Rajasthan Wind Tariff Order

RAJASTHAN ELECTRICITY REGULATORY COMMISSION, JAIPUR
In the matter of determination of generic tariff for sale of electricity to

Distribution Licensee from Wind Power Plants getting commissioned in the
State during FY 2016-17.
Coram:
1. Shri Vishvanath Hiremath, Chairman
2. Shri Vinod Pandya, Member
3. Shri Raghuvendra Singh, Member
Date of Order: 25.05.2016

Order
1. Government of India (GoI), in its National Tariff Policy notified on
28.01.2016 at para 6.4(2), has provided that States shall endeavour to
procure power from the renewable energy sources through
competitive bidding, except in the case of purchase of power from the
waste to energy plants, to keep the tariff low. Procurement of power by
Distribution Licensees from RE sources for the notified capacity shall be
done through competitive bidding process from the date to be notified
by the Central Government. However, till such notification, any such
procurement of power from the renewable energy sources may be
done under Section 62 of the Electricity Act, 2003. Therefore,
Commission in exercise of its power conferred under Section 62 read
with Section 64 of the Electricity Act, 2003 and the RERC RE Tariff
Regulations, 2014 proposes to determine the generic tariff of Wind
Power Plants getting commissioned during FY 2016-17.
2. The Commission has notified the RERC (Terms and Conditions for
Determination of Tariff for Renewable Energy Sources - Wind and Solar
Energy) Regulations, 2014 on 24.02.2014 (hereinafter called as the RERC
RE Tariff Regulations, 2014). As per Regulation 7(1) of the RERC RE Tariff
Regulations, 2014, the Commission may determine generic tariff on
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Suo-Motu basis at the beginning of each year of the control period for
Wind Power Plants for which principles and norms have been specified
under the said Regulations.
3. The Commission, based on the capital cost indexation mechanism and

performance parameters contained in the RERC RE Tariff Regulations,
2014, had prepared the draft order to determine the generic tariff for
the Wind Power Plants getting commissioned during FY 2016-17.
4. Public notices were published in the following newspapers on the dates

mentioned against each inviting comments/suggestions from the
stakeholders on the draft order:
Rajasthan Patrika : 18.02.2016
Rashtradoot : 18.02.2016
The Times of India : 19.02.2016
5. Public notices along with the draft order were also placed on the
Commissions website. The last date for submission of
comments/suggestions by the Stakeholders/Public was kept as
08.03.2016.
6. The Stakeholders who offered their suggestions/comments are

mentioned at Annexure-I.
7. Commission, through this order, is determining the tariff for Wind Power
Plants on Suo-Motu basis based on the parameters specified in the
RERC RE Tariff Regulations, 2014 and duly taking note of the
suggestions/comments received from the stakeholders on the draft
order circulated.
8. The present regulatory exercise is limited to determination of generic

tariff based on the parameters contained in RERC RE Tariff Regulations,
2014. Several comments/suggestions of the Stakeholders were received

on parameters such as O&M Expenses, interest on long term loan and
working capital and deration. The abovementioned
parameters/provisions are already incorporated in the RERC RE Tariff
Regulations, 2014 and this order has to follow the provisions of
Regulations in respect of above mentioned parameters. Apart from the
above, other suggestions have also been received seeking clarification
whether option of exercise of terminating PPA after ten operational
years is available to all wind energy generators for which tariff is
determined under the State Policy or by the Commission. It is further
requested by the Stakeholders that after ten operational years, above
wind energy generator may also be allowed to supply the energy
generated to open access consumers, captive power station or other
licensees or traders within or outside the State irrespective of the
default of payments from Licensees. It is observed that the above
comments/suggestions are not relevant to the present regulatory
exercise, therefore, these have not been dealt with.
9. The issues raised by the Stakeholders in their comments/suggestions

have broadly been grouped and summarized as under:
(1) Capital cost;
(2) Accelerated Depreciation (AD) benefit;
(3) Rate of Surcharge on MAT/Income Tax ;
(4) Discount Rate; and
(5) Competitive bidding.
10. The above issues and Commissions analysis/decision thereon are

presented in the following paras:
(1) Capital Cost

Commissions Proposal
11. Based on the capital indexation mechanism specified under
Regulation 23 of the RERC RE Tariff Regulations, 2014, a capital cost of `

579.84 Lakh/MW has been proposed in the draft order for wind power
plants getting commissioned during FY 2016-17.
Comments/Suggestions received
12. The following comments have been received from the Stakeholders:
(a) CERC, vide order dated 5.01.2016, has made it mandatory for all
wind turbines to be fitted with LVRT system. The prevalent capital
cost indexation mechanism does not consider this additional
burden to be incurred per MW, which is approx. ` 25 to 30 Lakh.
Further, for compliance with F&S requirements, wind generators
would incur additional expenditure of ` 10-15 Lakh per MW to
install necessary data telemetry equipment, system and servers
and other associated infrastructure for data collection,
processing and exchange. The capital cost may be set at least
at par with CERC, i.e., ` 620 Lakh/MW to take care of
technological up-gradation and to comply with the mandatory
requirement as above.
(b) Capital cost arrived at using indexation mechanism is not
reflective of the trend shown in recent projects which is minimum
of ` 6.5 to 7 Cr/MW. This should be considered.
(c) To achieve minimum PLF of 20%, higher hub height turbines with
larger rotor diameters are to be deployed. The Capital cost for 80
meter height turbine is atleast ` 80 to 100 Lakh/MW more than
the turbines of lower hub height. An additional capital cost of
`100 Lakh/ MW may be considered to achieve the minimum CUF
of 20% as all high/middle hub height wind sites have already
been exploited.
(d) Capital cost specified in the draft order is very low as the
balance of plant cost is quite high in Rajasthan owing to
requirement of a heavier transformers and long evacuation lines.
Capital cost should be in the range of ` 750 to 800 Lakh/MW. The
draft order does not take into account the cost of forecasting &
scheduling equipment mandated under draft RERC F& S
Regulations, 2016. Hence, a cost of ` 1 Lakh/MW per year
towards above may be included in Tariff calculations. Also, the
deviation charges for inaccuracies in scheduling should be
incorporated in the tariff order.
Commissions views/decision
13. It is observed that Stakeholders have requested for increase in the

capital cost on account of market trends. Some have requested to
increase the capital cost on account of increase in hub height. Some
have requested for increase due to requirement of higher cost of
balance of plant, i.e., heavier transformers and long evacuation lines.
The Commission has specified the capital cost indexation mechanism
at Regulation 23 of the RERC RE Tariff Regulations, 2014 where the
effect of change of WPI steel index and WPI Electrical Machinery with
respect to the WPI of respective indices prevalent during the base year
has been captured. Thus, latest trends in capital cost are taken care of
by the mechanism specified in the Regulations and suggestion for
increase in the capital cost on account of above is not acceptable.
14. Requests from Stakeholders for increase in capital cost on account of

implementation of provisions of the draft RERC F&S Regulations, 2016
have also been received. It is felt that as per the Draft F&S Regulation,
the Forecasting and Scheduling of the wind energy generators is
envisaged at the pooling station or at the QCA level and cost on this
account shall be shared amongst number of WEGs connected
together as aforesaid. This is not expected to have material impact on
individual generators. Therefore, request of increasing capital cost on
account of above is not accepted.

