CESC · 4.3.1 Gap in Revenue for FY16 56 ... renewable energy certificate ... 4.5 Format for...

KARNATAKA ELECTRICITY REGULATORY COMMISSION

TARIFF ORDER 2017

OF

CESC

ANNUAL PERFORMANCE REVIEW FOR FY16

&

REVISION OF ANNUAL REVENUE REQUIREMENT FOR

FY18

&

REVISION OF RETAIL SUPPLY

TARIFF FOR FY 18

11th April 2017

6th and 7th Floor, Mahalaxmi Chambers

9/2, M.G. Road, Bengaluru-560 001

Phone: 080-25320213 / 25320214

Fax : 080-25320338

Website: www.karnataka.gov.in/kerc - E-mail: [email protected]

http://www.karnataka.gov.in/kerc

ii

C O N T E N T S

CHAPTER

Page No.

1.0 Introduction 3

1.1 The CESC at a glance 5

1.2 Number of Consumers, Sales in MU to various

categories of consumers and details of Revenue

for FY16

5

2 Summary of Filing and Tariff Determination

Process

7

2.0 Background for current filing 7

2.1 Preliminary Observations of the Commission 7

2.2 Public Hearing Process 8

2.3 Consultation with the Advisory Committee of the

Commission

8

3.0 Public consultation – Suggestions / Objections

and Replies

9

3.1 List of persons who filed written objections 9

3.2 List of persons, who made oral submissions

during the Public Hearing held on 22.02.2017

10

3.3 The gist of the objections, replies by CESC and

the Commission’s views is appended to this

order as Appendix-1

10

4 Annual Performance Review for FY16 11

4.0 CESC’s Application for APR for FY16 11

4.1 CESC’s Submission 11

4.2 CESC’s Financial Performance as per Audited

Accounts for FY16

13

4.2.1 Sales for FY16 14

4.2.2 Distribution Losses for FY16 23

4.2.3 Power Purchase for FY16 24

4.2.4 RPO Compliance by CESC for FY16 28

4.2.5 Operation and Maintenance Expenses 30

4.2.6 Depreciation 34

4.2.7 Capital Expenditure for FY16 35

4.2.8 Interest and Finance Charges 46

4.2.9 Interest on Working Capital 47

4.2.10 Interest on Consumer Deposit 48

4.2.11 Other Interest and Finance Charges 49

4.2.12 Interest on belated payment of power purchase

cost

49

4.2.13 Capitalisation of Interest and finance charges 49

4.2.14 Other Debits 50

4.2.15 Net Prior Period Charges 50

4.2.16 Return on Equity 51

4.2.17 Income Tax 52

4.2.18 Other Income 52

4.2.19 Fund towards Consumer Relations / Consumer 53

iii

Education

4.2.20 Carrying cost on Regulatory Assets 53

4.2.21 Revenue for FY16 54

4.2.22 Revenue and Subsidy for FY16 54

4.3 Abstract of Approved ARR for FY16 54

4.3.1 Gap in Revenue for FY16 56

5.0 Revised Annual Revenue Requirement (ARR) for

FY18

57

5.1 Annual Performance Review for FY16 58

5.2 Revised Annual Revenue Requirement for FY18 58

5.2.1 Capital Investments for FY18 58

5.2.2 Sales forecast for FY18 63

5.2.3 Distribution Losses for FY18 73

5.2.4 Power Purchase for FY18 75

5.2.5 RPO Target for FY18 78

5.2.6 O & M Expenses for FY18 81

5.2.7 Depreciation 84

5.2.8 Interest on Capital Loans 86

5.2.9 Interest on Working Capital 87

5.2.10 Interest on Consumer Security Deposit 88

5.2.11 Other Interest and finance charges 89

5.2.12 Interest and other charges capitalised 90

5.2.13 Other Debits & Prior Period Charges 90

5.2.14 Return on Equity 90

5.2.15 Other Income 92

5.2.16 Fund towards Consumer Relations / Consumer

Education

92

5.2.17 Contribution towards Pension and Gratuity Trust 93

5.3 Abstract of ARR for FY18 94

5.4 Segregation of ARR into ARR for Distribution

Business and ARR for Retail Supply Business

95

5.5 Gap in Revenue for FY18 97

6 Determination of Retail supply Tariff for FY18 99

6.0 CESC’s Proposal and Commission’s Decision for

FY18

99

6.1 Tariff Application 99

6.2 Statutory Provisions Guiding Determination of

Tariff

99

6.3 Factors considered for Tariff Setting 100

6.4 New Tariff Proposals by CESC 101

6.5 Revenue at Existing Tariff and Deficit for FY18 107

6.6 Wheeling and Banking charges 136

6.6.1 Wheeling within CESC area 137

6.6.2 Wheeling of Energy using Transmission Network

or network of more than one licensee

139

6.6.3 Charges for Wheeling of Energy by RE sources

(non REC route) to consumer in the State

140

6.6.4 Charges for Wheeling Energy by RE sources

wheeling energy from the State to a consumer /

others outside the State and for those opting for

140

iv

renewable energy certificate (REC)

6.6.5 Banking charges and Additional surcharge 140

6.7 Cross Subsidy Surcharge (CSS) for FY18 140

6.8 Other issues 143

6.8.1 Tariff for Green power 143

6.9 Other Tariff related issues 143

6.10 Cross subsidy levels for FY18 146

6.11 Effect of Revised Tariff: 146

6.12 Summary of Tariff Order 147

6.13 Commission’s Order 149

Appendix 150

Appendix - I 196

v

LIST OF TABLES

Table

No.

Content Page

No.

4.1 APR for FY16 – CESC’s Submission 12

4.2 Financial Performance of CESC for FY16 13

4.3 CESC’s Accumulated Profits / Losses 14

4.4 Approved and actual Sales for FY16 15

4.5 Format for submission of details of IP Set Installations 17

4.6 Approved and actual Sales for FY16 22

4.7 Penalty for exceeding targeted loss levels in FY16 24

4.8 Source wise power purchase during FY16 25

4.9 Difference between source-wise approved and

Actual energy Purchase

26

4.10 RPO Compliance for FY16 28

4.11 Non- Solar RPO Compliance 29

4.12 Solar RPO Compliance 30

4.13 O & M Expenses –CESC’s submission 31

4.14 Approved O & M Expenses as per the Tariff Order

02.03.2015

31

4.15 Inflation to be allowed for FY16 32

4.16 Normative O&M Expenses for FY16 33

4.17 Allowable O&M Expenses for FY16 33

4.18 Depreciation for FY16 – CESC’s Submission 34

4.19 Category wise Capital Expenditure of CESC for FY16 35

4.20 Division wise summary of sample selection 39

4.21 Category wise summary of sample selection 40

4.22 Summary of prudence check results for CESC in FY16 42

4.23 Gist of prudence check findings for FY16 42

4.24 Summary of works having cost overrun 43

4.25 Summary of works having time overrun 43

4.26 Details of amounts disallowed in APR FY16 44

4.27 Allowable Interest on capital Loans – FY16 46

4.28 Allowable Interest on Working Capital for FY16 48

4.29 Allowable Interest and Finance Charges 49

4.30 Allowable other Debits 50

4.31 Status of Debt Equity Ratio for FY16 51

4.32 Allowable Return on Equity 52

4.33 Approved Revised ARR for FY16 as per APR 55

5.1 Revised ARR for FY18 – CESC’s submission 57

5.2 Capital expenditure for FY18 – CESC’s Submission 60

5.3 Additional capex sought by CESC 61

5.4 Approved & Actual capital investment 62

5.5 Computation of IP Set consumption 70

5.6 Approved sales for FY18 73

5.7 Approved and actual Distribution Losses for FY11-16 74

5.8 Approved Distribution Losses for FY18 75

vi

5.9 Power Purchase Cost as filed by CESC for FY18 75

5.10 Approved Power Purchase quantum and cost for the

State

77

5.11 Approved Power Purchase cost for CESC for FY18 78

5.12 Estimated solar RPO for FY18 79

5.13 Anticipated capacity addition from RE sources 79

5.14 Anticipated solar capacity and energy during FY17

and FY18.

80

5.15 O & M Expenses for FY18 – CESC’s submission 82

5.16 Approved O & M Expenses for FY18 as per the Tariff

Order dated 30th March, 2016

82

5.17 Approved O & M Expenses for FY18 84

5.18 Depreciation – FY18 – CESC’s submission 84

5.19 Approved Depreciation for FY18 85

5.20 Interest on Capital Loans – CESC’s submission 86

5.21 Approved Interest on Loans for FY18 87

5.22 Approved Interest on Working Capital for FY18 88

5.23 Approved Interest on Consumer Security Deposits for

FY18

89

5.24 Approved Interest and Finance Charges for FY18 90

5.25 Status of Debt Equity Ratio for FY18 91

5.26 Approved Return on Equity for FY18 92

5.27 Approved Revised ARR for FY18 95

5.28 Segregation of ARR – FY18 – CESC’s submission 96

5.29 Approved basis for Segregation of ARR – FY18 96

5.30 Approved Revised ARR for Distribution Business – FY18 97

5.31 Approved ARR for Retail Supply Business FY18 97

5.32 Revenue Gap for FY18 98

6.1 Revenue Deficit for FY18 107

6.2 Wheeling Charges 138

vii

LIST OF ANNEXURES

SL.NO. DETAILS OF ANNEXURES Page

No.

I Total Approved Power Purchase Quantum and Cost

of all ESCOMs for FY18

210

II Approved Power Purchase quantum and cost of

CESC for FY18

213

III Proposed and approved Revenue for FY18 216

IV Electricity Tariff – 2018 217

viii

ABBREVIATIONS

AAD Advance Against Depreciation

AEH All Electric Home

ABT Availability Based Tariff

A & G Administrative & General Expenses

ARR Annual Revenue Requirement

ATE Appellate Tribunal for Electricity

BST Bulk Supply Tariff

CAPEX Capital Expenditure

CCS Consumer Care Society

CERC Central Electricity Regulatory Commission

CEA Central Electricity Authority

CESC Chamundeshwari Electricity Supply Corporation

CPI Consumer Price Index

CWIP Capital Work in Progress

DA Dearness Allowance

DCB Demand Collection & Balance

DPR Detailed Project Report

EA Electricity Act

EC Energy Charges

ERC Expected Revenue From Charges

ESAAR Electricity Supply Annual Accounting Rules

ESCOMs Electricity Supply Companies

FA Financial Adviser

FKCCI Federation of Karnataka Chamber of Commerce & Industry

FR Feasibility Report

FoR Forum of Regulators

FY Financial Year

GFA Gross Fixed Assets

GoI Government Of India

GoK Government Of Karnataka

GRIDCO Grid Corporation

HP Horse Power

HRIS Human Resource Information System

ICAI Institute of Chartered Accountants of India

IFC Interest and Finance Charges

IW Industrial Worker

IP SETS Irrigation Pump Sets

KASSIA Karnataka Small Scale Industries Association

KEB Karnataka Electricity Board

KER Act Karnataka Electricity Reform Act

KERC Karnataka Electricity Regulatory Commission

KM/Km Kilometre

KPCL Karnataka Power Corporation Limited

ix

KPTCL Karnataka Power Transmission Corporation Limited

KV Kilo Volts

KVA Kilo Volt Ampere

KW Kilo Watt

KWH Kilo Watt Hour

LDC Load Despatch Centre

MAT Minimum Alternate Tax

MD Managing Director

MFA Miscellaneous First Appeal

MIS Management Information System

MoP Ministry of Power

MU Million Units

MVA Mega Volt Ampere

MW Mega Watt

MYT Multi Year Tariff

NFA Net Fixed Assets

NLC Neyveli Lignite Corporation

NCP Non Coincident Peak

NTP National Tariff Policy

O&M Operation & Maintenance

P & L Profit & Loss Account

PLR Prime Lending Rate

PPA Power Purchase Agreement

PRDC Power Research & Development Consultants

REL Reliance Energy Limited

R & M Repairs and Maintenance

ROE Return on Equity

ROR Rate of Return

ROW Right of Way

RPO Renewable Purchase Obligation

SBI State Bank of India

SCADA Supervisory Control and Data Acquisition System

SERCs State Electricity Regulatory Commissions

SLDC State Load Despatch Centre

SRLDC Southern Regional Load Dispatch Centre

STU State Transmission Utility

TAC Technical Advisory Committee

TCC Total Contracted Capacity

T&D Transmission & Distribution

TCs Transformer Centres

TR Transmission Rate

VVNL Visvesvaraya Vidyuth Nigama Limited

WPI Wholesale Price Index

WC Working Capital

x

KARNATAKA ELECTRICITY REGULATORY COMMISSION,

BENGALURU - 560 001

Dated 11th April, 2017

In the matter of:

Application of CESC in respect of the Annual Performance Review for FY16,

Revision of Annual Revenue Requirement for FY18 and Revision of Retail Supply

Tariff for FY18, under Multi Year Tariff framework.

Present: Shri M.K. Shankaralinge Gowda Chairman

Shri H.D. Arun Kumar Member

Shri D.B. Manival Raju Member

O R D E R

The Chamundeshwari Electricity Supply Corporation Ltd., (hereinafter

referred to as CESC) is a Distribution Licensee under the provisions of the

Electricity Act, 2003, and has, on 30.11.2016, filed the following

applications for consideration and orders:

a) Review of Annual Performance for the financial year 2015-16

(FY16) and approval of revised ARR thereon.

b) Approval for revision of ARR for the financial year 2017-18

(FY18).

c) Approval for revision of Retail Supply Tariff, for the financial year

2017-18 (FY18).

xi

In exercise of the powers conferred under Sections 62, 64 and other provisions

of the Electricity Act, 2003, read with KERC (Terms and Conditions for

Determination of Tariff for Distribution and Retail Sale of Electricity) Regulations

2006, as amended and other enabling Regulations, the Commission has

considered the applications and also the views and objections submitted by

the consumers and other stakeholders. The Commission’s decisions are brought

out in the subsequent Chapters of this Order.

xii

CHAPTER – 1

INTRODUCTION

1.0 Chamundeshwari Electricity Supply Corporation Limited (CESC):

The Chamundeshwari Electricity Supply Corporation Ltd., (CESC) is a

Distribution Licensee under Section 14 of the Electricity Act, 2003

(hereinafter referred to as the Act). The CESC is responsible for purchase

of power, distribution and retail supply of electricity to its consumers and

also for providing infrastructure for Open Access, Wheeling and Banking

in its area of operation which includes five Districts of the State as

indicated below:

1. Mysuru

2. Hassan

3. Mandya

4. Chamarajnagara

5. Kodagu

The CESC is a company registered under the Companies Act, 1956,

incorporated on 19th August, 2004. The CESC commenced its operations

on 1st April, 2005, with four districts in its area of operation.

Susequently, the Madikeri Division (Kodagu District) which was earlier

under the MESCOM, was transferred to the CESC with effect from 1st

April, 2006.

At present the CESC’s area of operations is structured as follows:

CESC, Mysore

HASSAN

MANDYA

KODAGU MYSORE

CH NAGAR

xiii

O&M Zones O&M Circles O&M Divisions

Mysore zone

Mysore Works Circle

VV Mohalla

NR Mohalla

Nanjangud

Hunsur

Mysore O&M Circle

Chamarajnagara

Kollegala

Madikeri

Hassan Circle

Hassan

CR patna

Arasikere

HN Pura

Mandya Circle

Mandya

Pandavapura

Nagamangala

Maddur

These O & M divisions of the CESC are further divided into sixty one O&M

sub-divisions with accounting / non-accounting sections and each O&M

sub division section offices.

The section offices are the base level offices looking into operation and

maintenance of the distribution system in order to provide reliable and

quality power supply to the CESC’s consumers.

xiv

1.1 The CESC at a glance:

The profile of the CESC is as indicated below:

*Includes Posts & Personnel on deputation to CESC

1.2 Number of Consumers, Sales in MU to various categories of

consumers and details of Revenue for FY16 are as follows:

CATEGORY

CESC

No. of

Installation

Sales in

MU

Revenue in

Rs.Crs.

Domestic 2196013 997.76 420.81

Commercial 215323 366.75 306.84

Industrial 38083 886.65 598.54

Agriculture 317955 2390.44 1051.59

Others 82665 763.63 478.45

Total 2850039 5405.23 2856.23

The CESC has filed its application for Annual Performance Review for FY16,

Revision of Annual Revenue Requirement (ARR) for FY18 and revision of

Revision of Retail Supply Tariff for FY18.

Sl.

No. Particulars (As on 30.09.2016) Figures

1. Area Sq. km. 27772.8

2

2. Districts Nos. 5

3. Taluks Nos. 29

4. Population lakhs 815536

9

5. Consumers Lakhs 29.01

6. Energy Sales MU 2958.56

7. Zone Nos. 1

8. DTCs Nos. 100063

9. Assets (including current

assets)

Rs. in Crores 2669.54

10. HT lines Ckt. kms 49289.1

4

11. LT lines Ckt. kms 80600.1

4

12. Total employees strength:

A Sanctioned Nos.* 10428

B Working Nos.* 5461

13. Revenue Demand Rs. in Crores 1644.87

14. Revenue Collection Rs. in Crores 1610.94

xv

The CESC’s application, the objections / views of stakeholders thereon and the

Commission’s decisions on the application for the Annual Performance Review for

FY16, Revision of ARR for FY18 and Revision of Retail Supply Tariff for FY18

are discussed in detail in the subsequent Chapters of this Order.

xvi

CHAPTER – 2

SUMMARY OF FILING & TARIFF DETERMINATION PROCESS

2.0 Background for Current Filing:

The Commission in its Tariff Order dated 30th March, 2016 had approved

the ARR for FY17 to FY19 and the Revised Retail Supply Tariff of CESC for

FY17 under the MYT principles for the control period of FY17 to FY19.

CESC in its present application filed on 30th November, 2016 has sought

for Annual Performance Review (APR) for FY16 based on the audited

accounts, Revision of ARR for the second year of the second year of the

fourth control period i.e. FY18 and revision of Retail Supply Tariff for FY18.

2.1 Preliminary Observations of the Commission

After a preliminary scrutiny of the application the Commission had

communicated its observations to CESC on 20th December, 2016 which

were mainly on the following points:

Capital Expenditure

Sales Forecast

Assessment of IP set consumption

Distribution Losses

Power Purchase

Issues pertaining to items of revenue and expenditure

Other new proposals

Compliance to Directives

The CESC has furnished its replies on 30th December, 2016. The Commission

had issued Rejoinders to the replies vide Commission letter dated 10th January,

2017 and the replies to the Rejoinder were received vide letter dated 16th

January, 2017. The replies furnished by CESC are considered in the respective

Chapters of this Order.

2.2 Public Hearing Process:

As per the Karnataka Electricity Regulatory Commission (Terms and

Conditions for Determination of Tariff for Distribution and Retail Sale of

Electricity) Regulations, 2006, read with the KERC Tariff Regulations, 2000,

and KERC (General and Conduct of Proceedings) Regulations, 2000, the

xvii

Commission vide its letter dated 04th January, 2017 treated the

application of CESC as petition and directed CESC to publish the

summary of ARR and Tariff proposals in the newspapers calling for

objections, if any, from interested persons.

Accordingly, CESC has published the same in the following newspapers:

Name of the News Paper Language Date of Publication

Deccan Herald English

06-1-2017 &

07-1-2017

The Hindu

Kannada Prabha Kannada

Vijayavani

The CESC’s applications on APR of FY16, Revision of ARR for FY18 and

revision of retail supply tariff for FY18 were also hosted on the web sites of

CESC and the Commission for the ready reference and information of the

general public.

In response to the application of CESC, the Commission has received thirty

statements / letters of objections. CESC has furnished its replies to all these

objections. The Commission has held a Public Hearing on 22nd February, 2017

at Mysore. The details of the written / oral submissions made by various

stakeholders and the response from CESC thereon have been discussed in

Chapter - 3 / Appendix to this Order.

2.3 Consultation with the Advisory Committee of the Commission:

The Commission has also discussed the proposals of the KPTCL and all the

ESCOMs in the State Advisory Committee meeting held on 8th March, 2017.

During the meeting the following important issues were also discussed:

Performance of KPTCL / ESCOMs during FY16

Major items of expenditure of KPTCL / ESCOMs for FY18

Members of the Committee have offered valuable suggestions on the

proposals. The Commission has taken note of these suggestions while

passing the Order.

xviii

CHAPTER – 3

PUBLIC CONSULTATION - SUGGESTIONS / OBJECTIONS &

REPLIES

3.1 AS per the provisions of the section 64 of the Electricity Act, 2003, the

Commission has undertaken the process of public consultation, to

invite and suggestions/views/objections from the interested stake-

holders and general public, on the application filed by CESC for

Annual Performance Review for FY16, Revision of Annual Revenue

Requirement for FY18 and Revision of Retail Supply Tariff for FY18. In the

written submissions filed as well as during the public hearing, the Stake-

holders and the public have raised several objections/ made

suggestions, on the CESC Tariff Application. The names of the persons

who have filed written objections and made oral submissions are given

below:

List of persons who filed written objections: -

Sl

No

Applicatio

n No. Name & Address of Objectors

1 AE-01 Sri. Prem Chand, Chief Electrical Traction Engineer,

South Western Railway.

2 AE-02 Smt. Shroti Bhatia, VP (Regulatory Affairs &

Communication), Indian Energy Exchange.

3 CA-01 Sri. K. Krishna Bhat, Koodanahally Estate, Sakaleshpur

Taluk.

4 CA-02 Sri. Ravindra B.N & Others, Kollegal taluk.

5 CA-03 Sri. K.C. Sudarshan, Madikeri, Kodagu.

6 CA-04 Sri. C.A. Subbaiah, Banangala Village, Kodagu.

7 CA-05 Laghu Udyog Bharati - Karnataka

8 CA-06 Sri. Ravindra Prabhu, Chairman, Energy Sub

Committee, HIEMA.

9 CA-07 Sri. Prem Chand, Chief Electrical Traction Engineer,

South Western Railway.

10 CA-08 Sri. Suresh Kumar Jain, Mysore Industries Association.

11 CA-09 Sri. Ravindra Prabhu, Vice President, KIAMA.

12 CA-10 Sri.B. Praveen, Hon’ble General Secretary, KASSIA.

13 CA-11 to

CA-22

Sri. A.B.Yogesh & Others Nanjanagud, Mysuru

14 CA-23 to

CA-28

Sri K.B. Utthappa & Others, Kodagu.

xix

3.2 List of the persons, who made oral submissions during the Public Hearing,

held on 22.02.2017.

SL.

No.

Names & Addresses of Objectors

1 Sri. K. Ravindra Prabhu, KIADB Manufacturers Association &

HIEMA

2 Sri. S. Sudhakar Shetty, Vice President, FKCCI

3 Sri. K.B. Lingaraju, Mysore Chamber of Commerce

4 Sri. Suresh Kumar Jain, Mysore Industries Association

5 Sri. Mallappa Gowda & Manjunath, KASSIA

6 Dr. M.R. Rangantha, Bharatiya Kissan Sangha, Mysuru

7 Sri. Jayakumar, Bharatiya Kissan Sangha, Gundlupet

8 Sri. Ningaraju, Bharatiya Kissan Sangha, Hunsur

9 Sri. G.R.Vidyaranya, Aam Admi Party, Mysuru.

10 Sri. Rajiv, Bharatiya Kissan Sangha, Kodagu

11 Sri. Chetan Jain, IEX

12 Smt. Savitha Ranganath, Voluntary Consumer Organizations

RTI Activist.

13 Sri. Nagabhushana Aradhya, Mysuru

14 Sri. Rajendra Ramapura, Bharatiya Kissan Sangha, Kollegal

15 Sri. Somashekar, Mysuru

16 Sri. Vasanth. S, Ex-Vice President & All ESCOMS Representative

& Karnataka State Licensed Electrical Contractors

Association.

17. Sri. Ravindra, BJP Ex- District President, Kodagu

18 Sri. M.A. Poonacha, Kodagu.

19 Sri. N. Kumaraswamy, Bharatiya Kissan Sangha, Nanjangud.

20 Sri. Mohammed Arief Khan For V.S ARBATTI for BWSSB

21 Sri. D. Sagayamani Raj, Division Electric Engr. South Western

Railways & Sri. D. Soundar Rajan, Dy. Chief Electrical Engineer,

South Western Railways.

3.3 The gist of the objections, replies by CESC and the Commission’s views is

appended to this order as Appendix-1.

xx

CHAPTER – 4

ANNUAL PERFORMANCE REVIEW FOR FY16

4.0 CESC’s Application for APR for FY16:

CESC has filed its application for Annual Performance Review (APR) for

FY16, revision of Annual Revenue Requirement (ARR) and revision of

retail supply tariff for FY18 on 30th November, 2016. CESC has sought the

Annual Performance Review (APR) for FY16 and approval of a revised

ARR thereon based on the Audited Accounts.

The Commission in its letter dated 20th December, 2016 had

communicated its preliminary observations on the application of CESC.

In its letter dated 30th December, 2016, CESC has furnished its replies to

the preliminary observations of the Commission. The Commission had

issued rejoinders on the replies vide letter dated 10th January, 2017 and

the replies to the rejoinders were furnished by CESC in its letter dated 16th

January, 2017.

The Commission in its Multi Year Tariff (MYT) Order dated 6th May, 2013

had approved CESC’s Annual Revenue Requirement (ARR) for FY14 –

FY16. Further, in its Tariff Order dated 2nd March, 2015, the Commission

had approved the APR for FY14 and had revised the ARR along with

Retail Supply Tariff for FY16.

During the course of Annual Performance Review (APR) for FY16, revision

of various items of revenue and expenditure with reference to the

audited accounts for FY16, are being discussed in this Chapter.

4.1 CESC’s Submission:

CESC in its application dated 30th November, 2016, has submitted its

proposals for revision of ARR for FY16 as follows:

xxi

TABLE – 4.1

ARR for FY16 – CESC’s Submission Amount in Rs. Crores

Sl.

No Particulars As Filed

1 Energy at Gen Bus in MU 6444.86

2 Energy at Interface in MU 6256.07

3 Distribution Losses in % 13.60

Sales in MU

4 Sales to other than IP & BJ/KJ 3060.25

5 Sales to BJ/KJ 38.13

6 Sales to IP & BJ/KJ 2306.85

Total Sales 5405.23

Revenue

7

Revenue from other than IP & BJ/KJ and

Misc. Charges 1814.45

8 Tariff Subsidy to BJ/KJ 23.82

9 Tariff Subsidy to IP 1017.96

Total 2856.23

Expenditure

10 Power Purchase Cost 2410.17

11 Transmission charges of KPTCL 305.42

12 SLDC Charges 2.16

Power Purchase Cost including cost of

transmission 2717.75

13 Employee Cost 327.65

14 Repairs & Maintenance 39.24

15 Admin. & General Expenses 51.58

Total O&M Expenses 418.47

16 Depreciation 117.46

Interest & Finance charges

17 Interest on Loans 83.52

18 Interest on Working capital 40.40

Interest on belated payment of PP Cost 7.05

19 Interest on consumer deposits 38.07

20 Other Interest & Finance charges 0.47

21

Less: interest & other expenses

capitalised 19.22

Total Interest & Finance charges 150.29

22 Other Debits 4.79

23 Net Prior period Debit/Credit (5.89)

24 Return on Equity 0.00

25 Provision for taxation 14.97

26

Funds towards Consumer

Relations/Consumer Education 0.00

27 Other Income 105.08

Net ARR 3312.76

xxii

Considering the revenue of Rs.2856.23 Crores against a net ARR of

Rs.3312.77 Crores, CESC has reported a gap in revenue of Rs.456.54

Crores for FY16.

4.2 CESC’s Financial Performance as per Audited Accounts for FY16:

An overview of the financial performance of CESC for FY16 as per its

Audited Accounts is given below:

TABLE – 4.2

Financial Performance of CESC for FY16

Amount in Rs. Crores

Sl.

No. Particulars FY16

Receipts

1 Revenue from Tariff and misc. charges 1814.45

2 Tariff Subsidy 1041.78

3

Income on account of Regulatory Asset/Truing

up Subsidy 464.46

Total Revenue 3320.69

Expenditure



6 SLDC Charges 2.16


transmission 2717.75

7 O&M Expenses 418.48





11

Interest on belated payment of power

purchase 7.05

12 Interest on consumer deposits 38.08


14 Less; Interest and other expenses capitalized 19.22

Total Interest & Finance charges 150.30


16 Net Prior Period Debit/Credit (5.89)

17 Other income 79.52

18 Income tax 14.97

Total Expenditure 3312.77

xxiii

As per the Audited Accounts, CESC has earned a profit of Rs.7.92 Crores

for FY16. The profits / losses reported by CESC in its audited accounts in

the previous years are as follows:

TABLE – 4.3

CESC’s Accumulated Profit / Losses

Particulars Amount in

Rs. Crs

Accumulated losses as at the end of FY10 (285.15)

Profit earned in FY11 11.38

Losses incurred in FY12 (123.45)



Profits earned in FY15 40.27

Profits earned in FY16 7.92

Accumulated losses as at the end of FY16 (634.27)

As seen from the above table, the accumulated loss as at the end of

FY16 is Rs.634.27 Crores.

APR Exercise by the Commission:

The Commission has taken up the Annual Performance Review for FY16,

duly considering the actual revenue and expenditure as per the Audited

Accounts vis-à-vis the revenue and expenditure approved by the

Commission, in its Tariff Order dated 2nd March, 2015. The item-wise

review of expenditure and the decisions of the Commission thereon are

as discussed in the following paragraphs:

4.2.1 Sales for FY16:

a) Sales - other than IP sets:

Annual Performance Review for FY-16

xxiv

The Commission in its Tariff Order 2015 dated 02.03.2015 had approved

total sales at 5744.83 MU to various consumer categories, as against the

proposed sale of 5798.94 MU. The Actual sales of CESC is 5405.24 MU, as

per the application filed by CESC [D-2 FORMAT], indicating a short fall in

sales to an extent of 339.59 MU as compared to the approved sales. The

reduction in sales is 288.66 MU is in LT-categories and 50.93 MU in HT-

categories. The Commission notes that, as against the approved sales of

3084.08 MUs to categories other than BJ/KJ and IP sets, the actual sales

achieved by CESC is 3060.24 MU, resulting in the reduction of sales to

these categories by 23.84 MU. Further, CESC has sold 2345.00 MU to BJ/KJ

and IP category against approved sales of 2660.75 MU resulting in

decreased sales to these categories by 315.75 MU.

The category-wise sales approved by the Commission in its Tariff Order

2015 dated 02.03.2015 and the actuals for FY 16 are indicated in the

table below:

TABLE-4.4

Approved and actual Sales for FY16

Energy in MU

Category Approved by the

Commission Actuals Difference

LT-2a* 959.55 954.37 -5.18

LT-2b 7.37 7.85 0.48

LT-3 262.46 259.57 -2.89

LT-4b 1.17 1.12 -0.05

LT-4c 11.57 11.59 0.02

LT-5 137.8 136.56 -1.24

LT-6 135.53 162.96 27.43

LT-6 90.66 99.90 9.24

LT-7 13.66 12.95 -0.71

HT-1 438.07 420.40 -17.67

HT-2a 794.17 750.08 -44.09

HT-2b 127.16 107.17 -19.99

HT-2c 31.09 45.15 14.06

HT-3a & b 65.14 82.46 17.32

HT-4 7.75 5.27 -2.48

HT-5 0.92 2.84 1.92

Sub total 3084.08 3060.24 -23.84

BJ/KJ 36.28 38.13 1.85

IP 2624.47 2306.87 -317.6

xxv

Sub total 2660.75 2345.00 -315.75

Grand total 5744.83 5405.24 -339.59

*Including BJ/KJ installations consuming more than 18 units/month

The Commission notes that the major categories contributing to the

reduction in sales are HT Industries (44.09 MU), HT Commercial (19.99 MU)

and IP sets (317.60 MU). The increase in sales is mainly in respect of LT-6

water supply installations.

The CESC has attributed the above variation in sales to the following:

i. Reduction in IP set sales is due to reduction in the specific

consumption to 7384 units/year/IP-set as against the approved

figure of 8195 units/year/IP-set, consequent to segregation of Agri-

feeders under NJY scheme.

ii. Reduction in HT-2a sales is due to twelve industries consuming 180.82

MU under Open Access.

iii. Increase in sales to LT-water supply is due to servicing of 1252 new

installations.

b) Sales to IP sets

i) In its Tariff Order dated 2nd March, 2015, the Commission had approved

a specific consumption of IP-sets at 8,195 units/installation/annum for

FY16, whereas, as per the data of IP-set consumption reported by the

CESC in its Tariff filing for APR of FY16, the specific consumption works

out to 7,469 units/installation/annum, which indicates a decrease in

the specific consumption by 726 units/installation/annum. The total IP-

set consumption reported for the FY16 is 2,306.87 MU as against

2,624.47 MU sales quantum approved by the Commission. Thus, the

specific consumption has decreased by 726 units /installation/annum

with the corresponding decrease in sales by 317.6 MU when

compared to the quantity approved by the Commission for the FY16.

ii) Further, the Commission had approved 3,32,629 as the number of

installations for FY16, whereas the actual number of installations

serviced as reported by the CESC is 3,17,674. The difference in number

of installations between the approved and the actuals reported is

xxvi

14,955. This indicates a decrease of around 4.5 per cent in the number

of installations serviced, as compared to the approved number of

installations by the Commission for the FY16. Also, it is noted that the

shortfall in the sales by 317.6 MU can be attributed to less number of

installations serviced, when compared to the number of installations

projected for FY16.

iii) The Commission in its Tariff Order dated 2nd March, 2015, had

directed the CESC to furnish feeder-wise IP-set consumption based on

the 11 kV feeders’ energy meter data, every month, to the

Commission, in respect of exclusive agricultural feeders segregated

under NJY scheme considering that the energy consumed by the IP-

sets can be accurately measured at the 11 kV level at the substations

after allowing the losses prevailing in the distribution system, as per the

following format prescribed by the Commission:

TABLE-4.5

Format for submission of details of IP set Installations

Mo

nth

Na

me

of

Su

b-d

ivis

ion

No

.

Se

gre

ga

ted

Ag

ric

ultu

ral

Fe

ed

ers

in

th

e s

ub

div

isio

n

Mo

nth

ly C

on

sum

ptio

n in

MU

as

rec

ord

ed

in

all t

he

ag

ric

ultu

ral

fee

de

rs a

t

the

su

bst

atio

ns

pe

rta

inin

g

to t

he

div

isio

n

Dis

trib

utio

n lo

ss(1

1k

V lin

e,

DTC

s,&

LT

lin

e)

Plu

s sa

les

to o

the

r c

on

sum

ers

if

an

y,

in M

U (

lo

sse

s in

all t

he

ag

ric

ultu

ral fe

ed

ers

on

ly

to b

e c

on

sid

ere

d)

Ne

t c

on

sum

ptio

n d

uly

de

du

ctin

g t

he

Dis

trib

utio

n

loss

(1

1k

V &

LT)

& a

ny

oth

er

loa

ds

if a

ny

No

. o

f IP

se

ts c

on

ne

cte

d

to t

he

ag

ric

ultu

ral fe

ed

ers

in t

he

su

bd

ivis

ion

Av

era

ge

co

nsu

mp

tio

n o

f

IP /

mo

nth

(sp

ec

ific

co

ns

in u

nits

/IP

/mo

nth

)

Tota

l n

o o

f IP

se

ts in

th

e

sub

div

isio

n (

as

pe

r D

CB

)

Tota

l sa

les

of

IP s

ets

in

MU

1 2 3 4 5 6=(4-5) 7 8 9 10=8*9

April to

March

Subdivisi

on-1

Subdivisi

on-2

Subdivisi

on….

iv) Considering the fact that the ESCOMs have bifurcated the 11 KV

feeders into separate rural and agricultural feeders, the Commission

has adopted the above methodology in the Tariff Order dated 12th

May, 2014, for FY15, which shall be applicable for all the future

computations. Prior to this, in the absence of universal metering of IP-

set installations, the Commission had allowed the ESCOMs to assess

the IP-set consumption, based on the readings of the sample meters

fixed to the distribution transformer Centres (DTCs) feeding

xxvii

predominantly IP-set loads. The sample was so selected that in each

O&M section, two to three DTCs feeding predominantly IP-set loads,

were covered and in each subdivision, about ten such DTCs were

covered. As per this methodology, the overall IP-consumption for the

Company was being assessed on the basis of specific consumption

arrived at from the metered consumption data of sample meters fixed

to DTCs.

v) For instance, as per the IP-set data for FY13 submitted to the

Commission by the CESC, a total of 798 DTCs covering 7,175 IP-sets out

of the total 2,55,173 IP-sets in its jurisdiction, were considered for

assessing the total IP-set consumption for the Company. It is observed

that the sample IP-sets considered to assess the total IP-

consumption for FY13, based on the sample DTCs meter readings,

constituted only 2.8 per cent. Thus, a small number of IP-sets were

considered for arriving at the total IP consumption, as compared to a

large sample (39% in March 2016) being considered now after

segregating the feeders under NJY. Therefore, this would be a better

representation of sample in terms of metered consumption for

computing the overall IP-set consumption, as compared to the

methodology followed earlier.

vi) Accordingly, the CESC was directed to furnish 11 kV feeder-wise IP-

set consumption based on energy meters’ reading data in respect of

agriculture feeders segregated under NJY scheme, duly deducting

the distribution losses prevailing in 11 kV lines, distribution transformers

and LT system, to the Commission, every month.

vii) The CESC in its current tariff filing has submitted the data of IP-sets

computing the total IP-consumption based on the specific

consumption in respect of the exclusive agricultural feeders

segregated under NJY, for FY16. However, as observed from the

data, there was inconsistency in the number of installations as well as

the total consumption (computed on the basis of exclusive

agricultural feeders) between the data submitted to the Commission

xxviii

and the data as reported in D2 format of the Tariff application.

Further, two different figures of the IP-set consumption based on the

exclusive agricultural feeders were submitted to the Commission as

2,024.25 MU and 2,319.576 MU, whereas the consumption reported in

format D2 of Tariff filing was 2,306.87 MU, indicating a large variation in

the data submitted to the Commission.

viii) The Commission in its preliminary observations had directed the CESC

to justify the IP-set consumption of 2,306.97 MU reported in format D2

of its Tariff filing with necessary data of segregated agricultural feeders

in support of the same and also clarify the inconsistency in the

number of installations as well as consumption data of agricultural

feeders reported for FY16.

ix) The CESC, in its reply to the preliminary observations made by the

Commission, has stated that it has submitted the IP-set consumption

based on the energy meters’ data in respect of the segregated

agricultural feeders as desired by the Commission. The CESC while

submitting the IP-consumption as per the agricultural feeders’ meter

reading data has reiterated the consumption as 2,024.25 MU and

2,319.58 MU (two different figures) and the consumption of 2,306.87

MU as claimed in the format D2 of its tariff filing, for FY16. Thus, the IP-

consumption of 2,306.87 MU claimed in the Tariff filing was not

agreeing with the consumption reported on the basis of specific

consumption arrived at from agricultural feeders’ energy meter data.

x) Further, the CESC in its replies submitted to the Commission (on the

Commission’s rejoinder) vide No. CESC/GM(coml.)/F-1/2016-17/19125,

dated 18.1.2017, has revised the IP-set consumption as 2,077.97 MU

based on the specific consumption of segregated agricultural

feeders’ meter reading, for FY16. Also, it has stated that there is still a

difference between the consumption reported as per Format D-2 of its

Tariff filing and the agricultural feeders’ meter reading data furnished

to the Commission due to the following reasons:

xxix

The number of IP-set installations as at the end of March, 2016 were

3,17,674, whereas the number of IP-sets connected to the bifurcated

agricultural feeders was only 84,851.

The consumption in respect of IP-sets in the bifurcated feeders was

computed on the basis of data from agricultural feeders’ meters,

whereas in respect of non-bifurcated and rural feeders, the

consumption was arrived at on the basis of readings from the sample

meters provided to DTCs predominantly feeding to the IP loads.

The specific consumption is less in respect of certain agricultural

feeders in Hunsur division, as the areas covered by these feeders are

fed by Kaveri and kabini water canals and hence, these figures cannot

be considered for non-bifurcated feeders.

For agricultural feeders three-phase power supply is being arranged for

7 hours as per orders of GoK and in respect of rural feeders, single-

phase power supply is also arranged in addition to three-phase

supply. Thus, the consumption of IP-sets in rural and non-bifurcated

feeders is higher than those in exclusive agricultural feeders.

The consumption by unauthorized IP-sets has also contributed to the

difference in IP-set consumption.

With the above justification, the CESC has requested the Commission to

consider the sales of IP-sets as 2,306.87 MU as reported in the Format D-2 of

its Tariff Application for the APR of FY16 and not to consider the revised

consumption of 2,077.97 MU which was submitted based on the

agricultural feeders’ meter reading data.

xi) The reply submitted by the CESC for the difference in IP-set

consumption is not convincing due to the following reasons:

a. Even, when 84,851 number of IP-set installations under bifurcated

feeders, out of total 3,17,67 number of IP-sets as at the end of

March 2016, are considered, they constitute around 27%, whereas

the IP-sets connected to DTCs (to which meters are provided)

feeding predominantly IP-set loads constitutes insignificant

number of IP-sets. This means the IP-set consumption based on

specific consumption arrived at from the meter readings data of

agricultural feeder (larger sample of 27%) needs to be considered

xxx

while computing the IP-set consumption for the entire company,

instead of considering the readings from the sample meters

provided to DTCs feeding predominant IP loads, which is based on

fewer IP-sets data.

b. As regards lower consumption in Hunsur division due to availability

of canal water, the division’s average IP-consumption could be

considered for computation of subdivision-wise IP consumption if

such a subdivision is not having bifurcated feeders within the same

division.

c. Regarding the contention that the IP consumption is more in non-

bifurcated and rural feeders, compared to bifurcated feeders due

to supply of single phase power in addition to three-phase power,

it is noted that the non-bifurcated agricultural feeders are

supplied with open delta supply/restricted supply with a relay

arrangement in the feeders at the substations to trip the same if

current is drawn more than the predetermined values. This would

even out the difference in power supply position between the

bifurcated and non-bifurcated feeders and therefore, the

average values of IP-consumption would be the same in both

bifurcated and non-bifurcated feeders.

d. As regards unauthorized IP-sets, the CESC has taken them into

account, as and when they are identified in the field by

regularizing them and assigning them with the RR numbers. This

means, barring a very few installations existing in the field as

unauthorized, majority of the IP-sets are being accounted for and

hence the consumption recorded in the exclusive agricultural

feeders at the substation is inclusive of these unauthorized IP-sets

also. The specific consumption of IP-sets is arrived at on the basis

of consumption recorded in the agricultural feeders at substations,

segregated under NJY, deducting the allowable losses prevailing

in the 11kV line, distribution transformers and LT line. This means

that the consumption of unauthorized IP-sets is also reflected in

xxxi

the total consumption recorded in the feeders at the substations.

Thus, the unauthorized IP-sets existing in the field are being

accounted for and hence, the contention of the CESC that they

are contributing to the difference in consumption is not

acceptable.

xii) Therefore, as discussed above, the revised IP-consumption submitted

by the CESC as per the segregated agricultural feeders’ meter

reading data is 2,077.97 MU and there is a difference of 228.9 MU

(2,306.87 MU - 2077.97 MU =228.9 MU). In consumption as declared in

tariff filing. There is no justification for accepting this consumption

difference of 228.9 MU in consumption as declared in tariff filing.

Hence, the Commission decides to disallow the consumption of 228.9

MU from out of 2,306.87 MU claimed by the CESC in its Tariff filing.

xiii) Accordingly, the Commission decides to approve IP sets sales of

2,077.97 MU on the basis of the revised meter readings data of

segregated agricultural feeders reported for the FY16, as against

2,306.87 MU claimed by the CESC in its Tariff filing, after disallowing

sales to an extent of 228.9 MU.

In the light of the above discussion, the Commission approves total sales

of 5176.34 MU for FY16 and the category-wise sales as indicated in the

table above:

TABLE – 4.6

Approved & Actual Sales for FY16 Million Units

Category

Approved as

per Tariff

Order dated

02.03.2015

Actuals as

per APR

LT-2a* 959.55 954.37

LT-2b 7.37 7.85

LT-3 262.46 259.57

LT-4b 1.17 1.12

LT-4c 11.57 11.59

LT-5 137.8 136.56

xxxii

LT-6 135.53 162.96

LT-6 90.66 99.9

LT-7 13.66 12.95

HT-1 438.07 420.4

HT-2a 794.17 750.08

HT-2b 127.16 107.17

HT-2c 31.09 45.15

HT-3a & b 65.14 82.46

HT-4 7.75 5.27

HT-5 0.92 2.84

Sub total 3084.08 3060.24

BJ/KJ 36.28 38.13

IP 2624.47 2077.97

Sub total 2660.75 2116.10

Grand total 5744.83 5176.34 *Including BJ/KJ installations consuming more than 18 units/month

4.2.2 Distribution Losses for FY16:

CESC’s Submission:

The Commission in its Tariff Order dated 2nd March,2015 had

approved distribution losses for FY16 as shown in the table below:

Distribution Loss Range FY16

Upper limit 15.00%

Average 14.50%

Lower Limit 14.00%

CESC, in its annual accounts, has reported the distribution losses

at 13.60% for FY16.

1 Energy at Interface Points in MU 6256.07

2 Total sales in MU including wheeled

energy 5405.23

3 Distribution losses as a percentage of

input energy at IF points 13.60%

Commission’s analysis and decisions:

The distribution loss of 13.60% reported by CESC is below the targeted

losses fixed by the Commission for FY16 by 0.90% percentage points.

However, as per the revised consumption of IP sets reckoned as

xxxiii

discussed in the preceding paragraphs of this Chapter, the percentage

of distribution losses of CESC for FY16 is 17.26%.

In the above context, the Commission notes that the actual overall

distribution losses of 17.26% are far beyond the approved upper limit of

losses for FY16. Hence, penalty for exceeding the targeted loss levels

has been factored in the APR for FY16 as detailed below:

TABLE-4.7

Penalty for exceeding targeted loss levels in FY16 Amount in Rs. Crores

Particulars FY16

Actual input at IF points as per audited accounts in

MU 6256.07

Retail sales in MU 5176.34

Percentage distribution losses 17.26%

Target Upper limit of distribution loss 15.00%

Increase in loss–in percentage point 2.26

Input at target loss for actual sales in MU 6089.81

Increase in input due to increase in distribution losses

in MU 166.26

Average cost of power purchase in Rs./unit 4.217

Increase in power purchase cost due to increase in

losses in Rs. Crores 70.11

Thus, the Commission decides to levy penalty of Rs.70.11 Crores for

exceeding the targeted distribution loss levels for FY16.

4.2.3 Power Purchase for FY16

CESC Submission:

The Commission in its Tariff order dated 30th March,2016, had approved

source-wise quantum and cost of power purchase for FY16. CESC, in its

application has submitted the details of actual power purchase for FY16

for the purpose of Annual Performance Review. The details of power

purchase are as under:

xxxiv

TABLE – 4.8

Source-wise Power Purchases during FY16

* Source : D1 format

Commission’s analysis and decisions: [

1. The actual power purchase for FY16 as filed by CESC for approval of

Annual Performance Review is 6444.86 MU amounting to Rs. 2717.75

Crores, as against the approved quantum of 6984.52 MU amounting to

Rs. 2369.15 Crores. This represents reduction in quantum of power

purchase to an extent of 539.66 MU and increase in the cost by Rs.

348.57 Crores. This has been reflected in reduced sales to an extent of

568.50 MU in FY16.

Source of Generation

Actuals for FY16 Approved for FY16 Difference-between Actuals

and Approved-for FY16

% increase

(+)/decrease (-)

over an

approved figures

Energy

in MUs

Cost in

Rs Cr.

Rate in

Rs per

Unit

Energy

in MUs

Cost in

Rs Cr.

Rate in Rs

per Unit

Energy

in MUs

Cost in

Rs Cr.

Rate in

Rs per

Unit

Energy Cost

KPCL Hydel

Stations

1030.87 114.81 1.11 1829.66 91.50 0.50 -798.79 23.29 0.61 -43.66 25.45

KPCL-

Thermal

Stations

1313.99 593.48 4.52 1826.26 715.70 3.92 -512.27 -122.22 0.60 -28.05 -

17.08

CGS 1724.1 539.44 3.13 1549.83 465.73 3.01 174.27 73.71 0.12 11.24 15.83

Major IPPs 991.82 415.36 4.20 970.19 400.92 4.13 21.63 15.44 0.07 2.23 3.85

IPPs -Minor

(NCE

Projects)

469.92 167.47 3.56 627.97 235.47 3.75 -158.05 -68.00 -0.19 -25.17 -

28.88

Other

States

Projects

4.78 8.13 17.01 21.26 3.83 1.80 -16.48 4.30 15.21 -77.52 112.2

7

Short

/Medium

term

480.62 249.24 5.19 159.35 83.66 5.25 321.27 165.58 -0.06 201.61 197.9

2

U I charges 66.74 20.36 3.05 66.74 20.36

Sec-11 331.48 168.25 5.08

331.48 168.25

Transmissio

n Charges

(KPTCL &

PGCIL)

414.65

368.78

45.87

SLDC

Charges

(POSOOC&

SLDC)

2.16

3.57

-1.41

Energy

Balancing 30.54 21.21 6.94

Others

Charges 2.19

TOTAL 6444.86 2717.75 4.22 6984.52 2369.15 3.39 -539.66 348.57 0.82 -7.73 14.71

xxxv

2. Against the approved quantum of 6984.52 MU, the actual power

purchased by CESC is 6444.86 MU for FY16, which is about 7.73% less than

the approved quantum.

3. On an analysis of the source-wise approved and actual power

purchases, the following deviations in the quantum of energy and its

cost of purchase are observed:

i. There is shortfall in supply from sources of power like KPCL Hydel, KPCL

Thermal and IPP minor (RE/ NCE) as follows:

TABLE-4.9

Difference between Source-wise approved and Actual Energy Purchase

Source of Generation

Energy Difference

between actual

and approved in

MU

Cost Difference

between actual

and approved in

Rs Cr.

KPCL Hydel - 798.79* 23.29

KPCL Thermal -512.27* -122.22**

IPP Minor(RE/NCE ) -158.05* -68.00**

* (-) indicates deficit **(-) indicated excess cost

The shortfall from the conventional sources has been met from the

un-requisitioned surplus power from CGS & major IPP sources apart from

short-term power to a tune of 480.62 MU at a cost of Rs.249.24 Crores.

