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RAJASTHAN ELECTRICITY REGULATORY COMMISSION, JAIPUR
Petition No. RERC/273/11
In the matter of in principle approval of capital works as additional
capitalization for (1240 MW) Coal based Kota Super Thermal Power Station
(KSTPS–Stage-I to V, Unit-1 to 7) of Rajasthan Rajya Vidyut Utpadan Nigam Ltd.,
(RVUN).
Coram: Shri S.K. Mittal, Member
Shri S. Dhawan, Member
Petitioner : Rajasthan Rajya Vidyut Utpadan Nigam Limited (‘RVUN’).
Respondents : Jaipur Vidyut Vitran Nigam Limited ( ’JVVNL’)
Ajmer Vidyut Vitran Nigam Limited ( ’AVVNL’)
Jodhpur Vidyut Vitran Nigam Limited (’JdVVNL’)
Date of hearing: 14.02.2012 & 21.02.2012
Present:
1. Shri N.K.Jain, CE(KTPS),RVUN (14/21.02.2012)
2. Shri R.K.Gaur, Dy CE (PPC&F),RVUN (14.02.2012)
3. Shri.G.R.Choudhary,Dy.CE(Commercial),AVVNL
(14.02.2012)
4. Shri S.K.Rajpurawala, CAO(W&M),RVUN (14/21.02.2012)
5. Shri K.K.Purohit,SE (Commercial),JVVNL (14.02.2012)
6. Shri G.L. Sharma, Individual(14/21.02.2012)
Date of Order: 10.05.2012
Order
1. The RVUN has filed this Petition for in principle approval of expenditure on
capital works costing Rs.24261Lakhs during FY11-12 & Rs.18554 Lakhs during
FY 12-13 at KSTPS (1240MW) as Additional Capitalization.
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2. The brief summary of capitalization proposal is as under:-
Sr.
No.
Description of Proposals Estimated
total cost of
Project
For FY
(2011-12)
For FY
(2012-13)
Commissioning
scheduled
1. Renovation of CHP system
Stage I&II by installing one
no. wagon tippler, 2 no.
Rotary breakers, 3 no. Ring
granulators, one no.
Stacker Reclaimer along
with associated conveyors
& equipments at KTPS,
Kota
Rs.23500
Lakhs
Rs.15200
Lakhs
Rs. 8300
Lakhs
By open tender enquiry
from experienced
agency like M/s Elecon,
M/s L&T etc.
2
Renovation &
Modernization of Railways
Track (up-gradation of
Railway track from Gurla /
Chambal Cabin to KSTPS,
Sakatpura Marshalling
Yard is proposed to carry
out by W.C. Railways as a
deposit work and it will
likely to be completed in
one year. Material and
labour and all other
requirements will be
arranged by W.C.
Railway.)
Rs. 1260
Lakhs
Rs. 600
Lakhs
Rs. 660
Lakhs
Within a period of one
year from
commencement /
placing the order to
W.C. Railway Kota.
3 Purchase of Operator
Training Simulator for
RVUNL Unit of KSTPS.
(Purchase order placed to
M/s IL Kota)
Rs 410
Lakhs
Rs 410
Lakhs
FY 2011 – 12 and 6
months for installation,
testing, commissioning
and fine tuning of the
supplied engineered
system.
4. Construction of Road over
bridge at LC-15 (R.O.B.) As
per decision OF BOD of
RVUNL has to share only
50% of total cost that
comes out to Rs. 2637
Lakhs. Work through UIT,
Kota. (RVUNL to deposit.
this amount with UIT Kota)
Rs. 5,275
Lakhs.
Rs. 2,637
Lakhs
As per D.P.R. which is
under preparation with
UIT kota.
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Purchase of 02 Nos. Bull
Dozers and 01 No.
Hydraulic Excavator
(Purchase made through
M/s BEML Ltd., A Govt. of
India Mini Ratan
Company under Ministry
of defense).
Rs. 334
Lakhs
Rs. 334
Lakhs
06 Months after getting
approval
3
Sr.
No.
Description of Proposals Estimated
total cost of
Project
For FY
(2011-12)
For FY
(2012-13)
Commissioning
scheduled
Purchase of 02 Nos. Diesel
Hydraulic Locomotives (
Purchase Agency shall be
finalized through open
competitive bidding)
Rs. 600
Lakhs
Rs. 600
Lakhs
16 Months after getting
approval.
Purchase of Hydraulic Re-
railing equipment (
Purchase Agency shall be
finalized through open
competitive bidding)
Rs. 60
Lakhs
Rs. 60
Lakhs
10 Months after getting
approval
Purchase of New Fire
water Tender of 6000 litre
capacity for KSTPS
(Purchase Agency shall
be finalized through open
competitive bidding)
Rs. 40 Lacs Rs. 40
Lacs
2011 - 12
6 A1: Purchase OF DYNAMIC
Coal Balancing System for
KSTPS Kota.( Purchase
Agency shall be finalized
through open competitive
bidding)
Rs. 1500
Lakhs
Rs 100
Lakhs
Rs. 1400
Lakhs
8 Months after getting
approval & 4 Months for
installation, testing,
commissioning and fine
tuning of the supplied
engineered system
7 Up gradation of Contronic
E-K type HMI system
based on old computer
architecture (Main Frame
type) ABB make of unit #
5 KSTPS with 800xA HMI
system of M/s ABB.
Rs. 740
Lakhs.
Rs 700
Lakhs
Rs. 40
Lakhs
Within 6 months from the
date of approval & 28
weeks for installation,
testing, commissioning.
8 R&M of SG/TG & Station
C&I package of KSTPS Unit
# 3 & 4 (1800 Lakhs for
Unit#3, 1800 Lakhs for Unit
# 4)
Rs. 3600
Lakhs.
Rs.3600
Lakhs
M/S BHEL or M/S ABB or
M/S Rockwell or M/S IL,
Kota or M/S Honeywell
One year after
placement of order.
9 Renovation of Static AVR
of unit no. 1 & 2 by Digital
AVR (DAVR)
500 Lakhs 500
Lakhs
M/s BHEL
10 Renovation of generator
protection and
associated 220 kV feeder
protection for KSTPS Stge-I
400 Lakhs 400
Lakhs
M /s BHEL, M/s ABB
11 Renovation of 25 KV
MOCB’s installed at KSTPS
switchyard
300 Lakhs 300
Lakhs
M /s BHEL
12 Replacement of Mech.
Drives by Variable
frequency drives
300 Lakhs 300
Lakhs
M /s BHEL
13 Replacement of High
voltage transformers for
ESP’s
200 Lakhs 200
Lakhs
M/s Hind Rectifiers
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Sr.
No.
Description of Proposals Estimated
total cost of
Project
For FY
(2011-12)
For FY
(2012-13)
Commissioning
scheduled
14 Engineering, Supply,
Erection, Testing and
Commissioning of two
stage vacuum pump, one
each in unit # 3 & 4
(2x210MW), KSTPS, Kota. .
(M/s. Nash – Denver,
through their Indian agent
M/s. Millennium Implex Pvt.