15. As regards the request for inclusion of cost of LVRT system in the capital
cost for WTG based on CERC Order dated 05.01.2016, the Commission
has considered the said Order of CERC. It is observed that as submitted
during the proceedings before CERC, CEA is still in the process of issuing
clarification in regard to the voltage level above which LVRT provision
would be mandatory. After issue of necessary regulations/clarifications
by CEA in this regard, the same requirement shall be applicable even
in case of WTG installed prior to 15.04.2014. In light of the above,
Commission decides that the suggestion of inclusion of LVRT system in
capital cost does not deserve consideration in this Order.
(2) Accelerated Depreciation Benefit

16. In the draft order, for determining accelerated depreciation (AD)
benefit, the depreciation rate of 80% of the written down value (WDV)
as per the Income Tax Act, 1961 has been compared with the
depreciation rate specified under the RERC RE Tariff Regulations, 2014,
i.e., 5.83% of the capital cost per annum on Straight Line Method (SLM)
basis for 12 years and the remaining depreciable value has been
spread over the remaining useful life of the project from the 13th Year
onwards.
17. The following comments/suggestions have been received from the
Stakeholders:
(a) As per the Union Budget proposal for FY 2016-17, AD rate
provided under the Income Tax Act will be limited to maximum
40% from 1.04.2017. The new rate is applicable to all assets
(whether old or new) falling in the relevant block of assets. Thus,
the AD at the rate of 100%/80% will not be available from FY
2017-18 and onwards and accordingly, depreciation at the rate
of 40% of written down value (WDV or operating balance) may
be considered for FY 2017-18 (i.e., 2nd year) and onwards in
determination of AD benefit.
(b) Since the announcement of reduction in AD rate made in the
Union Budget which impacts the overall AD benefit, the same
may be reworked.
(c) The tariff may be determined in line with the latest general
budget announcements and Finance Bill for FY 2017.
18. Commission has considered the GoI Notification
No.43/2014/F.No.152/1/2013-TPL S.O. 2399(E) dated 16.09.2014 and for
the purpose of assessing levellised AD benefit and the depreciation
rate of 80% has been considered in the draft order. The announcement
of limiting the maximum depreciation rate to 40% made in the Union
Budget-2016 is yet to be notified as an Amendment in the Income Tax
Act. Further, the proposed changes are to be applicable from FY 2017-
18, which may undergo further changes at a later date for which no
true up is available in the levellised generic tariff determination. CERC
has also considered AD rate of 80% in their draft RE Tariff order dated
30.03.2016. In consideration of the above, the Commission decides to
proceed with determination of AD benefit with the prevailing rate of
depreciation of 80% as per the Income Tax Act and
suggestions/comments in this respect are not accepted.
(3) Surcharge on MAT/Income Tax Rate

19. The Commission, in the draft order, for the purpose of grossing up the
base rate of RoE provided under Regulation 15(3) of the RERC RE Tariff
Regulations, 2014, has considered the MAT rate of 20.39% (= 18.50%

MAT rate+7% surcharge + 3% cess) for first year and a MAT rate of
19.06% (= 18.5% MAT rate + 3% cess) for remaining nine years of the first
ten years. For remaining fifteen years of plant life (also equal to useful
life), the normal tax rate of 30.90% (= 30% tax rate + 3% cess) has been
applied. Similarly, for determination of levellised AD benefit also, a tax
rate of 33.06% (=30% tax rate+7% surcharge+3% cess) for the first year
and 30.90% (= 30% tax rate+ 3% cess) has been considered for
subsequent years.
20. The following comments/suggestion have been received from the
Stakeholders:
(a) In the Union Budgets/Finance Acts subsequent to Amendment in
Income Tax Act announced in Union Budget for FY 2009-10,
surcharge/MAT has not been abolished and 12% surcharge has
been specified/retained for the Assessment Year 2016-17. There is
no guarantee that the Government would abolish surcharge in
future years. Therefore, surcharge of 12% on MAT/Income Tax
and Education Cess and Secondary & Higher Education cess of
3% may be considered. Accordingly, effective Income Tax rate
of 34.61% (30% + Surcharge 12% + Cess 3%) and effective MAT
Rate of 21.34% (18.5% + Surcharge 12% + Cess 3%) may be
considered for all the years, not just for first year only.
(b) Since Union Budget 2009-10, six years have passed, but
surcharge on Income Tax/MAT has not been abolished and
surcharge at the rate of twelve percent has been
specified/retained as reflected in Memorandum of Finance Bill-
2016. The surcharge at the rate of 12% will apply to wind power
generating companies who are having income above ` 10 Cr
and Income Tax may be considered for all years as under:

Particulars MAT Income Tax
Base Rate 18.5% 30%
Surcharge 12% 12%
Education Cess and Secondary & 3% 3%
Higher Education Cess
Overall rate 21.34% 34.61%
(c) Surcharge has been considered for the first year only, ignoring
surcharge from year 2 to 25 based on APTEL Order dated
30.05.2011. The said APTEL Order, passed five years ago, had
estimated that Surcharge may be discontinued in future and
therefore, may not be applicable from year 2 to 25. However,
the surcharge has not only continued but has increased with
time. Commission has considered the lower rate of surcharge on
the basis that most of the projects in the State are small.
However, based on the investor wise data available on
commissioned wind capacity on the RRECLs website, more than
60% of the installed capacity is not small and therefore, would
be subject to higher rate of surcharge. Therefore, higher rate of
surcharge may be considered for all 25 years of the wind energy
generators for calculating the effective rate of Income Tax in
grossing up the RoE.
21. As regards suggestion of considering higher rate of surcharge of 12%, it
is observed that as per the Union Budget 2016, the rate of the
surcharge is 7% and is applicable in case of total income being more
than ` 1Cr but less than ` 10 Cr for a domestic company for FY 2016-17.
Further, it has been proposed that rate of surcharge of 12% is
applicable in case total income is more than ` 10 Cr. It is noticed from
the data received from RREC, that maximum number of the wind
power plants, set up during FY 2015-16 and supplying power to the
Distribution Licensee are of smaller individual capacity such that total

annual income of such plants relevant for levellised tariff would be
lesser than ` 10 Cr. Therefore, these companies would not be subject to
surcharge rate of 12%. Further, it would not be prudent to consider a
higher rate of surcharge for a specific category in a generic tariff order.
Hence, suggestion of taking higher rate of surcharge is not accepted
and surcharge at the rate of 7% has been considered in the
computations of generic tariff.
22. As regards the suggestion of considering the surcharge at the effective

rate of MAT and Income tax for entire project life, the same has been
dealt in detail in the Tariff Order dated 16.07.2014. In the said order
Commission has relied upon the Honble APTEL judgement in the
matter of M/s Enercon (India) Limited and Indian Wind Power Association
(Rajasthan State Council) vs. Rajasthan Electricity Regulatory Commission,
Jaipur and Ors. reported in 2011 ELR (APTEL) 0987 wherein APTEL had
upheld the methodology of not considering surcharge on MAT for
second to tenth year and on corporate tax for eleventh to twentieth
year. Therefore, the Commission considers it appropriate that no
change is required as far as levy of surcharge is concerned.
Considering above points, the Commission in the present order has also
determined the levellised tariff based on the methodology hitherto
followed.
(4) Discount Factor

