISTS Customer over and above the Approved Injection for the Designated ISTS Customer for each representative block of months, peak and off-peak scenarios at the ex-bus of the generator or any other injection point of the Designated ISTS Customer into the ISTS; Approved Short Term Injection means the injection, as per the Short Term Open Access approved by RLDC / NLDC such injection including all injections cleared on the power exchange; Approved Withdrawal means the simultaneous withdrawal in MW vetted by Implementing Agency for any Designated ISTS Customer in a control area aggregated from all nodes of ISTS to which Designated ISTS Customer is connected for each representative block of months, peak and other than peak scenarios at the interface point with ISTS, and where the Approved Withdrawal shall be determined based on the demand data submitted by the Designated ISTS Customers. incorporating long term and medium term transactions; Approved Additional Medium Term Withdrawal means additional withdrawal, as per the Medium Term Open Access approved by CTU after submission of data to NLDC by the Designated ISTS Customer over and above Approved Withdrawal for Designated ISTS Customers aggregated from all nodes of ISTS for each representative block of months, peak and other than peak scenarios at the interface point with the ISTS; 4

6 Approved Short Term Withdrawal means withdrawal, as per the Short Term Open Access approved by RLDC/NLDC and where such Withdrawal includes all withdrawals cleared on the power exchange; "Availability" shall mean and be calculated in accordance with CERC (Terms and Conditions of Tariff) Regulations, 2009 and any amendment thereof; "Business Day" shall mean a day other than Sunday or a statutory holiday, on which the banks remain open for business in the State in which the Party s registered office is located; CEA shall mean the Central Electricity Authority constituted under Section -70 of the Electricity Act; CERC shall mean the Central Electricity Regulatory Commission of India constituted under Section-76 of the Electricity Act, 2003 or its successors; "Central Transmission Utility" or CTU shall mean the utility notified by the Central Government under Section-38 of the Electricity Act, 2003; Change in law shall have the meaning ascribed thereto in Clause 14 Commercial Operation Date or COD shall mean the date as per Article 7.2 Competent Court of Law shall mean the Supreme Court or any High Court, or any tribunal or any similar judicial or quasi-judicial body in India that has jurisdiction to adjudicate upon issues relating to the ISTS Scheme; "Consultation Period" shall mean the period of sixty (60) days or such longer period as the concerned DIC and the concerned ISTS Licensee may agree, commencing from the date of issue of notice, as provided in Clause 15 of this Agreement, for consultation to mitigate the consequence of the relevant event having regard to all the circumstances; "Consents, Clearances and Permits" shall mean all authorizations, licenses, approvals, registrations, permits, waivers, privileges, acknowledgements, agreements, or concessions required to be obtained from or provided by any Indian Governmental Instrumentality for the development, execution and operation of any part of ISTS network including without any 5

7 limitation for the construction, ownership, operation and maintenance of the concerned Transmission Lines and/or sub-stations; Deemed Inter State Transmission System or Deemed ISTS means such transmission system which has regulatory approval of the CERC as being used for interstate transmission of power and qualified as ISTS Designated ISTS Customers or DICs means the users of any segments/elements of the ISTS and shall include all generators, state transmission utilities, State Electricity Boards (SEBs) or load serving entities directly connected to the ISTS including Bulk Consumer and any other entity/person; "Due Date" in relation to any Invoice shall mean the thirtieth (30 th ) day after the date on which any Invoice is received and duly acknowledged by the DIC, and by such date, the Invoice is payable by the DIC; Demand Customers shall mean State Electricity Boards / State Transmission Utilities connected with ISTS (on behalf of distribution companies, generators and other bulk customers connected to the transmission system owned by the SEB/STU/intrastate transmission licensee) or any bulk consumer directly connected with the ISTS; Effective Date for the purposes of this Agreement, shall have the same meaning as per Clause 3 of this Agreement; "Element" shall mean each Transmission Line or each circuit of the Transmission Lines (where there are more than one circuit) or each bay of Sub-station or switching station or HVDC terminal or inverter station that are part of the ISTS; Expiry Date shall be the date which is 25 (twenty five) years from the date of issue of Transmission License or such extended period as granted by the CERC; Financial Year shall mean a period of twelve months at midnight Indian Standard Time (IST) between 1st April & 31st March; "Financing Agreements" shall mean the agreements pursuant to which the concerned ISTS Licensee is to finance its part of the ISTS including the loan agreements, security documents, notes, indentures, security agreements, letters of credit and other documents, 6

