The Case for Making Aggregate Revenue Requirement (ARR) an Inclusive Document: CAG, had submitted to

the TNERC, that the ARR should also incorporate TANGEDCO's Standards of Performance within it so as to make it a

comprehensive document. At present, the ARR and Standards of Performance are viewed as two separate docu-

ments/entities by TNERC and TANGEDCO. The effect of inclusion is three-fold a) regulators have an holistic picture/

report card of the day-to-day functioning of TANGEDCO, b) consumers are better informed that the compliance

mechanism is being followed by TANGEDCO and c) the extent of „hidden‟ expenditure made by TANGEDCO is made

visible.

Aggregate Revenue Requirement or Annual Revenue Requirement (ARR) has always been seen by electricity

regulators as the key document to assess the performance of generation, transmission and distribution utilities.

ARR is the aggregate revenue requirement that the licensee believes

it is entitled to recover and the expected revenue at the prevailing

tariff rate. The ARR is filed by the utility before the State Electricity

Regulatory Commission for approval of its income and expenditure for

the year. Any request for increase in tariff is made through the ARR.

The Regulatory Commission will then scrutinize utility‟s calculation—

costs and revenue estimates—and based on this it may allow or disal-

low certain costs or tariff increases, before approving the ARR. The

ARR is expected to contain a) Audited figures for the previous finan-

cial year, b) Estimated figures for the current financial year, c) Fore-

cast figures for the ensuing financial year (HERC).

The various factors determining ARR from the Regulatory Commission‟s perspective is to „1) encourage efficiency,

economy, competition, good performance, optimum investments and reduction of costs; (2) reward efficiency in

performance; (3) stress commercial aspects; (4) safeguarding of consumers interest and at the same time, recov-

ery of cost of electricity in a reasonable manner‟. (HERC, Terms and Conditions for Determination of Wheeling Tariff

and Distribution & Retail Supply Tariff, Regulations, 2008, Terms and Conditions for Determination of Generation

Tariff, Regulations, 2008). The principles making the ARR a holistic document are efficiency, economy, good per-

formance and cost recovery while safeguarding consumer interests.

In the same light, Standards of Performance (Section 86, Electricity Act 2003) deals with standards with respect

to quality, continuity and reliability of service by transmission, generation and distribution. The licensee/utility is

required to maintain standards of performance for supply of electricity within a prescribed time limit failing which

the affected consumer is entitled for compensation by the Licensees. (contd on Page 2)

Electricity Contacts

Call centre—

155333/9445850829

Fuse Off Call Centre:

Tamil Nadu and Chennai

RTI—TANGEDCO

TNERC & Ombudsman:

044-28411376, 28411378,

28411379

CGRF: Addresses

Pay online: TNEBNET

CAG’s Oral submissions to TNERC on Draft ARR at Public Hearing on 3rd May 2013 (Part –3)

Inside this issue:

Editorial 1 –2

TN News 2

India Electricity News 2-3

Consumer Corner 3

Around the World 4

Regulations & Cases 4

Publications 4

Miscellaneous 4

Poster 5

Empowering Electricity Consumers in Tamil Nadu

EmPower TN June 1-15, 2013

Volume 2, Issue 11

Please send your feedback to

empowertn@cag.org.in

ARR components: a) Business Plan for five

years, a) Capital Investment Plan, b) Capital

Cost, c) Additional Capitalisation, d) Debt-

Equity Ratio: 70:30, e) Return on Equity, e)

Interest and Finance Charges on (debt) Loan

Capital f) Depreciation, g) Operation and Main-

tenance Expenses, h) Working Capital, i) Inter-

est on Working Capital, j) contingency re-

serve, k) insurance. TNERC Tariff Regulations

of 2005

Page 2 EmPower TN

Pakistan mulls importing electricity from India

Reeling under severe energy shortages, Pakistan is keen to import 500 to 1000

MW of electricity from India. A top government official seeking anonymity said

New Delhi is willing to help, and is exploring the points that can be used to hook-

up the grid in Pakistan through a high-voltage direct current (HVDC) line.

The proposal to buy power was made when a power ministry delegation led by

joint secretary Rita Acharya visited Pakistan earlier this week, and discussed the

broad contours of the proposed arrangement. Officials said the transmission

line may not take very long to build, and power could start flowing in matter of

months. However, details and modalities of the purchase and the techno-

commercial as well as sovereign arrangements are still to be worked out. (HT,

14 June, 2013)

TN Electricity News

India Electricity News

Panel confirms nod for Udangudi, Cheyyur power projects

The Expert Appraisal Committee (EAC) of the Union Environment and Forests Ministry has reiterated its recommendation, given three years ago, for granting environ-

mental clearance for the Rs. 8,400-crore Udangudi supercritical thermal power project & Cheyyur Ultra Mega Power Project (UMPP), which would produce 4,000 MW.