23. Commission in the draft order has computed discount factor
considering the normative debt equity ratio and weighted average of
the post tax rates for interest and equity components. In the
computation, for loan component (i.e., 70%) of the capital cost, the
post tax interest rate of 13% multiplied by factor (1-Tax rate) has been
considered. For equity component (i.e.30%), post tax rate of return of
16% has been considered. In this manner, the discount factor has been
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computed as 10.78% [=70% * 12.76% * (1-33.06%) + 30% *16%] and
considered in computations of the levellised tariff.
24. The following comments/suggestions have been received from the
Stakeholders:
(a) Instead of Income Tax Rate of 33.06% proposed in the draft
order, a Tax rate of 30.90%(30% tax + 3% education cess) may be
considered while computing discount factor as under:
DF =((IR*DC*(1-IT))+(RoE*EC)
=((12.76*0.70*(1-30.90%))+(16*0.30)
=10.97%
(b) The debt itself is paid off in the first 10-12 years and assuming a
lower post-tax cost of debt is counter intuitive. Discounting is
weighted average cost of capital, the post-tax cost of debt
during first ten years should be preferred over that thereafter. The
cost in the first 10-12 years affects the project viability the most
due to time value of money. Commission may consider WACC
based on post-MAT cost of debt, not post-Corporate tax cost of
debt.
25. The Commission has made the first Amendment in the RERC RE Tariff
Regulations, 2014 based on the provisions of CERC RE Tariff Regulations,
2012. It is stated that as per Income Tax Act, cost of debt is a tax
deductible expense and results in a tax shield by taking an allowable
deduction from taxable income. A project developer who if takes a
loan and pays interest on it, he ends up in paying less in the business
taxes by creation of a tax shield. Due to this tax shield, the effective
cost of capital of project reduces to the extent of the project
developers overall tax rate. Accordingly, a tax rate of 33.06% has been
considered in computation of discount rate. CERC also follows the
WIND 2016-17 Page 11 of 21
same methodology of computation of Discount Rate. In Appeal
number 225 of 2013, Moser Baer Clean Energy Ltd vs. CERC, the
methodology of working of discount rate by CERC has been upheld by
Honble APTEL. In consideration of this, Commission decides to retain
the income tax rate of 33.06% in computations of discount factor and
comments/suggestions in this regard are not accepted.
Competitive bidding
26. Government of India (GoI), in its National Tariff Policy notified on
28.01.2016 at para 6.4(2), provides that, except in the case of purchase
of power from the waste to energy plants States shall endeavour to
procure power from the renewable energy sources through
competitive bidding to keep the tariff low. Procurement of power by
Distribution Licensee from RE sources shall be done through
competitive bidding process from the date to be notified by the
Central Government. However, till such notification, any such
procurement of power from the renewable energy sources may be
done under Section 62 of the Electricity Act, 2003. Therefore, the
Commission in exercise of its power conferred under Section 62 read
with Section 64 of the Electricity Act, 2003 and the RERC RE Tariff
Regulations, 2014, proposed to determine the generic tariff of Wind
Power Plants getting commissioned during FY 2016-17.
27. The following comments/suggestions have been received:
(a) In the absence of availability of standard documents, it may be
clarified whether the Distribution Licensees can prepare their
own tender documents and get them approved by the
Commission?
(b) The guidelines for procurement of RE power through competitive
bidding are yet to be notified by the Central Government under
Section 63 of the Electricity Act, 2003. Even Draft Guidelines for
WIND 2016-17 Page 12 of 21
Tariff Based Competitive Bidding Process of Grid Connected
Power projects based on Renewable Energy Sources as
prepared by MNRE does not include wind power. Therefore
under the circumstances, all power from wind energy plants
commissioned in FY 2016-17 ought to be purchased by
Distribution Companies on the basis of generic tariff to be
determined by the Commission on cost plus basis only.
28. It is stated that RERC RE Tariff Regulations, 2014 contain the enabling
provision for adopting tariff if such tariff has been determined through
a process of competitive bidding in accordance with the guidelines
issued by the Central Government as envisaged under Section 63 of
the Electricity Act, 2003. It is noticed that guidelines for procurement of
RE power through competitive bidding are yet to be notified by the
Central Government under Section 63 of the Electricity Act, 2003. On
notification only, these Guidelines would be legally enforceable.
Therefore, the Commission in exercise of its power conferred under
Section 62 read with Section 64 of the Electricity Act, 2003 and the
RERC RE Tariff Regulations, 2014, has determined the generic tariff of
Wind Power Plants to be commissioned during FY 2016-17.
The levellised generic tariff for wind power plants to be commissioned during
FY 2016-17.
29. The levellised generic tariff for wind power plants to be commissioned
during FY 2016-17 has been discussed below:
Useful Life
30. The Regulation 2(22) of RERC RE Tariff Regulations, 2014 provides for a
useful life of 25 years for wind power plants and accordingly, for
computation of generic tariff, a useful life of 25 years has been
considered.
WIND 2016-17 Page 13 of 21

Tariff Period
31. The RERC RE Tariff Regulations, 2014 at Regulation 5 specify that the
tariff determined for the wind power plants getting commissioned
during the control period shall continue to be applicable for entire
duration of the tariff period as stipulated in Regulation 6 of the said
Regulations, which is 25 years for wind power plants.
Tariff Structure, Tariff Design and Levellised Tariff

32. As per Regulation 8 of the RERC RE Tariff Regulations, 2014, the tariff for
wind power plants shall be a single part tariff consisting of following
fixed cost components:
(a) Operation and Maintenance (O&M) Expenses;

