(A govt.

of India enterprise)

OPERATION AND MAINTENANCE BUDGETING AT NTPC PLANTS

Summer Internship Report On Operation and maintenance budgeting in NTPC plants

(In partial fulfillment of Master of Business Administration)

With special reference to

Under the supervision of

under the guidance of:

Mr. suresh kumar mehrotra Senior manager finance

Submitted by:

Mr. Ajay kumar rathore

MBA Faculty

Chandan Kumar
MBA 3rd semester IP enroll no. 0671703908

Session: 2008-2010

7HFQLD,QVWLWXWHRI$GYDQFHG6WXGLHV
Madhuban Chowk, Delhi (Approved by AICTE, Ministry of HRD, Govt. of India) Affiliated To Guru Gobind Singh Indraprastha University, Delhi

DECLARATION
I hereby declare that, this project report titled A STUDY ON OPERATION AND MAINTENANCE BUDGET AT NTPC PLANTS, is my own work, prepared by me during my summer training of 8 week dated june1, 2009 to july31, 2009 in the academic year 200810 under the guidance of Mr. Suresh Kumar mehrotra (industry guide) and Mr.Ajay Kumar rathore (faculty guide) in partial fulfillment of the requirement of Master in Business Administration degree to be awarded by the GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY New Delhi (INDIA). I further declare that this project report has not been submitted to any other Institute/University for any degree or diploma.

Date: Place:

CHANDAN KUMAR [IP enroll no: 0671703908] MBA 3rd SEM

ACKNOWLEDGEMENT
Foremost of all, I express my serious indebtedness to Almighty for bestowing with me all favorable circumstances and keeping me in high spirits. The joy, satisfaction and euphoria that come along with successful completion of any work would be incomplete unless we mention the people who made it possible, whose constant guidance and encouragement served as a beam of light and crowed out efforts. This report has been made possible through the direct and indirect co-operation of various persons for whom I wish to express my sincere appreciation and gratitude. The formal piece of acknowledgement may not be sufficient to express my deep gratitude towards who have helped me in successfully completing my training. I am really indebted to my Project guide Mr.suresh Kumar mehrotra (senior financial manager NTPC LTD.) for his active guidance, valuable advice and constant inspiration and support to complete the project work effectively. I would also like to express my deep sense of gratitude to my Faculty Guide Mr. Ajay Kumar rathore (Finance department, Tecnia Institute of Advanced Studies, New Delhi) for his indeed co-operation and providing support during the project. I am really thankful to Mrs. Anju Batra (Project Coordinator, Tecnia Institute of Advanced Studies) for his guidance, valuable advice and constant inspiration and support during the project. It gives me pleasure in thanking Mr.S.N.sinha (HR Manager, NTPC LTD.) for allowing me to undertake this present work. I am grateful to Dr. Ajay Pratap Singh (Tecnia institute of Advanced Studies) for his guidance toward this project work. Last but not the least I am deeply in debt my parents and family member for their constant encouragement and moral support because without their support I would not have been able to complete this project. Chandan Kumar 0671703908 MBA 3rd Semester Tecnia Institute of Advanced Studies

PREFACE

In spite of the theoretical knowledge gained through classroom study, a person is incomplete if not subjected to practical exposure of real corporate world. He may have to face hurdles, which will be difficult to overcome without any first-hand experience of business. A curriculum has been designed by Guru Gobind Singh Indraprastha University, New Delhi of 8 weeks industrial training for MBA students after their 2nd semester. I have done my 8 weeks summer internship in NTPC LTD. noida sector 24 (UP), and worked on the project titled OPERATION AND MAINTENANCE BUDGETING AT NTPC PLANTS The main feature of this project report is that under it a simplified approach is followed to interpret the operation and maintenance budgeting at NTPC plants. Under it all the technical and financial terms related to the operation and maintenance are discussed. To give a practical approach to my project, I have prepared operation and maintenance budget for the NTPC ramagundam station which generation capacity is 2600MW. .

S.No

TITLE
5

PAGE No.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

COMPANY PROFILE INDUSTRY PROFILE INTRODUCTION OBJECTIVE REVIEW OF LITERATURE DEFINATION BUDGETING PROCESS BUDGET PERIOD BUDGET MONITORING SYSTEM CRITERIA OF DECLARING COMMERCIAL OPERATION CURRENT SCENARIO RESEARCH METHODLOGY RAMAGUNDAM STATION BUDGET AND ANALYSIS OF DATA FINDING AND RECOMMENDATION ANNEXURE ABBREVIATIONS BIBLIOGRAPHY

8-16 17-20 21 22 24-42 25-28 29-33 34 35-41 42 43-46 48 49-69 71 72 74 75

TABLE OF CONTENT

CHAPTER 1

RESEARCH PROBLEM AND PURPOSE

COMPANY PROFILE

NTPC LTD. (INDIA)

THE COMPANY

NTPC Limited

Type Founded Headquarters Key people Industry Products Revenue

Public 1975 Delhi, India R S Sharma, Chairman & Managing Director Electricity generation Electricity INR 416.37 billion (2008) or USD 18.15 billion

Net income Employees Website

INR 70.47 billion (2008) or USD 1.89 billion

24,698

http://www.ntpc.co.in

OVERVIEW OF ORGANIZATION

Indias largest power company, NTPC was set up in 1975 to accelerate power development in India. NTPC is emerging as a diversified power major with presence in the entire value chain of the power generation business. Apart from power generation, which is the mainstay of the company, NTPC has already ventured into consultancy, power trading, ash utilization and coal mining. NTPC ranked 317th in the 2009, Forbes Global 2000 ranking of worlds biggest companies.

The total installed capacity of the company is 30, 144 MW (including JVs) with 15 coal based and 7 gas based stations, located across the country. In addition under JVs, 3 stations are coal based & another station uses naphtha/LNG as fuel. By 2017, the power generation portfolio is expected to have a diversified fuel mix with coal based capacity of around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about 2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources (RES). NTPC has adopted a multi-pronged growth strategy which includes capacity addition through green field projects, expansion of existing stations, joint ventures, subsidiaries and takeover of stations. NTPC has been operating its plants at high efficiency levels. Although the company has 18.79% of the total national capacity it contributes 28.60% of total power generation due to its focus on high efficiency. NTPC Limited or National Thermal Power Corporation Ltd is the largest thermal power generating company of India. NTPC was founded in 1975 to give boost to power development in the country as a wholly owned company of the Government of India. Presently, Government of India holds 89.5% equity in the company and the balance 10.5% is held by FIIs, Domestic Banks, Public and others. NTPC is engaged in engineering, construction and operation of power generating plants. It also provides consultancy in the area of power plant constructions and power generation to companies in India and abroad. NTPC was among the first Public Sector Enterprises to enter into a Memorandum of Understanding (MOU) with the Government in 1987-88. Since then, every year, NTPC has been placed under the 'Excellent category' (the best category). In recognition of its excellent performance and tremendous potential NTPC has been given the status of "Navratna" by the GOI.

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VISION OF THE ORGANIZATION

"A world class integrated power major, powering Indias growth, with increasing global presence

MISSION OF THE ORGANIZATION

"Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco friendly technologies and contribute to society"

CORE VALUE
y y y y y y Business Ethics Customer Focus Organizational & professional Pride Mutual Respect and Trust Innovation and Speed Total Quality for Excellence

SUBSIDIARIES OF NTPC
NTPC Electric Supply Company Ltd (NESCL): NESCL is a wholly owned subsidiary of NTPC. It was incorporated in August 2002 with the objective to acquire, establish & operate Electricity Distribution Network in various circles/cities across India. The company provides consultancy in the area of: Turnkey execution, Project monitoring, Quality Assurance and Inspection, and Third Party quality inspection on the behalf of utility.

NTPC Vidyut Vyapar Nigam Ltd. (NVVN): It was formed to cater to and deal with the vast potential of power trading in the country and optimum capacity utilization.

NTPC Hydro Limited (NHL): It was set up in December, 2002 to develop small and medium sized Hydro Electric Power Projects of up to 250 MW capacities. Pipavav Power Development Co. Ltd (PPDCL): A MOU was signed between NTPC, Gujarat Power Corporation limited (GPCL) and Gujarat electricity board (GEB) in 2004 for development of 1000MW thermal power project.

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Particulars

NTPC Electric Supply Co. Limited

NTPC Vidyut Vyapar Nigam Limited

NTPC Hydro Limited

Kanti Bijlee Utpadan Nigam Limited

Bhartiya Rail Bijlee Company Limited

Extent of NTPC Holding (in %)

100

100

100

67.66

74

Table 1: List of subsidiaries

JOINT VENTURES OF NTPC:

NAME OF THE JV COMPANY PROMOTERS EQUITY HOLDING AS ON 31.3.2009 AREA(S) OF OPERATION

Trading of power,
PTC India Limited NTPC = 5.28% NHPC = 5.28% PFC = 5.28% Power Grid Corp = 5.28%

import/export of power and purchase of power from identified private power Projects and selling it to identified SEBs/others.

Utility Power tech Limited (UPL)

NTPC = 50% Reliance Infrastructure ltd.=50%

To take up assignments of construction, erection and supervision in power sector and other sectors in India and abroad.

NTPC-SAIL Power Company Pvt. Ltd.

NTPC 50% SAIL 50%

To own and operate a capacity of 814 MW as captive power plants for SAILs steel manufacturing facilities located at Durgapur,

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Rourkela and Bhilai.

NTPC-Alstom Power Services Private Ltd.

NTPC 50% Alstom Power Generation 50%

To take up Renovation & Modernization assignments of power plants both in India and abroad.

Ratnagiri Gas and power Pvt. Limited

NTPC 28.33 %

To take over and operate gas based Dabhol Power Project along with LNG terminal.

