Overview of Commercial Department

by

Chitikena Abhijith
Manager (Commercial)
 Transmission – An Enabler

Transmission is Infrastructure to the infrastructure sector (Power).

 Transmission a crucial link in the entire electricity Power value supply chain.
Integration of transmission systems enhances “market reach” that fosters
competition between suppliers and demand customers.
 Economy & efficiency, by replacing costly power by cheaper power
 Robust and reliable transmission network offers choices to sellers and buyers
of electric power and thereby creates a vibrant electricity market.
 Takes care of uncertainty in Generation & Distribution: Transmission has
metamorphosed from a mere evacuation system to source of reliability to the
entire power sector.
 Lack of transmission results in loss of generation of much higher magnitude
 “Transmission” though forms the bedrock in creation of market and
competition, wherein, the rates of electricity varies in real time depending on
its perceptive value by the utilities involved, however, the tariff for
transmission is not subjected to change.

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 Transmission : Concurrent Subject

Transmission

ISTS
Cross-border
Intra State
Links

 Inter-State Transmission System (ISTS) :It serves the following purpose

(i) Evacuation of power from inter-state generation stations which have beneficiaries in more
than one state.
(ii) Onwards transmission of power for delivery of power from inter-state generation stations
up to the delivery point of the state grid.
(iii)Transfer of operational surpluses from surplus state(s) to deficit state(s) or from surplus
region(s) to deficit region(s) as need under relevant regulation.
 Intrastate tarnsmission : It serves the following purpose
(i) Evacuation of power from the state’s generating stations having beneficiaries in that State.
(ii) Onwards transmission within the State from ISTS boundary up to the various substations
of the state grid network.
(iii) Transmission within the state grid for delivery of power to the load centres within the
state.
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Transmission System Planning Process

4
Transmission planning rules

5
 Transmission : Planning to Revenue

System
Planning
i2Ren0Cv1r5)–u6(s.

Revenue Project
Realization & implementation
Operation Phase & Capex

Operational risks. Regulatory Risk for 35 Project execution risks & Mismatch
years on Return on investment. Debt re- risk .No return on investment
servicing and operational expenses to be
ensured. Commissioning
& DOCO
declaration

6
 Revenue
Transmission determination
: Mode of Development

Transmission

Factors Cost Plus TBCB Incentive

Cost Plus:- Multi Year Tariff Competitive Bidding– Licence Period Basis

 Return on equity set by CERC  Annual transmission charge for a 35-year period
 Establishes norms for capital and operating is set through the bidding process
costs, operating standards and performance  Projects are bid on BOOT model with provision
indicators of deemed COD

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 Transmission tariff history
 Transmission was part of generation and no separate provisions existed for transmission
tariff.
 Unbundled transmission did not exist till the establishment of POWERGRID in 1989.
 In fact POWERGRID treated as a generation company under the definition provided in
the Electricity (Supply) Act, 1948.
 The assets of POWERGRID, the sole central government transmission company, were
transferred to it from central generators such as NTPC and NHPC etc.
 Tariffs have been notified by the central government on
the basis of techno economic approvals of investment given by the CEA.
 Notification dated December 17, 1997 by Ministry of Power was the first attempt to
formalize the methodology of tariff setting.
o A single part tariff comprising all costs on account of interest on outstanding loans and
working capital, return on equity, depreciation, O&M expenses as per norms and income
tax.
o The full cost is recoverable at an availability of 95%.
o An incentive is given in the form of increase in ROE at the rate of upto 1% point for every
1% point increase in availability.
o A debt equity ratio within the norm of 80% maximum and 20% minimum has been used
for POWERGRID. 8
 Major Responsibilities

Commercial & RC

Regulations &
Petition & Tariff Billing Collection
MIS for
Orders Disbursement
Commercial

- Filing of Tariff - Regulatory Policy Advocacy

Petition - Billing
- Realization of - Handling of Critical cases in
(Regular & True up) CERC, APTEL, HC & SC
Revenue
- Tariff Orders - MIS for Commercial &
- Disbursement
- Review Petition knowledge building
 Vision
 Main objectives of Commercial & Regulatory Cell deptt;
 To keep abreast with the regulatory environment having impact on Commercial
functions of corporation,
 To obtain Central Electricity Regulatory Commission (CERC) orders for
approved tariff by way of filing the tariff petitions and other document/data
before CERC & issuance of billing advice,
 To collect Transmission Charges & Disbursement of collected amounts to
eligible ISTS Licensees as CTU as per CERC Regulations and assisting the
Regions for collection of dues,
 To generate and maintain appropriate revenue data base at regular intervals for
Management information,
 To maintain cordial relationship with the customers by way of redressal of the
commercial related grievances, if any.
 With due emphasis on quality of work, safety hazards, environmental aspects
and information security hazards.
 Petitions & Tariff Orders

For Projects under ‘Cost Plus’ regime, POWERGRID’s revenue

is determined by the Regulator (CERC).
CERC notifies the framework for Tariff for a control period of
five years.
Presently, CERC Tariff Regulations, 2019 for 2019 – 24 are in
vogue.

Preparation and filing of Tariff Petitions before CERC for all

assets that are capitalized/will be capitalized (within 3
months).
Filing of Truing-up Petition and Tariff Petition for 2019-24
block for old assets [440 Petitions filed since April 2019]

Submission of replies/updated data to CERC (during Technical

Validation and Record of Proceedings)
Pleading in CERC’s public hearings and obtaining Tariff Orders
from CERC

Preparation and filing of Review Petition, if any, in CERC

Filing of Appeal/defending in APTEL/HC & SC, if any
 Billing, Collection & Disbursement

• Billing
 Since Nov, 2020, Billing of transmission charges is being done as per CERC Sharing
Regulations, 2020.
 CTUIL is the nodal agency for Billing, Collection and Disbursement (BCD) of ISTS
charges on behalf of all ISTS Licensees (Pvt. as well as Govt.)
 MOP vide the Gazette notification dated 09th March 2021 has notified the CTUIL,
presently a subsidiary company of POWERGRID. At present, POWERGRID is
providing back end services for BCD function as an interim arrangement to CTU.
 Commercial deptt is doing the BCD function.
 Sharing
Sharing Regulations, 2020 - PoC Mechanism :

Similar provisions both for RTM vs TBCB

Central Transmission Utility (CTU)

Transmission Licensee DICs

Total Transmission Charges
Billed as per approved/adopted
tariff
YTC (Trans. Line 1) All Generator /
Pro-rata disbursement Injection Node
of transmission
YTC (Trans. Line 2) charges as per the
monthly transmission
charges All Demand /
YTC (Trans. Line n) Pooling of payment from all Drawal Node
transmission system users
 Regulatory Cell
 Pro-active participation by way of policy advocacy with the Regulator/CEA/
MOP in the evolution / modification of various Rules/Regulations/ Policies that
could impact the revenue of the Company;
 Acts as focal point in providing POWERGRID data/ comments/ suggestions
during the preparation of various regulations/ amendments.
 Principal information disseminator on the existing, new and unfolding
Regulations regarding commercial issues
 Internal coordination & comments on draft/amendments in Regulations

 Preparation, filing & pleadings of Petitions on Policy issues, chronic issues such
as
 Stranded Assets, Decapitalization issues
 Filing petitions for various transmission system associated with URTDSM,
SCADA/EMS replacement etc. with CERC.
 Approval for formation of POWERGRID subsidiary companies (Telecom),
praying for additional O&M & tariff for particular projects (Unified Network
Management System) etc. with CERC.
 Regulatory Cell
 Preparation of Management Information System (MIS) for Commercial Group with
following objectives;
 Billing vs Realisation and outstanding dues status
 Timely submission of Petitions /replies to CERC
 Detailed scrutiny of Time over run & cost over run cases to avoid tariff deduction
by CERC
 Obtain timely orders from CERC and avoiding cost restrictions/disallowance of
tariff by CERC

