Himachal at a Glance

(i) HPSEB shall purchase power from private parties/joint sector companies setting up the Micro Hydel Power Stations @ Rs. 2.50 per unit

ii) Wheeling for captive use within the State shall be allowed by HPSEB at a fee of 2% (including system losses). For sale/captive use of power outside the State the HPSEB shall levy wheeling charges @ 10% (including system losses) of the energy received (excluding royalty) at the interconnection point for wheeling/transfer of power up to the mutually agreed inter-state point.

(iii) Banking of energy will also be allowed by the HPSEB as per prevailing rules and regulations.

(v) Royalty on water usage in shape of free power to the State from the Small Hydel Projects having installed capacity upto (5.00MW), is waived off for a period of 12 years reckoned after 30 months from the date of signing of IA of the Project (irrespective of extension in time period of IA granted to an IPP on any account). Beyond 12 years, the royalty will be @ of 12% for next 18 years and beyond that @ 18%. The 12 years relaxation in royalty shall however not be applicable to the Projects which make captive use of power outside the state or make third party sale outside the state. In that case, the royalty @ of 18% reckoned after 30 months from the date of signing of IA of the Project (irrespective of extension in time period of IA granted to an IPP on any account) shall be applicable.

(vi) The developer will be permitted to establish, own, operate and maintain the Project for a period of 40 (forty) years and the date shall be reckoned after 30 months from the date of the signing of the Implementation Agreement (irrespective of extensions in the time period of the Implementation Agreement granted on any account.). Thereafter, the Project shall revert to the State Government free of cost and free from all encumbrances.

(vii) In case of such Projects assets would be maintained by the developer in a condition that would ensure a residual life of the Project at the rated capacity for at least 30 years at any point of time. During the 10th, 20th, 30th & 35th years of operations, the Government of Himachal Pradesh or one of its appointed agencies would carry out a mandatory inspection of the Project site to ensure that the Project assets are maintained to the required standards to ensure the specified generation capability and residual life of the plant.

If such inspections find that the Project capacity or life is being undermined by inadequate maintenance, the Government of Himachal Pradesh shall be entitled to seek remedial measures from the developer. If the developer fails to comply with the requirement, the Government of Himachal Pradesh shall have the right to take over the commercial operation of the Project and shall have full right upon the sale of power including developer share. The cost on account of suggestive remedial measures shall be deducted from the sale of developer’s share of metered power including the operation & maintenance cost for such a period till the Project’s assets are restored to the required standards to ensure the specified generation capability and residual life of the Project as specified above. Thereafter, the Project shall be handed over to the developer.

viii) Interfacing including transformers, panels, kiosks, protection, metering, H.T. Lines from the points of generation to the HPSEB’s nearest feasible H.T. sub‑station as well as maintenance shall be undertaken by the Developer as per the specifications and requirements of the HPSEB for which the Developer shall bear the entire cost. Alternatively, these works and their maintenance could be undertaken by the HPSEB, at charges to be decided by the HPSEB payable by the Hydro Project Developer.

The Hydro Projects Developers shall however be at liberty to erect common dedicated transmission lines for joint evacuation of Power from two or more Projects by way of suitable Consortium Agreements.

(i) These non-cash incentives shall be provided in terms of speedy clearances by the Screening Committee and timely payments by the Electricity Board to the entrepreneur.

(b) HPSEB shall clear all dues of a private party on account of purchase of power within thirty days from the receipt of the bill, failing which penalty @ 1.5% per month shall be payable by HPSEB. The HPSEB shall open a revolving Letter of Credit (LC) to ensure timely payment for which the charges shall be borne by the Company. The Letter of Credit provision shall be applicable only in case where the entire power is sold to HPSEB (excluding royalty).

(c) If the applicant does not take effective steps to undertake survey and investigation within a period of three months from the date of MOU or after finding the site feasible does not prepare DPR within the stipulated period as indicated in the MOU, the MOU shall be automatically terminated (except force majeure conditions) and the site shall be allotted to some other applicant. If on the other hand, land is not leased to the entrepreneur and power purchase agreement is not signed by the HPSEB within six months from the date of signing of Implementation Agreement, the applicant will have the option to terminate the implementation agreement without any financial obligation on either side. The implementation agreement shall be signed within 30 months from the date of signing the Memorandum of Understanding (MOU).

1) The deemed generation shall be payable in case of non-availability or partial availability of evacuation system beyond the interconnection point on various grounds of system parameters and/ or backing down instructions from the state load dispatch centre.