Table 2: List of JVS

CORPORATE PLAN
Recognizing the importance of a long term Corporate Plan, NTPC initiated this process very early in its evolutionary cycle.

The First Corporate Plan (1985 2000) With a view to chart the growth path for NTPC, a 15-year Corporate Plan was prepared in 1983. This plan covered the time period 1985-2000. The Corporate Plan effectively served as a guiding document and NTPC achieved great success in project implementation, generation and financing rapid growth as envisaged in the Corporate Plan till the late eighties. However, for a short while, during the period 1989-92 .NTPCs growth plans were affected adversely, mainly on account of the poor financial health of SEBs resulting in non-recovery of full dues. The situation was exacerbated by withdrawal of net budgetary support by the Government in year 1989. During this period, there were significant policy changes that resulted in an increased focus on attracting private sector participation in electricity generation.

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Looking Ahead: Corporate Plan (1997 2012) Consequent to the initiation of the economic reforms and the liberalization process by Government of India in 1991, a new power policy was announced in October 1991. This policy was designed to alter the investment pattern in the power sector in the country. Private sector participation was actively encouraged in various sectors of the industry. New factors such as potential competition from

Independent Power Producers (IPPs), stringent environmental regulations, greater uncertainties in fuel linkages, funds constraints, restructuring of SEBs and the pace of reforms in the power sector necessitated a review of the corporate road map for NTPC. Hence a revised Corporate Plan (Looking Ahead) for the period 1997-2012 was drawn up. This document became the guiding document and directional plan for NTPC. NTPC achieved progress on many parameters outlined in Looking Ahead. These included continuous improvements in operating performance, shortening the duration for project execution, initiatives on people related issues, increased customer focus, exploring lower cost fuel options etc.

Corporate Plan 2012 2017 The execution of the strategy outlined in the Corporate Plan 1997-2012, Looking Ahead, was predicated on assumptions pertaining to some key improvements/ enablers in the domestic business environment over the period 1997 2012. Many of these enablers did not materialize during the 9th plan. The above period also saw a significant change in the business environment. This included setting up of independent regulatory agencies at the central and state levels, and unbundling of state electricity boards in many states. Some of these changes had a direct impact on NTPC. Even though, the last Corporate Plan was prepared for a period of fifteen years, the plan had a built in feature of mid course correction through periodic review and rolling. Accordingly, at the end of first rolling period of five years, the plan has been reviewed with respect to original targets and goals. Keeping in view the fast changing business environment, the Corporate Plan 2002 2017 has also been prepared in similar lines with a provision of review and rolling at the end of five years. In the meanwhile, with the objective of positioning NTPC as a world-class power utility, a comprehensive organization transformation exercise named Project Disha has been launched. The change management program emerging from the study has also been suitably incorporated in this Corporate Plan.

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GROWTH:
 Installed capacity crosses 30,000 MW mark. (30,144 MW)  1000 MW commissioned during the year.  Commercial capacity addition of 2,000 MW, highest ever in last 14 years.  Contributed 31.85% of the generation increase in the country  Records highest ever generation of 206.9 billion units, an increase of 3.03% YOY.  Contributed 28.60% of the total electricity generated in the country during 2008-09 with 8.79% share of the total installed capacity of the nation.  Commendable performance by NTPC coal based with 23,895 MW capacity comprising 79 units with average fleet age of 18 years.  All time high PLF of 100.03% in March, 2009.  All time high Availability Factor of 92.47% in 2008-09 against 92.12% in 2007-08.  Plant Load Factor (PLF) of 91.14% in 2008-09 (National PLF 77.19%).

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NTPC POWER STATION

1. 2. POWER PLANT 1.Singrauli 2.Korba 1. 2. 3. 4. 5. 6. 7. 8. 9. 3.Farakka 4.Vindhyachal 5.Rihand 6.Kahalgaon 7.NCTPP Dadri 8.Talcher Kaniha 9.Unchahar 10.Talcher Angul STATE Uttar Pradesh Chattishgarh West Bengal Madhya Pradesh Uttar Pradesh Bihar Uttar Pradesh Orissa Utter Pradesh Orissa COMMISSION CAPACITY (MW) 2,000 2,100 1,600 3,260 2,000 1340 840 3000 1050 460 1,000 440 705 500 2600

11.Simhadri (Visakhapatnam) Andhra Pradesh Uttar Pradesh Delhi Chhattisgarh Andhra Pradesh

10. 12.Tanda 11. 13.Badarpur 12. 14.Sipat-II 13. 15.Ramagundam

Table 3 NTPC POWER STATION

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POWER SECTOR IN INDIA

The electricity sector in India is predominantly controlled by Government of India's public sector undertakings (PSUs). Major PSUs involved in the generation of electricity include National Thermal Power Corporation (NTPC), National Hydroelectric Power Corporation (NHPC) and Nuclear Power Corporation of India (NPCI). Besides PSUs, several state-level corporations, such as Maharashtra State Electricity Board (MSEB), are also involved in the generation of electricity. The intra state distribution is managed by the State Electricity Boards (SEBs) and private companies. Powergrid Corporation of India is responsible for the interstate transmission of electricity and the development of national grid. India is world's 6th largest energy consumer, accounting for 3.4% of global energy consumption. Due to India's economic rise, the demand for energy has grown at an average of 3.6% per annum over the past 30 years. More than 50% of India's commercial energy demand is met through the country's vast coal reserves. About 76% of the electricity consumed in India is generated by thermal power plants, 21% by hydroelectric power plants and 4% by nuclear power plants. The country has also invested heavily in recent years on renewable sources of energy such as wind energy. In July 2009, India unveiled a $19 billion plan to produce 20 GW of solar power by 2020. In March 2009, the installed power generation capacity of India stood at 147,000 MW while the per capita power consumption stood at 612 Kwh. The country's annual power production increased from about 190 billion kWh in 1986 to more than 680 billion kWh in 2006. The Indian government has set an ambitious target to add approximately 78,000 MW of installed generation capacity by 2012. The total demand for electricity in India is expected to cross 950,000 MW by 2030. 17

Electricity losses in India during transmission and distribution are extremely high and vary between 30 to 45%. In 2004-05, electricity demand outstripped supply by 7-11%. Due to shortage of electricity, power cuts are common throughout India and this has adversely effected the country's economic growth. Theft of electricity, common in most parts of urban India, amounts to 1.5% of India's GDP. Despite an ambitious rural electrification program, some 400 million Indians still have no access to electricity. While 80 percent of Indian villages have at least an electricity line, just 44 percent of rural households have access to electricity. According to a sample of 97,882 households in 2002, electricity was the main source of lighting for 53% of rural households compared to 36% in 1993. Multi Commodity Exchange has sought permission to offer electricity future markets. Strategies Power Generation Strategy with focus on low cost generation, optimization of capacity utilization, controlling the input cost, optimization of fuel mix, Technology upgradation and utilization of Non Conventional energy sources Transmission Strategy with focus on development of National Grid including Interstate connections, Technology upgradation & optimization of transmission cost. Distribution strategy to achieve Distribution Reforms with focus on System upgradation, loss reduction, theft control, consumer service orientation, quality power supply commercialization, Decentralized distributed generation and supply for rural areas. Regulation Strategy aimed at protecting Consumer interests and making the sector commercially viable. Financing Strategy to generate resources for required growth of the power sector. Conservation Strategy to optimize the utilization of electricity with focus on Demand Side management, Load management and Technology upgradation to provide energy efficient equipment / gadgets. Communication Strategy for political consensus with media support to enhance the genera; public awareness.

Energy policy in India The energy policy of India is characterized by tradeoffs between four major drivers: Rapidly growing economy, with a need for dependable and reliable supply of electricity, gas, and petroleum products;

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Increasing household incomes, with a need for affordable and adequate supply of electricity, and clean cooking fuels; Limited domestic reserves of fossil fuels, and the need to import a vast fraction of the gas, crude oil, and petroleum product requirements, and recently the need to import coal as well; and Indoor, urban and regional environmental impacts, necessitating the need for the adoption of cleaner fuels and cleaner technologies. The major reasons for inadequate, erratic and unreliable power supply are:         Inadequate power generation capacity; Lack of optimum utilization of the existing generation capacity; Inadequate inter-regional transmission links; Inadequate and ageing sub-transmission & distribution network leading to power cuts and local failures/faults; Large scale theft and skewed tariff structure; Slow pace of rural electrification; Inefficient use of electricity by the end consumer. Lack of grid discipline

Strengths and opportunities in the sector

        

Abundant coal reserves (enough to last 200 years) Vast hydroelectric potential (150,000 MW). Large pool of highly skilled technical personnel. Impressive power development in absolute terms (comparable in size to those of Germany and UK). Expertise in integrated and coordinated planning. Emergence of strong and globally comparable central utilities Wide outreach of state utilities. Enabling framework for private investors. Well laid out mechanisms for dispute resolution.

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Political consensus on reforms. Potentially, one of the largest power markets in the world. Objectives

    

To provide 'Power on Demand by 2012'. To make the sector commercially sound and self sustaining. To provide reliable and quality power at an economic price. To achieve environmentally sustainable power development. To promote general awareness to achieve consensus on the need for reforms.

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INTRODUCTION
BUDGETING: Budgeting is description of a financial plan. It is a list of estimates of revenues to and expenditures by an agent for a stated period of time. Normally a budget describes a period in the future not the past. OPERATION AND MAINTENANCE BUDGET: Operation and maintenance budgeting is description of a financial plan related to a power station that are in operation phase. It essentially lays down the physical and financial operating plan for the budget period and lays down the standard and yardstick for input and the output associated with the various activities. It is also an important tool for managerial appraisal and control. It also provides an estimate of internal generation of funds from operations, which would be available for financing the capital expenditure, meeting the loan repayment obligations, etc.

