MAHARASHTRA ELECTRICITY REGULATORY COMMISSION

MUMBAI

MAHARASHTRA ELECTRICITY REGULATORY COMMISSION

(TERMS AND CONDITIONS FOR DETERMINATION OF RE TARIFF)
REGULATIONS, 2010

INDEX

1 Short title, extent and commencement 1

2 Definitions and Interpretations 1

3 Scope of Regulation and extent of application 4

4 Eligible Entities 5

5 General Principles 7

6 Financial Principles 10

7 Technology specific parameters for Wind Energy Projects 13

8 Technology specific parameters for Small Hydro Projects 14

9 Technology specific parameters for Biomass based Power Projects 15

10 Technology specific parameters for Non-fossil fuel based Cogeneration Projects 18

11 Technology specific parameters for Solar PV Power Projects 22

12 Technology specific parameters for Solar Thermal Power Projects 23

13 Miscellaneous 24

i
 MAHARASHTRA ELECTRICITY REGULATORY COMMISSION
(TERMS AND CONDITIONS FOR DETERMINATION OF RE TARIFF)
REGULATIONS, 2010

Electricity Act, 2003

No.MERC/Legal/2010/482/ In exercise of powers conferred under Section 61, 66, 86 read with
Section 181 of the Electricity Act, 2003, and all other powers enabling it in this behalf, and after
previous publication, the Maharashtra Electricity Regulatory Commission hereby makes the
following Regulations, namely:

1. Short title and commencement

1.1 These Regulations may be called the Maharashtra Electricity Regulatory Commission
(Terms and Conditions for determination of RE Tariff) Regulations, 2010.

1.2 These Regulations shall come into force from the date of their publication in the
Official Gazette.

2. Definitions and Interpretation

2.1 In these Regulations, unless the context otherwise requires,-

(a) ‘Act’ means the Electricity Act, 2003 (36 of 2003), including amendments
thereto;

(b) 'Auxiliary energy consumption' or 'AUX' in relation to a period in case of a

generating station means the quantum of energy consumed by auxiliary
equipment of the generating station, and transformer losses within the
generating station, expressed as a percentage of the sum of gross energy
generated at the generator terminals of all the units of the generating station;

(c) ‘Biomass’ means wastes produced during agricultural and forestry operations
(for example straws and stalks) or produced as a by-product of processing
operations of agricultural produce (e.g., husks, shells, deoiled cakes, etc); wood
produced in dedicated energy plantations or recovered from wild bushes/weeds;
and the wood waste produced in some industrial operations;

(d) ‘Capital cost’ means the capital cost as defined in Regulations 12, 24, 28, 35, 49,
64 and 68;

(e) 'Commission' means the Maharashtra Electricity Regulatory Commission

referred to in section 82 of the Act;

(f) ‘Central Commission’ or ‘CERC’ shall mean Central Electricity Regulatory

Commission referred to in sub-section (1) of Section 76 of the Act;

(g) ‘CERC RE Tariff Regulations’ shall mean Central Electricity Regulatory

Commission (Terms and Conditions for Tariff determination from Renewable
Energy Sources) Regulations, 2009, as amended from time to time.

Final MERC(RE Tariff) Regulation 2010 Page 1 of 33

 (h) ‘Conduct of Business Regulations’ means the Maharashtra Electricity
Regulatory Commission (Conduct of Business) Regulations, 2004 as amended
from time to time;

(i) ‘Control Period' or 'Review Period’ means the period during which the norms
for determination of tariff specified in these Regulations shall remain valid;

(j) ‘Date of Commissioning’ means in relation to a unit of generating station shall

mean the date declared by Generating Company.

(k) ‘Existing RE Project’ means the renewable energy project whose date of
commissioning falls prior to date of notification of these Regulations;

(l) ‘Gross Calorific Value’ or ‘GCV’ in relation to a fuel used in a generating

station means the heat produced in kcal by complete combustion of one
kilogram of solid fuel or one litre of liquid fuel or one standard cubic meter of
gaseous fuel, as the case may be;

(m) ‘Gross Station Heat Rate’ or ‘SHR’ means the heat energy input in kcal required
to generate one kWh of electrical energy at generator terminals of a thermal
generating station;

(n) ‘Hybrid Solar Thermal Power Plant’ means the solar thermal power plant that
uses other forms of energy input sources along with solar thermal energy for
electricity generation, and wherein not less than 75% of electricity is generated
from solar energy component.

(o) ‘Installed Capacity' or 'IC’ means the summation of the name plate capacities of
all the Units of the generating station or the capacity of the generating station
(reckoned at the generator terminals), approved by the Commission from time to
time;

(p) ‘Inter-connection Point’ shall mean interface point of renewable energy

generating facility with the transmission system or distribution system, as the
case may be:

1. in relation to wind energy projects and Solar Photovoltaic Projects,

inter-connection point shall be the line isolator on outgoing feeder on
HV side of the pooling sub-station;

Provided the Pooling Sub-station shall mean the sub-station at project

site of the windfarm or solar power plant, as the case may be, and shall
constitute step-up transformer and associated switchgear, and to the LV
side of which, multiple (more than one) generating unit(s) (i.e. wind
turbine generators or solar PV modules/arrays/inverter units) are
connected.

2. in relation to mini/micro hydro power, small hydro power, biomass

power and non-fossil fuel based co-generation power projects and Solar
Thermal Power Projects the, inter-connection point shall be the line
isolator on outgoing feeder on HV side of generator transformer;

Final MERC(RE Tariff) Regulation 2010 Page 2 of 33

 (q) ‘MNRE’ means the Ministry of New and Renewable Energy of the Government
of India.

(r) ‘Mini/Micro Hydro’ means Hydro Power projects with a station capacity up to
and including 1 MW.

(s) ‘New RE Project’ means the renewable energy project whose date of
commissioning shall be subsequent to the date of notification of these
Regulations;

(t) ‘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.

(u) ‘Non fossil fuel based co-generation’ means the process in which more than one
form of energy (such as steam and electricity) are produced in a sequential
manner by use of biomass provided the project may qualify to be a co-
generation project if it fulfills the eligibility criteria as specified in clause (5) of
Regulation 4.

(v) 'Operation and maintenance expenses’ or ‘O&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;

(w) 'Project' means a generating station or the evacuation system upto inter-
connection point, as the case may be, and in case of a small hydro generating
station includes all components of generating facility such as dam, intake water
conductor system, power generating station and generating units of the scheme,
as apportioned to power generation;

(x) ‘Renewable Energy’ means the grid quality electricity generated from renewable
energy sources.

(y) ‘Renewable Energy Power Plants’ means the power plants other than the
conventional power plants generating grid quality electricity from renewable
energy sources.

