In the matter of CERC (Conduct of Business) and (Terms and Condition of Tariff) Regulations for determination of providing Connectivity to M/s Greenko AP01 IREP Pvt. Ltd. in the Southern Region – EQ
Summary:
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## 1. Case Overview
| Parameter | Details |
|———–|———|
| **Petition Number** | 426/TT/2025 |
| **Order Date** | January 19, 2026 |
| **Petitioner** | Power Grid Corporation of India Limited (PGCIL) |
| **Respondents** | 14 Distribution Companies across Southern Region + Greenko AP01 IREP Pvt. Ltd. + CTUIL |
| **Regulatory Framework** | CERC (Terms and Conditions of Tariff) Regulations, 2024 |
| **Purpose** | Tariff determination for 1 No. 400kV line bay at Kurnool New Substation for Greenko connectivity |
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## 2. Project Details
### 2.1 Asset Description
| Parameter | Specification |
|———–|————–|
| **Asset Name** | Implementation of 1 No. 400kV line bay at Kurnool New S/s for providing Connectivity to M/s Greenko AP01 IREP Pvt. Ltd. (2nd 400kV line bay for M/s Greenko) (Bay No. 412) |
| **Location** | Kurnool New Substation, Southern Region |
| **Scope** | 1 No. 400kV AIS line bay extension (Brown field) |
| **Purpose** | Evacuation of power from Greenko’s Pumped Storage Plant (565 MW) |
### 2.2 Timeline
| Milestone | Date | Delay |
|———–|——|——-|
| **Investment Approval (IA)** | March 27, 2023 | – |
| **Scheduled COD (SCOD)** | February 27, 2024 | – |
| **Actual COD** | September 2, 2024 | **188 days** |
| **CTUIL Recommendation** | November 28, 2022 | – |
| **CEA Energisation Certificate** | August 29, 2024 | – |
| **Trial Operation Completion** | September 1, 2024 | – |
### 2.3 Cost Details
| Parameter | Amount (₹ Lakh) |
|———–|——————|
| **Original FR Cost (Dec 2022)** | 550.00 |
| **CTUIL Estimated Cost (Nov 2022)** | 855.00 |
| **RCE-I Approved Cost** | 650.00 |
| **Award Cost** | 510.55 |
| **Capital Cost as on COD (Allowed)** | 286.84 |
| **ACE Allowed (2024-25)** | 287.82 |
| **ACE Allowed (2025-26)** | 59.09 |
| **Total Capital Cost as on 31.3.2029** | **633.75** |
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## 3. Key Issues and Decisions
### 3.1 Date of Commercial Operation (COD)
**Petitioner’s Submission:**
– Asset charged under no-load conditions on August 31, 2024
– Proposed COD: September 2, 2024
– Delay due to non-readiness of Greenko’s associated transmission line/generation
**Supporting Documents:**
– CEA Energisation Certificate dated August 29, 2024
– SRLDC Trial Operation Certificate dated October 8, 2024
– CMD Certificate
– CTUIL Completion Certificate dated January 23, 2025
**Commission’s Decision:**
✅ **COD approved as September 2, 2024** in accordance with Regulation 5 of 2024 Tariff Regulations and IEGC, 2023
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### 3.2 Capital Cost Determination
**Petitioner’s Claim:**
– Initial claim: ₹310.27 lakh as on COD
– Revised claim after notional IDC correction
**Cost Variation Analysis:**
| Component | Variation (₹ Lakh) | Reason |
|———–|——————-|——–|
| Substation Equipment & Civil Works | +120.60 | Competitive bidding outcomes, market conditions |
| IDC | -11.62 | Weighted average interest rate lower than FR assumption |
| IEDC | -1.80 | Actual expenditure vs. estimate |
| **Net Variation vs. RCE-I** | **+7.18** | |
**Comparison with CTUIL Estimate:**
– CTUIL OM cost: ₹855.00 lakh
– Estimated completion cost: ₹661.98 lakh
– **Reduction: ₹193.02 lakh** (22.6% lower)
**Commission’s Decision:**
✅ Allowed capital cost as on COD: **₹286.84 lakh** (after adjustments)
✅ Allowed ACE (2024-25): **₹287.82 lakh**
✅ Allowed ACE (2025-26): **₹59.09 lakh**
✅ Total capital cost as on 31.3.2029: **₹633.75 lakh**
**Adjustments Made:**
– IDC disallowed due to time overrun: ₹3.38 lakh
– IEDC disallowed (pro-rata): ₹22.51 lakh
– Notional IDC allowed till SCOD: ₹2.47 lakh (vs. claim of ₹4.80 lakh)
—
### 3.3 Time Overrun Analysis
**Delay Summary:**
– SCOD: February 27, 2024
– Actual COD: September 2, 2024
– Total Delay: **188 days**
**Reasons for Delay (Petitioner’s Submission):**
– Delay in award of contract (189 days)
