CENTRAL ELECTRICITY REGULATORY COMMISSION

NEW DELHI

Petition No. 167/MP/2017

Coram:
Shri A.K. Singhal, Member
Shri A.S.Bakshi, Member
Dr. M.K. Iyer, Member

Date of Order: 16th February, 2018

In the matter of

Petition under section 62 and 79 (1) (a) of the Electricity Act, 2003 read with
Chapter-V of the CERC (Conduct of Business) Regulations, 1999 for relaxation of
APC norms of Talcher Super Thermal Power Station, Stage-I (1000 MW) for the
period from 1.4.2014 to 31.3.2019

And

In the matter of

NTPC Ltd
NTPC Bhawan
Core-7, SCOPE Complex
7, Institutional area, Lodhi Road
New Delhi- 110003 …….Petitioner
Vs

1. West Bengal State Electricity Distribution Co. Ltd.

Vidyut Bhawan, Block-DJ, Sector-II,
Salt Lake City, Kolkata- 700091

2. Bihar State Power Holding Company Ltd.

Vidyut Bhawan, Bailey Road
Patna-800001

3. Jharkhand Urja Vikas Nigam Ltd

Engineering Bhawan
Heavy Engineering Corporation
Dhurwa, Ranchi-834004

4. Grid Corporation of Orissa Ltd.

Vidyut Bhawan, Janpath
Bhubaneshwar – 751007

5. Damodar Valley Corporation

DVC Towers, VIP Road, Kolkata - 700054

Order in Petition No. 167/MP/2017 Page 1 of 13

6. The Energy & Power Department
Govt, of Sikkim, Kazi Road ,
Gangtok Sikkim -737101

7. Assam Power Distribution Company Ltd

Bijulee Bhawan, Paltan Bazar
Guwahati-781001

8. Tamil Nadu Generation & Distribution Co. Ltd

NPKRP Maaligail, 800, Anna Salai,
Chennai - 600002 ……Respondents

Parties present:
Shri Ajay Dua, NTPC
Shri Shailendra Singh, NTPC
Shri R.K.Mehta, Advocate, GRIDCO
Ms. Himanshi, Advocate, GRIDCO
Shri S.Vallinayagam, Advocate, TANGEDCO
Shri Sanjay Sen, Senior Advocate, WBSEDCL

ORDER

This Petition has been filed by the Petitioner, NTPC that has prayed for the

following relief:

“In view of the fact and circumstances mentioned above, it is submitted that
the petition may please be admitted and NTPC TSTPS Stage-I may be allowed
relaxed operating norms for APC/ AEC from 5.75% to 7.5% for 2014-19 period
by invoking Hon‟ble Commission‟s powers under Regulation 54 „Power to
Relax‟‟.

2. In support of the above prayer, the Petitioner in this Petition has submitted as

under:

(i) The Petitioner is a Govt. company within the meaning of Companies Act,
1956 and is a „generating company‟ as defined under section 2(28) of the
Electricity Act, 2003 (the 2003 Act). Talcher Super Thermal Power Station,
Stage-I (referred to as “the generating station‟) comprises of two units of 500
MW each, is owned by the Petitioner and located in the State of Odisha. Power
from the generating station is supplied to the Respondents.

(ii) This Commission has the jurisdiction to regulate the tariff of generating
companies owned or controlled by the Central Govt. under Section 62 of the
Electricity Act, 2003. Accordingly, the Commission has notified the CERC
(Terms and Conditions of Tariff) Regulations, 2014 (hereinafter referred to as

Order in Petition No. 167/MP/2017 Page 2 of 13

 „the 2014 Tariff Regulations‟) providing for the terms and conditions for
determination of tariff, applicable from 1.4.2014.

(iii) The tariff of the generating station for the period from 1.4.2014 to
31.3.2019 was determined by the Commission by order dated 29.7.2016 in
Petition No. 281/GT/2014 in accordance with the 2014 Tariff Regulations.

(iv) In the 2014 Tariff Regulations notified by the Commission, the

Commission has revised the Operation & Financial norms of Thermal Power
Stations. In respect of this generating station of the Petitioner, the norms for
Auxiliary Power Consumption (APC) were tightened from 6.5 % to 5.75%
(applicable norms for 500 MW units having Induced draft cooling towers).