(z) ‘Renewable Energy Sources’ means renewable sources such as mini, micro and
small hydro, wind, solar, biomass including bagasse, bio fuel co-generation,
urban or municipal waste and such other sources as recognized or approved by
the MNRE;

(aa) ‘Small Hydro’ means Hydro Power projects with a station capacity more than 1
MW and up to and including 25 MW.

(bb) ‘Solar PV power’ means the Solar Photo Voltaic power projects that uses
sunlight for direct conversion into electricity through Photo Voltaic technology.

(cc) ‘Solar rooftop PV and other small solar power’ means the Solar rooftop or other
small solar Photo Voltaic power projects that uses Photo Voltaic technology for
generation of electricity, which are mounted on rooftop of buildings or ground
mounted installations, and satisfying any other eligibility criteria as may be
specified by MNRE from time to time.

Final MERC(RE Tariff) Regulation 2010 Page 3 of 33

 (dd) ‘Solar Thermal power’ means the Solar Thermal power projects that uses
sunlight for direct conversion into electricity through Concentrated Solar Power
technology based on either line focus or point focus principle.

(ee) ‘Tariff period’ means the period for which tariff is to be determined by the
Commission on the basis of norms specified under these Regulations;

(ff) ‘Useful Life’ in relation to a unit of a generating station including evacuation

system shall mean the following duration from the date of commercial operation
(COD) of such generation facility, namely:-

a) Wind energy power project 25 years

b) Biomass power project, non-fossil fuel co-generation 20 years
c) Mini/Micro and Small Hydro Power Plants 35 years
d) Solar PV/Solar thermal power plants 25 years
e) Solar rooftop PV systems and small ground mounted
PV systems 25 years
f) Municipal waste based power plants 20 years

(gg) ‘Year’ means a financial year.

2.2 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, or the Indian Electricity Grid Code or Maharashtra State Grid Code or the
Maharashtra Electricity Regulatory Commission (Terms and Conditions of Tariff)
Regulations, 2005 and amendments thereof shall have the meanings assigned to them
respectively in the Act or the Indian Electricity Grid Code or Maharashtra State Grid
Code or the Maharashtra Electricity Regulatory Commission (Terms and Conditions
of Tariff) Regulations, 2005 and amendments thereto.

3. Scope of Regulations and extent of application

3.1 These Regulations shall apply for all new RE projects to be commissioned within
Maharashtra for generation and sale of electricity from such RE projects to all
distribution licensees within Maharashtra subsequent to date of notification of these
Regulations and where tariff, for a generating station or a unit thereof based on
renewable sources of energy, is to be determined by the Commission under Section 62
read with Section 86 of the Act.

Provided that in case of wind, mini/micro hydro projects, small hydro projects,
biomass power, non-fossil fuel based cogeneration projects, solar PV, Solar Thermal,
Solar rooftop PV and other small solar power projects, these Regulations shall apply
subject to the fulfilment of eligibility criteria specified in Regulation 4;

Provided that in cases where renewable energy (hereinafter referred to as "RE")

projects opt to adopt REC mechanism formulated under the MERC (RPO, Its
Compliance and Implementation of REC framework) Regulations, 2010, (hererinafter
referred to as "MERC RPO and REC Regulations"), the pricing mechanism for such
RE projects shall be governed by the pricing mechanism and related terms and
conditions as outlined under the said MERC RPO and REC Regulations.

3.2 In case of existing RE projects, applicable tariff and other terms and conditions, shall
be governed by respective RE Tariff Orders and amendments thereof as issued from
time to time by the Commission and the tariff, tariff structure and other conditions as

Final MERC(RE Tariff) Regulation 2010 Page 4 of 33

 specified under respective RE Tariff Order shall continue to be applicable for such
existing RE projects over the duration of the Tariff Period as stipulated under
respective RE Tariff Orders.

3.3 For existing and new projects based on renewable energy technologies having fuel
cost component, like biomass power projects and non-fossil fuel based co-generation
projects, the tariff, tariff structure and other conditions as specified under respective
RE Tariff Order shall continue to be applicable for first three years of the Control
Period, i.e., FY 2010-11, FY 2011-12 and FY 2012-13.

4. Eligible Entities

4.1 Wind power project – New Wind power project(s) to be commissioned subsequent to
notification of these Regulations and located at the wind sites having minimum annual
mean Wind Power Density (WPD) of 200 Watt/m2 measured at hub height of 50
metres and using new wind turbine generators.

4.2 Small hydro project – New Small hydro project(s) to be commissioned subsequent to
notification of these Regulations and located at the sites approved by State Nodal
Agency/State Government using new plant and machinery, and with installed power
plant capacity lower than or equal to 25 MW at single location.

4.3 Mini /Micro hydro project – New Mini /Micro hydro project(s) to be commissioned
subsequent to notification of these Regulations and located at the sites approved by
State Nodal Agency/State Government using new plant and machinery, and with
installed power plant capacity lower than or equal to 1 MW at single location.

4.4 Biomass power project – New Biomass power project(s) to be commissioned

subsequent to notification of these Regulations and using new plant and machinery
based on Rankine cycle technology and using biomass fuel sources, provided use of
fossil fuel is restricted as stipulated under Clause 42.1 of these Regulations.

4.5 Non-fossil fuel based co-generation project: New non-fossil fuel based co-generation
project to be commissioned subsequent to notification of these Regulations shall
qualify to be termed as a non-fossil fuel based co-generation project, if it is using new
plant and machinery and is in accordance with the definition and also meets the
qualifying requirement outlined below. Provided that use of fossil fuel is restricted as
stipulated under Clause 58.1 of these Regulations:

Topping cycle mode of co-generation – Any facility that uses non-fossil fuel input for
power generation and also utilizes the thermal energy generated for useful heat
applications in other industrial activities simultaneously.

Provided that for the co-generation facility to qualify under topping cycle mode, the
sum of useful power output and one half the useful thermal output should be greater
than 45% of the facility’s energy consumption, during season.

Explanation.- For the purposes of this Clause

‘Useful power output’ is the gross electrical output from the generator. There will
be an auxiliary consumption in the co-generation plant itself (eg. the boiler feed pump
and the FD/ID fans). In order to compute the net power output, it would be necessary
to subtract the auxiliary consumption from the gross output. For simplicity of
calculation, the useful power output is defined as the gross electricity (kWh) output
from the generator.

Final MERC(RE Tariff) Regulation 2010 Page 5 of 33

 ‘Useful Thermal Output’ is the useful heat (steam) that is provided to the process by
the co-generation facility.

‘Energy Consumption’ of the facility is the useful energy input that is supplied by
the fuel.

