Order on True up for FY 2015-16, Annual Performance Review for FY 2016-17 & ARR for FY 2017-18 For Uttarakhand Power Corporation Ltd. March 29, 2017 UTTARAKHAND ELECTRICITY REGULATORY COMMISSION Vidyut Niyamak Bhawan, Near I.S.B.T., P.O. Majra, Dehradun – 248171
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Final Tariff Order of UPCL for FY 2017-18 29.03.17 with ... Order/2017-18/Tariff Orders for FY...Order on True up for FY 2015-16, Annual Performance Review for FY 2016-17 & ARR for
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2.26.11 Proof of Ownership .................................................................................................................. 74
2.27 Views of State Advisory Committee: ....................................................................................75
3. Petitioners’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up
for FY 2015-16 ........................................................................................................................................... 79
3.1 Truing-up for FY 2015-16 ........................................................................................................79
Dhasmana, Shri Indra Sen Yadav, Shri Tushar Agrawal, Shri Vijay Mishra and Shri G.S. Bedi of
Indian Drugs & Pharmaceuticals Ltd. submitted that an increase proposed by UPCL in categories
like Public Water Works, LT and HT Industry and Mixed load along with the hikes proposed by
UJVN Ltd. and PTCUL is exorbitant and unjustified.
Dr. V.K. Garg submitted that the 22% increase in the consumer tariff will have serious
implications for the industrial development, economic development, development of services sector
and employment in the State as the industries would either move out of the State or opt for open
access causing serious financial dent in the revenue of UPCL as they are high revenue pay masters.
Shri Bachchi Ram Kaunswal of Uttarakhand Kisan Sabha submitted that the electricity tariffs
should be fixed as per the tariff prevalent in November 2000. He submitted that any gaps in
revenue should be paid by the Government of Uttarakhand.
2.2.1.2 Petitioner’s Reply
As regards increase in Tariff, the Petitioner submitted that on the Tariff Petition of UPCL,
the Commission had conducted Technical Validation Session and pointed out various deficiencies.
As per direction of the Commission, revised submissions were made by UPCL vide its letter no.
211/UPCL/RM/B-18, dated January 19, 2017. The details of variation due to revision in ARR is
shown as follows:-
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
10 Uttarakhand Electricity Regulatory Commission
Table 2.1: Details of Variation in ARR for FY 2017-18 S.
No. Particulars Rs. Crore
1. Power Purchase Cost 287.28 1.1 Gas based power plant (PLF 70% to 85%) 256.23 1.2 Upcoming Stations not considered in revised submission -65.71 1.3 Escalation on Tariff for CGS (2% to 4%) 33.67 1.4 Additional Procurement of Short Term Purchase 63.09 2. Revision in PGCIL Cost as per revised power purchase 56.46 3. Impact of revision in capitalization 67.96 4. Previous years adjustments 133.37 5. Profit sharing on working capital 17.60 6. Total 562.67 7. Gap as shown in the Petition 186.32 8. Revised Gap 748.99
The Petitioner submitted that UPCL is a commercial organization and is required to meet its
Annual Revenue Requirement out of the revenue realized from the consumers through electricity
tariffs. The revenue deficit for FY 2017-18 has been estimated at Rs. 748.99 Crore for which tariff
hike of 13.48% is required. This average tariff hike has been proposed for all the categories.
2.2.1.3 Commission’s Views
The Commission is of the view that the overall tariff increase is a function of the projected
Annual Revenue Requirement for the ensuing year (including impact of truing up of expenses and
revenues for previous year) and projected revenue at existing tariffs. The Commission has carried
out the detailed scrutiny of APR for FY 2016-17, Revised ARR for FY 2017-18 and truing up for FY
2015-16 in accordance with the provisions of relevant Regulations as discussed in the subsequent
Chapters of the Order. Based on the approved ARR for FY 2017-18 including impact of truing up for
FY 2015-16, the Commission has marginally increased the tariff to meet the projected revenue gap
as discussed in detail in Chapter 5 of the Order. Further, as mentioned by the Petitioner, it is a
commercial organization and need not be funded by GoU for its operations.
G.L. Verma and some others submitted that the fixed costs, electricity duty and regulatory asset
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 11
charges levied on domestic consumers should be waived/ reduced. Other initiatives and measures
to control tariff hike should be considered.