CESC has incurred an additional cost Rs.348.57 Crores towards overall

deficit in the availability of power, resulting in an increase in per unit cost

by 82 Paise.

ii. The change in the source-wise mix of supply, reconciliation of energy

and its cost among ESCOMs have resulted in higher average power

purchase cost of CESC at the rate of Rs.4.22 per KWh as against the

approved rate of Rs.3.39 per KWh.

4. In order to ensure proper accounting of energy and its cost, CESC is

directed to reconcile the inter-ESCOM energy exchanges and its costs

xxxvi

every month and it shall collect/pay the corresponding amounts out of

the tariff subsidy received from Government of Karnataka,

5. The Commission notes that, the SLDC has not implemented the intra-state

ABT. As per the directions issued by the Government of Karnataka vide

its letter dated 28th January, 2016, intra state ABT has to be

implemented immediately by the KPTCL and ESCOMs. The Commission

therefore directs the SLDC, KPCL and the CESC to take appropriate

action immediately to implement intra-state ABT and to host the details

thereof, on their respective websites.

6. The power purchases made by the CESC during FY16 from different

sources of generation also include the energy purchased under Section

11 of the Electricity Act, 2003, in pursuance of the Government Order

dated 16.09.2015. The Government, in the said order, had fixed a

provisional tariff of Rs.5.08 Per unit subject to determination of final tariff

by this Commission. The Commission in its order dated 18th August,2016,

has fixed the final tariff of Rs.4.79 per unit and has ordered recovery of

the difference amount (Rs.5.08- 4.79) from the generators. However,

some of the generators have filed petitions before the Hon’ble ATE.

Some of the generators have also filed review petitions before this

Commission. The Hon’ble ATE has ordered not to recover the difference

amount pending disposal of the petitions. Hence the power purchase

cost allowed in this order is subject to the decision of the Hon’ble ATE

and also this Commission.

7. On analysis of Power Purchase cost for FY16 in respect of KPCL Hydel

Stations, it is observed that the rates allowed per unit by ESCOMs, varies

among ESCOMs as given bellow:

BESCOM Rs 0.90 per unit.

MESCOM Rs 1.45 per unit.

CESC Rs 1.11 per unit.

HESCOM Rs 0.91 per unit.

GESCOM Rs 0.97 per unit.

xxxvii

CESC has allowed Rs.1.11 per unit, which indicates that while making

payment of the power purchase bills, adequate checks have not been

exercised. In FY15 the power purchased by ESCOMs from KPCL Hydel is

as under:

BESCOM Rs 0.57 per unit.

MESCOM Rs 0.56 per unit.

CESC Rs 0.58 per unit.

HESCOM Rs 0.56 per unit.

GESCOM Rs 0.59 per unit.

It is seen from the above that there is no significant variation in the rates

allowed in FY15 among the ESCOMs, as compared with the rates paid in

FY16. There should be justifiable reasons for the variations, which are not

available in the tariff applications.

In the light of this, CESC is directed to verify correctness of the payment

made by it at the rate of Rs.1.11 per unit to KPCL Hydel power. The

excess payment, if any, may be recovered from KPCL under intimation

to the Commission.

The Commission decides to approve the power purchase of 6444.86 MU

at a cost of Rs.2717.75 Crores for the purpose of Annual Performance

Review for FY16.

4.2.4 Renewable Purchase Obligation (RPO) compliance by CESC for FY16:

CESC in the petition has filed the details of RPO compliance for solar and

non-solar RPO for 2015-16 as indicated below:

TABLE-4.10

RPO Compliance for FY16

Energy Purchased-MU 6444.86

Non-Solar energy required to be procured at 10% target-

MU

644.49

Non-Solar energy actually procured excluding energy sold

under green tariff -MU

723.73

xxxviii

Non-Solar compliance as percentage of energy purchased 11.23%

Solar energy required to be procured at 0.25% target-MU 16.11

Solar energy actually procured -MU 25.22

Solar compliance as percentage of energy purchased 0.39%

For validating the RPO compliance, the Commission had directed CESC

to furnish the data as per a specified format, duly reconciling the data

with audited accounts.

CESC in their replies have furnished the following data:

TABLE-4.11

Non-solar RPO Compliance

No. Particulars Quantum

in MU

Cost-

Rs.Crores.

1 Total Power Purchase quantum

from all sources

6444.85 2717.75

2 Non–solar Renewable energy

purchased under PPA route at

Generic tariff including Non-

solar RE purchased from KPCL

457.39 158.17

3 Non –solar Short-Term purchase

from RE sources, excluding sec-

11 purchase

127.55 65.47

4 Non –solar Short-Term purchase

from RE sources under sec-11

138.63 70.36

5 Non-solar RE purchased at

APPC

0 0

6 Non-solar RE pertaining to

green energy sold to

consumers under green tariff

0 0

7 Non-solar RE purchased from

other ESCOMs

0 0

8 Non-solar RE sold to other

ESCOMs

0 0

9 Non-solar RE purchased from

any other source like banked

energy purchased at 85% of

Generic tariff

0.16* 0.06

10 Total Non-Solar RE Energy

Purchased

[No 2+ No.3+No.4+No.5

+No.7+No.9]

723.73

11 Non-Solar RE accounted for

the purpose of RPO

0

xxxix

[ No.10- No.5-No.6-No.8]

12 Non-solar RPO complied in %

[No11/No1]*100

11.23

* As per the breakup details furnished, it is 0.48 MU, which is reckoned for the Purpose of RPO.

TABLE-4.12

Solar RPO Compliance

No. Particulars Quantum

in MU

Cost- Rs.

Crs.

1 Total Power Purchase quantum from all

sources

6444.85 2717.75

2 Solar energy purchased under PPA route

at Generic tariff including solar energy

purchased from KPCL

12.65 9.31

3 Solar energy purchased under Short-

Term, excluding sec-11 purchase

0 0

4 Solar Short-Term purchase from RE under

sec-11

0 0

5 Solar energy purchased under APPC 0 0

6 Solar energy pertaining to green energy

sold to consumers under green tariff

0 0

7 Solar energy purchased from other

ESCOMs

0 0

8 Solar energy sold to other ESCOMs 0 0

9 Solar energy purchased from NTPC (or

others) as bundled power

12.56 13.51

10 Solar energy purchased from any other

source like banked energy purchased at

85% of Generic tariff

0 0

11 Total Solar Energy Purchased

[No2+No.3+No.4+No.5+No.7+No.9+No.10]

25.22 22.82

12 Solar energy accounted for the purpose

of RPO [ No.11- No.5-No.6-No.8]

0 0

13 Solar RPO complied in %

[No12/No.1]*100

0.39

The Commission has approved total input energy of 6444.86 MU for FY16

in its APR. Based on this input energy, CESC was required to purchase

644.49 MU of Non-Solar energy and 16.11 MU of solar energy to meet its

RPO targets. Considering the data submitted by CESC, the Commission

notes that CESC has achieved 11.23% of Non-Solar and 0.39% of solar

RPO targets for FY16. Thus, CESC has over-achieved its non-solar and

solar RPO targets by 1.23 percentage points and 0.14 percentage points

respectively.

xl

4.2.5 Operation and Maintenance Expenses:


In its application, the CESC, as per its audited accounts, has

requested to approve O&M expenses of Rs.418.47 Crores for FY16.

The break-up of O&M expenses are as follows:

TABLE – 4.13

O & M Expenses – CESC’s submission


Particulars FY16

Employee cost

327.65

Administrative & General Expenses 51.58

Repairs and Maintenance 39.24

Total O & M Expenses 418.47


The Commission in its Tariff Order dated 2nd March, 2015 had approved

O&M expenses for FY16 as detailed below:

TABLE – 4.14

Approved O&M Expenses as per Tariff Order dated 02.03.2015

Particulars FY16

No. of installations as per actuals as per Audited

Accts 2864790

Weighted Inflation Index 6.69%

CGI based on 3 Year CAGR 4.12%

Actual O&M expenses for FY13 - in Rs. Crs. 326.07

Total approved O&M Expenses for FY16 – in Rs. Crs. 409.15

The Commission in its preliminary observations, on the application of

CESC, had sought the details of the certain expenses booked under A &

G expenses during FY16 and noted the replies furnished.

The Commission notes that the actual O&M expenses reported by CESC

are more than the approved O&M expenses by Rs.9.32 Crores. The

Commission, in accordance with the methodology adopted while

approving the ARR for FY14-16 and subsequent APRs, proceeds with the

determination of normative O&M expenses based on the 12 Year data

of WPI and CPI besides considering 3 year compounded annual growth

rate (CAGR) of consumers. Considering the Wholesale Price Index (WPI)

xli

as per the data available from the Ministry of Commerce & Industry,

Government of India and Consumer Price Index (CPI) as per the data

available from the Labour Bureau, Government of India and adopting

the methodology followed by the CERC with CPI and WPI in a ratio of

80:20, the allowable rate of inflation for FY16 is computed as follows:

TABLE-4.15

Inflation to be allowed for FY16

Year WPI CPI

Compo

site

Series

Yt/Y

1=Rt Ln Rt

Year

(t-1)

Product

[(t-1)*

(LnRt)]

2004 98.72 111.1 108.624

2005 103.37 115.8 113.314 1.04 0.04 1 0.04

2006 109.59 122.9 120.238 1.11 0.10 2 0.20

2007 114.94 130.8 127.628 1.17 0.16 3 0.48

2008 124.92 141.7 138.344 1.27 0.24 4 0.97

2009 127.86 157.1 151.252 1.39 0.33 5 1.66

2010 140.08 175.9 168.736 1.55 0.44 6 2.64

2011 153.35 191.5 183.87 1.69 0.53 7 3.68

2012 164.93 209.3 200.426 1.85 0.61 8 4.90

2013 175.35 232.2 220.83 2.03 0.71 9 6.39

2014 182.00 246.90 233.92 2.15 0.77 10 7.67

2015 177.03 261.42 244.542 2.25 0.81 11 8.93

A= Sum of the product column 37.56

B= 6 Times of A 225.37

C= (n-1)*n*(2n-1) where n= No of years of data=12 3036.00

D=B/C 0.07

g(Exponential factor)= Exponential (D)-1 0.0771

e=Annual Escalation Rate (%)=g*100 7.71

For the purpose of determining the normative O & M expenses for FY16,

the Commission has considered the following:

a) The actual O & M expenses allowed for FY13 excluding contribution

to Pension and Gratuity Trust.

b) The three year compounded annual growth rate (CAGR) of the

number of installations considering the actual number of installations

as per the audited accounts up to FY16 at 3.92%.

c) The weighted inflation index (WII) at 7.71% as computed above.

d) Efficiency factor at 2 % as considered in the earlier two control

periods.

xlii

Thus, the normative O & M expenses for FY16 will be as follows:

TABLE – 4.16

Normative O & M Expenses for FY16

Particulars FY16

No. of Installations As per actuals as per Audited Accts 2848206

Weighted Inflation Index 7.71%

Consumer Growth Index (CGI) based on 3 Year CAGR 3.92%

Base year actual O & M expenses for FY13 excluding

P&G contribution - Rs. Crores 270.60

O&M Index= 0&M (t-1)*(1+WII+CGI-X)- Rs. Crores. 349.27

The above normative O & M expenses have been computed without

considering the contribution to Pension and Gratuity Trust for FY16.

The Commission has treated the employee costs on account of

contribution to P&G Trust as uncontrollable O&M expenses. This

component has been allowed beyond the normative O&M expenses to

enable the ESCOMs to meet their actual employee costs.

CESC, as per the audited accounts has incurred an amount of Rs.64.31

Crores towards contribution to Pension and Gratuity Trust for FY 16.

Considering the request of CESC to treat the pension and gratuity

contribution as uncontrollable O & M expenses, the Commission

computes the allowable O & M expenses for FY16 as follows:

TABLE – 4.17

Allowable O & M Expenses for FY16 Amount in Rs. Crores

Sl.


1 Normative O & M expenses 349.27

2 Additional employee cost (uncontrollable O & M

expenses)

64.31

Allowable O & M expenses for FY16 413.58

Thus, the Commission decides to allow an amount of Rs.413.58 Crores as

O&M expenses for FY16.

xliii

4.2.6 Depreciation:


CESC, in its application has claimed an amount of Rs.117.46 Crores as

gross depreciation as per the audited accounts. Further, an amount of

Rs.25.57 Crores towards the depreciation on account of assets created

out of consumers’ contributions / grants as per Accounting Standards

(AS) – 12, is considered under other income as per the Audited Accounts

for FY16. Thus the net amount of depreciation claimed by the CESC in its

tariff application is Rs. 91.89 Crores for FY16.

The asset-wise depreciation claimed by the CESC is as follows:

TABLE – 4.18

Depreciation for FY16- CESC’s Submission


Particulars

Opening Balance

of Asset as on

01.04.2015

Closing Balance

of Asset as on

31.03.2016

Depreciation

for FY16

Buildings 58.81 70.53 2.27

Civil 1.79 1.93 0.10

Other Civil 0.72 0.72 0.02

Plant & M/c 432.87 575.16 29.77

Line, Cable

Network

1505.59 1926.79 84.62

Vehicles 4.38 4.38 0.09

Furniture 3.90 4.23 0.19

Office

Equipment

5.18 9.56 0.39

Intangible

assets

2.17 2.16 0.01

Sub Total 2015.41 2595.45 117.46

Less: Depreciation on account of Assets created out

of Consumer contribution/grants

25.57

Net Depreciation 91.89

xliv


In accordance with the provisions of the KERC (Terms and Conditions for

Determination of Tariff for Distribution and Retail Sale of Electricity)

Regulations, 2006 and amendments thereon, the depreciation for FY16

has been determined by the Commission. Based on the opening and

closing balances of gross blocks of fixed assets for FY16 and the

depreciation as per audited accounts, the weighted average rate of

depreciation works out to 5.09%. Further, as per the Accounting

Standards (AS) – 12, an amount of Rs.25.57 Crores of depreciation on

assets created out of consumer contribution / grants has been factored

in and deducted from the gross depreciation for FY16.

Based on the above, the Commission decides to allow net depreciation

of Rs.91.89 Crores for FY16.

4.2.7 Capital Expenditure:

I. Capital Investment for FY16

CESC’s submission:

The CESC has indicated an actual capital expenditure of Rs.488.52

Crores as against the Commission approved capital expenditure of

Rs.317 Crores for FY16. The category-wise breakup of the expenditure

furnished by CESC is shown in the table below:

Table -4.19

Category wise capital expenditure of CESC for FY16


Sl.

No Schemes

FY16 As

approved

FY16

Actuals

1 Extension & improvement 80 75.76

2 NJY 50 247.53

3 HVDS 20 -

4 R-APDRP 50 21.23

5 RGGVY(Restructured)+DDG 0 0.66

6 Replacement of failed

Transformers 10 5.00

7 Service Connections 40 25.76

xlv

8 Rural Electrification(General) - -

A Electrification of Hamlets/HB/JC

under RGGVY

10 87.09 B

Providing infrastructure to

Irrigation Pump sets

&energization of IP SETS

C Kutir Jyothi(RGGVY)

9 Tribal Sub Plan - -

A Electrification of Tribal Colonies

(RGGVY) 3 2 B Energization of IP sets

C Kutir Jyothi (RGGVY)

10 Special Component Plan - -

A Electrification of

HB/JC/AC(RGGVY)

10 6 B Energization of IP sets


11 Tools & Plants 4 8.40

12 Civil Engineering Works 10 9.10

13

Providing Meters to DTC, BJ/KJ,

Street Light for replacement of

electromechanical meters,

providing modems to meters for

communication

30 0.00

Total 317.00 488.52

Commission’s analysis:

The Commission notes that, the overall capital expenditure of Rs.488.52

Crores incurred by CESC for FY16 has exceeded the approved capex of

Rs.317 Crores by Rs.171.52 Crores. Some of the major categories in which

CESC has exceeded the capex are as follows:

i. The CESC has exceeded the approved capex limit of Rs. 50 Crores in

“NJY program” by Rs.197.52 Crores. CESC in its replies to preliminary

observations, has stated that, due to field constraints like Right of

Way (RoW) and objections to lay the lines by the people, the project

that were taken up in previous years were delayed and the

expenditure was not booked during the previous years. During FY16

majority of NJY feeders have been completed and billed, resulting in

excess capex.

xlvi

ii. In respect of “HVDS” works, it is stated that CESC has not utilized the

approved capex of Rs.20 Crores, for the reason that, the ongoing

NJY works and providing individual transformers to Ganga Kalyana IP

Set works would render the same benefit as that of HVDS. Further,

CESC in its replies to preliminary observations has stated that, the NJY

Phase-I and Phase- II works cover a huge area in its jurisdiction in

which it has increased the number of distribution transformers and

also, it has installed individual DTCs for each of the Ganga Kalyana

works, and hence, the HVDS is not required to be implemented.

Though CESC has taken this stand, it is to be noted that the NJY

program or the individual DTC for Ganga Kalyana would not result in

the conversion of already existing lengthy LT lines emanating from

the 11 kV feeder both in rural loads as well as for IP Sets to HT lines.

Since the HVDS scheme is meant to reduce the HT/LT ratio, the

Commission directs CESC to take up a study of the existing

distribution lines and take suitable action to implement HVDS in order

to reduce the LT lines.

iii. In respect of “Rural Electrification (General)”, CESC has achieved a

capex of Rs.77.09 Crores, over and above the approved capex of

Rs.10 Crores. CESC in its replies to preliminary observations has

stated that, these works are related to social obligation and are

Government’s priority works and hence, CESC has incurred excess

capex for completion of these works.

iv. In respect of “Tools & Plants”, CESC has achieved a capex of Rs.8.4

Crores against the approved capex of Rs.4 Crores. CESC in its replies

to the preliminary observations made by the Commission has stated

that, three phase energy meter testing bench, PGRS software has

been procured during FY16. Further, it has stated that, some of the

T& P materials which were ordered in FY15 have been billed during

FY16 resulting in excess capex.

v. In respect of “Providing Meters to DTC, BJ/KJ, Street Light for

replacement of electromechanical meters, providing Modems to

xlvii

meters for communication”, CESC has incurred a very meager

/negligible capex of Rs.0.0019 Crore against the approved capex of

Rs.30 Crores. The Commission has been directing CESC to complete

DTC metering and conduct energy audit to quantify the distribution

losses and take remedial measures thereon. But, CESC has not

achieved its own set targets in the above category. CESC in its

replies to the preliminary observations made by the Commission has

stated that, there was a delay in tendering process due to delay in

finalization of the technical specifications, due to which it could not

achieve the progress in FY16.

In the light of the above discussion on excess capex and considering the

reasons furnished by CESC, the Commission decides to recognize the

capital expenditure of Rs.488.52 Crores incurred by CESC for APR of FY16,

subject to disallowance if any, as per the prudence check for FY16,

indicated in the following paras.

II. The prudence check of capital expenditure and material procurement

of CESC for FY16:

The Commission has got the Prudence check of capital expenditure for

FY16, done through third party verification of the capital works

categorized and also the material procurement of CESC during FY16.

This was taken up in two parts:

a) Prudence check of execution of the capital works of FY16:

b) Prudence check of material procurement process of FY16:

a) Prudence check of execution of the capital works of FY16:

The Commission has taken up prudence check of the capital

expenditure incurred by the CESC for the period FY16 by engaging the

services of M/s. Pricewaterhouse Coopers Private Limited, (M/s PWC) as

consultant, being the lowest bidder for the said job, through a

transparent process of e-tendering to evaluate the capital expenditure

incurred during FY16, in respect of categorized works.

xlviii

The Consultant has taken a list of division-wise and cost-wise total Capex

works carried out, categorized in the CESC during FY16. As per the scope

of work, the sampling technique of stratified random sampling for

finalizing the sample of projects as per KERC guidelines was taken up.

Total number of works of CESC in category of more than Rs.6 lakhs and

between Rs.3 lakhs to Rs.6 lakhs were much higher and exceeding the

maximum limit of sample size specified in the KERC guidelines. Therefore,

120 works and 50 works have been selected from each category of

projects more than Rs.6 lakhs and between Rs.3 lakhs to Rs.6 lakhs

respectively. For works costing less than Rs.3 lakhs, 24 works from 50% of

the total divisions i.e. 8 O&M divisions have been selected. Thus,

totally194 numbers of sample projects for capital expenditure to the tune

of Rs.110.96 Crore have been selected for capex prudence of CESC and

mentioned below:

Table – 4.20

Division Wise summary of sample selection

Division name

Above Rs. 6

lakhs

Between Rs.3 to 6

lakhs

Below Rs. 3

lakhs Grand total

No. Actual

cost

Rs.Lakhs

No. Actual

cost

Rs.Lakhs

No. Actual

cost

Rs.Lakhs

No. Actual cost

Rs.Lakhs

VV Mohalla 3 266 2 8 3 8 8 282

NR Mohalla 3 277 2 8 3 8 8 293

Nanjangud 20 1,955 5 27 - - 25 1,982

Hunsur 4 664 2 9 3 9 9 682

Chamrajnagar 5 50 5 26 - - 10 76

Kollegal 10 448 2 10 - - 12 458

Madikeri 13 200 4 21 - - 17 221

Hassan 17 2,469 5 62 - - 22 2,531

CR Patna 4 485 1 5 3 9 8 499

Arasikere 6 515 2 9 3 9 11 533

HN Pura 14 2,002 5 25 - - 19 2,027

Mandya 6 557 4 21 3 8 13 586

Pandavapura 9 763 4 18 - - 13 781

Nagamangala 4 75 3 15 3 9 10 99

Maddur 2 19 4 21 3 9 9 49

Total 120 10,746 50 284 24 69 194 11,099

Table – 4.21

Category wise summary of sample selection

xlix

Scheme

name

Above Rs. 6 lakhs Between Rs.3 to 6

lakhs Below Rs. 3 lakhs

No of

Works

Actual

cost

Rs.

Lakhs

No of

Works

Actual

cost

Rs.

Lakhs

No of

Works

Actual

cost

Rs.

Lakhs

GK 1 6 4 19 2 6

E&I 43 803 22 138 8 23

NJY 37 9,107 - - - -

RAPDRP 2 195 - - - -

DAS - - - - - -

HVDS - - - - - -

Civil 5 148 1 5 - -

DSM - - - - - -

RMPM 11 291 2 10 - -

UNIP 18 156 20 106 13 37

IT - - - - - -

RGGVY - - - - - -

ECW - - - - - -

Other 3 40 1 5 1 3

Total 120 10,746 50 284 24 69

The sample for site visits was broadly covered under the following types

of objectives, with sample covering each type in the O&M divisions of

CESC:

a) Works envisaged for loss reduction which included projects

related to reconductoring, replacement of feeders, replacement

of high capacity distribution transformer centers with multiple low

capacity distribution centers etc. in order to reduce the losses on

the feeder

b) Works carried out for load growth which involve creation of link

line, bifurcation of feeders, building new substation etc.

c) Works taken up for improving quality of supply, continuity of

supply and reduce interruptions, works for Voltage improvement.

d) Other projects like Energizing Unauthorized IP sets, works to

arrange power supply to Water supply installations etc.

The consultant has stated that, the analysis of sample works

performance was carried out by considering:

l

i. Planning: The planning aspect for the capital works were

measured considering the pro-activeness in the investment,

whether cost benefit analysis was carried out for the works and

whether alternatives have been considered before taking up the

work.

ii. Pro-activeness: The works have been graded as proactive or

reactive based on comprehensive review. Works have been

graded proactive when they are initiated before the supply

conditions have become adverse or if it is a part of any specific

scheme. It can be seen that 93% of the investment were

proactive in nature.

iii. Cost benefit analysis: The cost benefit analysis has been carried

out for only 24% of the total sample works. Also, in many cases the

cost benefit ratio is less than one (1) and the reason for taking up

such works was not justified by CESC in the estimates.

iv. Implementation and schedule of implementation: It is observed

that 53% of the works have no time overruns.

v. Cost of implementation: It is observed that 61% of the works have

no cost overruns.

vi. Quality of execution: The quality of construction has scored full

marks in 61% of the works.

vii. Ex-post implementation: The ex-post implementation aspect for

the capital works were measured considering the achievement

against the primary and secondary objectives.

a. Primary objective: It is observed that, that 35% of the works

have received full score.

b. Secondary objective: It is seen that 18% of the works have

received full score.

The consultant has furnished the summary of the prudence check results

as mentioned below:

li

TABLE – 4.22

Summary of Prudence check results for CESC in FY16

Work

name

Total works Sample works Non-prudent works

No. Actual

cost Rs.

Lakhs

No. Actual

cost Rs.

Lakhs

No. Actual

cost Rs.

Lakhs

GK 936 1,685 7 31 - -

E&I 11,226 10,509 73 964 1 48.59

NJY 240 25,605 37 9,107 1 250.87

RAPDRP 6 554 2 195 - -

Civil 40 998 6 153 - -

RMPM 113 1,362 13 301 - -

UNIP 3,521 7,505 51 299 - -

Other 517 763 5 48 - -

Total 16,599 48,981 194 11,099 2 299.46

As per the prudence check report submitted by the consultants, the

following are the salient features:

TABLE – 4.23

Gist of Prudence check findings for FY16

Sl No

Particulars Numbers Amount in Rs.Crores

1 Works costing Rs.6 Lakhs and above considered as samples for validation

120 107.46

2 Works costing between than Rs.6 Lakhs and Rs.3 Lakhs considered as samples

50 2.84

3 Works costing below Rs.3 Lakhs considered as samples

24 0.69

4 Works not meeting the norms of prudence

Rs.6 Lakhs and above 02 2.9946

Rs.6 Lakhs and Rs.3 Lakhs Nil -

below Rs.3 Lakhs Nil -

5 Total works not meeting the norms of prudence as stipulated in the guidelines issued by this Commission

02 2.9946

The Consultant has stated that, the following works are not meeting the

prudence norms as mentioned below:

1) NJY work costing Rs.250.87 Lakhs in CR Patna division: The work is

considered as not meeting the norms of prudence, as there were

frequent issues pertaining to puncture of Aerial Bunched cable

(AB cable). The Guarding was not provided on line crossover

points across the road. The feeders were not segregated in a safe

lii

way and there are high chances of lines coming in contact with

other lines, creating short circuit at certain crossover points. Also,

the sagging of AB cable was observed which are not within the

safety limit. There was a time overrun of more than 25 months and

cost overrun of more than 34.69% was observed in these projects.

2) E & I work costing Rs.48.59 Lakhs in Hassan division: The work is

considered as non-prudent, as it is not meeting the primary

objective to prevent electrocution of wild elephants and there

are still some poles which are below 8 m of height against 9 m

height. The transformer is still placed at the ground level which

may cause further accidents. Also, the reasons for delay in

categorization of the work beyond 9 months were not mentioned.

The summary of the other findings in the prudence check are given in

following Table:

TABLE – 4.24

Summary of Works having cost overrun

Particulars Within 10% 10-25% Above 25%

Rs.6 Lakhs and above 11 09 26

Rs.6 Lakhs and Rs.3 Lakhs 08 03 04

below Rs.3 Lakhs 06 01 02

TABLE – 4.25

Summary of Works having Time overrun

Particulars Within one Year

Between one and two Years

above 2 Years

Rs.6 Lakhs and above 24 12 10

Rs.6 Lakhs and Rs.3 Lakhs 18 03 01

below Rs.3 Lakhs 12 04 01

The Commission had forwarded the copy of the Report on the Prudence

check submitted by the consultant to the CESC seeking its

views/comments and justification if any on the non-prudent works as

meeting to norms of prudence, to reach the Commission on or before

20th March, 2017. But, CESC has not furnished any reply on this regard

within the date.

Hence, the Commission after verifying the works treated as not meeting

prudence norms as per the consultant has decided to disallow the

liii

capex and, the weighted average interest and weighted average

depreciation are disallowed as indicated below:

TABLE – 4.26

Details of Amounts disallowed in APR FY16

Sl

No Particulars

Amount

in Rs.

Crores

1 Total cost of categorized works eligible for prudence

check

489.81

2 Total cost of the sample works 110.99

3 Cost of sample works not meeting prudence norms (01

work with cost of Rs.48.59Lakh) in E& I category 0.4859

4

Cost of sample works not meeting prudence norms (01

work with cost of Rs.48.59Lakh against a sample basket of

73 works with Rs.964 Lakhs in the category of E&I works

of11226 Nos. of works and total cost of Rs.10509 Lakhs)

5.297

5 Cost of sample works not meeting prudence norms (01

work with cost of Rs.250.87Lakh)in NJY category 2.5087

6

Cost of sample works not meeting prudence norms (01

work with cost of Rs.250.87Lakh against a sample basket of

37 works with Rs.9107 Lakhs in the category of NJY works of

240 Nos. of works and total cost of Rs.25605 Lakhs)

7.053

7 The total amount of capex not meeting the norms of

Prudence (=4+6) 12.350

8

Amount to be disallowed towards works not meeting

prudence norms calculated on the basis of weighted

average interest & weighted average depreciation on the

capex to be disallowed.

1.551

Thus, the Commission decides to deduct an amount of Rs.1.551 Crores

towards disallowance of interest and depreciation on the imprudent

capital works for FY16 in the revised approved ARR for FY18 as discussed

in the subsequent Chapter of this Order.

b) Prudence check of material procurement process of FY16:

CESC is carrying out the capital works through total turnkey as well as

partial turnkey works. In some cases, the agency or the contractor

assigned with the partial turnkey would also invest in some of the smaller

materials whenever it is necessary. While procuring the materials at large

quantities, it is very essential for CESC to see that, procurement will not

liv

result into pile up of idle stock for a longer period and the procurement is

made in a prudent manner. With a view to verify the procurement process

and stock position, the Commission has instructed the consultants to

check the process in all the ESCOMs along with the prudence check of

execution of works.

M/s PwC has stated that, the process of verification procurement of major

materials included:

i. Analyzing the procurement of major materials required for capital works

for FY16 based on the opening stock, material received, utilized for

works and closing stock balances for the above years.

ii. Critical analysis including assessment of quantities in relation to the

capital works planned/executed and the closing balances to see the

extent to which materials procured are utilized for works within a

reasonable time frame.

iii. General review of the procurement process to ascertain whether, the

same is done as per the rules.

M/s. PwC’s observations on material procurement are as below:

a) CESC follows tendering process as per KTPP act and KEB account

volume.

b) The material procurement was made as average consumption over

previous 3 years and on present demand by divisions also considering

the safety stock and procurement lead time into consideration.

c) Tenders were floated for procurement of poles, conductors, insulators

and DTRs for a value of 19.63 Crore INR during FY16.

d) 80% of the budget allocated for works under service connection and

E&I were allocated as store budget for procuring required materials.

The Commission having noted the above discussions on prudence check

of execution of works as well as the material procurement of CESC:

a) Directs CESC to properly plan, execute and monitor the projects to

see that, there will not be any slippage in terms of time overrun, cost

overrun and also, the works are completed and categorized to reap

the objectives set out by the company. Also, there should not be any

lv

default, by which, the works will have to be treated as not meeting

the prudence norms.

b) Directs CESC to monitor the material procurement, deployment to the

field and track the stock position to see that, no idle stock of

materials is kept for a longer period.

4.2.8 Interest and Finance Charges:

a) Interest on Capital loan:


CESC in its application has claimed an amount of Rs.83.52 Crores

towards interest on capital loans drawn from Banks/Financial

Institutions for FY16.


The Commission has noted the status of opening and closing balances

of capital loans as per the audited accounts for FY16 and format D9 of

the filings as shown below:

TABLE – 4.27

Allowable Interest on Capital Loans – FY16 Amount in Rs. Crores

Particulars FY16

Opening balance of capital loans 671.24

Add: New Loans 188.37

Less: Repayments 65.35

Total loan at the end of the year 794.26

Average Loan 732.75

Allowable Interest on Capital Loans 83.52

As per the audited accounts of CESC for FY16, the actual interest on the

capital loans is Rs.83.52 Crores. Considering the average loan of

Rs.732.75 Crores and an amount of Rs.83.52 Crores incurred towards

interest on capital loans, the weighted average rate of interest works out

to 11.40%. The actual weighted average rate of interest is comparable

with the prevailing rate of interest for long term loans.

lvi

Thus, the Commission decides to allow an amount of Rs.83.52 Crores

towards interest on capital loans for FY16.

4.2.9 Interest on Working Capital:


CESC in its application has stated that it has raised short term loans

and overdrafts to meet its day to day expenditure (working

capital) during FY16. As per the audited accounts, CESC has

incurred an amount of Rs.40.40 Crores towards interest on short

term loans / overdrafts during FY16.


As per the audited accounts, CESC has incurred an interest of Rs.40.40

Crores on short term loans/over drafts for FY16.

As per the CESC’s replies to the Commission’s preliminary observations, it

is stated that short term loans are availed at an interest rate of 10%

to10.90% and overdraft at 10.70% during FY16. As per the Tariff Order

dated 2nd March, 2015, the Commission decides to allow the working

capital loans at a normative interest rate of 11.75% for FY16.

As per the KERC (Terms and Conditions for Determination of Tariff

Distribution and Retail Sale of Electricity) Regulations, 2006 and

amendments thereon, the Commission has computed the allowable

interest on working capital for FY16 as follows:

lvii

TABLE – 4.28

Allowable Interest on Working Capital for FY16 Amount in Rs. Crores

Particulars FY16

One-twelfth of the amount of O&M Expenses 34.47

Opening GFA 2018.26

Stores, materials and supplies 1% of Opening

balance of GFA 20.18

One-sixth of the Revenue 459.25

Total Working Capital 513.90

Rate of Interest (% p.a.) 11.75

Normative Interest on Working Capital 60.38

Actual interest on WC as per audited accounts

for FY16 40.40

Allowable Interest on Working Capital 50.39

The Commission therefore decides to allow an amount of Rs.50.39 Crores

towards interest on working capital for FY16.

4.2.10 Interest on Consumer Deposits:


CESC in its application as per the audited accounts has claimed

an amount of Rs.38.08 Crores towards payment of interest on

consumers’ security deposits for FY16.


The Commission notes that, based on the average amount of consumer

security deposits, the interest on consumer security deposits amounting

to Rs.38.07 Crores claimed by CESC works out to a weighted average

rate of interest of 8.42%. As per the KERC (Interest on Security Deposit)

Regulations, 2005, the interest on consumer deposits shall be allowed as

per the bank rate prevailing on the 1st of April of the relevant year. The

bank rate as on 1st April, 2015 was 8.50%. The weighted average rate of

interest claimed by CESC as per the audited accounts is within the

applicable bank rate.

Thus, the Commission decides to allow an amount of Rs.38.08 Crores

towards interest on consumer security deposits for FY16.

lviii

4.2.11 Other Interest and Finance charges:

CESC has claimed an amount of Rs.0.47 Crores towards other interest

and finance charges for FY16, paid to banks / financial institutions. The

Commission decides to allow the same for FY16.

4.2.12 Interest on belated payment of Power Purchase Cost:

CESC has claimed an amount of Rs.7.05 Crores towards Interest on

belated payment of Power Purchase Cost for FY16. As per the audited

accounts, an amount of Rs.7.05 Crores is indicated as interest on power

purchase dues. The Commission has been consistently allowing the

interest on working capital as per the norms under MYT Regulations to

meet the day to day expenses of the ESCOMs. Hence, there is no

justification for claiming interest on power purchase dues separately.

Hence, the Commission decides not to allow any interest on power

purchase dues in the APR for FY16.

4.2.13 Capitalization of Interest and finance charges:

CESC in its filing and as per the audited accounts for FY16 has

capitalized interest of Rs.19.22 Crores during FY16. The Commission has

considered the same for computation of APR for FY16.

Thus the allowable interest and finance charges for FY16 are as follows:

TABLE – 4.29

Allowable Interest and Finance Charges


Sl.


1. Interest on Loan capital 83.52

2. Interest on working capital 50.39

3. Interest on consumer deposits 38.08

4. Interest on Power Purchase dues 0.00

5. Other interest and finance charges 0.47

6. Less Interest and other finance charges

capitalized

19.22

Total interest and finance charges 153.24

lix

4.2.14 Other Debits:


CESC has claimed an amount of Rs.4.79 Crores towards other

debits for FY16.


As per the audited accounts, the allowable other debits excluding the

provision for bad and doubtful debts for FY16 are as detailed below:

TABLE – 4.30

Allowable Other Debits Amount in Rs. Crores

Sl.


1 Small and Low value items written off 0.11

2 Losses relating to fixed assets 0.39

3 Assets decommissioning cost 0.78

4 Miscellaneous losses and write offs 1.14

5 Bad debts written off excluding

provisions 0.64

Total 3.06

Thus, the Commission decides to consider an amount of Rs.3.06 Crores

as other debits for FY16.

4.2.15 Net Prior Period Charges:


CESC has claimed the net Prior Period credit of Rs.5.89 Crores for

FY16.


As per the Audited Accounts for FY16, the prior period expenses/ loss are

indicated as Rs.23.86 Crores on account of short provision of power

purchase cost, A&G expenses, interest and finance charges and other

expenses of the previous years. Further the prior period income of

Rs.29.75 Crores is on account of excess provision of depreciation, interest

& finance charges and others relating to prior period.

lx

Thus, the Commission decides to allow a net prior period income (credit)


4.2.16 Return on Equity:


CESC has not claimed Return on Equity for FY16 as its accounts

depict a negative net worth.


The closing balances of gross fixed assets along with break-up of equity

and loan component and the details of GFA, debt and equity (net-

worth) for FY16 as per actual data as per the audited accounts are

indicated as follows:

TABLE – 4.31

Status of Debt Equity Ratio for FY16


GFA

(Closing

Balance)

Debt

(Closing

Balance)

Equity

(Net-

worth)

(Closing

Balance)

Normati

ve Debt

@ 70% of

GFA

Normati

ve

Equity @

30% of

GFA

%age of

actual

debt on

GFA

%age of

actual

equity on

GFA

2598.32 794.26 -111.70 1818.82 779.52 30.57 0

From the above table it is evident that the debt and equity amounts lie

within the normative debt and equity ratio amounts reckoned on the

basis of the closing balances of GFA for FY16.

As per the KERC (Terms and Conditions for Determination of Tariff)

Regulations, 2006 and amendments thereon, the Commission has

computed the allowable Return on Equity at 15.5% on equity plus the

accumulated balance of profit/loss as per audited accounts as at the

beginning of the year and also factoring recapitalization of security

deposit of Rs.23.00 Crores in compliance with the Orders of the Hon’ble

ATE in appeal No.46/2014. The allowable RoE for FY16 is determined as

follows:

As per the KERC (Terms and Conditions for Determination of Distribution

and Retail Sale of Electricity) Regulations, 2006 and amendments

lxi

thereon, the Commission has computed the allowable Return on Equity

at 15.5% on equity plus accumulated profits/ losses under reserves and

surplus, as at the beginning of the year and also factoring

recapitalization of security deposit of Rs.23.00 Crores in compliance with

the Orders of the Hon’ble ATE in appeal No.46/2014. The allowable RoE

for FY16 is determined as follows:

TABLE – 4.32

Allowable Return on Equity


Particulars FY16

Paid Up Share Capital 325.52

Share deposit 69.32

Reserves and Surplus as on 01.04.2015 (642.19)

Recapitalization of Consumers’ security

deposit (23.00)

Total Equity (270.35)

Allowable RoE @ 15.50% 0.00

Further, it is noted that as reported by CESC and as per the audited

accounts, an additional equity of Rs.127.73 Crores has been received

during the year from Government of Karnataka. Even with this additional

equity infused during FY16, the net worth remains negative and hence,

the Commission is unable to allow any return on equity for FY16.

4.2.17 Income tax:

As per the audited accounts, CESC has factored Rs.14.97 Crores towards

payment of deferred Income Tax liability for FY16. The Commission decides to

allow the same in the APR for FY16.

4.2.18 Other Income:


CESC in its application has claimed an amount of Rs.105.08 Crores as

Other Income for FY16.


As per the audited accounts of CESC, Rs.215.23 Crores is indicated as

other income for FY16. This includes income from sale of scrap, income

lxii

from rent, rebate for collection of electricity duty, delayed payment

charges from consumers, income relating to prior period, depreciation

withdrawn from contribution/grants as per accounting standards - 12

and miscellaneous recoveries. The delayed payment charges from

consumers amounting to Rs.80.40 Crores, included under other income,

is considered as revenue and an amount of Rs.29.75 Crores of income

relating to prior period is factored and accounted under the head ‘prior

period debit/credit’ and an amount of Rs.25.57 Crores depreciation

withdrawn from contribution and grants as per Accounting Standards-12

is factored under depreciation head. Also an amount of Rs.13.61 Crores

pertaining to incentive received for early payment of power purchase

bills is considered as other income. Further, as decided in the earlier Tariff

Orders, to encourage and bring in financial discipline in timely payment

of monthly power purchase bills, the Commission continues to allow10%

of the total incentive amounting to Rs.1.36 Crores on account of early

payment of power purchase bills, to be retained by CESC for FY16.

Thus, the Commission decides to allow an amount of Rs.78.15 Crores as

other income for FY16.

4.2.19 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.0.50 Crore per year

towards consumer relations / consumer education. CESC in its filing has not

claimed any expenditure for FY16. Hence, the Commission has not considered

any expenditure towards Consumer Relations / Consumer Education for FY16.

4.2.20 Carrying Cost on Regulatory Asset:

CESC in its application has not claimed any amount of carrying cost on the

Regulatory Assets kept by the Commission in its Tariff Orders. The

Commission in its Tariff Order dated 12.05.2014 had kept the unmet gap in

revenue of Rs.131.60 Crores as Regulatory asset to be recovered in FY16 and

FY17 and also decided to allow carrying cost at 12% per annum on the

Regulatory Asset to be assessed at the time of APR of FY16 and FY17.

Accordingly, the Commission had factored Rs.65.80 Crores being the 50% of

Regulatory Asset in the ARR of FY16 and allowed it to be recovered in the

revised retail supply tariff.

lxiii

The Commission, while Computing the revised ARR as per APR of CESC for

FY16, decides to allow the Carrying cost of Rs.7.90 Crores at 12% per annum

on the Regulatory Asset of 65.80 Crores pertaining to FY16.

4.2.21 Revenue for FY16:

CESC, in its application has considered Rs.2856.23 Crores as revenue from

sale of power from consumers and miscellaneous charges for FY16.

As per the audited accounts for FY16, the revenue from sale of power is Rs.

2775.83 Crores. However, as discussed earlier, the sale to IP sets is reckoned

at 2077.97 MU instead of 2306.85 MU, a reduction of 228.88 MU. Based on the

approved CDT of Rs.4.40 per unit, revenue of Rs.100.72 Crs is deducted from

revenue from sale to IP Sets.

Further, the delayed payment charges from consumers of Rs.80.40 Crores

included under other income has been recognized as revenue from sale of

power.

Accordingly, the Commission decides to consider Rs.2755.51 Crores as

revenue from sale of power to consumers and Miscellaneous Revenue while

approving the revised ARR as per APR of CESC for FY16.

4.2.22 Revenue and Subsidy for FY16:

The Commission in its tariff order dated 2nd March, 2016 has approved

tariff subsidy of Rs. 1174.65 Crores towards sale of power to BJ/KJ and IP

sets for FY16 in accordance with the prevailing Government order. The

Commission in computation of APR for FY16 has approved the revised

tariff subsidy of Rs.941.06 Crores towards sale of power to BJ/KJ and IP

sets for FY16.

4.3 Abstract of Approved ARR for FY16:

As per the above item-wise decisions of the Commission, the

consolidated Statement of revised ARR for FY16 is as follows:

lxiv

TABLE – 4.33

Approved revised ARR for FY16 as per APR


Sl.

No Particulars

APR FY16

As

approved

02.03.2015

As filed

30.11.2016

As per

APR

1 Energy at Gen Bus 6984.51 6444.86 6444.86

2 Transmission Losses in % 3.80% 2.93% 2.93%

3 Energy @ Interface in MU 6719.10 6256.07 6256.07

4 Distribution Losses in % 14.50% 13.60% 17.26%

Sales in MU

5 Sales to other than IP & BJ/KJ 3084.08 3060.25 3060.24

6 Sales to BJ/KJ 36.28 38.13 38.13

7 Sales to IP 2624.47 2306.85 2077.97

8 Total Sales 5744.83 5405.23 5176.34

9 Revenue from tariff in Rs Crs

10 Revenue from tariff and

Misc. Charges 1844.64 1814.45 1814.45

11 Tariff Subsidy to BJ/KJ 19.09 23.82 23.82

12 Tariff Subsidy to IP 1155.56 1017.96 917.24

13 Total Revenue 3019.29 2856.23 2755.51

Expenditure in Rs Crs

14 Power Purchase Cost 2062.88 2410.17 2410.17

15 Transmission charges of

KPTCL 303.02 305.42 305.42

16 SLDC Charges 3.25 2.16 2.16

17 Power Purchase Cost

including transmission

charges 2369.15 2717.75 2717.75



20 Admin & General Expenses 51.58

Total O&M Expenses 409.15 418.47 413.58

21 Depreciation 74.98 117.46 91.89


22 Interest on Loans 83.84 83.52 83.52

23 Interest on Working capital 63.66 40.40 50.39

24 Interest on belated payment

on PP Cost 0.00 7.05 0.00

25 Interest on consumer

deposits 40.22 38.07 38.08

26 Other Interest & Finance

charges 1.72 0.47 0.47

27 Less interest capitalised 15.00 19.22 19.22

Total Interest & Finance

charges 174.44 150.29 153.24

28 Other Debits 0.00 4.79 3.06

29 Net Prior Period Debit/Credit 0.00 -5.89 -5.89

lxv

30 RoE 0.00 0.00 0.00

31 Provision for taxation 0.00 14.97 14.97

32 Funds towards Consumer

Relations/Consumer

Education 0.50 0.00 0.00

33 Other Income 30.00 105.08 78.15

ARR 2998.22 3312.76 3310.45

Deficit 21.07 -456.53 -554.94

34 Deficit for FY14 carried

forward 10.69 0.00 0.00

35 Disallowance of capex on

account of prudence check 0.80 0.00 0.00

36 Carrying cost on Regulatory

asset as per TO dated

02.03.2015 131.60 0.00 7.90

37 Regulatory asset carried

forward 120.41 0.00 0.00

38 Penalty for excess losses

beyond target loss levels 70.11

Net ARR 3019.29 3312.76 3248.24

Deficit for FY16 0.00 -456.53 -492.73

4.3.1 Gap in Revenue for FY16:

As against an approved ARR of Rs.3019.29 Crores, the Commission, after

the Annual Performance Review of CESC, decides to allow a revised

ARR of Rs.3248.24 Crores for FY16. Considering the revenue of Rs.2755.51

Crores, the deficit in revenue, of Rs.492.73 Crores is determined for the

year FY16.

The Commission decides to carry forward the deficit of Rs.492.73 Crores

of FY16 to the proposed ARR for FY18, as discussed in the subsequent

Chapter of this Order.

lxvi

CHAPTER – 5

REVISED ANNUAL REVENUE REQUIREMENT FOR FY18

5.0 Revised Annual Revenue Requirement (ARR) for FY18

CESC’s Application:

CESC in its application dated 30th November, 2016, has sought approval

of the Commission for the revised ARR for FY18. The summary of the

proposed revised ARR for FY18 is as follows:

TABLE – 5.1

Revised ARR for FY18-CESC’s Submission


Sl.


1 Energy at Gen Bus in MU 7739.23

2 Transmission Losses in % 3.37%

3 Energy at Interface in MU 7478.41

4 Distribution Losses in % 13.00%

Sales in MU

5 Sales to other than IP & BJ/KJ 3499.12

6 Sales to BJ/KJ 38.45

7 Sales to IP 2968.65

Total Sales 6506.22

Revenue from tariff, in Rs. Crores

8 Revenue from Tariff and Misc. Charges 2205.86

9 Tariff Subsidy from BJ/KJ 21.80

10 Tariff Subsidy from IP 1457.84

Total Revenue 3685.50

Expenditure in Rs. Crores



13 SLDC Charges 2.70

14 Power Purchase Cost including cost of transmission 2983.57



17 Administration & General Expenses 62.14

18 Total O&M Expenses 504.13





23 Interest on belated payment on PP Cost 0.00

24 Interest on consumer security deposits 41.70


26 Less: interest & other expenses capitalised 24.00

lxvii

Total Interest & Finance charges


29 Net Prior Period Debit/Credit 2.00

30 Return on Equity 0.00

31 Funds towards Consumer Relations/Consumer Education 0.00

32 Provision for contribution to P&G Trust (GoK Liability) 346.50


34 ARR 4191.88

35 Deficit for FY16 carried forward -456.54

Net ARR 4648.42

The CESC has requested the Commission to approve the revised Annual

Revenue Requirement of Rs.4648.42 Crores for FY18. Considering the

estimated revenue of Rs.3685.50 Crores based on the existing retail

supply tariff, CESC has projected a revenue gap of Rs.962.92 Crores

inclusive of carried forward gap of revenue of Rs.456.54 Crores of FY16. In

order to bridge this gap in revenue, CESC, in its application has

proposed increase in retail supply tariff by 148 paise per unit in respect of

all the categories of consumers including BJ/KJ and IP set consumers for

FY18.

5.1 Annual Performance Review for FY16:

As discussed in the preceding chapter of this Order, the Commission has

carried out the Annual Performance Review for FY16 based on the

audited accounts furnished by CESC. Accordingly, a deficit of Rs.492.73

Crores of FY16 is carried forward into the ARR of FY18.

5.2 Revised Annual Revenue Requirement for FY18:

The item wise expenditure proposed by CESC and approved by the

Commission for FY18 is discussed in this Chapter as follows:

5.2.1 Capital Investments for FY18:


CESC has proposed a revised capex of Rs.889 Crores as against the

capex of Rs.552 Crores approved in the MYT Order, being the amount

factored for tariff computations. The Commission, while recognizing a

capex of Rs.697 Crores for FY18, as proposed by CESC, had factored

Rs.552 Crores, for the tariff computations, keeping in view the debt

equity ratio of 70:30 for financing the capex, as per the MYT Order.

lxviii

The CESC has now proposed to execute the following capital works

during FY18:

i) Extension and Improvement (E&I) Works: The CESC proposes to add

1500 additional distribution transformers, 500 distribution transformers

of different capacities for capacity enhancement works and

construction of new link lines with associated LT lines for evacuation

of power from the new substations of KPTCL coming up during FY18.