4.6 Non-fossil fuel based non-qualifying co-generation (NFNQC) shall mean non-fossil
fuel based co-generation projects that do not fulfill above eligibility criteria as outlined
under Regulation 4.5.

4.7 Solar PV, Solar Thermal Power Projects, Solar rooftop PV systems and other small
Solar power projects – Based on Technologies approved by MNRE.

4.8 Municipal waste based power plants – Based on Technologies approved by MNRE.

Final MERC(RE Tariff) Regulation 2010 Page 6 of 33

Chapter 1: General Principles

5. Control Period or Review Period

5.1 The Control Period or Review Period under these Regulations shall be of five (5)
financial years. First year of the Control Period shall commence from the date of
notification of these Regulations and shall cover upto the end of financial year 2014-
15.

Provided further that the tariff determined as per these Regulations for the RE projects
commissioned during the Control Period, shall continue to be applicable for the RE
projects for the entire duration of the Tariff Period as specified in Regulation 6 below;

Provided also that the revision in Regulations for next Control Period shall be notified
separately and in case Regulations for the next Control Period are not notified until
commencement of next Control Period, the tariff norms as per these Regulations shall
continue to remain applicable until notification of the revised Regulations subject to
adjustments as per revised Regulations.

5.2 Notwithstanding anything contained in these Regulaitons, a) the generic preferential

tariff determined for Solar PV 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 b) the generic preferential tariff determined for Solar thermal projects based on
the capital cost and other norms for the year 2010-11 shall also apply for such projects
during the years 2011-12 and 2012-13,

Provided that (i) the Power Purchase Agreements in respect of the Solar PV projects
and Solar thermal projects as mentioned in this clause are signed on or before 31st
March, 2011; and (ii) the entire capacity covered by the Power Purchase Agreements is
commissioned on or before 31st March, 2012 in respect of Solar PV projects and on or
before 31st March, 2013 in respect of Solar thermal projects.

6. Tariff Period

6.1 The Tariff Period for Renewable Energy power projects except in case of Small hydro
projects upto and including 5 MW, Mini/Micro Hydro projects, Solar PV, Solar
thermal power projects, Solar rooftop PV and other small Solar power projects shall be
thirteen (13) years.

6.2 In case of Small hydro projects upto and including 5 MW and Mini/Micro Hydro
projects, the Tariff Period shall be thirty five (35) years.

6.3 In case of Solar PV, Solar thermal power projects, Solar rooftop PV and other small
Solar power projects, the Tariff Period shall be twenty five years (25) years.

6.4 Tariff Period under these Regulations shall be considered from the date of commercial
operation of the renewable energy generating stations.

6.5 Tariff determined as per these Regulations shall be applicable for Renewable Energy
power projects, only for the duration of the Tariff Period as stipulated under
Regulation 6(1), (2) and (3).

Final MERC(RE Tariff) Regulation 2010 Page 7 of 33

7. Project Specific tariff

7.1 Project specific tariff, on case to case basis, shall be determined by the Commission
for the following types of projects:
a) Municipal Waste based Projects

b) any other new renewable energy technologies approved by MNRE

c) the renewable energy projects that have been commissioned before the
notification of these Regulations but for which no energy purchase
agreement has been signed and have not opted for the pricing mechanism
under the REC mechanism formulated under the MERC (RPO, Its
Compliance and Implementation of REC framework) Regulations, 2010,
until the date of notification of these Regulations.

d) Solar PV and Solar Thermal Power projects, if a project developer opts for
project specific tariff: Provided that the Commission while determining the
project specific tariff for Solar PV and Solar Thermal projects shall be
guided by the provisions of Chapter 8 of these Regulations.

e) Hybrid Solar Thermal Power plants

f) Biomass project other than that based on Rankine Cycle technology

application with water cooled condenser.
7.2 Determination of project specific tariff for generation of electricity from such
renewable energy sources shall be in accordance with such terms and conditions as
stipulated under relevant Orders of the Commission.

Provided that the financial norms as specified under Chapter-2 of these Regulations,
except for capital cost and O&M cost, shall be ceiling norms while determining the
project specific tariff.

8. Petition and proceedings for determination of tariff

8.1 The Commission shall notify the generic preferential tariff on suo-motu basis pursuant
to issuance of revised norms by Central Electricity Regulatory Commission at the
beginning of each year of the Control Period for renewable energy technologies for
which norms have been specified under the Regulations.

Provided that for the first year of Control Period, (i.e. FY 2010-11), the generic tariff
on suo-motu basis may be determined within a period not exceeding three months
from the date of notification of these Regulations.

8.2 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 1.1, 1.2, 2.1 and 2.2 as the case may be, and as
appended to these Regulations;
b) Detailed project report outlining technical and operational details, site
specific aspects, premise for capital cost and financing plan, etc.
c) A Statement of all applicable terms and conditions and expected
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

Final MERC(RE Tariff) Regulation 2010 Page 8 of 33

 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.
8.3 The proceedings for determination of tariff shall be in accordance with the Conduct of
Business Regulations.

9. Tariff Structure

9.1 The tariff for renewable energy technologies shall be single-part tariff consisting of the
following fixed cost components:
a) Return on equity;
b) Interest on loan capital;
c) Depreciation;
d) Interest on working capital;
e) Operation and maintenance expenses;

Provided that for renewable energy technologies having fuel cost component, like
biomass power projects and non-fossil fuel based co-generation projects, single-part
tariff with two components, viz., fixed cost component and fuel cost component, shall
be determined.

10. Tariff Design

10.1 The generic tariff shall be determined on levellised basis for the Tariff Period.

Provided that for renewable energy technologies having single-part tariff with two
components, tariff shall be determined on levellised basis considering the year of
commissioning of the project for fixed cost component while the fuel cost component
shall be specified on year of operation basis.

10.2 For the purpose of levellised tariff computation, the discount factor equivalent to
normative weighted average cost of capital shall be considered.

10.3 Levellisation shall be carried out for the ‘useful life’ of the Renewable Energy project
while tariff shall be specified for the period equivalent to ‘Tariff Period’.

11. Despatch principles for electricity generated from Renewable Energy Sources:

11.1 All renewable energy power plants except for biomass power plants and co-generation
plants shall be treated as ‘MUST RUN’ power plants and shall not be subjected to
‘merit order despatch’ principles.

11.2 The biomass power generating station and co-generation projects shall be subjected to
scheduling and despatch code as specified under the State Grid Code (SGC) including
amendments thereto.

