Posturi concurs,perioadă determinată (după disciplină) ARGEȘ 24.07.2015
APGCL Tariff Order dated 24.07.2015 Tariff Order dated 24.07.2015.pdf · 6.4 GAS SUPPLY POSITION...
Transcript of APGCL Tariff Order dated 24.07.2015 Tariff Order dated 24.07.2015.pdf · 6.4 GAS SUPPLY POSITION...
ASSAM ELECTRICITY REGULATORY COMMISSION
(AERC)
TARIFF ORDER
TRUING UP OF FY 2013-14, APR OF FY 2014-15 AND
ARR & TARIFF FOR FY 2015-16
Assam Power Generation Corporation Limited (APGCL)
Petition No. 9/2015
ASSAM ELECTRICITY REGULATORY COMMISSION
A.S.E.B. Campus, Dwarandhar,
G. S. Road, Sixth Mile, Guwahati - 781 022
Website: www.aerc.gov.in Email: [email protected]
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CONTENTS
ORDER
1 INTRODUCTION ........................................................................... 1
1.1 CONSTITUTION OF THE COMMISSION ............................................................ 1
1.2 TARIFF RELATED FUNCTIONS OF THE COMMISSION ................................... 1
1.3 BACKGROUND AND BRIEF HISTORY ............................................................... 2
1.4 PROCEDURAL HISTORY ................................................................................... 5
1.5 ADMISSION OF PETITION AND HEARING PROCESS ...................................... 5
1.6 STATE ADVISORY COMMITTEE MEETING ....................................................... 7
2 SUMMARY OF ARR AND TARIFF PETITION .............................. 8
2.1 TRUE UP FOR FY 2013-14 ................................................................................. 8
2.2 APR FOR FY 2014-15 AND REVISED ARR AND GENERATION TARIFF FOR
FY 2015-16 ....................................................................................................................... 9
3 SUMMARY OF OBJECTIONS RAISED, RESPONSES OF
APGCL AND COMMISSION’S COMMENTS ...................................... 12
4 TRUING UP FOR FY 2013-14 ..................................................... 38
4.1 METHODOLOGY FOR TRUING UP .................................................................. 38
4.2 BACKGROUND ................................................................................................. 39
4.3 TRUE-UP FOR FY 2013-14 ............................................................................... 39
4.3.1 OPERATING CAPACITY ................................................................................... 39
4.3.2 AVAILABILITY / CAPACITY INDEX ................................................................... 40
4.3.3 PLANT LOAD FACTOR (PLF) ........................................................................... 41
4.3.4 AUXILIARY ENERGY CONSUMPTION ............................................................. 42
4.3.5 GROSS GENERATION AND NET GENERATION ............................................. 44
4.3.6 GROSS STATION HEAT RATE (GSHR) ........................................................... 45
4.3.7 FUEL COST ....................................................................................................... 47
4.3.8 INCENTIVE FOR GENERATION ....................................................................... 48
4.3.9 EMPLOYEE EXPENSES ................................................................................... 50
4.3.10 REPAIR AND MAINTENANCE (R&M) EXPENSES ........................................... 50
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4.3.11 ADMINISTRATION AND GENERAL (A&G) EXPENSES ................................... 51
4.3.12 DEPRECIATION ................................................................................................ 51
4.3.13 INTEREST AND FINANCE CHARGES .............................................................. 54
4.3.14 INTEREST ON WORKING CAPITAL ................................................................. 55
4.3.15 PRIOR PERIOD ITEMS ..................................................................................... 56
4.3.16 RETURN ON EQUITY (ROE) ............................................................................ 57
4.3.17 INCOME TAX..................................................................................................... 57
4.3.18 OTHER INCOME ............................................................................................... 58
4.3.19 OTHER RECEIPT .............................................................................................. 58
4.3.20 REVENUE FROM SALE OF POWER ................................................................ 58
4.3.21 SUMMARY OF TRUE-UP FOR FY 2013-14 ...................................................... 59
5 ANNUAL PERFORMANCE REVIEW FOR FY 2014-15 .............. 60
5.1 ANNUAL PERFORMANCE REVIEW ................................................................. 60
5.1.1 AVAILABILITY / CAPACITY INDEX ................................................................... 60
5.1.2 PLANT LOAD FACTOR (PLF) ........................................................................... 61
5.1.3 AUXILIARY ENERGY CONSUMPTION ............................................................. 61
5.1.4 GROSS GENERATION AND NET GENERATION ............................................. 62
5.1.5 GROSS STATION HEAT RATE ......................................................................... 62
5.1.6 FUEL COST ....................................................................................................... 64
5.1.7 EMPLOYEE EXPENSES ................................................................................... 65
5.1.8 REPAIR AND MAINTENANCE EXPENSES (R&M EXPENSES) ....................... 65
5.1.9 ADMINISTRATION AND GENERAL EXPENSES (A&G EXPENSES) ............... 66
5.1.10 DEPRECIATION ................................................................................................ 67
5.1.11 INVESTMENT PLAN.......................................................................................... 68
5.1.12 INTEREST AND FINANCE CHARGES .............................................................. 70
5.1.13 INTEREST ON WORKING CAPITAL ................................................................. 71
5.1.14 INCOME TAX..................................................................................................... 71
5.1.15 RETURN ON EQUITY (ROE) ............................................................................ 72
5.1.16 OTHER INCOME ............................................................................................... 72
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5.1.17 REVENUE FROM SALE OF POWER ................................................................ 73
5.1.18 REVIEW OF ARR FOR FY 2014-15 .................................................................. 74
6 REVISED ARR AND GENERATION TARIFF FOR FY 2015-16 . 75
6.1 INTRODUCTION ............................................................................................... 75
6.2 GENERATION CAPACITY FOR FY 2015-16 ..................................................... 75
6.3 BRIEF STATUS OF APGCL POWER STATIONS ............................................. 75
6.3.1 NAMRUP THERMAL POWER STATION (NTPS) (119.5 MW) ........................... 76
6.3.2 LAKWA THERMAL POWER STATION (LTPS) (157.2 MW) .............................. 76
6.3.3 KARBI LANGPI HYDRO ELECTRIC PROJECT (KLHEP) (100 MW) ................. 77
6.3.4 MYNTRIANG SHEP STAGE I (9 MW = 3X3 MW) & STAGE II (4.5 MW= 3X1.5
MW) ................................................................................................................... 77
6.3.5 NAMRUP REPLACEMENT POWER PROJECT (NRPP) ................................... 77
6.4 GAS SUPPLY POSITION .................................................................................. 77
6.5 REVISED ARR AND GENERATION TARIFF FOR FY 2015-16 ......................... 78
6.5.1 AVAILABILITY / CAPACITY INDEX ................................................................... 78
6.5.2 PLANT LOAD FACTOR (PLF) ........................................................................... 78
6.5.3 AUXILIARY ENERGY CONSUMPTION ............................................................. 79
6.5.4 GROSS GENERATION AND NET GENERATION ............................................. 80
6.5.5 GROSS STATION HEAT RATE (GSHR) ........................................................... 82
6.5.6 FUEL COST ....................................................................................................... 82
6.5.7 OPERATION AND MAINTENANCE (O&M) EXPENSES ................................... 85
6.5.8 FINANCING OF THE CAPITAL INVESTMENT .................................................. 90
6.5.9 DEPRECIATION ................................................................................................ 93
6.5.10 INTEREST AND FINANCE CHARGES .............................................................. 96
6.5.11 INTEREST ON WORKING CAPITAL ................................................................. 97
6.5.12 RETURN ON EQUITY (ROE) ............................................................................ 98
6.5.13 SPECIAL R&M EXPENSES (FOR KHLEP, LTPS UNIT 2 & UNIT 7) VIDE
REVIEW ORDER DATED JULY 07, 2014 .......................................................... 99
6.5.14 INCOME TAX..................................................................................................... 99
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6.5.15 OTHER INCOME ............................................................................................. 100
6.5.16 SUMMARY ...................................................................................................... 100
6.5.17 GENERATION TARIFF FOR FY 2015-16 ........................................................ 101
6.5.18 EFFECTUATION OF GENERATION TARIFF .................................................. 101
7 COMPLIANCE OF DIRECTIVES & NEW DIRECTIVES ........... 102
7.1 COMPLIANCE OF OLD DIRECTIVES ............................................................. 102
7.2 NEW DIRECTIVES .......................................................................................... 107
ANNEXURE-1 .................................................................................... 108
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TABLES
TABLE 2.1: SUMMARY OF TRUE-UP FOR FY 2013-14 AS SUBMITTED BY APGCL (RS.
CRORE) ................................................................................................................................ 8
TABLE 2.2: APR FOR FY 2014-15 AS SUBMITTED BY APGCL (RS. CRORE) ................... 9
TABLE 4.1: OPERATING GENERATION CAPACITY OF APGCL FOR FY 2013-14 .......... 40
TABLE 4.2: TARGET AVAILABILITY / CAPACITY INDEX FOR RECOVERY OF FULL
FIXED CHARGES ............................................................................................................... 40
TABLE 4.3: ACTUAL AVAILABILITY / CAPACITY INDEX FOR FY 2013-14 AS SUBMITTED
BY APGCL (%) .................................................................................................................... 40
TABLE 4.4: TARGET PLF FOR EFFICIENCY INCENTIVE ................................................. 41
TABLE 4.5: PLF APPROVED BY THE COMMISSION AND ACTUALS AS SUBMITTED BY
APGCL FOR FY 2013-14 .................................................................................................... 42
TABLE 4.6: PLF APPROVED FOR TRUING UP FOR FY 2013-14 (%) ............................... 42
TABLE 4.7: AUXILIARY ENERGY CONSUMPTION FOR FY 2013-14 ............................... 43
TABLE 4.8: BREAK-UP OF AUXILIARY ENERGY CONSUMPTION SUBMITTED BY
APGCL FOR FY 2013-14 .................................................................................................... 43
TABLE 4.9: AUXILIARY ENERGY CONSUMPTION APPROVED FOR TRUING UP FOR FY
2013-14 ............................................................................................................................... 44
TABLE 4.10: GROSS GENERATION AND NET GENERATION FOR FY 2013-14(MU) ..... 44
TABLE 4.11: GROSS AND NET GENERATION APPROVED FOR TRUING UP FOR FY
2013-14(MU) ....................................................................................................................... 45
TABLE 4.12: GROSS STATION HEAT RATE FOR FY 2013-14(KCAL/KWH) .................... 46
TABLE 4.13: ACTUAL WEIGHTED AVERAGE GCV AND PRICE OF GAS CONSIDERED
BY THE COMMISSION FOR TRUING UP FOR FY 2013-14 .............................................. 47
TABLE 4.14: APPROVED FUEL COST FOR TRUING UP FOR FY 2013-14 ...................... 48
TABLE 4.15: INCENTIVE COMPUTATION FOR THERMAL STATIONS FOR FY 2013-14 49
TABLE 4.16: INCENTIVE COMPUTATION FOR HYDRO STATION FOR FY 2013-14 ....... 49
TABLE 4.17: DEPRECIATION APPROVED FOR TRUE-UP FOR FY 2013-14(RS. CRORE)
............................................................................................................................................ 53
TABLE 4.18: DEPRECIATION ON ASSETS CREATED OUT OF GRANTS/SUBSIDIES AND
CONSUMER CONTRIBUTION (RS. CRORE) .................................................................... 54
TABLE 4.19: INTEREST AND FINANCE CHARGES APPROVED BY THE COMMISSION
FOR FY 2013-14(RS. CRORE) ........................................................................................... 55
TABLE 4.20: INTEREST ON WORKING CAPITAL APPROVED BY THE COMMISSION
FOR FY 2013-14(RS. CRORE) ........................................................................................... 56
TABLE 4.21: OTHER INCOME (RS. CRORE) .................................................................... 58
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TABLE 4.222: SUMMARY OF TRUE-UP FOR FY 2013-14 (RS. CRORE).......................... 59
TABLE 5.1: AVAILABILITY / CAPACITY INDEX FOR FY 2014-15 ..................................... 60
TABLE 5.2: PLANT LOAD FACTOR FOR FY 2014-15 ....................................................... 61
TABLE 5.3: AUXILIARY ENERGY CONSUMPTION FOR FY 2014-15 ............................... 61
TABLE 5.4: GROSS GENERATION AND NET GENERATION FOR FY 2014-15 (MU) ...... 62
TABLE 5.5: GROSS STATION HEAT RATE FOR FY 2013-14 (KCAL/KWH) ..................... 63
TABLE 5.6: GSHR COMPUTATION FOR APGCL THERMAL POWER PLANTS FOR FY
2014-15 ............................................................................................................................... 63
TABLE 5.7: WEIGHTED AVERAGE GCV AND LANDED PRICE OF GAS FOR FY 2014-15
............................................................................................................................................ 64
TABLE 5.8: FUEL COST CALCULATION FOR FY 2014-15 ............................................... 64
TABLE 5.9: FUEL COST FOR FY 2014-15 (RS. CRORE) .................................................. 65
TABLE 5.10: EMPLOYEE EXPENSES FOR FY 2014-15(RS. CRORE) .............................. 65
TABLE 5.11: R&M EXPENSES FOR FY 2014-15 (RS. CRORES) ...................................... 66
TABLE 5.12: A&G EXPENSES FOR FY 2014-15 (RS. CRORE) ......................................... 67
TABLE 5.13: DEPRECIATION FOR FY 2014-15(RS. CRORE) ........................................... 68
TABLE 5.14 INVESTMENT PLAN FOR FY 2014-15 ........................................................... 68
TABLE 5.15: INTEREST AND FINANCE CHARGES FOR FY 2014-15(RS. CRORE) ........ 71
TABLE 5.16: INTEREST ON WORKING CAPITAL FOR FY 2014-15(RS. CRORES) ......... 71
TABLE 5.17: INCOME TAX FOR FY 2014-15(RS. CRORE) ............................................... 72
TABLE 5.18: RETURN ON EQUITY FOR FY 2014-15(RS. CRORE) .................................. 72
TABLE 5.19: OTHER INCOME FOR FY 2014-15(RS. CRORE) .......................................... 73
TABLE 5.20: SUMMARY OF APR FOR FY 2014-15(RS. CRORE) ..................................... 74
TABLE 6.1: OPERATING GENERATION CAPACITY FOR FY 2015-16 ............................. 75
TABLE 6.2: GAS SUPPLY POSITION FOR FY 2015-16 ..................................................... 78
TABLE 6.3: AVAILABILITY / CAPACITY INDEX FOR FY 2015-16 ..................................... 78
TABLE 6.4: REVISED PLANT LOAD FACTOR PROJECTED FOR FY 2015-16 ................. 79
TABLE 6.5: APPROVED PLANT LOAD FACTOR FOR FY 2015-16 ................................... 79
TABLE 6.6: REVISED AUXILIARY ENERGY CONSUMPTION PROJECTED FOR FY 2015-
16 ........................................................................................................................................ 80
TABLE 6.7: APPROVED AUXILIARY ENERGY CONSUMPTION FOR FY 2015-16 ........... 80
TABLE 6.8: REVISED GROSS GENERATION AND NET GENERATION PROJECTED FOR
FY 2015-16 (MU)................................................................................................................. 81
TABLE 6.9: APPROVED GROSS GENERATION AND NET GENERATION FOR FY 2015-
16 (MU) ............................................................................................................................... 81
TABLE 6.10: REVISED GROSS STATION HEAT RATE PROJECTED FOR FY 2015-16
(KCAL/KWH) ....................................................................................................................... 82
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TABLE 6.11: APPROVED GROSS STATION HEAT RATE FOR FY 2015-16 (KCAL/KWH)
................. 82
TABLE 6.12: WEIGHTED AVERAGE GCV AND LANDED PRICE OF GAS FOR FY 2015-16
............................................................................................................................................ 83
TABLE 6.13: APPROVED WEIGHTED AVERAGE GCV AND LANDED PRICE OF GAS
FOR FY 2015-16 ................................................................................................................. 84
TABLE 6.14: APPROVED FUEL COST FOR FY 2015-16 ................................................... 84
TABLE 6.15: REVISED EMPLOYEE EXPENSES PROJECTED FOR FY 2015-16 (RS.
CRORE) .............................................................................................................................. 86
TABLE 6.16: APPROVED EMPLOYEE EXPENSES FOR FY 2015-16 (RS. CRORE) ........ 87
TABLE 6.17: REVISED R&M EXPENSES PROJECTED FOR FY 2015-16 (RS. CRORE) . 87
TABLE 6.18: APPROVED R&M EXPENSES FOR FY 2015-16(RS. CRORE) ..................... 88
TABLE 6.19: REVISED A&G EXPENSES PROJECTED FOR FY 2015-16 (RS. CRORE) .. 89
TABLE 6.20: APPROVED A&G EXPENSES FOR FY 2015-16(RS. CRORE) ..................... 89
TABLE 6.21: APPROVED INVESTMENT PLAN FOR FY 2015-16 (RS. CRORE) ............... 90
TABLE 6.22: FINANCING OF THE CAPITAL INVESTMENT FOR FY 2015-16 APPROVED
BY THE COMMISSION IN THE MYT ORDER DATED NOVEMBER 21, 2013 ................... 91
TABLE 6.23: REVISED FINANCING PLAN FOR CAPITAL INVESTMENT FOR FY 2015-16
(RS. CRORE) ...................................................................................................................... 91
TABLE 6.24: APPROVED DEPRECIATION FOR FY 2015-16(RS. CRORE) ...................... 95
TABLE 6.25: APPROVED DEPRECIATION FOR FY 2015-16 ............................................ 96
TABLE 6.26: APPROVED INTEREST AND FINANCE CHARGES FOR FY 2015-16 (RS.
CRORE) .............................................................................................................................. 97
TABLE 6.27: INTEREST ON WORKING CAPITAL PROJECTED BY APGCL FOR FY 2015-
16 (RS. CRORE) ................................................................................................................. 97
TABLE 6.28: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2015-16 (RS.
CRORE) .............................................................................................................................. 98
TABLE 6.29: APPROVED RETURN ON EQUITY FOR FY 2015-16(RS. CRORE) ............. 99
TABLE 6.30: APPROVED ARR FOR FY 2015-16 (RS. CRORE) ...................................... 100
TABLE 6.31: REVISED APPROVED GENERATION TARIFF FOR FY 2015-16 ............... 101
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List of Abbreviations
A&G Administrative & General ABT Availability Based Tariff ADB Asian Development Bank AEGCL Assam Electricity Grid Corporation Limited AERC Assam Electricity Regulatory Commission APC Auxiliary Power Consumption
APDCL Assam Power Distribution Company Limited APDRP Accelerated Power Development and Reforms Programme
APGCL Assam Power Generation Corporation Limited APM Administered Price Mechanism APR Annual Performance Review ARR Annual Revenue Requirement ASEB Assam State Electricity Board BTPP Bongaigaon Thermal Power Plant CEA Central Electricity Authority CTPS Chandrapur Thermal Power Station EPC Engineering Procurement Construction FPPPA Fuel and Power Purchase Price Adjustment FY Financial Year GAIL Gas Authority of India Limited GCV Gross Calorific Value GFA Gross Fixed Assets GoA Government of Assam GoI Government of India GSHR Gross Station Heat Rate IDC Interest During Construction KLHEP Karbi Langpi Hydro Electric Project kV Kilo Volt kVA Kilo Volt Ampere kW Kilo Watt kWh Kilo Watt Hour LRPP Lakwa Replacement Power Project LTPS Lakwa Thermal Power Station MAT Minimum Alternate Tax Misc Miscellaneous MMSCMD Million Metric Standard Cubic Metres per day MoP Ministry of Power MU Million Unit MW Mega Watt MYT Multi-Year-Tariff NCV Net Calorific value NPC National Productivity Council
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NRPP Namrup Replacement Power Project NTPC National Thermal Power Corporation NTPS Namrup Thermal Power Station PAF Plant Availability Factor PGCIL Power Grid Corporation of India Limited PLF Plant Load Factor PPAC Petroleum Planning and Analysis Cell R&M Repairs and Maintenance ROE Return on Equity Rs. Rupees SHR Station Heat Rate T.C. Transportation Cost TEC Techno Economic Clearance WHRU Waster Heat Recovery Unit
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ASSAM ELECTRICITY REGULATORY COMMISSION
Guwahati
Present
Shri Naba Kumar Das, Chairperson
Shri Dipak Chakravarty, Member
Petition No. 9/2015
Assam Power Generation Corporation Limited (APGCL) -Petitioner
ORDER
(Passed on July 24, 2015)
(1) The Commission vide its Order dated November 21, 2013, approved the Multi Year
Tariff for the Assam Power Generation Corporation Limited (APGCL) for the period of
FY 2013-14 to FY 2015-16.
(2) Regulation 6.1 of the Assam Electricity Regulatory Commission (Terms and
Conditions for Determination of Tariff) Regulations, 2006 (hereinafter referred to as
the AERC Tariff Regulations, 2006) specifies that the generating company shall file a
Tariff Petition annually before the Commission to determine changes to the current
tariff not later than 1stDecember,except in case an extension is granted by the
Commission upon application.
(3) The APGCL filed a Misc. Petition on November 25, 2014 praying for extension of
time to submit the Petition for approval of Annual Revenue Requirement (hereinafter
called as ‘ARR’) and Tariff for FY 2015-16 along with Annual Performance
Review(herein after called as ‘APR’) of FY 2014-15 up to December 20, 2014.The
Commission, vide its Order dated December 06, 2014, granted extension of time up
to December20, 2014, for filing of Petition for Truing Up of FY 2013-14, Annual
xi
Performance Review (hereinafter called as ‘APR’) of FY 2014-15 and the approval of
revised ARR and Tariff for FY 2015-16..
(4) The APGCL filed the Petition (Petition No.9/2015) for Truing Up of FY 2013-14, APR
of FY 2014-15 and approval of Revised ARR and tariff for FY 2015-16 on December
20, 2014 under Section 62 of the Electricity Act, 2003, and Regulation 5, 6, & 7 of the
AERC Tariff Regulations, 2006.However, the APGCL submitted the Audited
Statement of Accounts for FY 2013-14on April 07, 2015.
(5) The Commission, on preliminary scrutiny, found that the above Petitions filed by the
APGCL were incomplete with regard to some material information. Therefore,
additional data and clarifications on the Petition were sought for from the APGCL
from time to time and replies were received. The Commission in the larger interest of
the consumers as well as the Petitioner and abiding by the statutory obligation of
tariff determination, admitted the Petitions on April 13, 2015.
(6) Although, the Petitions of the APGCL were admitted on April 13, 2015, the
Commission continued to receive additional clarifications from the APGCL on various
aspects as late as up to June 20, 2015.
(7) After the Petitions were admitted, in accordance with Section 64 of the Electricity Act
2003, the Commission directed the APGCL to publish a summary of the ARR and
Tariff filings in local dailies to ensure due public participation. Copy of the Petitions
and other relevant documents were also made available to consumers and other
interested parties at the offices of the APGCL. Copy of the Petition was also made
available on the websites of the Commission and the APGCL.
(8) Meanwhile, the Petition filed by the APGCL, were also discussed in the meeting of
the State Advisory Committee (constituted under Section 87 of the Electricity Act,
2003), convened on May 08, 2015, at Administrative Staff College, Khanapara,
Guwahati.
(9) Further, a Public Notice was issued by the APGCL inviting objections/suggestions
from objectors on or before May 15, 2015. The notice was published in eleven (11)
newspapers of the State on April 23, 2015 in English and vernacular.
(10) The Commission received objections from seven (7) objectors on the Petitions filed
by the APGCL. Also, the replies were provided by the APGCL on the objections to
the concerned individuals/ parties. The Hearing was held at District Library, Guwahati
xii
on June 04, 2015. The details are discussed in the relevant sections of this tariff
order.
(11) The Commission, now in exercise of its powers vested in it under Sections 61 and 62
of the Electricity Act, 2003 and all other powers enabling it in this behalf, and taking
into consideration the submissions made by the Petitioners, objections and
suggestions received from stakeholders and all other relevant materials on record,
has carried out the true-up for FY 2013-14, Annual Performance Review for FY 2014-
15, and determined the revised ARR and Generation Tariff for FY 2015-16, and
accordingly, issues this Order making the new tariff effective from August 1, 2015.
(12) The Commission further directs the APGCL to publish a Public Notice intimating the
revised generation tariff, before the implementation of the Order in English and
Vernacular newspapers and on the website of the APGCL.
(13) Accordingly, the Petition no. 9 of 2015 stands disposed of.
Sd/-
(D. Chakravarty) Member, AERC
Sd/- (N. K. Das)
Chairperson, AERC
1
1 Introduction
1.1 CONSTITUTION OF THE COMMISSION
1.1.1. The Assam Electricity Regulatory Commission (hereinafter referred to as the AERC
or the Commission) was established under the Electricity Regulatory Commissions
Act, 1998 (14 of 1998) on February 28, 2001.The first proviso of Section 82(1) of the
Electricity Act, 2003(36 of 2003) (hereinafter referred to as the “Act”) has ensured
continuity of the AERC under the Electricity Act, 2003.
1.1.2. AERC came into existence in August 2001 as a one-man Commission. Considering
the multidisciplinary requirements of the Commission, it was made a multi-Member
Commission comprising of three Members (including Chairperson) from January 27,
2006. The Commission started functioning as a multi-Member Commission on joining
of two Members from February 1, 2006.
1.1.3. The Commission is mandated to exercise the functions conferred on it under Section
86 of the Act and to exercise the powers conferred under Section 181 of the
Electricity Act, 2003 (36 of 2003) (hereinafter referred to as the Act).
1.2 TARIFF RELATED FUNCTIONS OF THE COMMISSION
1.2.1. Under Section 86 of the Act, the Commission inter-alia has the following tariff related
functions:
(a) to determine the tariff for generation, supply, transmission and wheeling of
electricity, wholesale, bulk or retail, as the case may be within the State;
(b) to regulate electricity purchase and procurement process of distribution utilities
including the price at which the electricity shall be procured from the generating
companies, from other licensees or from other sources through agreements for
purchase of power for distribution and supply within the State;
(c) to facilitate intra-State transmission and wheeling of electricity;
(d) to promote competition, efficiency and economy in the activities of the electricity
industry to achieve the objects and purpose of this Act.
1.2.2. Under Section 61 of the Act in the determination of tariffs, the Commission is to be
guided by the following:
2
(a) The principles and methodologies specified by the Central Commission for
determination of the tariff applicable to generating companies and transmission
licensees;
(b) The electricity generation, transmission, distribution and supply are conducted
on commercial principles;
(c) The factors, which would encourage competition, efficiency, economical use of
the resources, good performance, Optimum investments, and other matters
which the State Commission considers appropriate for the purpose of this Act;
(d) The interests of the consumers are safeguarded and at the same time, the
consumers pay for the use of electricity in a reasonable manner;
(e) That the tariff progressively reflects the cost of supply of electricity at an
adequate and improving level of efficiency and also gradually reduces cross
subsidies;
(f) The National Electricity Plans formulated by the Central Government including
the National Electricity Policy and National Tariff Policy.
1.2.3. In accordance with the provisions of the Act, the Commission shall not show undue
preference to any consumer of electricity in determining the tariff, but may
differentiate according to the consumers load factor, power factor, voltage, total
consumption of energy during any specified period or the time at which the supply is
required or the geographical position of any area, the nature of supply and the
purpose for which the supply is required. (Section 62 of the Act).
1.2.4. If the State Government decides to grant any subsidy to any consumer or class of
consumers in the tariff determined by the Commission, the State Government shall
pay the amount in advance to compensate the person affected by the grant of
subsidy in the manner the Commission may direct as a condition for the licence or
any other person concerned to implement the subsidy provided by the State
Government (Section 65 of the Act).
