Section 5(4) in Orissa Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulation, 2004
(4)Power Purchase - (a) The quantum of power purchase for the ensuing financial years shall be estimated on the basis of actual purchase made during the previous financial year(s), actuals to the extent available for the current year and any projections for the balance period of the current year with appropriate adjustments for any abnormal variations during the period. The licensee through appropriate documentation shall justify all the abnormal deviations. This quantity will be evaluated at the price based on the power purchase agreements, bulk supply agreements, etc. consented by the Commission.(b)The Commission will not ordinarily consider the additional power purchases beyond the approved level of power purchase. However, if the variation in the actual purchase vis-a-vis the quantum of power as ordered by the Commission is on account of events beyond the reasonable control of the Licensee, as established to the satisfaction of the Commission, the resultant effect will be taken in to account in subsequent accounting years. To meet this additional requirement of power, the licensee shall follow the least cost combination of power procurement.(c)In the regime of Availability Based Tariff (ABT) the licensee shall be allowed to retain incentive of overdrawl of power under higher frequency and likewise absorb the loss for drawl of power under lower frequency as and when decided by the Commission.(d)In case of direct procurement of power by the distribution licensees from generators/other sources in order to optimise the cost of power procured by utilities, the Commission may lay down guidelines for power purchase mainly based on merit order dispatch. While devising the guidelines, the Commission may consider the following;(i)Load profiles during various seasons;(ii)Technical constraints;(iii)Avoidable costs (whether from own generation or power purchase) after giving due consideration to valid contractual obligations.(e)The power purchase expenses as determined through such optimal merit order dispatch after due consideration for contractual obligations and technical constraints, shall be considered for pass through in the Revenue requirement.(f)An automatic fuel cost revision provision may be provided, and the licensee shall be required to compute changes in the fuel costs, and appropriately claim or refund the same in tariffs, on quarterly basis according to an automatic fuel cost revision provision. The fuel cost revision shall include fuel related expenses including variations in mix of power purchases.
