The B

PUBLI

(NO.PATNA 297) PA

BIHAR ELEC

No. BERC-SMP-27

Sections 86 (1) (b) and 18

powers enabling the Comm

Commission hereby make

Procurement Process of Li

Short Title, Exten

1.1

These Regul

Commission

Licensee) Reg

1.2

These Regula

1.3

These Regul

publication i

Definitions

2.1 In these Regu

(i)

“Act” m

(ii) “Biddin

determi

short/lo

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(iii) “CERC”

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Act, 200

REGISTERED

Bihar Gazett

XTRA ORDINARY

SHED BY AUTHORITY

13 CHAITRA 1940(S)

ATNA, TUESDAY, 3RD APRIL 20

CTRICITY REGULATORY COMMISSION

————

NOTIFICATION

The 2^nd April 2018

7/2017-03–– In exercise of powers confe

1 of the Electricity Act, 2003(36 of 2003) a

mission in this behalf, the Bihar Electricity

es the following Regulations for Power Pu

icensee in the State.

nt and Commencement

lations shall be called Bihar Electricity

(Power Purchase and Procurement

gulations, 2018.

ations extend to the whole of the State of B

lations shall come into force from the d

in the official gazette of the Government of

ulations, unless the context otherwise requ

means the Electricity Act, 2003 (36 of 2003)

Guidelines”

means

the

Guid

ination of tariff by bidding process for proc

ong term power by Distribution Licensee(s

nistry of Power, Government of India under

Act;

”

means

the

Central

Electricity

ssion constituted under Section-76 of the

03;

NO. PT.-40

tetetete

018

erred under

and all other

y Regulatory

urchase and

Regulatory

Process of

Bihar.

date of their

Bihar.

uires:-

;

delines

for

curement of

s) issued by

r Section 63

Regulatory

e Electricity

BIHAR GAZETTE (EXTRA) 3RD APRIL 2018

(iv) “Commission” means the Bihar Electricity Regulatory

Commission;

(v) “Conduct of Business Regulations” means the Bihar

Electricity Regulatory Commission (Conduct of Business)

Regulations 2005 as amended from time to time;

(vi) “Current Year” means the financial year in which the power

procurement plan is filed by the Licensee;

(vii) “Ensuing Year” means the financial year immediately

following the current year;

(viii) “Licensee” means a person who has been granted a

distribution licence under the Act and shall also include a

deemed Licensee;

(ix) “Long term procurement of power” means procurement of

electricity including medium term for a period exceeding one

year;

(x) “Previous Year” means the financial year immediately

preceding the current year;

(xi) “Power Purchase Agreement (PPA)” means the agreement

entered into between the Procurer(s) and the Seller pursuant

to which the Seller shall supply power to the Procurer(s) as

per the terms and conditions specified therein;

(xii) “Procurer(s)” means the Distribution Licensee(s), or the

representative

the

Licensee(s)

authorized

the

Distribution Licensee(s) to perform all tasks of procurement

of power in accordance with these regulations;

(xiii) “Short term procurement of power” means procurement of

electricity for a period less than or equal to one year;

(xiv) “Year” means financial year beginning 1st April and ending

on 31st March of following year.

2.2 The words and expressions used and not defined in these

Regulations but defined in the Act, shall have the meanings

assigned to them in the Act.

Scope of Application

3.1

Section 86 (1) (b) of the Act stipulates that the State Commission

shall regulate electricity purchase and procurement process of

distribution licensees including the price at which electricity shall

be procured from the generating companies or licensees or from

other sources through agreements for purchase of power for

distribution and supply within the State.

3.2

These Regulations framed as per requirement stated in Sub-

Regulation 3.1 above shall be followed by the Distribution

Licensee(s) in following cases:

a) While preparing short/long term forecasting of demand (MW),

energy requirement (MU) and availability;

b) While formulating short/long term Power Procurement Plan to

meet its obligations as distribution licensee;

While

making

short/long

term

power

procurement

accordance with the power procurement plan approved by the

commission .

d) While making additional power procurement beyond the scope

of approved power procurement Plan

3.3

These Regulations shall apply to all inter/intra state purchase and

procurement of power by the Licensee(s) in the state of Bihar.

