The B

PUBLI

(NO.PATNA 541) PAT

BIHAR ELEC

No. BERC-Regl/Sola

Section 61 read with Section

enabling it in this behalf, and

Commission hereby makes th

1. Short title and com

Electricity Regulatory Comm

Solar Energy Sources) Regul

(2) These regulations

2. Definitions and In

otherwise requires,–

(a) ‘Act’ means th

(b) 'Auxiliary ene

a generating s

equipments o

generating sta

generated at

station;

(d) 'Commission'

to in sub-secti

REGISTERED

Bihar Gazett

XTRA ORDINARY

SHED BY AUTHORITY

13 SHRAVANA (S)

TNA, WEDNESDAY, 4TH AUGUST 20

CTRICITY REGULATORY COMMISSION

—————

NOTIFICATION

The 2nd August 2010

ar-2/2010-03–247—In exercise of powers con

181(2)(zd) of the Electricity Act, 2003, and all

d after previous publication, the Bihar Electricit

he following regulations, namely:

mmencement.—(1) These regulations may be cal

mission (Terms and Conditions for Tariff Determ

lations, 2010.

shall come into force from the date of notificati

nterpretation.— (1) In these regulations, unles

he Electricity Act, 2003 (36 of 2003);

ergy consumption' or 'AUX' in relation to a peri

station means the quantum of energy consumed

f the generating station, and transformer losse

ation, expressed as a percentage of the sum of

the generator terminals of all the units of th

means the capital cost as defined in regulations

means the Bihar Electricity Regulatory Commis

ion (1) of section 82 of the Act;

NO. PT.-40

tetetete

010

nferred under

other powers

ty Regulatory

lled the Bihar

mination from

ion.

s the context

iod in case of

d by auxiliary

es within the

gross energy

he generating

25 and 29;

ssion referred

BIHAR GAZETTE (EXTRA) 4TH AUGUST 2010

(e) ‘Conduct of Business Regulations’ means the Bihar Electricity Regulatory

Commission (Conduct of Business) Regulations, 2005 as amended from

time to time;

(f)

‘Control Period or Review Period’ means the period during which the

norms for determination of tariff specified in these regulations shall

remain valid;

(g) ‘Hybrid Solar Thermal Power Plant’ means the solar thermal power plant

that uses other forms of energy input sources alongwith solar thermal

energy for electricity generation, and wherein not less than 75 Percent of

electricity is generated from solar energy component.

(h) ‘Inter-connection Point’ shall mean interface point of solar energy

generating facility with the transmission system or distribution system, as

the case may be:

(a) in relation to Solar Photovoltaic Projects, inter-connection point

shall be line isolater on outgoing feeder on HV side of the pooling

sub-station;

(b) in relation to Solar Thermal Power Projects the, inter-connection

point shall be line isolator on outgoing feeder on HV side of

generator transformer;

(i)

‘MNRE’ means the Ministry of New and Renewable Energy, Government

of India.

(j)

‘Non-firm power’ means the power generated from renewable sources, the

hourly variation of which is dependent upon nature’s phenomenon like

sun, cloud, wind, etc., that cannot be accurately predicted.

(k) 'Operation and maintenance expenses’ or ‘O and M expenses' means the

expenditure incurred on operation and maintenance of the project, or part

thereof, and includes the expenditure on manpower, repairs, spares,

consumables, insurance and overheads;

(l)

‘Renewable Energy’ means the grid quality electricity generated from

renewable energy sources.

(m) ‘Renewable Energy Power Plants’ means the power plants other than the

conventional power plants generating grid quality electricity from

renewable energy sources.

(n) ‘Solar Energy Sources’ means solar PV, rooftop solar PV and other small

solar projects, and solar thermal energy sources as approved by the

MNRE;

(o) ‘Solar PV power’ means the Solar Photo Voltaic power project that uses

sunlight for direct conversion into electricity through Photo Voltaic

technology.

(p)

'Solar Rooftop and other Small Solar Power' means the solar rooftop or

other small solar photovoltaic power projects that uses photovoltaic

technology for generation of electricity which are mounted on rooftop of

the buildings or ground mounted installation satisfying eligibility criteria

as may be specified by MNRE from time to time.

