- (1.) THE application has been made seeking review of the Commission's order dated 23.3.2007 in Petition No 5/2002 vide which tariff in respect of NLC THErmal Power Station Stage II for the period 2001-04 was fixed. Among the various grounds urged for review, the Commission vide order dated 28.9.2007 admitted the application for review on the following two grounds, namely (i) Award of reimbursement of FERV based on actuals in addition to capitalization in respective year; and (ii) Station Heat Rate.
(2.) Briefly, the case of the applicant with reference to the above two grounds on which the review application has been admitted is as under: (a) While there is no loan (either foreign currency or domestic) outstanding in respect of NLC TPS Stage - II mines, the Commission, vide the order dated 23.3.2007, has allowed capitalization of Rs.7.51 lakh, and this is an error apparent on the face of the records, which needs to be corrected. (b) The Commission, vide the said order dated 23.3.2007, has allowed tariff on account of FERV twice in respect of Mine - II, Stage - I, first by way of capitalization of Rs. 6.09 lakh and secondly by way of reimbursement of Rs.45 lakh through tariff. As per the applicant, only one course out of the two is permissible. (c) In respect of Mine - I (Expansion) and Mine-IA, the Commission had allowed capitalization of FERV to the extent of Rs. 10519 lakh and Rs 199 lakh from the respective date of commercial operation to 31.3.2004. In addition to the above, the Commission has awarded Rs. 1305 lakh and Rs 66 lakh as yearly reimbursement of FERV during 2003-04. (d) The said order dated 23.3.2007 is based on Station Heat Rate of 2960 kCal/kWh presumably arrived at considering 1.24 kg as specific consumption of lignite and 2635.33 kCal/kg as GCV of lignite. It has been stated that PPA signed by the applicant with the first respondent for the period upto 31.3.2001 was based on specific consumption of lignite irrespective of its GCV or moisture content. However, even if the moisture content is taken to be 50% and above, station heat rate works out to 2750 kCal/kWh only. Award of station heat rate of 2960 kCal/kWh is erroneous in the opinion of the applicant. (e) According to the applicant, fuel price adjustment charges based on weighted average GCV of lignite and moisture content from all mines duly supported with documentary evidence had to be considered for the year 2003-04, instead of GCV of 2635.33 kCal/kg actually considered by the Commission. Per contra, the first respondent has made the following submissions: (a) There is no double claim on account of FERV. In foreign exchange variation accounting there are two terminologies viz. translation difference and transaction difference. (b) Translation difference is the additional liability provided in the books of accounts by way of translating the outstanding loan liability on the Balance Sheet date at the exchange rate prevailing as on that date. On the other hand, transaction difference is the differential claim of FERV in respect of repayment of principal and payment of interest amount at the exchange rate on payment date and the exchange rate considered as on the date of previous balance sheet. (c) FERV for the period 2001-02 to 2003-04 was capitalised on year to year basis. Hence FERV of Rs. 199 lakh, Rs.13.6 lakh and Rs.10519.46 lakh were capitalized in respect of Min IA, Mine II and Mine I Expansion upto 31.3.2004. (d) Transaction difference claimed in the lignite price was Rs. 45 lakh for Mine II, Rs. 1305 lakh for Mine I Expansion and Rs. 66 lakh for Mine IA. The claims are in line with the Accounting Standards and are duly certified by the Chartered Accountant. (e) As per Clause 2.3 (b) of the Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulations 2001 (hereinafter referred to as "the 2001 regulations"), operational norms except those relating to target availability and Plant Load Factor for the existing and the new stations of NTPC and NLC for which no tariff notification was issued by the Central Government but PPAs and BPSAs existed on the date of issue of the 2001 regulations shall be governed by the respective PPA/BPSA signed between the parties. (f) In accordance with the 2001 regulations, station heat rate of 2960 kCal/kWh corresponding to the specific lignite consumption of 1.24 kg/kWh adopted in the period ending 31.3.2001 as per BPSA for the period 1.4.1996 to 31.3.2001 has been continued for the period upto 31.3.2004. Adopting station heat rate of 2960 kCal/kWh as per the BPSA is, therefore, in tune with the 2001 regulations and is in order.
(3.) BESIDES, the fourth respondent has also filed its reply which is practically a reiteration of the grounds raised by the applicant.;