The Tangedco informed the EAC that a revised environment impact assessment (EIA) study had been carried out for the 100 per cent imported coal and all emission

factors, according to the study, were within the limits prescribed by the E&F Ministry. As such, there would not be significant impact in the project area due to the change

in fuel mix.

Laying down an elaborate set of stringent measures to be followed, the committee directed the project proponent, Coastal Tamilnadu Power Limited, to set up the pro-

posed UMPP as a model plant “where ecology and development co-exist in harmony.” The Coastal Regulation Zone clearance for permissible activities should be obtained.

Solar power should be harnessed. A stack of 275 m should be provided with continuous online monitoring equipment for emission. Apart from asking the project propo-

nent to keep a close watch of surface water quantity and quality, the committee wanted the Coastal Tamilnadu Power Limited to monitor continuously the quality of water

of the Cheyyur lagoon, said to be a home to a large number of migratory birds, and maintain records. If any mangrove in the study area becomes degraded, the authori-

ties should regenerate it. A well-designed water harvesting system should be put in place within six months. (Hindu, 15 June, 2013)

UPPCL for LED streetlights to reduce electricity consumption

Caught in the struggle to meet the ever growing demand for electricity in the state,

UP Power Corporation Ltd has forwarded a proposal to the government to ask all

urban local bodies of the state to replace ordinary street lights with LED ( light

emitting diode) lights, which will reduce electricity consumption by nearly 50%.

There are 730 urban local bodies in the state. On recommendations of BEE ( Bureau

of Energy Efficiency), UPPCL has asked the state government to consider options

that can help save energy like LED street lights and BEE-approved water pumps.

The government, before approving the project, has proposed to carry out a pilot

study in a particular zone of both Kanpur and Lucknow, to assess the project's

feasibility. LED lights can emanate about one-and-a-half times brighter than ordi-

nary lights and lasts for 3-4 years longer. (TOI, 16 June, 2013)

This may be seen as Unapproved Expenditure which the licensee should mention as part of its ARR expenditure in the previous year. E.g, under Section 4

of TNERC Distribution Standards of Performance (2004), it is the duty of the licensee to supply on request from owner or occupier of premises and fail-

ure to will invite penalty of upto Rs. 1000 per day. Therefore, non-compliance to Standards of Performance results in costs to the utility. From an institu-

tional perspective, the Standards of performance highlights how human resources, management coordination between departments and resource utiliza-

tion of the licensee combine to bring about a well coordinated system. Standards of Performance thus fall within the ambit of factors which encourages

efficiency, economic use of the resources, good performance, and optimum investments. The ARR should include the following Standards of Performance

components to make it more inclusive/inclusive: a) Number and duration of supply interruptions on networks, b) Periods when voltage and/or frequency

was beyond the prescribed limits on transmission and primary distribution (33 kV, 11 kV) networks—steps to improve them, c) Number of supply or con-

nection applications pending for more than six months, d) Numbers of fatal and non-fatal accidents reported during last 3 years, e) Number of unauthor-

ised connections, f) non-collection and details of litigation involving collection of revenue of Rs50,000, g) amount of compensation disbursed due to non-

compliance—Standards of Performance (HERC).

In summary, both ARR and Standards of Performance must be seen as coordinating documents that helps in the management of day-to-day operations in

TANGEDCO - as business operations are linked to regulatory codes and compliance mechanisms. Failure to combine or incorporate ARR with Standards of

Performance highlights the lack of co-ordination and synchronization of the various departments of TANGEDCO highlighting inefficiency, wastage, poor

performance and monetary losses and non-protection of consumer interests by TNERC.

Page 3 EmPower TN

FAQs

Interruptions and Restoration of Supply (Contd)

II) Failure / Interruption in Corporation limits and certain special areas declared by the Commission from time to time shall be attended to round the clock within the

time limit specified for urban areas. Complaints of failure/interruption at consumer premises in rural areas and urban areas other than corporation limits shall be

attended to between 8.00 AM and 6.00 PM. Individual complaints of consumers received during night hours i.e., from 6.00 PM to 8.00 AM shall be considered to have

been received at the start of working hours on the next day and attended to within the time limit as specified above. The restoration time specified in respect of individual

service connection faults in rural areas shall exclude the time period of 6.00 PM to 8.00 AM. However the complaints from essential services like Water supply, Hospi-

tals, and other important Govt. services shall be attended to immediately, round the clock.

(III) In case of interruptions, it is the responsibility of the affected consumer to inform the same to the Licensee‟s local office or nearest fuse off call center by Tele-

phone / written communication in person, etc.Provided that in case failure / break down due to natural calamities like cyclone, [land slides in hill areas,] etc. the Licen-

see shall take every action to restore supply within the least possible time. Distribution Standards of Performance, 2004 (Amended upto 2008)

Consumer Corner

Laying wires across private Land: Is it trespass?