BIHAR GAZETTE (EXTRA), 3RD APRIL 2018

Assessment of Demand and Energy Requirements

4.1

The Distribution Licensee(s) shall make an assessment of demand

(MW) and energy requirement for peak and off-peak period of the

day for all the months of the year for next one year(Short term)

and for next ten years (Long term) on monthly basis. The demand

and energy requirements shall be worked on peaking capacity

(MW) and energy basis (MU).The forecast shall be done based on

load duration curve explicitly defining the base load and peak load

in such a way that unrestricted 24 hours supply of adequate and

uninterrupted power can be ensured to all categories of

consumers by 2021-22 or earlier.

4.2

The assessment shall be based on historical data, load

requirement projections in accordance with the business plan and

likely impact of implementation of efficiency improvement

programmes including but not limited to T&D loss reduction

initiatives and DSM programmes.

4.3

While

making

forecast,

licensee(s)

shall

also

take

into

consideration the following along with other relevant factors –

(i)

Weather forecast and seasonal variations;

(ii)

Overall economic growth projections;

(iii)

Likely impact of implementation of DSM Regulations;

(iv)

Projected efficiency gains due to implementation of T&D

loss

reduction

initiatives

and

other

improvement

programmes;

4.4

The analysis must also consider the impact of the provisions of the

Act and possible switch over of consumers to open access and

captive generation;

4.5

The Distribution Licensee (s) shall also be guided by the

methodology adopted in the latest Electric Power Survey of Central

Electricity Authority (CEA) for the State.

Assessment of Availability

5.1

The Distribution Licensee(s) shall make an assessment of the

availability of power and energy from different sources for peak

and off-peak periods of the day for all the months of the year for

next one year (short term) and for next ten years(long term) on

monthly basis.

5.2

The assessment of availability shall be based on the following,

among other relevant information and inputs:-

(i)

Existing share of power from plants including generating

plants owned and/or operated by the State/Distribution

Licensee(s), Central Sector and other sources of power;

(ii)

Availability of Renewable energy from sources within and

outside the State

(iii)

New generating stations due for commissioning and

expected share of the licensee(s);

(iv)

Banking power arrangements;

(v)

Uprating of existing power plants;

(vi)

Phase out of old stations or non-availability of capacity due

to extended period of maintenance/ renovation of old

generating plants

(vii)

Maintenance schedules of generating stations owned or

operated by the licensee(s) or the State, and Central Sector

Plants and other sources of power;

⁴

BIHAR GAZETTE (EXTRA) 3RD APRIL 2018

(viii) Renewable purchase obligation

(xi)

The Distribution Licensee (s) shall also be guided by the

methodology adopted in the latest Electric Power Survey of

CEA for the State.

5.3

For making the assessment of availability the following criteria

shall also be adopted for Peak Demand (MW) and Energy (MUs)

calculations.

(i) Assessment on Peak Demand basis

(a)

In case of Hydro Power Plants, availability to be

considered

shall

subject

project

specific

hydrological constraints & variations and auxiliary

consumption shall be taken as per CEA norms.

Provided that if a relaxed norm is approved for any

project by the BERC/CERC, the same shall be

considered.

(b)

In case of Thermal & Gas based Power Plants, Plant

Availability Factor and auxiliary consumption shall be

taken as per CEA norms.

Provided that if a relaxed norm is approved for any

project by the BERC/CERC, the same shall be

considered.