8 as may be amended, modified, or replaced from time to time, but without in anyway increasing the liabilities of the DICs; "Force Majeure" and "Force Majeure Event" shall have the meaning assigned thereto in Clause 17; Generators shall mean power stations / generating stations that are regional entities as defined in the Indian Electricity Grid Code (IEGC); Grid Code or IEGC shall mean the Grid Code specified by the Central Electricity Regulatory Commission under Clause (h) of sub-section (1) of Section 79 of the Electricity Act; Implementing Agency shall mean the agency designated by the CERC to undertake the estimation of allocation of transmission charges and transmission losses at various nodes/zones for the Application Period along with other functions as per the CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010; Independent Engineer shall mean the Person(s) and/or agency appointed by Indian Government Instrumentality in order to exercise oversight over the ISTS Scheme of the ISTS Licensee as per his appointed terms and conditions; "Indian Governmental Instrumentality" shall mean Government of India, Government of any State in India or any ministry, department, board, authority, agency, corporation, commission under the direct or indirect control of Government of India or any State Government or both, any political sub-division of any of them including any court or Appropriate Commission or tribunal or judicial or quasi-judicial body in India; Inter-State Generating Station or ISGS has the meaning as assigned in the Indian Electricity Grid Code specified by the CERC; Inter-State Transmission System or ISTS has the meaning as assigned in the The Electricity Act, 2003; ISTS Licensee means the company to whom the Transmission License has been granted by CERC; 7

9 ISTS Scheme means any scheme for development of inter-state transmission systems in consonance with the National Electricity Plan; "Letter of Credit" or "LC" shall mean an unconditional, irrevocable, revolving Letter of Credit opened by a DIC in favour of the CTU with any scheduled bank; "Lenders" means the banks, financial institutions, multilateral funding agencies, non banking financial companies registered with the Reserve Bank of India (RBI), mutual funds, etc., including their successors and assigns, who have agreed to provide the concerned ISTS Licensee with the senior debt financing described in the capital structure schedule, and any successor banks or financial institutions to whom their interests under the Financing Agreements may be transferred or assigned; Provided that, such assignment or transfer shall not relieve the concerned ISTS Licensee of its obligations to the DICs under this Agreement in any manner and shall also does not lead to an increase in the liability of any of the DICs; "Lenders Representative" shall mean the person notified by the Lenders in writing as being the representative of the Lenders and such person may from time to time be replaced by the Lenders pursuant to the Financing Agreements by written notice to the concerned ISTS Licensee; Long-term access means the right to use the Inter-State Transmission System for a period exceeding 12 years but not exceeding 25 years; Long-term customer means a person who has been granted long-term access and includes a person who has been allocated central sector generation that is electricity supply from a generating station owned or controlled by the Central Government; Loss Allocation Factor of a bus measures the losses attributed to that node and shall be computed pursuant to and in accordance with CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010; Medium-term open access means the right to use the Inter-State Transmission System for a period exceeding 3 months but not exceeding 3 years; Medium-term customer means a person who has been granted medium-term open access; 8

10 Month shall mean a period of thirty (30) days from (and excluding) the date of the event; Monthly Transmission Charge means the transmission charges (inclusive of incentives) payable for each calendar month as given in the CERC (Terms and Conditions of Tariff) Regulations in force; "Party" shall mean a signatory to this Agreement, which shall be a DIC or an ISTS Licensee, and "Parties" shall mean a joint reference to all the signatories to this Agreement, which shall be all the DICs and all the ISTS Licensee; Point of Connection (PoC) Charging Method shall mean the methodology of computation of sharing of ISTS charges and losses amongst Designated ISTS Customers, which depends on the location of the node in the grid and is calculated in accordance with CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010 and as amended from time to time; Point of Connection Transmission Charges or PoC Charges are the nodal / zonal charges determined using the Point of Connection Charging Method; "Prudent Utility Practices" shall mean the practices, methods and standards that are generally accepted internationally from time to time by electric transmission utilities for the purpose of ensuring the safe, efficient and economic design, construction, commissioning, operation, repair and maintenance of any part of the ISTS network and which practices, methods and standards shall be adjusted as necessary, to take account of: a. operation, repair and maintenance guidelines given by the manufacturers, b. the requirements of Law, and c. the physical conditions at the Site Regulation shall mean such regulatory averments as contained in orders/notifications/records of proceedings etc. as issued from time to time by the concerned regulatory entity. "Scheduled Outage" shall mean the final outage plan, as approved by the RPC, as per the provisions of the Indian Electricity Grid Code; "Site" in relation to a substation, switching station or HVDC terminal or inverter station, shall mean the land and other places upon which such station / terminal is established; 9