The TNEB used the private lands of Mr. Subramanian for laying wires in order to effect the service connection of another consumer, Mr. Murugan. Mr. Subramanian ob-

jected to this as he stated that this was in violation of a permanent injunction passed by the District Munsif Court, Ambattur . The Munsif Court order restrained Mr. Mu-

rugan from trespassing into his land.

However, TNEB argued that they had been directed by the Madras High Court to provide the said connection within one week and since this was the only manner in which

the wires could be laid ( due to the layout of the area), they had been forced to use Mr. Subramanian's land without giving him any notice. The CGRF had ruled in favour of

the TNEB and hence, Mr. Subramanian preferred this appeal.

The question of law before the Ombudsman was whether the TNEB had the authority under law to make use of private land for this purpose. To answer this, the Ombuds-

man looked at Sections 51 and 42 of the Electricity Act as well as various judgements, the most notable being the case before the Madras High Court cited as 2001 (4) CTC

129. On perusing these documents, the Ombudsman came to the conclusion that the TNEB has the absolute power, under law, to make use of private lands of individuals

for the purpose of providing such services. The only remedy available to the aggrieved party in such circumstances is to demand, and be entitled to, compensation for

any damage caused to the land in the process.

The appeal was dismissed i.e. the TNEB was deemed justified in making use of the appellant's land for effecting the connection of another.

P Subramanian vs Superintending Engineer, TNEB. Click here

Consumption of Conventional Sources of Energy (Energy Statistics 2012) Per-Capita Energy Consumption (PEC) and Energy intensity

Page 4 EmPower TN

Around the World

Publications

UNDP, Energizing the Millennium Development Goals, A Guide to Energy‟s Role in Reducing Poverty, 2005. Click here

EU, Renewable energy progress report: 2013, European Commission, 2013. Click here

www.cag.org.in

9/5 II Street Padmanabha Nagar,

Adyar, Chennai 600020.

Phone: 91-44-24460387

Telefax: 91-44-24914358

Email: empowertn@cag.org.in

Join our facebook page @

www.facebook.com/CAGChennai

Citizen consumer and civic Action Group

(CAG)

Latest Regulations

Tamil Nadu ERC, RA NO.1 of 2013 - TANTRANSCO letter. Click here

Tamil Nadu ERC, TANGEDCO seeking approval of the Commission for adoption of tariff towards the procurement of

around 1177 MW of RTC power, P.P.A.P No. 4 of 2013. click here

Miscellaneous

US U.S. Department of Energy, Solar Decathlon Competition, click here

National Renewable Energy Laboratory (NREL), Geothermal Technology Analysis Models and Tools, click here

ABOUT CAG

Established in 1985, Citizen consumer and civic Action Group (CAG) is an advocacy and campaigning group that works

towards protecting citizens rights in consumer and environmental issues and promotes good governance processes

including transparency, accountability and participatory decision-making.

Editorial Team

K. Vishnu Mohan Rao

Nikhitha M.

Trash to Cash - Methane Capture Generates $3-4 Million Annually

A power plant was constructed on the site of Toronto‟s, Canada, primary waste landfill to convert

captured methane gas into electricity providing power for roughly 24,000 homes. Keele Valley

Landfill site was Toronto‟s primary waste disposal facility. It is one of three landfills in which To-

ronto has installed piping used to collect methane gas and routed to power plants, where it is

burned to create electricity.

Working: City of Toronto selected Eastern Power Developers (EPD) to generate electricity from Landfill Gas (LFG) for sale to local power utility, Ontario Power Genera-

tion. A power plant at the Keele Valley Site was constructed and generation of electricity began in April 1995. City of Toronto spent $12 million CAD to build a gas collec-

tion system into landfill site. Easter Power Developers spent $20 million CAD to install power plant. 40,000 linear meters of horizontal gas collection trenches and 80

vertical gas collection wells were installed within the landfill waste site by City of Toronto. The Site is encircled by roughly 10,000 linear meters of dual header piping for

transmission of gas from the wells and trenches to the central blower/flaring station. Centrifugal blowers located at the central blower/flare station apply vacuum to

the collection piping to extract LFG from the trenches and wells located in the landfill. The collected gas is then directed to the power plant for generation of electricity.

Creating energy from landfill gas provides 274,800,000 kW-hr or power for roughly 24,000 homes.

Future Plans: The landfill reached its maximum capacity and closed in 2002. The plant continues to operate. It is currently operating at 24 MW from an initial 33 MW. It

will continue to operate until there is no methane gas left. Keele Valley landfill site is in an urban setting, close to residential area. Site was required by city to control

odor and dispose of methane emitted: this meant either directing the gas underground or releasing it into open air. Because methane is explosive, directing it under-

ground was not a lucrative proposition. Made financial and practical sense to collect methane and utilize it as a fuel to produce electricity. Landfill site is close enough to

electrical grid, which makes constructing a power plant there financially viable- no need for hundreds of miles of electrical wiring. (C40, Keele Valley)