(c)

In case of Nuclear Power Plants, Plant Availability

Factor shall be taken as per prevailing norms;

(d)

In case of Renewable energy projects within the State,

Plant Availability Factor and auxiliary consumption

shall be taken as per norms applicable;

(ii) Assessment on Energy basis

(a)

Generation from existing Hydro Power Plants & share

and/or royalty shall be taken as average of last 3 years

actual generation;

(b)

In case of new Hydro Power Plants availability shall be

considered 100 % during June to September and for

remaining months the availability shall be as per CEA

norms;

(c)

Generation from own existing Thermal Plants shall be

taken as the average of all thermal units for three years

whereas generation of existing Central Sector Thermal

Plants shall be taken as same as the actual generation

of all Thermal Plants during last year;

(d)

In case of new Thermal and Gas based Power Plants,

Plant Availability Factor and auxiliary consumption

shall be taken as per CEA norms;

(e)

Generation from existing Renewable energy Plants

within the State shall be taken as actual generation for

the last year whereas for new plants, Plant Availability

Factor and auxiliary consumption shall be taken as per

norms applicable;

(f)

In case of existing and new Nuclear Power Plants,

availability of energy, Plant Availability Factor and

auxiliary consumption shall be taken as per norms;

BIHAR GAZETTE (EXTRA), 3RD APRIL 2018

(g)

Inter State transmission losses for each month shall be

taken as average of the corresponding month of the last

year whereas Intra State transmission losses shall be

taken as average of the last year.

5.4

The Distribution Licensee (s) shall also be guided by the

methodology adopted in the latest Electric Power Survey of CEA

for the State.

Power Procurement Plan.—On the basis of demand/energy forecast

and availability projections in accordance with provisions of these

Regulations,

the

Distribution

Licensee

shall

prepare

Power

Procurement Plan for procuring balance power and energy under short

term power procurement plan and long term power procurement plan.

6.1 Long Term Power Procurement Plan

6.1.1 The long-term Power Procurement Plan shall be prepared by

the Distribution Licensee(s) on the basis of the rolling plan

for ten years. The plan shall be prepared on monthly basis as

per the principles laid down earlier in the Regulations. The

procurement of power through Long term should be at least

equal to the base load assessed under Regulation 4 of these

Regulations.

6.1.2 The long-term Power Procurement Plan shall be strictly as

per merit order principle and it should be the least cost plan

[least financial cost to the Distribution Licensee(s)], the

ultimate objective being to make available secure and reliable

power supply at economically viable tariffs to all consumers

while

satisfying

power

supply

planning

and

security

standards;

Provided that the must run Plants/generators shall be

exempted from merit order principle.

6.1.3 The licensee(s) shall have to submit the following details for

the past three years along with long-term power procurement

plan:-

Month wise details (with year-wise totals) indicating

power produced by generating stations owned or

operated by the Distribution Licensee(s)/State, Central

sector generating stations and other sources of power

with whom long-term power purchase agreements have

been entered into, short-term purchases of electricity in

MU and expenses along with per unit cost;

Month-wise, category-wise energy sales to consumers

and losses in its area of operation.

6.1.4 The rolling plan shall be integral part of the ARR to be filed

every year. The first long term Power Procurement Plan shall

be submitted by the licensee(s) along with the ARR for the

financial year 2019-20.

6.2 Short-Term Power Procurement Plan

6.2.1 The short-term Power Procurement Plan presents assessment

of availability and requirement of electricity for a period of

one year on a monthly basis.

6.2.2 The short-term Power Procurement Plan shall cover different

periods of the day (peak, off peak and seasonal) and take into

account the following:-

⁶

BIHAR GAZETTE (EXTRA) 3RD APRIL 2018

Availability and Requirement worked out as per

Regulation 4&5 both on Peak Demand (MW) and

Energy (MUs) basis;

Impact of the power purchase cost on the ARR for the

ensuing year;

The power banking transactions;

Renewable purchase obligation;

Weather forecast and seasonal variations;

Transmission constraints, if any

6.2.3 The short-term Power Procurement Plan for purchase of

power shall be the least cost plan [least financial cost to the

Distribution Licensee(s)], the ultimate objective being to make

available secure and reliable power supply at economically

viable tariffs to all consumers while satisfying power supply

planning and security standards;

6.2.4 Short-term power procurement plan shall be submitted on or

before 15^th September each year in accordance with sub-

Regulation 6.8 of these Regulations.