Also, the CESC has planned to replace maximum number of existing

7.5/8.0 M poles by 9.0 M poles in the elephant corridor in its

jurisdiction.

ii) Niranthara Jyothi Yojana (NJY): CESC has planned to complete the

spill over/on-going works of phase-1& 2 schemes during FY18.

iii) Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) &

Decentralized Distributed Generation (DDG) : CESC has submitted

that the electrification of BPL households under RGGVY 12th Plan of

Mysuru and Mandya districts have been awarded already and, for

electrification of households in non-conventional method under DDG

project, the work award has been issued and work is in progress.

iv) Integrated Power Development Scheme (IPDS): The CESC has

submitted that, 33 towns are included under this scheme. The

proposed cost, as per the DPR, is Rs.170.00 Crores. As per the

guidelines for execution of IPDS, the work has to be awarded within

one month from the date of approval from GoI and CESC has stated

that the tendering work is in process.

v) Deen Dayal Upadyay Grameena Jyothi Yojana (DDUGJY): CESC has

stated that, the Improvement works will be taken up in rural areas of

five districts in CESC jurisdiction and the tendering is in process.

vi) Metering programme: As per the information provided under UDAY

Scheme, there are around 28,233 DTCs to be metered in Next two

years. CESC has proposed to provide 1200 meters to DTCs under

Thread through metering, 950 meters under IPDS and 19222 meters

under DDUGJY projects for which budget provision has been made

http://rggvy.gov.in/

http://powermin.nic.in/en/content/decentralized-distributed-generation-ddg

lxix

under respective scheme heads. Remaining 6857 DTCs are proposed

to be metered under E&I during FY18.

vii) Software development: It is proposed to implement computerization

and develop software in Finance, Material Management and HRMS

areas under UDAY scheme. Work amounting Rs.9.96 Crores has been

awarded for development of software in Material Management and

60 % of work is completed. Proposal is to be submitted for Finance,

HRMS and other software development for Rs.25 Crores.

The scheme-wise proposed capex of CESC for FY18 as per the

actions plan mentioned above is shown in the following table:

Table –5.2

Capital expenditure for FY18-CESC’s Submission Amount in Rs.

Crores

Sl.

No Schemes

As Approved

in MYT Order

As proposed by

CESC in the present

filing

1 Extension & improvement 230 320

2 NJY 40 40

3 HVDS

4 R-APDRP 25 25

5 IPDS 50 100

6 DDUGJY 100 150

7 RGGVY(Restructured)+DDG - 45

8 Replacement of failed Transformers 5 5

9 Service Connections 40 50

10 Rural Electrification(General)

A Electrification of Hamlets/HB/JC under

RGGVY

34 50 B

Providing infrastructure to Irrigation

Pump sets & energization of IP SETS


11 Tribal Sub Plan

A Electrification of Tribal Colonies

(RGGVY) 2 3

B Energisation of IP sets

C Kutir Jyothi (RGGVY)

12 Special Component Plan

A Electrification of HB/JC/AC(RGGVY)

7 10 B Energisation of IP sets


13 Tools & Plants 4 4

14 Civil Engineering Works 5 12

15

Providing Meters to DTC, BJ/KJ, Street

Light for replacement of electro-

mechanical meters, providing modems

10 40

lxx

to meters for communication

16 Software Development and smart grid

project - 35

Total 552 889

Commission’s analysis and decision:

The CESC has proposed a total capex of Rs.889 Crores indicating an

additional capex of Rs.337 Crores over and above the approved

capex of Rs.552 Crores as per MYT order for FY18, which was

considered for tariff computation. CESC has indicated the

requirement of additional capex in respect of certain categories duly

giving the action plan as discussed above, and it has retained the

outlay for the other categories of capex for FY18. The additional

capex sought by CESC in some of the major categories of works is

shown below:

The category of works for which additional Capex is sought by CESC

for FY18:

TABLE-5.3

Additional Capex Sought by CESC


Sl.

No. Schemes

As approved

in MYT Order

CESC

Proposal

Additional

CAPEX

1 Extension & improvement 230 320 90

2 IPDS 50 100 50

3 DDUGJY 100 150 50

4 RGGVY(Restructured)+DDG 0 45 45

5

Electrification of

Hamlets/HB/JC under

RGGVY 34

50

16

Providing infrastructure to

Irrigation Pump sets &

energization of IP SETS

Kutir Jyothi (RGGVY)

6

Providing Meters to DTC,

BJ/KJ, Street Light for

replacement of

electromechanical meters,

providing modems to meters

for communication

10 40 30

7 Software Development and

smart grid project 0 35 35

Total 424 740 316

It is noted that, CESC is seeking additional capex in respect of major

categories of works mentioned in the above table at Rs.740 Crores as

lxxi

against the approved capex of Rs.424 Crores in MYT filing which

amounts to an excess capex of Rs.316 Crores.

However, looking at the performance of CESC for the past five years

vis-à-vis the approved capex, it is to be noted that, CESC has not

achieved its capex even closer to Rs. 500 Crores in any of the years

right from FY12 except during FY16 and it is unlikely that, CESC would

be able to achieve a capex of Rs.889 Cores in FY18. The details of the

capex achieved for the past five years are shown in the following

table:

TABLE – 5.4

Approved Vs. Actual capital investment


F

rom the above it could be seen that, CESC has not been able to

achieve a capital expenditure more than 70% of the approved

capex. in the past years, except in FY16, wherein it has exceeded

the approved capex of Rs.317 Crores. The CESC has clarified in the

replies to the preliminary observation that, the excess capex

achievement in FY16, is due to the spill over/on-going works of NJY

which were not commissioned in the previous years due to RoW /

litigations and have been completed and commissioned during

FY16. If the amount of capex incurred for FY16 on NJY is taken out of

the total capex of Rs.488.52 Crores, the remaining capex would not

be more than Rs.300 Crores for FY16. Keeping in view the reasons for

excess capex during FY16 as well as a very low capex achievement

indicated by CESC during FY17 till September, 2016 at Rs.111.53

Crores, the Commission is of the view that, it is unlikely that CESC

would incur such a huge capex of Rs.889 Crores in FY18.

Particulars FY12 FY13 FY14 FY15 FY16

Capital Investment

Proposed &

Approved

485 560 575.5 455 317

Capital Investment

actually incurred 183.27 195.87 321.75 318.83 488.52

Short fall (-)/ Excess

outlay -301.73 -364.13 -253.75 -136.17 171.52

% Achievement 37.79% 34.98% 55.91% 70.07% 154.10%

lxxii

Further, it is noted that, though CESC has indicated the action plan

for FY18 by giving reasons for additional capex and furnished extract

of DPR/Estimates pertaining to eight projects stated to be prepared

complying to the “Capital Expenditure Guidelines for ESCOMs”, they

do not indicate the objectives and quantifiable outcomes of the

projects. The CESC should mandatorily follow the “Capital

Expenditure Guidelines for ESCOMs” in which the capital investment

planning process, prioritization and post commissioning analysis to be

adopted by the ESCOMs are discussed in detail, so as to address:

a) the network strengthening and expansion requirement,

b) Improvement of power supply reliability,

c) The target date for each of the project,

d) loss reduction trajectory etc.

The Commission notes that, CESC has submitted the details of 11kV

feeder’s losses in the descending order during earlier review

meetings, but, it has not mentioned whether, the E&I work taken up

by it are addressing the issue of reduction of distribution losses in the

high loss making feeders, which are listed by it.

In light of the above discussions and taking into consideration the

capex achievement during the past five years and the reasons for

excess capex during FY16 and also, a very low capex achievement

till September, 2016 during FY17, the Commission decides that, it is

unlikely for CESC to achieve the capex as proposed. Further, the

Commission, while recognizing the capex proposed by CESC at

Rs.889 Crores, decides to consider the capital expenditure of Rs.552

Crores for the purpose of tariff calculations for FY18 which is subject to

prudence check. The Commission directs CESC that, it should meet

any additional capex required during FY18, only through re-

appropriation of approved amounts for the prioritized category within

the overall capex and not to seek the approval of the Commission in

the middle of the year for additional/higher capex.

lxxiii

5.2.2 Sales:

a) Sales other than IP sets:

CESC in its Tariff Application has stated that for estimating sales for FY-

17 and FY18, it has considered three years or five year CAGR. The

Commission has observed that the CAGR (which is annual growth

rate) has been applied for the half-year data of FY-17 for estimating

the sales for second half of FY17, which is not appropriate, as CAGR

stands for compounded annual growth rate and has to be applied

for annual data and not on half-year data. For the current year,

where the half-year data is available, the estimate could be done on

pro-rata basis by considering the actual sales up to 30.09.2016 and

estimating the sales for the remaining period based on the growth

rate of the previous year for the corresponding period.

The observations of the Commission on sales forecast for the FY18

and the replies furnished by CESC are discussed below:

i) LT(1) – BJ/KJ category:

While the number of installations in this category has been reduced

from 497094 installations in FY16 to 496020 in FY18, the sales has

increased from102.75 MU to 118.52 MU. Further, though the number

of installations for FY18 is retained at FY17 level, the allocation

between installations consuming less than 18 units and above 18 units

have been altered in FY18. CESC shall explain the reasons for the

same. Further the number of installations is indicated as 496020 at

pg.12 and as 496780 at pg. 22. The figures shall be reconciled.

CESC in its replies has stated that the number of installations under

BJ/KJ installations consuming less than 18 units is decreasing since

FY13 and those under BJ/KJ consuming more than 18 units are

increasing, resulting in alteration in the allocation between BJ/KJ

consuming less than 18 units and those consuming more than 18

units.

Further CESC in its replies to the preliminary observations had clarified

that the number of installations indicated at page 22 is for FY16 and

lxxiv

that the figures indicated in page-12 is for FY17 and FY18.

Subsequently. In its replies to the rejoinder, CESC has clarified that

number of installations indicated at page 22 is for first half of FY17.

The Commission has taken note of the replies furnished by CESC. The

approach of the Commission in estimating the sales to different

category of consumers is discussed in the subsequent paragraphs.

ii) Number of Installations:

Regarding the number of installations, the Commission had observed

that, the growth rate considered for HT3 and HT4 categories is on the

higher side when compared to the normal growth rate indicated

and the growth rate considered for LT-2b and HT-1 categories is on

the lower side when compared to the normal growth rate indicated.

Further, the Commission regarding the energy sales, had observed

that the estimated growth rates for HT-2a, HT-2b and HT-4 categories

is higher considering the recent trends in growth rate for these

categories.

CESC, in its response to the preliminary observations did not furnish

any reply on the above observations. Since the above issue was

again raised in the rejoinder by the Commission, in its replies to the

rejoinder, CESC has stated that it has furnished the details of

estimation in its application for ERC and Revision of tariff for FY18 and

has reiterated the same.

iii) Category-wise information in the specified format was

requested to validate the sales and the CESC has furnished the detail

in its replies to the preliminary observations.

iv) To validate the sales estimate, the CESC was requested to

furnish the following information:

lxxv

a) The data of sales to HT2(a) and HT2(b) categories along with the

consumption from open access / wheeling for the period 2011-12 to

2015-16 in the in the specified format.

b) To estimate the impact of shifting of installations from HT2a, HT2b

and HT-4 to HT-2c category, the number of installations shifted from

these categories and the corresponding sales figures for FY14, FY15

and FY16.

CESC in their replies to the preliminary observations has furnished the

above details.

The Commission’s approach for estimating the number of installations

and sales for FY18:

The methodology adopted by the Commission to estimate the number

of installations and sales to categories other than BJ/KJ and IP sets is

discussed below:

i) No. of Installations:

While estimating the number of installations (excluding BJ/KJ and IP),

the following approach is adopted:

a. The base year number of installations for FY17 is modified duly

validating the revised estimate furnished by CESC in the current

filing and the data available as on 30.11.2016. The Commission

has validated both the number of installations and sales to various

categories considering the actuals as on 30.11.2016 and has

estimated the number of installations and sales for the remaining

period reasonably, keeping in view the number of installations

and sales as on 31.03.2016 also. Accordingly, the base year

estimation has been revised which has an impact on the

estimated number of installations and estimated sales for the year

FY18.

b. Wherever the number of installations estimated by CESC for the

FY18 is within the range of the estimates based on the CAGR for

lxxvi

the period FY11 – FY16 and for the period FY13 - FY16, the

estimates of CESC are retained.

c. Wherever the number of installations estimated by CESC for the

FY18 is lower than the estimates based on the CAGRs for the

period FY11 – FY16 and for the period FY13 - FY16, the estimates

based on the lower of the CAGRs are considered.

d. Wherever the number of installations estimated by CESC for FY18

is higher than the estimates based on the CAGRs for the period

FY11 – FY16 and for the period FY13 - FY16, the estimates based on

the higher of the CAGRs are considered.

e. For LT 4(b), 4(c), LT-7, HT-2(c), HT (4) and HT-5 categories, the

estimates of CESC are retained, as the growth rate for these

categories is not consistent.

Based on the above approach, the total number of installations

(excluding BJ/KJ and IP) estimated by the Commission for FY18 is

2218006 as against 2221966 proposed by CESC.

[

ii) Energy Sales:

For categories other than BJ/KJ and IP sets, generally the sales are

estimated considering the following approach:

a. The base year sales for FY17 as estimated by CESC are validated

duly considering the actual sales upto November, 2016 and

modified suitably as stated earlier.

b. Wherever the sales estimated by CESC for the FY18 is within the

range of the estimates based on the CAGR for the period FY11 –

FY16 and for the period FY13 - FY16, the estimates of CESC are

retained.

c. Wherever the sales estimated by CESC for the FY18 is lower than

the estimates based on the CAGRs for the period FY11 – FY16 and

for the period FY13- FY16, the estimates based on the lower of the

CAGRs are considered.

lxxvii

d. Wherever sales estimated by CESC for the FY18 is higher than the

estimates based on the CAGRs for the period FY11 – FY16 and for

the period FY13 - FY16, the estimates based on the higher of the

CAGRs are considered.

e. For LT4(b), LT 4(c), LT-7, HT-2(c) and HT-5 categories, the estimates

of CESC are retained, as the growth rate for these categories is

not consistent.

f. For HT-4 category, the sales are estimated based on the specific

consumption of FY16.

g. For HT2(a) and HT2(b) categories, the sales estimate based on the

methodology specified at paras b, c and d above are

reasonable and is adopted. Therefore, the sales estimate based

on the analysis of open access impact is not considered for FY18.

Based on the above approach, the sales (excluding BJ/KJ and IP)

estimated by the Commission for FY18 is 3368.54 MU, as against

3419.05 MU proposed by CESC.

b) Sales to BJ/KJ

The electricity consumption to this category upto 18 units per

installation per month hitherto was being subsidized by the

Government of Karnataka and any installation under this

category consuming more than 18 units per month was billed

under relevant LT 2(a) category. However, the Government of

Karnataka in its Budget for 2017-18 has announced that it would

extend the subsidy to BJ/KJ installations consuming upto 40 units

per installation per month. Therefore, the Commission has

reckoned the above and has worked out the subsidy

accordingly.

Considering the specific consumption and the number of

installations, for FY16, for installations consuming upto 18 units and

above 18 units as per the actual data furnished by CESC, the total

sales estimated for this category for FY18 works out to 106.17 MU.

Considering the total number of BJ/KJ installations of 496020 for

lxxviii

FY18 as proposed by CESC, the specific consumption works out to

17.84 units per installation per month which is less than 40 units per

installation per month announced by the Government for the

purpose of subsidy. Thus, the entire consumption of 106.17 MU is

considered for the purpose of estimating the subsidy for this

category. However, the CESC while claiming the subsidy shall

consider only such installations which consume upto 40 units per

installation per month and any installation under this category

consuming more than 40 units shall be billed under the relevant LT

2(a) category.

c) IP set sales projections for ARR for FY18

The Commission, in its Tariff Order dated 30th March, 2016, had

approved a specific consumption of IP-sets as 7,843

units/installation/ annum for the control period FY17 to FY19.

However, based on the actual data of sales to IP-sets as reported

by the CESC in its Tariff filing, the Commission had approved the

specific consumption as 8,195 units/installation/annum, for the

FY16.

Further, the IP-sales reported as per the format D2 of its Tariff filing

by the CESC was 2,306.87 MU as against the approved sales

quantity of 2,624.47 MU, for FY16. However, the CESC in its

subsequent communication dated 30th January, 2017, to the

Commission, has submitted the revised sales of IP-sets based on

the specific consumption arrived at from the meter readings of

segregated agricultural feeders as 2,077.97 MU, for FY16. This

indicates a decrease in sales to an extent of 228.9 MU between

the IP consumption reported by the CESC in its Tariff filing and its

subsequent submission on the basis of metered consumption in

respect of the segregated agricultural feeders, under NJY. Also, it

is noted that the CESC has already segregated significant number

of feeders under NJY as exclusive agricultural feeders and rural

feeders, which means that regulated power supply to IP-sets has

lxxix

contributed to reduction in the agricultural consumption during

the FY16.

It is noted that during FY15, the CESC’s specific consumption

arrived at on the basis of metered consumption in respect of

agricultural feeders was 7,843 units/installation/annum. It is

observed that the specific consumption of 7,843

units/installation/annum for FY15 is less than the approved specific

consumption of 8,195 units / installation /annum for FY16 by 352

units /installation/annum. Further, the specific consumption

worked out on the basis of the revised consumption of 2,077.97

MU for FY 16 as reported by the CESC is 6,728

units/installation/annum. Further, it is noted that the specific

consumption arrived at considering the revised consumption

based on the segregated agricultural feeders for FY16 is far less

than the approved specific consumption of 8,195 units/

installation/annum, by 1467 units/installation/annum. Hence, it is

appropriate to consider the specific consumption of 6,728 units/

installation/annum for the FY18 also. In view of this, the

Commission decides to approve the specific consumption of

6,728 units/installation/ annum for the ARR of FY18.

Further, it is noted that the CESC has estimated the number of IP-

set installations as 3,69,402 for the FY18 in the current Tariff filing. In

view of this, the Commission has considered the number of IP-sets

as reported by the CESC, for the ARR of FY18 without any

modifications. Hence, based on the estimated number of

installations for the FY17 and the FY18 as reported by the CESC,

the mid-year number of installations is determined and the sales

to IP-set consumers are indicated as follows:

TABLE-5.5

Computation of IP Set Consumption

lxxx

Accordingly, the Commission approves 2,386.77 MU as energy

sales to IP-sets as against the CESC’s sales projections of 2,968.65

MU, for the FY18. The number of installations approved for FY18 is

3,69,402. This approved IP-set consumption for FY18 is with the

assumption that the Government of Karnataka would release full

subsidy to cover the approved quantum of IP-sales. However, if

there is any reduction in the subsidy allocation by the GoK, the

quantum of sales to IP-sets of 10 HP and below shall be

proportionately regulated.

During the course of Public hearing held by the Commission, the

representatives of certain Farmers’ Association have suggested

that the Government may consider paying the subsidy directly to

the farmers against their IP Set consumption. They have also

expressed that meters could be installed to their IP Sets, by the

ESCOMs to whom energy charges would be paid by the farmers.

The Commission is of the view that implementing the suggestion of

direct remittance of subsidy to the farmers would encourage

metering of the IP Sets enabling proper accounting of energy and

also facilitate accurate computation of losses in the distribution

system. The Commission notes that the Government of Karnataka

would have to formulate suitable policy in the matter.

Further, the CESC was directed to take up GPS survey of IP-sets in

order to identify the defunct/dried up/not-in-use installations in

the field and to take further action to arrive at correct number of

IP-sets, by deducting such IP-sets from its account, on the basis of

GPS survey report. In this regard, the CESC has reported that it has

completed GPS survey of 50 per cent of the feeders and has

Particulars

As filed by the

CESC

As approved by the

Commission

FY17 FY18 FY18

No of installations 3,40,102 3,69,402 3,69,402

Mid-Year no. of installations 3,54,752 3,54,752

Specific consumption in

units/installation/annum

8,368 6,728

Sales in MU 2,968.65 2,386.77

lxxxi

identified 9,114 as not-in-use installations and 82,908 as

unauthorized installations. The CESC has sought time up to March,

2017 to revalidate the same and to complete the survey of

remaining installations under other feeders, to enable it to arrive

at correct number of dried up/defunct/not-in-use wells and to

take further action to deduct such IP-set installations from its

accounts.

In this regard, the CESC is directed to complete the GPS survey of

IP-sets within the targeted time as agreed by it and compliance

thereon shall be submitted to the Commission. In view of the

pendency of GPS survey of IP-sets, the number of installations

estimated for FY17 as well as for FY18 are subject to change

based on the GPS survey. Hence, on completion of the GPS

survey, the CESC shall arrive at correct number of IP-sets in the

field, duly deducting from its account the number of dried

up/defunct/not-in-use wells, based on the GPS survey results. Any

variation in sales due to change in number of installations would

be trued up during the Annual Performance Review, for the FY18.

Further, it is noted that the CESC has already segregated 372

agriculture feeders from rural loads under NJY phase1&2 and

implementation of balance feeders’ works is in progress.

Therefore, energy consumed by the IP-sets could be more

accurately measured at the 11 KV feeder level at the sub-stations

after allowing for distribution system losses in 11 KV lines,

distribution transformers and LT lines.

Hence, the Commission reiterates its directive that the CESC shall

report the total IP-set consumption on the basis of specific

consumption arrived at from the consumption data from energy

meters at the substations in respect of agriculture feeders

segregated under NJY only, to the Commission, every month

regularly, as per the following format:

lxxxii

Mo

nth

Na

me

of

Su

b-d

ivis

ion

No

. o

f

Se

gre

ga

ted

Ag

ric

ultu

ral

Fe

ed

ers

in

th

e s

ub

div

isio

n

Mo

nth

ly C

on

sum

ptio

n in

MU

as

rec

ord

ed

in

all t

he

ag

ric

ultu

ral fe

ed

ers

at

the

sub

sta

tio

ns

pe

rta

inin

g t

o t

he

su

b-

div

isio

n

Dis

trib

utio

n lo

ss(1

1k

V lin

e, D

TCs,

& L

T

lin

e)

Plu

s sa

les

to o

the

r c

on

sum

ers

if

an

y, in

MU

( lo

sse

s in

all t

he

ag

ric

ultu

ral fe

ed

ers

on

ly t

o b

e

co

nsi

de

red

)

Ne

t c

on

sum

ptio

n d

uly

de

du

ctin

g

the

Dis

trib

utio

n lo

ss (

11k

V lin

e, D

TCs

&LT

lin

e)

& a

ny

oth

er

loa

ds

if a

ny

No

. o

f IP

se

ts

(to

tal-

dri

ed

up

) c

on

ne

cte

d

to t

he

ag

ric

ultu

ral

fee

de

rs in

th

e

sub

div

isio

n

Ave

rag

e

co

nsu

mp

tio

n o

f

IP s

ets

/ m

on

th

(sp

ec

ific

co

ns

in u

nits

/IP/m

on

th)

Tota

l n

o o

f IP

sets

(to

tal-

dri

ed

up

) in

the

su

bd

ivis

ion

(as

pe

r D

CB

)

Tota

l sa

les

of IP

sets

in

MU

Begin

ning

of the

Month

Servic

ed

during

Month

Mid-

Month

Begin

ning

of the

Month

Servic

ed

during

Month

Mid-

Month

1 2 3 4 5 6=(4-5) 7 a 7 b 7c

=

(7a+7b)

/2

8=6/7c 9 a 9 b 9c

=

(9a+9

b)/2

10=

8*9c

April to

March

Subdivisi

on-1

Subdivisi

on-2

Subdivisi

on….

Note:

(1) If the agricultural feeders are not yet segregated under NJY in any sub-division, then the

specific consumption of the division / circle / zone / company (where NJY is taken up)

shall be considered to compute the IP consumption of such sub-division.

(2) No. of dried up IP-set installations shall be deducted from the accounts, while arriving at

the month-wise and subdivision-wise specific consumption and total sales.

Based on the above discussions, the category-wise approved

number of installations and sales for the year FY 18 vis-à-vis the

estimates made by CESC is indicated below:

TABLE-5.6

Approved Sales for FY18

FY18 FY-18

Category CESC’s estimate Approved

Installations Sales Installations Sales

No. MU No. MU

LT-2a 1847441 1070.63 1842749 1030.81

LT-2b 3063 9.9 3088 9.73

LT-3 238968 310.82 239319 297

LT-4 (b) 202 0.8 202 0.8

LT-4 (c) 7537 14.84 7537 14.84

LT-5 40945 147.23 40946 143.77

LT-6-WS 25860 216.56 25860 216.56

LT-6-PL 21188 111.53 21592 111.53

LT-7 34645 15.82 34645 15.82

HT-1 152 466.79 140 463.65

HT-2 (a) 934 776.96 917 776.95

HT-2 (b) 604 132.01 590 126.28

HT2C 283 65.27 283 65.27

HT-3(a)& (b) 100 70.85 95 84.51

HT-4 18 3.96 18 5.93

lxxxiii

HT-5 26 5.08 26 5.08

Sub-Total other

than BJ/KJ and

IP sets

2221966 3419.05 2218006 3368.54

BJ/KJ 496020 118.52 496020 106.17

IP 369402 2968.65 369402 2386.77

Sub-Total of

BJ/KJ and IP sets 865422 3087.17 865422 2492.94

Total 3087388 6506.22 3083428 5861.48

Thus, the Commission decides to approve 5861.48 MU as sales for FY18.

5.2.3 Distribution Losses for FY18:


As per the audited accounts for FY16, the CESC has reported distribution

losses of 13.60% as against an approved loss level of 14.50%. The

Commission in its Tariff Order dated 2nd March, 2015 had fixed the target

level of losses for FY18 at 13.00%. CESC in its application has proposed to

retain the loss levels of 13.00% for FY18.

Commission’s Analysis and Decisions:

The performance of CESC in achieving the loss targets set by the

Commission in the past six years is as follows:

TABLE – 5.7

Approved & Actual Distribution Losses-FY11 to FY16

Figures in % Losses

Particulars FY11 FY12 FY13 FY14 FY15 FY16

Approved

Distribution losses

15.50 15.24 15.00 15.50 15.00 14.50

Actual

distribution losses

16.42 16.20 15.07 14.73 13.88 13.60*

*Actual losses for FY16 are reported as 13.60%.

As per Commission’s APR the losses for FY16 is 17.26% after validation of sales.

As discussed in the previous chapter of this Order, based on the revised

consumption of IP Sets, the distribution losses for FY16 is reassessed at

17.26% which is much higher than the actual loss of 13.6% reported by

CESC.

The Commission has allowed the capex as proposed by CESC and

substantial capital expenditure is consistently being incurred by the

lxxxiv

CESC. Investments in improvements of the existing distribution system

enable the CESC to reduce the distribution losses besides increasing the

reliability and quality of power supply to end consumers.

Hence, the Commission, in its preliminary observations stressed on the

need of further reduction in the distribution loss levels proposed by the

CESC, for FY18, duly considering the past and the present capex.

Therefore, there could have been a revised target of distribution loss for

FY18. However, the CESC has not proposed any change to its proposed

loss levels. Nevertheless, considering that, a higher target would

incentivize CESC to make efforts to identify and plug commercial losses

through vigilance and other activities, the Commission decides to retain

the distribution loss levels as approved in the Tariff Order dated 30th

March, 2016 for FY18 as follows:

TABLE – 5.8

Approved Distribution Losses for FY18

Figures in % Losses

Distribution Loss Range FY18

Upper limit 13.50

Average 13.00

Lower limit 12.50

5.2.4 Power Purchase for FY18


CESC has submitted the power purchase requirement along with its cost

including the transmission charges and SLDC charges, in D-1 Format.

CESC has sought approval of the Commission for purchase of power to

an extent of 7739.23MU at Cost of Rs 2983.57Crores for the FY18, which

includes transmission charges and SLDC charges.

The cost of power purchase has been considered by the CESC as per

the norms defined in the contracts (PPAs)/Regulations and based on the

Tariff indicated by the KPCL, for its Stations. In respect of Central

lxxxv

Generating Stations, DVC Stations and UPCL Stations, the cost is

considered as per the tariff determined by CERC.

Table-5.9

Power Purchase Cost as filed by CESC for FY18

Source of Power

Power Purchase Cost as filed by CESC

Energy in MU Cost in Rs. Crs Cost Per Unit

in Rupees

KPCL Hydel Energy 1645.85 126.47 0.76

KPCL Thermal Energy 1850.79 806.07 4.35

CGS Energy 2245.57 798.32 3.55

IPP 824.86 349.76 4.24

NCE 1021.25 348.80 3.41

Other State Hydel 3.41 5.93 17.38

Short Term/Medium

term

147.50 66.37 4.50

KPTCL Transmission

charges

334.94

PGCIL Charges 146.53

POSOCO Charges 0.38

Total 7739.23 2983.57 3.85


The energy requirement of the ESCOMs, including CESC is being met by

Karnataka Power Corporation Limited (KPCL) Generating Stations,

Central Generating Stations(CGS), Major Independent Power

Producers(IPPs) and Minor Independent Power Producers (RE sources)

through long term Power Purchase Agreements.

The Commission has considered the availability of energy as furnished by

KPCL for its generation and by SRPC/CEA in respect of Central

Generating Stations (CGS). The availability of CGS stations is based on

the share of Karnataka, as notified by MoP from time to time. However,

the availability of energy from CGS thermal Generating Stations has

been considered duly limiting the quantum of energy as per the

requirement of ESCOMs, to meet the sales target on the basis of merit

Order dispatch.

The energy availability for FY18 from the upcoming thermal projects of

750 MW unit No.3 of BTPS, 2x800 MW units of YTPS and 1x800 MW of Kudgi

plant of NTPC, has not been considered by the CESC, since these units

are under trial Operation and are yet to stabilize.

The Commission has decided to consider the energy availability from

these units in line with the LGBR furnished by the NTPC for the 1X800 MW

lxxxvi

unit of Kudgi Power Plant for the FY18. However, the energy has been

considered from these units by limiting the quantum of energy as per the

requirement of ESCOMs, to meet the sales target on the basis of merit

order despatch. It is expected that any surplus energy available from

tied up sources of energy would be traded by the ESCOMs through PCKL

on commercial principles. Similarly, any requirement over and above

the quantum approved in this Tariff Order shall be procured from the tied

up sources only.

While approving the cost of power purchase, the Commission has

determined the quantum of power from various sources in accordance

with the principles of merit order schedule and dispatch based on the

ranking of all approved sources of supply, according to the merit order

of the variable cost.

After a detailed Analysis of the rates claimed by the CESC, the

Commission has arrived at the power purchase cost to be allowed in the

ARR for the FY18.

The fixed charges and the variable charges for the Central Generating

Stations, UPCL Stations and the DVC Stations are reckoned based on the

Tariff determined by the CERC and the CERC norms. The transmission

charges payable to PGCIL are arrived at with 5% annual escalation on

the base figure for FY16.

The fixed charges and the variable charges for the State owned Thermal

and Hydel Power Stations are based on the tariff approved by the

Commission and the norms in the PPAs wherever the tariff is regulated as

per the PPAs. In respect of upcoming new stations only variable charge

has been considered.

The variable costs of State thermal stations and UPCL are considered

based on the recent power purchase bills passed by the BESCOM duly

keeping in view the substantial increase in the fuel costs. This is subject to

adjustment in the FAC exercise/Annual Performance Review of FY18.

The ESCOM-wise share of the quantum of power from different sources

of generation is as per the allocation given by the Government of

Karnataka.

The Source-wise approved power purchase quantum for the State (of all

ESCOMs) and its cost is as under:

lxxxvii

TABLE-5.10

Approved Power Purchase Quantum & Cost- For the State

Source of Power

Power Purchase

Energy

(MU)

Amount in

Rs. Crores

Cost/Unit

in Rs.

KPCL Thermal Energy 16071.68 6963.89 4.33

CGS Energy 20542.91 7283.67 3.55

IPP 6712.00 3288.88 4.90

KPCL Hydel Energy 11668.46 926.33 0.79

OTHER HYDRO 119.37 49.54 4.15

NCE 7165.41 2980.86 4.16

NTPC Bundled power 582.21 258.46 4.44

Power purchase from Co gen 1300.00 451.10 3.47

Short term Power Purchase 1120.00 467.04 4.17

Short term Purchase from MSEDCL 294.00 106.43 3.62

TRANSMISSION CHARGES

PGCIL CHARGES

1066.00

KPTCL CHARGES

2753.70

SLDC

24.77

POSOCO CHARGES

3.48

TOTAL INCLUDING TRANSMISSION & SLDC

CHARGES 65576.04 26624.15 4.06

The Source-wise approved Power Purchase quantum and cost of CESC is

as under:

TABLE-5.11

Approved Power Purchase Cost of CESC for FY18

Source of Power

Power Purchase Cost as

filed by CESC

Power Purchase Cost as

approved by the

Commission

Energy

in MU

Cost in

Rs Cr

Per

Unit

Cost in

RS

Energy in

MU

Cost in

Rs Cr

Per

Unit

Cost

in RS

KPCL Hydel Energy 1645.85 126.47 0.76 2434.98 153.76 0.63

KPCL Thermal Energy 1850.79 806.07 4.35 1031.07 445.66 4.32

CGS Energy 2245.57 798.32 3.55 2184.12 774.41 3.55

UPCL 824.86 349.76 4.24 164.70 80.70 4.90

Renewable Energy 1021.25 348.80 3.41 828.55 361.79 4.36

Other State Hydel 3.41 5.93 17.38 12.69 5.27 4.15

Short Term/Medium

term

147.50 66.37 4.50 316.19 120.00

PGCIL Charges 146.53 109.79

KPTCL Charges 334.94 301.47

SLDC & POSOCO Charges 0.38 3.52

Total 7739.23 2983.57 3.85 6972.30 2356.37 3.379

lxxxviii

The details of station-wise / source-wise power purchased quantum &

cost for the State and CESC are shown in Annexure-I & Annexure-II

respectively.

5.2.5 RPO target for FY18:

1. The Commission had directed CESC to submit the estimates for

complying with solar and non-solar RPO for 2017-18, including cost

implication for purchasing RECs, if any.

CESC in its replies has not furnished the estimates explicitly. However

as per the D1 format furnished by CESC, the estimate would be as

indicated below:

TABLE-5.12

Estimated Solar RPO for FY18 Energy in MU

Estimated Energy Purchase 7739.23

Estimated Non-Solar energy purchase 457.31

Estimated Non-Solar compliance as percentage of energy

purchase

5.91

Estimated Solar energy purchase 563.94*

Estimated Solar compliance as percentage of energy purchase 7.29

*Includes NTPC bundled power of 67.39 MU. As NTPC bundled power for FY16 is retained for FY18 also,

based on the breakup furnished by CESC for FY16, out of 67.39 MU, solar energy at 12.56 MU is considered.

2. Further, the Commission had directed CESC to furnish certain details,

with respect to the renewable energy purchase estimates made for

the FY18.

CESC in its replies has furnished the following details

TABLE-5.13

Anticipated Capacity Addition from RE Sources

Source

Capacity

under PPA

in MW as on

30.11.2016

Anticipated MW

capacity

addition under

PPA during the

remaining

period of FY17

Anticipated

MW capacity

addition under

PPA during

FY18

Wind 121.25 00 00

Mini-hydel 117.70 5.00 0

Co-generation 28.00 93.14 16.50

Biomass 7.80 0 00

Waste to Energy 00 0 00

Solar 26.00 79.00 255.00 CESC has also indicated that it would purchase 73.29MU from IEX.

lxxxix

3. The Commission had directed CESC to furnish certain data on solar

power projects. CESC has furnished the details as under:

TABLE 5.14

Anticipated Solar Capacity and Energy during FY17 & FY18

Type of Solar Plant

Capacity

in

MWp

Estimated Energy

contribution and

cost for FY17

Estimated Energy

contribution and

cost for FY18

Qty

(MU)

Cost

(Rs.Crores)

Qty

(MU)

Cost

Rs.Crores)

Solar Rooftop plants of < 500KW 0.5 1.495 0.227 0 0

Solar Rooftop plants of >500KW 1.827 0 0 0 0

1-3 MW Projects allotted to Farmers

by KREDL.

21 8.738 7.32 0 0

20 MW Projects Taluk wise issued by

KREDL.

145 0 0 211.70 106.80

Other MW scale projects 58 25.4 17.46 96.30 43.30

Total 226.33 35.63 25.01 308 150.10

*Projects expected in FY18

Commission’s observations on CESC’s RPO Submissions:

Regarding Non-Solar RPO, the Commission notes that:

a. As per D-1 Format, the non-solar renewable energy is

estimated as 457.31 MU.

b. Even though, CESC has not considered any energy under

non-solar projects for FY18 in D-1 format, in the replies

furnished to the preliminary observations, it has considered

new Mini-Hydel Projects of 5 MW and about 110 MW of

cogeneration capacity addition. CESC has not considered

the contribution from the above projects while estimating

renewable energy for FY18.

c. With the estimated energy of 7739.23 MU for FY18 and

considering excess solar energy of 412.37 MU, CESC as per its

filing would meet Non-solar RPO of 11.24% against target of

12% for FY18.

As far as solar RPO is concerned, the Commission notes that:

a. As per D-1 Format, the solar renewable energy is estimated as

563.94 MU. However, considering only 12.56 MU of solar

xc

energy, out of NTPC bundled power of 67.90 MU, CESC would

be able to procure only 509.11 MU of solar energy.

b. With the estimated energy of 7739.23 MU and considering

509.11 MU of solar energy, CESC would meet solar RPO of

6.58% against target of 1.25% for FY18.

c. In the replies to the preliminary observations, CESC has

estimated solar energy as 150.10 MU, which is not in tune with

the data furnished in D-1 format.

Commission’s Analysis and Decision:

The Commission has approved power purchase quantum of

6972.30 MU for FY18. The Non-solar RPO target at 12% would be

836.68 MU. The Commission has approved purchase of 601.00 MU

from non-solar RE sources. Thus, CESC would be able to procure

601.00 MU as against an estimated RPO of 836.68 MU, resulting in

shortfall of 235.68 MU. Even after considering the anticipated

surplus of solar energy of 229.26 MU, CESC would fall short in

meeting the non-solar RPO by 6.42 MU. Therefore, there may be a

need for purchasing RECs. Thus, in case there is a shortfall based on

the actuals, CESC may purchase RECs at the market rates, which

would be considered by the Commission in the APR of FY18.

The Commission has approved power purchase quantum of

6972.30 MU for FY18. The Solar RPO target at 1.25 % would be 87.15

MU. The Commission has approved purchase of 316.41 MU of Solar

energy. Thus, CESC would exceed the solar RPO by 229.26 MU,

which shall be utilized to meet the shortfall in non-solar RPO. In

case, there is any need to buy Solar RECs to fully meet the solar

RPO, the cost thereon would be factored in the APR of FY18.

5.2.6 O & M Expenses for FY18:

CESC’s Proposal:

The CESC, in its application, has considered the actual O&M expenses of

Rs.418.48 as the base year O&M expenses and factored the weighted

inflation index of 7.71% and consumer growth index of 3.98% for FY17 on

three years CAGR and 7.41% for FY18. Also an amount of Rs.282.63

Crores is claimed as CESC portion of liability towards pension and

xci

gratuity as per the instructions of the Energy Department, Government of

Karnataka vide letter No. EN 26 PSR 2016/ P3 dated 16th September,

2016. CESC has also included an amount of Rs. 63.87 Crores towards

increase in employee cost on account of the proposed revision of pay

scales during FY18.

Based on the above, the CESC has sought the O & M expenses of Rs.

850.63 Crores for FY18 as detailed below:-

TABLE – 5.15

O & M Expenses for FY18- CESC’s Submission


Particulars FY16 FY17 FY18

No. of Installations 2962650 3087388

CGI based on 3 Year CAGR 3.98% 4.11%

Weighted Inflation index 7.71% 7.71%

Base Year O&M expenses (as per

actuals of FY16 ) 418.48

Total O&M Expenses 459.03 504.12

Pay scale impact during FY18 63.87

P&G Contribution liability 282.63

Total O&M Expenses for FY18 850.63

Commission’s analysis & decision:

The Commission in its MYT Order dated 30th March, 2016 while deciding

the ARR for each year of the control period FY17-19, had approved

O&M expenses of Rs. 484.09 Crores for FY18 based on the base year

O&M expenses of FY16 determined on the basis of the actual O&M

expenses inclusive of contribution to P&G Trust of FY15, three years

compounded annual growth rate (CAGR) of consumers of 3.92% and

weighted inflation index of 7.24%. The approved O&M expenses for FY18

were as follows:

Table-5.16

Approved O&M Expenses for FY18 as per Tariff Order dated 30th March,

2016

Particulars

FY17 FY18





actuals of FY15 )-Rs.Crs 406.02

Total O&M Expenses-Rs.Crs 443.46 484.09

xcii

As per the norms specified under the MYT Regulations, the O & M

expenses are controllable expenses and the distribution licensee is

required to incur these expenses within the approved limits.

The Commission notes that, the CESC has claimed additional O&M

expenses of Rs.63.87 Crores and Rs.282.63 Crores for FY18 owing to

revision of pay scales and liability of P&G contribution respectively.

The Commission is of the view that additional employee cost due to

revision of pay scale during FY18 could be factored and considered only

after being incurred by the distribution licensee. The claims of liability of

P&G contribution of Rs.282.63 Crores is discussed separately in the

following paragraphs.

In view of the above discussion, the Commission has computed the O &

M expenses for FY18 duly considering the actual O & M expenses of FY16

as per the audited accounts (being the latest data available as per the

audited accounts) to arrive at the O & M expenses for the base year i.e.

FY16. The actual O& M expenses for FY16 are Rs.418.48 Crores inclusive of

contribution to P&G Trust. Considering the Wholesale Price Index (WPI) as

per the data available from the Ministry of Commerce & Industry,

Government of India and Consumer Price Index (CPI) as per the data

available from the Labour Bureau, Government of India and adopting

the methodology followed by CERC with CPI and WPI in a ratio of 80:20,

the allowable annual escalation rate for FY18 is 7.71%.

For the purpose of determining the normative O & M expenses for FY18,

the Commission has considered the following:

e) The actual O & M expenses incurred as per the audited accounts

inclusive of contribution to the Pension and Gratuity Trust to

determine the O & M expenses for the base year FY16.

f) The three year compounded annual growth rate (CAGR) of the

number of installations of 4.07% considering the actual number of

installations as per the audited accounts up to FY16 and as

projected by the Commission for FY17 and FY18.

g) The weighted inflation index (WII) at 7.71%.

xciii

h) Efficiency factor at 2% as considered in the MYT Order.

The above said parameters are computed duly considering the same

methodology as being followed in the earlier Tariff Orders of the

Commission and the relevant Orders issued by the Commission on

Review Petitions.

Accordingly, the normative O & M expenses for FY18 are as follows:

TABLE – 5.17

Approved O & M expenses for FY18

Particulars FY16 FY17 FY18





actuals of FY16 )-Rs.Crs 418.48

Total allowable O&M Expenses-Rs.Crs 503.63

Since, the base year data includes the O & M expenses inclusive of

contribution to the P & G Trust, the Commission has not considered

allowing contribution to the P & G Trust separately.

Thus, the Commission decides to approve O&M expenses of Rs.503.63

Crores for FY18.

5.2.7 Depreciation:

CESC’s Proposal:

The CESC, in its application has claimed the depreciation of Rs.191.01

Crores for FY18 as detailed below:

TABLE – 5.18

Depreciation-FY18- CESC’s Submission

Amount in Rs.Crores

Particulars FY18

Land and Rights 0.02

Buildings 3.57

Civil 0.16

Other Civil 0.05

Plant & M/c 23.79

Line, Cable Network 161.57

Vehicles 0.87

xciv

Furniture 0.56

Office Equipment 0.42

Total 191.01


The Commission notes that, the depreciation amount claimed by CESC is gross

depreciation on gross fixed assets. The depreciation of Rs.53.26 Crores on the

assets created out of consumer contribution/ grants has been factored under

other income for FY18.

The Commission, in accordance with the provisions of the MYT

Regulations and amendments issued thereon, has determined the

depreciation for FY18 considering the following:

a) The actual rate of depreciation of category-wise assets has been

determined considering the depreciation and gross block of

opening and closing balance of fixed assets, as per the audited

accounts for FY16.

b) The actual rate of depreciation, so arrived at, is considered to

allow the depreciation on the gross block of opening and closing

balance of fixed assets fixed assets projected by CESC, in its

application for FY18 duly factoring the retirement of assets also.

c) The depreciation on account of assets created out of consumers

contribution / grants are deducted based on the opening and

closing balance of such assets duly considering the addition of

assets as proposed by the CESC, at the weighted average rate of

depreciation as per actuals in FY16.

Accordingly, the depreciation for FY18 is arrived at as follows:

TABLE – 5.19

Approved Depreciation for FY18


Particulars FY18

Buildings 3.19

Civil 0.13

Other Civil 0.03

Plant & M/c 43.65

Line, Cable Network 122.07

Vehicles 0.12

xcv

Furniture 0.26

Office Equipment’s 0.65

Total 170.09

Less: Deprecation on Assets created

out of Consumer Contribution / Grants 53.26

Net Depreciation 116.83

Thus, the Commission decides to approve an amount of Rs.116.83 Crores

towards depreciation for FY18.

5.2.8 Interest on Capital Loans:

CESC’s proposal:

CESC in its application has stated that, based on the proposed revised

capex of Rs.889.00 Crores and the interest on capital loan requirement is

projected at Rs.186.57 Crores for FY18.

The CESC has requested to approve interest on capital loan for FY18 as

follows:

TABLE – 5.20

Interest on Capital Loan– CESC’s Submission

Amount in Rs. Crore


The Commission in its Order dated 30th March, 2016 had approved

capex of Rs.552.00 Crores for FY18. CESC in its present application has

proposed the revised capex of Rs.889.00 Crores for FY18. As discussed in

the preceding section of this Order, the Commission has reckoned

capex of Rs.552.00 Crores for FY18.

As per the audited accounts and as per the APR of FY16, the CESC had

incurred interest on capital loan at a weighted average rate of interest

Particulars FY18

Opening Balance of Capital

Loans 1613.81

Add : New Loans 936.00

Less : Repayments 520.22

Total Loan at the end of the

year 2029.59

Average Loan for the year 1821.70

Total Interest on Capital Loans 186.57

xcvi

of 11.40% p.a. This rate of interest is considered for the existing loan

balances for which interest has to be factored during FY17. Further, for

the year FY18, the weighted average rate of interest of the preceding

year has been considered on the existing loan balances. The

Commission has considered new loan, in compliance of the debt equity

ratio of 70:30 as in MYT Regulations.

The present interest rates by commercial banks and financial institutions

are charged mainly on the basis of Marginal Cost of fund based Lending

Rates (MCLR). These rates are comparatively lower than the base rates

considered earlier. Further, in view of the changing economic situation, it

is observed that there is a considerable reduction in the MCLR and also

downward trend is evident in the interest rates. Hence, in such a

situation, the Commission is of the view that, the ESCOMs can avail

Capital loans at competitive interest rates. The Commission notes that,

the present SBI MCLR rate for capital loans with tenure of 3 years is 8.15%.

Considering the present MCLR, the Commission decides to allow an

interest rate of 11.00% for FY18 for new Capital loans. It shall be noted

that, the rate of interest now considered by the Commission on the new

capital loans is subject to review during APR.

Accordingly, the approved interest on loans for FY18 is as follows:

TABLE – 5.21

Approved Interest on Loans for FY18


Particulars FY18

Opening Balance long term loans 1042.39

Add : New loans 386.40

Less : Repayments 155.51

Total loan at the end of the year 1273.28

Average Loan 1157.84

Weighted average rate of interest in % 11.35%

Interest on long term loans 131.41

Thus, the Commission decides to approve interest of Rs.131.41 Crores on

Capital loans for FY18.

xcvii

5.2.9 Interest on Working Capital:

CESC’s proposal:

CESC has claimed interest on working capital of Rs.68.95 Crores based

on the norms prescribed in the MYT Regulations.


The Commission in its MYT Order dated 30th March, 2016 while deciding

the ARR for each year of the control period FY17-19, had approved

Interest on working capital of Rs. 73.64 Crores for FY18.

The Commission has been computing the interest on working capital as

per the norms specified under the MYT Regulations and amendments

thereon, which consists of one month’s O & M expenses, 1% of opening

GFA and two months’ revenue. As discussed earlier, the interest regime is

based on MCLR. The present MCLR for loans with tenure of one year is

8.00%. As such, the Commission decides to considered interest on

working capital at 11% p.a. for FY18.

Accordingly, the approved interest on working capital for FY18 is as

follows:

TABLE – 5.22

Approved Interest on Working Capital for FY18

Amount in Rs. Crs

Particulars FY 18

One-twelfth of the amount of O&M Expenses 41.97

Opening Gross Fixed Assets (GFA) 3073.80

Stores, materials and supplies 1% of Opening

balance of GFA 30.74

One-sixth of the Revenue 556.67

Total Working Capital 629.38

Rate of Interest (% p.a.) 11.00%

Interest on Working Capital 69.23

Thus, the Commission decides to approve the interest on working capital


xcviii

5.2.10 Interest on Consumer Security Deposit:

CESC’s proposal:

CESC in its application has claimed interest on consumer security deposit

of Rs.41.70 Crores for FY18 duly considering the addition of deposits for

FY18.


In accordance with the KERC (Interest on Security Deposit) Regulations

2005, the interest rate on consumer security deposit to be allowed is the

bank rate prevailing on the 1st of April of the financial year for which

interest is due. As per Reserve Bank of India Notification dated 4th

October, 2016, the applicable bank rate is 6.75%. The Commission has

considered the same, for computation of interest on consumer security

deposits for FY18.

The Commission has considered the consumer security deposits as per

audited accounts of FY16 for onward projection for FY18. Also, the

Commission is considering the average of the opening and closing

balances of consumer deposits of the relevant year. Accordingly, the

interest on consumer deposits for FY18 is as follows:

TABLE – 5.23

Approved Interest on Consumer Security Deposits for FY18


Particulars FY18

Opening balance of consumer security

deposits 504.48

Addition of deposits during FY18 40.00

Closing balance of consumer security

deposits 544.48

Average Consumer Security Deposits for

FY18 524.48

Rate of Interest at bank rate to be allowed

as per Regulations 6.75%

Approved Interest on average Consumer

Security Deposit 35.40

xcix

Thus, the Commission decides to approve interest on consumer security

deposits of Rs.35.40 for FY18.

5.2.11 Other Interest and Finance Charges:

CESC has claimed an amount of Rs.0.52 Crores towards other interest

and finance charges for FY18. Considering, the expenditure on this item

in the earlier years, the Commission decides to allow an amount of

Rs.0.52 Crores towards interest and finance charges for FY18.

5.2.12 Interest and other expenses Capitalized:

CESC has claimed an amount of Rs.24.00 Crores towards capitalization

of interest and other expenses during FY18. Considering, the capital

expenditure incurred and capitalized in the previous years, the

Commission decides to allow capitalization of interest and other

expenses of Rs.24.00 Crores as proposed by CESC for FY18.