Ltd. Delhi)
Rs. 450
Lakhs
Rs. 300
Lakhs
Rs. 150
Lakhs
Within 6 months from the
date of approval and
detailed Engineering by
consultant.12 Months for
delivery of material and 4
months for installation,
testing, commissioning
and
Fine tuning of the supplied
engineered system.
15 Construction of Barracks,
Boundary wall etc for CISF
etc.(Purchase Agency
shall be finalized through
open competitive
bidding)
Rs. 65
Lakhs Rs.65 Lakhs
2011-12
16 Construction of Operator
cabins, office stores etc. (
Purchase Agency shall be
finalized through open
competitive bidding)
Rs, 51
Lakhs
Rs.51
Lakhs
2011-12
17 Replacement of service &
control Air Compressors
installed in compressed air
system for Unit 1 & 2
stage-I (2 X 110 MW) at
KTPS, Kota
Rs 282
Lakhs
Rs 282
Lakhs
M/s KPCL
Totals Rs. Rs. 39867
Lakhs
Rs. 21097
Lakhs
Rs. 16134 Lakhs (Rs.2636 Lakhs
expenditure will be borne by the
UIT Kota which is not included)
IDC & Finance charges Rs.5584 Lacs Rs.3164Lacs Rs.2420
Lacs
Grand Totals. Rs. Rs.45451Lacs Rs.24261
Lacs
Rs. 18554 Lakhs (Rs.2636 Lakhs
expenditure will be borne by the
UIT Kota which is not included)
3. The installed capacity of KSTPS is 1240 MW stage –I (Unit No. I & II) each of
110 MW) was sanctioned by the planning commission in 1976. Whereas
state-II (Unit No.III & IV each of 210 MW) was sanctioned in 1980, stage-III
(Unit V of 210 MW) was sanctioned in 1989, Stage-IV (Unit VI of 195 MW)
was sanctioned in 2002 and Stage-V (Unit-VII of 195 MW) was sanctioned
in 2005.
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4. The petitioner has submitted the commissioning and commercial
operation dates of KSTPS Unit 1 to 7 as under:
S.No. UNIT Date of Commissioning Date of COD
1 UNIT#1 17.01.1983 01.04.1983
2 UNIT#2 13.07.1983 01.04.1984
3 UNIT#3 25.09.1988 11.03.1989
4 UNIT#4 01.05.1989 16.01.1990
5 UNIT#5 26.03.1994 18.07.1995
6 UNIT#6 30.07.2003 01.08.2004
7 UNIT#7 30.05.2009 31.12.2009
5. Public Notices, with salient features of the petition inviting comments/
suggestions / objections from any desirous person, were published in three
newspapers namely Dainik Bhaskar, Rashtradoot on 2.12.2011 and Times
of India on 03.12.2011. The petition was also placed on Commission’s
website. The last date of receiving comments/suggestions/objections was
kept as 21.12.2011.
6. Commission received comments/suggestions from the following:
(1) Jaipur Vidyut Vitran Nigam Limited;
(2) Ajmer Vidyut Vitran Nigam Limited; and
(3) Shri G.L. Sharma.
7. The matter came up for hearing on 14.02.2012. Shri R.K. Gaur appearing
on behalf of RVUN prayed to allow the additional capitalization as
petitioned. The Commission vide order dated 14.02.2012 directed the
petitioner to arrange details of their proposals under three subheads (a)
replacement of old assets (b) renovation and modernization and (c) new
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works. Commission also directed the petitioner to serve the copy of
desired information to respondents and stakeholders. The case was listed
for further hearing on 21.02.2012.
8. The petitioner subsequently furnished the information desired as above on
16.02.2012.
9. The matter was finally heard on 21.02.2012, where in submissions were
made by the petitioner and Sh. G. L. Sharma stakeholder. The Commission
observed that for these proposals approval of Board of Directors or Equity
commitment from Government has not been furnished. The Commission
allowed petitioner to submit such approvals or sanctions or written
arguments within one month.
10. Subsequently, RVUN submitted the written arguments vide their letter
27.02.2012. Approval of Board of Director was furnished vide letter dated
26.04.2012.
Stakeholders’ comments/suggestions and RVUN’s response have been
summarized in the following paras
Capitalization of assets
11. Jaipur and Ajmer Discoms submitted that from the cost estimates of
project & commissioning schedule, it would be observed that most of
works would be getting commissioned during FY 2012-13, therefore, the
entire capitalization of assets ( to be commissioned in FY 2012-13 ) may be
considered in FY 2012-13 and not in FY 2011-12.
12. Shri G.L. Sharma submitted that petitioner has indicated total estimated
cost for various works as Rs 45151 where as the correct total of estimates
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comes as Rs. 45451. He further submitted that as FY 2011-12 is nearing to
close and therefore, it would be meaningless to consider any expenditure
for FY 2011-12.
RVUN’s response
13. As regards the comment of Discoms, RVUN submitted that the
capitalization of the assets would be considered in the year of
commissioning of the assets.
14. In reply to the comment of Shri G.L. Sharma, RVUN submitted that the total
estimated cost for various works i.e Rs. 45451 Lacs is correct. Petitioner
agreed that capitalization of assets may be considered in the financial
year in which the works will be commissioned. However, Petitioner further
submitted that the works amounting to Rs. 504 Lacs ( i.e. Rs. 30.0 Lac for
Design Engg. Consultancy of CHP system, Rs. 24.0 Lacs advance payment
made to Railways against estimation charges for up gradation of KSTPS
siding track, Rs.410 Lacs for operator training simulator already under
commissioning, Rs. 40.0 Lacs for purchase of new fire tender ) which have
already been executed/ commissioned in FY 2011-12 may please be
considered in FY 2011-12.
Monitoring of the Progress
15. Jaipur and Ajmer Discoms requested the Commission to take a prudent
view on the adequacy of works mentioned by RVUN and may also
consider imparting directions to RVUN for submission of quarterly / half-
yearly progress report to monitor the progress of capital expenditure.
RVUN’s response
16. RVUN submitted that they would take action as per directions of the
Commission.
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O&M Expenses
17. Jaipur Discom submitted that Repair & Maintenance Expenses of Rs 36
Crores for units 3&4 (at S.No.8 of table at para 2) have been taken,
towards capitalization while these are the part of O&M expenses.
Therefore, it is to be ensured that these charges have not been claimed
by RVUN earlier while filing ARR.
18. Shri G.L. Sharma also submitted that:-
(i) As per para N0.4.3.2 of Guidelines for Renovation and Modernization
(R&M) /Life extension works issued by CEA (2009), the following works
should not be included in R&M/Life Extension works:
(1) Infrastructural development work such as township, welfare
measures etc., general civil works within the plant such as
boundary wall, roads, drainages etc; However technological
structure works required for equipments structure based on RLA
done as per design criteria ( such as turbine deck foundation
etc.) shall be part of LE.
(2) Procurement of spare equipments; and
(3) Routine repairs/replacement during annual/capital overhauls.
The expenditure on such works which are of O&M in nature is to
be met from O&M charges recovered through tariff for sale of
electricity as notified by regulatory commission. O&M ought to
be attended on a regular basis lest the condition of the unit
should deteriorate to such an extent resulting in major
breakdowns requiring huge expenditure.