 Regular interaction with CERC to adjudicate the disputes;

 Mismatch issues with other Licensee or generator,
 Disallowance of capital cost by CERC due to misinterpretation of relevant
regulation,
 Regulatory issues like Opening of Letter of Credits (LCs), TSA termination and
CBG encashment etc.
 Participation & advocacy in Critical Tariff Petitions in CERC (mismatch with
Generators/Transmission Licensees).
 Regulatory Cell
 Miscellaneous Petitions in CERC on issues related to POWERGRID TBCB projects
such as;
 Approval of cost over run due to Change in law,
 time overrun due to force majeure
 Issue with other TBCB licensee

 Filing of appeals in APTEL/ Supreme court pertaining to cases where disputes has
not been resolved in CERC forum;
 Preparation of appeals, attending court hearings before respective courts.
 Initiates action of filing caveats in critical matters viz; issues relating to encashment
of BG, regulation of power supply, payment of transmission charges etc.
 Obtaining Legal Opinion from Senior Advocates and in providing Legal
Assistance to Petition Group.
 Present Constitutional Provision
& Acts
 Electricity- Concurrent Subject - Entry 38 List III of Seventh Schedule to the
Constitution. Both Parliament and State Legislatures have powers to legislate.
 CERC is regulator at Central level and SERCs at State level

 Domain

 National level : Inter State

 State level : Intra State

 The Electricity Act, 2003

 Define the role of the Regulator to determine tariff for Generation, Transmission and
Distribution under Section 62 known as the Regulated Tariff Mechanism (RTM) or
Cost Plus.
 The Act also envisaged determination of tariff through a bidding process for
competition in all the activities sectors under Section 63.

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 Evolution of Indian Power Sector

• Basic Framework for electricity supply

Indian Electricity Act, • Permitting issuing licenses by local Govt. for
1910
supply of bulk electricity

• Establishment of CEA to monitor electricity

Electricity Supply Act, sector at central level
1948 • SEBs were set up

• Generation was opened up to Private Sector

Electricity Supply Act • Setting up of RLDC
Amdt 1991

• CERC and SERC were given authority to

Electricity Regulatory determine tariff
Commission Act, 1998
 Evolution of Indian Power Sector

Electricity Act, 2003

• Previous Acts were repealed
• Aimed at Consolidating laws for Generation,
Transmission, Distibution and Trading of
electricity
• Advocating competition
• Protecting interest of consumers, Idea of
unbundling, Open Access
 Electricity Act provisions

Section 62. (Determination of tariff)

•(1) The Appropriate Commission shall determine the tariff for –
• supply of electricity by a generating company to a distribution licensee
• Transmission of electricity ;
• Wheeling of electricity;
• Retail sale of electricity:

Section 63. (Determination of tariff by bidding process):

• The Appropriate Commission shall adopt the tariff if such tariff has been
determined through transparent process of bidding in accordance with the
guidelines issued by the Central Government.
 Evolution of Indian Power Sector

Transmission tariff
Transmission

Regulated Tariff
ISTS Mechanism (Section TBCB (Section 63)
Intra State 62)
Structure of Indian Electricity Sector
 Policy Mandate
Central Government:
Electricity Act 2003
National Electricity Policy
National Tariff Policy

CEA:
National Electricity Plan

NITI Ayog
National Energy Policy
 National Tariff Policy
 Notified by the Central Government in compliance to Section 3 of the
Act
Revised Tariff Policy on 28th January
Tariff Policy on 6 January, 2006
th
2016

 Guiding documents for CERC and SERCs while framing the regulations.

Objectives Pertaining to Transmission

• Ensuring optimal development of the transmission network ahead of

generation
• Adequate margin for reliability and to promote efficient utilization of
generation and transmission assets
• Attracting the required investments in the transmission sector and providing
adequate returns.
 National Tariff Policy

5.0 GENERAL APPROACH TO TARIFF

……..
5.11Tariff policy lays down the following framework
for performance based cost of service regulation

• Maintaining balance between the interests of

consumers and the need for investments.
• Return should attract investments - The rate of
Return on return should be such that it allows generation of
Investment reasonable surplus for growth of the sector.
• The Central Commission to notify the rate of
return on equity keeping in view the assessment of
overall risk and the prevalent cost of capital.
 National Tariff Policy

• Debt: Equity ratio of 70:30

Equity Norms • Promoters would be free to have higher quantum of equity investments.
• The equity in excess of this norm should be treated as loans.

• The Central Commission to notify the depreciation rates

• There should be no need for any advance against depreciation.
Depreciation
• Benefit of reduced tariff after the assets have been fully depreciated should
remain available to the consumers.

•Structuring of debt,
•including its tenure,
Cost of Debt •Reducing the tariff should be encouraged.
•Savings on account of subsequent restructuring of debt should be
suitably incentivized by the Regulatory Commissions

• the operating parameters in tariffs should be at “normative

Operating Norms
levels” only and not at “lower of normative and actuals”……..

• the Appropriate Commission for determining the terms and conditions

for the determination of tariff shall be guided, inter-alia, by Multi-Year
Multi Year Tariff
Tariff (MYT) principles. The framework should feature a five-year
control period.
CERC Tariff Regulations,2019
 Tariff Regulations,2019

 These regulations shall remain in force for a period of five years

from 1.4.2019 to 31.3.2024

 Applicable on generating station and a transmission system under

section 62 of the Act

 ‘Useful Life’ from the date of commercial operation shall mean:

(a) Coal/Lignite based thermal generating station 25 years
(b) Gas/Liquid fuel based thermal generating station 25 years
(c) AC and DC sub-station 25 years
(d) Gas Insulated Substation (GIS) 25 years
(e) Hydro generating station including pumped storage 40 years
(f) Transmission line (including HVAC & HVDC) 35 years
(g) Communication system 15 years

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 Date of Commercial Operation
 DOCO to be determined in accordance with the provisions of the
Grid Code.

Grid Code:

DOCO: Date declared by the transmission licensee from 0000 hour of which an
element of the transmission system is in regular service after successful trial
operation for transmitting electricity and communication signal from the
sending end to the receiving end

Trial Operation: successful charging of the transmission system or an

element thereof for 24 hours at continuous flow of power, and communication
signal from the sending end to the receiving end and with requisite metering
system, telemetry and protection system in service enclosing certificate to
that effect from concerned RLDC.

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 Date of Commercial Operation
 In case the interconnected system is not ready,

 Needs to file petition before the Commission for approval of the date
of commercial operation
 Licensee shall give prior notice of at least one month, to other party
and the long term customers of its transmission system, as the case
may be, regarding the date of commercial operation:
 Licensee shall be required to submit proof of readiness,
correspondences and relevant certificates along with the petition:

Documents required:
CEA Energization certificate, RLDC Trial operation certificate (with or
without electrical load), Implementation Agreement, Minutes of the
coordination meetings or related correspondences, Notice issued by the
transmission licensee, Certificate of the CEO or MD of the company
regarding the completion of the transmission system

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 Application for determination
of tariff

 For the whole of the transmission system or Element thereof or

associated communication system

Criterion If project comprises Filing of

several elements petition

• All elements • To file an application • Auditor

of the for determination of Certificate
transmission tariff for a group of (indicating
system elements on incurring of the capital
which are expenditure of not less cost)
anticipated than 70% of the cost • Tariff forms
to achieve envisaged in the • Documents
commercial Investment Approval justifying
operation or Rs. 200 Crore, the
during the whichever is lower readiness
next two • Delay
months reason
justification

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 Truing up
 Truing Up is done for:
 Capital Cost
 Rate of Return on equity (MAT rate)
 Interest on working capital
 For transmission system commissioned prior to 1.4.2019;