11 "Transmission Lines" shall mean all high pressure cables and overhead lines (not being an essential part of the distribution system of a licensee) transmitting electricity from a generating station to another generating station or a sub-station, together with any step-up and step-down transformers, switch-gear and other works necessary to and used for the control of such cables or overhead lines, and such buildings or part thereof as may be required to accommodate such transformers, switchgear and other works; Transmission Service Agreement or this Agreement means this agreement together with the Schedules, Exhibits, and Documents referred to therein, as may be amended or modified from time to time; "Unscheduled Outage" shall mean an interruption resulting in reduction of the Availability of an Element of the ISTS that is not a result of a Scheduled Outage or a Force Majeure Event; Yearly Transmission Charge or YTC means the Annual Transmission Charges for existing lines determined by the CERC in accordance with its Terms and Conditions of Tariff Regulations or adopted by the CERC in the case of tariff based competitive bidding in accordance with the Transmission License Regulations as specified by the CERC and as in force from time to time and for new lines based on benchmarked capital costs. 10

12 1.2 Interpretations Save where the contrary is indicated, any reference in this Agreement to: Agreement" shall be construed as including a reference to its Schedules, Exhibits; "Rupee", "Rupees" and shall denote lawful currency of India; crore shall mean a reference to ten million (10,000,000) and a lakh shall mean a reference to one tenth of a million (1,00,000); "encumbrance" shall be construed as a reference to a mortgage, charge, pledge, lien or other encumbrance securing any obligation of any person or any other type of preferential arrangement (including, without limitation, title transfer and retention arrangements) having a similar effect; "holding company" of a company or corporation shall be construed as a reference to any company or corporation of which the other company or corporation is a subsidiary; "indebtedness" shall be construed so as to include any obligation (whether incurred as principal or surety) for the payment or repayment of money, whether present or future, actual or contingent; "person" shall be construed as a reference to any person, firm, company, corporation, society, trust, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) of two or more of the above and a person shall be construed as including a reference to its successors, permitted transferees and permitted assigns in accordance with their respective interests; "subsidiary" of a company or corporation (the holding company) shall be construed as a reference to any company or corporation: (i) which is controlled, directly or indirectly, by the holding company, or (ii) more than half of the issued share capital of which is beneficially owned, directly or indirectly, by the holding company, or (iii) which is a subsidiary of another subsidiary of the holding company, for these purposes, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body; "winding-up", "dissolution", "insolvency", or "reorganization" of a company or corporation shall be construed so as to include any equivalent or analogous proceedings under the Law of the jurisdiction in which such company or corporation is incorporated or any 11

13 jurisdiction in which such company or corporation carries on business including the seeking of liquidation, winding-up, re-organization, dissolution, arrangement, protection or relief of debtors Words importing the singular shall include the plural and vice versa This Agreement itself or any other agreement or document shall be construed as a reference to this or to such other agreement or document as it may have been, or may from time to time be, amended, varied, novated, replaced or supplemented A Law shall be construed as a reference to such Law including its amendments or reenactments from time to time A time of day shall, save as otherwise provided in any agreement or document be construed as a reference to Indian Standard Time Different parts of this Agreement are to be taken as mutually explanatory and supplementary to each other and if there is any inconsistency between or among the parts of this Agreement, they shall be interpreted in a harmonious manner so as to give effect to each part The tables of contents and any headings or sub-headings in this Agreement have been inserted for ease of reference only and shall not affect the interpretation of this Agreement All interest payable under this Agreement shall accrue from day to day and be calculated on the basis of a year of three hundred and sixty five (365) days The words hereof or herein, if and when used in this Agreement shall mean a reference to this Agreement. 12

14 2 Parties to the Agreement 2.1 Existing Designated ISTS Customers (DICs) & ISTS Licensees The DICs and ISTS Licensees, as mentioned in Schedule 1, shall enter into this Agreement and bind themselves to the terms of this Agreement In the event of any conflict between the existing BPTAs and this Agreement, the terms of this Agreement shall supersede An ISGS who was not a signatory to BPTA too shall enter into this Agreement and bind itself to the terms of this Agreement 2.2 New Designated ISTS Customers (DICs) & ISTS Licensees This Agreement shall be acceded to by all new DICs intending to connect to and/or use the ISTS This Agreement shall be acceded to by all new ISTS Licensees intending to provide ISTS services and to develop and maintain any part of the ISTS network Any new DIC or ISTS Licensee shall become a party to this Agreement subject to and in accordance with the provisions of this Agreement by execution of Supplementary Agreement, as shown in Exhibit A, by such DIC or ISTS Licensee and the CTU Each Party hereby irrevocably and unconditionally authorises CTU to execute on behalf of such Party any Supplementary Agreement duly executed by the new DIC or ISTS Licensee, as the case may be, and to thereby admit the new DIC or ISTS Licensee, as the case may be, as a Party to this Agreement Upon execution of the Supplementary Agreement by both CTU and the new DIC or ISTS Licensee in accordance with Clause 2.2.4, the new DIC or ISTS Licensee shall become a Party to this Agreement. 2.3 Non-ISTS Licensees whose assets have been certified as being used for interstate 13