The abstract of approved interest and finance charges for FY18 are as

follows:

TABLE – 5.24

Approved Interest and finance charges for FY18


Particulars FY18

Interest on Loan Capital 131.41

Interest on Working Capital 69.23

Interest on Consumers Security Deposit 35.40

Other Interest & Finance Charges 0.52

Less : Interest & other expenses capitalized (24.00)

Total Interest & Finance Charges 212.57

5.2.13 Other Debits and Prior period charges:

CESC, in its application has claimed an amount of Rs.6.79 Crores towards

other debits and Rs.2.00 Crores towards net prior period debit / credit for

FY18.


The Commission notes that, CESC has claimed expenditure of Rs.6.79

Crores towards Other Debits and Rs.2.00 Crores towards Prior period

c

debit/credit for FY18. It is to be noted that, these items of

expenditures/income cannot be estimated upfront and included in the

proposed ARR for FY18. However, as per the provisions of the MYT

Regulations, the Commission would consider the same based on the

actuals as per the audited accounts while approving APR for FY18.

5.2.14 Return on Equity:

CESC’s proposal:

CESC in its application has not claimed RoE for FY18 as there is negative

equity on account of accumulated losses.


The Commission has considered the actual amount of share capital,

share deposits and reserves & surplus as per the audited accounts for

FY16 for arriving at the allowable equity base for the control period FY18.

The Commission, in accordance with the provisions of the MYT

Regulations, and amendments thereon, has considered 15.5% of Return

on Equity duly grossed up with the applicable Minimum Alternate Tax

(MAT) of 21.342%. This works out to 19.706% per annum. Further, as per

the decision of the Commission in the Review Petition No.6/2013 and

Review Petition 5/2014, and the provisions of amended Regulations the

Return on Equity is to be computed based on the opening balances of

share capital, share deposits and accumulated balance of surplus /

deficit under reserves and surplus account. Further, an amount of

Rs.23.00 Crores of recapitalized consumer security deposit as net-worth is

considered as per the orders of the Hon’ble Appellate Tribunal for

Electricity in Appeal No.46/2014.

Further, in compliance with the Orders of the Hon’ble ATE in Appeal

No.46/2014, wherein it is directed to indicate the opening and closing

balances of gross fixed assets along with break-up of equity and loan

component in the Tariff Order henceforth, the details of GFA, debt and

equity (net-worth) for FY18 are indicated as follows:

TABLE – 5.25

Status of Debt Equity Ratio for FY18

Amount in Rs.

Crores

ci

From the above table it is seen that the amounts of debt and equity are

within the normative debt:equity amounts on the closing balances of

GFA for FY18. Further, the Commission would review the same during the

Annual Performance Review, for FY18, based on the actual data, as per

the audited accounts.

Accordingly, the Return on Equity that could be approved for FY18,

works out as follows:

TABLE – 5.26

Approved Return on Equity for FY18


Particulars FY18

Opening Balance of Paid Up Share Capital 508.57

Share Deposit 64.00

Reserves and Surplus (Accumulated deficit) (634.27)

Less Recapitalised Security Deposit (23.00)

Total Equity (84.70)

Thus, as there is negative equity due to accumulated deficit, the

Commission decides not to allow any Return on Equity for FY18.

5.2.15 Other Income:

CESC’s proposal:

CESC has claimed an amount of Rs.115.86 Crores as other income for

the FY18, which also include depreciation on assets created out of

consumer contribution / grants.


The other income received by the CESC mainly includes income from

rebate on collection of electricity duty, miscellaneous recoveries, interest

on bank deposits, rent from staff quarters and sale of scrap, profit on sale

of stores besides incentives for timely payment of power purchase bills.

Year Particulars GFA Debt

Equity

(Net-

worth)

Normative

Debt @

70% of

GFA

Normative

Equity @

30% of

GFA

%age of

actual

debt on

GFA

%age of

actual

equity on

GFA

FY18 Opening

Balance

3073.80 1042.39 (84.70)

Closing

Balance

3602.02 1273.28 (84.70) 2521.41 1080.61 35.35% -

cii

The actual ‘other income’ as per the audited accounts for FY16 is

Rs.79.52 Crores.

Considering the other income earned by the CESC in the past two years,

the Commission decides to approve other income of Rs.59.48 Crores for

FY18.

5.2.16 Fund towards Consumer Relations / Consumer Education:

The Commission has been allowing an amount of Rs.0.50 Crore per year

towards consumer relations / consumer education. This amount is

earmarked to conduct consumer awareness and grievance redressal

meetings periodically and institutionalize a mechanism for addressing

common problems of the consumers. The Commission has already

issued guidelines for consumer education and grievance redressal

activities.

The Commission decides to continue providing an amount of Rs.0.50

Crore for each year of the control period FY18, towards meeting the

expenditure on consumer relations / consumer education.

The Commission directs CESC to furnish a detailed plan of action for

utilization of this amount and also maintain a separate account of these

funds and furnish the same at the time of APR.

5.2.17 Contribution towards Pension and Gratuity Trust

CESC in its application has claimed an amount of Rs.282.63 Crores as

being the arrears of contribution to P&G Trust not released by the

Government of Karnataka.

The Commission in its preliminary observations had requested CESC to

furnish reasons /justifications for inclusion of this amount in the proposed

ARR for FY18 to be recovered from the consumers as part of the retail

supply tariff during FY18 in contravention to the Commission’s decision in

Tariff Order 2016.

ciii

In its replies to the Commission’s preliminary observations, CESC has

stated that it has included an amount of Rs. 282.63 Crores towards CESC

portion of arrears of contribution to P&G Trust not released by the

Government of Karnataka, in accordance to the instructions issued by

the Energy Department, GoK vide Letter No. EN 26 PSR 2016/P3 dated

16.09.2016.

It is to be noted that, the Commission in its Order dated 30th March, 2016

has already dealt with this issue and has observed that,

“ a) As per Rule 4(13) of the Karnataka Electricity

Reforms (Transfer of Undertakings of KPTCL and its

Personnel to Electricity Distribution and Retail

Supply Companies) Rules, 2002, notified by the

Government on 31.05.2002, the State Government

is liable for funding the pension and gratuity

liability of existing pensioners as on the effective

date of Second Transfer Scheme.

b) The Government, as per its order dated

19.12.2002, has adopted “pay as you go”

approach to meet the pension and gratuity

requirements of existing pensioners on the

effective date of second transfer Scheme. With

this arrangement, the GoK is liable to meet the

pension and gratuity requirement of existing

pensioners”.

In the above context, as per the provisions of the prevailing Rules and

Government Orders issued thereon, the Commission had earlier decided

that this liability cannot be passed on to the consumers, through tariff.

In spite of this Order of the Commission, CESC has gone ahead to claim

this liability (in the proposed ARR for FY18) that should have been borne

by the Government of Karnataka.

The Commission reiterates its earlier decision that, as per Rule 4(13) of the

Karnataka Electricity Reforms (Transfer of Undertakings of KPTCL and its

Personnel to Electricity Distribution and Retail Supply Companies) Rules,

2002, notified by the Government on 31.05.2002 and Government Order

No. DE 15 PSR 2002 Dated 19.12.2002, the amount in question is liable to

be borne by the Government of Karnataka only and cannot be passed

on to the consumers, through tariff.

civ

In view of the above, the Commission is unable to accept the claims of

CESC to allow an amount of Rs.282.63 Crores being the GoK liability

towards arrears of contribution to P&G Trust in the ARR for FY18.

5.3. Abstract of revised ARR for FY18:

In the light of the above analysis and decisions of the Commission, the

following is the approved revised ARR for the control period FY18:

TABLE – 5.27

Approved Revised ARR for FY18 Amount in Rs.Crores

Sl.

No Particulars

FY18

As Appd

30.03.3016

As Filed

30.11.2016

As Revised

Approved

Revenue at existing tariff in Rs Crs

1 Revenue from tariff and Misc. Charges 2205.86 2154.32

2 Tariff Subsidy in BJ/KJ 21.80 20.98

3 Tariff Subsidy in IP 1457.84 1164.74

3 Total Existing Revenue 3685.50 3340.04

Expenditure in Rs Crs

5 Power Purchase Cost 2651.81 2648.63 2051.76

6 Transmission charges of KPTCL 332.24 332.24 301.47

7 SLDC Charges 2.70 2.70 3.14

8


transmission 2986.75 2983.57 2356.37



11 Admin & General Expenses 62.14

12 Total O&M Expenses 484.09 504.13 503.63

13 Depreciation 104.56 191.01 116.83


14 Interest on Capital Loans 124.89 186.57 131.41

15 Interest on Working capital loans 73.64 68.95 69.23

16 Interest on consumer security deposits 41.26 41.70 35.40

17 Other Interest & Finance charges 0.52 0.52

18 Less interest & other expenses capitalised 24.00 24.00 24.00

19 Total Interest & Finance charges 215.79 273.74 212.57

20 Other Debits* 0.00 6.79 0.00

21 Net Prior Period Debit/Credit* 0.00 2.00 0.00

22 Return on Equity 0.00 0.00 0.00

23

Funds towards Consumer Relations/Consumer

Education 0.50 0.00 0.50

24

Provision for contribution to P&G Trust (GoK

Liability) and Revision of pay scale. 346.50 0.00

25 Other Income 42.81 115.86 59.48

26

Disallowance of Interest and Depreciation on

imprudent investments in FY16 1.55

ARR 3748.89 4191.88 3128.86

27 Deficit for FY16 carried forward -456.54 -492.73

28 Net ARR 3748.89 4648.42 3621.58

cv

5.4. Segregation of ARR into ARR for Distribution Business and ARR for Retail

Supply Business:

CESC in its application has proposed the segregation of ARR into ARR for

Distribution Business and ARR for Retail Supply Business as proposed in

MYT application made earlier as detailed below:

TABLE – 5.28

Segregation of ARR – CESC’s Submission-FY18

Particulars

Distribution

Business

Retail Supply

Business

Power Purchase 0% 100%

Repairs & Maintenance 90% 10%

Employee costs 48% 52%

A&G expenses 55% 45%

Depreciation 78% 22%

Interest and Finance charges 100% 0%

Other interest charges 0% 100%

Other debits 48% 52%

Extra-ordinary items 0% 0%

Prior period expenses 91% 9%

RoE 75% 25%

Provision for taxes 50% 50%


The Commission notes that CESC has retained the same ratio as being

adopted for the MYT period FY17-19 for segregation of consolidated ARR

into ARR for Distribution Business and ARR for Retail Supply. As decided by

the Commission in its Tariff Order dated 30th March, 2016, the following

ratio of segregation of ARR is adopted for FY18:

TABLE – 5.29

Approved Basis for Segregation of ARR – FY18

Particulars Distribution

Business

Retail Supply

Business

O&M 51% 49%

Depreciation 84% 16%

Interest on Loans 100% 0%

Interest on Consumers’ Deposits 0% 100%

Return on Equity 75% 25%

Gross Fixed Assets 84% 16%

Non-Tariff Income 2% 98%

cvi

Accordingly, the following is the approved ARR for Distribution Business

and Retail supply business:

TABLE – 5.30

APPROVED REVISED ARR FOR DISTRIBUTION BUSINESS – FY18


Sl.

No Particulars

FY18

1 R&M Expenses

256.85

2 Employee Expenses

3 A&G Expenses


Interest & Finance Charges

5 Interest on Capital Loans 129.86

6 Interest on Working capital loans 6.42


8 Less interest & other expenses capitalised 24.00

9 Total 467.79


11 NET ARR 466.60

TABLE – 5.31

APPROVED ARR FOR RETAIL SUPPLY BUSINESS – FY18

Amount in Rs.Crores

Sl.

No Particulars

FY18

1 Power Purchase 2051.76

2 Transmission Charges 304.61

3 R&M Expenses

246.78

4 Employee Expenses

5 A&G Expenses


Interest & Finance Charges

7 Interest on Working capital loans 62.81

8 Interest on consumers’ security deposits 35.40

9 Total 2720.05


11

Fund towards Consumer Relations /

Consumer Education 0.50

12 NET ARR 2662.26

5.5. Gap in Revenue for FY18:

As discussed above, the Commission decides to approve the revised

Annual Revenue Requirement (ARR) of CESC for its operations in FY18 at

Rs.3621.58 Crores as against CESC’s application proposing the revised

ARR of Rs.4648.42 Crores by including the revenue deficit of Rs.456.54

Crores for FY16. This approved revised ARR includes an amount of

cvii

Rs.492.73 Crores which is determined as the deficit in FY16 as discussed in

Chapter-4. Based on the existing retail supply tariff, the total realization of

revenue will be Rs.3340.04 Crores which is Rs.281.54 Crores less than the

projected revenue requirement for FY18.

The net ARR and the gap in revenue for FY18 are shown in the following

table:

TABLE – 5.32

Revenue gap for FY18

Particulars FY18

Net ARR including carry forward gap of

FY16 (in Rs. Crores)

3621.58

Approved sales (in MU) 5861.48

Average cost of supply (in Rs./unit) 6.18

Revenue at existing tariff (in Rs. Crores) 3340.04

Gap in revenue (in Rs. Crores) (281.54) [

The determination of revised retail supply tariff on the basis of the above

approved ARR is detailed in the following Chapter.

cviii

CHAPTER – 6

DETERMINATION OF RETAIL SUPPLY TARIFF FOR FY18

6.0 Revision of Retail Supply Tariff for FY18-CESC’s Proposals and

Commission’s Decisions:

6.1 Tariff Application

As per the Tariff application filed by the CESC, it has projected an unmet

gap in revenue of Rs.962.92 Crores for FY18, which also includes the gap

in revenue of Rs.456.54 Crores for FY16. In order to bridge this gap in

revenue, CESC has proposed a uniform tariff increase of 148 paise per

unit, in respect of all the categories of consumers.

In the previous chapters of this order, the Annual Performance Review

(APR) for FY16 and the revision of ARR for FY18 has been discussed. The

various aspects of determination of tariff for FY18 are discussed in this

Chapter.

6.2 Statutory Provisions guiding determination of Tariff

As per Section 61 of the Electricity Act 2003, the Commission is guided

inter-alia, by the National Electricity Policy, the Tariff Policy and the

following factors, while, determining the tariff so that,

the distribution and supply of electricity are conducted on

commercial basis;

competition, efficiency, economical use of resources, good

performance, and optimum investment are encouraged;

the tariff progressively reflects the cost of supply of electricity, and also

reduces and eliminates cross subsidies within the period to be

specified by the Commission;

efficiency in performance is to be rewarded: and

a multi-year tariff framework is adopted.

cix

Section 62(5) of the Electricity Act 2003, read with Section 27(1) of the

Karnataka Electricity Reform Act 1999, empowers the Commission to

specify, from time to time, the methodologies and the procedure to be

observed by the licensees in calculating the Expected Revenue from

Charges (ERC). The Commission determines the Tariff in accordance with

the Regulations and the Orders issued by the Commission from time to

time.

6.3 Factors Considered for Tariff setting:

The Commission has considered the following relevant factors for

determination of retail supply tariff:

a) Tariff Philosophy:

As discussed in the earlier tariff orders, the Commission continues to

fix tariff below the average cost of supply in respect of consumers

whose ability to pay is considered inadequate and also fix tariff at or

above the average cost of supply for categories of consumers whose

ability to pay is considered to be higher. Thus, the system of cross

subsidy continues. However, the Commission has taken due care to

progressively bring down the cross subsidy levels as envisaged in the

Tariff Policy 2016, issued by the Government of India.

b) Average Cost of Supply:

The Commission has been determining the retail supply tariff on the

basis of the average cost of supply. The KERC (Tariff) Regulations,

2000, as amended from time to time, require the licensees to provide

details of embedded cost of electricity voltage / consumer

category-wise. The distribution network of Karnataka is such that, it is

difficult to segregate the common cost between voltage levels.

Therefore, the Commission has decided to continue the average

cost of supply approach for recovery of the ARR. With regard to the

indication of voltage- wise cross subsidy with reference to the

voltage-wise cost of supply, the same is indicated in the Annexure to

this Order.

cx

c) Differential Tariff:

The Commission has been determining differential retail supply tariff

for consumers in urban and rural areas, beginning with its Tariff Order

dated 25th November, 2009. The Commission decides to continue the

same in the present order also.

6.4 New Tariff Proposals by CESC’s:

i) Tariff determination for Auxiliary Consumption of KPTCL’s Sub-

stations:

CESC, in its tariff application dated 30th November, 2016, besides

seeking revision of retail supply tariff for all the categories of

consumers, has prayed for determination tariff for the Auxiliary

Consumption of KPTCL Stations. CESC has also filed separate

Petition before this Commission seeking tariff determination for

auxiliary consumption of KPTCL’s substations.

CESC Submission:

CESC and other ESCOMs have requested fixation of tariff for

KPTCL’s Auxiliary consumption on the following grounds:

1. The power utilized by KPTCL Substations for auxiliary

consumption purpose is supplied by ESCOMs through a

separate feeder or local feeder. The power so supplied by

ESCOMs is from the pooled purchase of power from different

sources at different rates. The cost incurred in procurement of

power by the ESCOMs, need to be paid by the KPTCL.

2. The auxiliary consumption of PGCIL stations, being the

transmission utility, is being billed under commercial tariff.

3. The auxiliary consumption of KPTCL Substations is being billed

at average power purchase cost of the ESCOMs where the

substations are geographically located, from June, 2005 to

October 2016 as per the KPTCL’s letter dated 15.12.2005.


cxi

The treatment of the electricity consumption of KPTCL’s substations

has been a matter of contention between KPTCL and ESCOMs.

While the KPTCL has been urging the Commission to treat the

consumption of its substations as transmission loss, the ESCOMs have

been requesting the Commission to fix a commercial tariff.

The BESCOM in its letter dated 29.05.2015, had requested the

Commission to approve the Commercial tariff to the auxiliary

consumptions in respect of KPTCL Sub-stations. After examining the

issue in detail, the Commission had clarified that as per the

provisions of Regulation 3.3 of the KERC (Terms and Conditions for

Determination of Transmission Tariff) Regulations, 2006, the charges

for the auxiliary consumptions of KPTCL substations used for the

purpose of air-conditioning, lighting etc. are part of the normative

operation and maintenance expenses of KPTCL and hence the

charges for the same have to be borne by KPTCL. Further, the

Commission also notes that, the KPTCL while computing the

transmission losses, is not considering the electricity consumption of

its sub-stations as part of the transmission loss. Accordingly, the

Commission vide its letter No. B/07/05/451 dated 23.06.2015, had

clarified that since there is no specific category in the present tariff

schedule for billing the auxiliary consumption of KPTCL Substations,

the ESCOMs should seek determination of tariff in respect of sale of

power to KPTCL substations under the provisions of clause 3.05 of the

Conditions of Supply of Electricity by Distribution Licensees in the

State of Karnataka. Accordingly, the ESCOMs have filed the

petitions.

From the submissions made by CESC and other ESCOM’s, it is clear

that, the power utilized by KPTCL Sub-stations for the consumption

purpose is being supplied by the ESCOMs through a separate / local

feeder. Since, KPTCL is responsible for accounting the energy

purchased by the ESCOMs upto the interface point of the ESCOMs

and the energy utilized by KPTCL Substations for auxiliary

consumption purpose has not been recognized in computation of

transmission losses, the energy supplied from the distribution network

of the ESCOMs for the consumption of the KPTCL Sub stations has to

cxii

be accounted and charged in accordance with the provisions of

the KERC (Terms and Conditions for Determination of Transmission

Tariff) Regulations, 2006.

Now, keeping in view the request of the CESC and other ESCOMs,

the issue before the Commission is whether to fix a commercial tariff

or a tariff equal to the State’s average power purchase cost, to bill

the auxiliary consumption of KTPCL Sub-stations. The Commission

notes that any tariff charged to bill the KPTCL’s substations

consumption, shall have to be ultimately recovered through

transmission tariff, which in turn, is passed on to the end consumers in

the form of retail supply tariff. In order to minimise the burden on the

retail supply consumers, the Commission decides as follows:

In accordance with the provisions of Regulation 3.3 of the KERC

(Terms and Conditions for Determination of Transmission Tariff),

Regulations, 2006 and amendment thereon and Clause 3.05 of the

Conditions of Supply of Electricity by Distribution Licensees in the

State of Karnataka, the power supplied by the ESCOMs to the

KPTCL’s Substations for auxiliary consumption purposes, the

Commission decides to fix a single part tariff rate at the State

Average Power Purchase Cost, as approved by the Commission, in

the Tariff Orders issued from time to time.

Further, for the energy consumption by KPTCL’s Sub-stations for

auxiliary purposes, during the previous periods, the ESCOMs shall bill

it at the average power purchase cost of the State, as determined

by the Commission in the Tariff Orders issued from time to time.

cxiii

ii) Petition seeking increase in Demand Charges and reduction in energy

charges to HT consumers.

CESC in its application has proposed increase in Demand Charges

(Fixed Cost) for all categories of consumers. Some of the ESCOMs have

proposed increase in demand charges and reduction in energy

charges to HT-1, HT-2(a)(b) (c) and HT4 consumers for the following

reasons:

i) The ratio of fixed and variable cost of power purchase cost

payable to the private generators is 33: 67

ii) All the ESCOMs in the state are recovering the fixed cost of their

distribution network only 9% of the ARR, the balance 24%. of the

fixed cost through energy charge (variable charge)

iii) ESCOMs, it is not able to recover the variable costs which include

the fixed cost by Rs.10/- (Rupees Ten only) Per KVA/HP/KW from

the HT consumer opting for open access.

iv) The contribution of Fixed cost is only 5.68% of the ARR and the

remaining fixed cost is camouflaged in the energy charges, which

are higher.

With the above justification, the CESC has proposed to increase the

Demand charges by Rs.10 to 25 per units and other ESCOMs upto Rs.250

per KVA of the billing demand from the existing Demand Charge of

Rs.180 -200 per KVA. Other ESCOMs have also proposed reduction in

energy charges ranging between 20 Paise to 85 paise per unit to the

various categories of HT consumers.

Consumers’ Response:

The representatives of small scale industries have opposed the proposal

for increasing the Demand Charges. They have contended that

ESCOM’s has not furnished the working details of fixed charges and its

percentage to the total fixed charges being incurred. It is submitted that

as per the provisions of the Electricity Act, 2003, the CESC should realise

the cost of supply from all the categories of consumers and should not

confine recovery of fixed cost only to a specific category of consumers.

cxiv


CESC, like other ESCOMs in its petition, has considered the recovery of

Fixed Cost (FC) of generation sources and the distribution network. It has

not considered the FC involved in transmission of power and the SLDC

charges which is one of the major components of the ARR. Further,

seeking increase in demand charges and reducing the energy charges

only to HT consumers does not appear to be a proper approach to

retain HT consumers in its fold. Any proposal to encourage sale or to

improve the ESCOM’s finances should be made by keeping the interest

of all the consumers in mind and the treatment to various class of

consumers across the ESCOM should be just and equitable. Hence, the

Commission is unable to accept the proposal of CESC and other

ESCOMs to increase the Demand Charges of its HT consumers at a

higher amount.

The Commission in its Tariff Order dated 30th March,2016 had considered

increase in demand charges to the consumers of all consumer in the

State. While doing so it had observed that:

“As per the new Tariff Policy issued by the Ministry of Power,

Government of India, dated 28th January, 2016, two-part Tariff

featuring separate fixed and variable charges shall be

introduced for all consumers. In order to ensure their financial

viability, it is imperative that the fixed expenditure incurred by the

ESCOMs are recovered in the form of fixed charges. On a study

of the existing rate of fixed charges levied on the consumers and

the amount collected thereon, it is observed that fixed charges

needs to be increased gradually to meet the above objective”.

In pursuance of the above, the Commission has again reviewed the

status of recovery of fixed charges while revising the tariff for FY18. The

fixed costs to be incurred by CESC to supply power to its consumers for

FY18, consists of the following components:

Activity Total Fixed Cost to be

incurred -Rs. Crs.

Generation 381.28

Transmission including SLDC charges 414.78

Distribution network cost 468.12

Total Fixed cost of CESC 1264.18

cxv

The approved Net ARR of CESC is Rs. 5861.48 Crores out of which,

RS.1264.18 Crores is towards fixed cost. As per the existing Revenue rates,

CESC recovers an amount of Rs. 281.82 Crores towards the fixed cost,

which accounts for recovery of 22.29% of the fixed cost, incurred by the

CESC.

Since the Commission has decided to increase the FC year on year

gradually, an increase ranging between Rs. 10 to Rs.20 has been

considered while approving the tariff to various categories of consumers.

The details of the actual increase is indicated in the tariff schedule of

each of the consumer categories.

iv) Introduction of morning peak from 6 AM to 10 AM under ToD billing:

In respect of HT consumers, the some of the ESCOMs have filed the

proposed to introduce ToD billing for morning peak between 6 AM to

10AM in addition to the prevailing ToD billing for usage of energy during

evening peak (6 p.m. to 10 p.m.) and not allow and incentive for off

peak usage (during night hours) against the existing rate of Rs.1.25 per

unit.

ESCOMs have submitted that the ToD billing is to encourage the HT

consumers to shift their load from peak hours to non-peak hours by

incentivising them and also to levy a penalty to discourage usage of

energy during peak hours. They have cited the examples of Delhi,

Mumbai and Gujarat where ToD billing is prevailing for both morning and

evening peak usage as compared to the State’s single ToD billing for

evening peak usage. The off peak incentive helps in shifting the load

curve to night hours which is helpful for optimum power generation

during night hours.

Consumers across the State have opposed this proposal and have

requested the Commission to make the ToD billing optional instead of

making it mandatory.

The Commission has examined the issue in detail. It is found that during

most part of the year, the morning peak usage is higher than the

evening peak usage. In the absence of penal charges during the

morning peak, the tendency to use the power in the morning peak is

cxvi

more as compared to the evening peak. The system of ToD billing for

morning peak is also prevalent in the States referred to above. Hence,

the Commission decides to introduce ToD billing in respect of HT

consumers for morning peak between 6 AM to 10AM in addition to the

prevailing ToD billing for usage of energy during evening peak (6 p.m. to

10 p.m.) and also to reduce the incentive for off-peak usage (during

night hours) to Rs.1/ per unit as against the existing rate of Rs.1.25 per

unit. The necessary changes in the ToD billing are indicated in the

respective Tariff schedule of the HT Consumers, in this Tariff Order.

6.5 Revenue at existing tariff and deficit for FY18:

The Commission in its preceding Chapters has decided to carry forward

the gap in revenue of Rs.281.54 Crores of FY16 to the ARR of FY18. The

gap in revenue for FY18 is proposed to be filled up by revision of Retail

Supply Tariff, as discussed in the following paragraphs of this Chapter.

Considering the approved ARR for FY18 and the revenue as per the

existing tariff, the gap in revenue for FY18 is as follows:

TABLE – 6.1

Revenue Deficit for FY18

Amount Rs. in Crores

Particulars Amount

Approved Net ARR for FY18 including gap of FY16 3621.58

Revenue at existing tariff 3340.04

Surplus / (- )Deficit (281.54)

Additional Revenue to be realised by Revision of

Tariff

281.54

Accordingly, in this Chapter, the Commission has proceeded to

determine the Revised Retail Supply Tariff for FY18. The category-wise

tariff as existing, as proposed by CESC and as approved by the

Commission are as follows:

1. LT-1 Bhagya Jyothi:

The existing tariff and the tariff proposed by CESC are given below:

Sl. Details Existing as per 2016 Proposed by CESC

cxvii

No Tariff Order

1 Energy charges

(including recovery

towards service main

charges)

567 Paise / Unit Subject

to a monthly minimum

of Rs.30 per installation

per month.

715 Paise / Unit Subject

to a monthly minimum

of Rs.30 per installation

per month.

Commission’s Views/ Decision

The Government of Karnataka has continued its policy of providing free

power to all BJ/KJ consumers with a single outlet, whose consumption is

not more than 40 units per month vide Government Order No. EN12 PSR

2017 dated 20th March, 2017 (instead of the earlier limit of 18 units per

month). Based on the present average cost of supply, the tariff payable

by these BJ/KJ consumers is revised to Rs.6.18 per unit.

Further, the ESCOMs have to claim subsidy for only those consumers who

consume 40 units or less per month per installation. If the consumption

exceeds 40 units per month or if any BJ/KJ installation is found to have

more than one outlet, it shall be billed as per the Tariff Schedule LT 2(a).

The Commission determines the tariff (CDT) in respect of BJ / KJ

installations of CESC as follows:

LT – 1 Approved Tariff for BJ / KJ installations

Commission determined Tariff Retail Supply Tariff

determined by the

Commission

618 paise per unit,

Subject to a monthly minimum of

Rs.30 per installation per month.

-Nil-*

Fully subsidized by GoK

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff

payable by these Consumers is shown as nil. However, if the GOK

does not release the subsidy in advance, a Tariff of Rs.6.18 per unit

subject to a monthly minimum of Rs.30 per installation per month,

shall be demanded and collected from these consumers.

cxviii

2. LT2 - Domestic Consumers:

CESC’s Proposal:

The details of the existing and proposed tariff under this category are

given in the Table below:

Proposed Tariff for LT-2 (a)

LT-2 a (i) Domestic Consumers Category

Applicable to areas coming under City Municipal Corporations and all

Urban Local Bodies

Details Existing as per 2016 Tariff Order Proposed by CESC

Fixed Charges per

Month

For the first KW Rs.30 For the first KW Rs.30

For every additional KW Rs.40 For every additional KW

Rs.40

Energy Charges

0-30 units

(life line

Consumption )

0 to 30 units:300 paise/unit 0 to 30 units: 448 paise/unit

Energy Charges

exceeding 30 units

per month

31 to 100 units:440 paise/unit 31 to 100 units: 588 paise

/ unit

101 to 200 units:590 paise

/unit


/unit

Above 200 units:690paise

/unit

Above 200 units:838paise

/unit

LT-2(a)(ii) Domestic Consumers Category

Applicable to Areas under Village Panchayats

Details Existing as per 2016 Tariff Order

Proposed by CESC

Fixed charges per

Month

For the first KW Rs.20 For the first KW Rs.20

For every additional KW

Rs.30

For every additional

KW Rs.30

Energy Charges

0-30 units ( life line

Consumption )

Upto 30 units:290 paise

/unit


/unit

Energy Charges

exceeding 30

Units per month


/ unit


/ unit

101 to 200 units: 560 paise

/unit

101 to 200 units: 708 paise

/unit

Above 200 units: 640 paise

/unit

Above 200 units:788 paise

/unit

Commission’s decision

The Commission decides to continue with the two tier tariff structure in

respect of the domestic consumers as shown below:

cxix

(i) Areas coming under City Municipal Corporations and all Urban Local

Bodies.

(ii) Areas under Village Panchayats.

The Commission approves the tariff for this category as follows:

Approved Tariff for LT 2 (a) (i) Domestic Consumers Category:

Applicable to Areas coming under City Municipal Corporations and all

Urban Local Bodies

Details Tariff approved by the

Commission

Fixed charges per Month For the first KW: Rs.40/-

For every additional KW Rs.50/-

Energy Charges up to 30 units per

month (0-30 units)-life line consumption.

Upto 30 units: 325paise/unit

Energy Charges in case the

consumption exceeds 30 units per

month

31 to 100 units:470 paise/unit

101 to 200 units:625 paise/unit

Above 200 units: 730 paise/unit

Approved Tariff for LT-2(a) (ii) Domestic Consumers Category:

Applicable to Areas under Village Panchayats

Details Tariff approved by the Commission

Fixed Charges per Month For the first KW: Rs.25/-

For every additional KW Rs.40/-

Energy Charges up to 30

units per month (0-30 Units)-

Lifeline Consumption

Up to 30 units: 315 paise/unit

Energy Charges in case the

consumption exceeds 30

units per month

31 to 100 units: 440 paise/unit

101 to 200 units:595paise/unit


LT2 (b) Private and Professional Educational Institutions & Private Hospitals

and Nursing Homes:

CESC’s Proposal:

The details of the existing and the proposed tariff by CESC under this

category are given in the Table below:

LT 2 (b) (i)Applicable to areas under City Municipal Corporations Areas

and all urban Local Bodies

cxx


Fixed

Charges per

Month

Rs.45 Per KW subject to a

minimum of Rs.75 per month

Rs.45 Per KW subject to a

minimum of Rs.75 per

month

Energy

Charges

For the first 200 units 625

paise per unit

For the first 200 units 773

paise per unit

Above 200 units 745 paise per

unit

For the balance units 893

paise per unit

LT 2 (b)(ii) Applicable to Areas under Village Panchayats

Details Existing as per 2016 Tariff

Order

Proposed by CESC

Fixed

Charges per

Month

Rs.35 per KW subject to a

minimum of Rs.60 per Month

Rs.35 per KW subject to a

minimum of Rs.60 per Month

Energy

Charges

For the first 200 units: 570

paise per unit

For the first 200 units:718

paise per unit

Above 200 units: 690 paise

per unit

For the balance units:838

paise per unit


As in the previous Tariff Order the Commission decides to continue the

two tier tariff structure as follows:

(i) Areas coming under City Municipal Corporation and all urban local

bodies.


Approved Tariff for LT 2 (b) (i)

Private Professional and other private Educational Institutions, Private

Hospitals and Nursing Homes

Applicable to areas under City Municipal Corporations and all other

urban Local Bodies.


Fixed Charges per Month Rs.55 per KW subject to a minimum of Rs.85

per Month

Energy Charges 0-200 units: 650 paise/unit


Approved Tariff for LT 2 (b) (ii)

Private Professional and other private Educational Institutions, Private

Hospitals and Nursing Homes

Applicable in Areas under Village Panchayats


Fixed Charges per Month Rs.45 per KW subject to a minimum of Rs.70 per

cxxi

Month

Energy Charges 0-200 units: 595 paise/unit


3. LT3- Commercial Lighting, Heating& Motive Power:

CESC’s Proposal:

The existing and proposed tariff are as follows:

LT- 3 (i) Commercial Lighting, Heating& Motive Power

Applicable to Areas coming under City Municipal Corporation and

urban local bodies


Order

Proposed by CESC

Fixed charges per

Month

Rs.50 per KW Rs.50 per KW

Energy Charges For the first 50 units:715

paise per unit

For the first 50 units:863paise

per unit


paise per unit

For the balance units: 963

paise per unit

Demand based tariff (optional) where sanctioned load is above 5 KW but

below 50 KW.


Fixed

charges


Energy

Charges


per unit


per unit

For the balance units:815 paise

per unit


paise per unit

LT-3 (ii) Commercial Lighting, Heating & Motive

Applicable to areas under Village Panchayats


Order

Proposed by CESC

Fixed Charges per

Month


Energy Charges For the first 50 units:665paise

per unit


paise per unit

For the balance

units:765paise per unit

For the balance


Demand based tariff (optional) where sanctioned load is above 5 KW but

below 50 KW

Details Existing as per 2016 Tariff Proposed by CESC

cxxii

Order

Fixed Charges

per Month


Energy Charges For the first 50



paise per unit


paise per unit

For the balance

units:913 paise per unit

Commission’s Views/ Decision

As in the previous Tariff Order, the Commission decides to continue with

the two tier tariff structure as below:

(i) Areas coming under City Municipal Corporations and other urban

local bodies.


Approved Tariff for LT- 3 (i)Commercial Lighting, Heating& Motive

Applicable to areas under City Municipal Corporations and other Urban

Local Bodies

Details Approved by the Commission

Fixed Charges per Month Rs.60 per KW

Energy Charges For the first 50 units: 750 paise/ unit

For the balance units: 850 paise/unit

Approved Tariff for Demand based tariff (Optional) where sanctioned

load is above 5 kW but below 50 kW


Fixed Charges per

Month

Rs.75 per KW

Energy Charges For the first 50 units:750paise /unit

For the balance units:850 paise/unit

Approved Tariff for LT-3 (ii) Commercial Lighting, Heating and Motive Applicable to areas under Village Panchayats


Fixed charges per

Month

Rs.50 per KW

Energy Charges For the first 50 units: 700 paise per unit

For the balance units: 800 paise per unit

Approved Tariff for Demand based tariff (Optional)where sanctioned

load is above 5 kW but below 50 kW


Fixed Charges per

Month

Rs.65 per KW

cxxiii

Energy Charges For the first 50 units: 700 paise per unit

For the balance units: 800 paise per unit

4. LT4-Irrigation Pump Sets:

CESC’s Proposal:

The existing and proposed tariff for LT4 (a) are as follows:

LT-4 (a) Irrigation Pump Sets

Applicable to IP sets upto and inclusive of 10 HP


Order

Proposed by CESC

Fixed charges per

Month

Nil Nil

Energy charges CDT 488 paise per unit Free (In case GoK does not

release the subsidy in

advance, CDT of 636 paise

per unit will be demanded

and collected from

consumers)

Commission’s Decision

The Government of Karnataka has extended free supply of power to

farmers as per Government Order No. EN 55 PSR 2008 dated 04.09.2008.

As per this policy of GoK, the entire cost of supply to IP sets up to and

inclusive of 10 HP is being borne by the GoK through tariff subsidy. In view

of this, all the consumers under the existing LT-4(a) tariff are covered

under free supply of power.

Considering the cross subsidy contribution from categories other than IP

Sets and BJ/KJ Categories, the Commission determines the tariff for IP

Sets under LT4(a) category as follows:

Approved CDT for IP Sets for FY18

Particulars CESC

Approved ARR in Rs. Crore 3621.58

Revenue from other than IP & BJ/KJ

installations in Rs. Crore 2276.76

Amount to be recovered from IP & BJ/KJ

installations in Rs. Crore 1344.82

Approved Sales to BJ/KJ installations in MU 106.17

Revenue from BJ/KJ installations at

Average Cost of supply in Rs. crore 65.51

Amount to be recovered from IP Sets

category in Rs. crore 1279.31

cxxiv

Approved Sale to IP Sets in MU 2386.77

Commission Determined Tariff (CDT) for IP

set Category for FY18 in Rs/Unit 5.36

Accordingly, the Commission decides to approve tariff of Rs.5.36 per unit

as CDT for FY18 for IP Set category under LT4 (a). In case the GoK does

not release the subsidy in advance, a tariff of Rs.5.36 per unit shall be

demanded and collected from these consumers.

Approved by the Commission

LT-4 (a) Irrigation Pump Sets

Applicable to IP sets up to and inclusive of 10 HP


Fixed charges per Month

Energy charges

Nil*

CDT (Commission Determined Tariff):

536 paise per unit

* In case the GoK does not release the subsidy in advance, a tariff of

Rs.5.36 per unit shall be demanded and collected from these

consumers.

The Commission has been issuing directives to ESCOMs for conducting

Energy Audit at the Distribution Transformer Centre (DTC)/feeder level for

properly assessment of distribution losses and to enable detection and

prevention of commercial loss. In view of substantial progress in

implementation of feeder segregation under NJY scheme, the ESCOMs

were also directed to submit IP set consumption on the basis of the

meter readings of the 11 kV feeders at the substation level duly

deducting the energy losses in 11kV lines, distribution transformers & LT

lines, in order to compute the consumption of power by IP sets

accurately. Further, in the Tariff Order 2016, the ESCOMs were also

directed to take up enumeration of IP sets, 11 KV feeder-wise by

capturing the GPS co-ordinates of each live IP set in their

jurisdiction. In this regard, the Commission has noted that the ESCOMs

have complied partly with these directions and they have initiated

measures to achieve full compliance. The ESCOMs need to ensure full

compliance as this has direct impact on their revenues and tariff

payable by other categories of consumers.

cxxv

For the forgoing reasons, the Commission directs the ESCOMs as follows:

The ESCOMs shall manage supply of power to the IP sets for the FY18, so

as to ensure that it is within the quantum of subsidy committed by the

GoK. They shall procure power which is proportional to such supply. In

case the ESCOMs opt to supply power to the IP sets in excess of the

quantum corresponding to the amount of subsidy the GoK has assured to

be released for FY18, the difference in the amount of subsidy relating to

such supply shall be claimed from the GoK. If the difference in subsidy is

not paid by the GoK, the same has to be collected from the IP set

consumers.

LT4 (b) Irrigation Pump Sets above 10 HP:

CESC’s Proposal

The Existing and proposed tariff for LT-4(b) are as follows:

LT-4 (b) Irrigation Pump Sets:

Applicable to IP Sets above 10 HP


Order

Proposed by CESC

Fixed charges per

Month

Rs.40 per HP Rs.40 per HP

Energy charges for

the entire

consumption

280 paise per unit 428 paise per unit

The existing and proposed tariff for LT4(c) are as follows:

LT-4 (c) (i) - Applicable to Private Horticultural Nurseries, Coffee, Tea

& Rubber plantations up to & inclusive of 10 HP


Order

Proposed by CESC

Fixed charges per

Month


Energy charges for

the entire

consumption


LT-4 (c) (ii) - Applicable to Private Horticultural Nurseries, Coffee, Tea &

Rubber plantations above 10 HP


Order

Proposed by CESC

cxxvi

Fixed charges per

Month


Energy charges for

the entire

consumption

280paise per unit 428paise per unit

Approved Tariff:

The Commission decides to revise the tariff in respect of these categories

as shown below:

LT-4 (b) Irrigation Pump Sets:

Applicable to IP Sets above 10 HP

Fixed charges per Month Rs.50 per HP

Energy charges for the entire

consumption

300 paise/unit

LT4(c) (i) - Applicable to Horticultural Nurseries,

Coffee, Tea &Rubber plantations up to & inclusive of 10 HP


Energy charges 300 paise / unit

LT4 (c)(ii) - Applicable to Horticultural Nurseries, Coffee, Tea& Rubber

plantations above 10 HP


Energy charges 300 paise/unit

5. LT5 Installations-LT Industries:

CESC’s Proposal:

The existing and proposed tariffs are given below:

LT-5 (a) LT Industries:

Applicable to areas under City Municipal Corporation

i) Fixed charges


Fixed

charges

per Month

i) Rs. 30 per HP for 5 HP & below

ii) Rs. 35 per HP for above 5 HP

& below 40 HP

iii) Rs. 40 per HP for 40 HP &

above but below 67 HP

iv)Rs. 100 per HP for 67 HP &

above

i) Rs. 30 per HP for 5 HP & below

ii) Rs. 35 per HP for above 5 HP &

below 40 HP

iii) Rs. 40 per HP for 40 HP &


iv)Rs. 100 per HP for 67 HP &

above

cxxvii

Demand based Tariff (Optional)

Details Description Existing Tariff as per

2016 Tariff Order

Proposed by

CESC

Fixed

Charg

es per

Month

Above 5 HP and less

than 40 HP

Rs.50 per KW of billing

demand

Rs.50 per KW of

billing demand

40 HP and above but

less than 67 HP


demand

Rs.65 per KW of

billing demand

67 HP and above Rs.150 per KW of

billing demand

Rs.150 per KW of

billing demand

ii) Energy Charges

Details Existing as per 2016

Tariff Order

Proposed by CESC

For the first 500 units 495 paise per unit 643 paise/ unit

For next 500 units 585 paise per unit 733 paise /unit

For the balance unit 615 paise per unit 763 paise /unit

LT-5 (b) LT Industries:

Applicable to all areas other than those covered under LT-5(a)

i) Fixed charges

Demand based Tariff (optional)

Details Description Existing Tariff as per

2016 Tariff Order

Proposed by CESC

Fixed Charges per Month

Above 5 HP and

less than 40 HP

Rs.50 per KW of

billing demand

Rs.50 per KW of

billing demand

40 HP and above

but less than 67 HP

Rs.65 per KW of

billing demand

Rs.65 per KW of

billing demand

67 HP and above Rs.150 per KW of

billing demand

Rs.150 per KW of

billing demand


Fixed Charges per Month

i)Rs.30 per HP for 5 HP &

below

ii) Rs.35 per HP for above 5 HP &

below 40 HP

iii) Rs.40 per HP for 40 HP &


iv)Rs.100 per HP for 67 HP &

above

i) Rs.30 per HP for 5 HP &

below

ii) Rs.35 per HP for above 5

HP & below 40 HP

iii) Rs.40 per HP for 40 HP &


iv)Rs.100 per HP for 67 HP &

above

cxxviii

ii) Energy Charges


Order

Proposed by CESC

For the first 500 units 485 paise per unit 633 paise/ unit

For the next 500 units 570 paise per unit 718 paise/ unit

For the balance units 600 paise per unit 748 paise/ unit

Existing ToD Tariff for LT5 (a) & (b): At the option of the consumers

ToD Tariff

Time of Day Increase (+ )/ reduction (-) in energy

charges over the normal tariff applicable

22.00 Hrs to 06.00 Hrs (-) 125 paise per unit

06.00 Hrs to 18.00 hrs 0

18.00 Hrs to 22.00 Hrs (+) 100 paise per unit

Proposed ToD Tariff for LT5 (a) & (b): At the option of the consumers

ToD Tariff



06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 hrs (+) 225 paise per unit


Commission’s Decision:

Time of the Day Tariff:

The decision of the Commission in its earlier Tariff Orders, providing for

mandatory Time of Day Tariff for HT2(a), HT2(b) and HT2(c) consumers

with a contract demand of 500 KVA and above is continued. The

optional ToD will continue as existing for HT2(a), HT2(b) and HT2(c)

consumers with contract demand of less than 500 KVA. Further, for LT5

and HT1 consumers, the optional ToD is continued as existing.

The Commission has decided to continue with two tier tariff structure

introduced in the previous Tariff Orders, which are as follows:

i) LT5 (a): For areas falling under City Municipal Corporations

ii) LT5 (b): For areas other than those covered under LT5 (a) above.

Approved Tariff:

The Commission approves the tariff under LT 5 (a) and LT 5 (b) as given

below:

cxxix

Approved Tariff for LT 5 (a):

Applicable to areas under City Municipal Corporations

i) Fixed charges


Fixed

Charges per

Month

i) Rs.40 per HP for 5 HP & below

ii) Rs.45 per HP for above 5 HP & below 40 HP

iii) Rs.60 per HP for 40 HP & above but below 67 HP

iv) Rs.120 per HP for 67 HP & above


Fixed

Charges per

Month

Above 5 HP and less than 40

HP


demand

40 HP and above but less

than 67 HP


demand

67 HP and above Rs.170 per KW of billing

demand

ii) Energy Charges


For the first 500 units 510 paise/unit

For the next 500 units 605 paise/ unit

For the balance units 635 paise/ unit

Approved Tariff for LT 5 (b):


i) Fixed charges

Details Approved Tariff

Fixed

Charges

per Month




iv)Rs.110 per HP for 67 HP & above

ii) Demand based Tariff (optional)

Details Description Approved Tariff

Fixed Charges per

Month

Above 5 HP and

less than 40 HP


demand

40 HP and above

but less than 67 HP


demand


demand

iii) Energy Charges

Details Approved tariff

cxxx

For the first 500 units 500 paise/ unit


For the balance units 620 paise/unit

As discussed earlier in this Chapter, the approved ToD Tariff for LT5 (a) &

(b): At the option of the consumers

ToD Tariff



06.00 Hrs to 10.00 Hrs (+) 100 paise per unit

10.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 hrs (+) 100 paise per unit


6. LT6 Water Supply Installations and Street Lights:

CESC’s Proposal:

The existing and the proposed tariffs are given below:

LT-6(a) : Water Supply


Order

Proposed by CESC

Fixed charges per

Month

Rs.45/HP/month Rs.45/HP/month

Energy charges 390 paise/unit 538 paise/unit

LT-6 (b) : Public Lighting


Order

Proposed by CESC

Fixed charges

per Month

Rs.60/KW/month Rs.60/KW/month

Energy charges

without LED bulbs

550 paise/unit 698 paise/unit

Energy charges

for LED /

Induction

450 paise/unit 598 paise/unit

The Commission approves the tariff for these categories are as follows:

Tariff Approved by the Commission for LT-6 (a): Water supply


Fixed Charges per

Month

Rs.55/HP/month


cxxxi

Tariff Approved by the Commission for LT-6 (b): Public Lighting


Fixed charges per

Month

Rs.70 /KW/month


Energy charges for LED

/ Induction Lighting

485 paise/unit

7. LT 7- Temporary Supply & Permanent supply to Advertising Hoardings:

CESC’s Proposal:

The existing rate and the proposed rate are given below:

Tariff Schedule LT-7(a) Applicable to Temporary power Supply for all purposes.

a) Less than 67

HP:

Energy charge at 950

paise per unit subject

to a weekly minimum

of Rs.170 per KW of

the sanctioned load.

Energy charge at 1098 paise

per unit subject to a weekly

minimum of Rs.170 per KW of

the sanctioned load.

TARIFF SCHEDULE LT-7(b)

Applicable to power supply to Hoardings & Advertisement boards

on Permanent connection basis.

a) Less than 67

HP:

Fixed Charge Rs.50

per KW/ month of the

sanctioned load.

Fixed Charge Rs.50 per KW/

month of the sanctioned load.

Energy charge at 950

paise per unit

Energy charge at 1098 paise

per unit


As decided in the previous Tariff Order, the tariff specified for installations

with sanctioned load / contract demand above 67 HP shall be covered

under the HT temporary tariff category under HT5.

With this, the Commission decides to approve the tariff for LT-7 category

as follows:


Tariff Order

Proposed by CESC


Tariff Order

Proposed by CESC

cxxxii

TARIFF SCHEDULE LT-7(a)

Applicable to Temporary Power Supply for all purposes.

LT 7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes.

Less than 67 HP:

Energy charges at 1000 paise / unit

subject to a weekly minimum of Rs.190

per KW of the sanctioned load.


Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the interest

of public such as Police Canopy Direction boards, and other sign boards

sponsored by Private Advertising Agencies / firms on permanent

connection basis.

[

LT 7(b) Details Approved Tariff

Power supply on

permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs.60 per KW / month


H.T. Categories:

Time of Day Tariff (ToD)

The Commission decides to continue the mandatory Time of Day Tariff

for HT2 (a), HT-2(b) and HT2(c) consumers with a contract demand

of 500 KVA and above. Further, the optional ToD will continue as

existing for HT2 (a), HT-2(b) and HT2 (c) consumers with contract demand

of less than 500 KVA. The details of ToD tariff are indicated under the

respective tariff category.

8. HT1- Water Supply & Sewerage

CESC’s Proposal:

The existing and proposed tariff are as given below:

The Existing and the proposed tariff – HT-1 Water Supply and Sewerage

Installations

Sl.

No.

