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UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION
PETITION NO.: 739/2011 & 793/2012
FILED BY
U. P. POWER TRANSMISSION CORPORATION LIMITED
IN THE MATTER OF
DETERMINATION OF ANNUAL REVENUE REQUIREMENT (ARR)
AND TARIFF FOR FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13
ORDER UNDER SECTION 64 OF
THE ELECTRICITY ACT, 2003
LUCKNOW
19th October, 2012
TABLE OF CONTENTS
Chapter 1. BACKGROUND AND BRIEF HISTORY......................................................................................... 6
1.1 BACKGROUND: .................................................................................................................................. 6
1.2 TRANSMISSION TARIFF REGULATIONS: ............................................................................................. 8
1.3 FILING OF ARR / TARIFF PETITION: .................................................................................................... 8
Chapter 2. PROCEDURAL HISTORY ............................................................................................................ 9
2.1 ARR & TARIFF PETITIONS FILING BY THE UTILITY: ............................................................................. 9
2.2 PRELIMINARY SCRUTINY OF THE PETITIONS: .................................................................................. 11
2.3 INTERACTION WITH THE PETITIONERS: .......................................................................................... 13
2.4 ADMITTANCE OF ARR / TARIFF PETITION OF THE LICENSEE: .......................................................... 13
2.5 PUBLICITY OF THE PETITION:........................................................................................................... 14
Chapter 3. PUBLIC HEARING PROCESS .................................................................................................... 15
3.1 OBJECTIVE: ...................................................................................................................................... 15
3.2 PUBLIC HEARING: ............................................................................................................................ 15
3.3 VIEWS / COMMENTS / SUGGESTIONS / OBJECTIONS / REPRESENTATIONS ON ARR / TARIFF ....... 16
Chapter 4. BRIEF ANALYSIS OF THE TARIFF PETITION’S .......................................................................... 22
4.1 INTRODUCTION: .............................................................................................................................. 22
4.2 TRANSMISSION LOSSES: .................................................................................................................. 23
4.3 COMPONENTS OF ARR AND ANALYSIS OF EACH COMPONENT: ..................................................... 24
Chapter 5. AGGREGATE REVENUE REQUIREMENT FOR FY 2010 - 11 ..................................................... 25
5.1 ESCALATION / INFLATION INDEX ..................................................................................................... 25
5.2 OPERATION & MAINTENANCE EXPENSES: ...................................................................................... 27
5.3 GFA BALANCES AND CAPITAL FORMATION ASSUMPTIONS: ........................................................... 35
5.4 DEPRECIATION EXPENSE ................................................................................................................. 37
5.5 INTEREST AND FINANCE CHARGES: ................................................................................................. 39
5.6 OTHER INCOME: .............................................................................................................................. 42
5.7 RETURN ON EQUITY: ....................................................................................................................... 42
5.8 OTHER DEBITS (INCLUDING PROVISION FOR DOUBTFUL DEBTS): .................................................. 44
5.9 SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR TRANSCO: .......................................... 44
Chapter 6. AGGREGATE REVENUE REQUIREMENT FOR FY 2011 - 12 ..................................................... 45
6.1 ESCALATION / INFLATION INDEX:.................................................................................................... 45
6.2 OPERATION & MAINTENANCE EXPENSES: ...................................................................................... 47
Order on ARR and Tariff Petitions of UPPTCL
Page 2
6.3 GFA BALANCES AND CAPITAL FORMATION ASSUMPTIONS: ........................................................... 54
6.4 DEPRECIATION EXPENSE ................................................................................................................. 56
6.5 INTEREST AND FINANCE CHARGES: ................................................................................................. 58
6.6 OTHER INCOME: .............................................................................................................................. 60
6.7 RETURN ON EQUITY: ....................................................................................................................... 60
6.8 SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR TRANSCO: .......................................... 61
Chapter 7. AGGREGATE REVENUE REQUIREMENT FOR FY 2012 - 13 ..................................................... 63
7.1 ESCALATION INDEX / INFLATION RATE ........................................................................................... 63
7.2 OPERATION & MAINTENANCE EXPENSES: ...................................................................................... 64
7.3 GFA BALANCES AND CAPITAL FORMATION ASSUMPTIONS: ........................................................... 71
7.4 DEPRECIATION EXPENSE ................................................................................................................. 73
7.5 INTEREST AND FINANCE CHARGES: ................................................................................................. 74
7.6 OTHER INCOME: .............................................................................................................................. 76
7.7 RETURN ON EQUITY: ....................................................................................................................... 77
7.8 SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR TRANSCO: .......................................... 78
7.9 SLDC CHARGES: ............................................................................................................................... 79
7.10 TRANSMISSION CHARGES: ......................................................................................................... 80
7.11 OPEN ACCESS: TRANSMISSION CHARGES: ................................................................................. 82
Chapter 8. DIRECTIVES ............................................................................................................................ 84
Chapter 9. APPLICABILITY OF THE ORDER ............................................................................................... 89
Order on ARR and Tariff Petitions of UPPTCL
Page 3
LIST OF TABLES
TABLE 3-1 : SCHEDULE OF PUBLIC HEARING AT VARIOUS LOCATIONS OF UTTAR PRADESH ........................ 15
TABLE 4-1: SUMMARY OF ARR PETITIONS FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13 (RS. CRORES) ............ 22
TABLE 4-2: APPROVED TRANSMISSION LOSSES FOR FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13 .................. 23
TABLE 5-1: INFLATION INDEX FOR FY 2010 - 11 ............................................................................................ 27
TABLE 5-3: APPROVED INCREMENTAL EXPENSES FOR FY 2010 - 11 (RS. CRORES) ....................................... 29
TABLE 5-2: ALLOCATION OF INCREMENTAL O&M EXPENSES (RS. CRORES) ................................................. 29
TABLE 5-4: APPROVED EMPLOYEE EXPENSES FOR FY 2010 - 11 (RS. CRORES) ............................................. 31
TABLE 5-5: APPROVED A&G EXPENSES FOR FY 2010 - 11 (RS. CRORES) ....................................................... 33
TABLE 5-6: APPROVED R&M EXPENSES FOR FY 2010 - 11 (RS. CRORES) ....................................................... 35
TABLE 5-7: APPROVED CAPITALIZATION AND WIP FOR FY 2010 - 11 (RS. CRORES) ...................................... 37
TABLE 5-8: DEPRECIATION APPROVED FOR FY 2010 - 11 (RS. CRORES) ........................................................ 39
TABLE 5-9: INTEREST ON LONG TERM LOAN FOR FY 2010 - 11 (RS. CRORES) ............................................... 40
TABLE 5-10: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2010 - 11 (RS. CRORES) ......................... 41
TABLE 5-11: APPROVED RETURN ON EQUITY FOR FY 2010 - 11 (RS. CRORES) .............................................. 43
TABLE 5-12: SUMMARY OF ARR FOR FY 2010 - 11 (RS. CRORES) .................................................................. 44
TABLE 6-1: INFLATION INDEX FOR FY 2011 - 12 ............................................................................................ 46
TABLE 6-2: APPROVED INCREMENTAL EXPENSES FOR FY 2011 - 12 (RS. CRORES) ....................................... 49
TABLE 6-3: APPROVED EMPLOYEE EXPENSES FOR FY 2011 - 12 (RS. CRORES) ............................................. 51
TABLE 6-4: APPROVED A&G EXPENSES FOR FY 2011 - 12 (RS. CRORES) ..................................................... 53
TABLE 6-5: APPROVED R&M EXPENSES FOR FY 2011 - 12 (RS. CRORES) ....................................................... 54
TABLE 6-6: APPROVED CAPITALIZATION AND WIP FOR FY 2011 - 12 (RS. CRORES) ...................................... 56
TABLE 6-7: DEPRECIATION APPROVED FOR FY 2011 - 12 (RS. CRORES) ........................................................ 57
TABLE 6-8: INTEREST ON LONG TERM LOAN FOR FY 2011 - 12 (RS. CRORES) ............................................... 59
TABLE 6-9: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2011 - 12 (RS. CRORES) ........................... 60
TABLE 6-10: APPROVED RETURN ON EQUITY FOR FY 2011 - 12 (RS. CRORES) .............................................. 61
TABLE 6-11: SUMMARY OF ARR FOR FY 2011 - 12 (RS. CRORES) .................................................................. 62
TABLE 7-1: INFLATION INDEX FOR FY 2012 - 13 ............................................................................................ 64
TABLE 7-2: APPROVED INCREMENTAL EXPENSES FOR FY 2012 - 13 (RS. CRORES) ....................................... 66
TABLE 7-3: APPROVED EMPLOYEE EXPENSES FOR FY 2012 - 13 (RS. CRORES) ............................................. 68
TABLE 7-4: APPROVED A&G EXPENSES FOR FY 2012 - 13 (RS. CRORES) ....................................................... 70
Order on ARR and Tariff Petitions of UPPTCL
Page 4
TABLE 7-5: APPROVED R&M EXPENSES FOR FY 2012 - 13 (RS. CRORES) ....................................................... 71
TABLE 7-6: APPROVED CAPITALIZATION AND WIP FOR FY 2012 - 13 (RS. CRORES) ...................................... 73
TABLE 7-7: DEPRECIATION APPROVED FOR FY 2012 - 13 (RS. CRORES) ........................................................ 74
TABLE 7-8: INTEREST ON LONG TERM LOAN FOR FY 2012 - 13 (RS. CRORES) ............................................... 75
TABLE 7-9: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2012 - 13 (RS. CRORES) ........................... 76
TABLE 7-10: APPROVED RETURN ON EQUITY FOR FY 2012 - 13 (RS. CRORES) .............................................. 77
TABLE 7-11: SUMMARY OF ARR FOR FY 2012 - 13 (RS. CRORES) .................................................................. 78
TABLE 7-12: APPROVED SLDC CHARGES (RS. CRORES) .................................................................................. 80
TABLE 7-13: APPROVED SLDC CHARGES PAYABLE BY UPPTCL ...................................................................... 80
TABLE 7-14: ANALYSIS OF TRANSMISSION TARIFFS ...................................................................................... 81
TABLE 7-15 APPROVED TRANSMISSION CHARGES FOR FY 2012 - 13 ............................................................ 81
TABLE 7-16: APPROVED VOLTAGE LEVEL TRANSMISSION OA CHARGES – LONG TERM (RS./KWH) ............. 83
TABLE 7-17: APPROVED VOLTAGE LEVEL TRANSMISSION OA CHARGES – SHORT TERM (RS./KWH)............ 83
TABLE 8-1: DIRECTIVES .................................................................................................................................. 84
Order on ARR and Tariff Petitions of UPPTCL
Page 5
Before
UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION
Petition No.: 739/2011 & 793/2012
IN THE MATTER OF:
Application dated 28th March, 2011 & 21st February, 2012 regarding Aggregate Revenue
Requirement and determination of Tariff for FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13,
Uttar Pradesh Power Transmission Corporation Limited (UPPTCL)
And
IN THE MATTER OF:
U.P. Power Transmission Corporation Limited (UPPTCL)
ORDER
The Commission having deliberated upon the above petitions and also the subsequent
filings by the Petitioner (the last being on 14th June, 2012 and the petitions thereafter
being admitted on 25th June, 2012), and having considered the views / comments /
suggestions / objections / representations received during the course of the above
proceedings and also in the public hearings held, in exercise of power vested under
Sections 61, 62, 64 and 86 of the Electricity Act 2003, hereby pass this Order signed,
dated and issued on 19th October, 2012. The licensee, in accordance to Section 139 of
the Uttar Pradesh Electricity Regulatory Commission (Conduct of Business) Regulations
2004, shall arrange to get published within one week from the date of issue of this Order
the tariffs approved herein by the Commission. The tariffs thus notified shall be effective
from 1st October, 2012 and unless amended or revoked, shall continue to be in force till
issuance of the next Tariff Order.
Order on ARR and Tariff Petitions of UPPTCL
Page 6
Chapter 1. BACKGROUND AND BRIEF HISTORY
1.1 BACKGROUND:
1.1.1 The Uttar Pradesh Electricity Regulatory Commission (UPERC) was formed under
U. P. Electricity Reform Act, 1999 by Government of Uttar Pradesh (GoUP) in one
of the first steps of reforms & restructuring process of the power sector in the
State. Thereafter, in pursuance of the reforms & restructuring process the
erstwhile Uttar Pradesh State Electricity Board (UPSEB) was unbundled into the
following three separate entities through the first Transfer Scheme dated 14th
January 2000:
Uttar Pradesh Power Corporation Limited (UPPCL): vested with the function
of Transmission and Distribution within the State,
Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL): vested with
the function of Thermal Generation within the State,
Uttar Pradesh Jal Vidyut Nigam Limited (UPJVNL): vested with the function of
Hydro Generation within the State.
1.1.2 Through another Transfer Scheme dated 15th January, 2000, assets, liabilities and
personnel of Kanpur Electricity Supply Authority (KESA) under UPSEB were
transferred to Kanpur Electricity Supply Company (KESCO), a company registered
under the Companies Act, 1956.
1.1.3 After the enactment of the Electricity Act, 2003 (EA 2003) the need was felt for
further unbundling of UPPCL (responsible for both Transmission and Distribution
functions) along functional lines. Therefore the following four new distribution
companies (hereinafter collectively referred to as “DISCOMS”) were created vide
Uttar Pradesh Transfer of Distribution Undertaking Scheme, 2003 dated 12th
August 2003, to undertake distribution and retail supply of electricity in the areas
under their respective zones specified in the scheme:
Dakshinanchal Vidyut Vitaran Nigam Limited : (Agra DISCOM)
Madhyanchal Vidyut Vitaran Nigam Limited : (Lucknow DISCOM)
Pashchimanchal Vidyut Vitaran Nigam Limited: (Meerut DISCOM)
Purvanchal Vidyut Vitaran Nigam Limited : (Varanasi DISCOM)
Under this scheme the role of UPPCL was specified as “Bulk Supply Licensee” as
per the license granted by the Uttar Pradesh Electricity Regulatory Commission
and as “State Transmission Utility” under sub-section (1) of Section 27-B of the
Indian Electricity Act, 1910 as notified by the State Government.
Order on ARR and Tariff Petitions of UPPTCL
Page 7
1.1.4 Subsequently, the Uttar Pradesh Power Transmission Corporation Limited
(UPPTCL), a Transmission Company (TRANSCO), was incorporated under the
Companies Act, 1956 by an amendment in the ‘Object and Name’ clause of the
Uttar Pradesh Vidyut Vyapar Nigam Limited. The TRANSCO started functioning
with effect from 26th July 2006 and is entrusted with the business of transmission
of electrical energy to various utilities within the State of Uttar Pradesh. This
function was earlier vested with UPPCL. Further, Government of Uttar Pradesh
(GoUP) in exercise of power under the Section 30 of the EA 2003, vide
notification No. 122/U.N.N.P/24-07 dated 18th July, 2007 notified Uttar Pradesh
Power Transmission Corporation Limited as the “State Transmission Utility” of
Uttar Pradesh.
1.1.5 Thereafter, on 21st January, 2010, the distribution companies of UPPCL, created
through UP Power Sector Reforms (Transfer of Distribution Undertakings)
Scheme, 2003 were issued fresh distribution licenses for their respective areas of
supply.
1.1.6 Further, assets and liabilities of transmission business were transferred from
UPPCL to UPPTCL through a Transfer Scheme No. 2974/24-P-2-2010 dated 23rd
December, 2010. UPERC granted the Transmission License to UPPTCL on 3rd
August, 2011. UPPTCL is entrusted with the responsibilities of planning and
development of an efficient and economic intra-state transmission system,
providing connectivity and allowing long-term open access for use of the intra-
state transmission system in coordination, among others, licensees and
generating companies. In doing so, it is guided by the provisions of UP Electricity
Grid Code, UPERC (Terms & Conditions for Open Access) Regulations, 2004,
UPERC (Grant of connectivity to Intra State Transmission System) Regulations,
2010 as amended from time to time.
1.1.7 Government of Uttar Pradesh (GoUP) in exercise of the powers under Section 31
of the Electricity Act, 2003, vide notification No. 78/24-U.N.N.P.-11-525/08 dated
24th January, 2011, notified ‘Power System Unit” as the “State Load Despatch
Centre” of Uttar Pradesh for the purposes of exercising the powers and
discharging the functions under Part V of EA, 2003. SLDC shall be operated by the
Uttar Pradesh Power Transmission Corporation Ltd., in its capacity as the State
Transmission Utility. State Load Despatch Centre shall be apex body to ensure
integrated operation of the power system in the State.
Order on ARR and Tariff Petitions of UPPTCL
Page 8
1.2 TRANSMISSION TARIFF REGULATIONS:
1.2.1 The Uttar Pradesh Electricity Regulatory Commission (Terms and Conditions for
Determination of Transmission Tariff) Regulations, 2006 (hereinafter referred to
as the “Transmission Tariff Regulations”) were notified by the Commission on 6th
October, 2006. These regulations are applicable for the purposes of ARR filing
and Tariff determination of the transmission licensee within the State of Uttar
Pradesh.
1.3 FILING OF ARR / TARIFF PETITION:
1.3.1 The transmission utility in the State has filed the ARR and Tariff petitions in line
with the provisions of the Transmission Tariff Regulations and the same is being
processed by the Commission accordingly.
Order on ARR and Tariff Petitions of UPPTCL
Page 9
Chapter 2. PROCEDURAL HISTORY
2.1 ARR & TARIFF PETITIONS FILING BY THE UTILITY:
2.1.1 Uttar Pradesh Power Transmission Corporation Limited (hereinafter referred to
as "UPPTCL”) submitted its ARR / Tariff petition for FY 2010 - 11 and FY 2011 - 12
(Petition No. 739/2011) under Section 64 of the Electricity Act, 2003 and the
provisions of the UPERC (Conduct of Business) Regulations, 2004 & Transmission
Tariff Regulation before the Commission on 28th March, 2011.
2.1.2 UPPTCL also submitted the ARR / Tariff petition for FY 2012 - 13 (Petition No.
793/2012) on 21st February, 2012.
2.1.3 The Commission noticed that the submissions of the Petitioner were void of the
audited accounts for FY 2009 - 10, FY 2010 - 11 and FY 2011 - 12. The UPERC
(Terms and Conditions for Determination of Transmission Tariff) Regulations,
2006 requires the distribution licensee to submit along with ARR / Tariff petition
the audited accounts of the relevant year. The Petitioner has failed to do so.
2.1.4 The Hon’ble Appellate Tribunal For Electricity (hereinafter referred to as
"APTEL”) in its judgement in Appeal No. 121 of 2010 dated 21st October, 2011
has, vide Para 12.1, upheld the Tariff Regulations in the matter of requirement of
the audited accounts for the previous year in any ARR / Tariff filing. The order
also stipulates to consider the audited accounts for the previous year and
provisional half yearly accounts for the current year as part of the Annual
Performance Review. It further held that in case the previous year audited
accounts are not available, then the audited accounts for the year prior to the
previous year could be taken into consideration. The Hon’ble APTEL vide Para
6.15, gave directions to the Petitioner with regards to time lines for filing the
audited accounts for FY 2007 - 08, FY 2008 - 09 and FY 2009 - 10. It also gave
directions to State Commission to immediately initiate true-up exercise after
receipt of the same. The timelines for submission of the audited accounts by the
licensee / Petitioner were as follows:
Financial Year Last date of Submission
2007 – 08 21.11.2011
2008 – 09 31.01.2011 (May be read as 31.01.2012)
2009 – 10 31.03.2012
Order on ARR and Tariff Petitions of UPPTCL
Page 10
2.1.5 The above - referred judgement of the Hon’ble APTEL’s judgment reproduced
below:
“..Therefore, we direct the respondents 3 to 8 to submit the audited accounts for
the FY 2007 - 08 to the State Commission within one month of the date of this
judgment. The audited accounts for the FY 2008 - 09 and 2009 - 10 should be
furnished by 31.01.2011 and 31.3.2012 respectively to the State Commission. The
State Commission shall initiate the true up exercise upto FY 2006-07 immediately,
followed by the true up of the FY 2007 - 08, 2008 - 09 and 2009 - 10 immediately
after the receipt of the respective audited accounts…”
2.1.6 As per the provisions of the Electricity Act, 2003, the UPERC (Terms and
Conditions for Determination of Transmission Tariff) Regulations, 2006 and the
Hon’ble APTEL’s Judgment referred above it is clear that the submission of the
audited accounts for the previous year is one of the requirements to be fulfilled
by the Petitioner for its petition to be admitted. Accordingly for processing of the
ARR / Tariff Petition for any financial year the following are required:
Provisional half year accounts for the current financial year,
Annual audited accounts for the previous year along with true up
petition,
In case due to any reason the audited accounts for previous year is not
available, then the audited accounts for at least the year prior to the
previous year is required along with provisional accounts for the previous
year.
2.1.7 The Commission finds that non-submission of audited accounts by the Petitioner
is contrary to the provisions of the UPERC Transmission Tariff Regulations. The
Commission had accordingly convened a hearing on 27th March, 2012, wherein
the issue of non-submission of audited accounts was discussed. During the
discussions on the above matter, Sh. Nand Lal, the then Director (P&A), UPPCL,
on behalf of the Petitioners, speaking to the Commission that the accounts for FY
2008 - 09 were under audit by the CAG and would be made available to the
Commission. Further, he submitted that the CAG audited accounts for FY 2009 -
10 would be made available by December, 2012. However, till the issue of this
order no submission has been made.
2.1.8 The Commission also notices that the process of determination of ARR / Tariff for
the period under consideration in this order is already much delayed and so
would not like to stall it further due to the non-submission of requisite
information by the Petitioner as elaborated above. Further delay in
Order on ARR and Tariff Petitions of UPPTCL
Page 11
determination of tariff would adversely affect the Petitioner as well as the
consumers of the State as a whole.