15 transmission by the RPCs shall be considered deemed signatories to this Agreement and therefore all such rights and obligations, as applicable to ISTS Licensees shall be applicable to them mutatis mutandis. 14

16 3 Effectiveness of the Agreement 3.1 With respect to each of the existing DICs and ISTS Licensees, this Agreement shall be effective with effect from 01 January 2011 or any such date as amended by CERC. 3.2 With respect to new DICs and ISTS Licensees, they will be Party to this Agreement from the date of signing of the relevant Supplementary Agreement, as executed by the CTU and the new DIC or ISTS Licensee, as the case may be. 3.3 With respect to Non-ISTS Licensees whose assets have been certified as being used for interstate transmission by the Regional Power Committees (RPCs), this Agreement shall be effective with effect from the date of such approval or certification coming into force. 3.4 With effect from the Effective Date, each Party undertakes to each other Party to comply with and to perform its obligations in accordance with and subject to this Agreement. 15

17 4 Description of ISTS 4.1 Existing ISTS The list of transmission system presently owned, operated and maintained by ISTS Licensees including Powergrid in India is detailed in Schedule Any transmission line and/or substation and/or transformer that may be added to the transmission system detailed in Clause and declared for commercial operation by the concerned ISTS Licensee will be intimated to the DICs by the ISTS Licensee, as and when these are declared for commercial operation. Such addition shall form a part of Schedule 2 of this Agreement and shall be governed by the terms and conditions as contained herein. 4.2 Deemed ISTS The provisions of this Agreement shall be applicable to Deemed ISTS, as approved by CERC. 4.3 New ISTS Schemes ISTS Schemes identified in consultation with the stakeholders, by CTU and CEA ISTS Scheme to be implemented by CTU ISTS Scheme identified by the Empowered Committee The provisions of this Agreement shall be applicable to such ISTS Schemes, as identified by the Empowered Committee under Guidelines for encouraging competition in development of transmission projects and competitive-bidding for transmission service notified by the Ministry of Power, Government of India; and any amendment made thereof ISTS Schemes as approved by the CERC as per CERC (Grant of Regulatory Approval for execution of Inter State Transmission Scheme to CTU) Regulations

18 5 DEVELOPMENT OF NEW ISTS SCHEMES 5.1 ISTS Licensee s obligations in development of the ISTS Scheme Contract Performance Guarantee a. In case of new ISTS schemes to be developed as described in Clause a Contract Performance Guarantee needs to be submitted by the concerned ISTS Licensee within thirty (30) days from the date of issue of Letter of Intent, to the CTU. The Contract Performance Guarantee would be computed on the basis of. 6 lakhs per km for the total Transmission Line length (including all 765 kv, 400 kv and other lines irrespective of conductors per phase, substations, switching stations, transformers etc.) of the ISTS Scheme. b. The format of Bank Guarantee is provided at Exhibit B. c. The Contract Performance Guarantee shall be initially valid for a period up to three (3) months after the Scheduled COD of the ISTS Scheme and shall be extended from time to time to be valid for a period up to three (3) months after the COD of the ISTS Scheme. In case the validity of the Contract Performance Guarantee is expiring before the validity specified in this Clause, the concerned ISTS Licensee shall, at least thirty (30) days before the expiry of the Contract Performance Guarantee, replace the Contract Performance Guarantee with another Contract Performance Guarantee or extend the validity of the existing Contract Performance Guarantee until the validity period specified in this Clause Subject to the terms and conditions of this Agreement, the ISTS Licensee at its own cost and expense shall observe, comply with, perform, undertake and be responsible: a. for procuring and maintaining in full force and effect all Consents, Clearances and Permits, required in accordance with Law for development of the ISTS Scheme; b. for financing, constructing, owning and commissioning each of the 17

19 Element of the ISTS Scheme in accordance with: i. the Grid Code, the grid connectivity standards applicable to the Transmission Line and the sub-station as per the Central Electricity Authority (Technical Standards for Connectivity to the Grid) Regulations, 2007 and other Regulations as may be notified from time to time including the following but not limited to them: CEA (Technical Standards for construction, operation and maintenance of Electrical Plants and Electric Lines) Regulation, 2008 CEA (Safety requirements for construction, operation and maintenance of transmission lines) Regulation, 2008 CEA (Grid Standards for operation and maintenance of transmission lines) Regulation, 2006 CEA (Safety and electricity supply) Regulation, 2008; ii. Prudent Utility Practices and the Law; not later than the Scheduled COD c. for entering into a Connection Agreement with the CTU/STU (as applicable) in accordance with the Grid Code. d. to co-ordinate and liaise with concerned agencies and provide on a timely basis relevant information with regard to the specifications of the ISTS Scheme that may be required for interconnecting the ISTS Scheme with the Interconnection Facilities; e. for providing all assistance to the Arbitrators as they may require for the performance of their duties and responsibilities; f. to provide to the CEA with a copy to CTU, on a quarterly basis, 18

