COMMERCIAL ACTIVITIES

Last Updated : 28/08/2020

The primary functions of the Commercial Department are:

  • Sale of power
  • Arranging for determination of tariff of the different power plants by the CERC.
  • Revenue matters
  • Regulatory matters

In addition to the above mentioned functions the Department is also assigned the following important functions:

  • Raising of bills for the energy supplied and realization of revenue.
  • Reconciliation of energy accounts with customers.
  • Execution of Power Purchase Agreements with customers.
  • Coordination with all external agencies in relation to Tariff, revenue and regulatory matters.
  • Financial Accounting of Sales and Receipts

In addition to the above the Department also performs other functions which are assigned to it from time to time or functions which are appurtenant to its primary and additional functions mentioned above.  

Commercial Milestones :

  • The corporation’s commercial activities commenced in 1984 with commercial generation of power from the 50 MW Khandong Power Station of the 250 MW Kopili Hydro Electric Project.
  • NEEPCO entered the Thermal Power (Gas Based) map with the successful commercial operation of its first gas based power station viz. the Assam Gas Based Power Plant (291 MW) in the Dibrugarh District of Assam in 1995.
  • The 75 MW Doyang Hydro Electric Plant in the Wokha District of Nagaland commenced commercial operation in the year 2000.
  • In 2002 another feather was added to NEEPCO’s cap when the 405 MW Ranganadi Hydro Electric Plant started commercial operation.
  • NEEPCO further diversified its operations and stamped its presence in the Renewable Energy scenario by successfully commissioning the 5 MWp Grid Interactive Solar PV Power Plant at Monarchak in the Sipahijala District of Tripura in the year 2015.
  • In the year 2017 the 101 MW Tripura Gas Based Power Plant in the Sipahijala District of Tripura started commercial generation of power.
  • The 60 MW Tuirial Hydro Electric Plant in Mizoram and the 110 MW Pare Hydro Electric Plant in Arunachal Pradesh commenced commercial operations in 2018.
  • The first two 150 MW units of the 600 MW Kameng Hydro Electric Project started operating commercially in July/August 2020.

GENERATING STATIONS & BENEFICIARIES:

Sl. No. POWER STATION INSATLLED CAPACITY (MW) STATION COD     Composite Tariff 4 
(Rs./kWh)          
      BENEFICIARIES 2                         
1 Khandong Hydro Electic Plant 2X25=50 04.05.1984           1.573

Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura

2 Kopili Hydro Power Plant (KHEP) 4X50=200 12.07.1997           1.094 Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura 
3 Kopili Hydo Electric Plant (Stage II) 1X25=25 26.07.2004           1.532 Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura 
4 Doyang Hydro Electric Plant (DHEP) 3X25=75 08.07.2000           5.147 Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura 
5 Ranganadi Hydro Electric Plant (RHEP) 3X135=405 12.04.2002           1.953 Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura 
6 Tuirial  Hydro Electric Plant (TrHEP) 2X30=60 30.01.2018           4.486 Mizoram
7 Pare Hydro Electric Plant (PaHEP) 2X55=110 28.05.2018           5.00 Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura 
8 Kameng Hydro Electric Project1

2X150=300

(present commissioned capacity)

Unit # 1: 17.06.2020
Unit#2: 01.07.2020
          4.00 Arunachal Pradesh, Assam, Chhattisgarh, Haryana, Meghalaya, Nagaland and Uttar Pradesh
Sub-Total (Hydro) 1225    
9 Agartala Gas Turbine Combined Cycle Power Plant (AGTCCP) 4X21+2x25.5=135 01.09.2015           4.432 Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura
10 Assam Gas Based Power Plant (AGBP) 3x33.5+3x30=291 01.04.1999           4.142 Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura
11 Tripura Gas Based Power Plant (TGBP) 65.42x1+35.58x1=101 31.03.2017           4.510 Tripura
Sub-Total (Thermal) 527    
12 5MWp Grid Interactive  Solar PV Power Plant,TGBPP,Tripura 5 15.02.2015 1. 7.72 (for RPO portion)
2. Tripura’s APPC (for portion under
Tripura
Sub-Total (Solar) 5    
Grand Total 1757    
  • At present the first two 150 MW units only (i.e 300 MW) out of the total 4x150 MW (i.e 600 MW) installed capacity of the plant are in commercial operation. The third and fourth units are expected to be commercially operational in December 2020.
  • Out of the total installed capacity of 600 MW of Kameng HEP, 255 MW is allocated to long term beneficiaries and 345 MW is allocated to NEEPCO as merchant power.
  • AGBP and AGTCCP are designated Reserve Regulation Ancillary Services (RRAS) stations. Kopili HEP-I, Kopili HEP-II Khandong HEP and Doyang HEP are designated Fast Response Ancillary Services (FRAS) stations.
  • Tariff of Kameng and Pare HEPs indicated above are provisional as mutually agreed with the beneficiaries and the same will be applicable till determination of the respective tariffs by CERC. Tariffs for all the other stations are based on the AFCs allowed by the tariff orders for the respective stations for 2018-19 as tariff orders for the period commencing 01.04.2019 to 31.03.2024 are yet to be issued. 
  • Tripura’s APPC at present is Rs. 2.88/kWh.

