The primary functions of the Commercial Department are:

1. PROCEDURE FOR TARIFF DETERMINATION

• Drafting, negotiating, and finalizing Long-Term, Medium-Term, and Short-Term PPAs.
• Coordination with state electricity boards (SEBs), power distribution companies (DISCOMs), and bulk consumers.
• Ensuring regulatory approvals from CERC/SERC for PPAs.
• Monitoring compliance with contractual obligations.

2. TARIFF & BILLING MANAGEMENT

• Tariff determination as per CERC regulations.
• Preparation and submission of tariff petitions to CERC/SERC.
• Issuing invoices to beneficiaries as per PPA terms.
• Implementations of tariff orders in Invoices as per CERC terms and conditions of tariff orders.
• Coordination with RLDCs, SLDCs, and Grid India for scheduling & despatch-related billing.
• Monitoring payments and ensuring adherence to Letter of Credit (LC) payment security mechanisms.
• Handling Late Payment Surcharge (LPS) claims and disputes.

3. PAYMENT & RECEIVABLES MANAGEMENT

• Ensuring timely collection of dues from DISCOMs and bulk consumers.
• Monitoring LCs and Payment Security Mechanisms (PSM).
• Following up on delayed payments and disputes with consumers.
• Reporting revenue collection status to senior management.

4. REGULATORY COMPLIANCE & LEGAL MATTERS

• Filing Petitions, Appeals, and Regulatory Approvals before CERC/SERC/APTEL/Supreme Court.
• Compliance with Electricity Act, 2003, CERC/SERC guidelines, and Ministry of Power (MoP) directives.
• Handling regulatory hearings, consultations, and representation of the company.

5. OPEN ACCESS & POWER MARKET OPERATIONS

• Coordination with Power Exchanges (IEX/PXIL), traders, and buyers.
• Managing open access applications and transactions.
• Ensuring compliance with Open Access Regulations & Guidelines.

6. RENEWABLE ENERGY (RE) CERTIFICATES & CARBON CREDITS

• Handling Renewable Energy Certificates (REC) trading and compliance.
• Managing carbon credits, energy efficiency certificates, and related financial instruments.

7. POWER TRADING & SHORT-TERM MARKET OPERATIONS

• Participation in DAM, TAM, RTM, and bilateral contracts on IEX/PXIL.
• Monitoring market trends, bidding strategies, and revenue optimization.

8. MIS, REPORTING & AUDITS

• Preparation of periodic revenue reports, collection status, and outstanding dues.
• Internal and external audits of commercial transactions.
• Submitting reports to CERC, SERCs, MoP, and internal stakeholders.

9. CUSTOMER RELATIONSHIP & DISPUTE RESOLUTION

• Addressing customer grievances and contract-related disputes.
• Engaging in arbitration and legal proceedings as needed.

10. POLICY ADVOCACY WITH CERC/NERPC/NERLDC

• Providing necessary inputs and suggestions to CERC in its staff paper and draft Regulations.
• Formulation of commercial issues and raising the same in Commercial Committee Meeting and seeking solutions in TCC/NERPC forum in favour NEEPCO.
• Advocacy in fixing normative parameters in Tariff Regulations for optimisation of profit.

11. PROFITABILITY ANALYSIS AND FLAGGING OFF COMMERCIAL ISSUES

• Analysis of gaps of revenue and expenditure and providing suggestions for bridging the same.
• Analysis of DSM Regulations and pinpointing reasons for under recovery of Fixed cost and fuels cost.

TARIFF

AVAILABILITY BASED TARIFF

The Availability Based Tariff (ABT) came into force in the North Eastern Region with effect from 1st November, 2003. Under the ABT regime the generator has to declare its generation availability on day-to-day basis to the RLDC. The beneficiaries have to submit their requisitions on daily basis. The RLDC draws up the daily injection and drawal schedules on the basis of the capacity declarations and requisitions.

PROCEDURE FOR TARIFF DETERMINATION

• Each generating station has a separate tariff.
• Tariff is determined by CERC based on the Tariff Regulations in force at the time and the submissions made by the generating station.
• Tariff is determined in two parts viz. Annual Capacity Charges and Energy Charge.
• The Annual Capacity Charges is based on Annual Fixed Charges. The Energy Charge Rates for hydro stations is calculated on the basis of Annual Fixed Charge and Annual Design Energy. In the case of thermal stations, it is based on the actual landed cost of fuel and the actual station heat rate achieved.
• The Annual Fixed Charge (AFC) consists of the following:
  
  1. Interest on loan
  2. Depreciation
  3. Return on equity
  4. Interest on working capital
  5. O&M expenses
• The Central Electricity Regulatory Commission (Terms and Conditions of Tariff), Regulations issued every five years, specifies the norms of operation, normative parameters and methods for computation of Capacity Charge and Energy Charge. Following are some of the highlights:
  