1.3 BACKGROUND AND BRIEF HISTORY
This Order relates to Petition No. 9 of 2015 filed by APGCL before the Commission
for true-up for FY 2013-14 , APR for FY 2014-15 and approval of revised ARR and
generation tariff for FY 2015-16 for sale of electricity to APDCL. APGCL is one of the
successor entities of the erstwhile ASEB and owns and operates the Generating
Stations previously owned by ASEB. APGCL started functioning as a separate entity
3
from December 10, 2004 as per the Assam Electricity Reforms First Transfer
Scheme, which was notified by the Government of Assam vide PEL. 151/2003/Pt/165
dated December 10, 2004. The Government of Assam, vide notification No.
PEL.151/2003/Pt/349 dated August 16, 2005 issued Orders to give effect to the
reorganization of the Assam State Electricity Board and finalization of the provisional
transfers effected as per the provisions of the Electricity Act, 2003 and First Transfer
Scheme. The Government of Assam notified the opening Balance Sheet, which was
updated and finalized based on the Audited Statement of Accounts of ASEB as on
March 31, 2005 under Notification No: PEL.114/2006/120 of August 29, 2007.
The Commission notified the AERC Tariff Regulations, 2006 vide No. AERC.2005/19
dated April 28, 2006, which was published in the Assam Gazette on May 24, 2006. It
was stated that it shall come into force from the date of their publication in the Official
Gazette of the Govt. of Assam, i.e., w.e.f May 24, 2006. As per Regulation 1.2(d), the
Regulations shall apply to all Generating Companies operating in the State of Assam,
which are not subject to the jurisdiction of the CERC, which include Generating
Companies that are owned or controlled by Central Government or Generating
Companies with a composite scheme of generation and sale in more than one State.
1.3.1. Assam Power Generation Corporation Limited
The Assam Power Generation Corporation Limited, hereinafter named as APGCL, is
the successor corporate entity of erstwhile ASEB formed pursuant to the notification
of the Government of Assam, notified under sub-sections (1), (2), (5), (6) and (7) of
Section 131 and Section 133 of the Electricity Act 2003 (Central Act 36 of 2003), for
the purpose of transfer and vesting of functions, properties, interests, rights,
obligations and liabilities, along with the transfer of personnel of the Board to
successor entries. Further, APGCL is a Company incorporated with the main object
of generation of electricity in the State of Assam and is a Generating Company under
the various provisions of the Electricity Act, 2003.
1.3.2. Commission’s Orders for the first Control Period
APGCL filed the MYT Petition for the first Control Period for determination of Annual
Revenue Requirement for FY 2010-11, FY 2011-12 and FY 2012-13 on February 8,
2010 in accordance with the AERC Tariff Regulations, 2006.
4
The Commission, after following the due procedure, issued the MYT Order for the
Control Period from FY 2010-11 to FY 2012-13 on May 16, 2011.
APGCL filed the Petition for approval of Annual Performance Review for FY 2011-12
and truing up for FY 2009-10 and FY 2010-11 on June 06, 2012.APGCL further filed
the Petition for approval of revised Annual Revenue Requirement and determination
of generation tariff for FY 2012-13 on September 28, 2012.Thereafter, the
Commission passed the tariff order on true-up for FY 2009-10 and FY 2010-11,
Annual Performance Review for FY 2011-12 and determination of revised ARR and
generation tariff for FY 2012-13 on February 28, 2013.
1.3.3. Commission’s Orders for the second Control Period
APGCL filed the MYT Petition for the second Control Period for determination of
Annual Revenue Requirement for FY 2013-14, FY 2014-15 and FY 2015-16 on
January 31, 2013, in accordance with the AERC Tariff Regulations, 2006. Further,
APGCL filed the Petition for true-up for FY 2011-12 and APR for FY 2012-13 on
March 21, 2013.
The Commission, after following the due procedure, issued the MYT Order for the
Control Period from FY 2013-14 to FY 2015-16 on November 21, 2013, along with
true-up for FY 2011-12 and APR for FY 2012-13.
APGCL filed the Petition for approval of Annual Performance Review for FY 2013-14
(Petition No 13/2013) on November 28, 2013. APGCL further filed the Petition for
truing up for FY 2012-13 and approval of revised Annual Revenue Requirement and
determination of generation tariff for FY 2014-15 (Petition No14/2014) on February
27, 2014. As directed by the Commission APGCL further submitted the revised
petition for truing up for FY 2012-13, APR of FY 2013-14 and approval of revised
Annual Revenue Requirement and determination of generation tariff for FY 2014-15
incorporating additional information requirements on April 10, 2014. The Commission
passed the tariff order on true-up for FY 2012-13, APR for FY 2013-14 and
determination of revised ARR and generation tariff for FY 2014-15 on November21,
2014.
5
1.4 PROCEDURAL HISTORY
APGCL filed the Petition for True-up for FY 2013-14, Annual Performance Review for
FY 2014-15 and revised ARR and generation Tariff for FY 2015-16 on December 20,
2014. However, APGCL submitted the Audited Statement of Accounts on April 10,
2015. As directed by the Commission, APGCL further submitted the revised petition
for truing up for FY 2013-14, APR of FY 2014-15 and approval of revised Annual
Revenue Requirement and determination of generation tariff for FY 2015-16
incorporating additional information requirements on April 10' 2015.
1.5 ADMISSION OF PETITION AND HEARING PROCESS
1.5.1. The Commission conducted the preliminary analysis of petition submitted by APGCL
and found that the petition was incomplete due to some need of some material
information. Therefore, the Commission sought additional clarification on the petition
from APGCL, as required from time to time. The key additional clarifications were
sought from February 26, 2015, March 11, 2015, March 20, 2015 and April 06, 2015.
Based on the additional information requirements, the Commission has also
conducted discussions/ meetings with APGCL on March 11, 2015, March 20, 2015,
April 06, 2015. In response to the additional information sought by the Commission,
APGCL submitted the additional information from time to time. The key additional
information was submitted by APGCL on March 07, 2015, March 16, 2015 and March
26, 2015. Further, based on the additional information requirement, discussions and
technical validation sessions, APGCL submitted revised petition on April 10, 2015.
1.5.2. As such, the Commission admitted the petition of APGCL for True up of FY 2013-14,
APR of FY 2014-15 and ARR of FY 2015-16 on April 13, 2015. Additionally, after
admission of the petition, APGCL continued to submit further clarifications till June
20, 2015.
1.5.3. .In accordance with Section 64 of the Electricity Act, 2003, the Commission directed
APGCL to publish its application in the abridged form and manner to ensure due
public participation.
A Public Notice was published by APGCL inviting objections / suggestions from
objectors on or before May 15, 2015. The notice was published in the following
eleven (11) newspapers on April 23, 2015.
6
Date Newspapers Language
April 23, 2015
The Assam Tribune English The Sentinel English The Telegraph English Asamiya Pratidin Assamese Dainik Asom Assamese Amar Asom Assamese Janasadharan Assamese Dainik Jugasankha Bengali Samayik Prasanga Bengali Purbanchal Prahari Hindi Dainik Purvoday Hindi
1.5.4. The time limit for submitting objections/suggestions was stipulated in accordance
with the AERC (Conduct of Business) Regulations, 2004. Moreover, the same was
also in line with the time limit given by most of the State Electricity Regulatory
Commissions in India, as well as the time allowed by the Commission in earlier tariff
proceedings.
1.5.5. The Commission has considered the objections received from various objectors and
also invited the objectors to take part in the Hearing process for presenting their
views in person before the Commission, if they so desired. Also, a comprehensive
Notice was published in the following seven (7) newspapers on May 27, 2015 in
Assamese and English language. Accordingly, the Commission scheduled the
Hearing on the matter on June 04, 2015 at Assam District Library Auditorium,
Guwahati.
7
Date Name of Newspaper Language
27.05.2015
The Assam Tribune English
The Sentinel English
Amar Asom Assamese
Asamiya Pratidin Assamese
Dainik Janambhumi Assamese
Dainik Jugasankha Bengali
Purbanchal Prahari Hindi
1.5.6. All the written representations submitted to the Commission and the oral submissions
made before the Commission during the Hearing and the responses of APGCL have
been carefully considered while issuing this tariff order. The issues raised by different
consumers and consumer groups along with the response of APGCL and views of
the Commission are elaborated in Chapter 3 of this Order.
1.6 STATE ADVISORY COMMITTEE MEETING
The meeting of the State Advisory Committee (constituted under Section 87 of the
Electricity Act, 2003) was convened on May 08, 2015at Assam Administrative Staff
College, Khanapara, Guwahati. The Members of SAC were briefed on the Petitions
of APGCL. The suggestions made by the members of SAC have been duly taken
into consideration by the Commission while finalizing the tariff order. The minutes of
the meeting are appended to this Order as Annexure - 1.
8
2 Summary of ARR and Tariff Petition
APGCL filed a Petition on November 25, 2014 praying for extension of time for
submission of Petition for approval of ARR and Tariff for FY 2015-16 along with APR
of FY 2014-15up to December20, 2014 and Commission granted extension of time up
to December20, 2014, for filing of Petition for Truing Up of FY 2013-14, APR of FY
2014-15 and the approval of revised ARR and Tariff for FY 2015-16.
Accordingly, APGCL filed the Petition for True-up for FY 2013-14, Annual Performance
Review for FY 2014-15 and revised ARR and generation Tariff for FY 2015-16 on
December 20, 2014, which was admitted on April 13, 2015.
2.1 TRUE UP FOR FY 2013-14
The summary of true-up for FY 2013-14 submitted by APGCL is as shown in the Table
given below:
Table 2.1: Summary of true-up for FY 2013-14 as submitted by APGCL (Rs. Crore)
Particulars
Approved MYT Order
Dated November 21,
2013
Amount claimed
for True-Up
INCOME
Revenue from tariff & Misc. Charges 483.95 544.49
Revenue from Secondary Energy Charges of
KLHEP 2.51
Total revenue from Sale of Power
547.00
Other Income 10.99 10.60
Total revenue income 494.94 557.60
EXPENDITURE
Fuel Cost 289.45 385.15
Employee Expenses 78.12 82.00
R&M Expenses 14.91 26.03
A&G Expenses 5.93 12.53
Depreciation 16.35 25.66
Interest & Finance Charges 30.90 31.28
Provision for taxes 0.93 0.45
Prior period items
-10.07
Return on Equity (ROE) 37.99 38.59
Interest on working Capital 18.25 22.32
9
Particulars
Approved MYT Order
Dated November 21,
2013
Amount claimed
for True-Up
Adjustment of Truing Up for FY 2011-12 13.10
Total Revenue Requirement 494.94 613.95
Add: Incentive for generation for FY 2013-14
7.97
Add: Incentive for Secondary Energy generation
for FY 2013-14 2.51
Gross Expenditure 494.94 624.43
Revenue Surplus(+) / Shortfall(-) 0 -66.83
APGCL claimed a Revenue Gap of Rs. 66.83 Crore for FY 2013-14 and requested the
Commission to allow the proposed Revenue Gap of FY 2013-14 in the ARR for FY
2015-16.
2.2 APR FOR FY 2014-15 AND REVISED ARR AND GENERATION TARIFF FOR FY
2015-16
The summary of APR for FY 2014-15 and revised ARR and generation tariff for FY
2015-16 submitted by APGCL, is as shown in the Table given below:
Table 2.2: APR for FY 2014-15 as submitted by APGCL (Rs. Crore)
Particulars
Approved Tariff Order Dated November 21,
2014
Proposed in this petition
Fixed Charges
Operation and Maintenance expenses
Employee expenses 75.75 86.54
Repair and Maintenance expenses
17.11 25.19
Administrative and General expenses
4.70 9.41
Interest and Finance Charges 32.14 29.61 Interest on Working Capital 19.08 26.03
Income Tax 0.93 0.93
Depreciation 35.55 32.81
Return on Equity 37.99 40.39
Less: Other Income 11.59 10.60
Total Fixed Charges 211.66 240.31
Fuel Cost 326.70 477.45
10
Particulars
Approved Tariff Order Dated November 21,
2014
Proposed in this petition
True up for 12-13 -16.79
Impact of revised true up 27.26
Annual Revenue Requirement 548.83 717.76
Power Generation (MU)
Gross Generation 1766.94 1894.66
Auxiliary Consumption 71.94 115.92
Net Generation 1695.00 1778.73
Generation Tariff (Rs./kWh)
Fixed Cost 1.31 1.35
Fuel Cost 1.93 2.68
Tariff 3.24 4.04
Table 2.3: Revised ARR and Generation Tariff for FY 2015-16 as submitted by APGCL
Particulars Approved MYT Order Dated
November 21, 2013
Proposed in this petition
Fixed Charges
Operation and Maintenance expenses
Employee expenses 91.42 105.27 Repair and Maintenance expenses 17.39 53.55
Administrative and General expenses 6.73 9.85
Interest and Finance Charges 89.09 55.88
Interest on Working Capital 21.18 30.83
Income Tax 0.93 0.93 Depreciation 49.66 48.21 Return on Equity 49.75 58.96 Less: Other Income 13.29 10.60 R&M expense approved vide letter no AERC 442/ 2014/15" Order n Review petition on Tariff order for FY 13-14 dated 08.07.2014
26.73
Total Fixed Charges 312.86 379.60
Fuel Cost 263.84 521.92
True-up for FY 2013-14 0.00
Annual Revenue Requirement 576.69 901.52
Power Generation (MU)
Gross Generation 2200.35 1930.71 Auxiliary Consumption 79.54 99.14
11
Particulars Approved MYT Order Dated
November 21, 2013
Proposed in this petition
Net Generation 2120.81 1831.57 Generation Tariff (Rs./kWh)
Fixed Cost 1.48 2.07 Fuel Cost 1.24 2.85 Tariff 2.72 4.92
APGCL has submitted that it has projected the ARR for FY 2015-16 based on the
current position of the generating Units and gas availability from various gas sources,
gas pricing, inflation trend, etc. APGCL has proposed the ARR of Rs.901.52 Crore as
against Rs. 576.69 Crore approved by the Commission for FY 2015-16 in the MYT
Order dated November 21, 2015. This is exclusive of proposed Revenue Gap of Rs.
66.83 Crore for Truing Up of FY 2013-14.
12
3 Summary of Objections raised, responses of
APGCL and Commission’s comments
The Commission has received objections/ suggestions from seven (7) objectors on the
Petitions filed by APGCL from the following objectors:
Sl. No. Name of the Objector
1. All Assam SSI Association, Industrial Estate, Guwahati
2. Assam Bidyut Grahak Adhikar Parisad
3. Assam Branch of Indian Tea Association, Guwahati
4. Consumers’ Legal Protection Forum
5. Federation of Industry & Commerce of North Eastern Region
6. Krishak Mukti Sangram Samiti & Gana Mukti Sangram
7. Shri Jayanta Deka and others
APGCL has submitted its responses to the objections/suggestions from the objectors.
The Commission held the Hearing at District Library, Guwahati on June 4,2015. Six
objectors attended the Hearing and submitted their views/suggestions. All the written
representations submitted to the Commission and oral submissions made before the
Commission in the Hearing and the responses of APGCL have been carefully
considered while issuing this tariff order.
The objections/suggestions made by the objectors and responses of the Petitioner have
been dealt with in this Chapter. The major issues raised by the objectors are discussed
below along with the response of APGCL and views of the Commission. All the
objections/suggestions received in written on the ARR and Tariff Petition along with
those raised during the course of Hearing, have been grouped and addressed issue-
wise hereunder.
Issue No. 1: Truing-up to be done before calculating ARR for 2015-16
Objections:
The Federation of Industry & Commerce of North Eastern Region has requested the
Hon’ble Commission to first carry out True-up and pass on the benefit of any excess
charge to the consumers before arriving at ARR and tariff for 2015-16.
Comments of the Commission:
13
The Commission has carried out True-up exercise based on submissions of APGCL,
Audited Statement of Accounts of APGCL and prudence check by the Commission.
The detailed component wise analysis of True-up is covered in the later chapter of
this order. The impact of True-up has been taken up while calculation of ARR
requirement for FY 2015-16.
Issue No. 2: PLF, Plant Availability and Generation
Objections:
The Assam Branch of Indian Tea Association (ABITA) submitted that in spite of the
lenient approach adopted by the Commission for approving the technical parameters
for the generating stations of APGCL, the actual technical parameters achieved by
the Petitioner for FY 2013-14 indicate poor performance of the plants. As per ABITA,
the primary reason for the non-achievement of the technical parameters is the non-
implementation of the Renovation & Modernisation schemes resulting in frequent
forced shut downs. ABITA further submitted that the non-achievement of the
technical parameters is attributable to APGCL and accordingly, ABITA has requested
the Commission not to allow the same to be passed to the consumers.
The Federation of Industry & Commerce of North Eastern Region (FINER) has also
objected on similar lines stating that while APGCL could achieve the generation
targets for NTPS, LTPS with WHRU and KLHEP for FY 2013-14.However, the target
with respect to Myntriang SHEP has not been met due to delay in commissioning of
the plant. Similarly for FY 2014-15, as per APGCL’s estimate, APGCL is not
expected to meet the generation target for KLHEP and Myntriang SHEP (due to
delay in commissioning of plant). The objectors have pointed out that, there has been
consistent failure on the part of generating company to complete new generating
units as per projections in MYT. FINER, has also pointed out that during the MYT
petition Hearing also, there were objections made on the projection made for new
capacity addition and today those objections have been proved to be correct.. The
FINER has requested APGCL to ensure timely completion of ongoing projects.
Assam Bidyut Grahak Adhikar Parisad has also observed that there is decrease in
generation of APGCL. They further mentioned that the delay in power generation
projects leading to procurement of power from outside state at higher cost.
Krishak Mukti Sangram Samiti & Gana Mukti Sangram has submitted that, the state’s
own generation was 486.90 MW as on April 30, 2015, as per the data of Government
of India. It received 747.68 MW from Central sector and 28.60 MW from private
14
sector, showing that 776.28 MW was received from others out of the total allocation
of 1263.18 MW. They further submitted that at present APGCL does not have any
project to increase its own generation.
Krishak Mukti Sangram Samiti &Gana Mukti Sangram further submitted that, as per
the available information, the total electricity production of Assam is only 1% of the
total electricity production of India, while Gujarat, Rajasthan, Karnataka, Maharashtra
and Punjab produces 8% and undivided Andhra Pradesh produces 12% (Share of
State/UT’s in State Sector generation in 2011-12). Also, the per capita consumption
in Assam is 250 kWh while the all India average per capita consumption is 884 kWh.
Among the big states, the per capita consumption in Punjab, Gujarat and Haryana
were 1799 kWh, 1663 kWh and 1628 kWh respectively. The lowest per capita
consumption is in Bihar which is 134 kWh. (As per FY 2011-12 data). The objector
submitted that more steps should be taken for increasing the production and
consumption in Assam. However the yearly demand for tariff increase is being made
by utilities, as a regular practice.
Further, Krishak Mukti Sangram Samiti & Gana Mukti Sangram submitted that, the
electricity consumption is one of the main indicators of development which is getting
reduced due to the huge increase in the tariff.
Response of APGCL:
In response to objections above, APGCL submitted that actual PLF of APGCL is
more than the normative PLF values both of LTPS and NTPS in the FY 2013-
14mainly due to successful R&M carried out. APGCL constantly endeavours to
improve the performance of its power stations and hence has achieved even higher
PLF than the normative PLF for NTPS and LTPS.
APGCL has submitted that,
• For FY 2013-14: The commissioning of Myntriang SHEP Stage-II Project was
delayed due the following reasons
i. Loss of valuable work days due to local issues such as frequent bandh calls
ii. Redesigning of the project for enhancing capacity by 3 MW in Stage-I and
by 1.5 MW in Stage-II, from the earlier planned capacity of 6 MW for Stage I
and 3 MW for Stage II. The 3 MW capacity for Stage II has already been
commissioned in FY 2014-15.
• For FY 2014-15: The generation of Hydro projects like KLHEP depends on
the availability of water which is beyond the control of APGCL. KLHEP
generated less than the target generation due to less amount of rainfall in the
15
monsoon season in the FY 2014-15.
Further, Myntriang SHEP Stage-II suffered heavy damages in the sudden
flash flood caused by the torrential rain on August 22, 2014 and had to be
shutdown intermittently. For the above reasons, it could not achieve target
generation for the FY 2014-15.
APGCL has further submitted that, the detailed reasons for delay in commissioning of
new projects vis-a-vis schedule proposed in the MYT Petition for 2013-14 to 2015-16
is mentioned below, which are beyond the control of APGCL.
100 MW NRPP:
The projected was initially proposed to be commissioned in FY 2013-14.However,
due to various reasons, the commissioning of the project was delayed as mentioned
below:
i. Continuous poor progress of works due to poor management of site by
BHEL’s sub-contractors due to deployment of insufficient machineries &
labourers hampered progress of works.
ii. Non availability of sufficient skilled manpower.
iii. Unfavourable Weather (In the whole year, only 5 months was only
favourable for ground work).
However, at present the project work is progressing at a better pace than earlier after
selection of new sub-contractors by BHEL on constant persuasion by APGCL. The
NRPP (63 MW), in open cycle mode, is expected to be commissioned in August,
2015.
70 MW LRPP: Delay was mainly due to delay in the selection of EPC contractors.
For selection of EPC contractors. re-tendering was done and bid submission date
had to be extended several times due to receipt of only single bid initially.
6 MW Lungnit SHEP: The contract with the EPC contractor had to be cancelled due
to very slow progress of work. Subsequently, the project got involved into litigations
with the cancelled EPC contractor. After that tendering process was started to select
new EPC contractor. However, due to high price bid than the estimated project cost,
the decision on EPC contractor selection is pending at the moment.
Myntriang SHEP Stage-I: Myntriang SHEP Stage-I suffered the same problems
during construction like that of the Stage-II project mentioned above. This project has
also been redesigned to 9 MW from earlier 6 MW. Project work is presently going on
16
and the project is expected to be commissioned in December 2015.
In the Revised Tariff Petition for the FY 2015-16 APGCL has considered the open
cycle commissioning of NRPP (63 MW GT part only) and Myntriang 13.5 MW
MSHEP St.-I & II as the new capacity addition.
APGCL is putting all effort to complete its ongoing projects in time.
In its reply to Krishak Mukt Sangram Samiti &Gana Mukti Sangram, APGCL
submitted that to meet the ever growing energy demand of the state of Assam to the
extent feasible, APGCL, at the initiative of Govt. of Assam, has emphasized on
development of large capacity thermal power projects based on coal & natural gas
available in this region as stated below. The following projects are currently under
construction / bidding /DPR/planning stage by APGCL for capacity addition.
i . Ongoing Projects
SI. No.
Name of the Project Fuel Capacity (MW)
Status
I Namrup Replacement Power Project (NRPP) Gas Turbine Unit
Natural Gas
100
Approximately 65% project work is completed. Open cycle Commissioning is expected in December 2015
2
Myntriang Stage-1 (3x3 MW) and Enhancement of Stage II (1x1.5 MW enhancement from 2x1.5 MW)
N/A (Hydro)
10.5
Approximately 57% project work is completed. Commissioning is expected in December 2015
i i . New Projects / Projects in Pipeline
Sl. No.
Name of the Project
Fuel Capacity (MW)
Expected Date of
Commissioning Present Status
1 Lakwa Replacement Power Project
Natural Gas
70 (Nominal)
2 years from issue of Work
Order
Technical bid evaluation is completed and sent to ADB
for approval.
2 Lower Kopili Hydro Electric Power Project
N/A (Hydro)
120 4 years from issue of Work
Order
Recasting of DPR as per the CEA advice is under finalization. DPR is
expected to be approved by CEA by July'15. The issue of pending clearances for
the project has been pursued by Govt. of Assam
with the Govt. of India.
17
Sl. No.
Name of the Project
Fuel Capacity (MW)
Expected Date of
Commissioning Present Status
3
Borpani Middle Stage-II Small Hydro Electric Power Project
--Do-- 24 3 years from issue of Work
Order
DPR has been approved by APGCL Board on December 03, 2014. Preliminary survey work for road and building is
in progress.
4 Cachar Power Project
Natural Gas
30 (Nominal)
2 years from issue of Work
Order
APGCL was the sole bidder in the Open Tender floated by ONGCL for sale of Gas
from Bhubaudar and Banskandi fields in Cachar
District. Gas linkage is awaited. GoI has been
pursued by GoA for early allocation of Gas
5 NTPS Solar PV Projects
Solar Energy
2 1 year from issue
of Work Order
To be Proposed under Jawaharlal Nehru National Solar Mission (JNNSM).
DPR is under preparation. 6 LTPS Solar PV Project
--Do-- 2
7 Borpani Middle Stage-I SHEP
N/A (Hydro)
21 3 years from issue of Work
Order DPR under preparation
8 Borpani Barrage Toe SHEP
--Do-- 12
9 Titabor Power Project
Natural Gas
40 (nominal)
MoPNG and ONGCL are being pursued for allocation of gas from small pockets of
gas around Titabor area
10 Amguri TIDP --Do-- 100 Deferred due to non-
availability of gas
18
i i i . JV Project
SI No.
Name of the Project
Fuel Capacity (MW)
Expected Commissioning
date
Present Status
1. Margherita Thermal Power Project
Coal 660 4 and 1/2 years from issue of Work Order
1. Proposed as a JV project with NEEPCO with 49% stake of APGCL.
2. 2000 Bigha land allotted to APGCL by GOA
3. Water off-take permission received
4. Amended Terms of Reference was received from MOE&F, Hearing for environment clearance was held on March 22, 2015.
5. DPR is being prepared by TCE 6. Coal linkage is awaited. The issue
of early allocation coal for the project is continuously being pursued by Govt. of Assam with the Govt. of India
2. Revival of Chandrapur Thermal Power Project
--Do--
60 2 and 1/2 years from issue of Work Order
1. JV project- M/s IAPL 2. Environment Clearance
received. 3. Coal linkage is awaited. 4. Govt. of Assam has pursued with
Govt. of India for early allocation of coal for the project
In reply to the observation of Assam Bidyut Grahak Adhikar Parishad, APGCL has
submitted that instead of decrease in generation, APGCL has shown increasing trend
of generation as stated below. Further, APGCL had achieved its highest ever Gross
generation of 1893.946 MU in the FY 2014-15.
APGCL 2012-13 2013-14 2014-15
Total Gross Gen. In(MU)
1765.26 1845.23 1893.95
Total Energy Supplied to APDCL (MU)
1631.60 1732.85 1778.73
APGCL further submitted that it is planning for more capacity addition in the coming
years (as shown in table above) and making an determined effort to implement this
plan to boost its generation capacity considerably to meet the ever growing energy
demand of the State of Assam to the extent feasible.
19
Comments of the Commission:
For Truing up purpose the Commission has considered SLDC certificate for the proof
of plant availability. Although the recovery of the fixed costs of APGCL is dependent
on the availability rather than the PLF of its stations, higher PLF is desirable as it
leads to optimal utilisation of capital investment incurred. The Commission observes
that the actual generation of the thermal generating stations of APGCL is more than
the approved generation level for FY 2013-14.
For FY 2014-15, the Commission has considered 10 months actual availability as per
SLDC certificate for approving the plant availability. Since the petitioned value is
similar to actual 10 month availability, the petitioned availability has been allowed.
Similarly for PLF of thermal plants, as the petitioned value were higher than
normative value, the Commission has considered petitioned PLF for generation
calculation. The gross generation for hydel plants has been taken as per petition.
For 2015-16, the Commission has taken generation figure as per submission of
APGCL, which has been projected based on gas availability and number of days of
operation, however, the target for availability and PLF will be considered as same as
in MYT order for true-up in future. It shall be noted that, the Commission has
specified the normative PLF for the generating stations of APGCL keeping in view
the vintage of the Units, availability of gas and maintenance schedule required for the
upkeep of the Units and hence no deviation from the same will be considered in
True-up.