(ii) RVUN has already placed orders for purchase of operator training
simulator costing Rs 410 Lacs and 2 Nos. bull dozers and 1 No.
Hydraulic Excavator costing Rs 334 Lacs. These items are also for
9
regular O&M, therefore, approval from Commission is not required. As
per guideline issued by CEA routine O&M items cannot be included as
a part of R&M/LE programme. He further requested for making
available the project reports/scope of work of stage-I (Unit-I&II), stage-
II (Unit-III& IV), Stage-III(Unit-V),Stage-IV(Unit-VI) and Stage V (Unit-VII).
(iii) The above mentioned guidelines at para 8.1 mention that the benefits
in terms of increase in PLF (including additional generation and
availability, reduction in forced outages), increase in efficiency,
reduction in auxiliary power consumption and fuel consumption,
improvement in plant safety and environmental up-gradation
expected to be achieved after implementation of R&M/LE scheme
should be clearly brought out. The petitioner has not mentioned any
cost benefit analysis in respect of each work.
(iv) All the works mentioned in the petition are of O&M in nature, and
therefore, the expenditure may be met from O& M head.
RVUN’s response
19. In reply to comment of Discom’s RVUN submitted that Expenses of Rs 36
Crores for units 3&4 are for Renovation & Modernization of Unit 3 & 4 & not
for their Repair & Maintenance. RVUN further submitted that units are
quite old (started operation in 1989 & 1990 respectively) and are running
for more than 21 years, Renovation & Modernization of these units has
been considered necessary for sustainable performance of these units.
20. (i) As regards CEA guidelines referred to by Shri G.L.Sharma, RVUN
submitted that the various works have been proposed in line with the
guidelines for R&M/LE issued by CEA, Ministry of Power, Govt. of India
in 2009 and the works like construction of Barracks & Boundary walls for
Central Industrial Security Force (CISF) have been proposed keeping in
view the requirement of security, safety & requisite norms of CISF.
10
(ii) As regards purchase of operator training simulator, RVUN submitted
that the purchase of operator training simulator does not come under
regular operation & maintenance works of the power station. The
simulator is required with a view to impart operational expertise to the
newly recruited engineers of RVUN for the safe, stable & efficient
operation and also to refresh / upgrade knowledge of experienced
engineers with latest modern methodologies to improve plant
performance and ensuring safe and reliable operation of
sophisticated machines and equipments. As per National Training
Policy for power sector (June 2002) Ministry of Power (MoP), Govt. of
India , the Simulator training tool is useful in terms of availability,
thermal performance, component life & environment compliance
savings. This is covered under regulation 19 (1)(f) of RERC Tariff
Regulations, 2009.
As regards the bull dozers and hydraulic excavator, RVUN submitted
that the life of the bull dozers as per recommendations of Original
Equipment Manufacturer (OEM) is nine (9) years or 21000 hours
operation, whichever is earlier. These bull dozers were purchased in
year 1982 and have already run for more than 21500 Hrs. and have
thus completed their useful life. Even after passage of useful life, these
bull dozers are just running due to their better upkeep and if they fail,
no alternate would be available with KSTPS to meet out stringent
requirement of coal feeding system. Further, as far as hydraulic
excavator is concerned, presently KSTPS does not have any hydraulic
excavator for handling coal boulders and stones during unloading of
coal causing heavy demurrage and chocking of system. Therefore,
purchase of hydraulic excavator is quite essential for betterment of
coal unloading system as well as to ensure required feeding to coal
conveying system. As this is the case of new purchase of equipments,
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which has become necessary for the efficient & successful run of the
generating station hence, needs budget under capital head as per
regulation 19 (1) (f) of RERC Tariff Regulations, 2009.
Regarding making available the project reports of various stages of
the KSTPS project RVUN mentioned that the detailed project reports
are quite voluminous and therefore, if any specific content from these
reports is asked, the copy of the same could be submitted.
(iii) In context of the benefits in terms of increase in PLF, increase in
efficiency, etc., RVUN submitted that all the proposed works are of
essential nature for efficient and successful operation of units and as
such are required to be covered under capital works. These proposed
works will benefit in stability, improvement of performance as well as
give life extension to the old age system. RVUN also submitted the
benefits of most of the items cannot be quantified but are necessary
in view of regulation 19(1)(f) of RERC Tariff regulations,2009.
(iv) Regarding the observation that all works mentioned in the petition are
covered in regular O&M, RVUN submitted that all the proposed works
are of essential nature for efficient and successful running of units and
are required to be covered under capital works.
21. RVUN further mentioned that most of the units of that era in which 110 MW
units at KSTPS were commissioned are either running on reduced
generation or at low PLF or have stopped generation while KSTPS 110 MW
units are still running on full load at about 90% PLF. But the optimum
generation of the power station with life extension is only possible by
adoption of latest state of the art technologies, improved metallurgy &
replacement of obsolete items of equipments, which is also the essence
of guidelines issued by CEA.
12
Information regarding replacement, renovation and Up gradation
22. Shri G.L. Sharma requested for the following information regarding
replacement, renovation and up gradation:
(1) Generating unit to which each item pertains and approved capital
cost of such unit;
(2) The year of purchase/installed / put to use in respect of each item;
(3) Updated cumulative depreciation in respect of each item;
(4) Amount corresponding to salvage value (10%) of each of such items
which have depreciated 90%;
(5) Date/Financial year since when such items have not been working
due to breakdown and thus put out of use and the year from which
depreciation has been stopped to be charged.
RVUN’s response
23. RVUN submitted that it is difficult to arrive at correct cost of individual
items as these were the part of complete package supplied by M/s BHEL.
The year of commercial operation of respective generating unit shall be
treated as year of purchase for these items. The salvage value of
electronic items at present is zero due to the reason that old technology
has become obsolete. The scrap value of non electronic items shall be
taken into consideration during fixation of tariff. RVUN also furnished unit
wise information showing related proposed additional capital work along
with capital cost, year of purchase/installed, cumulative depreciation
amount, depreciation amount till date and current operative status.
Information Regarding Railway siding track
24. In respect of railways siding track , Shri G.L. Sharma requested for the
following information:
13
(1) The terms and conditions at the time of laying the track and if in a
written form, then copy thereof be supplied;
(2) Agency who has borne the total cost initially and whether operation
and maintenance is with railways;
(3) Number of incidences of derailment of wagons in the past three
years and how such eventuality has been met and terms and
conditions thereof;
(4) Deep screening and overhauling from safety consideration needs to
be elaborated;
(5) The expenditure of changing of old sleepers with pre-stressed
reinforced concrete sleepers and fixing steel sleepers by removing
bridge timbers at steel bridges comes under normal O&M
expenditure ,therefore , additional capitalization of the same is not
justified;
(6) Ownership of railway track portion lying inside the premises of the
power station and out side the premises and fixed/rental charges
being charged by railway for any of these portions;
RVUN’s response
25. (1) As regards the copy of Agreement between Railways and Erstwhile
RSEB / KSTPS, petitioner furnished the copy of the same.