2.1.9 Accordingly the Commission, vide its order dated 29th March, 2012, had directed
the Petitioner to file the provisional accounts along with the schedules duly
certified by Chartered Accountant for FY 2009 - 10 and FY 2010 - 11 within 15
days.
2.1.10 The Petitioner had in compliance to the directives of the Commission had filed
the provisional accounts for FY 2009 - 10 and FY 2010 - 11 vide letter No.
605/RAU/ARR & Tariff FY 2012 - 13 dated 25th April, 2012.
2.2 PRELIMINARY SCRUTINY OF THE PETITIONS:
2.2.1 Subsequent to receipt of the ARR / Tariff Petitions a preliminary scrutiny of the
Petition was carried out by the Commission. It was observed that certain data
required as per the UPERC Transmission Tariff Regulations had not been
furnished with the submissions made by the licensee. Hence a detailed deficiency
note was sent to the licensee vide Letter No. UPERC/Secy./D(Tariff/11-251) dated
24th May 2011 and Letter No. UPERC/Secy./D(Tariff/12-945) dated 30th March
2012 directing it to provide the required information within 15 days. In response
to the deficiency note, the licensee provided some of the critical data required by
the Commission for acceptance / admission of the petition vide Letter No.
514/RAU/ARR & Tariff FY 2012 - 13 dated 12th April, 2012, Letter No.
936/RAU/ARR & Tariff FY 2012 - 13 dated 14th June, 2012. The latest submissions
on 14th June, 2012 were found to be at large variance with the data submitted
earlier. This was brought to the notice of the Petitioner vide Commission’s letter
dated 19th June, 2012, wherein it was also informed to the Petitioners that the
Commission would consider the latest submission of the Petitioner for analysing
the ARR.
2.2.2 The Commission also noted that the licensees had not submitted with their
petition the audited accounts for the respective years. The audited accounts are
primarily required for the purpose of undertaking the subsequent ‘true – up’
exercise for any given financial year. They serve the limited purpose of
recognizing the actual performance of the licensee and for considering whether
to permit or not permit the ‘true – up’ for performance variations vis-à-vis the
performance parameters considered in the Tariff Order. The ARR & Tariff
determination process on the other hand is the projected estimates based on
Order on ARR and Tariff Petitions of UPPTCL
Page 12
forecast of number of consumers likely to take supply, expected quantum of
energy required to meet the demand, anticipated load etc. Further, the
characteristic of power sector business is such that more often than not the
Regulatory Commissions would have to deal with estimated / projected
information on various factors and determine the tariff on judgmental prognosis
adopting a balanced approach in addressing interests of both the consumers and
the licensee subject to adjustments during subsequent ‘true-up’ exercise based
in audited accounts.
2.2.3 The Petitioner is already reeling under tremendous financial pressure on account
of various factors including increase in Employee Cost, Administrative Costs,
R&M Costs and increased cost of power purchased etc. While the Petitioner
should not be allowed to recover any additional costs on account of
inefficiencies, they should be allowed to recover the legitimate increase in costs
through tariff revision as deemed necessary. The Commission opines that the
delay in submission of audited accounts should not lead to stoppage of the
process of ARR & Tariff determination.
2.2.4 The Commission vide its Letter No. 1476 dated 12th January 2012, No. 044 dated
11th April 2012, and No. 063 dated 13th April 2012 directed the Petitioner to
submit the audited accounts for FY 2010 - 11 and FY 2011 - 12 and true-up
petitions upto FY 2009 - 10. Further, UPPTCL filed the true-up petition (Petition
No. 809/2012) for FY 2000 - 01 to FY 2007 - 08 on 28th May, 2012. This petition
shall be taken up by the Commission separately. In the present order, the
Commission has not undertaken true-up of any of the past years as UPPTCL has
not submitted audited accounts timely which are required for this purpose, in
line with the UPERC Transmission Tariff Regulations.
2.2.5 However, the Petitioner has not filed any audited accounts for FY 2008 - 09
onwards. Accordingly, the Commission has not undertaken true-up process. For
this very reason the Commission has been seeking again and again the audited
annual accounts from the Petitioner. The final approval of actual expenses will be
undertaken at the time of truing up process.
2.2.6 The Commission once again directs the Petitioner to ensure finalisation of
audited accounts for the past years at the earliest and, in case of coming years,
within a reasonable time frame. Further, the Petitioner is also directed to ensure
that the annual accounts are submitted along with the next ARR / Tariff filing by
them to enable the true up process to be undertaken.
Order on ARR and Tariff Petitions of UPPTCL
Page 13
2.2.7 The Commission has analysed the petitions, supplementary submissions,
provisional accounts etc. submitted by the Uttar Pradesh Power Transmission
Corporation Limited (UPPTCL) for approval of ARR/Tariff application for the FY
2010 - 11, FY 2011 - 12 and FY 2012 - 13 as detailed in the subsequent sections.
2.3 INTERACTION WITH THE PETITIONERS:
2.3.1 Subsequent to the admission of the petition several written and oral interactions
were held with the Petitioner wherein the additional information / clarification
were sought. Meetings were also held with UPPCL and the Petitioner in the office
of the Commission on 27th March, 2012 and 17th May, 2012 to hear their views
on their petition.
2.4 ADMITTANCE OF ARR / TARIFF PETITION OF THE LICENSEE:
2.4.1 Notwithstanding the fact that the structure of UP Power Sector is still not
completely in line with the spirit of the Electricity Act, 2003 the Commission, in
the larger interest of consumers as well as the Petitioner, admitted the petition
filed by them to honour its commitment to abide by the major statutory
obligation of tariff determination cast upon it by EA 2003.
2.4.2 The Commission observes that to proceed further in the matter of determination
of ARR / Tariff it has to refer to the data submitted by the licensees in their
petitions including the various additional data / clarifications submissions made
by them from time to time. The petition is void of the audited accounts which is a
primary requirement as per the Transmission Tariff Regulation. In the absence of
such details the petition is liable for rejection. In such a scenario the Commission
could have proceeded suo-motto, for determination of the ARR / Tariff, vide
powers conferred to it under the Section 26 of the UPERC (Conduct of Business)
Regulations, 2004. However, it is pertinent to note that while proceeding suo-
motto the Commission would be referring to all the data submitted by the
licensees vide their petitions including the various additional data / clarifications
submissions made from time to time. As such there would be no difference in the
analysis and the finalization of the ARR / Tariff orders if the petitions are
accepted in their present form. The only difference would be that in suo-motto
proceedings the Petitioners would play a passive role in the process involving
issue of public notices and holding of public hearings. The Commission,
therefore, is of the firm view that it would be in the best interest of the power
sector of the State to actively involve the Petitioner, who is also the biggest
stakeholder in the whole process. Required course correction with data based on
Order on ARR and Tariff Petitions of UPPTCL
Page 14
audited accounts can be carried out as and when true up exercise is taken up
with the audited accounts for the respective years. Also it is now clear from the
perusal of the true up petition submitted for FY 2000 - 01 to FY 2007 - 08 that
there is a very large gap which needs to be addressed. Taking all the above
factors into consideration the Commission admitted the ARR / Tariff petitions of
the transmission licensee for FY 2010 - 11 & FY 2011 - 12 and FY 2012 - 13 on 25th
June, 2012.
2.4.3 The Commission through its admittance orders dated 25th June, 2012 directed
the licensee to publish the Public Notice detailing the salient information and
facts of the ARR petitions in at least two daily newspapers (one English and one
Hindi) for two successive days for inviting objections by all stakeholders and
public at large.
2.5 PUBLICITY OF THE PETITION:
2.5.1 The Public Notice detailing the salient features of the ARR petitions were made
by UPPCL on behalf of the Petitioner and they appeared in the daily newspaper
as detailed below inviting objections from public at large and all stakeholders:
Hindustan (Hindi) : 8th July, 2012; 9th July, 2012
Hindustan Times (English) : 8th July, 2012
Amar Ujala (Hindi) : 8th July, 2012; 9th July, 2012
Dainik Jagran (Hindi) : 8th July, 2012; 9th July, 2012
Aaj (Hindi) : 8th July, 2012
Sunday Times (English): 8th July, 2012
Rashtriya Swaroop (Hindi) : 8th July, 2012
Rashtriya Sahara (Hindi) : 8th July, 2012
Swatantra Bharat (Hindi) : 8th July, 2012
Voice of Lucknow (Hindi) : 8th July, 2012
Avadhnama (Urdu) : 8th July, 2012
Roznama (Urdu) : 8th July, 2012
Dainik In Dinon (Urdu) : 8th July, 2012
HIndustan (Hindi), Aligarh Edition : 9th July, 2012
HIndustan (Hindi), Agra Edition : 9th July, 2012
HIndustan (Hindi), Bareli Edition : 9th July, 2012
HIndustan (Hindi), Moradabad Edition: 9th July, 2012
Order on ARR and Tariff Petitions of UPPTCL
Page 15
Chapter 3. PUBLIC HEARING PROCESS
3.1 OBJECTIVE:
3.1.1 The Commission, in order to achieve the twin objective i.e. to observe
transparency in its proceedings and functions and to protect interest of
consumers, has always attached importance to the views / comments /
suggestions / objections / representations of the public on the ARR / Tariff
petitions submitted by the licensees. The process gains significant importance in
a “cost plus regime”, where the entire cost allowed to the licensee gets
transferred to the consumer. The consumers therefore have a locus-standi to
comment on the ARR / Tariff Petition filed by the licensees.
3.1.2 The comments of the consumers play an important role in the determination of
tariff and the design of the rate schedule. Factors such quality of electricity
supply and the service levels need to be considered while determining the tariff.
The Commission takes into consideration the submissions of the consumers
before it embarks upon the exercise of determining the tariff.
3.1.3 The Commission, by holding public hearings, has provided the various
stakeholders as well as the public at large a platform where they were able to
share their views / comments / suggestions / objections / representations on the
ARR/Tariff petitions submitted by the distribution licensee for FY 2010 - 11, FY
2011 - 12 and FY 2012 - 13. It also enabled the Commission to adopt a
transparent and participative approach in the process of tariff determination.
3.2 PUBLIC HEARING:
3.2.1 To provide an opportunity to all sections of the population in the State to air
their views and to also obtain feedback from them, public hearings were held by
the Commission at various places in the State. The public hearings were
conducted from August 16th 2012 to September 11th 2012 as per details given
below:
TABLE 3-1 : SCHEDULE OF PUBLIC HEARING AT VARIOUS LOCATIONS OF UTTAR PRADESH
S.No. Date Venue of Hearing
1. 16.08.2012 Agra
2. 18.08.2012 Greater NOIDA
3. 18.08.2012 Noida
Order on ARR and Tariff Petitions of UPPTCL
Page 16
S.No. Date Venue of Hearing
4. 23.08.2012 Allahabad
5. 25.08.2012 Kanpur
6. 11.09.2012 Lucknow
3.2.2 Consumer representatives, industry associations as well as several individual
consumers participated actively in the public hearing process. The Petitioners
were also given an opportunity to respond to the stakeholders.
3.2.3 The views / comments / suggestions / objections / representations on the ARR/
Tariff petitions received from the public were forwarded to the licensee for their
comments / response. The Commission considers these submissions of the
consumers and the response of the licensee before it embarks upon the exercise
of determining the tariff for a particular period.
3.2.4 Besides this the Commission, while disposing the ARR / Tariff petitions filed by
the distribution licensee, has also taken into consideration the oral and written
views / comments / suggestions / objections / representations received from
various stakeholders during the public hearings or through post or by e-mail.
3.2.5 The Commission has taken note of the views and suggestions submitted by the
various stakeholders which provided useful feedback on various issues and the
Commission appreciates their keen participation in the entire process.
3.3 VIEWS / COMMENTS / SUGGESTIONS / OBJECTIONS / REPRESENTATIONS ON
ARR / TARIFF
3.3.1 The Commission has taken note of the various views / comments / suggestions /
objections / representations made by the stakeholders and would like to make
specific mention of the following stakeholders for their valuable inputs:
a. Mr. Avadesh Kumar Verma b. Mr. Rama Shankar Awasthi c. Mr. N. S. Hanspal
3.3.2 The list of the consumers, who have submitted their views / comments /
suggestions / objections / representations, is appended at the end of this
chapter. The major issues raised therein, the replies given by the Petitioner and
the views of the Commission have been summarised as detailed below:
Order on ARR and Tariff Petitions of UPPTCL
Page 17
ACTUAL COSTS
A) Comments / Suggestions of the Public:
3.3.3 UPPTCL has claimed a higher amount than the actual expenses incurred as per
the submissions made by the Petitioner.
B) The Petitioner’s response:
3.3.4 The Petitioner submitted that Govt of UP in exercise of power conferred under
sub section (4) of Section 13 of Electricity Act, 2003 on 23-12-2010 notified
Transfer Scheme, for the purpose of transfer proceedings from UP Power
Corporation Ltd to the UP Power Transmission Corporation. In the said Transfer
Scheme effective date was notified as 01-04-2007. Before this date there was
only one balance sheet while only after the issuance of the Transfer Scheme
separate balance sheet was prepared by the Petitioner. It is only after separation
of UPPTCL from UPPCL account, expenses toward transmission activities was
segregated. Now on the basis of Transfer Scheme, balance sheet has been
prepared and true-up has been submitted to the Commission for approval.
C) The Commission’s views:
3.3.5 In the previous Tariff Order of the Commission dated 31st March, 2010, the
Commission directed UPPTCL to co-ordinate with GoUP and expedite approval
process of the Transfer Scheme so that the actual expenses of the transmission
licensee can be ascertained to arrive at the accurate estimate of the aggregate
annual requirement. GoUP notified the transfer scheme on 23rd December, 2010
for transferring proceedings from UPPCL to UPPTCL.
3.3.6 Going forward, the Commission is of the view that after the above move from
GoUP and segregation of expenses of UPPTCL from UPPCL, accurate expenses of
the utility would be ascertained at the time of truing up exercise subject to the
submission of audited accounts for the respective years.
3.3.7 However the Commission has taken a prudent view in regard to the expenses
claimed by the Petitioner in the subsequent sections.
Order on ARR and Tariff Petitions of UPPTCL
Page 18
NO NEED OF TARIFF HIKE
A) Comments / Suggestions of the Public:
3.3.8 Consumer submitted that UPPTCL was revenue surplus in FY 2006-07, FY 2007 -
08 & FY 2008 - 09 with excess transmission charges charged in accordance to the
approval from Energy Task Force and Board of Directors of UPPTCL. If the said
amount is adjusted against the revenue gap for FY 2012 - 13, there might be no
need of tariff hike.
B) The Petitioner’s response:
3.3.9 The licensee clarified that at the time of determination of transmission tariff for
the year FY 2007 - 08 and FY 2008 - 09, Transfer Scheme was not finalized due to
which balance sheet could not be prepared. Hence the transmission tariff has
been derived based upon estimate available at that time. The Commission
approved the ARR on the basis of data submitted. Further the transfer scheme
was issued on 23rd December, 2010 and draft account was prepared for FY 2007 -
08 on that basis a petition was filed on 14th Oct, 2011 for revision of transmission
tariff which was accepted by the Commission and provisional rate was approved
for FY 2007 - 08. Further true-up for FY 2007 - 08 has already been submitted for
approval. With regards to the approval by BOD / ETF concerned it is an internal
requirement of the licensee. Licensee had apprised its position to the Hon’ble
Commission.
C) The Commission’s views:
3.3.10 The transmission tariff in the State is determined in accordance to the provisions
of the UPERC Transmission Tariff Regulations applicable from time to time. Every
year, the estimates of aggregate revenue requirement of the transmission
licensee is prepared aligned to the regulations and the tariffs are approved
accordingly. The Regulation 3.15 of the UPERC Transmission Tariff Regulations in
this regards states as follows:
“1. No tariff or part of any tariff may ordinarily be amended, more frequently
than once in any financial year.
2. Subject to other provisions of these regulations, the ARR determined by the
commission for any financial year shall be trued up on the basis of audited
Order on ARR and Tariff Petitions of UPPTCL
Page 19
financial and operational results. Any deficit or surplus arising out of such true up
shall be adjusted while determining the tariff for the subsequent years.
Provided that the Commission shall allow higher expenditure actually incurred by
the licensee in any financial year on account of non controllable factors only after
due verification of such expenses and prudence check.”
In accordance to the said provisions, the tariff for the transmission licensee was
approved for the years, however, due to the delay in the approval of the Transfer
Scheme, the accurate estimates of the expenses couldn’t be ascertained. After
the approval of the GoUP on the said Transfer Scheme on 23rd December, 2012,
some progress has been made by the licensee towards segregation of costs and
balance sheet items from the holding company UPPCL. The Commission with this
order directs the licensee to streamline the operations of the transmission
licensee and completely segregate it from the distribution operations with
separate annual accounts to be filed timely with the Commission. This would
allow the Commission to arrive at the accurate level of expenses and henceforth
the transmission tariffs to be applicable in the State. Any variations in the
approved estimates and the actual revenue gap would be adjusted at the time of
truing up.
INCOMPLETE PETITION / DATA / INFORMATION
A) Comments / Suggestions of the Public:
3.3.11 Consumers complained that the petitions filed by UPPTCL are incomplete as per
prescribed transmission formats in the Transmission Tariff Regulations. The
computations of depreciation, interest & finance charges, bifurcation of assets
etc. is not detailed and justified in the petition documents filed by UPPTCL.
B) The Petitioner’s response:
3.3.12 The Petitioner has submitted that the provisional balance sheet for FY 2008 - 09,
FY 2009 - 10 & FY 2010 - 11 have been submitted before the Hon’ble Commission
which also includes the details of gross fixed assets.
3.3.13 The Petitioner has referred the Chapter 5.5 of the petition submitted for
explanation of the depreciation calculations. The Petitioner has submitted that it
has calculated the depreciation at a weighted average depreciation rate of 4.5%
on the opening GFA and on pro-rata basis for the assets capitalized during the
Order on ARR and Tariff Petitions of UPPTCL
Page 20
year. The weighted average depreciation rate of 4.5% has been derived as per
un-audited balance sheet of FY 2010 - 11.
3.3.14 Interest & finance charges has been calculated based on current schedule of long
term debt, repayment and new debt requirement for new projects. In addition to
this interest on working capital has been calculated as per methodology
prescribed in Transmission Tariff Regulations.
3.3.15 The Petitioner further clarified that most of the formats here been submitted to
the Commission, henceforth the ARR is complete in all respect.
C) The Commission’s views:
3.3.16 The Commission is in agreement to the contention of the objectors that the
transmission formats have not been complete in all respects having gone
through the petition documents. However, the Commission in the subsequent
deficiency notes and queries has sought information on the missing figures and
data / information which the licensee provided during the course of the process
of tariff determination. Further, after going through the supplementary
submissions, the Commission admitted the UPPTCL petitions for approval of year
wise aggregate revenue requirements.
3.3.17 The Commission has gone through the computations of depreciation, interest &
finance charges etc. done by the licensee in the petition documents and the
supplementary submissions. The order has been prepared in line with the
Transmission Tariff Regulations; analysis of the submissions made by the licensee
to arrive at aggregate revenue requirements is detailed in the subsequent
sections for estimates of individual items year-wise.
LINE LOSSES FOR UPPTCL
A) Comments / Suggestions of the Public:
3.3.18 Consumers complained that how come UPPTCL has proposed line losses at the
rate of 3.63% which is similar for the three years.
B) The Petitioner’s response:
Order on ARR and Tariff Petitions of UPPTCL
Page 21
3.3.19 The licensee mentioned that ARR for FY 2012 - 13 has been filed before Hon’ble
Commission on 21.02.2012. At the time of preparation of ARR, actual data for FY
2010 - 11 was available and on the basis of available data transmission losses has
been calculated to be 3.63% for FY 2010 - 11. For estimation of ARR for FY 2011 -
12 & FY 2012 - 13, transmission losses has been assumed to be at same level as
was in FY 2010 - 11, hence there is nothing wrong in doing so.
However in revised estimate which were submitted to Commission in June 2012,
actual transmission losses for FY 2010 - 11 & FY 2011 - 12 were available, so
these losses has been revised accordingly as 3.25% & 4.20% respectively.
C) The Commission’s views:
3.3.20 The Commission has analyzed the ARR of the Petitioner in accordance with the
provisions of the Transmission Tariff Regulations and the latest data available as
per UPPTCL submissions in response to the deficiency notes and additional
clarifications sought by the Commission. Accordingly, the year wise losses have
been approved as detailed in the subsequent sections after prudence check.
The above suggestions / observations have been taken into consideration by the
Commission while finalising this Tariff Order.
Order on ARR and Tariff Petitions of UPPTCL
Page 22
Chapter 4. BRIEF ANALYSIS OF THE TARIFF PETITION’S
4.1 INTRODUCTION:
4.1.1 The Commission has analysed the petitions on Aggregate Revenue Requirement
(ARR) submitted by the Uttar Pradesh Power Transmission Corporation Limited
(UPPTCL) for approval of ARR/Tariff application for the FY 2010 - 11, FY 2011 - 12
and FY 2012 - 13 as detailed in the subsequent sections.