Main Objectives of operation and maintenance budget:

y y y y y

Ensure high plant availability Achieving the target PLF Keep up the designed plant efficiency with the selected fuel mix Accident free plant operation Operation with awareness of environmental impact Specific budgets in physical and financial terms are laid down for all activities and the respective budget / responsibility / cost centers are held accountable for them Co-ordination in planning so that all the inputs necessary to achieve the physical targets are available in time There is a basis of control over operational expenses and working capital and to inculcate greater cost consciousness in the organization A basis for forecasting profitability and planning for cash/ funds is provided Standards and yard sticks are laid down for measuring performance in physical and financial terms, ascertain variances, and identify responsibilities for under-performance, to analyze Contributory reasons thereof and determining corrective actions.

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OBJECTIVE OF THE STUDY

The basic objective of my study is to know the budgeting system for the stations that are in the operation phase in NTPC and to make the OPERATION AND MAINTENANCE BUDGET for the NTPC ramagundam station which is currently generating 2600MW.

Sub Objective y To know the budget preparation process. y y y To know which are the specific Budgeting format for NTPC stations To known Reporting requirements to monitor the budget To know how a UNIT is declare commercial

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CHAPTER-II REVIEW OF LITERATURE

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1. 00 OVERALL FRAME WORK OF BUDGETING SYSTEM Key factors

1.01 The factors determining the performance of the station include mainly the generation (Volume and revenue), O&M expenses and working capital management. 1.02 The key factor for the budget estimates shall be the generation level. The generation level should be fixed keeping in view the following: Generating capacity Availability of units Machine condition and overhauling of units Fuel availability Thresh-hold level of generation/ availability to recover the full fixed cost Maximization of incentives or and minimization of disincentives The following aspects should also be kept in mind while finalizing the generation targets. Under the ABT regime, demonstration of power supply in line with the declared availability assumes importance to avoid any penalties/Unscheduled interchange charges (UI) Sales realization level. The norms as per the Tariff Order, Norms as per design, past/ actual performance and perspective plan should form the basis for fixing the budget targets.

Budget Centers
1.03 Each station is a budget centre and hence each station should prepare the budget estimates. The station level budgets are to be consolidated at the region level (RHQ) and then at the Corporate Centre (CC) level to arrive at the company budget. The RHQ and CC would also be budget centers for the activities controlled by them and the expenditure incurred at the RHQ and CC level.

Budget period
1.04The budget is to be prepared on an annual basis for a financial year. The process of preparation of the budget shall start in the month of January and the final approved budget for the next financial year should be in place by the 31st of March. The budget estimates are to be prepared in respect of the following: Revised estimates for the next financial year Budget estimates for the year thereafter 1.05The annual budgets should also be broken into monthly targets. In addition, the budget Centers should project the balance period performance on a quarterly basis. This process shall enable review of

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the actual performance during the year and to take corrective/ remedial measures to achieve the budgets. This exercise is in terms of control only. 1.06All comparisons and variance analysis should be with respect to the original budgeted figures only (i.e. not with respect to the performance projected for the balance period).

Budget approval
1.07The budget estimates are to be reviewed and recommended by the budget committee at the Station and at RHQ and are to be approved at CC level. 1.08 The stations should prepare and submit the initial proposals to RHQ. At RHQ, the budget estimates should be consolidated for the region and then submitted to CC. 1.09 The approved initial proposals should form the basis for the final budget estimates. The budget centers should submit a copy of the final budget to RHQ and CC. The monthly phasing of the final budget should be compiled on the basis of the approved initial proposal.

2.00 DEFINITIONS
2.01 This section provides the definition of the terminology used in this project. The terminology used is broadly categorized as follows:

Technical Financial
TECHNICAL DEFINITIONS 2.02 Installed capacity is the design capacity of generating units in mega watts (MW) available for generating power. 2.03 Commissioning means the first synchronization of the boiler with the turbine. 2.04 Commercial generation is the date from which a unit is considered as stabilized and capable of generating energy on commercial basis. The start of revenue operations is reckoned from this date. 2.05 Outage hours is the period for which the unit is not available for generation either due to planned shut down for maintenance /overhauling or due to forced shut down on account of tripping etc. 2.06 Availability Factor (AF) is a measure of the actual period the unit has been in operation during the (reference) period. It is represented as a percentage and is computed as under: AF = Operating hours over the reference period * 100 Total hours in the reference period (Including outage hours) 25

2.07 Loading factor or Plant load factor (PLF) is the term used to indicate the average generation of a unit/station in relation to maximum capability during the reference period. The reference period can be a day or a month or a year. It is represented as a percentage and worked out as under: PLF = Gross generation over the reference period *100 Max. Generating capacity* total hrs during The reference period (including outage hours)

2.08 Gross generation or gross output is the total electrical energy generated at the generator in one unit of time. It is measured in kilowatt-hours (Kwh) and one Kwh is called one unit of energy. Normally generation is measured in million units (M Us) 2.09 Auxiliary power consumption is the consumption of power in unit and station auxiliaries and is represented as a percentage of gross generation. It includes transformer losses also but does not include consumption of power by utilities i.e. township, construction, power, etc 2.10 Consumption by utilities means consumption of power by utilities like township, construction
power, etc.

2.11 Energy sent Out (ESO) or energy export or net export is the electrical energy sent out at the bus bar for transmitting to the customers. 2.12 Unit means the Steam Generator, Turbine Generator and their auxiliaries. In relation to combined cycle generating station means the Combustion Turbine Generator and Auxiliaries. 2.13 Scheduled Energy / Scheduled Generation (SG): SG under ABT means the scheduled energy to be sent out Ex-Bus from the generating station. 2.14 Actual Energy / Actual Generation (AG): AG under ABT means the actual energy actually sent out Ex-Bus from the generating station. 2.15 Unscheduled Interchange (UI): UI under ABT mean the variation in AG (Actual Generation) and SG (Scheduled generation) . 2.16 Calories input (Kcal) is the total input of heat energy from coal or oil or both for heating Water/steam in the boiler in a given period in the case of thermal stations. In case of gas Stations, the calories input is the total input of the heat energy from gas and liquid fuels. It is worked out by multiplying calorific value of inputs by quantity consumed in a period. 2.17 Gross calorific value (GCV) is the heat content per unit of inputs like coal, oil, gas, etc and is represented as Kcal/Kg, ML . 2.18 Heat rate is the heat in Kcal required to generate one Kwh of electrical energy. It includes the following in case of coal stations: (i) Coal consumed in kg/ Kwh is converted into kcal by multiplying with GCV of coal (ii) Heat due to oil consumption in Kcal. 26

2.19 In the case of gas stations, the heat rate is obtained by converting the gas consumed in cm / Kwh into kcal by multiplying with the calorific value of gas and the liquid fuel in K l into Kcal by multiplying with the calorific value of liquid fuel.

FINANCIAL DEFINITIONS
2.20 Capacity variance is the impact on profit/loss of a profit centre due to utilization of a capacity level different from budgeted capacity. 2.21 Cost centre is the specific constituent responsibility centre of a profit centre. 2.22 Cost of gross generation means the total (variable and fixed) cost starting from the first Stage of generating process till the point the power is ready for transmission. 2.23 Cost of sales is the total cost of energy sent out. In other words, it is the total cost adjusted for the cost of auxiliary consumption. 2.24 Expense variance is the difference between budgeted and actual expenses. 2.25 Fixed cost refers to any cost, which does not change with the change in the level of activities Up to a specified capacity. 2.26 Marginal contribution is the difference between fuel recovery as per tariff and actual fuel expenditure. 2.27 Price variance is the difference in the budgeted and actual price attributable to change in the Price of inputs. 2.28 Sales Revenue the sales revenue will be the sum total of the following: (I) Revenue from sale of energy as per tariff (ii) Revenue in the form of electricity duty which will be obtained by multiplying energy sent out and per unit rate of electricity duty. (iii) Revenue from own consumption which will be obtained by multiplying own Consumption and per unit cost of net generation 2.29 Tariff variance is the difference in budgeted and actual profit due to increase/decrease in the Tariff rate. 2.30 Usage variance is the difference in the budgeted and actual material cost due to consumption of materials. 2.31 Variable cost is the cost that changes in direct proportion to the change in the level of activity.