2) Deemed generation shall be payable when water spillage exceeds 480 hours in a year and in such cases only where evacuation system is connected to manned 22 KV Sub-stations declared as control sub-stations by the Board/33 kV/EHV Sub-stations of HPSEB. The benefit on account of deemed generation shall not be allowed in case where captive use/third party sale is intended to be made outside the State

i)              The loss of generation at the Station due to the interruptions/ outages attributed to the aforesaid factor(s) lasting for a period of less than 20 minutes at a time.
ii)              The loss of generation at the Station on account of aforesaid factor(s) but attributed to the Force Majeure event(s).
iii)            The loss of generation at the Station due to the interruptions/outages attributed to the aforesaid factor(s) during the period in which the total duration of such outages/ interruptions, other that those excluded under (1) &(ii) above, is within the annual limit of 480 hours in a year; and .
iv)            The loss of generation at the Station that would have taken place otherwise also even in the absence of the aforesaid factor(s)

4.             The period of outage/interruption on account to such factor(s) shall be reconciled on monthly basis and the loss of generation of the Station counting towards Deemed Generation after accounting for the events (i) to (iv) above, shall be computed on following considerations:-
i)             If such period falls within the first twelve months after the COD of the project the generation envisaged for the month in which such period falls, based on inflows relating to 75% dependable year as per the hydrological data contained in the Approved DPR; and
ii)            If such period falls subsequent to the first twelve months after the COD of the project, the generation actually achieved including the Deemed Generation, if any, in the corresponding months of the previous year or the one envisaged in that month based on inflows relating to 75% dependable year as per the hydrological data contained in the approved DPR whichever is less.

5. The HPSEB shall pay for the Saleable Deemed Generation on the basis of the deemed generation after deducting on deemed basis the corresponding quantum of Govt supply, auxiliary consumption transformation losses and transmission losses in deemed delivery of such power at the interconnection Point.
6. For working out the benefit accruing on account of deemed generation any loss in generation attributed to the factors governing the deemed generation during the first year of the operation of the plant shall be based on the hydrological data in the DPR relating to 75% dependable year. During the subsequent years, deemed generation shall be payable up to actual generation in previous years / 75% dependable year generation, whichever is lower.

(A) MNES CAPITAL SUBSIDY SCHEME FOR SETTING UP OF COMMERCIAL SMALL HYDRO POWER (SHP) PROJECTS UPTO 25 MW STATION CAPACITY IN HIMACHAL PRADESH.

The Ministry of Non-Conventional Energy Sources will now provide capital subsidy through financial institutions. The subsidy is intended for making re payment of the term loan provided to the developer of the SHP Projects by the financial institution. The capital subsidy will be released after successful commissioning and commencement of commercial generation from the Project to financial institution providing loan to set up SHP Project. The quantum of subsidy will be independent of quantum of term loan and will be limited to the amount indicated below:-

B) MNES SCHEME FORPROVIDING PROMOTIONAL INCENTIVES TO CARRY OUT DETAILED SURVEY & INVESTIGATION (DSI) AND PREPARATION OF DETAILED PROJECT REPORT (DPR) FOR SHP SITES UP TO 25 MW POTENTIAL IN HIMACHAL PRADESH.

In order to encourage SHP development at the identified potential sites, the following promotional incentives under SHP programme of MNES will be applicable in the form of grant-in-aid as per the amount given below or actual cost incurred for carrying out Detailed Survey and Investigation (DSI) and Preparation of DPR of SHP Projects by the State/developers, whichever is less.

(ii) The Proposals to carry out DSI will be considered for identified hydel sites where pre-feasibility studies have been completed, and the Pre-Feasibility Report has been enclosed.

The proposal for preparation of Detailed Project Report (DPR) will be considered for SHP Project sites where detailed survey and investigations have already been completed, and the DSI report has been enclosed.
The Hilly areas would mean the areas in the State as mentioned/declared by various State Governments.
The above incentives are subject to modifications from time to time.

1). Subsidy for development/ upgradation of water mills:To encourage the development of Water mills in the remote & hilly areas to meet the basic needs of villagers, the Ministry will provide subsidy for development of new Water Mills or up-gradation of existing Water Mills. The subsidy would be applicable in following two categories of Water Mills:-

ii) Water Mills with electrical output (upto maximum of 5KW) only, or, both mechanical & electrical output (upto maximum of 5KW)

Incentives

From 1 MW up to