Final MERC(RE Tariff) Regulation 2010 Page 9 of 33

Chapter 2: Financial Principles

12. Capital Cost

12.1 The norms for the Capital Cost as specified in the subsequent technology specific
chapters shall be inclusive of all capital work including plant and machinery, civil
work, erection and commissioning, financing costs, preliminary and pre-operative
expenses, 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

13.1 For suo-motu determination of generic tariff, the debt equity ratio shall be 70 : 30.

13.2 For project specific tariff, the following provisions shall apply:

If the equity actually deployed is more than 30% 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% 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 denominated/
designated in Indian rupees on the date of each investment.

14. Loan and Finance Charges

14.1 Loan Tenure:

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

14.2 Interest Rate:

The loans arrived at in the manner indicated above shall be considered as gross
normative loan for calculation of interest on loan. The normative loan outstanding as
on April 1st of every year shall be worked out by deducting the cumulative repayment
up to March 31st of previous year from the gross normative loan.

For the purpose of computation of tariff, the normative interest rate shall be considered
as average of State Bank Advance Rate (SBAR) prevalent during the previous year
plus 150 basis points.

Notwithstanding any moratorium period availed by the generating 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

15.1 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

Final MERC(RE Tariff) Regulation 2010 Page 10 of 33

 10% and depreciation shall be allowed up to maximum of 90% of the Capital Cost of
the asset.

15.2 Annual Depreciation shall be based on ‘Differential Depreciation Approach’ using

‘Straight Line Method’.over two distinct periods comprising loan tenure and period
beyond loan tenure over useful life. The depreciation rate for the first 10 years of the
Tariff Period shall be 7% per annum and the remaining depreciation shall be spread
over the remaining useful life of the project from 11th year onwards.

15.3 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.

16. Return on Equity

16.1 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.

16.2 The normative Return on Equity shall be:

a) Pre-tax 19% per annum for the first 10 years.
b) Pre-tax 24% per annum 11th year onwards.
17. Interest on Working Capital

17.1 The Working Capital requirement in respect of wind energy projects, small hydro
power, solar PV and Solar thermal power projects shall be computed as under:
a) Operation & 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);
c) Maintenance spare @ 15% of operation and maintenance expenses
17.2 The Working Capital requirement in respect of biomass power projects and non-fossil
fuel based co-generation projects shall be computed as under:
a) Fuel costs for four months equivalent to normative Plant Load Factor
(PLF);
b) Operation & Maintenance expense for one month;
c) Receivables equivalent to 2 (Two) months of fixed and variable charges for
sale of electricity calculated on the target PLF;
d) Maintenance spare @ 15% of operation and maintenance expenses
17.3 Interest on Working Capital shall be at interest rate equivalent to average State Bank
Advance Rate (SBAR) during the previous year plus 100 basis points.

18. Operation and Maintenance Expenses

18.1 ‘Operation and Maintenance or O&M expenses’ shall comprise repair and
maintenance (R&M), establishment including employee expenses, and administrative
and general expenses including insurance.

18.2 Operation and maintenance expenses shall be determined for the Tariff Period based
on normative O&M expenses specified by the Commission subsequently in these
Regulations for the first Year of Control Period.

Final MERC(RE Tariff) Regulation 2010 Page 11 of 33

18.3 Normative O&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% per annum
over the Tariff Period.

19. Rebate

19.1 For payment of bills of the generating company through letter of credit, a rebate of 2%
shall be allowed.

19.2 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% shall be
allowed.

20. Late payment surcharge

20.1 In case the payment of any bill for charges payable under these Regulations is delayed
beyond a period of 60 (sixty) days from the date of billing, a late payment surcharge at
the rate of 1.25% per month shall be levied by the generating company.

21. Sharing of CDM Benefits

21.1 All risks, costs and efforts associated with the availing of carbon credits shall be borne
by the generating company. Further, the entire proceeds of carbon credit from
approved CDM project, if any, shall be retained by the generating company.

22. Subsidy or incentive by the Central/State Government

22.1 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 company, for the renewable 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:
a) 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.
b) Capitalisation of RE projects during second half of the fiscal year.
c) Per unit benefit shall be derived on levellised basis at discount factor
equivalent to weighted average cost of capital.
Provided further that in case any Central Government or State Government
notification specifically provides for any Generation based Incentive over and above
tariff, the same shall not be factored in while determining Tariff.

23. Taxes and Duties

23.1 Tariff determined under these Regulations shall be exclusive of taxes and duties on
generation and sale of electricity from renewable energy project as may be levied by
the appropriate Government:

Final MERC(RE Tariff) Regulation 2010 Page 12 of 33

 Provided that the taxes and duties levied by the appropriate Government on generation
and sale of electricity from renewable energy project shall be allowed as pass through
on actual incurred basis.

Chapter 3: Technology specific parameters for Wind Energy Projects

24. Capital Cost

24.1 The capital cost for wind energy projects shall include Wind turbine generator
including its auxiliaries, land cost, site development charges and other civil works,
transportation charges, evacuation cost up to inter-connection point, financing charges
and Interest During Construction (IDC).

24.2 The capital cost for wind energy projects shall be Rs.467.13 Lakh/MW (FY 2010- 11
during first year of Control Period) and shall be revised for projects to be
commissioned in each subequent year as outlined under Regulation 25.

25. Capital Cost Indexation Mechanism

25.1 The indexed Capital Cost in case of wind energy projects for each year of the Control
Period shall be notified pursuant to issuance of such indexed capital cost for wind
energy projects by Central Electricity Regulatory Commission in accordance with
indexation mechanism stipulated under CERC RE Tariff Regulations.

26. Capacity Utilisation Factor

26.1 Capacity Utlisation Factor (CUF) norms for the Control Period shall be as follows:

Annual Mean Wind Power

CUF
Density (W/m2)

200-250 20%

250-300 23%

300-400 27%

> 400 30%

26.2 The annual mean wind power density specified in Regulation 26.1 above shall be
measured at 50 metre hub-height.

26.3 For the purpose of classification of wind energy project into particular wind zone
class, the State-wise wind power density map prepared by the Centre for Wind Energy
Technology (C-WET) and enclosed as Schedule to these Regulations, shall be
considered.

Provided that the Commission may by notification in official gazette, amend the
schedule from time to time, based on the input provided by C-WET/MNRE.

27. Operation and Maintenance Expenses

Final MERC(RE Tariff) Regulation 2010 Page 13 of 33

27.1 Normative O&M expenses for the first year of the Control Period (i.e. FY 2010-11)
shall be Rs 6.87 Lakh per MW.

27.2 Normative O&M expenses allowed under these Regulations shall be escalated at the
rate of 5.72% per annum over the tariff period to compute the levellised tariff.

