Annual Revenue Requirement (ARR) and - JKSERC for Annual Revenue Requirement (ARR) & ... 4 Annual...

Application for Annual Revenue Requirement (ARR) & Tariff Petition for FY 2016-17

APPLICATION

FOR

ANNUAL REVEUE REQUIREMENT (ARR)

&

TARIFF PETITION FOR

FY 2016-17

PART - A

Submitted by:

JAMMU & KASHMIR POWER DEVELOPMENT CORPORATION LTD. January-2016


INDEX

PART - A

Sl. No.

DESCRIPTION PAGE No.

I Form -2 1 II Petition

1. Background 2

2. Main Objects 2

3. Installed capacity

a) Hydro Electric Power Stations 3

b) Gas based Thermal Power Stations 5

c) Transmission system 6

4.

Energy Sales within State to Power Development Department (PDD)

6

5. Compliance of Directives 8

Compliance Report of the directives of the order No. JKSERC/10 of 2015 dated 27/02/2015

Directive-1 8 Directive-2 8 Directive-3 8

Directive-4 9 Directive-5 9


Directive-8 10 Directive-9 10 Directive-10 11

New Directive for 2015-16

Directive-1 12


6. PRESENT STATUS OF BILLING OF ENERGY 13

7. A. Determination of Tariff for 8 HEPs 13

a) Project Cost 15


b) Design Energy 15

c) Interest on Loan Capital 15

d) Depreciation including Advance Against Depreciation 17

e) Return on Equity (ROE) 19

f) Operation & Maintenance Expenses 20

g) Interest on Working Capital 21

h) Other Expenses 23

i) Non-Tariff Income 25

Total Annual Fixed Charges (AFC) and Annual Revenue Requirement (ARR) (For 8 HEPs)

26

Summary of Annual Fixed Charges (AFC) and Annual Revenue Requirement (ARR ) for each HEPs ( for 8 HEPs)

i. Total annual fixed charges 29

ii. Indicative Tariff 29

7. B. Determination of Tariff for 10 HEPs 30

a) Project Cost 32

b) Design Energy 32

c) Interest on Loan Capital 32


e) Return on Equity (ROE) 34





Total Annual Fixed Charges (AFC) and Annual Revenue Requirement (ARR) (For 10 HEPs)

38

Summary of Annual Fixed Charges ( AFC ) and Annual Revenue Requirement (ARR ) for 10 HEPs

i. Total annual fixed charges 42

ii. Indicative Tariff 42 7. C. Determination of tariff for Baglihar HEP Stage- I 43

a) Project Cost as on 31-03-2016 47

b) Design Energy 47

c) Interest on loan capital 47


e) Return on Equity 50





Total Annual Fixed Cost 53


Summary of Total Annual Fixed Charges (AFC) and Annual Revenue Requirement (ARR) and Indicative Tariff

54

7. D. Determination of tariff for Sanjak HEP

a) Project Cost as on 31-03-2016 55

b) Design Energy 55








Total Annual Fixed Cost & Indicative Tariff 59

7. E. Determination of tariff for Stakna HEP

a) Project Cost 60

b) Design Energy 60








Total Annual Fixed Cost & Indicative Tariff

7. F. GAS TURBINES I & II 63 8. Mohra HEP 64 9. Requirement of Renovation & Modernization, Stabilization,

Major Repair Works and Additional Capitalization of HEPs 64

A RMU of projects 64

B Stabilization works 66

10. Arrears Of Energy Charges 67

11. Water Usage Charges 68

12. Taxes & Duties 68

Prayer 70

Annexure – A1 (i)

Annexure – A2 (ii)– (xviii)

Annexure – A3 (xix) – (xxxii)

Annexure – A4 (xxxiii- liv)

Annexure – A5 (lv)

Annexure – A6 (lvi)


I N D E X

PART – B

Sl. No.

Description Format No.

SUMMARY OF FORMATS

1 Profit & Loss Account Form S1

2 Balance Sheet Form S2

3 Cash Flow Statement Form S3

4 Annual Revenue Requirement Form S4

5 Return on Equity Form S5

6 Details of COD, Type of hydro station, Capacity Index, Primary energy rate (21 sheets)

Form S6 (I) to S6(XXI)

DETAILED FINANCIAL FORMATS

7 Revenue Form Tariff & Charges Form F1

8 Income from investments and other non- tariff income Form F2

9 Calculation of O&M Expenses Form F3(I) to F3(V)

10 Details of Operation and Maintenance expenses Form F4

11 Abstract of admitted Capital cost for the existing projects Form F5

12 Abstract of Capital Coat Estimates and Schedule of Commissioning for the New Projects

Form F5A (I) to F5A (II)

13 Net Project cost / equity / debt for Baglihar Hydro Power, Sanjak & Stakna HEPs

Form F5B (I) to 5B (III)

14 Financial Package up to COD Form F5D

15 Financial Package up to COD for each HEP Form F5D (I) to 5D

(IX)

16 Statement of Additional Capitalization after COD Form F6

17 Financing of Additional Capitalization Form F6A

18 Details of Fixed Assets & Provision for Depreciation Form F7 (I) to F7 (IV)

19 Calculation of Advance Against Depreciation (AAD) Form F7A (I) to F7A

(III)

20 Interest and Finance Charges & details of Project Specific Loans

Form F8A(I) to F8A(III)

21 Details of Others loans Form F8B

22 Calculation of Weighted Average Rate of Actual loans Form F8C (I) to F8C

(III)

23 Draw Down Schedule for Calculation IDC & Financing Charges

Form F8D

24 Details of Expenses Capitalized Form F9

25 Debits Write- offs and any other items Form F10


26 Statement of Sundry Debtors and Provision for Bad & Doubtful debts

Form F11

27 Extraordinary Items Form F12

28 Net Prior Period Expenses / Income Form F13

29 Contributions, Grants and subsidies towards Cost of Capital Assets

Form F14

30 Share Capital and Reserves & Surplus Form F15(I) to F15(III)

31 Investment's years FY08 to FY11 Form F16

32 Current Assets & Liabilities Form F17

33 Working Capital Requirements Form F18

34 Income Tax Provisions Form F19

TARIFF FORMATS

36 Existing and Proposed Tariff Schedule Form T1

37 Revenue from Sale of Power (At Existing Tariff) Form T2

38 Revenue from Sale of Power (At Proposed Tariff) Form T3


PART – C

Sl. No.

DOCUMENTS ANNEXURE No.

1 Copy of Provisional Balance Sheet and Profit & Loss Account of JKSPDC for FY 2014-15

C-1

2 Copy of tax challan for assessment year 2015-16 (FY 2014-15) (5 sheets)

C-2

3 Audited of Capital Cost of BHEP-I as on 31.3.2015 C-3

4 Audited of Capital Cost of Sanjak HEP as on 31.3.2015 C-4

5 Details of Income Tax pertaining to Core Business for FY (2014-15)

C-5

6 Project-wise Profitability for FY(2014-15) C-6

7 Status Report on RMU & Stabilization works C-7


J&K State Power Development Corporation Ltd. Page 1 of 71

BEFORE THE J&K STATE ELECTRICITY REGULATORY COMMISSION (J&KSERC),

JAMMU Filing No………… Case No…………

IN THE MATTER OF: APPLICATION FOR APPROVAL OF ANNUAL REVENUE REQUIREMENT AND DETERMINATION OF TARIFF OF HYDRO ELECTRIC STATIONS, GAS TURBINE AND TRANSMISSION LINE OF JAMMU & KASHMIR STATE POWER DEVELOPMENT CORPORATION LIMITED FOR THE FINANCIAL YEAR 2016-17 IN TERMS OF CLAUSE 45 OF THE J&KSERC (CONDUCT OF BUSINESS) REGULATIONS, J&KSERC (TERMS & CONDITIONS OF DETERMINATION OF HYDRO GENERATION TARIFF) REGULATIONS, 2011 AND J&KSERC TERMS & CONDITIONS FOR DETERMINATION OF TRANSMISSION TARIFF REGULATION, 2012 AS AMENDED FROM TIME TO TIME WHEREVER APPLICABLE

AND

IN THE MATTER OF: JAMMU & KASHMIR STATE POWER DEVELOPMENT CORPORATION LIMITED (HEREIN AFTER REFERRED TO AS JKSPDC, EXHIBITION ROAD, SRINAGAR, KASHMIR / ASHOK NAGAR, SATWARI, JAMMU 180004.

….. PETITIONER

DEVELOPMENT COMMISSIONER, POWER,

POWER DEVELOPMENT DEPARTMENT,

GOVERNMENT OF JAMMU AND KASHMIR,

EXHIBITI ROAD, SRINAGAR/ JANIPUR, JAMMU.

………….RESPONDENT



1. BACKGROUND

The Corporation was incorporated as “Jammu and Kashmir State Power Development Corporation Private Limited” on 16th February 1995 under the Companies Act, 1956. Subsequently, the Corporation was converted to public limited Company and the name was changed to “Jammu and Kashmir State Power Development Corporation Limited” and a new Certificate of Incorporation was issued by the Registrar of Companies, Jammu & Kashmir, at Jammu on 24th November, 1999. The Corporation is wholly owned by the Government of Jammu & Kashmir.

The Corporation, in spite of being incorporated on 16.02.1995, continued to work on Treasury pattern up to 31.12.1997. JKPDC effectively shifted to commercial pattern / Banking System with effect from 01.01.1998 as per Government Order No. 329F of 1997 dated 10.12.1997 when its financial set up was de-linked from the Treasury. The assets acquired costing Rs. 907.84 crore was transferred to the Corporation in the year 1999 vide Order No. PDD/AC/11/99 dated 29.10.1999.

2. MAIN OBJECTS

The main objects of the Corporation on its incorporation were:-

(i) To take over, execute, complete and operate Power Stations and Power projects of the Jammu and Kashmir Government including all property rights and other rights and obligations including with respect to personnel that may be assigned by the Government of the State of Jammu and Kashmir, and to arrange for conveyance loan or assignment in favour of the Company of all properties and rights that may be necessary for this purpose.

(ii)

a. To plan, promote and organize an integrated and efficient development of electric power in all aspects including planning, investigation, research, design and preparation of preliminary feasibility and detailed project reports, construction, generation , operation and maintenance of Power Stations and projects, transmission, distribution and sale of power generated at power stations in accordance with the policy of the State of Jammu and Kashmir and objectives laid down by the State Government from time to time.

b. To undertake, where necessary, the construction of transmission lines and ancillary works for timely and coordinated supply of Power.

(iii) To co-ordinate the activities of its subsidiaries, to determine their economic and financial objectives / targets and to review, control, guide and direct



their performance with a view to secure optimum utilization of all resources placed at their disposal.

(iv) To act as an agent of the Government / Public Sector Institutions, to exercise all the rights and powers exercisable at any meeting of any Company engaged in the Planning, Investigation, Research, Design and Preparation of Preliminary Feasibility and Detailed Project Reports, Construction, Generation, Operation and Maintenance of Power Stations and Projects, Transmission, Distribution and Sale of Power, in respect of any shares held by the Government, Public Financial Institutions, National Banks, Nationalized Insurance Companies with a view to secure the most effective utilization of the financial investments and loans in such companies and the most efficient development of the concerned industries.

(v) To carry on the business of purchasing, selling, importing, exporting, producing, trading, manufacturing or otherwise dealing in power generation and transmission equipment and supplies for power development, ancillary and other allied industries and for that purpose to install, operate and manage all necessary plants, establishments and works.

3. INSTALLED CAPACITY

a) Hydro Electric Power Stations

The Corporation has 22 hydro electric power stations (HEPs) having total installed capacity of 770.96 MW. Out of these total HEPs, 18 hydro power stations were commercially in operation till 31.03.2009.

One HEP namely Mohra, is not operating since floods of Sep, 1992.

450 MWs Baglihar HEP, stage – 1 was commissioned on 01.04.2009

4 MWs Stakana HEP was handed over to JKSPDC in March, 2011 for it’s operation.

Sanjak HEP of the Capacity of 1.26 MW (3 X0.42) was energized in Oct, 2011 & generation made available to the adjoining villages. With this, 21 HEPs having total installed capacity of 761.96 MW owned by the Corporation are presently functioning.

Accordingly details of installed capacity of hydro electric power stations of JKSDPC for the year 2015-16 are given here under:-



Details of Hydro Electric Power Stations

Sl. No.

Name of Power House Unit Capacity of each unit

(MW)

Installed Capacity

(MW)

Year of Commissioning

A. Jhelum River Basin

1 Lower Jhelum

Unit I 35.00

105.00

Feb, 1978

Unit II 35.00 Jan, 1979

Unit III 35.00 Nov, 1979

2 Upper Sindh – I Unit I 11.30

22.60 Dec, 1973

Unit II 11.30 July, 1974

3 Ganderbal

Unit I 3.00

15.00

Feb, 1955

Unit II 3.00 Feb, 1955

Unit III 4.50 1961

Unit IV 4.50 1961

4 Upper Sindh – II

Unit I 35.00

105.00

June, 2000

Unit II 35.00 Sept, 2001

Unit III 35.00 June, 2002

5 Karnah Unit I 1.00

2.00 1991

Unit II 1.00 1997

6 Pahalgam

Unit I 1.50

4.50

June, 2005

Unit II 1.50 June, 2005

Unit III 1.50 July, 2013

B Chenab Basin

7 Chenani – I

Unit I 4.66

23.30

1971

Unit II 4.66 1971

Unit III 4.66 1971

Unit IV 4.66 1975

Unit V 4.66 1975

8 Chenani – II Unit I 1.00

2.00 1996

Unit II 1.00 1996

9 Chenani – III

Unit I 2.50

7.50

2003

Unit II 2.50 2003

Unit III 2.50 2003

10 Baderwah

Unit I 0.50

1.50

May, 2005

Unit II 0.50 May, 2005

Unit III 0.50 September, 2012

11 Baglihar

Unit I 150

450

01/04/ 2009

Unit II 150

Unit III 150



Sl. No.

Name of Power House Unit Capacity of each unit

(MW)

Installed Capacity

(MW)


C. Ravi Basin

12 Sewa – III

Unit I 3.00

9.00

June, 2002

Unit II 3.00 Oct, 2002

Unit III 3.00 June, 2003

D. Indus Basin

13 Iqbal Bridge

Unit I 1.25

3.75

Nov, 1995

Unit II 1.25 1996

Unit III 1.25 1996

14 Hunder Unit I 0.20

0.40 1995

Unit II 0.20 1995

15

Sumoor Unit I 0.05

0.10 1993

Unit II 0.05 1993

16 Bazgo Unit I 0.15

0.30 1994

Unit II 0.15 1994

17 Igo-Mercellong Unit I 1.50

3.00 1/6/2005

Unit II 1.50 19/08/2005

18 Marpachoo

Unit I 0.25

0.75

2006

Unit II 0.25 2006

Unit III 0.25 2006

19 Haftal Unit I 0.50

1.00 2006-2007

Unit II 0.50 2006-2007

20 Stakna Unit I 2.00

4.00 1987

Unit II 2.00 1987

21 Sanjak

Unit I

Unit II

Unit III

0.42

0.42

0.42

1.26 2013

Total capacity in MW 761.96

b) Gas Based Thermal Power Stations

In addition to the hydro electric power stations, the corporation has 2 (Two) Gas based Thermal Power Stations as listed below which are operated on call from Transmission & Distribution utility i.e. J&K PDD.