4.1.2 The ARR as submitted by the UPPTCL is inclusive of State Load Despatch Centre
(SLDC)’s ARR. A brief overview of the ARR petitions and the updated estimates by
the Petitioner is shown in the table below:
Table 4-1: SUMMARY OF ARR PETITIONS FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13 (RS. CRORES)
Sr. No. Particulars FY 2010 -
11 FY 2011 -
12 FY 2012 -
13
1 Employee cost 331.75 404.09 456.64
2 A&G expenses 14.42 19.75 22.42
3 R&M expenses 101.74 113.24 127.97
4 Interest on Loan Capital (including bank
charges) 317.56 378.93 435.49
5 Interest on Working Capital - 30.56 34.73
6 Depreciation 310.93 345.85 394.53
7 Gross Expenditure 1,076.40 1,292.44 1,471.78
8 Less: Employee cost capitalized 65.44 87.68 99.09
9 Less: Interest capitalized 107.91 84.94 98.96
10 Less: A&G expenses capitalized 10.85 3.75 4.26
11 Net Expenditure 892.20 1,116.06 1,269.47
12 Provision for Bad & Doubtful debts 39.91 - -
13 Debits, write-offs & other expenses 2.26 - -
14 Net Expenditure with provisions 934.38 1,116.06 1,269.47
15 Add: Reasonable Return / Return on Equity
55.32 61.81
16 Less: Non-Tariff Income 40.30 29.62 32.53
17 Annual Revenue Requirement (ARR) 894.08 1,141.76 1,298.75
4.1.3 In the subsequent chapters, the Commission has determined and approved the
ARRs of the UPPTCL for FY 2010 - 11, FY 2011 - 12 and FY 2012 - 13 on the basis
of petitions, supplementary submissions submitted by UPPTCL and have
elaborated upon the approach followed for the same in line with the
Transmission Tariff Regulations. the Commission has approved SLDC’s ARR
submitted by UPPTCL on behalf of SLDC in line with the UPERC (Procedure, Terms
& Conditions for payment of Fee and Charges to State Load Despatch Centre and
Order on ARR and Tariff Petitions of UPPTCL
Page 23
other related provisions), Regulation, 2004 (hereinafter referred as SLDC
Regulations).
4.1.4 The Commission has not undertaken true-up of any of the past years as UPPTCL
has not submitted audited accounts which are required for this purpose, in line
with Transmission Tariff Regulations. In absence of the same, no true-up has
been considered by the Commission in this order.
4.2 TRANSMISSION LOSSES:
4.2.1 The Commission, in consultation with UPPCL, in its Tariff Order for FY 2001-02
had established the efficiency parameters i.e. T&D loss levels and Collection
Efficiency targets for a period of 5 (five) years to encourage UPPCL to exceed the
targets and thereby retain the benefits of improved performance.
4.2.2 The UPPTCL in the ARR petition for FY 2012 - 13 had mentioned the transmission
losses to be 3.63% for the three years FY 2010 - 11, FY 2011 - 12 and FY 2012 - 13
inclusive of inter-state transmission losses. However, for the three mentioned
years; UPPCL in their ARR petitions have mentioned different figures.
4.2.3 Henceforth, the Commission has considered the approved energy for all the
State DISCOMs while approving the losses for UPPTCL.
4.2.4 The details of energy purchased by UPPTCL and the corresponding losses after
delivering the same to DISCOMS as approved are presented in the table below:
Table 4-2: APPROVED TRANSMISSION LOSSES FOR FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13
Details 2010-11 2011-12 2012-13
Gross Power Purchased & Billed A 65,271 73,962 74,703
Net Power purchase at state's periphery B 64146 72701 73150
Inter-state losses C=1-(B/A) 1.72% 1.70% 2.08%
Energy received by DISCOM D 62062 69648 70495
Intra-state losses E=1-(D/B) 3.25% 4.20% 3.63%
Total losses F=1-(D/A) 4.92% 5.83% 5.63%
4.2.5 Based on the computation done above, Commission approves the total
transmission loss at 4.92%, 5.83% & 5.63% for FY 2010 - 11, FY 2011 - 12 & FY
2012 - 13 respectively.
Order on ARR and Tariff Petitions of UPPTCL
Page 24
4.2.6 In the last Tariff Order, the Commission had approved 5.98% overall transmission
loss for FY 2009 - 10 which has been brought down by UPPTCL to some extent.
The Commission acknowledges the efforts taken by UPPTCL for retaining the loss
at a competitive level as compared to other states and accordingly approves the
intra-state transmission loss at 3.25%, 4.20% & 3.63% for FY 2010 - 11, FY 2011 -
12 & FY 2012 - 13 respectively.
4.2.7 The Commission also encourages UPPTCL to undertake investments as specified
in Transmission Tariff Regulations to further strengthen its transmission lines to
reduce the losses. The Commission observes that the Petitioner’s Submission is
void of the voltage level wise losses which are essential for analysis of the
Commission while considering the performance targets for the ensuing year.
Further, the Commission directs UPPTCL to submit details of voltage-wise
losses within 3 months from the date of this Tariff Order along with method of
assessment adopted and supporting data / information.
4.3 COMPONENTS OF ARR AND ANALYSIS OF EACH COMPONENT:
4.3.1 The Commission has analysed all the components of the Aggregate Revenue
Requirement (ARR) submitted by the UPPTCL to provide suitable values for each
component. As per the Transmission Tariff Regulations, the ARR includes the
following components:
a) Operation & Maintenance Expenses
o Employee Expenses
o Administration & General Expenses
o Repairs and Maintenance Expenses
b) Interest Expenses
o Interest on Loan Capital
o Interest on Working Capital
c) Depreciation Expenses
d) Other Income (Non-tariff Income)
e) Special Appropriations
f) Return on Equity
g) Tax on Income
h) Any other relevant expenditure
4.3.2 Based on the ARR submission and Transmission Tariff Regulations, the
Commission has analysed each component of the ARR and accordingly approved
each of the component along with the justification for the same.
Order on ARR and Tariff Petitions of UPPTCL
Page 25
Chapter 5. AGGREGATE REVENUE REQUIREMENT FOR FY 2010 - 11
5.1 ESCALATION / INFLATION INDEX
The Petitioner’s Submission:
5.1.1 The Petitioner has computed the Escalation Index / Inflation Rate for FY 2010 - 11
as per the formula:
Inflation Rate=0.6* Inflation based on WPI + 0.4*Inflation based on CPI
The Petitioner has computed the inflation index as shown in the table below:
INFLATION INDEX- PETITIONER
The Commission’s Analysis:
5.1.2 The Regulation 4.2 of Transmission Tariff Regulations stipulates the methodology
for consideration of the O&M Expenses, wherein such expenses are linked to the
inflation index determined under these Regulations. The relevant provisions of
the Transmission Tariff Regulation are reproduced below:
Month 2008 2009 2010 2008 2009 2010
Jan 218 229 251 134 148 172 Feb 220 228 251 135 148 170 Mar 226 228 253 137 148 170 Apr 229 232 258 138 150 170 May 231 234 260 139 151 172 Jun 237 235 261 140 153 174 Jul 240 239 263 143 160 178 Aug 241 241 264 145 162 178 Sep 242 243 146 163 179 Oct 239 243 148 165 Nov 234 247 148 168 Dec 230 248 147 169
Inflation 9.55% 9.88%
Weighted Average (WPI 60%: CPI 40%) 9.68%
Inflation index for FY2010 - 11
Wholesale Price Index Consumer Price Index
Order on ARR and Tariff Petitions of UPPTCL
Page 26
“4.2 Operation and Maintenance Expenses
1. The O&M expenses for the base year shall be calculated on the basis of
historical/audited costs and past trend during the preceding five years. However,
any abnormal variation during the preceding five years shall be excluded. O & M
expenses so calculated for the base year shall then be escalated on the basis of
prevailing rates of inflation for the year as notified by the Central Government
and shall be considered as a weighted average of Wholesale Price Index and
Consumer Price Index in the ratio of 60:40. Base year, for these regulations
means, the first year of tariff determination under these regulations.
2. Where such data for the preceding five years is not available the Commission
may fix O&M expenses for the base year as certain percentage of the capital cost.
3. Incremental O&M expenses for the ensuing financial year shall be 2.5% of
capital addition during the current year. O&M charges for the ensuing financial
year shall be sum of incremental O&M expenses so worked out and O&M charges
of current year escalated on the basis of predetermined indices as indicated in
regulation 4.2.1 above.
4. However, the Commission may direct the utilities to bring down the O & M
expenses to an efficient level i.e., by fixing norms based on the circuit kilometers
of transmission lines, transformation capacity at the sub-stations, number of bays
in substation etc. of similarly placed efficient utilities, within such span of time, as
may be determined by the Commission.
5. The Commission shall examine and if satisfied shall allow inclusion in revenue
requirement in the next period additional O&M expenses on account of war,
insurgency, and change in laws or like eventualities for a specified
period.”[Emphasis supplied]
5.1.3 The Commission in accordance with the above stated regulation has calculated
the inflation index for the FY 2010 - 11 based on the weighted average index of
WPI and CPI. The Commission has considered the WPI and CPI index as available
on the website of Economic Advisor, Ministry of Commerce and Industry Ministry
of Labour respectively. The Commission has calculated the inflation index for
approval of O&M expenses at 9.96%. The computation of inflation index is given
in the table below:
Order on ARR and Tariff Petitions of UPPTCL
Page 27
Table 5-1: INFLATION INDEX FOR FY 2010 - 11
2009-10 2010-11 2009-10 2010-11
April 125 138.6 150 170
May 125.9 139.1 151 172
June 126.8 139.8 153 174
July 128.2 141 160 178
August 129.6 141.1 162 178
September 130.3 142 163 179
October 131 142.9 165 181
November 132.9 143.8 168 182
December 133.4 146 169 185
January 135.2 148 172 188
February 135.2 148.1 170 185
March 136.3 149.5 170 185
Average for Financial Year 130.82 143.33 162.75 179.75
Inflation index for FY 2009-10
Inflation index for FY 2010-11
Applicable Inflation rate
Month Wholesale Price Index Consumer Price Index
Calculation of Inflation Index (CPI-40%, WPI-60%)
143.59
157.90
9.96%
5.1.4 The base year shall undergo a change post the true up exercise which would be
done after the audited accounts for the FY 2008 - 09 and FY 2009 - 10 are
submitted by the Petitioner. The variation would have a cascading effect on the
approval of the O&M expenses for the ensuing years.
5.2 OPERATION & MAINTENANCE EXPENSES:
The Petitioner’s Submission:
5.2.1 Operation & maintenance expense comprises Employee costs, Administrative &
General Expenses and Repair & Maintenance expenses. The regulation 4.2 of the
Transmission Tariff Regulation issued by the Commission stipulates:
The O&M expenses for the base year shall be calculated on the basis of
historical/audited costs and past trend during the preceding five years. However,
any abnormal variation during the preceding five years shall be excluded. O & M
expenses so calculated for the base year shall then be escalated on the basis of
prevailing rates of inflation for the year as notified by the Central Government
and shall be considered as a weighted average of Wholesale Price Index and
Consumer Price Index in the ratio of 60:40. Base year, for these regulations
means, the first year of tariff determination under these regulations.
Order on ARR and Tariff Petitions of UPPTCL
Page 28
Where such data for the preceding five years is not available the Commission may
fix O&M expenses for the base year as certain percentage of the capital cost.
Incremental O&M expenses for the ensuing financial year shall be 2.5% of capital
addition during the current year. O&M charges for the ensuing financial year
shall be sum of incremental O&M expenses so worked out and O&M charges of
current year escalated on the basis of predetermined indices as indicated in
regulation 4.2.1 above.
5.2.2 The Petitioner further submitted the details of individual elements of O&M
expenditure as per the Commission’s Analysis in the last Tariff Order wherein the
Commission was of the opinion that a suitable norm for allowance of O&M
expenses could be adopted only after undertaking a thorough study of the O&M
expenditure based on the past performances and the cost drivers of the same,
through a separate process. This study also has to be backed by audited
information for the past which needs to be made available by the licensees. Only
then the true picture of the trend in the O&M expenses may emerge. Till any
such norm for O&M expenditure is determined, the Commission emphasised to
consider the individual elements of O&M expenditure.
5.2.3 Further in addition to the O&M cost based on inflationary indices based
escalation, the Petitioner has computed and sought an additional O&M expenses
@ 2.5% of the additions to GFA during the previous year as per the tariff
regulations.
Petitioner has estimated individual components of O&M expenses based on
methodology below.
5.2.4 O&M Expenses on Addition to Assets during the Year
5.2.4.1 In addition to the Employee cost, A&G cost and R&M expenses described in
the succeeding section, Regulation provide for incremental O&M expenses on
addition to assets during the year. Regulation stipulates that “Incremental
O&M expenses for the ensuing financial year shall be 2.5% of capital addition
during the current year. O&M charges for the ensuing financial year shall be
sum of incremental O&M expenses so worked out and O&M charges of current
year escalated on the basis of predetermined indices as indicated in regulation
4.3 (1).”
5.2.4.2 Accordingly based on above the incremental O&M has been worked out by the
Petitioner in following table. The same are allocated across the individual
Order on ARR and Tariff Petitions of UPPTCL
Page 29
elements of the O&M on the basis of the contribution of each element in the
gross O&M expenses excluding the incremental O&M charges and impact of
the 6th Pay Commission recommendation.
5.2.4.3 However, later in the petition submitted for FY 2012 - 13 as per the
Transmission formats filed, the Petitioner has not claimed any incremental
O&M expenses for FY 2010 - 11.
The Commission’s Analysis:
5.2.4.4 The Regulation 4.2 sub-section 3 of the Transmission Tariff Regulations provides
for consideration of the additional O&M expenses at 2.5% on additions to
assets during the previous year.
5.2.4.5 Based on the above, the Commission has approved incremental O&M expenses
for FY 2010 - 11 at Rs. 17.71 crores. The same are allocated across the
individual elements of the O&M expenses on the basis of the contribution of
each element in the gross O&M expenses which is being approved in
subsequent paragraphs.
Table 5-3: APPROVED INCREMENTAL EXPENSES FOR FY 2010 - 11 (RS. CRORES)
Incremental O&M expenses Approved
Capitalization in previous year 708.58
Incremental O&M expenses approved @ 2.5% 17.71
a) Employee costs 13.06
b) R&M expenses 4.32
c) A&G expenses 0.33 5.2.5 Employee Costs
The Petitioner’s Submission:
5.2.5.1 The projection of employee costs involves a detailed examination of the
various components of salary such as basic pay and dearness allowance for the
Capitalised Assets during previous year 743.18
Incremental O&M Expenses 18.58
a) Employee Costs 14.50
b) A&G Expenses 0.54 c) R&M Expeses 3.53
Incremental O&M Expenses @2.5% of
capital additions during the previous year FY 2010 - 11
Table 5-2: ALLOCATION OF INCREMENTAL O&M EXPENSES (RS. CRORES)
Order on ARR and Tariff Petitions of UPPTCL
Page 30
various grades of employees. It would also involve an understanding of the
extent of retirements as well as the manpower additions planned. Considering
above the Petitioner has estimated employee cost in the FY 2010 - 11 petition
filed based on un-audited data of FY 2009 - 10 and data available till the date
of filing. Here the Petitioner also mentioned that UPPCL vide order dated 27th
Nov 2010 has allowed its employees benefit of Assured Career Progression
(ACP) scheme in line with the recommendation of Sixth Pay Commission &
GoUP order in this regard. Under this scheme employees of UPPCL are allowed
first, second and third time scale in the year of 09, 14 & 19th years of their
service respectively. Further UPPCL vide order dated 14th August 2010 has
allowed applicability of third time scale since 01.01.1996 which was previously
allowed on different dates between 01.01.2006 to 19.02.2009. Impact of these
order has also been included in estimation of employees cost. Further as per
UPPCL order for implementation of Sixth Pay commission, the cost burden on
account of payment of instalment of arrear has also been provided. As per
arrear payment schedule the first instalment of three months arrear from Jan
2006 to March 2006 is due in FY 2010 - 11 and the second instalment of arrear
for the period April 2006 to March 2007 is due in FY 2011 - 12. So burden of
arrears has also been included in the employee expenses.
5.2.5.2 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on unaudited accounts for the relevant year.
The Commission’s Analysis:
5.2.5.3 In accordance with the Transmission Tariff Regulations as mentioned in Para
5.1.2 of this order, the O&M expenses are linked to the inflation index. The
Commission opines that escalating O&M expenses based on Petitioner
submission is incorrect, as it takes wrong base year, hence the Commission has
decided that for FY 2010 – 11, the components of A&G expenses and R&M
expenses of O&M expenses would be escalated based on approved O&M
expenses of FY 2009 - 10. However for employee expenses, the Commission
has taken a different view on account of Sixth Pay Commission salary revision
impact.
5.2.5.4 Accordingly, the Commission approves the following items of employee
expenses viz, Basic salaries, dearness allowance (DA) and other allowances &
relief as submitted by Petitioner. Terminal benefits like pension, gratuity and
other annulment benefits as are linked to basic salary and DA the Commission
therefore approves as these submitted by Petitioner. Commission approves
Order on ARR and Tariff Petitions of UPPTCL
Page 31
the other items of employee expenses viz. Bonus / Ex-gratia, Medical Expenses
Reimbursement, Earned Leave Encashment etc. based on the escalation factor
of 9.96% over the numbers approved by the Commission for FY 2009 - 10.
An incremental expense of 2.5% of GFA addition during the previous year has
also been added.
5.2.5.5 The employee expenses claimed by the Petitioner as per the provisional
accounts as against the approved figures is highlighted in the table below:
Table 5-4: APPROVED EMPLOYEE EXPENSES FOR FY 2010 - 11 (RS. CRORES)
Provisional Approved
Salaries 176.1 176.1
Dearness Allowance 72.3 72.3
Other Allowances & Relief 13.1 13.1
Bonus/Exgratia 1.8 3.8
Medical reimbursment 2.5 6.5
Leave travel alownce 0.1 0.1
Earned Leave Encashment 24.3 8.4
Compensation to Employees 0.0 0.0
Employeee welfare expencess 0.3 0.7
Pension and gratuity 37.5 37.5
Other terminal benefits 3.5 0.0
Expenses on trust 0.3 0.0
Any other employee expenses 0.0 0.0
Arrear of Pay Commission/Time Scale 0.0 0.0
Additional employee Expenses(@2.5% of
incremental GFA)
0.0 13.1
Grand Total 331.7 331.6
Employee expenses capitalised 65.4 65.4
Net Employee expenses 266.3 266.2
ParticularsFY 2010-11
5.2.6 Administration and General (A&G) Expenses:
The Petitioner’s Submission:
5.2.6.1 These expenses are incurred by the Petitioner for meeting day-to-day
expenses related to the administration of its offices, insurance,
communication, professional charges, audit fees, advertisement expenses &
freight etc. All these expenses are directly affected by inflation. A&G expenses
were projected by the petition in the petition filed for FY 2010 - 11 earlier
considering the impact of inflation and need for addition of more substation
and offices.
Order on ARR and Tariff Petitions of UPPTCL
Page 32
5.2.6.2 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on unaudited accounts.
The Commission’s Analysis:
5.2.6.3 Commission approves the A&G expenses for FY 2010 - 11 based on the
escalation factor of 9.96% over the approved figures for FY 2009 - 10. The
Commission appreciates the commitment of the Petitioner to keep costs under
control and accordingly approves gross A&G expenses of Rs. 6.71 Cr for FY 2010
- 11 including allocation of additional A&G expenses.
5.2.6.4 The Petitioner has proposed capitalized of A&G expenses @ 75% of the total
A&G expenses for FY 2010 - 11. The Petitioner has failed to adhere with the
Commission direction in its last Tariff Order to submit an appropriate policy on
capitalization of A&G expenses and develop proper accounting system to
capture the same. The Petitioner has failed to adhere with the Commission
direction in its last Tariff Order to submit an appropriate policy on capitalization
of A&G expenses and develop proper accounting system to capture the same.
In the absence of a capitalization policy framework the Commission has
considered the A&G capitalization percentage as submitted by Petitioner for FY
2010 - 11.
5.2.6.5 Therefore for the purpose of this Tariff Order, the Commission has considered
the capitalization @75% of the total A&G expenses as proposed by Petitioner.
However, the Commission directs that the Petitioner should capitalise the
expenditure based on the actual expenses incurred / projected, at the time of
next ARR filing. Further Petitioner should have proper accounting system to
capture the expenses related to capital schemes rather than assuming a
standard capitalisation %age.
5.2.6.6 An additional incremental expenses of 2.5% of GFA addition during the
previous year has also been added.
5.2.6.7 The A&G expenses claimed by the Petitioner as per the provisional accounts as
against the approved figures is highlighted in the table below:
Order on ARR and Tariff Petitions of UPPTCL
Page 33
Table 5-5: APPROVED A&G EXPENSES FOR FY 2010 - 11 (RS. CRORES)
Provisional Approved
Administration Expenses
Rent rates and taxes (Other than all taxes on
income and profit)
0.66 0.79
Insurance of employees, assets, legal l iability 0.24 0.29
Revenue Stamp Expenses Account 0.00 0.00
Telephone,Postage,Telegram, Internet Charges 1.77 2.11
Incentive & Award To Employees/Outsiders 0.00 0.00
Consultancy Charges 0.13 0.16
Travelling 0.00 0.00
Technical Fees 0.27 0.33
Other Professional Charges 0.00 0.00
Conveyance And Travel (vehicle hiring,
running)
2.76 3.30
UPERC License fee 0.00 0.00
Security / Service Charges Paid To Outside
Agencies
0.00 0.00
Regulatory Expenses 0.00 0.00
Sub-Total of Administrative Expenses 5.83 6.97
Other Charges 0.00 0.00
Fee And Subscriptions Books And Periodicals 0.00 0.00
Printing And Stationery 0.63 0.75
Advertisement Expenses (Other Than Purchase
Related) Exhibition & Demo.