Need for Additional Power

7.1 In case, additional procurement of power beyond the quantum

approved in the plan is necessitated, the Distribution Licensee(s)

shall demonstrate to the Commission’s satisfaction that there is a

need for such additional power which it intends to procure and shall

seek the prior approval of the Commission. It may do this by

referring to its most recent Power Purchase Plan approved by the

Commission. The Distribution Licensee(s) shall also specify any

areas in which its fresh proposal departs from its most recent Power

Purchase Plan and shall justify the departure.

7.2 The Commission may call for such additional information or

particulars or documents as the Commission may consider

necessary for approving the power Procurement Plan;

7.3 The Commission may, at its discretion, direct the licensee(s) to

publish the main details of the demand forecasted and power

procurement plan with such particulars and in such manner as the

Commission may direct, so as to enable any member of the public

who desires to file objections, comments or suggestions, to do so, in

the manner indicated in the Conduct of Business Regulations of the

Commission. The Commission shall consider such representations

before approval of the plan;

7.4 The Commission shall decide on the quantum of additional power

requirement within 60 days of receiving request complete in all

respect.

7.5 In case of special circumstances, Commission may issue interim

orders in overall public interest.

Approval of Power Procurement Plan

8.1

Short- Term Power Procurement Plan

8.1.1 The Distribution Licensee(s) shall submit the short term

Power Procurement Plan including the assessment of

availability and requirement of electricity on monthly basis

for the ensuing year to the Commission on or before 15th

September each year.

BIHAR GAZETTE (EXTRA), 3RD APRIL 2018

8.1.2 The Commission may call for such additional information

or particulars or documents as the Commission may

consider necessary for approving the power Procurement

Plan;

8.1.3 The Commission may, at its discretion, direct the licensee(s)

to publish the main details of the demand forecasted and

power procurement plan with such particulars and in such

manner as the Commission may direct, so as to enable any

member of the public who desires to file objections,

comments or suggestions, to do so, in the manner indicated

in the Conduct of Business Regulations of the Commission.

The Commission shall consider such representations before

approval of the plan;

8.1.4 Commission

shall

approve

such

short-term

power

procurement plan with such modifications or such

conditions as may be specified in that order or reject the

same after giving the Distribution licensee(s) ample

opportunity of being heard by 15^th November each year.

8.2

Long Term Power Procurement Plan

8.2.1 The Distribution Licensee(s) shall submit the rolling Long

term power procurement plan including the assessment of

availability and requirement of electricity prepared in

accordance with regulation 6.2 to 6.5 of these Regulations.

The rolling plan of next ten years will be filed to the

Commission along with ARR of each year, duly updating the

preceding Long Term Power Procurement Plan, to take the

latest development into account.

8.2.2 The Commission shall approve such Long Term Power

Procurement Plan with such modifications or such

conditions as may be specified in the order along with the

Tariff order each year.

Criterion for Power Purchases

9.1

The Distribution Licensee(s) shall effect power purchase or enter

into long term or short-term power purchase agreements or

arrangements in accordance with the Power Procurement Plan

approved by the Commission;

9.2

While effecting power purchase, the Distribution Licensee(s) shall

adhere to the principle of least cost plan (least financial cost to the

Distribution Licensee), the ultimate objective being to make

available secure and reliable power supply at economically viable

tariffs to all consumers while satisfying power supply planning

and security standards.

9.3

The Commission may, from time to time, specify criterion for

Power Purchase from hydro, co-generation & renewable generating

stations. The criterion shall, inter alia, consider any policy

directive of State Government, Commission directives on power

purchase, allocation including temporary allocation and diversion

of power from different sources, generation from conventional and

renewable energy sources.

