Going by the bill, the cost per unit amount works out to Rs 5 per unit. The tariff rate works out higher because MSEB is committed to pay full capacity charges on the basis of a higher plant load factor (PLF) to DPC even if it draws less power from the company as per the power purchase agreement (PPA). But in case MSEB feels its power requirements for a particular month is less it can ask DPC to operate on lower capacity. In such cases, MSEB will have to pay fuel cost only for units generated. However, the capacity charges have to be paid in full.

Thus, if MSEB is ready to take more power from DPC, the per unit cost comes down vis-a-vis the capacity charges. However, the correction to the unit cost is limited as the increase in generation also implies increase in fuel cost. The tariff will also vary as it is linkedwith the dollar.

The latest bill includes capacity charges of Rs 80 crore and fuel cost of Rs 36 crore. The board has already committed a capacity charges of around Rs 1,000 crore per year to DPC irrespective of the power it evacuates.

DPC has operated the plant on a lower capacity as asked by the board and supplied only 230 million units. MSEB had to ask for the cut in power generation because its peak demand last month reduced to around 8,500 MM as compared with around 10,000 MW earlier.

Earlier, DPC in its first bill had demanded a payment of Rs 230 crore. This included the pre-commissioned charges from October 1998 to May 13, 1999 and the post commissioning cost from May 13-31.

Of this bill amount MSEB has paid only Rs 180 crore. As regards to the balance amount of Rs 50 crore there is a dispute and MSEB has sought clarification from DPC for the same.

Even as the financial and legal experts of MSEB and DPC are still examining the issues, MSEB has categorically refused to pay around Rs 9 crorefor the fuel management fees as charged by the DPC for the pre-commissioning period.

According to MSEB, the PPA allowed DPC to charge a fuel management fee only after commissioning of the plant but DPC has billed this cost from October onwards. Apart from this the board was also not convinced if it had to pay the custom charges.