(b) Depreciation;
(c) Interest on long-term loans;
(d) Interest on Working Capital; and
(e) Return on Equity.
33. As per Regulation 9 of the RERC RE Tariff Regulations, 2014, the generic
tariff for wind power plants shall be determined on levellised basis for
the tariff period. For the purpose of levellised tariff determination, the
discount factor has been considered as per RERC (Terms and
Conditions for Determination of Tariff for Renewable Energy Sources-
Wind and Solar Energy) (First Amendment) Regulations, 2015.
Accordingly, the discount factor of 10.78 % has been considered. The
calculations for discount factor are available at Annexure-II.
Capital Cost
34. The Commission at Regulation 22(2) of the RERC RE Tariff Regulations,
2014 has specified a normative capital cost of ` 565 Lakh/MW for FY
2014-15 inclusive of ` 25 Lakh/MW towards the cost of transmission
system including pooling station upto the interconnection point, and
this ` 25 Lakh/MW also includes ` 2 Lakh/MW for grid connectivity
WIND 2016-17 Page 14 of 21
charges payable to Transmission licensee. The Capital cost for FY 2014-
15 has been escalated for FY 2016-17 at the rate of 2.635 % as per
Indexation Mechanism outlined under Regulation 23 of the RERC RE
Tariff Regulations, 2014, and accordingly, the capital cost for FY 2016-17
has been derived as ` 579.84 Lakh/MW inclusive of the cost of
transmission system including pooling station upto the interconnection
point, which also includes ` 2.00 Lakh/MW for grid connectivity charges
payable to Transmission Licensee for the FY 2016-17. The detailed
calculations for escalation for FY 2016-17 are available at Annexure-III.
Debt-Equity Ratio
35. The Debt-Equity ratio of 70:30 as envisaged at Regulation 15 of the
RERC RE Tariff Regulations, 2014 has been taken for working out the
debt and equity components of normative capital cost for
determination of levellised generic tariff.
Capacity Utilisation Factor (CUF) & de-ration in CUF

36. Regulation 24(1) of the RERC RE Tariff Regulations, 2014 provides for
CUF of 21% for Jaisalmer, Jodhpur and Barmer districts and 20% for
other districts. Further, Regulation 24(2) of the said Regulations also
stipulates a de-ration of 1.25% from 6th, 10th, 14th & 18th year in the
above CUFs. Accordingly, CUFs along with de-ration have been taken.
Operation & Maintenance (O&M) Expenses

37. Normative O&M expenses have been specified as ` 7.87 Lakh/MW for
wind power plants for FY 2014-15 in accordance with regulation 25(1)
of the RERC RE Tariff regulations 2014 and same have been escalated
at the rate of 5.85% per annum for FY 2016-17 and calculated as ` 8.82
Lakh/MW. The O&M Expenses have been escalated @ 5.85% over the
tariff period for computation of the levellised tariff for the plants to be
commissioned in FY 2016-17 as per the Regulation 25(2) of the RERC RE
Tariff Regulations, 2014.
WIND 2016-17 Page 15 of 21

Depreciation
38. In accordance with Regulation 14 of the RERC RE Tariff Regulations,
2014, the rate of depreciation for the first 12 years has been considered
as 5.83% of the capital cost per annum and from 13 th year onwards,
the remaining depreciable value has been spread over the balance
useful life of the wind power plant and transmission system.
Interest rate on long term loan

39. In accordance with sub-regulation (1) of Regulation 13 of the RERC RE
Tariff Regulations, 2014, the loan tenure of 12 years has been
considered for the purpose of determination of generic tariff for wind
power plants. Sub-regulation (2) of Regulation 13 of the said
Regulations further provides for the interest rate on long term loans as
300 basis points higher than the average State Bank of India (SBI) base
rate prevalent during first six months of the year previous to the relevant
year.
40. Accordingly, the average SBI base rate obtained from official website
of SBI prevalent during first six months of the year FY 2015-16 has been
considered for computation of applicable interest rate as shown in the
table below:
Table-1: Average SBI Base rate during first six months of FY 2015-16
Period from Period to Base rate No. of days
01.04.2015 09.04.2015 10.00% 9
10.04.2015 07.06.2015 9.85% 59
08.06.2015 30.09.2015 9.70% 115
Average SBI Base Rate 9.76% 183
41. In terms of the above, the interest rate of 12.76% (=9.76%+3.00%) has
been used for computation of interest on long term loan in generic
tariff computations, treating loan as 70% of the capital cost.
WIND 2016-17 Page 16 of 21

Interest on working capital requirement
42. For the purpose of working capital requirement, the composition of
working capital has been taken as per regulation 16(1) of the RERC RE
43. In accordance with Regulation 16(2) of the RERC RE Tariff Regulations,

2014, the interest rate on working capital for wind power plants has
been taken as 250 basis points higher than the average of SBI Base rate
prevalent during first six months of FY 2015-16, which works out to be
12.26% (=9.76%+2.50%). Accordingly, a rate of 12.26% has been taken
as interest rate on working capital requirements.
Return on Equity
44. Regulation 15(2) of the RERC RE Tariff Regulations, 2014 provides for RoE
of 16% on equity base of 30% determined in accordance with
Regulation 12 of the said Regulations. As per Regulation 15(3) of the
RERC RE Tariff Regulations, 2014, RoE has been computed by grossing
up the base rate of 16% with tax rate equivalent to Minimum Alternate
Tax (MAT) for first 10 years from COD and normal tax rate for remaining
years of the project life. In line with the practice followed during the
previous control period, the MAT rate of 20.39% (= 18.5% MAT rate + 7%
surcharge + 3% education cess) has been considered for first year and
a MAT rate of 19.06% ( = 18.5% MAT rate + 3% education cess) has been
considered for remaining 9 years of the first 10 years. For remaining 15
years of plant life (also equal to useful life), the normal tax rate of
30.90% (= 30% tax rate + 3% education cess) has been applied for
grossing up of the base rate of Return on Equity.
Subsidy or incentive by the Central Government, including Accelerated