 Petition for True up of 2014-19 period (in accordance with CERC Tariff
Regulations, 2014) and also for determination of tariff for the period
1.4.2019 to 31.3.2024 (in accordance with CERC Tariff Regulations, 2019)
 Capital cost admitted as on 31.03.2019 shall form the basis of the opening
capital cost as on 1.4.2019.
 Till issuance of tariff orders, transmission charges as approved by the
CERC earlier shall be billed.
 For transmission system commissioned after 1.4.2019;
 True up to be done only after completion of Tariff block (after
31.03.2024) and only POC petition needs to be filed.
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 Truing up
Scenario Provision
Original tariff >True up tariff Excess recovered tariff to be
refunded with simple interest

Original tariff <True up tariff Difference tariff to be recovered

with simple interest

Projected Capital cost (original petition) refund the tariff recovered

exceeds the actual cost incurred (True up) on corresponding to the additional
year to year basis by more than 10% capital expenditure not
incurred, along with interest at
1.20 times of the bank rate

Projected Capital cost (original petition) falls recover the tariff recovered
short of the actual cost incurred (True up) on corresponding to the additional
year to year basis by more than 10% capital expenditure, along with
interest at the bank rate

‘Bank Rate’: MCLR of SBI issued from time to time plus 350 basis points
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 Capacity Charge
 The Annual Fixed Cost (AFC) shall consist of the following
components:

Return
on
equity

Interest
on
Depreciation
working
capital
Tariff
Components

Interest
O&M
on loan
expenses
capital

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 Price Determination
(Cost of Service and Incentive based regulation)
Project Lifecycle
-2 0 12 25/35
Cost Heads
Sl.
No.

A Preliminary Survey & Soil Investigation

Depreciation : Return of Investment (90%)
B Cost of Compensation for Transmission Lines
Debt
Compensation towards Crop,Tree, PTCC and Railways
i)
etc. 70%
ii) Compensation towards Forest Inv.
iii)
Compensation towards Tower Base and diminution of 100% Interest : Cost of Debt (Actual)
land value in the width of Right of Way (RoW) Corridor

C Civil works
i) Infrastructure
ii) Non- Residential Buildings
Equity Return on Equity (15.5%)
iii) Colony 30%
D Equipment Cost
i) Transmission Lines
ii) Sub - Stations O&M Expenses (Normative)
iii) Special T&P

F
Incidental Expenditure During Construction (IEDC) Interest on Working capital (Normative)
incl. contingencies

G Interest During Construction (IDC) incl. FERV

System Availability (Calculated)
 Capital Cost
 Capital cost as determined by the CERC after prudence check in
shall form the basis for determination of tariff

Capital
Cost

Initial spares Additional Expenditure

Cost as on IDC Incidental
FERV during the capitalizati
COD charges expenditure subject to the on account of
construction period; on and de-
during ceiling rates change in law
capitalizati and force
construction
on majeure
events;

Capital Cost exclusion:

 The assets forming part of the project, but not in use, as declared in the tariff petition;
 Replacement or removal on account of obsolescence or shifting from one project to another
project;
 Any grant received from the Central or State Government or any statutory body or authority for
the execution of the project which does not carry any liability of repayment.

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 Prudence Check of
Capital Cost

 Following principles shall be adopted for prudence check of

capital cost of the existing or new projects:

Prudence check of capital cost shall include scrutiny of the capital

expenditure, in the light of capital cost of similar projects based on past
historical data, wherever available, reasonableness of financing plan,
interest during construction, incidental expenditure during
construction, use of efficient technology, cost over-run and time over-
run, procurement of equipment and materials through competitive
bidding and such other matters as may be considered appropriate by the
Commission:

Provided that, while carrying out the prudence check, the Commission shall
also examine whether the generating company or transmission licensee, as
the case may be, has been careful in its judgments and decisions in
execution of the project.

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 IDC and IEDC
(1) Interest during construction (IDC) shall be computed corresponding to the loan
from the date of infusion of debt fund, and after taking into account the prudent
phasing of funds upto SCOD.

(2) Incidental expenditure during construction (IEDC) shall be computed from the
zero date, taking into account pre-operative expenses upto SCOD:

Provided that any revenue earned during construction period up to SCOD on

account of interest on deposits or advances, or any other receipts shall be taken into
account for reduction in incidental expenditure during construction.

(3) In case of additional costs on account of IDC and IEDC due to delay in
achieving the COD,
 to furnish detailed justifications with supporting documents for such delay
including prudent phasing of funds in case of IDC and details of IEDC during the
period of delay and
 liquidated damages recovered or recoverable corresponding to the delay

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 IDC and IEDC
 Delay in achieving the COD is not attributable to the transmission
licensee,

 IDC and IEDC beyond SCOD may be allowed after prudence check and

 The liquidated damages, if any, recovered shall be adjusted in the capital cost

 Delay in achieving the COD is attributable either in entirety on in part

to the transmission licensee or its contractor or supplier or agency,

 IDC and IEDC beyond SCOD may be disallowed after prudence check
either in entirety or on pro-rata basis corresponding to the period of delay
not condoned and

 The liquidated damages, if any, recovered from the contractor or supplier or

agency shall be retained by the generating company or the transmission
licensee, as the case may be.

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 Controllable and Uncontrollable factors
Controllable and uncontrollable factors for deciding time over-run, cost
escalation, IDC and IEDC of the project:

(1) The “controllable factors” shall include but shall not be limited to the
following:

a. Efficiency in implementation not involving approved change in scope of

project, change in statutory levies or change in law or force majeure events;
b. Delay in execution of the project on account of contractor or supplier or
agency of the generating company or transmission licensee.

(2) The “uncontrollable factors” shall include but shall not be limited to following:

c. Force Majeure events;

d. Change in law; and
e. Land acquisition except where the delay is attributable to the generating
company or the transmission licensee.

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 Change in Law
‘Change in Law’ means occurrence of any of the following events:

Enactment, bringing into effect or promulgation of any new Indian law; or

Adoption, amendment, modification, repeal or re-enactment of any existing

Indian law; or

Change in interpretation or application of any Indian law by a competent

court, Tribunal or Indian Governmental Instrumentality; or

Change by any competent statutory authority in any condition or covenant of

any consent or clearances or approval or licence available or obtained for the
project; or

Coming into force or change in any bilateral or multilateral agreement or treaty

between the Government of India and any other Sovereign Government having
implication for the generating station or the transmission system regulated under
these regulations.

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 Force Majeure
‘Force Majeure’
partly or fully prevents the generating company or transmission licensee to
complete the project within the time ….., and only if such events or circumstances
are not within the control of …..and could not have been avoided…….

Act of God including lightning, drought, fire and explosion, earthquake,

volcanic eruption, landslide, flood, cyclone, typhoon, tornado, geological
surprises, or exceptionally adverse weather conditions; or

Any act of war, invasion, armed conflict or act of foreign enemy,

blockade, embargo, revolution, riot, insurrection, terrorist or military
action; or

Industry wide strikes and labour disturbances having a nationwide

impact in India; or

Delay in obtaining statutory approval for the project except where the delay
is attributable to project developer
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 Initial Spare
 Initial spares shall be capitalized as a percentage of the Plant and
Machinery cost, subject to following ceiling norms:
(i) Transmission line -
1.00%
(ii) Transmission Sub-station
- Green Field 4.00%
- Brown Field 6.00%
(iii) Series Compensation devices and HVDC Station - 4.00%
(iv) Gas Insulated Sub-station (GIS)
- Green Field 5.00%
- Brown Field 7.00%
(v) Communication system - 3.50%
(vi) Static Synchronous Compensator - 6.00%

 Plant and Machinery cost shall be considered as the original project cost
excluding IDC, IEDC, Land Cost and Cost of Civil Works.
 Transmission licensee for the purpose of estimating Plant and Machinery Cost,
shall submit the break-up of head wise IDC and IEDC in its tariff application;
43
 Additional Capitalization upto
the cut-off date

 Cut-off Date’ means the last day of the calendar month after thirty six months
from the date of commercial operation of the project;