(q) ‘Solar Thermal power’ means the Solar Thermal power project that uses

sunlight for direct conversion into electricity through Concentrated Solar

Power technology based on either line focus or point focus principle as

may be approved by the Ministry of New and Renewable Energy.

BIHAR GAZETTE (EXTRA), 4TH AUGUST 2010

(r) ‘Tariff period’ means the period for which tariff is to be determined by the

Commission on the basis of norms specified under these Regulations;

(s) 'Useful Life’ in relation to a unit of solar PV, rooftop solar PV and solar

thermal including evacuation system shall mean a duration of twenty five

years from the date of commercial operation (COD) of such generation

facility.

(t)

‘Year’ means a financial year.

(2) Save as aforesaid and unless repugnant to the context or if the subject matter

otherwise requires, words and expressions used in these regulations and not defined, but

defined in the Act, MNRE guidelines or the Indian Electricity Grid Code or the Bihar

Electricity Grid Code or the Bihar Electricity Regulatory Commission (Terms and

Conditions of Tariff) Regulations, 2007 shall have the meanings assigned to them

respectively in the Act or the Indian Electricity Grid Code or the Bihar Electricity Grid

Code or the Bihar Electricity Regulatory Commission (Terms and conditions of Tariff)

Regulations, 2007.

3. Scope and extent of application.—These regulations shall apply in all cases of

solar energy projects for generation and sale of electricity from such projects to

distribution licensee within the State of Bihar from the date of notification of these

Regulations and where tariff for a generating station or a unit thereof based on solar

energy sources, is to be determined by the Commission under Section 62 read with

Section 86 of the Act.

Provided that these regulations shall apply subject to the fulfilment of

eligibility criteria specified in regulation 4 of these Regulations.

4. Eligibility Criteria.—Both Solar PV and Solar Thermal Projects based on

technologies as approved by the MNRE, Government of India from time to time shall be

eligible.

CHAPTER 1

General Principles

5. Control Period or Review Period.—The Control Period or Review Period under

these Regulations shall be of three (3) years, of which the first year shall be the period

from the date of notification of these regulations to 31st March 2011.

Provided that the benchmark capital cost for these projects may be reviewed

annually by the Commission.

Provided further that the tariff determined as per these Regulations for the

solar projects commissioned during the Control Period, shall continue to

be applicable for the entire duration of the Tariff Period as specified in

Regulation 6.

Provided notwithstanding anything contained in these Regulations, the generic

preferential tariff determined for Solar PV and Solar Thermal Projects

based on the capital cost and other norms applicable for the year 2010-11

shall also apply for such projects during the year 2011-12 and 2012-13.

6. Tariff Period.—(1) Tariff Period for Solar PV, and Solar thermal power

projects shall be twenty five (25) years.

(2) Tariff period under these Regulations shall be considered from the date of

commercial operation from solar energy generating station.

7. Project Specific tariff .—(1) Project specific tariff, on case to case basis, shall

be determined by the Commission for the following types of projects :

(a) Solar PV and Solar Thermal Power projects, if a project developer opts for

project specific tariff.

⁴

BIHAR GAZETTE (EXTRA) 4TH AUGUST 2010

Provided that the Commission while determining the project specific tariff for

Solar PV and Solar Thermal shall be guided by the provisions of these

Regulations.

(b) Hybrid Solar Thermal Power Plants.

8. Petition and proceedings for determination of tariff.—(1) The Commission

may notify the generic preferential tariff on suo motu basis pursuant to issuance of

revised norms by Central Electricity Regulatory Commission or Bihar Electricity

Regulatory Commission.

(2) A petition for determination of project specific tariff shall be accompanied by

such fee as may be determined by regulations and shall be accompanied by

(a) Information in forms as appended in Appendix I to these regulations.

(b) Detailed project report outlining technical and operational details, site

specific aspects, premise for capital cost and financing plan etc.

expenditure for the period for which tariff is to be determined.

(d) A statement containing full details of calculation of any subsidy and

incentive received, due or assumed to be due from the Central

Government and/or State Government. This statement shall also include

the proposed tariff calculated without consideration of the subsidy and

incentive

(e) Any other information that the Commission requires the petitioner to

submit.

(3) The proceedings for determination of tariff shall be in accordance with the

Conduct of Business Regulations.