Depreciation
45. As per the Regulation 21 of the RERC RE Tariff Regulations, 2014, the
Commission shall take into consideration any incentive or subsidy or
benefit available from Central or State Government, including
WIND 2016-17 Page 17 of 21
accelerated depreciation (AD) benefit, if availed by a generating
company, for the renewable energy power plants while determining
the tariff under these Regulations. Further, the Generation Based
Incentive/Tariff Subsidy, if allowed by the Central/ State Govt. would be
governed by the terms and conditions of such scheme.
46. For the purpose of determining the AD benefit, as dealt earlier, the
depreciation as per the Regulations (5.83% for 12 years and 2.50% for
the remaining useful life)( as also allowed under the Companies Act,
2013) has been compared with depreciation rate as per Income Tax
Act, i.e., 80% of the written down value vide GoI Notification
No.43/2014/F.No.152/1/2013-TPL S.O. 239(E) dated 16.09.2014. However,
in addition to this, an additional depreciation of 20% has been allowed
to the Wind Power Projects during the first year in an amendment in the
Finance Act, 2012. In this computation, the capitalization has been
considered during the second half of the fiscal year, as provided at
Regulation 21 of the RERC RE Tariff Regulations, 2014. The energy
available in the second half of the year has been taken as 30% of
annual generation as the energy availability from wind power plant in
the second half of the year is much lower than the first half, i.e., during
April to September 70% and 30% in the second half of the year. The
levellised generic tariff has been worked out considering both the
situations, viz., if AD benefit is availed and if not availed. The
computation sheets for AD benefit are available at Annexure-IV & V.
Levellised Tariff
47. The levellised tariff has been determined for the useful life of the wind
power plants, i.e., for 25 years. Therefore, PPA shall be for 25 years.
48. In light of the above position, the levellised generic tariff for wind power
plants to be commissioned during FY 2016-17 has been determined as
under:
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Table-2: Tariff for wind power plants to be commissioned during FY 16-17
Tariff (`/kWh) if Tariff (`/kWh) if
S.
Particulars AD benefit is AD benefit is
No.
not availed availed
1 2 3 4
1 Wind Power Plants located 5.76 5.16
in Jaisalmer, Jodhpur &
Barmer districts
2 Wind Power Plants located 6.04 5.42
in districts other than
Jaisalmer, Jodhpur &
Barmer districts.
49. For wind power plants claiming the higher tariff worked out as above
for projects not availing higher depreciation benefit, the Commission
considers it appropriate to lay down modalities as under:
(1) The PPA shall include an undertaking of the wind power generator
that AD benefit would not be availed for the generating
plant/unit.
(2) The first bill raised by the wind power generator shall be
accompanied by an undertaking that AD benefit shall not be
claimed. Based on this, the applicable tariff would be allowed.
(3) The claims of energy charges as per applicable tariff may be
entertained based on the said undertaking upto the due date of
filing of Income Tax Return of the relevant financial year. This
would mean 30th September, 2017 for payment for the financial
year 16-17 and for the first six months (upto 30th September) of
financial year 17-18 and so on.
(4) After filing of Income Tax Return, a certificate from a Chartered
Accountant (CA) that AD benefit has not been claimed shall have
to be submitted or in the alternative a copy of Income Tax Return
filed with Income Tax Department wherein AD benefit has not
been claimed along with verification of Tax Consultant may be
furnished.
WIND 2016-17 Page 19 of 21

(5) As Income Tax Return is required to be filed in the next year, the
payment of amount corresponding to non-availment of AD
benefit in respect of energy supplied in the month of October
onwards of the financial year following the financial year of
commissioning of the plant would be made only after the said
certificate/copy of Income Tax Return is furnished.
(6) For the energy supplied in the months of October onwards, the
methodology as given in sub-paras (4) & (5) above shall be
followed.
50. Commission also considers it appropriate that the undertaking of the
wind power generator in PPA stating that benefit of AD would not be
claimed shall also include an undertaking that in case it is found that
benefit of AD benefit has been claimed, as per third proviso to
regulation 21 of the RERC RE Tariff Regulations, 2014, the Distribution
Licensee shall be entitled to recover the amount wrongly claimed by
power generator along with penal charges @ 1.50% per month
calculated on daily basis.
51. Similarly, annual undertaking shall need to be furnished if CDM benefit

is not availed. However, if CDM benefit is availed, it shall be shared
between the Distribution Licensee and Generating Company as
envisaged in Regulation 20 of the RERC RE Tariff Regulations, 2014.
52. The metering arrangement shall be as per regulation 37 of the RERC RE

53. The Commission, in exercise of its power conferred under Section 62

read with Section 64 of the Electricity Act, 2003 and the RERC RE Tariff
Regulations, 2014, determines the generic tariff of Wind Power Plants as
detailed in Annexure-IV and Annexure-V. The above Tariff is applicable
for the Wind Power Plants commissioned on or after 1.04.2016 and till
31.03.2017.
WIND 2016-17 Page 20 of 21

54. Copy of this order may be sent to the State Government, Central
Electricity Authority (CEA), Rajasthan Renewable Energy Corporation
Ltd (RREC), Distribution Licensees and all Stakeholders.
(Raghuvendra Singh) (Vinod Pandya) (Vishvanath Hiremath)

Member Member Chairman
WIND 2016-17 Page 21 of 21

Annexure-I
List of Stakeholders, who submitted their suggestions/comments:
S. Name of Stakeholder
No.
1. M/s InWEA
2. M/s ReGen infrastructure and Services Private Ltd.
3. M/s Rudraksh Energy
4. M/s Wind World (India) Ltd.
5. M/s Indian Wind Power Association
6. M/s Tanot Wind Power Ventures Pvt. Ltd.
7. M/s Mahindra Susten Pvt. Ltd.
8. M/s Inox Renewables Ltd.
9. M/s Sri Karthikeya Spinning & Weaving Mills Pvt. Ltd.
10. M/s Leap Green Energy Pvt. Ltd.
11. M/s General Electric (Late Received)
Annexure-II
Calculation of Discount Factor for FY 2016-17 as per the RERC (Terms and
Conditions for Determination of Tariff for Renewable Energy Sources - Wind
and Solar Energy) (First Amendment) Regulations, 2015:
DF = ((IR * DC * (1-IT)) + (ROE * EC)
= ((12.76 * 0.70 * (1- 33.06%)) + (16 * 0.30)
= 10.78%
Where,
DF = Discount Factor,
IR = Interest rate in percentage,
DC = Debt Component,
IT = Income tax rate,
ROE = Return on Equity in percentage,
EC = Equity Component
Annexure-III
Capital Cost Indexation for Wind Power Projects (FY 2016-17)
Indexation Formulation
CC(n) = P&M(n)*[1+F1+F2+F3]
d(n) = (a*(SI(n-1)/ SI(0))-1)+b*( EI(n-1)/ EI(0))-1))/(a+b)
= (0.60*(130.04/126.2)-1)+0.40*(138.36/135.62)-1))/(0.6+0.4)
= 0.02635= 2.635%
P&M(n) = P&M(0)*(1+d(n))
= 450.40 * (1+0.02635) = 462.27
Variable Description Value

a Weightage for Steel Index 0.60
b Weightage for Electrical Machinery Index 0.40
F1 Factor for land and civil work 0.08
F2 Factor for Erection and Commissioning 0.07
F3 Factor for IDC and Financing 0.10
Electrical Machinery Steel

Month/Year
2015 2013 2015 2013
January 139.0 133.9 129.4 126.2
February 139.0 133.8 130.1 126.2
March 138.2 134.1 130.1 126.2
April 137.9 134.5 130.1 126.2
May 137.9 135.5 130.1 126.2
June 138.2 135.6 130.1 126.2
July 138.3 135.6 130.1 126.2
August 138.4 135.7 130.1 126.2
September 138.4 136.3 130.1 126.2
October 138.3 137.1 130.1 126.2
November 138.3 137.5 130.1 126.2
December 138.4 137.8 130.1 126.2
Average 138.36 135.62 130.04 126.2
Parameters Description Value