(2) As regards bearing the total cost, RVUN submitted that the total cost
of Railway siding, was borne by erstwhile RSEB/KSTPS. The terms &
condition of operation & maintenance of track are contained in the
agreement furnished by them.
(3) With respect to number of incidences of derailment, RVUN submitted
that total 79 incidences of de-railment of wagons, in last three years
w.e.f. 1.01.2009 to 31.12.2011, have occurred. The minor de-railment
of wagons at Wagon-Tippler/in the marshalling yard is normally
attended departmentally. The major de-railments on main track
14
which requires heavy jacks & engineering are attended with the help
of Railways on chargeable basis.
(4) As regards querry relating to Deep screening , RVUN elaborated as
under:
“Deep screening of ballast is done to ensure that a clean
ballast cushion of required depth is available below the
bottom of sleepers, which is very necessary for proper
drainage and giving elasticity to the track. In the absence of
a clean ballast cushion of desired depth, the track geometry
may get disturbed and the running of the track gets
affected.”
(5) In reply to the comment regarding expenditure of changing of old
sleepers , RVUN submitted that the scope of running maintenance
contract is limited to maintaining the existing track only, whereas, the
Railways are demanding up gradation of existing track from
Chambal C cabin/Gurla to KSTPS marshalling yard. The proposed up
gradation work covers complete replacement of CST 9/Wooden
sleepers by PSC Sleepers with deep-screening (Cushion ballast of
about 300mm), change of all wooden sleepers by steel bridge by
galvanized channel sleepers, existing 52 kg rails by 60 kg rails in the
Chambal C curve section,. All en route points & crossing by
complete set of 1 in 12 curved switches. This complete work is of
specialized nature and requires lot of engineering /designing /skill
/without affecting the normal running of coal rakes. More over, as
per the contract agreement, the necessity of renewal & heavy repair
would be decided by the Railway administration, which would be
binding on RVUN. This is not a regular maintenance work and the
siding track is also required to be maintained at par with Indian
Railway track where, such upgradations have already taken place to
15
meet out enhancement in carrying capacity of wagons, speed limit,
traffic, safety norms. Railways have advised KSTPS to upgrade the
siding track as per latest operating norms.
(6) As regards the ownership of the Railway Track, RVUN submitted that
From Chambal C cabin/ Gurla to KSTPS marshalling yard and the
complete outside/inside yard is the private siding of KSTPS and utilized
for transportation of KSTPS rakes only. The Railways place the loaded
coal rake up to KSTPS marshalling yard & take out the empty rake
from KSTPS marshalling yard. The complete operation from Chambal
C cabin to KSTPS marshalling yard is being controlled by the Railways
only. Railways advised from time to time for maintenance & upkeep
of tracks strictly as per their safe operating norms and KSTPS has to
follow their guidelines.
Coal Handling Plant
26. Shri G.L. Sharma submitted that coal handling plant, conveyers etc. were
covered in the original scope of work of the project, and any up
gradation, renovation and repairs are to be done under normal repair
and maintenance head, therefore, separate capital expenditure for the
same is not admissible.
RVUN’s response
27. RVUN submitted that coal handling plant and conveyers system has
completed its useful life and lot of problems are being faced with
deteriorating CHP system to handle 20,000 tons of coal everyday required
for attaining full generation. Out of available five wagon tipplers, four
tipplers are equipped with old technology having Beatle chargers, which
are meant to drag loaded wagons to tippler. These Beatle chargers have
capacity of handling up to eight (08) wagons only and this technology
has become obsolete now a days and their spares are sparingly
available. Railways have reduced unloading time of rakes from 10 hours
16
to 07 hours in recent times, demurrage is imposed for delay in release of
rakes in prescribed time. Due to these obsolete chargers & old age
conveyers system, releasing rakes in time becomes a tough task and their
frequent outages result in unnecessary delay, which can only be avoided
by installation of a new system only. Hence, with a view to have efficient
& successful operation of CHP system, an additional wagon tippler &
associated equipments adhering to latest technology are required.
Without adherence to latest technologies and up gradation of system, the
system may not be able to feed coal for a long time and loss of
generation may result at any time due to collapse of old age system.
KSTPS is generating at full capacity and maintaining such high standards is
only possible by adopting new technology. Therefore, the proposals for
replacement/addition of new CHP system may be considered under
capital expenditure.
Commission’s Views & Decisions
28. While considering the proposals for additional capitalization, we have
kept in view the provisions of Regulation 19 “Additional capitalization” of
RERC (Terms & Conditions for determination of Tariff) Regulations, 2009 in
short Tariff Regulations 2009. Guidelines for Renovation and Modernization
/ Life extension works of Coal/ Lignite Based Thermal Power Stations issued
by Central Electricity Authority in 2009. We have also carefully considered
the elaborate written as well as oral arguments submitted/ made by the
Petitioner, Respondents and Stakeholders for arriving at the decisions in
the matter.
The provisions of regulation 19 of Tariff Regulations 2009 are as under:-
“Additional capitalization
(1) The following capital expenditure, actually incurred after the date of
commercial operation and duly audited, may be considered by the
Commission subject to prudent check.
17
(a) Due to deferred liabilities within the original scope of work,
(b) On works within the original scope of work, deferred for
execution,
(c) To meet award of arbitration or satisfaction of order or decree
of a court arising out of original scope of works,
(d) On account of change in law,
(e) On procurement of initial spares included in the original project
costs subject to the ceiling norm laid down in Regulation 18,
(f) Any additional works/services, which have become necessary
for efficient and successful operation of a generating station or
a transmission or a distribution system but not included in the
original capital cost:
Provided that original scope of work along with estimates of
expenditure shall be submitted alongwith the application for
provisional tariff:
Provided further that a list of the deferred liabilities and works
deferred for execution shall be submitted alongwith the application
for final tariff after the date of commercial operation of the
generating station.
Note 1
Any expenditure admitted on account of committed liabilities within
the original scope of work and the expenditure deferred on techno-
economic grounds but falling within the original scope of work shall
be serviced in the normative debt-equity ratio specified in Regulation
17.
Note 2
18
Any expenditure on replacement of old assets net of written
down/salvage value shall be considered after writing off the gross
value of the original assets from the original cost.
Note 3
Any expenditure admitted by the Commission for determination of
tariff on account of new works not in the original scope of work shall
be serviced in the normative debt-equity ratio specified in Regulation
17.
Note 4
Any expenditure admitted by the Commission for determination on
renovation, modernization, life extension and restoration of assets
damaged due to natural calamities shall be serviced on normative
debt-equity ratio specified in Regulation 17 after writing off the
original amount of the replaced assets from the original cost.
(2) Impact of additional capitalization on tariff may be considered
twice in a tariff period.”
