The amount has been adjusted against the monthly bills for purchase of power from DPC. Thus, the lower outgo from MSEB does not mean that the tariff charged by DPC has gone down.

The power company's current taripf is pegged at around Rs 4 per unit. This is also because the cost of fuel has gone up. The fuel mix used by DPC is primarily naphtha and distillate. Distillate is used for start-up and occasionally for other specific reasons. The increase in fuel cost has affected all power companies.

DPC which had to partially shut downits plant in August for around three weeks due to some technical snag is currently operating the plant at optimum capacity.

The company had also closed the plant for a short period in September. Since this was a routine shut down for overhaul maintenance, the power company was not charged any penalty.

With the winter season setting in, MSEB's demand for power has also picked up. The board can now buy the entire generation at a 90 per cent plant load factor as committed in the power purchase agreement (PPA) between MSEB and DPC.

According to PPA, MSEB has to pay a fix amount as capacity charges to the power company. However, the fuel cost is paid only for the units generated by the company. MSEB gives the demand schedule to DPC in advance.

If DPC is not able to generate the required quantum, it is required to offer the ``rebate.'' On the other hand, if the power company is in a position to run the plant at a higher load but MSEB's demand has fallen, the later still will have to pay the full capacitycharges. In this scenario, only the fuel cost would be limited to the extent of units generated.

Thus, the cost of DPC power fluctuates. The per unit cost comes down vis-a-vis capacity charges if the offtake of power by MSEB goes up. Similarly, if MSEB purchases less from DPC the per unit cost would appear more.

MSEB, which has a limited option for cheaper power available from other sources, prepares the demand schedule accordingly. The board, however, does not have much control to reduce the financial outgo for DPC's power because of the committed capacity charges.

The board has indicated that DPC's power purchase during April and August is around Rs 3.42 per unit in its tariff proposal submitted to the Maharashtra Electricity Regulatory Commission (MERC). However, since the cost of monthly purchase from DPC is not known, it appears that this is the per unit cost MSEB has worked out after discounting the rebate amount paid by DPC.

The board has further indicated that by the end of the year the DPC'spower would cost around Rs 3.69 per unit and the annual outgo from MSEB towards DPC would be around Rs 1,512.