1.28 1.53
Contributions/Donations To Outside Institute /
Association
0.00 0.00
Electricity Charges To Offices 0.45 0.53
Water Charges 0.00 0.00
Any Study - As per requirements 0.00 0.00
Any Other expenses 4.97 5.93
Sub-Total of other charges 7.33 8.76
Legal Charges 0.92 1.10
Auditor'S Fee 0.34 0.40
Freight - Material Related Expenses 0.00 0.00
Departmental Charges 0.00 0.00
Total Charges 14.42 17.23
Additional A&G expenses(@2.5% of
incremental GFA)
0.00 0.33
Total Charges Chargeable To Capital Works 10.85 10.85
Total Charges Chargeable to Revenue Expenses 3.57 6.71
ParticularsFY 2010-11
Order on ARR and Tariff Petitions of UPPTCL
Page 34
5.2.7 Repair and Maintenance (R&M) Expenses:
The Petitioner’s Submission:
5.2.7.1 The commission in the last Tariff Order has approved a total R&M expenditure
of Rs 76.12 Crores for FY 2009 - 10 as against Rs 76.27 Crores projected by the
Petitioner. As per un-audited balance sheet of FY 2009 - 10 the actual
expenditure incurred by the licensees under R&M expenditure is Rs 86.06
Crores which is more than the amount approved by the commission. This
increase is mainly attributed to substantial increase in raw material prices for
electrical equipment and fuel cost. The Petitioner submitted that this has
substantially increased the cost burden. Petitioner further submitted that it
has added a number of transformers, cables, grid substation etc. for which
there has been an increase in the amount of annual maintenance contracts,
which has translated to a higher R&M expenses in the ensuing year. Further
Petitioner has initiated proactive preventive maintenance and capital
expenditure to improve the quality of supply and reduction in number of
overloaded transformer etc.
5.2.7.2 In the ARR for FY 2010 - 11, Petitioner has assumed same methodology as
approved in last Tariff Order. Therefore, R&M expenses have been projected
from expenses of FY 2009 - 10 and have been increased with Escalation index
to offset impact of inflation. The amount so estimated has been spread out
proportionally among the sub-accounts. Further an additional incremental
expenses of 2.5% of GFA addition during the previous year has also been
added.
5.2.7.3 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on the unaudited accounts.
The Commission’s Analysis:
5.2.7.4 The Commission has approved the R&M expenses for FY 2010 - 11 after
considering escalation factor on approved expenses of previous year and an
additional expense of 2.5% of GFA addition during the previous year.
5.2.7.5 The R&M expenses claimed by the Petitioner as against the approved figures
are highlighted in the table below:
Order on ARR and Tariff Petitions of UPPTCL
Page 35
Table 5-6: APPROVED R&M EXPENSES FOR FY 2010 - 11 (RS. CRORES)
Provisional Approved
Plant and Machinery 86.29 71.00
Building 5.14 4.23
Civil Works 0.00 0.00
Hydraulic Works 0.00 0.00
Transformers 0.00 0.00
Lines, Cables Networks etc. 10.21 8.40
Vehicles 0.01 0.01
Furniture and Fixtures 0.00 0.00
Office Equipments 0.08 0.06
Transportation 0.00 0.00
Sub station maintenance by private agencies 0.00 0.00
Any other items (Incremental expenses @2.5%
of the GFA)
0.00 4.32
Total 101.74 88.02
ParticularsFY 2010-11
5.3 GFA BALANCES AND CAPITAL FORMATION ASSUMPTIONS:
The Petitioner’s Submission:
5.3.1 The assumptions used by the Petitioner in the petition for FY 2010 - 11 for
projecting GFA and CWIP were as follows:
The opening GFA and CWIP for FY 2010 - 11 have been taken as per the closing
figures provisional annual accounts of FY 2009 - 10.
25% the opening CWIP and 25% of investment made during the year, expenses
capitalised & interest capitalised (25% of total investment) has been assumed to
get capitalised during the year.
Investment through “deposit work“ has not been taken for capital formation as
per policy adopted by commission in its last Tariff Order. Thus, investments
shown in capital formation table below don’t include work funded through
deposit work.
Table below shows Licensee’s investment plan for FY 2010 - 11 along with the
proposed funding of each component of the investment plan.
Order on ARR and Tariff Petitions of UPPTCL
Page 36
UPPTCL INVESTMENT PLAN: (RS. CRORES)
5.3.2 Petitioner has considered capitalisation of investment as 25% of the sum of
opening WIP, investment made during the year (excluding deposit work),
employees expenses capitalised, A&G expenses capitalised and interest
capitalised.
5.3.3 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on unaudited accounts.
The Commission’s Analysis:
5.3.4 The Petitioner has submitted the provisional accounts for FY 2010 - 11 along with
the transmission tariff formats during the petition filed for FY 2012 - 13. The
Commission for the purpose of this order has considered the provisional
accounts submitted by the Petitioner.
5.3.5 The Commission has considered the additions to the Gross Fixed Assets as per
the provisional accounts submitted for FY 2010 - 11. Further the Commission also
observes that the Petitioner has not provided any substantial basis for
consideration of the expenses capitalised and the interest capitalised. Therefore
the Commission for the purpose of this order has considered the expenses and
interest capitalised as considered by the Petitioner which is verified from the
provisional accounts. The Commission observes that the figures are based on the
Petitioner’s provisional accounts, the variation in GFA between the Commission
approved figures and the actual figures for FY 2010 - 11 will be subject to true-up
once audited accounts are finalized and submitted for the analysis of the
Commission. Accordingly, the details of approved Capitalisation and Work-in-
progress for FY 2010 - 11 as per the provisional accounts are provided in the
table below:
Order on ARR and Tariff Petitions of UPPTCL
Page 37
Table 5-7: APPROVED CAPITALIZATION AND WIP FOR FY 2010 - 11 (RS. CRORES)
Provisional Approved
Opening WIP as on 1st April A 1,299.90 1,299.90
Investments B 1,315.20 1,315.20
Employee Expenses Capitalisation @ 15% C 65.44 65.44
A&G Expenses Capitalisation @ 15% D 10.85 10.85
Interest Capitalisation @ 23% on Interest on
long term loans
E 107.91 107.91
Total Investments F= A+B+C+D+E 2,799.28 2,799.28
Transferred to GFA (Total Capitalisation) G=F*25% 394.59 394.59
Closing WIP H= F-G 2,404.70 2,404.70
ParticularsFY 2010-11
5.4 DEPRECIATION EXPENSE
The Petitioner’s Submission:
5.4.1 The Commission in its Transmission Tariff Regulations has specified the
methodology for the computation of depreciation. The regulation also specifies
the rates to be used for the purpose of computation of the depreciation charged
during the year. In the last Tariff Order the Commission has approved
depreciation on the basis of weighted average depreciation rates as against
specific depreciation rates for each class of asset. Further Transmission Tariff
Regulations provide for charging depreciation on opening GFA and a pro-rata
basis on assets capitalized during the year. Petitioner has used same
methodology for computing depreciation in this ARR.
In last Tariff Order Commission had assessed weighted average
depreciation rate of 3.08%, so in this petition Petitioner has also used
same rate for depreciation.
The depreciation has been charged for the entire year on the opening
GFA and pro-rata basis for the assets capitalized during the year.
Opening GFA for FY 2010 - 11 has been taken from provisional balance
sheet of FY 2009 - 10. Hence based on the same and using above
specified weight average depreciation rate of 3.08%, the Petitioner has
calculated depreciation for FY 2010 - 11.
5.4.2 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on latest estimates.
Order on ARR and Tariff Petitions of UPPTCL
Page 38
The Commission’s Analysis:
5.4.3 The Commission vide the Transmission Tariff Regulation has specified the
methodology for the computation of depreciation. The Regulation specifies the
rates to be used for the purpose of computation of the depreciation charged
during the year. Regulation 4.3 requires that “Provided that where the Fixed
Assets Registers are not maintained, the Commission shall allow only as much
depreciation as it may consider appropriates”.
5.4.3.1 The Commission vide its previous orders has repeatedly several directions to
the Petitioner to ensure that proper and detailed Fixed Assets Registers are
maintained at the field offices. Further, the Honourable Appellate Tribunal for
Electricity (order to Appeal No. 121 of 2010 & I.A. No. 83 of 2011, Para 7.4, 7.5
& 7.6) has also reinforced Commission views and directed the distribution
licensee to comply with the regulation and direction issued by the Commission.
However the Petitioner has failed to produce any records relating to fixed
assets registers.
5.4.4 The Petitioner seems to be ignorant of significance of maintenance of Fixed Asset
Register and filing of investment plans with cost benefit of capital expenditure.
Components of the ARR viz, depreciation, allowable interest on debt and return
on equity are adversely affected by inadvertent misrepresentations of capital
assets creation numbers. Non-maintenance of Fixed Asset Register and absence
of strict policy framework for under taking capital investment based on cost
benefit analysis gives ample room for such misrepresentations.
5.4.5 Given the very sad state of Petitioner on the above matter and reluctance to act
on repeated direction issued by the Commission and the Appellate Tribunal of
Electricity, the Commission is severely hindered in its chore of undertaking
prudence check of ARR components viz, depreciation, and allowable interest on
debt and return on equity. On account of lack of details of fixed assets register,
the Commission has assessed depreciation on the basis of weighted average
depreciation rates as against specific depreciation rates for each class of asset.
The Commission while approving the depreciation expenses for other state
distribution utilities has considered the average depreciation rate approved for
FY 2009 - 10. However, in case of UPPTCL the asset transfer scheme is under
progress and at this stage it is difficult to ascertain the accurate level of
depreciation. Henceforth, for the purpose of this order, the Commission has
approved the depreciation based on the weighted average depreciation rate as
Order on ARR and Tariff Petitions of UPPTCL
Page 39
claimed by the Petitioner. The Commission approves the depreciation expenses
on the GFA as below:
Table 5-8: DEPRECIATION APPROVED FOR FY 2010 - 11 (RS. CRORES)
Provisional Approved
Depreciation Rate 4.41% 4.41%
Opening GFA as on 1st April 6,911.25 6,911.25
Addition to GFA during the year 394.59 394.59
Deduction from GFA during the year 113.32 113.32
Closing GFA as on 31st March 7,192.52 7,192.52
Opening Accumulated Depreciation 2,702.78 2,702.78
Depreciation on Opening GFA + Addition
during the year310.93 313.43
ParticularsFY 2010-11
5.4.6 The Commission reiterates its direction to the Petitioner to ensure that they
maintain proper and detailed fixed assets registers to work out the depreciation
expense as specified in the Transmission Tariff Regulations and directs the
Petitioner to submit report regularly to the Commission citing clearly as to how
they are maintaining fixed assets registers for the various assets.
5.5 INTEREST AND FINANCE CHARGES:
5.5.1 INTEREST & FINANCE CHARGES ON LONG TERM LOAN:
The Petitioner’s Submission:
5.5.2 Transmission Tariff Regulation stipulate that Interest and finance charges on loan
capital shall be computed on the outstanding loans based on the existing
agreements and arrangements terms regarding the interest rate and the
repayment schedules. Interest on fresh loans shall be allowed only on loan raised
for projects approved and undertaken in accordance with the guidelines
contained in Para 3.7 of these regulations. Accordingly Petitioner has computed
interest and financing costs in the FY 2010 - 11 petition based on the current
schedule of long-term debt, repayments and new debt requirements for new
project to be executed.
5.5.3 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on latest estimates.
Order on ARR and Tariff Petitions of UPPTCL
Page 40
The Commission’s Analysis:
5.5.4 The Commission has computed the interest and finance charges for FY 2010 - 11
based on the approved investments for UPPTCL. This has already been discussed
in the section on GFA balances and capital formation. A debt-equity ratio of
70:30 in accordance with the 3.9 of the Transmission Tariff Regulations has been
considered for arriving at the normative equity and debt.
5.5.5 The opening loans for FY 2010 - 11 has been taken from the closing loans as
approved for FY 2009 - 10 by the Commission in the previous Tariff Order.
5.5.6 Due to lack of adequate data and inconsistencies seen in the data submitted by
the Petitioner, the Commission has considered the interest rates for the loans as
approved in the last Tariff Order. Any variations would be taken up at the time of
truing up.
5.5.7 Based on above assumptions, Commission approves the interest on long term
debt as below:
Table 5-9: INTEREST ON LONG TERM LOAN FOR FY 2010 - 11 (RS. CRORES)
Interest on long term debt Approved
Old Loans
GoUP 14.96
NCR 2.46
PFC 93.51
REC Loans 53.99
HUDCO 9.10
New Loans 35.51
Total 209.53
5.5.8 INTEREST ON WORKING CAPITAL:
5.5.9 The Transmission tariff regulation provides for normative interest on working
Capital based on the methodology outlined in the regulations. The Petitioner is
eligible for interest on working capital worked out on methodology specified in
the regulations.
Order on ARR and Tariff Petitions of UPPTCL
Page 41
5.5.10 Further Transmission tariff regulations provide following methodology for
calculating working capital -
(i) Operation and Maintenance expenses, which includes Employee costs,
R&M expenses and A&G expenses, for one month;
(ii) One-twelfth of the sum of the book value of stores, materials and supplies
at the end of each month of current financial year.
(iii) Receivables equivalent to 60 days average billing of consumers less
security deposits by the beneficiaries
5.5.11 In accordance with the Transmission Tariff Regulation the interest on the working
capital requirement would be the Bank rate as specified by the Reserve Bank of
India as on 1st April of the relevant year plus a margin as decided by the
Commission. Accordingly the Commission for this order has considered the
interest rate on working capital requirement at 12.5% including margin. The
actual rate of interest would be considered based on the audited accounts during
the true-up process for the year in accordance the Transmission Tariff
Regulations.
5.5.12 The Commission has in accordance with the above mentioned Transmission Tariff
regulation has considered the interest on working capital which is shown in the
table below:
Table 5-10: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2010 - 11 (RS. CRORES)
FY 2010-11
Approved
O&M Expenses
Employee Expenses 331.59
R&M Expenses 88.02
A&G Expenses 6.71
Total O&M Expenses 426.32
One Months O&M Expenses 35.53
Book Value of Stores 363.47
One twelvth of the sum of book value of the
material in storesSum of Material in stores at
the end of each month
30.29
Recievable equivalent to 60 days average
bill ing of consumers
136.55
Total Working Capital Requirement 202.37
Interest rate 12.50%
Interest on working capital 25.30
Particulars
Order on ARR and Tariff Petitions of UPPTCL
Page 42
5.6 OTHER INCOME:
The Petitioner’s Submission:
5.6.1 Other Income includes only non-tariff income, which comprises interest on loans
and advances to employees, income from fixed rate investment deposits and
interest on loans and advances to Licensees.
The Commission’s Analysis:
5.6.2 As per the provisional accounts for FY 2010 - 11, other income is Rs. 40.3 Crores
and the same is approved by the Commission. Any variation would be taken up
at the time of true-up.
5.7 RETURN ON EQUITY:
The Petitioner’s Submission:
5.7.1 Under provisions of the Regulation licensees are allowed a return of @ 14% on
equity base, for equity base calculation debt equity ratio shall be 70:30. Where
equity involves is more than 30%, the amount of equity for the purpose of tariff
shall be limited to 30%. Equity amount more than 30% shall be considered as
loan. In case of actual equity employed is less than 30%, actual debt and equity
shall be considered for determination of tariff. In this petition return on equity
has been computed as per methodology adopted by Hon’ble Commission in last
Tariff Order.
5.7.2 In view of the huge gap in the recovery of cost of supply at the DisCom level,
Petitioner is of the view that return on equity would only result in accumulation
of receivables. As such Petitioner proposed to charge return on equity @ 2% for
the financial year 2010 - 11. ROE is calculated on the equity inflow from GoUP up
to FY 2009 - 10 and normative equity portion in capitalised assets during the
year.
The Commission’s Analysis:
5.7.3 In terms of the Regulation 4.6 of the Transmission Tariff Regulation the Petitioner
is entitled for a return on equity at 14% on the equity base. The equity base shall
be determined in accordance with the Regulation 3.9 of the Transmission Tariff
Regulations which states as follows:
Order on ARR and Tariff Petitions of UPPTCL
Page 43
“In case of all projects, debt-equity ratio as on the date of commercial operation
shall be 70:30 for determination of tariff. Where equity employed is more than
30%, the amount of equity for the purpose of tariff shall be limited to 30% and
the balance amount shall be considered as the normative loan.
Provided that in case of the projects where actual equity employed is less than
30%, the actual debt and equity shall be considered for determination of tariff.
Provided further that in case of existing projects, the actual debt equity shall be
used for tariff determination.
The debt and equity amounts arrived at in accordance with clause (1) above shall
be used for calculating interest on loan, return on equity and Advance Against
Depreciation.”
5.7.4 The Petitioner has submitted that the in view of the high cost of supply at the
discom level the claim of return on equity would result into accumulation of
receivables, therefore the Petitioner has only claimed return on equity at 2%.
5.7.5 The Commission while undertaking analysis for allowance of return on equity has
considered opening level of equity for FY 2010 - 11 based on the closing
regulatory equity approved in the previous Tariff Order. Further the equity
during the year has been allowed in terms of the Regulation 3.9 reproduced
above.
5.7.6 Accordingly the Commission has considered the submission of the Petitioner and
allowed the rate of return at 2% only. Accordingly the Commission approves the
return on equity of Rs. 45.66 Crores
Table 5-11: APPROVED RETURN ON EQUITY FOR FY 2010 - 11 (RS. CRORES)
Provisional Approved
Equity at the beginning of the year 2,533.68 2,223.97
Assets Capitalised 281.27 394.59
Addition to Equity 84.38 118.38
Closing Equity 2,618.06 2,342.35
Average Equity 2,575.87 2,283.16
Rate of Return 2% 2%
Return on Equity 51.52 45.66
ParticularsFY 2010-11
Order on ARR and Tariff Petitions of UPPTCL
Page 44
5.8 OTHER DEBITS (INCLUDING PROVISION FOR DOUBTFUL DEBTS):
5.8.1 UPPTCL has claimed an amount of Rs. 39.91 Cr for other debits, write-offs,
provision for doubtful debts etc. without any detailed breakup. However, the
Commission after referring to the unaudited / provisional accounts for FY 2010 -
11 has failed to understand how there can be bad-debts for a transmission
company. The Transmission Tariff Regulations also does not have any specific
provision for creation of bad and doubtful debts. Further the bad debts are only
a provision in the audited accounts and are not supported with any write off
sanction. Hence the Commission has disallowed the same for FY 2010 - 11.
5.9 SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR TRANSCO:
5.9.1 In the preceding sections, the Commission has detailed the expenses under
various heads submitted by UPPTCL in the petition and those which are now
approved. The summary of the expenses under different heads as approved by
the Commission for FY 2010 - 11 is given in table below:
Table 5-12: SUMMARY OF ARR FOR FY 2010 - 11 (RS. CRORES)
Provisional Approved
Employee cost 331.75 331.59
A&G expenses 14.42 17.23
R&M expenses 101.74 88.02
Interest on Loan Capital (including bank charges) 317.56 209.53
Interest on Working Capital - 25.30
Depreciation 310.93 313.43
Gross Expenditure 1,076.40 985.10
Less:Employee cost capitalized 65.44 65.44
Less:Interest capitalized 107.91 -
Less:A&G expenses capitalized 10.85 10.85
Net Expenditure 892.20 908.82
Provision for Bad & Doubtful debts 39.91 -
Debits, write-offs & other expenses 2.26 -
Net Expenditure with provisions 934.38 908.82
Add: Reasonable Return / Return on Equity - 45.66
Less: Non Tariff Income 40.30 40.30
Annual Revenue Requirement (ARR) 894.08 914.18
ParticularsFY 2010-11
Order on ARR and Tariff Petitions of UPPTCL
Page 45
Chapter 6. AGGREGATE REVENUE REQUIREMENT FOR FY 2011 - 12
6.1 ESCALATION / INFLATION INDEX:
The Petitioner’s Submission:
6.1.1 The Petitioner has computed the Escalation Index/Inflation Rate for FY 2011 - 12
as per the formula:
Inflation Rate=0.6* Inflation based on WPI + 0.4*Inflation based on CPI
Accordingly, the Petitioner has computed 9.68% as escalation index in the FY
2011 - 12 petition.
The Commission’s Analysis:
6.1.2 The Regulation 4.2 of Transmission Tariff Regulations stipulates the methodology
for consideration of the O&M Expenses, wherein such expenses are linked to the
inflation index determined under these Regulations. The relevant provisions of
the Transmission Tariff Regulation are reproduced below:
“4.2 Operation and Maintenance Expenses
1. The O&M expenses for the base year shall be calculated on the basis of
historical/audited costs and past trend during the preceding five years. However,
any abnormal variation during the preceding five years shall be excluded. O & M
expenses so calculated for the base year shall then be escalated on the basis of
prevailing rates of inflation for the year as notified by the Central Government
and shall be considered as a weighted average of Wholesale Price Index and
Consumer Price Index in the ratio of 60:40. Base year, for these regulations
means, the first year of tariff determination under these regulations.
2. Where such data for the preceding five years is not available the Commission
may fix O&M expenses for the base year as certain percentage of the capital cost.
3. Incremental O&M expenses for the ensuing financial year shall be 2.5% of
capital addition during the current year. O&M charges for the ensuing financial
year shall be sum of incremental O&M expenses so worked out and O&M charges
of current year escalated on the basis of predetermined indices as indicated in
regulation 4.2.1 above.
Order on ARR and Tariff Petitions of UPPTCL
Page 46
4. However, the Commission may direct the utilities to bring down the O & M
expenses to an efficient level i.e., by fixing norms based on the circuit kilometers
of transmission lines, transformation capacity at the sub-stations, number of bays
in substation etc. of similarly placed efficient utilities, within such span of time, as
may be determined by the Commission.
