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State of Rajasthan - Section

Section 84 in Rajasthan Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulations, 2009

84. Tariff Indexing Mechanism for Biomass Power Projects.

(1)In case of Biomass energy projects, the following indexing mechanism for adjustment of fuel prices for each year of operation be applicable for determination of applicable Variable Charge Component of Tariff, in case developer wishes to opt for indexing mechanism:
Pn = Pn-1x [a x (WPIn/WPIn-1) + b x (1+IRC)n-1+ c x (Pdn/Pdn-1)]
Where    
Pn = Price per ton of biomass for the nth year to be considered fortariff determination
Pn-1 = Price per ton of biomass for the (n-1)th year to be consideredfor tariff determination.In case of n=1, Pn-1shall be equal toPo.
a = Factor representing labour cost
b = Factor representing fuel cost
c = Factor representing transportation cost
IRCn-1 = Average Annual Inflation Rate for indexed energy chargecomponent in case of captive coal mine source (in %) to beapplicable for (n-1)th year, as may be specified by CERC for'Payment purpose' as per Competitive Bidding Guidelines
Pdn = Weighted average price of HSD at 'R' Power Station for nthyear.
Pdn-1 = Weighted average price of HSD at 'R' Power Station for (n-1)thyear.
WPIn = Whole sale price index for the month of April of nth year
WPIn-1 = Wholesale price index for month of April of (n-1)th year.
R = Any Arbitrary Thermal Power Station near to the Project Site.
Where a, b & c be specified by the Commission from time to time. For first 2 years and in default these be 0.2, 0.6 & 0.2 respectively.
(2)Variable Charge for the nth year shall be determined as under:i.e. VCn = VC0 x (Pn / Po) or VC0 x(1.05)n-1 (optional)where, VC0 represents the Variable Charge for FY 2009-10 based on Biomass Price Po for FY 2009-10 i.e. first year of Control Period and shall be determined as under:
VC0=| Station Heat Rate (SHR)Gross Calorific Value(GCV)| x| 1(1 - Aux Consum. Factor)| x| P01000|
Po = Rs.1216 per Metric Tonne for FY 2009-10
(3)Under Generic Tariff determination mechanism, automatic tariff revision for Fixed charge component of tariff through Tariff Indexation Mechanism as outlined below, shall be allowed by the Commission for biomass power projects to be commissioned during the Control Period. The parameters for indexation shall be 'normative capital cost' and long term PLR of State Bank of India. Under these Regulations, the Commission has specified 'normative capital cost for the base year of Control Period which shall be applicable for the projects to be commissioned in Base Year of Control Period. The Fixed charges component of Tariff for plants commissioned during each subsequent year of control period shall be indexed as under:FCn = FC1 * (1 + dn) + [0.03 * [LTPLRn-2 - LTPLR0]],dn = [a * (SIn-2/SIo - 1) + b * (CIn-2/CIo - 1)]/(a+b)Where,
FC1 = Base Levellised Fixed Charge component of Tariffdetermined for the Biomass projects commissioned in second yearof the Control Period i.e. FY 2010-11 (in Rs/kWh).
FCn = Levellised Fixed Charge component of Tariff tobe applicable for Biomass projects commissioned during thefinancial year (n) of the Control Period (in Rs/kWh).
dn = Capital cost escalation factor applicable foryear (n) of the Control Perioda = Constant to be determined byCommission from time to time, (in default it is 0.70) forweightage to Steel Index
SIn-2 = Average WPI Steel index prevalent for calendaryear (n-2) of the Control Period
SIo = Average WPI Steel Index prevalent for Calendaryear (0) i.e. Jan-2008 to Dec- 2008
b = Constant to be determined by Commission fromtime to time, (in default it is 0.30) for weightage to CementIndex
CIn-2 = Average WPI Cement Index prevalent for calendaryear (n-2) of the Control Period
CIo = Average WPI Cement Index prevalent for Calendaryear (0) i.e. Jan-2008 to Dec-2008
LTPLRn-2 = Average long term prime lending rate (in %) ofState Bank of India as prevalent for the calendar year of n-2 thyear of the Control Period.
LTPLR0 = Average Long term prime lending rate (in %) ofState Bank of India as prevalent for the period 1st Jan 2008 to31st December 2008.
Note. - (a) Since there be a lag of about 2 years between financial closure of the project and its commissioning , prices for the calendar year "n-2" is relevant and may be applied to the fixed charge of tariff of year "n". Thus, for projects commissioned on or after 1/4/2011 the applicable tariff be adjusted with the price information available for the period 1/1/2008 to 31/12/2008 as base with indexing mechanism considering FY 2011-12 as nth year and corresponding calendar year n-2 shall be from 1.01.2009 to 31.12.2009 for pricing.
(b)The indexation linked to interest rate is 3 paise/kWh per percentage point change in long term prime lending rate of State Bank of India.