29. At the outset, we may state that we are not inclined to accept the
general comment of the stakeholders that all the works for which
capitalization has been proposed by the petitioner are routine O&M works
for which no approval of the Commission is required. We have, therefore,
examined each proposal on merits. The findings are as under:
(1) Renovation of CHP (Coal Handling Plant) System Stage I&II (S.no.1 of
Table at Para 2)
The Petitioner has argued that present CHP system of Unit No. I & II was
commissioned in the year 1982-83. The existing system has already
completed its useful life. The existing system is now running at a reduced
capacity. The system has become obsolete and spare parts from the
original equipment manufacturers (OEM) are not available. On account
of running of tipplers at reduced capacity & frequent outages, delay
19
occurs in unloading of coal rakes. As a result of which on the one hand
heavy demurrage is imposed by Railways and on other hand continuous
coal feeding to the plant which is essential for generation with full
efficiency is becoming difficult. Divisional Railways Manager (DRM) Kota in
his inspection note has advised to enhance capacity of pulling
arrangement and has suggested to change the existing pulling
arrangement, which is possible through new wagon tippler. Petitioner has
prayed to approve the renovation of CHP system under 19(1)(f) of Tariff
Regulations 2009.
Sh. G.L. Sharma has argued that proposed work falls under regular O&M
and as such separate capital expenditure for the same is not admissible.
We observe that existing system is in operation for almost 29-30 years, and
has completed its useful life we, therefore, find the contention of
petitioner acceptable and accordingly approve the proposal.
(2) Renovation & Modernization of Railways Track ( S.N.2 of Table at para
No.2)
Petitioner has argued that as per track policy circular issued by Railway
Board and provisions of the Indian Railway Permanent Way manual, track
is required to be brought at par with the normative standards of Railways.
As per the provisions of the agreement which the petitioner has with
Railways the necessity for renewals is tobe decided by Railway
Administration which will be binding on the petitioner DRM. Railways vide
letter dated 17.07.2009 had asked for the proposed Renovation &
Modernization of the Railway track which was reiterated by Railways vide
letter dated 19.08.2010. It was also observed in the letter dt.19.08.2010 that
continued deficiencies in rail track of above siding led to the major
derailment of 7 wagons loaded with coal on 04.08.2010. Any derailment in
siding leads to the regulation of trains bound for KSTPS siding enroute at
different stations and consequently having serious repercussions on the
20
train operation of Railway network. Appropriate action was requested on
urgency basis for arranging the required inputs for tracks in KSTPS siding.
Railways vide letter dated 04.05.2011 insisted to deposit Rs. 24.00 lacs i.e
2% of cost of work as plan & estimate charges so that action may be
initiated for up-gradation of Railway track. It was further stated that any
accident due to poor condition of Railway track is KSTPS responsibility.
Petitioner prayed to approve proposed up gradation of the Railway track
under 19(1) (d) of the Tariff Regulation, 2009, which is considered must for
efficient & safe operation of train movement.
We observe that as per agreement with Railways, petitioner is bound to
carry out modernization of Railway track as decided by Railways. We,
therefore, accept the contention of the petitioner and accordingly
approve the proposal.
(3) Purchase of operators Training Simulator (S.N.3 of the Table at para
No.3)
The comment of Sh. G.L. Sharma & response of the petitioner on the issue
has been dealt with at para no 18(ii) & 20 (ii) above. Petitioner in written
submission has reiterated the contents of his response as above. Petitioner
has prayed to approve the proposal under regulation 19(1)(f) of Tariff
Regulations 2009.
We agree with the contention of the petitioner that purchase of operator
training simulator is not part of regular O&M and approve the purchase of
operator training simulator for capitalization.
(4) Construction of Road over Bridge (ROB) (S.N.4 of the table at para
No.2)
Petitioner has contended that as per policy for construction of ROB at any
Railway Crossing, the decision is based on the quantum of the traffic at
the crossing and the proposal is justified in view of the quantum of the
traffic. As per prevailing practice the cost of such ROB is shared equally by
21
the state Govt. /local bodies and Railways. For this ROB, Railways vide
their letter No dt. 24.06.08 informed that the track at LC-15 is of KSTPS,
therefore Railway will not share the cost of construction of ROB. Energy
department GoR vide letter dt. 12.09.2008 has directed RVUN to bear 50%
cost of the construction of ROB. Looking to these facts RVUN has to share
the 50% cost. The petitioner has further contended that after construction
of ROB, the establishment expenditure at local crossing shall be reduced
& prayed to approve proposed capital expenditure under 19(1)(d) of
Tariff Regulations 2009.
Shri G.L. Sharma strongly argued that the proposal is not covered under
Regulation 19 of Tariff Regulation 2009. He also said that as per the para
No. 4.3.2 of the Guide lines for Renovation & Modernization/ life extension
works issued by CEA infrastructural development works cannot be
covered under Renovation & Modernization. Referring to Minutes of
Meeting (MoM) dated 02.04.2008 held under the Chairmanship of the
Principal Secretary, PWD, Jaipur submitted by the petitioner with the
petition, Shri Sharma contented that construction of ROB would not be
required even based on Train vehicle movement criteria after
construction of bye-pass from NH-12 which is a part of NHDP project. Shri
Sharma referring to MoM of 186th meeting of Board of Directors of RVUN
stated that the BOD of RVUN had accorded approval for sharing the 50%
cost from Corporate Social Responsibility (CSR) funds to be allocated for
2x600 MW Kalisindh project or for super critical projects planned to be set
up at Chhabra/Kalisindh. However, alternatively it was decided to request
RERC for granting additional capitalization and refix fix charges in future
Tariff for KSTPS. Thus, the petitioner himself is not sure that work is covered
under Regulation 19 for the purpose of capitalization for KSTPS. Moreover,
the constructions of ROB will not in any way benefit the electricity
consumers. Shri Sharma concluded by saying that as the work is neither
22
covered under Regulation 19 of Tariff Regulations, 2009 nor falls in the
R&M criteria as per CEA guidelines as such the electricity consumers who
will not be benefited in any way cannot be burdened by capitalizing the
proposed expenses.
We have carefully considered the rival contentions and we are inclined to
agree with the contention of Shri Sharma and are of the view that it would
not be appropriate to allow proposed expenditure for capitalization. We
accordingly are not inclined to grant the prayer of Petitioner in this regard.
(5) Purchase of two Nos. Bull Dozers and one number Hydraulic Excavator
(S.N.6 of Table at para No.2)
The observation of Shri Sharma in the matter of the proposed purchase of
2 Bull Dozers are at para No. 18 (ii) above and the response of RVUN in the
matter is at para no. 20 (ii).
Shri Sharma has contended that the purchases are of the nature of
regular O&M works and therefore approval of the Commission is not
required, where as RVUN has contended that the proposed expenditure
is covered under 19 (1) (f )of the Tariff Regulations 2009.
Petitioner has submitted that 7 Bull Dozers were purchased during 1982 to
1994. As per the recommendation of OEM life of bull dozers is 9 years or
21000 hrs operation. Petitioner in support of its contention has also
enclosed the copy of letter for OEM. Petitioner submitted that on this basis
5 out of 7 bull dozers have completed their useful life. For Coal feeding to
all units of KSTPS atleast two number new bull dozers are required.
Petitioner has prayed to approve the proposed purchase for
capitalization under 19(1)( f) of the Tariff Regulations, 2009.
23
We observe that the equipments have completed their useful life and
requirement of the two number bull dozers is genuine. We therefore,
accept the prayer of RVUN in this regard.
Regarding purchase of one number Hydraulic excavator, Shri G.L.