(v) At the time of framing of the 2014 Tariff Regulations, the CEA in its
„Recommendations on Operational norms for Thermal Power Stations for tariff
period 2014-19‟ had recommended that the existing APC norms for coal fired
units are considered adequate and may continue. However, APC for 500 MW
and higher size units installed after 1.4.2009, may be reduced by 0.75% (three
fourth percentage points). But, the Commission under the 2014 Tariff
Regulations, reduced the APC norms by 0.75% even for units commissioned
before 1.4.2009.

(vi) Although the units of this generating station were commissioned before
1.4.2009, the APC norms were reduced to 5.75% from 6.5%. The actual APC
indicated by CEA of the generating station for the period 2008-13 is 6.7% to
7.4% (average 6.9%). Thus, this generating station has never in the past
achieved APC of 5.75% which is a norm for the period 2014-19. However, the
achieved APC of the generating station during the subsequent period is as
under:

2014-15 2015-16 2016-17 Average

PLF % (gross generation) 85.48 89.42 87.06 87.32
Availability% (running hrs) 88.85 91.62 91.59 90.69
Loading factor% 96.21 97.6 95.06 96.29
APC% 7.18 7.30 7.80 7.43

(vii) One of the main reasons for higher APC of this generating station is that
the station is provided with Ball & Tube Mills (BBD 4772 SI) supplied by GEC
Alsthom, which are highly power intensive. The power consumption is
significantly higher than the normal BHEL bowl mills. The design details of the
Ball & Tube Mill is as under:

Type Ball Tube Mill BBD 4772 SI

Nos. per Unit 05
Speed 16 r. p. m
Mill Outlet temperature 90 degree C
Weight of Ball Charge 118.5 Tonne
Order in Petition No. 167/MP/2017 Page 3 of 13
 Maximum Coal Output 89.15 T / Hr.
Motor Supplier GEC Alsthom
Voltage 11 KV
Power 2400 KW
Current 145 A

(viii) Normally a full unit load is achieved by running of 4 tube mills.

However, depending on coal quality and other conditions, sometimes 5 tube
mills are required for achieving full load. The average power consumption for
each tube mill is in the range of 1800-1900 KW. In comparison, the units with
Bell bowl mills, the average power consumption for each bowl mill is around
475-500 KW. For achieving full unit load, running of 6 mills in case of bowl mills
and 4 mills in case of tube mills has been considered. A comparison of APC of
Tube Mills (Stage-I) vis-a-vis Bowl Mills of similar 500 MW units is as under:

Type of Mill Mill Number of Total power Energy Contribution

Loading mills for consumption consumption towards APC at
full load @ 0.85 pf 85% PLF
(KW) (KW) (MU / ( %)
annum)
Tube Mills 1900 4 7600 56.59 1.52
(BBD 4772 SI)
Bowl Mills 500 6 3000 22.34 0.60
(XRP 1003)

(ix) Thus, a total of 1.52% (approx.) is contributed from the Tube Mills
towards APC of the units as compared to 0.60 % as in case of BHEL supplied
mills. There is a percentage increase in APC of 0.92% on account of tube mills.
In addition, the power consumption of auxiliaries associated with tube mills is
higher in comparison to bowl mills. A comparison of associated auxiliaries
corresponding one tube mill and bowl mill is as under:

Tube Mill Power Energy Bowl Mill Power Energy

Rating consumptio Rating consumption
(KW) n @ 0.85 pf (KW) @ 0.85 pf
MU/annum. MU/annum
Mill Main motor 2400 17.87 Mill Main motor 525 3.91
Mill seal air fan 75 0.56 Mill seal air fan 12.5 0.09
Reducer Oil p/p for 30 0.22 Lub oil p/p 3.7 0.03
mills mills
LP lub oil p/p for mills 5.5 0.04
HP lub oil p/p for mills 7.5 0.06
Ball & Socket oil p/p 3.0 0.02
Grease p/p for mills 0.55 0.00
Total KW 2521.55 18.78 541.2 4.03

It can be inferred from the above table that the one Tube Mill along with
its auxiliaries has power consumption of around 4.65 times energy as compared
to bowl mill.