Chapter 4: Technology specific parameters for Small Hydro Project

28. Capital Cost

28.1 The normative capital cost for small hydro projects during first year of Control Period
(FY 2010-11) shall be as follows:

Capital Cost
Project Size
(Rs Lakh/MW)
> 1 MW and upto
498.88
and including 5 MW
> 5 MW to 25 MW 453.53

28.2 The capital cost for subsequent years shall be revised for projects to be commissioned
in each subequent year as outlined under Regulation 29.

29. Capital Cost Indexation Mechanism

29.1 The indexed Capital Cost in case of Small Hydro projects for each year of the Control
Period shall be notified pursuant to notification of such indexed capital cost for Small
Hydro projects by Central Electricity Regulatory Commission in accordance with
indexation mechanism stipulated under CERC RE Tariff Regulations.

30. Capacity Utilisation Factor

30.1 Capacity Utilisation factor for small hydro projects shall be 30%.

31. Auxiliary Consumption

31.1 Normative Auxiliary Consumption for the small hydro projects shall be 1.0%.

32. Operation and Maintenance Expenses

32.1 Normative O&M expenses for the first year of the Control Period (i.e., FY 2010-11)
shall be as follows:

O&M Expense
Project Size
(Rs Lakh/ MW)

> 1 MW and upto

17.97
and including 5 MW
> 5 MW to 25 MW 12.69

32.2 Normative O&M expenses allowed under these Regulations shall be escalated at the
rate of 5.72% per annum for the Tariff Period for the purpose of determination of
levellised tariff.

33. Tariff for Mini/Micro Hydro Projects

Final MERC(RE Tariff) Regulation 2010 Page 14 of 33

33.1 Tariff for Mini/Micro Hydro Projects shall be higher by Rs 0.50/kWh or such other
higher amount as may be stipulated by Commission from time time over and above the
tariff applicable for Small Hydro Projects with installed capacity more than 1 MW but
upto and including 5 MW.

Chapter 5: Technology specific parameters for Biomass based Power Projects

34. Technology Aspect

34.1 The norms for tariff determination specified hereunder are for biomass power projects
based on Rankine cycle technology application using water cooled condenser.

35. Applicability

35.1 The capital cost and performance norms as specified under Regulation 36 to
Regulation 40 shall be applicable only for new biomass power projects with effect
from April 1, 2013.

35.2 The fuel related aspects specified under Regulation 41 to Regulation 47 shall be
applicable for existing and new biomass power projects with effect from April 1,
2013:

Provided that norms in respect of Station Heat Rate, Gross Calorific Value and
Auxiliary Consumption factor for existing biomass power projects shall be as
stipulated under the respective RE tariff Order as referred under Regulation 3.2.

36. Capital Cost Indexation Mechanism

36.1 The indexed Capital Cost in case of Biomass Power projects for fourth and fifth year
of the Control Period (i.e. FY 2013-14 and FY 2014-15) shall be notified pursuant to
notification of such indexed capital cost for Biomass Power projects by Central
Electricity Regulatory Commission in accordance with indexation mechanism
stipulated under CERC RE Tariff Regulations:

Provided that for the purpose of above indexation, the normative capital cost for the
biomass power projects shall be considered as Rs.402.54 Lakh/MW for the first year
of the Control Period (i.e. FY 2010-11).

37. Plant Load Factor

37.1 Threshold Plant Load Factor for determining fixed charge component of Tariff shall
be:
a) During Stabilisation: 60%
b) During the remaining period of the first year (after stabilization): 70%
c) From 2nd Year onwards: 80 %
37.2 The stabilisation period shall not be more than 6 months from the date of
commissioning of the project.

38. Auxiliary Consumption

38.1 The auxiliary power consumption factor shall be 10% for the determination of tariff.

39. Station Heat Rate

Final MERC(RE Tariff) Regulation 2010 Page 15 of 33

39.1 The Station Heat Rate for new biomass power projects shall be 3800 kcal/kWh.

40. Operation and Maintenance Expenses

40.1 Normative Operation & Maintenance (O&M) expenses for the first year of the Control
Period (i.e., FY 2010-11) shall be Rs. 21.41 Lakh per MW.

40.2 Normative O&M expenses allowed at the commencement of the Control Period (i.e.,
FY 2010-11) under these Regulations shall be escalated at the rate of 5.72% per
annum.

41. Fuel Mix

41.1 The biomass power plant shall be designed in such a way that it uses different types of
non-fossil fuels available within the vicinity of biomass power project such as crop
residues, agro-industrial residues, forest residues, etc., and other biomass fuels as may
be approved by MNRE.

41.2 The biomass power generating Companies shall ensure fuel management plan to
ensure adequate availability of fuel to meet the respective project requirements.

42. Use of Fossil Fuel

42.1 The use of fossil fuels shall be limited to the extent of 15% of total fuel consumption
on annual basis or as ammended by MNRE from time to time.

43. Monitoring Mechanism for the use of fossil fuel

43.1 The project developer shall furnish a monthly fuel procurement statement and monthly
fuel usage statement duly certified by Chartered Accountant to the beneficiary, with
whom the power purchase agreement has been made (with a copy to appropriate
agency appointed by the Commission for the purpose of monitoring the fossil and non-
fossil fuel consumption) for each month, along with the monthly energy bill. The
statement shall cover details such as –
a) Quantity of fuel (in tonnes) for each fuel type (biomass fuels and fossil
fuels) procured and consumed during the month for power generation
purposes,
b) Cumulative quantity (in tonnes) of each fuel type procured and consumed
till the end of that month during the year,
c) Actual (gross and net) energy generation (denominated in kWh) during the
month,
d) Cumulative actual (gross and net) energy generation (denominated in kWh)
until the end of that month during the year,
e) Opening fuel stock quantity (in tonnes),
f) Receipt of fuel quantity (in tonnes) at the power plant site and
g) Closing fuel stock quantity (in tonnes) for each fuel type (biomass fuels and
fossil fuels) available at the power plant site.
43.2 Non-compliance with the condition of fossil fuel usage by the project developer,
during any financial year, shall render such biomass power project to be ineligible to
avail preferential tariff determined as per these Regulations from the date of default
and for duration of the default during such financial year when such default occurs.
However, such defaulting Biomass Power Project shall continue to sell power to

Final MERC(RE Tariff) Regulation 2010 Page 16 of 33

 concerned distribution licensee even during the period of default at a rate lower by Rs
0.50/kWh below the applicable preferential tariff determined as per these Regulations.

44. Compliance Monitoring

44.1 The Maharashtra Energy Development Agency (MEDA) shall be responsible for
monitoring compliance of biomass projects with these Regulations.

44.2 MEDA shall maintain such data, including technical and commercial details of
biomass projects in the State and shall make the data available in the public domain by
publishing the same on its website with quarterly updation.