Government of Jammu and Kashmir bears the cost of fuel whenever the units are operated.

Sl. No.

Name of Power House Unit Capacity of Each unit

(MW)

Installed Capacity

(MW)


1 Gas Turbine Station – I Pampore

Unit I 25.0

75.00

1989-90

Unit II 25.0 1989-90

Unit III 25.0 1989-90

2 Gas Turbine Station – II Pampore

Unit I 25.0

100.00

1993-94

Unit II 25.0 1993-94

Unit III 25.0 1993-94

Unit IV 25.0 1993-94

Total Thermal Capacity 175.00

c) Transmission System

PDC has a dedicated 400kV D/C line to cater to evacuation of power from BHEP to Kishenpur where PGCIL has dedicated two bays at 400kV. The tariff for the same has been requested separately in the petition.

4. ENERGY SALES WITHIN THE STATE TO POWER DEVELOPMENT DEPARTMENT (PDD)

The entire quantity of electricity generated by the HEPs is being sold within the State to the Power Development Department (PDD) except for Baglihar HEP where 50% generation is sold to Power Development Department (PDD) and balance 50% generation is sold through Power Trading Corporation, to meet the lenders requirement.



Performance during 2014-15

Sl. No Name of Power House

Installed capacity

in MW

Net Energy

supplied (MUs)

1 USHP-II Kangan 105.00 290.94

2 Chenani-III Udhampur 7.50 1.48

3 Sewa-III H.E.P. 9.00 0.00

4 Pahalgam MHP 4.50 6.50

5 Igo Mercellong MHP 3.00 1.30

6 Baderwah Power House 1.50 1.80

7 Marpachoo HEP 0.75 0.73

8 Haftal 1.00 1.33

9 USHP-I Sumbal Kangan 22.60 72.55

10 L.J.H.P 105.00 577.12

11 Ganderbal Power House 15.00 15.72

12 Chenani-I 23.30 43.93

13 Karnah MHP 2.00 6.27

14 Iqbal MHP Kargil 3.75 4.82

15 Bazgo MHP 0.30 0.13

16 Sumoor 0.10 0.09

17 Hunder MHP 0.40 0.85

18 Chenani-II 2.00 4.02

19 BHEP 450.00 2913.10

20 Sanjak 1.26 0.61

21 Stakna 4.00 0.00

Total 761.96 3943.28

Performance in previous years (In MUs)

Generation 2005-06 868.324

Generation 2006-07 952.749

Generation 2007-08 853.508

Generation 2008-09 1697.894

Generation 2009-10 3448.839

Generation 2010-11 3721.844

Generation 2011-12 3863.972

Generation 2012-13 3931.657

Generation 2013-14 3738.66

Generation in the year 2015-16 upto September , 2015

2603.440



5. COMPLIANCE OF DIRECTIVES

Compliance Report of the directives of Order No. JKSERC/10 of 2015 dated 27th February, 2015

Sl. No. Directive JKSPDC compliance

1 Performance Improvement Measures: Since the assignment stands allotted to AHEC, IIT Roorkee, the Commission emphasizes to get the job completed expeditiously during FY (2015-16) and keep the Commission posted with the progress.

The assignment stands allotted to AHEC, IIT Roorkee as per the directives of SERC. Advance payment, all the requisite drawings and information stand provided to the agency concerned. The assignment is expected to get completed in FY(2015-16).

2 Original capital cost & additional capitalization of BHEP-Stage I & Baglihar Transmission System based on audited accounts. The Petitioner is considering credit of the In-firm power generating from the projects before the COD only to the extent of Rs. 25.97 crore, actually received by the Petitioner on account of sale of infirm power, as against Rs. 232.57 crore as worked out by the Commission. The Petitioner is directed to vigorously pursue the matter for recovery of balance cost of infirm power from JKPDD. The Petitioner is required to submit the audited capital cost of the Baglihar HEP as on 31.03.2015 along with the next tariff petition.

JKSPDC is vigorously following the matter regarding settlement of receivables including infirm power from BHEP-I with J&KPDD. Further, adjustment of infirm power of Rs.232.57 crore against the capital cost of the project is being examined by JKSPDC, given the fact that it would lead to opportunity cost of pro-rata reduction in the RoE, Deprecation etc. for the project. The audited capital cost of BHEP as on 31.3.2015 is enclosed as annexure C3.

3 Income Tax: The Commission again directs the Petitioner to submit separate details of income tax pertaining to the core business of the utility along with the next tariff petition. Further for purposes of recovery of income tax from beneficiaries, the Petitioner is directed to submit the details of revenue, expenditure and income tax for each project / station duly

The income tax paid by the Corporation in FY(2014-15) on the core business of the utility is enclosed as annexure C5. Details of revenue, expenditure and income tax for each project / station duly certified by Chartered Accountant is enclosed



certified by Chartered Accountant along with the next tariff petition for regulatory purpose.

herewith.

4 Valuation of capital cost of Sanjak HEP: The Petitioner is directed to submit the audited capital cost of Sanjak HEP along with the next Tariff Petition. Report on analysis of breakdown of plants in FY (2012-13) and FY(2013-14): The Petitioner is directed to furnish details of remedial measures taken and SOPs adopted to avoid break-downs.

Audited Capital Cost of Sanjak as on 31.3.2015 is enclosed as annexure C4.

5 Report on analysis of breakdown of plants in FY (2012-13) and FY (2013-14): The Petitioner is directed to furnish details of remedial measures taken and SOPs adopted to avoid break-downs.

The following remedial measures have been taken: LJHP (a) Arrangements for providing clean water for cooling system to prevent choking of strainers. (b) Improved ventilation system for air coolers. (c) Commissioning of new trash rack cleaning machine at barrage. (d) Provision for spares including runners and 630KVA AVR for auxiliaries for effective mitigation of factors effecting loss of generation. USHP-II

(a) Capital overhauling of Unit-II has been done.

(b) Procurement of spare PRV rod is under process.

(c) Inspection of underwater parts including PRV is being done during every stoppage of the machine.

(d) The lead of the Unit-I was replaced and the additional clamps holding the CC lead were installed.

(e) During every stoppage, the

inspection of CC lead is being done to avoid such instances.



6 Status on R&M works and generation at USHP-II. The Petitioner is directed to take all necessary measures to ensure completion and commissioning as per the committed schedule. The Commission in the meanwhile be appraised of progress bi-monthly basis.

Wangath link canal stands restored on 15th November, 2015.

7 Corporate Social Responsibility: The Commission directs the Petitioner to notify draft Policy on CSR activities for soliciting suggestions.

JKSPDC is in the process of identifying social needs where it can take initiatives under the CSR. A policy on CSR is being prepared and shall be made public as and when ready.

8 Status Report on RM&U and stabilization works: The Commission is concerned about the slow pace of progress towards completion of RMU and Stabilization works. The Commission directs the Petitioner to submit a Project wise status report regarding original work schedule, actual completion schedule, reason for delays and cost overruns (if any) within three months of the date of notification of this Order.

Status report is enclosed as annexure C7.

9 Modern Tools for monitoring implementation of New Projects: The petitioner should explore the possibility of creating a proper monitoring mechanism for real time monitoring of the implementation of new projects on the pattern of the NHPC which has established online project monitoring centre at Corporate office to support video conferencing, live video feedbacks from cameras installed at strategic locations of under construction projects and establish facilities for online webcasting for live broadcasting important events / comments / briefing by senior management across the organization.

JKSPDC is in the process of initiating real time monitoring mechanism of new projects using new technologies including videoconferencing. However, an initiation was done in this direction towards monitoring of BHEP-II during the last stage of its execution, immediately before commissioning through skype platform wherein a teleconference was held every week in India under the chairmanship of the Managing Director and twice every month with off-shore offices of the EM contractors. Also, a watsapp group was also within JKSPDC for real-time feedback on project related matters which yielded good results.

10 Establishment of training schools: The Petitioner is directed to immediately start

The State Government in its Budget speech of the current Financial Year announced setting up of Chenab



training of staff at existing premises in the projects by outsourcing trainings, if needed. An action taken report on the matter should be submitted within 3 months of the notification of this Order. The Commission also directs that the Petitioner should take all necessary measures regarding compliance with the commitment made by it to set up and start operations of the training facilities at BHEP and LJHP within three months. The petitioner is also directed to prepare an action Plan for training of employees on operation and maintenance of generating stations and report compliance within three months of the date of issue of this Order.

Power Management Training Institute for capacity building of youth of J&K State in Power sector. The site for establishing the institute has been identified at Baglihar village within the premises of the 900 MW Baglihar complex. The existing infrastructure has been taken up for renovation and the basic facilities like water supply and power have been restored and the infrastructure has almost been readied for conducting of training. The state Government has already released Rs 25.00 lac in the first instance for its establishment out of the Capex budget 2015-16. Possibility of collaboration with the Central Institute of Rural Electrification (CIRE), Hyderabad-a training arm of the Rural Electrification Corporation is also being explored for assisting in establishing the institute and also for training of trainers and sharing of resource personnel initially till the institute is fully established. A draft tripartite agreement for collaboration between J&K State, REC and Ministry of Power Government of India has also been prepared and stands agreed in principle by the parties although its formal signing is yet to take place. The process for identification of the trainers has also been taken up with the JK PDD.



New Directives for 2015-16

1 Evacuation and Transmission: - The Petitioner has developed roadmap for generation capacity addition during 12th and 13th plan period. Some of these projects such as Dah and Hanu in Ladakh region are anticipated to be commissioned during next two years. However, the Petitioner has not provided any details of the evacuation and transmission plan for power generated from these new power projects. The Petitioner is directed to prepare and submit the detailed evacuation and transmission plans for its new and upcoming power projects so that the evacuation / transmission system is in place well before the commissioning of the generating stations. The evacuation plan should be submitted to the Commission within three months of the date of notification of this Tariff Order.

Evacuation plan of Dah & Hanu HEPs is being implemented by JKSPDC on TBCB for which EoI is being floated to rope in reputed transmission companies of India like Tata Power, KEC International and Sterlite etc. Once the proposals are received from interested bidders, the same shall be submitted before the Hon’ble Commission.

2 Viability study of existing power projects: The Petitioner is directed to conduct viability studies of all its existing Hydro Electric Projects. The study should determine the viability of existing projects by analysing the financial inputs and outputs, strengths, weaknesses, opportunities, threats, risks and suggest strategy to improve the profitability of the projects. The Petitioner should submit the study reports along with the next Tariff Petition.

To enable the viability studies of existing power projects, a committee has been constituted under the chairmanship of the Chief Engineer Generation (Kashmir) withSGM (Electrical) and SGM (Civil) as the other two members. The committee is in process of formulating a report on the issue which will be placed before the Hon’ble Commission.

3 Reporting of Renewable Purchase Obligations The commission vide Notification No. JKSERC/40 dated 05.09.2014 designated J&K State Power Development Corporation as the ‘State Agency’ to undertake the functions as per the J&KSERC (Renewable Purchase Obligation, its compliance and REC framework implementation) Regulations, 2011. The Petitioner is directed to develop an appropriate protocol for collection of information from various sources such as Renewable Energy Generating Companies, Obligated Entities, SLDC etc. on a regular basis and compile and notify such information on RPO compliance by obligated entities in terms of the decision taken in meeting convened by the Commission on 24th November 2014 with all the concerned agencies.

As directed by the Commission, JKSPDC collects information from JKPDD on regular basis. JKSPDC has already established an in-house mechanism for the purpose.



6. PRESENT STATUS OF BILLING OF ENERGY

It is to submit before Hon’ble Commission that presently billing of energy is being done as per Hon’ble Commission’s Order dated 27th February, 2015 applicable for the year 2015-16.

7. A. DETERMINATION OF TARIFF FOR 8 HEPs

Details of HEPs indicating Installed capacity and COD are indicated in the table below:

Sl. No.

Name of HEP Capacity MW

COD

1. USHP-II Kangan 105.00 June, 2002

2. Chenani-III 7.50 June, 2003

3. Sewa-III 9.00 June, 2003

4. Pahalgam* 4.50 June, 2005

5. Igo-Marcellong 3.00 Aug; 2005

6. Baderwah# 1.50 May, 2005

7 Marpachoo 0.75 2006

8 Haftal 1.00 2006-07

* Unit-III of 1.5 MW commissioned in July, 2013 # Unit-III of 0.5 MW commissioned in September, 2012 As defined in the JKSERC Regulations, 2011, the tariff for sale of electricity from a hydro power station shall comprise of recovery of Annual Capacity Charges and primary Energy Charges. Accordingly following have been considered for tariff petition: Annual Fixed Charges:

The Annual Fixed Charges (AFC) consists of:-

a) Interest on Loan Capital

b) Depreciation including Advance Against Depreciation

c) Return on Equity

d) Operation & Maintenance Expenses

e) Interest on Working Capital

f) Other Expenses as approved by the Commission



The assumptions considered for 8 HEPs are given below:

Sl. No. Particulars Unit Value

1 Plant Availability Factor

Normative Capacity Index First Year Afterwards

Run of River % 85 90

Storage Type % 80 85

2 Auxiliary Consumption With Rotating Exciter

With Static Excitation

Surface % 0.20 0.50

Underground % 0.40 0.70

3 Transformer Losses % 0.50

4 O&M Expenses

For HEPs more than 5 yrs in operation in the base year of 2010-11

Average of Actual exp. for 2005-06 to 2009-10 taken as exp. for 2007-08 and same is escalated annually

For HEPs less than 5 yrs in operation in the base year of 2010-11

% 1.50 of Capital Cost

Annual Escalation % 4.00

5 Depreciation

Plant Life years As per Regulations

Residual % 10

Advance Against Depreciation Equivalent to difference of actual repayment of loan and normal depreciation

6 Working Capital

Receivable Months 2 of Fixed Charges

O & M Expenses Months 1

Spares for Maintenance % 1 of Historic Cost

Escalation in Spares Inventory % 6

Rate of Interest %

13.50

as per PLR of J&K Bank as on 1.4.2011

7 Return on Equity % 14

8 Initial Spares as part of Capital Cost

%

1.50

9 Equity % 30 Net Project Cost

Loan % 70 Net Project Cost

10 Interest % as per sanction

11 Moratorium No moratorium after COD



a) Project Cost

The Hon’ble Commission has already approved the Project costs of the 8 HEPs.

Summary of approved Project cost is provided below:

Project Cost

` in Crores

1 USHP-II Kangan 105.00 435.00

2 Chennani-III 7.50 54.97

3 Sewa-III 9.00 66.84

4 Pahalgam 4.50 59.56

5 Igo-Mercellong 3.00 49.42

6 Bhaderwah 1.50 10.60

7 Marpachoo 0.75 12.85

8 Haftal 1.00 16.13

Sl. No. Name of HEP Capacity in MW

b) Design Energy

The Design Energy of the HEPs as provided below have been considered for calculation of Gross Generation.

Sl. No.