Order in Petition No. 167/MP/2017 Page 4 of 13

 (x) The generating station could not meet the norms of APC and incurring a
financial loss on account of under recovery in APC. The details of actual APC
achieved during the period 2014-17 along with the loss incurred is as under:

Parameter 2014-15 2015-16 2016-17 Average

Scheduled PLF% 83.65 91.05 85.08 86.59
Normative APC% 5.75 5.75 5.75 5.75
Scheduled Generation MU 6906 7517 7023 7148.67
ECR (`/Unit) 1.46 1.34 1.66 1.49
Actual APC% 7.18 7.3 7.8 7.43
Under recovery in APC in % 1.43 1.55 2.05 1.68
Impact due to under-recovery in 0.022 0.022 0.037 0.03
APC in `/unit.
Financial loss incurred (in crore) 15.53 16.84 25.92 19.43
Total financial loss due to under-recovery in APC in 58.30
2014-17 (` in crore)

(xi) Thus, the contribution of ball and tube mills towards APC of the units is
comparatively much more than the bowl mills for same capacity units.

(xii) While framing the APC norms under Regulation 36 (E) of the 2014 Tariff
Regulations, the design aspects such as type of cooling tower, type of BFPs etc had
been considered. However, the higher APC in the “tube mills” in the units has not
been considered. Also, in the generating station some of the new schemes have
been planned and executed to meet the various statutory directives for pollution
control and safety and security of the generating station. These additional power
intensive systems are expected to be put to service during 2017-18. Accordingly,
the APC will further increase due to these additional power intensive systems
added by the Petitioner to meet statutory requirements. The details of these
additional systems are as under:

S. System Expected Energy % APC Remark

No. KW consumption contribution
contribution @ 0.85 pf at normative
in APC. MU/annum. PLF of 85%.
1 ESP R&M 4937 36.8 0.49 Capitalization allowed by
(Retrofitting of the Commission vide
ESP with order dated 29.7.2016.
additional field)
2 Firefighting system 54 0.4 0.01 To be considered by the
booster and foam Commission in Truing-up.
pump house.
3 4th ash slurry 1382 10.3 0.14 Capitalization allowed by
series. the Commission vide
order dated 29.7.2016
4 Dry ash 1912 14.2 0.19 To be considered by the
handling Commission in Truing-up.
system
Total 8285 61.7 0.83

Order in Petition No. 167/MP/2017 Page 5 of 13

3. In the above circumstances, the Petitioner has prayed for relaxation of

Regulation 36 (E) of the 2014 Tariff Regulations with respect to the APC norms for

the generating station from 5.75% to 7.5% in exercise of the power under

Regulation 54 (Power to Relax) of the 2014 Tariff Regulations.

4. The matter was heard on 16.1.2018 on „admission‟. During the hearing, the

learned counsel of the Petitioner reiterated the submissions made in the Petition

and prayed that the relief sought for may be granted. The Respondent No. 8

(TANGEDCO) has filed its reply vide affidavit dated 12.1.2018. The Commission,

after hearing the parties reserved its orders on the issue of „maintainability‟.

Reply of TANGEDCO

5. The Respondent, TANGEDCO in its reply affidavit has submitted as under:

(i) Unit I had achieved COD on 1.1.1997 and Unit II of the generating station
achieved COD on 1.7.1997 and therefore have completed the useful life of 20
years as on 31.12.2017. The CEA in its recommendations for the Operational
norms of the thermal power stations for the period 2014-19 had stated that the
Commission may review the existing APC norms based on actual performance.
Accordingly, the Commission has reviewed APC norms for existing as well as
new 500 MW units and specified Regulation 36 (E) of the 2014 Tariff
Regulations.

(ii) The 2014 Tariff Regulations notified by the Commission is guided by the
principles of CEA, National Electricity Policy and Tariff Policy and is based on
the norms and not on actuals. Moreover, the Petitioner has not raised any
issues before the Commission on the Statement of Reasons and Explanatory
Memorandum for the 2014 Tariff Regulations and has raised issue now after a
huge delay, which is not permitted in law. If the Petitioner is aggrieved by the
2014 Tariff Regulations, they should have approached the High Court
challenging the Regulations. Having failed to do so, the Petitioner is now trying
to challenge the 2014 Tariff Regulations, which is not maintainable.