CC(0) (` L/MW) Capital Cost for the base year 565
P&M(0) (` L/MW) Plant and Machinery cost for the base year 450.40
d(n) Capital Cost Escalation Factor 2.635%
P&M(n) (` L/MW) Plant and Machinery cost for the nth year 462.27
(FY 2016-17)
CC(n) (` L/MW) Capital Cost for the nth year (FY 2016-17) 579.84
Source of WPI (Steel and Electrical Machinery): Office of Economic Advisor,
Ministry of Commerce and Industry (www.eaindustry.nic.in)
TARIFF FOR WIND POWER PLANTS LOCATED IN JAISALMER,BARMER & JODHPUR DISTRICTS FY 2016-17
Annexure-IV
Levelised Tariff (Rs/kWh) without AD 5.7552

Levelised Tariff (Rs/kWh) without AD (Rounding off) 5.76
Accelerated Depreciation benefit (Rs/kWh) 0.5925
Levelised Tariff (Rs/kWh) with AD 5.1627
Levelised Tariff (Rs/kWh) with AD (Rounding off) 5.16
Case Select Option 1
2
Assumption
S. No. Sub-Head Sub-Head (2) Unit Base Case
Head
1 Power Generation
Capacity
Installed Power Generation Capacity MW 1
CUF % 21%
Deration factor % 1.25
Life of Transmission system Years 35
Life of Power Plant Years 25
2 Project Cost
Capital Cost/MW inc Land,Trans &Connectivity charges (Rs 2 Lacs)
Rs Lakh/MW 579.84
Project Cost Power Plant Cost + Transmission charges Rs Lakh/MW 577.84
Conectivity charges Rs Lakh/MW 2.00
3 Sources of Funds
Debt: Equity
Debt % 70%
Equity % 30%
Total Debt Amount Rs Lakh 405.88
Total Equity Amout Rs Lakh 174
Funding Options-1 (Domestic Loan Source-1)
Loan Amount Rs Lakh 405.88
Moratorium Period years 0
Interest Rate % 12.76%
Loan repayment per annum Rs Lakh 33.82
Funding Options-2 ( Equity Finance )
Equity amount Rs Lakh 174
Return on Equity % p.a 16.00%
Discount Rate 10.78%
4 Financial Assumptions
Fiscal Assumptions
Income Tax (for yr-11 to yr-25) % 30.90%
MAT Rate (for yr-1) % 20.39%
MAT Rate (for yr-2 to yr-10) % 19.06%
80 IA benefits Yes/No Yes
Accelerated Depreciation benefit Rs/kWh 0.59
Depreciation
Depreciation Rate % 5.83%
Years for 5.83% rate Years 12
5 Working Capital Requirement
O&M Charges Months 1

Maintenance Spare (% of O&M expenses) % 15%
Receivables for Debtors Months 1.5
Interest On Working Capital % 12.26%
6 Operation & Maintenance Expenses (2015-16)
Total O&M Expenses Rs Lakh/MW Rs Lakh/MW 8.82
Total O & M Expenses Escalation % 5.85%
Months of Operations Months 12

Working Hours/Day Hrs 24
No. of Days Days 365
Total No. of Hours Hrs 8760
TARIFF FOR WIND POWER PLANTS LOCATED IN JAISALMER,BARMER & JODHPUR DISTRICTS FY 2016-17 Annexure-IV contd
Units Generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Deration in capacity % 0% 0% 0% 0% 0% 1.25% 1.25% 1.25% 1.25% 2.50% 2.50% 2.50% 2.50% 3.75% 3.75% 3.75% 3.75% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Installed Capacity MW 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Generation MU 1.84 1.84 1.84 1.84 1.84 1.82 1.82 1.82 1.82 1.79 1.79 1.79 1.79 1.77 1.77 1.77 1.77 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75
Cost of generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

O&M Expenses Rs Lakh 8.82 9.33 9.88 10.46 11.07 11.72 12.40 13.13 13.90 14.71 15.57 16.48 17.44 18.46 19.54 20.69 21.90 23.18 24.54 25.97 27.49 29.10 30.80 32.60 34.51
Depreciation Rs Lakh 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92
Interest on term loan Rs Lakh 49.65 45.33 41.01 36.69 32.38 28.06 23.74 19.43 15.11 10.79 6.48 2.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Interest on working Capital Rs Lakh 2.24 2.18 2.14 2.10 2.06 2.02 1.98 1.95 1.92 1.89 1.95 1.92 1.54 1.59 1.64 1.69 1.74 1.80 1.86 1.92 1.99 2.06 2.14 2.22 2.31
Return on Equity Rs Lakh 34.96 34.38 34.38 34.38 34.38 34.38 34.38 34.38 34.38 34.38 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28
Total Cost of generation Rs Lakh 129.48 125.05 121.24 117.46 113.71 110.01 106.34 102.71 99.13 95.60 98.10 94.66 68.19 69.25 70.38 71.58 72.84 74.18 75.59 77.09 78.68 80.36 82.14 84.02 86.01
Per unit Cost of generation Rs/kWh 7.04 6.80 6.59 6.39 6.18 6.06 5.85 5.65 5.46 5.33 5.47 5.28 3.80 3.91 3.97 4.04 4.11 4.24 4.33 4.41 4.50 4.60 4.70 4.81 4.92
Levellised Tariff (Rs/kWh) 5.76 25 years
Note(s):
1.Levelised tariff has been worked out by carrying out levelisation over 25 years and with normative debt equity ratio (70:30).
2. Figures may not tally exactly on account of rounding of .
TARIFF FOR WIND POWER PLANTS LOCATED IN JAISALMER,BARMER & JODHPUR DISTRICTS FY 2016-17
Determination of Higher Depreciation Benefit for Wind Power Projects
Depreciation amount 90% Annexure-IV contd...
Book Depreciation rate 5.83%
Tax Depreciation rate 80%
Additional depreciation rate 20%
applicable during first year
Income Tax 33.06% 30.90% (yr-2 onwards)
Capital Cost 579.84 Rs Lakh/MW
Year(s)--> Unit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Depreciation % 2.92% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54%
Depreciation Rs Lacs 16.90 33.80 33.80 33.80 33.80 33.80 33.80 33.80 33.80 33.80 33.80 33.80 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94
Higher Depreciation Benefit
Opening balance % 100.00% 50.00% 5.00% 1.00% 0.20% 0.04% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Allowed during the year % 50.00% 45.00% 4.00% 0.80% 0.16% 0.03% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Closing % 50.00% 5.00% 1.00% 0.20% 0.04% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Higher depreciation Rs Lacs 289.92 260.93 23.19 4.64 0.93 0.19 0.04 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net depreciation benefit Rs Lacs 273.02 227.12 (10.61) (29.17) (32.88) (33.62) (33.77) (33.80) (33.80) (33.80) (33.80) (33.80) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94)
Tax Benefit Rs Lacs 90.27 70.18 (3.28) (9.01) (10.16) (10.39) (10.43) (10.44) (10.45) (10.45) (10.45) (10.45) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76)
Discounted Tax Benefit Rs Lacs 90.27 66.77 (2.82) (6.99) (7.11) (6.56) (5.95) (5.38) (4.85) (4.38) (3.95) (3.57) (0.85) (0.77) (0.69) (0.63) (0.57) (0.51) (0.46) (0.42) (0.38) (0.34) (0.31) (0.28) (0.25)
Levelised tax benefit Rs Lacs 9.96
Energy Generation MU 0.55 1.84 1.84 1.84 1.84 1.82 1.82 1.82 1.82 1.79 1.79 1.79 1.79 1.77 1.77 1.77 1.77 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75
Discounted Generation MU 0.55 1.75 1.58 1.43 1.29 1.15 1.04 0.94 0.84 0.75 0.68 0.61 0.55 0.49 0.45 0.40 0.36 0.32 0.29 0.26 0.24 0.21 0.19 0.17 0.16
Levelised generation MU 1.68
Per Unit Benefit Rs/kWh 16.36 3.81 (0.18) (0.49) (0.55) (0.57) (0.57) (0.57) (0.57) (0.58) (0.58) (0.58) (0.15) (0.16) (0.16) (0.16) (0.16) (0.16) (0.16) (0.16) (0.16) (0.16) (0.16) (0.16) (0.16)
Discount Factor 1.00 0.90 0.81 0.74 0.66 0.60 0.54 0.49 0.44 0.40 0.36 0.32 0.29 0.26 0.24 0.22 0.19 0.18 0.16 0.14 0.13 0.12 0.11 0.09 0.09
Applicable Discount Factor 1.00 0.95 0.86 0.78 0.70 0.63 0.57 0.51 0.46 0.42 0.38 0.34 0.31 0.28 0.25 0.23 0.20 0.18 0.17 0.15 0.14 0.12 0.11 0.10 0.09
Levelised ITAX benefit Rs/kWh
0.5925
Note(s):
1.In the above calculations, depreciation for the first year has been considered as 50%(= 50% of (80%+20%)) as per CERC methodology
2. Generation for the first year has been considered as 30% of the normative generation for the second half of the financial year.
3. For working out Tax benefit, income tax rate for the first year has been considered as 33.06% and 30.90% has been considered for remaining useful life.
4. Figures may not tally exactly on account of rounding off.
TARIFF FOR WIND POWER PLANTS LOCATED IN DISTRICTS OTHER THAN JAISALMER,BARMER & JODHPUR FY 2016-17
Annexure-V
Levelised Tariff (Rs/kWh) without AD 6.0430