The Commission had directed APGCL to obtain prior approval of the capital
investment for the Renovation & Modernisation schemes to be implemented by
APGCL. Further, the Commission, in its MYT Order for FY 2013-14 to FY 2015-16
dated November 21, 2013 has already directed APGCL to expedite all the
Renovation & Modernisation schemes required for the optimal performance of its
Stations. The Commission has also given directives to APGCL for submission of
project status and reason for delays. The Commission directs APGCL to make all out
efforts for maximum generation from its existing Stations as the availability of
adequate generation capacity within the State would reduce the dependence on the
import of power and the inherent transmission constraints.
Issue No. 3: Auxiliary Energy Consumption
20
Objections:
ABITA submitted that the actual Auxiliary Energy Consumption for FY 2013-14 and
revised estimate for FY 2014-15 and FY 2015-16 as submitted by the Petitioner are
higher than the approved norms. ABITA submitted that the Petitioner has not taken
necessary steps to reduce the Auxiliary Energy Consumption in compliance to the
directions of the Commission. ABITA further submitted that the reasons for higher
Auxiliary Energy Consumption submitted by the Petitioner should not be taken into
consideration and requested the Commission to consider the Auxiliary Energy
Consumption as per the norms.
The Federation of Industry & Commerce of North Eastern Region(FINER) has also
objected on similar lines stating that the Auxiliary Energy Consumption as submitted
by the Petitioner are higher than the approved norms and same should not be loaded
to consumers.
Response of APGCL:
APGCL has submitted that the Hon'ble Commission was appraised of the fact that
one of the contributors to the high Auxiliary Power Consumption (APC) of NTPS and
LTPS, is the energy loss at the switchyard end Transformer feeders, which,
otherwise should have been added to the accounts of APDCL and AEGCL. The
Hon’ble Commission directed APGCL in its tariff order for FY 2014-15 to handover
the switchyard transformer feeders/related equipment to APDCL and AEGCL so that
this issue can be resolved. APGCL submitted that this handover is complete with
AEGCL at NTPS, however at LTPS, the handover of transformer feeders to APDCL
is expected to be completed by June’15. Also, at NTPS, the handover process will be
complete only when the construction of the 33 kV distribution substations by APDCL
at NTPS site will be complete. Accordingly APGCL submitted that, once all the
transformers feeders are handed over to APDCL at NTPS, APC loss is expected to
be reduced.
Further, APGCL has also appraised the Hon’ble Commission about the problem of
decreasing Calorific Value of gas over the years, which is adding to the high APC
loss of LTPS as the gas supplied to LTPS is low pressure gas and it has to be
compressed with gas booster compressors for running the gas turbines. At the time
of designing these turbines for LTPS, the NCV of gas was as high as 11000
kcal/scm, hence less amount of gas had to be compressed by the compressors
21
leading to less consumption of power. However, at present, the NCV of gas has
reduced to around 8500 kcal/scm, therefore as such more gas has to be compressed
by the compressors to run the same machines at their rated capacity. Further, due to
high heat rate of the old gas turbines of LTPS, it requires more gas than modern
GTs, and as such APC loss increases for LTPS as more work has to be done by its
compressors. This is an inherent problem of LTPS. However, APC loss of LTPS is
expected to come down after the LRPP project is commissioned replacing the high
heat Phase-I turbines
APGCL has appealed to the Commission to enhance the APC norms of NTPS and
LTPS. APGCL appreciates consumers’ concern about the higher Auxiliary
Consumption, however, this may be mentioned here that, the increase in fuel cost
due to high Auxiliary Consumption is absorbed by the Generating Company and is
not passed on to the consumer.
APGCL has also submitted that for FY 2014-15, High APC of Myntriang SHEP
Stage-II is for taping of construction power for the ongoing Myntriang Stage-I.
However, the excess APC beyond the norms will be borne by APGCL.
Comments of the Commission:
The Commission, in this Order, after taking into consideration the norms specified in
the AERC Tariff Regulations, 2006, has approved the norms for Auxiliary Energy
Consumption for APGCL's stations for FY 2014-15 at the same levels approved in
the tariff Order 2014-15 and for true-up for FY 2013-14 and ARR for FY 2015-16, as
per value approved in MYT order.
Issue No. 4: Station Heat Rate
Objections:
Similar to Auxiliary Energy Consumption, both ABITA and FINER has submitted that
the actual SHR submitted by the Petitioner is higher than the approved value. The
objectors stated that the higher SHR indicates the inefficiency in the operation of the
Station by APGCL and accordingly the objector has requested the Commission to
consider the norm as per the AERC Tariff Regulations and not allow any inefficiency
to be passed on to the consumers.
Response of APGCL:
22
APGCL has submitted that, the actual Station Heat Rates achieved by NTPS and
LTPS (open cycle) for the year FY 2013-14 are comparable with the design Heat
Rates of these two old Power Stations, and hence, the question of high Gross Station
Heat Rate (GSHR) by APGCL does not arise. APGCL further submitted that the
issue of lower normative GSHR was taken up with AERC in FY 2007-08 and based
on the petition of APGCL; the Hon’ble Commission has subsequently amended the
normative GSHR w.e.f. January 07, 2015 which is at par with the design and actual
GSHR of NTPS and LTPS. This implies that APGCL was incurring loss in fuel cost
because of lower normative GSHR and not due to underperformance.
Station
Approved in MYT order dated
November 21, 2013(Kcal/Kwh)
FY 2013-14 (Actual)
(Kcal/Kwh)
As per Design Heat
Rate (Kcal/Kwh)
As per Amended Regulation (Kcal/Kwh)
NTPS 3266 3976 4230 3900
LTPS + WHRP 2719 3164 3327 3200
Comments of the Commission:
In this Order, for truing up of FY 2013-14, the Commission has approved the SHR
norms as specified in the AERC Tariff Regulations, 2006. However, based on the
Report of the study conducted by IIT Guwahati, submissions of APGCL & other
stakeholders and the Hearing on the matter, the Commission has amended the
normative GSHR and notified the new normative SHR on January 06, 2015 effective
from the date of the notification. Thus for FY 2014-15, SHR has been considered as
per AERC Tariff Regulations, 2006 till December 31, 2014 and as per revised SHR
from January 06, 2015. Similarly for 2015-16, revised SHR has been considered as
per order dated January 06, 2015
Issue No. 5: Fuel Cost
Objections:
Both ABITA and FINER has submitted that the actual fuel cost as per the Audited
statements of accounts for FY 2013-14 is much higher than the fuel cost compared to
the norms. The objectors have requested the Commission to direct the Petitioner to
submit adequate information for true-up of fuel cost for FY 2013-14 and allow the fuel
cost as per norms only. Also, the objectors have requested the Commission that, for
FY 2014-15 and FY 2015-16, any inefficiency in operation shall not be considered as
23
a reason for allowing higher fuel cost.
Response of APGCL:
APGCL has submitted that the Fuel cost claimed in the True-up of FY 2013-14 is the
actual cost incurred in the FY 2013-14. The station wise fuel bills have also been
submitted to AERC from where the actual stations wise Fuel Cost of NTPS and LTPS
can be reconciled. APGCL had appealed to Hon’ble Commission to consider the
actual fuel cost incurred in FY 2013- 14, however APGCL has further submitted that
it is Commission’s discretion to approve the above fuel cost as it may deem fit.
Also, as requested, APGCL has submitted the cost of Generation of NTPS, LTPS
and KLHEP for past seven years as given below:
Station Cost of generation in Rs/Kwh
FY-08 FY-09 FY-10 FY-11 FY-12 FY-13 FY-14
NTPS 1.68 2.06 1.79 2.5 3.03 3.02 4.14 LTPS 1.9 2.17 2.3 2.83 3.12 3.06 3.74 KLHEP 1.06 2.46 1.43 1.76 1.57 0.96 2.33
Comments of the Commission:
The Commission has approved the fuel cost in the true-up for FY 2013-14 based on
the approved performance parameters, GCV of gas as per the fuel bills submitted by
the Petitioner. For ARR, the Commission has considered the gas price notified by
Ministry of Petroleum and Natural Gas (MoPNG) and latest GCV as per fuel bills, for
projecting the fuel cost for FY 2015-16. The detailed analysis is given in the
respective Chapters of this Order.
Issue No. 6: Employee expenses
Objections:
ABITA and FINER has submitted that the actual employee expenses for FY 2013-14
and petitioned value for FY 2014-15 and FY 2015-16 as submitted by the Petitioner
are higher than that approved by the Commission in the MYT Order. The objector
submitted that the employee expense is a controllable item under the MYT regime
and therefore, any gain or loss on account of higher or lower actual employee
expenses should be to the account of the Petitioner. ABITA further requested the
Commission not to revise the employee expenses from that approved by the
Commission. Also, ABITA has requested the Commission to consider escalation as
per earlier approach of CPI: WPI of 60:40.
24
Both ABITA and FINER has submitted that the O&M expenses are a controllable
item and if it is revised each year based on actual, the concept of MYT framework
shall be defeated. ABITA requested the Commission to approve the O&M expenses
as approved in the MYT Order for FY 2013-14 to FY 2015-16.
Shri Jayanta Deka has submitted that present employee strength of APGCL is much
more than actual requirement and APGCL has not taken any initiatives to scale down
the employee strength in a phased manner and hence, ARR gap of Rs. 38.76 Crore
shall not be allowed while fixing up new tariff.
Response of APGCL:
APGCL has submitted the reference of Regulation 36 of the existing AERC Tariff
Regulations 2006, which states that:
36.2: The Generating Company shall prepare a budget for Operation & Maintenance
Expenses indicating for each head of account actual expenditure of the last year,
estimate for the current year and projection for the next year and submit it to the
Commission along with the tariff petition.
APGCL submitted that it has claimed the actual employees cost of Rs. 82.00 Crore
on the basis of the Audited statements of accounts for the FY 2013-14 in accordance
with the above clause of the tariff regulation of AERC. The actual employees cost is
higher than that of the approved amount on account of the higher DA sanctioned.
APGCL stated that, the Hon’ble Commission while approving Employees cost has
escalated the trued up employees cost of FY 11-12 by 8% twice to arrive at Rs.
78.12 Cr for FY 13-14.However, the Govt. of Assam has hiked the Dearness
Allowance (DA) by 10 % from 80 percent to 90 percent w.e.f July 01, 2013 and by
another 10% from 90 percent to 100 percent w.e.f January 01, 2014, on which
APGCL has no control and thus the employees expenses claimed at Rs. 82.00 Cr is
the actual expenditure incurred which has been reflected in the Audited Statement of
Account and accordingly claimed in true-up for FY 2013-14.
APGCL has submitted that for FY 2014-15, APGCL has calculated the claims for
Employees Cost expenses by considering six months actual and proportionate
assumption for the remaining six months and hence arrived at a claim of Rs. 86.54
Crore.
Regarding employee strength, APGCL has submitted that it was registered as a
successor company of erstwhile ASEB w.e.f October 2003. As of April 01 2015,
25
manpower strength of APGCL was 1281. The number of new recruits since FY 2004-
05 is 345. Most of the employees recruited during the existence of ASEB are above
55 years of age now and are going to retire in the next few years. So, the scaling
down of these employees has not been considered as of now. The new recruitments
since the formation of APGCL has been totally on need basis. As such, APGCL
submitted that the manpower strength of APGCL as of today is justified and
necessary for its operations.
Further, APGCL submitted that the actual Employees cost claimed in the True-up
petition for FY 2013-14 has been evaluated with DA hikes and yearly increments and
it is mere 5% (difference of Rs. 3.876 Cr) higher than the approved cost of
employees in the MYT order for FY 2013-14 to FY 2015-16, which is very nominal
and justifiable considering DA hike.
Comments of the Commission:
The Commission has approved the employee expenses in the true-up for FY 2013-
14 after due prudence check of the actual expenses in accordance with AERC Tariff
Regulations, 2006. The Commission has approved the employee expenses for FY
2014-15 and FY 2015-16 by considering the appropriate growth rates over the
employee expenses approved for FY 2013-14 after truing up. The detailed analysis is
given in the respective Chapters of this Order.
Issue No. 7: Administration and General Expense
Objections:
Similar to Employee Expense, ABITA and FINER has submitted that the actual A&G
expenses for FY 2013-14 and petitioned value for FY 2014-15 and FY 2015-16 as
submitted by the Petitioner are higher than that approved by the Commission in the
MYT Order, indicating poor management of cost by APGCL. The objector has
requested the Commission to approve A&G as approved in MYT order. Also, ABITA
has requested the Commission to consider escalation as per earlier approach of CPI:
WPI of 60:40.
Shri Jayanta Deka has submitted that A&G expense of Rs. 9.85 Crore, estimated for
ARR of FY 2015-16 is not reasonable and such lavish expenditure should not be
allowed to avoid extra burden on consumers.
Response of APGCL:
26
APGCL has submitted, that in line with Regulation 36, APGCL has claimed the actual
Administration & General expenses of Rs. 12.53 Cr for FY 2013-14, based on the
Audited statements of accounts for the FY 2013-14. The Hon’ble Commission has
approved an amount of Rs. 5.93 Cr for FY 13-14. However, during FY 13-14, an
amount of Rs. 5.78 Cr has been further provided for Electricity bill of different offices
of APGCL (which is required to be paid to APDCL) in addition to normal A&G
expenses, which resulted in increase in A&G expenses compared to the previous
year approved by the Hon’ble Commission.
Moreover, APGCL further submitted that the Hon’ble Commission in its technical
validation session had already sought after the reason & certification for such
provision. In reply the certification i.e. estimate for electricity charges furnished by
APDCL was produced to Hon’ble Commission for reconciliation of components of
A&G expenses appeared in Audited Statement of Account and claimed in true up
petition.
APGCL has submitted that for FY 2014-15, APGCL has calculated the claims for
A&G expenses by considering six months actual and proportionate assumption for
the remaining six months and hence arriving at a claim of Rs. 9.41 Cr.
Comments of the Commission:
The Commission has approved the A&G expenses in the true-up for FY 2013-14
after due prudence check of the actual expenses in accordance with AERC Tariff
Regulations, 2006. The Commission has approved the A&G expenses for FY 2014-
15 and FY 2015-16 by considering the appropriate growth rates over the approved
value for FY 2013-14 after truing up. The detailed analysis is given in the respective
Chapters of this Order.
Issue No. 9: R&M expenditure
Objections:
ABITA submitted that petitioned value for R&M expense for FY 2014-15 and FY
2015-16 as submitted by the Petitioner are higher than that approved by the
Commission in the MYT Order, indicating poor management of cost by APGCL. The
objector has requested the Commission to approve R&M expense as approved in
MYT order. Further the objector has stated that special R&M expenses as claimed by
petitioner shall only be allowed based on actual expense basis for FY 2013-14 and
FY 2014-15 and the same shall only be allowed if such expenses are already
27
approved by the Hon’ble Commission.
Also, ABITA submitted that the special R&M expenses are of capital nature having
use for multiple years and same shall be capitalised instead of passing on the entire
burden in one year.
Both ABITA and FINER has submitted that the O&M expenses are a controllable
item and if it is revised each year based on actual, the concept of MYT framework
shall be defeated. The objector has requested the Commission to approve the O&M
expenses as approved in the MYT Order for FY 2013-14 to FY 2015-16.
Response of APGCL:
APGCL submitted that, The Hon’ble Commission has approved an amount of Rs.
14.91 Cr for Repair and Maintenance (R&M) for FY 2013-14. However, during FY
2013-14 there was expenditure for the overhauling of Karbi Langpi HEP Unit#2 of Rs.
9.03 Cr, the overhauling work for the same was approved in total by the Commission
in the tariff order for FY 2013-14 and in the Review Order for FY 2013-14.
APGCL has submitted that, as mentioned in the note for the Overhauling of Unit-2 of
LTPS, the work has already been approved by the Hon’ble Commission in its Review
Order dated July 07, 2014 on APGCL’s Petition on the MYT Order of FY 2013-14. In
its MYT Order dated November 21, 2013, initially AERC rejected the proposed
Regular Overhauling as per OEM guidelines of various units of APGCL and asked
APGCL to submit detailed Cost Benefit Analysis for this proposed expenditure.
Accordingly, APGCL submitted the detailed Cost Benefit Analysis for the proposed
overhauling expenditure in its Review Petition and requested the Commission to
approve the work as it was of Regular Repair & Maintenance nature.
Consequently, the Commission after prudence checking approved the work in its
Review Order. As the approval came only in July 14, the overhauling work of unit 2
could not be done as proposed in FY 2013-14. The Original estimated work amount
was Rs. 8.5 Cr, and later it was revised to Rs. 12.94 Cr with additional work.
Accordingly, the additional amount has been placed for the Hon’ble Commission’s
approval in the APR for the FY 2014-15. Further, APGCL submitted that the regular
R&M cost for FY 14-15 is taken at par to that approved in Tariff order FY 14-15 i.e.
Rs. 17.11 Cr, however, as the approved amount did not include Lubricants &
Consumables Stores& Turbine Oil, the same were included in the Regular R&M
expenses(Rs. 1.41 Cr and 0.23 Cr respectively) coming to a total Regular R&M of
28
Rs.(17.11+1.41+0.23) Cr=18.75 Cr.
Similarly, APGCL submitted that the Special R&M expenses of Rs. 32.00 Cr have
been proposed for the FY 2015-16 for the Overhauling of APGCL’s various units as
per the OEM guidelines. This overhauling work is in addition to regular repair and
maintenance nature and is important for the smooth running of APGCL’s generating
units. The detailed Cost Benefit Analysis of the same has been submitted in the
petition for the Commission’s consideration.
Regular Repair & Maintenance Cost of 21.55 Cr has been proposed by escalating
the approved Repair & Maintenance Cost for the year 2014-15 as per the tariff order
dated November 21, 2014 at a rate of 15%. Rate of escalation at 15% has been
taken considering the old machineries of APGCL’s power stations (NTPS, LTPS) and
for foreign exchange variation.
Comments of the Commission:
The Commission has approved the regular and special R&M separately. As the
Commission has allowed for special R&M for vintage plants in its various tariff orders
based on detailed prudence check, the same has been allowed. The regular R&M for
FY 2013-14 as claimed by the APGCL has been allowed as per Audited Statement of
Accounts. The Commission has approved the regular R&M expense for FY 2014-15
and FY 2015-16 by considering the appropriate growth rates over the approved value
for FY 2013-14 after truing up. The details have been provided in the relevant
sections of the order.
Issue No. 10: Capital expenditure
Objections:
ABITA submitted that the Petitioner has not submitted the details of heads under
which capital expenditure was incurred in FY 2013-14. The Existing plants of APGCL
are vintage plants and APGCL keeps on investing on these plants without submitting
any details of expenditure while on the other hand inspite of such investments, plants
are under performing. Also, objector has stated that no prior approval of capital
expenditure was taken in FY 2013-14.
ABITA has further submitted that, APGCL has an amount of Rs. 37.56 Crore as
capitalised against Myntriang while no generation against that plant has been
29
achieved indicating that plant may not have commissioned in FY 2013-14 and hence
capitalisation of this expense is not justified.
ABITA has further submitted that, APGCL has not provided the details of schemes
under which State Government Loan and PFC loan for FY 2013-14 has been utilised.
ABITA has further requested the Hon’ble Commission to seek information from
APGCL regarding the details of capital investment and capitalisation during the FY-
2013-14 and further requests the Hon’ble Commission to ask APGCL to submit the
details of establishment expenses and measures taken for reduction of same.
Response of APGCL:
APGCL has submitted that, as per the Audited Statement of Accounts, there is an
increase in assets amounting to Rs. 41.30 Crore in Gross Asset block. APGCL has
submitted that it had already provided the plant wise –head wise details under which
the capital expenditure is incurred to the Hon’ble Commission in its calculation for
Depreciation. All the capital expenditures incurred in FY 2013-14 were undertaken
after prior approval of the Hon’ble Commission. The Hon’ble Commission has
directed APGCL to provide adequate details of capital investment and capitalisation
during FY 2013-14, 2014-15, 2015-16 in its technical validation session and
accordingly APGCL had furnished the details to the Commission.
APGCL has further submitted that during FY 2013-14, Rs. 37.56 Cr. has been
capitalized against Myntriang SHEP in the month of March’14.However, in
accordance with the audit observations, this capitalized amount was transferred to
FY 2014-15, the year of actual commercial operation of the plant. However the
amount (i.e. depreciation, interest) claimed for depreciation is a negative amount of
Rs. -0.28 Cr (Page 124 of the Petition) & a small interest expense of Rs. 0.02 Cr
(Page 129 of the Petition). The Commission had already directed to provide
adequate details of capital investment and capitalisation during FY 2013-14.
Accordingly APGCL had already furnished the details to the Commission.
APGCL has further submitted that it has shown Rs. 18.57 Cr of State Government
loan and Rs. 50.00 Cr of PFC loan for FY 2013-14 (Page 181 of the Petition). The
detailed Schemes with DPR for the above investment (Rs. 18.57 Cr) was submitted
to Govt. of Assam for incorporation in the Annual Plan FY 2013-14. Accordingly,
GOA has approved and released fund to APGCL for execution of these schemes.
The quarterly progress report on implementation of these projects is being submitted
30
to AERC, as per directives of the Hon’ble Commission. Accordingly, APGCL had
taken up these schemes for Investment in FY 2013-14. The drawal of Rs. 50.0 Cr.
PFC loan is against ongoing 100MW Namrup Replacement Power Project.
APGCL has further submitted that it has furnished the details of Investment and
Establishment Expenditure for the last seven years supported by CAG Audited
statements of accounts to the Hon’ble Commission for approval after prudence check
and the Hon’ble Commission had already constituted a Committee with members
from various prominent sectors for quarterly review of Performance of APGCL.
Comments of the Commission:
The Commission has carried out due prudence check of investment plan for capital
expenditure. The details are provided in relevant chapters
Issue No. 11: Return on Equity (RoE)
Objections:
ABITA submitted that the Return on Equity claimed by the Petitioner is higher than
that approved in MYT order and since APGCL has not taken any approval on revised
equity capital, RoE shall be approved as per MYT order.
Response of APGCL:
APGCL has submitted that it has claimed Return on Equity of Rs. 38.59 Cr. The
equity capital was approved by the Hon’ble Commission in its tariff order for FY
2008-09 & 2009-10. Since then no revision is made in the equity capital for the
subsequent years. APGCL hence considered that revision of equity capital is
necessary and in order to seek approval on revised equity capital base, APGCL in its
petition has worked out the Cost of Capital (Page 199 of the Tariff Petition) and
Estimated Approved Equity Capital (page 200 of the Tariff Petition) as follows:
a) Cost of Capital: - The Gross Fixed Assets Value (GFA) as on April 01, 2009 as per
the Audited Statement of Accounts has been considered as the Gross Approved
Capital cost for the FY 2009-10. The Gross Fixed Assets Value (GFA) as on April 01,
2009along with the station wise additions during the FY 2009-10 has been
considered as the Gross Approved Capital cost for the FY 10-11. In the same way,
the Gross Approved Capital Cost has been calculated for each year till March 31,
2016.
b) Approved Equity component of Capital Cost:- To arrive at the Equity component of
31
this capital cost, APGCL considered the Capital cost from FY 2009-10 to FY 2015-16
(calculated at (a) above) and 30% of the same is compared with Actual paid-up
capital duly approved by the Hon’ble Commission. APGCL considered the lower of
30% of the Approved Capital Cost and the Actual equity capital as apportioned
above.
On the revised Equity Capital, base return on equity is calculated @ 14%. The soft
copy of the same in MS-Excel format is also furnished to the Hon’ble Commission for
prudence check. Similarly RoE for FY 2014-15 and FY 2015-16 has been arrived.
Comments of the Commission:
The Commission has approved Return on Equity in the true-up for FY 2013-14, APR
for FY 2014-15, and ARR for FY 2015-16 in accordance with AERC Tariff
Regulations, 2006. The detailed analysis is given in the respective Chapters of this
Order.
Issue No. 12: Depreciation
Objections:
ABITA submitted that the Petitioner has not submitted the computations of
depreciation in the Petition. ABITA requested the Commission to approve the
depreciation in accordance with AERC Tariff Regulations, 2006.
Response of APGCL:
APGCL submitted that Depreciation has been calculated using the methodology &
schedule of depreciation rates as prescribed by the Hon’ble AERC. APGCL has
further submitted that the Hon’ble Commission had already directed APGCL to
provide the details of investment incurred, assets capitalized/de-capitalized, plant
wise break up assets under the various heads & Computation methodology along
with soft copy of the same in MS-Excel format for the relevant financial years.
APGCL has furnished all the details sought by the Hon’ble Commission.
APGCL has further submitted that it has deducted the depreciation on assets created
out of grants and capital subsidies in line with Tariff Regulations. APGCL mentioned
that the details of assets and capital work in progress created out of grants and
capital subsidies have been provided in the petition.
32
Comments of the Commission:
The Commission has approved depreciation in the true-up for FY 2013-14, APR for
FY 2014-15, and ARR for FY 2015-16 in accordance with AERC Tariff Regulations,
2006. The detailed analysis is given in the respective Chapters of this Order.
Issue No. 13: Interest and Finance Charges
Objections:
ABITA submitted that the actual interest expenses for FY 2013-14 as submitted by
the Petitioner are much higher than that approved by the Commission. Also, Interest
on government loan has been taken as 10.5% against 10% approved in MYT for FY
2013-14 overstating the interest. The objector has requested the Hon’ble
Commission to check the Schedule of loans before approval of Interest and Finance
Charges.
FINER has requested for submission of methodology for calculation of capitalisation
of interest so as to enable them to respond to the same in a meaningful way.
Response of APGCL:
APGCL submitted that the interest rate considered for loan from Government has
been submitted at Annexure C of the tariff petition. The interest on PFC loan is paid
on the basis of claim raised by PFC as per the terms and conditions of each loan
agreement and accordingly, APGCL makes payment of the same on receipt of the
claims from PFC. Claims relating to PFC are annexed in Annexure-E of the tariff
petition.
Further, APGCL has submitted that it has furnished all the details on Interest and
finance charges along with calculation in MS-Excel format as directed during the
technical validation session. APGCL has submitted that it has also provided all the
sanction letters of loan from Government of Assam in Annexure B and loan drawn
from PFCL during FY 2013-14 in Annexure D of the Tariff Petition.
APGCL has further submitted that the methodology adopted by APGCL for
Capitalisation of the interest and finance Charges has been shown in the section for
Investment in FY 2013-14(Table 35, Page 180-181 of the Tariff Petition), Revised
Investment Proposal FY 2014-15 (Table-6A, Page 14 of the Tariff Petition) &
Investment Plan Table II FY 2015-16 (Page 65-66 of the Tariff Petition), which are as
33
follows,
• The addition of debt in FY 13-14 along with the opening debt as on April o1,
2013 is summed up to arrive at closing debt balance as on March 31, 2014 of
each project
• Project-wise closing debt balance is arrived for FY 2014-15 &FY 2015-16 in
similar way.
• On the closing debt balance, the applicable interest rate in respect of State
Govt. loan, PFC loan and other FI loan are applied to calculate interest
expenses for FY 2013-14, 2014-15 &2015-16.
• The interest expenses in respect of projects to be commissioned beyond the
control period are excluded as a whole and capitalized to form part of Capital
work in progress. However, with respect to the projects to be commissioned
in the FY 2015-16 i.e. Myntriang Stage-I along with enhanced capacity of 4.5
MW & Namrup RPP in the FY 2015-16, proportionate interest expenses are
charged to revenue and the balance is capitalized. Accordingly, the figures of
Rs. 19.44 Crore, Rs 22.85 Crore, & Rs. 19.75 Crore for the FY 2013-14, FY
2014-15 & FY 2015-16 are calculated. The project-wise break up of interest
expenses and capitalized expenses can be referred to in Page 127- 132 of
the Petition.
Comments of the Commission:
The Commission has approved the interest and finance charges in accordance with
AERC Tariff Regulations, 2006. The Commission has verified the details of loan from
APGCL. The detailed analysis is given in the respective Chapters of this Order.