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2.32 The Repair and Maintenance expenses are classified based on nature of activity as defined below: Non discretionary activity 1. Overhaul The maintenance activities carried out during the periodic overhaul program. 2. Breakdown maintenance The maintenance activities which are carried out after a system or equipment has failed 3. Preventive maintenance The maintenance activities which are carried out based on the condition of the equipment and failure of the same may lead to process / equipment /safety failure, such as: - bearing replacement based on condition monitoring data - pump reconditioning due to deterioration in performance - lube oil change based on condition - Plant surveys / inspection initiated by performance problem or safety recommendation 4. Routine Maintenance The maintenance activities which are based on a regular time Frame (say calendar / time based) and are not condition based, such as: - Safety system checks - lube oil level checks - Plant inspection at defined intervals - House keeping Discretionary These are the activities that are planned for the financial year but may or may not be carried out, depending upon changes in the business priority during the period. 5. Reliability One time planned maintenance / operational improvements, controlled by the budget holders, leading to direct improvement of system or operational performance. It must be borne in mind that only those expenses shall be booked under this head which are incurred for increasing the reliability of the system and are discretionary. For example, expense on replacing a motor / switch / bearing with a new technology motor /switch / bearing, which is a technological advancement over the previous one and which requires less servicing / maintenance. 6. Exceptional One time budget spends in the financial year, which are planned for a range of activities that are not directly related to the short term performance of the process plant, such as:

- New security system - Road repairs - Railway siding

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3.00 BUDGETING PROCESS

3.01 This section provides the process for budget formulation at the Station and review at RHQ and finalization at CC.

BUDGETING AT THE STATION LEVEL

3.02 The stations are responsible for providing the following information: Operating parameters Fuel expenditure O&M expenditure i.e. employees, repairs & maintenance and overheads Depreciation Working capital (other than debtors) Miscellaneous income Other Finance charges (excluding rebates) 3.03 The following aspects are not controlled at the station level and therefore are not required to be budgeted by the station. However, the station is to incorporate the following information provided by RHQ/CC: Interest budget The details of loans contracted, repayment schedule of outstanding loans, applicable rates of interest, etc are controlled at Corporate Centre and hence Corporate Centre should workout the interest cost for the year and allocate the same to the stations. These details should be communicated to the site along with the budget circular. Debtors budget The budget in respect of debtors and rebates based on the billing and collection pattern should be prepared by RHQ. The details should be communicated to the stations for inclusion in the initial budget proposal. For this purpose, the station should first communicate the generation targets to RHQ. 3.04 In overall terms the budget at the station level would consist of the following: Balance Sheet Profit and loss Account before taxes Cash Flow Statement Responsibility for budget preparation 3.05 The primary entity for the budget preparation at the station will be the individual departments/ cost centers. Each department should prepare the budget for the activities that they are responsible and accountable for including related areas of work. For example: Mechanical maintenance department should prepare the budget for repairs and maintenance for the various cost centers/ sub-cost centers (such as Boiler, Ash Handling Plant, Coal Handling Plant, etc.)

29

 HR department should prepare the employee related expenditure budgets (relating to salaries, LTC, medical, travel, training, etc), general administration expenditure (hire charges, security expenses, stationary, electricity, postage, guest house expenses, etc) Town Administration department to prepare budgets for the relevant sub cost centers like horticulture, maintenance of residential quarters, roads, etc 3.06 The responsibility for co-urinating the entire budget exercise at the stations is as follows: Maintenance Planning Section (MTP) and Operation and Efficiency Section (O&E) These sections are responsible for the co-ordination of the budget process of all O&M sections. They are to prepare the Operating parameters budget (physical budget) and also to examine / review the budget proposals made by the O&M sections. F&A Department The F&A department is responsible for co-urinating the entire budget preparation exercise (including the budget preparation exercise by the non-O&M departments). Its responsibilities include: Distribution of the budget circular to initiate the budgeting process Co-ordination with the O&E and MTP sections with respect to preparation of the budgets for the O&M departments Interacting with the non-O&M departments for setting up the targets Compilation of the budgets prepared by the various departments and presentation to the various committees for deliberation and approval Co-ordinate, compile and submit final budget along with monthly phasing Communication of the final budget to the various departments Budget preparation process 3.07 The budget proposal is to be formulated in two stages i.e. Initial Budget proposal Final Budget (as per the approved initial proposal) 3.08 The initial budget proposal should contain the following along with necessary justifications and explanations:

Main documents Summary of budget parameters Budgeted Balance Sheet Budgeted profit and loss account Budgeted cash flow statement cash from operations Purchase Budget Physical targets for the year O&M expenses Budget R&R/ Energy conservation and Ash Utilization Budget

30

Supporting documents Calendar of planned outages Cost centre wise details of O&M expenses (as applicable) 3.09 The initial budget proposal should be prepared for the yearly targets the monthly phasing of the targets is to be provided in the final budget. The budgets should be revised by the stations based on the approved initial budget proposal. A copy of the finalized budget is to be submitted to the respective RHQ and to CC. Budget Review Process 3.10 The budget for the station should be reviewed and finalized by the station (O&M) budget committee consisting of: General Manager (Station) O&M In-charge All Head of departments 3.11 The station budget committee has the following functions: To review the overall physical targets for budget preparation To review the budget proposals of the individual departments To decide priority of allocation of resources for the individual cost centers 3.12 The budget proposal as finalized by the Budget Committee should be forwarded through RHQ to CC for approvals.

BUDGETING AT THE RHQ LEVEL

3.13 The RHQ s are responsible for budgeting for the expenses of RHQ and the other offices under their control. The budget estimates should be prepared in respect of the following: Employees cost Administration and general expenditure of RHQ Debtors and Rebates 3.14 The debtors and rebate budget estimates should be communicated to the respective stations for inclusion in the initial budget proposal. 3.15 The RHQ should review the station-wise initial budget proposals and consolidate the budget estimates for the region as a whole i.e. the Regional Budget. 3.16 The Regional budget should be reviewed by the Executive Director (ED), RHQ and recommend the same for approval to CC. 3.17 The initial budget proposal (station wise) is to be reviewed with respect to the following key aspects:

31

 Budgeted physical parameters Budgeted O&M cost as compared to norms Budgeted return on capital employed as compared to norms 3.18 The budgeting activities at RHQ are to be co-ordinate by the F&A department, RHQ. 3.19 The RHQ should forward the following to CC: Initial Budget proposal Station wise Consolidated Regional budget 3.20 On approval of the budget by CC, the RHQ should communicate the approved initial budget proposal to the respective stations to prepare the final budget estimates.

BUDGETING AT THE CC LEVEL

3.21 The budgeting exercise at CC is to be co-ordinate by the F&A department Commercial Section. Budgeting process at CC 3.22 CC is responsible for preparing the budget estimates in respect of the following: Employees cost of CC Administration and general expenditure of CC Interest on working capital Other income, such as income on investments, etc Consultancy budget 3.23 The above budgets should be prepared simultaneously with the preparation of initial proposals by the stations. 3.24 However, the budget for interest on long- term debts and the allocation of the same should be carried out in the beginning of the financial year and communicated to the stations along with the budget circular. 3.25 The budget estimate for working capital should be based on the working capital as per the approved initial budget proposal and the same should be communicated to the stations for the necessary adjustment in the final proposal. Review of the initial budget proposals 3.26 On receipt of the initial budget proposals of the stations as recommended by the Regional ED, the F&A department at CC should compile the following for the company as a whole:

32

 Balance Sheet Profit and loss statement Cash Flow Statement 3.27 The initial budget proposal of the stations along with the Balance Sheet, Profit and loss and cash flow statement for the company should be circulated to the following departments for their review and comments thereon: Corporate Planning Corporate Materials Management Corporate Operation Services (OS) Corporate Commercial Corporate Engineering Corporate HR 3.28 The comments of each of the above departments should be consolidated by the F&a Dept. Commercial Section and presented to the Budget Committee, CC for their consideration. 3.29 The initial budget proposal as approved by the Corporate Budget Committee should be communicated to the RHQ. Budget Committee 3.30 The budget committee at CC to have the following members: Chairman and Managing Director All functional directors/ executive directors Final Budget 3.31 The final budget (prepared on the basis of the approved initial budget proposal) giving the detailed budget estimates are to be received from the respective stations through the RHQ.This final budget to form the basis for monitoring the performance of the station.

33

4.00 BUDGET PERIOD AND TIME SCHEDULE

4.01 The budget should be prepared for the financial year. The process of preparation of the Budget to start in the month of January and the final approved budget for the next financial year should be in place by the 31st of March. 4.02 The budget estimates should be prepared in respect of the following: Revised estimates for the next financial year Budget estimates for the year thereafter 4.03 The time frame to be followed for the budgeting process is as under: Activity Time frame Station Issue of Budget Circular Commencement of the budget exercise Formulation of initial budget proposal Review of initial budget proposal by the Station Budget Committee and submission to RHQ Compilation of Regional Budget Review of regional budget by ED, RHQ and submission to CC Compilation of budgeted Balance sheet, Profit and Loss Account and Cash Flow Statement Circulation of initial budget proposal and budgeted Balance sheet, Profit and Loss Account and Cash Flow Statement to the various departments Consolidation of comments of various departments Review of the initial budget proposal and discussions with the stations Presentation of budget to Corporate Budget Committee and approval thereon Intimation of approved budget to RHQ Preparation of Final Budget and forwarding to RHQ and CC By 30th April 1st week of January By 1st week of February By 10th of February By 15th of February By 25th of February By last day of February RHQ CC 1st week of January

By 1st week of March By 3rd week of March By the 25th of March By 31st March

Table 4 BUDGETING PERIOD AND TIME SCHEDULE

34

5.00 BUDGET MONITORING SYSTEM

5.01 The expenditure against budgets should be monitored in the following manner: Monitoring prior to incurring an expenditure (pre-control) Monitoring after the expenditure has been incurred, based on the actual performance (post-control) Pre-control 5.02 Pre-control should be carried out in the following manner: Review of proposals by the departmental officials (as per the delegation of powers) prior to sanctioning any expenditure w. R. T. availability of budget Review of proposals by the Finance Concurrence Department Post-control 5.03 The post control exercise would consist of review of the periodic reports on the actual performance against budgets. The monthly/quarterly performance should be reviewed at the following levels: Monthly Operations Review meetings at stations to review the physical targets against the budget estimates Monthly Budget Review meetings to review the actual expenditure and working capital as against the budget estimates for the period Review by the ED, Region review of the physical and financial performance Review at CC - review of the physical and financial performance 5.04 The periodic reports should provide the following : Monthly reports Actual vs. budget estimates and the standards for the month Actual vs. budget till date and standards Quarterly reports Expected performance for the balance period (at quarter-end) 5.05 The respective departments should indicate the reasons for any variances in the physical and financial performance. The actions required to achieve the budgets or to control the variances should be discussed and agreed in the respective review meetings. The minutes of the review meetings should be documented and enclosed with the MIS reports to be submitted to CC.

