8/13/2019 Appr Trst Ruc
1/46
POWER SECTOR STATUS & TARIFF
IN
ANDHRA PRADESH
8/13/2019 Appr Trst Ruc
2/46
ANDHRA PRADESH
POWER SECTOR STATUS & TARIFF
IN
ANDHRA PRADESH
(2000-01)
1. The Andhra Pradesh State Electricity Board (APSEB) used to be one
of the most efficiently managed Electricity Boards in India. It had consistently
won Awards for the high Plant oad !actor (P!) achie"ed by its generating
stations. But of late# the annual re"enue deficit of APSEB had steadily
increased from $s. %&' r. in year 1*+& to $s. ,&-- r. in year 1+
,---. The increase in tariff from time to time was neither regular nor
adeuate. The deficit amount was met by /o"ernment of Andhra Pradesh
(hereinafter called /oAP) as subsidy# which had also not been 0aid in cash
most of the time. Table+1 below gi"es! the details.
8/13/2019 Appr Trst Ruc
3/46
,. The reasons for the huge deficits were hea"y subsidi;ation of 0ower to
Agricultural and omestic consumers and growing transmission and
distribution losses.
4. The consum0tion 0attern of 0ower in the State showed that about 46
of 0ower sold was consumed by the !arm sector but it contributed only about
46 of the re"enues because of highly subsidi;ed tariff.
Table-2Category !"e # Sale" $ # Re%e&'e Real!"at!o&
S.
8o
etails 1'+%
(Actls) APSEB
1%+ (Actls)
APSEB
1+,--- ,---+,--1
(Pro9ected)6 ToTotalSales
6 ToTotal
$e"enue
6 ToTotalSales
6 ToTotal
$e"enue
6 ToTotalSales
6 ToTotal
$e"enue
6 ToTotalSales
6 ToTotal
$e"enue
1 omestic 1 ,- ,- ,- ,1 1 ,4 ,1
, 8on+domestic * % * 1- & 1- & 1-
4 Agricultural 4 * 4 * *- * 42 &
* Industrial ,% & ,2 &2 ,, &% ,' &&
8/13/2019 Appr Trst Ruc
4/46
&. The resultant deficit amount was co"ered 0artly by cross+subsidi;ation
during tariff fi3ation and the balance# which was a substantial amount "arying
from $s. ** r. to $s. ,2', r. was 0aid by the /o"ernment annually as
e30lained earlier (Table+1).
2. The transmission and distribution losses were high at about 446.
These were wor?ed out as the difference of the gross units of 0ower
0urchased and units of 0ower sold. 7"er the last si3 years# while the 0ower
0urchases increased by 446 0ower losses increased by 1'46. =owe"er#
following the energy audit conducted by APT$A8S7 during 12+'#
APT$A8S7 conceded the e3istence of energy theft in the system and
reduced the consum0tion attributed to the Agricultural Sector. This e30lains
the sudden increase in the loss figures from 12+'.
8/13/2019 Appr Trst Ruc
5/46
metered. The metered consum0tion accounted for only *16 of the total 0ower
handled.
Table-7PERCENTA
8/13/2019 Appr Trst Ruc
6/46
. The consum0tion mi3 of 0ower in the State was uite ad"erse. hile
the !arm sector consum0tion was *-6 of the total consum0tion# the Industrial
consum0tion remained almost stagnant at ,,6.
Table - 5CATEPTION IN >U"
Category )9-)7 )7-)5 )5-)8 )8-)6 )6-)) ))-** # o0 totalo&"'3t!o&
omestic 4,14 4,'2 4%-1 *&4& &-- &%&* ,1
8on+domestic 2', '-* '& ,' 1-2- 14&- &
Agricultural 1-,, 114 '%4& 442 %22 1114% *-
Industry 22- 22*' 2'%4 2''- 22&4 21*1 ,,
$aiway Traction &* 24, 2%2 %&- %&, -- *
7thers %** '*, 1-,4 14,* 12,4 ,1*- %
Total ,,4& ,4*-- ,-,4 ,4'*, ,&1** ,'&,4 1--
1-. It a00eared that bul? of the increase in 0urchase of 0ower was to meet
the growing demand of !arm and omestic sectors# thereby causing more
re"enue losses through increased 0urchase of 0ower. There being no
corres0onding increase in the consum0tion of industry# the burden of
8/13/2019 Appr Trst Ruc
7/46
11. The cost reco"ered from the sales was less than the a"erage cost of
su00ly due to huge losses incurred# highly subsidi;ed tariff for su00ly of 0ower
to !arm sector# substantially subsidi;ed domestic sector# limitation to further
cross+subsidi;ation and the tariff not being re"ised regularly or adeuately.