The additional capital expenditure incurred or projected to be incurred on the

following counts, within the original scope of work, after COD and up to the cut-
off date may be admitted by the Commission, subject to prudence check:

(a) Undischarged liabilities recognized to be payable at a future date;

(b) Works deferred for execution;
(c) Procurement of initial capital spares within the original scope of work,
(d) Liabilities to meet award of arbitration or for compliance of the directions or
order of any statutory authority or order or decree of any court of law;
(e) Change in law or compliance of any existing law; and
(f) Force Majeure events:

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 Additional Capitalisation after
the cut-off date

 The additional capital expenditure incurred after the cut-off date may be
admitted by the Commission, subject to prudence check:

(a) Liabilities to meet award of arbitration or for compliance of the directions or

order of any statutory authority, or order or decree of any court of law;

(b) Change in law or compliance of any existing law;

(d) Liability for works executed prior to the cut-off date;

(e) Force Majeure events;

(f) Liability for works admitted by the Commission after the cut-off date to the extent
of discharge of such liabilities by actual payments;

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 Availability
For AC system: For HVDC bi-pole links and HVDC back-to-
 for tariff recovery: 98% back Stations:
 for incentive: 98.5%  for tariff recovery: 95%
 for incentive: 97.5%
Availability shall be calculated on monthly
basis. New HVDCs
Normative Availability
• 1st 12 months : 85%
• for incentive: 97.5%

Availability shall be calculated on cumulative

annual basis for all HVDC.
 No incentive shall be payable for availability beyond 99.75%.
 Actual outage hours shall be considered for computation of availability upto two trippings per
year.
 After two trippings in a year, for every tripping, additional 12 hours outage shall be considered in
addition to the actual outage hours.
 In case of outage of a transmission element affecting evacuation of power from a generating station,
outage hours shall be multiplied by a factor of 2.

46
 Sharing of saving/ other Income

 Sharing of saving in interest due to re-financing or restructuring of loan :

If refinancing or restructuring of loan, results in net savings on interest after
accounting for cost associated with such refinancing or restructuring, the same
shall be shared between the beneficiaries and the generating company or
the transmission licensee, as the case may be, in the ratio of 50:50.

 Sharing of Non-Tariff Income: The non-tariff net income in case of

generating station and transmission system from rent of land or buildings, sale
of scrap and advertisements shall be shared between the beneficiaries or the
long term customers and the generating company or the transmission
licensee, as the case may be, in the ratio 50:50.

47
 Steps from Petition Filing To Tariff Order
Tariff petitions containing the detailed calculations of different elements of tariff alongwith all
relevant documentary evidence is to be filed before CERC for all assets that are to be capitalized .

Replies by Comml.
Petition Technical
to TVs with inputs
Validation/ queries
filing from concerned
by CERC
deptts

Reply Rejoinders to
RoPs Final Hearing
Respondents

The Commission in course of proceedings also

calls for information as is considered
necessary for determination of tariff. Such
Replies to RoPs Final Order data/information are utilized by the
Commission for prudence check while
determining the tariff.

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 Information in Petition
 Approval of the scheme
 Scheme approval
 Investment approval (IA)

 Justification for delay if any

 Cost comparison IA cost vis-à-vis actual cost

 Initial spares

 IDC/IEDC summary

 Additional capitalisation

 Sharing methodology

 Tariff forms

49
 Issues
 Restriction due to Revised Cost Estimate/ FR
 Cost restricted due to cost overrun.

 Initial Spare restrictions

 Claimed amount exceeds the CERC limits in multiple cases

 Time Over run not condoned

 Due to non availability of supporting documents
 CERC not allowing any delay for works in Brownfield
Substations/Augmentation projects
 Lack of proper coordination in case of mismatch with associated system.
 Large delay in projects associated with projects for establishment of Fiber Optic
Communication
 Delay in approaching for approvals from Forest/ Railway etc.

50
 Issues
 O&M Add-Cap
 For renovation of Buildings not allowed as same is not critical for System operations and
may be approved after RPC/SCM approval
 Restricted in absence of OEM certificates and RPC/SCM approval for replacement of
equipment.
 Decapitalisation before useful life
 Remaining depreciation not allowed by CERC even if decapitalization is done after due
approval as per System requirement
 In case of Re capitalization, carrying cost for intermediate period not allowed.
o Rs 6.86 Crs decapitalized from Indo Bangla project for removal of LILO of 400 kV S/C Farakka-
Jeerat Trans. Line at Baharampur.
o In case of Series Compensation on Panki- Muradnagar 400 KV S/C line of UPPCL in Northern
Region, Asset de-cap due to not in use w.e.f 31.10.2015. (De-cap around Rs.12.73 Cr).
o 315 MVA, 440/220 KV ICT-IV at Ballabgarh Substation with associated bay equipments in
Northern Region tariff allowed upto 12.06.2017 (Rs.5.85 Cr).

51
 Projects under Cost Plus
 Transmission Charges
Determined by the Central Electricity Regulatory Commission (CERC)
based on Terms and Conditions of Tariff Regulations which are notified
for a block period of five years.
 Currently, Tariff Regulations for 2019 -24 are in vogue
 Tariff Regulation contain the financial norms as well as operational norms.
 Tariff is usually called the cost plus tariff as it is determined on the basis of
capital cost.
 Tariff petitions containing the detailed calculations of tariff for different
elements as per the tariff forms along with all relevant documentary
evidence is to be filed before CERC for all assets that are to be capitalized.
 Tariff is approved by CERC after the regulatory process through an order
in the petition.
 Components of Tariff – Cost Plus

Depreciation

Debt Funding
Interest on Loan
Capital Cost & Capital
Capital Structure
Equity Funding
Return of Equity
Project

Project Elements TL and SS O&M expense

Interest on
Working Capital
 Tariff Components

RoE IOL Depreciat O&M IOWC

• @ 15.5% after • On actual ion • Predefined • Working
tax basis • 90% allowed. rates linked capital
• Maximum • Debt - 70% 10% salvage to conductor accounting
equity : 30% • Predefined configuratio for 45 days
• Addl. 0.5%
of total n and
capital cost rates for first voltage level
receivables,
for projects Mnt.
completed or actual 12 years of Tr. System
within whichever is • Thereafter Spares
timeline more uniformly @15% of
stipulated by spread until O&M and 1
CERC useful life of month
asset O&M
 Tariff Components
RoE Depreciation IOL O&M IOWC
 Return on Equity
 15.5% ROE after Tax
 Maximum equity allowed to be considered for tariff calculation 30%
 Additional RoE on earlier commissioning withdrawn
 ROE for Addcap after cut-off date (i.e., after 3 years ) beyond original
scope will be on weighted average rate of loan.
 For projects which has completed useful life as on 01.04.2019, equity
in excess of 30% shall not be taken into account for tariff
computation.
 Sample Calculation
Equity 30 Crs
MAT 17.49%
Rate of RoE (base rate) 15.50%
Effective RoE % 18.78%
Effective RoE 5.64
55
 Tariff Components
RoE Depreciation IOL O&M IOWC
• 90% allowed till the useful life of the project. 10 % Salvage value

• Predefined rates for first 12/13 years and thereafter Straight line method (SLM) over useful
life of asset
• This component is for recovering principal portion of loan deployed in the project.
Asset Particulars Depreciation Rate
(Salvage Value=10%)
Land 0% (full ownership)
3.34% (under lease)
Building & Civil Engineering 3.34%
works
Transmission lines 5.28%
Substation equipments 5.28%
Communication equipments 6.33%
including Fibre Optic
IT equipments including 15.00%
software

56
 Tariff Components
RoE Depreciation IOL O&M IOWC
 Principal repayment considered equal to depreciation,
 Actual rate of interest based on loan portfolio.
 Debt - 70% of total capital cost or actual whichever is more
 Sample Calculation:

