CASE No. 73 of hours for a period of six months from 1 April, 2019 to 30 September, Coram. I. M. Bohari, Member Mukesh Khullar, Member

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1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: CASE No. 73 of 2019 Case of M/s. KRC Infrastructure and Projects Private Limited seeking approval of Power Purchase Plan for 5 years and adoption of tariff determined through transparent process of bidding for Short-Term Procurement of power up to 2 MW RTC from 00:00 to 24:00 hours for a period of six months from 1 April, 2019 to 30 September, 2019 Coram I. M. Bohari, Member Mukesh Khullar, Member M/s. KRC Infrastructure and Projects Private Limited (KRC)..Petitioner Appearance For Petitioner:..Shri. Palaniappan M.( Rep) ORDER Dated: 26 March, M/s. KRC Infrastructure and Projects Private Limited (KRC) has filed this Case for seeking approval of Power Purchase Plan for 5 years and adoption of tariff determined through transparent process of bidding under Section 63 of the Electricity Act, 2003 (EA) and as per Guidelines for Short-term procurement of power up to 2 MW RTC from 00:00 to 24:00 hours for a period of six months from 1 April, 2019 to 30 September, Main prayers of KRC are as follows: a) approve the Power Procurement plan of KRC submitted in this Petition. b) adopt the tariff of Rs. 4.84/kWh for supply of power upto 2.00 MW RTC for 00:00 to 24:00 hours for the period of six months from April 1, 2019 to September 30, 2019, discovered through e-bidding Process in accordance with the Guidelines for Short-term MERC Order in Case No. 73 of 2019 Page 1 of 9

2 (i.e., for a period of more than one day to one year) Procurement of Power by Distribution Licensees Through Tariff Based Bidding Process issued by Government of India. c) approve the PPA signed between KRC and MBPPL under Section 86(1)(b) of the Electricity Act, The Petition states as follows: 3.1 KRC and M/s. Gera Developments Pvt. Ltd.(GDPL) jointly have been notified as the Developer of the SEZ by the Ministry of Commerce & Industry (Department of Commerce) vide Notification No. S.O (E) dated 19 June, 2017, and are developing the Information Technology and Information Technology Enabled Services (IT & ITeS SEZ) at Survey No. 65(p), Village Kharadi, Taluka Haveli, District Pune, Maharashtra, India. 3.2 The Commission, vide its Order in Case No 75 of 2018 dated 25 June, 2018 declared KRC as a deemed Distribution Licensee and directed as under : "Considering KRC s proposal in this regard and other views expressed, the Commission directs KRC to file its Petition for PPA approval and adoption of Tariff, discovered through competitive bidding in accordance with the Central Government s Guidelines, under Section 63 of the EA, 2003 within three months of the issue of the Specific Conditions of its Licence. " KRC is directed to establish its IGRC and CGRF and comply with the other requirements of the MERC (CGRF and Electricity Ombudsman) Regulations,2006 within six months from the issue of the Specific Conditions of its License. (Emphasis added). 3.3 Subsequently, the Commission, vide its Notification dated 27 September 2018, notified MERC (Specific Conditions of Distribution Licence applicable to M/s. KRC Infrastructure and Projects Pvt. Ltd for IT and ITES SEZ at Village Kharadi, Taluka Haveli, District Pune) Regulations, As per Clause 7 of the conditions, KRC is mandated to provide uninterrupted power supply within its area of supply. 3.4 Based on the directions given in Order dated 25 June, 2018, KRC has undertaken Shortterm power procurement through Competitive Bidding route under Section 63 of the Electricity Act, 2003 (EA) for a period of six months. After the completion of the competitive bidding process, Mindspace Business Parks Private Limited (MBPPL) emerged as the lowest bidder and PPA was signed with MBPPL on 14 March, 2019 for supply of power for period of six months. MERC Order in Case No. 73 of 2019 Page 2 of 9