44.3 The project developer shall submit the information to MEDA as required under
Regulation 43 in the format as specified in schedule templates-1.1, 1.2, 2.1 and 2.2.

44.4 The Commission shall reimburse to MEDA the reasonable expenses incurred in
connection with the compliance monitoring activities in respect of biomass power
projects.

44.5 In addition to the above monotring mechanism, the developer shall also submit on an
annual basis, such necessary financial Statements or documents as stipulated from
time to time to enable the Commission to ascertain that the financial returns to the
developers are in accordance with the regulated returns specified under these
Regulations.

45. Calorific Value

45.1 The average Calorific Value of the biomass fuel(s) used for the purpose of
determination of tariff for new biomass power projects shall be 3611kcal/kg.

46. Fuel Cost

46.1 Biomass fuel price shall be 2605 Rs/MT during first three years of the Control Period
(i.e., FY 2010-11, FY 2011-12 and FY 2012-13) and thereafter shall be linked to
indexation mechanism as specified under Regulation 47.

47. Fuel Price Indexation Mechanism

47.1 In case of (existing and new) biomass power projects, the following indexing
mechanism for adjustment of fuel prices for each year of operation, from April 1,
2013, will be applicable for determination of applicable variable charge component of
tariff:

The indexed Biomass Fuel Price (Pn) in case of Biomass Power projects for each year
(n) of the Control Period shall be notified pursuant to notification of such indexed
Biomass Fuel Price norm as applicable for Biomass Power projects within
Maharashtra by Central Electricity Regulatory Commission in accordance with
indexation mechanism stipulated under CERC RE Tariff Regulations.

Where,

Final MERC(RE Tariff) Regulation 2010 Page 17 of 33

 P (n) = Price per ton of biomass for the nth year to be considered for tariff
determination

P (n-1) = Price per ton of biomass for the (n-1)th year to be considered for tariff
determination. P1 shall be Biomass price for FY 2010-11 as specified under
Regulation 46

47.2 Variable Charge for the nth year shall be computed as under: i.e. VCn = VC1x (Pn /
P1)

where,

VC1represents the Variable Charge based on Biomass Price P1for FY 2010-11 as

specified under Regulation 46 and shall be determined as under:

VC1 = Station Heat Rate (SHR) x 1 x P1

Gross Calorific Value (GCV) (1 – Aux Consum. Factor) 1000

Chapter 6: Technology specific parameters for Non-fossil fuel based Cogeneration Projects

48. Technology Aspect

48.1 A project shall qualify as a non-fossil fuel based co-generation project, if it is in

accordance with the eligibility criteria as specified under Regulation 4(4).

49. Applicability

49.1 The capital cost and performance norms as specified under Regulation 50 to
Regulation 54 and Regulation 62 shall be applicable only for new non-fossil fuel based
co-generation projects with effect from April 1, 2013.

49.2 The fuel related aspects specified under Regulation 55 to Regulation 61 shall be
applicable for existing and new non-fossil fuel based co-generation projects with effect
from April 1, 2013:

Provided that norms in respect of specific fuel consumption, Gross Calorific Value and
Auxiliary Consumption factor for existing non-fossil fuel based co-generation projects
shall be as stipulated under the respective RE tariff Order as referred under Regulation
3.2.

50. Capital Cost Indexation Mechanism

50.1 The indexed Capital Cost in case of Non-fossil fuel based Co-generation projects for
fourth and fifth year of the Control Period (i.e. FY 2013-14 and FY 2014-15) shall be
notified pursuant to notification of such indexed capital cost for Non-fossil fuel based
Co-generation projects by Central Electricity Regulatory Commission in accordance
with indexation mechanism stipulated under CERC RE Tariff Regulations.

Provided that for the purpose of above indexation, the normative capital cost for the
non-fossil fuel based co-generation projects shall be considered as Rs.398.07
Lakh/MW for the first year of the Control Period (i.e. FY 2010-11).

Final MERC(RE Tariff) Regulation 2010 Page 18 of 33

51. Plant Load Factor

51.1 For the purpose of determining fixed charge, the plant load factor for non-fossil fuel
based co-generation projects shall be computed on the basis of plant availability for
number of operating days considering operations during crushing season and off-
season as specified under clause (2) below and load factor of 92%.

51.2 The number of operating days shall be as follows:

Operating Days Plant Load Factor (%)

180 days (crushing)+ 60 days (off-season) 60%

= 240 days operating days

52. Auxiliary Consumption

52.1 The auxiliary power consumption factor shall be 8.5% for computation of tariff.

53. Station Heat Rate

53.1 The Station Heat Rate of 3600 kcal/kWh for power generation component alone shall
be considered for computation of tariff for non-fossil fuel based co-generation
projects.

54. Calorific Value

54.1 The Gross Calorific Value for bagasse shall be considered as 2250 kcal/kg. For the use
of biomass fuels other than bagasse, calorific value as specified under Regulation 45
shall be applicable.

55. Fuel Cost

55.1 The price of bagasse shall be 1832 Rs/MT during first three years of the Control
Period (i.e., FY 2010-11, FY 2011-12 and FY 2012-13) and thereafter shall be linked
to indexation formulae as outlined under Regulation 56.

55.2 For use of biomass other than bagasse in co-generation projects, the biomass prices as
specified under Regulation 46 shall be applicable.

56. Fuel Price Indexation Mechanism

56.1 In case of (existing and new) non-fossil fuel based cogeneration projects, the following
indexing mechanism for adjustment of fuel prices for each year of operation, from
April 1, 2013, will be applicable for determination of applicable variable charge
component of tariff.

The indexed Bagasse Fuel Price (Pn) in case of Non-fossil fuel based Co-generation
projects for each year (n) of the Control Period shall be notified pursuant to
notification of such indexed Bagasse Fuel Price norm as applicable for Non-fossil fuel
based Co-generation projects within Maharashtra by Central Electricity Regulatory
Commission in accordance with indexation mechanism stipulated under CERC RE
Tariff Regulations.

Where,

Final MERC(RE Tariff) Regulation 2010 Page 19 of 33

 P (n) = Price per ton of Bagasse for the nth year to be considered for tariff
determination

56.2 Variable Charge for the nth year shall be computed as under:

i.e. VCn = VC1x (Pn / P1)

where,

VC1represents the Variable Charge based on bagasse Price P1 for FY 2010-11 as

specified under Regulation 55 and shall be determined as under:

VC1 = Station Heat Rate (SHR) x 1 x P1

Gross Calorific Value (GCV) (1 – Aux Consum. Factor) 1000

57. Fuel Mix and Co-generation Plant Capacity

57.1 The co-generation power plant may be designed to use different types of non-fossil
fuels available within the vicinity of co-generation power project such as bagasse and
crop residues, bio-gas, agro-industrial residues, forest residues, etc., and other biomass
fuels as may be approved by MNRE.