9. Tariff Structure.—The tariff for solar energy technologies shall be single part

tariff consisting of the following fixed cost components:

(a) Return on equity;

(b) Interest on loan capital;

(d) Interest on working capital;

(e) Operation and maintenance expenses;

10. Tariff Design—(1) The generic tariff shall be determined on levellised basis

for the Tariff Period.

(2) For the purpose of levellised tariff computation, the discount factor equivalent

to weighted average cost of capital shall be considered.

(3) Levellisation shall be carried out for the ‘useful life’ of the Solar PV and Solar

Thermal Power Project while Tariff shall be specified for the period equivalent to ‘Tariff

Period’.

11. Despatch principles for electricity generated from Solar Energy Sources.—All

solar energy power plants shall be treated as ‘MUST RUN’ power plants and shall not be

subjected to ‘merit order despatch’ principles.

BIHAR GAZETTE (EXTRA), 4TH AUGUST 2010

CHAPTER 2

Financial Principles

12. Capital Cost.—The norms for the Capital cost as specified in the technology

specific chapters hereinafter shall be inclusive of all capital work including plant and

machinery, civil work, erection and commissioning, financing and interest during

construction, and evacuation infrastructure up to inter-connection point.

Provided that for project specific tariff determination, the generating company

shall submit the break-up of capital cost items along with its petition in the

manner specified under Regulation 8.

13. Debt Equity Ratio.—(1) For generic tariff to be determined based on suo motu

petition, the debt equity ratio shall be 70 : 30.

(2) For Project specific tariff, the following provisions shall apply :—If the

equity actually deployed is more than 30 Percent of the capital cost, equity in excess of

30% shall be treated as normative loan.

Provided that where equity actually deployed is less than 30 Percent of the

capital cost, the actual equity shall be considered for determination of

tariff:

Provided further that the equity invested in foreign currency shall be

designated in Indian rupees on the date of each investment.

14. Loan and Finance Charges.—(1) Loan Tenure. For the purpose of

determination of tariff, loan tenure of 10 years shall be considered.

(2) Interest Rate —

(a) The loans arrived at in the manner indicated above shall be considered as

gross normative loan for calculation for interest on loan. The normative

loan outstanding as on 1st April of every year shall be worked out by

deducting the cumulative repayment up to 31st March of previous year

from the gross normative loan.

(b) For the purpose of computation of tariff, the normative interest rate shall

be considered as average long term prime lending rate (LTPLR) of State

Bank of India (SBI) prevalent during the previous year plus 150 basis

points. In case of change of SBI Policy as regard LTPLR the Commission

may Suo Motu amend this rate of basis points over and above the bank

interest rate.

company, the repayment of loan shall be considered from the first year of

commercial operation of the project and shall be equal to the annual

depreciation allowed.

15. Depreciation.—(1) The value base for the purpose of depreciation shall be the

Capital Cost of the asset admitted by the Commission. The Salvage value of the asset

shall be considered as 10 Percent and depreciation shall be allowed up to maximum of 90

Percent of the Capital Cost of the asset.

(2) Depreciation per annum shall be based on ‘Differential Depreciation

Approach’ over loan tenure and period beyond loan tenure over useful life computed on

‘Straight Line Method’. The depreciation rate for the first 10 years of the Tariff Period

shall be 7 Percent per annum and the remaining depreciation shall be spread over the

remaining useful life of the project from 11th year onwards.

(3) Depreciation shall be chargeable from the first year of commercial operation.

Provided that in case of commercial operation of the asset for part of the year,

depreciation shall be charged on pro rata basis.

⁶

BIHAR GAZETTE (EXTRA) 4TH AUGUST 2010

16. Return on Equity.—(1) The value base for the equity shall be 30% of the

capital cost or actual equity (in case of project specific tariff determination) as

determined under Regulation 13.

(2) The normative Return on Equity shall be:

(a) Pre-tax 19 Percent per annum for the first 10 years.

(b) Pre-tax 24 Percent per annum 11th years onwards.

17. Interest on Working Capital.—(1) The Working Capital requirement in respect

of solar PV, and Solar thermal power projects shall be computed in accordance with the

following :

(a) Operation and Maintenance expenses for one month;

(b) Receivables equivalent to 2 (Two) months of energy charges for sale of

electricity calculated on the normative Capacity Utilisation Factor (CUF);

(2) Interest on working capital shall be at interest rate equivalent to average State

Bank of India short term Prime Lending Rate (STPLR) during the previous year plus 100

basis points. In case of change of SBI Policy as regard STPLR the Commission may Suo

Motu amend this rate of basis points over and above the bank interest rate.