Name of HEP Capacity in MW Design Energy

in MUs

1 USHP II 105.00 447.37

2 Chennani III 7.50 36.71

3 Sewa III 9.00 33.06

4 Pahalgam 4.50 17.30


6 Baderwah 1.50 9.44


8 Haftal 1.00 4.88

c) Interest on Loan Capital

Details of loan liabilities, rate of interest thereon and moratorium period for these HEPs are enclosed at Form F8A(I). Total interest on loans has been worked out as per Clause 22 of JKSERC Regulation No. JKSERC/11/2011 dated 20.04.2011 and given here under for the year 2016-17.



(` in Crores)

Sl.

No. Name of HEP USHP - II Chenani - III Sewa - III Pahalgam

IGO-

Merchellong

1 Approved cost of

project435.00 54.97 66.84 59.57 49.42

2 MNRE subsidy 0.00 0.00 0.00 3.67 3.00

3 Net cost of the

project 435.00 54.97 66.84 55.90 46.42

4 Total normative

Loan considering

70% of the net cost of

the project 304.50 38.48 46.79 39.13 32.50

5 Total normative

Equity considering


the project 130.50 16.49 20.05 16.77 13.93

6 Rate of Interest on

loan 14.50% 15.00% 15.00% 13.00% 13.00%

7 Interest Amount for

the year

2016-17 0.00 0.00 0.00 0.25 0.00



(` in Crores)

Sl.

No. Name of HEP Bhaderwah Marpachoo Haftal

1 Approved cost of

project10.60 12.85 16.13

2 MNRE subsidy 2.44 1.70 2.25

3 Net cost of the

project 8.16 11.15 13.88

4 Total normative

Loan considering


the project 5.71 7.80 9.72

5 Total normative

Equity considering


the project 2.45 3.34 4.16

6 Rate of Interest on

loan 13.00% 13.00% 13.00%

7 Interest Amount for

the year

2016-17 0.00 0.00 0.00

Note: (i) Erstwhile loan undertaken with respect to USHP II, Chenani III, Igo- Mercellaong, Baderwah, Sewa III, Marpachoo and Haftal hydro generating plants, which have been in operation for more than 10 years, have been considered repaid in full, therefore no interest on loan for the HEPs has been claimed.

(ii) Project Cost of Pahalgam HEP includes approved additional capitalization of Rs. 4.3549 crores. The loan component of the approved additional capitalisation and interest thereon is reflected above.

d) Depreciation including Advance Against Depreciation

(i) Depreciation

Depreciation has been calculated annually based on Straight Line Method considering the useful life as per JKSERC regulations. Details of depreciation for these eight HEPs are given as under:-



(` in Crores)

Sl.

No.Name of HEP USHP - II Chenani III Sewa III Pahalgam

IGO-

Merchellong

1 Cost of project

excluding Land Cost 427.50 53.52 66.14 61.14 49.34

2 Residual value 10% 10% 10% 10% 10%.

3 Total Depreciation to

be claimed 384.75 48.17 59.53 55.02 44.41

4 Normal depreciation

rate

5 Total depreciation for

the year

2016-17 11.50 1.41 1.76 1.76 1.31

As per Regulations Pl ref Annexure – A1

(` in Crores)

Sl.

No.Name of HEP Bhaderwah Marpachoo

1 Cost of project

excluding Land Cost 10.45 12.73

2 Residual value 10%. 10%.

3 Total Depreciation to

be claimed 9.41 11.46

4 Normal depreciation

rate

5 Total depreciation for

the year

2016-17 0.30 0.35 0.42

Haftal

16.08

10%.

14.47


(ii) Advance Against Depreciation (AAD)

In addition to allowable depreciation, the JKSPDC is entitled to Advance against Depreciation (AAD) also which has been considered as per the formula “Advance against Depreciation = Annual Repayment of Loan – Normal Depreciation” Details of AAD are furnished in the following table:-



(` in Crores)

Sl.

No.Name of HEP USHP - II Chenani - III Sewa - III Pahalgam *

IGO-

Merchellong

1 Total Normative

Loan Amount 304.50 38.48 46.79 39.13 32.50

2 1/10th of Loan 30.45 3.85 4.68 3.91 3.25

3 Annual Repayment

of Loan 0.26

4Normal Depreciation

for full year 0.12

5 Advance Against

Depreciation

2016-17 0.00 0.00 0.00 0.14 0.00

AAD is not considered as loan is

repaid in full

AAD is not

considered as

loan is repaid

in full

*For AAD of Pahalgam HEP, depreciation on additional capitalization only has been taken.

(` in Crores)

Sl.

No.Name of HEP Bhaderwah Marpachoo Haftal

1 Total Normative

Loan Amount 5.71 7.80 9.72

2 1/10th off Loan 0.57 0.78 0.97

3 Annual Repayment

of Loan

4Normal Depreciation

for full year

5 Advance Against

Depreciation

2016-17 0.00 0.00 0.00

AAD is not considered as loan is

repaid in full

e) Return on Equity (ROE)

As per provision under Regulation 25 of JKSERC Regulations, 2011, Return on Equity has been considered @ 14% per annum for each of Hydro Power Station. The Equity for the purpose of calculation of ROE has been computed as per Regulation 18 of JKSERC Regulations, 2011. Accordingly Debt-Equity ratio of 70:30 has been considered. Calculation of ROE for each HEP is provided below:



(` in Crores)

Sl.

No.Name of HEP USHP - II Chenani - III Sewa - III Pahalgam

IGO-

Merchellong

1 Net cost of the

Project 435.00 54.97 66.84 55.90 46.42

2 Total normative

Equity 30% of the

Project Cost 130.50 16.49 20.05 16.77 13.93

3 Rate of Return on

Equity 14.00% 14.00% 14.00% 14.00% 14.00%

4Return on Equity

2016-17 18.27 2.31 2.81 2.35 1.95

(` in Crores)

Sl.

No.Name of HEP Bhaderwah Marpachoo Haftal

1 Net cost of the

Project 8.16 11.15 13.88

2 Total normative

Equity 30% of the

Project Cost 2.45 3.34 4.16

3 Rate of Return on

Equity 14.00% 14.00% 14.00%

4Return on Equity

2016-17 0.34 0.47 0.58

f) Operation & Maintenance Expenses-

The Operation & Maintenance Expenses of HEPs which were in operation for 5 years or more in the base year of 2010-11 has been calculated as per provisions under regulation 26(1) of JKSERC regulations 2011. Accordingly average of actual operation and maintenance expenses for the years 2005-06 to 2009-10 has been considered as operation & maintenance expenses for 2007-08 and same has been escalated at the rate of 4% per annum to arrive at the O&M expenses for the year 2016-17.



The Operation & Maintenance Expenses of HEPs which were in operation for less than 5 years in the base year of 2010-11 have been calculated as per provisions under regulation 26(2) of JKSERC regulations 2011. Accordingly, the O&M Expenses have been considered @ 1.5% of the Capital Cost from COD with escalation @ 4% per annum. The O&M Expenses for these eight HEPs are as under:-

(` in Crores)

Sl.

No. Name of HEP USHP - II

Chenani -

III

Sewa –

III Pahalgam

IGO-

Merchellong Bhaderwah

1 Year of Commissioning 2000/

2001/

2002

20032002/

20032005 2005 2005

2 Calculation of Base O & M -

2007-08 #:7.77 1.09 1.50 0.86 0.92 0.15

3 Annual Escalation in O&M

expenses as per Regulation4.00% 4.00% 4.00% 4.00% 4.00% 4.00%

4 O&M Expenses for the year

as per Regulation:2016-17 11.05 1.55 2.14 1.22 1.31 0.22

(` in Crores)

Sl.

No.Name of HEP Marpachoo Haftal

1 Capital Cost 12.85 16.13

2 Calculation of Base O & M# 1.50% 1.50%

3 Annual Escalation in O&M

expenses as per Regulation 4.00% 4.00%

4 O&M Expenses for the year

on admitted Capital Cost as

per Regulation:2016-17 0.29 0.36

# The details of the expenditure & basis is provided in Annexure “A3”

g) Interest on Working Capital

The requirement of Working Capital & Interest thereon has been computed as per Clause 27 “Interest on Working Capital” of the J&KSERC Regulation 2011 dated 20.04.2011. Interest @ 13.50 % per annum on working capital has been considered which is the Prime Lending Rate (PLR) of Jammu & Kashmir Bank as



on 01.04.2011. The calculation of interest on working capital is summarized below:-

(` in Crores)

Financial Year

Name of HEP USHP - II Chenani - III Sewa - III PahalgamIgo-

Mercellong

1 Receivable (2 Months) 7.25 0.93 1.18 1.00 0.80

2 O & M Expenses (1 Months) 0.92 0.13 0.18 0.10 0.11

3 Spares for Maintenance @ 1% 9.81 1.18 1.43 0.99 0.88

4 Escalation in spares @ 6% 0.59 0.07 0.09 0.06 0.05

5 Spares for Maintenance @ 1%

for addl. Capitalization 0.00 0.00 0.00 0.07 0.00

6 Total Working Capital

Requirement as per regulation 18.57 2.31 0.00 2.22 1.85

7 Rate of Interest 13.50% 13.50% 13.50% 13.50% 13.50%

8 Interest on working Capital for

the year 2.51 0.31 0.39 0.30 0.25

Sl.

No.

2016-17

(` in Crores)

Financial Year

Name of HEP Bhaderwah Marpachoo Haftal

1 Receivable (2 Months) 0.15 0.19 0.24

2 O & M Expenses (1 Months) 0.02 0.02 0.03

3 Spares for Maintenance @ 1% 0.19 0.21 0.27

4 Escalation in spares @ 6% 0.01 0.01 0.02

5 Spares for Maintenance @ 1%

for addl. Capitalization 0.00 0.00 0.00

6 Total Working Capital

Requirement as per regulation 0.37 0.44 0.56

7 Rate of Interest 13.50% 13.50% 13.50%

8 Interest on working Capital for

the year 0.05 0.06 0.08

Sl.

No.

2016-17



h) Other Expenses

Consultancy charges for Rs. 1.017 Crores have been considered in the AFC of respective HEPs in proportion to the capacity in Megawatt (MW). The details are given in the table below:

Sl.

No.

For the Year

2015-16

(In ` Crores)

Total

(In ` Crores)

1 0.200 0.200

2 0.150 0.150

3 0.218 0.218

4 0.260 0.260

5 0.070 0.070

6 0.065 0.065

7 0.045 0.045

8 0.009 0.009

1.017 1.017

Consultancy for Cost Accounting Records

Consultancy for Cost Accounting Records

Preparation of ARR & Tariff Petition

Accounting Consultancy

TOTAL

Consultancy Expense

Consultancy for Corporate Restructuring

Consultancy for Pre IPO Advisory

Consultancy for Double Entry System

Consultancy for AMC Data Centre



Sl.

No.Name of Power House

Capacity in

MW

Proportionate

Consultancy

Charges

(in ` Crores)

1 Upper Sindh-II 105.00 0.140

2 Chenani-III 7.50 0.010

3 Sewa-III 9.00 0.012

4 Pahalgam 4.50 0.006




8 Haftal 1.00 0.001

9 Upper Sindh-I 22.60 0.030

10 Lower Jhelum 105.00 0.140

11 Ganderbal 15.00 0.020

12 Chenani-I 23.30 0.031

13 Karnah 2.00 0.003

14 Iqbal 3.75 0.005

15 Bazgo 0.30 0.0004

16 Sumoor 0.10 0.0001

17 Hunder 0.40 0.001

18 Chennai-II 2.00 0.003

19 Baglihar 450.00 0.601

20 Stakna 4.00 0.005

21 Sanjak 1.26 0.002

Total 761.96 1.017



i) Non-Tariff-Income (NTI):

HEP wise projected Non- Tariff Income for the FY 2016-17 as detailed below has been considered in the AFC of the respective HEPs.

Sl.

No.

For the Year

2016-17

(In ` Crores)

Total

(In ` Crores)

1 41.77 41.77

41.77 41.77TOTAL

NTI

Other Non-Tariff Income



Sl.

No.Name of Power House

Capacity in

MW

Projected Non-

tariff Income

(in ` Crores)

1 Upper Sindh-II 105.00 5.76


3 Sewa-III 9.00 0.49

4 Pahalgam 4.50 0.25




8 Haftal 1.00 0.05

9 Upper Sindh-I 22.60 1.24

10 Lower Jhelum 105.00 5.76

11 Ganderbal 15.00 0.82

12 Chenani-I 23.30 1.28

13 Karnah 2.00 0.11

14 Iqbal 3.75 0.21

15 Bazgo 0.30 0.02

16 Sumoor 0.10 0.01

17 Hunder 0.40 0.02

18 Chennai-II 2.00 0.11

19 Baglihar 450.00 24.67

20 Stakna 4.00 0.22

21 Sanjak 1.26 0.07

Total 761.96 41.77

TOTAL ANNUAL FIXED CHARGES (AFC) AND ANNUAL REVENUE REQUIREMENT (ARR) FOR 8 HEPS

Based on the above parameters, station-wise AFC & ARR for the Financial Year 2016-17 are given in the following tables:

Annual Fixed Charges

(` in Crores) USHP - II HEP



Financial Year FY 2016-17

O&M Expenses 11.05

Interest on Loan 0.00

Depreciation 11.50

Addl. Depreciation 0.00

Return on Equity 18.27

Interest on Working Capital 2.51

Consultancy charges 0.14Total Annual Fixed Cost 43.47

Less; Non-Tariff Income 5.76

Net Annual Fixed Cost 37.72

CHENANI - III (` in Crores)


O&M Expenses 1.55


Depreciation 1.41

Additional Depreciation 0.00



Consultancy charges 0.01

Total Annual Fixed Cost 5.59



SEWA - III HEP (` in Crores)



Pahalgam

(` in Crores)


O&M Expenses 1.22


Depreciation 1.76







IGO MERCHELONG HEP (` in Crores)


O&M Expenses 1.31


Depreciation 1.31








O&M Expenses 2.14


Depreciation 1.76









BHADERWAH HEP (` in Crores)


O&M Expenses 0.22


Depreciation 0.30








MARPACHOO HEP (` in Crores)


O&M Expenses 0.29


Depreciation 0.35







HAFTAL HEP (` in Crores)


O&M Expenses 0.36


Depreciation 0.42









SUMMARY OF ANNUAL FIXED CHARGES (AFC) AND ANNUAL REVENUE REQUIREMENT (ARR) FOR EACH HEPS (FOR 8 HEPS)

Fixed charges for supply of energy from the 8 hydro electric projects are given in the table as under:-

i. Total Annual Fixed Charges (` in Crores)

Year 2016-17

1 USHP II 37.72

2 Chenani III 5.18

3 Sewa III 6.61

4 Pahalgam 5.78

5 Igo-Marchellong 4.66

6 Bhaderwah 0.84

7 Marpachoo 1.12

8 Haftal 1.38

Name of HEPNet Annual Fixed

ChargesSl. No.

ii. Indicative Tariff

Based on the Annual Fixed Charges and the Design Energy, the individual tariff for the 8 HEPs is worked out as under:-

(` per kWh)

Indicative Tariff

Year 2016-17

1 USHP II 0.85

2 Chenani III 1.43

3 Sewa III 2.02

4 Pahalgam 3.38

5 IGO-Merchellong 2.97

6 Bhaderwah 0.89

7 Marpachoo 2.98

8 Haftal 2.87

Sl. No. Name of HEP



7. B. DETERMINATION OF TARIFF FOR 10 HEPs

Details of HEPs indicating Installed capacity and COD is indicated in the table below:

Sl. No. Name of HEP Capacity

MW COD

1. Upper Sind-I 22.60 Dec, 1973, July 1974

2. Lower Jhelum 105.00 Feb, 1978, Jan. 1979, Nov. 1979

3. Ganderbal 15.00 Feb, 1955,1961

4. Chenani-I 23.30 1971,1975

5. Karnah 2.00 1991, 1997

6. Iqbal Bridge 3.75 Oct, 1995, 1996 & 1996

7 Bazgo 0.30 1994

8 Sumoor 0.10 1993

9 Hunder 0.40 1995

10 Chenani-II 2.00 1996

As defined in the JKSERC Regulations, 2011, the tariff for sale of electricity from a hydro power station shall comprise of recovery of Annual Capacity Charges and primary Energy Charges. Accordingly following have been considered for tariff petition :-

Annual Fixed Charges:

The Annual Fixed Charges (AFC) consists of:-

(i) Interest on Loan Capital

(ii) Depreciation including Advance Against Depreciation

(iii) Return on Equity

(iv) Operation & Maintenance Expenses

(v) Interest on Working Capital

(vi) Other Expenses as approved by the Commission



The assumptions considered for 10 HEPs are given below:

Sl. No

Particulars Unit Value

1 Auxiliary Consumption With Rotating Excitation


Surface % 0.20 0.50


2 Transformation Losses % 0.50

3 O&M Expenses: For HEPs more than 5 yrs in operation

Average of Actual exp. for 2005-06 to 2009-10 taken as exp. for 2007-08 and same is escalated annually

4 Annual Escalation % 4.00

5 Depreciation

Plant Life Years As per Regulations

Residual life Years 10

Advance Against Depreciation

Equivalent to difference of repayment of loan and normal depreciation with regard to proposed additional Capitalisation

6 Working Capital



Spares for Maintenance % 1

Escalation in Spares Inventory

% 6

Rate of Interest % 13.50


7 Return on Equity % 14

8 Equity % 30 of Net Project Cost

Loan % 70 of Net Project Cost



a) Project Cost

The Hon’ble Commission has already approved the Project costs of the 10 HEPs as provided in the table below. Although there has been additional capital works undertaken but since they do not stand completed, no additional capitalization is sought on this account.