35

DESCRIPTION OF BUDGETS 5.06 This section provides a description of the various budgets and the basis for preparing the budgets. BUDGET ESTIMATES STATIONS GENERATION BUDGET 5.07 The key factor to the budgeting exercise is the generation budget. The generating stations are expected to operate at the rated capacity after the stabilization period subject to technical constraints and limitations. Considering the tariff structure of Availability Based Tariff (ABT), the generation targets should be fixed in such a manner that the disincentives are avoided or minimized. 5.08The generation should be budgeted unit-wise in terms of availability, gross generation, auxiliary and utility consumption and net generation (as described below). Gross generation 5.09 The gross generation would depend upon the generating capacity, plant availability factor (PAF) and the loading factor. 5.10The PAF i.e. the total number of hours that the unit is available for generation during the budget period should be budgeted keeping in view the following: Planned outage hours based on the annual maintenance schedule Forced outage hours for breakdown maintenance Closure due to non-availability of fuel Net generation 5.11The net generation should be determined after deducting the auxiliary consumption from the gross generation. 5.12The Energy Sent out (ESO) should be determined after deducting the consumption by utilities (like township) from the net generation. Auxiliary consumption and Consumption by Utilities 5.13The consumption by each of the individual unit auxiliaries, station auxiliaries as well as the transformer losses should be estimated based on the design specifications. Consumption by the utilities (township, etc) should be estimated by the respective departments. The common consumption by the station auxiliaries and utilities should be pro-rated in the ratio of the generation of the units to ascertain the unit wise net generation and ESO. COST BUDGETS Fuel Budget

36

5.14Fuel should be budgeted for considering the following: Heat Rate Specific oil consumption GCV of oil Quantity of oil Heat input from coal (i.e. Heat rate heat input from oil) GCV of coal Quantity of coal Transit and handling losses of coal 5.15The above estimates should be prepared after considering the following: Machine condition Budgeted operating plan Fuel consumption Quantity In order to budget for the fuel consumption for the station in quantity terms, the first step should be to fix the budgeted heat rate for the units and then consolidated for the station. Fuel consumption cost The fuel cost should be worked out for the budgeted quantity based on the current or contractual prices. Other consumables budget Water The consumption of various types of water should be estimated by the O&E department based on the design norms and the budgeted generation. The consumption should be valued at the current prices including pollution cuss (as applicable). The estimate for water should not include the cost of treatment, if any (these are to budgeted under the budget head of Chemicals consumption) Chemicals consumption The chemicals are required for treatment of water. The consumption would thus be based on the budget estimates of water consumption (as determined above). The Chemistry Department shall provide the chemical consumption budget. The valuation of the chemicals should be based on the current or contractual prices. Employee cost budget The employee budget should be prepared department wise. The budget should indicate the total manpower for each category (viz. Executives, supervisor and workmen) and the manpower cost . Manpower nos The manpower numbers should be considered based on the existing manpower and also the likely changes (additions/deletions) during the period.

37

Manpower cost The manpower cost should be budgeted under the following heads: Salaries and wages (including all allowances) Overtime Contribution to PF Welfare expenses Medical LTC Canteen Grants to welfare organizations Other expenses Salaries and wages should be considered at the existing levels after adjusting for likely grade-wise additions/deletions and a provision for promotions and increments. Repairs and maintenance The Repairs and Maintenance (R&M) budget should deal with the total outlay for the budget period covering material cost, payment to contractors and other costs. The respective O&M departments should prepare the R&M budget for each cost centre and sub cost centre for the following activities: Non discretionary 1. Overhaul 2. Breakdown 3. Preventive 4. Routine Discretionary 5. Reliability 6. Exceptional 1.23 The R&M cost should be budgeted under the following heads: I. Materials Spares Consumables Lubricants Tools and plants II. Jobs The R&M budget should be accumulated separately for the following category of fixed assets: Plant and machinery Buildings and other Assets Township

38

The budget estimates for the R&M expenditure should be based on the planned maintenance schedules. The proposal should also indicate the one-time / non-recurring expenses during the last year. Station and general overheads budget The F&A department should prepare the administrative expense budget in consultation with the P&A department, Auto base, Materials management department, etc. The budget estimates should be made based on the requirements, the work orders issued/ continuing and the estimates provided by the various cost centers. The share in CC expenses should be provisionally considered based on the previous year in the initial budget proposal. For the final budget an adjustment should be made for the final expenses as communicated by CC. Depreciation Depreciation should be calculated based on the capitalized values of the assets and the prescribed rates of depreciation. Depreciation should be calculated for the major groups of fixed assets as per the fixed asset schedule. Interest on loans Interest on loans should be included in the budget as communicated by CC. Working capital interest The budget estimates for interest on working capital should be included in the initial budget proposal based on the previous years figures. On receipt of the final figures from CC the necessary adjustments should be made in the final budget. REVENUE BUDGETS The sales revenue should be based on the ESO and the applicable tariff. In case of a station commissioned during the year the tariff rate to be adopted should be obtained from the Commercial Department - CC. No budget estimates are required to be made in respect of charges for Unscheduled Interchanges (UI). Electricity duty (ED) Electricity duty on auxiliary consumption, township and other consumption is to be estimated at the prevailing rates and on items as applicable under the relevant State Acts. However, for billing to S E Bs the ED on auxiliary consumption is only to be considered. ED on township and others is to be absorbed by the company. Other income Miscellaneous income like arising from scrap sales, tender fees, sale of ash bricks, etc. should be assessed and included in the budget estimates.

39

Interest income from loans given to employees should be based on the actual loans outstanding at the beginning of the year, likely repayments during the year, estimates of further disbursements and the applicable rates of interest. WORKING CAPITAL BUDGET Purchase Budget The Purchase budget for the year should be prepared based on the total requirement for materials as budgeted in the Maintenance Budget. The responsibility for preparing this budget would lie with the MTP and the Purchase departments. The following factors should be considered while framing the purchase budget: The requirement for materials as per the maintenance budget The stock in hand, minimum safety stock The lead time for purchases Current market or contractual rates CASH BUDGET Based on the above budgets, the F&A department should prepare a cash budget for the station as a whole specifying the source wise cash inflows and outflows. The Cash budget should also indicate the capital items, loans and advances that are to be financed from O&M budget. BUDGETED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET The F&A department should prepare the budgeted Balance sheet considering the following: Profit and Loss account Working capital budget Capital addition Changes in CWIP and construction stores MBOA budget Employee Loans and advances The additions to CWIP should be as per the Construction budget. II. BUDGET ESTIMATES RHQ RHQs EXPENDITURE BUDGET Employees budget The employees budget should be prepared for all the categories of manpower covered under the RHQ offices and other offices covered by it (the basis as outlined for the station budget estimates should be adopted as applicable) Administration and general expenditure budget The F&A department should prepare the budget estimates for the general administration expenses based on the budgeted level of activities for the year. (the procedure outlined for the budget estimates preparation by the station should be adopted).

40

SUNDRY DEBTORS AND REBATES Based on the revenue budget - for energy sent out, the sundry debtors budget should be prepared. The budget estimates should take into account the sales level, arrangement for receivables, the expected collection level, etc. CONSOLIDATION OF BUDGETS The RHQ should consolidate the budget of the stations of the region. BUDGET ESTIMATES CC CCs EXPENDITURE BUDGET The budget estimates for employees cost and administration and general overheads should be prepared on the basis as outlined for the stations (as applicable) INTEREST COST The interest cost to be allocated to the station should be worked out by the Budget Section, CC based on the loan agreements (existing/ scheduled to be entered into during the year) and the loans allocated to the station. The interest should be allocated to the stations. ALLOCATION OF CC EXPENSES The budget estimates for the general and administration expenses of CC should be consolidated by the Book Section, CC and an allocation statement of the same should also be prepared and intimated to the stations by CC Commercial Finance Section. Based on the above budget estimates, the same should be included in the Budgeted Profit and Loss account of the Station in the final budget . OTHER INCOME BUDGET Budget estimates should be prepared for other income i.e. income from investments, interest income, income from consultancy wing, income from JVs, etc. The budget estimates should be prepared by the respective departments at CC (income from investments/ interest income by the Treasury/ Investment group, income from JVs by the JV cell, consultancy income by the Consultancy wing, income from management contracts by Finance Commercial, etc) and should be consolidated by the Book Section, CC. The income budget should be retained in the CC budget i.e. it should not be allocated to the station

41

Criteria for declaring commercial operation (a) All main equipment and auxiliary systems including fuel oil plant, coal handling plant, water treatment plant and ash disposal system, MGR has been commissioned to give adequate capacity to operate the unit. (b) All safety measures including segregating units in operation from units in construction and fire protection system have been put into service. (c) All permanent electrical supply systems including emergency supplies and instrumentation, control and protection systems for operating the unit have been put into service (d) Trial operation of the unit has been performed with the contractor and the trial operation report has been jointly prepared with the contractor and signed without absolving the contractor of his obligations under the contract. Trial operation of the unit shall be considered successful if a unit has operated continuously for 14 days out of which at least 72 hours should be a full load. (e) The unit has been in operation for a period at least 1000 hrs giving generation not less than2500 kWh/KW/ year and shall cover the whole range of operation including full load for a minimum period of 72 hours. (f) In case some major shortcomings have been noticed because of which it had not been possible to carry out the trial operation of the unit as given above or to run the unit on stable load in view of force major conditions such as non availability of coal, non completion of MGR or other sub-systems, lack of system demand and reduction in generation imposed by R E Bs, etc. the period of six months from the date of synchronizing or four months from the date of synchronizing after bearing inspection whichever is earlier could be extended.