3 3.5 For Procurement of power for future years, KRC has estimated the demand of 20 MW including 10 MW as Round the Clock (RTC) Base Load and 10 MW as Peak Load from 08:00 to 23:00 hours from Monday to Friday excluding National holidays. This demand includes the estimated load of under construction Building No. R1, R4 and G1, which are expected to be operationalised by FY Power procurement plan is for 5 years based on the load envisaged during this period. The phasing of addition to demand in MW on account of completion of Buildings and part/full occupancy, is given in the Table below: Building FY FY FY H1 H2 H1 H2 H1 H2 Base Load G R1 2.5 R G Total Peak Load G R1 2.5 R G Total Therefore it is requested to approve the Power Procurement Plan in MW, designed to meet the projected phased demand, as shown in the Table below: Particulars FY FY FY FY FY Base Load Peak Load It is planned to commence operations as a Distribution Licensee and supply of electricity in its license area with effect from 1 April, As of now, Building G2 is commissioned and partially occupied, and regular supply is proposed to be given to the said building, with construction power being given for construction of Buildings R1, R4 and G1. The load will increase after commissioning of Building R1, R4 and G1. Hence, it is decided to opt for short-term power purchase for the initial period of 6 months.. Once the load stabilizes and there is greater clarity regarding the load, it will source medium-term power through competitive bidding. 3.8 Currently G2 building is commissioned and partially occupied. Based on past experience with other SEZ Distribution Licensees, it is estimated that Base Load of around 1 MW and Peak Load of 0.8 MW (08:00 to 23:00 hrs) is likely to be there on 1 April Accordingly, KRC floated the short-term tender for 2 MW. MERC Order in Case No. 73 of 2019 Page 3 of 9

4 3.9 KRC decided to procure power for the six-month period from 1 April, 2019 to 30 September, 2019 in accordance with the E-Tendering and E-Reverse Auction process, under the Guidelines for Short-term Procurement of Power by Distribution Licensees through Tariff Based Bidding Process (Standard Bidding Guidelines) issued by Government of India ( GoI) KRC initiated the power procurement process through Discovery of Efficient Electricity Price (DEEP) Portal and E-bidding. The following were the original timelines for the bidding process: Sl. No. Event Timeline 1. Publication of RfP/Activation of Event 11:00 Hrs. 2. Last date of submission of RfP Bids including 16:00 Hrs. EMD 3. Opening of non-financial technical Bids 11:00 Hrs 4. Opening of IPOs (upto 1300 hrs) hrs 5. Start of era hrs 3.11 KRC issued a Public Notice in Business Standard, Mumbai Edition and in Hindustan Times, Delhi Edition on 11 February, 2019 for procurement of power based on E-Tendering and E-Reverse Auction process in accordance with the Standard Bidding Guidelines The E-Tender for procurement of power up to 2.00 MW RTC for all days for the period from 1 April, 2019 to 30 September, 2019 was issued to the bidders through the DEEP Portal in accordance Standard Bidding Guidelines, without any deviations In accordance with Clause 3.1 of the Standard Bidding Guidelines, KRC appointed PFC Consulting Limited (PFCCL) as the Authorised Representative to conduct the E-bidding KRC did not receive any Bids till the last date, i.e., 18 February, Hence, KRC first extended the timeline for submission of Bids to 22 February, 2019 (Corrigendum I), and subsequently to 26 February, 2019 (Corrigendum II), and 1 March, 2019 (Corrigendum III). As no bids were received till 2 PM on 1 March 2019, vide Corrigendum IV, KRC extended the timeline for submission of the bids to 6 March, KRC received two bids, one from MBPPL and other from GMR Energy Trading Limited (GMRETL). As the last date for submission had already been extended four times, and two bids has been received, KRC decided to proceed with the evaluation of the bids received, in order to complete the power procurement process before the proposed commencement of operations as a Distribution Licensee, i.e., 1 April, MERC Order in Case No. 73 of 2019 Page 4 of 9