Table - 6
COST RECOVERY FRO> SA:ES ($s5Dwh)
escri0tion 1*+& 1&+2 12+' 1'+% 1%+ 1+--
,Pro%!"!o&al/
A"erage ost of nit 1.4* 1.&1 ,.-4 ,., ,.'% ,.1
ost reco"ered from sales -.% 1.-4 1.2% 1.%, 1.%4 1.'
Percentage ',6 2%6 %46 '6 226 226
1,. The /oAP had been 0ro"iding subsidy to the e3tent of about 4- to 4&6
of the total e30enditure to meet the re"enue deficit as well as the statutory 46
return on the net fi3ed assets to the Board.
8/13/2019 Appr Trst Ruc
8/46
Table-1*EXPENDITURE - REVENUE - SUBSIDY
($s. in rores)
escri0tion 1*+& 1&+2 12+' 1'+% 1%+ 1+,---(Pro".)
Total Subsidy ** 1,& %&1 1,&2 ,&1 ,2',
SubsidyPaid5ad9usted by
/oAP
Euitywritten off
Ad9ustedagainst
oan
Ad9ustedagainst
oan
$s. *%4r.
Ad9ustedagainstoans
ash oan of$s. &*& r.#
Bonds$s.11-- r.
Total $s.12*&r.
ash grant of$s.1-& r. :
Bonds for$s.4-14.,*r. raised
1*. This had in turn forced the Board to borrow money to settle the bills
for 0urchase of coal and 0ower. The Board also raised funds by
way of Bonds guaranteed by the /o"ernment. The /o"ernment
was reuested to ser"ice the debt arising out of these Bonds as the
Bond issue was resorted to on account of the non+recei0t of subsidy
f th / t Th / t h d d t i th
8/13/2019 Appr Trst Ruc
9/46
Table-12INTEREST C.AR
8/13/2019 Appr Trst Ruc
10/46
8/13/2019 Appr Trst Ruc
11/46
distribution could not be maintained unless the charges for the electricity
su00lied were adeuately le"ied and duly collected.
,-. ith the enactment of the $eform Act# the APSEB was unbundled into
K/enerationF and KTransmission C istributionF entities by constituting
/eneration or0oration of Andhra Pradesh (AP/E87) C Transmission
or0oration of Andhra Pradesh imited (APT$A8S7) on -1.-,.. The
Andhra Pradesh Electricity $egulatory ommission was constituted on
41.-4.1. APT$A8S7 was further unbundled w.e.f. -1.-*.,--- into
LTransmission or0orationM and four Listribution om0aniesM (IST7S)#
which would function as subsidiaries of the Transmission com0any till the
0ri"ati;ation of the IST7S too? 0lace. APT$A8S7 was both the Bul?
and $etail Su00ly icensee. icensing of the IST7S had been under
0rocess in the ommission.
8/13/2019 Appr Trst Ruc
12/46
while subsidi;ing su00ly of 0ower to !arm and omestic sectors and for this
reason reduce the de0endence on e3ternal subsidy# mo"e towards
om0ensatory tariffs# im0ro"e the financial "iability and credibility of the utility
to attract 0ower de"elo0ers and finally reduce the cost of su00ly.
I33e?!ate Ta"@" be0ore te Co33!""!o&
Im0ro"e o0erational efficiency.
inimise cross+subsidy.
etering of Agriculture onsum0tion
$educe TC osses.
$educe e3ternal subsidy.
o"e towards com0ensatory tariffs.
a?e the icensee financially "iable.