Summary of approved Project cost is provided below:

Admitted Cost

` in Crores

1 Upper Sind-I 22.60 46.26

2 Lower Jhelum 105.00 421.25

3 Ganderbal 15.00 15.95

4 Chenani-I 23.30 78.51

5 Karnah 2.00 13.55

6 Iqbal Bridge 3.75 24.63

7 Bazgo 0.30 2.16

8 Sumoor 0.10 0.70

9 Hunder 0.40 2.86

10 Chenani-II 2.00 11.73

Sl. No. Name of HEPCapacity in

MW

b) Design Energy

The Hon’ble Commission, has already approved the design energy of the 10 HEPs. The Design Energy of the HEPs as provided below have been considered for calculation of Gross Generation.

Sl. No.

Name of HEP Capacity in MW

Design Energy in MUs

1 USHP – I 22.60 106.62

2 Lower Jhelum 105.00 609.43

3 Ganderbal 15.00 90.15

4 Chenani-I 23.30 110.02

5 Karnah 2.00 11.36

6 Iqbal Bridge 3.75 21.23

7 Bazgo 0.30 1.09

8 Sumoor 0.10 0.45

9 Hunder 0.40 1.77

10 Chenani-II 2.00 12.00


Interest on Loan considered as zero.



d) Depreciation including Advance Against Depreciation (i) Depreciation

Depreciation has been calculated annually based on Straight Line Method considering the useful life as per JKSERC regulations. Details of depreciation

for these ten HEPs are given as under:-

(` in Crores)

Sl. No. Name of HEP UHP-I LJHP Ganderbal Chenani-I Karnah

1 Cost of project

excluding Land

Cost 46.26 421.25 15.95 78.51 13.55

2 Residual value 10%. 10%. 10%. 10%. 10%.

3 Total Depreciation

to be claimed 41.63 379.12 14.36 70.65 12.19

4 Normal

depreciation rate

5 Total depreciation

for the year

2016-17 1.20 10.92 0.41 2.03 0.35


(` in Crores)

Sl. No. Name of HEP

Iqbal

Bridge Bazgo Sumoor Hunder

Chenani-

II

1 Cost of project

excluding Land

Cost 24.63 2.16 0.70 2.86 11.73

2 Residual value 10% 10% 10% 10% 10%.

3 Total Depreciation

to be claimed 22.17 1.94 0.63 2.57 10.56

4 Normal

depreciation rate

5 Total depreciation

for the year

2016-17 0.65 0.06 0.02 0.07 0.30


(ii) Advance Against Depreciation (AAD) Advance against depreciation considered as zero.



Return on Equity (ROE)

As per provision under Regulation 25 of JKSERC Regulations, 2011, Return on Equity has been considered @ 14% per annum for each of Hydro Power Station.

Details of Return on Equity for these ten HEPs are given as under:-

(` in Crores)

Sl. No. Name of HEP USHP-I LJHP Ganderbal Chenani-I Karnah

1 Net cost of the

Project 46.26 421.25 15.95 78.51 13.55

2 Total normative

Equity 30% of the

Project Cost 13.88 126.37 4.79 23.55 4.06

3 Rate of Return on

Equity 14% 14% 14% 14% 14%

4 Return on Equity

2016-17 1.94 17.69 0.67 3.30 0.57

(` in Crores)

Sl. No. Name of HEP

Iqbal

Bridge Bazgo Sumoor Hunder Chenani-II

1 Net cost of the

Project 24.63 2.16 0.70 2.86 11.73

2 Total normative

Equity 30% of the

Project Cost 7.39 0.65 0.21 0.86 3.52

3 Rate of Return on

Equity 14% 14% 14% 14% 14%

4 Return on Equity

2016-17 1.03 0.09 0.03 0.12 0.49

e) Operation & Maintenance Expenses

The Operation & Maintenance Expenses of HEPs which are in operation for 5 years or more have been calculated as per provisions under regulation 26(1) of JKSERC regulations 2011. Accordingly average of actual operation and maintenance expenses for the years 2005-06 to 2009-10 have been considered as operation & maintenance expenses for 2007-08 and same have been escalated at



the rate of 4% per annum to arrive at the O&M expenses for the year 2016-17. The details of annual O&M cost is as under:-

(` in Crores)

Sl. No. Name of HEP UHP-I LJHP Ganderbal Chenani-I Karnah

1 Year of

Commissioning

1973/

1974

1978/

1979

1955/

1961

1971/

1975

1991/

19972 Calculation of Base

O & M -2007-08 #: 3.63 9.13 2.87 2.79 1.82

3 O&M Expenses as

per Regulation

4 Annual Escalation

in O&M expenses as

per Regulation 4.00% 4.00% 4.00% 4.00% 4.00%

5 O&M Expenses for

the year as per

Regulation

(i) 2014-15 4.78 12.02 3.78 3.68 2.39

(ii) 2015-16 4.97 12.50 3.93 3.82 2.49

(iii) 2016-17 5.17 13.00 4.09 3.98 2.59

(` in Crores)

Sl. No. Name of HEP

Iqbal

Bridge Bazgo Sumoor Hunder

Chenani-

II

1 Year of

Commissioning

1995/

19961994 1993 1995 1996

2 Calculation of Base

O & M -2007-08 #: 1.64 0.16 0.08 0.20 0.29

3 O&M Expenses as

per Regulation

4 Annual Escalation

in O&M expenses as

per Regulation 4.00% 4.00% 4.00% 4.00% 4.00%

5 O&M Expenses for

the year as per

Regulation

(i) 2014-15 2.16 0.21 0.10 0.26 0.38

(ii) 2015-16 2.24 0.21 0.11 0.27 0.40

(iii) 2016-17 2.33 0.22 0.11 0.28 0.41

# The details of the expenditure & basis is provided in Annexure “A3”



f) Interest on Working Capital

The requirement of Working Capital & Interest thereon has been computed as per Clause 27 “Interest on Working Capital” of the J&KSERC Regulations, 2011. Interest @ 13.50 % per annum on working capital has been considered which is the Prime Lending Rate (PLR) of Jammu & Kashmir Bank as on 01.04.2011. The calculation of interest on working capital is summarized below:-

(` in Crores)

Financial Year

Name of HEP USHP-I LJHP Ganderbal Chenani-I Karnah

1Receivable (2 Months) 1.49 7.48 0.93 1.67 0.61

2 O & M Expenses (1

Months) 0.43 1.08 0.34 0.33 0.22

3 Spares for

Maintenance @ 1% 2.51 13.65 1.47 3.03 0.30

4 Escalation in spares @

6% 0.15 0.82 0.09 0.18 0.02

Spares for

Maintenance @ 1% for

addl. Capitalization0.00 0.00 0.00 0.00 0.00

5 Total Working

Capital Requirement

as per regulation 4.58 23.03 2.83 5.22 1.14

6 Rate of Interest 13.50% 13.50% 13.50% 13.50% 13.50%

7 Interest on working

Capital for the year0.62 3.11 0.38 0.70 0.15

Sl.

No.

2016-17



(` in Crores)

Financial Year

Name of HEP Iqbal Bridge Bazgo Sumoor Hunder Chenani-II

1Receivable (2 Months) 0.70 0.06 0.03 0.08 0.22

2 O & M Expenses (1

Months) 0.19 0.02 0.01 0.02 0.03

3 Spares for

Maintenance @ 1% 0.59 0.04 0.01 0.06 0.33

4 Escalation in spares @

6% 0.04 0.00 0.00 0.00 0.02

Spares for

Maintenance @ 1% for

addl. Capitalization0.00 0.00 0.00 0.00 0.00

5 Total Working

Capital Requirement

as per regulation 1.52 0.13 0.05 0.17 0.60

6 Rate of Interest 13.50% 13.50% 13.50% 13.50% 13.50%

7 Interest on working

Capital for the year0.21 0.02 0.01 0.02 0.08

Sl.

No.

2016-17

g) Other Expenses

Consultancy charges as already detailed in sub para (h) of para 7(A) amounting to Rs 1.017 Crores has been apportioned in the same way as indicated in the previous paras.

h) Non-Tariff-Income (NTI):

HEP wise projected Non- Tariff Income for the FY 2016-17 as detailed in sub para (i) of para 7(A) has been considered in the AFC of the respective HEPs.



TOTAL ANNUAL FIXED CHARGES (AFC) AND ANNUAL REVENUE REQUIREMENT (ARR) FOR 10 HEPS.

Based on the above parameters, station-wise AFC & ARR for the Financial Year 2016-17 are given in the following tables:

Annual Fixed Charges

USHP-I (` in Crores)


O&M Expenses 5.17


Depreciation 1.20








Lower Jhelum HEP (` in Crores)


O&M Expenses 13.00


Depreciation 10.92










Ganderbal HEP (` in Crores)


O&M Expenses 4.09


Depreciation 0.41







Net Annual Fixed Cost 4.75 Chenani-I (` in Crores)


O&M Expenses 3.98


Depreciation 2.03








Karnah (Rs. in Crores)


O&M Expenses 2.59


Depreciation 0.35










Bazgo HEP (` in Crores)


O&M Expenses 0.22


Depreciation 0.06








Sumoor HEP (` in Crores)


O&M Expenses 0.11


Depreciation 0.02








Iqbal Bridge HEP (Rs. in Crore)


O&M Expenses 2.33


Depreciation 0.65










Chenani- II (Rs. in Crores)


O&M Expenses 0.41


Depreciation 0.30








Hunder HEP (` in Crores)


O&M Expenses 0.28


Depreciation 0.07










SUMMARY OF ANNUAL FIXED CHARGES (AFC) AND ANNUAL REVENUE REQUIREMENT (ARR) FOR EACH HEPS ( FOR 10 HEPS) Fixed charges for supply of energy from the following 10 hydro electric projects are given in the table as under:-

i. Total Annual Fixed Charges

(` in Crores)

Year 2016-17

1 USHP - I 7.72

2 Lower Jhelum 39.11

3 Ganderbal 4.75

4 Chenani I 8.76

5 Karnah 3.56

6 Iqbal 4.02

7 Bazgo 0.37

8 Sumoor 0.16

9 Hunder 0.48

10 Chenani-II 1.18

Total Annual

Fixed ChargesSl. No. Name of HEP

Indicative Tariff

Based on the Annual Fixed Charges and the Design Energy, the individual tariff for these HEPs is worked out as under:-

(Rs. Per Kwh)

Indicative Tariff

Year 2016-17

1 USHP I 0.73

2 Lower Jhelum 0.65

3 Ganderbal 0.53

4 Chenani I 0.80

5 Karnah 3.17

6 Iqbal 1.91

7 Bazgo 3.44

8 Sumoor 3.63

9 Hunder 2.71

10 Chenani-II 1.00

Name of HEPSl. No.



7. C. DETERMINATION OF TARIFF FOR BAGLIHAR STAGE I HEP

The Baglihar HEP was declared commercially operational on 1st April 2009 along with 68 KM of 400 kV D/C transmission line from Baglihar to Kishanpur for evacuation of power from the project. The 400 kV D/C transmission line has been connected with 2 nos. 400 kV lines terminating bays at Grid sub-station Kishanpur of PGCIL.

The tariff petition for Baglihar Hydro Electric Project for the year 2015-16 has been submitted and Tariff order passed by of Hon’ble Commission. We are now submitting the petition for the year 2016-17 assuming the same parameters.

Installed capacity & COD

Name of HEP Capacity MW

COD

Baglihar 450 01.04.2009

400 kv D/C transmission line from Baglihar to Kishanpur

500 MW for each circuit

01.04.2009

Net Project Cost (` in Crores)

Project Cost 5827.17

Less Revenue from Infirm Power -25.97Net Project Cost 5801.2

IDC 757.3

Net Basic Cost of Project 5043.9

The Net cost has been further bifurcated for Hydro project and Transmission System as follows:

Cost of Hydro Project (` in Crores)

Basic Cost of the Project 4891.6

IDC 734.3

Total Project Cost( Hydro) 5625.9

Cost of Transmission Works (` in Crores)

Basic cost 152.3

IDC 23

Total cost of Transmission 175.3



For Baglihar - Hydro for FY 2016-17

The tariff for this is submitted as per the procedure defined in chapter 1 and chapter -2 of JKSERC (terms & conditions of determination of hydro generation tariff) Regulation 2011 dated 20-04-2011

For Baglihar – Transmission System for FY 2016-17

The tariff petition for Baglihar - Transmission System has been prepared based on the Terms and Conditions of Transmission Tariff Regulation, 2012 of JKSERC.

COMPUTATION OF ANNUAL CAPACITY CHARGES

As defined in the Regulation, tariff shall comprise of recovery of Annual capacity charges and primary energy charges.

The capacity charges have been computed in accordance with the following formula.

Capacity charges = Annual Fixed Charges – Primary Energy charges

ANNUAL FIXED CHARGES

The Annual Fixed charges (AFC) consists of:-

a) Interest on Loan capital

b) Depreciation including Advance Against Depreciation

c) Return on Equity

d) Operation & Maintenance Expenses

e) Interest on Working capital

Following norms/ assumptions as prescribed in Chapter – 3 of JKSERC Regulation 2011 dated 20-04-2011 have been considered for filing the tariff for Baglihar-Hydro excluding transmission system.



