NHPC to recover water user charges from J&K govt


Contrary to claims of state government, National Hydroelectric Project Corporation (NHPC) has been allowed to recover water usage charges from state government as additional energy charge in proportion of supply of power from generating station on monthly basis.

Central Electricity Regulatory Commission (CERC) in an order in petition no. 89/GT/2017 issued on October 11, 2017 has allowed NHPC to charge water user component from the Jammu and Kashmir government. Though this order would be implemented only after the high court gives its verdict in OWP no. 604/2011 and shall stand modified to the extent of inconsistency with its decision but it has already given jitters to government which had even mentioned this in its budget statement.

In the present case, NHPC would be charging extra money from Jammu and Kashmir government on the 45 MW Nimoo Bazgo Hydroelectric Project, which has been completed and made partially operational. NHPC had approached CERC for approval of generation tariff of Nimoo Bazgo Hydroelectric Project (3 x15 MW) for the period and relaxation of operational or technical norms of operation under Clause-4 of part-7 of the Indian Electricity Grid Code.

CERC granted NHPC its wish by relaxing the norms and in the same order, asked the state government to pay NHPC additional money of it intends to get water user charges from it. NHPC has in its affidavit dated February 21, 2017 submitted that Unit Nos. II and III of the generating station had been commissioned on January 20, 2017 and October 12, 2017 respectively.

NHPC had further submitted that the said units are ready for testing at full load while adding that these units are being operated on partial load made available by the state government presently. It further submitted that the project has not been connected to the grid and therefore commercial operation of the units was possible only when full load will be provided by the state government.

NHPC added that the sub-stations are being constructed under RGGVY scheme at Leh which are yet to be commissioned for requisite test load. Accordingly, NHPC submitted that the declaration of Commercial Operation (COD) of the units of the generating station cannot be achieved at this stage and the total capital cost of the project shall be worked out later.

It needs to be stated that the project was sanctioned by the government of India in August, 2006 to be executed in the State of J&K at an estimated cost of Rs. 611.01 crore (including IDC & FC of Rs. 7.34 crore at December, 2005 price level) with the completion period of 48 months from the date of its sanction.

The project has been funded through equity of Rs. 183.30 crore and a subordinate debt of Rs. 270 crore provided by government of India at an interest rate of 4 percent per annum with repayment of principal to start from the 12th year after the commissioning and to continue till the 29th year.

It was also informed that there would be no interest on subordinate debt during the construction period and the purpose for providing subordinate loan is for reduction of the higher per MW cost of the project. NHPC informed CERC that the capital expenditure actually incurred on the project upto September 30, 2017 is Rs. 822.19 crore (excluding depreciation) as per audited statement.

It also submitted that anticipated expenditure for the balance period (from October, 2017 till COD) shall be Rs. 156.25 crore (excluding depreciation). Accordingly, NHPC submitted that the anticipated capital cost of the project would go up to  Rs. 978.44 crore and the actual cost of project as on COD would be known after commercial operation of the project and closure of accounts thereafter.