Salient aspects of Power Supply :

  • The generating stations deliver power ex-power plant (ex-bus) to the regional / state grids through their respective switchyards.
  • Power is transmitted to the bulk consumers through the transmission systems of Powergrid Corporation of India Limited or the respective State Transmission Utilities.
  • Generation and Transmission of power in the region is regulated by the NERPC and NERLDC, which are the designated apex bodies / grid operators for integrated operation and management of the Regional Power System (Regional Grid).
  • Deviation Settlement Mechanism (DSM) charges are levied on those grid constituents / Designated Interstate Customers (DICs) which deviate from the final injection / drawal schedules.

Billing and Payment:

  • Sale of energy is governed by the Bulk Power Supply Agreements (BPSAs)/ Power Purchase Agreements (PPAs) executed between the bulk customers and NEEPCO within the framework of the CERC Tariff Regulations.
  • Shares from the power stations to the customers are allocated by the Ministry of Power, Government of India from time to time. The daily injection / drawal scheduling is done by NERLDC based on Declared Capacities of power stations, allocated shares, requisitions by beneficiaries, collective transactions and open access approvals.
  • Merchant power is sold through collective transactions at power exchange platforms / bilateral transactions (LTA/MTOA/STOA) with open access customers. 
  • Bills are raised on the beneficiaries every month for the energy made available to them as reflected in the monthly Regional Energy Accounts (REAs) issued by the NERPC. Bills against bilateral transactions are raised according to the agreed billing cycles on the basis of Bilateral Exchange statements of the monthly REAs.
  • Realization of proceeds from sales to beneficiaries is governed by the applicable CERC regulations, BPSAs/PPAs as well as the Tripartite Agreements between the Government of India, Reserve Bank of India and the respective state governments. Realization of proceeds against bilateral transactions is done in accordance with the agreements with the parties. Proceeds from collective transactions are realized in accordance with provisions of the applicable CERC regulations.
  • Payments are received primarily through electronic transfers / cheques. Beneficiaries are required to maintain irrevocable and revolving Letters of Credit (LCs) in favour of NEEPCO as a Payment Security Mechanism.
  • Rebates are given for timely payments according to the CERC Tariff Regulations and in terms of NEEPCO’s Rebate Scheme. Surcharge on delayed payments is levied as per the provisions of CERC Tariff Regulations.

Availability Based Tariff:

The Availability Base Tariff (ABT) came into force in the North Eastern Region with effect from 1st November, 2003. Under the ABT regime the generator has to declare its generation availability on day-to-day basis to the RLDC. The beneficiaries have to submit their requisitions on daily basis. The RLDC draws up the daily injection and drawal schedules on the basis of the capacity declarations and requisitions.

Procedure for Tariff Determination:

  • Each generating station has a separate tariff.
  • Tariff is determined by CERC based on the Tariff Regulations in force at the time and the submissions made by the generating station.
  • Tariff is determined in two parts viz. Annual Capacity Charges and Energy Charge.
  • The Annual Capacity Charges is based on Annual Fixed Charges. The Energy Charge Rates for hydro stations is calculated on the basis of Annual Fixed Charge and Annual Design Energy. In the case of thermal stations it is based on the actual landed cost of fuel and the actual station heat rate achieved.

The Annual fixed Charges (AFC) comprises of the following components:

  • Interest on Loan.
  • Depreciation.
  • Return on Equity.
  • Interest on Working Capital.
  • O&M Expenses.

The Central Electricity Regulatory Commission (Terms and Conditions of Tariff), Regulations issued every five years, specifies the norms of operation, normative parameters and methods for computation of Capacity Charge and Energy Charge. Following are some of the highlights:

  • The Normative Annual Plant Availability Factor (NAPAF) of each generating station
  • AFC is recoverable in the ratio of the actual Plant Availability Factor (PAF) to the NAPAF.
  • The PAF for a period means the average of the daily Declared Capacities (DCs) for the number of days during that period expressed as a percentage of the Installed Capacity in MW reduced by the Normative Auxiliary Energy Consumption.
  • In the case of hydro stations 50 % of the AFC is recoverable as Capacity Charge and the balance 50 % as Energy Charge.
  • In the case of thermal stations apart from 100 % AFC being recoverable as Capacity Charge, cost of fuel is recoverable as Energy Charge on the basis of actual station heat rate achieved.
  • Petitions for determination of tariff for the Tariff Period 01.04.2019 to 31.03.2024 in respect of all the operating stations have been filed before CERC and the process of being heard. Till issuance of the tariff orders by CERC provisional billing is being done on the basis of tariff orders for 2018-19 subject to adjustment subsequently.

TARIFF PETITION FOR NEEPCO