Assumptions for Hydro Power Project excluding transmission system are given below:-

S No

Particulars Unit Value

1 Auxiliary Consumption With Rotating Exciter


Surface % 0.20 0.50


2 Transformer Losses % 0.50 0.50

3 Transmission losses % 0.30 0.30

4 O&M Expenses

% of Cap Cost % 1.50

Annual Escalation % 4.00

5 Depreciation As per regulation

Advance Against Depreciation

Equivalent to difference of actual repayment of loan and normal depreciation

6 Working Capital



Spares for Maintenance % 1 of Historical Cost

Escalation in Spares Inventory

% 6

Rate of Interest p.a. % 14.75


7 Return on Equity % 14 of normative equity

8 Initial Spares as part of Capital Cost

% 1.50

9 Equity % 30 of Net Project Cost


10 Interest % as per sanction




Assumptions for transmission system are given below:-

400kV Transmission system

The AFC calculations for transmission system have been based on Terms and Conditions of Transmission Tariff Regulation, 2012 of JKSERC

The Assumption for the transmission line is given below:-

S No Particulars Unit Value 1 O&M Expenses

Annual O&M Cost of Line ` in

Crores

Projected As per JKSERC

Transmission Tariff Regulation, 2012.

2

Depreciation As per

Regulation

Advance Against Depreciation Equivalent to difference of actual repayment of loan and normal depreciation

3 Working Capital

Receivable months 2 of Transmission Charges

O & M Expenses months 1

Spares for Maintenance % 1 of Historical Cost

Rate of Interest %

14.75 PLR of J & K Bank as on 1st April of the each year (As on 01/04/2014)

4 Return on Equity % 15.50 of normative Equity 5 Equity % 30 of Net Project Cost


6 Interest % Weighted Average




a) Project Cost as on 31.03.2016

Net cost of the Baglihar - Hydro and Baglihar - Transmission System is derived from project cost of the HEP after adjusting the revenue received from infirm power. It is submitted that JKSPDC has capitalized the expenditures incurred towards the works which were deferred but necessary for efficient and successful operation of plant included in the original capital cost of ` 5827 crores. Details of the expenditures proposed to be capitalized is indicated in Format 5A. The proposed additional capitalisation may kindly be admitted.

Details of capital cost is provided below:

(` in Crores)

FY 2016-17

( 31-3-2016)

1 Baglihar –Hydro 450 5406.61

2 Baglihar -Transmission System 500 MW for each circuit 168.03

Sl. No. Name of Project Capacity in MW

b) Design Energy

The Design Energy as approved by the Hon’ble Commission for Baglihar HEP has been considered for calculation of Gross Generation.

Design Energy

in MUs / GWH

1 Baglihar-HEP Stage-I 450 2536.07

Sl. No. Name of HEP capacity in MW


Details of loan liabilities, rate of interest thereon and moratorium period for Baglihar HEP is enclosed in Format F8C(II). Total interest on loans has been worked out as per Clause 22 of JKSERC Regulation NO.JKSERC/11/2011 dated 20.04.2011 for the year 2016-17 for Baglihar-Hydro and as per Terms and Conditions of Transmission Tariff Regulation, 2012 of JKSERC for Baglihar-Transmission system and given here under for the year 2016-17.



(` in Crores)

Sl. No. Name of HEPBaglihar- Hydro FY 2016-

17

1 Net Cost 5406.61

2 Equity 30% for tariff purpose 1621.98

3Debt + Subsidy (70% of the net cost) 3784.63

4 Subsidy 539.29

5 Debt for Tariff purpose 3245.34

6 Loan re-paid during earlier years 2202.42

7 Loan at the beginning of the year 1042.92

8 Repayment of loan (Normal

depreciation + AAD) 324.53

9 Loan at the end of the year 718.38

10 Average of the loan 880.65

11 Rate of Interest on loan 12.08%12 Interest on the loan 106.36

(` in Crores)

Sl. No. Name of HEPTransmission System

FY 2016-17

1 Net Cost 168.03


3Debt + Subsidy (70% of the net cost) 117.62

4 Subsidy 16.71




8 Repayment of loan (Normal

depreciation + AAD) 10.09







(i) Depreciation:

a. For Baglihar – Hydro

The depreciation has been calculated annually based on straight line method over the useful life of the assets as per regulation 23 of Chapter 4 of JKSERC Regulation 2011 dated 20.04.2011 and at the rates prescribed in Appendix of this regulation. The residual life of the asset has been considered as 10% of the historical capital cost. Land cost has been excluded from the capital cost while computing 90% of the historical cost of the asset.

b. For Baglihar – Transmission System

Depreciation has been calculated annually based on Straight Line Method in accordance with clause 4.9 of the Terms and Conditions of Transmission Tariff Regulation, 2012 of JKSERC for Baglihar Transmission system.

The following Formats / Annexure have been attached for calculation of depreciation.

(a) Break up of Capital Cost for Baglihar HEP Stage-I – Form No. F5A(I).

(b) Net project cost, equity, debt for Baglihar – Hydro, Baglihar Transmission System & for final estimated cost – Form No. F5B (I).

(c) Break up of cost & depreciation for Baglihar – Hydro for FY 2016-17 – Annexure – A2

(d) Depreciation for Baglihar – Transmission System for FY 2016-17 – Annexure – A2

(` in Crores) Sl.

No. Baglihar –

Transmission

System

1 Depreciation 143.22 4.44

Description

FY 2016-17

Baglihar –Hydro

(ii) Advance against Depreciation (AAD)

In addition to allowable depreciation, JKSPDC is also entitled to Advance against depreciation (AAD) as per Regulation 24 of Chapter 4 of JKSERC Regulation 2011 dated 20.04.2011 has been considered as per the formula given below:-



Advance against depreciation = Annual repayment of loan – normal depreciation

Details of AAD are furnished in the following table:-

(` in Crores)

Baglihar- Hydro

FY 2016-17

1 Total Normative Loan Amount 3245.34

2 Annual Repayment of Loan 1/10th 324.53

3 Normal Depreciation for full year 143.22

4 Advance Against Depreciation 181.31

Sl. No.Name of HEP

(` in Crores)

Transmission System

FY 2016-17



3 Normal Depreciation for full year 4.44

4 Advance Against Depreciation 5.65

Sl. No. Name of HEP

e) Return on Equity

As per Regulations 25 Chapter 4 of JKSERC Regulation 2011 dated 20-04-2011 Return on Equity has been considered @ 14% per annum for hydro Power stations and Transmission system. Details of Return on Equity are given as under:-

(` in Crores)

Baglihar- Hydro

FY 2016-17

1 Net cost of the Project 5,406.61

2 Total normative Equity 30% of the

Project Cost 1621.98

3 Rate of Return on Equity 14.00%

4 Return on Equity 227.08

Name of HEPSl. No.



(` in Crores)

Transmission

System

FY 2016-17

1 Net cost of the Project 168.03

2

Total normative Equity 30% of the

Project Cost 50.41



Name of HEPSl. No.

f) Operation & Maintenance Expenses

The operation and maintenance expenses have been calculated as per Regulation 26(2) (b) of JKSERC Regulation 2011 dated 20-04-2011 taking 1.5% of the estimated completion cost for 2009-10 (COD) and escalated @ 4% per annum for the year 2016-17 The O & M expenses for the year is given below. The O&M expenses for transmission system have been calculated as per Terms and Conditions of Transmission Tariff Regulation, 2012 of JKSERC.

(` in Crores) Baglihar- Hydro

FY 2016-17

1 Final estimated completion cost 5513.47

2 O & M Expenses 1.50%

3 Annual Escalation in O & M expenses 4.00%

4 O & M Expenses for the year 107.99

Name of HEPSl. No.

(` in Crores) Transmission

System

FY 2016-17

1 2010-11-Actual 0.47

2 2011-12-Actual 1.64

3 2012-13-Actual 0.53

4 2013-14 - Actual 4.37

5 2014-15 - Actual 1.73

6 2015-16 - Estimated 8.37

7 2016-17 - Projected 9.21

Sl. No. Particulars



g) Interest on working capital

The requirement of working capital and interest thereon has been computed as per Clause 27 “interest on working capital” of the J&K SERC Regulation, 2011 dated 20.04.2011. Interest @ 13.50% per annum on working capital has been considered which is the short term prime lending rate of Jammu & Kashmir Bank as on 01.4.2011. The calculation of working capital and interest is summarized below:-

(` in Crores)

Baglihar-

Hydro

FY 2016-17

1 Receivable Rs in Crore 2 132.71

2 O & M Expenses Rs in Crore 1 9.00

3 Spares 73.79

4 Escalation in spares 4.43

5 Total Working Capital Rs in Crore 219.93

6 Working Capital Loan Rs in Crore 219.93

7 Rate of Interest - PLR of J & K Bank as

on 01/04/20118 Interest on working capital Rs in Crore 29.69

1.00%

6.00%

13.50%

Sl. No. Description Unit Months

(` in Crores) Transmissi

on System

FY 2016-17



3 Spares 1.68




on 01/04/20157 Interest on working capital Rs in Crore 1.13

MonthsUnitDescription

14.75%

1%

Sl. No.

h) Other Expenses

Consultancy charges as already detailed in sub para (h) of para 7(A) amounting to ` 1.017 Crores has been apportioned in the same way as indicated in the para.





Based on the above parameters AFC for the Financial Year 2016-17 is given in the following Table:-

Baglihar Hydro

Annual Fixed Cost

(` in Crores) Financial Year FY 2016-17

O&M Expenses 107.99


Depreciation 143.22




Consultancy Charges 0.60Total Annual Fixed Cost 796.26



Net Saleable Energy in MU 2498.03Indicative Tariff Rs. per kWh 3.09

Transmission Line Annual Fixed Cost

(` in Crores) Financial Year FY 2016-17

O&M Expenses 9.21


Depreciation 4.44



Interest on Working Capital 1.13Total Annual Fixed Cost 31.29

Net Saleable Energy in MU 2498.03

Indicative Tariff Rs. per kWh 0.13



Summary of Total Annual Fixed Charges (AFC) and Annual Revenue Requirement (ARR):

(` in Crores) Total Annual

Fixed Cost

FY 2016-17

1 BAGLIHAR - Hydro 771.59

2 Baglihar-Transmission System 31.29

3 TOTAL 802.88

Sl. No. Name of HEP

Total AFC for PDD (50%) -` 401.44 Crore

(` per kwh) Indicative Tariff

FY 2016-17

1 BAGLIHAR - Hydro 3.09

2 Baglihar-Transmission System 0.13

3 TOTAL 3.21

Sl. No. Name of HEP



7. D. DETERMINATION OF TARIFF FOR SANJAK HEP

a) Project cost

Estimated completion cost of the Sanjak HEP is submitted below. Details are provided in Format F5A(II).

Sl. No. Name of HEP Capacity in MW Rs. in crores

1 Sanjak 1.26 25.29

Based on the expenditure incurred & valuation report, project cost of Rs. 15.55 as on 31.03.2014 has been taken as base, thereafter additional expenditure incurred during the FY 2014-15 and proposed to be incurred upto 31.03.2017 has been considered as detailed in Format 5A (II). The Project cost for the F.Y. 2016-17 has been taken accordingly and the various parameters for the tariff are discussed as under.

b) Design energy The Design Energy of the HEP as approved by the Hon’ble Commission is provided below:

Sl. No.

Name of HEP Capacity in MW Design Energy in MUs

1 Sanjak 1.26 4.46




Details of loan liabilities and rate of interest thereon for the HEP is enclosed in Format 8C(II).

(` in Crores)

Sanjak HEP

FY 2016-17

1 Net Cost 16.30


3 Debt + Subsidy (70% of the net cost) 11.41

4 Subsidy 1.76




8 Repayment of loan (Normal depreciation +

AAD) 0.96




Sl. No. Description


i. Depreciation

Depreciation has been calculated annually based on Straight Line Method considering the useful life as per JKSERC regulations as was adopted in the previous petitions. Details of depreciation for the Sanjak HEP are given as under:-

(` in Crores)

Sl. No. Name of HEP

Sanjak HEP

FY 2016-17

1 Cost of project excluding Land Cost 15.32

2 Residual value 10%

3 Total Depreciation to be claimed 13.78

4

Normal depreciation rate

As per Regulation Pl. Ref.

Annexure A2

5 Total depreciation for the year

2016-17 0.41



ii. Advance Against Depreciation (AAD)

(` in Crores)

Sl. No. Description Sanjak HEP

FY 2016-17



3 Normal Depreciation for full year 0.414 Advance Against Depreciation 0.50


As per provision under Regulation 25 of JKSERC Regulations, 2011, Return on Equity has been considered @ 14% per annum for the Hydro Power Station.

Details of Return on Equity for the HEP are given as under:-

(` in Crores)

Sanjak HEPFY 2016-17


2 Total normative Equity 30% of the

Project Cost 4.89



Sl. No. Description


The Operation & Maintenance Expenses of the HEP has been calculated as per provisions under regulation 26(2) of JKSERC regulations 2011. Accordingly, the O&M Expenses have been considered @ 1.5% of the Final Estimated Capital Cost with escalation @ 4% per annum.

The O&M Expenses for the HEP are as under:-



(` in Crores)

Sanjak HEPFY 2016-17

1 Final estimated completion cost 25.29


3Annual Escalation in O & M expenses 4.00%


Sl. No. Description


The requirement of Working Capital & Interest thereon has been computed as per Clause 27 “Interest on Working Capital” of the J&KSERC Regulation 2011 dated 20.04.2011. Interest @ 14.75 % per annum on working capital has been considered which is the Prime Lending Rate (PLR) of Jammu & Kashmir Bank as on 01.04.2013. The calculation of interest on working capital is summarized below:-

(` in Crores)

Sanjak HEP

FY 2016-17

1 Receivable ` in Crore 2 0.47

2 O & M Expenses ` in Crore 1 0.04

3 Spares 0.32


5 Total Working Capital ` in Crore 0.85

6 Working Capital Loan ` in Crore 0.85


on 01/04/2013

8 Interest on working capital ` in Crore 0.1314.75%


1.00%

6.00%

h) Other Expenses:

Consultancy charges as already detailed in sub para (h) of para 7(A) amounting to ` 1.017 Crores has been apportioned in the same way as indicated.

i) Non-Tariff-Income (NTI)




TOTAL ANNUAL FIXED CHARGES (AFC) AND ANNUAL REVENUE REQUIREMENT (ARR)

Based on the above parameters, AFC & ARR for the Financial Year 2015-16 are given in the following tables for the year 2016-17 for approval of the Commission provisionally till the plant gets completed and declared commercially operational:

Annual Fixed Charges (` in Crores)


O&M Expenses 0.43


Depreciation 0.41

Advance Against Depreciation (AAD) 0.50









7. E. DETERMINATION OF TARIFF FOR STAKNA HEP The Stakna HEP has installed capacity of 4 MW. Tariff for the HEP has been calculated with the procedure defined in JKSERC regulation No. JKSERC/11/2011 dated 20.04.2011.

a) Project cost The Hon’ble Commission, has already approved the project cost of the Stakna HEP as provided below:

Admitted Cost

(` in Crores)

1 Stakna 4 12.65


MW

b) Design Energy The Hon’ble Commission, has already approved the design energy of the Stakna HEP. The Design Energy of the HEP as provided below has been considered for calculation of gross generation.