Details Existing tariff as per

2016 Tariff Order

Proposed Tariffs by CESC

dated 31.11.2016

1 Demand

charges

Rs.190 / kVA of billing

demand / month

Rs.190 / kVA for billing

demand / month

cxxxiii

2 Energy charges 450 paise per unit 598 paise per unit

Existing ToD tariff to HT-1 tariff to Water Supply & Sewerage installations at the option of the consumer

22.00 Hrs to 06.00 Hrs next day (-) 125 Paise per unit

06.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+) 100 Paise per unit

Proposed ToD Tariff to HT-1 category:

Time of day Increase (+) / reduction (-) in the energy


06.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs (-) 175 Paise per unit

Commission’s decision:

As discussed earlier in this chapter, the Commission approves the tariff for HT 1 Water Supply & Sewerage category as

below:

Details Approved Tariff for HT 1

Demand

charges

Rs.200 / kVA of billing demand / month

Energy charges 485 paise/ unit

As discussed earlier in this chapter, the approved ToD tariff to HT-1 tariff to

Water Supply & Sewerage installations at the option of the consumer is as

follows

06.00 Hrs. to 10.00 hours (+) 100 paise per unit

10.00 Hrs to 18.00 Hrs 0

18.00 Hrs to 22.00 Hrs (+)100 paise per unit

22.00 Hrs to 06.00 Hrs next day (-) 100 paise per unit

9. HT2 (a) – HT Industries & HT 2(b) – HT Commercial

CESC’s Proposal:


Time of day Increase (+) / reduction (-) in the

energy charges over the normal tariff

applicable



cxxxiv

HT – 2 (a) HT Industries

Applicable to all areas of CESC

Details Existing tariff as per Tariff

Order 2016

Proposed Tariff by CESC

dated 30.11.2016

Demand

charges

Rs. 180 / kVA of billing

demand / month


demand / month

Energy charges

(i) For the first

one lakh

units

(ii) For the

balance

units

620 paise per unit

660 paise per unit

768 paise per unit

808 paise per unit

Railway traction and Effluent Plants under HT2 (a).


Tariff order 2016

Tariff Proposed by CESC

dated 30.11.2016

Demand

charges

Rs. 190 / kVA at billing

demand / month


demand / month

Energy charges 590paise per unit for

all the units

738 paise per unit for all

the units

Existing ToD Tariff for HT-2(a)



22.00 Hrs to 06.00 Hrs next day (- )125 Paise per unit

06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff for HT-2(a)



06.00 Hrs to 18.00 Hrs 0




Approved Tariff for HT – 2 (a):

As discussed earlier in this chapter, the Commission approves the tariff for HT 2(a) category as below:

i) Approved Tariff for HT2(a)

Applicable to all areas under CESC


Demand charges Rs.200 / kVA of billing demand / month

Energy charges

cxxxv

For the first one lakh units 660 paise/ unit

For the balance units 680 paise/ unit

As discussed earlier in this chapter, the approved ToD tariff to HT2(a)(i) & (ii)

tariff.


10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs (-)100 paise per unit

ii) Railway Traction & Effluent Treatment Plants under both HT2(a)


Demand charges Rs. 210 / kVA of billing demand / month

Energy charges 620 paise / unit for all the units

10. HT-2 (b) HT Commercial

CESC’s Proposal:


Existing and proposed tariff HT – 2 (b) HT Commercial



Tariff Order 2016


dated 30.11.2016

Demand charges Rs.200 / kVA of billing

demand / month


demand / month

Energy charges

(i) For the first two

lakh units

785paise per unit

933paise per unit

(ii)For the balance

units

815paise per unit 963paise per unit

Existing ToD Tariff for HT-2(b)




06.00 Hrs to 18.00 Hrs 0




cxxxvi

Proposed ToD Tariff for HT-2(b)



06.00 Hrs to 18.00 Hrs 0




The Commission notes the issue raised by the consumer of Diagnostic

centres and their request to classify under HT-2(c)(ii) category. The

Commission has examined the issue in detail and decided to classify the

HT power supply to Diagnostic centres running on commercial lines

under HT-2(b) category.

As discussed earlier in this chapter, the Commission approves the

following tariff for HT 2 (b) consumers:

Approved tariff for HT – 2 (b) - HT Commercial




Energy charges

(i) For the first two lakh units 825 paise per unit

(ii) For the balance units 835 paise per unit

Note: The above tariff under HT2 (b) is not applicable for construction of new

industries. Such power supply shall be availed only under the temporary

category HT5.

Approved ToD Tariff for HT-2(b)


10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit



cxxxvii

11. HT – 2 (c) – Applicable to Hospitals and Educational Institutions:

The existing and proposed tariff are given below:

Existing and proposed tariff for HT – 2 (c) (i)

Applicable to Government Hospitals & Hospitals run by Charitable Institutions & ESI

Hospitals

and

Universities, Educational Institutions belonging to Government, Local Bodies and Aided

Institutions and Hostels of all Educational Institutions

Details Existing tariff as per Tariff

Order 2016



demand / month


demand / month

Energy charges

(i) For the first one

lakh units


(ii) For the balance

units


Existing and proposed tariff for HT – 2 (c) (ii) –

Applicable to Hospitals and Educational Institutions other than those covered under

HT2(c) (i)


Tariff Order 2016


Demand charges Rs. 180 / kVA of billing

demand / month


demand / month

Energy charges

(i) For the first one

lakh units

700 paise per unit 848paise per unit

(ii) For the balance

units

750 paise per unit 898paise per unit

Existing ToD Tariff for HT-2(c)(i) & (ii)




06.00 Hrs to 18.00 Hrs 0


Proposed ToD Tariff for HT-2 HT-2(c)(i) & (ii)



06.00 Hrs to 18.00 Hrs 0



cxxxviii


The Commission approves the following tariff for HT2(c) consumers.

Approved tariff for HT – 2 (c) (i)

Applicable to Government Hospitals, Hospitals run by Charitable Institutions, ESI

Hospitals,

Universities and Educational Institutions belonging to Government& Local Bodies, Aided

Educational Institutions and Hostels of all Educational Institutions


Demand charges Rs.200/ kVA of billing demand / month

Energy charges

(i) For the first one lakh units 640 paise per unit


Approved tariff for HT – 2 (c) (ii)

Applicable to Hospitals/Educational Institutions other than those covered under HT2(c)

(i)



Energy charges

(i) For the first one lakh units 740 paise per unit


As discussed earlier in this Chapter approved ToD for Tariff to HT-2(c) (i)

& (ii)


10.00 Hrs to 18.00 Hrs 0


22.00 Hrs to 06.00 Hrs next day (-)100 paise per unit

12. HT-3(a) Lift Irrigation Schemes under Government Departments /

Government owned Corporations/ Lift Irrigation Schemes under Pvt.

Societies:

The existing and proposed tariff are given below:

Existing and proposed tariff for HT – 3 (a) –Lift Irrigation Schemes

HT 3(a) (i) Applicable to LI Schemes under Government Departments /

Government owned Corporations



cxxxix

Details Existing charges as per Tariff

Order 2016

Proposed charges by

CESC

Energy

charges/

Minimum

charges

200 paise / unit

Subject to an annual minimum

of Rs.1120 per HP / annum

348 paise / unit

Subject to an annual

minimum of Rs. 1120

per HP / annum

HT 3(a) (ii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

Fed through Express / Urban feeders

Details Existing Tariff as per Tariff

Order 2016

Proposed by CESC

Fixed charges Rs. 40 / HP / Month of

sanctioned load

Rs. 40 / HP / Month of

sanctioned load

Energy charges 200paise / unit 348 paise / unit

HT 3(a) (iii) Applicable to Pvt. LI Schemes and Lift Irrigation Societies:

other than those covered under HT-3 (a)(ii)

Details Existing Tariff as per Tariff

Order 2016

Proposed by CESC

Fixed charges Rs.20 / HP / Month of

sanctioned load

Rs.20 / HP / Month of

sanctioned load

Energy charges 200paise / unit 348paise / unit


The Commission approves the following tariff for HT 3(a) consumers:

Approved tariff for HT 3 (a) (i)

Applicable to LI schemes under Govt. Dept. / Govt. owned Corporations

Energy charges /

Minimum charges

225 paise/ unit subject to an annual

minimum of Rs. 1240 per HP / annum

Approved tariff for HT 3 (a) (ii)

Applicable to Private LI Schemes and Lift Irrigation Societies fed through

express / urban feeders

Fixed charges Rs.50 / HP / Month of sanctioned load


Approved tariff for HT 3 (a) (iii)

Applicable to Private LI Schemes and Lift Irrigation Societies other

than those covered under HT 3 (a) (ii)

Fixed charges Rs.30 / HP / Month of sanctioned load


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13. HT3 (b) Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut

Plantations:

CESC’s Proposal:

The existing and the proposed tariff are given below:

HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Coconut & Arecanut

Plantations:

Details Existing Tariff Order 2016 Proposed tariff by CESC

Energy charges /

minimum

charges

400 paise / unit subject to

an annual minimum of

Rs.1120 per HP of

sanctioned load

548 paise / unit subject to

an annual minimum of

Rs.1120 per HP of

sanctioned load


The Commission approves the tariff for this category as indicated below:

Approved Tariff

HT3 (b)- Irrigation & Agricultural Farms, Government Horticulture farms,

Private Horticulture Nurseries, Coffee, Tea, Rubber, Coconut & Arecanut

Plantations:


Energy charges /

minimum charges

425 paise / unit subject to an

annual minimum of Rs.1240 per

HP of sanctioned load

14. HT4- Residential Apartments/ Colonies:

CESC’s Proposal:

The existing and the proposed tariff for this category are given below:

Existing and proposed tariff for HT – 4 - Residential Apartments/ Colonies

HT – 4 Applicable to all areas.

Details Existing Tariff Order 2016 Tariff Proposed by CESC


demand


demand

Energy charges 585 paise per unit 733 paise/ unit


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As discussed earlier in this chapter, the Commission approves the tariff

for this category as indicated below:

Approved tariff

HT – 4 Residential Apartments/ Colonies Applicable to all areas

Demand charges Rs.120 / kVA of billing demand

Energy charges 620 paise/ unit

15. TARIFF SCHEDULE HT-5

CESC’s Proposal:

The existing and the proposed tariffs are given below:

HT – 5 – Temporary supply

67 HP and above: Existing Proposed

Fixed charges /

Demand Charges

Rs.220/HP/month for the

entire sanction load /

contract demand

Rs.220/HP/month for the

entire sanction load /

contract demand

Energy Charge 950 paise / unit (weekly

minimum of Rs.170/- per

KW is not applicable)

1098 paise / unit (weekly

minimum of Rs.170/- per

KW is not applicable)

Commission’s Views/Decisions:

TARIFF SCHEDULE HT-5

(i) As approved in the Commission’s Tariff Order dated 6th May, 2013,

this Tariff is applicable to 67 HP and above hoardings,

advertisement boards and construction power for industries

excluding those category of consumers covered under HT2(b)

Tariff schedule availing power supply for construction power for

irrigation and power projects and also applicable to power supply

availed on temporary basis with the contract demand of 67 HP

and above of all categories.

Approved Tariff for HT – 5 – Temporary supply

67 HP and above: Approved Tariff

Fixed Charges /

Demand Charges

Rs.240 /HP/month for the entire sanction load /

contract demand

Energy Charges 1000 paise / unit

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The Approved Tariff schedule for FY18 is enclosed in Annex – IV of this

Order.

6.6 Wheeling and Banking Charges:

CESC in their tariff petition has furnished the following details on wheeling

charges:

Wheeling charges for FY-18

Distribution ARR-Rs. Crs. 566.46

Sales -MU 6506.22

Wheeling charges-paise/unit: 87.06

HT-Network @ 30% 26.12

LT-Network @ 70% 60.95

HT loss 4.22

LT loss 7.25

The Commission in its preliminary observations had noted that CESC at

page -65 of the petition has considered distribution ARR as Rs. 566.46 Crs

for computing wheeling charges for FY18. However, at Pg.95, the

distribution ARR was indicated as Rs. 790.74 Crs. for FY18. Therefore, the

Commission had directed CESC to reconcile the data and resubmit the

revised working for wheeling charges.

CESC in their replies to the preliminary observations has furnished the

revised wheeling charges for FY18 as indicated below:

Wheeling charges for FY-18

Distribution ARR-Rs. Crs. 790.74

Sales -MU 6506.22

Wheeling charges-paise/unit: 121.54

HT-Network @ 30% 36.46

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LT-Network @ 70% 85.08

HT loss 4.22

LT loss 7.25

The approach of the Commission regarding wheeling & banking charges

is discussed in the following paragraphs:

The Commission has considered the approved ARR pertaining to

distribution wires business and has proceeded determining the wheeling

charges as detailed below:

6.6.1 Wheeling within CESC Area:

The allocation of the distribution network costs to HT and LT networks for

determining wheeling charges is done in the ratio of 30:70, as was being

done earlier. Based on the approved ARR for distribution business, the

wheeling charges to each voltage level is worked out as under:

TABLE – 6.2

Wheeling Charges

Distribution ARR-Rs. Crs 466.60

Sales-MU 5861.48

Wheeling charges- paise/unit 79.60

Paise/unit

HT-network 23.88

LT-network 55.72

In addition to the above, the following technical losses are applicable to

all open access/wheeling transactions:

Loss allocation % loss

HT 4.25

LT 7.25 Note: Total loss is allocated to HT, LT & Commercial loss based on energy flow diagram furnished by CESC.

The actual wheeling charges payable (after rounding off) will depend

upon the point of injection & point of drawal as under:

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paise/unit

Injection point

Drawal point

HT LT

HT 24(4.25%) 80(11.50%)

LT 80(11.50%) 56(7.25%) Note: Figures in brackets are applicable loss

The wheeling charges as determined above are applicable to all the

open access or wheeling transactions for using the CESC’s network,

except for energy transmitted or wheeled from Renewable sources to

the consumers within the State.

6.6.2 WHEELING OF ENERGY USING TRANSMISSION NETWORK OR NETWORK OF

MORE THAN ONE LICENSEE

In case the wheeling of energy [other than RE sources wheeling to

consumers in the State] involves usage of Transmission network or

network of more than one licensee, the charges shall be as indicated

below:

i. If only transmission network is used, transmission charges

determined by the Commission shall be payable to the

Transmission Licensee.

ii. If the Transmission network and the ESCOMs’ network is used,

Transmission Charges shall be payable to the Transmission

Licensee. Wheeling Charges payable to the ESCOM where the

power is drawn shall be shared equally among the ESCOMs

whose networks are used.

Illustration:

If a transaction involves transmission network & CESC’s network and 100

units is injected, then at the drawal point the consumer is entitled for

85.52 units, after accounting for Transmission loss of 3.37% & CESC’s

technical loss of 11.50%.

The Transmission charge in cash as determined in the Transmission Tariff

Order shall be payable to KPTCL & Wheeling charge of 80 paise per unit

shall be payable to CESC. In case more than one ESCOM is involved the

above 80 paise shall be shared by all the ESCOMs involved.

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iii. If ESCOMs’ network only is used, the Wheeling Charges is payable

to the ESCOM where the power is drawn and shall be shared

equally among the ESCOMs whose networks are used.

Illustration:

If a transaction involves injection to BESCOM’S network & drawal at

CESC’s network, and 100 units is injected, then at the drawal point, the

consumer is entitled for 88.50 units, after accounting CESC’s technical

loss of 11.50%.

The Wheeling charge of 80 paise per unit payable to CESC shall be

equally shared between CESC& BESCOM.

6.6.3 CHARGES FOR WHEELING OF ENERGY BY RE SOURCES (NON-REC ROUTE)

TO CONSUMERS IN THE STATE

The separate Orders issued by the Commission from time to time in the

matter of wheeling and banking charges for RE sources (non-rec route)

wheeling energy to consumers in the State shall be applicable.

6.6.4 CHARGES FOR WHEELING ENERGY BY RE SOURCES FROM THE STATE TO A

CONSUMER/OTHERS OUTSIDE THE STATE AND FOR THOSE OPTING FOR

RENEWABLE ENERGY CERTIFICATE[REC]

In case the renewable energy is wheeled from the State to a consumer

or others outside the State, the normal wheeling charges as determined

in para 6.6.1 and 6.6.2 of this Order shall be applicable. For Captive RE

generators including solar power projects opting for RECs, the wheeling

and banking charges as specified in the Orders issued by the

Commission from time to time shall be applicable.

6.6.5 BANKING CHARGES AND ADDITIONAL SURCHARGE

The Commission notes that all the ESCOMs except CESC, have filed

separate petitions seeking modifications to the existing banking facility.

Further, all the ESCOMs have filed petitions separately to introduce

additional surcharge. The above issues pertaining to banking facility and

additional surcharge are being dealt separately by the Commission in

those petitions. Till such time the Orders are passed in those petitions, the

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existing banking facility shall be continued and no additional surcharge

is payable.

6.7 CROSS SUBSIDY SURCHARGE [CSS]:

CESC in its tariff petition has worked out the Cross Subsidy surcharge as

per the Tariff Policy-2016 and has worked out the surcharges as

indicated below at the proposed tariff:

Paise/unit

Voltage

Level

HT-1 HT-2a HT-2b HT-2C HT-3b HT-4 HT-5

66kV &

above

127.57 168.39 213.21 174.40 58.52 154.28 352.61

HT level-

33kV/11kV

98.92 168.39 213.21 174.40 9.06 154.28 352.61

The determination of cross subsidy surcharge by the Commission is

discussed in the following paragraphs: -

The Commission in its MYT Regulations has specified the methodology for

calculating the CSS as per Tariff Policy 2006. Meanwhile, the Central

Government has issued the new Tariff Policy 2016, wherein a revised

methodology has been specified for determining CSS. So far the

Commission, for determining the CSS had adopted the methodology

specified in the earlier Tariff Policy of 2006. However, considering that

such Tariff Policy has been replaced now by the Tariff Policy-2016 and

that a few ESCOMs including CESC have sought determination of CSS

under such new Tariff Policy, the Commission decides to adopt the

methodology specified in the latest Tariff Policy 2016 for determination of

CSS in this Tariff Order for FY18. Action shall be taken to amend the

relevant Regulations for adoption of the revised methodology for

determination of CSS. Based on this methodology, the category- wise

cross subsidy will be as indicated below:

Paise/unit

Particulars Category

Tariff

Average

Cost of

supply @

66 kV and

above

level*

Average

Cost of

supply at HT

level**

Cross subsidy

surcharge

paise/unit @ 66

kV & above

level as per

formula

Cross

subsidy

surcharge

paise/unit @

HT level as

per formula

20% of

tariff

payable

by

relevant

category

1 2 3 4 8 9 10

HT-1

Water

Supply

536.76 410.53 445.45 126.23 91.32 107.35

HT-2a

Industries 762.23

410.53 445.45 351.70 316.79 152.45

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HT-2b

Commercial 962.09

410.53 445.45 551.56 516.64 192.42

HT-2 (C)(i) 735.84 410.53 445.45 325.31 290.40 147.17

HT-2 (C)(ii) 819.70 410.53 445.45 409.17 374.25 163.94

HT3 (a)(i)

Lift Irrigation 225.48

410.53 445.45 -185.05 -219.97 45.10

HT3 (a)(ii)


410.53 445.45 -92.47 -127.38 63.61

HT3 (a)(iii)


410.53 445.45 -147.86 -182.77 52.53

HT3 (b)

Irrigation &

Agricultural

Farms

426.55

410.53 445.45

16.02 -18.90 85.31

HT-4

Residential

Apartments

662.71

410.53 445.45 252.18 217.27 132.54

HT5

Temporary 1642.58

410.53 445.45 1232.05 1197.14 328.52

*Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of

51.09/unit and transmission losses of 3.37%.

** Includes weighted average power purchase costs of 347.33Ps/unit, transmission charges of

51.09Ps/unit and transmission losses of 3.37%, HT distribution network / wheeling charges of

20.81Ps/unit and HT distribution losses of 3.77%.

Note: The carrying cost of regulatory asset for the current year is zero.

As per the Tariff Policy 2016, while limiting the CSS so as not to exceed

20% of the tariff applicable to relevant category, the CSS (after rounding

off to nearest paise) is determined as under:

Cross Subsidy Surcharge for FY18

Paise/unit

Particulars

66 kV

&

above

HT level-11

kV/33kV

HT-1 Water Supply 107 91

HT-2a Industries 152 152

HT-2b Commercial 192 192

HT-2 (C)(i) 147 147

HT-2 (C)(ii) 164 164

HT3 (a)(i) Lift Irrigation 0 0

HT3 (a)(ii) Lift Irrigation 0 0

HT3 (a)(iii) Lift Irrigation 0 0

HT3 (b) Irrigation &

Agricultural Farms 16

0

HT-4 Residential Apartments 133 133

HT5 Temporary 329 329 Note: wherever CSS is negative, it is made zero

The cross subsidy surcharge determined in this order shall be applicable

to all open access/wheeling transactions in the area coming under

CESC. However, the above CSS shall not be applicable to captive

generating plant for carrying electricity to the destination of its own use

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and for those renewable energy generators who have been exempted

from CSS by the specific Orders of the Commission.

The Commission directs the Licensees to account the transactions under

open access separately.

6.8 Other Issues:

6.8.1 Tariff for Green Power:

In order to encourage generation and use of green power in the State,

the Commission decides to continue the existing Green Tariff of 50 paise

per unit as the additional tariff over and above the normal tariff to be

paid by HT-consumers, who opt for supply of green power from out of

the renewable energy procured by distribution utilities over and above

their Renewable Purchase Obligation (RPO).

6.9 Other tariff related issues:

i) Rebate for use of Solar Water Heater:

While some of the ESCOMs have requested to discontinue the Solar

rebate to consumers, the consumers have requested to increase the

Solar Rebate. Since the use of Solar Water Heaters is advantageous

to both the ESCOMs and the consumers, the Commission has

decided to retain the existing rebate of 50 paise per unit subject to a

maximum of Rs.50 per installation per month for use of solar water

heaters.

ii) Prompt payment incentive:

The Commission had approved a prompt payment incentive at the

rate of 0.25% of the bills amount (i) in all cases of payment through

ECS; and (ii) in the case of monthly bill exceeding Rs.1,00,000/- (Rs.one

lakh), where payment is made 10 days in advance of due date and

(iii) advance payment of exceeding Rs.1000 made by the consumers

towards monthly bills. The Commission decides to continue the same.

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iii) Relief to Sick Industries:

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy

2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the

Government of Karnataka has issued G.O No.CI2 BIF 2010, dated

21.10.2010. The Commission, in its Tariff Order 2002, had accorded

approval for implementation of reliefs to the sick industries as per the

Government policy and the same was continued in the subsequent

Tariff Orders. However, in view of issue of the G.O No.CI2 BIF 2010,

dated 21.10.2010, the Commission has accorded approval to the

ESCOMs for implementation of the reliefs extended to sick industrial

units for their revival / rehabilitation on the basis of the orders issued

by the Commissioner for Industrial Development and Director of

Industries & Commerce, Government of Karnataka.

iv) Power Factor:

The Commission in its previous order had retained the PF threshold

limit and surcharge, both for LT and HT installations at the levels

existing as in the Tariff Order 2005. The Commission has decided to

continue the same in the present order as indicated below:

LT Category (covered under LT-3, LT-4, LT-5 & LT-6 where motive

power is involved): 0.85

HT Category: 0.90

v) Rounding off of KW / HP:

In its Tariff Order 2005, the Commission had approved rounding off of

fractions of KW / HP to the nearest quarter KW / HP for the purpose of

billing and the minimum billing being for 1 KW / 1HP in respect of all

the categories of LT installations including IP sets. This shall continue to

be followed. In the case of street light installations, fractions of KW

shall be rounded off to the nearest quarter KW for the purpose of

billing and the minimum billing shall be for a quarter KW.

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vi) Interest on delayed payment of bills by consumers:

The Commission, in its previous Order had approved interest on

delayed payment of bills at 12% per annum. The Commission

decides to continue the same in this Order also.

vii) Security Deposit (3 MMD/ 2 MMD):

The Commission had issued the K.E.R.C. (Security Deposit)

Regulations, 2007 on 01.10.2007and the same has been notified in

the Official Gazette on 11.10.2007. The payment of security deposit

shall be regulated accordingly, pending orders of the Hon’ble High

Court in WP No.18215/2007.

viii) Mode of Payment by consumers:

The Commission, in its previous Order had approved revenue

payment in cash/cheque/DD of amounts up to and inclusive of

Rs.10,000/- and payment of amounts above Rs.10,000 to be made

only through cheque. The consumers can also make payment of

power bills through Electronic Clearing System(ECS)/ Credit card/

online E-payment up to the limit prescribed by the RBI, RTGS/NEFT/on

line E-Payment / Digital mode of payments as per the guidelines

issued by the RBI wherever such facility is provided by the Licensee in

respect of bill payments, up to the limit prescribed by the RBI.

Some of the ESCOMs in their applications had proposed to consider the

collection of power supply bills above One lakh rupees, through

RTGS/NEFT. The Commission has examined the request of ESCOMs, and

decides to approve the payment of power supply bills above One lakh

rupees, through RTGS/NEFT, at the option of the consumer.

6.10 Cross Subsidy Levels for FY18:

The Hon’ble Appellate Tribunal for Electricity (ATE), in its order dated 8th

October, 2014, in Appeal No.42 of 2014, has directed the Commission to

clearly indicate the variation of anticipated category-wise average

revenue realization with respect to overall average cost of supply in

cli

order to implement the requirement of the Tariff Policy that tariffs are

within ±20% of the average cost of supply, in the tariff orders being

passed in the future. It has further directed the Commission to also

indicate category-wise cross subsidy with reference to voltage-wise cost

of supply so as to show the cross subsidies transparently.

In the light of the above directions, the variations of the anticipated

category-wise average realization with respect to the overall average

cost of supply and also with respect to the voltage-wise cost of supply of

CESC and the cross subsidy thereon, is Indicated in ANNEXURE- III of this

Order. It is the Commission’s endeavour to reduce the cross subsidies

gradually as per the Tariff policy.

6.11 Effect of Revised Tariff:

As per the KERC (Tariff) Regulations 2000, read with the MYT Regulations

2006, the ESCOMs have to file their applications for ERC/Tariff before 120

days of the close of each financial year in the control period. The

Commission observes that the ESCOMs have filed their applications for

revision of tariff on 30th November, 2016. As the tariff revision is effective

from 1st April, 2017 onwards, the ESCOMs would be recovering revenue

as per the revised tariff for eleven months of the Financial Year (except

in case where the billing cycle is lesser than a month).

A statement indicating the proposed revenue and approved revenue is

enclosed vide Annexure-III and detailed tariff schedule is enclosed vide

Annexure IV.

6.12 Summary of the Tariff Order:

The Commission has approved an ARR of Rs.3621.58 Crores for FY18,

which includes the deficit for FY16 of Rs.492.73 Crores with a net gap in

revenue of Rs.281.54 Crores as against CESC’s proposed ARR of

Rs.4648.42 Crores.

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The Commission has allowed recovery of entire gap in revenue with

additional revenue of Rs.281.54 Crores on Tariff Revision as against the

additional revenue of Rs.962.92 Crores proposed by CESC for FY18.

CESC in its filing dated 30.11.2016 had proposed an increase of 148

paise per unit for all categories of consumers resulting in average

increase in retail supply tariff by 26.13%. The Commission has

approved an average increase of 48 paise per unit. The average

increase in retail supply tariff of all the consumers for FY18 is 8%.

The Commission has allowed for recovery of additional revenue

partly by increase in fixed charges ranging from Rs.5 per

KW/HP/KVA to Rs.20 per KW/HP/KVA.

The Commission has allowed for recovery of additional revenue

partly by increase in the energy charges in the range of 15

paise per unit to 50 paise per unit.

The increase in the energy charges for domestic category upto

30 and from 30 to 100 units is 25/30 paise per unit.

The increase in the LT industries category is in the range of 15

paise per unit to 20 paise per unit and for other categories, the

increase is in the range of 20 paise per unit to 50 paise per unit.

In order to increase sales under HT industry and HT commercial

category, the increase made in energy charges in 2nd slab is 20

paise per unit as against 40 paise per unit increase in 1st slab for

consumption upto 1 lakh / 2 lakh units per month.

Time of the day tariff which was made mandatory in the previous Tariff

Orders for installations under HT2 (a),HT2 (b) and HT2(c) with contract

demand of 500KVA and above is continued in this Order.

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The Commission has introduced Time of Day billing for morning

peak period from 06.00 hours to 10.00 hours in respect of LT/ HT

consumers in addition to the prevailing ToD billing.

A rebate of 50 paise per unit is allowed for effluent treatment

plant installed within the industrial premises under HT-2(a) tariff

schedule.

Green tariff of additional 50 paise per unit over and above the

normal tariff which was introduced a few years ago for HT

industries and HT commercial consumers at their option, to

promote purchase of renewable energy from ESCOMs, is

continued in this Order.

As in the previous Orders, the Commission has continued to

provide a separate fund for facilitating better Consumer

Relations /Consumer Education Programmes.

The Commission has decided to impose penalty upto Rs.one

lakh per sub division of CESC who fail to conduct Consumer

Interaction Meetings at least once in three months and such

penalty would be payable by the concerned officers of the

CESC.

6.13 Commission’s Order

1. In exercise of the powers conferred on the Commission under

Sections 62, 64 and other provisions of the Electricity Act, 2003, the

Commission hereby determines and notifies the retail supply tariff of

CESC for FY18 as stated in Chapter-6 of this Order.

2. The tariff determined in this order shall be applicable to the

electricity consumed from the first meter reading date falling on or

after 1st April, 2017.

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3. Consequent to issue of this Tariff Order, the petition filed by CESC vide

OP.No.90 of 2016 stands disposed of.

4. This Order is signed dated and issued by the Karnataka Electricity

Regulatory Commission at Bengaluru this day, the 11th April, 2017.

Sd/- Sd/- Sd/-

(M.K.Shankaralinge Gowda) (H.D. Arun Kumar) (D.B. Manival Raju)

Chairman Member Member

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APPENDIX

NEW DIRECTIVES

AND

REVIEW OF COMPLIANCE OF PREVIOUS DIRECTIVES ISSUED BY THE

COMMISSION

1. The following new directives are issued by the Commission:

i. Directive on conducting Consumers’ Interaction Meetings in the O &

M sub-divisions for redressal of consumer complaints:

During the Public Hearings held by the Commission to hear the

views, comments & suggestions of the consumers and other

stakeholders on the ESCOMs’ Tariff applications, it was brought to

the notice of the Commission by the consumers that the Consumer

Interaction Meetings chaired by the Superintending Engineers, in the

O&M sub-divisions of ESCOMs are not being conducted regularly,

thus denying them of the opportunity to attend such meetings to air

their complaints/ grievances pertaining to supply of electricity and

any others issues. The consumers have urged the Commission to

ensure that ECOMS take necessary action to make the sub-divisions

conduct Consumer Interaction meetings regularly to hear and

address the consumer grievances.

The Commission strongly opines that if the ESCOMs conduct

consumer interaction meetings regularly, not only most of the

grievances of the consumers could be redressed in such meetings,

the ESCOMS could also redesign/realign their operations and

investments on capital and other works to optimally deliver better

and satisfactory service to the consumers. Such development could

also increase the efficiency and revenues of the ESCOMs.

Hence, the Commission hereby directs the CESC to ensure that

Consumer Interaction Meetings chaired by the Superintending

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Engineers, are conducted in each O&M sub-division according to a

pre-published schedule, at least once in every three months. Further,

the consumers shall be invited to such meetings in advance through

emails, letters, notices on CESC’s website, local newspapers etc., to

facilitate participation of maximum number of consumers in such

meetings. The CESC should ensure that the proceedings of such

meetings are recorded and uploaded on its website, for the

information of consumers. Compliance in this regard shall be

reported once in three months to the Commission, indicating the

date, the number of consumers attending such meetings and the

status of redressal of their complaints.

If the CESC fails to ensure conduct of the Consumer Interaction

Meetings as directed, the Commission would consider imposing a

penalty of upto Rs one lakh per O&M sub-division per quarter for

each instance of non-compliance, and also direct that such penalty

shall be recovered from the concerned Superintending Engineer

who fails to conduct such meetings.

ii. Directive on preparation of energy bills on monthly basis by

considering 15 minute’s time block period in respect of EHT/HT

consumers importing power through power exchange under Open

Access

The Commission has noticed that, year on year, there has been a

substantial increase in the number of EHT and HT consumers of the

distribution licensees opting for open access resulting in substantial

volume of energy being procured through Power Exchanges, which

imposes a burden on the SLDC, in grid management.

Further, in accordance with the stipulations in Clause 6.3 (f) of the

Karnataka Electricity Grid Code (KEGC),2015, under the chapter on

Operation Planning, in order to facilitate demand estimation for

operational purpose, the distribution licensee (ESCOM) is required to

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provide to the SLDC, on a day ahead basis, at 09.00 hours each day,

its estimated demand for each 15-minute block, for the ensuing day.

The distribution licensee is also, required to provide to the SLDC, the

estimates of loads that may be shed, when required, in discrete

blocks, with the details of arrangements of such load shedding.

Consequent to such stipulation the ESCOMs are required to prepare

monthly energy bills in respect of EHT/HT consumers importing power

through power exchange under Open Access, by considering 15

minute’s time block. However, it is observed that in rare cases,

except this billing requirement is not being complied with the

ESCOMs.

In view of this, the Commission directs the CESC to ensure

preparation of energy bills on monthly basis by considering the 15

minute’s time block period in respect of EHT/HT consumers importing

power through power exchange under Open Access. The CESC shall

implement the directive forthwith and the compliance regarding the

same shall be submitted monthly from May, 2017 onwards, to the

Commission, regularly.

2. Review of Compliance of Existing Directives:

The Commission, in its earlier Tariff Orders and other communications,

has issued several directives for compliance by the CESC. While

reproducing those directives, the compliance of the directives as

reported by the CESC is analyzed in this Section.

i. Directive on Energy Conservation:

The Commission had directed the ESCOMs to service all the new

installations only after ensuring that the BEE ***** (Bureau of Energy

Efficiency five-star rating) rated Air Conditioners, Fans, Refrigerators,

etc., are being installed in the applicant consumers’ premises.

Similarly, ESCOMS were directed to ensure that all new

streetlight/high mast installations including extensions made to the

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existing streetlight circuits shall be serviced only with LED

lamps/energy efficient lamps like induction lamps.

Further, the Commission had directed the ESCOMs to take up

programmes to educate all the existing domestic, commercial and

industrial consumers, through media and distribution of pamphlets

along with monthly bills, regarding the benefits of using five-star

rated equipment certified by the Bureau of Energy Efficiency in

reduction of their monthly electricity bills and conservation of

precious energy.

Compliance by the CESC:

The following energy conservation measures have been taken:

Unnat Jyothi by Affordable LEDs for All (UJALA) (DELP):

The CESC has implemented “Unnat Jyothi by Affordable LEDs for All”

(UJALA) popularly known as ‘‘Hosa Belaku’’ to provide high quality

9W LED bulbs at an affordable rate to consumers. The Energy

Department, Government of Karnataka has designated Energy

Efficiency Services Limited (EESL), a public sector entity under the

administrative control of Ministry of Power as implementing agency

for UJALA in the State. The programme was launched on 11.12.2015,

in Mysuru by the Hon’ble Chief Minister of Karnataka. As on October

2016, 25,90,536 LED bulbs have been sold.

DEEP Project

The detailed project report for the proposed DEEP pilot project on the

following two feeders has been submitted for approval of the

Commission.

Servicing of new installations after ensuring BEE***** (5-star rating)

appliances

SI.

N0.

FEEDER NAME DIVISION DPR

COST RS.

CRORES

1 Heggadahalli Nanjangudu 7.42

2 Chowdikatte Hunsur

clix

The CESC has issued a circular No.

CESC/GMT/EEE(DSM)/AEE(DSM)/2016-17/cys-65 dated 20.04.2016,

in line with the KERC directives, to service new installations only after

ensuring that the BEE 5-star rating household electrical appliances

are being installed in the applicant consumers’ premises and to

service all new streetlight / High mast installations including

extensions made to the existing streetlight circuits only with LED

lamps/energy efficient lamps like induction lamps. Further, the GoK

vide its circular EN 1 VSC2016, dated 14.07.2016, has also

mandated that all Government Departments and Public Sector

Undertakings shall procure and use only BEE 5 star rated electrical

equipment.

Further, to create awareness among the consumers, the CESC has

created a link in the official website regarding energy saving tips and

to use BEE 5 star rated electrical appliances for reduction of their

monthly electricity bills. Also, notifications are being issued to

educate all the existing domestic, commercial and industrial

consumers, through media and distribution of pamphlets along with

monthly bills, regarding the benefits of using five star rated

equipment certified by the Bureau of Energy Efficiency which would

result in reducing their monthly electricity bills and also conserving

precious energy.

Commission’s Views:

The Commission observes that the CESC has not submitted the

compliance of the directive regularly. It is also observed from the

CESC’s compliance that, it has merely issued a circular to all its

officers directing them to ensure that BEE five-star rated energy

efficient appliances while servicing the installations, and has not

taken any further effective steps in the field to ensure service to all

new installations only with the BEE five-star rated Air Conditioners,

Fans, Refrigerators, etc., in the applicant consumers’ premises. The

clx

CESC is directed to focus on effective implementation of this

directive by reviewing periodically the progress/status of

implementation of its circular instructions by its field officers and take

corrective action wherever necessary.

Further, it is also important that the CESC draws up a continuous

awareness programme to educate the consumers about the benefit

of using the energy efficient appliances in their premises and ensure

increase in use of energy efficient appliances.

The Commission reiterates that the CESC shall service all the new

installations are serviced only after ensuring that the BEE ***** (Bureau

of Energy Efficiency five-star rating) rated Air Conditioners, Fans,

Refrigerators, etc., are being installed in the applicant’s /consumers’

premises and the compliance thereon shall be reported to the

Commission once in a quarter regularly.

ii. Directive on implementation of Standards of Performance (SoP):

The Directive issued was as follows:

“The CESC is directed to strictly implement the specified Standards of

Performance while rendering services related to supply of power as

per the KERC (Licensee’s Standards of Performance) Regulations,

2004. Further, the CESC is directed to display prominently in Kannada

the details of various critical services such as replacing the failed

transformers, attending to fuse off call / line breakdown complaints,

arranging new services, change of faulty energy meters,

reconnection of power supply, etc., rendered by it as per Schedule-1

of the KERC (Licensee’s Standards of Performance) Regulations, 2004

and Annexure-1 of the KERC (Consumer Complaints Handling

Procedure) Regulations, 2004, on the notice boards in all the O & M

sections and O & M sub-divisions in its jurisdiction for the information

of consumers as per the following format.

clxi

Nature of

Service

Standards of

performance

(indicative minimum

time limit for

rendering services)

Primary

responsibility

centres where

to lodge

complaint

Next higher

Authority

Amount

payable to

affected

consumer

The CESC shall implement the above directive within one month from

the date of the order and report compliance to the Commission

regarding the implementation of the directives.”


The CESC has implemented the specified Standards of Performance

while rendering services related to supply of power as per the KERC

(Licensee’s Standards of Performance) Regulations, 2004. The CESC

has prominently displayed in Kannada the details of various services

such as replacing of the failed transformers, attending to fuse off call /

line breakdown complaints, arranging new services, change of faulty

energy meters, reconnection of power supply, etc., rendered as per

Schedule-1 of the KERC (Licensee’s Standards of Performance)

Regulations, 2004 and Annexure-1 of the KERC (Consumer Complaints

Handling Procedure) Regulations, 2004, on the notice boards in all the

O & M sections and O & M sub-divisions for the information of

consumers. The details have already been furnished to the

Commission vide letter No. CESC/SEE (Coml.)/EE (Com)/2015-

16/12661-66, dated 07.11.2015.

Implementation of KERC Directive on Standard of Performance (SOP)

as on October 2016

SL.

NO

.

CIR

CLE

NO

OF

O&

M SU

B-

DIV

ISIO

NS

EX

ISTI

NG

NO

OF

O&

M

SEC

TIO

NS

EX

ISTI

NG

N

O O

F

O&

M S

UB

-

DIV

ISIO

NS

WH

ER

E T

HE

DETA

ILS

DIS

PLA

YED

N

O O

F

O&

M

SEC

TIO

NS

WH

ER

E T

HE

DETA

ILS

DIS

PLA

YED

NO

OF

CO

MP

LAIN

TS

REC

EIV

ED

FO

R T

HE

DELA

Y IN

REN

DER

ING

THE

SER

VIC

E

AM

OU

NT

PA

ID T

O

THE

CO

NSU

MER

IN R

S.

CU

MU

LATI

V

E N

O O

F

HR

S

DELA

Y

IN

REN

DER

ING

SER

VIC

ES

CU

MU

LATI

V

E A

MO

UN

T

PA

ID T

O

THE

CO

NSU

MER

IN R

S.

Nos. Nos. Nos. Nos. Nos. Nos. Nos. Nos.

1 Works

circle 19 77 19 77

0 0 0 0

2 O&M

Circle 13 55 13 55

0 0 0 0

3 Mandya

Circle 13 54 13 54

0 0 0 0

clxii

4 Hassan

Circle 16 65 16 65

0 0 0 0

CESC Total 61 251 61 251 0 0 0 0


The Commission while noting the compliance furnished, reiterates

that CESC shall continue to comply by displaying the details of SoP

in all its O&M section and sub-division offices for the information of

the consumers, and also to adhere to the specified standards of

performance in rendering various services to consumers in a time

bound manner.

The Commission notes that consumers participating in the Public

Hearings held on the ESCOMs’ Tariff revision proposals have stated

that the ESCOMs, contrary to their submission before the

Commission, on compliance of the directive issued by the

Commission, have not displayed the details of SoP on the notice

boards in O&M offices and also not adhered to the time lines

stipulated in the SoP. They have sought the intervention of the

Commission to ensure that the ESCOMs comply with the directive on

the SoP.

The Commission notes that the situation indicates that there is lack of

effective supervision over the functioning of field officers by the

ESCOMs especially in rendering services relating to supply of power

to the consumers.

The Commission reiterates its directive to the CESC to continue to

strictly implement the specified SoP while rendering services related

to supply of power as per the KERC (Licensee’s Standards of

Performance) Regulations, 2004. The compliance regarding the

same shall be submitted to the Commission, regularly.

clxiii

iii. Directive on use of safety gear by linemen:

The directive issued was as follows:

“The Commission directs the CESC to ensure that all the linemen in its

jurisdiction are provided with proper and adequate safety gear and

also ensure that the linemen use such safety gear provided while

working on the network. The CESC should sensitise the linemen about

the need for adoption of safety aspects in their work through suitably

designed training and awareness programmes. The CESC is also

directed to device suitable reporting system on the use of safety gear

and mandate supervisory/higher officers to regularly cross check the

compliance by the linemen and take disciplinary action on the

concerned if violations are noticed. The CESC shall implement this

directive within one month from the date of this order and submit

compliance report to the Commission.”


The CESC has provided proper and adequate safety gear to all the

linemen in its jurisdiction and is also ensuring that the linemen use

such safety gear provided while working on the distribution system.

Further, CESC is conducting training programmes for the linemen

wherein the absolute necessity of adoption of safety aspects in their

work is constantly highlighted. Training on safety aspects has been

imparted to 625 linemen during FY 6.

The CESC has also directed the field officers to monitor the proper up

keep of the safety gear provided and keep in stock reasonable

spare sets of safety gear and also monitor the use of the same by

linemen and take disciplinary action on the concerned if violations

are noticed. The details are furnished below:

clxiv

Implementation of KERC Directive on use of safety gear by linemen

as on the month of October 2016

SL

NO CIRCLE

NO OF

LINEME

N /ASST.

LINEME

N

EXISTIN

G

NO OF

LINEME

N/ASST.

LINEME

N

PROVID

ED WITH

SAFETY

GEAR

NO

OF

TRAI

NING

AND

AWA

RENE

SS

PRO

GRA

MME

CON

DUCT

ED

NO OF

SURPRI

SE

INSPEC

TIONS

COND

UCTED

REGAR

DING

USE OF

SAFETY

GEAR

/UNIFO

RM BY

LINEME

N

NO OF

NOTIC

ES

GIVEN

TO THE

LINEME

N FOR

NOT

USING

SAFETY

GEAR

NO OF

DISCIP

LINARY

ACTIO

NS

TAKEN

AGAIN

ST

LINEME

N

CUMUL

ATIVE

NO OF

TRAINI

NG

AND

AWAR

ENESS

PROG

RAMM

E

COND

UCTED

CUMULATI

VE NO OF

SURPRISE

INSPECTIO

NS

CONDUC

TED

REGARDI

NG USE

OF SAFETY

GEAR

/UNIFOR

M BY

LINEMEN

CUMU

LATIVE

NO OF

NOTIC

ES

GIVEN

TO THE

LINEM

EN

FOR

NOT

USING

SAFETY

GEAR

YEAR

CUMULATI

VE NO OF

DISCIPLIN

ARY

ACTIONS

TAKEN

AGAINST

LINEMEN

Nos. Nos. Nos. Nos. Nos. Nos. Nos. Nos. Nos. Nos.

1 2 3 4 5 6 7 8 9 10 11 12

1 Works

circle 702 702 11 113 0 0 117 523 0 0

2 O&M

Circle 723 407 1 6 0 0 24 162 0 0

3 Mandy

a 609 465 2 12 0 0 8 49 0 0

4 Hassan 716 716 0 0 0 0 91 146 4 0

CESC Total 2750 2290 14 131 0 0 240 880 4 0

Further, it is submitted that the remaining linemen will be provided

with safety gear by March 2017.


It is important that the CESC should continue to focus on safety

aspects to reduce the electrical accidents occurring due to

negligence and non-adherence of safety procedures by the field

staff while working on the distribution network. Further, the linemen

should be given training periodically on adherence to safety

aspects so that it becomes part of their routine.

The Commission reiterates its directive that the CESC shall ensure

that, all the linemen in its jurisdiction are provided with proper and

adequate safety gear and that they use such safety gear

provided to them while working on the network. The compliance

in this regard shall be submitted once in a quarter to the

Commission regularly.

iv. Directive on providing Timer Switches to Street lights by the

ESCOMs

The directive issued was as follows:

clxv

“The Commission directs the CESC to install timer switches using

own funds to all the street light installations in its jurisdiction

wherever the local bodies have not provided the same and later

recover the cost from them. The CESC shall also take up

periodical inspection of timer switches installed and ensure that

they are in working conditions. They shall undertake necessary

repairs / replacement work, if required and later recover the cost

from local bodies. The compliance regarding the progress of

installation of timer switches to street light installations shall be

reported to the Commission within three months of the issue of the

order.”

Compliance by the CESC;

TOTAL NO. OF

STREETLIGHT

INSTALLATIONS

NO. OF

INSTALLATIONS

PROVIDED

WITH TIMER

SWITCHES

BALANCE NO.

OF

INSTALLATIONS

TO BE

PROVIDED WITH

TIMER SWITCHES

LIKELY DATE

OF

COMPLETIO

N OF ALL

INSTALLATI

ON

REMARKS

/ISSUES

20,330 50 20,280 -

The work of providing timer switches to streetlight installations

will be taken up by the CESC under E&I works during 2016-17,

covering Mysuru city and other district & taluk Headquarters

initially and later village Panchayats.

The CESC will also ensure that henceforth, the new streetlight

installations and any extensions/modifications to be carried

out to the existing streetlight installations shall be serviced

only with timer switches.

The cost of a timer switch is around Rs. 55,000/-. As the

expenditure involved is huge, the CESC is also examining the

possibility of providing load monitoring units which also have

the time limiting capability to streetlight installations. The cost

per unit is around 12,000/-.

clxvi

Further, regarding the installation of timer switches to the

streetlight installations, the CESC has addressed letters to MCC

Mysuru, but no action has been taken by them.

Further, the CESC on its own, has not taken up this case because

of huge capex requirement. In the meanwhile, on request by the

Urban Development Department, Bengaluru, the CESC has

submitted a proposal under “AMRUT” scheme in which the main

objective is to optimize energy consumption in streetlights

including replacement of energy inefficient bulbs by suitable

efficient LED bulbs and also fixing timer switches to all streetlight

installations in AMRUT cities i.e., Mysuru, Mandya and Hassan. The

proposal consists of replacement of 77,446 streetlight fittings and

fixing of 4,754 timer switches in AMRUT cities vide letter No.

CESC/GM(T)/DGM(DSM)/AGM (DSM)/2016-17/16885 dated

21.12.2016 and approval from the Urban Development

Department, GoK is awaited.


The Commission observes that so far the CESC has not taken any

concrete steps to provide timer switches to the streetlight

installations in its jurisdiction. The CESC has also not initiated any

action to coordinate with the concerned local authorities for

installation of timer switches by them. The inaction by the CESC

has resulted in wastage of electricity by indiscriminate use of

streetlights during day time in its jurisdiction.

It is also noted that providing timer switches to streetlight

installations under AMRUTH scheme covering 4,754 streetlight

installations has not yet taken off. The same should be pursued

with utmost seriousness this matter deserves, with the concerned

authorities so as to take the matter forward. The progress /status in

this regard shall be reported to the Commission on a quarterly

basis, regularly.

clxvii

Further, wherever feasible, the CESC should install the timer

switches at its cost and later recover the cost from the concerned

local bodies. The CESC is also directed to persuade the local

bodies to install timer switches at their cost availing funds / grants

received from Government and other agencies for such

programmes.

The Commission reiterates its directive that the CESC shall ensure

that, the new streetlight installations and any

extension/modification to be carried out to the existing streetlight

installations shall be serviced only with timer switches.

v. Directive on Load shedding:

The Commission had directed that:

(1) Load shedding required for planned maintenance of

transmission/ distribution networks should be notified in daily

newspapers at least 24 hours in advance for the information

of consumers.

(2) The ESCOMs shall on a daily basis estimate the hourly

requirement of power for each sub-station in their jurisdiction

based on the seasonal conditions and other factors affecting

demand.

(3) Any likelihood of shortfall in the availability during the course

of the day should be anticipated and the quantum of load

shedding should be estimated in advance. Specific sub-

stations and feeders should be identified for load shedding for

the minimum required period with due intimation to the

concerned sub-divisions and sub-stations.

(4) The likelihood of interruption in power supply with time and

duration of such interruption may be intimated to consumers

through SMS and other means.

clxviii

(5) Where load shedding has to be resorted to due to unforeseen

reduction in the availability of power, or for other reasons,

consumers may be informed of the likely time of restoration of

supply through SMS and other means.

(6) Load shedding should be carried out in different sub-stations /

feeders to avoid frequent load shedding affecting the same

sub-stations / feeders.

(7) The ESCOMs should review the availability of power with

respect to the projected demand for every month in the last

week of the previous month and forecast any unavoidable

load shedding after consulting other ESCOMs in the State

about the possibility of inter-ESCOM load adjustment during

the month.

