One Nation, One Grid
5 Stable Business Model With Comparatively Low Risk
Framework on Cost Plus Basis
✓ Revenue model on assets built and annual fixed
charges basis
15.5% guaranteed ROE + 0.5% for timely
completion
✓ Recovery of operating costs, including debt
servicing charges and currency depreciation /
hedging
Debt Equity of 70:30
✓ Availability based incentives
Existing tariff norms applicable up to March 2014
2
Changing Regulatory Framework
TBCB
Regulated returns
New Framework Post January 2011
Following projects will continue under the cost plus model
-
All existing projects
All under construction projects
All projects for which agreements have been signed before January 2011 but
are yet to start implementation
New projects allotted by GOI on nomination basis
All future ISTS projects, except certain scheme, to be awarded through tariff based
competitive bidding ("TBCB") route, in line with tariff policy of Gol, will be done by
independent SPV Companies
Secure Payment Collection
LC coverage from Designated ISTS Customers adequate to cover monthly billing
✓ Regulation of power supply of defaulting entities as per CERC regulations
Denial of Short Term Open Access to consistent defaulting entities being pursued with CERC
✓ Disconnection of feeders being contemplated for the entities who neglect to pay the transmission charges
3
Right of Way
Enjoys Right of Way ("ROW") under the
Indian Telegraph Act, 1885
Significantly reduces project
execution timelines
'ONE NATION, ONE GRID'
13.
Secure Tariff Mechanism
Linked to the transmission network
availability
Independent of actual power
transmitted or transmission losses
through the network
5
Gol Assistance
Operational: RoW, forest clearances and
land acquisitions
✓ Sovereign rating
✓ Assistance in collecting dues from State
Power Utilities ("SPUS")
S
Transmission charges allocated to all
customers based on CERC's Sharing
Methodology and adjustable on actuals on a
quarterly basis
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