5. The Commission shall examine and if satisfied shall allow inclusion in revenue
requirement in the next period additional O&M expenses on account of war,
insurgency, and change in laws or like eventualities for a specified
period.”[Emphasis supplied]
6.1.3 The Commission in accordance with the above stated regulation has calculated
the inflation index for the FY 2011 - 12 based on the weighted average index of
WPI and CPI. The Commission has considered the WPI and CPI index as available
on the website of Economic Advisor, Ministry of Commerce and Industry Ministry
of Labour respectively. The Commission has calculated the inflation index for
approval of O&M expenses at 8.67%. The computation of inflation index is given
in the table below:
Table 6-1: INFLATION INDEX FOR FY 2011 - 12
2010-11 2011-12 2010-11 2011-12
April 138.60 152.10 170.00 186.00
May 139.10 152.40 172.00 187.00
June 139.80 153.10 174.00 189.00
July 141.00 154.20 178.00 193.00
August 141.10 154.90 178.00 194.00
September 142.00 156.20 179.00 197.00
October 142.90 157.00 181.00 198.00
November 143.80 156.90 182.00 199.00
December 146.00 156.90 185.00 202.28
January 148.00 157.70 188.00 198.00
February 148.10 158.40 185.00 199.00
March 149.50 159.80 185.00 201.00
Average for Financial Year 143.33 155.80 179.75 195.27
Inflation index for FY 2010-11
Inflation index for FY 2011-12
Applicable Inflation rate
171.59
8.67%
Month Wholesale Price Index Consumer Price Index
Calculation of Inflation Index (CPI-40%, WPI-60%)
157.90
Order on ARR and Tariff Petitions of UPPTCL
Page 47
6.2 OPERATION & MAINTENANCE EXPENSES:
The Petitioner’s Submission:
6.2.1 Operation & maintenance expense comprises of Employee costs, Administrative
& General Expenses and Repair & Maintenance expenses. The regulation 4.2 of
the Transmission Tariff Regulation issued by the Commission stipulates:
“The O&M expenses for the base year shall be calculated on the basis of
historical/audited costs and past trend during the preceding five years. However,
any abnormal variation during the preceding five years shall be excluded. O & M
expenses so calculated for the base year shall then be escalated on the basis of
prevailing rates of inflation for the year as notified by the Central Government
and shall be considered as a weighted average of Wholesale Price Index and
Consumer Price Index in the ratio of 60:40. Base year, for these regulations
means, the first year of tariff determination under these regulations.
Where such data for the preceding five years is not available the Commission may
fix O&M expenses for the base year as certain percentage of the capital cost.
Incremental O&M expenses for the ensuing financial year shall be 2.5% of capital
addition during the current year. O&M charges for the ensuing financial year
shall be sum of incremental O&M expenses so worked out and O&M charges of
current year escalated on the basis of predetermined indices as indicated in
regulation 4.2.1 above.”
6.2.2 The Petitioner further submitted the details of individual elements of O&M
expenditure as per the Commission’s Analysis in the last Tariff Order wherein the
Commission was of the opinion that a suitable norm for allowance of O&M
expenses could be adopted only after undertaking a thorough study of the O&M
expenditure based on the past performances and the cost drivers of the same,
through a separate process. This study also has to be backed by audited
information for the past which needs to be made available by the licensees. Only
then the true picture of the trend in the O&M expenses may emerge. Till any
such norm for O&M expenditure is determined, the Commission emphasised to
consider the individual elements of O&M expenditure.
6.2.3 Further in addition to the O&M cost based on inflationary indices based
escalation, the Petitioner has computed and sought an additional O&M expenses
Order on ARR and Tariff Petitions of UPPTCL
Page 48
@ 2.5% of the additions to GFA during the previous year as per the tariff
regulations.
Petitioner has estimated individual components of O&M expenses based on
methodology below.
6.2.4 O&M Expenses on Addition to Assets:
6.2.5 In addition to the Employee cost, A&G cost and R&M expenses described in the
succeeding section, Regulation provide for incremental O&M expenses on
addition to assets during the year. Regulation stipulates that “Incremental O&M
expenses for the ensuing financial year shall be 2.5% of capital addition during
the current year. O&M charges for the ensuing financial year shall be sum of
incremental O&M expenses so worked out and O&M charges of current year
escalated on the basis of predetermined indices as indicated in regulation 4.3
(1).”
6.2.6 Accordingly based on above the incremental O&M has been worked out by the
Petitioner in following table. The same are allocated across the individual
elements of the O&M on the basis of the contribution of each element in the
gross O&M expenses excluding the incremental O&M charges and arrears as per
the 6th Pay Commission Recommendations.
6.2.7 In the petition for FY 2011 - 12 filed earlier, UPPTCL claimed 19.72 crores as
incremental O&M expenses.
6.2.8 However, later in the petition submitted for FY 2012 - 13 as per the Transmission
formats filed, the Petitioner claimed incremental O&M expenses of Rs. 7.03
Crores.
The Commission’s Analysis:
6.2.9 The Regulation 4.2 sub-section 3 of the Transmission Tariff Regulations provides
for consideration of the additional O&M expenses at 2.5% on additions to assets
during the previous year.
6.2.10 Based on the above, the Commission has approved incremental O&M expenses
for FY 2011 - 12 at Rs. 9.86 crores. The same are allocated across the individual
elements of the O&M expenses on the basis of the contribution of each element
in the gross O&M expenses which is being approved in subsequent paragraphs.
Order on ARR and Tariff Petitions of UPPTCL
Page 49
Table 6-2: APPROVED INCREMENTAL EXPENSES FOR FY 2011 - 12 (RS. CRORES)
Incremental O&M expenses Approved
Capitalization in previous year 394.59
Incremental O&M expenses approved @ 2.5% 9.86
a) Employee costs 7.28
b) R&M expenses 2.22
c) A&G expenses 0.37
6.2.11 Employee Costs
The Petitioner’s Submission:
6.2.12 The projection of employee costs involves a detailed examination of the various
components of salary such as basic pay and dearness allowance for the various
grades of employees. Petitioner has estimated employee cost for FY 2011 - 12
based on un-audited data of FY 2010 - 11 and data available to date.
6.2.13 As mentioned above evolution of sub account of employee cost has been
forecasted from base figure of FY2009 - 10 balance sheet and actual figure
available till date. While projecting the expenses for ensuing years, Petitioner has
endeavoured to control the employee expenses but cost has increased due to
impact of implementation time scale and arrear of pay commission which is
totally beyond the control of the Petitioner. Various sub account were estimated
by the Petitioner as follows:
Basic salary: The Petitioner projected the expenses for FY 2011 - 12 by
considering 5% increase on FY 2010 - 11 provisional figures.
Dearness Allowance (DA): The Petitioner projected the expenses for FY 2011 - 12
by considering 58% increase on FY 2010 - 11 figures on account of the new pay
scales.
Other allowance: Other allowance for FY 2011 - 12 has been forecasted in the
ratio as actually incurred in FY 2010 - 11 of Basic Salary.
Likewise, Medical Reimbursement, LTA, Earned leave encashment, staff welfare
expenses and other terminal benefit have been forecast to increase by inflation
index per year from FY 2010 - 11.
Order on ARR and Tariff Petitions of UPPTCL
Page 50
Pension and Gratuity: Pension and Gratuity have been calculated at 16.7% and
2.38% (i.e. 19.08%) of Basic Salary and Dearness Allowance.
Capitalisation of Expenses: Employee Expenses Capitalized has been taken 22%
as per audited balance sheet of FY 2007 - 08.
An additional incremental expenses of 2.5% of GFA addition during the previous
year has also been added.
The Commission’s Analysis:
6.2.14 In accordance with the Transmission Tariff Regulations as mentioned in para
6.1.2 of this order the O&M expenses are linked to the inflation index. The
Commission opines that escalating O&M expenses based on Petitioner
submission is incorrect, as it takes wrong base year, hence, the Commission has
decided that for F Y 2011 - 12 the A&G expenses and R&M expenses components
of O&M expenses would be escalated based on approved O&M expenses of FY
2009 - 10. However for employee expenses, the Commission has taken a
different view on account of Sixth Pay Commission salary revision impact
6.2.15 Accordingly the Commission approves the following items of employee expenses
viz, Basic salaries, dearness allowance (DA) and other allowances & relief as
estimated by Petitioner, which have been actually the same as projected by the
Petitioner. Terminal benefits like pension, gratuity and other annulment benefits
as are linked to basic salary and DA the Commission therefore approves as these
estimated by Petitioner. Commission approves the other items of employee
expenses viz. Bonus/ Exgratia, Medical Expenses Reimbursement, Earned Leave
Encashment etc. FY 2011 - 12 based on the escalation factor of 8.67% over the
numbers approved by the Commission for FY 2010 - 11. The rationale for
considering components as proposed by the Petitioner, is as follows:
Basic Salary: The Commission has considered the basic salary separately to
account for the revision in the wages due to implementation of the 6th Pay
Commission. UPPTCL has projected an increase of 5% in the basic salary for the
FY 2011 - 12 over the provisional figures of FY 2010 - 11. The escalation rate
considered by the Commission comes to 8.67%. The Commission appreciated
the Petitioners efforts to restrict its expenses and therefore approves the
escalation of 5% on the approved figures of FY 2010 - 11 for Basic Salaries.
Order on ARR and Tariff Petitions of UPPTCL
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Dearness Allowance: The dearness allowance has a direct linkage with the
Basic Salaries approved. The Commission has considered the average Dearness
Allowance for the FY 2011 - 12 based on the actual rate of 58%.
Terminal Benefits and other annulment benefits: These expense are linked
directly to the Basic Salary and the Dearness allowance disbursed therefore
these are considered as a percentage of Basic and DA as proposed by the
Petitioner.
6.2.16 An additional incremental expenses of 2.5% of GFA addition during the previous
year has also been added.
6.2.17 The employee expenses claimed by the Petitioner as per the revised estimates as
against the approved figures is highlighted in the table below:
Table 6-3: APPROVED EMPLOYEE EXPENSES FOR FY 2011 - 12 (RS. CRORES)
Estimated Approved
Salaries 184.9 184.9
Dearness Allowance 107.2 107.2
Other Allowances & Relief 13.7 13.7
Bonus/Exgratia 4.9 4.2
Medical reimbursment 2.7 7.1
Leave travel alownce 0.1 0.1
Earned Leave Encashment 25.0 9.1
Compensation to Employees 0.0 0.0
Employeee welfare expencess 0.3 0.8
Pension and gratuity 55.7 55.7
Other terminal benefits 3.9 0.0
Expenses on trust 0.3 0.0
Any other employee expenses 0.0 0.0
Arrear of Pay Commission/Time Scale 0.0 0.0
Additional employee Expenses(@2.5% of
incremental GFA)
5.3 7.3
Grand Total 404.1 390.2
Employee expenses capitalised 87.7 84.7
Net Employee expenses 316.4 305.5
FY 2011-12Particulars
6.2.18 Administration and General (A&G) Expenses:
The Petitioner’s Submission:
6.2.19 These expenses are incurred by the Petitioner for meeting day-to-day expenses
related to the administration of its offices, insurance, communication,
professional charges, audit fees, advertisement expenses & freight etc. All these
Order on ARR and Tariff Petitions of UPPTCL
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expenses are directly affected by inflation. A&G expenses were projected by the
petition in the petition filed for FY 2011 - 12 considering the impact of inflation
and need for addition of more substation and offices.
6.2.20 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on latest estimates.
6.2.21 The A&G estimates for FY 2011 - 12 as submitted by UPPTCL is as below:
The Commission’s Analysis:
6.2.22 Commission approves the A&G expenses for FY 2011 - 12 based on the escalation
factor of 8.67% over the approved figures for FY 2010 - 11. The Commission
appreciates the commitment of the Petitioner to keep costs under control and
accordingly approves gross A&G expenses of Rs. 15.49 Crores for FY 2011 - 12
including allocation of additional A&G expenses.
6.2.23 Petitioner has proposed capitalized of A&G expenses @ 19% of the total A&G
expenses for FY 2011 - 12. The Petitioner has failed to adhere with the
Commission direction in its last Tariff Order to submit an appropriate policy on
capitalization of A&G expenses and develop proper accounting system to capture
the same. The Petitioner has failed to adhere with the Commission’s direction in
its last Tariff Order to submit an appropriate policy on capitalization of A&G
expenses and develop proper accounting system to capture the same. In the
Order on ARR and Tariff Petitions of UPPTCL
Page 53
absence of a capitalization policy, the Commission has considered the A&G
capitalization percentage as submitted by Petitioner for FY 2010 - 11.
6.2.24 Therefore for the purpose of this Tariff Order, the Commission has considered
the capitalization @19% of the total A&G expenses as proposed by Petitioner.
However, the Commission directs that the Petitioner should capitalise the
expenditure based on the actual expenses incurred / projected, at the time of
next ARR filing. Further Petitioner should have proper accounting system to
capture the expenses related to capital schemes rather than assuming a standard
capitalisation %age.
6.2.25 The Commission thus approves the net A&G expenses (after capitalization) as
below:
Table 6-4: APPROVED A&G EXPENSES FOR FY 2011 - 12 (RS. CRORES)
Estimated Approved
Total Charges 19.50 18.73
Additional A&G expenses(@2.5% of
incremental GFA)
0.26 0.37
Total Charges Chargeable To Capital Works 3.75 3.61
Total Charges Chargeable to Revenue Expenses 16.00 15.49
FY 2011-12Particulars
6.2.26 Repair and Maintenance (R&M) Expenses:
The Petitioner’s Submission:
6.2.27 The commission in the last Tariff Order has approved a total R&M expenditure of
Rs 76.12 Crores for FY 2009 - 10 as against Rs 76.27 Crores projected by the
Petitioner. As per un-audited balance sheet of FY 2009 - 10 the actual
expenditure incurred by the licensees under R&M expenditure is Rs. 86.06 Crores
which is more than the amount approved by the commission. This increase is
mainly attributed to substantial increase in raw material prices for electrical
equipment and fuel cost. The Petitioner submitted that this has substantially
increased the cost burden. Petitioner further submitted that it has added a
number of transformers, cables, grid substation, etc. for which there has been an
increase in the amount of annual maintenance contracts, which has translated to
a higher R&M expenses in the ensuing year. Further Petitioner has initiated
Order on ARR and Tariff Petitions of UPPTCL
Page 54
proactive preventive maintenance and capital expenditure to improve the quality
of supply and reduction in number of overloaded transformer etc.
6.2.28 In the ARR for FY 2011 - 12, Petitioner has assumed same methodology as
approved in last Tariff Order. Therefore R&M expenses have been projected from
expenses of FY 2010 - 11 and have been increased with Escalation index to offset
impact of inflation. The amount so estimated has been spread out proportionally
among the sub-accounts. Further an additional incremental expenses of 2.5% of
GFA addition during the previous year has also been added.
6.2.29 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on latest estimates.
The Commission’s Analysis:
6.2.30 The Commission has approved the R&M expenses for FY 2011 - 12 after
considering escalation factor on approved expenses of previous year and an
additional incremental expense of 2.5% of GFA addition during the previous year.
6.2.31 The R&M expenses claimed by the Petitioner as against the approved figures are
highlighted in the table below:
Table 6-5: APPROVED R&M EXPENSES FOR FY 2011 - 12 (RS. CRORES)
Estimated Approved
Plant and Machinery 94.80 77.15
Building 5.65 4.60
Civil Works 0.00 0.00
Hydraulic Works 0.00 0.00
Transformers 0.00 0.00
Lines, Cables Networks etc. 11.22 9.13
Vehicles 0.01 0.01
Furniture and Fixtures 0.00 0.00
Office Equipments 0.09 0.07
Transportation 0.00 0.00
Sub station maintenance by private agencies 0.00 0.00
Any other items (Incremental expenses @2.5%
of the GFA)
1.48 2.22
Total 113.24 93.18
FY 2011-12Particulars
6.3 GFA BALANCES AND CAPITAL FORMATION ASSUMPTIONS:
The Petitioner’s Submission:
Order on ARR and Tariff Petitions of UPPTCL
Page 55
6.3.1 The assumptions used by the Petitioner in the petition for FY 2011 - 12 for
projecting GFA and CWIP were as follows:
The opening GFA and CWIP for FY 2011 - 12 have been taken as per the closing
figures provisional annual accounts of FY 2010 – 11.
25% the opening CWIP and 25% of investment made during the year, expenses
capitalised & interest capitalised (25% of total investment) has been assumed to
get capitalised during the year.
Investment through “deposit work “has not been taken for capital formation as
per policy adopted by commission in its last tariff Order. Thus investments shown
in capital formation table below don’t include work funded through deposit
work.
Table below shows Licensee’s investment plan for FY 2011 - 12 along with the
proposed funding of each component of the investment plan.
TRANSCO INVESTMENT PLAN: (RS. CRORES)
6.3.2 Petitioner has considered capitalisation of investment as 25% of the sum of
opening WIP, investment made during the year (excluding deposit work),
employees expenses capitalised, A&G expenses capitalised and interest
capitalised.
6.3.3 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on latest estimates.
The Commission’s Analysis:
6.3.4 The Commission has considered the opening balance of GFA as per the closing
balance from the provisional balance sheet for FY 2010 - 11.
Order on ARR and Tariff Petitions of UPPTCL
Page 56
6.3.5 The Commission has considered the capital investments as submitted by the
Petitioner for FY 2011 - 12. Further the Commission also observes that the
Petitioner has not provided any reasonable basis for consideration of the
expenses capitalised and the interest capitalised. Therefore, the Commission for
the purpose of this order has considered the expenses capitalised as approved in
the previous section. The interest capitalization has been considered as per the
Petitioner’s submission. Commission observes a lot of anomalies in computation
of interest capitalization hence the variation in GFA between the Commission
approved figures and the actual figures for FY 2011 - 12 will be subject to true-up
once audited accounts are finalized and submitted for the analysis of the
Commission. Accordingly, the details of approved Capitalisation and Work-in-
progress for FY 2011 - 12 are provided in the table below:
Table 6-6: APPROVED CAPITALIZATION AND WIP FOR FY 2011 - 12 (RS. CRORES)
Estimated Approved
Opening WIP as on 1st April A 2,404.70 2,404.70
Investments B 1,363.00 1,363.00
Employee Expenses Capitalisation @ 15% C 87.68 84.66
A&G Expenses Capitalisation @ 15% D 3.75 3.61
Interest Capitalisation @ 23% on Interest on
long term loans
E 84.94 84.94
Total Investments F= A+B+C+D+E 3,944.07 3,940.90
Transferred to GFA (Total Capitalisation) G=F*25% 986.02 941.92
Closing WIP H= F-G 2,958.05 2,825.77
FY 2011-12Particulars
6.4 DEPRECIATION EXPENSE
The Petitioner’s Submission:
6.4.1 The Commission in its Transmission Tariff Regulations has specified the
methodology for the computation of depreciation. The Regulation also specifies
the rates to be used for the purpose of computation of the depreciation charged
during the year. In the last Tariff Order the Commission has approved
depreciation on the basis of weighted average depreciation rates as against
specific depreciation rates for each class of asset. Further Transmission Tariff
Regulations provide for charging depreciation on opening GFA and a pro-rata
basis on assets capitalized during the year. Petitioner has used same
methodology for computing depreciation in this ARR.
Order on ARR and Tariff Petitions of UPPTCL
Page 57
In last Tariff Order Commission had assessed weighted average
depreciation rate of 3.08%, so in this petition Petitioner has also used
same rate for depreciation.
The depreciation has been charged for the entire year on the opening
GFA and pro-rata basis for the assets capitalized during the year.
Opening GFA for FY 2011 - 12 has been taken from closing figures as
claimed in the previous section. Hence based on the same and using
above specified weight average depreciation rate of 3.08%, the Petitioner
has calculated depreciation for FY 2011 - 12.
6.4.2 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on latest estimates.
The Commission’s Analysis:
6.4.3 On account of the reasons highlighted in Section 5.4, the Commission while
approving the depreciation expenses for FY 2011 - 12 has considered the average
depreciation rate as claimed by the Petitioner.
6.4.4 The Commission approves the depreciation expenses on the GFA as computed
below:
Table 6-7: DEPRECIATION APPROVED FOR FY 2011 - 12 (RS. CRORES)
Estimated Approved
Depreciation Rate 4.50% 4.50%
Opening GFA as on 1st April 7,192.52 7,192.52
Addition to GFA during the year 986.02 941.92
Deduction from GFA during the year 0.00 0.00
Closing GFA as on 31st March 8,178.54 8,134.44
Opening Accumulated Depreciation 2,991.96 3,016.21
Depreciation on Opening GFA + Addition
during the year345.85 344.86
FY 2011-12Particulars
6.4.5 The Commission had directed UPPTCL to ensure that proper and detailed Fixed
Assets Registers at the field offices. The UPPTCL in response has intimated that
necessary instructions have been issued to the field offices with regards to
maintaining the Fixed Assets Register and the work is in progress.
Order on ARR and Tariff Petitions of UPPTCL
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6.4.6 Hence, in this regard the Commission reiterates its direction to the UPPTCL to
ensure that they maintain proper and detailed fixed assets registers to work out
the depreciation expense as specified in the Transmission Tariff Regulations.
6.5 INTEREST AND FINANCE CHARGES:
6.5.1 INTEREST & FINANCE CHARGES ON LONG TERM LOAN:
The Petitioner’s Submission:
6.5.2 Transmission Tariff Regulation stipulate that Interest and finance charges on loan
capital shall be computed on the outstanding loans based on the existing
agreements and arrangements terms regarding the interest rate and the
repayment schedules. Interest on fresh loans shall be allowed only on loan raised
for projects approved and undertaken in accordance with the guidelines
contained in Para 3.7 of these regulations. Accordingly Petitioner has computed
interest and financing costs in the FY 2011 - 12 petition based on the current
schedule of long-term debt, repayments and new debt requirements for new
project to be executed.
6.5.3 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the
numbers were revised based on latest estimates.
The Commission’s Analysis:
6.5.4 The Petitioner has submitted the provisional accounts for FY 2010 - 11 along with
the transmission tariff formats during the petition filed for FY 2012 - 13.
6.5.5 The Commission has computed the interest and finance charges for FY 2011 - 12
based on the approved investments for UPPTCL. This has already been discussed
in the section on GFA balances and capital formation. A debt-equity ratio of
70:30 has been considered by UPPTCL on proposed investments as per
Transmission Tariff Regulations.
6.5.6 The opening loans for FY 2011 - 12 has been taken from the closing loans as
approved for FY 2010 - 11 by the Commission in the previous Tariff Order.