Shri Naveen Chandra Joshi, Shri Puran Chandra, Shri Amar Singh, Shri Shyam Lal Shah and
some others submitted that for residents in the hilly regions of the State, the power consumption is
minimal and as most of them do not have any fixed occupation, a separate electricity schedule
should be made for the hilly regions which should be subsidised. Shri Puran Chandra Tiwari
further submitted that Kedarnath affected people should be provided free electricity.
Brig. K.G. Behl submitted that the domestic users should be charged at the rates at which
electricity is produced in the State and the industries should be charged, accordingly, when more
electricity has to be imported.
Shri Vijay Singh Verma of Kisan Club submitted that the fixed charges may be increased
instead of increasing the energy charges till 200 units to reduce theft.
2.3.1.2 Petitioner’s Reply
The Petitioner submitted that the total cost of UPCL may be segregated into power purchase
cost and other cost. The other cost is about 10% to 15% of the total cost and fixed in nature. This cost
has necessarily to be incurred by UPCL and is not related to the energy consumed, but is related to
the contracted load of the consumers. Thus, this cost needs to be recovered through fixed/demand
charges.
The Petitioner also submitted that the tariff of electricity is determined as per the provisions
of Electricity Act 2003. The Tariff of BPL Consumers has been proposed at about 50% of Average
Cost of Supply. The tariff of Other Domestic Consumers has been proposed at about 73% of
Average Cost of Supply. The rates of electricity cannot be kept below these rates keeping in view
the cost estimates of UPCL and the provisions of Law.
The Petitioner also submitted that as per Section 3 of Uttar Pradesh Electricity (Duty) Act
(Uttarakhand Adaptation and Modification) Order 2001, State Government is empowered to fix the
rates of Electricity Duty to be charged from various categories of consumers. Government of
Uttarakhand vide its notification no. 79/I/2016-01(3)/01/2003, dated January 25, 2016 has fixed
these rates applicable w.e.f. January 1, 2016. UPCL is charging electricity duty as per Government
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
12 Uttarakhand Electricity Regulatory Commission
orders. The Electricity duty charged from consumers is payable by UPCL to GoU. Therefore, the
matter may be taken up with GoU.
The Petitioner submitted that UPCL is a commercial organization and is required to meet its
Annual Revenue Requirement out of the revenue realized from the consumers through electricity
tariffs. The revenue deficit for FY 2017-18 has been estimated at Rs. 748.99 Crore for which tariff
hike of 13.48% is required. This average tariff hike has been proposed for all the categories.
2.3.1.3 Commission’s Views
The Commission appreciates the views expressed by some of stakeholders that the tariff
increase should be reasonable. As discussed earlier, based on the APR for FY 2016-17 including
impact of truing up for FY 2015-16, the Commission has marginally increased the tariff to meet the
projected revenue gap as discussed in detail in Chapter 5 of the Order.
Further, continuing with the approach adopted in the previous years, the Commission has
attempted to reduce the cross-subsidy while designing the tariffs for various categories as
elaborated in Chapter 5 of the Order. As regards the special tariff to be provided for consumers in
hilly areas and consumers having lower consumption, the Commission would like to clarify that as
per the existing tariff structure also, the tariff structure for domestic category includes BPL
consumer with consumption upto 30 units/month as a sub-category with a much lower tariff.
Further, within the domestic category, the consumers having consumption upto 100 units per
month fall in the 1st slab with lowest tariff and hence, there arises no need to provide any separate
rebate. For better understanding, the Rate Schedule (RTS-1) annexed to the Tariff Order can be
referred.
The Commission informs that the issue of Electricity Duty does not fall under the purview of
the Commission.
2.4 Non-Domestic Tariff
2.4.1 Tariff for Residential School/Dharamshalas/Trust/Ashrams
2.4.1.1 Stakeholder’s Comments
Shri Gunmeet Bindra of Welham Boys’ High School submitted that Welham Boys’ High
School Society is a non-profit institution and is running a fully residential school. The society in
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 13
campus houses all the students and teachers. The connections CDK000076 and CDK000075 are
presently billed as per RTS-2 (Non Domestic connection). Since, the prime motive of the institution
is to impart education and it is incidental that the housing is in campus, he requested to grant relief
to the Welham Boys’ School Society by charging Domestic tariff.
Shri Raj Singh of Devbhoomi Dharamshala Prabandhak Sabha submitted that the
Dharamshalas, Trusts or Ashrams are presently charged as Commercial connections. He submitted
that these entities perform only charitable functions and the power purchased should be billed as
per Domestic tariff. He also requested that the fuel charge, cess and fixed charges should not be
levied.