Levelised Tariff (Rs/kWh) without AD (Rounding off) 6.04
Accelerated Depreciation benefit (Rs/kWh) 0.6221
Levelised Tariff (Rs/kWh) with AD 5.4209
Levelised Tariff (Rs/kWh) with AD (Rounding off) 5.42
Case Select Option 2
2
Assumption
S. No. Sub-Head Sub-Head (2) Unit Base Case
Head
1 Power Generation
Capacity
Installed Power Generation Capacity MW 1
CUF % 20%
Deration factor % 1.25
Life of Transmission system Years 35
Life of Power Plant Years 25
2 Project Cost
Capital Cost/MW inc Land,Trans &Connectivity charges (Rs 2 Lacs)
Rs Lakh/MW 579.84
Project Cost Power Plant Cost + Transmission charges Rs Lakh/MW 577.84
Conectivity charges Rs Lakh/MW 2.00
3 Sources of Funds
Debt: Equity
Debt % 70%
Equity % 30%
Total Debt Amount Rs Lakh 405.88
Total Equity Amout Rs Lakh 174
Funding Options-1 (Domestic Loan Source-1)
Loan Amount Rs Lakh 405.88
Moratorium Period years 0
Interest Rate % 12.76%
Loan repayment per annum Rs Lakh 33.82
Funding Options-2 ( Equity Finance )
Equity amount Rs Lakh 174
Return on Equity % p.a 16.00%
Discount Rate 10.78%
4 Financial Assumptions
Fiscal Assumptions
Income Tax (for yr-11 to yr-25) % 30.90%
MAT Rate (for yr-1) % 20.39%
MAT Rate (for yr-2 to yr-10) % 19.06%
80 IA benefits Yes/No Yes
Accelerated Depreciation benefit Rs/kWh 0.62
Depreciation
Depreciation Rate % 5.83%
Years for 5.83% rate Years 12
5 Working Capital Requirement
O&M Charges Months 1

Maintenance Spare (% of O&M expenses) % 15%
Receivables for Debtors Months 1.5
Interest On Working Capital % 12.26%
6 Operation & Maintenance Expenses (2015-16)
Total O&M Expenses Rs Lakh/MW Rs Lakh/MW 8.82
Total O & M Expenses Escalation % 5.85%
Months of Operations Months 12

Working Hours/Day Hrs 24
No. of Days Days 365
Total No. of Hours Hrs 8760
TARIFF FOR WIND POWER PLANTS LOCATED IN DISTRICTS OTHER THAN JAISALMER,BARMER & JODHPUR FY 2016-17 Annexure-V contd
Units Generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Deration in capacity % 0% 0% 0% 0% 0% 1.25% 1.25% 1.25% 1.25% 2.50% 2.50% 2.50% 2.50% 3.75% 3.75% 3.75% 3.75% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Installed Capacity MW 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Generation MU 1.75 1.75 1.75 1.75 1.75 1.73 1.73 1.73 1.73 1.71 1.71 1.71 1.71 1.69 1.69 1.69 1.69 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66
Cost of generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