8/13/2019 Appr Trst Ruc
13/46
,&. 7n A0ril '# the !iling for Pro0osed tariff was made. A correction to
su00lementary A$$ 5 E$ was filed on ay %# ,---. The filing of A$$5 E$
was as followsBEDDED COST >ODE: - A::OCATION FACTORS
ategory escri0tion
ENERAND CUSTO>ER
Energyincludingall losses
in
Energyallocation
factor
oincidentdemandincludingall losses
in
oincidentdemand
allocationfactor
8o. ofustomers
ustomersallocation
factor
:T omestic at+I 1-#1,- ,*.%26 4#412 *.,6 %#&%#-- '4.*46
:T Indl. Su00ly at+III ,#1 '.4&6 *21 2.%26 141#1& 1.146
:T Irrn. C Agrl. at+> 1''4 4%.'&6 1#-&1 1&.2,6 1#%'#1-- 12.,,6
.T Indl. Seg. at+I 4#*4, %.*46 *%' '.,*6 ,#&' -.-,6
:T$.T Total ,All at4/= 9*;81* 1**4**# 5;828 1**4**# 11;5)8;*19 1**4**#
24. sing classification factors and allocation factors# the cost to ser"e for
each category was estimated. The 0er unit cost was determined on the basis
of consum0tion net of losses. Table ae!ed e30lains the wor?ing of Host to
Ser"eH in res0ect of omestic ategory of onsumers.
8/13/2019 Appr Trst Ruc
30/46
2&. It would be obser"ed from the abo"e that T 8on+domestic# T
Industry# =T industry C =T $ailway Traction ategories of onsumers were
0aying higher than their Lost to Ser"eM and thus subsidi;ing Agricultural and
omestic ategories of onsumers. $e"enue reali;ation from domestic
category was only 4*6 of the cost to ser"e while that for agriculture was
e"en lower at %6. This ty0e of cross subsidi;ation had resulted in the
following outcome ,
T Irrigation5Agrl. at > '-4
T Public ighting (ocal Bodies) at.>I ,'
=T Irrigation at.I> G
=T $ural Elec.o+o0.Societies -
Additional Subsidy to T Agrl.at.> on account of annualisation ,,
TOTA:= 1(97
GIncluded in T ategory >
'2. 7n account of the /o"ernment sanctioning subsidy# the e3isting tariffs
were reuired to be increased to generate only $s.1-', r.
Table - (1
8/13/2019 Appr Trst Ruc
36/46
Table - (2Tar!00 Not!0!e? by te Co33!""!o& !t a S'b"!?y o0 R"41(97 Cr4
ategory !A inPs5nit
A"g.reali;ation at
full cost
A"erage $ealisationin Ps5unit after
subsidy of $s. 14*&r.
T omestic *2 4&- ,&%
T 8on+domestic 42% *'& *'&
T Industrial 4,* *1% *1%
T Agriculture ,42 &- 4-
=T Industry ,-% *2, *2,
=T $ailway Traction 14 *&* *&*
'%. The ommission rewor?ed the reuired metered tariff on the basis of
the re"ised flat rates and fi3ed 4& 0aise 0er unit for metered Agricultural
consum0tion. This resulted in four out of eight categories finding the metered
tariff attracti"e.
8/13/2019 Appr Trst Ruc
37/46
%-. If the use of 0um0sets was limited only for four hours and for 1*- to
12- days in a year# the metered tariff would benefit all categories of farmers
as shown belowariable ost Ad9ustment ,12 ,12 ,12
Efficiency gains &-- &-- &--
A$$+after deductions %&1% '%2& '%2&
$e"enue at urrent Tariffs &*4' &**% &**%
/AP to be co"ered 4-%1 ,*1' ,*1'
Tariff Increase %-% (1&6) 1-', ',
Subsidy E30ected ,,', 14*& 12,2
1. The re"enue reali;ation from the different consumer categories had
gone down with the increase in subsidy committed by the /oAP. The final
0icture on a"erage reali;ation basis was as below Agricultural '& to *-- 5=P5@ear &- 5=P5 @ear 1&- to *--5=P5 @ PAP $ailwayTraction
,1, ,2& (,&6) 4*- (,%6) *,- : % (,26) *&* (26)
T C =T 7"erall
A"erage
1-, 1,, (,-6) 12, (446) 1% (,-6) ,,' (1*.&6)
(G) The increase u0to 4-- units5 month is 8il
(G) The increase for - to *-- units5 month is ,16
(G) The increase for - to *-- units5 month is ,%6
8/13/2019 Appr Trst Ruc
46/46
Annexure
,R"4 !& ror"/
E8E$/@ $EATE 7STS EA8 $EATE 7STS ST7E$ $EATE 7STS
8ame of
the
E30enditure
onsum0tionEnergy
in sAmount
lassifi
cation
factor
Allocati
on
factor
Energy
related
cost
Amount
lassifi
cation
factor
Allocation
factor
emand
related
cost
Amount
lassifi
cation
factor
Allocation
factor
usto
mer
related
in $s.
