GRID STATUS – PRE - ABT Very wide Frequency fluctuations 48.0Hz to 52 Hz. Low Grid Voltages 400kV going down up to 330kV Frequent Grid Disturbances Sub-Optimal Operation High Technical loss Overdrawals at low frequency – might is right Grid Operation on fire fighting instead of Optimisation & Economy

Components of inter-utility tariff (Pre – ABT Mechanism) Fixed charges Interest on loans Depreciation O & M charges Return on equity Interest on Working Capital Energy charges (fuel cost) Incentives Surcharge & other levies No charge for reactive energy

Unscheduled Interchange (UI) Payment to Inter State Generating Stations (ISGS) from beneficiaries under Availability Based Tariff (ABT) Capacity charges Energy charges Unscheduled Interchange (UI)

CAPACITY CHARGE Capacity charge will be related to ‘availability’ of the generating station and the percentage capacity allocated to the state. ‘Availability’ for this purpose means the readiness of the generating station to deliver ex-bus output expressed as a percentage of its rated ex-bus output capability.

ENERGY CHARGE Energy charges shall be worked out on the basis of a paise per kwh rate on ex-bus energy scheduled to be sent out from the generating station as per the following formula Energy charges = Rate of energy charges (paise/kwh) x Scheduled Generation (ex-bus MWh)

UNSCHEDULED INTERCHANGE (U I) : Variation in actual generation / drawal with respect to scheduled generation / drawal shall be accounted for through Unscheduled Interchange (UI). UI for generating station shall be equal to its total actual generation minus its scheduled generation. UI for beneficiary shall be equal to its total actual drawal minus its total scheduled drawal.

UNSCHEDULED INTERCHANGE (U I) : UI shall be worked out for each 15 minute time block. Charges for all UI transactions shall be based on average frequency of the time block. UI rates shall be frequency dependent and uniform throughout the country.

UI RATE Rate of Unscheduled Drawal/Injection Frequency (Hz) Rate (p/u) Above 50.5 50.0 150 49.8 210 49.0 and below 570

AVAILABILITY BASED TARIFF CAPACITY CHARGE ENERGY CHARGE ADJUSTMENT FOR DEVIATIONS (U I CHARGE) (A) = a function of the Ex-Bus MW availability of Power Plant for the day declared before the day starts x SEB’s % allocation from the plant (B) = MWh for the day as per Ex-Bus drawal schedule for the SEB finalised before the day starts x Energy charge rate (C) = Σ (Actual energy interchange in a 15 minute time block – scheduled energy interchange for the time block) x UI rate for the time block TOTAL PAYMENT FOR THE DAY = (A) + (B) ± (C)

FEATURES : No complication regarding deemed generation. (A) and (B) do not depend on actual plant generation / drawal. No metering required for this as they are based on off-line figures. All deviations taken care of by (C) No complication regarding deemed generation. Perpetual incentive for maximizing generation and reducing drawal during deficit, but no incentive to over generate during surplus. ESC TO EXIT

TOTAL UI AMOUNT DISBURSED:- 2753 CR AVG WEEKLY TRANSACTION:- 61 MU UI IN SR (FROM 01/01/03 TO 07/01/07) TOTAL UI TURNOVER :- 12842 MU TOTAL UI AMOUNT DISBURSED:- 2753 CR AVG WEEKLY TRANSACTION:- 61 MU AVG WEEKLY UI AMOUNT DISBURSED:- 13 CR

SUMMARY OF UI – 190 WKS (FROM 01/JAN/03 TO 07/JANUARY/07) AP KAR KER TN PONDY Total UI exported(-) / Imported(+) in MUs -3674 5213 283 1819 -260 Total amount paid in Crores Rs. -528 983 -81 458 -51 Average rate of UI in paise/unit 144 189 285 252 195

UI EXCHANGES AND AVG. RATES IN RESPECT OF DIFFERENT CONSTITUENTS IN SR 817MU 2659MU 5164MU 1337MU 5046MU 658MU AP KAR KER TN 111MU 949MU

IR EXCHANGES OF SR IN THE FORM OF UI TRANSACTION WITH WR TRANSACTION WITH ER Energy Imported 919 MU (IMPORT BY SR) 985 MU Net Saving to each SR and WR/ER Constituents due to differential tariff Rs. 115.8 Cr. Rs. 49.40 Cr. Energy Exported 763 MU (EXPORT BY SR) 450 MU ESC TO EXIT