Sharma has stated that purchase is in the nature of regular O&M and
therefore approval of Commission is not required. Petitioner have
submitted that presently no hydraulic excavator is available at KSTPS
for handling of coal boulders and stones during unloading process of
coal from the Railway wagons. Receipt of coal boulders and stone
with coal is regular feature, therefore, purchase of hydraulic excavator
will increase the efficiency of coal unloading at KSTPS. Petitioner
prayed to approve the purchase for capitalization under 19(1) (f) of
Tariff Regulation, 2009.
We find merit in the argument of petitioner and accordingly approve
the proposal.
Purchase of two Nos Diesel Hydraulic Locomotives
Petitioner stated that KSTPS is presently having 7 Nos. locomotives.
These locomotives were purchased during 1982-1995. Subsequently
two new units (No.6&7) were commissioned as a result of which coal
handling capacity requirements went up by approximately 43% but no
new locomotive was added and existing locomotives were being
used. Out of 7 locomotives two are of WDS-4B type which were
purchased in the year 1982. Condition of existing locomotives has
detoriated. Railways have intimated that life of these locomotives is 36
years. Regarding availability of spares, Railways have intimated that
the material required for these locomotives would be partially
manufactured till WDS-4B type locomotives are in service and the
material demanded will be made available by Railways if available
24
with them. In the circumstances, when the condition of existing locos
have deteriorated and availability of spares is uncertain, to meet the
enhanced requirement of coal additional 2 new locomotives are
required. Petitioner prayed to approve the purchase under 19(1)(f) of
Tariff Regulations 2009.
We observe that two locomotives of WDS-4B type have completed
approximately 29 years of service which is quite close to the
prescribed life period. The timely availability of the spares for those
locos is not certain. Under these circumstances and also looking to the
fact that no new locomotives were purchased after commissioning of
unit No. 6&7, we are of the view that proposal of the petitioner is
genuine and accordingly we approve the same.
Purchase of Hydraulic Re-railing Equipment
Petitioner argued that no re-railing equipment is available at KSTPS for Re-
railing the derailed wagons and locomotives in KSTPS marshalling yard.
Presently the work is being done by conventional method by using jacks.
In this method much more time is required in Re-railing resulting in
demurrage charges of that rack and also due to manual handling
chances of accident always remain. By Purchase of Hydraulic Re-railing
equipment not only chances of accident would be minimized but also
time required for Re-railing of wagons and locomotive would be reduced
resulting in saving of demurrage charges. Petitioner prayed to approve
the purchase for capitalization under 19(1)(f)of the Tariff Regulations 2009.
We accept the argument advanced by petitioner and accordingly
approve the proposal.
Purchase of new fire water tender
Petitioner submitted that only 3 Nos. of fire water tenders are at present
available with KSTPS. These are also 20 years old and their capacities have
25
reduced considerably. These are insufficient to meet the fire safety
requirement of 1240 MW KSTPS plant. No fire tenders were purchased for
unit no. 6&7. NDMC also suggests to add latest fire water tenders in such
industries where inflammables like coal/ diesel/ furnace oil are used in
large quantum. Petitioner prayed to approve the purchase under 19 (1)(f)
of Tariff Regulations 2009.
We find the proposal acceptable from the point of view of safety
consideration and accordingly approve the same.
(6) Purchase of Dynamic coal Balancing system (S.N.6 of the table at
para 2)
Petitioner submitted that in tangential fired water tube boiler, pulverized
coal is fed to the corners of furnace through coal pipes. Firing takes place
inside furnace and a fire ball is developed which indirectly heats the
water passing through boiler tubes. At present, the coal flow continuously
passing through all four corners of the furnace is not measured and
unequal flow results in disturbance of fire ball. This causes localized
heating of boiler tube where fire ball is more in vicinity. It also increases
unburnt carbon or we can say higher coal consumption, and a need of
such tool has been felt which can measure coal flow through pipes and
may balance flow by integrated monitoring and control system. Dynamic
coal Balancing system measures online coal discharge through pipes
balance them by adjustment of valve orifices and also controls the
velocity of coal feed & its particle size. Hence balance air fuel flow from
each side of furnace is ensured. Looking to the cost of Raw material like
DM water, coal, and stringent Environment norms, and for efficient
generation with more stable operation, this tool is of utmost importance &
necessity. The various advantages which will be available after installation
of this system are:
26
1. Uniform heating inside furnace hence boiler tube leakages in 28 year
old units can be avoided.
2. Balance air fuel mixture improves combustion & thus saves coal
consumption & also gives better emission levels.
3. Cost benefit of around 350 lacs per annum can be achieved through
this system hence payback period is less than 5 years.
During hearing it was enquired whether proposed system has been
purchased by RVUN for any of their Generating Station. We were informed
that RVUN has not purchased this system so far for any of their Generating
Station. On enquiry about the performance, it was indicated that they will
be furnishing the performance for such plants after obtaining information
from NTPC who were reported to have purchased the system. We find
that Petitioner has not filed any such performance report with their written
submission. We are therefore unable to accept the proposal of Petitioner
in this regard.
(7) Up-gradation of contronic E-K type HMI system based on old
computer architecture for KSPTS unit No.3 &4. (S.N. 7 of Table at para
No.2)
Petitioner submitted that Contronic E-K type DCS system was
commissioned in 1993-94. This system deals with all the displays, auto
control and information aspects of Entire C & I system. Outage of this
system will result in failure of all auto controls and will lead to tripping of
units. This system is based on old computer architecture (Main Frame
type) and has become totally obsolete. Its spare parts, cards etc are not
available and at present we are even not in a position to print any trends,
graphics etc. The OEM has said that service life of the system has
completed and new system is the only feasible solution to get rid of this
problematic system. The proposed 800 X A human machine interface is an
advance system which works on windows operating system which is user
27
friendly and there is ease of access to all relevant control parameters
hence plant processes can be run more efficiently and improved
performance will be obtained. This advance 800 XA system is based on
PC’s hence engineering and maintenance will be very easy and less
costly. Overall performance in terms of output, stability of system will be
ensured. Petitioner prayed to approve the proposal under 19 (1)(f) of Tariff
Regulations 2009.
We observe that existing system is proposed to be replaced on the
ground that the technology has become obsolete. We also observe from
the petition that replaced system is proposed to be used as spare for the
similar system which is installed on the unit No.1 & 2 of STPS. We, therefore,
agree with the contention of petitioner and accordingly approve the
proposal.
(8) R&M of SG/TG & station C&I package of KTPS Units 3&4 (S.N.8 of Table
at para 2)
Petitioner submitted that SG/TG and station C&I packages are
continuously in service since last 24 years and have practically outlived
useful life. This technology has become obsolete and no support for repair
& maintenance is available from OEM. The package of SG/TG which was
supplied by M/s BHEL is not being manufactured now-a-days and most of
its defective modules have been declared irreparable by BHEL .M/s ABB
who is OEM of station C&I package has also stopped production of
contronic–3 modules. Hence this technology is totally obsolete. There
have been spurious and unexplained trip outs of equipment and units on
account of malfunction of modules. Due to ageing, the system has
become unreliable and fine control over Boiler/Turbine/Generator
parameters has become impossible. In latest technologies signal transfer
between ST/TG system and station C&I package is possible through
hardware. Historian servers provide recording of history, SOE and trends of
28
parameters is available in New Technology hence diagnostic & analysis is
much simpler. Signal unified system provides a facility to operate
complete plant from one operating work station. Petitioner prayed to
approve the proposal under 19(1)(f) of Tariff Regulations,2009.