IOL Calcualtion
Opening Loan (Rs Crs) 70.00
New Loan in year 0.00
Repayment as depreciation 5.28
Closing loan 64.72
Average Loan 67.36
Weighted average rate of
interest 8%
IOL (Rs Crs) 5.39
57
 Tariff Components
RoE Depreciation IOL O&M IOWC
O&M : Predefined rates linked to configuration and voltage level of Tr. System
Particulars 2019-20 2020-21 2021-22 2022-23 2023-24
Norms for sub-station Bays (Rs Lakh per bay)
765 kV 45.01 46.60 48.23 49.93 51.68
400 kV 32.15 33.28 34.45 35.66 36.91
220 kV 22.51 23.30 24.12 24.96 25.84
132 kV and below 16.08 16.64 17.23 17.83 18.46
Norms for Transformers (Rs Lakh per MVA)
765 kV 0.491 0.508 0.526 0.545 0.564
400 kV 0.358 0.371 0.384 0.398 0.411
220 kV 0.245 0.254 0.263 0.272 0.282
132 kV and below 0.245 0.254 0.263 0.272 0.282
Norms for AC and HVDC lines (Rs Lakh per km)
Single Circuit (Bundled Conductor with six or more
sub-conductors)
0.881 0.912 0.944 0.977 1.011
Single Circuit (Bundled conductor with four sub-
conductors)
0.755 0.781 0.809 0.837 0.867
Single Circuit (Twin & Triple Conductor) 0.503 0.521 0.539 0.558 0.578
Single Circuit (Single Conductor) 0.252 0.260 0.270 0.279 0.289
Double Circuit (Bundled conductor with four or more
sub-conductors)
1.322 1.368 1.416 1.466 1.517
Double Circuit (Twin & Triple Conductor) 0.881 0.912 0.944 0.977 1.011
Double Circuit (Single Conductor) 0.377 0.391 0.404 0.419 0.433
Multi Circuit (Bundled Conductor with four or more
sub-conductor)
2.319 2.401 2.485 2.572 2.662
Multi Circuit (Twin & Triple Conductor) 1.544
रेगुलेटरी सेल 1.598 1.654 1.713 1.773
58
 Tariff Components
RoE Depreciation IOL O&M IOWC
 IOWC
 Working capital considered
 Working capital accounting for 45 days receivables
 Maintenance Spares @15% of O&M and
 1 month O&M
 Rate of Interest considered
 Bank rate linked to one year MCLR of SBI plus 350 bps

 Sample Calculation
IOWC Calculation
O&M expenses a
Maint. Spares b
Receivables c
Total Working capital =(a+b+c)
Rate of Intt. 12.05%
IOWC =(a+b+c)*.1205

59
 Tariff Structure (Cost Plus)

a) Return on Equity
b) Interest on Loan capital
c) Depreciation Annual Fixed Cost
d) Interest on Working capital
(As per CERC order)
e) O&M expenses

 Actual transmission charges depends on availability of transmission systems on monthly basis

 Minimum Availability
AC: 98% HVDC : 95%
 If availability is less than the above norms, reduced recovery of transmission charges
 Normative Availability for the purpose of Incentive
AC: 98.5% HVDC : 97.5% Ceiling : 99.75%
 If availability is more than the above norms-

Monthly Availability
Annual Fixed Cost X = Tr. Charges
Normative Availability for incentive

Annual Tariff is not dependent upon the quantum of power flow

60
 Sample Calculation of Yearly Transmission Tariff

Asset : 400kV D/C Quad Transmission Line (31.5 km) along with bays at
both end

 Capital Cost : Rs. 100 Cr

 Loan : Rs. 70 Cr
 Equity : Rs. 30 Cr
 Rate of Interest (IOL) : 9.58% per annum
 Repayment of loan : 12 yrs
 IOWC : 12.05%
 DOCO : 1st April 2019
 O&M (Line & Bay details) : Bay – 4 no. 400 kV bays
 Line – 31.5 km 400 kV D/C (4 subconductor)
 MAT : 17.49%
 Actual availability : 99.5%

61
 Sample Calculation of Yearly Transmission Tariff

400kV D/C Quad Transmission Line (31.5 km) along with bays at both end

Sl. No. Tariff component As per CERC Regulations 2019-24

1. Return on Equity 30 x 0.155 /(1-0.1749) = 5.64 Cr
2. Interest on Loan Average loan * rate of Interest =67.36 x 0.08 = 5.39 Cr
3. Depreciation 100 x 0.0528 = 5.28 Cr
4. O&M Expenses Bay : 0.3215 x 4 = 1.286 Cr
Line: 1.322 x 31.5 = 0.414 Cr
Total = 1.7 Cr

5. Interest on Working Capital 1 month O&M = 0.14 Cr

O&M Spare 15% O&M = 0.26 Cr
45 days rbls = 2.29 Cr
Total = 2.66 Cr
IoWC = 2.66 x 0.1205 = 0.32 Cr

Total 1st Year Tariff = 18.33 + Incentive

= 18.33 x (99.5/98.5)
= 18.33 x 1.01015 = 18.516 Cr

62
Sample tariff for 35 years for a 400kV D/c Quad line
Year ROE Depreciation IOL IOWC O&M Total
1 5.63 5.28 5.39 0.32 1.70 18.33
2 5.63 5.28 4.97 0.32 1.76 17.96
3 5.63 5.28 4.54 0.31 1.82 17.59
4 5.63 5.28 4.12 0.31 1.88 17.23
5 5.63 5.28 3.70 0.31 1.95 16.87
6 5.63 5.28 3.28 0.30 2.02 16.51
7 5.63 5.28 2.85 0.30 2.09 16.15
8 5.63 5.28 2.43 0.30 2.16 15.80
9 5.63 5.28 2.01 0.29 2.23 15.45
10 5.63 5.28 1.59 0.29 2.31 15.10
11 5.63 5.28 1.16 0.29 2.39 14.75
12 5.63 5.28 0.74 0.28 2.47 14.41
13 5.63 5.28 0.32 0.28 2.56 14.07
14 5.63 0.97 0.07 0.22 2.64 9.53
15 5.63 0.97 0.02 0.22 2.73 9.57
16 5.63 0.97 0.22 2.83 9.66
17 5.63 0.97 0.23 2.93 9.76
18 5.63 0.97 0.23 3.03 9.86
19 5.63 0.97 0.24 3.13 9.97
20 5.63 0.97 0.24 3.24 10.08
21 5.63 0.97 0.25 3.35 10.20
22 5.63 0.97 0.25 3.47 10.32
23 5.63 0.97 0.26 3.58 10.45
24 5.63 0.97 0.26 3.71 10.58
25 5.63 0.97 0.27 3.84 10.71
26 5.63 0.97 0.27 3.97 10.85
27 5.63 0.97 0.28 4.10 10.99
28 5.63 0.97 0.28 4.25 11.14
29 5.63 0.97 0.29 4.39 11.29
30 5.63 0.97 0.30 4.54 11.45
31 5.63 0.97 0.30 4.70 11.61
32 5.63 0.97 0.31 4.86 11.78
33 5.63 0.97 0.32 5.03 11.95
34 5.63 0.97 रेगुलेटरी सेल 0.33 5.20 12.13
35 5.63 0.97 0.33 5.38 12.32

63
 Tariff Components
RoE IOL Depreciation O&M IOWC
All 5 components together form the total tariff of POWERGRID transmission asset as per the CERC
regulation.