2.4.1.2 Petitioner’s Reply
The Petitioner also submitted there are two sub categories in the Rate Schedule RTS-2: (Non-
Domestic). First sub category has lower Tariff as compared to the second sub category. In first sub
category Government/Government Aided Educational Institutions and Charitable Institutions
registered under the Income Tax Act whose income is exempted from tax are covered.
The Petitioner submitted that as per the existing categorization of consumers, Residential
Schools/Dharamshalas/ Trusts/ Ashrams fall under the category of RTS-2 (Non-domestic). The
domestic category applies only on the residential premises for light, fan and power and other
domestic purposes including single point bulk supply above 50 kW for residential colonies,
residential multi-storied buildings where energy is exclusively used for such purpose. Non-
domestic category is a subsidizing category whereas the domestic category is a subsidized category.
As per the provisions of Electricity Act, 2003 and National Tariff Policy, the cross subsidy should be
reduced. In view of the facts mentioned hereinabove, consumers covered under subsidizing
category cannot be transferred into the subsidized category. Thus, the Residential
Schools/Dharamshalas/ Trusts/ Ashrams are rightly categorized under Rate Schedule RTS-2 (Non-
domestic).
The Petitioner also submitted that the total cost of UPCL may be segregated into power
purchase cost and other cost. The other cost is about 10% to 15% of total cost and are fixed in nature.
This cost has necessarily to be incurred by UPCL and is not related to the energy consumed, but is
related to the contracted load of the consumers. Thus, this cost needs to be recovered through
fixed/demand charges. UPCL is a commercial organization and is required to meet its Annual
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
14 Uttarakhand Electricity Regulatory Commission
Revenue Requirement out of the revenue realized from the consumers through electricity tariffs.
The revenue deficit for FY 2017-18 has been estimated at Rs. 748.99 Crore for which tariff hike of
13.48% is required. This average tariff hike has been proposed for all the categories.
2.4.1.3 Commission’s Views
The Commission agrees with the views of the Petitioner that as per the existing
categorization of consumers, Residential Schools/Dharamshalas/ Trusts/ Ashrams fall under the
category of RTS-2 (Non-domestic). The domestic category applies only on the residential premises
for light, fan and power and other domestic purposes including single point bulk supply above 50
kW for residential colonies, residential multi-storied buildings where energy is exclusively used for
domestic purpose. Hence, it will not be appropriate to categorise Residential
Schools/Dharamshalas/Trusts/Ashrams under RTS-1 (Domestic) category.
Moreover, the Commission has deliberated in detail on the issue of levy of Fixed Charges in
Chapter 5 of the Order. Further, the issue of Duty and Cess do not fall under the purview of the
Commission.
2.4.2 Tariff Hike
2.4.2.1 Stakeholder’s Comments
Shri Ram Kumar of Mussoorie Hotels Association submitted that the proposed tariff
increase in RTS-2 category for consumers having contracted demand above 25 kW from Rs.
5.00/kVAh to Rs. 5.70/kVAh is exorbitant. He also submitted that the inefficiency of UPCL is
passed on to the honest customers. He further added that the charges (fixed and energy), electricity
duty and green cess brings the gross cost up to Rs. 6.00/kWh and further increase of the charges
would increase this landed cost to Rs. 7.00/kWh.
Shri (Col) SPS Rawat of Lansdowne Hotel Association and Shri Deepak Gupta of Hotels and
Restaurants Association of Uttaranchal submitted that due to the floods of 2013 and
demonetization, the tourism industry has been hit badly. They submitted that the proposed tariff
hike shall adversely affect the tourism of the State and requested the Commission not to approve
the tariff hike in RTS-2 (Non- Domestic) Tariff.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 15
Shri (Col) SPS Rawat of Lansdowne Hotel Association also submitted that the CM had
earlier announced the exemption of electricity and water bills for hotels, but after three years, the
bills have been handed over for this period.
2.4.2.2 Petitioner’s Reply
The Petitioner submitted that UPCL is a commercial organization and is required to meet its
Annual Revenue Requirement out of the revenue realized from the consumers through electricity
tariffs. The revenue deficit for FY 2017-18 has been estimated at Rs. 748.99 Crore for which tariff
hike of 13.48% is required. This average tariff hike has been proposed for all the categories.