O&M Expenses Rs Lakh 8.82 9.33 9.88 10.46 11.07 11.72 12.40 13.13 13.90 14.71 15.57 16.48 17.44 18.46 19.54 20.69 21.90 23.18 24.54 25.97 27.49 29.10 30.80 32.60 34.51
Depreciation Rs Lakh 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 33.82 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92 8.92
Interest on term loan Rs Lakh 49.65 45.33 41.01 36.69 32.38 28.06 23.74 19.43 15.11 10.79 6.48 2.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Interest on working Capital Rs Lakh 2.24 2.18 2.14 2.10 2.06 2.02 1.98 1.95 1.92 1.89 1.95 1.92 1.54 1.59 1.64 1.69 1.74 1.80 1.86 1.92 1.99 2.06 2.14 2.22 2.31
Return on Equity Rs Lakh 34.96 34.38 34.38 34.38 34.38 34.38 34.38 34.38 34.38 34.38 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28 40.28
Total Cost of generation Rs Lakh 129.48 125.05 121.24 117.46 113.71 110.01 106.34 102.71 99.13 95.60 98.10 94.66 68.19 69.25 70.38 71.58 72.84 74.18 75.59 77.09 78.68 80.36 82.14 84.02 86.01
Per unit Cost of generation Rs/kWh 7.39 7.14 6.92 6.70 6.49 6.36 6.15 5.94 5.73 5.60 5.74 5.54 3.99 4.11 4.17 4.24 4.32 4.46 4.54 4.63 4.73 4.83 4.94 5.05 5.17
Levellised Tariff (Rs/kWh) 6.04 25 years
Note(s):
1.Levelised tariff has been worked out by carrying out levelisation over 25 years and with normative debt equity ratio (70:30).
2. Figures may not tally exactly on account of rounding of .
TARIFF FOR WIND POWER PLANTS LOCATED IN DISTRICTS OTHER THAN JAISALMER,BARMER & JODHPUR FY 2016-17
Determination of Higher Depreciation Benefit for Wind Power Projects
Depreciation amount 90% Annexure-V contd...
Book Depreciation rate 5.83%
Tax Depreciation rate 80%
Additional depreciation rate 20%
applicable during first year
Income Tax 33.06% 30.90% (yr-2 onwards)
Capital Cost 579.84 Rs Lakh/MW
Year(s)--> Unit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Depreciation % 2.92% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 5.83% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54% 1.54%
Depreciation Rs Lacs 16.90 33.80 33.80 33.80 33.80 33.80 33.80 33.80 33.80 33.80 33.80 33.80 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94 8.94
Higher Depreciation Benefit
Opening balance % 100.00% 50.00% 5.00% 1.00% 0.20% 0.04% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Allowed during the year % 50.00% 45.00% 4.00% 0.80% 0.16% 0.03% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Closing % 50.00% 5.00% 1.00% 0.20% 0.04% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Higher depreciation Rs Lacs 289.92 260.93 23.19 4.64 0.93 0.19 0.04 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net depreciation benefit Rs Lacs 273.02 227.12 (10.61) (29.17) (32.88) (33.62) (33.77) (33.80) (33.80) (33.80) (33.80) (33.80) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94) (8.94)
Tax Benefit Rs Lacs 90.27 70.18 (3.28) (9.01) (10.16) (10.39) (10.43) (10.44) (10.45) (10.45) (10.45) (10.45) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76) (2.76)
Discounted Tax Benefit Rs Lacs 90.27 66.77 (2.82) (6.99) (7.11) (6.56) (5.95) (5.38) (4.85) (4.38) (3.95) (3.57) (0.85) (0.77) (0.69) (0.63) (0.57) (0.51) (0.46) (0.42) (0.38) (0.34) (0.31) (0.28) (0.25)
Levelised tax benefit Rs Lacs 9.96
Energy Generation MU 0.53 1.75 1.75 1.75 1.75 1.73 1.73 1.73 1.73 1.71 1.71 1.71 1.71 1.69 1.69 1.69 1.69 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66
Discounted Generation MU 0.53 1.67 1.50 1.36 1.23 1.09 0.99 0.89 0.80 0.72 0.65 0.58 0.53 0.47 0.42 0.38 0.35 0.31 0.28 0.25 0.23 0.20 0.18 0.17 0.15
Levelised generation MU 1.60
Per Unit Benefit Rs/kWh 17.17 4.01 (0.19) (0.51) (0.58) (0.60) (0.60) (0.60) (0.60) (0.61) (0.61) (0.61) (0.16) (0.16) (0.16) (0.16) (0.16) (0.17) (0.17) (0.17) (0.17) (0.17) (0.17) (0.17) (0.17)
Discount Factor 1.00 0.90 0.81 0.74 0.66 0.60 0.54 0.49 0.44 0.40 0.36 0.32 0.29 0.26 0.24 0.22 0.19 0.18 0.16 0.14 0.13 0.12 0.11 0.09 0.09
Applicable Discount Factor 1.00 0.95 0.86 0.78 0.70 0.63 0.57 0.51 0.46 0.42 0.38 0.34 0.31 0.28 0.25 0.23 0.20 0.18 0.17 0.15 0.14 0.12 0.11 0.10 0.09
Levelised ITAX benefit Rs/kWh
0.6221
Note(s):
1.In the above calculations, depreciation for the first year has been considered as 50%(= 50% of (80%+20%)) as per CERC methodology
2. Generation for the first year has been considered as 30% of the normative generation for the second half of the financial year.
3. For working out Tax benefit, income tax rate for the first year has been considered as 33.06% and 30.90% has been considered for remaining useful life.
4. Figures may not tally exactly on account of rounding off.

Rajasthan Wind Tariff Order

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Rajasthan Wind Tariff Order

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RAJASTHAN ELECTRICITY REGULATORY COMMISSION, JAIPUR

In the matter of determination of generic tariff for sale of electricity to

Date of Order: 25.05.2016

WIND 2016-17 Page 1 of 21

3. The Commission, based on the capital cost indexation mechanism and

4. Public notices were published in the following newspapers on the dates

6. The Stakeholders who offered their suggestions/comments are

8. The present regulatory exercise is limited to determination of generic

WIND 2016-17 Page 2 of 21

9. The issues raised by the Stakeholders in their comments/suggestions

10. The above issues and Commissions analysis/decision thereon are

(1) Capital Cost

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13. It is observed that Stakeholders have requested for increase in the

14. Requests from Stakeholders for increase in capital cost on account of

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(2) Accelerated Depreciation Benefit

(3) Surcharge on MAT/Income Tax Rate

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22. As regards the suggestion of considering the surcharge at the effective

(4) Discount Factor

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Tariff Structure, Tariff Design and Levellised Tariff

(a) Operation and Maintenance (O&M) Expenses;

Capacity Utilisation Factor (CUF) & de-ration in CUF

Operation & Maintenance (O&M) Expenses

WIND 2016-17 Page 15 of 21

Interest rate on long term loan

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43. In accordance with Regulation 16(2) of the RERC RE Tariff Regulations,

Subsidy or incentive by the Central Government, including Accelerated

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51. Similarly, annual undertaking shall need to be furnished if CDM benefit

52. The metering arrangement shall be as per regulation 37 of the RERC RE

53. The Commission, in exercise of its power conferred under Section 62

WIND 2016-17 Page 20 of 21

(Raghuvendra Singh) (Vinod Pandya) (Vishvanath Hiremath)

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List of Stakeholders, who submitted their suggestions/comments:

DF = ((IR * DC * (1-IT)) + (ROE * EC)

= ((12.76 * 0.70 * (1- 33.06%)) + (16 * 0.30)

IR = Interest rate in percentage,

IT = Income tax rate,

ROE = Return on Equity in percentage,

Capital Cost Indexation for Wind Power Projects (FY 2016-17)

Variable Description Value

Electrical Machinery Steel

Parameters Description Value

Levelised Tariff (Rs/kWh) without AD 5.7552

O&M Charges Months 1

Months of Operations Months 12

Units Generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Cost of generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Levellised Tariff (Rs/kWh) 5.76 25 years

Levelised Tariff (Rs/kWh) without AD 6.0430

O&M Charges Months 1

Months of Operations Months 12

Units Generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Cost of generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Levellised Tariff (Rs/kWh) 6.04 25 years