42

CHAPTER-III
CURRENT SCENARIO
Recent trends in power sector
With the world population nearly doubling in the past three decades, the present surge in electricity demand, and the projected increase of the global population, the importance of available energy cannot be underestimated. In India, the burning of coal accounts for approximately one half of all electricity generation, nuclear energy approximately one fourth of all electricity generation, and hydro, and gas roughly ten percent of the total electricity generation. Globally, India is presently positioned as the eleventh largest manufacturer of energy, representing roughly 2.4% of the overall energy output per annum. Usually energy, especially electricity, has a major contribution in speeding up the economic development of the country. The existing production of per capita electricity in India is around 600 kWh per annum. Ever since 1990s, Indias gross domestic product (GDP) has been increasing very rapidly and it is estimated that it will maintain the pace in the next couple of decades. The rise in GDP should be followed by an increase in the expenditure of key energy other than electricity. The Report on the Indian Power Sector draws attention the following matters: The aggressive market scenario of the Indian Power Industry. The significance of the role of the private players and foreign investments in the Power sector. Impact of the political condition, collaborations with private participants, new strategies and reforms in regulating the Oil & Gas sector in India. Significance of renewable sources of energy for Power Generation. The different prospects and difficulties faced by the Power Industry. Growing concern about pollution and global warming has led many individuals and nations to consider the nuclear industry as an excellent alternative for future power generation. Technological advancements and increased public awareness concerning nuclear power are critical to the success of the nuclear industry. Investments made by the nuclear industry in both technology and education will likely be seen in the near future. The future power reforms will be in the field of nuclear energy. Power for ALL by 2012 The Government of India has an ambitious mission of POWER FOR ALL BY 2012. This mission would require that our installed generation capacity should be at least 200,000 MW by 2012 from the present level of 144,564.97 MW. Power requirement will double by 2020 to 400,000MW.

43

Objectives Sufficient power to achieve GDP growth rate of 8% Reliable power Quality power Optimum power cost Commercial viability of power industry Rural electrification

S ubs i d i e s
S e v e r a l s t a t e g o ve r n m e nt s i n I nd i a p r o v i d e e l e c t r i c it y a t s u bs i d i z e d r a t e s o r e v e n f r e e t o s o me s e c t io n s . T h i s i n c l u d e s fo r u s e i n a g r i c u l t u r e a n d fo r c o n s u m p t io n b y b a c k w a r d c l a s s e s . T h e s u b s i d i e s a r e m a i n l y a s c r o s s s u b s i d i z a t io n, w it h t he o t he r u s e r s s u c h a s i n d u s t r i e s a nd p r i v a t e c o n s u m e r s p a y i n g t he d e f i c it c a u s e d b y t he s u b s i d i z e d c h a r g e s c o l l e c t e d . S u c h m e a s u r e s h a v e r e s u lt e d i n m a n y o f t h e s t a t e e l e c t r i c it y bo a r d s b e c o m i n g f i n a n c i a l l y w e a k . At p r e s e nt ( 2 0 0 9 ) , t he p r i c e p e r u n it o f e l e c t r ic it y i n I nd i a i s a bo u t R s . 4 fo r d o m e s t ic c o n s u m e r s , a nd R s 9 fo r t h e c o m m e r c i a l . POWER SECTOR AT A GLANCE

Power generation in India Sector MW %

State sector Central sector Private sector Total

76115.67 48970.99 22878.75 147965.41

52.5 34.0 13.5 100

Table 5: POWER GENERATOR

44

Types of power Type

MW

Thermal Coal Gas Oil Sub total Hydro (renewable) Nuclear RES
TOTAL

77648.88 14876.71 1199.75 93725.24 36647.76 4120.00 13242.41

147965.51

53.3 10.5 0.9 64.6 24.7 2.9 7.8

100

Table 6: TYPES OF POWER GENERATION IN INDIA

45

NTPC IN INDIAN POWER SECTOR

FIGURE: 1 CAPACITY V/S GENERATION

46

CHAPTER -IV

RESEARCH METHODOLOGY:

47

TYPE OF DATA
Data related to operation and maintenance (O&M) budgeting has mainly collected from secondary sources, which was analyzed for the study purpose. Although for data collection related to O&M, semi-structured Interviews cum discussions were held with senior level officials of NTPC from Finance and Commercial Departments and with industry guide. In house Magazines and other published reports of NTPC were also used. In the beginning of every year the corporate centre (CC) issues guidelines and norms for preparing the O&M budget, those guidelines and norms were also used to prepare this project

48

NTPC LTD.
(Ramagundam) ANDHRA PRADESH

The Ramagundam power plant is the third in the series of the super thermal power stations set up by the NTPC. The foundation stone for the 2100 MW project was laid by the then Prime Minister, Morarji Desai, on November 14, 1978. The NTPC is generating power with three 200 MW units and three 500 MW units at Ramagundam. In august 2004 a unit of 500 MW is added to the station, now the total capacity of the station is 2600 MW. Since inception, the station has achieved excellence in all operational spheres like project implementation, generation, environment management, ash utilization, etc. The NTPC, Ramagundam, is supplying power to Andhra Pradesh (610 MW), Tamil Nadu (470 MW), Karnataka (345 MW), Kerala (245 MW), Goa (100 MW) and Pondicherry (50 MW) and remaining 280 MW would be distributed among the states depending on their requirements. The project is spread over 10,630 acres is utilizing about 30,000 tonnes of coal and 150 cusecs of water every day for generating power. Ramagundam is situated at a distance of about 75 Kms. Godavari and is the highly populated village in the madal Andhra Pradesh. The power-house at the place is the biggest thermal power producing station in the state and supplies power to Hyderabad, Karimnagar, Warangal and also to the Mancherial Cement Factory. A Navaratna Public sector undertaking completed 25 glorious years in service to the Nation. This Super Thermal Power Station with an installed capacity of 2600 mega watt has earned the distinction of being the beacon light of the Southern States, promoting economic growth and prosperity. NTPc Ramagundam has excelled in all spheres of operations since inception namely generation, safety, environment; human resource development etc.The quest to excellence is never ending. The Station is fully generated to face the challenges ahead and commits to illumine the Nation with everlasting pride.

49

DATA ANALYSIS & INTERPRETATION

Station-RAMAGUNDAM

SUMMARY OF BUDGET PARAMETERS

Overhauling Expenditure Unit I RE(2009-10) BE(2010-11) Boiler Capital Boiler Capital Rs/Lakhs Rs/Lakhs Rs/Lakhs Rs/Lakhs 450 600 Unit II 430 600 Unit III 450 610 950 Unit IV 590 Unit V 520 Unit VI 650 Unit VII 450 650 Total 3540 2460 950

Description

Unit

Cross Ref.

2008RE 09(provisional) 2009-10 21500 93.56 94.40 5.74 20266 7.85 96.56 2372 0.16 0.624 3798 20400 91.95 89.57 6.20 19136 7.85 91.17 2372 0.23 0.651 3638

BE 2010-11 20802 94.10 89.57 6.20 19513 7.85 92.97 2369 0.23 0.651 3638

Remarks

PHYSICAL Generation Availability PLF Auxiliary Power Consumption (APC) ESO Normative APC Availability asper ABT [(ESO/100-APC)/IC] Heat Rate Specific Oil Consumption Specific Cons of coal GCV of coal
`

MU % % % MU % % Kcal/Kwh ml/ Kwh Kg/K w Kcal/kg

50

Description

Unit Cross Ref.

2008-09 (provisional)

RE 2009-10

BE 2010-11

Remark s

FINANCIAL R&M Overhauling Expenses- Capital - Boiler Rs/Lakhs Rs/Lakhs Rs/Lakhs Rs/Lakhs 2300 800 1500 7439 14712 1339 3396 29185 9600 38785 53525 28.96 3540 6782 16713 1339 4068 32441 10368 42809 39398 24.01 3540 3410 950 2460 8109 17444 1339 4248 34549 11093 45642 41202 24.81

Other than Overhauling Rs/Lakhs Rs/Lakhs Employee Cost Rs/Lakhs Water charges & cess Rs/Lakhs Station Overheads Rs/Lakhs Total O&M Expenses Rs/Lakhs Share in CC exp Rs/Lakhs Total O&M including CC Rs/Lakhs Net Profit % ROCE Table 7: SUMMARY OF BUDJET PARAMETERS

51

CALENDAR OF PLANNED OUTAGES Station - RAMAGUNDAM Responsibility: O&M Month Unit I Reason From Hrs
Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total hrs.

Unit II To Hrs Reason From Hrs To Hrs

Unit III Reason From Hrs To Hrs

Unit IV Reason From To Hrs Hrs

12th 5th 1st 7th 15th 21st 1st 23d

168 Unit V Reason From To Hrs Hrs

168 Unit V I Reason From Hrs To Hrs

552 Unit VII Reason From Hrs To Hrs

600

Month

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Total hrs.

