MSEB sources told The Financial Express that it has received the DPC's proposal in this regard. However, sources said that the MSEB would not mind allowing the DPC to go in for a third-party sale, but that it would not like to be involved directly in this arrangement.

DPC sources confirmed that it had made a strong plea for the sale of power to a third-party and added that it was quite optimistic that the sale of power to a third-party would commence in fiscal 2001.

According to the DPC's proposal, the point of sale of power would be dependent on the location of the purchaser. These purchasers would be classified as follows: For northern region constituents (Rajasthan, New Delhi etc), the delivery point would be the HVDC link-up at Vindhyachal, for southern region constituents (Andhra Pradesh, Karnataka etc), the delivery point would be the HVDC link-up between the western region and the southern region at Chandrapur. Further, for Karnataka, the delivery point could also be Kolhapur and for western region constituents (Gujarat, Madhya Pradesh), the delivery point could be the busbars of any central sector plant located in the western grid.

For the purpose of measurement of energy sold to third parties, meters could be used at various delivery points. The purchaser would be entitled to attend the joint visual readings of the meter at the delivery point together with MSEB's representatives.

About the invoicing and payment mechanism, the DPC said that at the end of each month, the MSEB would invoice the purchaser on a monthly basis for energy sold and metered at the delivery point. Further, with regard to the sale of firm power (which would be sold round-the-clock), the invoice would also take into account the purchaser's minimum monthly capacity off-take obligations. Payment for energy delivered/sold by the MSEB would be due 7 days from the date of presentation of the invoice and this payment would be made on a direct payment basis.

Moreover, payment for power purchased would have to be secured through a standby letter of credit (value equivalent to the monthly anticipated invoice) or any other acceptable security mechanism (such as advanced deposit for 50 per cent of the anticipated monthly invoice and a letter of credit for the remaining 50 per cent portion). In the event of non-receipt of the invoiced amount by the due date, MSEB would utilise the payment security mechanism made available to it. It will also reserve the right to discontinue energy supply to the purchaser in the event of non-payment of the invoiced amounts by the purchaser on the due date or non-renewal of the letter of credit on drawal.

According to the DPC, the quantum of power to be made available for sale of firm power and infirm power (its sale could be differentiated between peak and off-peak power) would have to be decided by the MSEB. While the quantum of firm power has to be made known up front, the quantum of infirm power can be made known on a periodic basis through an "availability notice."

As per the DPC proposal, the tariff for the power sold would be different for firm power and infirm power. However, the company has made it clear that the tariffs for both categories of power sale would have to be above the variable cost of generation.

According to DPC, the tariff for firm power would be a two-part tariff, with a capacity charge and an energy charge. The capacity charge would be a fixed price (in terms of Rs per kWh), which has to be fixed by the MSEB. However, the energy charge would be linked to actual fuel price (based on DPC's invoice to the MSEB for that month) and would be charged on the basis of actual dispatch.

A minimum amount of off-take commitment upto 75 per cent plant load factor would also be required from the purchaser.

In case of infirm power, the tariff would be a one-part tariff, but could be priced to reflect the principles of "time of use" tariff. The peak tariff of Rs/kWh during peak hours would be priced higher than firm power and off-peak tariff of Rs/kWh during off-peak hours would be priced lower than the price for firm power, but "definitely higher than the available cost of generation." According to the DPC, the peak period duration comprises 6 am to 10 pm while off-peak period duration would be between 10 pm to 6 am. With regard to the sale of firm power, the purchaser would pay capacity charges attributable to a minimum of (75 per cent of actual capacity) even if the purchaser fails to despatch up to the minimum committed off take level of 75 per cent of the contracted capacity for a specific period.

"However, the energy charges would be payable only on actual despatch of energy," the DPC said and added that the charges with respect to infirm power are payable by the purchaser, only if the energy is dispatched.

MSEB may sell power to Haryana

Although, MSEB has yet to take a formal decision on DPC's proposal for sale of power to third party, it has offered to directly sell 180 mw of power at Rs 3.75 per unit to Haryana for a month. Haryana, which had recently approached the MSEB in this regard, has yet to respond to the MSEB's proposal. Haryana has demanded power availability at Rs 1.95 per unit.