The Hindu Business Line : APERC cuts tariffs of non-conventional energy projects

THE Andhra Pradesh Electricity Regulatory Commission (APERC) has reduced tariffs for non-conventional energy projects (NCEP) and thus decreased the power purchase cost of the Transmission Corporation of AP (APTransco) by Rs 120 crore per annum.

However, the new tariff rates effective from April 1 this year are higher than Rs 2.37 per unit proposed by APTransco. The power utility had spent about Rs 415 crore on purchase of electricity from NCEP at a rate of Rs 3.48 per unit during the current fiscal.

Taking into consideration the existing and committed sources in the State, APTransco was expected to purchase 1,850 million units (MUs) of non-conventional energy during 2004-05. Of this, 1070 MUs would be from biomass-based power plants, 450 MUs from bagasse-based power units and 115 MUs from mini-hydel projects.

As against the existing Rs 3.48 per unit, the new tariff rates in case of biomass and industrial-based power plants range from Rs 2.88 to Rs 2.14 per unit in 2004-05 basing on their year of operation.

Similarly, the tariff rates for bagasse-based co-generation plants range from Rs 2.74 to Rs 1.92 and mini-hydel projects range from Rs 2.60 to Rs 1.88 per unit next fiscal depending upon the year of their commissioning.

For power projects based on municipal waste, the tariff rates would be Rs 3.37 per unit in 2004-05, Rs 3.48 per unit in 2005-06, Rs 3.59 per unit in 2006-07, Rs 3.70 per unit in 2007-08 and Rs 3.81 per unit in 2008-09. For wind farm projects, the tariff rate would remain stagnant at Rs 3.37 per unit for the next five years.

According to the APERC Secretary, Mr Surya Prakasa Rao, the new tariffs were fixed by adopting cost-plus approach. A two-tier tariff system has been introduced for co-generation, biomass and mini-hydel projects. While fixed cost tariffs of these projects are based on the year of commissioning, the variable costs are calculated on the basis of parameters such as fuel mix, calorific value, station heat rate and price of fuel.

For projects based on municipal waste and wind, he said the tariff was arrived by keeping Rs 2.25 per unit as on 1994-95 with an annual escalation of 5 per cent on simple rate basis.

While the 5 per cent escalation would continue to be available to municipal waste-based projects, tariff for wind projects would be frozen during the five-year period, 2004-09.

Mr Rao told newspersons here on Monday that the APERC would review the tariffs for each NCEP after completion of 10 years of the project's date of commercial operation.

APERC has fixed the tariff rates after hearing the views from NCEP developers, the Non-conventional Energy Development Corporation of Andhra Pradesh, APTransco and the general public at a public hearing held on March 19.

The commission had received more than 500 written representations in this regard, while 14 persons presented their views before it at the public hearing.

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