Total Tar iff Without Incenti ve

20.00
18.3
3
18.00

16.00

14.00
12.323
12.00
Total
9.53
10.00
3
8.00

6.00

4.00

2.00

0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
64
 New Tariff Regulation Notification

Procedure for notification of Regulation involving Public consultation

65
 New tariff Block
Parameters Existing in Tariff Regulations, Proposed in Draft Tariff Regulations,
2019-24 2024-29
Debt: Equity Ratio 70:30 Retained as TR 2019-24
Base Rate Existing Projects Pre-tax Return on equity at 15.50% Retained as TR 2019-24
of RoE for all Transmission
New Projects Transmission :- 15 %
Accelerated depreciation for 12 years and Same as TR 2019-24 expect following
after 12 years balance depreciation spread
o IT eqp incl. Software & SCADA System: 15%
Existing Projects over remaining useful life. o Communication equipment : 15 %
Rate of Depreciation: o Fibre Optic/OPGW :5.28 %
o S/S & TL- 5.28 % o Batteries : 9.5 %
o I. T Equipment including software: Accelerated depreciation for 15 years for S/S & TL
Depreciatio 15% and after 15 years, balance depreciation spread over
n o Communication equipment: 6.33 % remaining useful life.
New Projects o Batteries: 5.28 % Rate of Depreciation
o S/S & TL- 4.22 %
Depreciation same for other items as provided
for Existing Projects
Working capital consists of
• 45 days receivables,
• 1 month O&M expenses & Retained as TR 2019-24
IOWC • Maintenance spares @ 15% of
Projects O&M Exp
Rate of IoWC = 1 Yr SBI MCLR+350 Basis
Points

O&M Rates : Per MVAr rate introduced for Reactors irrespective of Voltage level
Per MVA rate for ICTs irrespective of Voltage level

वाणिज्यिक विभाग व रेगुलेटरी सेल 66

 Transmission Charges Sharing
Methodology & Regulations
and

Billing, Collection & Disbursement

Procedure
 Sharing of Transmission Charges
 Transmission charges are recovered in accordance with CERC (Sharing of
Inter-State Transmission Charges and Losses) Regulation, 2020 (Sharing
Regulation) and the subsequent amendments as applicable.
 The method of sharing is known as Point of Connection (POC)
Mechanism.
 POWERGRID, as CTU, is the nodal agency for carrying out Billing,
Collection and Disbursement (BCD) on behalf of all ISTS Licensees.
 For Billing :
 Charges of all ISTS licensees (POWERGRID, JVs, Sterlite, Reliance etc.)
to be pooled together
 Charges of some of STU systems being used for transfer of ISTS power,
as approved by RPC/CERC, are also considered in the pool.

68
 CERC Sharing Regulations, 2020

Background

 “Draft CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations,

2019” issued on 01st November, 2019 inviting comments from the Stakeholders.
 CERC vide notification dated 4th May 2020 issued “CERC (Sharing of Inter-State
Transmission Charges and Losses) Regulations, 2020”
 These regulations came into force with effect from 1st November, 2020 superseding
Central Electricity Regulatory Commission (Sharing of inter-state transmission
charges and losses) Regulations, 2010.
CTU role in Sharing of Transmission Charges
 Billing & Collection of the ISTS charges from all the DICs on behalf of all
the ISTS licensees
 Disbursement of the collected charges to the concerned ISTS Licensees
 Custodian of Payment security mechanism (Management of the BGs, LCs,
Escrow accounts etc.)
 Periodic compilation of transmission charges defaults and regulation of
power supply including barring to apply for MTOA/STOA to the
defaulters
 For smooth implementation of Billing, Collection and Disbursement
Process, the following agreements shall be signed by all the ISTS Licensees
and DICs with CTU :-
(i)Transmission Service Agreement(TSA) - By all DICs & ISTS Licensees
(ii) Revenue Sharing Agreement (RSA) - By all ISTS Licensees

70
 Tariff of ISTS Licensee

 Approved by CERC under Section 62 of EA 2003

 Discovered through TBCB & adopted by CERC under Section

63 of EA 2003
TBCB Tariff
Tariff of RTM Projects (U/s Sec-62)
Important Features of Sharing Regulation

Responsibilities:

A) National Load Dispatch Centre (NLDC):

Notified as Implementing Agency for carrying out Load

Flow Studies, Data Collection, Pooling of Transmission
tariff of all ISTS Licensees and Determination of
transmission charges payable by all DICs depending
upon YTC and other details.
Important Features of Sharing Regulation

b) Regional Power Committees (RPCs):

 Issue Regional Transmission Accounts (RTA) & Regional

Transmission Deviation Accounts (RTDA) every month,
on the basis of Notification of Transmission charges for
DICs for every month.
Summary of CTU Role for BCD

Billing
Invoicing to all DICs
Collection
Payment Collection in a
Common Pool Account

Disbursement
Proportionate
Disbursement to
ISTS Licensees
CTUs Role

Note : No separate billing by ISTS Licensees

Collection & Disbursements by CTU

DIC1 DIC2 DIC3 DICn

Payment against PoC Bills by

DICs in PoC Pool Account

CTU

Disbursement to ISTS
Licensees on a prorated
manner, in the ratio of MTC
given by NLDC

L1 L2 L3 Ln

Note : No direct payment by DICs to Licensees

 CERC Sharing Regulations, 2020

Background

 These regulations came into force with effect from 1st November, 2020 superseding
Central Electricity Regulatory Commission (Sharing of inter-state transmission
charges and losses) Regulations, 2010.
 Transmission Sharing Methodology in Sharing Regulations,2020

 Recovery of YTC under four components

1) National Component (NC);
2) Regional Component (RC);
3) Transformer Component (TC); and
4) AC System Component (ACC).

Monthly Transmission charge

3. Transformers Component
1. National Component 2. Regional Component 4. AC system component
(TC) : Trans. Charges for ICTs (ACC) : Balance Trans.
(NC) : To be shared among (RC) : To be shared by DICs
planned for drawl of power. To be Charges for AC system
all DICs in the ratio of their of beneficiary region in the
borne by State for whom it is excluding 1, 2 & 3
LTA+MTOA ratio of their LTA+MTOA
planned

List of such ICTs for each

(a) HVDC (RC-HVDC) : 70 % State to be provided by CTU (a) Usage based component (AC-
(a) Renewable Energy ( NC- Trans. Charge of HVDC bi pole * UBC) : % use as calculated through
RE) : Systems developed for RE (Except NER Agra & Mudra WebNet software of each Tr line to
and as identified by CTU Mohindargarh ) be multiplied by line wise YTC,
sharing to be calculated by Software

(b) 100% of NER Agra, Back to back (b) STATCOM, SVC, Bus Reactor Spare
HVDC, Mudra Mohindargarh ICT & Reactor and any other element
(for1005 MW) & 30 % of all other critical for grid security as identified by (b) Balance component (AC-BC) : ( 4-
HVDC bi pole CTU * 4(a) ) to be shared among all DICs in
ratio of LTA+MTOA

* Where separate transmission charges are not available, the transmission charges shall be worked out and provided by CTU
 Notification of Trans. Charges by Implementing Agency (NLDC)
Transmission Charges for Designated ISTS Customers (DICs) for the billing month of November,2023

Usage based Balance AC Regional Transformers

LTA Demand AC system system charges National Component (₹) Component component
S.No. Zone Region / Injection charges (₹) (₹) (₹) (₹) Bilateral Total Transmission
(in MW) Charges (₹) charges payable in ₹

AC-UBC AC-BC NC-RE NC-HVDC RC TC

1 Delhi NR 4704 183628381 818144155 126947481 106628775 223498115 58398502 1517245408

2 UP NR 9648 687429208 1678005246 260367977 218694520 458392334 135524319 519836 3438933440

3 Punjab NR 4438 435016839 771758017 119749967 100583267 210826491 106804953 1744739534

4 Haryana NR 4412 405889903 767378974 119070492 100012546 209630238 203134563 2313176 1807429892

5 Chandigarh NR 352 13833268 61195183 9495361 7975572 16717113 3148659 112365155

6 Rajasthan NR 4053 316398180 704810351 109362021 91857974 192537933 89257575 2064918 1506288952

7 HP NR 1687 30893032 293370866 45520942 38235042 80142155 34732669 2114537 525009243

8 J&K NR 2004 74393722 348562983 54084836 45428234 95219368 52589147 670278290
9 Uttarakhand NR 1283 57795212 223073172 34613188 29073139 60938446 28525291 3412459 437430907
 Billing