Design Energy

in MUs

1 Stakna 4 19.52


MW


No interest on loan has been considered.


(i) Depreciation

Depreciation has been calculated annually based on Straight Line Method considering the useful life as per JKSERC regulations as was adopted in the previous petitions. Details of depreciation for the Stakna HEP are given as under:-



(` in Crores) FY 2016-17

Stakna

1 Cost of the project excluding

Land 9.832 Residual value 10%3 Total depreciation to be

claimed 8.854

Normal Depreciation Rate

As per

regulation Pl.

refer to

Annexure - A2

5 Depreciation for the year 0.21

DescriptionSl. No.

(ii) Advance Against Depreciation (AAD) Advance against depreciation considered as zero


As per provision under Regulation 25 of JKSERC Regulations, 2011, Return on Equity has been considered @ 14% per annum for the Hydro Power Station.

Details of Return on Equity for the HEP are given as under:-

(` in Crores)

Stakna HEP

FY 2016-17


2 Total normative Equity 30% of

the Project Cost 3.80



Sl. No. Description


The Operation & Maintenance Expenses of the HEP has been calculated as per provisions under regulation 26(2) of JKSERC regulations 2011. Accordingly, the O&M Expenses have been considered @ 1.5% of the Capital Cost with escalation @ 4% per annum.



The O&M Expenses for the HEP are as under:-

(` in Crores)

Stakna HEP

FY 2016-17

1Final estimated completion cost 12.65


3 Annual Escalation in O & M

expenses 4.00%


Sl. No. Description


The requirement of Working Capital & Interest thereon has been computed as per Clause 27 “Interest on Working Capital” of the J&KSERC Regulation, 2011 dated 20.04.2011. Interest @ 13.50 % per annum on working capital has been considered which is the Prime Lending Rate (PLR) of Jammu & Kashmir Bank as on 01.04.2011. The calculation of interest on working capital is summarized below:-

(` in Crores)

Stakna HEPFY 2016-17



3 Spares 0.15




7 Rate of Interest - PLR of J & K

Bank as on 01/04/2011

8 Interest on working capital Rs in Crore 0.05

1.00%

6.00%

13.50%


h) Other Expenses

Consultancy charges as already detailed in sub para (h) of para 7(A) amounting to 1.017 Crores has been apportioned in the same way as indicated in the para.





TOTAL ANNUAL FIXED CHARGES (AFC) AND ANNUAL REVENUE REQUIREMENT (ARR)

Based on the above parameters, AFC & Indicative Tariff for the Financial Year 2016-17 are given in the following table:

Annual Fixed Charges (` in Crores)


O&M Expenses 0.22

Interest on Loan 0

Depreciation 0.21

Advance Against Depreciation 0.00







7. F. GAS TURBINES I & II

The Gas Power Station I and II are operated on the requisition of T&D utility (Power Development Department) / State Government. The T & D utility (PDD) requisitions its operation only in acute emergency condition.

As JKSPDC has to maintain the gas turbines in running conditions to operate in emergency, staff has been provided and timely plant maintenance is also being carried out by the JKSDPC. The corporation has been constantly requesting for the reimbursement of the expenditure incurred by it for the upkeep of the Gas turbines.

In reference to the directive of the Hon’ble Commission in the para 10.11 & 10.12 of the Tariff order for the FY 2015-16, it is submitted that JKSPDC is making all efforts in this regard but the matter is yet to be resolved causing financial burden on the JKSPDSC.

The Corporation has incurred the following expenditure on Gas Turbine in the year 2014-15 excluding cost of fuel.

(` in Crores)

Sl. No. Description FY 2014-15

1 Salary & other admin Expenses 2.32

2 Operation & Maintenance 0.52

3 Total 2.84



8. Mohra Receiving Station

The Hon’ble Commission in tariff order for the FY 2014-15 directed JKSPDC to pursue the matter of transfer of Mohra receiving station with JKPDD.

In this regard it is submitted that JKSPDC has been requesting the JKPDD to take over the Mohra station as per the direction of the Hon’ble Commission but in-spite of repeated requests, the T&D utility (PDD) has not taken over the Receiving Station till date.

In reference to the direction of the Hon’ble Commission in Para 10.14 & 10.15 of the Tariff Order for the FY 2015-16, it is submitted that issue is yet to be resolved. The Commission is requested to pass suitable directives to the T&D utility (PDD) to take action in this regard.

9. Requirement of Renovation & Modernization, Stabilization, Major Repair Works and Additional Capitalization of HEPs.

A. RM&U of Projects:

Hydro power stations are generally designed for useful operational life of about 35 years. Degradation of equipments starts from commencement of regular operation of the power plant. As a result, over a period of time performance of the plants gradually deteriorates and PLF's plummets to alarmingly low levels. This necessitates undertaking of Renovation & Modernisation of old power stations .Before the plants complete their useful life, they are subjected to Renovation and Modernization for bringing their performance back to a reasonable level. Sizeable capital investment is required to undertake RM & U of the projects. This investment cannot be met out of the normal O&M provisions which cover only the cost of routine maintenance. repairs, spares, insurance, establishment and are approved by the regulator in accordance to the regulations.Renovation & Modernisation of old power stations is cost effective, environment friendly and requires less time for implementation. Capacity addition through RM&U of old power stations is an attractive proposition in the present scenario, when huge investment is required for creation of new generating capacity. The economy in cost and time essentially results from the fact that apart from the availability of the existing infrastructure, only selective replacement of critical components such as turbine runner, excitation system, governor etc. can lead to increase in efficiency, peak power and energy availability apart from giving a new lease on life to the power plant/ equipment.

The main objective of undertaking RM&U is as follows:

(i) To arrest the deterioration in performance (ii) To improve availability, reliability, efficiency and safety of the equipment (iii) To regain lost capacity



(iv) To extend useful life beyond designated life. (v) To save investments on new equipment

With above considerations, the Board of Directors of JKSPDC has approved programme for taking up Renovation & Modernization of seven HEPs at a cost of ` 208.96 crore.

State Government vide its letter dated 14.01.2008 has also approved taking of RMU of seven major HEPs. Loan assistance of ` 133.95 crore has been tied up with Power Finance Corporation out of which ` 32.93 crore has already been availed. Further, Ministry of New & Renewable Energy (MNRE) has also approved subsidy of ` 32.94 crore for the six HEPs with details as under:

(` in Crore)

Name of the HEP

Envisaged

completion cost

Debt from

PFC

Subsidy from

MNRE

Equity from

State Govt.

105 MW LJHP 101.3 71 - 30.3

22.6 MW USHP-I 25 14.65 10.35 0

23.3 MW Chenani-I 39.14 24.3 10.61 4.23

15 MW Ganderbal 39.3 24 10 5.3

300 kW Bazgo 1.32 - 0.74 0.58

400 kW Hunder 1.77 - 0.94 0.83

100 kW Sumoor 1.13 - 0.3 0.83

Total 208.96 133.95 32.94 42.07 Works on these projects have already been started since 2009-10. Details of expenditure incurred and approved (budgeted) for the current year on these works are as under.

(` in Crores)

Sl. No.

Name of HEP Approved

Cost

Revised Estimated

Cost

Cumulative Expenditure up

to 3/2015

1 LJHP 101.30 117.05 104.66

2 Chenani-I 39.14 59.38 13.37

3 USHP-I 25.00 35.00 23.77

4 Ganderbal 39.3 39.30 25.90

5 Sumoor 1.13 1.50 0.56

6 Hunder 1.77 2.51 1.19

7 Bazgo 1.32 2.41 1.18

Total 208.96 257.15 170.62

After full completion of RMU works there will be increase in annual generation from



these HEPs. Likely increase in annual energy generation as worked out by CEA during its appraisal report after RM&U of four main HEPs namely, LJHP, Chenani-I, USHP-I and Ganderbal is given below. RMU will ensure that these old power stations operate for additional period without any major overhauling requirements.

Project Installed capacity

(MW)

Annual Generation

in MUs

Annual Increase in generation

in MUs

Expected Generation after RM&U in MUs

LJHP 105 412.1 81.6 493.7

USHP-I 22.6 89.36 13.24 102.6

Ganderbal 15 22.33 63.64 85.97

Chenani I 23.3 71.32 33.85 105.17

Renovation and modernization of three other projects viz. Sumoor, Hunder and Bazgo have also been taken up. The RMU programme is a cyclic feature aimed at optimizing power generation and prolonging the life of the projects. On same consideration projects of Karnah , Mohra, Iqbal & Stakna are being taken up for RMU. Haftal is being taken up for augmentation from 1 MW to 2 MW.

Since the works are partly completed the capitalization has not been claimed in the present tariff petition. The Corporation shall submit the details for additional capitalization on completion of the works.

B. Stabilization

There are a number of HEPs which are not operating as per the rated capacity and face breakdown frequently. Most of these HEPs are located in remote and far flung areas and are operating under harsh climatic conditions. Necessity of any additional capital expenditure occurs as a result of major break down of machinery, natural calamity i.e. earthquakes and floods etc. Details of the project, amount approved for Additional Capital Expenditure and actual expenditures for the years 2014-15 is given below:



(` in Crores)

Sl. No.

Name of Project 2014-15

Approved Provision

Expenditure Incurred

1 Sewa-III 0.22 0.09

2 Chenani-II 0.64 0.09


4 USHP-II 24.57 6.76

5 Karnah 1.57 0.34


7 Stakna 0.10 0.07

8 Iqbal 0.35 0.10

9 Haftal 0.14 0.12

10 Marpocho 0.12 0.12 Total 32.2446 9.3537

The impact of these works both in respect of RMU and stabilization in terms of improvement in generation/Plant Load Factor shall be got evaluated on completion of RMU activities and submitted to the Hon’ble Commission as per the directive in the tariff order dated 16.07.2011.

It is however to submit that since these works are going on, the Corporation is not seeking additional capitalization on this account. The projects where the works get completed shall be sought for additional capitalization. 10. ARREARS OF ENERGY CHARGES WITH REGARDS TO THE BILLS

RAISED IN ACCORDANCE WITH THE TARIFF ORDER /PPA.

It is submitted that the Corporation has been raising the bills in respect of energy sold in accordance with the Tariff Order/ Power purchase Agreement to the Power Development Department (PDD). The Power Development Department is irregular in making the payments with such payments not only intermittent but meager as well. This has resulted in accumulation of huge arrears which has affected the cash flow of the corporation thereby impacting its financial health & esteem.

The total Arrears on account of Energy Charges upto 31.03.2015 is Rs. 2519.24 Crores. After adjustment of surcharge & PDD arrears.

Applicant has already submitted in earlier Tariff Petitions that the expenses allowed as per the regulations are insufficient to cover the Operation and Maintenance expenses. Apart from that the applicant is forced to make huge investment towards Capital expenses to keep the power houses in working condition. Hence the nonpayment of Energy Bills on the part of PDD is causing cash flow problems.



Further, as reported in the last tariff petition, the BoDs of JKSPDC in its 70th meeting has resolved as under:- “JKSPDC to take required action to make the necessary adjustments in the books of accounts for setting off the receivable outstanding as on 31.3.2014 from JKPDD amounting Rs1987.37 crore with the plan funds received from the state Government as on March ending, 2014 amounting Rs 3406.84 crore and conversion of remaining grants of Rs 1419.47 crore into the State equity contribution to the JKSPDC. The earlier resolutions of the BOD meetings on the issue shall stand modified to this extent. However, if the JKPDD repay the outstanding arrears proposed for adjustment in cash to the Corporation in future, the same adjustment treatment shall be reversed.” However, the Board resolution has not been operationalised so far, as the Finance Department , GoJK has asked for discussion in the matter, the matter is being pursued.

11. Water Usage Charges:

As per the order No. WRRA/01/2011 dated 01.02.2011 issued by the State Water Resources Regulatory Authority, Government of Jammu & Kashmir water usage charges @ 25 paisa per cubic meter of water used for generation of hydro-electric power has been levied by the J&K Government.

In the earlier Tariff petitions, the Hon’ble Commission was requested that the actual expenditure towards Water Usage Charges may be allowed as pass through in addition to the Annual Fixed Charges (AFC) for each project. The Commission approved to claim the reimbursement of water usage charges from PDD. PDD is yet to pay the Water usage charges as per the direction of the Hon’ble commission in the Tariff order. JKSPDC is pursuing the matter.

Further, in line with the directions in earlier Tariff Orders, JKSPDC shall be claiming the water usage charges as pass through from JKPDD.

12. TAXES AND DUTIES

The above tariff proposal is exclusive of any statutory levies, taxes and duties, Cess or any head of imposition (s) whatsoever imposed / charged by any Govt. Central / State and for any other local bodies / authorities etc.

The amount of such taxes / levies / Cess / duties etc shall be borne by the beneficiary (PDD) additionally.

Incidence of tax liability and other charges as per J&KSERC tariff Notification 2011 shall also be payable by the beneficiary (PDD) in proportion of power generation sold to the PDD.



So far JKSPDC has paid Income Tax for the AY 2015-16 amounting to Rs. 64,16,76,540/-. Details of tax paid so far are as under:-

Challan No.

Period Amount paid

90026 Financial Year 2014-15 Assessment Year 2015-16 5,93,16,200





TOTAL 64,16,76,540

As the Income Tax is pass through, the amount paid towards Income Tax Rs. 64.17 crore may kindly be approved for reimbursement by PDD. The supporting documents are enclosed at Annexure C.



PRAYER

It is respectfully prayed that the Hon’ble Commission may be pleased to:

(a) Approve the Annual Fixed Charges as mentioned in Para 7A, B, C, D & E.

(b) Pass necessary orders in the light of Additional submissions made in Para 7F, 8, 10 , 11 & 12 above.

(c) Approve reimbursement of Tariff Petition filing fee of ` 3.00 Lacs

(d) Pass such other and further order(s) as are deemed fit and proper in the facts and circumstances of the case.

Authorised Signatory

Place: Jammu

Date


J&K State Power Development Corporation Ltd.

Page i

APPLICATION

FOR

ANNUAL REVEUE REQUIREMENT (ARR)

&

TARIFF PETITION FOR

FY 2016-17

PART – B

& PART - C

Submitted by:

JAMMU & KASHMIR POWER DEVELOPMENT CORPORATION LTD. January-2016


J&K State Power Development Corporation Ltd.