  1. The Normative Annual Plant Availability Factor (NAPAF) of each generating station.
  2. AFC is determined based on prudent check for each of the Power Station.
  3. The PAF for a period means the average of the daily Declared Capacities (DCs) for the number of days during that period expressed as a percentage of the Installed Capacity in MW reduced by the Normative Auxiliary Energy Consumption.
  4. In the case of hydro stations 50 % of the AFC is recoverable as Capacity Charge and the balance 50 % as Energy Charge.
  5. In the case of thermal stations apart from 100 % AFC being recoverable as Capacity Charge, cost of fuel is recoverable as Energy Charge on the basis of actual station heat rate achieved.
  6. Petitions for determination of tariff for the Tariff Period 01.04.2024 to 31.03.2029 in respect of all the operating stations have been filed before CERC and tariff order has been issued.
  7. Till issuance of the tariff orders for 2024-29 tariff period by CERC provisional billing will be done on the basis of tariff orders for 2019-24 subject to adjustment subsequently.

GENERATING STATIONS, BENEFICIARIES & TARIFF:

• Out of the total installed capacity of 600 MW of Kameng HPS, 259 MW is allocated to long term beneficiaries and 341 MW is allocated to NEEPCO as merchant power.
• Tariff of Kameng indicated above are provisional as mutually agreed with the beneficiaries and the same will be applicable till determination of the respective tariffs by CERC.
• Tariff for Pare HPSs is escalating tariff based on Government initiative for promotion of Hydro Power. Tariffs for all the other stations are based on the AFCs allowed by the tariff orders for the respective stations for 2019-24 .
• Tripura’s APPC at present is Rs.4.40 /kWh.

SALIENT ASPECTS OF POWER SUPPLY

• The generating stations deliver power ex-power plant to the regional / state grids through their respective switchyards.
• Power is transmitted to the bulk consumers through the transmission systems of Powergrid Corporation of India Limited or the respective State Transmission Utilities.
• Secure, stable and integrated operation of the NER Power System is ensured by NERLDC in its role as Grid Manager. NERPC, as an apex body, coordinates among the constituents of the system and facilitates the efficient and integrated operation of the grid.
• Deviation Settlement Mechanism (DSM) charges are levied on those grid constituents / Designated Interstate Customers (DICs) which deviate from the final injection / drawal schedules.

BILLING AND PAYMENT

• Sale of energy is governed by the Bulk Power Supply Agreements (BPSAs)/ Power Purchase Agreements (PPAs) executed between the bulk customers and NEEPCO within the framework of the CERC Tariff Regulations.
• Shares from the power stations to the customers are allocated by the Ministry of Power, Government of India from time to time. The daily injection / drawal scheduling is done by NERLDC based on Declared Capacities of power stations, allocated shares, requisitions by beneficiaries, collective transactions and open access approvals.
• Merchant power is sold through collective transactions at power exchange platforms / bilateral transactions (LTA/MTOA/STOA) with open access customers.
• Bills are raised on the beneficiaries every month for the energy made available to them as reflected in the monthly Regional Energy Accounts (REAs) issued by the NERPC. Bills against bilateral transactions are raised according to the agreed billing cycles on the basis of Bilateral Exchange statements of the monthly REAs.
• Realization of proceeds from sales to beneficiaries is governed by the applicable CERC regulations, BPSAs/PPAs as well as the Tripartite Agreements between the Government of India, Reserve Bank of India and the respective state governments. Realization of proceeds against bilateral transactions is done in accordance with the agreements with the parties. Proceeds from collective transactions are realized in accordance with provisions of the applicable CERC regulations.
• Payments are received primarily through electronic transfers / cheques. Beneficiaries are required to maintain irrevocable and revolving Letters of Credit (LCs) in favour of NEEPCO as a Payment Security Mechanism.
• Rebates are given for timely payments according to the CERC Tariff Regulations and in terms of NEEPCO’s Rebate Scheme.
• If the payments are not made by the beneficiaries within a period of 45 days from the date of presentation of bill, late payment surcharge is levied as per Electricity (Late Payment Surcharge and Related Matters) Rules, 2022. In case non liquidation of dues beyond 75 days (i.e.  Default trigger date) after presentation of bills, power supply to the beneficiary / Discom is regulated as per above mentioned rule. The beneficiaries / Discoms are required to comply all the provisions of Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 for continuous power supply with them.

FOLLOWING ARE THE BEST PRACTICES ADOPTED BY THE COMMERCIAL DEPARTMENT:

1. Regulatory Advocacy for appropriate orders.
2. Adherence to Audit plans and minimizing Audit Paras.
3. Advocacy in formulation of Regulations/Policies/Rules/Procedures by CERC, MoP, CEA, NLDC etc.
4. Adherence to timelines in filing tariff Petitions/Replies/Rejoinders etc.
5. Timely identifying issues in orders/directions of CERC/APTEL.
6. Marketing of New Capacity/Timely signing of PPAs.
7. Ensuring requisite PSM/TPAs/LC.
8. 100% Realisation for payments due in a year.
9. Ensuring sale of URS/Relinquished power in Market.
10. CRM through Customer Meets and other initiatives.

TARIFF PETITION FOR NEEPCO