The Telangana State Electricity Regulatory Commission (TSERC) has directed the two power distribution companies of Telangana — TSSPDCL and TSNPDCL — to safeguard the interests of consumers by incorporating several changes in their power purchase agreements (PPAs) with Chhattisgarh State Power Distribution Company.
In the interim orders issued by TSERC, its Chairman Ismail Ali Khan and Member H. Srinivasulu told Telangana Discoms to present their views on the capital cost of the Marwa project in Chhattisgarh from which they get power supply, including interest during the construction period while participating in the final tariff determination proceedings before Chhattisgarh State ERC (CSERC). The interim orders of the TSERC were uploaded on its website on Thursday.
As the determination of tariff would be done by the Chhattisgarh State ERC, a petition for approval of the provisional tariff for Marwa was filed by the CSPGCL in March last. An order was passed on April 30, 2016 determining the provisional tariff of ₹3.90 per kWh (per unit) comprising of ₹2.70 fixed charges and ₹1.20 energy charges. It was also stated that the final tariff would be based on the capital cost of the project to be approved by the CSERC after the due regulatory process.
The TSERC has observed that the provisional tariff does not include pension and gratuity liability, which would form part of the final tariff and told TS Discoms to discuss this issue with Chhattisgarh Discom and resolve it amicably.
As per the provisional tariff, the weighted average rate of interest on loans is 13% and the rate of interest on working capital is 13.2%, but TS Discoms could plead before CSERC and Chhattisgarh Discom for reduction of interest rates as the rates are declining in the market and also seek swapping of loans, so as to reduce the interest burden on the consumers.
Further, it has pointed out that the deviation of the debt equity ratio from the normal 70:30 to 90:10 for the Marwa plant is not prejudicial to the interests of TS Discoms. It has also advised Telangana Discoms to plead for relaxation of rules so that the tariff determined could be in the interests of its consumers.
The TSERC told Telangana Discoms to incorporate the modifications in the PPA along with final tariff to be determined by CSERC and submit before it for consenting the PPA.