57.2 The co-generation projects shall be sized in co-relation to the locally available non-
fossil fuel.

57.3 The co-generation plant developer shall ensure fuel management plan to ensure
adequate availability of fuel to meet the respective project requirements.

58. Use of Fossil Fuel

58.1 The use of fossil fuels shall be limited to the extent of 15% of total fuel consumption
on annual basis or as amended by MNRE from time to time.

59. Monitoring Mechanism for the use of fossil fuel and Cogeneration Efficiency

59.1 The project developer shall furnish a monthly fuel procurement statement and monthly
fuel usage statement duly certified by Chartered Accountant to the beneficiary with
whom power purchsase agreement has been made (with a copy to appropriate agency
appointed by the Commission for the purpose of monitoring the fossil and non-fossil
fuel consumption) for each month, along with the monthly energy bill. The statement
shall cover details such as –
a) Quantity of fuel (in tonnes) for each fuel type (bagasse/biomass fuels and
fossil fuels) procured and consumed during the month for power generation
purposes,
b) Cumulative quantity (in tonnes) of each fuel type procured and consumed
till the end of that month during the year,
c) Actual (gross and net) energy generation (denominated in kWh) during the
month,
d) Cumulative actual (gross and net) energy generation (denominated in kWh)
until the end of that month during the year,
e) Opening fuel stock quantity (in tonnes),
f) Receipt of fuel quantity (in tonnes) at the power plant site, and
g) Closing fuel stock quantity (in tonnes) for each fuel type (biomass fuels and
fossil fuels) available at the power plant site.

Final MERC(RE Tariff) Regulation 2010 Page 20 of 33

59.2 Non-compliance with the condition of fossil fuel usage by the project developer,
during any financial year, shall render such non-fossil fuel based co-generation
projects to be ineligble for preferential tariff determined as per these Regulations from
the date of default and for duration of the default during such financial year when such
default occurs. However, such defaulting Non-fossil fuel based Co-generation Project
shall continue to sell power to concerned distribution licensee even during the period
of default at a rate lower by Rs 0.50/kWh below the applicable preferential tariff
determined as per these Regulations.

60. Measurement and Verification Protocol for Compliance Monitoring

60.1 An Energy Audit of the co-generation facility shall be conducted through Energy
Auditor empanelled with State Nodal Agency (MEDA) during every crushing season
(once a year). The dates of the audit should be intimated to the purchasing Licensees,
who have the option to depute their representatives to participate in the Audit. The
Licensee shall ensure scrutiny of such Audit reports to ensure compliance by the co-
generation project.

60.2 The Audit shall be carried out during a period of steady load on the facility during the
season.

60.3 In addition to any other, the following readings/stipulations shall be mandatory for
such Audit:
a) Duration of Test – The duration shall be at least one hour of continuous
operation.
b) Input fuel (e.g. Bagasse) flow – The total quantity of fuel supplied to a
boiler for the duration of the test is to be measured (in case the continuous
measurement of fuel inflow is not possible, an average figure of fuel
intake/hour can be taken as the basis. To arrive at this average, the fuel
weighment over a period of constant plant load operation – either on 8-hour
shift or 24 hours, as the case may be – shall be considered). Mass flow rate
of non-fossil fuel – bagasse i.e. (m b is to be then calculated in kg/hr).
c) A sample of input fuel (e.g. bagasse) is to be tested (certified laboratory test
report to be included) for its Gross Calorific Value using a bomb
calorimeter.
d) Temperatures and pressures are to be measured at the different steam
consumption points say, 1,2,...n (T1, P1, T2, P2,....Tn, Pn etc.)
e) The steam flow rates at 1,2, ....n (m1, m2,....mn) are to be measured with on
line steam flow meters. The flow meters are to be calibrated before the
Audit.
f) Electrical output – at generator terminals is to be recorded in kWh for the
test period.
g) A schematic of the configuration showing the instrument locations shall be
provided.

60.4 The Audit shall include computation of the boiler efficiency (based on direct or
indirect method), the turbine isentropic efficiency and the auxiliary electricity
consumption of the co-generation facility.

60.5 Before entering into EPA the distribution licensee shall ensure that, the manufacturer
test certificates for boiler efficiency and the turbine characteristic curves (steam flow
rate vs power output) are made available along with the DPR.

Final MERC(RE Tariff) Regulation 2010 Page 21 of 33

60.6 The co-generation project entity shall appoint, at its cost, an independent Auditor for
the purpose of conducting Energy Audit as above, from among a panel of such
Auditors prepared by State Nodal Agency (MEDA).

60.7 The Audit results shall be reported to the Commission (in addition to the reporting
requirements already stipulated in the Order) by the concerned licensee

61. Compliance Monitoring

61.1 MEDA shall be responsible for monitoring compliance of non-fossil fuel based co-
generation projects with these Regulations.

61.2 MEDA shall maintain such data, including technical and commercial details of non-
fossil fuel based co-generation projects in the State and shall make the data available
in the public domain by publishing the same on its website with quarterly updation.

61.3 The project developer shall submit the information to MEDA as required under
Regulation 59 in the format as specified in schedule templates-1.1, 1.2, 2.1 and 2.2.

61.4 The Commission shall reimburse to MEDA the reasonable expenses incurred in
connection with the compliance monitoring activities in respect of non-fossil fuel
based co-generation projects.

61.5 In addition to the above monotring mechanism, the developer shall also submit on an
annual basis, such necessary financial Statements or documents as stipulated from
time to time to enable the Commission to ascertain that the financial returns to the
developers are in accordance with the regulated returns specified under these
Regulations.

62. Operation and Maintenance Expenses

62.1 Normative O&M expenses during first year of the Control Period (i.e., FY 2010-11)
shall be Rs. 14.11 Lakh per MW.

62.2 Normative O&M expenses allowed at the commencement of the Control Period (i.e.
FY 2010-11) under these Regulations shall be escalated at the rate of 5.72% per
annum.

63. Tariff for Non-fossil fuel based Non-Qualifying Co-generation Projects

63.1 The Tariff for Non-fossil fuel based non-qualifying co-generation projects shall be
linked to average power purchase cost of host utility (excluding procurement from
renewable energy sources) where such co-generation plant is situated, as approved by
the Commission for that year.

63.2 The average power purchase cost excluding procurement from renewable energy
sources as approved by the Commission for each year of Control Period shall be
applicable for the purpose of billing during the year.