Issue No. 14: Incentive
Objections:
ABITA submitted that Incentive has been claimed on account of higher PLF,
however, due to poor SHR and high Auxiliary consumption, higher expenses are
claimed and therefore no incentive shall be allowed to APGCL.
Response of APGCL:
APGCL submitted that it has claimed Incentive for NTPS, LTPS and KLHEP as per
the Regulatory norms.
Comments of the Commission:
34
The Commission has approved incentive as per the norms given in the AERC Tariff
Regulations, 2006. The detailed analysis is given in the respective chapters of this
order.
Issue No. 15: Submission of Fixed Asset Register
Objections:
FINER has submitted that APGCL has not submitted any proof of assets in operation
in the form of Fixed Asset Register. FINER also referred to APTEL order dated
November 11, 2011 in the appeal of 121 of 2010 for the same.
Response of APGCL:
APGCL submitted that it is maintaining a fixed asset register by taking into
consideration the earlier fixed asset register of the company (derived from the
opening trial balance of APGCL as on April 01, 2005 received on bifurcation of
erstwhile ASEB). APGCL further submitted that, during the FY 2013-14, physical
verification of fixed assets was also carried out and based on the same, a fresh fixed
asset register was prepared during the year and the same is produced for statutory
and C&AG audit.
Comments of the Commission:
The Commission has taken note of the Petitioner’s submission and has issued necessary directive in this regard.
Issue No. 16: Principles for Tariff fixation
Objections:
Shri Jayanta Deka has submitted that the proposed tariff for FY 2013-14 was already
too high, exorbitant, excessive and unaffordable to the poor, common people and the
people from economically backward classes. Shri Jayanta Deka has further
submitted that the proposed tariff Enhancement plea of the APGCL is not in
consonance with the principle laid down in Section 61 & 62 of Electricity Act 2003
and national tariff policy. The proposed enhancement of tariff has put the interest of
consumer on the back seat.
Response of APGCL:
APGCL has submitted that they have proposed the tariff for FY 2015-16 in
accordance with the principle of Section 61 of the Electricity Act 2003, National Tariff
35
Policy and taking into consideration the inflationary trend for fuel cost and
spares/equipment required to run the APGCL’s plant smoothly. APGCL has also
submitted that the tariff shall allow for recovery of cost of electricity in reasonable
manner and that the tariff should reflect the cost of supply of electricity. Further
APGCL has submitted the methodology of calculation of various cost components.
Comments of the Commission:
The Commission has taken note of the Petitioner’s submission and has approved
tariff after detailed prudence check of the submission made by APGCL.
Issue No. 17: MYT Principle
Objections:
Shri Jayanta Deka, has submitted that APGCL has not followed MYT tariff principle
and therefore the petition of APGCL should be rejected.
Response of APGCL:
APGCL has submitted that it has filed petition as per MYT principle laid down by
Commission.
Comments of the Commission:
The Commission has taken note of the Petitioner’s submission and has approved
tariff after detailed prudence check of the submission made by APGCL in accordance
with the MYT principles.
Issue No. 18: General Comments
Objections:
Consumers Legal Protection Forum, in their written submission, submitted that the
objections and suggestions during previous Hearings, have not been duly
considered. Consumers’ Legal Protection Forum has further submitted that the
Hearing is being organized by AERC at Guwahati with the presence of limited
number of participants. They submitted that many consumers are interested to be
present in the Hearing. However, they are unable to attend the Hearing as it takes
place centrally, at Guwahati. As such, consumers are having difficulties to file
objections against tariff hike. Consumers Legal Protection Forum demanded that the
Commission should organize Hearing at every district headquarter and take
objections/ suggestions prior to taking any decision on Tariff hike.
36
.Comments of the Commission:
The Commission has noted the objections and suggestions provided. However, It has
to be noted that the APDCL publishes notice (as per direction of the Commission)
requesting public comments on the Tariff Petition. Thereafter, based on the number
of response/objection petitions received from consumers/societies/associations etc of
various parts of Assam, the Commission decides on suitable place/s of Hearing.
For this year, response/objections received by the Commission from outside
Guwahati, were from associations who can come down to Guwahati. Therefore, the
Hearing was conducted centrally in Guwahati. In future also Commission will decide
on requirement of conducting Hearing at multiple places based on the volume of
Public response to Tariff Petitions.
The Commission takes note of all the objections of the objectors during the tariff
setting process and has set the tariff as per regulations and after doing proper
prudence check of each of submission by APDCL and objectors.
Issue No. 19: Promotion of Co-generation and generation of electricity from Renewable Energy Sources.
Objections:
Shri Jayanta Deka has submitted that, APGCL has not taken any steps for co-
generation of electricity from renewable energy sources. He submitted that the
burden on the consumers would have been lower if APGCL has paid heed towards
the generation of electricity from renewable energy sources and thus APGCL has not
followed the principle laid down in section 61(g) of the Electricity Act 2003 and hence
the prayer for enhancement of tariff should be rejected on the above ground.
Response of APGCL:
APGCL has submitted that it has already commissioned a 3 MW hydel project as a
part of Myntriang Small Hydro Electric Project (SHEP), in the year 2014 under
Renewable Energy Program. Another 10.5 MW of the project is expected to be
commissioned in the FY 2015-16.In addition to these, the following Renewable
Energy projects are under process of implementation:
1. 24 MW Borpani Middle-II SHEP (DPR of the project is already approved by
APGCL Board and Preliminary survey work for road and building is in
progress)
2. 21 MW Borpani Middle-I and 12 MW Borpani Barrage Toe SHEP (DPR for
these projects is under preparation)
37
3. 2 MW Solar PV projects each at NTPS and LTPS(DPR for these projects are
under preparation)
APGCL further submitted that the cost of generation of power from renewable
sources is usually high. Hence, to attract investors in the Renewable Energy Sector,
a separate Regulation called AERC (Terms and Conditions for Tariff Determination
from Renewable Energy Sources) has been issued by AERC. APGCL requested
AERC to scale down its tariff for RE sources to have some relevance with tariff of
power from regular sources of energy.
Comments of the Commission:
The Commission always encourages Renewable Energy projects and have
formulated various regulations to promote renewable energy including notification of
minimum renewable purchase obligations.
Issue No. 20: Internal Financial Control
Objections:
Assam Bidyut Grahak Adhikar Parishad has submitted that several flaws in Audited
Statement of Accounts have been pointed out by CAG.
Response of APGCL:
APGCL has submitted that the objection pertains to Audited Statement of Account of
FY 2012-13 for which the Necessary rectification has already been made in the
accounts for FY 2013-14 under the head of prior period expenses/ credit.
Comments of the Commission:
The Commission has taken note of the objection. The Commission has done
prudence check of prior period expense of FY 2013-14 related to period prior to FY
2013-14 while truing up and similarly will do the prudence check of audited prior
period income and expense in subsequent order.
38
4 Truing up for FY 2013-14
4.1 METHODOLOGY FOR TRUING UP
The Commission approves the cost parameters through approval of the Annual
Revenue Requirement based on the data provided by the petitioner as available
during the time of filing tariff petitions. The cost approvals for each of the items are
based on projection of expenses and revenue generation before the start of the year
and hence, the projections might vary over the course of the year.
The actual cost/values for certain elements/parameters may vary as against the
approved cost during the year due to various controllable and uncontrollable factors.
The generating company may end up with higher or lower expenditure, as the case
may be, at the end of the year as against the approved cost. In case of actual fixed
costs being higher than the approved fixed costs, there is no mechanism during the
year to recover the additional fixed costs over and above the approved fixed costs as
the tariff for the generating company cannot be amended more than once as per
Regulation 5.1 of the AERC Tariff Regulations, 2006, the abstract of which is
provided below:
“No tariff or part of any tariff may ordinarily be amended, more frequently than once
in any financial year, except in respect of any changes expressly permitted under the
terms of any fuel surcharge formula as may be specified in terms of subsection (4) of
section 62 of the Act specified in Regulation 9 of these Regulations”
As per Regulation 9 of AERC Tariff Regulations, 2006, the recovery of additional cost
for fuel and power purchase over and above the cost approved by the Commission is
provided on a quarterly basis in accordance with the formula approved by the
Commission.
Accordingly, the Commission approved the Fuel and Power Purchase Price
Adjustment Formula (FPPPA) and the same was notified on December 28, 2010 as
AERC (Fuel and Power Purchase Price Adjustment Formula) Regulations, 2010.
Under the truing up mechanism, APGCL has analysed the difference between actual
expenditure and the expenditure approved by the Commission and requested for
39
recovery of the previous year’s actual expenditure through truing up. Based on above
methodology, APGCL has submitted the truing up proposal for FY 2013-14,
supported by audited Annual Statement of Accounts.
The Commission has analysed the actual expenditure for the previous year/years
based on the Audited statements of accounts of the generating company and
allowed/disallowed the recovery of the actual expenditure through the present year’s
tariff, subject to prudence check.
4.2 BACKGROUND
The Commission has approved the ARR and Tariff for FY 2013-14 in the MYT Order
dated November 21, 2013. Further, the Commission vide the Tariff Order dated
November 21, 2014 carried out the true-up for FY 2012-13 including revised true-up
for FY 2011-12, Review for FY 2013-14 and determined the revised ARR and
generation tariff for FY 2014-15.
APGCL has submitted the Petition for approval of true-up for FY 2013-14, APR of
2014-15 and ARR of 2015-16 and revised ARR and generation tariff for FY 2015-16
on December 20, 2014. However, APGCL submitted the Audited Statement of
Accounts on April 07, 2015. As directed by the Commission, APGCL further
submitted the revised petition for truing up for FY 2013-14, APR of FY 2014-15 and
approval of revised ARR and determination of generation tariff for FY 2015-16
incorporating additional information requirements on April 10' 2015.
On scrutiny, it was noticed that the data furnished in respect of truing up for FY 2013-
14, was deficient in some respects and the Commission sought further
information/clarification from APGCL, which has been submitted by APGCL. The
Commission has carried out the truing up for FY 2013-14 based on the submissions
of the Petitioner in accordance with AERC Tariff Regulations, 2006 and prudence
check.
4.3 TRUE-UP FOR FY 2013-14
4.3.1 Operating Capacity
The operating generation capacity of APGCL for FY 2013-14 is as shown in the
Table given below:
40
Table 4.1: Operating Generation Capacity of APGCL for FY 2013-14
Station Operating Capacity (MW)
NTPS 119.50
LTPS with WHRU 157.20
KLHEP 100.00
Total 376.70
APGCL has submitted that earlier Myntriang Stage-II SHEP project was expected to
be completed in June’13. However due to delay in completion of project, it, started
commercial operation only from August 08, 2014. Thus, there was no generation
from Myntriang Stage-II SHEP in FY 2013-14.
4.3.2 Availability / Capacity Index
In accordance with Regulation 39.1 and Regulation 61.1 of AERC Tariff Regulations,
2006, the Target Availability / Capacity Index for recovery of full fixed charges are as
shown in the Table below.
Table 4.2: Target Availability / Capacity Index for recovery of full fixed charges
Station Target Availability / Capacity Index (%)
NTPS 50%
LTPS 50%
KLHEP (Run-of-river) with Pondage
85%
The actual Availability/Capacity Index for FY 2013-14 as per SLDC certification is
shown in the Table below:
Table 4.3: Actual Availability / Capacity Index for FY 2013-14 as submitted by APGCL (%)
Station Availability as Certified by
SLDC (%)
NTPS 61.70
LTPS with WHRU 86.10
KLHEP (Run-of-river) 91.50
APGCL, in its petition for True Up for FY 2013-14 has submitted that KHLEP is a
41
Run-of-River power station with pondage and not a Run-of-River project (without
Pondage) as submitted in earlier Tariff Petitions. As the matter that KLHEP is a
project with Pondage has been brought to the notice of the Commission in this
petition, the Commission directed APGCL to provide justification for the same. In
response to Commission's directive, APGCL submitted the DPR of the KLHEP
project duly signed by authorised signatory and also the Generation schedules. From
the analysis of the DPR and daily generation schedules of KHLEP, it may be
considered that the KLHEP project is not a Run-of-River project (without pondage)
but a Run-of-River project with pondage and therefore, for Truing Up of FY 2013-14,
the Commission has considered KHLEP as a Run-of-River power station with
pondage for the FY 2013-14. Accordingly, the relevant target availability as per the
norms given in the AERC Tariff Regulations, 2006 is considered. However, there will
not be any change in treatment of Incentive for the years prior to FY 2013-14.
It is observed from the above Table that the actual Availability / Capacity Index for FY
2013-14 is higher than the target Availability / Capacity Index specified for recovery
of full fixed charges for all the plants and hence, APGCL is eligible to recover the
full fixed charges for FY 2013-14.
As actual Capacity Index of KLHEP of 91.50%, is higher than the normative capacity
index specified for run-of-the-river with pondage power generating stations,( i.e.,
85%),efficiency incentive is allowed for the Station.
4.3.3 Plant Load Factor (PLF)
In accordance with Regulation 39.2 of AERC Tariff Regulations, 2006, the Target
PLF for eligibility for efficiency incentive for NTPS and LTPS, is as shown in the
Table below:
Table 4.4: Target PLF for efficiency incentive
Station Target PLF (%)
NTPS 50.00
LTPS 50.00
The PLF approved by the Commission and actuals as submitted by APGCL for FY
2013-14 is shown in the Table below:
42
Table 4.5: PLF approved by the Commission and actuals as submitted by
APGCL for FY 2013-14
Station PLF approved in MYT order dated November 21, 2013 (%)
Actuals as submitted by APGCL (%)
NTPS 50.00 50.30
LTPS with WHRU 62.10 65.08
KHLEP 44.50 48.23
Commission’s view
APGCL has submitted month wise break up of actual gross generation and PLF for
its stations for FY 2013-14. The Commission observes that the actual PLF of
APGCL's stations for FY 2013-14 is in order and higher than approved value. As the
actual PLF for NTPS and LTPS for FY 2013-14 is higher than the target PLF,
efficiency incentive is allowed for FY 2013-14 for these two thermal generating
Stations.
For truing up purposes, the actual PLF achieved has been approved, as shown in the
Table below:
Table 4.6: PLF approved for truing up for FY 2013-14 (%)
4.3.4 Auxiliary Energy Consumption
The Auxiliary Energy Consumption approved by the Commission for FY 2013-14 and
actuals submitted by APGCL for its Stations for FY 2013-14 is shown in the Table
below:
Station Approved by the Commission for
truing up
NTPS 50.30
LTPS with WHRU 65.08
KHLEP 48.23
43
Table 4.7: Auxiliary Energy Consumption for FY 2013-14
Station Approved in MYT Order dated November 21, 2013
(%)
Actuals as submitted by APGCL (%)
NTPS 4.50 6.00
LTPS 5.50
8.80
KLHEP 0.50
0.50
In response to Commission query on reason for high Auxiliary consumption, APGCL
has submitted that the CERC norm could not be followed in case of ageing NTPS
and LTPS for different mode of operation & frame sizes of the power stations. For
KLHEP also, CERC norms was found to be not applicable as the power project was
commissioned in 2007 after an inordinate delay of 25 years for which its project cost
was not at par in comparison to the norms of a Hydro Project’s having normal
gestation period.
APGCL has submitted that the average actual Auxiliary Power Consumption (APC)
for the last 3 years of both LTPS/NTPS is on the higher side than the normative
targets fixed by Commission. APGCL has also submitted that they are constantly
trying for reduction of APC to the extent possible and has already taken numerous
initiatives/ steps as per recommendation of Energy Audit Report of National
Productivity Council (NPC).As per direction of Commission, APGCL submitted the
following break-up of Auxiliary Energy Consumption for NTPS and LTPS:
Table 4.8: Break-up of Auxiliary Energy Consumption submitted by APGCL for
FY 2013-14
Particulars LTPS NTPS
MU % MU %
Gross Generation
896.15
-
526.57
-
Station Auxiliary Energy Consumption
63.55 7.10
18.62
3.54
Transformer loss
15.13
1.69
12.96
2.46
44
Particulars LTPS NTPS
MU % MU %
Total Auxiliary Energy Consumption
78.68
8.79
31.58
6.00
Commission’s view
The actual Auxiliary Energy Consumption achieved by APGCL for NTPS and LTPS is
higher than that approved by the Commission. As Auxiliary Energy Consumption is a
performance parameter, the Commission, in this Order, has approved the Auxiliary
Energy Consumption for FY 2013-14 same as approved in the MYT Order dated
November 21, 2013. It is pertinent to mention here that in the MYT Order dated
November 21, 2013, the Commission has set the Auxiliary Energy Consumption for
FY 2013-14 after considering the age of plant and other relevant parameters and as
such there is no major scope to deviate from the set parameters. The Auxiliary
Energy Consumption approved by the Commission for the Truing Up of FY 2013-14
is shown in the Table below:
Table 4.9: Auxiliary Energy Consumption approved for truing up for FY 2013-14
Station Approved by the Commission for
truing up purposes (%)
NTPS 4.50
LTPS with WHRU 5.50
KLHEP 0.50
4.3.5 Gross Generation and Net Generation
The station-wise gross generation and net generation approved by the Commission
for FY 2013-14in the MYT order and actuals as submitted by APGCL is shown in the
Table below:
Table 4.10: Gross Generation and Net Generation for FY 2013-14(MU)
Station
Approved in MYT order dated November 21, 2013
Actuals for FY 2013-14 as submitted by APGCL
Gross Net Gross Net
NTPS 523.41 499.86 526.57 494.98
LTPS 855.30 808.26 896.15 817.47
Total Thermal 1378.71 1308.11 1422.72 1312.45
45
Station
Approved in MYT order dated November 21, 2013
Actuals for FY 2013-14 as submitted by APGCL
Gross Net Gross Net
KLHEP 390.00 388.05 422.51 420.40
Myntriang SHEP 17.69 17.60 Nil Nil
Total Hydro 407.69 405.65 422.51 420.40
Total APGCL 1786.40 1713.76 1845.23 1732.85
In reply to the Commission’s query about proof of gross generation, APGCL has
submitted the actual gross generation and net generation duly certified by SLDC for
its stations for FY 2013-14. The Commission observes that the actual gross
generation and net generation, as submitted by APGCL, is in order. The Commission
has considered the actual gross generation as submitted by APGCL and as certified
by SLDC. The Commission has approved the Net generation based on the approved
Auxiliary Energy Consumption percentage. The station wise gross generation and
net generation approved by the Commission for FY 2013-14 is shown in the Table
below:
Table 4.11: Gross and Net Generation approved for truing up for FY 2013-
14(MU)
Station Approved by the Commission
Gross Net
NTPS 526.57 502.87
LTPS with WHRU 896.15 846.86
Total Thermal 1422.72 1349.73
KLHEP 422.51 420.40
Total APGCL 1845.23 1770.13
4.3.6 Gross Station Heat Rate (GSHR)
The Gross Station Heat Rate approved by the Commission in the MYT order and the
actuals as submitted by APGCL for FY 2013-14 is shown in the Table below:
46
Table 4.12: Gross Station Heat Rate for FY 2013-14(kcal/kWh)
Station Approved in MYT order dated November 21,
2013
Actual for FY 2013-14 as submitted by APGCL
NTPS 3266 3976
LTPS with WHRU 2792 3164
It is observed that the actual GSHR for NTPS and LTPS for FY 2013-14 is
significantly higher than that approved by the Commission. APGCL has submitted
that actual Station Heat Rates of LTPS and NTPS are more or less similar with that
of the Draft Amended Regulation of AERC. In view of this, APGCL appealed before
Commission to consider the actual Heat Rates of LTPS and NTPS in the True-up of
2013-14.
Commission’s view
Based on the Report of the study conducted by IIT Guwahati, submission of APGCL
&other stakeholders and the Hearing on the matter, the Commission had notified
Amendment to AERC Tariff Regulations, 2006 on 6th January, 2015, thereby revising
the GSHR. The revised GSHR came into effect only from the date of notification i.e.
January 06, 2015. Therefore, the revised Station Heat Rates (SHR) are not
applicable for the truing up of FY 2013-14.
Therefore, for truing up of FY 2013-14, Commission has approved the original SHR
norms as specified in the AERC Tariff Regulations, 2006. The Commission, in this
Order, has approved the GSHR of 3266 kcal/kWh for NTPS, same as approved in
the MYT Order dated November 21, 2013. For LTPS, however, the Commission has
revised the GSHR considering the actual generation of LTPS WHRU for FY 2013-14.
The computation of the revised GSHR for LTPS WHRU is given below:
Particulars Amount
GSHR for open cycle as per AERC Tariff Regulations, 2006 3658 kcal/kWh
Total generation of LTPS for FY 2013-14 896.15MU
Generation in WHRU for FY 2013-14 192.56MU
47
Particulars Amount
Generation excluding WHRU 703.59MU
Approved GSHR taking into consideration WHRU generation
= (3658/896.15) x 703.59 = 2872kcal/kWh
Hence, the Commission approves the GSHR of 3266kcal/kWh and
2872kcal/kWh for NTPS and LTPS, respectively, for FY 2013-14.
4.3.7 Fuel Cost
APGCL has claimed the actual Fuel Cost of Rs. 385.15 Crore as per the Audited
Statement of Accounts for FY 2013-14. As the station-wise fuel cost details are not
mentioned in the Audited Statement of Accounts for FY 2013-14, the Commission
directed APGCL to submit the actual fuel bills for FY 2013-14.The Commission has
verified the actual fuel price and gross calorific value (GCV) of fuel from the actual
fuel bills submitted by APGCL. The Commission has trued up the fuel cost for FY
2013-14 based on the approved performance parameters and actual fuel price and
GCV for FY 2013-14.The actual weighted average GCV and landed price of gas
considered by the Commission in the truing up of fuel cost for FY 2013-14 is shown
in the Table below:
Table 4.13: Actual weighted average GCV and price of gas considered by the Commission for truing up for FY 2013-14
Station Wt. Avg. GCV of gas
(kcal/SCM)
Wt. Avg. price of gas (including transport) (Rs./1000 SCM)
NTPS
9267.25
6488.49
LTPS
9580.61
8059.51
The fuel cost trued up by the Commission for APGCL for FY 2013-14 based on the approved
generation and performance parameters is shown in the Table below:
48
Table 4.14: Approved fuel cost for truing up for FY 2013-14
Particulars Derivation Unit NTPS LTPS with WHRU
Total
Gross Generation A MU
526.57
896.15
1422.72
Heat Rate B kcal/kWh
3266.00
2872.00
GCV of gas C kcal/SCM
9267.25
9580.61
Overall Heat D=AxB G. cal.
1719771.09
2573741.47
4293512.56
Gas consumption E=D/C M. SCM
185.58
268.64
Price of Gas F Rs./1000 SCM
6488.49
8059.51
Total cost of Gas G=ExF/100 Rs. Crore 120.41
216.51
336.92
Auxiliary Consumption
H %
4.50
5.50
Auxiliary Consumption
I=AxH MU
23.70
49.29
72.98
Net Generation J=A-I MU
502.87
846.86
1349.73
Fuel Cost per Unit (Gross)
K=G/A/10 Rs./kWh
2.29
2.42
2.37
Fuel Cost per Unit (Net)
L=G/J/10 Rs./kWh
2.39
2.56
2.50
The Commission thus, approves the trued up fuel cost of Rs. 336.92 Crore as
against the APGCL’s claim of Rs. 385.13 Crore for FY 2013-14.
4.3.8 Incentive for Generation
As discussed in Para 4.3.3, APGCL is eligible for incentive for the thermal stations at
a flat rate of 25.00 paise/kWh, for ex-bus scheduled energy corresponding to
scheduled generation in excess of ex-bus energy corresponding to target PLF.
49
Further, as discussed in Para 4.3.2, incentive is payable for the hydro generating
station in case Capacity Index exceeds 85% for run-of-river power station with
pondage in accordance with the following formula:
Incentive =0.65 x Annual Fixed Charges x (CIA-CIN)/100
Where:
CIA- Capacity Index Achieved
CIN- Normative Capacity Index, i.e., 85% for run-of-river power station with pondage
The incentive calculations for thermal generating stations and hydro generation
stations are shown in the Tables below:
Table 4.15: Incentive computation for Thermal Stations for FY 2013-14
Station
PLF (%)
Gross
Generation
(MU)
Auxiliary
Consumption
(%)
Net
Generation
(MU)
Ex-bus energy eligible for
incentive (MU)
Incentive (Rs. Crore)
Target
for
Incentive
Actual
At target PLF
Actual
Normative
Actual
At target PLF
Actual
NTPS 50.00
50.30
523.41
526.57
4.50
6.00
499.86
494.98
0.00
0.00
LTPS
with
WHRU
50.00
65.08
688.54
896.15
5.50
8.80
650.67
817.47
166.80
4.17
Total
1211.95
1422.72
1150.52
1312.26
166.80
4.17
Table 4.16: Incentive computation for Hydro Station for FY 2013-14
Station
Capacity Index (%) Generation capacity
(MW) Annual Fixed Charges
(Rs. Crore) Incentive (Rs. Crore) Normative Actual
Total APGCL
KLHEP Total APGCL
KLHEP
KLHEP 85.00
91.5%
376.70 100.00
221.52
58.81
2.48
Thus, for thermal generating stations, APGCL is eligible for incentive of Rs.
50
4.17 Crore, and for the hydro generating station, incentive for exceeding target
Capacity Index works out to Rs. 2.48 Crore. The total incentive amount of Rs.
6.65 Crore is to be passed on as incentive in the ARR for FY 2013-14.
4.3.9 Employee expenses
The Commission, in the MYT Order dated November 21, 2013 for FY 2013-14, had
approved the Employee Expenses of Rs. 78.12 Crore. APGCL has claimed the
actual Employee Expenses of Rs. 82.00 Crore for FY 2013-14 as per the Audited
Statement of Accounts for FY 2013-14.
The Commission has examined the reasons for increase in Employee Expenses and
it has understood that the same is primarily on account of increase in DA in line with
the rates approved by Government of Assam.
Accordingly, Commission has approved the Employee Expenses of Rs. 82.00
Crore as per the Audited Statement Accounts for FY 2013-14.
4.3.10 Repair and Maintenance (R&M) expenses
The Commission, in the MYT Order dated November 21, 2013, had approved the
R&M expenses of Rs. 14.91Crore, for FY 2013-14. APGCL has claimed the actual
R&M expenses of Rs. 26.03 Crore for FY 2013-14 as per the Audited Statement of
Accounts for FY 2013-14. APGCL has submitted that actual amount appeared
includes additional cost of Rs. 9.03 Crores towards overhauling of Karbi Langpi HEP
unit-II. In this regard, APGCL referred to the Review Order dated July 07, 2014 and
mentioned that Commission has granted additional approval of Rs 26.73 Crore for R
& M Expense. APGCL also submitted that the approved R&M expenses in MYT
Order dated November 21, 2013, does not include Lubricants & consumables and
Turbine Oil expenses, which they have claimed in addition to normal R&M expenses
in the true up for FY 2013-14.
In the Review Order dated July 07, 2014, the Commission has considered Expense
towards Overhauling i.e. Rs. 26.73 Crore as part of R & M Expense in line with the
approach adopted by CERC & other SERCs, after considering the fact that
Overhauling need to be done as per the advice of the OEM for maintaining
generation level,. As such, the Overhauling Expense is referred as Special type R &
M Expense and normal R & M is referred as Regular R & M Expense. The summary
of Special R & M Expense for FY 2013-14 (as approved in MYT Order and Review
Order) is mentioned in the table below:
51
Particular FY 2013-14 (Rs Cr)
Overhauling-KLHEP 16.83
Overhauling-LTPS-Unit2 8.5
Overhauling-LTPS-Unit7 9.9
Special Type R & M 35.23
Accordingly, considering the submission of APGCL and as per Audited Statement of
Accounts for FY 2013-14, the Commission has segregated Special Type of R&M
Expense of Rs. 9.03 Crore and Regular R&M Expenses of Rs. 17 Crore (including
expense of Rs. 1.43 Crore for Lubricants and consumable stores etc). Hence, the
Commission approves R&M Expense of Rs. 26.03 Crore for truing up of FY
2013-14.