a?hs
Total
E30end
iture
Energy
charges
in
Ps.5unit
emand
harge
s in
Ps.5
unit
ustomer
harge
s in
Ps.5
unit
Total
A"g.
ost 5
nit in
Ps.
/ross e"el 1-1,- '4%1* &%.%-6 ,*.%26 1-'1* '4%1* *1.,-6 *.,6 1*%4 '4%1* -.--6 '4.*46 - ,&'%-' 1-' 1*% - ,&&
8et e"el 2,&1 1-'1* 1*%4 - 1'4 ,*- - *1,
/ross e"el 1-1,- 141&1 -.--6 ,*.%26 - 141&1 -.--6 *.,6 &%4* 141&1 1-.--6 '4.*46 22 2%-- - 2 1 '
8et e"el 2,&1 - &%4* 22 - , 11
/ross e"el 1-1,- &*,&* -.--6 ,*.%26 - &*,&* &-.--6 *.,6 144'1 &*,&* &-.--6 '4.*46 11 44,- - 14 ,- 44
8et e"el 2,&1 - 144'1 11 - ,1 4, &4
/ross e"el 1-1,- -4* -.--6 ,*.%26 - -4* 1.%,6 *.,6 ,,,2 -4* %.1%6 '4.*46 441' &&*4 - , 4 &
8et e"el 2,&1 - ,,,2 441' - * &
/ross e"el 1-1,- ,*&&, -.--6 ,*.%26 - ,*&&, 1.%,6 *.,6 1111 ,*&&, %.1%6 '4.*46 1*'& 1,&%' - 11 1 1,
8et e"el 2,&1 - 1111 1*'& - 1% , ,-
/ross e"el 1-1,- 4,%&1 -.--6 ,*.%26 - 4,%&1 1.%,6 *.,6 1*%2' 4,%&1 %.1%6 '4.*46 1'* 12%*1 - 1& , 1'
8et e"el 2,&1 - 1*%2' 1'* - ,* 4 ,'
/ross e"el 1-1,- 1,* -.--6 ,*.%26 - 1,* 1.%,6 *.,6 &%2 1,* %.1%6 '4.*46 '% 224 - 1 - 1
8et e"el 2,&1 - &%2 '% - 1 - 1
/ross e"el 1-1,- +*&'*' -.--6 ,*.%26 - +*&'*' &-.--6 *.,6 +11,'& +*&'*' &-.--6 '4.*46 +12'2 +,%-'1 - +11 +1' +,%
8et e"el 2,&1 - +11,'& +12'2 - +1% +,' +*&
/ross e"el 1-1,- %'1 -.--6 ,*.%26 - %'1 1.%,6 *.,6 *-2- %'1 %.1%6 '4.*46 &4 *& - * 1 &8et e"el 2,&1 - *-2- &4 - 2 1 '
/ross e"el 1-1,- %42&&* ,*.%26 1-'1* %42&&* *.,6 1-2'* %42&&* '4.*46 11*'1 41--& 1-' 1%% 11 4-2
8et e"el 2,&1 1'4 4-& 1% *2
Table o0 Co"t alloat!o& o0 eaA ategory o0 e2e&?!t're to :T Do3e"t! - 1
Purchase
of Energy
aintanenc
eEm0loyees
ost
7ther $e".
(8on+Tariff
Income)e urn on
a0italBase
Total ost
./eneral
E3 .e0reciatio
nn e res an
other !in.
h.Pro"ision
for Ta3es
46
Top Related