Page ii


J&K State Power Development Corporation Ltd. Page iii

Calculation for Depreciation of 21 Hydro Electric Projects ANNEXURE – A2

USHP –II Calculation of Depreciation (` in Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

7.50 - 7.50 - -

287.34 0.00 287.34 35 2.57% 7.39

4.94 0.00 4.94 50 1.80% 0.09

Power Plant 75% 96.77 0.00 96.77 35 2.57% 2.49

Switchgears 25% 32.25 0.00 32.25 25 3.60% 1.16

6.2 6.20 15 6.00% 0.37435.00 0.00 435.00 11.50

Class of Asset

Building

Total

Non - Depreciable Asset

Land

Civil Works

Power Plant & Switchgears

Communication

Depreciable Assets


J&K State Power Development Corporation Ltd. Page iv

Chenani –III Chenani – III

Calculation for Depreciation (` in Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

1.45 0.00 1.45 0 -

39.61 0.00 39.61 35 2.57% 1.02

1.15 0.00 1.15 50 1.80% 0.02

Power Plant 75% 9.27 0.00 9.27 35 2.57% 0.24

Switchgears 25% 3.09 0.00 3.09 25 3.60% 0.11

0.40 0.40 15 6% 0.0254.97 0.00 54.97 1.41Total

Depreciable Assets

Civil Works

Building


Communication

Class of Asset


Land


J&K State Power Development Corporation Ltd. Page v

Sewa – III Calculation

Sewa – III Calculation for Depreciation (` in Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

0.70 0.00 0.70 0.00 -

43.59 0.00 43.59 35 2.57% 1.12

2.29 0.00 2.29 50 1.80% 0.04

Power Plant 75% 14.71 0.00 14.71 35 2.57% 0.38

Switchgears 25% 4.90 0.00 4.90 25 3.60% 0.18

0.66 0.00 0.66 15 6.00% 0.0466.84 0.00 66.84 1.76

Civil Works

Total


Land

Building


Class of Asset

Communication

Depreciable Assets


J&K State Power Development Corporation Ltd. Page vi

Pahalgam

(` in Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

0.58 0.00 0.58 0 -

36.75 0.00 36.75 35 2.57% 0.94

1.03 0.00 1.03 50 1.80% 0.02

Power Plant 75% 11.22 0.00 11.22 35 2.57% 0.29

Switchgears 25% 3.74 0.00 3.74 25 3.60% 0.13

6.25 6.25 15 6% 0.3759.57 0.00 59.57 1.76

Depreciable Assets

Civil Works


Communication

Class of Asset


Land

Total

Building


J&K State Power Development Corporation Ltd. Page vii

IGO – Marchellong

(Rs. In Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

0.08 0.00 0.08 0 -

33.36 0.00 33.36 35 2.57% 0.86

1.37 0.00 1.37 50 1.80% 0.02

Power Plant 75% 10.57 0.00 10.57 35 2.57% 0.27

Switchgears 25% 3.52 0.00 3.52 25 3.60% 0.13

0.53 0.00 0.53 15 6% 0.0349.42 0.0000 49.42 1.31Total

Civil Works

Building


Class of Asset


Land

Depreciable Assets

Communication


J&K State Power Development Corporation Ltd. Page viii

Bhaderwah


Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

0.15 0.00 0.15 0 -

-

5.35 0.00 5.3465 35 2.57% 0.14

0.69 0.00 0.69 50 1.80% 0.01

Power Plant 75% 2.637 0.00 2.637 35 2.57% 0.07

Switchgears 25% 0.88 0.00 0.88 25 3.60% 0.03

0.9 0.00 0.9 15 6% 0.0510.60 0.00 10.60 0.30

Communication

Total

Depreciable Assets

Civil Works

Building


Class of Asset


Land

.


J&K State Power Development Corporation Ltd. Page ix

Marpachoo


Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

0.12 - 0.12 0 -

7.14 0.00 7.14 35 2.57% 0.18

0.47 0.47 50 1.80% 0.01

Power Plant 75% 3.61 0.00 3.61 35 2.57% 0.09

Switchgears 25% 1.20 0.00 1.20 25 3.60% 0.04

0.30 0.00 0.30 15 6% 0.0212.85 0.00 12.85 0.35


Building

Class of Asset

Communication

Total


Land

Depreciable Assets

Civil Works


J&K State Power Development Corporation Ltd. Page x

Haftal


Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

0.05 0.00 0.05 0 -

11.09 0.00 11.09 35 2.57% 0.28

0.99 0.00 0.99 50 1.80% 0.02

Power Plant 75% 2.87 0.00 2.87 35 2.57% 0.07

Switchgears 25% 0.95 0.00 0.95 25 3.60% 0.03

0.19 0.00 0.19 15 6% 0.0116.13 0.00 16.13 0.42

Civil Works

Land

Depreciable Assets

Building

Class of Asset



Communication

Total


J&K State Power Development Corporation Ltd. Page xi

USHP-I Calculation for Depreciation (` in Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

22.48 0.00 22.48 35 2.57% 0.58

22.96 0.00 22.96 35 2.57% 0.59

0.82 0.00 0.82 25 3.60% 0.03

46.26 0.00 46.26 1.20

Power Plant &

Total

Switchyard

Depreciable Assets

Class of Asset

Civil Works

Lower Jhelum

Calculation for Depreciation

(` in Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

206.20 0.00 206.20 35 2.57% 5.30

205.68 0.00 205.68 35 2.57% 5.29

9.36 0.00 9.36 25 3.60% 0.34

421.25 0.00 421.25 10.92

Class of Asset

Depreciable Assets

Switchyard

Civil Works

Power Plant &

Total


J&K State Power Development Corporation Ltd. Page xii

Ganderbal


Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

11.41 0.00 11.41 35 2.57% 0.29

4.26 0.00 4.26 35 2.57% 0.11

0.28 0.00 0.28 25 3.60% 0.01

15.95 0.00 15.95 0.41

Class of Asset

Switchyard

Total

Depreciable Assets

Civil Works

Power Plant &

Chenani – I


Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

64.04 0.00 64.04 35 2.57% 1.65

13.38 0.00 13.38 35 2.57% 0.34

1.08 0.00 1.08 25 3.60% 0.04

78.51 0.00 78.51 2.03

Class of Asset

Civil Works

Depreciable Assets

Switchyard

Total

Power Plant &


J&K State Power Development Corporation Ltd. Page xiii

Karnah


(` in Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

7.76 0.00 7.76 35 2.57% 0.20

5.14 0.00 5.14 35 2.57% 0.13

0.64 0.00 0.64 25 3.60% 0.02

13.55 0.00 13.55 0.35

Class of Asset

Total

Depreciable Assets

Civil Works including

Electrical & Mechanical

Switchyard

Iqbal Bridge


Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

12.06 0.00 12.06 35 2.57% 0.31

11.36 0.00 11.36 35 2.57% 0.29

1.22 0.00 1.22 25 3.60% 0.04

24.63 0.00 24.63 0.65Total

Class of Asset

Civil Works

Power Plant &

Switchyard

Depreciable Assets


J&K State Power Development Corporation Ltd. Page xiv

Bazgo


Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

1.13 0.00 1.13 35 2.57% 0.03

0.91 0.00 0.91 35 2.57% 0.02

0.12 0.00 0.12 25 3.60% 0.00

2.16 0.00 2.16 0.06

Power Plant &

Depreciable Assets

Switchyard

Class of Asset

Total

Civil Works

Sumoor


Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

0.37 0.00 0.37 35 2.57% 0.01

0.29 0.00 0.29 35 2.57% 0.01

0.04 0.00 0.04 25 3.60% 0.001

0.70 0.0000 0.70 0.02

Class of Asset

Depreciable Assets

Switchyard

Civil Works

Total

Power Plant &


J&K State Power Development Corporation Ltd. Page xv

Hunder


Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

1.51 0.00 1.51 35 2.57% 0.04

1.21 0.00 1.21 35 2.57% 0.03

0.14 0.00 0.14 25 3.60% 0.01

2.86 0.00 2.86 0.07

Power Plant &

Class of Asset

Total

Civil Works

Depreciable Assets

Switchyard

Chenani – II


(` in Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

7.31 0.00 7.31 35 2.57% 0.19

4.42 0.00 4.42 35 2.57% 0.11

11.73 0.00 11.73 0.30Total

Civil Works

Power Plant &

Class of Asset

Depreciable Assets


J&K State Power Development Corporation Ltd. Page xvi

Baglihar-Hydro: (` in Crores)


1 Land 32.68 0.00 32.68 0.00 32.68 0

Depreciable Assets

2 Building 42.13 0.05 42.18 0.00 42.18 50 1.80% 0.76 0.76 0.76

3 Civil Works 3169.07 7.33 3,176.40 0.00 3,176.40 35 2.57% 81.45 81.63 81.63

4 Other Civil Works 529.32 0.00 529.32 0.00 529.32 35 2.57% 13.60 13.60 13.60

5 Power Plant & Switchgears

6 Power Plant 1275.14 0.00 1,275.14 0.00 1,275.14 35 2.57% 32.77 32.77 32.77

7 Switchgears 289.2 0.00 289.20 0.00 289.20 25 3.60% 10.41 10.41 10.41

8 Communication, Office Furniture, 58.82 0.00 58.82 0.00 58.82 15 6% 3.53 3.53 3.53

9 Batteries, Self Propelled Vehicle 1.87 1.00 2.87 0.00 2.87 5 18% 0.34 0.52 0.52

10 Total Cost Excluding Land Cost 5365.55 8.38 5373.93 0.00 5373.93

Cost of Land 32.674 0.00 32.67 0.00 32.68

11 Total Cost of Civil & Electrical

Including Land 5398.22 8.38 5406.61 0.00 5,406.61 142.86 143.22 143.22

Class of AssetSl.

No.

Depreciation

Rate

Total

Depreciation

for 2016-17

Total Cost

as on

31.03.2014

Addition

during

2014-15

Addition

during

2015-16

Useful

Life

(Years)

Total

Depreciation

for 2015-16

Total

Depreciation

for 2014-15

Net Cost as

on

31.03.2016

Net Cost as

on

31.03.2015


J&K State Power Development Corporation Ltd. Page xvii

Baglihar -Transmission System

(Rs. In crores)

Non-Depreciable Assets

1 Land

Depreciable Assets

2 Transmission Line Materials 155.75 0.00 155.75 0.00 155.75 35 2.57% 4.00 4.00 4.00

3Transmission & Sub-station

equipment12.28 0.00 12.28 0.00 12.28 25 3.60% 0.44 0.44 0.44

4 Total Cost Excluding Land Cost 168.03 0.00 168.03 0.00 168.03 4.44 4.44 4.44

Cost of Land

5Total Cost of Transmission Line

Including Land 168.03 0.00 168.03 0.00 168.03 4.44 4.44 4.44

Addition

during

2015-16

Addition

during

2014-15

Total

Depreciation

for 2016-17

Net Cost as

on

31.03.2015

Depreciation

Rate

Sl.

No.Description

Total Cost

as on

31.03.2014

Total

Depreciation

for 2014-15

Total

Depreciation

for 2015-16

Useful

Life

(Years)

Net Cost as

on

31.03.2016


J&K State Power Development Corporation Ltd. Page xviii

Sanjak Calculation for Depreciation

(` in Crores)

Class of Asset Estimated

Cost up to

31.03.2015

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

Non-Depreciable

Asset

0.26 - 0.26 - -

7.02 0.00 7.02 35 2.57% 0.18

0.47 0.00 0.47 50 1.80% 0.01

Power Plant &

SwitchgearsPower Plant 75% 5.87 0.00 5.87 35 2.57% 0.15

Switchgears 25% 1.96 0.00 1.96 25 3.60% 0.07

Communication 0 0 0.00 15 6.00% 0.0015.58 0.00 15.58 0.41Total

Land

Depreciable Assets

Civil Works

Building


J&K State Power Development Corporation Ltd. Page xix

Stakna Calculation for Depreciation (` in Crores)

Admitted

Cost

Additional

Capitalization

Total Cost Life

(Years)

Depreciation

Rate

Annual

Depreciation

2.817 - 2.817 - -

0.005 0.00 0.00 35 2.57% 0.00

6.947 0.00 6.95 50 1.80% 0.13

Power Plant 75% 2.12 0.00 2.12 35 2.57% 0.05

Switchgears 25% 0.71 0.00 0.71 25 3.60% 0.03

0.059 0.00 0.06 15 6.00% 0.00412.65 0.00 12.65 0.21

Land

Civil Works

Building


Communication

Total

Depreciable Assets

Class of Asset



J&K State Power Development Corporation Ltd. Page xx

Annexure-A3

A note on Operation & Maintenance Cost i. A statement of project wise expenditure for the period 2005-06 to 2009-10 is given at Schedule-A. ii. A statement of the administrative & other expenditure of JKSPDC as a whole (as per books of accounts) for the last 5 years is given at Schedule-B. Basis of information 1. Total expenses incurred by projects including Corporate Office, Office the Chief Engineer, Office of the Superintending Engineer, Chief Pay & Accounts Officer etc have been compiled. 2. These expenditure includes expenses of direct salary & wages, repairs, maintenance and other such expenses of each project and all the proportionate cost of the respective controlling offices viz. Office of the Chief Engineer, Superintending Engineer, Executive Engineer, CPO and Head Office.


J&K State Power Development Corporation Ltd. Page xxi

Schedule A

Consolidated O&M Expenses for project and Appropriation of Corporate Expenses for the year 2005 to 2010

(` In Crores)

Sl. No

Installed capacity

Name of Project

Total O&M Expenditure

(MW) FY 2005-

06 FY 2006-07 FY 2007-

08 FY 2008-09 FY 2009-10 Average

1 105 USHP II 6.517 7.44424 7.7624 7.9598 9.14725 7.77

2 3 Pahalgam 0.68289 0.84003 0.72775 0.72377 1.31687 0.86

3 7.5 Chenani III 0.58191 1.2781 1.06488 1.2014 1.31514 1.09

4 9 Sewa III 0.72198 1.16133 1.141 1.26656 3.22804 1.50

5 3 Igo Mercellong 0.05245 0.83891 0.9259 1.29844 1.49244 0.92

6 0.75 Marpachoo 0 0.30708 0.478 0.40999 0.34365 0.31

7 1 Haftal 0 0.33078 0.33733 0.44419 0.38061 0.30

8 1 Bhaderwah 0.11993 0.24725 0.1599 0.13905 0.10447 0.15

Total of 8 HEPs 8.67611 12.44772 12.59716 13.4432 17.32847 12.90


J&K State Power Development Corporation Ltd. Page xxii

Sl. No

Installed capacity

Name of Project

Total O&M Expenditure

(MW) FY 2005-

06 FY 2006-07 FY 2007-

08 FY 2008-09 FY 2009-10 Average

1 22.6 USHP I 2.59207 2.79823 4.05957 4.38928 4.32024 3.631878

2 15 Ganderbal 2.27062 2.67904 2.81026 2.85853 3.75057 2.873804

3 105 LJHP 7.85825 8.21648 9.00819 9.91322 10.67764 9.134756

4 2 Karnah 1.36727 1.75605 1.85159 1.96311 2.14994 1.817592

5 2 Chenani II 0.23566 0.20169 0.27287 0.3948 0.3507 0.291144

6 23.3 Chenani I 2.34965 2.74544 2.82896 3.14041 2.90313 2.793518

7 3.75 Iqbal 1.26613 1.53542 1.77765 1.81785 1.80394 1.640198

8 0.1 Sumoor 0.05756 0.05966 0.07434 0.06451 0.1389 0.078994

9 0.4 Hunder 0.12345 0.23864 0.22679 0.18605 0.20145 0.195276

10 0.3 Bazgo 0.12587 0.15523 0.22259 0.13955 0.138 0.156248

Total of 10 HEPs 18.24653 20.38588 23.13281 24.86731 26.43451 22.613408

G. TOTAL OF 8 + 10 HEPs 26.92264 32.8336 35.72997 38.31051 43.76298 35.51194


J&K State Power Development Corporation Ltd. Page xxiii

Schedule A- 1

Consolidated O&M Expenses for project and Appropriation of Corporate Expenses for the year ended 2005 – 06