 CTU shall raise 3 bills :

• First Bill -in each billing month for the all 4 components of trans. charges.
• Second Bill- quarterly to adjust variations on account of any revision in
transmission charges allowed by the commission, including incentives
• Third Bill-in each billing month for transmission deviation charges.
 Separate bills for bilateral charges for mismatch cases

 Rebate and Late Payment surcharge: in line with tariff Regulations 2019
• Rebate: 1.50% for payment within 5 days and 1% after 5 days and within a period
of 30 days of presentation of bills.
→
• LPS: LPS shall be as per LPS rules 2022 and its amedments

 Delay in issuance of RTA: CTU may raise provisional bills based on last available RTA
and subsequently raise adjustment bills when RTA is issued.
 Payment Security Mechanism

 DIC to open LC for amount equal to 2.10 times average amount of First Bill of a
Year( 1.05 times if TPA is signed) not later than 1 month prior to the date of
operationalization of LTA/MTOA

 If DIC fails to pay any bill or part by the Due Date, CTU may encash the LC

 The DICs shall renew LC 30 (thirty) days prior to the date of expiry.

 In case of failure on the part of any DIC to maintain LC, CTU may regulate the power
 Collection and Disbursement

 In case of shortfall in collection of trans. charges, the amount to be disbursed to ISTS

and intra-State licensees shall be reduced pro-rata from their share of YTC.
 Bilateral bill collected to be disbursed directly to concerned Trans. licensee or GenCo.
 Transmission charges collected shall be first adjusted towards LPS thereafter towards
outstanding transmission charges, starting from the longest overdue bill.
 In case on non payment of full amount by the due date by any DIC, CTU may take
following actions:
• Regulation of power supply in line with LPS Rules, 2022
Salient Features of BCD Procedures as per Sharing
Regulations, 2020
Billing:

First Bill: CTU shall raise the First Bill for billing period as per Regulations 5 to 8 of
Sharing Regulations 2020 in the first week of relevant billing month as per
procedure given below :-

 First Bill shall be raised within one(1) working day after publishing of
Regional Transmission Account (RTA) by Regional Power Committees
(RPCs) of respective region as per the timeline given in the Sharing
Regulations, 2020.

 In case RTA is not published by the 4th day of the billing month, CTU shall
raise provisional first bill on the next working day of the billing month as
per the last available RTA. Subsequently, CTU shall raise adjustment bill
within two working days after publishing of RTAs by all RPCs for the billing
month after considering provisional first bill.
Second Bill:
 Second bill shall be raised on quarterly basis for April to June(Q1), July to
September(Q2), October to December (Q3) and January to March(Q4)
period. The bill shall be raised in the month of September, December,
March and June for Q1, Q2, Q3 and Q4 respectively.

 One month prior to raising the second bill, ISTS licensee shall submit to
CTU, the final monthly transmission charges for the billing period which
is inclusive of approved MTC, incentive based on the certified
transmission system availability by RPCs and any other charges leviable
as per CERC Regulations/orders etc. in the prescribed format in the form
of excel sheets, PDF copy / hard copy duly signed by the designated
official of the ISTS Licensee.

 Incentive/penalty for transmission system availability for transmission

system under RTM projects shall be calculated as per applicable CERC
Tariff Regulations issued from time to time.

 Incentive/penalty for transmission system availability for TBCB projects

shall be calculated as per respective Transmission System Agreement.
 ISTS licensee shall include any revenue to be shared with DICs as per
CERC (Sharing of Revenue derived from utilization of transmission assets
for other business), Regulations 2020 alongwith support documents in
second bill on quarterly basis.

 ISTS licensee (RTM) shall include in second bill, any net savings in interest
resulting from re-financing or restructuring of loan to be shared with DICs
as per CERC (Terms & Conditions of Tariff) Regulations, 2019, as amended
from time to time, alongwith support documents.

 ISTS Licensee shall have to submit necessary documents such as

availability certificates issued by RPCs, CERC orders, Tariff adoption
orders etc. in support of their calculations without which the MTC as
submitted to implementing agency, shall only be considered for the
Second bill for the period under consideration, after necessary prudence
check.

 Difference of transmission charges arising out of Tariff determination by

CERC shall be calculated separately and furnished by ISTS Licensee in the
prescribed format along with necessary supporting documents such as
relevant CERC order, bank rate certificates etc.
 Sharing
 Monthly Trans. Charges (MTC) is derived from Yearly
Transmission Tariff (YTC) as per following
 In case of Tariff under Sec -62 (RTM)
 MTC = YTC x NDM/NDY
 MTC (Incl. of Incentive) = (YTC x NDM/NDY)x Trans. System
Availability /Target Availability
 In case of Tariff under Sec -63 (TBCB)
 MTC = YTC x NDM/NDY
 Incentive = 0.02 x YTC x (Actual Availability-Target Availability)
Penalty = 0.02 x YTC x (Target Availability - Actual
Availability)
Third Bill:
Third Bill shall be raised on the next working day after publishing of Regional
Transmission Deviation Account (RTDA) by Regional Power Committees
(RPCs) of respective region.

Surcharge Bill:
CTU shall raise the Surcharge Bills as per following procedure:

 The late payment surcharge shall be as per Regulation 18 of Sharing

Regulations 2020 as amended from time to time.

 Surcharge on outstanding dues of First Bill and Second Bill beyond due
date shall be calculated and billed on monthly basis.

 Surcharge on outstanding dues of Third Bill beyond due date shall be

calculated and billed on monthly basis. Payment received against this
surcharge bill shall be adjusted to the DICs in the ratio of First Bill.
Bilateral Bill:
Bills on behalf of ISTS Licensees for their Assets not covered under
Regulations 5 to 8 and covered under Clauses (3), (6), (8), (9) and (12) of
Regulation 13 of Sharing Regulations 2020 shall be raised as per following
procedure:

 ISTS Licensee, whose assets are covered under Clause (3), (6), (9) & (12)
of Regulations 13 shall submit their YTC data to Implementing Agency.

 Generator, who has to receive YTC from ISTS Licensee as per Clause (8) of
Regulation 13, shall submit its claim it to the Implementing Agency.

 Implementing Agency shall inform the RPCs on the claims of ISTS

Licensees / Generators for incorporating in the RTA for billing under
specific cases.

 After publishing the RTA, CTU, along with First Bill, shall also raise the
bilateral bill on behalf of the ISTS Licensee/Generator for specific cases to
entities from whom transmission charges are to be recovered.
 After receipt of the payment against the bills raised for specific cases,
same shall be disbursed to concerned ISTS Licensee/ Generator.

 If any dispute is raised by either entity in these special cases, same shall
be settled mutually between the parties without any prejudice to their
respective liabilities under the Central Electricity Regulatory Commission
(Sharing of Inter-State Transmission Charges and Losses) Regulations,
2020, without any liability to CTU.
 Payment:
Mode of payment:

 The payment by DICs to CTU shall be executed through National

Electronic Funds Transfer (NEFT) or Real Time Gross Settlement (RTGS) or
any other means of electronic transfer approved by the Reserve Bank of
India in the designated account of CTU as mentioned in the bills raised by
CTU.

 Due date of the payment shall be 45 days from presentation of bill as per
Regulation 16 of the Sharing Regulations 2020 or as amended from time
to time.

 Except for the due date being a Bank Holiday, any delay in transfer of
money to the Designated Account of CTU due to any other reasons shall
be to the account of the concerned DIC. Date of payment shall be the
date of actual credit of payment into designated account of CTU.
Rebate :

 Rebate shall be allowed on the timely payment as per Regulation 17 of

Sharing Regulations 2020 as amended from time to time.