4.3.11 Administration and General (A&G) expenses
The Commission, in the MYT order dated November 21, 2013 had approved the
A&G expenses of Rs. 5.93 Crore for FY 2013-14,APGCL has claimed the actual
A&G expenses of Rs.12.53 Crore for FY 2013-14 as per the Audited Statement of
Accounts for FY 2013-14. APGCL submitted that they have included an amount of
Rs 5.78 Crore under the provision of electricity bill of different offices of APGCL.
In a response to the query raised by the Commission, APGCL has not submitted the
proof of electricity bills paid to APDCL. The Commission has thus disallowed the
provision of electricity bill claimed by APGCL and approved the rest of A&G
expenses as per Audited statements of account.
The A&G expenses approved by the Commission for True up of FY 2013-14 is
Rs. 6.75 Crore.
4.3.12 Depreciation
The Commission, in the MYT Order dated November 21, 2013, had approved the
depreciation for APGCL as Rs. 16.35 Crore. APGCL has claimed depreciation of Rs.
25.66 Crore for FY 2013-14. As per the Audited statements of accounts, the actual
depreciation for FY 2013-14 is Rs. 28.68Crore.
As per Regulation 14 of AERC Tariff Regulations 2006, the total depreciation during
the life of the asset shall not exceed 90% of the original cost of GFA. In line with the
AERC Tariff Regulations, 2006, APGCL has submitted head wise value of GFA for
52
which accumulated depreciation has exceeded 90% of the GFA and consequent
adjustments. The information submitted by APGCL is scrutinised and considered
accordingly.
Further, as specified in Regulation 14 of AERC Tariff Regulations, 2006, assets
created using consumer contribution or capital subsidy/grant, etc. need to be
excluded from the asset value for the purpose of depreciation. For arriving at value
for asset created out of grant/subsidy, Commission has apportioned the total grant
reflected in Audited Statement of Accounts for FY 2013-14 in to grant pertaining to
CWIP & Fixed Asset, based on the ratio of CWIP & Fixed Asset.
The Commission has considered the opening GFA base for FY 2013-14 as per the
value approved in True up of FY 2012-13. . The weighted average rate of
depreciation has been considered for computing the depreciation on assets created
out of grants/subsidies and consumer contribution and the same has been deducted
from the total depreciation to arrive at the Approved depreciation for FY 2013-14.
The depreciation approved by the Commission for true-up for FY 2013-14 is
shown in the Table 4.17 in the next page:
Table 4.17: Depreciation approved for true-up for FY 2013-14(Rs. Crore)
Group of Asset
GFA as
on
01/04/13
Asse
t Addit
ion
Asset
Deletion
GFA as
on
01/04/14
Average
GFA
90% of
Average
GFA
Rate of
Depreciati
on
Depreciatio
n for FY
13-14
Less:
Depreciation
on GFA
having 90%
accumulated
dep.
Net
Depreciation
for FY 13-14
Land
20
.79
-
- 20
.79
20
.79
18
.71
0.
00%
0.
00
0.00
-
Bui
ldin
g
44.9
8
0.31
-
45.2
9
45.1
4
40.6
2
1.80
%
0.73
0.
00
0.73
Hyd
raul
ic w
orks
14
5.31
15
.78
-
161.
09
153.
20
137.
88
2.57
%
3.54
0.
00
3.54
Oth
er c
ivil
wor
ks
184.
84
3.92
-
188.
76
186.
80
168.
12
1.80
%
3.03
0.
00
3.03
Pla
nt &
mac
hine
ry
ther
mal
48
8.30
10
.83
(5
.57)
49
3.56
49
0.93
44
1.84
6.
00%
26
.51
9.
22
17.2
9
Pla
nt &
mac
hine
ry
hyd
el
175.
20
18.3
5
- 19
3.55
18
4.37
16
5.94
2.
57%
4.
26
0.00
4.
26
Lin
es &
cab
les
44.3
3
0.33
-
44.6
6
44.4
9
40.0
5
2.57
%
1.03
0.
02
1.01
Veh
icle
1.
24
- -
1.24
1.
24
1.12
18
.00%
0.
20
0.07
0.
13
Fur
nitu
re
4.28
-2
.77
-
1.51
2.
90
2.61
6.
00%
0.
16
0.09
0.
07
Oth
er o
ffic
e eq
uip
men
t 1.
07
0.11
-
1.18
1.
12
1.01
6.
00%
0.
06
0.00
0.
06
Roa
ds o
n la
nd
belo
ngin
g to
oth
er
-
- -
- -
1.80
%
0.00
0.
00
-
Cap
ital s
pare
s
174.
10
- -
174.
10
174.
10
156.
69
4.75
%
7.44
3.
63
3.81
Total
1284.43 46.87 -5.57
1325.73
1305.09
1174.58
46.97
13.03
33.9
4
Ave
rage
ass
ets
in
FY
13-
14
excl
udin
g La
nd &
Rig
hts
1,284.29
54
Table 4.18: Depreciation on assets created out of grants/subsidies and consumer contribution (Rs. Crore)
Particulars FY 2013-14
Grants & Subsidies as on 01.04.2013
399.25
Grants & Subsidies as on 01.04.2014
380.38
Average Grants & subsidies
389.82
90% of the Assets funded by Grants/subsidies
350.83
CWIP
567.46
GFA excluding Land and rights
1284.29
Cumulative grants apportioned in the ratio of GFA and CWIP
243.32
Depreciation
33.94
Rate of Depreciation 3.66%
Depreciation on 90% of the Assets funded by Grants/subsidies
8.90
Depreciation approved
25.04
Accordingly, the Commission has approved the depreciation of Rs. 25.04
Crore for true-up of FY 2013-14.
4.3.13 Interest and Finance Charges
The Commission, in the MYT Order dated November 21, 2013, had approved the
interest and finance charges for APGCL as Rs. 30.90 Crores .APGCL has claimed
the interest and finance charges of Rs.31.28 Crores for FY 2013-14 as per the
Audited Statement of Accounts for FY 2013-14. APGCL has submitted that since
GPF trust was not formed till FY 2013-14, there is no interest on GPF claimed for that
Financial year in true up. The Commission has considered the opening balance of
loans equal to the closing balance of loans approved by the Commission in the true
55
up for FY 2012-13. The Commission has considered the actual interest rates as
submitted by APGCL for computing the interest expenses for FY 2013-14.
APGCL has claimed Rs. 19.46 Crore as Interest Capitalised as against Rs. 15.32
Crore as per Statement of Accounts for FY 2013-14. However, for truing up purpose,
the Commission has considered the Interest Capitalised booked in Statement of
Accounts for FY 2013-14, after reducing the same in proportion of allowed and
booked interest. Thereby, Commission has allowed Rs. 13.78 Crore as Interest
Capitalised based on the details given below.
The interest and finance charge approved by the Commission for FY 2013-14 is
shown in the Table below:
Table 4.19: Interest and Finance Charges approved by the Commission for FY
2013-14(Rs. Crore)
Particulars
FY 2013-14
Opening Balance
Receipts Repayments Closing Balance
Rate of interest
Interest
PFC
306.48
50.00
22.97
333.51
11.71%
37.46
State Govt. Loan
97.35
18.57
0.00
115.92
10.45%
11.14
Total
403.83
68.57
22.97
449.44
11.39%
48.60
Other Finance Charges
0.05
Less: Interest capitalised
13.78
Net Interest and finance charges
34.87
Accordingly, the Commission has trued up the interest and finance charges of
Rs. 34.87 Crore for FY 2013-14.
4.3.14 Interest on Working Capital
The Commission, in the MYT Order dated November 21, 2013, for FY 2013-14, had
approved the interest on working capital as Rs. 18.25 Crore. As against the same,
APGCL has claimed the interest of working capital of Rs. 22.32 Crore for true-up of
FY 2013-14. The Commission has approved the normative interest on working
56
capital for FY 2013-14 in accordance with AERC Tariff Regulations, 2006. As per the
AERC Tariff Regulations, 2006, the applicable interest rate should be the Prime
Lending Rate of State Bank of India as applicable on 1st April of the Financial Year
for which tariff is being determined. Based on this, the applicable SBI PLR is 14.45%.
APGCL has also stated that they have not considered O&M and GFA component for
Chandrapur Thermal Power Stations (CTPS) during calculation of Interest on working
capital. As the CTPS is not generating power, the Commission has reduced O&M
and GFA component of CTPS proportionately as per the ratio of O&M expense
submitted by APGCL and approved by the Commission, for those ARR components
from the calculation of Interest on Working capital.
Table 4.20: Interest on Working Capital approved by the Commission for FY
2013-14(Rs. Crore)
Particulars
Approved in MYT order dated
November 21, 2013 (%)
True-up Petition
Approved by the Commission
Fuel Cost (1 month) 24.12 32.10 23.45
O&M expenses (1 month) 8.25 9.79 9.32
Maintenance spares 8.85 12.48 12.48
Receivables (2 months) 82.49 96.97 78.38
Total Working Capital 123.71 151.34 123.64
Rate of Interest on Working Capital
14.75% 14.75%
14.45%
Interest on Working Capital 18.25
22.32
17.87
Accordingly, the Commission has trued up the interest on working capital of
Rs. 17.87 Crore for truing up of FY 2013-14.
4.3.15 Prior period items
APGCL has recorded expense through net prior period items for true-up for FY 2013-
14 of Rs.10.07 Crores. The Commission observed that as per the Audited statements
of accounts, there has been net prior period income for FY 2013-14. APGCL has
submitted details of Prior period related income and expenses in the revised petition,
which is shown below:
57
Table 4.21: Net Prior Period Items
Particulars Proposed by APGCL Approved by the
Commission for true-up for FY 2013-14
Prior Period Income in lakh
Withdrawal of excess provision of ROP arrear for FY 2009-10
1004.84 1004.84
Interest income for prior period 0.01 0.01
Other income relating to prior period 10.30 10.30
Total prior period Income 1015.16 1015.16
Prior period Expense in lakh
Operating expenses for Prior period (KLHEP) 7.59 7.59
Other charges relating to prior period 0.94 0.94
Total Prior Period Expense 8.53 8.53
Net Prior Period Income (in lakh) 1007 1007
As observed from the above table, the net prior period is of income nature. As such,
based on the submission of APGCL, the net prior period income for FY 2013-14
after prudence check, is approved by the Commission amounting Rs. 10.07
Crore.
4.3.16 Return on Equity (RoE)
The Commission, in the MYT Order dated November 21, 2013, had approved the
Return on Equity of Rs. 37.99 Crore for FY 2013-14. As against the same, APGCL
has claimed the Return on Equity of Rs. 38.59 Crore for true-up for FY 2013-14.
APGCL has also submitted details of Equity addition and deletion during the FY
2013-14.The Commission has approved RoE in the true-up for FY 2013-14 in
accordance with AERC Tariff Regulations, 2006.
Accordingly, the Commission has trued up Return on Equity for FY 2013-14 as
Rs. 38.59 Crore.
4.3.17 Income Tax
The Commission, in the MYT Order dated November 21, 2013, had approved the
provision for tax as Rs.0.93Crore for FY 2013-14. As against the same, APGCL has
claimed the Income Tax of Rs. 0.45Crore as per Statement of Accounts for FY 2013-
14.
58
The Commission has observed that the actual tax paid is Rs. 0.45 Crore and
hence the same amount is approved as Income Tax in the true-up for FY 2013-
14.
4.3.18 Other Income
The Commission, in the MYT Order dated November 21, 2013, had approved the
other income as Rs. 10.99 Crore for FY 2013-14. As against the same, APGCL has
considered the other income of Rs. 10.60 Crore for true-up for FY 2013-14 as per the
Audited Statement of Accounts for FY 2013-14.
The Commission has approved Rs. 10.60 Crore as Other Income in the true-up
for FY 2013-14.
Table 4.21: Other Income (Rs. Crore)
Particulars Audited
Statement of Accounts
Approved for true-up for FY
2013-14
Other income as per Note 22 of the Audited Statement of Accounts
10.55 10.55
Other Income from Sale of Scrap as per Note 21 of the Annual Account
0.05 0.05
Other income 10.60 10.60
4.3.19 Other Receipt
In the Statement of Accounts for FY 2013-14, Rs. 19.00 Crore is booked as Other
Receipt under the Income section of the Profit & Loss A/C, which is the Revenue
Grant received by APGCL. However, APGCL has not claimed this amount as part of
Income in their petition.
As the said grant is of Revenue nature and is booked as Other Receipts under
Income section of the Statement of Accounts for FY 2013-14, Commission
approves Rs 19.00 Crore of Other Receipt as part of Income.
4.3.20 Revenue from Sale of Power
APGCL has claimed the revenue from sale of power for FY 2013-14 as Rs. 547.00
Crore as per the Audited Statement of Accounts for FY 2013-14.
The Commission has considered the revenue from sale of power as Rs. 547.00
Crore for the true-up of FY 2013-14.
59
4.3.21 Summary of true-up for FY 2013-14
In view of the above analysis and approvals given by the Commission, the approved
revenue requirement for FY 2013-14 after true-up is summarised in the Table
below:
Table 4.222: Summary of true-up for FY 2013-14 (Rs. Crore)
Approved in the MYT Order dated November 21,
2013
True-up Petition
Approved True up
Fixed Charges Operation and Maintenance expenses
Employee expenses 78.12 82.00 82.00 Repair and Maintenance expenses
14.91 26.03 26.03
Administrative and General expenses
5.93 12.53 6.75
Interest and Finance Charges 30.90 31.28 34.87
Interest on Working Capital 18.25 22.32 17.87
Income Tax 0.93 0.45 0.45
Depreciation 16.35 25.66 25.04
Return on Equity 37.99 38.59 38.59
Less: Other Income 10.99 10.60 10.60
Prior Period expenses(+) / credit(-)
-10.07 -10.07
Total Fixed Charges 192.38 218.20 210.92
Fuel Cost 289.45 385.15 336.92
True Up for 2011-12 13.10
13.10 Incentive for Generation for FY 2013-14
0.00 7.97 6.65
Incentive for Secondary Generation for FY 2013-15
2.51 2.51
Total Cost 494.94 613.83 570.10
Revenue from sale of Power 494.94 547.00 547.00
Other Receipts NA NA 19.00
Revenue Gap (+)/Surplus (-) 0.00 66.83 4.10
Hence, the Net Revenue deficit on true-up for FY 2013-14 is Rs. 4.10 Crore as
against the net revenue gap of Rs. 66.83 Crore as claimed by APGCL. The same
has been carried forward for adjustment in the revised ARR for FY 2015-16.
60
5 Annual Performance Review for FY 2014-15
5.1 ANNUAL PERFORMANCE REVIEW
The MYT Order for the Control Period from FY 2013-14 to FY 2015-16 was issued by
the Commission on November 21, 2013 and came into effect from December 01,
2013. Approved components of Tariff in this order have been further revised by the
Commission based on the submission of APGCL in order dated November 21,
2014.Before issuing the next tariff order, it is important for the Commission to review
the technical as well as financial performance of APGCL vis-à-vis the tariff order
issued by the Commission for this year. Also, it is pertinent and desirable that the
Commission reviews its own estimation and directives to ensure better and effective
implementation of its next tariff order.
While the true-up exercise was based on the Audited Statement of Accounts for FY
2013-14, the review exercise examines the technical and financial performance of
APGCL based on approved parameters for FY 2014-15 in the tariff order dated
November 21, 2014 for FY 2014-15based on the actual performance of APGCL.
The exercise also attempts to gauge the effectiveness of the last tariff order by
evaluating the extent of implementation of the directives in the tariff order. These
aspects are discussed in the following paragraphs.
5.1.1 Availability / Capacity Index
The revised Availability / Capacity Index for FY 2014-15 estimated by APGCL in the
APR Petition, are shown in the Table below:
Table 5.1: Availability / Capacity Index for FY 2014-15
Sl. No.
Station
Target Availability / Capacity Index (%)
Approved in the MYT Order dated November 21, 2013(%)*
APR Petition (%)
SLDC certification (Up to January 2015)
(%)
1 NTPS 50.00 52.60 62.60 62.60
2 LTPS with WHRU 50.00 61.00 78.40 78.40
3 KLHEP 90.00 90.00 92.60 92.60
4 Myntriang Stage-II - 91.00 4.25 4.25
*There was no separate approval for Availability for FY 2014-15 in the Tariff Order
dated November 21, 2014. Hence approved value of MYT order dated November 21,
61
2013 has been considered.
APGCL shall be eligible to recover full fixed charges if the actual Availability /
Capacity Index is higher than the target Availability / Capacity Index specified in the
AERC Tariff Regulations, 2006.
5.1.2 Plant Load Factor (PLF)
The revised PLF for FY 2014-15 estimated by APGCL in the APR Petition, is shown
in the Table below:
Table 5.2: Plant Load Factor for FY 2014-15
Station Target PLF for incentive (%)
Approved in the tariff Order dated November
21, 2014 (%) APR Petition (%)
NTPS 50.00 50.00 56.52
LTPS with WHRU 50.00 61.20 67.92
KLHEP - 44.50 41.89
Myntriang SHEP-Stage II
- 43.30 4.18
The revised PLF submitted by APGCL for NTPS and LTPS for FY 2014-15 are
higher than the target PLF of 50%, and also higher than the PLF approved by the
Commission in the tariff order for 2014-15. For Myntriang, APGCL has submitted that
the plant got affected by heavy flood on August 22, 2014, and all the equipment
needed servicing and accordingly actual generation has been low. At present both
the units are under forced shutdown. The Commission has considered PLF for
Annual Performance Review of FY 2014-15 as petitioned by APGCL.
5.1.3 Auxiliary Energy Consumption
The revised Auxiliary Energy Consumption for FY 2014-15 estimated by APGCL in
the APR Petition, is shown in the Table below:
Table 5.3: Auxiliary Energy Consumption for FY 2014-15
Station Approved in the tariff Order dated November 21, 2014
Proposed in petition
APR
NTPS 4.50 5.76 4.50
LTPS 5.50 8.55 5.50
KLHEP 0.50 0.50 0.50
Myntriang SHEP-Stage II
1.00 1.72 1.00
62
It is observed that the revised Auxiliary Energy Consumption for NTPS, LTPS and
Myntriang estimated by APGCL in the APR Petition for FY 2014-15 is higher than the
Auxiliary Energy Consumption approved by the Commission. However, the
Commission has considered auxiliary consumption for APR of FY 2014-15 as
approved in the Tariff order dated November 21, 2014 for FY 2014-15.
5.1.4 Gross Generation and Net Generation
The revised gross generation and net generation for FY 2014-15 estimated by
APGCL in the APR Petition is shown in the Table below:
Table 5.4: Gross Generation and Net Generation for FY 2014-15 (MU)
Station
Approved in the Tariff order dated November
21, 2014 Proposed in petition APR
Gross Net Gross Net Gross Net
NTPS 523.09 499.55 591.66 557.60 591.66 565.04
LTPS 842.47 796.14 935.30 855.30 935.30 883.86
Total Thermal 1365.56 1295.69 1526.97 1412.89 1526.97 1448.90
KLHEP 390.00 388.05 366.98 365.15 366.98 365.15
Myntriang SHEP 11.38 11.26 0.71 0.70 0.71 0.70
Total APGCL 1766.94 1695.00 1894.66 1778.73 1894.66 1814.75
The revised gross generation and net generation for FY 2014-15 estimated by
APGCL in the APR Petition is higher than that approved by the Commission.
However, the Commission has approved net generation for APR of FY 2014-15, after
considering gross generation as proposed by AEGCL and Normative Auxiliary
Consumption.
5.1.5 Gross Station Heat Rate
The revised Gross Station Heat Rate for FY 2014-15 estimated by APGCL in the
APR Petition is shown in the Table below:
63
Table 5.5: Gross Station Heat Rate for FY 2013-14 (kcal/kWh)
Station Approved in the tariff Order dated November 21, 2014
Proposed in petition
NTPS 3266 4056
LTPS with WHRU 2872 3058
On January 06, 2015, Commission has notified Amendment to AERC Tariff
Regulations, 2006, thereby revising the GSHRs. Therefore, for arriving at GSHR of
NTPS and LTPS for FY 2014-15, the Commission has considered weighted average
of the applicable GSHRs prior to & after notification of amended GSHR and the
actual generation of NTPS & LTPS during the respective periods.
For LTPS, till the period when amendment came, the Commission has taken same
approach as per the previous orders and arrived at Closed cycle GSHR as per the
calculation given below.
Table 5.6: GSHR computation for APGCL thermal Power Plants for FY 2014-15
Particulars Prior to Amendment of GSHR (Upto Dec’15)
After Amendment of GSHR (Jan-Mar’15)
GSHR for APR of FY 2014-15
Generation (MU)
GSHR (kCal/kWh)
Generation (MU)
GSHR (kCal/kWh)
1 2 3 4 5 6=(2x3+4x5)/(2+4)
NTPS 451.46 3266.00 140.20 3900.00
3416.23
LTPS 689.09
2807.10
246.22 3200.00
2910.53
Particulars Unit FY 2014-15
Heat Rate as per AERC Tariff Regulations, 2006 kcal/kWh 3658.00
Total generation of LTPS for FY 2014-15 MU 689.09
Generation in WHRU for FY 2014-15 MU 160.29
Generation other than WHRU MU 528.80
Approved Heat Rate taking into consideration WHRU generation
kcal/kWh 2807.10
64
5.1.6 Fuel Cost
The revised weighted average GCV of gas and landed price of gas for FY 2014-15
estimated by APGCL in the APR Petition, is shown in the Table below:
Table 5.7: Weighted average GCV and landed price of gas for FY 2014-15
Station Approved in the tariff Order dated November 21, 2014
APR Petition
Wt. Avg. GCV of Gas
(kcal/SCM)
Wt. Avg. price of Gas (including transport) (Rs./1000 SCM)
Wt. Avg. GCV of Gas
(kcal/SCM)
Wt. Avg. price of Gas (including transport)
(Rs./1000 SCM)
NTPS 9157.50 6275.19
9533.30
7712.65
LTPS with WHRU
9432.42 8172.02 9902.59
9808.52
The commission has considered the GCV & fuel price as per actual fuel bills of gas &
transportation till February 2015 and provisional value for March 2015, while arriving
at the fuel cost for APR of FY 2014-15.
The Commission had approved the fuel cost of Rs. 326.70 Crore for FY 2014-15 in
the Tariff Order dated November 21, 2014. Against the same, APGCL has proposed
for fuel cost of Rs. 477.45 Crore for FY 2014-15. As per the direction of Commission,
APGCL submitted fuel bills till February, 2015 and estimation of fuel cost for March,
2015. After considering normative technical parameters and scrutiny of APGCL’s
submission of station wise generation, GCV & price of Fuel etc., the Commission has
arrived at provisional fuel cost of Rs. 433.27 Crore for FY 2014-15. However,
Commission will undertake prudence check of Fuel cost at the time of truing up of FY
2014-15.
Table 5.8: Fuel Cost calculation for FY 2014-15
Particulars Derivation Unit NTPS LTPS Total
Gross Generation A MU 591.66 935.30 1526.97
Heat Rate B kcal/kWh 3416.23 2910.53
GCV of gas C kcal/SCM 9514.06 9913.15
Overall Heat D=AxB G. cal. 2021258.79 2722223.77 4743482.56
Gas consumption E=D/C M. SCM 212.45 274.61 487.06
Price of Gas F Rs./1000 SCM 7680.01 9836.14
Total cost of Gas G=ExF/100 Rs. Lakh 16316.16 27010.78 43326.94
65
Table 5.9: Fuel Cost for FY 2014-15 (Rs. Crore)
Particulars Approved in the tariff Order dated November
21, 2014
APR Petition
APR
Fuel Cost 326.70 477.45 433.27
5.1.7 Employee Expenses
The Commission had approved the Employee Expenses of Rs. 75.75 Crore for FY
2014-15 in the Tariff Order dated November 21, 2014. As against the same, APGCL
has estimated the Employee Expenses of Rs. 86.54 Crore. As the provisional
account of AEGCL has not been prepared during this exercise, the Commission has
arrived at a figure of Rs. 87.15 Crore, based on approved Employee Expense for FY
2013-14 and the CPI of 6.29%. The Commission provisionally considers submission
of APDCL, Rs. 86.54 Crore for FY 2014-15.
However The Commission shall true-up the Employee Expenses for FY 2014-15
based on the prudence check of Audited Statement of Accounts.
Table 5.10: Employee expenses for FY 2014-15(Rs. Crore)
Particulars Approved in the tariff Order dated November
21, 2014 APR Petition APR
Employee Expenses 75.75
86.54
86.54
5.1.8 Repair and Maintenance expenses (R&M expenses)
The Commission had approved the R&M expenses of Rs. 17.11 Crore for FY 2014-
15 in the Tariff Order dated November 21, 2014. As against the same, APGCL has
proposed R&M expenses of Rs. 25.19 Crore including special R&M cost of Rs. 6.44
Crore for LTPS unit# II.
APGCL has submitted that the present estimated Overhauling cost of LTPS Unit-2 is
Rs. 12.94 Crore for FY 2014-15. APGCL further submitted that originally the
estimated approved amount of this overhauling works was Rs. 8.5 Crore, out of
which Rs 2.0 Crore was approved in MYT Order dated November 21, 2013 and Rs
6.5 Crore was approved in the Review Order dated July 07, 2014. APGCL stated that
66
the expenditure of Rs. 2.0 Cr., allowed in MYT Order dated November 21, 2013, was
not incurred in FY 2013-14. APGCL submitted that the variation in the estimated
Overhauling cost is due to additional works. APGCL has claimed Rs. 6.5 Crore in
ARR of FY 2015-16, as per the Review Order dated July 07, 2014.
However, APGCL has estimated to spend entire amount of Rs. 12.94 Crore in FY
2014-15 but has not included the same in the APR, which is not justified.
Commission has already explained the detail about the approval of special type of R
& M Expense in the Para 4.3.10 & Para 6.5.13 of this order. As per the same a total
of Rs. 18.4 Crore was allowed as Special type R & M Expense for LTPS (Rs. 8.5
Crore for LTPS Unit-2 & Rs. 9.9 Crore for LTPS Unit-7). Now for APR of FY 2014-
15, as APGCL has submitted that Rs. 12.94 Crore is estimated to be spent during FY
2014-15 for Overhauling of LTPS Unit-2, Commission has considered the entire
amount as part of Special type R & M Expense for APR of FY 2014-15.It is to be
noted that Special type of R & M expenses will be allowed only during the year in
which it is incurred. For Regular R&M expenses, the Commission has escalated
trued up values of Regular R & M Expense for FY 2013-14 with WPI of FY 2014-15.
Accordingly, the Commission has arrived on a provisional R&M expense of Rs.
30.28 Crore for APR of FY 2014-15.However, Commission shall true-up the R &
M Expense for FY 2014-15 based on the prudence check of Audited Statement
of Accounts for FY 2014-15.
Table 5.11: R&M expenses for FY 2014-15 (Rs. Crores)
Particulars Approved in the tariff Order dated November 21, 2014
APR Petition
APR
Special Type R&M expenses
17.11
6.44 12.94
Regular R&M Expenses
18.75 17.34
Total 30.28
5.1.9 Administration and General Expenses (A&G Expenses)
The Commission has approved the A&G expenses of Rs. 4.70 Crore for FY 2014-15
in the Tariff Order dated November 21, 2014. As against the same, APGCL has
proposed the A&G expenses of Rs. 9.41 Crore for FY 2014-15. APGCL has stated
67
that A&G expense has been computed based on Actuals up to 2nd quarters and
estimation for the last two quarters.