20 progress reports with regards to the ISTS Scheme and its execution (in accordance with Agreed Form) to enable the CEA/CTU to monitor and co-ordinate the development of the ISTS Scheme matching with the Interconnection Facilities. g. for complying with all its obligations undertaken in this Agreement. 5.2 DICs obligations in implementation of the New ISTS Schemes: Subject to the terms and conditions of this Agreement, the concerned DICs, at their own costs and expense undertake to be responsible; a. for assisting and supporting the concerned ISTS Licensee in obtaining the Consents, Clearances and Permits required for the ISTS Scheme and in obtaining any applicable concessions for the ISTS Scheme, by providing letters of recommendation to the concerned Indian Governmental Instrumentality, as may be requested by the concerned ISTS Licensee from time to time; b. for arranging and making available the Interconnection Facilities to enable the ISTS Licensee to connect the ISTS Scheme; c. for complying with all their obligations under this Agreement, and d. for providing all assistance to the Arbitrators as they may require for the performance of their duties and responsibilities. 5.3 Time for Commencement and Completion: a. The ISTS Licensee shall undertake all necessary steps to commence work on the ISTS Scheme from the Effective Date of the Supplementary Agreement and shall achieve Scheduled COD of the ISTS Scheme as per the Supplementary Agreement b. The COD of each Element of the ISTS Scheme shall occur no later than the Scheduled COD or within such extended time to which the ISTS Licensee shall be entitled under 5.4 hereto. 19

21 5.4 Extension of time: In the event that the ISTS Licensee is prevented from performing its obligations under Clause 5.1.2(a), (b) and (d) by the stipulated date, due to an Event of Default of the DIC concerned, the Scheduled COD shall be extended, by a day for day basis, subject to the provisions of Clause In the event that an Element or the ISTS Scheme cannot be commissioned by its Scheduled COD on account of any Force Majeure Event as per Clause 17, the Scheduled COD shall be extended, by a day for day basis, for a maximum period of one hundred and eighty (180) days. In case the Force Majeure Event continues even after the maximum period of one hundred and eighty (180) days, the ISTS Licensee or the CTU may choose to terminate the Agreement If the Parties have not agreed, within thirty (30) days after the affected Party s performance has ceased to be affected by the relevant circumstance, on how long the Scheduled COD should be deferred by, any Party may raise the Dispute to be resolved in accordance with Clause

22 6 CONSTRUCTION OF NEW ISTS SCHEMES 6.1 ISTS Licensee s Construction Responsibilities: The ISTS Licensee, at its own cost and expense, shall be responsible for designing, constructing, erecting, completing and commissioning each Element of the ISTS Scheme by the Scheduled COD in accordance with the Central Electricity Authority (Technical Standards for Connectivity to the Grid) Regulations, 2007, Prudent Utility Practices and all the codes/regulations as and when notified by the competent authority including the following but not limited to them: CEA (Technical Standards for construction, operation and maintenance of Electrical Plants and Electric Lines) Regulation, 2008 CEA (Safety requirements for construction, operation and maintenance of transmission lines) Regulation, 2008 CEA (Grid Standards for operation and maintenance of transmission lines) Regulation, 2006 CEA (Safety and electricity supply) Regulation,2008 and other applicable Laws The ISTS Licensee acknowledges and agrees that it shall not be relieved from any of its obligations under this Agreement or be entitled to any extension of time by reason of the unsuitability of the Site or Transmission Line route(s) for whatever reasons. The ISTS Licensee further acknowledges and agrees that it shall not be entitled to any financial compensation in this regard unless except to the extent approved by the CERC. In case such a compensation is allowed, it shall be adjusted in ISTS Licensee s next year s YTC The ISTS Licensee shall be responsible for obtaining all Consents, Clearances and Permits relating but not limited to road / rail / river / canal / power line / crossings, Power and Telecom Coordination Committee (PTCC), defence, civil aviation, right of way / way-leaves and environmental & forest clearances from relevant authorities required for developing, financing, constructing, maintaining/ renewing all such Consents, Clearances and Permits in order to carry out its 21

