AVAILABILITY BASED TARIFF AND SCHEDULING MECHANISM

1. AVAILABILITY BASED TARIFF AND SCHEDULING MECHANISM

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

3. 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

4. TENTATIVE COST FOR NTPC THERMAL STATIONS FOR THE MONTH OF JUNE 2004 *Rates for mixed fuel (gas+ liquid fuel, naphtha)

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

6. 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)

7. 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.

8. IN SR 17935 MW OF THERMALS OUT OF 19227 MW (93%) HAS VARIABLE COST THAT FALLS IN THE RANGE OF 60PAISE TO 400 PAISE ESC TO EXIT CAP N D >400 Ps/u DETAILS

10. 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.

11. SCHEDULING RLDC Time S L D C R L D C I S G S Availability Declaration Entitlements Requisition & Bilateral Agreements Injection Schedule Drawal Schedule Revision in DC Revision in Requisition Final Injection Schedule Final Drawal Schedule 0 to 24 hours Revisions during Current day Revisions during Current day

12. TIME TABLE FOR EXCHANGE OF INFORMATIONIN RESPECT OF SCHEDULING ESC TO EXIT

13. SRLDC INTER STATE GENERATING STATIONS BY 10: 00 HRS SAMPLE DC SHEET ISGSs shall advise SRLDC the Station-wise MW and MWh capabilities Back

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

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

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

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

18. SRLDC 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

20. HIDE TABLE SHOW TABLE 80 Ps 45 Ps 30 Ps