Chapter 7: Technology specific parameters for Solar PV Power Project

64. Technology Aspects

64.1 Norms for Solar Photovoltaic (PV) power under these Regulations shall be applicable
for grid connected PV systems with installed capacity more than 3 MW that uses

Final MERC(RE Tariff) Regulation 2010 Page 22 of 33

 sunlight for direct conversion into electricity through Photo Voltaic technology as may
be approved by MNRE.

65. Capital Cost

65.1 The normative capital cost for setting up Solar Photovoltaic Power Project shall be Rs.
1690 Lakh/MW for FY 2010-11.

Provided that the Commission may deviate from above norm in case of project
specific tariff determination in pursuance of Regulation 7 and Regulation 8.

66. Capacity Utilisation Factor

66.1 The Capacity utilisation factor for Solar PV project shall be 19%.

Provided that the Commission may deviate from above norm in case of project
specific tariff determination in pursuance of Regulation 7 and Regulation 8.

67. Operation and Maintenance Expenses

67.1 The O&M Expenses shall be Rs.9.51 Lakhs/MW for the 1st year of operation.

67.2 Normative O&M expenses allowed at the commencement of the Control Period under
these Regulations shall be escalated at the rate of 5.72% per annum.

68. Tariff for Solar rooftop PV and Other Small Solar Power

68.1 Tariff for Solar rooftop PV and other small solar power Projects, complying with
eligibility criteria as may be specified by MNRE from time to time, shall be higher by
Rs 0.50/kWh or such other higher amount as may be stipulated by Commission from
time time, over and above the tariff applicable for Solar PV power projects as per
norms outlined under Regulation 65, 66 and 67.

Provided that such tariff shall be applicable for solar generation including such solar
generation used for captive consumption, subject to compliance of related terms and
conditions as may be specified by MNRE from time to time.

Chapter 8: Technology specific parameters for Solar Thermal Power Project

69. Technology Aspects

69.1 Norms for Solar thermal power under these Regulations shall be applicable for such
Solar Thermal power projects that uses sunlight for direct conversion into electricity
through Concentrated Solar Power technology based on either line focus or point focus
principle. .

70. Capital Cost

70.1 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.

71. Capacity Utilisation Factor

Final MERC(RE Tariff) Regulation 2010 Page 23 of 33

71.1 The Capacity utilisation factor shall be 23%.

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.

72. Operation and Maintenance Expenses

72.1 The O&M Expenses shall be Rs 13.74 Lakhs/MW for 1st year operation.

72.2 Normative O&M expenses allowed at the commencement of the Control Period under
these Regulations shall be escalated at the rate of 5.72% per annum.

73. Auxiliary Consumption

73.1 The auxiliary consumption factor shall be 10%.

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 9: Miscellaneous

74. Deviation from norms

74.1 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.

75. Power to Relax

75.1 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.

76. Power to Amend

76.1 The Commission may, at anytime, vary, alter, modify or amend any provisions of
these Regulations.

77. Power to remove difficulties

77.1 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.

Mumbai (K N Khawarey)
Dated: June 7, 2010 Secretary,
Maharashtra Electricity Regulatory Commission

Final MERC(RE Tariff) Regulation 2010 Page 24 of 33

Final MERC(RE Tariff) Regulation 2010 Page 25 of 33
Form-1.1 Form Template for (Wind Power or Small Hydro Project or Solar PV/Solar thermal):
Parameter Assumptions

Final MERC(RE Tariff) Regulation 2010 Page 26 of 33

 Form 1.2- Form template for (Wind Power or Small Hydro Project or Solar PV/Solar thermal): Determination of Tariff Components

Final MERC(RE Tariff) Regulation 2010 Page 27 of 33

 Form 2.1- Form Template for Biomass power or non-fossil fuel based Cogen:
Parameter Assumptions

Final MERC(RE Tariff) Regulation 2010 Page 28 of 33

 Form-2.2: Form Template for (Biomass Power or Non-fossil fuel based Cogen): Determination of Tariff Components

Final MERC(RE Tariff) Regulation 2010 Page 29 of 33

Schedule – Format of Monthly Statements to be submitted by Biomass and Cogeneration project
developers to MEDA

Monthly Update

Template 1.1: Monthly Fuel Usage Statement (1/2)

Name of the Project For FY :

(Location, District) Statement Date:
MEDA / Utility Ref.No. Project Code:
Installed Capacity (MW)
Date of Commissioning

Sr. Month Biomass Fuel-1 Biomass Fuel-2 Biomass Fuel-3 Fossil Fuel (Coal) % Fossil Fuel
No. consumption (in Tonnes) consumption (in Tonnes) consumption (in Tonnes) consumption (in Tonnes) Consumption of
Total Fuel
Consumption (%)

Type of During Cumu- Type of During Cumu- Type of During Cumu- Grade of During Cumu- During Cumu-
fuel current lative fuel current lative fuel current lative coal used current lative last current lative last
month last 12 month last 12 month last 12 month 12 month month 12 month
month month month (13 ) / (14) /
(4+7+10+1 (5+8+11+
3) 14)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1 April
2 May
3 June
4 July
5 August
6 September
7 October
8 November
9 December
10 January
11 February
12 March

Final MERC(RE Tariff) Regulation 2010 Page 30 of 33

Final MERC(RE Tariff) Regulation 2010 Page 31 of 33
Final MERC(RE Tariff) Regulation 2010 Page 32 of 33
 Monthly Update

Template 2.2: Monthly Fuel Procurement Statement (2/2)

Name of the Project For FY :

(Location, District) Statement Date:
MEDA / Utility Ref.No. Project Code:
Installed Capacity (MW)
Date of Commissioning

Sr. Month Biomass Fuel-1 Procured Biomass Fuel-2 Procured Biomass Fuel-3 Procured Fossile Fuel (Coal) Procured
No.

Cost to Storage Handling Transport Delivered Cost to Storage Handling Transport Delivered Cost to Storage Handling Transpor Delivered Cost to Storage Handling Transport Delivered
supplier cost in cost in ation cost cost of supplier in cost in cost in ation cost cost of supplier in cost in cost in tation cost of supplier cost in cost in ation cost cost of
in (Rs./Ton) (Rs./Ton) in fuel in (Rs./Ton) (Rs./Ton) (Rs./Ton) in fuel in (Rs./Ton) (Rs./Ton) (Rs./Ton) cost in fuel in in (Rs./Ton) (Rs./Ton) in Coal in
(Rs./Ton) (Rs./Ton) (Rs./Ton) (Rs./Ton) (Rs./Ton) (Rs./Ton) (Rs./Ton) (Rs./Ton) (Rs./Ton) (Rs./Ton)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

1 April
2 May
3 June
4 July
5 August
6 September
7 October
8 November
9 December
10 January
11 February
12 March

Final MERC(RE Tariff) Regulation 2010 Page 33 of 33