(iii) If the Petitioner is aggrieved by the Commission‟s order dated 29.7.2016

in Petition No. 281/GT/2014 (determination of tariff of the generating station
for 2014-19), it should have filed review petition before the Commission or
appeal before the APTEL. Therefore, this Petition is liable to be dismissed at
the admission stage.
Order in Petition No. 167/MP/2017 Page 6 of 13
 (iv) The operational norms determined by the Commission while specifying
the 2014 Tariff Regulations are based on the operational data furnished by the
generators for the previous tariff block (2009-14). However, the data furnished
by the Petitioner in the present petition relates to the period 2014-17 and not
prior to 2014.

(v) The terms and conditions specified under the 2014 Tariff Regulations
cannot be categorized as unreasonable to resort to the exercise of general
Power of Relaxation in the manner sought for by the Petitioner. The prayer for
relaxation is therefore beyond the Regulation 54.

(vi) The 2014 Tariff Regulations have been specified by the Commission in
exercise of its power under section 178 of the 2003 Act and thus form part of
the said Act. This has been laid down by the Hon‟ble Supreme Court in State of
UP & ors v/s Babu Ram Upadhyaya (1961) 2SCR 679. In WBSEB v/s Patel Engg
Co. Ltd (2001) 2SCC 451, the Hon‟ble Supreme Court held that where power to
relax or waive a rule or a condition exists under the rule, it has to be done
strictly in compliance with the rules.

Accordingly, the Respondent, TANGEDCO has submitted that the relief

sought for by the Petitioner may be rejected.

6. We have considered the submissions of the parties and perused the

documents on record. The Petitioner has prayed that the APC norms in respect of

the generating station may be revised from 5.75% to 7.5% for the period 2014-19 in

relaxation of Regulation 36(E) of the 2014 Tariff Regulations. In justification of this

prayer, the Petitioner has submitted that the higher APC for this generating station

is on account of the fact that the station is provided with Ball & Tube Mills (BBD

4772 SI) supplied by GEC Alsthom which are highly power intensive and the

consumption is higher than the normal BHEL bowl mills. In addition to this, the

Petitioner has submitted that due to the addition of power intensive systems for

the generating station towards statutory compliances for pollution control and

safety & security during the year 2017-18, the APC will further increase. Thus, the

issue for consideration is whether the prayer of the Petitioner in this Petition is

maintainable.
Order in Petition No. 167/MP/2017 Page 7 of 13
Maintainability

7. Regulation 36 (E) of the 2014 Tariff Regulations provides as under:

(a) Coal-based generating stations except at (b) below:

With Natural Draft cooling
tower or without cooling tower
(i)200 MW series - 8.5%
(ii) 300/330/350/500 MW and above 5.25%
Steam driven boiler feed pumps –
Electrically driven boiler feed pumps 7.75%
Provided further that for thermal generating stations with induced draft cooling towers,
the norms shall be further increased by 0.5%:

8. Regulation 54 of the 2014 Tariff Regulations provides as under:

‘’54. Power to Relax. The Commission, for reasons to be recorded in writing, may
relax any of the provisions of these regulations on its own motion or on an
application made before it by an interested person.‟‟

9. The power of relaxation under the Tariff Regulations is in general terms and

its exercise is discretionary. It is settled law that exercise of discretion must not

be arbitrary, must be exercised reasonably and with circumspection, consistent

with justice, equity and good conscience, always in keeping with the given facts

and circumstances of a case.

10. The Commission vide order dated 7.6.2013 had initiated the process of

framing the terms and conditions for determination of tariff, including the norms

of operation applicable for the period from 1.4.2014 to 31.3.2019. Accordingly, it

had directed various Central and State generating utilities to furnish the

operational and performance data for the period from 2008-09 to 2012-13. The CEA

was also requested to recommend suitable operational norms for the thermal

generating stations. Thus, the Commission, after considering the said data and

recommendations of the CEA, including the comments/responses of generating

companies like the Petitioner, had notified the 2014 Tariff Regulations applicable

Order in Petition No. 167/MP/2017 Page 8 of 13

for the said period. As regards APC, the submissions of the Petitioner (as per Para

37.72 of the SOR) were as under:

“37.72 NTPC submitted as under:

a. Performance of Units cannot be sustained in the coming years as Unit loading is

expected to be low in view of the inadequate fuel availability, lower
demand/schedule by customers, ageing of units, renovation & modernisation, etc.

b. Hence, the existing AEC norms should be continued with provision of additional
AEC on account of new technologies like FGD, desalination plant, pipe conveyors,
ash disposal system, etc.

c. As gas stations are facing heavy partial loading due to low schedule, the existing
AEC norms of gas stations need to be revisited with additional consideration for
partial loading below 80% for all gas stations.

d. Beneficiaries should share the energy bill paid by NTPC stations for drawing
energy from grid during plant shutdown due to lower schedule in the proportion of
their allocation.”

11. The Commission after considering the submissions of other stakeholders

including the above submissions of the Petitioner had concluded (vide Para 37.83 &

37.84 of the SOR) as under:

“37.82 Most of the generating stations have suggested allowing the current norms as
per tariff Regulation 2009 along with additional margin for various equipment‟s to
be installed. The Commission while specifying the auxiliary energy consumption
norms for 200/210/250 MW and 500 MW stations had retained the current norms.
However, CEA in its report has recommended to reduce the auxiliary energy
consumption for new 500 MW Units by 0.75% stating that though there is a scope of
reducing the norm by 1%, however, with a view to allow some operational flexibility
to the stations, 0.75% has been recommended by CEA. In view of the same, the
Commission has reviewed the auxiliary energy consumption norm for existing as
well as new 500 MW Units and has reduced the current norm by 0.75%. As regards
the norms for 200/210/250 MW Units, the Commission has retained the norms
proposed in the draft Regulations.

37.83 In regard to increase in auxiliary consumption due to partial loading, the

auxiliary consumption norms are in due consideration of historical power
consumption furnished for various generating stations for the past five year period
2008-09 to 2012-13. This actual power consumption is an average consumption
taking into account the partial loading of the generating stations. Thus, the
additional consideration of power consumptions due to partial loading is not
required. If the loading is decreased considerably, the generators opt to shutdown
entire unit thereby on saving the auxiliary consumption. The argument of NTPC is
that stations were operating at a low plant load factor for the last 2 years namely
2012-13 and 2013-14 implying that auxiliary consumption norms should have been
specified based on last two years data. However, it is not desirable to specify norms
Order in Petition No. 167/MP/2017 Page 9 of 13
 based on two year performance. The approach of the Commission has been to
specify norms based on past 5 years average consistently followed during previous
tariff periods. This methodology ensures that generator if loses in one year then it
should be possible for him to recover in other years”

12. It is therefore evident that the Commission after considering the comments /

suggestions of the stakeholders, including the Petitioner, had specified the Terms

and Conditions for determination of tariff, including the operational norms,

applicable for the period from 1.4.2014. In our considered view, the operational

norms (Regulation 36(E) specified by the Commission under the 2014 Tariff

Regulations cannot be categorized as unreasonable so as to justify resort to

exercise of the power of relaxation. Moreover, the power of relaxation cannot be

exercised in a manner so as to nullify the said provision of the Tariff Regulations

and render them otiose or completely redundant. Accordingly, we find no merit in

the prayer of the Petitioner for relaxation of the APC norms and the same is

beyond the scope of Regulation 54 of the 2014 Tariff Regulations. The Petition is

therefore not maintainable.

13. The Petitioner has prayed for relaxation of the APC norms under Regulation

36 (E) of the 2014 Tariff Regulations on account of usage of Ball & Tube Mills (BBD

4772 SI) in the generating station. This submission of the Petitioner is not

maintainable. It is noticed that in Petition No. 281/GT/2014 filed by the Petitioner

for determination of the tariff of the generating station for the period 2014-19,

the Petitioner had sought for relaxation of APC norms from 5.75% to 7.25%, under

Regulation 54 of the 2014 Tarff Regulations, based on the actual operating data.

