AVAILABILITY BASED TARIFF AND SCHEDULING MECHANISM

THE INDIA ELECTRICITY MARKET TIME LINE REAL TIME 15 MT BLOCKS LONG TERM BENEFICIARY CAPACITY ALLOCATION > 5 YEARS POWER PURCHASE AGREEMENTS CAPACITY COMMITTMENT 1-5 YEARS SHORT TERM AGREEMENTS DAY-AHEAD SCHEDULING DAY AHEAD - 3 MONTHS

Components of inter-utility tariff (Pre – ABT Mechanism i.e. the mechanism used to exist about 5 years back) Tariff used to consist of the following built-in components:  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

TENTATIVE COST FOR NTPC THERMAL STATIONS FOR THE MONTH OF JUNE 2004 Station Fixed Cost Rs. Cr/yr (1) Average Fixed Cost Rs. Cr/day (2) Average Fixed Cost P / KWh (3) Variable Base Cost P / KWh (4) Variable FPA P / KWh (5) Total Variable Base Cost P / KWh (6) Composite Cost P / KWh (3) + (6) Ramagundam Talcher Stage II Singrauli Rihand Unchahar – I Anta GPS* Auraiya GPS* DadriGPS G) Dadri (T) Unchahar – II Dadrigas(L) *Rates for mixed fuel (gas+ liquid fuel, naphtha)

Availability Based Tariff (ABT) the presently followed mechanism Tariff is split into the following separate components:  Capacity charges  Energy charges  Unscheduled Interchange (UI)

AVAILABILITY BASED TARIFF (A) CAPACITY CHARGE (B) ENERGY CHARGE (C) ADJUSTMENT FOR DEVIATIONS (U I CHARGE) (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 :  ( 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.

IN SR MW OF THERMALS OUT OF MW (93%) HAS VARIABLE COST THAT FALLS IN THE RANGE OF 60PAISE TO 400 PAISE DETAILS>400 Ps/u CAP N D ESC TO EXIT

DAY AHEAD SCHEDULING Schedules are made for each 15 minute time block wise on day ahead basis i.e. 96 time blocks in a day. Participating agencies are ISGS and States. Bilaterals/STOAs are also included in the preparation of schedules. RLDC prepares and coordinates the schedules. On the day of operation the schedules can be revised with prior intimation i.e. 4 to 6 time blocks.

SCHEDULING Availability Declaration Entitlements SLDCSLDC Requisition & Bilateral Agreements Injection Schedule Drawal Schedule Revision in DC Revision in Requisition Final Injection Schedule Final Drawal Schedule 10:00 11:00 15:00 17:00 22:00 23:00 RLDCRLDC ISGSISGS Time Revisions during Current day Revisions during Current day 0 to 24 hours RLDC

TIME TABLE FOR EXCHANGE OF INFORMATION IN RESPECT OF SCHEDULING By hrs.ISGSs shall advise SRLDC the Station-wise MW and MWh capabilities By 1100 Hrs.SRLDC shall advise the States / Beneficiaries the Station wise MW & MWh entitlements. By 1500 hrs.SLDCs/ Beneficiaries shall communicate the Station-wise requisitions and details of bilateral exchanges to SRLDC. By 1700 hrs.SRLDC shall convey the ex-power plant despatch schedule to each ISGS and net drawal schedule to each State / Beneficiary. The details of unrequisitioned surpluses shall also be intimated. By2200 hrs.ISGSs / States / Beneficiaries shall inform the modifications, if any, for incorporating in the final schedule By 2300 hrs.SRLDC shall issue the final despatch and drawal schedule. ESC TO EXIT

BY 10: 00 HRS ISGSs shall advise SRLDC the Station-wise MW and MWh capabilities Back SAMPLE DC SHEET

BY 11: 00 HRS Back SRLDC shall advise the States / Beneficiaries the Station wise MW & MWh entitlements. SAMPLE ENT. OF STATES

BY 15: 00 HRS SLDCs/ Beneficiaries shall communicate the Station-wise requisitions and details of bilateral exchanges to SRLDC. Back

BY 17: 00 HRS SRLDC shall convey the ex-power plant despatch schedule to each ISGS SRLDC shall convey the net drawal schedule to each State / Beneficiary The details of unrequisitioned surpluses shall also be intimated. Back SAMPLE SCHD OF STATES SAMPLE SCHD OF ISGS

BY 22 00HRS Back ISGSs / States / Beneficiaries shall inform the modifications, if any, for incorporating in the final schedule

BY 23 00HRS SRLDC shall issue the final ex-power plant despatch schedule to each ISGS SRLDC shall issue the final net drawal schedule to each State / Beneficiary Back

SHOW TABLE HIDE TABLE 30 Ps 45 Ps 80 Ps