As regards the issue of passing on the inefficiency, the Petitioner submitted that it is true
that the Commission has fixed the Distribution Losses at 14.75% for FY 2017-18 but these losses
have not been fixed keeping in view the existing level of Distribution Losses of the Company. The
actual Distribution Losses for FY 2015-16 are 18.39%, hence, it is practically not possible to achieve
the loss level of 14.75% in FY 2017-18 and, therefore, UPCL has proposed a realistic level of
Distribution Losses at 16.39% for FY 2017-18 considering 1% reduction in losses in each year.
As regards waiver of electricity bills to hotels, the Petitioner submitted that as per direction
received from the Government of Uttarakhand vide its above letter dated May 25, 2014, UPCL vide
its O. M. No. 1261/UPCL/N.P/No.30] dated June 7, 2014 ordered that the Electricity Bills of the
Commercial establishments (Hotel, Restaurant, Lodge, Dhaba, Sarai and Dharamshala) of the above
mentioned areas for the period from April 1, 2014 to March 31, 2017 shall be waived off by the
concerned Executive Engineer (Distribution) of UPCL on the recommendation of the concerned
District Magistrate. The electricity bills for the above period have been waived off.
2.4.2.3 Commission’s Views
The Commission appreciates the views expressed by some of the stakeholders that the tariff
increase should be reasonable. As discussed earlier, based on the APR for FY 2016-17, Revised ARR
for FY 2017-18 including impact of truing up for FY 2015-16, the Commission has marginally
increased the tariff to meet the projected revenue gap as discussed in detail in Chapter 5 of the
Order. Further, continuing with the approach adopted in the previous years, the Commission has
attempted to reduce the cross-subsidy while designing the tariffs for various categories as
elaborated in Chapter 5 of the Order. UPCL is directed to submit the details of the category-wise
energy consumed & amount thereon of those areas where bills have been waived off & also the
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
16 Uttarakhand Electricity Regulatory Commission
details if any subsidy in this regard has been received from GoU, within one month of the date
of the Order.
Further, the Commission is of the view that the impact of demonetization is temporary and
the economy shall recover from it completely.
2.5 Agricultural Tariff
2.5.1.1 Stakeholder’s Comments
Shri Teeka Singh Saini, Shri Kuldeep Singh, Shri Jagdish Singh and some Respondents
submitted that the tariff hike proposed by UPCL is very high and it shall affect the livelihood of
farmers and other poor population of the state. They requested the Commission not to allow the
hike in tariffs. They also submitted that the losses incurred by UPCL should not be passed on to the
general population.
Shri R.P. Singh of Tarai Foods Ltd. submitted that mushroom growing is included in RTS-
4A; “Agriculture and Allied” rate schedule. He also submitted that it is yet to be implemented for
the present tariff inspite of several representations to concerned authorities. He requested the
Commission to allow them to be billed under RTS-4A.
Some stakeholders requested the Commission to abolish minimum charges for agricultural
consumers.
2.5.1.2 Petitioner’s Reply
The Petitioner submitted that UPCL is a commercial organization and is required to meet its
Annual Revenue Requirement out of the revenue realized from the consumers through electricity
tariffs. The revenue deficit for FY 2017-18 has been estimated at Rs. 748.99 Crore for which tariff
hike of 13.48% is required. This average tariff hike has been proposed for all the categories.
UPCL further, submitted that the tariff of PTW Category has been proposed at only 36% of
average cost of supply.
As regards tariff for mushroom cultivation, the Petitioner submitted that as per the
provisions of Tariff Order for FY 2016-17, the Rate Schedule RTS – 4A is applicable to supply of
power for use in nurseries growing plants/saplings, poly-houses growing flowers/vegetables and
fruits which doesn’t involve any kind of processing of product except for storing and preservation.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 17
2.5.1.3 Commission’s Views
As discussed earlier, based on APR for FY 2016-17 and Revised ARR for FY 2017-18
including impact of truing up for FY 2015-16, the Commission has marginally increased the tariff to
meet the projected revenue gap as discussed in detail in Chapter 5 of the Order. Further, continuing
with the approach adopted in previous years, the Commission has attempted to reduce the cross-
subsidy while designing the tariffs for various categories as elaborated in Chapter 5 of the Order.