5 3.16 To evaluate the Non-Financial Technical Bids, the Petitioner constituted a Standing Committee for evaluation of the Bids consisting of five internal members, and one independent Consultant, in accordance with Clause 9.2 of the Standard Bidding Guidelines. After evaluation of Non-Financial Technical Bids, the Standing Committee shortlisted both the bidders, for opening of financial bids. The technical result was further communicated to PFCCL through letter dated 7 March 2019, which further enabled the qualified bidders to participate in the E- Reverse Auction (e-ra) process On the basis of IPO, the list of bidder(s) and their initial prices were as follows: Price bid for 2.00 MW RTC Name of the Bidder Initial Price (Rs /kwh) Mindspace Business Parks Private Limited 4.84 GMR Energy Trading Limited After e-ra process, the list of successful bidder(s) generated by the system was as follows: Price bid for 2.00 MW RTC Name of the Bidder Quoted Price (Rs /kwh) Status Mindspace Business Parks Private Limited 4.84 L1 GMR Energy Trading Limited 6.76 L Thus, at the end of e-ra process, Mindspace Business Parks Private Limited (MBPPL) emerged as the Successful Bidder for supply of 2.00 MW RTC power to KRC for the period from 1 April, 2019 to 30 September, The Standing Committee submitted its Report and advised to issue Letter of Award (LoA) in favour of the Successful Bidder, as the tariff discovered was in line with prevailing market trends, and the response from generators and traders was very poor. Based on the recommendations of the Standing Committee, KRC issued the LoA to MBPPL dated 11 March Pursuant to the acceptance of LoA, KRC and MBPPL entered into the Power Purchase Agreement (PPA) for supply of power upto 2.00 MW RTC in accordance with Clause 16 of the Request for Proposal (RFP) KRC has followed the transparent process of E-bidding strictly in accordance with the guidelines issued by the Central Government, and the clause-wise compliance with the Guidelines for Short-term (i.e., for a period of more than one day to one year) Procurement of Power by Distribution Licensees through Tariff Based Bidding Process issued by GoI, Hence, it is requested to adopt the tariff determined through the E-bidding process. MERC Order in Case No. 73 of 2019 Page 5 of 9

6 3.22 Therefore, it is requested to adopt the tariff of Rs. 4.84/kWh for supply of power upto 2.00 MW RTC for 00:00 to 24:00 hours for the period of six months from 1 April, 2019 to 30 September, 2019, discovered through e-bidding Process in accordance with the Guidelines for Short-term (i.e., for a period of more than one day to one year) Procurement of Power by Distribution Licensees through Tariff Based Bidding Process issued by GoI and to approve the PPA signed between KRC and MBPPL under Section 86(1)(b) of the EA. 4. At the hearing held on 19 March, 2019, KRC reiterated the submission made in the Petition. Commission s Analysis and Ruling 5. KRC is a deemed Distribution Licensee notified by the Commission for IT& ITES SEZ located at Survey No. 65(p), Village Kharadi, Taluka Haveli, District Pune, Maharashtra, India.. KRC has filed this Case seeking approval for PPA signed between KRC and MBPPL for 2 MW RTC Power at a delivery point of Maharashtra State periphery for the period of six months from 1 April, 2019 to 30 September, 2019 and for adoption of Rs. 4.84/kWh Tariff discovered through Competitive Bidding on DEEP Portal. 6. KRC as a deemed distribution Licensee, is planning to commence supply of electricity in its License area with effect from 1 April, KRC is developing 4 IT buildings ( G1, G2 R1 and R4) in its area with consideration of 5 MW load for each building having Base Load of 10 MW and 10 MW as Peak Load from 08:00 to 23:00 hours from Monday to Friday excluding National holidays, total load after full occupancy is expected to be 20 MW. 7. The Commission notes that at present building G2 is commissioned and partially occupied and other three buildings are in construction phase and as stated by KRC are likely to be operationalised in FY Therefore, full load will commence in FY As KRC has only four buildings in its licenced area and it has projected demand based on commissioning and occupancy of these buildings, the Commission accepts the phasing of projection of demand for 5 years submitted by KRC as follows: Building FY FY FY H1 H2 H1 H2 H1 H2 Base Load G R1 2.5 R G Total Peak Load G R1 2.5 MERC Order in Case No. 73 of 2019 Page 6 of 9