14th 10th 3rd

8th

5th

24th

600 Table: 8 PLANNED OUTAGES

600

600

52

OPERATIONAL PARAMETERS PHYSICAL

Station- RAMAGUNDAM Responsibility : O&M

Particulars

Unit

Actual 2008-09 (provisional)

RE 2009-10

BE 2010-11

Capacity (A) Non-Availability - Overhaul - Breakdowns - Fuel Shortage - Grid restriction Sub-total (B) Availability (A-B) Generation (C) PLF Auxiliary Consumption (D) Net Generation E= (C-D) Consumption by Utilities- Construction power - Township - Others (specify) Sub-total (F ESO (E-F) Normative Auxiliary Power Consumption (As per Tariff) Availability under ABT [(ESO/100-APC%)/ Ic] Heat rate

MW %

2600 6.44

2600 8.05

2600 5.90

% MU % % C MU MU MU

93.56 21500 94.40 5.74 20266

91.95 20400 89.57 6.20 19136

94.10 20802 91.33 6.20 19513

MU % %

20266 7.85 96.56

19136 7.85 91.17 2372

19513 7.85 92.97 2369

Kcal/Kwh 2372

Table: 9 PARAMETERS OF OPERATION

53

PURCHASE BUDGET RE/BE Station- RAMAGUNDAM S. No Material Description Unit Opening Stock Purchases during the year Material Closing consumed Stock during the year 196580 18425

Coal/ Gas/ Naphtha Oil

000 KT 22585 Rs / Lakhs KL Rs/Lakhs 112

192420

889

921

80

Total 3 4 5 6 7 Chemicals Consumables Spares Lubricants Others Total Rs/Lakhs Rs/Lakhs Rs/Lakhs Rs/Lakhs Rs/Lakhs Rs/Lakhs

22697 52 12 08

193309 374 56 42 25

197501 390 39 36 29

18505 36 17 18 04

72 22769

497 193806

494 197995

75 18580

Rs/Lakhs Grand Total Table: 10 PURCHASE BUDGET

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FUEL CONSUMPTION COAL

Station- RAMAGUNDAM Responsibility : O&M S. Description No

1 2 3

Unit

Actual 2008-09 3801 2372 .624 21500 13446 14.5 25.027 9550 239012 100.76 62.87

BE 2009-10 3643 2372 .651 20400 13280.4 12.6 20.419 9600 196026 82.64 53.79

RE 2009-10 3639 2369 .651 20400 13280.4 14.5 22.521 9700 218461 92.21 60.02

BE 2010-11 3525 2369 .672 20802 20801.32 12 22.83 9750 222642 93.98 63.15

Average Calorific value Kcal/Kg Heat input Kcal/Kwh Specific coal Kg/Kwh consumption (2/1) 4 Generation M us 5 Consumption (3*4) 000s MT 6 Handling loss % 7 Gross consumption (incl. 000s MT Loss) 8 Price Rs/MT 9 Value (7* 8) Rs./lacks 10 Cost per Kcal [9/2] Ps 11 Cost per Kwh (10*3) PS / Kwh Table: 11 CONSUMPTION OF COAL

55

FUEL CONSUMPTION OIL

S. No
1 2 3 4 5 6 7

Description Average Gross Calorific Value Specific oil consumption Heat input (1*2) Generation Consumption (4*2) Price Value (5* 6) Table: 12 CONSUMPTION OF OIL

Unit Kcal/ it Ml / Kwh Kcal/ Kwh M us KL lakh/KL Rs/ lacks

Actual 2008-09 7080 0.16 1132.8 21500 3440 .19593 674

RE 2009-10 7100 0.23 1633 20400 4692 .13810 648

BE 2010-11 7050 0.23 1621.5 20802 4784.46 .1289 617

56

CHEMICAL COST

Station: RAMAGUNDAM Responsibility : O&M S. No Description 1 2 3 4 5 6 7 Hydro choric acid

Unit 2006-07 Rs/Lakes 107

Actual 2007-08 115

2008-09 185 57 112 72 10 65 19 520

BE 2009-10 95 110 36 32 33 56 28 390

RE 2009-10 193 68 34 69 52 59 475

BE 2010-11 215 112 65 23 86 21 522

Sodium hydroxide - do 56 39 Non-Ferric - do 56 87 Aluminum Hydrazine -hydrate - do 36 54 Chlorine - do 38 Liquid Ammonia - do 14 12 Others - do 11 307 318 Total Table: 13 CONSUMPTION OF CHEMICAL

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ADMINISTRATIVE COST Station- RAMAGUNDAM Responsibility : F&A Rs. Lakhs S. Description No 1 2 3 4 5 6 7 8 9 10 11 12 2006-07 429 144 53 48 4 84 59 27 86

Actual 2007-08 441 131 68 38 2 107 49 73 64 2008-09 628 128 52 55 5 97 110 23 89 81 545 425 2238

BE 2009-10 458 155 19 31 5 105 200 33 69 76 920 481 2552

RE 2009-10 655 133 54 56 5 107 229 21 92 84 1025 425 2886

BE 2010-11 681 138 56 59 6 117 180 21 96 87 1125 425 2991

Traveling Expenses Rates and taxes Tender expenses Legal and proff. charges Publicity Education Community development Ash utilization expenses Vehicle running expenses Communication expenses 88 79 Security expenses 818 1059 Insurance 553 418 2393 2529 Total Table: 14 ADMINISTRATIVE COSTS

58

DEPRECIATION Station- RAMAGUNDAM Responsibility: F&A Rs. Lakhs S. Description No Total Fixed Assets Plant and machinery Tools Building Furniture & fixture Office equipment vehicle Total Table: 15 DEPRECIATION
1 2 3 4 5 6

Gross Block

Rate of Actual Depreciation 2008-09 n 13.9 12 3.64 6.42 9.47 19.5 4725 2385 1485 1290 1890 1095 12870

RE 2009-10

BE 201011 4025 1798 985 728 1180 600 9316

198258 58295 39290 21250 39071 38285 394449

3925 1895 1092 898 1225 753 9788

59

EMPLOYEE COST

Station RAMAGUNDAM Responsibility : HR/ F&A S. Description No Employee Cost Salaries, Wages & allowances - Executives - Supervisors - Non-supervisors Overtime Contribution to PF Other welfare funds Welfare expenses - Medical - LTC - Canteen - Grants to welfare organizations - Others Total Table: 16 MEN POWER COST

Unit

Actual 2008-09

BE 2009-10

RE 2009-10

BE 2010-11

Rs./ lakhs 12714 11868 13403 14594

1433 566

604 1339 442

885 1819 606

922 1299 629

14713

14253

16713

17444

60

O&M Expenses

A/S/08

Station -RAMAGUNDAM Rs/Lakhs S. Description No .

Ref format 2006-07

Past Performance 2007-08 2008-09 (provision al) 12714 0 566 1433 14713 BE

2009-10

2010-11

RE

BE

2 (I)

Employee Cost Salaries & wages Overtime Contribution to PF and other Funds Medical exp Other Welfare Exp Total Repairs & Maintenance Plant & Machinery Overhauls - Material cost - Contractor & others Routine - Material cost - Contractor &others Breakdown - Material cost - Contractor& others Preventive - Material cost - Contractor &others Reliability - Material cost - Contractor &others Exceptions - Material cost - Contractor &other

7108 556 427 576 8666

10489 584 1400 391 12864

11868 604 442 1339 14253

13403 885 606 1819 16713

14594 922 629 1299 17444

A/S/8.1

A/S/8.2 2105 662 A/S/8.2 3130 1585 3220 1522 3997 1295 2795 863 3544 1317

A/S/8.2 237 202 A/S/8.2 2127 1819 A/S/8.2 847 252 997 511 10 35 61 1058 185 1328 1220 1339 1404 969 1525 944 1503 968 1677 148 136 149 156 108 169 105 167 108 186

O&M Expenses

Station - RAMAGUNDAM Rs/Lakhs S. No.

Description

Ref format 200607

Past Performance 200708 120 390 90 452 313 531 9443

2009-10

201011 BE

2008-09 BE (provisional) 79 241 87 503 551 489 9739 50 208 60 500 550 505 11035

RE

(ii)

(iii)

(iv)

Buildings - Material cost - Contractor & others Township assets - Material cost - Contractor & others Other Assets - Material cost - Contractor & others Total Station/ Administrative Overheads Chemicals Other consumables Administrative Expenses R&R expenses Energy Conservation Ash Utilization expenses Total (without CC exp) Share in CC expenses Grand Total(with CC) expenses Table: 17 O&M Expenses

84 379 74 369 156 462 8676

120 430 78 452 745 567 10322

117 307 108 507 940 496 11519

307 4458

318 3769

520 4192

390 4670

475 4911

522 5043

27 4792 3691 8483

73 4160 5200 9360

23 4734 9600 14334

33 5093 5600 10693

21 5406 10368 15774

21 5586 11093 16680

62

WORKING CAPITAL REQUIREMENT Station RAMAGUNDAM Responsibility: F&A S. No A

1 2

Description

Actual 2008-09 26985 18562 3265 2154 1625 3567

RE 2009-10 16895 21542 2563 3254 1254 5241

BE 2010-11 17586 18099 3256 3523 1563 5189

Current Assets Receivables Inventory - Coal - Oil - Chemicals - Lubricants and consumables - Tools and plants - Spares - Others 3 Cash & Bank Balances 4 Loans & Advances 5 Others Total A B Current Liabilities 1 Liability - Materials - Expenses 2 Provisions 3 Others (specify) Total B Working Capital (A-B) C Interest on Working Capital @ cash credit Interest rate of ..% Table: 18 WORKING CAPITAL

4856 11685 72699

5268 11752 67769

4895 13658 67769

12565 3977 8575 25117 47582

13658 3101 6596 23355 44414

11895 4590 5989 22474 45295

7446

7500

7600

63

Cash Budget Cash from operations Station: RAMAGUNDAM Responsibility: F&A Description

S. No . A

Actual Revised (provisional) Estimate 2008-09 2009-10 53525 12870 39398 9788

Rs. /lakh Budget Estimate 2010-11 41202 9316

CASH FLOW FROM OPERATING ACTIVITIES Net profit (as per FormA/03) Adjustment for non-cash items: - Depreciation - Amortized expenditure - Provisions - Others Operating profit before working capital changes Adjustment for working capital changes: - Sundry debtors - Inventories - Other current assets - Sundry creditors - Other creditors/liabilities Cash generated from operations Table: 19 CASH FLOW STATEMENTS