We observe that existing system is proposed to be replaced on the
ground that technology has become obsolete and also that spares are
not available. We find that the contention of the petitioner is acceptable
and accordingly approve the proposal.
(9) Renovation of static AVR of Unit 1&2 by digital AVR (DAVR)
Petitioner submitted that these static excitation and AVR system were
manufactured in 1977 and are in service at KSTPS since 1983. BHEL vide
letter given in 2009 have refused to give its spares and also refused to
repair so many important modules of existing AVR system. For the last
couple of years a resin type fluid is coming out from AVR panels and is
depositing at terminal connectors. This may lead to short circuiting of
terminal blocks and consequent failure of AVR system. BHEL has
suggested incorporation of Digital AVR system equipped with latest state
of the art technology. Digital AVR (Microprocessor based) are fast
responsive, harmonics free and smooth control over voltage regulation is
adhered. Therefore it is very much essential for efficient and successful run
of the generating station. Petitioner has proposed to approve the
proposal under 19(1)( f) of Tariff Regulation, 2009.
We observe that Renovation has been proposed for Unit No. 1&2 which
have completed their useful life. We also observe from the referred letter
of BHEL that BHEL has shown its inability to repair number of modules due
to non-availability of spares. In the circumstance we are of the view that
proposal is justified and we accordingly approve the same.
29
(10) Renovation of generation protection and associated 220 kV feeder
protection of KSTPS stage-I( S.N.10 of the table at para No.2)
Petitioner submitted that Electromechanical relays are presently installed
for stage-I generating units (110 MW) and associated 220 kV feeders
namely KTPS– Sakatpura, KTPS – Sanagner, KTPS – Heerapura etc. These
relays are very sluggish and have outlived their useful life. The OEM (M/s
Areva) has stopped manufacturing these electromechanical relays. Fault
clearing time of these relays is very high and facility of recording of fault
condition is also not available in relay and hence diagnostic & analytical
output cannot be ascertained. Protection coordination committee has
also advised to install advance digital numerical protection system. Fast
fault clearance and recording of fault condition will help in stability of
feeder system and proper analysis will reduce the risk of recurrence of
same type of faults.
We observe that the Renovation has been proposed on account of the
technology having become obsolete. We, therefore approve the
proposal of petitioner in this regard.
(11) Renovation of 245 kV MOCB’S Installed at KSTPS (S.N.11 of the table
at para No.2)
Petitioner submitted that 15 Nos. BHEL make 245 kV MOCB’s are in service
since installation (1981) (Unit 1 to 5, 4 Nos. 220 KV feeders, 2 Nos. bus
couplers, 1 No. at bus sectionaliser, 3 Nos. at Station Transformer). BHEL
has stopped manufacturing these MOCB’s. Spares are not available and
BHEL has refused to give some of its critical spares. Protection coordination
committee headed by Chief Engineer (RVUN) has also advised several
times to get them renovated by SF6 breakers. SF6 breakers are more
reliable, compact and give fast response. Auto Re-close scheme is
possible in SF6 breakers and not with the existing MOCB’s. Power
Transmission system has become completely non reliable and may lead to
30
outage of any 220 kV feeder. Efficient & successful run can be assured by
replacing the existing breakers with new SF6 breakers which will also
match with RVPN system. Petitioner has proposed to approve the system
under 19(1)(f ) of the Tariff Regulations,2009.
We observe that the Renovation has been proposed on account of the
technology having become obsolete. Also commissioning of auto
reclosing scheme is not possible with existing breakers. We find that the
proposal of petitioner is acceptable and accordingly approve the same.
(12) Replacement of Mechanical drives by Variable frequency drives (
S.N.12 of Table at para No.2)
Petitioner submitted that presently installed Mechanical drives run on
constant voltage and frequency therefore Aux. power consumption
remains same irrespective of Loading on equipments such as ID Fans,
CEP’s, seal air fans etc.(Variable Load Equipments). Presently speed
regulation is achieved through Fluid drives while motor runs on rated
speed & frequency & voltage. In VFD’s Speed is proportional to frequency
hence speed is regulated by varying frequency which in turn varies EMF or
voltage and gives significant saving in power consumption (up to 30%).
These VFD take low starting currents at low speed while normal drives take
very high starting current (6-8 Times) during initial start and this gives bad
impact on motor winding insulation. Hence these VFD’s ensure easy and
smooth starting of Equipment. There is low vibration level & maintenance
requirement as these are STATIC devices. Fast response and wide range of
speed control is their additional feature. These have already been proven
in Unit 5. They save auxiliary consumption significantly & payback period
will be merely 3 years. Petitioner has proposed to approve the proposal
under 19 (1)(f ) of Tariff Regulations 2009.
31
We observe that as per the true up petition for 2009-10, Aux. consumption
is slightly higher than the prescribed norms. To enable the petitioner to
achieve the bench mark norms we accept the proposal.
(13) Replacement of High Voltage transformers for ESP’s ( S.N.13 of Table
at para No.2)
Petitioner submitted that the 20 High Voltage transformers were installed in
Stage–I KTPS in 1981 and are running since then. At present they are
running at reduced capacity and are not able to give rated rectified
output current to ESP fields for the better collection of carbon contents in
ESP. Now Pollution control board is pressing hard to keep emission levels
well within their norms up to 120 microgram / cubic mtr. and in new units
this has been reduced down to 50 microgram / cubic mtr.. This high
standard can only be maintained by installation of new HV rectifier
transformers in ESP system. Petitioner has proposed to approve the
proposal under 19 (1)(d ) of Tariff Regulations 2009.
We observe that the proposal has been made to achieve the prescribed
emission levels. We find the contention of petitioner acceptable and
accordingly approve the proposal.
(14) Engineering, supply, erection, testing and commissioning of two
stage vacuum pump one each for Unit 3 & 4( S.N.14 of Table at para
No.2)
Petitioner submitted that the persistent problem of low vacuum is faced
specially during peak summer & rainy season in unit no. 3 & 4. These units
have to be run at reduced capacity and net generation from the units
gets badly affected when vacuum comes down. Presently installed steam
jet ejectors are very old and have outlived their useful life and consume
approx. 3000 Kg of steam per hour that is equivalent to 5000 MT of coal in
a year. By installing new vacuum pumps this problem may be overcome
& around Rs.110 Lacs may be saved per year. This vacuum system is
32
robust and has proven in unit no. 6&7 of KSTPS. With the addition of this
system, loss of generation on account of low vacuum can be avoided.
Petitioner has proposed to approve the proposal under 19 (1) (f ) of Tariff
Regulations, 2009.
We observe that substantial saving is expected in coal consumption after
execution of proposal, we, therefore approve the same.