23 obligations under this Agreement in general and Clause in particular and shall furnish to the CEA promptly with copy/ies of each Consents, Clearances and Permits, which it obtains The ISTS Licensee shall be responsible for: (a) acquisition of land for location specific substations, switching stations or HVDC terminal or inverter stations; (b) final selection of Site including its geo-technical investigation; (c) survey and geo-technical investigation of line route in order to determine the final route of the Transmission Lines; (d) seeking access to the Site and other places where the ISTS Scheme is being executed, at its own costs, including payment of any crop compensation or any other compensation as may be required In case the ISTS Scheme involves any resettlement and rehabilitation, the resettlement and rehabilitation package will be implemented by the State Government authorities, for which the costs is to be borne by the ISTS Licensee and no changes would be allowed in the Transmission Charges on account of any variation in the resettlement and rehabilitation cost. The ISTS Licensee shall provide assistance on best endeavour basis, in implementation of the resettlement and rehabilitation package, if execution of such package is in the interest of expeditious implementation of the ISTS Scheme and is beneficial to the persons affected by the construction of the said ISTS Scheme. 6.2 Appointing Contractors: The ISTS Licensee shall conform to the requirements as provided in this Agreement while appointing Contractor(s) for procurement of goods & services The appointment of such Contractor(s) shall neither relieve the ISTS Licensee of any of its obligations under this Agreement nor make the concerned DICs liable for the performance of such Contractor(s). 22

24 6.3 Quarterly Progress Reporting: The ISTS Licensee shall provide to the CTU/CEA, on a quarterly basis, progress reports vetted by Independent Engineer with regards to the ISTS Scheme and its execution (in accordance with Agreed Form) to enable the CTU/CEA to monitor and co-ordinate the development of the ISTS Scheme, matching with the Interconnection Facilities. 6.4 Quality of Workmanship: The ISTS Licensee shall ensure that the ISTS Scheme is designed, built and completed in a good workmanlike manner using sound engineering and construction practices, and using only materials and equipment that are new and of international utility grade quality such that the useful life of the ISTS Scheme will be till the Expiry Date. The ISTS Licensee shall ensure that design, construction and testing of all equipment, facilities, components and systems of the ISTS Scheme shall be in accordance with Indian Standards and Codes issued by Bureau of Indian Standards and only in case they are not applicable under certain conditions, the other equivalent internationally recognized Standards and Codes shall be followed. 6.5 Site regulations and Construction Documents The ISTS Licensee shall abide by the Safety Rules and Procedures as mentioned in Schedule 5 of this Agreement The ISTS Licensee shall retain at the Site and make available for inspection to the CEA at all reasonable times copies of the Consents, Clearances and Permits, construction drawings and other documents related to construction. 6.6 Supervision of work: The ISTS Licensee shall provide all necessary superintendence for execution of 23

25 the ISTS Scheme and its supervisory personnel shall be available to provide fulltime superintendence for execution of the ISTS Scheme. The ISTS Licensee shall provide skilled personnel who are experienced in their respective fields. 6.7 Remedial Measures: The ISTS Licensee shall take all necessary actions for remedying the shortfall in achievement of timely progress in execution of the ISTS Scheme, if any, as intimated by the Independent Engineer/CEA. However, such intimation and the subsequent effect of such remedial measures carried out by the ISTS Licensee shall not relieve the ISTS Licensee of its obligations in the Agreement. CEA/CTU may carry out random inspections during the execution of the ISTS Scheme, as and when deemed necessary by it. If the shortfalls as intimated to the ISTS Licensee are not remedied to the satisfaction of the CEA, it may refer the same to the CERC for appropriate action. 24

26 7 CONNECTION AND COMMISSIONING OF NEW ISTS SCHEMES 7.1 Connection with the Inter-Connection Facilities: The ISTS Licensee shall give the RLDC(s), CTU, the concerned DICs and any other agencies as required at least sixty (60) days advance written notice of the date on which it intends to connect an Element of the ISTS Scheme, which date shall be not earlier than its Scheduled COD or Schedule COD extended as per Clause of this Agreement, unless the concerned DICs otherwise agrees The RLDC or the CTU, for reasonable cause, including failure to arrange for Interconnection Facilities as per Clause 5.2, defer the connection for up to fifteen (15) days from the date notified by the ISTS Licensee pursuant to Clause if it notifies to the ISTS Licensee in writing, before the date of connection, of the reason for the deferral and when the connection is to be rescheduled. However, no such deferment on one or more occasions would be for more than an aggregate period of 30 days. Further, the Scheduled COD would be extended as required, for all such deferments on day for day basis Subject to Clauses and 7.1.2, any Element of the ISTS Scheme may be connected with the Interconnection Facilities when: a. it has been completed in accordance with this Agreement and the Connection Agreement; and b. it meets the Grid Code, Central Electricity Authority (Technical Standards for Connectivity to the Grid) Regulations, 2007 and all other Indian legal requirements and c. The ISTS Licensee has obtained the approval in writing of the Electrical Inspector certifying that the Element is ready from the point of view of safety of supply and can be connected with the Interconnection Facilities. 25