66394 -20069 -7739 -3509

49186 4930 0 0

50518 0 0 0

5503 40580

0.31486 54116

0 50518

64

SALES REVENUE Station RAMAGUNDAM Responsibility : Commercial/ F&A Station/ RHQ S. Description Unit Actual N 2008-09 o 1 Revenue from Sales 96526 - Fixed charges 51256 - Variable charges 36251 - Fuel Price Adjustment 29891 - UI charges 35928 - Incentive/ Disincentive 12564 - ED 23212 - Others Sub-total Revenue from Own Consumption- Township - Others (to specify) Sub-total Grand total 285628

BE 2009-10

RE 2009-10

BE 2010-11

85924 48125 38592 22562 27125 8596 15384 246308

87298 48956 37562 24521 22156 11025 24081 256229

84928 46592 35625 22365 20125 15263 18225 19253 262376

71298 71298 356926

48928 48928 295236

68854 68854 325083

70308 70308 332684

OTHER REVENUE Responsibility : F&A S Description Unit . N o 1 Operating income Rs. - Interest - Hire charges - Misc. receipts Rs. Total 2 Non- operating income Rs. - sale of fixed assets - profit on sale of surplus material - extra-ordinary income - other Rs. Total Rs. Grand Total Table: 20 SOURCES OF REVENUE

Actual 2008-09

BE 2009-10

RE 2009-10

BE 2010-11

1252 1071 2323 253

565 125 690 52

392 98 490 70

412 45 457

153 406 2729

40 92 782

70 560

103 103 560

65

Budgeted Profit and Loss account Station: RAMAGUNDAM Responsibility: F&A S. Description No . A INCOME 1 Sales Revenue 2 Other Revenues Total A B EXPENDITURE 1 Fuel cost a. Coal b. Oil c. Gas d. Naphtha e. HSD Sub-total
2 3 4

Rs. / lakh Cross Ref. 2008-9 Budget (provisional) Estimate 2009-10 356926 2729 359655 295236 782 296018 Revised Estimate 2009-10 325083 560 325643 Budget Estimate 2010-11 332684 560 333244

239012 674 22 468

196026 921 554

218461 648 539

222642 617

404 240176 1199 27986 12870 6854 7446 197501 1100 29280 11409 7000 7381 219648 1199 31242 9788 6500 7500 223484 1199 33350 9316 6000 7600

C D E

Water Charges O&M cost( excl CC) Finance charges a. Depreciation b. Interest on fixed capital c. Interest on working capital d. Rebate/ LC charges e. Provisions f. Prior period adjustments g. Others Sub Total TOTALEXPENDITURE (B) Station Profit / Loss Share of CC and Regional expense Net profit and Loss

27169 296530 63124 9600 53525

25790 253671 42347 5600 36747

23788 275877 49766 10368 39398

22916 280949 52295 11093 41202

Table: 21 PROFIT AND LOSS ACCOUNT

66

Budgeted Balance Sheet Station: RAMAGUNDAM Responsibility: F&A S. Description No. A SOURCES OF FUNDS 1 Shareholders Funds - Capital - Reserves & Surplus 2 Loan Funds - Loans from GOI - Foreign Loans - Cash credit from Banks 3 Inter unit balance 4 Inter unit cash credit TOTAL A B APPLICATION OF FUNDS 1 Fixed Assets Gross Block Less: Depreciation Net Block 2 Capital Work in Progress 3 Construction Stores and Advances 4 Investments 5 Current assets, loans and advances - Operation - Construction sub total 6 Current liabilities and Provisions - Operation - Construction Sub Total 7 Net Current Assets (5-6) - Operation - Construction Miscellaneous expenditure (to the extent not written off) TOTAL- B Table: 22 BALANCE-SHEETS Rs. / lakh Revised Estimate Budget Estimate 2009-10 2010-11

Cross Ref.

Actual(prov.) 2008-09

562435

601833

643035

366552 -735504 193482

373052 -788758 186126

379052 -840695 181391

394449 249988 144461 1439

398049 259776 138273 3439

404249 269092 135157 939

72699 72699

67769 67769

67769 67769

25117 25117 47582

23355 23355 44414

22474 22474 45295

NIL 193482

NIL 186126

NIL 181391

67

Budgeted Return on Capital Employed (ROCE) Station: RAMAGUNDAM Responsibility: F&A Description Rs. / lakh Revised Budget Estimate Estimate (Current year) (next year)

S. No.

Actual (previous year/ provisional) 2600 358506 152982 62661 35369 24859 2433 215643

Budget Estimate (Current year)

A I (i) (ii) (iii)

II

B (I) (ii) (iii) (iv) (v) (vi) C (I) (ii) (iii)

BASIC PARAMETERS Capacity As per Tariff Capital cost Equity Capital Working capital - Debtors - Inventories - Others Normative Capital employed (A(ii)+ A(iii)) Budgeted Working capital - Debtors - Inventories - Loans and advances & Other current assets Less : Current liabilities Actual /projected Capital employed [A (iii) + II] Variance REVENUE Fuel recovery O&M Recovery Return on Equity Intt .on Working capital Incentive/ Disincentive Other Income Total EXPENDITURE Fuel Cost O&M Expenses (excl. CC share) Interest on working capital (including rebate and LC charges)

2600 356718 152088 63063 35771 24859 2433 215151

2600 358506 152982 62661 35369 24859 2433 215643

2600 358506 152982 62661 35369 24859 2433 215643

47479 35889 25595 11215 25220 200461 15182 269558 27790 21417 6423 8444 1220 334853 240176 29185 7446

40079 30173 20565 9702 20361 192167 22984 217875 24770 21292 6465 6319 784 277505 197501 30380 7381

42549 30959 25595 11215 25220 195531 20112 239621 32441 21417 6423 5861 780 306544 219648 32441 7500

42549 30959 25595 11215 25220 195531 20112 244156 34549 21417 6423 6824 780 314149 223484 34549 7600

68

Total D(I) Net Return (B-C) (ii) Return Before Interest [D(I) + C(iii)] E Return as a % of capital employed (actual) (D (ii)/AII) Return as a % of capital employed (actual/budgeted) (D(ii/AII) Variance in Return (E-F) Reasons for variance (details to be provided under the broad heads) Ratio of Actual W. Cap to Normative W. Cap (E/F) O&M cost per MW

276807 58046 65492

235262 42243 49624

259589 46955 54455

265633 48516 56116

28.96

25.82

24.01

24.81

26.92 2.04

19.63 6.19

21.77 2.24

22.50 2.31

G H

I J

75.77 11.23

63.55 11.68

67.90 12.48

67.90 13.29

Table: 23 RETURNS ON CAPITAL EMPLOYED

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CHAPTER V

FINDINGS OF THE STUDY

70

FINDING AND RECOMMENDATION

After going through the budgeting process of NTPC LTD. I found that operation and maintenance (O&M) budgeting is very important for the NTPC plants as it essentially lays down the physical and operating plans for the budget period and lays down the standard/yardsticks for inputs and the outputs associated with the various activities. It tells about the generation capacity of power in a given period, availability factor, plant loading factor (PLF), electricity sent out ratio etc. It also tells about the different costs incurred during the generation of power, sources of revenue and return on the capital employed.

RECOMMENDATION
y y y y
Company should reduce the outages hours, as it leads to reduce the availability hours for generation. Company should increase plant loading factor (PLF), as it will enhance the generation capacity. Company should establish reserve for fuels, especially for coals. Company should looks for cheapest and qualitative sources of fuels as it is know around 80% of the total expenditure.

71

ANNEXURE:
Table 1: List of subsidiaries Table 2: List of JVS Table 3 NTPC POWER STATION Table 4 BUDGETING PERIOD AND TIME SCHEDULE Table 5: POWER GENERATOR Table 6: TYPES OF POWER GENERATION IN INDIA Table 7: SUMMARY OF BUDJET PARAMETERS Table: 8 PLANNED OUTAGES Table: 9 PARAMETERS OF OPERATION Table: 10 PURCHASE BUDGET Table: 11 CONSUMPTION OF COAL Table: 12 CONSUMPTION OF OIL Table: 13 CONSUMPTION OF CHEMICAL Table: 14 ADMINISTRATIVE COSTS Table: 15 DEPRECIATION Table: 16 MEN POWER COST Table: 17 O&M Expenses Table: 18 WORKING-CAPITALS

72

Table: 19 CASH FLOW STATEMENTS Table: 20 SOURCES OF REVENUE Table: 21 PROFIT AND LOSS ACCOUNT Table: 22 BALANCE-SHEETS Table: 23 RETURNS ON CAPITAL EMPLOYED

FIGURE: 1 CAPACITY V/S GENERATION

73

ABBREVIATIONS USED IN THE REPORT

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

SP AP SQ AQ SE AE ST AT SESO AESO SCU ACU SPT O&M UI RHQ CC MW AF PLF KWH MU Kcal GCV ED ESO R&M F&A SEB MTP O&E ML MT

Standard Price Actual Price Standard Quantity Actual Quantity Standard Fixed Expenses Actual Fixed Expenses Standard Tariff Actual Tariff Standard Energy Sent Out Actual Energy Sent Out Standard Cost per Unit Actual Cost per Unit Standard Profit per unit Operation and maintenance Unscheduled interchange Regional head quarter Corporate centre Mega watts Availability factor Plant loading factor Kilowatt-hours Million units Calories input Gross calorific value Executive Director Energy sent out Repair and maintenance Finance & administration State Electricity Board Maintenance planning section Operation and Efficiency section Mille liter Metric ton

74

BIBLIOGRAPHY
www.ntpc.ac.in www.wikipedia.org www.google.com www.powermin.gov.in Monthly journal of NTPC Ramagundam Previous o&m report of NTPC NTPC previous financial report Financial accounting DR.S.N.Maheshwari

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