(15) Construction of barracks, boundary walls etc. ( S.N.15 of Table at
para No.2)
Petitioner submitted that only 45% CISF staff is allowed to stay with their
families and the rest 55% staff is accommodated in barracks as per CISF
policies. CISF is providing security to plants, airports & industries of national
repute and come under Home ministry, Govt. of India. The D.G.P of CISF
during his inspection at KTPS has also pointed out to construct barracks &
recreation hall for CISF security personnel. Petitioner proposed to approve
the proposal under 19 (1) (d) of Tariff Regulations, 2009.
Sh. G.L. Sharma argued that proposal is not covered under Regulation
19(1) of the Tariff Regulations, 2009 as the petitioner has not cited any
change in law in his submission. Also as per para no4.3.2 of guidelines for
R&M of thermal plants issued by CEA such works cannot be covered
under Renovation & Modernization works. Shri G.L. Sharma argued to
reject the proposal.
We are inclined to agree with the argument of Sh. G.L. Sharma and are of
the view that the proposed work is not covered under 19(1) (d) of Tariff
Regulation, 2009. We are therefore, unable to accept the proposal of
petitioner in this regard.
(16) Construction of Operators cabins, office, stores( S.N.16 of Table at
para No.2)
Petitioner submitted that these were not included in original cost of the
work. These are very necessary for proper sitting arrangements of
33
operators at locations in the plant. Stores are also required to store initial
spares of Unit no. 7 safely. Petitioner prayed to approve the proposal
under 19 (1)(f ) of Tariff Regulations, 2009.
Sh. G.L. Sharma argued that proposal cannot be covered under
regulation 19(1) of the Tariff Regulations, 2009. Also as per para no4.3.2
guidelines for R&M of thermal plants issued by CEA such works are not
covered under Renovation & Modernization works. Shri G.L. Sharma
argued to reject the proposal.
We are inclined to agree with the arguments of Shri G.L. Sharma and
accordingly do not accept the proposal.
(17) Replacement of service & control air compressors for unit no. 1&2 at
KSTPS Kota( S.N.17 of Table at para No.2)
Petitioner submitted that the control air compressors, which are presently
in service, are of the year 1981. Their working efficiency has reduced
significantly & is further decreasing day by day. They are hardly sufficient
to give requisite Service air pressure of 7.0 Kg. & control air pressure of 3.0
kg. These models have become obsolete. The OEM has stopped
production of these models 10-12 years back. By addition of new
compressors, smooth reliable operation can be ensured and system
flexibility& availability will also get increased. Petitioner has proposed to
approve the proposal under 19 (1) (f) of Tariff Regulations, 2009.
We observe that the control air compressors which are proposed to be
replaced are of unit No. 1&2 which have completed their useful life
therefore, there cannot be any objection to the replacement of the
same, and we accordingly, accept the proposal.
30. IDC & Finance charges: IDC & Finance charges claimed by the Petitioner
have been reduced in proportion to the reduction in the capitalization.
34
31. In consideration to the position discussed at para No 29 above, we
accord in principle approval for the following capital works at KSTPS.
Sr. No. Description of Proposals
Total estimated
cost as
petitioned
(Rs Lacs)
Total cost
allowed
(Rs Lacs)
1 Renovation of CHP system Stage I&II by
installing one no. wagon tippler, 2 no. Rotary
breakers, 3 no. Ring granulators, one no.
Stacker Reclaimer along with associated
conveyors & equipments at KTPS, Kota
23500 23500
2 Renovation & Modernization of Railways Track
(up-gradation of Railway track from Gurla /
Chambal Cabin to KSTPS, Sakatpura
Marshalling Yard is proposed to carry out by
W.C. Railways as a deposit work )
1260 1260
3 Purchase of Operator Training Simulator for
RVUNL Units of KSTPS.
410 410
4# Construction of Road over bridge at LC-15
(R.O.B.)
5275 -
5 Purchase of 02 Bull Dozers and 01 Hydraulic
Excavator
334 334
Purchase of 02 Diesel Hydraulic Locomotives 600 600
Purchase of Hydraulic Re-railing equipment 60 60
Purchase New Fire water Tender of 6000 litre
capacity for KSTPS
40 40
6 Purchase of Dynamic Coal Balancing System
for KSTPS Kota.
1500 -
7 Up gradation of Contronic E-K type HMI system
based on old computer architecture (Main
Frame type) ABB make of unit - 5 KSTPS with
800xA HMI system of M/s ABB.
740 740
35
Sr. No. Description of Proposals
Total estimated
cost as
petitioned
(Rs Lacs)
Total cost
allowed
(Rs Lacs)
8 R&M of SG/TG & Station C&I package of KSTPS
Unit - 3 & 4 (Rs 1800 Lacs for Unit -3, Rs 1800 Lacs
for Unit - 4)
3600 3600
9 Renovation of Static AVR of unit no. 1 & 2 by
Digital AVR (DAVR)
500 500
10 Renovation of generator protection and
associated 220 kV feeder protection for KSTPS
Stage-I
400 400
11 Renovation of 25 kV MOCB’s installed at KSTPS
switchyard
300 300
12 Replacement of Mech. Drives by Variable
frequency drives
300 300
13 Replacement of High voltage transformers for
ESP’s
200 200
14 Engineering, Supply, Erection, Testing and
Commissioning of two stage vacuum pump,
one each in unit - 3 & 4 (2x210MW), KSTPS,
Kota.
450 450
15 Construction of Barracks, Boundary wall etc for
CISF etc.
65 -
16 Construction of Operator cabins, office stores
etc.
51 -
17 Replacement of service & control Air
Compressors installed in compressed air system
for Unit 1 & 2 stage-I (2 X 110 MW) at KTPS, Kota
282 282
18 Total (1 to 17) 39867 32976
19 IDC & Finance charges 5584 4619
20 Grand Total (18+19) 45451 37595
# 50% of the cost proposed to be borne by RVUN
36
Petitioner shall comply with the provisions of the Note 1 to 4 below
Regulation 19 (1) (f) of Tariff Regulations, 2009.
32. We direct the petitioner to furnish quarterly progress of the works to the
Respondents.
33. Petitioner in his response to the comments of Shri G.L. Sharma stakeholder
has indicated the cost benefit analysis. Also in the written arguments,
petitioner has indicated the benefits that would be derived in case
proposals are approved. We direct that when the petitioner submits the
proposal for admitting the expenditure for tariff setting, it shall besides
making compliance of note no.1 to 4 below Regulation 19 (1)(f) of the
Tariff Regulations,2009 shall also file the comparison of the benefit
anticipated at this stage vis-à-vis actual benefits derived.
34. Petitioner in the petition has indicated the methodology for procuring
material/services i.e. single tender/limited tender/wide publicity. It is to
clarify that the approval of the proposal shall not be construed as
approval for methodology for procuring material/services as indicated by
the petitioner. It is to state that action in this regard shall be taken, as per
the prevalent Rules & Regulations of the Department.
35. The copy of this order may be sent to petitioner, respondents, CEA, GoR
and stakeholders.
36. The Petition stands disposed of accordingly.
(S.Dhawan) ( S.K.Mittal)
Member Member