9.4

There

shall

mechanism

consultation

among

STU,

Transmission Licensee, generating companies and Distribution

Licensee(s) & SLDC for formulating Power Procurement Plan. The

Distribution Licensee(s) shall make the assessment of availability

⁸

BIHAR GAZETTE (EXTRA) 3RD APRIL 2018

and requirement of electricity in consultation with the State

Government, all concerned generating companies, Transmission

Licensees, Eastern Regional Power Committee, National/ Regional

Load Despatch Centre(s), Central Electricity Authority and other

concerned entities;

9.5

The Distribution Licensee(s) shall endeavour not to import reactive

power

from

the

Eastern

Grid.

Requirement

reactive

compensation in the State power system to be provided by

Transmission

and

Distribution

Licensee

and

generating

Companies will be finalised in Consultation with ERLDC/SLDC.

10.

Power procurement procedure

10.1 Short-Term Power Procurement Procedure

10.1.1 After approval of the short term Power Procurement Plan

by the Commission, Distribution Licensee(s) shall

procure required power through transparent open

competitive bidding in accordance with the bidding

Guidelines, as amended from time to time, for short term

procurement of power under section 63 of the Act or

through

power

exchange

bilateral

banking

arrangements.

10.1.2

The Distribution Licensee(s) shall be free to procure

power as per Power Procurement Plan approved by the

Commission from any source for meeting short-term

demand of power by adopting transparent bidding

process as per the bidding guidelines of the Ministry of

Power, Government of India referred above and in such

case the licensee need not approach the Commission for

prior approval but shall intimate about the initiation of

such procurement process. These Guidelines shall be

binding on the procurer [Distribution Licensee(s)].

10.1.3

In case there is any deviation from the bidding

Guidelines, the Distribution licensee(s) shall obtain prior

approval of the Commission and the Commission shall

decide on the modifications to the bid documents within

a reasonable time in accordance with provisions of the

bidding guidelines;

10.1.4 In

case

emergency

condition

arising

due

shortage/non-availability

fuel,

unplanned/forced

outage of a generator etc. which necessitates emergency

procurement of power, efforts shall be made to carry out

such emergency purchases through Power Exchange. In

such case, the license(s) need not to approach the

Commission for prior approval.

10.1.5 For cost optimization of power purchase cost, efforts

shall be made to replace long term power having higher

variable rates through purchase from Power Exchange.

In such a case, the license(s) need not to approach the

Commission for prior approval.

10.1.6 For procurement of additional power over and above the

quantum approved by the Commission in the short-term

power procurement plan, licensee (s) shall seek the prior

approval of the Commission.

BIHAR GAZETTE (EXTRA), 3RD APRIL 2018

10.1.7 Within 15 days from the date of entering into an

agreement or arrangement of short term procurement,

the

Distribution

Licensee(s)

shall

submit

the

Commission providing full details of such agreement or

arrangement including quantum, duration, supplier

detail,

procedure

adopted

for

supplier

selection,

reasonability of cost and any other detail seeking

adoption of the tariff under Section 63 of the Act.

10.1.8

The Commission shall adopt the tariff subject to

reasonability or reject the same, after giving ample

opportunity to the Distribution licensees of being heard,

within a reasonable time not exceeding 60 days.

10.1.9 Licensee(s)

shall

submit

monthly

return

the

Commission in the proforma as may be specified by the

Commission giving all the details of procurement/sale

carried out during the month.

10.2 Long Term Power Procurement Procedure

10.2.1 Tariff Policy issued by Central Govt. shall be basic

guiding principle for any long term power procurement;

10.2.2 Unless otherwise approved by the Commission by a

general or special order, long-term power purchase or

procurement by the Distribution Licensee(s) shall be

done through a competitive procurement process;

10.2.3 The Competitive Procurement Process shall be as per the

bidding Guidelines. These Guidelines shall be binding on

the procurers [Distribution Licensee(s)].