6.5.7 Due to lack of adequate data and inconsistencies seen in the data submitted by
the Petitioner, the Commission has considered the interest rates for the loans as
Order on ARR and Tariff Petitions of UPPTCL
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approved in the last Tariff Order. Any variations would be taken up at the time of
truing up.
6.5.8 Based on above assumptions, Commission approves the interest on long term
debt as below:
Table 6-8: INTEREST ON LONG TERM LOAN FOR FY 2011 - 12 (RS. CRORES)
Interest on long term debt Approved
Old Loans
GoUP 14.96
NCR 1.74
PFC 93.39
REC Loans 77.87
HUDCO 4.76
New Loans 101.96
Total 294.67
6.5.9 INTEREST ON WORKING CAPITAL:
6.5.10 The Transmission Tariff Regulation provides for normative interest on working
Capital based on the methodology outlined in the Regulations. The Petitioner is
eligible for interest on working capital worked out on methodology specified in
the Regulations.
6.5.11 Further Transmission tariff regulations provide following methodology for
calculating working capital
(i) Operation and Maintenance expenses, which includes Employee costs,
R&M expenses and A&G expenses, for one month;
(ii) One-twelfth of the sum of the book value of stores, materials and supplies
at the end of each month of current financial year.
(iii) Receivables equivalent to 60 days average billing of consumers less
security deposits by the beneficiaries
6.5.12 In accordance with the Transmission Tariff Regulation the interest on the working
capital requirement would be the Bank rate as specified by the Reserve Bank of
India as on 1st April of the relevant year plus a margin as decided by the
Commission. Accordingly the Commission for this order has considered the
interest rate on working capital requirement at 12.5% including margin. The
actual rate of interest would be considered based on the audited accounts during
Order on ARR and Tariff Petitions of UPPTCL
Page 60
the true-up process for the year in accordance the Transmission Tariff
Regulations.
6.5.13 The Commission has in accordance with the above mentioned Transmission Tariff
regulation has considered the interest on working capital which is shown in the
table below:
Table 6-9: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2011 - 12 (RS. CRORES)
Estimated Approved
O&M Expenses
Employee Expenses 404.09 390.16
R&M Expenses 113.24 93.18
A&G Expenses 16.00 15.49
Total O&M Expenses 533.34 498.83
One Months O&M Expenses 44.76 41.57
Book Value of Stores 363.47 363.47
One twelvth of the sum of book value of the
material in storesSum of Material in stores at
the end of each month
9.47 30.29
Recievable equivalent to 60 days average
bill ing of consumers
190.29 181.72
Total Working Capital Requirement 244.52 253.58
Interest rate 12.50% 12.50%
Interest on working capital 30.56 31.70
FY 2011-12Particulars
6.6 OTHER INCOME:
The Petitioner’s Submission:
6.6.1 Other Income includes only non-tariff income, which comprises interest on loans
and advances to employees, income from fixed rate investment deposits and
interest on loans and advances to Licensees.
6.6.2 The Petitioner has estimated the non-tariff income as Rs. 29.62 Crores and the
same is approved by the Commission. Any variation would be taken up at the
time of true-up.
6.7 RETURN ON EQUITY:
6.7.1 Under provisions of the Regulation licensees are allowed a return of @ 14% on
equity base, for equity base calculation debt equity ratio shall be 70:30. Where
equity involves is more than 30%, the amount of equity for the purpose of tariff
Order on ARR and Tariff Petitions of UPPTCL
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shall be limited to 30%. Equity amount more than 30% shall be considered as
loan. In case of actual equity employed is less than 30%, actual debt and equity
shall be considered for determination of tariff. In this petition return on equity
has been computed as per methodology adopted by Hon’ble Commission in the
last Tariff Order.
6.7.2 In view of the huge gap in the recovery of cost of supply at the DisCom level,
Petitioner is of the view that return on equity would only result in accumulation
of receivables. As such Petitioner proposed to charge return on equity @ 2% for
the financial year 2011 - 12. ROE is calculated on the equity inflow from GOUP up
to FY 2010 - 11 and normative equity portion in capitalised assets during the
year.
6.7.3 The Commission while undertaking analysis for allowance of return on equity has
considered opening level of equity for FY 2011 - 12 based on the closing
regulatory approved in the previous section.
6.7.4 In absence of any substantial and verifiable information, the Commission has
allowed RoE @2% for FY 2011 - 12 as below:
Table 6-10: APPROVED RETURN ON EQUITY FOR FY 2011 - 12 (RS. CRORES)
Estimated Approved
Equity at the beginning of the year 2,618.06 2,342.35
Assets Capitalised 986.02 941.92
Addition to Equity 295.81 282.58
Closing Equity 2,913.86 2,624.93
Average Equity 2,765.96 2,483.64
Rate of Return 2% 2%
Return on Equity 55.32 49.67
FY 2011-12Particulars
6.8 SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR TRANSCO:
In the preceding sections, the Commission has detailed the expenses under
various heads submitted by UPPTCL in the petition and those which are now
approved. The summary of the expenses under different heads as approved by
the Commission for FY 2011 - 12 is given in table below:
Order on ARR and Tariff Petitions of UPPTCL
Page 62
Table 6-11: SUMMARY OF ARR FOR FY 2011 - 12 (RS. CRORES)
Estimated Approved
Employee cost 404.09 390.16
A&G expenses 19.75 19.09
R&M expenses 113.24 93.18
Interest on Loan Capital 378.93 294.67
Interest on Working Capital 30.56 31.70
Depreciation 345.85 344.86
Gross Expenditure 1,292.44 1,173.66
Less:Employee cost capitalized 87.68 84.66
Less:Interest capitalized 84.94 -
Less:A&G expenses capitalized 3.75 3.61
Net Expenditure 1,116.06 1,085.40
Provision for Bad & Doubtful debts - -
Debits, write-offs & other expenses - -
Net Expenditure with provisions 1,116.06 1,085.40
Add: Reasonable Return / Return on Equity 55.32 49.67
Less: Non Tariff Income 29.62 29.62
Annual Revenue Requirement (ARR) 1,141.76 1,105.45
FY 2011-12Particulars
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Page 63
Chapter 7. AGGREGATE REVENUE REQUIREMENT FOR FY 2012 - 13
7.1 ESCALATION INDEX / INFLATION RATE
The Petitioner’s Submission:
7.1.1 The Petitioner has computed the Escalation Index/Inflation Rate for FY 2012 - 13
as per the formula:
Inflation Rate=0.6* Inflation based on WPI + 0.4*Inflation based on CPI
Accordingly, the Petitioner has computed 9.85% as escalation index in the FY
2012 - 13 petition.
The Commission’s Analysis:
7.1.2 The Regulation 4.2 of Transmission Tariff Regulations stipulates the methodology
for consideration of the O&M Expenses, wherein such expenses are linked to the
inflation index determined under these Regulations. The relevant provisions of
the Transmission Tariff Regulation are reproduced below:
“4.2 Operation and Maintenance Expenses
1. The O&M expenses for the base year shall be calculated on the basis of
historical/audited costs and past trend during the preceding five years. However,
any abnormal variation during the preceding five years shall be excluded. O & M
expenses so calculated for the base year shall then be escalated on the basis of
prevailing rates of inflation for the year as notified by the Central Government
and shall be considered as a weighted average of Wholesale Price Index and
Consumer Price Index in the ratio of 60:40. Base year, for these regulations
means, the first year of tariff determination under these regulations.
2. Where such data for the preceding five years is not available the Commission
may fix O&M expenses for the base year as certain percentage of the capital cost.
3. Incremental O&M expenses for the ensuing financial year shall be 2.5% of
capital addition during the current year. O&M charges for the ensuing financial
year shall be sum of incremental O&M expenses so worked out and O&M charges
of current year escalated on the basis of predetermined indices as indicated in
regulation 4.2.1 above.
4. However, the Commission may direct the utilities to bring down the O & M
expenses to an efficient level i.e., by fixing norms based on the circuit kilometers
Order on ARR and Tariff Petitions of UPPTCL
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of transmission lines, transformation capacity at the sub-stations, number of bays
in substation etc. of similarly placed efficient utilities, within such span of time, as
may be determined by the Commission.
5. The Commission shall examine and if satisfied shall allow inclusion in revenue
requirement in the next period additional O&M expenses on account of war,
insurgency, and change in laws or like eventualities for a specified
period.”[Emphasis supplied]
7.1.3 The Commission in accordance with the above stated Regulation has calculated
the inflation index for the FY 2011 - 12 based on the weighted average index of
WPI and CPI. The Commission has considered the WPI and CPI index as available
on the website of Economic Advisor, Ministry of Commerce and Industry Ministry
of Labour respectively. The Commission has used the inflation index of actuals
available for previous year for approval of O&M expenses of FY 2012 - 13 at
8.67%. The computation of inflation index is given in the table below:
Table 7-1: INFLATION INDEX FOR FY 2012 - 13
2010-11 2011-12 2010-11 2011-12
April 138.60 152.10 170.00 186.00
May 139.10 152.40 172.00 187.00
June 139.80 153.10 174.00 189.00
July 141.00 154.20 178.00 193.00
August 141.10 154.90 178.00 194.00
September 142.00 156.20 179.00 197.00
October 142.90 157.00 181.00 198.00
November 143.80 156.90 182.00 199.00
December 146.00 156.90 185.00 202.28
January 148.00 157.70 188.00 198.00
February 148.10 158.40 185.00 199.00
March 149.50 159.80 185.00 201.00
Average for Financial Year 143.33 155.80 179.75 195.27
Inflation index for FY 2010-11
Inflation index for FY 2011-12
Applicable Inflation rate
171.59
8.67%
Month Wholesale Price Index Consumer Price Index
Calculation of Inflation Index (CPI-40%, WPI-60%)
157.90
7.2 OPERATION & MAINTENANCE EXPENSES:
The Petitioner’s Submission:
7.2.1 Operation & maintenance expense comprises Employee costs, Administrative &
General Expenses and Repair & Maintenance expenses. The regulation 4.2 of the
Transmission Tariff Regulation issued by the Commission stipulates:
Order on ARR and Tariff Petitions of UPPTCL
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The O&M expenses for the base year shall be calculated on the basis of
historical/audited costs and past trend during the preceding five years. However,
any abnormal variation during the preceding five years shall be excluded. O & M
expenses so calculated for the base year shall then be escalated on the basis of
prevailing rates of inflation for the year as notified by the Central Government
and shall be considered as a weighted average of Wholesale Price Index and
Consumer Price Index in the ratio of 60:40. Base year, for these regulations
means, the first year of tariff determination under these regulations.
Where such data for the preceding five years is not available the Commission may
fix O&M expenses for the base year as certain percentage of the capital cost.
Incremental O&M expenses for the ensuing financial year shall be 2.5% of capital
addition during the current year. O&M charges for the ensuing financial year
shall be sum of incremental O&M expenses so worked out and O&M charges of
current year escalated on the basis of predetermined indices as indicated in
regulation 4.2.1 above.
7.2.2 The Petitioner further submitted the details of individual elements of O&M
expenditure as per the Commission’s Analysis in the last Tariff Order wherein the
Commission was of the opinion that a suitable norm for allowance of O&M
expenses could be adopted only after undertaking a thorough study of the O&M
expenditure based on the past performances and the cost drivers of the same,
through a separate process. This study also has to be backed by audited
information for the past which needs to be made available by the licensees. Only
then the true picture of the trend in the O&M expenses may emerge. Till any
such norm for O&M expenditure is determined, the Commission emphasised to
consider the individual elements of O&M expenditure.
7.2.3 Further in addition to the O&M cost based on inflationary indices based
escalation, the Petitioner has computed and sought an additional O&M expenses
@ 2.5% of the additions to GFA during the previous year as per the tariff
regulations.
Petitioner has estimated individual components of O&M expenses based on
methodology below.
7.2.4 O&M Expenses on Addition to Assets during the Year
7.2.5 In addition to the Employee cost, A&G cost and R&M expenses described in the
succeeding section, Regulation provide for incremental O&M expenses on
Order on ARR and Tariff Petitions of UPPTCL
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addition to assets during the year. Regulation stipulates that “Incremental O&M
expenses for the ensuing financial year shall be 2.5% of capital addition during
the current year. O&M charges for the ensuing financial year shall be sum of
incremental O&M expenses so worked out and O&M charges of current year
escalated on the basis of predetermined indices as indicated in regulation 4.3
(1).”
7.2.6 Accordingly based on above the incremental O&M has been worked out by the
Petitioner in following table. The same are allocated across the individual
elements of the O&M on the basis of the contribution of each element in the
gross O&M expenses excluding the incremental O&M charges and 6th Pay
Commission installment arrears.
7.2.7 In the petition for FY 2012 - 13 filed, UPPTCL claimed Rs. 24.65 Crores as
incremental O&M expenses.
The Commission’s Analysis:
7.2.8 The Regulation 4.2 sub-section 3 of the Transmission Tariff Regulations provides
for consideration of the additional O&M expenses at 2.5% on additions to assets
during the previous year.
7.2.9 Based on the above, the Commission has approved incremental O&M expenses
for FY 2012 - 13 at Rs. 23.55 crores. The same are allocated across the individual
elements of the O&M expenses on the basis of the contribution of each element
in the gross O&M expenses which is being approved in subsequent paragraphs.
Table 7-2: APPROVED INCREMENTAL EXPENSES FOR FY 2012 - 13 (RS. CRORES)
Incremental O&M expenses Approved
Capitalization in previous year 941.92
Incremental O&M expenses approved @ 2.5% 23.55
a) Employee costs 17.34
b) R&M expenses 5.32
c) A&G expenses 0.88
7.2.10 Employee Costs:
The Petitioner’s Submission:
Order on ARR and Tariff Petitions of UPPTCL
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7.2.11 The projection of employee costs involves a detailed examination of the various
components of salary such as basic pay and dearness allowance for the various
grades of employees. Petitioner has projected employee cost for FY 2012 - 13
based on un-audited data of FY 2010 - 11 and data available to date.
7.2.12 As mentioned above evolution of sub account of employee cost has been
forecasted from base figure of FY 2010 - 11 balance sheet and actual figure
available till date. While projecting the expenses for ensuing years, Petitioner has
endeavoured to control the employee expenses but cost has increased due to
impact of implementation time scale and arrear of pay commission which is
totally beyond the control of the Petitioner. Various sub account were estimated
by the Petitioner as follows:
Basic salary: The Petitioner projected the expenses for FY 2012 - 13 by considering escalation factor (inflation index) on FY 2011 - 12 estimated figures.
Dearness Allowance (DA): The Petitioner projected the expenses for FY 2012 - 13 by considering escalation factor on FY 2011 - 12 figures.
Other allowance: Other allowance for FY 2012 - 13 has also been forecasted by considering escalation factor on FY 2011 - 12 figures.
Likewise, Medical Reimbursement, LTA, Earn leave encashment, staff welfare expenses and other terminal benefit have been forecast to increase by inflation index per year from FY 2011 - 12.
Pension and Gratuity: Pension and Gratuity have been calculated at 16.7% and 2.38% (i.e., 19.08%) of Basic Salary and Dearness Allowance.
Capitalisation of Expenses: Employee Expenses Capitalized has been taken 22% as per audited balance sheet of FY 2007 - 08.
An additional incremental expenses of 2.5% of GFA addition during the previous year has also been added.
The Commission’s Analysis:
7.2.13 As discussed in the preceding sections the Commission is treating employee
expenses for FY 2012 - 13 in a different manner to factor-in the
recommendations of the 6th Pay Commission. The Commission approves to
escalate employee expenses of FY 2011 - 12 at the escalation factor of 8.67% for
FY 2012 - 13.
7.2.14 An additional incremental expenses of 2.5% of GFA addition during the previous
year has also been added.
Order on ARR and Tariff Petitions of UPPTCL
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7.2.15 The employee expenses claimed by the Petitioner as per the revised estimates as
against the approved figures is highlighted in the table below:
Table 7-3: APPROVED EMPLOYEE EXPENSES FOR FY 2012 - 13 (RS. CRORES)
Projected Approved
Salaries 203.1 200.9
Dearness Allowance 117.8 116.5
Other Allowances & Relief 15.1 14.9
Bonus/Exgratia 5.3 4.5
Medical reimbursment 3.0 7.7
Leave travel alownce 0.1 0.1
Earned Leave Encashment 27.5 9.9
Compensation to Employees 0.0 0.0
Employeee welfare expencess 0.4 0.8
Pension and gratuity 61.2 60.6
Other terminal benefits 4.2 0.0
Expenses on trust 0.3 0.0
Any other employee expenses 0.0 0.0
Arrear of Pay Commission/Time Scale 0.0 0.0
Additional employee Expenses(@2.5% of
incremental GFA)
18.5 17.3
Grand Total 456.6 433.4
Employee expenses capitalised 99.1 94.1
Net Employee expenses 357.6 339.4
FY 2012-13Particulars
7.2.16 Administration and General (A&G) Expenses:
The Petitioner’s Submission:
7.2.17 These expenses are incurred by the Petitioner for meeting day-to-day expenses
related to the administration of its offices, insurance, communication,
professional charges, audit fees, advertisement expenses & freight etc. All these
expenses are directly affected by inflation. A&G expenses were projected by the
Petitioner in the petition filed for FY 2012 - 13 considering the impact of inflation
and need for addition of more substation and offices.
7.2.18 The A&G projections for FY 2012 - 13 as submitted by UPPTCL are given below:
Order on ARR and Tariff Petitions of UPPTCL
Page 69
The Commission’s Analysis:
7.2.19 UPPTCL has mentioned that A&G expenses are for meeting the day-to-day
expenses relating to the administration of its offices, insurance, communication,
professional charges, audit fees, advertisement expenses, freight etc. and are
directly linked with inflation indices. The UPPTCL has cited lower A&G expenses
owing to variation in actual capital investments made in past years.
7.2.20 The Commission has approved the A&G expenses for FY 2009 - 10 based on the
escalation factor of 8.74% (inflation index) over provisional figures of Rs. 15.22
Crores for FY 2008 - 09. Keeping the same methodology for FY 2012 - 13, the
Commission is considering escalation factor of 8.63% over the approved A&G
expenses for FY 2011 - 12.
7.2.21 For the purposes of this Tariff Order, capitalization @19% of the total A&G
expenses as proposed by UPPTCL has been accepted by the Commission.
However, the Commission directs that UPPTCL should capitalise the expenditure
based on the actual expenses incurred / projected, at the time of next ARR filing.
Further UPPTCL should have proper accounting system to capture the expenses
related to capital schemes rather than assuming a standard capitalisation %age.
7.2.22 The Commission thus approves the net A&G expenses (after capitalization) as
below:
Order on ARR and Tariff Petitions of UPPTCL
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Table 7-4: APPROVED A&G EXPENSES FOR FY 2012 - 13 (RS. CRORES)
Projected Approved
Total Charges 21.51 20.35
Additional A&G expenses(@2.5% of
incremental GFA)
0.91 0.88
Total Charges Chargeable To Capital Works 4.26 4.03
Total Charges Chargeable to Revenue Expenses 18.16 17.20
FY 2012-13Particulars
7.2.23 Repair and Maintenance (R&M) Expenses:
The Petitioner’s Submission:
7.2.24 In the ARR for FY 2012 - 13, Petitioner has assumed same methodology as
approved in last Tariff Order. Therefore R&M expenses have been projected from
expenses of FY 2011 - 12 and have been increased with Escalation index to offset
impact of inflation. The amount so estimated has been spread out proportionally
among the sub-accounts. Further an additional incremental expenses of 2.5% of
GFA addition during the previous year has also been added.
The Commission’s Analysis:
7.2.25 The Commission has approved the R&M expenses for FY 2012 - 13 after
considering escalation factor on approved expenses for FY 2011 - 12 and an
additional incremental expense of 2.5% of GFA addition during the previous year.
7.2.26 The R&M expenses claimed by the Petitioner as against the approved figures are
highlighted in the table below:
Order on ARR and Tariff Petitions of UPPTCL
Page 71
Table 7-5: APPROVED R&M EXPENSES FOR FY 2012 - 13 (RS. CRORES)
Projected Approved
Plant and Machinery 104.14 83.85
Building 6.21 5.00
Civil Works 0.00 0.00
Hydraulic Works 0.00 0.00
Transformers 0.00 0.00
Lines, Cables Networks etc. 12.32 9.92
Vehicles 0.01 0.01
Furniture and Fixtures 0.00 0.00
Office Equipments 0.10 0.08
Transportation 0.00 0.00
Sub station maintenance by private agencies 0.00 0.00
Any other items (Incremental expenses @2.5%
of the GFA)
5.20 5.32
Total 127.97 104.18
FY 2012-13Particulars
7.3 GFA BALANCES AND CAPITAL FORMATION ASSUMPTIONS:
The Petitioner’s Submission:
7.3.1 The assumptions used by the Petitioner in the petition for FY 2012 - 13 for
projecting GFA and CWIP were as follows:
The opening GFA and CWIP for FY 2012 - 13 have been taken as per the closing figures claimed in FY 2011 - 12 estimates.
25% the opening CWIP and 25% of investment made during the year, expenses capitalised & interest capitalised (25% of total investment) has been assumed to get capitalised during the year.
Investment through “deposit work “has not been taken for capital formation as per policy adopted by commission in its last tariff Order. Thus investments shown in capital formation table below don’t include work funded through deposit work.
Table below shows Licensee’s investment plan for FY 2012 - 13 along with the
proposed funding of each component of the investment plan:
Order on ARR and Tariff Petitions of UPPTCL
Page 72
Transco Investment Plan: (Rs. Crores)
7.3.2 Petitioner has considered capitalisation of investment as 25% of the sum of
opening WIP, investment made during the year (excluding deposit work),
employees expenses capitalised, A&G expenses capitalised and interest
capitalised.