18. Operation and Maintenance Expenses.—(1) ‘Operation and Maintenance or

O and M expenses’ shall comprise repair and maintenance (R and M), establishment

including employee expenses, and administrative and general expenses, like insurance

and overhead, spares consumable, etc.

(2) Operation and maintenance expenses shall be determined for the Tariff Period

based on normative O and M expenses specified by the Commission subsequently in

these Regulations for the first year of Control Period.

(3) Normative O and M expenses allowed during first year of the Control Period

(i.e. FY 2010-11) under these Regulations shall be escalated at the rate of 5.72 Percent

per annum over the Tariff Period.

19. Rebate.—(1) For payment of bills of the generating company through letter of

credit, a rebate of 2 Percent shall be allowed.

(2) Where payments are made other than through letter of credit within a period of

one month of presentation of bills by the generating company, a rebate of 1 Percent shall

be allowed.

20. Late payment surcharge.—In case the payment of any bill for charges payable

under these regulations is delayed beyond a period of 60 days from the date of billing, a

late payment surcharge at the rate of 1.25 Percent per month shall be levied by the

generating company.

21. Sharing of Clean Development Management (CDM) Benefits.—(1) The

proceeds of carbon credit from approved CDM project shall be shared between

generating company and concerned beneficiaries in the following manner, namely-

(a) 100 Percent of the gross proceeds on account of CDM benefit to be

retained by the project developer in the first year after the date of

commercial operation of the generating station ;

(b) In the second year, the share of the beneficiaries shall be 10 Percent which

shall be progressively increased by 10 Percent every year till it reaches 50

Percent, where after the proceeds shall be shared in equal proportion, by

the generating company and the beneficiaries.

22. Subsidy or incentive by the Central / State Government.—The Commission

shall take into consideration any incentive or subsidy offered by the Central or State

Government, including accelerated depreciation benefit if availed by the generating

BIHAR GAZETTE (EXTRA), 4TH AUGUST 2010

company, for the solar energy power plants while determining the tariff under these

Regulations.

Provided that the following principles shall be considered for ascertaining

income tax benefit on account of accelerated depreciation, if availed, for

the purpose of tariff determination:

(i) Assessment of benefit shall be based on normative capital cost,

accelerated depreciation rate as per relevant provisions under Income Tax

Act and corporate income tax rate.

(ii) Capitalisation of Solar projects during second half of the fiscal year.

Per unit benefit shall be derived on levellised basis at discount factor

equivalent to weighted average cost of capital.

23. Taxes and Duties.—Tariff determined under these regulations shall be

exclusive of taxes and duties as may be levied by the appropriate Government:

Provided that the taxes and duties levied by the appropriate Government shall

be allowed as pass through on actual incurred basis.

CHAPTER 3

Technology specific parameters for Solar PV, Power Projects

24. Technology Aspects.—(1) Norms for Solar Photovoltaic (PV), Rooftop Solar

PV and other Small Solar Power Projects under these Regulations shall be applicable for

grid connected PV systems that directly convert solar energy into electricity and are

based on the technologies such as crystalline silicon or thin film etc. as may be approved

by MNRE from time to time.

25. Capital Cost.—(1) The normative capital cost for setting up Solar

Photovoltaic (PV), Rooftop Solar PV and other Small Solar Power Projects shall be Rs.

1690 Lakh/MW for FY 2010-11 which may be reviewed from time to time.

Provided that the Commission may deviate from above norm in case of

project specific tariff determination in pursuance of Regulation 7 and

Regulation 8.

26. Capacity Utilisation Factor.—(1) The Capacity Utilisation Factor (CUF) for

Solar Photovoltaic (PV), Rooftop Solar PV and other Small Solar Power Projects shall be

19 Percent.

Provided that the Commission may deviate from above norm in case of

project specific tariff determination in pursuance of Regulation 7 and

Regulation 8.

27. Operation and Maintenance Expenses.—(1) The O and M Expenses shall be

Rs. 9.51 Lakhs/MW for the 1st year of operation.