(8) The ESCOMs shall submit to KERC their projections of

availability and demand for power and any unavoidable

load shedding for every succeeding month in the last week of

the preceding month for approval.

(9) The ESCOMs shall also propose specific measures for

minimizing load shedding by spot purchase of power in the

power exchanges or bridging the gap by other means.

(10) The ESCOMs shall submit to the Commission sub-station wise

and feeder-wise data on interruptions in power supply every

month before the 5th of succeeding month.

The Commission had directed that the ESCOMs shall make every

effort to minimize inconvenience to consumers strictly complying

with the above directions. The Commission had indicated to review

the compliance of directions on a monthly basis for appropriate

orders.

clxix


Load shedding required for planned maintenance of distribution

networks are being notified in daily newspapers in advance by

the concerned O&M officials.

At present the “SLDC” is instructing the CESC regarding shortfall

in power and based on real time allocation of power due to

shortfall, CESC is taking action to effect unscheduled load

shedding on the identified specific sub-stations and feeders on

rotation basis.

Unscheduled load shedding is being informed to all

Superintending Engineers O&M circle, Executive Engineers O&M

divisions through SMS for intimating to consumers. The CESC is

informing all 220kV stations to effect load shedding through

“DCC” established at Mysuru. Also, the CESC is taking action to

intimate the unscheduled load shedding to the public through

newspapers and FM radio channel during shortfall in generation.

CESC is implementing uniform load shedding in all the 5 districts.

At present, SLDC is monitoring inter-ESCOM availability and

allocation of power.

The details of sub-station feeder-wise interruption data (both

number and duration of interruptions) are being submitted to

the Commission every month in the form of PQM statements.

The CESC is submitting the projection of availability and

demand for power and any unavoidable load shedding for

every succeeding month in the last week of the preceding

month to the Commission. Projection of availability and demand

for power and any unavoidable load shedding details for the

month of September and October 16 are herewith enclosed as

Annexure-1.

“Development & deployment of web based Feeder-wise Data

Analysis and Outage Management (FDA&OM) along with support

and maintenance for a period of one year in CESC”.

clxx

The CESC has taken action towards implementation of an

“Application Software namely “Feeder-wise Data Analysis and

Outage Management” for providing information on time and

duration of unscheduled interruptions to the consumers through SMS.

This application also helps avoiding of load shedding of the same

sub-stations/feeders considered for load shedding by rostering based

on feeder priority.

The Work has been awarded to M/s Idea Infinity IT solutions

Pvt. Ltd, Bengaluru, on 7-1-2016.

The implementation of application is in progress.

The sample data has been shared to M/s Infinity IT solutions

Pvt. Ltd, Bengaluru by SLDC on 9-3-2016.

The test file from MCC was pushed to FDAOM application

server on 22.04.2016 and sample reports were generated and

accepted.

From May, 2016, the data is pushed to FDAOM application

server on real time basis.

Daily reports and monthly reports are generated and also the

same application is used for generation of JSON files of reports

required by the Nation Power Portal (NPP) web portal where in

REC (Rural Electrification Corporation) will be pushing the SMS

to the consumers at its own cost for one year and this is in

progress.

The application is likely to ‘go live’ from 1.05.2016 and User

Acceptance Test is completed on 08.08.2016

The outage management module still needs improvement

and specifications w.r.t SMS gateway to integrate to field

officers of the CESC and station mobile numbers that are in

CUG are still under development.

At present through this application only the scheduled outage

is being intimated to CESC officials and elected

representatives through SMS as the input to this application is

SCADA data where in the bifurcation between scheduled and

un-schedule interruption cannot be made.

clxxi

The outage Management module developed is now taken up

for improvement to send SMS to MPs, MLAs, VIPs, HT and EHT

consumers at the first instance. Mobile telephone numbers of all

the consumers are being collected and sending SMS to all

consumers will be taken up in phased manner.

Also, the 11kV feeder consumer mapping is not completed

and data collection is in progress. After completion of this, the

consumers can be intimated through SMS.

Commission’s views:

The Commission notes that the CESC has not expedited the

‘application software’ which it has been developing for integration

with the SCADA data to enable providing information to the

consumers through SMS in advance regarding the time and duration

of probable interruptions. There is no progress in this regard as there is

no change in the status as compared to the status of the last year.

The Commission notes that the CESC has not effectively and

satisfactorily complied with the directive on load shedding. The

CESC shall expedite development of necessary software and other

process required to inform consumers through SMS regarding both

scheduled and un-scheduled load shedding due to reasons such as

system constraints, breakdowns of lines/equipment, maintenance

etc. This would certainly address significantly the consumers’

dissatisfaction on this issue and prevent inconvenience/disruption

caused to industrial consumers.

Further, the Commission observes that the CESC is not submitting its

projections of availability and demand for power and any

unavoidable load shedding for every succeeding month in the last

week of the preceding month to the Commission, regularly. The

CESC shall henceforth, submit the same regularly to the Commission

without fail.

clxxii

The Commission reiterates that, the CESC shall comply with the

directive on load shedding and submit monthly compliance reports

thereon to the Commission regularly.

vi. Directive on Establishing a 24x7 Fully Equipped Centralized

Consumer Service Center for Redressal of Consumer

Complaints:

The directive was as follows:

“The CESC is directed to put in place a 24x7 fully equipped

Centralized Consumer Service Center at its Headquarters with

state of the art facility/system for receiving consumer complaints

and monitoring their redressal so that electricity consumers in its area

of supply are able to seek and obtain timely and efficient services /

redressal in the matter of their grievances. Such a Service Center

shall have adequate number of desk operators in each shift so that

consumers across the jurisdiction of the CESC are able to lodge their

complaints directly with this Centre.

Every complaint shall be received on a helpline telephone number

by the

desk operator and registered with a docket number which shall be

intimated to the consumer. Thereafter, the complaints shall be

transferred

online / communicated to the concerned field staff for resolving the

same. The concerned O&M / local service station staff shall visit the

complainant’s premises / fault location at the earliest to attend to

the complaints and then inform the Centralized Service Centre that

the

complaint is attended. In turn, the call Centre shall call the

complainant

and confirm with him whether the complaint has been attended to.

The

complaints shall be closed only after receiving consumer’s /

complainant’s confirmation. Such a system should also generate

clxxiii

daily

reports indicating the number / nature of complaints received,

complaints attended, complaints pending and reasons for not

attending to the complaints.

The CESC shall publish the details of the complaint handling

procedure /

Mechanism with contact numbers in the local media periodically for

the

information of the consumers. The compliance of the action taken in

the matter shall be submitted to the Commission within two months

from the date of this Order.

Further, the Commission directs the CESC to establish/strengthen

24x7 service stations, equipping them with separate vehicles and

adequate line crew, safety kits and maintenance materials at all its

sub-divisions including rural areas for effective redressal of consumer

complaints”.


The CESC has already put in place during December, 2011, a

24x7 fully equipped centralized Consumer Service Centre at its

Headquarters at Mysuru with state of the art facility / system for

receiving consumer complaints and monitoring their redressal

so that electricity consumers in its area of supply are able to

seek and obtain timely and efficient services / redressal in the

matter of their grievances.

29 numbers of 24x7 service stations are established at 19 sub-

divisions. These service stations are equipped with vehicles,

crew, safety kits and maintenance materials for effective

redressal of consumer complaints. Further, there are 32 service

stations yet to be established in the sub-divisions/sections and

the same will be established by March, 2018.

clxxiv

Infrastructure at call Centre:

Single window customer care centre is connected directly to

data centre; for online user service.

Call centre is equipped with IVRS server, 15 PCs, IP phones, Fax

server etc.

Customers can call Toll Free telephone number 1800-425-1916.

The toll free number is published in all leading newspapers,

Company web site & also printed at the back of the monthly

consumer electricity bills, so that consumers can utilize this

facility for their queries.

Call centre has IVRS server facility for operator free customer

interaction.

Manpower at Customer Care Centre:

An Assistant Engineer, 4 team leaders and 16 customer care

representatives (CCR) are working at customer care centre.

One team leader with 4 CCRs are working round the clock to

address the customer complaints/requests.

Work at Customer Care Centre:

Wide publicity has been given to the helpline number “1912” by

publishing in all leading English and Kannada newspapers. A

caller tune has been implemented in all CUG Mobile Numbers of

CESC officers/service station to intimate public to call “1912” for

registration of electricity complaints.

A complaint received at customer care centre will be registered

immediately in the software and docket numbers are intimated

simultaneously to consumers and to the concerned sub-

divisional officer/ section officer or local service station

automatically via SMS to their mobile numbers. Once the

complaint is resolved, the status of complaint will be updated by

concerned sub-divisional officer/ section officer / local service

station or customer care executive, closing the docket. The

clxxv

consumers can also track the status of their complaint through

online.

The complaints which are not solved as per SoP will be

escalated to higher officers.

Web based PGRS (Public Grievance Redress system) software is

installed successfully on 22.9.2015 and working satisfactorily

enabling fast complaint registration and redressal at customer

care centre. Provision of consumer complaints registration

through various sources like; helpline, SMS, Email, Web,

Facebook and retrieving of consumer history is available in the

software.

Further, the CESC is taking all steps to ensure that, complaints of

consumers are registered only through the centralized consumer

service Centre, for proper monitoring of disposal of complaints

registered. The CESC has also published the contact number of the

centralized Consumer Service Centre regularly in the local media

and other modes like FM Radio periodically for the information of

public for ensuring that all the complaints of consumers are

registered only through the centralized consumer service Centre, for

proper monitoring of disposal of complaints registered.


The Commission takes note of the fact that CESC has established a

24x7 customer care centre and has taken various measures for

redressal of consumer complaints. The CESC should continue its

efforts in improving delivery of consumer services to reduce the

consumer complaint downtime so as to ensure that prompt services

are extended to them. In this regard, the CESC should develop

necessary capacity and infrastructure for prompt and effective

response to attend to the consumer complaints regarding

breakdown of lines/equipment, failure of transformers etc., resulting

in interruptions in power supply. In addition to this, the CESC should

clxxvi

take up necessary action to continuously sensitize its field staff so that

they need to discharge their work efficiently and effectively.

The Commission reiterates its directive to the CESC to publish the

complaint handling procedures / contact number of the centralized

Consumer Service Centre in the local media and other modes

periodically for the information of the public and ensure that all the

complaints of consumers are registered only through the centralized

consumer service centre for proper monitoring of disposal of

complaints registered. The compliance in this regard shall be

furnished regularly once in a quarter, to the Commission.

vii. Directive on Energy Audit:

The Commission had directed the CESC to prepare a metering plan

for energy audit to measure the energy received in each of the

Interface Points and to account for the energy sales. The

Commission had also directed the CESC to conduct energy audit

and chalk out an Action Plan to reduce distribution losses to a

maximum of 15 per cent wherever it was above this level in towns/

cities having a population of over 50,000.

The Commission had earlier directed all the ESCOMs to complete

installation of meters at the DTCs by 31st December, 2010. In this

regard the ESCOMs were required to furnish to the Commission the

following information on a monthly basis:

a) Number of DTCs existing in the Company.

b) Number of DTCs already metered.

c) Number of DTCs yet to be metered.

d) Time bound monthly programme for completion of work.


The energy audit of all the feeders as per the formats prescribed

by the Commission is being submitted from December, 2015,

onwards. So far the energy audit of 439 feeders and 4,779

clxxvii

DTCs has been submitted. The energy audit for the month of

April, May and June, 2016 has already been submitted to the

Commission.

The distribution loss calculation for the FY16 for all the existing

1,396 feeders is calculated and has been furnished to the

Commission vide letter No: CESC/GM(Coml.)/ RA-1/2/16-

17/7630/21.07.2016. The same has been enclosed as Annexure-

2.

Status as on 30-09-2016:

i. 372 numbers of exclusively agricultural feeders have been

commissioned. There are 37,028 distribution transformers on

these feeders. Metering is not required in respect of these

transformers as the feeder consumption is being considered for

calculation of IP-set consumption.

ii. 8,261 numbers of water supply installations have been serviced

and all of them are in rural areas. Each of these water supply

installations has been provided with an independent distribution

transformer. As such metering is not required in respect of these

transformers also.

iii. 27,289 numbers of DTCs have to be provided with meters. The

details are furnished below:

PARTICULARS EXISTING

DTCS

METERED

DTCS

DTCS WHERE

METERS ARE

NOT

REQUIRED

DTCS TO BE

METERED

Urban

( non-

RAPDRP)

6,122 3,723 0 2,399

Urban

(RAPDRP) 7,064 7,064 0 0

Rural 86,877 16,698 45,289 24,890

Total 1,00,063 27,485 45,289 27,289

clxxviii

Energy Audit of Towns under R-APDRP:

MDA/MDM Modules of R-APDRP towns are under UAT stage.

M/s Infosys, along with R-APDRP nodal officer of BESCOM, is

conducting UAT at Bengaluru. The percentage of completion is

around 85. The UAT of these modules will be completed within

December 2016 and once it is completed and proper

consumer tagging is done, the energy audit of feeders/DTC will

be made available in the RAPDRP-portal. At present town-wise

energy audit of R-APDRP towns is available and it is consistent.

The same has been submitted to PFC, New Delhi also.

GIS - Mapping of network assets and consumers, to the R-

APDRP system is being affected once in six months and

recently (October, 2016) second iteration for all the twelve

towns is completed and is being updated. However, updating

the data by M/s Infosys in R-APDRP system will be completed by

the end of November, 2016.

The town-wise/ city-wise energy audit of RAPDRP towns/cities

for FY16 as well as for FY17 up to September, 2016 is enclosed

as Annexure-6 and Annexure 6a.

In respect of rural DTCs, the consumption of exclusive agricultural

feeders is being obtained from the sub-stations, after completion of

the works of bifurcation of agricultural and non-agricultural feeders

under the NJY scheme. So far, as at the end of September 2016, 372

exclusive agricultural feeders are existing in the CESC.

The Metering of non-agricultural DTCs will also be taken up

at the earliest.

The loss levels of distribution transformers (including those

under RAPDRP) for which energy audit has been carried out

as at the end of September, 2016 are as given below:

clxxix

MONTH

/ YEAR

TOTAL NO. OF DTCS

FOR WHICH ENERGY

AUDITED

DTC ENERGY LOSS ANALYSIS

Urban Rural Total <5% 5-10% 10-20% 20-30% >30%

April’16 6,383 385 6,768 2,501 2,719 1,252 261 35

May’16 6,445 389 6,834 2,547 2,723 1,407 133 24

June’16 6,477 314 6,791 2,645 2,644 1,383 109 10

July’16 6,507 281 6,788 2,877 2,435 1,372 98 6

Aug’16 6,935 309 7,244 2,938 2,774 1,390 137 5

Sep’16 6,262 433 6,695 3,003 2,387 1,125 178 2

The loss levels of distribution transformers for which energy

audit has been carried out for FY 6 are as given below:

MONT

H /

YEAR

TOTAL NO. OF DTCS

FOR WHICH ENERGY

AUDITED

DTC ENERGY LOSS ANALYSIS

Urban Rur

al

Total <5% 5-

10%

10-20% 20-

30%

>30%

April’1

5

2,868 45 2,913 1,43

5

1,01

9

421 36 2

May’1

5

2,889 45 2,934 1,42

8

1,04

7

434 23 2

June’1

5

2,994 45 3,039 1,51

7

1,05

5

450 17 0

July’1

5

2,942 45 2,987 1,39

1

1,07

3

500 21 2

Aug’1

5

2,910 10 2,920 1,31

1

1,14

8

429 30 2

Sep’1

5

3,346 10 3,356 1,32

3

1,24

0

743 35 15

Oct’1

5

3,618 14 3,632 1,51

8

1,33

2

718 57 7

Nov’1

5

3,874 41 3,915 1,61

2

1,49

8

736 63 6

Dec’1

5

4,165 85 4,250 1,62

5

1,78

9

800 30 6

Jan’16 5,539 158 5,697 2,40

9

2,15

2

905 116 115

Feb’1

6

6,076 185 6,261 2,55

0

2,43

5

1,088 160 28

Mar’1

6

6,324 99 6,423 2,49

7

2,51

6

1,215 174 21

Action is being initiated to bring down the losses in respect of

transformers where the losses are more than 10 per cent. The

clxxx

remedial measures initiated to reduce loss levels are indicated in

Annexure- 7.

Further, the CESC has furnished the details of energy audit for FY16 as

well as FY17 (upto September 2016) vide Annexures 6a and 6b in the

application for APR for FY16. However, the energy audit details for

FY17 up to November 2016 are enclosed as Annexure-18. The action

plan for reduction of loss levels has been furnished vide Annexure-7

to the application for APR for FY16. The comparative statement of

losses recorded in towns and cities for FY16 as against FY15 are

enclosed vide Annexure- 19.

The reasons for not taking up the energy audit of all DTCs, where the

meters have been provided are as follows:

Metered DTCs are idle without loads

Display/ MNR problems.

Meter burnt out.

CT failures.

Meters are not synchronized in AFT Web Link.

Communication issues remain in rural area and problems in

establishing communication with modems are being

encountered.

Tagging of installations to the DTC is underway and whenever

new transformers are commissioned, creation of new transformer

code and transfer the installations to these new DTCs could not

be carried out easily due to software constraint. Now bulk

shifting of installations from one DTC to other is made available in

the TRM software.


It is observed that the monthly energy audit reports of cities/towns

with detailed analysis are not being submitted by the CESC regularly

to the Commission. The Commission directs the CESC to conduct

energy audit of identified cities/towns and initiate necessary

clxxxi

measures on the basis of energy audit results to reduce the technical

losses and improving collection efficiency to achieve the mandated

A T & C loss of less than 15 per cent. The CESC is directed to submit

compliance thereon regularly to the Commission.

The Commission further notes that the CESC despite completing

significant percentage of the metering of the DTCs, it has failed to

take up DTC-wise energy audit, citing non-completion of tagging of

consumer installations with the concerned feeders/DTCs, CT failures

and synchronization issues. The stand repeatedly taken by the CESC

for the last three years that tagging of consumer details with the

concerned feeders/DTCs is not completed does not augur well for

the Company which wants to run its business on commercial

principles. This shows that the CESC is not serious about conducting

energy audit and taking remedial measures to reduce losses in order

to run its business efficiently. The Commission views with displeasure,

the delay on the part of the CESC to complete the tagging of

consumer installations and take up the DTC-wise energy audit.

The CESC is directed to take up energy audit of DTCs where meters

have already been installed and to initiate remedial measures for

reducing energy losses in the distribution system. The compliance in

respect of DTC-wise energy audit conducted with analysis and the

remedial action initiated to reduce loss levels shall be submitted

every month regularly to the Commission.

Further, the CESC is directed to submit to the Commission the

consolidated energy audit report for the FY17, as per the formats

prescribed by the Commission, vide its letter No: KERC/D/137/14/91

dated 20.04.2015, before 15th May, 2017.

vii. Directive on Implementation of HVDS:

In view of the obvious benefits in the introduction of HVDS in

reducing distribution losses, the Commission had directed the CESC

clxxxii

to implement High Voltage Distribution System in at least one O&M

division in a rural area in its jurisdiction by utilizing the capex provision

allowed in the ARR for the year.


In the present scenario, CESC is putting up one DTC for each

Ganga Kalyana IP-set as well as water supply installations and

is providing one DTC for every three IP-sets serviced under

regularization scheme.

DTCs provided for the above works are large in number and are

analogous to HVDS concept.

As on 30.09.2016, there are 1,495 feeders in CESC (Agri-372,

Rural-413, NJY-266, Urban-444)

Bifurcating non-agricultural loads from rural feeders is being

undertaken and this addresses all our load needs. Therefore,

this is the reason that the Board of Directors have decided to

do away with HVDS in CESC, because it would be a waste of

public funds to invest in non-productive scheme.

It has been CESC’s view that HVDS is not required in its area as the

coverage of NJY under phase-1 and phase-2 is massive (number of

feeders added 306, number of transformer added 9,495).

The table below gives an overview of the DTCs added, HT/LT line

added and HT/LT ratio in CESC for the past five years.

Year 2011-12 2012-13 2013-14 2014-15 2015-16

DTCs added 3,780 6,004 10,829 10,057 10,172

HT line added 1,313.43 1,726.42 4,514.02 5,164.98 4,323.80

LT line added 971.30 1,082.26 1,800.56 1,842.36 4,260.55

HT lines 31,252.12 32,978.55 37,492 42,657 46,981

LT lines 70,392.07 71,474.33 73,275 75,117 79,378

HT/LT ratio 1:2.25 1:2.16 1:1.95 1:1.76 1:1.68

It can be seen from the above that there is a huge jump in number

of DTCs and the HT lines added during every year from 2013-14

onwards. This addition has effectively decreased HT/LT ratio to 1:1.68

by FY-16. Further, the trend is maintained even in the FY17.

clxxxiii

Commensurately, distribution loss is also seen in the downward trend

and the CESC is achieving the stipulated target figure approved by

the Commission in this regard.


The Commission has been directing the ESCOMs to identify one

sub-division in each ESCOM with high LT / HT ratio and high

distribution loss levels, so that substantial loss reduction could be

achieved by implementing the HVDS in such sub-divisions. Further,

the Commission, with a view to bring down the cost of

implementation of HVDS, had issued revised guidelines to all the

ESCOMs directing them to implement the HVDS in their sub-

divisions/feeders having the highest distribution losses.

However, the CESC has not taken up implementation of HVDS in its

jurisdiction contending that providing one DTC for every three IP-

sets serviced under regularization scheme is akin to implementation

of HVDS.

The Commission is of the view that implementation of the HVDS for

the agricultural feeders segregated under NJY scheme, wherever

high losses are prevailing, is necessary to reduce the distribution

losses significantly. However for the present, the Commission has

taken note of the decision of the CESC that it has decided not to

implement HVDS in its jurisdiction citing various reasons in support of

its decision.

viii. Directive on Nirantara Jyothi – Feeder Separation:

The ESCOMs were directed to furnish to the Commission the

programme of implementing taluk wise 11 KV feeders segregation

with the following details

a) Number of 11 KV feeders considered for segregation.

b) Month wise time schedule for completion of envisaged work.

c) Improvement achieved in supply after segregation of feeders.

clxxxiv


NJY Phase-1:

The CESC has taken initiatives to commission the completed feeders

on top priority and to complete and commission the feeders where

the works are in progress. An action plan was made and 125 feeders

have been commissioned under NJY phase-1 as at the end of

October, 2016. Action is being taken to commission the remaining

feeders.

Further, the works are under progress in 5 feeders and the same will

be completed before December, 2016. The delay in completion of

these 5 feeders was due to pending approvals from the Railway /

Forest authorities.

The progress of NJY phase-1 as at the end of October, 2016, and

action plan to complete the works are as detailed below:

NO.

OF

TALUK

AS

COVE

RED

TOTAL

FEEDE

RS

FEEDERS ACTION PLAN

completed commissio

ned

balan

ce

Nov

’16

Dec

’16 Total

10 135* 130 125 5 2 3 5

*As per DPR, 161 NJY feeders were proposed, however, due to field

constraints, work on 26 feeders could not be taken up and the same is

proposed to be taken up in DDUGJY for which tenders are invited.

NJY Phase-2:

Out of 235 feeders proposed, works on 196 feeders have been

completed, out of which 176 feeders have been commissioned as at

the end of October 2016. Action is being taken to commission the

completed feeders.

Out of the remaining 39 feeders, work is in progress in 27 feeders and

the works on 12 feeders are to be taken up.

clxxxv

The progress of NJY phase-2 works as at the end of October, 2016,

and action plan for completing the works are as detailed below:

NO. OF

TALUKS

COVERED

TOTAL

FEEDERS

FEEDERS

completed commissioned Balance

14 235 196 176 39

The CESC is taking all the necessary measures to complete and

commission the proposed feeder works under NJY scheme as per

the action plan.

Further, M/s CPRI has been entrusted with the task of analysing the

benefits to the system post implementation of NJY scheme and the

report will be submitted to the Commission in due course.

Further, regular inspections and patrolling are being conducted by

the O&M staff to ensure that NJY feeders are not tapped illegally for

running IP-sets. Nine cases of unauthorized tapping of IP sets on NJY

feeders have been booked and one consumer in Kollegal has also

been imprisoned. The details are furnished below:

SL.

NO DATE DIVISION NAME CL UNITS

BBC

IN RS

COMPOUNDING

FEE IN RS

1

21-

05-

16

Mandya Shivaswamy

S/o Nanjaiah 4kW 8460 77,414 6,000/-

2

23-

05-

16

Mandya

Devegowda

S/o late

Chikkakarigowda

5HP 675 6,588 10,000/-

3

27-

05-

16

Maddur Basavaraju

S/o Rachaiah 5 HP 2686 26,215 10,000/-

4

03-

06-

16

Mandya Buragegowda

S/o late Lingaiah

3.75

KW 2025 19,764 5,000/

5

03-

06-

16

Mandya

Siddaiah

S/o

Thimmegowda

4.75

kW 4050 39,528 10,000/

6

07-

06-

16

Mandya Devegowda

S/o Kalegowda 6 kW 2160 21,082 8,000/

ACTION PLAN

Nov’16 Dec’16 Jan’17 Feb’17 Mar’17 Total

6 6 6 9 12 39

clxxxvi

SL.

NO DATE DIVISION NAME CL UNITS

BBC

IN RS

COMPOUNDING

FEE IN RS

7

21-

06-

16

Mandya Shankaregowda

S/o Sannegowda 3.75kW 2700 26,352 10,000/-

8

21-

05-

16

Kollegal Siddamallappa

S/o K. Basappa 3.75kW 8100 71,928 10,000/-

9

08-

07-

16

Nanjanagud Kariyappa

S/o Bettegowda 3.75kW 1343 13,108 10,000/-


The Commission notes that the CESC has commissioned totally 301

feeders under both NJY phase 1&2. But, it has not expedited total

commissioning of the NJY works. In fact, there has been an

inordinate delay on the part of the CESC in completion of the NJY

works, across its jurisdiction which has only resulted in non-realization

of envisaged benefits set out in the DPR when the project was

initiated.

The CESC is hereby directed to complete and commission the

remaining 44 feeders expeditiously and thereafter carry out the

analysis of those feeders so as to ensure that the objectives set out

as per the DPR are accomplished. Further, the CESC shall continue to

ensure that NJY feeders are not tapped illegally for running IP-sets

which would defeat the very purpose of feeder segregation scheme

undertaken at huge cost. The consumers who are found to be

tapping the NJY feeders need to be dealt with seriously for theft of

energy. The field officers/officials who fail to note and curb illegal

tapping shall be personally held responsible for these irregularities.

Further, the Commission notes that the CESC has not carried out the

analysis of feeders already commissioned under NJY phase 1&2. The

Commission is of the view that the benefits accrued to the system in

terms of reduction in failures of distribution transformers;

improvement in tail-end voltage; improvement in supply/reduction in

interruptions and increase in metered consumption needs to be

known by conducting proper analysis. It is also necessary to know

whether such analysis reveals that the consumers are satisfied in the

clxxxvii

wake of increased number of hours of availability of quality power,

post implementation of NJY.

Further, it is noted that the CESC has already segregated significant

number of feeders under NJY phase1 & 2 works and consequent to

this, agricultural feeders are exclusively used to supply power to rural

IP loads and the energy consumed by the IP-sets could be more

accurately measured at the 11 KV feeders at the sub-stations after

duly allowing for distribution losses in 11 KV lines, distribution

transformers and LT lines. The CESC is directed to report every month,

specific consumption and the overall IP-set consumption only on the

basis of data obtained from agricultural feeders’ energy meters as

per the formats prescribed by the Commission.

The Commission reiterates its directive to the CESC to continue to

furnish the details of feeder-wise IP-set consumption based on the

data of energy meters fixed to the 11 KV feeders, to the Commission,

every month in respect of agriculture feeders segregated under NJY.

ix. Directive on Demand Side Management in Agriculture:

In view of the urgent need for conserving energy for the benefit of

the consumers in the State, the Commission had directed the CESC

to take up replacement of inefficient pumps with energy efficient

pumps approved by the Bureau of Energy Efficiency, at least in one

sub-division in its jurisdiction.


A pilot project of Agriculture DSM in Malavalli Taluk of Mandya district was

taken up for implementation after entering into an agreement with M/s

EESL, New Delhi, on 06.08.2013. In this programme, the existing inefficient

pump sets are to be replaced by energy efficient pump sets at free of cost

to farmers. The details are as follows:

clxxxviii

As on date, the CESC has replaced 1,337 IP sets coming under

five 11kV feeders of Malavalli taluk by energy efficient pump

sets.

It has been proposed for replacement of 1,753 existing IP-sets

with energy efficient pump sets in Varuna and TN Pura area of

Mysuru district.

Further, as per the directions of Energy Department, GoK, a list

containing the details of one lakh inefficient pump sets were

furnished in the required format for replacement of the same

by energy efficient pump sets, wherein 1,753 pump sets of

Varuna and TN Pura were also included. After approval of the

project, the detailed project report will be submitted before to

Commission.


The Commission notes that there is no change in status of

replacement of inefficient irrigation pump sets by efficient pump sets,

as compared to the previous year. It is also noted that the agriculture

DSM project to be taken up by the CESC in T.N. Pura and Varuna

areas of Mysuru district covering 1,753 numbers of IP-sets, has not

progressed as targeted. It is important that the CESC expedites this

work so as to complete it in time to enable the farmers to avail the

benefits of this scheme at the earliest. Further, the CESC should also

give emphasis on implementation of DSM measures in the other parts

of its jurisdiction as the results of the pilot project as reported by it

have indicated that around 36 per cent savings in energy due to

replacement of inefficient pumps with efficient ones. Therefore, the

CESC needs to focus on early implementation of DSM measures by

necessary coordination with all the stakeholders concerned agreeing

on crucial measurement and verification methodology for scaling up

the DSM measures in its entire jurisdiction.

The Commission directs the CESC to expedite implementation of

agriculture DSM project in T.N. Pura & Varuna and submit the

clxxxix

compliance thereon to the Commission within three months from the

date of this Order.

x. Directive on Lifeline Supply to Un-Electrified Households:

The Commission had directed the ESCOMs to prepare a

detailed and time bound action plan to provide electricity to

all the un-electrified villages, hamlets and habitations in every

taluk and to every household therein. The action plan was

required to spell out the details of additional requirement of

power, infrastructure and manpower along with the shortest

possible time frame (not exceeding three years) for achieving

the target in every taluk and district. The Commission had

directed that the data of un-electrified households could be

obtained from the concerned Gram Panchayaths and the

action plan be prepared based on the data of un-electrified

households.


Under RGGVY 12th Plan, the electrification of un-electrified

households of previous Plans and newly added un-electrified

households were proposed in all the 5 districts of CESC and the

details are as follows:

SL.

N

O

DISTRICT

NO. OF

HABITATI

ONS

COVERED

NO. OF

BPL

HOUSEH

OLDS

NO. OF

RURAL

HOUSEHO

LDS

PROJ

ECT

COST

IN RS

CRO

RE

SANCT

IONED

BY

M.O.P

1 Mysuru 1,621 14,274 33,401 18.84 Yes

2 Mandya 1,610 10,824 23,336 12.48 Yes

3 Chamarajnaga

ra

681 10,504 20,099 19.69 No

4 Hassan 3,515 23,316 40,157 30.35 No

5 Coorg 435 6,287 21,177 12.92 No

Total 7,862 65,205 1,38,170 94.30

cxc

Survey and preparation of DPR was entrusted to M/s RECPDCL,

New Delhi.

Sanction from MoP for electrification of households in Mysuru

and Mandya districts is obtained. A LoI has already been

issued and the works are in progress in these two districts.

Sanction for Chamarajnagar, Hassan and Coorg districts were

pending. But, before sanction of these schemes, DDUGJY

scheme was launched.

The CESC has identified 67 hamlets covering 2,772 BPL

households to electrify hamlets and BPL households under DDG

(Decentralized Distributed Generation) scheme. The following

are the details:

a. 29 hamlets, covering 1,539 BPL households have been

sanctioned by “REC”. DWA has been issued on 16.11.2015

for two packages and on 02.01.2016 for one package.

b. 11 hamlets, covering 818 BPL households have been

sanctioned by “REC”. Tender was invited and the evaluated

reports have been sent to REC on 14.09.2016 for approval.

c. In respect of 27 hamlets, covering 415 BPL households,

tender has been processed in anticipation of approval from

REC. The tender evaluation report has been sent to REC on

14.09.2016, for approval.

The details of un-electrified Rural Households (RHh) identified and the

progress achieved as on 31.08.2016 is as follows;

NO. OF UN-

ELECTRIFIED

HOUSEHOLDS

IDENTIFIED AS AT

THE END OF

MAR’16

NO. OF UN-

ELECTRIFIED

HOUSEHOLDS

ELECTRIFIED

FROM APRIL’

TO AUG’16

BALANCE

TO BE

ELECTRIFIED

TARGET DATE

FOR

COMPLETION

1,99,700 28,058 1,71,642 Dec’ 2018

It is proposed to cover the above un-electrified RHh under various

schemes as detailed below:

cxci

Note:

Under DDUGJY scheme, it was proposed to electrify 1,02,048 BPL

households. But, as per revised allocation given for rural

electrification works, it is proposed to electrify 58,269 un-

electrified rural households (covering 48,768 BPL households)

under DDUGJY scheme over a period of 2 years from the date

of award of works. A Notification Inviting Tender (NIT) has been

published on 03.09.2016.

Since the revised allocation given for RE works under DDUGJY is

not sufficient to cover all the un-electrified households, a

proposal has been forwarded to REC to sanction DPR submitted

under RGGVY XII Plan for 3 districts under DDUGJY scheme to

cover electrification of balance un-electrified rural households.

The total number of households electrified up to November 2016

under various schemes in the CESC is 31,508.


SCHEME AREA COVERED

NO. OF UN-

ELECTRIFIED

RURAL

HOUSEHOLDS

COVERED

REMARKS

RGGVY 12th

Plan

Mysuru and

Mandya districts 56,666

Work is in

progress

DDG

67 hamlets of

Mysuru, Kodagu

and

Chamarajanagara

districts

28,00 DWA issued for

29 hamlets

DDUGJY

Mysuru, Mandya,

Hassan,

Chamarajanagar

& Kodagu districts

58,269

Tender invited

on 03.09.2016

for all 5 districts

DDUGJY

additional

proposal (left

out RGGVY

12th Plan)

Hassan,

Chamarajanagara

& Kodagu districts

81,965

Proposal

submitted to

REC for

additional

sanction

Total 1,99,700

cxcii

The Commission expresses its displeasure over the CESC’s tardy

progress and apparent lack of seriousness in electrification of un-

electrified households, in its jurisdiction. Even after lapse of so many

years there are a large number of households without electricity,

which is a matter of serious concern.

Further, the Commission concerned about the slow pace of progress

of this programme, in its previous Tariff Orders had directed the CESC

to cover electrification of 5 per cent of the total identified un-

electrified households every month beginning from April, 2015 so as

to complete this programme in about twenty months. However, the

progress achieved in electrification of households so far by the CESC

is disappointing.

The Commission therefore directs the CESC to initiate action to

provide electricity to the un-electrified households and cover all the

remaining households, expeditiously and report compliance thereon

to the Commission on the monthly progress achieved from May,

2017 onwards. The Commission, as already indicated in the earlier

Tariff Orders, would be constrained to initiate penal proceedings

under section 142 of the Electricity Act, 2003, against CESC, in the

event of its continued non-compliance of the directive.

xii. Directive on Implementation of Financial Management

Framework:

The present organizational set up of the ESCOMs at the field level

appears to be mainly oriented to maintenance of power supply

without a corresponding emphasis on realization of revenue. This has

resulted in a serious mismatch between the power supplied,

expenditure incurred and the revenue realized in many cases. The

continued inability of ESCOMs to effectively account the input

energy and its sale in different sub-divisions of the ESCOM in line with

the revenue realization rate fixed by the Commission, urgently calls

for a change of approach by the ESCOMs, so that the field level

cxciii

functionaries are made accountable for ensuring realization of

revenues vis-à-vis the input energy supplied to the jurisdiction of sub-

division/ division.

The Commission had therefore directed the CESC to introduce a

system of Cost-Revenue Centre Oriented sub-divisions at least in two

divisions, on a pilot basis, in its operational area and report the results

of the experiment to the Commission.


As directed by the Commission, the CESC has implemented the

model suggested by the consultant M/s PWC in its entire jurisdiction

covering all the divisions & sub-divisions to bring in accountability in

relation to the quantum of energy recovered, sold and its cost in

order to conduct the business on commercial principles.

Further, the CESC has reviewed the performance of the divisions for

the period from April to September 2016 in respect of energy

received, sold, average revenue realization and average cost of

supply using the financial framework as directed in the Tariff Order.

The following areas for each month and as well as cumulative

performance of the divisions are being analyzed at corporate level.

1) a) Target Losses fixed and achievement level at each stage.

b) Target revenue to be billed and achievement level at each

category.

c) Targeted revenue to be collected and achievement level at

all categories.

2) Targeted distribution loss reduction when compared to previous

years’ losses.

3) Comparison of high performance divisions in sales with low

performance divisions.

cxciv

Further divisional officers have been directed to implement the same

model at their sub-division levels. In this regard, workshops were also

conducted at the corporate office.

The following measures have been taken to reach to targeted ARR

and also achieve 100% collection efficiency.

1. Revenue Monitoring cell has been created for exclusively

monitoring the 100% billing, collection along with arrears of

previous months, analyzing sub normal consumption pattern,

ensuring correct metering constants in billing, age-wise arrears’

analysis to be collected, replacement of not recording meters

etc.

2. Introducing Android mobile billing system.

3. Introducing photo billing system in order to ensure the correctness

of meter reading.

4. SMS alerts to consumers regarding due date for electricity bill

payment.

The CESC has achieved 97.82 % collection efficiency and 86.83 %

billing efficiency from April to September 2016.The revenue demand

achieved for FY16 is Rs. 5.54 as against the KERC approved demand

of Rs. 5.67.

The analysis of the performance of all the divisions during

September16 using the financial framework is enclosed as

Annexure-3.


The Commission had entrusted a study to the Consultants, M/s PWC,

on implementation on Financial Management Framework to bring in

accountability on the performance of the divisions / sub-divisions by

analyzing the quantum of energy received, sold and cost so that the

ESCOMs conduct their business on commercial principles. The

Consultants had completed the study and submitted a report, which

was forwarded to all the ESCOMs for its implementation.

cxcv

The CESC has not submitted the compliance report in respect of

implementation of Financial Management Framework, on quarterly

basis to the Commission. The CESC is directed to submit the

compliance regularly as directed.

The Commission notes that the CESC has taken up monitoring of the

performance of divisions, using the financial framework Model

suggested by the Consultants. The CESC is directed to continue

reviewing the performance of the divisions & sub-divisions in relation

to total energy received, sold, average revenue realization and

average cost of supply using the Model. Further, the CESC is directed

to analyze the following parameters for each month to monitor the

performance of the divisions/sub-divisions at corporate level.

a) Target losses fixed and the achievement.

b) Target revenue to be billed and achievement.

c) Target revenue to be collected and achievement.

d) Targeted distribution loss reduction when compared to

previous years’ losses.

e) Comparison of high performance divisions in sales with low

performance divisions.

Based on the analysis, the CESC needs to take remedial measures to

ensure100 per cent meter reading, billing, and collection.

The Commission reiterates its directive that the CESC shall review the

performance of its divisions & sub-divisions using the financial

management framework model and report compliance thereon on

a quarterly basis to the Commission.

xiii. Directive on Prevention of Electrical Accidents:

The directive was as follows:

“The Commission has reviewed the electrical accidents that

have taken place in the State during the year 2015-16 and with

regret noted that as many as 430 people and 520 animals

have died in the State due to these accidents.

cxcvi

From the analysis, it is seen that the major causes of these

accidents are due to snapping of LT/HT lines, accidental

contact with live LT/HT/EHT lines, hanging live wires around the

electric poles /transformers etc., in the streets posing great

danger to human lives.

Considering the above facts, the Commission had directed the

CESC to prepare an action plan to effect improvements in the

transmission and distribution networks and implement safety

measures to prevent electrical accidents. Detailed division

wise action plans shall be submitted by the CESC to the

Commission.


The details of electrical accidents that have occurred during 2015-16

and up to September 2016 are appended below:

SL.

N

O

YEAR

NO OF

ACCIDE

NTS

DEPARTMEN

TAL

NON -

DEPARTME

NTAL

ANI

MAL

S

COMPEN

SATION

PAID IN

RS LAKH

Fatal

Non-

fatal

Fat

al

Non

-

fata

l

1 2015-16 192 5 25 58 25 79 77.95

2

2016-

17(up to

Sep’16)

101 2 10 32 8 49 34.24

A copy of the Safety Technical Manual prepared by the sub-

Committee comprising of experts from the Advisory Committee

constituted by the Commission has been uploaded on the CESC’s

website for the benefit of all the employees as well as the

consumers.

cxcvii

Further, in order to prevent electrical accidents and spread

awareness on conservation of energy and safety, following action

plan has been initiated in the CESC.

Identifying and rectification of hazardous installations like

providing intermediate poles to lengthy spans, replacement of

deteriorated service wires/conductors/poles, replacement of

lower size conductor by higher size, restringing of loose spans,

shifting the transformers and lines which are close to buildings or

in dangerous locations etc.

Proper periodical and preventive maintenance of the

distribution system and cutting of tree branches coming in

contact with power lines.

Providing all safety equipment to linemen and surprise

inspection of works to check use of safety equipment by them.

Conducting safety meetings at section offices, to train the

maintenance staff regarding use of safety equipment and

safety procedures while working on lines like earthling on both

sides of working zone, use of hand gloves, insulated tools,

adherence to line clear procedure etc.

Issuing Notices to consumers constructing the buildings near

distribution network and to ensure proper clearances before

servicing of new installations.

Educating the consumers through media, interaction meetings,

distributing pamphlets, regarding the safety precautions to be

taken by them to avoid accidents.

Exhibiting the safety advertisements containing safety aspects in

prime locations during public programme, to educate the

general public regarding the safety precautions to be taken to

avoid accidents.

Safety awareness advertisement at Railway Stations, Chandana

TV Programme, Vividabharati Radio Programme.

Safety awareness through street plays.

Highlighting the issues of conservation of energy and prevention

of electrical accidents on the reverse of the monthly electricity

bills.

Displaying hoardings at all district Headquarters and all offices of

the CESC.

cxcviii

Conducting quiz program, essay competition and debates

among students studying in High schools, ITI and Diploma

institutions.

Progress regarding action taken for reduction of electrical accidents as

at the end of September 16

Sl

No Details of Action taken

O&M

Mysuru

CH

nagar-

Kodagu

Mandya Hassan Total

1

Replacement of

damaged/

deteriorated

RCC/PSC, I Beam,

Tubular, Ladder,

Wooden poles

Nos 598 1,146 732 906 3,382

2

Replacement of

deteriorated

Aluminium conductor

Ckm 6.92 112 6.4 0 125.32

3 Enhancement of size

of conductor Ckm 5.99 0 3.77 0 9.76

4 Replacement of

copper conductor Ckm 0 0 0.5 0 0.5

5 Providing

intermediate

poles

HT line Nos 209 6,497 80 321 7,107

6 LT line Nos 265 2,964 91 1,754 5,074

7 No of slanted poles

set right Nos 296 604 140 1,313 2,353

8

No of places where

lines close to/ above

the buildings are

shifted

Nos 123 164 11 112 410

9

No of places where

the transformers are

shifted to safe place

Nos 10 19 8 4 41

10

No of poles where

jumbled service main

connections are set

right

Nos 822 2,108 35 937 3,902

11

No of poles where LT

kits/ MCCBs are

provided

Nos 30 127 50 0 207

12 Aerial bunched

cables provided kms 7.133 0 1.77 0 8.903

13

No of awareness

programs for public

conducted

Nos 84 12 9 39 144

14

No of training

programs to field

staff conducted

Nos 39 15 4 231 289

cxcix

Sl

No Details of Action taken

O&M

Mysuru

CH

nagar-

Kodagu

Mandya Hassan Total

15

No of other

preventive

maintenance works

like tree cutting,

restringing of wires,

providing proper

fuses, replacement of

lead wires, providing

proper earthing etc.,

is carried out

Nos 1,018 1,477 107 2,564 5,166

Progress regarding action taken for reduction of electrical accidents up

to March, 2016 (15-16)

SL.

NO.

DETAILS OF ACTION

TAKEN

O&M

MYSU

RU

CH

NAGAR

-

KODA

GU

MAND

YA

HASS

AN

CESC

TOTAL

1

Replacement

of damaged/

deteriorated

RCC, PSC,

I-Beam,

Tubular,

Ladder,

Wooden Poles

Nos 1,588 1,872 1,208 875 5,543

2

Replacement

of deteriorated

Aluminium

Conductor

Ck

m

35.68

5 145 46 2.845 229.53

3

Enhancement

of size of

Conductor

Ck

m

76.05

5 0

128.70

7 0 204.762

4

Replacement

of Copper

Conductor

Ck

m 3.71 1.68 14.24 0 19.63

5 Providing

intermediate

poles

Nos 767 4,719 272 4,091 9,849

6 Nos 670 2,343 289 1,519 4,82

1

7 No of slanted

poles set right Nos 1,233 1,075 477 1,907 4,692

8

No of places

where lines

close to

/above the

buildings are

shifted

Nos 509 218 42 413 1182

9 No of places Nos 123 40 35 57 255

cc

SL.

NO.

DETAILS OF ACTION

TAKEN

O&M

MYSU

RU

CH

NAGAR

-

KODA

GU

MAND

YA

HASS

AN

CESC

TOTAL

where the

transformers

are shifted to

safe place

10

No of places

where jumbled

service main

connections

are set right

Nos 1,762 3,587 116 2,789 8,254

11

No of places

where LT kits

/MCCBs are

provided

Nos 221 448 155 95 919

12

No of places

where Aerial

Bunched

cables are

provided

Nos 5 20 0 0 25

13

No of

awareness

programs for

public

conducted

Nos 235 200 9 47 491

14

No of training

programs to

field staff

conducted

Nos 154 157 14 403 728

15

No of other

preventive

maintenance

works like tree

cutting,

restringing of

wires,

providing

proper fuses,

replacement

of Lead wires,

Providing

Proper earthing

etc., is carried

out

Nos 3,720 3,083 448 12,572 19,823

cci

Vigilance Activities

In CESC, level-wise inspection drives are being carried out to check

theft of energy and misuse of energy. The progress achieved during

FY16 and FY17(as on October 16) are as given below:

SL. NO PARTICULARS FY16 FY17

(SEP’16)

1 Installations inspected in Nos 56,416 19,754

2 Discrepancies detected in Nos 4,020 3,534

3 No of cognizable cases booked 863 392

4 Non cognizable cases booked 3,157 3,142

5 Penalty levied in Rs. lakh 1,170.42 868.96

6 Penalty collected in Rs. lakh 992.48 564.1

Jana Samparka Sabhas

Jana Samparka sabhas are being frequently conducted at all sub-

divisional levels to get firsthand information and solve the grievances

of the consumers. Wide publicity is given and senior officers attend

these Jana Samparka Sabhas. The details of Janasamparka Sabhas

conducted from April to September 2016 as well as for the period

April to March16 are furnished below:

NAME OF

THE

CIRCLE

APR’ 16 MAY’ 16 JUN’ 16 JUL’ 16 AUG’ 16 SEP’ 16 TOTAL

O&M,

Mysuru 3 0 3 0 2 0 8

CH Nagar-

Kodagu 0 1 0 1 0 1 3

Mandya

Circle 6 2 3 2 1 2 16

Hassan

Circle 1 0 0 1 0 6 8

CESC Total 10 3 6 4 3 9 35

Details of Janasamparka Sabha from April 2015 to March 2016

NAME

OF THE

CIRCLE

AP

R’1

5

MAY’

15

JU

N’1

5

JUL’15 AUG

’15

SEP’

15

OCT’

15

NO

V’1

5

DE

C’1

5

JA

N’1

6

FEB

’16

MA

R’1

6

TOT

AL

O&M,

Mysuru 5 6 7 7 5 2 7 3 1 4 4 3 54

Ch

nagar-

Kodagu

0 1 0 0 0 2 1 2 0 0 0 0 6

Mandy

a 1 0 1 3 2 2 1 0 1 2 0 1 14

Hassan 16 0 13 0 6 0 0 5 5 0 0 10 55

CESC

Total 22 7 21 10 13 6 9 10 7 6 4 14 129

ccii


The Commission notes that the CESC has taken up various remedial

measures including rectification of number of hazardous installations

and also carried out improvements to its distribution network.

However, despite these measures taken by the CESC, the number of

fatal electrical accidents involving both human and livestock has

increased, which is a matter of serious concern. The Commission

would like to impress upon the CESC that the identification and

rectification of hazardous installations is a continuous process, which

should be regularly carried out without any let up, with a focused

attention, this matter deserves. Therefore, the CESC should make

more concerted efforts continuous identification and rectification of

all the hazardous installations including streetlight installations / other

electrical works under the control of local bodies to prevent

electrical accidents. In addition, it is also important that the CESC

takes up awareness campaigns through visual/print media

continuously to spread safety aspects among public.

During the ESCOMs’ Review meetings held, the Commission has

been emphasizing that the ESCOMs should take up periodical

preventive maintenance works, install LT protection to distribution

transformers, conduct regular awareness programme for public on

electrical safety aspects in use of electricity and also ensure use of

safety tools & tackles by the field staff besides imparting necessary

training to the field staff at regular intervals.

Further, the Commission is of the view that the hazardous installations

in the distribution network is the result of works carried out shabbily

without adhering to the best construction practices as per the

standards, while taking up construction/expansion of the distribution

network. Therefore, the CESC shall take adequate and effective

steps to ensure that distribution network is hazardous free. In addition

to this, the CESC also needs to conduct regular safety audit of its

cciii

distribution system and to carryout preventive maintenance works as

per schedule in order to keep the network equipment in healthy

condition.

The Commission has already forwarded the Safety Technical Manual

to the ESCOMs, which enumerates detailed account of the steps to

be taken on each element of the distribution system which would

help the engineers in the field to identify and attend to the defects.

In this context, it is necessary that the ESCOMs continuously monitor

the implementation of the suggestions / recommendations

contained in the Safety Technical Manual to ensure that distribution

network is maintained properly.

