The tariff arrived at by SBI Caps is at a stepped up plant load factor (PLF) availability of 85 per cent and at the exchange rate of Rs 42.5 per dollar. Earlier tariff offers of the promoters and power trading corporation were based on a guaranteed availability of 68.5 per cent.

Once approved by the Central Electricity Regulatory Commission (CERC), this tariff will then become a benchmark for negotiating tariff from other mega power projects.

Significantly, all parties concerned, including PTC, the project promoters along with the five state electricity boards (SEBs), buying power from this project, have given an in-principle approval to the tariff structure worked out by SBI Caps. SBI Caps was assisted by Black & Veatch as a technical consultant for working out the tariff structure.

This will now bring an end to the year long tussle over the tariff issue going on between PTC and the promoters. A final decision on the tariff issue will be taken by CERC on August 29, when the case comes up for hearing next. SBI Caps, after detailed discussions with the two sides submitted its report to the commission on Wednesday.

Earlier, both the promoters and PTC were at variance over the tariff issue, which was then referred to CERC. Whereas, the promoters had worked out the levelised fixed charge component of tariff from the project at 1.4633 per Kwh at 68.5 per cent PLF for a 30 year period, PTC felt that the levelised tariff for 30 years should be Rs 1.35 Kwh.

The tariff of Rs 1.2249 per Kwh by SBI Caps has worked out in case of availability and PLF were to be guaranteed at 85 per cent and will have capacity charges of US $ 0.0362 per Kwh, 50 per cent of which would be converted into rupees at the current exchange rate ($ component) and 50 per cent would be converted at the rate of Rs 35 (rupee component) for the first 12 years.

The ratio would become 25 per cent and 75 per cent respectively for the next 18 years with capacity charges at $ 0.0101 per Kwh.

Under another scenario, on a availability guaranteed at 85 per cent and at a guaranteed recovery of full fixed charges at 68.5 per cent PLF including deemed generation, SBI has suggested a levelised tariff of Rs 1.2309. This is with a capacity charge of US $ 0.0432 per Kwh with all other assumptions remaining the same as in the first case.

Both these options worked out by SBI Caps have been agreed to by the project promoters and it the PTC which has to select one of the options. The difference in tariff in the two cases works out to be a Rs 0.0060 per Kwh.SBI Caps has also suggested a incentive at the rate of one paise per Kwh for one per cent increase in despatch above 85 per cent and two paise per Kwh for 2 per cent increase in despatch above 85 per cent PLF and so on.

The calculations made by SBI Caps are at an estimated project cost of Rs 20,477 crore and also includes the outlay towards installation of a fuel gas de-sulphurisation (FGD) unit. Earlier both the parties have worked out tariff costs with and without FGD unit.

However, while working out tariff calculations, SBI Caps has got a clear understanding from both the parties that installation of the flue gas de-sulphuriusation (FGD) unit is necessary due to environmental stipulations.