(2) Normative O and M expenses allowed at the commencement of the Control

Period under these Regulations shall be escalated at the rate of 5.72 Percent per annum.

CHAPTER 4

Technology specific parameters for Solar Thermal Power Projects

28. Technology Aspects.—(1) Norms for Solar thermal power under these

Regulations shall be applicable for concentrated solar power (CSP) technologies viz. line

focusing or point focusing, as may be approved by MNRE, and uses direct sunlight,

concentrating it several times to reach higher energy densities and thus higher

temperatures whereby the heat generated is used to operate a conventional power cycle to

generate electricity which may be reviewed from time to time.

⁸

BIHAR GAZETTE (EXTRA) 4TH AUGUST 2010

29. Capital Cost.—(1) The normative capital cost for setting up Solar Thermal

Power Project shall be Rs. 1530 Lakh/MW for FY 2010-11.

Provided that the Commission may deviate from the above norm in case of

project specific tariff determination in pursuance of Regulation 7 and

Regulation 8.

30. Capacity Utilisation Factor (CUF).—(1) The Capacity utilisation factor shall

be 23 Percent.

Provided that the Commission may deviate from the above norm in case of

project specific tariff determination in pursuance of Regulation 7 and

Regulation 8.

31. Operation and Maintenance Expenses.—(1) The O and M Expenses shall be

Rs 13.74 Lakhs/MW for 1st year of operation.

(2) Normative O and M expenses allowed at the commencement of the Control

Period under these Regulations shall be escalated at the rate of 5.72 Percent per annum.

32. Auxiliary Consumption for Solar Thermal.—(1) The auxiliary consumption

factor for Solar Thermal shall be 10 Percent.

Provided that the Commission may deviate from the above norm in case of

project specific tariff determination in pursuance of Regulation 7 and

Regulation 8.

CHAPTER 5

Miscellaneous

33. Deviation from norms.—Tariff for sale of electricity by the generating

company may also be determined in deviation from the norms specified in these

regulations subject to the conditions that the levellised tariff over the useful life of the

project on the basis of the norms in deviation does not exceed the levellised tariff

calculated on the basis of the norms specified in these regulations.

Provided that the reasons for deviation from the norms specified under these

Regulations shall be recorded in writing.

34. Power Purchase Agreement (PPA).—The utility before signing any PPA with

solar Power developer shall satisfy the eligibility criteria as decided/modified from time

to time by MNRE, under Jawaharlal Nehru National Solar Mission Programme (JNNSM)

and also satisfy the technical and financial credibility of the Developers.

35. Renewable Purchase Obligation (RPO).—(1) Keeping in view generation

from existing renewable sources including small/mini hydroelectric power plants in the

State, and the projection made by the Distribution Licensee the Commission revises the

target for purchase of electricity by the Distribution Licensee from renewable and

cogeneration sources or any other source coming under this category as per guidelines of

MNRE in the following percentage of its total energy consumption in a year,

Year

Minimum Percentage

2010-11

1.5 Percent

2011-12

2.5 Percent

2012-13

4.0 Percent

Purchase obligations for Distribution Licensee(s) as mentioned above are

mandatory minimum percentage of purchase to be maintained by the licensee(s)

(2) Renewable Purchase Obligation from solar sources for FY 2010-11 shall be

0.25 Percent of overall RPO as specified in (1) above with an annual increase of 0.25

Percent.

BIHAR GAZETTE (EXTRA), 4TH AUGUST 2010

36. Guidelines of Competent Authority.—Policy/guidelines issued by the Ministry

of Power, Government of India, MNRE, State Government and any other competent

authority in this regard from time to time shall prevail.

37. Power to Relax.—The Commission may by general or special order, for

reasons to be recorded in writing, and after giving an opportunity of hearing to the parties

likely to be affected may relax any of the provisions of these regulations on its own

motion or on an application made before it by an interested person.

38. Power to Remove Difficulties—If any difficulty arises in giving effect to the

provisions of these Regulations, the Commission may, by general or specific order, make

such provisions not inconsistent with the provisions of the Act, as may appear to be

necessary for removing the difficulty.

39. Power to Amend—The Commission may from time to time add, vary, alter,

modify or amend any provisions of these regulations on its own motion or on any

application made before it by an interested person.