The Commission’s Analysis:
7.3.3 The Commission has considered the opening balance of GFA as per the closing
balance approved for FY 2011 - 12.
7.3.4 The Commission has considered the capital investments as submitted by the
Petitioner for FY 2012 - 13. Further the Commission also observes that the
Petitioner has not provided any substantial basis for consideration of the
expenses capitalised and the interest capitalised. Therefore the Commission for
the purpose of this order has considered the expenses capitalised as approved in
the previous section. The interest capitalization has been considered as per the
Petitioner’s Submission. The Commission observes a lot of anomalies in
computation of interest capitalization hence the variation in GFA between the
Commission approved figures and the actual figures for FY 2012 - 13 will be
subject to true-up once audited accounts are finalized and submitted for the
analysis of the Commission. Accordingly, the details of approved Capitalisation
and Work-in-progress for FY 2012 - 13 are provided in the table below:
Order on ARR and Tariff Petitions of UPPTCL
Page 73
Table 7-6: APPROVED CAPITALIZATION AND WIP FOR FY 2012 - 13 (RS. CRORES)
Projected Approved
Opening WIP as on 1st April A 2,958.05 2,825.77
Investments B 1,549.95 1,549.95
Employee Expenses Capitalisation @ 15% C 99.09 94.05
A&G Expenses Capitalisation @ 15% D 4.26 4.03
Interest Capitalisation @ 23% on Interest on
long term loans
E 98.96 98.96
Total Investments F= A+B+C+D+E 4,710.31 4,572.77
Transferred to GFA (Total Capitalisation) G=F*25% 1,177.59 1,093.93
Closing WIP H= F-G 3,532.72 3,281.79
FY 2012-13Particulars
7.4 DEPRECIATION EXPENSE
The Petitioner’s Submission:
7.4.1 The Commission in its Transmission Tariff Regulations has specified the
methodology for the computation of depreciation. The regulation also specifies
the rates to be used for the purpose of computation of the depreciation charged
during the year. In the last Tariff Order the Commission has approved
depreciation on the basis of weighted average depreciation rates as against
specific depreciation rates for each class of asset. Further Transmission Tariff
Regulations provide for charging depreciation on opening GFA and a pro-rata
basis on assets capitalized during the year. Petitioner has used same
methodology for computing depreciation in this ARR.
In the petition, the Petitioner had assessed weighted average
depreciation rate of 4.50% for FY 2012 - 13.
The depreciation has been charged for the entire year on the opening
GFA and pro-rata basis for the assets capitalized during the year.
Opening GFA for FY 2012 - 13 has been taken from closing figures as
claimed in the previous section. Hence based on the same and using
above specified weight average depreciation rate of 4.50%, the Petitioner
has calculated depreciation for FY 2012 - 13.
The Commission’s Analysis:
7.4.2 On account of the reasons highlighted in Section 5.4, the Commission while
approving the depreciation expenses for FY 2012 - 13 has considered the average
depreciation rate as claimed by the Petitioner.
Order on ARR and Tariff Petitions of UPPTCL
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7.4.3 The Commission approves the depreciation expenses on the GFA as computed
below:
Table 7-7: DEPRECIATION APPROVED FOR FY 2012 - 13 (RS. CRORES)
Projected Approved
Depreciation Rate 4.50% 4.50%
Opening GFA as on 1st April 8,178.54 8,134.44
Addition to GFA during the year 1,177.59 1,093.93
Deduction from GFA during the year 0.00 0.00
Closing GFA as on 31st March 9,356.13 9,228.37
Opening Accumulated Depreciation 3,337.80 3,361.07
Depreciation on Opening GFA + Addition
during the year394.53 390.66
FY 2012-13Particulars
7.4.4 The Commission had directed UPPTCL to ensure that proper and detailed Fixed
Assets Registers are maintained at the field offices. The UPPTCL in response has
intimated that necessary instructions have been issued to the field offices with
regards to maintaining the Fixed Assets Register and the work is in progress.
7.4.5 Hence, in this regard the Commission reiterates its direction to the UPPTCL to
ensure that they maintain proper and detailed fixed assets registers to work out
the depreciation expense as specified in the Transmission Tariff Regulations.
7.5 INTEREST AND FINANCE CHARGES:
7.5.1 INTEREST & FINANCE CHARGES ON LONG TERM LOAN:
The Petitioner’s Submission:
7.5.2 Transmission Tariff Regulation stipulate that Interest and finance charges on loan
capital shall be computed on the outstanding loans based on the existing
agreements and arrangements terms regarding the interest rate and the
repayment schedules. Interest on fresh loans shall be allowed only on loan raised
for projects approved and undertaken in accordance with the provisions of Para
3.7 of these Regulations. Accordingly, the Petitioner has computed interest and
financing costs in the FY 2012 - 13 petition based on the current schedule of
long-term debt, repayments and new debt requirements for new project to be
executed.
Order on ARR and Tariff Petitions of UPPTCL
Page 75
The Commission’s Analysis:
7.5.3 The Commission has computed the interest and finance charges for FY 2012 - 13
based on the approved investments for UPPTCL. This has already been discussed
in the section on GFA balances and capital formation. A debt-equity ratio of
70:30 has been considered by UPPTCL on proposed investments as per
Transmission Tariff Regulations.
7.5.4 The opening loans for FY 2012 - 13 has been taken from the closing loans as
approved for FY 2011 - 12 by the Commission in the previous Tariff Order.
7.5.5 Due to lack of adequate data and inconsistencies seen in the data submitted by
the Petitioner, the Commission has considered the interest rates for the loans as
approved in the last Tariff Order. Any variations would be taken up at the time of
truing up.
7.5.6 Based on above assumptions, Commission approves the interest on long term
debt as below:
Table 7-8: INTEREST ON LONG TERM LOAN FOR FY 2012 - 13 (RS. CRORES)
Interest on long term debt Approved
Old Loans
GoUP 14.96
NCR 1.02
PFC 90.87
REC Loans 100.98
HUDCO 0.00
New Loans 126.25
Total 334.07
7.5.7 INTEREST ON WORKING CAPITAL:
7.5.8 The Transmission tariff regulation provides for normative interest on working
Capital based on the methodology outlined in the regulations. The Petitioner is
eligible for interest on working capital worked out on methodology specified in
the regulations.
7.5.9 Further Transmission tariff regulations provide following methodology for
calculating working capital
(i) Operation and Maintenance expenses, which includes Employee costs,
R&M expenses and A&G expenses, for one month;
Order on ARR and Tariff Petitions of UPPTCL
Page 76
(ii) One-twelfth of the sum of the book value of stores, materials and supplies
at the end of each month of current financial year.
(iii) Receivables equivalent to 60 days average billing of consumers less
security deposits by the beneficiaries
7.5.10 In accordance with the Transmission Tariff Regulation, the interest on the
working capital requirement would be the Bank rate as specified by the Reserve
Bank of India as on 1st April of the relevant year plus a margin as decided by the
Commission. Accordingly the Commission for this order has considered the
interest rate on working capital requirement at 12.5% including margin. The
actual rate of interest would be considered based on the audited accounts during
the true-up process for the year in accordance the Transmission Tariff
Regulations.
7.5.11 The Commission has, in accordance with the above mentioned Transmission
Tariff Regulation, considered the interest on working capital which is shown in
the table below:
Table 7-9: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2012 - 13 (RS. CRORES)
Projected Approved
O&M Expenses
Employee Expenses 456.64 433.44
R&M Expenses 127.97 104.18
A&G Expenses 22.42 17.20
Total O&M Expenses 607.03 554.81
One Months O&M Expenses 50.59 46.23
Book Value of Stores 129.17 129.17
One twelvth of the sum of book value of the
material in storesSum of Material in stores at
the end of each month
10.76 10.76
Recievable equivalent to 60 days average
bill ing of consumers
216.46 204.06
Total Working Capital Requirement 277.81 261.06
Interest rate 12.50% 12.50%
Interest on working capital 34.73 32.63
FY 2012-13Particulars
7.6 OTHER INCOME:
The Petitioner’s Submission:
7.6.1 Other Income includes only non-tariff income, which comprises interest on loans
and advances to employees, income from fixed rate investment deposits and
interest on loans and advances to Licensees.
Order on ARR and Tariff Petitions of UPPTCL
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7.6.2 The Petitioner has projected the non-tariff income as Rs. 32.53 Crores and the
same is approved by the Commission. Any variation would be taken up at the
time of true-up.
7.7 RETURN ON EQUITY:
7.7.1 Under provisions of the Regulation licensees are allowed a return of @ 14% on
equity base, for equity base calculation debt equity ratio shall be 70:30. Where
equity involves is more than 30%, the amount of equity for the purpose of tariff
shall be limited to 30%. Equity amount more than 30% shall be considered as
loan. In case of actual equity employed is less than 30%, actual debt and equity
shall be considered for determination of tariff. In the petition, return on equity
has been computed as per methodology adopted by Hon’ble Commission in last
Tariff Order.
7.7.2 In view of the huge gap in the recovery of cost of supply at the DisCom level,
Petitioner is of the view that return on equity would only result in accumulation
of receivables. As such Petitioner proposed to charge return on equity @ 2% for
the financial year 2012 - 13. ROE is calculated on the equity inflow from GoUP up
to FY 2011 - 12 and normative equity portion in capitalised assets during the
year.
7.7.3 The Commission while undertaking analysis for allowance of return on equity has
considered opening level of equity for FY 2012 - 13 based on the closing
regulatory approved in the previous section.
7.7.4 In absence of any substantial and verifiable information, the Commission has
allowed RoE @2% for FY 2012 - 13 as below:
Table 7-10: APPROVED RETURN ON EQUITY FOR FY 2012 - 13 (RS. CRORES)
Projected Approved
Equity at the beginning of the year 2,913.86 2,624.93
Assets Capitalised 1,177.59 1,093.93
Addition to Equity 353.28 328.18
Closing Equity 3,267.14 2,953.11
Average Equity 3,090.50 2,789.02
Rate of Return 2% 2%
Return on Equity 61.81 55.78
FY 2012-13Particulars
Order on ARR and Tariff Petitions of UPPTCL
Page 78
7.8 SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR TRANSCO:
7.8.1 In the preceding sections, the Commission has detailed the expenses under
various heads submitted by UPPTCL in the petition and those which are now
approved. The summary of the expenses under different heads as approved by
the Commission for FY 2012 - 13 is given in table below:
Table 7-11: SUMMARY OF ARR FOR FY 2012 - 13 (RS. CRORES)
Projected Approved
Employee cost 456.64 433.44
A&G expenses 22.42 21.23
R&M expenses 127.97 104.18
Interest on Loan Capital 435.49 334.07
Interest on Working Capital 34.73 32.63
Depreciation 394.53 390.66
Gross Expenditure 1,471.78 1,316.21
Less:Employee cost capitalized 99.09 94.05
Less:Interest capitalized 98.96 -
Less:A&G expenses capitalized 4.26 4.03
Net Expenditure 1,269.47 1,218.13
Provision for Bad & Doubtful debts - -
Debits, write-offs & other expenses - -
Net Expenditure with provisions 1,269.47 1,218.13
Add: Reasonable Return / Return on Equity 61.81 55.78
Less: Non Tariff Income 32.53 32.53
Annual Revenue Requirement (ARR) 1,298.75 1,241.38
FY 2012-13Particulars
Order on ARR and Tariff Petitions of UPPTCL
Page 79
7.9 SLDC CHARGES:
7.9.1 Load Despatch Centres have been termed as apex bodies in the
electricity industry. They need true independence not only in financial terms but
also in decision making. The Ministry of Power, Government of India had also
constituted a Committee on “Manpower Certification and Incentives for System
Operation and Ring Fencing Load Despatch Centres” to ensure functional
autonomy for Load Despatch Centres. The Committee in its report dated 11th
August, 2008 observed that functional autonomy would mean taking decisions
without being adversely influenced by extraneous issues originating from the
Company Management or any of the market players, which can be ensured
through:
Independent governance structure;
Separate accounting;
Adequate number of skilled manpower having high ethical standards and driven by altruistic values;
Adequate logistics / infrastructure.
7.9.2 For implementation of the above recommendations, the Commission has
decided to determine the SLDC Charges which shall be payable by UPPTCL and
which will be recovered through transmission tariff as per the Clause 8 (2) of the
SLDC Regulations.
7.9.3 UPPTCL has also provided separate cost estimates for its SLDC Charges in the
filings for FY 2010 - 11, FY 2011 - 12 and FY 2012 - 13
7.9.4 However, these costs are already embedded in the transmission ARR submitted
by the TRANSCO. The Commission hereby redirects the TRANSCO / SLDC, that the
ARR and budget for SLDC should be submitted separately along with the ARR
submission of TRANSCO at time of next filing. The costs have to be separately
identified and not embedded in the TRANSCO ARR.
7.9.5 The estimated costs of running UPPTCL central load despatch centre in Lucknow
and four regional load despatch centres at Panki, Sahupuri, Modipuram and
Moradabad which are owned and operated by UPPTCL are provided in the below
along with the Commission’s approved values for FY 2010 - 11, FY 2011 - 12 and
FY 2012 - 13. The Commission has decided to approve all the expenses as given in
the SLDC’s ARR since SLDC is yet to be separated from UPPTCL there is no basis
Order on ARR and Tariff Petitions of UPPTCL
Page 80
to actually determine the SLDC’s ARR. However, any difference between actual
and approved figures could be adjusted at the time of true-up of the given
financial years.
Table 7-12: APPROVED SLDC CHARGES (RS. CRORES)
Petition Approved Petition Approved Petition Approved
Employee cost 7.19 7.19 7.89 7.89 8.92 8.92
A&G expenses 0.61 0.61 0.68 0.68 0.75 0.75
R&M expenses 0.14 0.14 0.15 0.15 0.20 0.20
Depreciation 3.86 3.86 6.77 6.77 7.73 7.73
Interest & Finance charges 5.00 5.00 6.35 6.35 7.27 7.27
Less: Other Income 0.53 0.53 0.58 0.58 0.64 0.64
Add: Reasonable Return 1.43 1.43 1.08 1.08 1.21 1.21
Annual Revenue Requirement (ARR) 17.70 17.70 22.34 22.34 25.43 25.43
ParticularsFY 2010-11 FY 2011-12 FY 2012-13
7.9.6 These approved values have been already included in Approved UPPTCL ARR as
shown in previous tables.
7.9.7 Based on the above ARR and as per the Clause 9 (2) of the SLDC Regulations, the
monthly SLDC charges payable by UPPTCL is given below:
Table 7-13: APPROVED SLDC CHARGES PAYABLE BY UPPTCL
Particulars FY 2010-11 FY 2011-12 FY 2012-13
Approved ARR for SLDC (Rs. Cr.) 17.70 22.34 25.43
Monthly charges to be paid by UPPTCL (Rs./kWh) 1.48 1.86 2.12 7.9.8 These charges shall be paid by the UPPTCL to the SLDC on monthly basis.
7.10 TRANSMISSION CHARGES:
7.10.1 The Transmission Tariff Regulations provide for capacity (MW) based
transmission charges. But there are still numerous issues involved in the
determination of the MW based transmission tariff like allocation of transmission
capacity to the existing long term transmission system users, allocation of the
existing PPAs etc.
7.10.2 Presently, the State Discoms have not been allotted transmission capacity as
such, henceforth the Transmission tariff has been calculated by the Petitioner on
Order on ARR and Tariff Petitions of UPPTCL
Page 81
the basis of numbers of units wheeled by the transmission licensee for
distribution licensees.
7.10.3 The Petitioner has computed the transmission tariff applicable for the FY 2010 -
11, FY 2011 - 12 and FY 2012 - 13 based on the above methodology. The
Commission in its analysis approves similar methodology since the allocation of
transmission capacity to the long term transmission system users is not available
currently. Accordingly, the Commission highlights below the analysis of
transmission tariffs for the respective years as against the Petitioner’s
Submissions.
Table 7-14: ANALYSIS OF TRANSMISSION TARIFFS
Petition Commission Petition Commission Petition Commission
Aggregate Revenue Requirement (Rs. Cr.) 894.08 914.18 1,141.76 1,105.45 1,298.75 1,241.38
Energy delivered to DISCOMs (MUs) 61,814 62,062 70,070 69,648 79,043 70,495
Transmission charges (Rs. /kWh) 0.145 0.147 0.163 0.159 0.164 0.176
ParticularsFY 2010-11 FY 2011-12 FY 2012-13
7.10.4 Since the FY 2010 - 11 and FY 2011 - 12 has already lapsed, the transmission
charges for the FY 2010 - 11 and FY 2011 - 12 have been recovered by the
licensee based on the previous Tariff Order. Henceforth, the Commission do not
find any rationale for implementation of the above tariffs in the lapsed years. The
transmission tariffs determined above are only for the sake of analysis.
7.10.5 The Commission has approved the Transmission Tariff for FY 2012 - 13 based on
the revenue gaps determined for FY 2010 - 11 & FY 2011 - 12 and the approved
ARR for FY 2012 - 13. Any differences in the ARR and revenue gap for previous
years would be subject to true up.
7.10.6 Thus, the Transmission Charges payable by all the distribution licensees in the
state are as given in the table below:
Table 7-15 APPROVED TRANSMISSION CHARGES FOR FY 2012 - 13
Particulars Approved
Revenue Gap for FY 2010-11 (Rs. Crores) 83.49
Revenue Gap for FY 2011-12 (Rs. Crores) (97.71)
ARR for FY 2012-13 (Rs. Crores) 1,241.38
Total (Rs. Crores) 1,227.16
Energy delivered to DISCOMs (MUs) 70,495
Transmission charges (Rs. /kWh) 0.174
Order on ARR and Tariff Petitions of UPPTCL
Page 82
7.10.7 The revenue gap for FY 2010 - 11 has been computed after considering the
revenue as per provisional accounts for FY 2010 - 11.
7.10.8 The revenue gap for FY 2011 - 12 has been computed after considering the
transmission charges approved for the DISCOMs in the previous Tariff Order.
7.10.9 The Commission thus approves a transmission tariff of Rs. 0.174 /kWh for FY
2012 - 13.
7.10.10 The transmission charges as determined are payable by all distribution
licensees of the State.
7.11 OPEN ACCESS: TRANSMISSION CHARGES:
7.11.1 The Commission has computed the transmission charges for respective years at
Para 7.10.3 of this order for use of the UPPTCL network for transmission of
power.
7.11.2 The Commission in its previous order had impressed upon the Petitioner to
submit the details in support of the voltage wise losses claimed. However the
Petitioner had not submitted any supporting study to justify the voltage wise
losses. The present petition of UPPTCL is also void of any supporting information
/ study with regard to the voltage wise losses considered.
7.11.3 The Commission in its previous order had considered the interim allocation of
cost at various voltage levels and approved the Transmission charges payable by
the Open Access consumers. In absence of any study and details of voltage wise
losses the Commission is constrained to adopt a normative approach for the
determination of Open Access charges at different voltage levels. Therefore, the
Commission has adopted the same approach as considered in its last order for
approval of transmission charges at different voltage levels.
7.11.4 Accordingly, the transmission charges for long term consumers connected at 132
kV voltage level are assumed to be same as computed in section 7.10.3 of this
order. The transmission charges for open access consumers connected at voltage
levels above 132 kV are assumed to be at 75% of the charges specified for
consumers connected at 132 kV voltage level. The short term open access
Order on ARR and Tariff Petitions of UPPTCL
Page 83
charges shall remain same as approved in the previous Tariff Order dated 31st
March 2010. The transmission open access charges approved are given in the
table below:
Table 7-16: APPROVED VOLTAGE LEVEL TRANSMISSION OA CHARGES – LONG TERM (RS./KWH)
FY 2010-11 FY 2011-12 FY 2012-13
Long Term Long Term Long Term
Connected at 132 kV Voltage Level 0.147 0.159 0.176
Connected above 132 kV Voltage Level 0.110 0.119 0.132
Particulars
7.11.5 The Commission has retained the short term open access charges as approved in
the previous order. The approved short term open access charges are given in
the table below:
Table 7-17: APPROVED VOLTAGE LEVEL TRANSMISSION OA CHARGES – SHORT TERM (RS./KWh)
FY 2010-11 FY 2011-12 FY 2012-13
Short Term Short Term Short Term
Connected at 132 kV Voltage Level 0.05 0.05 0.05
Connected above 132 kV Voltage Level 0.04 0.04 0.04
Particulars
7.11.6 In addition to the above charges the open access consumer would also be liable
to bear the transmission losses in kind. In the absence of authenticated voltage
level loss data, the Commission has ruled that the transmission losses for FY 2012
- 13 would be 3.63% as approved at Table 4-2: APPROVED TRANSMISSION
LOSSES FOR FY 2010 - 11, FY 2011 - 12 & FY 20Table 4-2 of this order, irrespective
of the voltage levels at which the consumers are connected to the grid.
7.11.7 The Open Access charges and the losses to be borne by the open access
consumers may be reviewed by the Commission on the submission of the
relevant information by the Petitioner.
Order on ARR and Tariff Petitions of UPPTCL
Page 84
Chapter 8. DIRECTIVES
8.1.1 The Commission had issued several directives to UPPTCL / SLDC in the previous
Tariff Order. This chapter deliberates upon the status of compliance of those
directives. The Petitioner, in the ARR and Tariff petition for FY 2010 - 11 & FY
2011 - 12, provided the status on compliance of the directives. In the ARR and
Tariff petition for FY 2012 - 13, the Petitioner did not provide any updated status
on compliance of the directives.
8.1.2 The Commission once again directs the UPPTCL / SLDC to comply with the
balance directives issued in the previous Tariff Order. The compliance report on
the said directives shall be submitted to the Commission within two months
from the date of issue of this Tariff Order.
8.1.3 Further, some of the directives issued by the Commission in the present Tariff
Order are in continuation or similar to the directives issued in the previous Tariff
Order. In case UPPTCL / SLDC has not complied with the same earlier, it shall be
necessary for them to provide reasons for non - compliance and further comply
with the same as per the time-lines prescribed in the present Tariff Order.