For APR of FY 2014-15, the Commission has arrived on a provisional figure of
Rs. 6.88 Crore for APR, by escalating Trued up value of FY 2013-14 with WPI of
FY 2014-15. However, the Commission shall true-up the A&G expenses for FY
2014-15 based on the prudence check of Audited Statement of Accounts for FY
2014-15.
Table 5.12: A&G expenses for FY 2014-15 (Rs. Crore)
Particulars Approved in the tariff Order dated November
21, 2014
APR Petition
APR
A&G expenses 4.70
9.41
6.88
5.1.10 Depreciation
The Commission has approved Depreciation of Rs. 35.55 Crore for FY 2014-15 in
the Tariff Order dated November 21, 2014. As against the same, APGCL has
estimated the depreciation of Rs. 32.81 Crore for FY 2014-15.
As per Regulation 14 of AERC Tariff Regulations 2006, the total depreciation during
the life of the asset shall not exceed 90% of the original cost of GFA. In line with the
AERC Tariff Regulations, 2006, APGCL has submitted head wise value of GFA for
which accumulated depreciation has exceeded 90% of the GFA and consequent
adjustments. The information submitted by APGCL is scrutinised and considered
accordingly.
Further, as specified in Regulation 14 of AERC Tariff Regulations, 2006, assets
created using consumer contribution or capital subsidy/grant, etc. need to be
excluded from the asset value for the purpose of depreciation. For arriving at value
for asset created out of grant/subsidy, Commission has apportioned the total grant
reflected in Audited Statement of Accounts for FY 2013-14 in to grant pertaining to
CWIP & Fixed Asset, based on the ratio of CWIP & Fixed Asset.
The Commission has considered the opening GFA base for FY 2014-15 as per the
closing value approved in True up of FY 2013-14 and closing value of FY 2014-15 as
per submission of APGCL regarding additions/removal of assets. APGCL should
68
reconcile the GFA Opening Balance. The weighted average rate of depreciation has
been considered for computing the depreciation on assets created out of
grants/subsidies and consumer contribution and the same has been deducted from
the total depreciation to arrive at the Approved depreciation for FY 2014-15.
The depreciation provisionally approved by the Commission for APR of FY 2014-15
is shown in the Table below:
Table 5.13: Depreciation for FY 2014-15(Rs. Crore)
Particulars Approved in the tariff Order dated
November 21, 2014 Proposed APR
Depreciation 35.55
25.14
32.14
The Commission shall true-up the depreciation for FY 2014-15 based on the
GFA addition as per the Audited Statement of Accounts for FY 2014-15 in
accordance with AERC Tariff Regulations, 2006.
5.1.11 Investment Plan
The investment plan proposed by APGCL for the FY 2014-15 is shown in the table below:
Table 5.14 Investment Plan for FY 2014-15
Sl. No.
Name of the Project
Approved in the Tariff
Order of 2014-15
Revised investment Proposal for 2014-15
Remarks Govt
(Equity) GOA (Loan)
Grant (Govt)
FI (Loan)
Total
1 R&M of Namrup TPS
6.85
8.67
8.67
Additional work of (i) Rs. 1.80 Cr due to procurement of 25 nos. of important mechanical, electrical & instrumentation spares required at NTPS for smooth and trouble free operations of the old GT units and its auxiliaries, (ii) Rs. 0.02 Cr due to revised estimate of Anti Erosion Measures at Dillighat intake from earlier Rs. 0.30 Cr to 0.32 Cr
69
Sl. No.
Name of the Project
Approved in the Tariff
Order of 2014-15
Revised investment Proposal for 2014-15
Remarks Govt
(Equity) GOA (Loan)
Grant (Govt)
FI (Loan)
Total
2 R&M of Lakwa TPS
23.2
20.19
20.19
Amount reduced as the R&M proposal for 2014-15 by APGCL was curtailed by GOA and work is now going to be executed on priority basis.
R&M of Lakwa TPS (Major Overhauling of Unit#2)
12.5
0
Details of Overhauling Cost of Unit #2 of LTPS is given at Page No. 193
3 R&M of KLHEP
5.82
1.56
1.56
Amount reduced as the work of procurement of 11/232/√3 kV, 21 MVA single phase generator transformer has been deferred due to fund constraint.
4 100 MW Namrup RPP
165.00
0.00
Amount is reduced due to delay in resuming of Project work
5 70 MW Lakwa Replacement Power Project
1.00
0.6
0.60
As per approved amount in the Annual Plan for construction of boundary wall at site
6
660 MW Margherita Thermal Power Project
0.00
2.00
2.00
As per approved amount in the Annual Plan for construction of boundary wall at site
7 9 MW Myntriang SHEP
0.00
7.00
7.00 Land Compensation
8 6 MW Lungnit SHEP
22.00
0.00
Due to litigations, bid finalization process is at present under suspension
9 120 MW Lower Kopilii HEP
0.00
7.00
7.00
Earlier Rs. 15/- Cr was included in the Annual Plan Proposal for FY 2014-15 as govt. loan for part payment of land compensation. However, later it was decided to include the whole amount of land Compensation in the Govt. Equity to be given by AIFA in the
70
Sl. No.
Name of the Project
Approved in the Tariff
Order of 2014-15
Revised investment Proposal for 2014-15
Remarks Govt
(Equity) GOA (Loan)
Grant (Govt)
FI (Loan)
Total
meeting held on 05/08/14 with GOA. The proposed amount in Annual plan has thus been reduced to Rs. 7/- Cr. under Govt. loan for project development activities
10 Boundary Wall at Jagiroad for KLHEP Store
0.33
0.36
0.36
Earlier estimate was as per the 2011-12 APWD price schedule. Estimate has been revised as per the 2013-14 APWD price schedule
Total Proposed Investment
236.7 0.00 40.38 7.00 0.00 47.38
After carrying out prudence check of the above plan, the Commission
provisionally approves the Investment of Rs. 37.78 Crores for APR of FY 2014-15.
5.1.12 Interest and Finance Charges
The Commission had approved the interest and finance charges of Rs. 32.14 Crore for
FY 2014-15 in the Tariff Order dated November 21, 2014. As against the same, APGCL
has estimated interest and finance charges of Rs. 29.61 Crore for FY 2014-15.
APGCL has calculated the Interest on loans for FY 2014-15 at the rate of 10.5% on loan
outstanding for Loan from Govt. of Assam and based on actual interest rates charged by
PFC for Loan up to December, 2014 for PFC loan.
The Commission has considered the opening balance of loans for FY 2014-15 equal to
the closing balance of loans approved by the Commission in the true up for FY 2013-14.
Further, for addition of loan Commission has considered loan estimated to be added
during FY 2014-15 as per provisionally approved Investment Plan for FY 2014-15 as per
Para 5.1.11 of this Order. The Commission has considered repayment of loans and
actual interest rates as submitted by APGCL for computing the interest expenses for FY
2014-15. The Commission has considered the proportionate capitalisation of interest
expense based on claimed and approved interest expenses. The Commission has
considered finance charges as per submission of APGCL for FY 2014-15. The Interest
and Finance charge provisionally approved by the Commission for APR of FY 2014-15 is
shown in the Table below:
71
Table 5.15: Interest and Finance Charges for FY 2014-15(Rs. Crore)
Particulars Approved in the tariff Order dated November 21, 2014
Proposed APR
Interest and Finance Charges
32.14
29.61
28.14
The Commission shall true-up the interest and finance charges for FY 2014-15
based on the prudence check of Audited Statement of Accounts for FY 2014-
15.
5.1.13 Interest on Working Capital
The Commission had approved the normative interest on working capital of Rs.
19.08Crorefor FY 2014-15 in the Tariff Order dated November 21, 2014. As against
the same, APGCL has estimated interest on working capital of Rs. 26.03 Crore for
FY 2014-15.
As per the AERC Tariff Regulations, 2006, the applicable interest rate should be the
Prime Lending Rate of State Bank of India as applicable on 1st April of the Financial
Year for which tariff is being determined. Based on this, the applicable SBI PLR is
14.75%.
Accordingly, the Commission has arrived on a provisional interest on working
capital of Rs. 21.70 Crore for APR for FY 2014-15, as per AERC Tariff
Regulations, 2006.
Table 5.16: Interest on Working Capital for FY 2014-15(Rs. Crores)
Particulars Approved in the tariff Order dated November 21, 2014
Proposed APR
Interest on Working Capital 19.08 26.03 21.70
5.1.14 Income Tax
The Commission had approved the income tax of Rs. 0.93 Crore for FY 2014-15 in
the Tariff Order dated November 21, 2014. As against the same, APGCL has
estimated the Income tax of Rs. 0.93 Crore for FY 2014-15. For APR of FY 2014-15,
Commission has considered Rs. 0.93 Crore as Income Tax.
72
Table 5.17: Income Tax for FY 2014-15(Rs. Crore)
Particulars Approved in the Tariff Order dated November 21, 2014
Proposed APR
Income Tax 0.93
0.93
0.93
However, the Commission shall true-up the income tax for FY 2014-15 based
on the Audited Statement of Accounts for FY 2014-15.
5.1.15 Return on Equity (RoE)
The Commission has approved the Return on Equity of Rs. 37.99Crorefor FY 2014-
15 in the Tariff Order dated November 21, 2014. As against the same, APGCL has
estimated RoE of Rs. 40.39 Crore for FY 2014-15.APGCL has also submitted details
of Equity addition and deletion during the FY 2014-15. It may be noted that for
Myntriang, the Return on Equity has been allowed for half of the year since Date of
Commercial Operation (COD) of the plant was on August 08, 2014. The
Commission has provisionally approved RoE of Rs. 40.39 Crore for APR of FY
2014-15.
Table 5.18: Return on Equity for FY 2014-15(Rs. Crore)
Particulars Approved in the tariff Order dated November
21, 2014 Proposed APR
Return on Equity
37.99
40.39
40.39
However, the Commission shall true-up the RoE for FY 2014-15 based on the
Audited Statement of Accounts for FY 2014-15, in accordance with AERC Tariff
Regulations, 2006.
5.1.16 Other Income
The Commission had approved the other income of Rs. 11.59 Crore for FY 2014-15
in the Tariff Order dated November 21, 2014. As against the same, APGCL has
estimated other income of Rs. 10.60 Crore for FY 2014-15.
For APR of FY 2014-15, the Commission has arrived on a provisional figure of
Rs 11.66 Crore considering 10% escalation from the trued up value of FY 2013-
14.
73
Table 5.19: Other Income for FY 2014-15(Rs. Crore)
Particulars Approved in the tariff Order dated November 21, 2014
Proposed APR
Other Income 11.59 10.60 11.66
However, the Commission shall true-up the other income for FY 2014-15 based on
the prudence check of the Audited Statement of Accounts for FY 2014-15. Revenue
from Sale of Power
5.1.17 Revenue from Sale of Power
APGCL has proposed the revenue from sale of power of Rs. 618.38 Crore for FY
2014-15. The Commission considers the APGCL proposal of Rs. 618.38 Crore
of Revenue from Sale of Power as proposed by APGCL for APR of FY 2014-15.
However, the Commission shall true-up the revenue from sale of power for FY
2014-15 based on the prudence check of the Audited Statement of Accounts
for FY 2014-15.
74
5.1.18 Review of ARR for FY 2014-15
Considering the above heads of expense and revenue and after provisional approval
as elaborated above, the net revenue requirement of APGCL for FY 2014-15 is
provisionally approved as Rs. 675.35 Crore, as shown in the Table below:
Table 5.20: Summary of APR for FY 2014-15(Rs. Crore)
Approved in the tariff Order dated November 21, 2014
Proposed in this petition
APR
Fixed Charges
Operation and Maintenance expenses
Employee expenses 75.75 86.54 86.54
Repair and Maintenance expenses
17.11 25.19 30.28
Administrative and General expenses
4.70 9.41 6.88
Interest and Finance Charges 32.14 29.61 28.14
Interest on Working Capital 19.08 26.03 21.70
Income Tax 0.93 0.93 0.93
Depreciation 35.55 32.81 32.14
Return on Equity 37.99 40.39 40.39
Less: Other Income 11.59 10.60 11.66
Total Fixed Charges 211.66 240.31 235.34
Fuel Cost 326.70 477.45 433.27
Add: Revenue Gap/Surplus for previous year as approved
Revenue surplus for True up for FY 2012-13
-16.79
-16.79
Review of True-Up for FY 2011-12 27.26
27.26
Annual Revenue Requirement 548.83 717.76 679.08
The Commission shall carry out the true up of revenue and expenses for FY
2014-15 based on the Audited Statement of Accounts for FY 2014-15 in
accordance with AERC Tariff Regulations, 2006.
75
6 Revised ARR and Generation Tariff for FY
2015-16
6.1 INTRODUCTION
This Chapter deals with determination of revised fixed charges and variable charges
for APGCL for FY 2015-16. The Commission had approved the ARR for FY 2015-16
in the MYT Order dated November 21, 2013. The Commission, in this Order, has
carried out the true-up of expenses and revenue for FY 2013-14 based on the
Audited Statement of Accounts for FY 2013-14 and APR for FY 2014-15and ARR for
2015-16.
Based on the Approved ARR for FY 2015-16 and considering the impact of True-up
for 2013-14, the generation tariff for FY 2015-16 has been revised. The impact of
APR for FY 2014-15 has not been considered for computation of revised generation
tariff as the APR is estimation only.
6.2 GENERATION CAPACITY FOR FY 2015-16
The generation capacity of APGCL as considered for determination of generation
tariff of FY 2015-16, is shown in the Table below:
Table 6.1: Operating Generation Capacity for FY 2015-16
Station Operating Capacity (MW)
NTPS 119.50
LTPS with WHRU 157.20
NRPP (Open Cycle) 63.00
KLHEP 100.00
Myntriang SHEP Stage II 4.50
Myntriang SHEP Stage I 9.00
Total 453.20
6.3 BRIEF STATUS OF APGCL POWER STATIONS
The status of APGCL's power stations as submitted by APGCL is as follows:
76
6.3.1 Namrup Thermal Power Station (NTPS) (119.5 MW)
At present Namrup Thermal Power Station is generating an average of 75-90 MW
depending on availability of gas. The details of units are as under:
• Unit-1 (20 MW, GT): Unit is presently running at an average load of 19 MW. The
unit is overdue for major overhauling and is scheduled to be overhauled in June’
2015-July’ 2015 for 60 days. This was earlier scheduled in 2014-15.
• Unit-2 (21 MW, GT): Unit is presently running at an average load of 20 MW
• Unit-3 (21 MW, GT): Unit is presently running at an average load of 18 MW. The
unit is overdue for major overhauling and is scheduled to be overhauled in
Nov’2015-Dec’2015 for 60 days.
• Unit-4 (11 MW, GT): Unit presently runs at an average load of 9 MW. The unit
was under overhauling and resumed operation from April 02, 2015.
• Steam Turbine Unit 5 (24 MW): The unit is presently running with an average
load of 12 MW due to technical constraints.
• Waste Heat Unit 6 (22.5 MW): Unit is presently running with an average load of
12 MW due to technical constraint. The unit is overdue for major overhauling
and is scheduled to be overhauled in Aug’ 2015-Sep’ 2015 for 60 days. This was
earlier scheduled in 2014-15.
6.3.2 Lakwa Thermal Power Station (LTPS) (157.2 MW)
Currently, Lakwa Thermal Power Station is generating at an average capacity of 100-
125 MW depending on the availability of gas. The brief status of the Units is as
follows:
• Unit-1 (15 MW, GT): The unit is presently running at full load capacity.
• Unit-2 (15 MW, GT): The unit is presently running at full load capacity. The unit is
overdue for major overhauling and is scheduled to be overhauled in Apr’ 2015-
May’ 2015 for 50 days. This was earlier scheduled in 2014-15.
• Unit-3 (15 MW, GT): The unit is presently running at full load capacity. The unit is
overdue for major overhauling and is scheduled to be overhauled in Jul’15-Aug’
2015 for 50 days.
• Unit-4 (15 MW, GT): The unit is presently running at full load capacity
• Unit-5 (20 MW, GT): The unit is presently running at full load capacity
• Unit-6 (20 MW, GT): The unit is presently running at full load capacity. The unit is
overdue for major overhauling and is scheduled to be overhauled in Jun’ 2015 for
25 days.
• Unit-7 (20 MW, GT): The unit is presently running at full load capacity. Unit-8
77
(37.2 MW WHRU): The unit is presently running with an average load of 30 to 32
MW.
6.3.3 Karbi Langpi Hydro Electric Project (KLHEP) (100 MW)
• Unit-1 (50 MW): The unit is presently running at full capacity depending on
availability of water.
• Unit-2 (50 MW): The unit is presently running at full capacity depending on
availability of water.
6.3.4 Myntriang SHEP Stage I (9 MW = 3x3 MW) & Stage II (4.5 MW= 3x1.5 MW)
• Stage II: The commercial operation for Unit I and II, were declared on August 08'
2014. The plant got affected by heavy flood on August 22’ 2014. All the
equipment needed servicing. At present both the units are running. Further, the
project is expected to be enhanced by 1.5 MW of another unit in December'
2015.
• Stage I: The plant was earlier designed for 6 MW but now has been enhanced by
another 3 MW making the total capacity of 9 MW. This project of 9 MW is also
expected to be commissioned in December' 2015.
6.3.5 Namrup Replacement Power Project (NRPP)
• This is a gas based combined cycle replacement power plant, with capacity of
100 MW. The open cycle capacity is 63 MW and the waste heat recovery section
is of capacity 37 MW. The project (open cycle) is expected to be commissioned in
August 2015. However, the waste heat recovery section is not expected to be
commissioned in FY 2015-16.
6.4 GAS SUPPLY POSITION
APGCL has submitted that BCPL (Brahmaputra Cracker and Polymer Limited) is
expected to be commissioned in FY 2015-16. APGCL further submitted that they have
received assurance from the gas suppliers of APGCL that the Gas with same CV will
be supplied even after commissioning of BCPL. APGCL has considered the avg. GCV
of gas from 2011-12 to September 2014 for Generation Projection for 2015-16. The
details of the gas availability for 2015-16 as submitted by APGCL are given in the table
below:
78
Table 6.2: Gas Supply Position for FY 2015-16
Station Period Gas
Source
Avg GCV from 2011-12 to Sep’14 in kcal/scm
Contracted Quantity (MMSCMD)
Availability (MMSCMD)
Remarks
NTPS 2015-16 OIL
APM 9300 0.66 0.66
LTPS
2015-16 GAIL APM
9793 0.40 0.40
Apr-Oct OIL Non-APM
9300 0.50 0.35
Gas availability from OIL to LTPS has
been considered as per site experience Nov-Mar 0.45
6.5 REVISED ARR AND GENERATION TARIFF FOR FY 2015-16
6.5.1 Availability / Capacity Index
The Availability / Capacity Index approved by the Commission for FY 2015-16 vide
MYT Order dated November 21, 2013 and the revised Availability / Capacity Index
projected by APGCL are shown in the Table below:
Table 6.3: Availability / Capacity Index for FY 2015-16
Station
Target Availability / Capacity Index (%)
Approved in MYT order dated November 21,
2013 (%)
APGCL Petition (%)
NTPS 50.00 52.60 50.56
LTPS 50.00 59.00 67.88
NRPP 80.00 77.00 83.86
KLHEP (RoR with pondage)
85.00 90.00 90.45
Myntriang SHEP-Stage I
- 91.00 90.91
Myntriang SHEP-Stage II
- 91.00 90.91
Accordingly, Commission approves that APGCL shall be eligible to recover full
fixed charges if the actual Availability / Capacity Index is higher than the target
Availability / Capacity Index specified in the AERC Tariff Regulations, 2006.
6.5.2 Plant Load Factor (PLF)
The Plant Load Factor approved by the Commission for FY 2015-16 and the revised
Plant Load Factor projected by APGCL is shown in the Table below:
79
Table 6.4: Revised Plant Load Factor projected for FY 2015-16
Station Approved in MYT order dated
November 21, 2013 (%) APGCL
Petition (%)
NTPS 50.00 47.80
LTPS with WHRU 53.60 62.85
KLHEP 44.50 44.52
NRPP 72.00 80.00
Myntriang SHEP-Stage I
87.10 80.67
Myntriang SHEP-Stage II
80.80 80.85
It may be observed that except for NTPS and Myntriang Stage-I, APGCL has
proposed for higher PLF as compared to approved value in MYT Order dated
November 21, 2013.Therefore, the Commission, in this Order, has considered PLF of
those stations as projected by APGCL. For NTPS, the Commission has considered
the PLF as per AERC Tariff Regulations, 2006. Further as Myntriang Stage-I is a new
station and may need time for stabilisation, Commission has accepted APGCL’s
proposal of PLF even though the same is lower than the approved level of MYT
Order dated November 21, 2013. The PLF approved by the Commission in the
approval of revised ARR and generation tariff for FY 2015-16 is shown in the Table
below:
Table 6.5: Approved Plant Load Factor for FY 2015-16
Station Approved for FY 2015-16
NTPS 50.00
LTPS with WHRU 62.85
KLHEP 44.52
NRPP 80.00
Myntriang SHEP-Stage I 80.67
Myntriang SHEP-Stage II 80.85
6.5.3 Auxiliary Energy Consumption
The Auxiliary Energy Consumption approved by the Commission for FY 2015-16 vide
MYT Order dated November 21, 2013 and the revised Auxiliary Energy Consumption
projected by APGCL is shown in the Table below:
80
Table 6.6: Revised Auxiliary Energy Consumption projected for FY 2015-16
Station Approved in MYT order dated November 21, 2013
(%)
APGCL Petition (%)
NTPS 4.50 5.49
LTPS with WHRU 5.50 7.51
KLHEP 0.50 0.50
NRPP 4.50 4.60 Myntriang SHEP-Stage I
1.00* 1.00
Myntriang SHEP-Stage II
1.00* 1.00
Note: * - The Commission has approved the Auxiliary Energy Consumption for Myntriang
SHEP I & II as 1%, in the Review Order dated July 07, 2014. .
The revised Auxiliary Energy Consumption projected by APGCL for NTPS,LTPS and
NRPP is higher than that approved by the Commission. As Auxiliary Energy
Consumption is a performance parameter, the Commission, in this Order, has
approved the same Auxiliary Energy Consumption for FY 2015-16 as approved for
FY 2015-16 in the MYT Order for FY 2013-14 to FY 2015-16.. The Auxiliary Energy
Consumption approved by the Commission for FY 2015-16 is shown in the Table
below:
Table 6.7: Approved Auxiliary Energy Consumption for FY 2015-16
Station Approved for FY 2015-16 (%)
NTPS 4.50
LTPS with WHRU 5.50
KLHEP 0.50
NRPP 4.50
Myntriang SHEP-Stage I 1.00
Myntriang SHEP-Stage II 1.00
6.5.4 Gross Generation and Net Generation
As per generation projection of APGCL for FY 2015-16, after commissioning of 63
MW NRPP (Open Cycle) from August, 2015, capacity of existing 119.5 MW NTPS
plant will get reduced by 56 MW due to shutting down of old unit no 3, 4 and 5.
APGCL has also projected PLF for NTPS less than the value approved in MYT order
dated November 21, 2013 for FY 2015-16. The gross generation and net generation
approved by the Commission for FY 2015-16 vide MYT Order dated November 21,
2013 and the revised gross & net generation projected by APGCL is shown in the
81
Table below:
Table 6.8: Revised Gross Generation and Net Generation projected for FY 2015-16 (MU)
Station
Approved in MYT order dated November 21, 2013
Proposed by APGCL
Gross Net Gross Net
NTPS 219.60 209.72 342.98 324.16
LTPS with WHRU 457.63 432.46 861.00 796.62
NRPP 622.32 594.31 295.14 281.57
LRPP 415.80 401.75 Nil Nil
Total Thermal 1715.35 1638.24 1499.12 1402.35
KLHEP 391.07 389.11 390.00 388.05
Myntriang SHEP Stage I
67.19 66.85
18.91 18.72
Myntriang SHEP Stage II 22.68 22.45
Lungit SHEP 26.74 26.60 Nil Nil
Total Hydro 485.00 482.57 431.59 429.22
Total APGCL 2200.35 2120.81 1930.71 1831.57
The Commission, in this Order, has approved the gross generation based on the
approved PLF and net generation based on the approved Auxiliary Energy
Consumption. The gross generation and net generation approved by the Commission
for FY 2015-16 is shown in the Table below:
Table 6.9: Approved Gross Generation and Net Generation for FY 2015-16 (MU)
Station
ARR Approved
Gross Net
NTPS 358.77 342.62
LTPS with WHRU 861.00 813.64
NRPP (Open Cycle)* 295.14 281.86
Total Thermal 1514.91 1438.13
KLHEP 390.00 388.05
Myntriang SHEP Stage I 18.91 18.72
Myntriang SHEP Stage II 22.68 22.45
Total Hydro 431.59 429.22
Total APGCL 1946.49 1867.35
*Considering generation from NRPP (Open Cycle) from August, 2015.
82
6.5.5 Gross Station Heat Rate (GSHR)
The GSHR approved by the Commission for FY 2015-16vide MYT Order dated
November 21, 2013, Amended GSHR as per Notification dated January 06, 2015
and the revised GSHR proposed by APGCL is shown in the Table below:
Table 6.10: Revised Gross Station Heat Rate projected for FY 2015-16 (kcal/kWh)
#The GSHR of NRPP was approved in MYT order based on closed cycle mode
As GSHR is a normative parameter, for APGCL’s thermal power plants, the
Commission has considered GSHR as per notification dated January 06, 2015.
The GSHR approved by the Commission for FY 2015-16 is shown in the Table
below:
Table 6.11: Approved Gross Station Heat Rate for FY 2015-16 (kcal/kWh)
6.5.6 Fuel Cost
The weighted average GCV and landed price of gas approved by the Commission for
FY 2015-16 and the revised weighted average GCV and landed price of gas
projected by APGCL is shown in the Table below:
Station
Approved in MYT order dated November 21,
2013
As per amendment notification dated January 06, 2015
APGCL
Proposal
NTPS 3266 3900 4110
LTPS with WHRU 2529 3200 3213
NRPP 1704# 2830 2830
Station GSHR Approved
NTPS 3900
LTPS with WHRU 3200
NRPP (open cycle) 2830
83
Table 6.12: Weighted average GCV and landed price of gas for FY 2015-16
Station
Approved in MYT order dated November 21, 2013
Proposed
Wt. Avg. GCV of Gas
(kcal/SCM)
Wt. Avg. price of Gas
(including transport)
(Rs./1000 SCM)
Wt. Avg. GCV of Gas
(kcal/SCM)
Wt. Avg. price of Gas (including transport)
(Rs./1000 SCM)
NTPS 9182.00 5904.16 9300 8395.84
LTPS 9527.00 7161.25 9549 11020.35
NRPP 9182.00 5904.16 9300 8395.84
APGCL submitted that, for projection of fuel cost for FY 2015-16, the average GCV
of gas from FY 2011-12 to September 2014 has been considered. APGCL has
proposed to procure APM gas for NTPS and NRPP from. M/s OIL. Further for LTPS,
APGCL has projected procurement of APM gas from M/s GAIL and Non- APM gas
from M/s OIL.
The Commission, in this Order, has considered the weighted average GCV derived
from actual fuel bills submitted by APGCL for FY 2014-15 till February, 2015 and
estimation for March, 2015. The Commission has also computed landed price of Gas
for FY 2015-16 based on the methodology derived below.
The gas requirement has been calculated for NTPS & NRPP for FY 2015-16, based
on the approved generation and approved GSHR of the stations. For NTPS and
NRPP, calculation has been done considering supply of APM Gas from same source
i.e. M/s OIL and accordingly landed price has been determined. During this exercise,
Gas price has been considered from MoPNG (PPAC) (As per notification no. PPAC/
Gas Pricing/ April-September, 2015 dated March 31, 2015) for April to September
2015 and GCV of FY 2014-15. Accordingly, other pricing components has been
incorporated like Marketing margin, VAT/sales Tax, Transportation cost, Service Tax
for transportation as per latest actual data and guidelines issued by appropriate
authorities and final Landed price of Gas for FY 2015-16 has been determined.