The Commission, therefore, reiterates its directive that the CESC shall

continue to take adequate measures to identify & rectify all the

hazardous locations/installations existing in its distribution system,

duly prescribing an action plan to prevent and reduce the number of

electrical accidents occurring in its distribution system. The

compliance thereon shall be submitted to the Commission every

month, regularly.

cciv

APPENDIX - 1

Statement showing the objections of the stakeholders/public, CESC’s response

and the Commission’s Views.

Objections on Tariff Issues:

Objections Replies by CESC

1. CESC, in its ERC and Tariff

application for FY18, has not

provided details of Consumption

of LT-4c(i) and (ii) categories for

FY16-17. Though there are no

separate feeders for the service of

the above categories the

consideration of 3 year CAGR of

3.19% for projection of sales growth

for FY18 does not significantly

contribute to increase in revenue.

Subjecting a category of

consumers, to a discriminatory

increase of 53% in tariff from the

existing Rs.2.80 per unit to the

proposed Rs.4.28 per unit, is

therefore not proper.

CESC, in its ERC and Tariff filing for FY18,

has furnished the actual consumption

in respect of LT4c category for FY 17 for

the period April, 2016 to September,

2016. Any increase in sales will

contribute to an increase in the

revenue.

As there is a total gap of Rs.962.93

crores for FY18, a tariff hike of Rs.1.48

per unit across all categories has been

proposed.

Commission's Views: The reply furnished by CESC is noted. The Commission has

dealt with the tariff issue in the appropriate chapter of this Tariff Order.

2. CESC should have indicated steps

taken for the improvement of

efficiency and the efficiency gains

thereon.

CESC has made efforts for the

improvement of the system. The

Distribution loss has reduced from

15.07% during FY13 to 14.73% during

FY14, to 13.88% during FY-15. The

distribution loss was reduced to 13.60%

during FY16 as against to the

approved loss of 14.50%.

Commission's Views: The reply furnished by the CESC is noted. Nevertheless, the

Commission directs CESC to tackle high loss making lengthy feeders and take

appropriate action to suitably improve the distribution system in order to

reduce the losses further.

3. As per the tariff policy, the cross

subsidy should be brought within

+/-20% of the cost of supply.

Hence, the tariff determination

should be based on the cost of

supply. The IP Sets are subsidized

by the other category of

consumers, mainly the Industrial

sector. Hence, cross subsidy

payable by industrial consumers

should be reduced.

At least the cost to serve of HT2(a)

The details have been furnished in

formats D-23 a, b and c in the

application for ERC and Revision of

Tariff for FY-18.

ccv

category should be worked out

based on voltage-wise supply and

the cost per unit is to be reduced.

Commission's Views: The cross subsidy level based on the Cost to serve is being

indicated in the Tariff Orders issued by the Commission. The cross subsidy levels

based on the Average Cost of supply is also being shown in the Annexure to

the Tariff Orders.

4. CESC has totally failed to improve

the efficiency of its operations by

implementing the directives issued

by the Commission. The power

supply situation and quality of

power supply in rural areas have

deteriorated further during the

current year. The compliance of

directives is also very poor and no

tangible results have come out, so

far. On these aspects, the ERC and

Tariff filings are defective and

liable to be dismissed as not

maintainable.

The directives of the Commission are

being complied with. The details have

been furnished in pages 8 to 45 in the

application for APR for FY-16.

The power supply arrangement during

FY17 upto October 2016 is detailed in

page 33 of the application for ERC

and Revision of Tariff for FY-18. Also, the

CESC is ensuring that power supply is

being arranged as per the directions of

GoK.

Commission's Views: The reply furnished by the CESC is noted. The Commission

is reviewing the compliance to its directives in the KPTCL and ESCOMS review

meetings and directing the ESCOMs’ to strictly adhere to the same.

5. Due to non-release of subsidy in

advance by the Government, the

ESCOMs are paying interest on the

dues. The interest so paid, should

not be passed on to the

consumers.

The subsidy bills are submitted to GOK

on regular basis for which GOK

releases the subsidy on a monthly

basis. The details of subsidy demanded

and released is already submitted in

Page No. 51 & 52 of APR filing.

Commission's Views: The reply furnished by CESC is noted and the issue of

subsidy is dealt in the relevant chapter of this Order.

6. The Fixed charges are to be based

on the assets created for each

type of consumers, but, CESC has

not furnished the details except

seeking increase in Fixed charges

just to increase its revenue. This

should not be allowed.

The hike in fixed charges is

necessitated due to a gap in the

actual fixed charges against the

proposed cost to be incurred in

respect of Employees, A&G and R&M

costs. The details have been furnished

in page 105 of the application for ERC

and Tariff Revision for FY-18.

Commission's Views: The Commission has dealt with this matter in the

appropriate chapter of the Tariff Order.

7. The Proposal of CESC to reduce

the period of Banking to 3 months

is not to be allowed as it is not

practicable.

It has not made such request in the

ERC and Tariff revision for FY18.

ccvi

Commission's Views: The proposal of ESCOMS on this issue will be dealt in a

separate proceeding as ESCOMs have filed a separate petition in the matter.

8. The Vigilance officers are booking

cases by treating some of the

Industrial establishments as

commercial entities, though they

are not competent to book cases

under section 126 of the Electricity

Act 2003. The competent officer

as per the Act is assessing officer

(AEE Ele of the subdivision). Such

acts of the Vigilance Officers

needs to be stopped.

With regard to be vigilance activities,

the CESC is following the Government

notification No. DE87PSR2003/28

dated.05-01-2004.

Commission's Views: The CESC is directed to strictly adhere to the provisions of

the Electricity Act, 2003 and the relevant Regulations there under.

9. CESC is not properly utilizing Rs.1

Crore allowed for consumer

education. It would be better to

educate the industrial and

commercial consumers about the

provisions of the Act and KERC

Regulations.

Apart from the advertisements and

publication of handbooks, CESC is also

creating consumer education and

awareness by conducting

“Janasamparkha Sabha” at the

subdivision level on a regular basis.

Further, the CESC would take up the

education of Industrial and commercial

units as suggested.

Commission's Views: The reply furnished by the CESC is acceptable.

10. CESC is not conducting energy

audit and segregating the

technical and commercial losses.

The distribution losses declared

without proper energy audit is

doubtful. The CESC has not given

the number of IP sets based on

the enumeration.

The computation of distribution losses at

11kV feeder level and DTCs has already

been initiated as per the directions of

the Commission. This enables

determination of technical losses.

Further, energy auditing at DTC levels

as directed by the Commission enables

computation of DTC loss levels which

includes both technical and

commercial losses.

After full implementation of the above,

the segregation of technical and

commercial losses in the distribution

system is possible.

The status of enumeration of IP sets has

been furnished in pages 44 and 45 of

the application for APR for FY16.

Enumeration of IP Sets is under progress

in CESC. 80% of the work has been

completed by the end of January, 2017

and probably work will be completed

by the end of March, 2017. The R.R. No

tagging work is also in progress for the

ccvii

regularized IP sets. After completion of

tagging work, total no of un-authorized

IP sets will be arrived and action will be

taken.

Commission's Views: The reply furnished by the CESC is noted. However, the

Commission emphasises that, conducting energy audit is the only way for

plugging the leakage and to make the company viable both technically and

financially.

11. CESC has indicated a huge

capex of Rs.889 Crores for FY18,

whereas, the actual capex

incurred during FY16 is at Rs.488.52

Crores and the actual capex

during FY17 up to September,

2016 is Rs.111.53 Cores. This

proposal of huge capex will have

tariff implications and should not

be allowed.

The Capex for FY 16 is Rs.488.52 Crores

(actuals) Cumulative progress of Capex

for FY17 up to Dec. 2016 is Rs.235.68

Crores. The Capex approved by the

Commission for FY17 is Rs.562 Crores.

The Capital investment of Rs.889 Crores

has been proposed for FY18 towards

achievement of the objectives of the

proposed Schemes under Capex as

indicated in the ERC filing for FY18.

All the works will not be completed by

FY18. There will be spillover of works to

an extent of 30 to 35% for FY19.

Commission's Views: The reply furnished by the CESC is noted. The Commission

has dealt with this matter appropriately, in the relevant chapter of this Tariff

Order.

12. Unplanned power purchase by

CESC has resulted in payment of

huge cost to the IPPs.

Power purchase agreements (PPA) for

energy purchases from all IPPs are

approved and the tariff for energy from

IPPs is determined by KERC.

Commission's Views: The reply furnished by the CESC is noted and the issue of

power purchase is dealt in the relevant chapter of this Tariff Order.

13. The Sundry Debtors are mainly the

Govt. entities. The Government

being the owner of ESCOMs has

not been reimbursing the dues of

ESCOMs in time.

The CESC has furnished the details of

the receivables from the Government

entities as on 31-12-2016 as follows:

Amount in

Rs.Crores

1 Urban local bodies: 59

2 Rural Local Bodies: 611.64

3 Lift Irrigation : 12.8

4 Tariff Subsidy

(IP,BJ/KJ) :

371.78

Others : 1.28

Total = 1056.50

ccviii

Commission's Views: Though the CESC has furnished the details of the

receivables, it should have furnished the details of the action taken to recover

the same. The Commission directs CESC to follow up the matter with the

respective departments and recover the receivables.

14. The second highest cost incurred

by CESC is the employee cost

projected at Rs.741Crs for the year

FY-2018 which has jumped by

106% over the employee cost of

FY-2016. CESC has not done

proper manpower planning.

The employee cost has been

calculated and projected as per the

norms fixed by KERC for O&M

expenses.

A revision in the pay scales for

ESCOMs/ KPTCL employees is due from

01.04.2017. An additional liability on

account of pay revision and P&G

contribution is included in the

employee cost in form D6.

The break up is as follows:

1. Additional liability on account of

pay revision – Rs.42.75 Crores.

2. P&G contribution liability-Rs.282.63

Crores.

All the details have been furnished in

Format D-6 of the application for ERC

and tariff revision for FY-18.

Commission's Views: The reply furnished by CESC is noted and the Commission

has dealt with the matter appropriately in the relevant chapters of this Tariff

Order.

15. There is no consistency in the solar

policy framed by the Government

of Karnataka and ESCOMs. The

policy has seen several

unpredictable changes to the

disadvantage of consumers. This

aspect needs consideration of the

Commission.

It will abide by the Orders of GoK and

the Commission.

Commission's Views: The concern raised is noted.

16. Flat increase in tariff by Rs.1.48 has

no justification that too within a

span of a year.

CESC has sought a tariff hike of Rs.1.48

per unit in respect of all categories of

consumers to bridge the shortfall in ARR

during FY18.

Commission's Views: The reply by CESC is noted and the Commission has dealt

with the matter suitably in the relevant chapter of the Tariff Order.

17. CESC has stated that the Gap for

FY18 is Rs.962.93 crores (page-105)

and requested the Commission to

hike the tariff by 148 paise per unit

for all categories of consumers. In

the truing up of FY16 it is

mentioned that the total annual

revenue gap for FY16 is Rs.456.54

crores and this will be recovered in

The KERC, in its Tariff Order 2016 dated

30th March 2016, has recognized

Rs.120.41 Crores as regulatory asset. In

this back ground and also based on

the previous truing up orders, the

Company has accounted the

regulatory asset as follows:

ccix

FY18. This should not be done. Gap

of Rs.456.54 crores (page-105) for

FY16 due to Truing up is not proper.

Any expenditure over and above

the approved limit has to be

absorbed by the Government and

should not be passed on to the

consumers.

The Regulatory Asset of Rs.120.41

Crores as allowed by the Commission

in its Tariff Order-2016 dated 30th

March, 2016. The additional

Regulatory asset to the extent of

Rs.344.05 Crores (The difference of

Approved - Actual Power Purchase

cost) are accounted by Computing

the provisional gap expected to be

considered by KERC for inclusion in the

tariff revision of future years. The total

annual revenue gap for FY16 of

Rs.456.54 crores to be recovered in

FY18 is on account of Regulatory

Assets.

Commission's Views: The Commission takes note of the reply by the CESC. The

Commission has dealt with the matter suitably in the relevant chapters of this

Tariff Order.

18. CESC has not indicated the

benefits of implementing ToD and

has not stated whether the peak

load has come down due to ToD.

Further, if the peak load is not

reduced, then ToD should be

made as optional.

The detailed analysis after

implementation of TOD is under

process. CESC will abide by the orders

of the Commission.

Commission's Views: The Commission has dealt with this issue appropriately in

the relevant chapters of the Tariff Order.

19. Introducing the morning peak

price would hamper the industries

and hence not to be allowed.

CESC has not made any request for

the morning peak price in its

application for ERC and Tariff revision

for FY18.

Commission's Views: The Commission has dealt with this issue appropriately in

the relevant chapters of the Tariff Order.

20. CESC should regularize all un-

authorized IP sets to bring down

the distribution loss and to claim

realistic subsidy from the

government.

Enumeration of IP Sets is under progress

in CESC. 80% of the work has been

completed by the end of January,

2017 and will be completed probably

by the end of March-2017. R.R.No.

tagging work is also in progress for the

regularized IP sets. After completion of

tagging work, total No. of un-

authorized IP sets will be arrived and

action will be taken as per law.

As on 30-09-2016, there are 372

exclusive agriculture feeders in CESC

ccx

CESC has not mentioned the

number of DTCs feeding to IP sets.

The IP Set consumption is still being

calculated based on sample

metering only.

jurisdiction in which 37028 DTCs are

feeding the IP Sets. This information has

been furnished in Page 25 of the

application for APR for FY16. Further, as

per the orders of the Commission, the

consumption of IP sets is calculated

based on the agriculture feeder

consumption.

Commission's Views: The Commission takes note of the reply by CESC. The

Commission directs CESC to complete the enumeration and tagging of the IP

Sets and consider the meter reading of the segregated feeders of IP Sets for

arriving at the IP Set consumption.

21. CESC has not implemented HVDS,

which will bring down the losses. It

has stated that, implementation of

NJY does not necessitate the

HVDS, but, HVDS and NJY are

totally different and HVDS will

reduce the losses by 8 to 10%.

The details have been furnished in

pages 28 and 29 of the application for

APR for FY16. CESC is of the view that

HVDS is not required in its area as the

coverage of NJY under phase-1 and

phase-2 is massive (No. of feeders

added-306, Nos. of transformer added-

9495.) and also in view of providing of

one DTC for each GK/WS installations

and one DTC for every three UNIP

installations.

Commission's Views: The reply furnished by the CESC is noted. However, the

Commission directs the CESC to explore the possibility of reducing the length of

LT lines in IP Set feeders, through implementation of HVDS.

22. The DSM in agriculture is not

completed by CESC, even though

it was proposed in 2013.

CESC has furnished the list of one lakh

inefficient IP sets in the prescribed

format to M/s EESL, New Delhi as per

the directions of Energy Department,

Government of Karnataka for

replacement of pumps under

Agriculture DSM program, wherein

1753 Nos. of pump sets of Varuna and

T. Narasipura were also included in the

list. The approval from the GoK is

awaited.

Commission's Views: The reply furnished by CESC is noted. CESC should speed

up the programme.

23. Although, the Commission had

directed CESC to complete

metering of DTCs by 2010, the

progress was only 29.15% in five

years. Further, CESC has not

conducted energy audit in the

DTCs which have been metered.

The details of metering of DTCs and

energy audit of DTCs have been

furnished in pages 25 and 26 in the

application for APR for FY16 filed

before the Commission. As on 30-09-

2016, 27289 nos. of DTCs are yet to be

metered. Providing meters to DTCs

coming under Agricultural feeders

ccxi

have been exempted by Commission

in the review meeting held on

19.10.2013. Energy audit is being

conducted on town feeders as well as

metered DTCs. The details are furnished

in pages 26 and 27 of the application

for APR for FY16. The additional

information has also been furnished on

page 48 of the replies to the

preliminary observations of the

Commission.

Commission's Views: The reply given by CESC is noted. The Commission directs

CESC to complete DTC metering and conduct energy audit within a definite

timeframe.

24. The cross subsidy surcharge

proposed by the ESCOMs is higher

than the previous year and is

against the principles set out by the

Commission.

Cross subsidy surcharge has been

determined by limiting to 20% of the

tariff applicable to the particular

category of consumers as per Tariff

Policy issued by GOI on 28.01.2016.

Commission's Views: The Commission takes note of the reply by CESC and has

dealt with the matter appropriately in the relevant chapter of this Tariff Order.

25. The Open Access Consumers are

already paying demand charges

(fixed charges) as per their

contract demand. As demand

charges are already inbuilt while

calculating T as revenue realization

from the particular category of

consumers, demand charges

ought to be deducted from T while

calculating CSS to avoid double

charging of demand charges.

The calculation of CSS is done on the

same manner as in previous years.

Commission's Views: The Commission has already issued Orders in the matter in

RP4/2016 and the decision is binding.

26. The Wheeling Charges proposed

by the ESCOMs have been

increased to the tune of 39%

(BESCOM), 95% (CESC),

94%(GESCOM), 106% (HESCOM)

and 54% (MESCOM) for FY 18

compared to FY17 which is

consequent to increase of

Distribution ARR to the tune of

Rs.2500 Crores.

The Commission should do

prudence check of these

allocations which are not in line

with the principle set out by the

The Methodology for calculation of

segregation of ARR into distribution

and supply business in FY18 adopted

by CESC is the same as was

adopted in FY16. For FY18 the

increase in the ARR is mainly due to

the increase in employee cost.

Employee cost has been calculated

and projected as per the norms

fixed by the KERC for calculation of

O&M expenses.

ccxii

Commission in its earlier tariff

orders.

Commission's Views: The Commission takes note of the reply by CESC and has

dealt with this matter appropriately in the relevant chapter of this Tariff Order.

27. The calculation of Wheeling

charges proposed by ESCOMs

seems to be erroneous, as the

quantum of energy considered for

calculation is only the quantum of

Sales by ESCOM to the consumers

excluding quantum of Open

Access.

For calculation of wheeling

charges, total energy to be

wheeled in the ESCOM system

(Discom sale+ Open Access Sale)

should be considered.

The quantum of Open Access

energy and wheeled energy is very

less compared to quantum of Sales

by CESC and also the open access

and wheeled energy cannot be

projected in advance as CESC will

not be having advance information

in respect of the same.

Commission's Views: The reply furnished by CESC is noted.

28. ESCOMs must buy power from

Exchange/Short term markets when

prices are lower than energy

charge of generators tied up in long

term PPAs. At such low prices there

is huge potential to replace costlier

power. ESCOMs may continue to

pay fixed charges irrespective of

their schedule from generator and

replace costlier power with power

purchased through IEX to ensure

most efficient merit order dispatch.

The power purchased from long

term thermal generators are

reliable and is assured power. The

payment has to be made before

hand to buy the power from IEX,

whereas ESCOMs get a credit

period of about 30 days from the

date of presentation of bill in

respect of other generators.

Despatch Scheduling will be

done as per grid code. Open

access energy cannot be

considered for RPO fulfillment as

the source of energy will not be

known as in the case of other

sources of power and short term

power.


29. Though the average cost of supply

is Rs.5.69 per unit, IP Sets are

charged at Rs.2.38 per unit and the

difference is charged to the other

consumers through cross subsidy.

As approved in Tariff Order, 2016, the

average cost of supply for FY17 is

Rs.5.67 per Unit and for the BJ/KJ

Consumer upto 18 units and IP sets

Consumers upto 10HP the rates are

claimed as per Commission

determined Tariff i.e for BJ/KJ upto 18

units is charged by Rs.5.67 per unit and

IP sets upto 10 HP, is charged by

ccxiii

Rs.4.88 per unit. The Subsidy bills are

submitted to GOK on regular basis for

which GOK releases the subsidy on

monthly basis.

The details of Subsidy demanded and

subsidy released has been submitted

in Page No. 51 & 52 of the APR filing.

Commission's Views: The reply furnished by CESC is noted and the above

issues are appropriately dealt in the relevant Chapters of this Tariff Order.

30. Interest on consumer deposits are

to be paid on a quarterly basis

and bills should indicate the

deposit amount.

For FY 15-16, it has paid 8.5% interest on

consumer security deposit to the

consumers and the interest is credited

to the consumers account in the 1st

quarter of FY16. CESC is following the

KERC (Interest on security deposit)

Regulations-2005, for payment of

interest.


Objections on the Quality of Service:

31. CESC is carrying out load shedding

without publishing it in advance

through newspaper and has also

not obtained approval of the

Commission. CESC should have

procured power from other

sources to meet the demand

instead of resorting to load

shedding.

The load shedding is being done only

as a last resort in the identified specific

stations and feeders when there is

shortage of availability of power and

to maintain grid discipline. Scheduled

interruptions are being brought to the

notice of the public by publishing the

same in newspapers.

Further, during October, 2016 and

November, 2016, CESC Mysore has

purchased power from IEX as there

was decreased generation at that

time.


32. CESC has not taken effective and

serious measures to reduce the

accidents. CESC has only narrated

the proposed action plan to

reduce accidents but the action

plan has not been implemented.

Only emergency works have been

carried out. CESC has not been

able to do periodical

maintenance. Live wires on the

road, open junction boxes and

short circuits in transformer wiring

are usual hazards.

The details in this regard were furnished

in pages 39 to 43 of the application for

APR for FY16. The safety standards are

being adhered to and the workmen

have been provided with safety

equipment and care is being taken to

ensure that the workmen use the safety

equipment while at work. The safety

training is also being imparted on a

regular basis. Disciplinary action is also

being initiated on the errant

workmen/officers.

Commission's Views: The Commission takes note of the reply by CESC. The

Commission directs CESC to take all precautionary measures and periodical

maintenance to reduce the accidents.

33. CESC has not taken serious The HT/Lt ratio which was 1:1.95 during

ccxiv

measures to achieve HT:LT ratio of

1:1. The present ratio of 1:1.68 has

resulted in high distribution loss.

FY-14 has been brought down to 1:1.76

during FY15 and to 1:1.68 during FY16.

After the implementation of IPDS and

DDUGVY schemes there will be a

further improvement in the HT/LT ratio.


34. The CESC has not furnished the

details of Reliability index to know

the quality of service it is rendering

to the consumers.

CESC is furnishing the details of

reliability index of feeders to the

Commission every month.

Commission's Views: The reply furnished by CESC is noted. The Commission is

hosting on its website the details of the Reliability Indices as and when

submitted by the ESCOMs.

35. CESC has not furnished the details

of failed distribution transformers

and the expenditure incurred in

repairing the failed Transformers.

CESC has stated that, the details of

failure of DTCs is furnished in Pages 66

to 70 in the application for APR for FY-

16.

Commission's Views: The reply furnished by CESC is acceptable.

36. CESC has not monitored the

implementation of the Standards

of Performance.

CESC has implemented the specified

Standards of Performance while

rendering services related to supply of

power as per the KERC (Licensee’s

Standards of Performance)

Regulations, 2004 and the CESC has

displayed prominently in Kannada the

details of various services such as

replacing of the failed transformers,

attending to fuse off call / line

breakdown complaints, arranging new

services, change of faulty energy

meters, reconnection of power supply,

etc., on the notice boards in all the O

& M sections and O & M subdivisions

for the information of consumers. The

details are available in pages 20 and

21 of the application for APR for FY16.


37. CESC should not collect meter

charges from consumers while

replacing the old Electro-

mechanical meter by new

Electronic meters.

CESC is not collecting any meter

charges while replacing the

Electromechanical meters by

Electronic meters.

Commission's Views: The reply furnished by CESC is noted. The Consumers may

bring to the notice of the CESC any cases of un-authorized collection of Meter

Deposits.

38. The Distribution transformer failures

are increasing due to poor

maintenance. The repair centres

are not using quality coils and not

filling the oil to the required level

The HT rating subdivisions are regularly

monitoring the quality of material as

well as works carried out in the repair

centres and the repaired transformers

are subjected to various tests before

ccxv

resulting in failure of the

transformers. CESC should take

necessary timely action to replace

the failed transformers.

deployment to the DTCs.


39. Though the farmers have paid the

charges for regularization of IP

Sets, the infrastructure is not

created even after lapse of two

years. This has resulted in frequent

failures of transformers and

interruptions to IP Sets.

As and when the farmers have paid

the amount, R.R. Nos, have been

allotted and the IP Sets are regularized.

Action is being taken to create

infrastructure to such IP Sets.


Specific Requests:

40. Only two categories in LT4

category should be made by

clubbing LT4(a) with LT4(c)(1) and

LT4(b) with LT4(c) (2) and the benefit

of free power extended to the

Coffee plantations on par with the

other agriculture activities.

The Commission in the Tariff Order 2016

has expressed that, “Coffee

plantations have been given a special

status as compared to other

agricultural lands and therefore coffee

planters cannot be treated on par with

other agriculturists. Further, extending

any subsidy to coffee plantations has

to be decided by the State

Government”.

Hence, the tariff matter has to be

decided by the Commission and CESC

will abide by it.

Commission's Views: The reply furnished by the CESC is acceptable. The

Commission reiterates is earlier decision on this issue.

41. CESC should indicate the tariff slab

rates in the bills issued to the

consumers and the quality of

paper and ink used to print the bill

should be improved.

CESC has published the tariff slab rates

in the newspapers and also in the

company’s website.

The quality of the paper and the print in

the bill has been improved since

September, 2016.


42. The awareness among the

consumers on the CGRF

mechanism should be improved

and the complaints should be

redressal within the time frame

stipulated.

The CGRFs are functional in all the five

Districts and attempts are being made

to create awareness among the

consumers regarding the redressal

mechanism.

Commission's Views: The reply by CESC is acceptable. However, the

Commission directs CESC to increase the awareness among the consumers, so

that, the consumers are benefitted from the functioning of CGRF.

43. Railways should be given

incentives for maintaining the

power factor (P.F) above, 0.9.

The Commission determines the tariff

for all categories of consumers. CESC

will abide by the orders of the

Commission.

Commission's Views: The maintenance of proper PF is in the interest of

consumer only. PF above the threshold levels would improve the voltage of the

ccxvi

supply to the consumers and also enables optimizing the power consumption.

44. Railway quarters should be

connected under bulk LT supply

with a rebate on bill against

maintenance & bill collection

charges or the quarters should be

connected directly on ESCOM

supply so that, billing and line

maintenance is the responsibility of

ESCOMs.

CESC is following the norms laid down

under Conditions of Supply and the

latest Tariff order of the Commission.

Commission's Views: The reply furnished by CESC is taken note of. The

Commission has dealt with the matter appropriately in the relevant chapter of

the Tariff Order.

45. The Railways a service utility and

an essential part of the transport

system, should have single part

tariff instead of two-part tariff and

a lower tariff than the prevailing

tariff.

The tariff for various categories of

consumers is determined by the

Commission. CESC will abide by the

orders of the Commission.

Commission's Views: The reply of CESC is noted.

46. Under HT2(b) major part of the

Energy purchased by the Railways

is consumed for providing of

passenger amenities like Platform

lighting, waiting halls, Approach

area, Water coolers, Water

pumping, Concourse etc, to bring

perceptible improvements in the

quality of services. Hence Railways

should be exempted from

proposed tariff hike.

CESC will abide by the orders of the

Commission.

Commission's Views: The activities in the station are considered as commercial

and non-domestic. Hence there cannot be any discrimination between the

consumers who are similarly placed.

47. The solar water heater rebate

should be increased from Rs.50 to

Rs.100 to encourage domestic

consumers installing solar heaters.

CESC has not given the details of

how man installations which are

yet to be serviced with solar water

heaters.

CESC will abide by the orders of GoK

and the Commission. All residential

buildings with built up area of 600 Sq ft

and above constructed on sites

measuring 1200 sq ft and above and

falling within the limits of Muncipalities

/Corporations are being serviced with

solar water heaters as per the GOK

order no EN87 NCE 2008/08-04-2008.

Commission's Views: The Commission has suitably dealt with the matter of solar

rebate in the relevant Chapter of this Tariff Order.

48. MSME sector should be

categorized under separate tariff

category and a tariff fixed at 25%

lower than small industries.

CESC will abide by the Orders of the

Commission.

ccxvii

Commission's Views: The retail tariff to the consumers is being fixed keeping in

view the recovery of average cost of supply and the cross subsidy levels with

reference to the average cost of supply. Fixing a tariff below the cost of supply

would entail meeting the balance cost either by Government subsidy or

through cross subsidization. In the absence of subsidy from the Government to

MSMEs, extending concessions to this category would result in increase in cross

subsidy levels of other categories of consumers, which is not permissible under

the Tariff Policy.

ccxviii

ESCOM's Total Approved Power Purchase For FY18

NAME OF THE GENERATING STATION

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL COST

(Rs Cr)

PER UNIT

RATE

(RS/Kwh

)

KPCL THERMAL STATIONS

RAICHUR THERMAL POWER

STATION_RTPS 1-7 (7x210) 7850.68 792.92 3.34 2622.13 3415.05 4.35

RAICHUR THERMAL POWER

STATION_RTPS 8 (1x250) 1269.00 227.15 2.88 365.47 592.62 4.67

BELLARY THERMAL POWER

STATIONS_BTPS-1 (1x500) 2516.00 274.36 3.52 885.63 1159.99 4.61


STATIONS_BTPS-2 (1x500) 2516.00 470.49 3.06 769.90 1240.39 4.93


STATIONS_BTPS-3 (1x700) 960.00 0.00 2.87 275.52 275.52 2.87

YTPS (1x 800) 960.00 0.00 2.92 280.32 280.32 2.92

TOTAL KPCL THERMAL 16071.68 1764.92 3.23 5198.97 6963.89 4.33

CGS SOURCES

N.T.P.C-RSTP-I&II

(3X200MW+3X500MW) 3214.00 198.82 2.29 735.65 934.48 2.91

N.T.P.C-RSTP-III (1X500MW) 792.00 75.94 2.40 190.08 266.02 3.36

NTPC-Talcher (4X500MW) 2845.00 225.86 1.68 478.13 703.99 2.47

Simhadri Unit -1 &2 (2X500MW) 987.68 163.12 2.77 274.00 437.12 4.43

NTPC Tamilnadu Energy

Company Ltd (NTECL)_Vallur TPS

Stage I &2 &3 (3X500MW)

702.21 125.25 2.64 185.34 310.60 4.42

Neyveli Lignite Corporation_NLC

TPS-II STAGE I (3X210MW) 710.08 82.73 2.82 200.24 282.97 3.99


TPS-II STAGE 2 (4X210MW) 1126.00 135.83 2.82 317.53 453.36 4.03


TPS I EXP (2X210MW) 698.00 98.92 2.61 182.07 281.00 4.03


TPS2 EXP (2X250MW) 520.98 111.33 2.55 132.67 244.00 4.68

NLC TAMINADU POWER LIMITED

(NTPL) (TUTICORIN) (2X500MW) 1153.11 216.03 2.50 288.28 504.30 4.37

MAPS (2X220MW) 199.00 0.00 42.80 42.80 2.15

Kaiga Unit 1&2 (2X220MW) 920.00 0.00 293.10 293.10 3.19

Kaiga Unit 3 &4 (2X220MW) 912.00 0.00 290.55 290.55 3.19

NPCIL-KudanKulam Atomic

Power Generating Station

(KKNPP U1 (1X1000MW)

1511.00 0.00 623.16 623.16 4.12

NPCIL-KudanKulam Atomic

Power Generating Station

(KKNPP) U2(1X1000MW)

345.77 0.00 142.60 142.60

4.12

ccxix


ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL COST

(Rs Cr)

PER UNIT

RATE

(RS/Kwh

)

DVC-Unit-1 &2 Meja TPS

(2x500MW) 1402.48 208.22 2.38 333.59 541.82 3.86

DVC-Unit-7 & 8-KODERMA TPS

(2x500MW) 1753.58 321.82 2.19 383.48 705.30 4.02

Kudgi 750.04 0.00 3.02 226.51 226.51 3.02

TOTAL CGS Energy @ KPTCL

periphery 20542.92 1963.88 5319.80 7283.68 3.55

TOTAL MAJOR IPPS

UDUPI POWER CORPORATION

LIMITED_UPCL (2x600) 6712.00 1141.04 3.20 2147.84 3288.88 4.90

KPCL HYDEL STATIONS

SHARAVATHI VALLEY

PROJECT_SVP (10x103.5+2x27.5) 4914.10 21.27 0.35 173.40 194.67 0.40

MAHATMA GANDHI HYDRO

ELECTRIC POWER HOUSE_MGHE

(4x21.6+4x13.2)

279.58 2.32 0.45 12.60 14.92 0.53

GERUSOPPA_GPH (SHARAVATHI

TAIL RACE_STR) (4x60) 521.59 24.43 1.11 57.94 82.37 1.58

KALI VALLEY PROJECT_KVP

(2x50+6x150) 3172.76 21.36 0.55 174.31 195.67 0.62

VARAHI VALLEY PROJECT_VVP

(4x115+2x4.5) 1068.73 40.64 1.18 125.65 166.29 1.56

ALMATTI DAM POWER

HOUSE_ADPH (1x15+5x55) 481.63 31.50 0.97 46.73 78.23 1.62

BHADRA HYDRO ELECTRIC

POWER HOUSE_BHEP

((1x2+2x12)+(1x7.2+1x6))

60.65 1.50 3.36 20.39 21.89 3.61

KADRA POWER HOUSE_KPH

(3x50) 362.80 19.38 1.46 53.13 72.51 2.00

KODASALLI DAM POWER

HOUSE_KDPH (3x40) 340.17 12.01 1.14 38.86 50.87 1.50

GHATAPRABHA DAM POWER

HOUSE_GDPH (2x16) 82.75 2.18 1.68 13.92 16.10 1.95

SHIVASAMUDRAM (4x4+6x3) &

SHIMSHAPURA (2x8.6) HYDRO

STATIONS.

292.24 3.54 0.80 23.52 27.06 0.93

MUNIRABAD POWER HOUSE

(2x9+1x10) 91.46 0.43 0.58 5.32 5.75 0.63

TOTAL KPCL HYDRO 11668.46 180.56 0.64 745.77 926.33 0.79

OTHER HYDRO

PRIYADARSHINI JURALA HYDRO

ESLECTRIC STATION (6x39) 110.00 4.35 47.82 47.82 4.35

TUNGABHADRA DAM POWER

HOUSE_TBPH (4x9+4x9) 9.37 1.83 1.72 1.72 1.83

TOTAL OTHER HYDRO 119.37 4.15 49.54 49.54 4.15

RENEWABLE ENERGY SOURCES

WIND-IPPS 3704.87 1343.76 1343.76 3.63

KPCL-WIND (9x0.225+10x0.230) 7.80 2.89 2.89 3.71

MINI HYDEL-IPPS 1009.11 331.59 331.59 3.29

CO-GEN 160.01 74.30 74.30 4.64


ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGES

(Rs Cr)

TOTAL COST

(Rs Cr)

PER UNIT

RATE

(RS/Kwh

)

ccxx

CAPPTIVE 13.17 3.74 3.74 2.84

BIOMASS 119.71 59.23 59.23 4.95

SOLAR-existing (anticipated as

on 31.03.2017) 932.00 618.10 618.10 6.63

Solar-New Park 535.96 187.59 187.59 3.50

Solar-KREDL 672.16 353.29 353.29 5.26

SOLAR-KPCL

(YELESANDRA,ITNAL,YAPALDINNI,

SHIMSHA) (3x1+3x1+1x3x1x5)

10.61 6.37 6.37 6.00

TOTAL RE 7165.41 2980.86 2980.86 4.16

NTPC Bundled power 582.21 258.46 258.46 4.44

Power purchase from Co gen 1300.00 451.10 451.10 3.47

Short term power purchase 1120.00 467.04 467.04 4.17

Short term Purchase from

MSEDCL 294.00 106.43 106.43 3.62

TRANSMISSION CHARGES 0.00

PGCIL CHARGES 1066.00 1066.00

KPTCL CHARGES 2753.70 2753.70

SLDC 24.77 24.77

POSOCO CHARGES 3.48 3.48

TOTAL INCLUDING

TRANSMISSION & SLDC CHARGES 65576.04 8898.35 17725.80 26624.15 4.06

ccxxi

CESC’s Approved Power Purchase For FY18


% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGE

S

(Rs Cr)

TOTAL

COST

(Rs Cr)

PER

UNIT

RATE

(RS/Kw

h)

KPCL THERMAL STATIONS

RAICHUR THERMAL POWER STATION_RTPS 1-7

(7x210) 2.000 157.01 15.91 3.34 52.44 68.35 4.35

RAICHUR THERMAL POWER STATION_RTPS 8

(1x250) 10.632 134.92 24.15 2.88 38.86 63.01 4.67

BELLARY THERMAL POWER STATIONS_BTPS-1

(1x500) 10.632 267.50 29.16 3.52 94.16 123.32 4.61


(1x500) 10.632 267.50 50.02 3.06 81.86 131.88 4.93


(1x700) 10.632 102.07 0.00 2.87 29.29 29.29 2.87

YTPS (1x 800) 10.632 102.07 0.00 2.92 29.80 29.80 2.92

TOTAL KPCL THERMAL

1031.07 119.24 3.16 326.41 445.66 4.33

CGS SOURCES

N.T.P.C-RSTP-I&II (3X200MW+3X500MW) 10.632 341.71 21.14 2.29 78.21 99.35 2.91

N.T.P.C-RSTP-III (1X500MW) 10.632 84.21 8.07 2.40 20.21 28.28 3.36

NTPC-Talcher (4X500MW) 10.632 302.48 24.01 1.68 50.83 74.85 2.47

Simhadri Unit -1 &2 (2X500MW) 10.632 105.01 17.34 2.77 29.13 46.47 4.43

NTPC Tamilnadu Energy Company Ltd

(NTECL)_Vallur TPS Stage I &2 &3 (3X500MW) 10.632 74.66 13.32 2.64 19.71 33.02 4.42

Neyveli Lignite Corporation_NLC TPS-II STAGE I

(3X210MW) 10.632 75.50 8.80 2.82 21.29 30.09 3.99

Neyveli Lignite Corporation_NLC TPS-II STAGE

2 (4X210MW) 10.632 119.72 14.44 2.82 33.76 48.20 4.03

Neyveli Lignite Corporation_NLC TPS I EXP

(2X210MW) 10.632 74.21 10.52 2.61 19.36 29.88 4.03

Neyveli Lignite Corporation_NLC TPS2 EXP

(2X250MW) 10.632 55.39 11.84 2.55 14.11 25.94 4.68

NLC TAMINADU POWER LIMITED (NTPL)

(TUTICORIN) (2X500MW) 10.632 122.60 22.97 2.50 30.65 53.62 4.37

MAPS (2X220MW) 10.632 21.16 2.15 4.55 4.55 2.15

Kaiga Unit 1&2 (2X220MW) 10.632 97.81 3.19 31.16 31.16 3.19

Kaiga Unit 3 &4 (2X220MW) 10.632 96.96 3.19 30.89 30.89 3.19

NPCIL-KudanKulam Atomic Power

Generating Station (KKNPP U1 (1X1000MW) 10.632 160.65 4.12 66.25 66.25 4.12

NPCIL-KudanKulam Atomic Power

Generating Station (KKNPP) U2(1X1000MW) 10.632 36.76 4.12 15.16 15.16

4.12


% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGE

S

(Rs Cr)

TOTAL

COST

(Rs Cr)

PER

UNIT

RATE

(RS/Kw

h)

ccxxii

DVC-Unit-1 &2 Meja TPS (2x500MW) 10.632 149.11 22.14 2.38 35.47 57.61 3.86

DVC-Unit-7 & 8-KODERMA TPS (2x500MW) 10.632 186.44 34.22 2.19 40.77 74.99 4.02

Kudgi 10.632 79.74 0.00 3.02 24.08 24.08 3.02

TOTAL CGS Energy @ KPTCl periphery

2184.12 208.80 2.59 565.60 774.40 3.55

TOTAL MAJOR IPPS

UDUPI POWER CORPORATION LIMITED_UPCL

(2x600) 2.454 164.70 28.00 3.20 52.70 80.70 4.90

KPCL HYDEL STATIONS

SHARAVATHI VALLEY PROJECT_SVP

(10x103.5+2x27.5) 27.598 1356.18 5.87 0.35 47.85 53.72 0.40

MAHATMA GANDHI HYDRO ELECTRIC POWER

HOUSE_MGHE (4x21.6+4x13.2) 10.632 29.72 0.25 0.45 1.34 1.59 0.53

GERUSOPPA_GPH (SHARAVATHI TAIL

RACE_STR) (4x60) 10.632 55.46 2.60 1.11 6.16 8.76 1.58

KALI VALLEY PROJECT_KVP (2x50+6x150) 22.000 698.01 4.70 0.55 38.35 43.05 0.62

VARAHI VALLEY PROJECT_VVP (4x115+2x4.5) 10.632 113.63 4.32 1.18 13.36 17.68 1.56

ALMATTI DAM POWER HOUSE_ADPH

(1x15+5x55) 10.632 51.21 3.35 0.97 4.97 8.32 1.62

BHADRA HYDRO ELECTRIC POWER

HOUSE_BHEP ((1x2+2x12)+(1x7.2+1x6)) 10.632 6.45 0.16 3.36 2.17 2.33 3.61

KADRA POWER HOUSE_KPH (3x50) 10.632 38.57 2.06 1.46 5.65 7.71 2.00

KODASALLI DAM POWER HOUSE_KDPH (3x40) 10.632 36.17 1.28 1.14 4.13 5.41 1.50

GHATAPRABHA DAM POWER HOUSE_GDPH

(2x16) 10.632 8.80 0.23 1.68 1.48 1.71 1.95

SHIVASAMUDRAM (4x4+6x3) & SHIMSHAPURA

(2x8.6) HYDRO STATIONS. 10.632 31.07 0.38 0.80 2.50 2.88 0.93

MUNIRABAD POWER HOUSE (2x9+1x10) 10.632 9.72 0.05 0.58 0.57 0.61 0.63

TOTAL KPCL HYDRO

2434.98 25.23 0.53 128.52 153.76 0.63

OTHER HYDRO

PRIYADARSHINI JURALA HYDRO ESLECTRIC

STATION (6x39) 10.632 11.70 4.35 5.08 5.08 4.35

TUNGABHADRA DAM POWER HOUSE_TBPH

(4x9+4x9) 10.632 1.00 1.83 0.18 0.18 1.83

TOTAL OTHER HYDRO 10.632 12.69 4.15 5.27 5.27 4.15

RENEWABLE ENERGY SOURCES

WIND-IPPS 188.95 68.53 68.53 3.63

KPCL-WIND (9x0.225+10x0.230) 0.00 0.00 0.00 3.71

MINI HYDEL-IPPS 222.13 72.99 72.99 3.29


% SHARE

OF

ENERGY

ALLOWED

ENERGY

ALLOWED

(MU)

CAPACITY

CHARGES

(Rs Cr)

ENERGY

CHARGES

PER UNIT

RATE

(RS/Kwh)

ENERGY

CHARGE

S

(Rs Cr)

TOTAL

COST

(Rs Cr)

PER

UNIT

RATE

(RS/Kw

h)

CO-GEN 41.80 19.41 19.41 4.64

CAPPTIVE 0.00 0.00 0.00 2.84

BIOMASS 4.43 2.19 2.19 4.95

SOLAR-existing (anticipated as on 31.03.2017) 141.37 93.76 93.76 6.63

Solar-New Park 11.05 59.24 20.73 20.73 3.50

Solar-KREDL 103.24 54.26 54.26 5.26

ccxxiii

SOLAR-KPCL

(YELESANDRA,ITNAL,YAPALDINNI,SHIMSHA)

(3x1+3x1+1x3x1x5)

0.00 0.00 6.00

TOTAL RE 761.16 331.88 331.88

NTPC Bundled power 11.57 67.39 29.92 29.92 4.44

Power purchase from Co gen 11.05 143.69 49.86 49.86 3.47

Short term power purchase 12.50 140.00 58.38 58.38 4.17

Short term Purchase from MSEDCL 11.05 32.50 11.76 11.76 3.62

TRANSMISSION CHARGES

PGCIL CHARGES 109.79 109.79

KPTCL CHARGES 301.47 301.47

SLDC 3.14 3.14

POSOCO CHARGES 0.38 0.38

TOTAL INCLUDING TRANSMISSION & SLDC

CHARGES 6972.30 796.06 1560.31 2356.37 3.38

ccxxiv

Sales-M U Revenue

Rs. crores

Sales-M U Revenue

Rs. crores

1

LT-1[fully

subsidised by

GoK]*

Bhagya Jyothi/Kutir Jyothi

118.52 72.3 106.17 65.61 6.18 0.00 -2.98

2

LT-2(a)(i) Dom. / AEH - Applicable to City

Municipal Corporations areas and all

area under Urban Local Bodies. 694.19 452.52 691.47 371.94 5.38 -12.96 -15.56

3LT-2(a)(ii) Dom. / AEH - Applicable to areas

under Village Panchayats 376.45 209.65 339.34 156.29 4.61 -25.47 -27.70

4

LT-2(b)(i) Pvt. Educational Institutions

Applicable to all areas of Local

Bodies including City Corporations 6.60 6.09 6.42 4.89 7.62 23.28 19.60

5

LT-2(b)(ii) Pvt. Educational Institutions

Applicable to areas under Village

Panchayats 3.30 2.80 3.31 2.25 6.80 10.19 6.90

6

LT-3(i) Commercial - Applicable in areas

under all ULBs including City

Corporations. 229.35 235.99 221.62 205.59 9.28 50.11 45.63

7LT-3(ii) Commercial - Applicable to areas

under Village Panchayats 81.46 78.00 75.38 64.63 8.57 38.74 34.60

8 LT-4(a)* IP<=10HP 2968.65 1,897.20 2386.77 1279.31 5.36 -13.27 -15.86

9 LT-4(b) IP>10HP 0.80 0.49 0.80 0.42 5.25 -15.10 -17.63

10

LT-4 (c) (i) Pvt. Nurseries, Coffee & Tea

Plantations of sanctioned load of 10

HP & below 8.80 4.51 8.90 4.76 5.35 -13.41 -15.99

11

LT-4 (c) (ii) Pvt. Nurseries, Coffee & Tea

Plantations of sanctioned load of

above 10 HP 6.04 4.51 5.94 4.05 6.82 10.43 7.14

12 LT-5(a) LT Industrial 51.21 43.14 81.27 59.38 7.31 18.22 14.70

13 LT-5(b) LT Industrial 96.02 79.06 62.50 45.66 7.31 18.22 14.69

14 LT-6(a) Water supply 216.56 130.99 216.57 106.44 4.91 -20.47 -22.84

15 LT-6(b) Public lighting 111.53 88.48 111.53 78.35 7.03 13.68 10.29

16 LT-7(a) Temporary supply 15.75 27.17 15.75 26.46 16.80 171.80 163.69

17LT-7(b) Permanent Supply to Adversiting &

Holding 0.07 0.11 0.07 0.10 14.29 141.00 133.81

4985.30 3333.01 4333.81 2476.15 5.71 -7.55 -10.30

1 HT-1 Water supply & sew erage 466.79 297.74 463.65 240.50 5.19 -16.07 -10.26 -5.52

2 HT-2(a) Industrial - 776.96 654.15 776.95 593.94 7.64 23.70 32.26 39.24

3 HT-2(b) Commercial 132.01 140.73 126.28 121.41 9.61 55.57 66.34 75.12

4 HT-2 ( c) (i)

Govt./ Aided Hospitals & Educational

Institutions 40.54 35.46 37.68 29.58 7.85 27.01 35.79 42.97

5 HT-2 ( c) (ii)

Hospitals and Educational

Institutions other than covered

under HT-2( c) (i) 24.73 21.50 27.59 22.76 8.25 33.51 42.75 50.29

6

HT-3(a)(i) Lift Irrigation - Applicable to lif t

irrigation schemes under Govt Dept,

/ Govt. ow ned Corporations 70.58 34.64 84.31 18.97 2.25 63.59 -61.07 -59.02

7

HT-3(a)(ii) Lift Irrigation - Applicable to Private

lif t irrigation schemes Lift Irrigaton

societies on urban/express feeders 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

8HT-3(a)(iii) LI schemes other than those

covered under HT 3(a)(ii) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

9

HT - 3b Irrigation & Agriculture Farms,Govt.

Horticultural Farms, Pvt.Horticulture

Nurseries, Coffee, Tea,Cocanut &

Arecanut Plantations 0.27 0.15 0.20 0.09 4.50 -31.23 -26.47 -22.59

10 HT-4 Residential Apartments -Colonies 3.96 3.05 5.93 3.87 6.53 5.50 12.80 18.76

11 HT-5 Temporary supply 5.08 8.96 5.08 8.34 16.42 165.66 184.05 199.05

1520.92 1196.38 1527.67 1039.46 6.80 10.10 17.72 23.94

6506.22 4529.39 5861.48 3515.61 6.00

119.05 105.97

6506.22 4648.42 5861.48 3621.58 6.18 0.00

* These categories are subsidised by GoK. In case subsidy is not released by the Gok in advance, CESC

shall raise demand & collect CDT of Rs.6.18/unit by BJ/KJ &Rs.5.36/unit from IP set Consumers.

* Voltage w ise cost of supply per unit to: LT Rs: 6.37, HT Rs.5.78 & EHT- Rs.5.49 Page - 216

Cross

Subsidy in

w ith ref.

toVoltage

wise COS

% (EHT)

PROPOSED AND APPROVED REVENUE AND REALISATION AND LEVEL OF CROSS SUBSIDY FOR FY-18 OF CESC

Annexure- III

Grand Total

Level o f

C ro ss

Subsidy with

ref .to

A verage

co st o f

supply in %

HT - TOTAL

TOTAL

Proposed by CESC

LT - TOTAL

Average

Realisation

in Rs. Per

Kwh

Cross

Subsidy

with ref.

to ACS %

(LT/HT)

Misc. Revenue

Sl No Category Description

Approved as per RST

ccxxv

ANNEX - IV

ELECTRICITY TARIFF - 2018

K.E.R.C. ORDER DATED: 11th April, 2017

Effective for the Electricity consumed from the first meter

reading date falling on or after 01.04.2017

Chamundeshwari

Electricity Supply Corporation Ltd.,

ccxxvi

ELECTRICITY TARIFF-2018

GENERAL TERMS AND CONDITIONS OF TARIFF:

(APPLICABLE TO BOTH HT AND LT)

1. Supply of power is subject to execution of agreement by the

Consumer in the prescribed form, payment of prescribed deposits

and compliance of terms and conditions as stipulated in the

Conditions of Supply of Electricity of the Distribution Licensees in

the State of Karnataka and Regulations issued under the Electricity

Act, 2003 at the time of supply and continuation of power supply

is subject to compliance of the said Conditions of Supply /

Regulations as amended from time to time.

2. The tariffs are applicable to only single point of supply unless

otherwise approved by the Licensee.