8.1.4 The directives to the Petitioner as issued under the present Tariff Order along
with the time frame for compliance are given in the table below:
TABLE 8-1: DIRECTIVES
S. No. Description of Directive for TRANSCO / SLDC Time Period for compliance from the date of issue of the Tariff Order
1 The Commission directs UPPTCL to submit details of voltage-wise losses, method of assessment adopted and supporting data / information on the same.
3 months
2 The Commission directs UPPTCL to suggest an appropriate policy on capitalization of salaries & wages.
Along with the petition for FY 2013-14
3 The Commission directs UPPTCL to submit the Fresh Actuarial Valuation Study Report in respect to employee expenses.
Along with the petition for FY 2013-14
4 The Commission directs UPPTCL to capitalise the expenditure based on the actual A&G expenses incurred/ projected to be incurred. Further UPPTCL should have proper accounting system to capture the expenses related to capital schemes rather than
Along with the petition for FY 2013-14
Order on ARR and Tariff Petitions of UPPTCL
Page 85
S. No. Description of Directive for TRANSCO / SLDC Time Period for compliance from the date of issue of the Tariff Order
assuming a standard capitalisation %age.
5 The Commission reiterates its direction to the UPPTCL to ensure proper maintaining of detailed fixed assets registers to work out the depreciation expense as specified in the Transmission Tariff Regulations and directs the UPPTCL to submit a report to the Commission citing clearly as to how they are maintaining fixed assets registers for the various assets.
Along with the petition for FY 2013-14
6 The Commission directs UPPTCL to develop a system whereby the actual interest accrued/ incurred till the capital scheme is completed and put to use gets captured in separate account typically called as ‘Interest during Construction’ (IDC) rather than assuming a standard capitalisation % age.
Along with the petition for FY 2013-14
7 The Commission hereby redirects the UPPTCL / SLDC that the ARR / budget for SLDC should be submitted separately along with the ARR submission of TRANSCO. The costs have to be separately identified and not embedded in the TRANSCO ARR.
Along with the petition for FY 2013-14
8 The Commission directs UPPTCL to submit the detailed billing procedure of transmission charges for approval of the same.
1 month
9 The Commission directs UPPTCL to initiate the process of signing of BPTA with distribution licensees who are the existing long-term customers and submit the status on execution of BPTA of the same.
3 months
10 The Commission directs the SLDC to submit the status of compliance on scheduling, energy accounting, balancing and settlement of Open Access Transactions.
1 month
11 The Hon’ble Central Electricity Regulatory Commission as a first step towards inclusion of non-ISTS lines in the Point of Connection (PoC) transmission charges, has vide Order dated 14.03.2012 in Petition No.15/Suo-moto/2012 proposed to include the transmission lines connecting two States for computation of PoC transmission charges and losses. However, for the disbursement of transmission charges, tariff for
Immediately
Order on ARR and Tariff Petitions of UPPTCL
Page 86
S. No. Description of Directive for TRANSCO / SLDC Time Period for compliance from the date of issue of the Tariff Order
such assets needs to be approved by the Hon’ble CERC in accordance with the provisions of the Sharing Regulations. Accordingly the CERC has directed the owners of such inter-state lines including UPPTCL to file tariff petitions for determination of ARR in accordance with the CERC (Terms and Conditions of Tariff) Regulations 2009 in respect of its inter-state transmission lines. In the order dated 14-3-2012, the CERC had directed the UPPTCL to file the ARR Petition by April 20, 2012. The Commission directs UPPTCL to submit a copy of such petition which it has filed before the CERC.
12 The Commission directs the UPPTCL to exclude the transmission charges approved by CERC towards transmission lines connecting two States from the overall transmission charges claimed in the next ARR filing for UPPTCL
Along with the petition for FY 2013-14
13 Clause 5.3.5 of the National Electricity Policy states the following: “To facilitate orderly growth and development of the power sector and also for secure and reliable operation of the grid, adequate margins in transmission system should be created. The transmission capacity would be planned and built to cater to both the redundancy levels and margins keeping in view international standards and practices. A well planned and strong transmission system will ensure not only optimal utilization of transmission capacities but also of generation facilities and would facilitate achieving ultimate objective of cost effective delivery of power. To facilitate cost effective transmission of power across the region, a national transmission tariff framework needs to be implemented by CERC. The tariff mechanism would be sensitive to distance, direction and related to quantum of flow. As far as possible, consistency needs to be maintained in transmission pricing framework in inter-State and intra-State systems. Further it should be ensured that the present network deficiencies do not result in unreasonable transmission loss compensation requirements.” In exercise of the powers conferred under section 178 read with Part V of the Electricity Act, 2003 (36 of 2003), and in line with the above provision of the
Six Month
Order on ARR and Tariff Petitions of UPPTCL
Page 87
S. No. Description of Directive for TRANSCO / SLDC Time Period for compliance from the date of issue of the Tariff Order
National Electricity Policy, the Central Electricity Regulatory Commission notified the regulations i.e. CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010 on 15th June 2010 which came into effect from 1.7.2011. Further, the Clause 7.1 (7) of the National Tariff Policy states the following: “After the implementation of the proposed framework for the inter-State transmission, a similar approach should be implemented by SERCs in next two years for the intra-State transmission, duly considering factors like voltage, distance, direction and quantum of flow.” The National Tariff Policy requires the states to adopt the mechanism similar to the one adopted at the Central level within two years of its implementation at the central level. Hence, the transmission pricing mechanism in line with the PoC mechanism has to be implemented at the state level by June 2013 The Commission directs the UPPTCL to submit load flow studies along with the assessment of various options with regards to transmission pricing, their relative advantages and disadvantages and suitability for adoption in Uttar Pradesh
14 The Commission directs UPPTCL to formalise the capacity of transmission system in use by long-term open access customers (distribution licensees or generating companies) in accordance with the principle laid down under Regulation 3.11 of Transmission Tariff Regulations and based on existing PPAs / MoU’s signed by them for purchase or sale of electricity.
Immediate
15 The Commission directs UPPTCL to create database for implementation of open access and making operational and managerial decisions by UPPTCL.
Immediate
16 The Commission directs UPPTCL to follow the procedure laid down under UPERC Open Access Regulations for grant of LTOA to the distribution licensees or generating companies or open access consumers by capturing all information for taking decision in this regard.
Immediate
17 The Commission directs UPPTCL to follow the procedure laid down under UPERC Connectivity
Immediate
Order on ARR and Tariff Petitions of UPPTCL
Page 88
S. No. Description of Directive for TRANSCO / SLDC Time Period for compliance from the date of issue of the Tariff Order
Regulations for grant of connectivity to the generating companies or distribution licensees or captive users or open access consumers and sign connection agreements.
18 The Commission directs UPPTCL to follow the procedure laid down under UPEGC for co-ordinated planning of transmission system and submit long-term transmission plan including 12th Plan period.
Immediate
19 The Commission directs SLDC to submit organizational structure of SLDC and status of implementation of the same in view of its creation on 24th January, 2011 by a notification of State Govt.
Within one month.
20 The Commission directs SLDC to make rules and procedures for conduct of business of State Power Committee.
Within three month.
21 The Commission directs SLDC to submit status of compliance of the directions issued in Para 9 and 10 of order dated 12.09.11 passed in Petition No. 659 of 2010.
Within one days.
8.1.5 The Commission would like to mention here that the list given above may not be
exhaustive and the Petitioner is directed comply with all directives given in the
text of this Tariff Order.
Page 89
Order on ARR and Tariff Petition for UPPTCL
Chapter 9. APPLICABILITY OF THE ORDER
The licensee, in accordance to Section 139 of the Uttar Pradesh Electricity Regulatory
Commission (Conduct of Business) Regulations 2004, shall arrange to get published
within one week from the date of issue of this Order, the tariffs approved herein by the
Commission. Petitioner shall ensure that the same is published in atleast two daily
newspapers (one English and one Hindi) having circulation in the area of supply. The
tariffs so published shall become the notified tariffs applicable in the area of supply and
shall be effective from 1st October, 2012 and unless amended or revoked, shall continue
to be in force till issuance of the next Tariff Order.
(Meenakshi Singh) (Shree Ram)
Member Member
Dated: 19th October, 2012
Lucknow
Page 90
Order on ARR and Tariff Petition for UPPTCL
ANNEXURE – I
LIST OF PERSONS WHO HAVE ATTENDED PUBLIC HEARING AT 6 PLACES FOR ARR & TARIFF
DETERMINATION FOR FY 2012 - 13:
List of Persons who attended Public Hearing in Lucknow on 11 September, 2012
S.N Name Organization
1 A.K. Arora NPCL
2 B.B.Jindal Consultant
3 M.P.Sharma Pvt Business
4 Deven Kumar IIA
5 Manish Goel IIA
6 D.S.Verma IIA
7 Prashant Bhatia IIA
8 Avadesh Kumar Verma Upabhokta Parishad
9 Pradeep Kumar Misra Rolia Icecream,Purani Tikoli Lucknow
10 Mohd.Ghufran R.A.U
11 V.K.Agarwal Pvt Business
12 A.K. Singh MMVNL
13 Col. M.C Pal Veteran
14 Prof. Rakesh Goel Akhil Bharatiya Matadhikari Sangh
15 Manish Garg General Consumer
16 J.P.Arya (Advocate) Indira Nagar Adhikarata Sangh
17 R.S.Bhadawria (IFS retd) President, Janhet Manch
18 Mohd. Yonus Siddiqui Industries Welfare Association UP
19 Syed Mohd Farhat Industries Welfare Association UP
20 A.K.Kansal MVVNL
21 Dr. Satyabrat Farmer
22 Dr. Anil Chaudhary Ex-MLA (RLD)
23 S.Johari UPPCL
24 P.K.Johari SE, UPPCL
25 Brijesh Kumar Atul Advertising
26 Atul Kumar Shobha Publicity
27 V.K.Saxsena NTPC
28 N.S. Hanspal IIA
29 G.C.Chaturvedhi IIA
30 M.K.Tiwari Individual (Domestic Consumer)
31 S.P.Singh IIA
Page 91
Order on ARR and Tariff Petition for UPPTCL
List of Persons who attended Public Hearing in Lucknow on 11 September, 2012
S.N Name Organization
32 Shiv Shankar Awasthi IIA
33 Vijay Pratap UPPCL (Retd)
34 Harish Chandel CE (Retd) UPSEB/UPPCL
35 BML Garg A to Z Group
36 Dharmendra Gupta A to Z Group
37 Prashant Chaturvedhi NTPC
38 Nitishwar Kumar MD,MVVNL
39 M.C. Aggarwal SE MVVNL
40 Sunil Kumar Misra
41 M.S.Gulati Big Apple
42 M.K.Rastogi
43 V.K.S. Tewari MVVNL
44 Ravi Shrivastava MVVNL
Page 92
Order on ARR and Tariff Petition for UPPTCL
List of Persons who attended Public Hearing in Allahabad on 23 August, 2012
S.N Name Organization
1 Dr G.S. Darbari President, Eastern UP Chamber of Commerce & Industry
2 V.K.Tandon Secy. Eastern UP Chamber of Commerce & Industry
3 V.D.Singh EE UPPCL
4 Sanjay Sharma SDO UPPCL
5 O.P.Mishra SDO Civil Lines
6 Arvind Yadav SDO
7 Ashwani K R EE CBSC
8 K.N.Pandey UPPCL
9 Chandprakesh, Gangapur Parshad Gangapur ex-Parshad
10 Lal Ranvijay Gupta Hindusthan Times
11 Raj Kumar Srivastava Jan Sandesh Times
12 Ashutosh Amar Ujala
13 Arivind Singh Amar Ujala
14 A.R.Verma EE UPPCL
15 Br. R.R.Pal EE UPPCL
16 Ashish Asthana EE UPPCL
17 Er. N.K.Singh EE UPPCL
18 Sr.A.K.Dubey SE UPPCL
19 Mukesh Kumar EE UPPCL
20 B.K.Chaudhary EE UPPCL
21 A.K.Verma SE UPPCL
22 Anil Mital CE (TE) UPPCL
23 S.Agrawal SE UPPCL
24 Mohd. Ghufran SE UPPCL
25 M.L.Sharma CE
26 C.B.S. Rathore CE Retd
27 Durgaprasad Farmer
28 Vinod
29 Ajay Kumar
30 Sudeep Kumar Mishra General Consumer
31 Vikas Kapoor EE,UPPCL
32 Jeevan Prakash EE EDD
33 A.S.Raghuvansy EE EUDD
34 L.K.Projapati JE - Civil
35 A.K.Singh
36 Dr. L.Singh
Page 93
Order on ARR and Tariff Petition for UPPTCL
List of Persons who attended Public Hearing in Allahabad on 23 August, 2012
S.N Name Organization
37 Pankaj Sadhana News
38 Rohit Srivastava Shri News
39 Rakesh Das
40 Rajesh Kumar
41 G.P.Verma
Page 94
Order on ARR and Tariff Petition for UPPTCL
List of Persons who attended Public Hearing in Noida on 18 August, 2012
S.N Name Organization
1 M.K.Jain M/s Bhushan Sheet Ltd
2 R.R.Puri Ghaziabad Industrial Association
3 R.K.Jain Western UP Chamber of Commerce & Industry
4 S.P.Chauhan SBP. Industrial Association
5 Anil Gupta Industrial Area MFRS Association
6 S.K.Maheshwari Sr. Vice President Industries Federation
7 Arun Sharma President Industries Federation
8 Vijay Narain Gupta Ghaziabad Industrial Association
9 Alok Gupta Noida Enterprises Association
10 Kamal Kumar Noida Enterprises Association
11 Pradeep Mehta Noida Enterprises Association
12 Vipin Malhan Noida Enterprises Association
13 Harish Taneja Noida Enterprises Association
14 Amarjeet Noida Enterprises Association
15 V.K.Seth Priya Plastics
16 S.C.Jain R.J.Enterprises
17 Dharamveer Sharma N.E.A
18 Sushil Agarwal FONRWA
19 N.P.Supti FONRWA
20 A.N.Dhawan FONRWA
21 C.L.Dhir Industries Forum Ghaziabad
22 R.K.Suri
23 Rahesh Gupta PEPL
24 Rajeev Bansal PEPL
25 D.C.Verma UPPCL
26 V.K.Singh UPPCL
27 Pratap Bhan UPPCL
28 Rajnish Kumar Shri Ram Pistong & Rugs Ltd
29 Yogesh Goel UP Steel
30 R.C.Mishra UP Steel
31 Ashok Aggarwal Baishano Steel Pvt, Muzzafurnagar
32 Sudhir Goyal IIA, Muzzafurnagar
33 Rama Shankar Awasthi General Consumer
34 S.C.Jain Wazi Industries, Muzzafarnagar
35 Kamalsheel Maheshwari Shri Rathi Steel Ltd
36 P.K.Goel SE PVVNL
Page 95
Order on ARR and Tariff Petition for UPPTCL
List of Persons who attended Public Hearing in Noida on 18 August, 2012
S.N Name Organization
37 R.P.Singh CE PVVNL
38 S.K.Gupta SE PVVNL
39 Rajesh Sharma SDO III, Nioda
40 S.M.Singh Vice President, Rajya Vidhut Prishad J.E's Santhan
41 R.K.Bhatia Jr. Engg Noida
42 A.Rajesh UPPCL
43 M.K.Pallak UPPCL
44 Rajesh Kumar UPPCL
45 Ranjeet Singh Yadav UPPCL
46 K K Teofia UPPCL
47 A.P.Singh UPPCL
48 Anshul Agarwala UPPCL
49 P.K.Metha UPPCL
50 A.K.Singh UPPCL
51 D.K.Jain UPPCL
52 Sahil Yadav UPPCL
53 J.S.Yadav UPPCL
54 C.L.Gupta UPPCL
Page 96
Order on ARR and Tariff Petition for UPPTCL
List of Persons who attended Public Hearing in Greater Noida on 18 August, 2012
S.N Name Organization
1 Dharmveer Singh Kanpur
2 Rama Shankar Awasthi Lucknow
3 Vikram Singh Alpha II
4 Bhimraj Kanpur
5 Mahavir Kanpur
6 P.K.Tiwari IIA, Greater Noida
7 Ajay Bhati Pradhan Bisrahka
8 Naveen Janpath
9 Manoj Bhatt Bisrahka
10 Subhash Bhati Janpath
11 Mahesh Tygi IIA, Greater Noida
12 S.P. Shan IIA, Greater Noida
13 Dalip Singh Association of Energy Engineering, Delhi NCR
14 Azad Kumar
15 Sunrendra Ram Natioanl Duniya
Page 97
Order on ARR and Tariff Petition for UPPTCL
List of Persons who attended Public Hearing in Kanpur on 25 August, 2012
S.N Name Organization
1 Rama Shankar Awasthi General Consumer
2 Atul Seth PIA
3 J.P.Gupta PIA
4 Mohd.Ghufrani R.A.U
5 P.K.Johari SE, UPPCL
6 Bhushan Rastogi Consultant KESCO
7 Pankaj S Dy. CEO KESCO
8 Rajesh Grover Gen.Sec IIA
9 Manmohan Rajpal Div. Chairman IIA
10 G.R.Ambwani Advisory - IIA
11 Sheshnarayan Triwedi President Kapada Committee.
12 V.P.Handgil IIA
13 Gurdeep Singh IIA
14 A.S.Kotwal Secy. Coop Estate DADA Nagr
15 Brijendrakumar KESCO
16 Suresh Chandra Guha PIA
17 Arun RR Jain Coop Estate DADA Nagar
18 A.A.Khan CE (RAU) UPPCL
19 S.K.Verma SE, KESCO
20 Sushil Garg EE, KESCO
21 Jai Prakash Aggarwal President, Laghu Udyog Bharati
22 Subodh Pramodaka UP Industrial Estate Manufacturers Association
23 Ladli Prasad Laghu Udyog Bharati
24 Hardeep Singh Rakhra IIA
25 Rohit Baijpuria IIA
26 A.K.S Chaudhari KESCO
27 Mahesh Medhani
28 Vijay Udasi S B Pri P.Rd. U.M
29 Anurag Mishra Dinik Jagaran
30 Poroshatam Triwedi Hindusthan Times
31 Shubham E.TV News (UP)
32 Abhishek
33 Mr. Ravindra Kumar CE - KESCO
34 Mr. R.S. Pandey Managing Director, KESCO
35 OmPrakash KESCO
Page 98
Order on ARR and Tariff Petition for UPPTCL
List of Persons who attended Public Hearing in Agra on 16 August, 2012
S.N Name Organization
1 Chaudhari Buddha Singh Pradhan, Bharati Kisan Union, Mathura
2 Rahguveer Prasad Pachori Farmer
3 Bhishampal Singh Landlord, Farmer
4 Rama Shankar Awasthi General Consumer
5 Pradeep Singal RCS Rallies Elec Mills Ltd
6 O.P.Rathi
7 V.K.Mittal
8 Vijay Singh
9 Lal Singh
10 Prakask Baghal Farmer
11 Subhash Chandra Pal Farmer
12 Ranjeet Kumar Farmer
13 Chaudhari Omprakash Singh Farmer
14 ChaudhariMahavir Singh Farmer
15 Shivkumar Verma Farmer
16 Pancham Singh Farmer
17 Yojendra Singh Farmer
18 Rajpal Singh Farmer
19 Layak Singh Farmer
20 Sardar Singh Farmer
21 Rambabu Singh Farmer
22 Thakur Kaluram Farmer
23 Chandraveer Singh Farmer
24 Jagveer Singh Farmer
25 Omkar Singh Farmer
26 Hari Singh Farmer
27 Dharmapal Singh Farmer
28 Jagdish Parsad Farmer
29 Omveer Singh Farmer
30 Saheb Singh Farmer
31 Veerpal Singh Farmer
32 Bacchu Singh Farmer
33 Mohan Singh Farmer
34 Narayan Farmer
35 Bhagwan Singh Farmer
36 Gopal Farmer
37 Puran Singh Farmer
Page 99
Order on ARR and Tariff Petition for UPPTCL
List of Persons who attended Public Hearing in Agra on 16 August, 2012
S.N Name Organization
38 Vijendra Singh Farmer
39 Mohan Singh Chahar Farmer
40 Atra Singh Farmer Leader
41 Kishanpal Singh Farmer
42 Narendra Singh Farmer
43 Rameshbabu Farmer
44 Hari Singh Farmer
45 Rajendra Singh Farmer
46 Shahibhushan Mishra Upabhokta Sarakahan & Kalyan Samiti
47 Mukul Pandey Upabhokta Sarakahan & Kalyan Samiti
48 Prempal Sharma Farmer
49 M.M.Sharma DVVNL
50 Rajiv Jain DVVNL
51 Ajay Chopra Agra Vyapar Mandal Sangathan, Agra
52 Mohan Singh Nagla Raddo Noogawan
53 Omprakash Farmer
54 Rambabu Farmer
55 Rameshchandra Farmer
56 Mohan Singh Farmer
57 Than Singh Farmer
58 Deven Singh Farmer
59 Chaudhari Mahaveer Singh Farmer
60 Radhacharan Singh Farmer
61 Kale Khan Farmer
62 Ramveer Singh Farmer
63 D.C.Sharma Farmer
64 V.B.Agarawal National Chamber of Industries & Commerce
65 S.S.Goyal National Chamber of Industries & Commerce
66 B.K.Aggarwal Factory Owner Association
67 Rajesh Goyal Agra Cold Storage Association, IIA Agra
68 Ravindra Pal Singh President, Savdaan Vyapari Federation
69 Govind Agarwal President, Agra Mandal Vyapari Sangthan
70 Kamal Agarwal Agra Cold Storage Association
71 Kiran Dhawan Foundry Nagar Industries Association