For LTPS, the previous years trend of supply from different sources were observed
and the sources, who supplied APM & Non-APM gas to LTPS in FY 2014-15, were
considered accordingly. Gas requirement computation has been performed for FY
84
2015-16 for LTPS based on the approved generation and approved GSHR. The
Commission has allocated source wise gas (APM & Non-APM) availability for FY
2015-16 based on the ratio of gas received by APGCL during FY 2014-15.
Afterwards, to arrive at final source wise Landed price of Gas, the Commission has
taken approach similar for NTPS & NRPP. After arriving at source wise landed price
of gas, the Commission has calculated weighted average price as the price for the
entire plant.
The weighted average GCV and landed price of gas approved by the Commission for
for FY 2015-16 is shown in the Table below:
Table 6.13: Approved Weighted average GCV and landed price of gas for FY 2015-16
The Commission had approved the fuel cost of Rs. 263.83 Crore for FY 2015-16 in
the MYT Order dated November 21, 2013. As against the same, APGCL has
projected fuel cost of Rs. 521.92 Crore. The fuel cost approved by the Commission
for FY 2015-16 is shown in the Table below:
Table 6.14: Approved fuel cost for FY 2015-16
Particulars Derivation Unit NTPS LTPS NRPP Total
Gross Generation A MU^ 358.77 861.00 295.14 1514.91
Heat Rate B kcal/kWh 3900.00 3200.00 2830.00
GCV of gas C kcal/SCM 9514.06 9913.15 9514.06
Overall Heat D=AxB G. cal. 1399193.75 2755187.00 835252.99 4989633.75
Gas consumption E=D/C M. SCM 147.07 277.93 87.79 512.79
Price of Gas F Rs./1000 SCM 8252.76 11023.33 8252.76
Total cost of Gas G=ExF/100 Rs. Lakh 12137.00 30637.43 7245.22 50019.65 Auxiliary Consumption
H % 4.50 5.50 4.50
Auxiliary Consumption
I=AxH MU 16.14 47.35 13.28 76.78
Net Generation J=A-I MU 342.62 813.64 281.86 1438.13 Fuel Cost per Unit (Gross)
K=G/A/10 Rs./kWh 3.38 3.56 2.45 3.30
Fuel Cost per Unit (Net)
L=G/J/10 Rs./kWh 3.54 3.77 2.57 3.48
^MU= Million kWh
Plant Wt. Avg. GCV of Gas
(kcal/SCM) Wt. Avg. landed price of Gas
(Rs./1000 SCM)
NTPS 9514.06 8252.76
LTPS 9913.15 11023.33
NRPP 9514.06 8252.76
85
Accordingly, the Commission approves the Fuel Cost of Rs. 500.20 Crore for
FY 2015-16. Any deviations in Fuel cost during FY 2015-16 may be claimed
under AERC (Fuel and Power Purchase Price Adjustment Formula)
Regulations, 2010.
6.5.7 Operation and Maintenance (O&M) expenses
The Operation and Maintenance (O&M) expenses comprise of Employee Expenses,
Repair and Maintenance (R&M) Expenses and Administration and General (A&G)
Expenses.
6.5.7.1 Escalation Index
Regulation 36 of the AERC Tariff Regulations, 2006 specifies as under:
“......
36.2 The generating company shall prepare a budget for Operation and Maintenance
Expenses indicating for each head of account actual expenditure of the last year,
estimate for the current year and projection for the next year and submit it to the
Commission along with the tariff petition.
36.3 The Commission shall verify the budget estimates and projections and allow the
amount depending on its views about the reasonableness of the projections.
..............”
The Commission is of the view that as the O&M Expenses are dependent on the
prevailing rate of inflation based on CPI for Employee Expenses and WPI for R&M
and A&G expenses. Hence, the escalation factor for projecting sub heads of O&M
Expenses needs to be derived based on the prevailing CPI and WPI. Year-on-year
inflation has been computed for FY 2014-15 based on the CPI for Employees
Expenses and WPI for R&M and A&G expenses. The same has been considered for
projecting aforementioned sub heads of O&M expenses for FY 2015-16. CPI and
WPI considered for projecting the O&M expenses for FY 2015-16are shown in the
Table below:
86
WPI CPI
Month FY 14
FY 15
FY 16
FY 14
FY 15
FY 16
April 171 181
226 242
May 171 182
228 244
June 173 183
231 246
July 176 185
235 252
August 179 186
237 253
September 181 185
238 253
October 181 184
241 253
November 182 181
243 253
December 180 179
239 253
January 179 177
237 254
February 180 176
238 253
March 180.3 176
239 254
Average 178 181
236 251
2.00% 2.00% 6.29% 6.29%
6.5.7.2 Employee Expenses
The Employee Expenses approved by the Commission for FY 2015-16 in the MYT
Order dated November 21, 2013 and the Employee Expenses projected by APGCL
is shown in the Table below:
Table 6.15: Revised employee expenses projected for FY 2015-16 (Rs. Crore)
Particulars Approved in MYT order dated
November 21, 2013 APGCL Petition
Gross employee expenses 91.81
112.19
Less: Capitalisation 0.39
6.92
Net employee expenses 91.42 105.27
APGCL has submitted that the revised employee expenses for FY 2015-16 have
been projected based on estimated figure for FY 2014-15 with an escalation factor of
8.42%. APGCL has also included Rs. 2.35 Crore considering full capacity operation
of Myntriang SHEP (4.5 MW) from December 2015 and an amount 16.01 Cr for
commencement of NRPP from August 2015 which specifically requires new
recruitment.
The Commission, in this Order, has approved the Employee Expenses for FY 2015-
87
16 by escalating the trued up Employee Expenses for FY 2013-14 by CPI for FY
2014-15 and FY 2015-16. The Commission has considered the proportionate
capitalisation of employee expenses in ratio of claimed and approved employee
expense excluding capitalisation. The Employee Expenses approved by the
Commission for FY 2015-16 is shown in the Table below:
Table 6.16: Approved employee expenses for FY 2015-16 (Rs. Crore)
Particulars APGCL Proposed Approved
Salaries 48.21 38.19 Overtime 2.07 1.62 Dearness Allowance 39.33 30.64 Other Allowances 7.38 7.83 Bonus 0.04 0.03 Medical Allowances 0.13 0.20 Leave Travel Allowance 0.07 0.05 Earned Leave Encashment 0.36 0.31 Workmen Compensatory Payment 0.00 0.00 Other Staff Cost 0.00 0.01 Staff Welfare expenses 0.19 0.15 Terminal Benefits 14.41 13.60 Gross employee expenses 112.19 92.63
Less: Capitalisation 6.92 5.72 Net employee expenses 105.27 86.91
The Commission approves Rs. 86.91 Crore as Employee Expense for FY 2015-
16.
6.5.7.3 Repair and Maintenance (R&M) expenses
The R&M Expenses approved by the Commission for FY 2015-16 vide MYT Order
dated November 21, 2013 and the revised R&M Expenses projected by APGCL is
shown in the Table below:
Table 6.17: Revised R&M expenses projected for FY 2015-16 (Rs. Crore)
Particulars Approved in MYT order dated November 21, 2013
APGCL Petition
R&M expenses
17.39
53.55
APGCL has projected the R&M Expense for FY 2015-16, considering escalation rate
of 15%. APGCL has stated that to keep the generating machines in healthy and
88
running conditions, they have to carry out the Major Overhauling (O/H), as per the
OEM’s (Original Equipment Manufacturer) Operation Manual. APGCL has proposed
this Special type of Repair & Maintenance cost amounting to Rs. 32.00 Crore for
consideration under Operation & maintenance (O&M) as a special case to keep
these machines in smooth running condition to enable them to contribute power to
the state of Assam to mitigate shortfall of power to the extent feasible.
For FY 2015-16, the Commission has approved special R&M and regular R&M
expense separately. The Commission has reviewed Cost Benefit analysis and
running hours related submissions of APGCL and has considered special R&M
requirement proposed by APGCL, for continuing smooth operation of the Units.
Hence the Commission has approved Rs. 32.00Crorefor Special type of R&M for
NTPS unit# 1, NTPS unit#3, NTPS unit# 6 and LTPS unit#3.
To arrive at the Regular R&M cost for FY 2015-16, Trued up R&M cost for FY 2013-
14 has been escalated by CPI for FY 2014-15 and FY 2015-16.
The R&M expense approved by the Commission for FY 2015-16 is shown in the
Table below:
Table 6.18: Approved R&M expenses for FY 2015-16(Rs. Crore)
Particulars Approved
A. Special Type Repair & Maintenance:-
Overhauling Works 32.00
B. Regular Repair & Maintenance:- 17.69
Total: 49.69
Accordingly, the Commission approves Rs 49.69 Crore as R&M expense for FY
2015-16.
6.5.7.4 Administration and General (A&G) expenses
The A&G expenses approved by the Commission for FY 2015-16 in the MYT Order
dated November 21, 2013 and the revised A&G expenses projected by APGCL is
shown in the Table below:
89
Table 6.19: Revised A&G expenses projected for FY 2015-16 (Rs. Crore)
Particulars Approved in MYT order dated
November 21, 2013 APGCL Petition
Gross A&G expenses 6.81 10.56
Less: Capitalisation 0.08
0.70
Total/Net A&G expenses 6.73
9.85
APGCL has submitted that A&G expenses for FY 2015-16 have been projected
based on the past trend considering escalation @8.42%.
The Commission, in this Order, has approved the A&G expenses for FY 2015-16 by
escalating the trued up A&G expenses for FY 2013-14 by WPI for FY 2014-15 and
FY 2015-16. The Commission has considered the capitalisation of A&G expenses as
projected by APGCL for FY 2015-16. The A&G Expenses approved by the
Commission for FY 2015-16are shown in the Table below:
Table 6.20: Approved A&G expenses for FY 2015-16(Rs. Crore)
Particulars Approved
Gross A&G expenses 7.02
Less: Capitalisation 0.47
Total/Net A&G expenses 6.56
Accordingly, Commission approves Rs 6.56 Crore as A&G expense for FY
2015-16.
6.5.7.5 Investment Plan for FY 2015-16
The Commission has approved the Investment Plan of Rs. 298.76 Crore for FY
2015-16 in the MYT Order dated November 21, 2013. As against the same, APGCL
has projected the revised Investment Plan of Rs. 621.36 Crore. APGCL has
submitted that in order to meet the ever growing demand of electricity in the state,
APGCL has earmarked on large investment plan for development of power projects.
APGCL has stated that this will also help in the growth & profitability for them. The
90
Commission, in this Order, has approved the investment Plan for FY 2015-16 after
prudence check of the submissions of the Petitioner as shown in the Table below:
Table 6.21: Approved Investment Plan for FY 2015-16 (Rs. Crore)
Particulars Proposed by APGCL Approved for FY
2015-16
NTPS 3.80 3.80 LTPS 20.62 20.62 KHLEP 7.80 7.80 NRPP 160.00 160.00 MARGHERITA Thermal Power Project 0.00 0.00 Cachar Distributed Generation System by Gas IC Engine
21.49 0.00
Titabor Power Project 0.49 0.00 MYNTRIANG 31.62 31.62 120 MW Lower kopili 190.00 91.50 Boundary wall at jagiroad for KLHEP Store 0.00 0.00 Slope Stabilization of KLHEP Dam damaged due to flood
0.00 0.00
EPC contract for 2.0 MW Solar power project at NTPS
17.00 0.00
EPC contract for 2.0 MW Solar power project at LTPS
17.00 0.00
KLHEP (Upper Stage) 0.25 0.00 KLHEP (Inter Stage-I) 0.25 0.00 KLHEP (Inter Stage-II) 0.25 0.00 KLHEP Barrage Toe Project 0.25 0.00 70 MW LRPP 133.50 54.90
Installation of deep tube well with submersible pump set for water supply at BKV Investigation Division Colony, Jagiroad
0.05 0.05
Construction of a new water intake pump house at Dilli River for consumptive water requirement of NTPS
17.00 17.00
Total 621.36 387.28
The Commission has approved the Capital Investment of Rs. 387.28 Crore as
against the capital investment of Rs. 621.36 Crore for FY 2015-16 proposed by
APGCL.
6.5.8 Financing of the Capital Investment
The financing of the Capital Investment approved by the Commission for FY 2015-16
in the MYT Order for FY 2013-14 to FY 2015-16 is shown in the Table below:
91
Table 6.22: Financing of the Capital Investment for FY 2015-16 approved by the
Commission in the MYT Order dated November 21, 2013
Particulars Approved in MYT order dated November 21, 2013
Financing of Capital Investment
Loans 206.65
Grant 8.11
Equity 84.00
Total 298.76
APGCL has submitted the revised Investment Plan for FY 2015-16 and the
corresponding financing for the proposed Capital Investment. The Commission, in
this Order has approved the financing plan for the revised approved Investment Plan
based on the financing proposed by APGCL. The financing plan approved by the
Commission for FY 2015-16 is shown in the Table below:
Table 6.23: Revised Financing Plan for Capital Investment for FY 2015-16 (Rs. Crore)
Sl. No.
Particulars
FY 2015-16
GoA Equity
GoA Loan
GoA Grant
PFC Loan
Others Total
1 NTPS APGCL Petition 0.00 3.80 0.00 0.00 0.00 3.80
Approved 0.00 3.80 0.00 0.00 0.00 3.80
2 LTPS APGCL Petition 0.00 20.62 0.00 0.00 0.00 20.62
Approved 0.00 20.62 0.00 0.00 0.00 20.62
3 KLHEP APGCL Petition
0.00 5.38 2.42 0.00 0.00 7.80
Approved 0.00 5.38 2.42 0.00 0.00 7.80
4 NRPP APGCL Petition
0.00 0.00 0.00 160.00 0.00 160.00
Approved 0.00 0.00 0.00 160.00 0.00 160.00
5 LRPP APGCL Petition 54.90 0.00 0.00 0.00 78.60 133.50
Approved 54.90 0.00 0.00 0.00 0.00 54.90
6 Titabor Power Project
APGCL Petition 0.00 0.00 0.49 0.00 0.00 0.49
Approved 0.00 0.00 0.00 0.00 0.00 0.00
7 Myntriang SHEP
APGCL Petition 8.12 0.00 23.50 0.00 0.00 31.62
92
Sl. No.
Particulars
FY 2015-16
GoA Equity
GoA Loan
GoA Grant
PFC Loan
Others Total
Approved 8.12 0.00 23.50 0.00 0.00 31.62
8 Cachar Distributed Generation System by Gas IC Engine
APGCL Petition 3.80 0.00 0.83 0.00 16.86 21.49
Approved 0.00 0.00 0.00 0.00 0.00 0.00
9 120 MW Lower Kopili
APGCL Petition 183.0 7.00 0.00 0.00 0.00 190.00
Approved 91.50 0.00 0.00 0.00 0.00 91.50
10 EPC contract for 2.0 MW Solar power project at NTPS
APGCL Petition 0.00 17.00 0.00 0.00 0.00 17.00
Approved 0.00 0.0 0.00 0.00 0.00 0.00
11 EPC contract for 2.0 MW Solar power project at LTPS
APGCL Petition 0.00 17.00 0.00 0.00 0.00 17.00
Approved 0.00 0.0 0.00 0.00 0.00 0.00
12 KLHEP (Upper Stage)
APGCL Petition 0.00 0.25 0.00 0.00 0.00 0.25
Approved 0.00 0.00 0.00 0.00 0.00 0.00
13 KLHEP (Middle Stage-I)
APGCL Petition 0.00 0.25 0.00 0.00 0.00 0.25
Approved 0.00 0.00 0.00 0.00 0.00 0.00
14 KLHEP (Middle Stage-II)
APGCL Petition 0.00 0.25 0.00 0.00 0.00 0.25
Approved 0.00 0.00 0.00 0.00 0.00 0.00
15 KLHEP Barrage Toe Project
APGCL Petition 0.00 0.25 0.00 0.00 0.00 0.25
Approved 0.00 0.00 0.00 0.00 0.00 0.00
16 Installation of deep tube well with submersible pump set for water supply at BKV Investigation Division Colony, Jagiroad
APGCL Petition
0.00 0.05 0.00 0.00 0.00 0.05
Approved
0.00 0.05 0.00 0.00 0.00 0.05
93
Sl. No.
Particulars
FY 2015-16
GoA Equity
GoA Loan
GoA Grant
PFC Loan
Others Total
17 Construction of a new water intake pump house at Dilli River for consumptive water requirement of NTPS
APGCL Petition
0.00 17.00 0.00 0.00 0.00 17.00
Approved
0.00 17.00 0.00 0.00 0.00 17.00
18 Total APGCL Petition 249.82
88.85
27.23
160.00
95.46
621.37
Approved 154.52 46.85 25.92 160.00 0.00 387.29
6.5.9 Depreciation
The Commission had approved the Depreciation of Rs. 49.66 Crore for FY 2015-16
in the MYT Order dated November 21, 2013. As against the same, APGCL has
projected depreciation of Rs. 48.21Crore for FY 2015-16.
As per Regulation 14 of AERC Tariff Regulations 2006, the total Depreciation during
the life of the asset shall not exceed 90% of the original cost of GFA. In line with the
AERC Tariff Regulations, 2006, APGCL has submitted head wise value of GFA for
which accumulated depreciation has exceeded 90% of the GFA and consequent
adjustments. The information submitted by APGCL is scrutinised and considered
accordingly.
Further, as specified in Regulation 14 of AERC Tariff Regulations, 2006, assets
created using consumer contribution or capital subsidy/grant, etc. need to be
excluded from the asset value for the purpose of depreciation. For arriving at value
for asset created out of grant/subsidy, Commission has apportioned the total grant in
to grant pertaining to CWIP & Fixed Asset, based on the ratio of CWIP & Fixed
Asset.
The Commission has considered the opening GFA base for FY 2015-16 as per the
closing value approved in APR of 2014-15 and closing value of FY 2015-16 as per
submission of APGCL regarding additions/removal of assets as per approved
94
investment plan. The weighted average rate of depreciation has been considered for
computing the depreciation on assets created out of grants/subsidies and consumer
contribution and the same has been deducted from the total depreciation to arrive at
the Approved depreciation for FY 2015-16.
The Commission had considered the GFA addition of Rs. 298.76 Crore for FY 2015-
16 in the MYT Order dated November 21, 2013. However, for computation of
Depreciation for FY 2015-16, Commission has considered APGCL proposal of GFA
addition i.e. Rs. 845.72 Crore. The depreciation approved by the Commission for
ARR of FY 2015-16 is shown in the Table 6.24 in the next page:
Table 6.24: Approved Depreciation for FY 2015-16(Rs. Crore)
Group of Asset
GFA as
on
01/04/15
Asset
Additi
on
Asset
Deleti
on
GFA as
on
01/04/16
Averag
e
GFA
90% of
Average
GFA
Rate of
Depreci
ation
Depre
ciatio
n for
FY 15-
16
Less:
Depreciation
on GFA
having 90%
accumulated
dep.
Net
Deprecia
tion for
FY 15-16
Land
27.7
9
4.12
-
31.9
1
29.8
5
26.8
7
0.00
%
0.00
0.
00
-
Building
45.2
9
1.63
-
46.9
2
46.1
1
41.5
0
1.80
%
0.75
0.
00
0.75
Hydraulic works
166.
09
24.8
7
- 19
0.96
17
8.53
16
0.67
2.
57%
4.
13
0.00
4.
13
Other civil works
196.
63
51.2
8
- 24
7.92
22
2.27
20
0.05
1.
80%
3.
60
0.00
3.
60
Plant & machinery thermal
513.
66
673.
02
- 11
86.6
8
850.
17
765.
15
6.00
%
45.9
1
-4.2
6
41.6
5
Plant & machinery hydel
193.
55
63.4
6
- 25
7.01
22
5.28
20
2.75
2.
57%
5.
21
0.00
5.
21
Lines & cables
45.6
2
6.02
-
51.6
4
48.6
3
43.7
7
2.57
%
1.12
-0
.02
1.
10
Vehicle
1.24
-
- 1.
24
1.24
1.
12
18.0
0%
0.20
-0
.07
0.
13
Furniture
1.51
5.
60
- 7.
11
4.31
3.
88
6.00
%
0.23
-0
.06
0.
18
Other office equipment
1.18
0.
20
- 1.
38
1.28
1.
15
6.00
%
0.07
0.
00
0.07
Roads on land belonging
to other
- -
- -
- -
1.80
%
0.00
0.
00
-
Capital spares at
Generating Stations
177.
95
15.5
2
- 19
3.47
18
5.71
16
7.14
4.
75%
7.
94
-4.2
8
3.66
Total
1370.51
845.72
0.00
2216.23
1793.37
1614.03
69.16
-8.70
60.47
Average assets of OB &
CB excluding Land&
Rights
1763.52
96
Table 6.25: Approved Depreciation for FY 2015-16
Particulars Amount
(Rs. Crore)
Grants & Subsidies as on 01.04.2015 407.54
Grants & Subsidies as on 01.04.2016 434.77
Average Grants & subsidies 421.15
90% of the Assets funded by Grants/subsidies 379.04
CWIP 523.10
GFA excluding Land and rights 1763.52
Grant pertaining to GFA (apportioned in the ratio of GFA and CWIP)
292.33
Rate of Depreciation 3.92%
Depreciation on 90% of the Assets funded by Grants/subsidies
11.46
Depreciation Approved for FY 2015-16 49.00
Accordingly, the Commission approves the Depreciation of Rs. 49.00
Crore for FY 2015-16.
6.5.10 Interest and Finance Charges
The Commission had approved the Interest and Finance charges of Rs. 89.09 Crore
for FY 2015-16 in the MYT Order dated November 21, 2013. As against the same,
APGCL has projected Interest and Finance charges of Rs. 55.88 Crore for FY 2015-
16.
The Commission, in this Order, has considered the closing balances of Loans for FY
2014-15, as the opening loan balances for FY 2015-16. The loan addition during the
year has been considered as approved in the Investment plan and provided above.
Repayment during the year has been considered as proposed by APGCL. The
Commission has considered interest rates as proposed by APGCL for computing the
interest expenses for FY 2015-16. While approving finance charges, the Commission
has increased approved finance charge of FY 2013-14 in the ratio of loan receipt in
FY 2013-14 and FY 2015-16. The Commission has considered the capitalisation of
interest expenses in the ratio of projected figures of total interest charges and interest
charges capitalized. The interest and finance charges approved by the Commission
in the approval of revised ARR and generation tariff for FY 2015-16 is shown in the
Table below:
97
Table 6.26: Approved interest and finance charges for FY 2015-16 (Rs. Crore)
Particulars
FY 2015-16
Opening Balance
Receipts Repayments Closing Balance
Rate of interest
Interest
PFC 310.55 160.00 22.97 447.58 12.29% 46.61
State Govt. Loan 135.63 46.85 15.20 167.29 8.54% 12.94
Total 446.18 206.85 38.16 614.87 11.22% 59.55
Other Finance Charges
0.14
Less: Interest capitalised 16.99 Net Interest and finance charges
42.69
Accordingly, the Commission approves the Interest and Financial charges of
Rs. 42.69 Crore for FY 2015-16.
6.5.11 Interest on Working Capital
The Interest on Working Capital approved by the Commission for FY 2015-16 vide
MYT Order dated November 21, 2013 and the Interest on Working Capital projected
by APGCL is shown in the Table below:
Table 6.27: Interest on Working Capital projected by APGCL for FY 2015-16 (Rs. Crore)
Particulars Approved in MYT
order dated November 21, 2013
APGCL Proposal
Fuel Cost (1 month) 21.99 43.49
O&M expenses (1 month) 9.63 13.77
Maintenance spares 15.90 13.28
Receivables (2 months) 96.12 138.48
Total Working Capital 143.63 209.02
Rate of Interest on Working Capital 14.75% 14.75%
Interest on Working Capital 21.18 30.83
The Commission has approved the normative Interest on Working Capital for FY
2015-16 in accordance with AERC Tariff Regulations, 2006.
APGCL stated that they have not considered O&M and GFA component for CTPS for
calculation of Interest on working capital. The Commission has accordingly reduced
O&M and GFA component of CTPS proportionately as per the ratio of O&M expense
submitted by APGCL and that approved by the Commission, for those ARR
components from the calculation of Interest on Working Capital. The Interest on
Working Capital approved by the Commission for FY 2015-16 is shown in the Table
98
below:
Table 6.28: Approved Interest on Working Capital for FY 2015-16 (Rs. Crore)
Particulars Approved
Fuel Cost (1 month) 36.68
O&M expenses (1 month) 11.69
Maintenance spares 13.35
Receivables (2 months) 123.10
Total Working Capital 184.82
Rate of Interest as on April 01, 2015 14.75%
Interest on Working Capital 27.26
Accordingly, the Commission approves the Interest on Working Capital of Rs.
27.26 Crore for FY 2015-16.
6.5.12 Return on Equity (RoE)
The Commission had approved the Return on Equity of Rs. 49.75 Crore for FY 2015-
16vide the MYT Order dated November 21, 2013. As against the same, APGCL has
projected the Return on Equity of Rs. 58.96 Crore. APGCL has also submitted details
of station wise Equity addition and deletion during the FY 2015-16.
The Commission has observed that APGCL has calculated Return on Equity for the
new projects i.e. NRPP and Myntriang for the full year even though these plants shall
be operational for only a part of the year. As such, the Commission has calculated
the Return on Equity for the applicable period during which the plant shall be
operational in the Financial Year (i.e after date of CoD till the end of Financial Year).
For Myntriang, the period of operation has been calculated based on the assumption
that 3 MW shall be operational for full year and 10.5 MW shall be operational for a
period of 4 months (the weighted average period is calculated accordingly). For
NRPP the project (Open Cycle) will be operational for 8 months. As such, the
Commission has approved RoE for FY 2015-16 in accordance with AERC Tariff
Regulations, 2006. The details of station wise RoE computation are shown in the
table below:
99
Table 6.29: Approved Return on Equity for FY 2015-16(Rs. Crore)
Particulars NTPS LTPS KLHEP LWHRP NRPP* Myntriang* Total
Opening Equity 69.44 79.24 68.11 70.92 0.00 13.37 301.08
Closing Equity 75.68 84.98 68.11 70.92 208.12 33.34 541.15
Average equity 72.56 82.11 68.11 70.92 104.06 23.36 421.12
Rate 14% 14% 14% 14% 14% 14% 14%
ROE 10.16 11.50 9.54 9.93 8.50 1.57 51.19
*Return has been calculated based on the operational period
Accordingly, the Commission approves Return on Equity of Rs 51.19 Crore for
FY 2015-16.
6.5.13 Special R&M expenses (for KHLEP, LTPS Unit 2 & Unit 7) vide Review Order
dated July 07, 2014
For special type R&M under this head, APGCL has included Rs 26.73 Crore as a
part of the ARR for FY 2015-16 in the table 34 of the Tariff petition and mentioned
that this amount is the R & M Expense approved vide Review Order dated July 07,
2014.
It is explained in the clause 4.3.10 of this Order that, the overall approved Special
type R & M for FY 2013-14 after considering Review Order dated July 07, 2013 is Rs.
35.23 Crore. Out of this amount, APGCL has incurred Rs. 9.03 Crore during FY
2013-14 and Rs. 12.94 Crore is estimated to be incurred during FY 2014-15, thereby
a total of Rs. 21.97 Crore is incurred/estimated to be incurred during FY 2013-14 &
FY 2014-15. This means, as against APGCL’s earlier proposal for Overhauling of
KLHEP, LTPS Unit 2 & 7 amounting Rs. 35.23 Crore, the amount of Rs. 21.97 Crore
has already been incurred till FY 2014-15.