 Rebate deducted by a DIC from payment against First & Second Bill shall
be reviewed and any adjustment due to wrong deduction of rebate by
the DIC shall be made in the First Bill in the following month.

 Rebate deducted by a DIC from the payment against Third Bill shall be
reviewed and any adjustment due to wrong deduction of rebate by DICs
shall be made in the subsequent Third Bill in the following month.

Payment Information:

DICs shall provide the information of payment for each and every transaction
made through electronic transfer to designated account of CTU, strictly adhering
to the format prescribed compulsorily within One(1) working days of making any
transaction to facilitate timely settlement of bills.
Adjustment of Payment

 The payment received from a DIC shall be first adjusted towards late
payment surcharge on the outstanding dues and thereafter, towards
other outstanding bills, starting from the longest overdue bill (FIFO
method), as indicated in 20 (6) of Sharing Regulations 2020.

 Payment made by DICs shall be adjusted against the outstanding bills on

First-In-First-Out (FIFO) principle i.e. oldest bills shall be cleared first.
 Disbursement:
 After getting payment information from DICs, CTU shall disburse the
amount received in designated account.

 The disbursements to ISTS Licensees shall be made in a pro-rated

manner. Shortfall in collection against any bill shall result in Pro-rata
reduction in disbursement to ISTS licensees.

 Rebate deducted by DICs shall be apportioned in the ratio of billing and

adjusted in the ISTS Licensee account.

 Any Tax deducted by DICs shall be apportioned and adjusted with the
ISTS Licensee in whose name TDS has been deducted and corresponding
TDS certificate issued by DIC.

 The disbursement of payment of transmission charges to the ISTS

Licensees for each Bill shall be made on a rolling basis within three (3)
Working Days of receiving the payment information, i.e details of bill
against which the payment is made, from the DIC.
 The CTU shall arrange to credit the disbursements to the bank accounts
of ISTS Licensees directly through NEFT/RTGS. CTU shall enter into
appropriate arrangements with its bank to facilitate such disbursements.
Any delays by the bank in relation to such disbursements shall not be
attributable to the CTU

 All disbursements by CTU shall be executed through NEFT/RTGS. The CTU

shall, notify the ISTS Licensees of the payments made to their respective
bank accounts in the form of a detailed Disbursement Advice furnishing
the details of payments against the bills, based on which periodical
reconciliation shall be done.

 The cost of NEFT/RTGS transactions or any other charges for such

transactions, if any, shall be to the account of the concerned ISTS
Licensee.
 Bill Dispute:

 Bill shall be considered correct, complete and conclusive between the DIC and
the CTU unless the DIC disputes the Bill within thirty (30) days of receiving it.
However, if any issue is brought out by the DIC at the later date, it shall be
reviewed by CTU for necessary action and same shall not be treated as bill
dispute.

 If any error in raising the bill on account of CTU is intimated by DIC, same shall
be reviewed and CTU shall raise supplementary bill, if required, within Seven
(7) days of getting intimation from DIC.

 If a DIC raises a dispute regarding any item or part of an item set out in a bill
raised by CTU as per regulation 5 to 8 of Sharing Regulations 2020, following
procedure is to be followed :-
a. Dispute must be raised by the DIC within 30 (Thirty) days of presentation
of the bill.
b. DIC shall serve a notice (a "Bill Dispute Notice") on the CTU setting out
(i) the item or part of an item which is in dispute, (ii) its estimate of
what such item or part of an item should be, (iii) and with all
documentary evidence in support of its claim.
c. If the bill has been raised by CTU as per RTA issued by RPCs and in case
DICs is not in agreement to amount of bill in the RTA, the DIC instead of
bill dispute notice, shall inform concerned RPCs/Implementing Agency
for correction in RTA with a copy to CTU. On revision of RTA, CTU shall
raise a supplementary bill.
d. If the CTU agrees to the claim raised in the Bill Dispute Notice issued
pursuant to Clause (b), CTU shall raise Supplementary Bill within fifteen
(15) days of receiving such notice from the disputing DIC and if the
disputing DIC has already made the excess payment against bill under
dispute, CTU shall adjust the excess amount (Supplementary Bill) against
the next month bill/refund the excess amount in case no next bill to be
raised.
e. If the CTU does not agree to the claim raised in the Bill Dispute Notice
issued pursuant to Clause (b), it shall, within fifteen (15) days of
receiving the Bill Dispute Notice, furnish a clarification to the disputing
DIC providing reasons thereof.
f. In case of disagreement to CTU clarification to the Bill Dispute Notice
under Clause ( e ) above, authorised representative(s) of the disputing
DIC and the CTU shall make best endeavours to amicably resolve such
Dispute within thirty (30) days thereafter.
g. If the disputing DIC and the CTU do not amicably resolve the dispute
pursuant to Clause ( f ), either party may approach the CERC for
adjudication of dispute.
h. If a Dispute regarding a Bill is settled pursuant to Clause ( f ) or by
Dispute resolution mechanism pursuant to Clause ( g ) in favour of the
disputing DIC that issued the Bill Dispute Notice, the CTU shall give
credit adjustment through a Supplementary Bill or through first bill in
the following month. Alternately, if the Dispute is settled in favour of
the CTU, then such amount as disputed shall be payable by the disputing
DIC along with the Late Payment Surcharge, as applicable.
i. For the avoidance of doubt, it is clarified that despite a Dispute
regarding the Bill which has been raised in accordance with RTA/RTDA as
per Regulations and these Procedures, the concerned DIC shall, without
prejudice to its right to the Dispute, be under an obligation to make
timely payment as per the bill raised. On resolution of the issue,
necessary adjustments shall be passed on by CTU to the DIC.
 Billing & Collection Performance during FY 22-23
Status as on 01.04.2023 Rs. in Cr.
All ISTS Licensees POWERGRID Portion
Billing Collection Dues Billing Collection Dues
Dues as on
5231 4312
31.03.2022
Apr-22 3454 2436 6249 2973 2158 5127
May-22 3583 3170 6661 2834 2488 5473
Jun-22 3348 2869 7140 2644 2261 5856
Jul-22 7422 3395 11167 6606 2938 9524
Aug-22 3412 5037 9543 2704 4099 8130
Sep-22 3546 4958 8131 2804 4157 6777
Oct-22 8031 5261 10900 7255 4493 9539
Nov-22 3553 4128 10325 2835 3391 8983
Dec-22 5077 4776 10626 4269 4018 9234
Jan-23 3897 5483 9040 3150 4696 7688
Feb-23 3723 5074 7689 2950 4190 6448
Mar-23 3947 5955 5681 3172 4799 4821
Total 52992 52542 44196 43688
Trade receivables
39.81
(equivalent days)
An Empowered organization is the one in which
individuals have the knowledge, skill, desire and
opportunity to lead collective organisational
Success

64
 CTU Graded Rebate Table
0-15 days 16-30 days 31-45 days ←
Days Rebate Days Rebate Days Rebate (%)
(%) (%)
T+0 1.65 T+16 1.30 T+31 0.50
T+1 1.65 T+17 1.28 T+32 0.45
T+2 1.65 T+18 1.26 T+33 0.40
T+3 (*) 1.65 T+19 1.24 T+34 0.35
T+4 1.50 T+20 1.22 T+35 0.30
T+5 1.50 T+21 1.20 T+36 0.25
T+6 1.50 T+22 1.18 T+37 0.20
T+7 1.48 T+23 1.16 T+38 0.15
T+8 1.46 T+24 1.14 T+39 0.10
T+9 1.44 T+25 1.12 T+40 0.05
T+10 1.42 T+26 1.10 T+41 0.05
T+11 1.40 T+27 1.08 T+42 0.05
T+12 1.38 T+28 1.06 T+43 0.05
T+13 1.36 T+29 1.02 T+44 0.0
T+14 1.34 T+30 1.00 T+45 0.0
T+15 1.32