– Small bid size clubbed with other projects for better pricing
– Low bidder participation for small-value contracts
– Compressed timelines in CTUIL OM
– High lead times for equipment manufacturing
**NCT’s Revised Timelines (May 6, 2025):**
– Bay extension works increased from 15 to **18 months**
– However, **not applicable retrospectively** to projects awarded before March 6, 2025
**TNP DCL’s Objection:**
– Remaining 99 days beyond NCT’s 3-month extension not covered under uncontrollable factors
– Requested disallowance of IDC/IEDC for 37 days beyond extended timeline
**Commission’s Decision:**
– Time overrun falls under **Regulation 22(1)(b)** (controllable factors)
– **Entire 188 days NOT condoned**
– IDC and IEDC disallowed accordingly
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### 3.4 Initial Spares
| Parameter | Petitioner’s Claim | Commission’s Decision |
|———–|——————-|———————-|
| **Initial Spares Claimed** | ₹30.07 lakh | ₹30.20 lakh |
| **Plant & Machinery Cost Considered** | ₹523.23 lakh | ₹503.24 lakh (after excluding ₹20 lakh civil works) |
| **Ceiling Limit (Brown field)** | 6.00% | 6.00% |
| **Allowable Initial Spares** | – | **₹30.20 lakh** |
✅ Allowed as per Regulation 23(d) of 2024 Tariff Regulations
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### 3.5 Additional Capital Expenditure (ACE)
**ACE Components:**
| Component | Amount (₹ Lakh) | Regulatory Provision |
|———–|—————–|———————|
| Payment towards admitted liabilities (works executed up to cut-off date) | 234.08 | Regulation 24(1)(a) |
| Works deferred for execution | 53.74 | Regulation 24(1)(b) |
| **Total ACE (2024-25)** | **287.82** | |
| **ACE (2025-26)** | **59.09** | |
✅ Allowed as claimed
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### 3.6 Sharing of Transmission Charges
**TNP DCL’s Objection:**
– Asset commissioned without associated transmission line/generation of Greenko
– No benefit to beneficiaries until generator achieves COD
– Requested recovery from generator under Regulation 13(3) of Sharing Regulations, 2020
**CTUIL’s Submission:**
– Stage-II Connectivity granted to Greenko: 565 MW (September 28, 2022)
– Start date of Connectivity: December 15, 2023 (tentative)
– LTA start date: July 16, 2024 (revised)
**Commission’s Decision:**
– Connectivity grantee (Greenko) liable to pay transmission charges from September 2, 2024 till COD of its PSP
– YTC to be included for DIC determination **only for capacity achieving COD**
– Recovery in terms of **2020 Sharing Regulations**
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## 4. Financial Determination (2024-29 Tariff Period)
### 4.1 Annual Fixed Charges Allowed (Asset-1)
| Particulars | 2024-25* | 2025-26 | 2026-27 | 2027-28 | 2028-29 |
|————-|———-|———|———|———|———|
| Depreciation | 13.74 | 33.43 | 34.68 | 34.68 | 34.68 |
| Interest on Loan | 13.88 | 31.99 | 30.90 | 28.07 | 25.25 |
| Return on Equity | 13.58 | 32.95 | 34.56 | 34.56 | 34.56 |
| O&M Expenses | 17.07 | 31.08 | 32.71 | 34.43 | 36.23 |
| Interest on Working Capital | 1.35 | 2.80 | 2.90 | 2.93 | 2.97 |
| **Total AFC** | **59.62** | **132.25** | **135.75** | **134.67** | **133.69** |
*Pro-rata for 211 days
### 4.2 Comparison: Claimed vs. Allowed
| Year | Claimed (₹ Lakh) | Allowed (₹ Lakh) | Difference |
|——|——————|——————|————|
| 2024-25* | 62.33 | 59.62 | -2.71 |
| 2025-26 | 136.85 | 132.25 | -4.60 |
| 2026-27 | 140.22 | 135.75 | -4.47 |
| 2027-28 | 139.01 | 134.67 | -4.34 |
| 2028-29 | 137.90 | 133.69 | -4.21 |
### 4.3 Debt-Equity Structure (as on COD)
| Component | Amount (₹ Lakh) | Ratio |
|———–|—————–|——-|
| **Debt** | 200.79 | 70% |
| **Equity** | 86.05 | 30% |
| **Total** | 286.84 | 100% |
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## 5. Regulatory Parameters
| Parameter | Value |
|———–|——-|
| **Return on Equity (Base Rate)** | 15.00% |
| **MAT Rate** | 17.472% |
| **Grossed-up RoE** | 18.176% |
| **Interest on Loan Rate** | 8.15% |
| **Interest on Working Capital Rate** | 11.90% (SBI 1-Yr MCLR 8.65% + 325 bps) |
| **Depreciation Rate (WAROD)** | 5.47% – 5.53% |
| **O&M Norms (400kV Bay)** | ₹29.53 – ₹36.23 lakh per bay |
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