Accordingly, the balance amount of Rs. 13.26 Crore is estimated to be incurred
during FY 2015-16 and as such, the Commission approves Rs. 13.26 Crore under
Special R&M expenses for ARR of FY 2015-16.
6.5.14 Income Tax
The Commission had approved the Income Tax of Rs. 0.93 Crore for FY 2015-16
vide MYT Order November 21, 2013. As against the same, APGCL has proposed the
Income Tax of Rs. 0.93 Crore.
The Commission has approved the Income Tax of Rs. 0.93 Crore for FY 2015-
16, as approved in the MYT Order dated November 21, 2013.
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6.5.15 Other Income
The Commission had approved the Other Income of Rs. 13.29 Crore for FY 2015-
16vide MYT Order dated November 21, 2013. As against the same, APGCL has
proposed the Other Income of Rs. 10.60 Crore.
The Commission has approved the Other Income for FY 2015-16 by escalating the
Other Income for FY 2014-15 by 10% in accordance with the principle as followed in
the MYT Order.
Thereby, the Commission has approved Other Income of Rs. 12.83 Crore for FY
2015-16.
6.5.16 Summary
Based on the above analysis, the ARR approved by the Commission for FY 2015-16
is shown in the Table below:
Table 6.30: Approved ARR for FY 2015-16 (Rs. Crore)
ARR Components Approved in MYT
order dated November 21, 2013
APGCL Proposal
Approved by the
Commission
Fixed Charges
Operation and Maintenance expenses
Employee expenses 91.42 105.27 86.91
Repair and Maintenance expenses 17.39 53.55 49.69
Administrative and General expenses 6.73 9.85 6.56
Interest and Finance Charges 89.09 55.88 42.69
Interest on Working Capital 21.18 30.83 27.26
Income Tax 0.93 0.93 0.93
Depreciation 49.66 48.21 49.00
Return on Equity 49.75 58.96 51.19
Less: Other Income 13.29 10.60 12.83
Total Fixed Charges 312.86 352.87 301.41
Fuel Cost 263.84 521.92 500.20
Add: Revenue deficit of True-up for FY 2013-14 0.00 -66.83 4.10
Add: R&M expense approved vide Review petition on Tariff order for FY 13-14 dated 08.07.2014
26.73 13.26
Annual Revenue Requirement 576.69 968.35 818.97
Thus, the Commission has approved the ARR of Rs. 818.97 Crore for FY 2015-
16 as against APGCL’s proposal of Rs. 968.35.
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6.5.17 Generation Tariff for FY 2015-16
The generation tariff includes separate energy charges for NTPS, LTPS and NRPP
(on energy sent out basis) and monthly fixed charges for APGCL. The approved
generation tariff for FY 2014-15 is shown in the Table below:
Table 6.31: Revised approved Generation Tariff for FY 2015-16
Energy Charge (Net) (Rs./kWh)
FY 2015-16
NTPS 3.54
LTPS 3.77
NRPP 2.57
Fixed Charges Rs. Crore
Total Fixed Charges 318.77*
Monthly Fixed Charges 26.56
*Total fixed charges includes approved ARR gap during truing up of FY 2013-14.
Note: The Station-wise Fixed Charges could not be approved for APGCL as the Station-wise details of fixed costs are not available.
6.5.18 Effectuation of Generation Tariff
The approved rate of Energy Charge and Fixed Charge shall be effective from
August 1, 2015 till it is replaced by another Order of the Commission.
APGCL has to file the Petition for approval of revised ARR and generation tariff along
with true-up for FY2014-15 and APR for FY 2015-16 along with the MYT petition (for
the control period of FY 2016-17 to FY 2018-19) by December 1, 2015.
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7 Compliance of Directives & New Directives
The Commission has issued certain directives to APGCL with an objective of
attaining operational efficiency and streamlining the flow of information, which would
be beneficial to the sector and the Petitioner, both in the short-term and long-term.
This Chapter deals with the compliance status and the Commission’s views thereon
as well as the summary of new directions for compliance and implementation by
APGCL.
7.1 COMPLIANCE OF OLD DIRECTIVES
The Commission’s comments on the status of compliance to the directives are given
below:
Directive-1: Auxiliary Consumption (NTPS and LTPS)
The efforts should continue and the Auxiliary Consumption levels of both the Stations
need to be brought down to the levels specified in the Regulations.
APGCL’s Compliance
APGCL submitted that the measures being taken to reduce Auxiliary Consumption
along with the Report on action already taken as per the recommendations of the
energy audit done by NPC has been submitted to the Commission vide Letter No.
APGCL/CGM (G)/AERC/2012-13/115/Pt-VIII/43 dated January 24, 2014. APGCL
further submitted that all necessary measures are being implemented to reduce the
Auxiliary Energy Consumption to the extent possible. LTPS and NTPS, being a
designated consumer of Bureau of Energy Efficiency (BEE) under Perform, Achieve
and Trade (PAT) Scheme, have been given a specific target and APGCL is following
the suggested procedures prescribed in the energy audit Report to achieve targets
as fixed by the Ministry of Power, GOI/ BEE under PAT Scheme.
Commission’s Comments
The Commission has taken note of APGCL’s submissions. The Commission
acknowledges the efforts of APGCL in reducing the Auxiliary Energy Consumption.
However, the Commission is of the view that the targets specified under PAT
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Scheme are altogether for a different purpose and APGCL should strive to reduce
the Auxiliary Consumption of NTPS and LTPS to the normative levels specified in the
Regulations.
Directive-2: Employee’s Provident Fund
The Commission again directs APGCL to maintain separate accounts for the
amounts recovered from the employees towards provident fund and its utilization
duly audited by statutory auditors. In this matter, APGCL should expedite the
formalities of forming the Trust and the same should be completed as early as
possible.
APGCL’s Compliance
APGCL submitted that the reply from GoA for earlier correspondence is awaited and
APGCL is continuously pursuing the matter with GoA.
Commission’s Comments
The Commission again directs APGCL to complete the formalities of forming the
Trust as early as possible..
Directive-3: Procurement of Gas
APGCL should make all out efforts to procure committed quantity of gas and to get
additional allotments, to overcome the generation problem. The efforts made and the
outcome should be periodically reported to the Commission.
APGCL’s Compliance
APGCL submitted that it has made all out efforts to get the gas supply as per
commitment. APGCL is also pursuing for an additional allotment of gas of 0.15
MMSCMD from the ONGC gas fields in the Cachar district. However, inspite of all
these efforts, during the 3rd quarter of 2014, natural gas supplied by both OIL and
GAIL has been inconsistent.
Commission’s Comments
Noted. APGCL should continue to pursue with the gas suppliers to obtain the
required quantum of gas on a regular basis and inform the Commission about any
difficulties in getting gas supply from time to time.
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Directive-4: Performance of Plants and Expediting Renovation & Modernization
works
APGCL should expedite the on-going Renovation & Modernisation schemes and
ensure timely completion of the projects, to improve the performance of the plants.
Also, the final DPR with cost benefit analysis indicating life extension period shall be
submitted for approval of the Commission as early as possible.
APGCL’s Compliance
APGCL has submitted the impact of Renovation & Modernization on the
performance of NTPS and LTPS. Also, the DPR for new Renovation & Modernization
(R&M) works related to NTPS, LTPS and KLHEP for FY 2014-15and FY 2015-16 has
been submitted by APGCL.
Commission’s Comments
The in-principle approval for R&M works has been accorded for FY 2014-15 and FY
2015-16 vide letter dated February 14' 2015 and March 18' 2015 respectively.
APGCL is directed to expedite the completion of these R&M works and submit
compliance report to the Commission on quarterly basis.
Directive-5: Monitoring of Progress of New Power Projects and Need for
augmentation of own generating capacity
APGCL is directed to submit quarterly progress report on regular basis.
APGCL’s Compliance
APGCL submitted that the progress Report on implementation of New Projects
(Thermal) & ongoing R&M projects had been submitted for the 3rd and 4th quarter of
FY 2014-15 on January 27, 2015 and April 30, 2015. Similarly, for Hydro Projects
also, the progress of new projects and R&M projects were submitted for 3rd and 4th
quarter of FY 2014-15 on February 26, 2015 and May 06, 2015.
Commission’s Comments
The compliance of APGCL is noted in this regard. However, APGCL is directed to
expedite the completion of new projects as per schedule and continue to submit
quarterly progress report on regular basis, till completion of the projects.
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Directive-6: Capital Cost of Small Hydro Projects
The Commission directs APGCL to submit the Petition with detailed break-up of the
Capital Cost for approval of the Commission.
APGCL’s Compliance
APGCL submitted that in response to Commission’s letter No. AERC.447/2014/6
dated 16.05.2014, the details of Capital cost of 9 MW Myntriang Stage I&6 MW
Lungnit SHEPs were submitted to the Commission on October 28, 2014. Similarly,
the revised DPR for 4.5 MW enhancement of Myntriang SHEP was submitted to the
Commission on March 07, 2015.
Commission’s Comments
The compliance of APGCL is noted in this regard.
Commission has already accorded in principle approval for Capital Cost of Myntriang
SHEP (9 MW). In principle approval for Capital Cost of Lungit SHEP (6MW) and
enhanced capacity of Myntriang SHEP (4.5 MW) will be issued shortly.
Directive-7: Filing of complete Petitions within the scheduled dates
It has been observed that the Petitions are not being filed on time, and even after
filing of the Petitions, the necessary data and clarifications are not submitted on time,
leading to delays in the tariff determination process. The Commission directs APGCL
to ensure that the Petitions are filed on time, and all the necessary data and
clarifications are submitted along with the Petition itself.
APGCL’s Compliance
APGCL submitted that the Petition for Revised ARR and Tariff for 2015-16 was
submitted to AERC with due extension on 20thDecember 2014.
Commission’s Comments
In future, APGCL is directed to file the petition within the time stipulated by the
Commission and avoid delays in filing the petition. Also, the submitted petitions are
found to have several deficiencies, most of which are repetitive in nature. APGCL is
directed to file the complete petition with required supporting documents in future to
enable proper and faster review of petition.
Directive-8: Calculation of depreciation in accordance with the AERC Tariff
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Regulations
It has been observed that APGCL does not submit the calculations of depreciation
strictly in accordance with the AERC Tariff Regulations, 2006, and claims
depreciation on assets funded through grants also. The Commission directs APGCL
to ensure that in subsequent Petitions, the depreciation is computed strictly in
accordance with the AERC Tariff Regulations, 2006.
APGCL’s Compliance
APGCL submitted that the Petition for Revised ARR and Tariff for 2015-16 was
submitted to AERC and the calculation of depreciation has been done as per the
norms of AERC.
Commission’s Comments
The Commission has observed several discrepancies have been found in current
depreciation submission. The Commission directs APGCL to ensure that in
subsequent Petitions, the depreciation is computed strictly in accordance with the
AERC Tariff Regulations, 2006.
Directive-9: Transfer of transformer feeders
The Commission had directed APGCL to expedite the transfer of transformer feeders
within 3 months from the date of issue of FY 2014-15 tariff order (dated November
21' 2014) and submit the status of the same to the Commission.
APGCL’s Compliance
APDCL has submitted that the construction of 132/33 kV substation is going on at
NTPS. The transfer of 6 no. of 33 kV feeders to APDCL will be done after the
commissioning of the substation. It has also submitted that AEGCL related feeders
equipments has already been handed over to AEGCL on September 25' 2014 along
with the control room of operations of these feeders/equipments.
For LTPS, APGCL submitted that a meeting has been held between APGCL and
APDCL in February' 2015 to discuss the modalities for handing over the distribution
feeders/equipments to APDCL. The handing over process is expected to be
completed by June' 2015.
Commission’s Comments
Noted. The Commission directs APGCL to expedite the process of handing over the
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transformer feeders to APDCL and submit the compliance report for LTPS
immediately.
7.2 NEW DIRECTIVES
Directive-1: Submission of Fixed Asset Register: APGCL is directed to submit the
fixed asset register along with the summary report of asset taken over by APGCL as
on date of transfer and subsequent additions along with accumulated depreciation of
asset based on asset class and year of addition.
Directive-2: Submission of Complete Tariff Petitions: In addition to the Directive 7
above, APGCL is directed to submit Tariff petition for Truing up, APR and ARR along
with calculations/ information/ formats based on which they have arrived on filed ARR
components in hard and soft copy (MS-Excel). APGCL is also directed to submit their
petition clearly segregated by chapters for True- Up, APR and ARR. While replying to
Objectors/ stakeholders, APGCL is directed to equip their reply with all necessary
fundamental calculations/ information/ tables/ formats.
Sd/-
(D. Chakravarty)
Member, AERC
Sd/-
(N. K. Das)
Chairperson, AERC
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Annexure-1
Minutes of the 19th meeting of the State Advisory Committee
held on 8th May, 2015, at Administrative Stuff College Khanapara, Guwahati
The 19th meeting of the State Advisory Committee was held at 10.30 am on 8th May, 2015, at Administrative Stuff College Khanapara, Guwahati.
The list of members and officers present is appended at Annexure – 1.
At the very outset, the Secretary, AERC, welcomed all the Members of the State Advisory Committee, Special Invitees and officers present, to the 19th Meeting of the Committee, which had been recently reconstituted vide circular dated 20.04.2015as per Section 87 of The Electricity Act, 2003. He stated that the State Advisory Committee is an important body with an objective to advise the Commission on important issues such as:
• Major questions of policy; • Matters relating to quality, continuity and extent of service provided by the
licensees; • Compliance by Licensees with the conditions and requirements of their licence; • Protection of Consumer Interest; and • Electricity supply and overall Standards of Performance by utilities.
He then requested the Chairperson, AERC, Shri Naba Kumar Das, IAS (Retd.) to preside over the meeting.
The Chairperson, AERC, on behalf of the Commission, extended a hearty welcome to all the Members of the State Advisory Committee.
The Chairperson informed the members that Power Point presentations would be made by the representatives of the power utilities on the overall power scenario of the State and also on the petitions submitted by each of the three utilities for revision of tariff. He requested the members to take this opportunity to raise various issues and problems being faced by the consumers and offer suggestions so that effective strategies could be worked out to improve the power position in the State. The agenda items were taken up for discussions in seriatim which are briefly recorded below.
1. Agenda No. 1: Confirmation of the Minutes of the 18th meeting of the State Advisory Committee (SAC) held on 12-08-2014
The Minutes of the 18th Meeting of the Committee was already circulated among the Members and Special Invitees. Hence, it was taken as read. No comment was received on the Minutes. With the approval of the members, the Minutes of the 18th meeting of the SAC were confirmed.
2. Agenda No. 2: Action taken on the Minutes of the 18th Meeting of SAC.
The action taken report was submitted to the members, which are summarized as below.
2.1. Peak power Tariff in consumer categories is not presently covered under the TOD Tariff. The Commission had advised APDCL to submit the required information. On receipt of the same the Commission would be in a position to take a decision.
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2.2. Regarding the Regulation of Peak Power Management it was informed that the Commission have issued the AERC DSM (Demand Supply Management) Regulations, 2012. Commission now will be take up framing the peak power Regulations.
2.3. It was appraised that the two Regulations ofAERC viz. (I) Co-generation and
Generation of Electricity from Renewable Sources of Energy and (II) AERC Grid Interactive Solar PV systems have been finalized and have been sent for publication in the Assam Gazette.
2.4. The amendments to AERC (Terms & Conditions for Determination of Tariff)
Regulations, 2006 were notified in the Assam Gazette on 06.01.2015.
2.5. Chairperson, AERC requested Mr. K.V Eapen Chairman (APDCL, AEGCL and APGCL) to present a brief about the Power Availability Scenario up to the year 2019. Who shared the following stated below:
Plant Name
Maximum Availability (MW)
Date Of Commissioning
OTPC Palatana(Unit I)
120
January 2014
Farakka super Thermal Power Station
75
September 2014 to August 2016
OTPC Palatana (Merchant Power)
35 (Merchant power) Agreement made
Damodar Valley Corporation
75
May 2015 to July 2015
Nikachhu hydro Power station
118
July 2019
TOTAL 423
3. Agenda No. 2: Present power scenario of the State.
A presentation was made by Mr M.K Adhikari GM, (APDCL) on Present power scenario of the State of Assam.
4.1. During the presentation Mr. Bimal Phukan desired to know about the methodology of
calculation of demand by APDCL .APDCL appraised that physical demand recorded in the system is considered to calculate demand. Mr. Bimal Phukan objected to the same stating that during summer months (4-5months) load shedding occurs across the state therefore the system will not record the actual demand. APDCL confirmed that they consider substation wise recorded data for those days of the month when no load shedding was carried out. However, Mr. Phukan not being satisfied with the reply mentioned that the demand data is a suppressed demand data and he apprehended that if this demand is considered by Central Government for allocation of power then Assam will get lower allocation of power than actual requirement.
4.2. Mr. Anup Gogoi mentioned that per capita per month consumption of Assam is very low compared to other states of India. He opined that this may be due to the demand
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reflected is not the actual demand .Actual demand may be 3000 MW as compared to assessed demand of 1100 to 1450 MW.
4.3. Chairperson AERC mentioned that per capita consumption appears to be very low; there is a need to analyze/ asses the actual requirement to meet demand.
4.4. Mr. Nitin Sabikhi Manager, IEX enquired about the base load of the system, APDCL replied that the base load of the system is minimum of 600 MW throughout the day and 750 to 800 MW during day time.
4.5. Mr Bimal Phukan desired to know about the methodology for allocation of CSGS power. APDCL replied that Gadgil-Mukherjeeformula is used for allocation of both hydro as well as thermal power. The new revised Gadgil-Mukherjee formula as approved by National Development
Council (NDC) is given in the following table. Criteria for inter-state allocation of Plan
Assistance
Criteria Weight (%)
Population 55
Per capita Income 25
Fiscal Management 5
Special Problems 15
Total 100
He further enquired about the availability of Meghalaya power and the cost. APDCL replied that Meghalaya power is available since 1988 at a rate mutually decided. Presently, in some areas of Mankachar and Goalpara District of Assam power from Meghalaya is received at 11KV level.
4.6. Mr. Bimal Phukan asked about Commissioning date of Lakwa Thermal Power Station (LTPS) and also desired to know about the projects those came up after 1978.Mr. KV Eapen replied that LTPS was Commissioned in 1978. Mr.P. Bujarbaruah, MD (APGCL) replied that presently Namrup Replacement power Plant (NRPP) and Lakua Replacement Power Plant (LRPP) are under implementation.
4.7. Mr. Anup Gogoi desired to know about the present power prices in the exchange. Mr. Nitin Sabikhi, Manager IEX replied that for the last six months exchange prices are very low, the RTC price was `2.5 /unit and night price was less than ` 2 /Unit for North East Region. With the present trend of growth in Generation capacity (8to 9%) versus growth in Demand (4%). It is expected that there will be surplus scenario in next few years and exchange prices likely to fall further.
He opined that Assam may think of replacing purchase of costlier power with
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exchange power, which may lead to saving of substantial amount of power purchase
cost. He informed that States such as Haryana, Punjab Rajasthan are already using
the method of replacing costly power with cheap power from the Exchange.
4.8. Mr. Abjijit Barooah desired to know about the internal system of APDCL to take quick commercial decision on power purchase. Mr.KV Eapen replied that Commercial department of APDCL is responsible for handling power purchase. Mr. Adhikari GM (TRC), APDCL highlighted that on a daily basis (block wise) demand supply position is assessed and decision taken regarding the power purchase. At present APDCL meets 80% of demand from firm allocation /Contracted supply, 5 to 10% from exchange and 5% through deviation settlement mechanism.
5. Agenda No. 4: Tariff Proposals for FY 2015-16
• Mr.SM Kalita CGM (F & A), APGCL made a presentation on APGCL Tariff Proposals for FY 2015-16.
5.1. Mr. Bimal phukan Member SAC enquired as to whether there was any break down of the generating stations. APGCL replied that the details break down have been submitted.
5.2. Mr. phukan further pointed out that the proposed Generation Tariff at ` 4.92 is higher compared to the exchange price of under ` 4.00. He requested APGCL to review this issue.
5.3. It was suggested that the long-term viability of the small gas based projects be reviewed as a cluster of small projects may result in high O &M expenses.
5.4. Mr. Abhijit Barooah mentioned that the average auxiliary consumption of the stations are very high. APGCL appraised that there are three main reasons of high auxiliary consumption
a) Because of low availability of gas machines are run on low load (40-50%) condition. Though, some of the Auxiliary Units need to be run all the time irrespective of loading resulting in higher auxiliary consumption.
b) Being old the Station Heat Rates are high for the existing stations. Besides, use of low CV gas compared to design there is requirement of higher volume of gas which results in higher auxiliary consumption.
6. Mr. S.K. Saha CGM (F & A) AEGCL made a presentation on AEGCL Tariff Proposals for FY 2015-16.
6.1. Mr. Bimal phukan enquired about the capacity that can be handled by AEGCL.AEGCL replied that an average of 716 MW and 806 MW were handled during 2013-14 and 2014-15 respectively.
6.2. Mr. Nitin Sabikhi Manager IEX desired to know about the Import capacity of AEGCL. AEGCL replied that the import capacity is 1100 MW.
7. Mr. Manoj Adhikari GM, APDCL made a presentation on APDCL Tariff Proposals for FY 2015-16.
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7.1. Mr. Abhijit Barooah opined that a provision should be there to penalize the utility for not meeting the norms set in Regulations. He further mentioned that with the present status of revenue gap there is a need for Government to provide a onetime fund to bring a clean slate. He enquired about the methodology of fixing the Tariff for different categories of customers. APDCL replied that Tariff for different categories of customers is proposed keeping in mind the guidelines of National Tariff Policy to maintain the cross subsidy level within ± 20%.
7.2. Mr. Bimal phukan suggested that the buying and selling of power through the
exchange be carried out in a prudent manner so that the maximum benefit can be derived out of the process. Should the need arise; personnel can be specially trained for the purpose.
8. Agenda No. 5: Draft AERC ( Terms & Conditions for Determination of Multi Year
Tariff) Regulations, 2015
8.1. A brief presentation was made by Mr. Amit Goenka (Deloitte Touche Tohmatsu India Pvt. Ltd.) on Multi Year Tariff Regulation. Mr. Saurabh Agarwal enquired about the mechanism of sharing of Gain/loss in the regulations. It was replied that the Mechanism proposed is as per model FOR Regulations. Mr. Saurabh Agarwal further enquired as to why the incentive structure has been changed (Earlier 25 paisa which becomes 50 paisa w.e.f 1st April 2016). Mr. Amit Goenka (Deloitte Touche Tohmatsu India Pvt. Ltd) clarified that it totally depends upon the new Regulation. Mr. Agarwal enquired as to why AT & C Loss is not kept as an Efficiency Parameter. Mr. Goenka replied that as there is ambiguity in formula for AT & C loss, distribution loss is kept as one of the efficiency parameters.
9. Agenda No. 6: Draft AERC (Payment of Fees etc.) Regulations, 2015.
• A brief presentation was made by Mr. Sanjeeb Tamuli, Consultant AERC on the Draft
AERC (Payment of Fees etc.) Regulations, 2015 which was considered and approved by the SAC.
10. Agenda No. 7: Draft AERC (Smart Grid) Regulations, 2015. • A brief presentation was made by Mr. D.K Sarmah, Joint Director (Tariff) AERC on
the Draft AERC (Smart Grid.) Regulations, 2015 which was considered and approved by the SAC.
11. Agenda No. 8 :Any other mater
11.1. Mr. Dilip Kumr Baruah expressed that the Tariff has to go up due to prevailing conditions however; there is a scope for moderation.
11.2. He requested to ensure 24×7 power supply and suggested the following which may help control the Tariff.
a) Efforts should be made to Minimize cost.
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b) Under utilisation of capacity should be avoided as far as possible by taking preventive measures.
c) Execution of work should be expedited. d) There should be policies on procurement and inventory control of
Stocks. Physical verification should be carried out at times. In substations equipments are idle for 5 to 30 years.
e) A proper investment policy should be made by the Companies. f) Also a disaster management cell should be set up by all the
Companies. g) Audit report should be made available in the public domain.
11.3. He further enquired as to how many consumer complaints have been received and
whether any compensation was paid to the consumers when the complaint was not settled in a given time.
Chairperson AERC advised that the suggestions put forward should be included in the business plans of utilities.
12. Comments from Chairperson AERC:
Chairperson AERC mentioned that Tariff Proposals are subjected to due scrutiny and wherever it is found that the expenditure are not justified, AERC do not allow them in the permissible Tariff .Consequently, every year there is a difference between amount claimed and amount allowed. Chairperson, AERC appreciated the suggestions offered by Mr.Dilip Kumar Baruah on better management of Inventory and also advised the utilities to take appropriate action.
Regarding Consumer Awareness, Chairperson AERC mentioned that Administrative staff college of India (ASCI) Hyderabad has been Commissioned to do a study on “Effectiveness of Consumer Grievances Redressal Mechanism and Compliance of S.O.P by APDCL.” They will also examine whether the SOPs issued by the Commission are being followed by APDCL. Effectiveness of the consumer redressal forum also will be evaluated. He also appraised the members about the proposed modification in the structure of the Consumer Redressal Forum.
13. No other matter came up for discussion. The meeting ended with a Vote of Thanks to and from the chair.
Sd/- (Naba Kumar Das)
Chairperson Assam Electricity Regulatory Commission
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Annexure – 2
List of members present in the meeting of the State
Advisory Committee held on 8th May, 2015
1. Shri Naba Kumar Das, IAS(Retd.), Chairperson, AERC
2. Dr. Rajani Kanta Gogoi, Member, AERC
3. Shri D.Chakravarty, Member, AERC neccessary
4. Shri V.K Pipersenia, Additional Chief Secretary,GOA
5. Shri V.B Pyarelal, Additional Chief Secretary,GOA
6. Shri K.V. Eapen, Chairman, APDCL, AEGCL & APGCL
7. Shri R.L. Barua, MD, APDCL
8. Shri P. Bujarbaruah, MD, APGCL
9. Shri G.K.Das, MD, AEGCL
10. Shri Arup Kumar Dutta, President, AASIA.
11. Dr. Shree Birendra Kumar Das, President, Grahak Suraksha Sanstha, Guwahati.
12. Shri Bharat Saikia, Secretary, Grahak Suraksha Sanstha, Guwahati
13. Shri Anuj Kumar Baruah, AASSIA, President,Bamunimaidam, I/E Guwahati
14. Shri Saurabh Agarwala, FINER, Member
15. Shri Ranjit Kumar Barua ABITA,GS Road
16. Smt. Utpala Saikia, Deputy Secretary, Power Deptt., Dispur.
17. Shri Kulendra Talukdar, Joint Secretary Agriculture, Dispur.
18. Shri Akhil Sarma Under Secretary Finance Deptt, Dispur.
19. Shri Nitin Sabikhi, Manager IEX, New-Delhi.
20. Shri Abhinandan Goswami, R.M IEX, New-Delhi
21. Shri Bimal Phukan, Public
22. Shri Anup Gogoi, Prof Deptt. EEE IITG
23. Shri Dilip Kumar Baruah, Former Principal Cotton College
24. Shri Abhijit Barooah, CII North East
25. Smt.Joyshree Das Verma, Chairperson FICCI
Officers of AERC
1. Shri SK Roy (ACS, Retd.)Secretary AERC
2. Shri A.k..Barthakur, Senior Consultant,AERC
3. Shri D.K. Sarmah, Joint Director, AERC
4. Shri T. Mahanta, Deputy Director (Engg) AERC
5. Shri A. Purkayastha, Deputy Director (Finance) AERC
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6. Ms. Panchamitra Sarma, Consultant (Finance, Database and Consumer Advocacy Cell) AERC.
7. Shri N.K. Deka, Consultant (Technical), AERC
8. Shri Sanjeeb Tamuli, Consultant AERC
9. Shri Jayjeet Bezbaruah, Consultant,AERC
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