By Order of the Bihar Electricity Regulatory Commission

(Sd.) Illegible,

Secretary.

¹⁰

BIHAR GAZETTE (EXTRA) 4TH AUGUST 2010

Appendix-1

Form Template for Solar PV/Solar Thermal

Sl.

No.

Assumption Head

Sub-Head

Sub-Head (2)

Unit

Assumptions

Power Generation

Capacity

Installed Power

Generation Capacity

Capacity Utilisation

Factor

Commercial Operation

Date

mm/yyyy

Useful Life

Years

Project Cost

Capital Cost/MW

Normative Capital Cost

Rs Lakh/MW

Capital Cost

Rs. Lakh

Capital Subsidy, if any

Rs. Lakh

Net Capital Cost

Rs. Lakh

Financial Assumptions

Tariff Period

Years

Debt: Equity

Debt

Equity

Total Debt Amount

Rs Lacs

Total Equity Amount

Rs Lacs

Debt Component

Loan Amount

Rs Lacs

Moratorium Period

years

Repayment Period

years

(including Moratorium)

Interest Rate

Equity Component

Equity amount

Rs Lacs

Return on Equity for first

10 years

% p.a

RoE 11th year onwards

Year

BIHAR GAZETTE (EXTRA), 4TH AUGUST 2010

Sl.

No.

Assumption Head

Sub-Head

Sub-Head (2)

Unit

Assumptions

Discount Rate

Depreciation

Depreciation Rate for

first 12 years

Depreciation Rate 13th

year onwards

Generation based

incentives, if any

Rs. L p.a.

Period for GBI

Operation &

Maintenance

Normative O&M

expense

Rs. Lakh/MW

O&M expense p.a.

Rs. Lakh

Escalation factor for

O&M expenses

Working Capital

O&M expenses

Months

Maintenance Spare

(% of O&M expenses)

Receivables

Months

Interest on Working

Capital

¹²

BIHAR GAZETTE (EXTRA) 4TH AUGUST 2010

Form Templates for Solar PV / Solar Thermal: Determination of Tariff

Components

Units Generation

Unit

Yr-->

Installed Capacity

Gross Generation

Auxiliary Consumption

Net Generation

Units Generation

Unit

Yr-->

Installed Capacity

Gross Generation

Auxiliary Consumption

Net Generation

Tariff Components

(Fixed Cost )

Unit

Yr-->

O&M Expenses

Rs Lakh

Depreciation

Rs Lakh

Interest on term loan

Rs Lakh

Interest on working

Capital

Rs Lakh

Return on Equity

Rs Lakh

Total Fixed Cost

Rs Lakh

Tariff Components

(Fixed Cost )

Unit

Yr-->

O&M Expenses

Rs Lakh

Depreciation

Rs Lakh

Interest on term loan

Rs Lakh

Interest on working

Capital

Rs Lakh

Return on Equity

Rs Lakh

Total Fixed Cost

Rs Lakh

Per Unit Tariff

Components

Unit

Yr-->

O&M expn

Rs/kWh

Depreciation

Rs/kWh

Int. on term loan

Rs/kWh

Int. on working capital

Rs/kWh

RoE

Rs/kWh

Total Tariff

components

Rs/kWh

Per Unit Tariff

Components

Unit

Yr-->

O&M expn

Rs/kWh

Depreciation

Rs/kWh

Int. on term loan

Rs/kWh

Int. on working capital

Rs/kWh

RoE

Rs/kWh

Total Tariff

components

Rs/kWh

BIHAR GAZETTE (EXTRA), 4TH AUGUST 2010

Levellised Tariff

Unit

Yr-->

Discount Factors

0.39

Discounted Tariff

Components

Rs/kWh

0.43

Levellised Tariff

Rs/kWh

0.31

Levellised Tariff

Unit

Yr-->

Discount Factors

0.39

Discounted Tariff

Components

Rs/kWh

0.43

Levellised Tariff

Rs/kWh

0.31

By Order of the Bihar Electricity Regulatory Commission

(Sd.) Illegible,

Secretary.

————

PUBLISHED AND PRINTED BY THE SUPERINTENDENT,

BIHAR SECRETARIAT PRESS, PATNA.

Bihar Gazette (Extra) 541—571+400—D.T.P.

Website: http://egazette.bih.nic.in