Decided on September 29,2006



- (1.) THE petitioner, National Hydroelectric Power Corporation Ltd. (NHPC), has filed this petition for revision of O & M expenses for Rangit Hyderoelectric Project for the period from 1.4.2001 to 31.3.2004 allowed by the Commission in its common order dated 19.5.2004 in Petitions No. 3/2000 and 63/2001, based on the Appellate Tribunal of Electricity order dated 3.1.2006 in Appeal No. 103 of 2005 National THErmal Power Corporation v. Central Electricity Regulatory Commission and Ors..
(2.) By its common order dated 19.5.2004 in Petitions No. 3/2000 and 63/2001, the Commission had, inter alia, approved O & M expenses for the period 1.4.2001 to 31.3.2004, based on actual escalation factors. The details of O & M expenses approved are as under: JUDGEMENT_200_TLET0_20060.htm The Commission in its notification dated 26.3.2001 had specified the terms and conditions for determination of tariff, applicable from 1.4.2001 to 31.3.2004. In accordance with the notification, operation and maintenance charges (O & M charges) for the generating stations in operation for five years or more in the base year 1999-2000 were derived on the basis of actual O & M expenses, excluding abnormal O & M expenses, if any, for the years 1995-96 to 1999-2000. The average of actual O&M expenses was considered as O&M expenses for the year 1997-98. In order to arrive at O & M expenses for the base year of 1999 - 2000, O & M expenses for the year 1997-98 arrived in the manner indicated above were escalated twice @ 10% per annum. Thereafter, the base O&M expenses for the year 1999-2000 were escalated successively @ 6% per annum to arrive at notional O & M expenses for the year 2000-01 and O & M expenses payable for the years 2001-02, 2002-03 and 2003-04. The notification also provided that in case the actual escalation factor computed from the observed data was within 20% of the notified escalation factor of 6%, that is, when the actual escalation factor was within the range of 4.8% to 7.2%, the variation was to be absorbed by the Central Power Sector Utilities and the beneficiaries and no revision of O & M expenses claimed/paid by applying escalation factor of 6%, was necessary. However, when the deviation was beyond these specified limits, adjustment was required to be made by applying the actual escalation factor arrived at in the specified manner.
(3.) THE year-wise inflation rates (escalation factor) for the years 2000-01 to 2003-04 computed in accordance with the methodology specified in the notification were circulated among all the stakeholders, the Central Power Sector Utilities and the state utilities for their views and suggestions thereon. After consideration of the views and suggestions received, the Commission in its order dated 28.2.2005 in petition No. 196/2004 concluded that the notification dated 26.3.2001 provided that there would be no adjustment when the escalation factor was between 4.8% to 7.2% and where the escalation factor was beyond these limits, O & M expenses were to be worked out by applying the actual escalation factor and not the marginal adjusted factor. THE final year-wise escalation factors approved under order dated 28.2.2005 are extracted below: JUDGEMENT_200_TLET0_20061.htm ;

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