(` In Crores)

Sl. No

Installed capacity

(MW)

Name of Project

Salary A/c

Repair & Maintenance

Office Expences

Legal, Rates & Taxes

Electricity Charges

Travelling & POL

Misc. Expences

Grand Total

1 105 USHP II 5.4201 0.9694 0.0248 0.0325 0.0000 0.0580 0.0121 6.5170

2 3 Pahalgam 0.6540 0.0247 0.0012 0.0002 0.0000 0.0024 0.0004 0.6829

3 7.5 Chenani III 0.3191 0.2510 0.0032 0.0027 0.0000 0.0051 0.0009 0.5819

4 9 Sewa III 0.6177 0.0924 0.0032 0.0022 0.0000 0.0059 0.0006 0.7220

5 3 Igo Mercellong 0.0381 0.0007 0.0048 0.0002 0.0000 0.0043 0.0043 0.0525

6 0.75 Marpachoo 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

7 1 Haftal 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

8 1 Bhaderwah 0.0133 0.1053 0.0004 0.0003 0.0000 0.0007 0.0001 0.1199

Total of 8 HEPs 7.0623 1.4434 0.0376 0.0381 0.0000 0.0763 0.0184 8.6761


J&K State Power Development Corporation Ltd. Page xxiv

Sl. No

Installed capacity

(MW) Name of Project

Salary A/c


Office Expences


Electricity Charges

Travelling & POL

Misc. Expences

Grand Total

9 22.6 USHP I 2.08774 0.45835 0.01148 0.00181 0 0.01916 0.01353 2.59207

10 15 Ganderbal 1.98729 0.25111 0.01027 0.0012 0 0.0144 0.00636 2.27063

11 105 LJHP 6.97784 0.74283 0.0314 0.01049 0 0.07035 0.02535 7.85826

12 2 Karnah 1.2078 0.1357 0.0028 0.00017 0 0.00483 0.01598 1.36728

13 2 Chenani II 0.19679 0.03458 0.0013 0.00075 0 0.00197 0.00026 0.23565

14 23.3 Chenani I 2.12975 0.16647 0.01968 0.00969 0.00285 0.01659 0.00463 2.34966

15 3.75 Iqbal 0.80317 0.4345 0.0104 0.0008 0 0.01255 0.0047 1.26612

16 0.1 Sumoor 0.05313 0.00043 0.00286 0.00002 0 0.00096 0.00015 0.05755

17 0.4 Hunder 0.09438 0.02759 0.00064 0.00003 0 0.00051 0.0003 0.12345

18 0.3 Bazgo 0.07913 0.04488 0.00098 0.00002 0 0.00043 0.00043 0.12587

Total of 10 HEPs 15.61702 2.29644 0.09181 0.02498 0.00285 0.14175 0.07169 18.2465

G. TOTAL OF 8 + 10 HEPs 22.6793 3.73984 0.12944 0.06311 0.00285 0.21807 0.09005 26.9227


J&K State Power Development Corporation Ltd. Page xxv

Schedule A – 2


` In Crores

Sl. No

Installed capacity


Salary A/c


Office Expenses


Electricity Charges

Travelling & POL

Misc. Expenses

Grand Total

1 105 USHP II 6.46704 0.72892 0.11174 0.05092 0 0.06614 0.01948 7.44424

2 3 Pahalgam 0.56376 0.26896 0.00317 0.00065 0 0.0029 0.00059 0.84003

3 7.5 Chenani III 0.94677 0.28542 0.0309 0.00432 0.00092 0.00807 0.0017 1.2781

4 9 Sewa III 0.97586 0.15181 0.01222 0.00611 0.0011 0.0114 0.00282 1.16132

5 3 Igo Mercellong 0.60577 0.20129 0.02121 0.00065 0 0.00906 0.00092 0.8389

6 0.75 Marpachoo 0.23145 0.0598 0.01165 0.00018 0 0.00348 0.00052 0.30708

7 1 Haftal 0.30861 0.00107 0.01553 0.00023 0 0.00464 0.0007 0.33078

8 1 Bhaderwah 0.1047 0.14014 0.00111 0.00033 0.00012 0.00068 0.00018 0.24726

Total of 8 HEPs 10.20396 1.83741 0.20753 0.06339 0.00214 0.10637 0.02691 12.4477


J&K State Power Development Corporation Ltd. Page xxvi

Sl. No

Installed capacity


Salary A/c


Office Expenses


Electricity Charges

Travelling & POL

Misc. Expenses

Grand Total

9 22.6 USHP I 2.08258 0.65871 0.02743 0.00527 0 0.02133 0.00291 2.79823

10 15 Ganderbal 2.05935 0.57616 0.02 0.00343 0 0.01791 0.00219 2.67904

11 105 LJHP 7.14569 0.87078 0.09855 0.02472 0 0.0641 0.01264 8.21648

12 2 Karnah 1.6574 0.08582 0.00697 0.00063 0 0.00332 0.00191 1.75605

13 2 Chenani II 0.18281 0.01429 0.00169 0.00083 0.00024 0.00142 0.0004 0.20168

14 23.3 Chenani I 2.29264 0.40289 0.01513 0.00871 0 0.023 0.00306 2.74543

15 3.75 Iqbal 1.15727 0.29902 0.05824 0.00088 0 0.0174 0.00261 1.53542

16 0.1 Sumoor 0.05515 0.00043 0.00271 0.00002 0 0.00115 0.0002 0.05966

17 0.4 Hunder 0.14061 0.07172 0.02083 0.00009 0 0.0046 0.00079 0.23864

18 0.3 Bazgo 0.08384 0.06644 0.00062 0.00406 0 0.00018 0.00009 0.15523

Total of 10 HEPs 16.85734 3.04626 0.25217 0.04864 0.00024 0.15441 0.0268 20.3859

G. TOTAL OF 8 + 10 HEPs 27.0613 4.88367 0.4597 0.11203 0.00238 0.26078 0.05371 32.8336


J&K State Power Development Corporation Ltd. Page xxvii

Schedule A – 3


` In Crores

Sl. No.

Installed capacity


Salary A/c


Office Expenses


Electricity Charges

Travelling & POL

Misc. Expenses

Grand Total

1 105 USHP II 6.59169 0.77189 0.09768 0.10083 0.08901 0.0866 0.02469 7.76239

2 3 Pahalgam 0.50265 0.20108 0.0074 0.00285 0.0002 0.00317 0.0104 0.72775

3 7.5 Chenani III 0.8644 0.17061 0.00741 0.01 0.0008 0.00917 0.0025 1.06489

4 9 Sewa III 1.04729 0.05751 0.00854 0.01247 0.00096 0.01099 0.00324 1.141

5 3 Igo Mercellong 0.69826 0.08129 0.10542 0.02163 0 0.017 0.00229 0.92589

6 0.75 Marpachoo 0.23357 0.0874 0.14858 0.0033 0 0.00467 0.00049 0.47801

7 1 Haftal 0.29142 0.00653 0.02811 0.0044 0 0.00622 0.00065 0.33733

8 1 Bhaderwah 0.11133 0.0447 0.00092 0.00132 0.00011 0.0012 0.00032 0.1599

Total of 8 HEPs 10.34061 1.42101 0.40406 0.1568 0.09108 0.13902 0.04458 12.5972


J&K State Power Development Corporation Ltd. Page xxviii

Sl. No

Installed capacity


Salary A/c


Office Expenses


Electricity Charges

Travelling & POL

Misc. Expenses

Grand Total

9 22.6 USHP I 3.26536 0.64166 0.03229 0.04754 0.02943 0.03471 0.00857 4.05956

10 15 Ganderbal 2.43256 0.31064 0.01911 0.01456 0.01299 0.01527 0.00513 2.81026

11 105 LJHP 7.8492 0.7985 0.08371 0.10119 0.06473 0.08185 0.029 9.00818

12 2 Karnah 1.71134 0.11953 0.00746 0.0019 0.00509 0.00528 0.00099 1.85159

13 2 Chenani II 0.24729 0.01789 0.00166 0.00267 0.00021 0.00254 0.00061 0.27287

14 23.3 Chenani I 2.58097 0.15843 0.01935 0.03107 0.00247 0.02958 0.00708 2.82895

15 3.75 Iqbal 1.16785 0.20464 0.3629 0.01649 0 0.02333 0.00245 1.77766

16 0.1 Sumoor 0.02675 0.01271 0.03351 0.00072 0 0.00057 0.00008 0.07434

17 0.4 Hunder 0.10644 0.01084 0.10406 0.00288 0 0.00227 0.00031 0.2268

18 0.3 Bazgo 0.07983 0.03813 0.10054 0.00216 0 0.0017 0.00023 0.22259

Total of 10 HEPs 19.46759 2.31297 0.76459 0.22118 0.11492 0.1971 0.05445 23.1328

TOTAL OF 8 + 10 HEPs 29.8082 3.73398 1.16865 0.37798 0.206 0.33612 0.09903 35.730


J&K State Power Development Corporation Ltd. Page xxix

Schedule A -4


` In Crores

Sl. No

Installed capacity


Salary A/c


Office Expenses


Electricity Charges

Travelling & POL

Misc. Expenses

Grand Total

1 105 USHP II 6.72103 0.85736 0.09077 0.09242 0.10416 0.07708 0.01698 7.9598

2 3 Pahalgam 0.44333 0.26741 0.00602 0.00264 0 0.00382 0.00055 0.72377

3 7.5 Chenani III 0.84854 0.32278 0.00763 0.01011 0 0.01009 0.00226 1.20141

4 9 Sewa III 1.05246 0.17781 0.0099 0.01131 0 0.01191 0.00318 1.26657

5 3 Igo Mercellong 0.79959 0.47183 0.01472 0.00396 0 0.00647 0.00188 1.29845

6 0.75 Marpachoo 0.24603 0.15337 0.00767 0.00084 0 0.00157 0.00051 0.40999

7 1 Haftal 0.32804 0.10202 0.01022 0.00112 0 0.0021 0.00068 0.44418

8 1 Bhaderwah 0.10999 0.02499 0.0012 0.00126 0 0.00132 0.00029 0.13905

Total of 8 HEPs 10.54901 2.37757 0.14813 0.12366 0.10416 0.11436 0.02633 13.4432


J&K State Power Development Corporation Ltd. Page xxx

Sl. No

Installed capacity


Salary A/c


Office Expenses


Electricity Charges

Travelling & POL

Misc. Expenses

Grand Total

9 22.6 USHP I 3.66575 0.48985 0.03434 0.16548 0 0.02808 0.00579 4.38929

10 15 Ganderbal 2.5987 0.22297 0.00944 0.01355 0 0.01132 0.00256 2.85854

11 105 LJHP 8.72776 0.91632 0.07044 0.09642 0 0.08415 0.01813 9.91322

12 2 Karnah 1.76112 0.18845 0.00665 0.00186 0 0.00404 0.00098 1.9631

13 2 Chenani II 0.27275 0.11542 0.00136 0.0027 0 0.00212 0.00046 0.39481

14 23.3 Chenani I 2.85751 0.20567 0.01582 0.0314 0 0.02464 0.00537 3.14041

15 3.75 Iqbal 1.23016 0.53474 0.03833 0.00421 0 0.00786 0.00255 1.81785

16 0.1 Sumoor 0.02665 0.03695 0.00049 0.00013 0 0.00022 0.00006 0.0645

17 0.4 Hunder 0.10661 0.07584 0.00196 0.00053 0 0.00086 0.00025 0.18605

18 0.3 Bazgo 0.07996 0.05688 0.00147 0.0004 0 0.00065 0.00019 0.13955

Total of 10 HEPs 21.32697 2.84309 0.1803 0.31668 0 0.16394 0.03634 24.8673

TOTAL OF 8 + 10 HEPs 31.87598 5.22066 0.32843 0.44034 0.10416 0.2783 0.06267 38.3105


J&K State Power Development Corporation Ltd. Page xxxi

Schedule A-5


` In Crores

Sl. No

Installed capacity


Salary A/c


Office Expenses


Electricity Charges

Travelling & POL

Misc. Expenses

Grand Total

1 105 USHP II 6.94061 1.70167 0.12424 0.0827 0.00387 0.06728 0.22689 9.14726

2 3 Pahalgam 0.82844 0.00136 0.47673 0.00144 0.00011 0.00134 0.00745 1.31687

3 7.5 Chenani III 0.98174 0.27246 0.01219 0.01022 0 0.01005 0.02848 1.31514

4 9 Sewa III 3.06314 0.00453 0.10462 0.00794 0 0.02037 0.02744 3.22804

5 3 Igo Mercellong 0.59108 0.80184 0.01759 0.00663 0 0.06672 0.00858 1.49244

6 0.75 Marpachoo 0.33854 0.00032 0.00181 0.00026 0 0.00101 0.00172 0.34366

7 1 Haftal 0.21759 0.15663 0.00241 0.00034 0 0.00134 0.00229 0.3806

8 1 Bhaderwah 0.09825 0.0005 0.00138 0.00063 0 0.00123 0.00247 0.10446

Total of 8 HEPs 13.05939 2.93931 0.74097 0.11016 0.00398 0.16934 0.30532 17.3285


J&K State Power Development Corporation Ltd. Page xxxii

Sl. No

Installed capacity


Salary A/c


Office Expenses


Electricity Charges

Travelling & POL

Misc. Expenses

Grand Total

9 22.6 USHP I 3.10488 0.6763 0.0219 0.00862 0.44053 0.01841 0.04959 4.32023

10 15 Ganderbal 3.28773 0.40085 0.01336 0.00714 0.00055 0.00864 0.03229 3.75056

11 105 LJHP 9.85358 0.3734 0.11011 0.04352 0.00387 0.06832 0.22483 10.6776

12 2 Karnah 1.99317 0.13975 0.00384 0.00369 0.00007 0.0049 0.00451 2.14993

13 2 Chenani II 0.2618 0.07266 0.00325 0.00273 0 0.00268 0.0076 0.35072

14 23.3 Chenani I 2.78105 0.00999 0.02445 0.01281 0 0.0218 0.05304 2.90314

15 3.75 Iqbal 1.10404 0.56133 0.0831 0.00449 0 0.03841 0.01256 1.80393

16 0.1 Sumoor 0.12738 0.01077 0.00028 0.00003 0 0.0002 0.00024 0.1389

17 0.4 Hunder 0.1681 0.03032 0.0011 0.00014 0 0.00081 0.00097 0.20144

18 0.3 Bazgo 0.12563 0.01011 0.00083 0.0001 0 0.00061 0.00073 0.13801

Total of 10 HEPs 22.80736 2.28548 0.26222 0.08327 0.44502 0.16478 0.38636 26.4345

TOTAL OF 8 + 10 HEPs 35.86675 5.22479 1.00319 0.19343 0.449 0.33412 0.69168 43.763


J&K State Power Development Corporation Ltd. Page xxxiii

Schedule - B

Administrative & Other Expenses for the Corporation as per books of accounts

(` In Crores)

Financial Year 2005-06 2006-07 2007-08 2008-09 2009-10 Average

Total Amount 59.69 63.28 59.6 58.1 70.30 62.19


J&K State Power Development Corporation Ltd. Page xxxiv

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