7 Building FY FY FY H1 H2 H1 H2 H1 H2 R G Total Particulars FY FY FY FY FY Base Load Peak Load The Commission notes that KRC has proposeed to start its operations as Distribution Licensee from 1 April, At present only building G2 is commissioned and partially occupied. Hence, in absence of any historical consumption data, exact demand projections are not possible. However, based on the past experience of other SEZ Distribution Licensees having similar type of IT Load SEZ, KRC has estimated Base Load of around 1 MW and Peak Load of 0.8 MW (08:00 to 23:00 hrs) from Monday to Friday excluding National holidays. The Commission accepts the same for the purpose of approving power procurement. 9. The Commission notes that KRC has initiated the power procurement process through DEEP Portal for 2.00 MW RTC for the period of six months from 1 April, 2019 to 30 September, 2019 as per Standard Bidding Guidelines issued by the MoP. The Commission observes that KRC has also published Notice on 11 February, 2019 in Business Standard, Mumbai Edition and in Hindustan Times, Delhi Edition and floated e-tender/bidding Document (including RFQ and RFP) through DEEP Portal as per Standard Bidding Guidelines without any deviation. 10. The Commission notes that KRC has not got any response for the first time. After extending bid submission deadline through corrigendum two bidders viz. MBPPL and GMRETL participated in the bid. As per the procedure prescribed in the guidelines, KRC carried out the E- Bidding and E-Reverse Auction. Post E-Reverse Auction, MBPPL with rate of Rs / kwh was found to be lowest bidder. 11. The Commission notes that MBPPL is deemed Distribution Licensee having its IT&ITes SEZ at Airoli, Navi Mumbai. MBPPL is also Group Company of the promoters of KRC. MBPPL being Distribution Licensee, its Annual Revenue Requirement (ARR) and Tariff is determined by the Commission. Hence, revenue accrued to MBPPL by way of sale of power to KRC will be trued up during tariff determination process. At that time prudency of this contract with reference to MBPPL s power procurement cost will be scrutinized. MERC Order in Case No. 73 of 2019 Page 7 of 9

8 12. The Commission notes that KRC has appointed PFCCL for conducting short term bidding process on DEEP Portal. The Commission notes that process of procurement of Short Term Power is conducted in accordance with Competitive Bidding Guidelines. The Commission also notes that discovered rate of Rs. 4.84/kWh for short term power of 2 MW for the period of 1 April to 30 September, 2019, is comparable with the rate discovered (Rs to Rs /-) by other Distribution Licensees in Maharashtra. Hence, rate discovered by KRC is reflective of current market rate. 13. Section 63 of the EA mandates the Commission to adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government. 14. In view of the foregoing, the Commission notes that Power Procurement rate discovered by KRC fulfils mandates and requirements for adoption as set out in Section 63 of the EA, the Commission adopts the Power Procurement rate of Rs 4.84/kWh RTC supply of 2.00 MW power for the period of six months from 1 April, 2019 to 30 September, The Commission notes that PPA is in line with Standard Bidding documents issued by MoP. The Commission also notes that MBPPL accepted the LoA vide its letter dated 12 March, Accordingly, the Commission accords approval to PPA between KRC and MBPPL. KRC shall submit copy of final PPA for records of the Commission. Hence following Order: 1. Case No 73 of 2019 is allowed. ORDER 2. The Commission approves M/s. KRC Infrastructure and Projects Private Limited s demand projection for 5 years as set out in para no Under Section 63 of the Electricity Act, 2003, the Commission adopts short term Power Procurement rate of Rs 4.84/kWh for RTC supply of 2.00 MW power for the period of six months from 1 April, 2019 to 30 September, 2019 and accordingly approves PPA between M/s. KRC Infrastructure and Projects Private Limited and Mindspace Business Parks Private Limited. 4. M/s. KRC Infrastructure and Projects Private Limited, to submit copy of Final PPA to the Commission. Sd/- (Mukesh Khullar) Member Sd/- (I.M.Bohari) Member MERC Order in Case No. 73 of 2019 Page 8 of 9