Petition No 730 of 2011 BEFORE THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION LUCKNOW. Date of Order :

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1 Petition No 730 of 2011 BEFORE THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION LUCKNOW Date of Order : IN THE MATTER OF: BETWEEN Approval for Quantum of 3 x 660 MW Power to be procured under Case-2 Standard Bidding Guidelines (SBG) of Govt. of India and Permission for initiation of bidding process. Sonebhadra Power Generation Company Limited (SoPGCL), 3rd Floor, Shakti Bhawan Extension, 14, Ashok Marg, Lucknow Petitioner The following were present: 1. Sri V. K. Verma, CE (Projects), JVUNL 2. Sri S. A. Faruqi, EE, UPPCL 3. Sri Sandeep Narang, Consultant, E&Y 4. Sri Jagdish Agarwal, Advocate Order (Date of Hearing ) 1. The Petitioner has submitted that UPPCL has been authorized by the Discoms viz. Paschimanchal Vidyut Vitran Nigam Limited, Purvanchal Vidyut Vitran Nigam Limited, Madhyanchal Vidyut Vitran Nigam Limited and Dakshinanchal Vidyut Vitran Nigam Limited, to select the developer for the 1980 MW Dopaha Thermal Power Project, located at District Sonebhadra, Uttar Pradesh. The Petitioner is a subsidiary company of UPPCL incorporated under the Companies Act, 1956 for the development of this Project. Two stage bidding process i.e. Request for Qualification (RFQ) stage and Request for Proposal (RFP) stage for selection of the developer has been proposed. The Petitioner has proposed to invite bids Page 1 of 6

2 for supply of 3x660 MW of power for a period of twenty five (25) years. Power supply under such procurement is proposed to commence within 48 months from signing of the SPA for the first unit and with a gap of 5 months from subsequent units. Accordingly, the Petitioner has proposed to commence supply of electricity from the year The Petitioner has submitted the revised demand and supply forecast for upto FY based on 17 th Electric Power Survey data of Central Electricity Authority and the Energy Policy, 2009 of the Government of Uttar Pradesh. According to them, forecasted demand of electricity for UP for the year is 12,495 MW and is projected to increase to 37,246 MW by As against this the total electricity available for the year is 10,820 MW which is projected to increase to 37,779 MW by Based on these figures, they have projected a surplus of 533 MW (including 1557 from Sonebhadra Project which is presently under consideration) for the year Details of the demand and supply forecasts for the State of Uttar Pradesh for the period upto has been submitted by them with the petition. The Petitioner states that such additional demand for the State cannot be met from the present available generation capacity and the ongoing projects. It is therefore necessary to plan the future procurement of power in advance. It is also required to meet the ever growing demand of electricity and to cope up with the acute shortage of electricity presently experienced in the State. 3. The Petitioner has proposed to invite bids for selection of a developer for the 1980 MW Sonbhadra Power Project to meet such shortage in availability of power and prayed to the Hon ble Commission to approve the quantum of energy to be procured and initiation of the Case-2 bidding process. 4. The Petitioner has stated that the proposal for coal linkage for the Sonebhadra Power Generation Co. Limited had been submitted for approval to the Ministry of Coal, Government of India in July 2009 but the allocation is still awaited. Therefore, the Petitioner had requested the Page 2 of 6

3 permission of the Hon ble Commission to initiate the Bid Process with the provision of imported coal. During the hearing on , the Petitioner was directed to submit indicative transfer price for the coal to be supplied for the Project. The Petitioner had proposed to make a provision in the bid document that the determined coal price would be informed to prospective bidders at least 30 days before the deadline for filing response to the RFP document. 5. On 7 th July, 2011 vide letter No Plg/UMPP/SbPGCL/UPERC, the Petitioner has informed that in the event coal linkage is not granted for the project then instead of imported coal, the coal from UCM Coal Company Ltd. shall be utilized. A decision to this effect has been taken by the Energy Task Force, Government. of U.P., on UCM Coal Company Limited has been jointly incorporated by UPRVUNL, CMDC and MAHAGENCO on for development and mining of Chandipara and Chandipara-II coal blocks allotted by Ministry of Power vide its order dated In view of the revised supply and demand scenario submitted by the Petitioner, the Commission approves the quantum of power submitted under the subject petition for procurement through case-2 bidding process based on SBG of GoI. The supply and demand scenario submitted by the Petitioner is as below: Revised Supply and Demand forecasts for electricity in Uttar Pradesh (Capacities in MW) FY A Capacity B Estimated Availability C Demand Page 3 of 6

4 OTHER ADDITIONS UNDER CASE-1/CASE-2/MOU/JV/STATE SECTOR ROUTE CASE MW MW CASE 2 3 Jawaharpur (2 x 660 MW) 4 Dopaha (3 x 660 MW) 5 Yamuna Expressway (3 x 660 MW) State sector 6 Anpara E MOU Route 7 Lalitpur (3x660MW) UPShare: Bajaj Sugar Mills (5x90MW) UP Share:405 9 Bhognipur Himavat (2x 660 MW) UP Share: Bhognipur LANCO (2x660 MW) UPshare: Bargarh (Chitrakoot) (2x300MW) UP share: Bargarh (Chitrakoot) (3x660MW) UP share: Farukkabad (1x250MW) UP share: Page 4 of 6

5 14 Aurraiya (1x250MW) UP share: Sandila UP share: Gazipur UP share: Bilhaur NTPC UP share: Khurja THDC UP share: Nevelli Lignite (3x660MW) UP share:1485 Enhanced Capacity/ Availability GAP (MW) (Excluding project to be identified) The capacities have been calculated taking Availability as 85% and Auxiliary Consumption as 7.5%. 7. The above projections show a positive approach for addition of generating capacity to fill up the gap between demand and supply of power in the State of UP. The Petitioner has applied for coal linkage for Sonebhadra Power Generation Co. Limited. However, to initiate the bid process, option with use of coal from UCM Coal Company may be exercised. Therefore, the Commission directs the Petitioner to initiate the bid process by inviting the bids in both scenarios i.e. Option-1 (with coal linkage) from GOI and Option2 (with coal from UCM Coal Company). Option-1 shall be preferred so as not to affect the development of other proposed state owned Thermal Power Projects envisaged with use of coal from UCM Coal Company. Page 5 of 6

6 8. Based on the submission of the Petitioner, the Commission allows tentative transfer price of coal as Rs / mt required to proceed with the bidding process. The determined price of the coal shall however be made available to the bidders at least 30 days before the deadline for filing response to the RFP document with intimation to the Commission. 9. The petition is disposed of. (Meenakshi Singh) (Shree Ram) (Rajesh Awasthi) Member Member Chairman Place : Lucknow Dated: Page 6 of 6