3. The Licensee does not bind himself to energize any installation,

unless the Consumer guarantees the minimum charges. The

minimum charge is the power supply charges in accordance with

the tariff in force from time to time. This shall be payable by the

Consumer until power supply agreement is terminated,

irrespective of the installation being in service or under

disconnection.

4. The tariffs in the schedule are applicable to power supply within

the area of operation of the licensee.

5. The tariffs are subject to levy of Tax and Surcharges thereon as

may be decided by the State Government from time to time.

6. For the purpose of these tariffs, the following conversion table would be

used:

1 HP=0.746 KW. 1HP=0.878 KVA.

ccxxvii

7. The bill amount will be rounded off to the nearest Rupee, i.e., the bill

amount of 50 Paise and above will be rounded off to the next higher

Rupee and the amount less than 50 Paise will be ignored.

8. Use of power for temporary illumination in the premises already having

permanent power supply for marriages, exhibitions in hotels, sales

promotions etc., is limited to sanctioned load at the applicable

permanent power supply tariff rates. Temporary tariff rates will be

applicable in case the load exceeds sanctioned load as per the

Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka.

9. No LT power supply will be given where the requisitioned load is 50

KW/67 HP and above. This condition does not apply for installations

serviced under clause 3.1.1 of K.E.R.C. (Recovery of Expenditure for

supply of Electricity) Regulations, 2004 and its amendments from time to

time. The applicant is however at liberty to avail HT supply for lesser

loads. The minimum contract demand for HT supply shall be 25 KVA or

as amended from time to time by the Licensee with the approval of

KERC.

10. The Consumer shall not resell electricity purchased from the Licensee to

a third party except -

(a) Where the Consumer holds a sanction or a tariff provision for

distribution and sale of energy,

(b) Under special contract permitting the Consumer for resale of

energy in accordance with the provisions of the contract.

11. Non-receipt of the bill by the Consumer is not a valid reason for non-

payment. The Consumer shall notify the office of issue of the bill, if the

same is not received within 7 days from the meter reading date.

Otherwise, it will be deemed that the bills have reached the Consumer

in due time.

12. The Licensee will levy the following charges for non-realization of each

Cheque

ccxxviii

1 Cheque amount upto

Rs. 10,000/-

5% of the amount subject to a

minimum of Rs100/-

2 Cheque amount of

Rs. 10,001/- and upto

Rs. 1,00,000/-


minimum of Rs500/-

3 Cheque amount above

Rs. 1 Lakh:


minimum of Rs3000/-

13. In respect of power supply charges paid by the Consumer through

money order, Cheque /DD sent by post, receipt will be drawn and the

Consumer has to collect the same.

14. In case of any belated payment, simple interest at the rate of 1 % per

month will be levied on the actual No. of days of delay subject to a

minimum of Re.1/- for LT installation and Rs.100/- for HT installation. No

interest is however levied for arrears of Rs.10/- and less.

15. All LT Consumers, except BhagyaJyothi and KutirJyothi Consumers, shall

provide current limiter/Circuit Breakers of capacity prescribed by the

Licensee depending upon the sanctioned load.

16. All payments made by the Consumer will be adjusted in the following

order of priority: -

(a) Interest on arrears of Electricity Tax

(b) Arrears of Electricity Tax

(c) Arrears of Interest on Electricity charges

(d) Arrears of Electricity charges

(e) Current month’s dues

17. For the purpose of billing,

(i) the higher of the rated load or sanctioned load in respect of LT

installations which are not provided with Electronic Tri-Vector

meter.

(ii) sanctioned load or MD recorded, whichever is higher, in respect of

installations provided with static meters or Electronic Tri-Vector meter

will be considered.

Penalty and other clauses shall apply if sanctioned load is exceeded.

18. The bill amount shall be paid within 15 days from the date of presentation of

the bill failing which the interest becomes payable.

ccxxix

19. For individual installations, more than one meter shall not be provided under

the same tariff. Wherever two or more meters are existing for individual

installation, the sum of the consumption recorded by the meters shall be

taken for billing, till they are merged.

20. In case of multiple connections in a building, all the meters shall be

provided at one easily accessible place in the ground floor.

21. Reconnection charges: The following reconnection charges shall be levied

in case of disconnection and included in the monthly bill.

For reconnection of:

a Single Phase Domestic installations

under Tariff schedule LT 1 & LT2 (a)

Rs.20/- per installation

b Three Phase Domestic installations

under Tariff schedule LT2 (a) and

Single Phase Commercial & Power

installations.


c All LT installations with 3 Phase supply

other than LT2 (a)


d All HT& EHT installations Rs.500/-per Installation.

22. Revenue payments upto and inclusive of Rs.10, 000/- shall be made by

cash or cheque or D.D and payments above Rs.10, 000/- shall be made by

cheque or D.D only. Payments under other heads of account shall be

made by cash or D.D up to and inclusive of Rs.10, 000/- and payment

above Rs.10, 000/-shall be by D.D only.

Note: The Consumers can avail the facility of payment of monthly power

supply bill through Electronic clearing system (ECS)/ Credit cards /

RTGS/ NEFT/ on-line E-Payment / Digital mode of payments in line

with the guidelines issued by the RBI wherever such facility is

provided by the Licensee in respect of revenue payments up to the

limit prescribed by the RBI.

23. For the types of installations not covered under any Tariff schedules, the

Licensee is permitted to classify such installations under appropriate Tariff

schedule under intimation to the K.E.R.C.

24. Seasonal Industries

Applicable to all Seasonal Industries

i) The industries that intend to avail this benefit shall have Electronic Tri-

Vector Meter fitted to their installations.

ccxxx

ii) ‘Working season’ months and ‘off-season’ months shall be

determined by an order issued by the Executive Engineer of the

concerned O&M Division of the Licensee as per the request of the

Consumer and will continue from year to year unless otherwise

altered. The Consumer shall give a clear one month’s notice in case

he intends to change his ‘ working season’.

iii) The consumption during any month of the declared off-season shall

not be more than 25% of the average consumption of the previous

working season.

iv) The ‘Working season’ months and ‘off-season’ months shall be full–

calendar months. If the power availed during a month exceeds the

allotment for the ‘off-season’ month, it shall be taken for calculating

the billing demand as if the month is the ‘working season’ month.

v) The Consumer can avail the facility of ‘off-season’ up to six months in

a calendar year not exceeding in two spells in that year. During the

‘off-season period, the Consumer may use power for administrative

offices etc., and for overhauling and repairing plant and machinery.

25 Whether an institution availing Power supply can be considered as

charitable or not will be decided by the Licensee on the production

of certificate Form-12 A from the Income Tax department.

26 Time of the Tariff (ToD)

The Commission as decides in the earlier tariff order, decide to continue

compulsory Time of Day Tariff for HT2 (a) and HT2 (b) and HT2(c)

consumers with a contract demand of 500 KVA and above. Further, the

optional ToD would continue as existing earlier for HT2(a), HT2(b) and

HT2(c) consumers with contract demand of less than 500 KVA. Also the

ToD for HT1 consumers on optional basis would continue as existing

earlier. Details of ToD tariff are indicated under the respective tariff

category.

27. SICK INDUSTRIES:

The Government of Karnataka has extended certain reliefs for

revival/rehabilitation of sick industries under the New Industrial Policy

2001-06 vide G.O. No. CI 167 SPI 2001, dated 30.06.2001. Further, the

ccxxxi

Government of Karnataka has issued G.O No.CI2 BIF 2010, dated

21.10.2010. The Commission, in its Tariff Order 2002, has accorded

approval for implementation of reliefs to the sick industries as per the

Government policy and the same was continued in the subsequent

Tariff Orders. In view of issue of the G.O No.CI2 BIF 2010, dated

21.10.2010, the Commission has accorded approval to ESCOMs for

implementation of the reliefs extended to sick industrial units for their

revival / rehabilitation on the basis ofthe orders issued by the

Commissioner for Industrial Development and Director of Industries &

Commerce, Government of Karnataka.

28. Incentive for Prompt Payment / Advance Payment: An incentive at the rate

of 0.25% of such bill shall be given to the following Consumers by way of

adjustment in the subsequent month’s bill:

(i) In all cases of payment through ECS.

(ii) And in the case of monthly bills exceeding Rs.1, 00,000/-

(Rs. one lakh), if the payment is made 10 days in advance

of the due date.

(iii) Advance Payment exceeding Rs.1000/- madeby the

Consumers towards monthly bills

29. Conditions of Supply of Electricity of the Distribution Licensees in the State of

Karnataka and amendments issued thereon from time to time and

Regulations issued under the Electricity Act, 2003 will prevail over the extract

given in this tariff book in the event of any discrepancy.

30. Self-Reading of Meters:

The Commission has approved Self-Reading of Meters by Consumers

and issue of bills by the Licensee based on such readings and the

Licensee shall take the reading at least once in six months and reconcile

the difference, if any and raise the bills accordingly. This procedure may

be implemented by the Licensee as stipulated under Section 26.01 of


State of Karnataka.

---0---

ccxxxii

ELECTRICITY TARIFF - 2018

PART-1

HIGH TENSION SUPPLY

Applicable to Bulk Power Supply at Voltages of 11KV (including

2.3/4.6 KV) and above at Standard High Voltage or Extra High

Voltages when the Contract Demand is 50 KW / 67 HP and above.

CONDITIONS APPLICABLE TO BILLING OF HT INSTALLATIONS:

1. Billing Demand

A) The billing demand during unrestricted period shall be the

maximum demand recorded during the month or 75% of the CD,

whichever is higher.

B) When the Licensee has imposed demand cut of 25% or less, the

conditions stipulated in (A) shall apply.

C) When the demand cut is in excess of 25%, the billing demand shall

be the maximum demand recorded or 75% of the restricted

demand, whichever is higher.

D) If at any time the maximum demand recorded exceeds the CD or

the demand entitlement, or opted demand entitlement during

the period of restrictions, if any, the Consumer shall pay for the

quantum of excess demand at two times the normal rate per KVA

per month as deterrent charges as per Section 126(6) of the

Electricity Act, 2003. For over-drawal during the billing period, the

penalty shall be two times the normal rate.

E) During the periods of disconnection, the billing demand shall be

75% of CD, or 75% of the demand entitlement that would have

been applicable, had the installation been in service, whichever

ccxxxiii

is less. This provision is applicable only, if the installation is under

disconnection for the entire billing month.

F) During the period of energy cut, the Consumer may get his demand

entitlement lowered, but not below the percentage of energy

entitlement, (For example, In case the energy entitlement is 40%

and the demand entitlement is 80%, the re-fixation of demand

entitlement cannot be lower than 40% of the CD). The benefit of

lower demand entitlement will be given effect to from the meter

reading date of the same month, if the option is exercised on or

before 15th of the month. If the option is exercised on or after 16th

of the month, the benefit will be given effect to from the next

meter reading date. The Consumer shall register such option by

paying a processing fee of Rs.100/- at the Jurisdictional sub-

division office.

(i) The billing demand in such cases, shall be the “Revised

(Opted) Demand Entitlement” or, the recorded demand,

whichever is higher. Such option for reduction of demand

entitlement, is allowed only once during the entire span of

that particular “Energy Cut Period”. The Consumer, can

however opt for a higher demand entitlement upto the

level permissible under the demand cut notification, and

the benefit will be given effect to from the next meter

reading date. Once the Consumer opts for enhancement

of demand, which has been reduced under Clause (F), no

further revision is permitted during that particular energy

cut period.

(ii) The opted reduced demand entitlement will automatically

cease to be effective, when the energy cut is revised. The

facility for reduction and enhancement can however be

exercised afresh by the Consumer as indicated in the

previous paras.

ccxxxiv

G) For the purpose of billing, the billing demand of 0.5 KVA and

above will be rounded off to the next higher KVA, and billing

demand of less than 0.5 KVA shall be ignored.

2. Power factor (PF)

It shall be the responsibility of the HT Consumer to determine the

capacity of PF correction apparatus and maintain an average PF of

not less than 0.90.

(i) The specified P.F. is 0.90. If the power factor goes below 0.90

Lag, a surcharge of 3 Paise per unit consumed will be levied

for every reduction of P.F. by 0.01 below 0.90 Lag.

(ii) T

he power factor when computed as the ratio of KWh / KVAh

will be determined upto 3 decimals (ignoring figures in the

other decimal places), and then rounded off to the nearest

second decimal as illustrated below:

(a) 0.8949 to be rounded off to 0.89

(b) 0.8951 to be rounded off to 0.90

In respect of Electronic Tri-Vector meters, the recorded average PF

over the billing period shall be considered for billing purposes. If the

same is not available, the ratio of KWh to KVAh consumed in the

billing month shall be considered.

3. Rebate for supply at high voltage:

If the Consumer is availing power at voltage higher than 13.2 KV, he will

be entitled to a rebate as indicated below:

ccxxxv

Supply Voltage: Rebate

A) 33/66 KV 2 Paise/unit of energy consumed

B) 110 KV 3 Paise/unit of energy consumed

C) 220 KV 5 Paise/unit of energy consumed

The above rebate will be allowed in respect of all the installations of the

above voltage class, including the existing installations, and also for

installations converted from 13.2 KV and below to 33 KV and above and

also for installations converted from 33/66 KV to 110/220 KV, from the

next meter reading date after conversion / service / date of notification

of this Tariff order, as the case may be. The above rebate is applicable

only on the normal energy consumed by the Consumer, including the

consumption under TOD Tariff, and is not applicable on any other

energy allotted and consumed, if any, viz.,

i) Wheeled Energy.

ii) Any energy, including the special energy allotted over and above

normal entitlement.

iii) Energy drawal under special incentive scheme, if any.

The above rebate is not applicable for Railway Traction.

4. In respect of Residential Quarters/ Colonies availing Bulk power supply by

tapping the main HT supply, the energy consumed by such Colony

loads, metered at single point, shall be billed under HT-4 tariff schedule.

No reduction in demand recorded in the main HT meter will be allowed.

5. Energy supplied may be utilized for all purposes associated with the

working of the installations, such as, Office, Stores, Canteens, Yard

Lighting, Water Supply and Advertisements within the premises.

6. Energy can also be used for construction, modification and expansion

purposes within the premises.

7. Power supply under HT-4 tariff schedule may be used for Commercial

and other purposes inside the colony, for installations such as Canteen,

Club, Shop, Auditorium etc., provided, this load is less than 10% of the

CD.

8. In respect of Residential Apartments availing HT Power supply under HT-4

tariff schedule, the supply availed for Commercial and other purposes

ccxxxvi

like Shops, Hotels, etc., will be billed under appropriate tariff schedule,

(Only Energy charges) duly deducting such consumption in the main HT

supply bill. No reduction in the recorded demand of the main HT meter is

allowed. Common areas shall be billed at Tariff applicable to that of the

predominant Consumer category. [

9. Seasonal Industries

a. The industries, which intend to utilize seasonal industry benefit,

shall conform to the conditionalities under Para no. 24 of the

General terms and conditions of tariff (applicable to both HT &

LT).

b. The industries that intend to avail this benefit, shall have Electronic

Tri-Vector Meter fitted to the installation.

c. Monthly charges during the working season shall be the demand

charges on 75% of the contract demand or the recorded

maximum demand during the month, whichever is higher, plus

the energy charges

d. Monthly charges during the off season, shall be demand charges

on the maximum demand recorded during the month, or 50% of

the CD whichever is higher plus the energy charges.

TARIFF SCHEDULE HT 1

Applicable to Water Supply, Drainage / Sewerage water treatment plant and

Sewerage Pumping installations, belonging to Karnataka Urban Water Supply

and Sewerage Board, other local bodies, State and Central Government.

RATE SCHEDULE

Demand charges Rs.200/-KVA of billing demand/month


TOD Tariff at the option of the Consumer Time of Day Increase + / reduction (-) in energy


06.00 Hrs to 10.00 Hrs + 100 paise per unit

10.00 Hrs to 18.00 Hrs 0



Note: Energy supplied to residential quarters availing bulk supply by the

above category of Consumer, shall be metered separately at a

single point, and the energy consumed shall be billed at HT-4

ccxxxvii

Tariff. No reduction in the demand recorded in the main HT meter

will be allowed.

TARIFF SCHEDULE HT-2(a)

Applicable to Industries, Factories, Workshops, Research & Development

Centres, Industrial Estates, Milk dairies, Rice Mills, Phova Mills, Roller Flour

Mills, News Papers, Printing Press, Railway Workshops/KSRTC Workshops/

Depots, Crematoriums, Cold Storage, Ice & Ice-cream mfg. Units,

Swimming Pools of local bodies, Water Supply Installations of KIADB and

other industries, all Defence Establishments. Hatcheries, Poultry Farm,

Museum, Floriculture, Green House, Bio Technical Laboratory, Hybrid

Seeds processing Units, Stone Crushers, Stone cutting, Bakery Product

Manufacturing Units, Mysore Palace illumination, Film Studios, Dubbing

Theatres, Processing, Printing, Developing and Recording Theaters, Tissue

Culture, Aqua Culture, Prawn Culture, Information Technology Industries

engaged in development of Hardware & Software, Information

Technology (IT) enabled Services / Start-ups(As defined in GOI

notification dated 17.04.2015)/ Animation / Gaming / Computer

Graphics as certified by the IT & BT Department of GOK/GOI, Drug Mfg.

Units, Garment Mfg. Units, Tyre retreading units, Nuclear Power Projects,

Stadiums maintained by Government and local bodies, also Railway

Traction, Effluent treatment plants and Drainage water treatment plants

owned other than by the local bodies, LPG bottling plants, petroleum

pipeline projects, Piggery farms, Analytical Lab for analysis of ore metals,

Saw Mills, Toy/wood industries, Satellite communication centres, and

Mineral water processing plants / drinking water bottling plants.

RATE SCHEDULE

HT-2(a): Applicable to all areas of CESC.

Demand charges Rs.200/kVA of billing demand/month

Energy charges

For the first one lakh units 660 paise per unit

For the balance units 680 paise per unit

Railway Traction and Effluent Treatment Plants


Energy Charges 620 paise per unit for all the units

TARIFF SCHEDULE HT-2(b)

Applicable to Commercial Complexes, Cinemas, Hotels, Boarding & Lodging,

Amusement Parks, Telephone Exchanges, Race Course, All Clubs, T.V. Station, All

ccxxxviii

India Radio, Railway Stations, Air Port, KSRTC bus stations, All offices, Banks,

Commercial Multi-storied buildings.

APMC Yards, Stadiums other than those maintained by Government and Local Bodies,

Construction power for irrigation, Power Projects and Konkan Railway Project, Petrol /

Diesel and Oil storage plants, I.T. based medical transcription centers, telecom, call

centers, BPO/KPO Diagnostic centres, concrete mixture (Ready Mix Concrete)

units.

RATE SCHEDULE

HT-2 (b): Applicable to all areas of CESC

Energy charges

For the first two lakh units 825 paise per unit


TARIFF SCHEDULE HT-2(c)

RATE SCHEDULE

HT-2 (c) (i)- Applicable to Government Hospitals, Hospitals run by Charitable

Institutions, ESI hospitals, Universities and Educational Institutions belonging to

Government and Local bodies, Aided Educational Institutions andHostels of

all Educational Institutions.


Energy charges



RATE SCHEDULE

HT-2 (c) (ii) - Applicable to Hospitals and Educational Institutions other than

those covered under HT-2 (c)(i).


Energy charges



Note: Applicable to HT-2 (a) , HT-2 (b) & HT-2(c) Tariff Schedule.

1. Energy supplied may be utilized for all purposes associated

with the working of the installation such as offices, stores,

canteens, yard lighting, water pumping and advertisement

within the premises.

Demand charges Rs.220 /kVA of billing demand/month

ccxxxix

2. Energy can be used for construction, modification and

expansion purposes within the premises.

3. In respect of industries availing HT power supply under HT2

(a) tariff schedule, the supply availed for Effluent Treatment

Plant situated within the premises by fixing the separate sub-

meter, a rebate of 50 paise per unit of electricity consumed

by such Effluent Treatment Plant shall be given to the

applicable tariff schedule. No reduction in the recorded

demand of the main HT supply is allowed.

TOD Tariff applicable to HT-2(a), HT-2(b) and HT-2(c) category.

Time of Day Increase + / reduction (-) in energy



10.00 Hrs to 18.00 Hrs 0



TARIFF SCHEDULE HT-3 (a)

Applicable to Lift irrigation Schemes/ Lift irrigation societies,

RATE SCHEDULE

HT-3 (a)(i): Applicable to LI schemes under Govt. Departments/ Govt.

owned Corporations

Energy charges/ Minimum Charges 225 paise per unit subject to an

annual minimum of Rs.1240 per

HP/Annum

HT-3(a)(ii): Applicable to Private LI schemes and Lift Irrigation societies:

Connected to Urban/Express feeders

Fixed Charges Rs.50 /HP/ per month of sanctioned

load


HT-3(a)(iii): Applicable to Private LI schemes and Lift Irrigation societies other

than those covered under HT-3 (a)(ii)

Fixed Charges Rs.30 /HP/ per month of sanctioned

load


TARIFF SCHEDULE HT-3 (b)

ccxl

HT-3 (b): Applicable to Irrigation and Agricultural Farms, Government

Horticultural Farms, Private Horticulture nurseries, Coffee, Tea,

Rubber, Coconut &Arecanut Plantations.

RATE SCHEDULE

Energy charges / Minimum Charges 425paise per unit subject to an

annual minimum of Rs.1240/- per HP

of sanctioned load.

Note: These installations are to be billed on quarter yearly basis.


Applicable to Residential apartments and colonies (whether situated outside or

inside the premises of the main HT Installation) availing power supply

independently or by tapping the main H.T. line. Power supply can be used for

residences, theatres, shopping facility, club, hospital, guest house, yard/street

lighting, canteen located within the colony.

RATE SCHEDULE

Applicable to all areas

Demand charges Rs.120/- per KVA of billing demand/

month


NOTE: (1) In respect of residential colonies availing power supply by tapping

the main H.T. supply, the energy consumed by such colony loads

metered at a single point, is to be billed at the above energy rate.

No reduction in the recorded demand of the main H.T. supply is

allowed.

(2) Energy under this tariff may be used for commercial and other

purposes inside the colonies for installations such as, Canteens,

Clubs, Shops, Auditorium etc., provided, this commercial load is less

than 10% of the Contract demand. [

(3) In respect of Residential Apartments, availing HT Power supply

under HT-4 tariff schedule, the supply availed for Commercial and

other purposes like Shops, Hotels, etc., will be billed under

appropriate tariff schedule (Only Energy charges), duly deducting

such consumption in the main HT supply bill. No reduction in the

recorded demand of the main HT meter is allowed. Common areas

ccxli

shall be billed at Tariff applicable to the predominant Consumer

category.


Tariff applicable to sanctioned load of 67 HP and above for

hoardings and advertisement boards and construction power for

industries excluding those category of consumers covered under

HT2(b) Tariff schedule availing power supply for construction power

for irrigation, power projects and Konkan Railway Projects and also

applicable to power supply availed on temporary basis with the

contract demand of 67 HP and above of all categories.

HT – 5 – Temporary supply

RATE SCHEDULE

67 HP and above:

Fixed charges /

Demand Charges

Rs240/HP/month for the entire sanction load /

contract demand

Energy Charges 1000 paise / unit

Note:

1. Temporary power supply with or without extension of distribution main shall

be arranged through a pre–paid energy meter duly observing the provisions

of Clause 12 of the Conditions of Supply of Electricity of the Distribution

Licensees in the State of Karnataka.

2. This Tariff is also applicable to touring cinemas having license for a duration of

less than one year.

3. All the conditions regarding temporary power supply as stipulated in Clause

12 the Conditions of Supply of Electricity of the Distribution Licensees in the

State of Karnataka shall be complied with before service.

------

ccxlii

ELECTRICITY TARIFF-2018

PART-II

LOW TENSION SUPPLY

(400 Volts Three Phase and

230Volts Single Phase Supply)

CESC

ccxliii

CONDITIONS APPLICABLE TO BILLING OF LT INSTALLATIONS:

1. In the case of LT Industrial / Commercial Consumers, Demand based Tariff at

the option of the Consumer, can be adopted. The Consumer is permitted to

have more connected load than the sanctioned load. The billing demand will

be the sanctioned load, or Maximum Demand recorded in the Tri-Vector

Meter during the month, whichever is higher. If the Maximum Demand

recorded is more than the sanctioned load, penal charges at two times the

normal rate shall apply.

2. Use of power within the Consumer premises for bonafide temporary purpose

is permitted subject to the conditions that, total load of the installation on the

system does not exceed the sanctioned load.

3. Where it is intended to use power supply temporarily, for floor polishing and

such other portable equipment, in a premises having permanent power

supply, such equipment shall be provided with earth leakage circuit breakers

of adequate capacity.

4. The laboratory installations in educational institutions are allowed to install

connected machineries up to 4 times the sanctioned load. The fixed charges

shall however be on the basis of sanctioned load.

5.Besides combined lighting and heating, electricity supply under tariff

schedules LT2 (a) & LT2 (b), can be used for Fans, Televisions, Radios,

Refrigerators and other household appliances, including domestic water

pumps and air conditioners, provided, they are under single meter

connection. If a separate meter is provided for Air-conditioner load, the

Consumer shall be served with a notice to merge this load and to have a

single meter for the entire load. Till such time, the air conditioner load will be

billed under Commercial Tariff.

6. Bulk LT supply:

If power supply for lighting / combined lighting & heating {LT 2(a)}, is availed

through a bulk Meter for group of houses belonging to one Consumer, (ie,

Where bulk LT supply is availed), the billing for energy shall be done at the

ccxliv

slab rate for energy charges matching the consumption obtained by dividing

the bulk consumption by number of houses. In addition, fixed charges for the

entire sanctioned load shall be charged as per Tariff schedule.

7. A rebate of 25 paise per unit will be given for the House/ School/Hostels

meant for Handicapped, Aged, Destitute and Orphans, Rehabilitation

Centres under Tariff schedule LT 2(a).

8. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed subject

to a maximum of Rs. 50/- per installation per month will be allowed to Tariff

schedule LT 2(a), if solar water heaters are installed and used. Where Bulk

Solar Water Heater System is installed, Solar Water Heater rebate shall be

allowed to each of the individual installations, provided that, the capacity of

Solar Water Heater in such apartment / group housing shall be a minimum

capacity of 100 Ltr. per household.

9. A rebate of 20% on fixed charges and energy charges will be allowed in the

monthly bill in respect of public Telephone booths having STD/ISD/ FAX facility

run by handicapped people, under Tariff schedule LT 3.

10. A rebate of 2 paise per unit will be allowed if capacitors are installed as per

Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees in

the State of Karnataka in respect of all metered IP Set Installations.

11. Power Factor (PF):

Capacitors of appropriate capacity shall be installed in accordance with

Clause 23 of Conditions of Supply of Electricity of the Distribution Licensees in

the State of Karnataka, in the case of installations covered under Tariff

category LT 3, LT4, LT 5, & LT 6, where motive power is involved.

(i) The specified P.F. is 0.85. If the PF is found to be less than 0.85 Lag, a

surcharge of 2 paise per unit consumed will be levied for every reduction

of P.F. by 0.01 below 0.85 Lag. In respect of LT installations, however, this

is subject to a maximum surcharge of 30 paise per unit.

(ii) The power factor when computed as the ratio of KWh/KVAh will be

determined up to 3 decimals (ignoring figures in the other decimal

places) and then rounded off to the nearest second decimal as

illustrated below:

(a) 0.8449 to be rounded off to 0.84

(b) 0.8451 to be rounded off to 0.85

ccxlv

(iii) In respect of Electronic Tri-Vector meters, the recorded average PF over

the billing period shall be considered for billing purposes.

(iv) During inspection, if the capacity of capacitors provided is found to be

less than what is stipulated in Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka, a surcharge of 30

Paise/unit will be levied in the case of installations covered under Tariff

categories LT 3, LT 5, & LT 6 where motive power is involved.

(v) In the case of installations without electronic Tri-vector meters even after

providing capacitors as recommended in Clause 23.01 and 23.03 of


State of Karnataka, if during any periodical or other testing / rating of the

installation by the Licensee, the PF of the installation is found to be lesser

than 0.85, a surcharge determined as above shall be levied from the

billing month following the expiry of Three months’ notice given by the

Licensee, till such time, the additional capacitors are installed and

informed to the Licensee in writing by the Consumer. This is also

applicable for LT installations provided with electronic Tri-vector meters.

12. All new IP set applicants shall fix capacitors of adequate capacity in

accordance with Clause 23 of Conditions of Supply of Electricity of the

Distribution Licensees in the State of Karnataka before taking service. [

13. All the existing IP set Consumers shall also fix capacitors of adequate

capacity in accordance with Clause 23 of Conditions of Supply of Electricity

of the Distribution Licensees in the State of Karnataka, failing which, PF

surcharge at the rate of Rs.60/-per HP/ year shall be levied. If the capacitors

are found to be removed / not installed, a penalty at the same rate as

above (Rs. 60/-per HP / Year) shall be levied.

14.The Semi-permanent cinemas having Semi-permanent structure, with

permanent wiring and license of not less than one year, will be billed under

commercial tariff schedule i.e., LT 3.

15.Touring cinemas having an outfit comprising cinema apparatus and

accessories, taken from place to place for exhibition of cinematography

ccxlvi

films, and also outdoor shooting units, will be billed under Temporary Tariff

schedule i.e., LT 7.

16.The Consumers under IP set tariff schedule, shall use the energy only for pumping

water to irrigate their own land as stated in the IP set application / water right

certificate and for bonafide agriculture use. Otherwise, such installations shall be

billed under appropriate Industrial / Commercial tariff, based on the recorded

consumption if available, or on the consumption computed as per the Table given

under Clause 42.06 of the Conditions of Supply of Electricity of the Distribution


17. The water pumped for agricultural purposes may also be used by the

Consumer for his bonafide drinking purposes and for supplying water to

animals, birds, Poultry farms, Dairy farms and fish farms maintained by the

Consumer in addition to agriculture.

18. The motor of IP set installations can be used with an alternative drive for

other agricultural operations like sugar cane crusher, coffee pulping,

arecanut cutting etc., with the approval of the Licensee. The energy used

for such operation, shall be metered separately by providing alternate

switch and charged at LT Industrial Tariff (Only Energy charges) during the

period of alternative use. However, if the energy used both for IP Set and

alternative operation is measured together by one energy meter, the

energy used for alternate drive shall be estimated by deducting the

average IP Set consumption for that month as per the IP sample meter

readings for the sub division, as certified by the sub-divisional Officer.

19. The IP Consumer is permitted to use energy for lighting the pump house and

well limited to two lighting points of 40 Watts each.

20. Billing shall be made at least once in a quarter year for all IP sets.

21. In the case of welding transformers, the connected load shall be taken

as:

a) Half the maximum capacity in KVA as per the nameplate specified

under IS: 1851

OR

b) Half the maximum capacity in KVA as recorded during the rating by

the Licensee, whichever is higher.

22. Electricity under Tariff LT 3 / LT 5 can also be used for Lighting, Heating and

Air-conditioning, Yard-Lighting, water supply in the respective premises of

Commercial / Industrial Units.

ccxlvii

23. Fluorescent fittings shall be provided by the Licensee for the Streetlights in

the case of villages covered under the Licensee’s electrification

programme for initial installation.

In all other cases, the entire cost of fittings including Brackets, Clamps, etc.,

and labour for replacement, additions and modifications shall be met by the

organizations making such a request. Labour charges shall be paid at the

standard rates fixed by the Licensee for each type of fitting.

24. Lamps, fittings and replacements for defective components of fittings shall

be supplied by the concerned Village Panchayaths, Town Panchayaths or

Municipalities for replacement.

25. Fraction of KW / HP shall be rounded off to the nearest quarter KW / HP for

purpose of billing and the minimum billing being for 1 KW / 1HP in respect of

all categories of LT installations including I.P. sets. In the case of street

lighting installations, fraction of KW shall be rounded off to nearest quarter

KW for the purpose of billing and the minimum billing shall be quarter KW.

26. Seasonal Industries.

a) The industries which intend to utilize seasonal industry benefit, shall

comply with the conditionalities specified under Para no. 24 of the

General terms and conditions of tariff (applicable to both HT & LT).

b) The industries that intend to avail this benefit, shall have Electronic Tri-

Vector Meter fitted to their installation.

c) Monthly charges during the seasonal months shall be fixed charges

and energy charges. The monthly charges during the off seasonal

months, shall be the energy charges plus 50% of the fixed charges.

TARIFF SCHEDULE LT-1

LT-1: Applicable to installations serviced under Bhagya Jyothi and Kutira Jyothi

(BJ/KJ) schemes.

RATE SCHEDULE

Energy charges

(including recovery towards

service main charges)

Nil*

Fully subsidized by the GOK

Commission Determined Tariff for the above category i.e., LT-1 is Rs.6.18 per unit.

*Since GOK is meeting the full cost of supply to BJ / KJ, the Tariff payable by these

Consumers is shown as Nil. However, if the GOK does not release the subsidy in

ccxlviii

advance, a Tariff of Rs.6.18 per unit subject to monthly minimum of Rs. 30/- per

Installation per month shall be demanded and collected from these Consumers.

Note: If the consumption exceeds 40 units per month or any BJ/KJ installation is

found to have more than one out let, it shall be billed as per Tariff

Schedule LT 2(a).


Applicable to lighting/combined lighting, heating and motive Power

installations of residential houses and also to such houses where a portion is

used by the occupant for (a) Handloom weaving (b) Silk rearing and reeling

and artisans using motors up to 200 watts (c) Consultancy in, (i) Engineering

(ii) Architecture (iii) Medicine (iv) Astrology (v) Legal matters (vi) Income Tax (vii)

Chartered Accountants (d) Job typing (e) Tailoring (f) Post Office (g)

Gold smithy (h) Chawki rearing (i) Paying guests/Home stay guests (j) personal

Computers (k) Dhobis (l) Hand operated printing press (m) Beauty Parlours (n)

Water Supply installations, Lift which is independently serviced for bonafide use

of residential complexes/residence, (o) Farm Houses and yard lighting limiting

to 120 Watts,(p) Fodder Choppers & Milking Machines with a connected load

upto 1 HP.

Also applicable to the installations of (i) Hospitals, Dispensaries, Health Centres

run by State/Central Govt. and local bodies; (ii) Houses, schools and Hostels

meant for handicapped, aged, destitute and orphans; (iii) Rehabilitation

Centres run by charitable institutions, AIDS and drug addicts Rehabilitation

Centres; (iv) Railway staff Quarters with single meter (v) fire service stations.

It is also applicable to the installations of (a) Temples, Mosques, Churches,

Gurudwaras, Ashrams, Mutts and religious/Charitable institutions; (b) Hospitals,

Dispensaries and Health Centres run by Charitable institutions including X-ray

units; (c) Jails and Prisons (d) Schools, Colleges, Educational institutions run by

State/Central Govt.,/Local Bodies; (e) Seminaries; (f) Hostels run by the

Government, Educational Institutions, Cultural, Scientific and Charitable

Institutions (g) Guest Houses/Travelers Bungalows run in Government buildings

or by State/Central Govt./Religious/Charitable institutions; (h) Public libraries; (i)

Silk rearing; (j) Museums; (k) Installations of Historical Monuments of Archeology

Departments; (l) Public Telephone Booths without STD/ISD/FAX facility run by

ccxlix

handicapped people; (m) Sulabh / Nirmal Souchalayas; (n) Viswa Sheds

having Lighting Loads only.

RATE SCHEDULE

LT 2 (a) (i): Applicable to areas coming under City Municipal Corporations and

all other urban local bodies

Fixed charges per month For the first KW Rs.40/- per KW

For every additional KW Rs.50/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

325 paise/unit

31 to 100 units 470 paise/unit


Above 200 units 730 paise/unit

LT-2(a)(ii): Applicable to Areas under Village Panchayats

Fixed charges per month For the first KW Rs.25/- per KW

For every additional KW Rs.40/- per KW

Energy charges

For 0 - 30 units (Lifeline

consumption)

315 paise/unit

31 to 100 units 440paise/unit


Above 200 units 680paise/unit


Applicable to the installations of Private Professional and other Private

Educational Institutions including aided, unaided institutions, Nursing

Homes and Private Hospitals having only lighting or combined lighting &

heating, and motive power. [[[[[

RATE SCHEDULE

LT 2 (b) (i): Applicable to City Municipal Corporations and all other urban local

bodies

Fixed charges Rs.55 Per KW subject to a minimum of Rs.85per

month

Energy charges



LT-2(b)(ii): Applicable in Areas under Village Panchayats

Fixed charges Rs.45per KW subject to a minimum of Rs.70per

month

Energy charges


Above 200 units 720paise/unit

ccl

Note: Applicable to LT-2 (a), LT-2 (b) Tariff Schedules.

1 A rebate of 25 paise. Per unit shall be given for installation of a house/

School/ Hostels meant for Handicapped, Aged, Destitute and Orphans,

Rehabilitation Centres run by Charitable Institutions.

2 (a) Use of power within the consumer’s premises for temporary purposes

for bonafide use is permitted subject to the condition that, the total

load of the installation on the system does not exceed the sanctioned

load.

(b) Where it is intended to use floor polishing and such other portable

equipment temporarily, in the premises having permanent supply, such

equipment shall be provided with an earth leakage circuit breaker of

adequate capacity.

3 The laboratory installations in educational institutions are allowed to install

connected machinery up to 4 times the sanctioned load. The fixed

charges shall however be on the basis of sanctioned load.

4. Besides lighting and heating, electricity supply under this schedule can be

used for fans, Televisions, Radios, Refrigerators and other house-hold

appliances including domestic water pump and air conditioners,

provided, they are under single meter connection. If a separate meter is

provided for Air conditioner Load, the consumption shall be under

commercial tariff till it is merged with the main meter.

5. SOLAR REBATE: A rebate of 50 paise per unit of electricity consumed to a

maximum of Rs.50/- per installation per month will be allowed to Tariff

schedule LT 2(a), if solar water heaters are installed and used. Where Bulk

Solar Water Heater System is installed, Solar Water Heater rebate shall be

allowed to each of the individual installations, provided that, the capacity

of Solar Water Heater in such apartment / group housing shall be a

minimum capacity of 100 Ltr, per household.


Applicable to Commercial Lighting, Heating and Motive Power installations of

Clinics, Diagnostic Centres, X Ray units, Shops, Stores,

Hotels/Restaurants/Boarding and Lodging Homes, Bars, Private guest Houses,

Mess, Clubs, KalyanMantaps / Choultry, permanent Cinemas/ Semi Permanent

Cinemas, Theatres, Petrol Bunks, Petrol, Diesel and oil Storage Plants, Service

Stations/ Garages, Banks, Telephone Exchanges. T.V.Stations, Microwave

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Stations, All India Radio, Dish Antenna, Public Telephone Booths/ STD, ISD, FAX

Communication Centers, Stud Farms, Race Course, Ice Cream Parlours,

Computer Centres, Photo Studio / colour Laboratory, Photo Copiers, Railway

Installation excepting Railway workshop, KSRTC Bus Stations excepting

Workshop, All offices, Police Stations, Commercial Complexes, Lifts of

Commercial Complexes, Battery Charging units, Tyre Vulcanizing Centres, Post

Offices, Bakery shops, Beauty Parlours, Stadiums other than those maintained

by Govt. and Local Bodies. It is also applicable to water supply pumps and

street lights not covered under LT 6, Cyber cafés, Internet surfing cafés, Call

centres, BPO/KPO, telecom I.T. based medical transcription centres, Private

Hostels not covered under LT -2 (a), Paying guests accommodation provided in

an independent / exclusive premises, concrete mixtures (Ready Mix Concrete)

units .

RATE SCHEDULE

LT-3 (i): Applicable to City Municipal Corporations and all other urban local

bodies.

Fixed charges Rs.60 per KW per month

Energy charges

For 0 - 50 units 750 paise/unit


Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW

Fixed charges Rs.75 per KW

Energy charges As above

RATE SCHEDULE

LT-3 (ii): Applicable in Areas under Village Panchayats


Energy charges For 0 - 50 units 700 paise/unit


Demand based tariff (optional) where sanctioned load

is above 5 KW but below 50 KW


Energy charges As above

Note: 1. Besides Lighting, Heating and Motive power, Electricity supply

under this Tariff can also be used for Yard lighting/ air

Conditioning/water supply in the premises.

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2. The semi-permanent Cinemas should have semi-Permanent

Structure with permanent wiring and licence for a duration of

not less than one year.

3. Touring Cinemas having an outfit comprising Cinema

apparatus and accessories taken from place to place for

exhibition of cinematography film and also outdoor shooting

units shall be billed under LT- 7 Tariff.

4. A rebate of 20% on fixed charges and energy charges shall be

allowed in the monthly bill in respect of telephone Booths

having STD / ISD/FAX facility run by handicapped people.

5. Demand based Tariff at the option of the Consumer can

be adopted as per Para 1 of the conditions applicable to

LT installations.

TARIFF SCHEDULE LT-4 (a), LT-4 (b) & LT-4(c)

Applicable to (a) Agricultural Pump Sets including Sprinklers (b) Pump sets used

in, (i) Nurseries of forest and Horticultural Departments; (ii) Grass Farms and

Gardens; (iii) Plantations other than Coffee, Tea, Rubber and Private

Horticulture Nurseries

TARIFF SCHEDULE LT-4 (a)

Applicable to I.P. Sets upto and inclusive of 10 HP

RATE SCHEDULE

Fixed

charges Free

Energy

charges

Commission Determined Tariff (CDT) for LT4 (a) category is 536 paise per

unit. In case the GOK does not release the subsidy in advance in the

manner specified by the Commission in K.E.R.C. (Manner of Payment of

subsidy) Regulations, 2008, CDT of 536 paise per unit shall be demanded

and collected from these Consumers.

Note: This Tariff is applicable for Coconut and Areca nut plantations also.

TARIFF SCHEDULE LT-4 (b):

Applicable to IP sets above 10 HP

RATE SCHEDULE

Fixed charges Rs.50 per HP per month.

Energy charges 300 paise per unit

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TARIFF SCHEDULE LT-4 (c) (i):

Applicable to Private Horticultural Nurseries, Coffee, Tea and Rubber

plantations of sanctioned load up to and inclusive of 10 HP

RATE SCHEDULE

Fixed charges Rs.40 per HP per month


TARIFF SCHEDULE LT-4 (c)(ii):

Applicable to Private Horticultural Nurseries, Coffee , Tea and Rubber

plantations of sanctioned load above 10 HP.

RATE SCHEDULE

Fixed charges Rs.50 per HP per month


Note: 1) The energy supplied under this tariff shall be used by the consumers only for

pumping water to irrigate their own land as stated in the I.P. Set application / water

right certificate and for bonafide agriculture use. Otherwise, such installations shall

be billed under the appropriate Tariff (LT-3/ LT-5) based on the recorded

consumption if available, or on the consumption computed as per the Table given

under Clause 42.06 of the Conditions of Supply of Electricity of the Distribution


2) The motor of IP set installations can be used with an alternative drive for other

agricultural operations like sugar cane crusher, coffee pulping, arecanut

cutting etc., with the approval of the Licensee. The energy used for such

operation shall be metered separately by providing alternate switch and charged at

LT Industrial Tariff (Only Energy charges) during the period of alternative use. If the

energy used both for IP Set and alternative operation, is however measured

together by one energy meter, the energy used for alternate drive shall be

estimated by deducting the average IP Set consumption for that month as per the

IP sample meter readings for the sub-division as certified by the sub-divisional

Officer.

3) The Consumer is permitted to use the energy for lighting the pump house and well

limited to 2 lighting points of 40 W each.

4) The water pumped for agricultural purposes may also be used by the Consumer for

his bonafide drinking purposes and for supplying water to animals, birds, Poultry

farms, Dairy farms and fish farms maintained by the Consumer in addition to

agriculture.

5) Billing shall be made at least once in a quarter year for all IP sets. 6) A rebate of 2 paise per unit will be allowed if capacitors are installed as per Clause

23 of Conditions of Supply of Electricity of the Distribution Licensees in the State of

Karnataka in respect of all metered IP Set Installations.

7) Only fixed charges as in Tariff Schedule for Metered IP Set Installations shall be

collected during the disconnection period of IP Sets under LT 4(a), LT 4(b) and LT

4(c) categories irrespective of whether the IP Sets are provided with Meters or not.

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Applicable to Heating & Motive power (including lighting) installations of

industrial Units, Workshops, Poultry Farms, Sugarcane Crushers, Coffee Pulping,

Cardamom drying, Mushroom raising installations, Flour, Huller & Rice Mills, Wet

Grinders, Milk dairies, Ironing, Dry Cleaners and Laundries having washing,

Drying, Ironing etc., ExclusiveTailoring shop , Bulk Ice Cream and Ice

manufacturing Units, Coffee Roasting and Grinding Works, Cold Storage Plants,

Bakery Product Mfg. Units, KSRTC workshops/Depots, Railway workshops, Drug

manufacturing units and Testing laboratories, Printing Presses, Garment

manufacturing units, Bulk Milk vending Booths, Swimming Pools of local Bodies,

Tyre retreading units, Stone crushers, Stone cutting, Chilly Grinders, Phova Mills,

pulverizing Mills, Decorticators, Iron & Red-Oxide crushing units, crematoriums,

hatcheries, Tissue culture, Saw Mills, Toy/wood industries, Viswa Sheds with

mixed load sanctioned under Viswa Scheme, Cinematic activities such as

Processing, Printing, Developing, Recording theatres, Dubbing Theatres and film

studios, Agarbathi manufacturing unit., Water supply installations of KIADB &

industrial units, Gem & Diamond cutting Units, Floriculture, Green House, Biotech

Labs., Hybrid seed processing units. Information Technology industries engaged

in development of hardware & Software, Information Technology (IT) enabled

Services / Start-ups(As defined in GOI notification dated 17.04.2015)/ Animation

/ Gaming / Computer Graphics as certified by the IT & BT Department of

GOK/GOI, Silk filature units, Aqua Culture, Prawn Culture, Brick manufacturing

units, Silk / Cotton colour dying, Stadiums maintained by Govt. and local

bodies, Fire service stations, Gold / Silver ornament manufacturing units, Effluent

treatment plants, Drainage water treatment plants, LPG bottling plants and

petroleum pipeline projects, Piggery farms, Analytical Lab. for analysis of ore

metals, Satellite communication centres, Mineral water processing plants /

drinking water bottling plants and soda fountain units.

Tariff for LT 5 :

Tariff for LT 5 (a):

Applicable to areas under Municipal Corporations

i) Fixed charges


Fixed

Charges per



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Month iii) Rs.60 per HP for 40 HP & above but below 67 HP

iv) Rs.120 per HP for 67 HP & above


Fixed

Charges per

Month

Above 5 HP and less than 40

HP


demand

40 HP and above but less

than 67 HP


demand


demand

ii) Energy Charges


For the first 500 units 510 paise/unit


For the balance units 635 paise/unit

Tariff for LT 5 (b):


i. Fixed charges

Fixed Charges

per Month




iv)Rs.110 per HP for 67 HP & above

ii. Demand based Tariff (optional)

Fixed

Charges

per Month

Above 5 HP and less than 40 HP Rs.55 per KW of billing demand

40 HP and above but less than

67 HP

Rs.80 per KW of billing demand

67 HP and above Rs.160 per KW of billing demand

iii. Energy Charges




TOD Tariff applicable to LT-5:At the option of the Consumer

Time of Day Increase + / reduction (-) in energy



10.00 Hrs to 18.00 Hrs 0



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NOTE:

1. DEMAND BASED TARIFF

In the case of LT Industrial Consumers, Demand based Tariff at the

option of the Consumer can be adopted. The Consumer is permitted

to have more connected load than the sanctioned load. The billing

demand will be the sanctioned load or Maximum Demand recorded

in the Tri-Vector Meter during the month whichever is higher. If the

Maximum Demand recorded is more than the sanctioned load, penal

charges at two times the normal rate shall apply.

2. Seasonal Industries: The industries which intend to utilize seasonal

industry benefit shall comply with the conditionalities under para no.

24 of general terms and conditions applicable to LT.

3. Electricity can also be used for lighting, heating, and air-conditioning

in the premises.

4. In the case of welding transformers, the connected load shall be taken

as, (a) Half the maximum capacity in KVA as per the name plate

specified under-IS1851, or (b) Half the maximum capacity in KVA as

recorded during rating by the Licensee, whichever is higher.


Applicable to water supply and sewerage pumping installations and also

applicable to water purifying plants maintained by Government and Urban

Local Bodies/ Grama Panchayats for supplying pure drinking water to

residential areas, Public Street lights/Park lights of village Panchayat, Town

Panchayat, Town Municipalities, City Municipalities / Corporations / State and

Central Govt. / APMC, Traffic signals, Surveillance Cameras at traffic locations

belonging to Government Department, subways, water fountains of local

bodies. Also applicable to Streetlights of residential Campus of universities,

other educational institutions, housing colonies approved by local

bodies/development authority, religious institutions, organizations run on

charitable basis, industrial area / estate and notified areas, also Applicable to

water supply installations in residential Layouts, Street lights along with signal

lights and associated load of the gateman hut provided at the Railway level

crossing High Mast street lights, Lifts/ Escalators installed in pedestrian road

crossing maintained by Government and Urban local bodies/ Grama

Panchayats independently serviced .

RATE SCHEDULE

Water Supply- LT-6 (a)

Fixed charges Rs.55/HP/month


Public lighting- LT-6 (b)

Fixed charges Rs.70/KW/month


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Energy Charges for LED/ Induction

Lighting

485 paise/unit


Temporary Supply and Permanent Supply to Advertising Hoardings


Applicable to Temporary Power Supply for all purposes.

LT 7(a) Details Approved Tariff

Temporary Power

Supply for all

purposes.

Less than 67 HP:


subject to a weekly minimum of Rs.190

per KW of the sanctioned load.


Applicable to Hoardings & Advertisement boards, Bus Shelters with

Advertising Boards, Private Advertising Posts / Sign boards in the interest

of public such as Police Canopy Direction boards, and other sign boards

sponsored by Private Advertising Agencies / firms on permanent

connection basis.

LT 7(b) Details Approved Tariff

Power supply on

permanent

connection basis

Less than 67 HP:

Fixed Charges at Rs.60 per KW/month

& Energy charges at 1000 paise / unit

Note:

1. Temporary power supply with or without extension of distribution main shall

be arranged through a pre–paid energy meter duly observing the provisions

of Clause 12 of the Conditions of Supply of Electricity of the Distribution


2. This Tariff is also applicable to touring cinemas having licence for duration

less than one year.

3. All the conditions regarding temporary power supply as stipulated in Clause

12 of the Conditions of Supply of Electricity of the Distribution Licensees in

the State of Karnataka shall be complied with before service.

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