The relevant portion of the submissions of the Petitioner in the said Petition is

extracted as under:

Order in Petition No. 167/MP/2017 Page 10 of 13

 “11.(i) ……..The design details of the Ball & Tube Mill is as under:

Type Ball Tube Mill BBD 4772 SI

Nos. per Unit 05
Speed 16 r. p. m
Mill Outlet temperature 90 degree C
Weight of Ball Charge 118.5 Tonne
Maximum Coal Output 89.15 T / Hr.
Motor Supplier GEC Alsthom
Voltage 11 KV
Power 2400 KW
Current 146 A

(ii) …….A comparison of APC of Tube Mills (Stage-I) vis-a-vis Bowl

Mills of similar 500 MW units is as under:”
Type of Mill Mill Number Total power Energy Contribution
Loading of mills consumption consumption @ towards APC at
for full 0.85 pf 85% PLF
load
(KW) (KW) (MU / annum) ( %)
Tube Mills 1750 4 7000 52.12 1.40
(BBD 4772
SI)
Bowl Mills 475 7 3325 24.76 0.67
(XRP 1003)

14. Accordingly, the Commission after considering the submissions of the

Petitioner, by order dated 29.7.2016 had rejected the prayer of the Petitioner for

relaxation of APC norms and held that the APC of 5.75% in terms of the 2014 Tariff

Regulations shall be made applicable for the generating station. The relevant

portion of the order is extracted as under:

“Auxiliary Energy Consumption

73. The petitioner has claimed Auxiliary Energy Consumption at 5.75% during 2014-19
period. Further, the petitioner has submitted that the Auxiliary Energy Consumption
has increased significantly due to deterioration in coal quality during the last two
years and in view of increased Auxiliary Energy Consumption on account of usage of
Tube Mills, the Commission is requested to allow the Auxiliary Energy Consumption
norm of 7.25% under Regulation 54 & 55 of the Tariff Regulations, 2014.

74. Regulation 36(E)(a) of 2014 Tariff Regulations, provides for the Auxiliary Energy
Consumption of 5.25% for coal based generating stations of 500 MW sets with Natural
Draft cooling tower or without cooling tower with steam driven BFP. It further
provides that for thermal generating stations with induced draft cooling towers, the
norms shall be further increased by 0.5%. Accordingly, the Auxiliary Energy
Consumption to be considered is 5.75% as per the norms and the same is allowed for
the purpose of tariff computations.”

Order in Petition No. 167/MP/2017 Page 11 of 13

15. It is therefore evident that the prayer of the Petitioner for relaxation of APC

norms from 5.75% to 7.25% on the ground of usage of Tube Mills etc., had been

rejected by the Commission by order dated 29.7.2016. The Commission having

rejected the prayer of the Petitioner for relaxation of APC norms in order dated

29.7.2016, there is no justification for the Petitioner to seek the relaxation of the

APC norms now from 5.75% to 7.5% in this Petition, on the same grounds. The

Petitioner cannot be permitted to unsettle the settled issue. In our view, the

application, though termed as an application for relaxation, is an application for

review of order dated 29.7.2016 in disguise. In this background, the relief sought

by the Petitioner for relaxation of APC of the generating station is not

maintainable.

16. The Petitioner has further submitted that due to addition of some power

intensive systems like Retrofitting of ESP (ESP R & M), 4th Ash Slurry Series, Dry Ash

Handling System and Fire Fighting system to meet various statutory directives for

pollution control and safety & security during 2017-18, there is increase in APC of

the generating station. This submission of the Petitioner is also not acceptable. In

our view, the planning and addition of power intensive schemes for the station

during the period 2017-18 cannot be a ground for relaxation of the APC norms

specified by the Commission under Regulation 36 (E) of the 2014 Tariff

Regulations. As stated, the Commission while specifying the operational norms

under the 2014 Tariff Regulations had taken into consideration the operational and

performance data furnished by the generating utilities for the period from 2008-09

to 2012-13, i.e prior to the period 2014-19. Hence, the addition of power intensive

systems during the year 2017-18 cannot be a factor for relaxation of the APC norms

Order in Petition No. 167/MP/2017 Page 12 of 13

for the generating station for the period 2014-19. Accordingly, the prayer of the

Petitioner for relaxation of the APC norm specified under Regulation 36(E) is not

maintainable and is therefore rejected.

17. Accordingly, Petition No. 167/MP/2017 is disposed of at the admission stage.

Sd/- Sd/- Sd/-

(Dr. M.K.Iyer) (A. S. Bakshi) (A. K. Singhal)
Member Member Member

Order in Petition No. 167/MP/2017 Page 13 of 13