27 7.2 Commercial Operation: An Element of the ISTS Scheme shall be declared to have achieved COD seventy two (72) hours following the connection of the Element with the Interconnection Facilities or seven (7) days after the date on which it is declared ready for charging by the ISTS Licensee or seven (7) days after the date of deferment, if any, pursuant to Clause 7.1.2, but is not able to be charged for reasons not attributable to the ISTS Licensee Once any Element of the ISTS Scheme has been declared to have achieved COD as per Clause above, such Element of the ISTS Scheme shall be deemed to have Availability equal to the Target Availability till the actual charging of the Element and to this extent, shall be eligible for payment of the Monthly Transmission Charges applicable for such Element. 7.3 Liquidated Damages for Delay in achieving COD of the ISTS Scheme: If the ISTS Licensee fails to achieve COD of any Element of the ISTS Scheme or the ISTS Scheme, by the Element s / ISTS Scheme s Scheduled COD as extended under Clause 5.4.1, and intimated by Independent Engineer, then the ISTS Licensee shall pay to the CTU, as on the date seven (7) days prior to the Commissioning Deadline, a sum equivalent to 3.33% of Monthly Transmission Charges applicable for the Element of the ISTS Scheme [in case where no Elements have been defined, to be on the ISTS Scheme as a whole] / ISTS Scheme, for each day of delay up to sixty (60) days of delay and beyond that time limit, at the rate of five percent (5%) of the Monthly Transmission Charges applicable to such Element / ISTS Scheme, as liquidated damages for such delay and not as penalty, without prejudice to CTU s any rights under the Agreement The ISTS Licensee s maximum liability under this Clause 7.3 shall be limited to the amount of liquidated damages calculated in accordance with Clause for and up to six (6) months of delay for the Element or the ISTS Scheme. Provided that in case of failure of the ISTS Licensee to achieve COD of the Element of the ISTS Scheme even after the expiry of six (6) months from its Scheduled COD, the provisions of Clause 19 shall apply. 26

28 7.3.3 The ISTS Licensee shall make payment of the liquidated damages calculated pursuant to Clause within ten (10) days of the earlier of: a. the date on which the applicable Element achieves COD; or b. the date of termination of this Agreement. The payment of such damages shall not relieve the ISTS Licensee from its obligations to complete the ISTS Scheme or from any other obligation and liabilities under the Agreement If the ISTS Licensee fails to pay the amount of liquidated damages within the said period of ten (10) days, the CTU shall be entitled to recover the said amount of the liquidated damages by invoking the Contract Performance Guarantee. If the then existing Contract Performance Guarantee is for an amount which is less than the amount of the liquidated damages payable by the ISTS Licensee under this Clause 7.3, the ISTS Licensee shall be liable to forthwith pay the balance amount Liquidated damages recovered from the ISTS Licensees would be passed on by the CTU to all DICs. 7.4 Return of Contract Performance Guarantee If the ISTS Licensee fails to achieve COD of any of the elements on their respective Scheduled COD specified in the Supplementary Agreement, subject to conditions mentioned in Clause 5.4, the CTU on behest of Independent Engineer/CEA, shall have the right to encash the Contract Performance Guarantee and appropriate in their favour as liquidated damages an amount specified in Clause 7.3.1, without prejudice to the other rights of the CTU under the Agreement The Contract Performance Guarantee as submitted by ISTS Licensee in accordance with this Agreement shall be released by the CTU within three (3) months from the COD of the ISTS Scheme. In the event of delay in achieving Scheduled COD of any of the Elements by the ISTS Licensee and consequent part invocation of the Contract Performance Guarantee by the CTU, the CTU shall 27

29 release the Contract Performance Guarantee if any, remaining unadjusted, after the satisfactory completion by the ISTS Licensee of all the requirements regarding achieving the Scheduled COD of the remaining Elements of the ISTS Scheme The release of the Contract Performance Guarantee shall be without prejudice to other rights of the CTU under this Agreement. 28