10.2.4 In case there is any deviation from the bidding

Guidelines, the Distribution licensee(s), shall obtain prior

approval of the Commission and the Commission shall

decide on the modifications to the bid documents within

a reasonable time in accordance with provisions of the

bidding guidelines;

10.2.5 The rate of power purchase in cases of generating

companies, which are not covered under the process of

competitive bidding as per Section 63 of the Act shall be

determined by the Commission under Section 62 of the

Act subject to the provisions in Tariff Policy;

10.2.6 Any long-term power purchase arrangements made

through MOUs and PPAs with the generating companies

by the Distribution Licensee(s) prior to the issue of these

Regulations will not come under the purview of these

Regulations till their validity;

10.2.7 All power purchase for a period of more than one year

and less than 10 years will be treated at par with long-

term power purchase.

10.2.8 Within 15 days from the date of entering into an

agreement or arrangement of long term procurement, the

Distribution Licensee(s) shall submit to the Commission

providing full details of such agreement or arrangement

including quantum, duration, supplier detail, procedure

adopted for supplier selection, reasonability of cost and

any other detail seeking adoption of the tariff under

Section 63 of the Act.

¹⁰

BIHAR GAZETTE (EXTRA) 3RD APRIL 2018

10.2.9 The Commission shall adopt the tariff subject to

reasonability or reject the same, after giving ample

opportunity to the Distribution licensees of being heard,

within a reasonable time not exceeding 60 days.

11.

Power Purchase Arrangements or Agreements

11.1 Commencement of power under any new long term or short term

power purchase arrangement or agreement and amendments to

existing PPA entered into by Distribution Licensee(s), shall be

subject to prior approval of the Commission under section 86 of

the Act, in respect of:-

(i)

Necessity;

(ii) Reasonability of cost;

(iii) Promoting efficiency, economy, equitability and competition ;

(iv) Conformity with regulations for investment approval;

(v) Conformity with requirements of quality, continuity and

reliability of supply;

(vi) onformity with safety and environmental standards;

(vii) Conformity with criterion of power purchase as laid down in

these Regulations;

(viii) Conformity with policy directives of the State Government

and policies issued by the Government of India viz. National

Electricity Policy, Tariff Policy, long term and short term

power procurement bidding guidelines.

12.

Intervention in the Procurement Process

12.1 Once the Distribution Licensee(s) have begun to implement a

procurement process in accordance with these Regulations, the

Commission shall not intervene except on the grounds -

of mala fide or improper conduct ; and/or

the manner in which the Distribution Licensee(s) is

conducting the procurement process differs materially from

its proposal as approved by the Commission; and

on other reasonable grounds.

12.2 These provisions are without prejudice to the Commission's right

to investigate and take appropriate action on credible information

of malpractice becoming available to it;

12.3 Any investigation of a procurement process will be initiated by a

notice of inquiry and conducted in accordance with the

Commission's Conduct of Business Regulations. The Distribution

Licensee(s) shall not enter into any commitment to procure power

or act upon such a commitment pending the outcome of such

investigation;

12.4 If the Commission determines that the procurement process was

unsatisfactory and not in line with these Regulations, the

Commission may order the Licensee(s) to take necessary corrective

steps,

including

requiring it

temporarily

to suspend

the

procurement process, or to cancel it and declare the results null

and void;

12.5 If the results of the procurement process are declared null and

void, the Distribution Licensee(s) shall so notify to the public and

bidders;

BIHAR GAZETTE (EXTRA), 3RD APRIL 2018

12.6 Nothing in these Regulations shall prevent the Commission from

investigating or taking such other action, as it deems appropriate,

with respect to a completed power purchase agreement in the

exercise of its responsibilities under the Act.

13.

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

any provisions of these Regulations, the Commission may by general or

specific order, do or undertake or direct the Distribution Licensee to do

or undertake things which in the opinion of the Commission are

necessary or expedient for removing the difficulties.

14.

Power to Amend.—The Commission may at any time, vary, alter, modify

or amend any provisions of these Regulations.

By the order of the Commission,

PARMANAND SINGH,

Secretary.

————

PUBLISHED AND PRINTED BY THE SUPERINTENDENT,

BIHAR SECRETARIAT PRESS, PATNA.

Bihar Gazette (Extra) 297—571+400—Egazette

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