30 8 OPERATION AND MAINTENANCE OF THE ISTS 8.1 Operation and Maintenance of the ISTS: The ISTS Licensee shall be responsible for ensuring that the ISTS is operated and maintained in accordance with the Indian Electricity Grid Code (IEGC) / State Grid Code (as applicable), Transmission License, directions of National Load Despatch Centre / RLDC / SLDC (as applicable), Prudent Utility Practices, other legal requirements including the terms of Consents, Clearances and Permits and is made available for use by the DICs as per the provisions of applicable regulations including but not limited to the Central Electricity Regulatory Commission (Open Access in Inter-state Transmission) Regulations, 2004, Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006, and the Central Electricity Authority Grid Standards of Operation and Maintenance of Transmission Lines (as and when it comes into force) as amended from time to time and provisions of this Agreement If the ISTS Licensee fails to comply with the directions issued by the CERC or the RLDC and is liable to pay a penalty under the provisions of the Electricity Act 2003, such penalties shall be borne by the ISTS Licensee and can not be claimed from any of the DICs The ISTS Licensee may, with prior intimation to the CERC, engage in any business for the optimum utilisation of the assets, subject to the provisions of Section 41 of the Electricity Act 2003 and Transmission License The ISTS Licensee shall abide by the Safety Rules and Procedures during the Operation Period as mentioned in Schedule 5 of this Agreement. 8.2 Scheduled Outage In line with the provisions of the Indian Electricity Grid Code, as amended from time to time, each ISTS Licensee shall provide its annual outage plan, and shall be governed by the decisions of the Regional Power Committee (RPC) in this regard. 8.3 Unscheduled Outage In the event of an Unscheduled Outage, the concerned ISTS Licensee shall inform, in writing to the concerned RLDC and the concerned DIC, the reasons and the details of 29

31 occurrence of such Unscheduled Outage. The ISTS Licensee shall further inform about, the nature of the work to be carried out, the estimated time required to complete it and the latest time by which in its opinion the work should begin consistent with the Prudent Utility Practices The ISTS Licensee shall use its reasonable endeavours consistent with Prudent Utility Practices to carry out the maintenance in minimum time schedule to address such Unscheduled Outage and bring the Element back in operation. 30

32 9 AVAILABILITY OF THE ISTS SCHEME 9.1 Calculation of Availability of the ISTS Scheme/Element: Calculation of Availability for the Elements and for the ISTS Scheme, as the case may be, shall be as per Appendix IV of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, Target Availability: The Target Availability of the ISTS Scheme shall be as per the norms mentioned in CERC Terms and Conditions of Tariff Regulations,

33 10 Grant of Connection and Provision of Access to the ISTS Transmission Service Agreement 10.1 The ISTS Licensees agree to provide DICs any connection to the ISTS and any long term access or medium term open access, as may be required by the DICs, in accordance with CERC (Grant of Connectivity, Long-term Access and Medium-term Open Access in inter- State Transmission and related matters) Regulations, 2009; and any amendment made thereof Any DIC desirous of procuring connection or long term access or medium term open access to the ISTS shall comply with the detailed procedure contained in the relevant Regulation and shall enter into any such agreements, as may be required pursuant to and in accordance with the CERC regulations mentioned in Clause Provision of short term open access shall be governed by CERC (Open Access in inter-state transmission) regulations, 2008 and any amendment made thereof For transmission projects under construction and are yet to be commissioned, the existing Bulk Power Transmission Agreements/ Transmission Service Agreements would continue to remain valid except for such provisions as related to sharing of transmission charges by the Designated ISTS Customers, as identified in these agreements. 32

34 11 Declaration and Approval of Contracted Capacity at each node or aggregation of nodes in the ISTS for each Designated ISTS Customer (DIC) 11.1 Pursuant to and in accordance with the CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010 and any amendment made thereof; the Implementing Agency shall compute the Point of Connection charges and Loss Allocation Factors for all DICs On or before the end of the fourth week of November in each Financial Year, each DIC shall submit the generation and demand data and the data pertaining to the Basic Network for each season of the following Financial Year in accordance with the detailed procedure and format, approved by CERC upon submission by the Implementing Agency On or before the end of the fourth week of November in each Financial Year, each ISTS licensee and each owner of Deemed Inter State transmission systems whose charges are to be recovered from DICs, shall supply the Implementing Agency with Basic Network details, Monthly Transmission Charge, and any other information; in accordance with the detailed procedure and format, approved by CERC 11.4 The DICs, ISTS licensees and owners of Deemed Inter State transmission systems agree to provide in case it requires the data at times other than those indicated in Clause 11.2 and/ or In the event of any conflict between the DIC and the Implementing Agency, a Validation Committee appointed by CERC in this behalf shall take the final decision after hearing the DIC and Implementing Agency The Basic Network, nodal generation, nodal demand and the load flow results for the subsequent financial year for each grid condition, as firmed up by the Implementing Agency, shall be validated by this Committee and presented for approval to CERC as per CERC Sharing of Inter-State Transmission Charges and Losses Regulations,