The Commission in its Tariff Order dated April 10, 2015 for FY 2015-16 had created a
separate category Agriculture Allied Activities after due consultation process and hence, the tariff
applicable for mushroom cultivation should not be covered under commercial tariff and the tariff
for Agriculture Allied Activities should be applicable. Further, the Commission in Rate schedule
has specifically included “mushroom cultivation” in RTS 4A Category.
2.6 Mixed Load Tariff
2.6.1.1 Stakeholder’s Comments
Shri G.S. Bedi of Indian Drugs and Pharmaceuticals Ltd. requested that the tariff for RTS-8
(Mixed load) be brought at par with the single point bulk supply connections under RTS-1
(Domestic) because such consumers like IDPL colony connection have no commercial activity
except for some shops/khokhas to cater to the urgent needs of the residents of the IDPL Colony.
Shri Bedi also pointed out that domestic consumers having contracted load up to 2 kW and
consumption up to 200 kWh per month are allowed to use some portion of the premises for
business/other purposes without any additional charges at the domestic rates. These two cases are
quite similar. Alternatively RTS-8 be merged with RTS-1 (Domestic-Single point bulk supply).
2.6.1.2 Petitioner’s Reply
The Petitioner submitted that Single Point Bulk Supply under Domestic (RTS -1) Category is
allowed where the consumption of electricity is for domestic residential purposes. Whereas Single
Point Bulk Supply under mixed load (RTS – 8) category is applicable where there is at least 60%
domestic load and rest is used for other non–domestic purposes. In case some portion of the supply
is used for non-domestic purpose, the supply of electricity cannot be given under rate schedule RTS
-1. Further, single point bulk supply under mixed load category cannot be compared with the
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
18 Uttarakhand Electricity Regulatory Commission
consumers covered under domestic category having load upto 2 kW and consumption upto 200
kWh per month using some portion of their premises for non-domestic purposes.
2.6.1.3 Commission’s Views
The Commission agrees with the replies of the Petitioner that the Single Point Bulk Supply
under Domestic (RTS -1) category is allowed where the consumption of electricity is for domestic
residential purposes whereas Single Point Bulk Supply under Mixed Load (RTS – 8) category is
applicable where there is a mixed load with minimum 60% of domestic load while the balance load
is used for other non–domestic purposes. As in Mixed load category, part of the load is utilised for
other than domestic purposes, it will not be appropriate to merge the Mixed Load category with the
domestic category.
2.7 Tariff for Drinking Water Pumping Schemes
2.7.1.1 Stakeholder’s Comments
Dr. Umakant Panwar, Principal Secretary (Energy), Govt. Of Uttarakhand and Shri Vijay
Singh Verma of Kisan Club submitted that the Drinking Water Pumping Schemes, used to supply
drinking water to the domestic consumers are billed under the RTS-6 category applicable for Public
Water Works. Since, this is an essential service and is used for pumping drinking water for
domestic consumption; RTS-1 tariff for Domestic consumption may be applied for the same.
2.7.1.2 Petitioner’s Reply
The Petitioner submitted that the Commission may take a view in the matter considering the
total ARR of UPCL and in accordance with the provisions of the Electricity Act, 2003.
2.7.1.3 Commission’s Views
As per the existing Tariff Schedule, Tariff of RTS-1: Domestic is applicable for residential
premises/purposes and places of worship only. The usage of electricity by these electrically
operated water pumps by Public Water Works and other rural groups by no means qualifies under
consumption for residential purposes or places of worship. Hence, the Commission does not find
any appropriate reason to accept the suggestion of stakeholder.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 19
2.8 Industrial Tariff
2.8.1 Tariff Hike
2.8.1.1 Stakeholder’s Comments
Shri Sanjay Kumar Chaurasia of Hindustan National Glass & Industries Ltd. submitted that
the fixed charges should not be increased as it is already higher when compared to the
neighbouring States. He also submitted that the proposed hike of 16% is much higher as compared
to the tariff hikes of the previous three years. He also submitted that duty and green energy cess
makes the power too costly.
Shri Sandeep Sharma of Cavendish Industries Ltd. and Shri Sanjay Kumar Chaurasia of
Hindustan National Glass & Industries Ltd. requested that the tariffs should be reduced as the solar
tariff has decreased over the past 4-5 years. They also submitted that the electricity duty and green
energy cess make the power too costly.
Shri Sandeep Sharma of Cavendish Industries Ltd. submitted that demand charges should
not be increased further as it is already high.
Shri Munish Talwar of Asahi India Glass Ltd. submitted that it is not viable to run industry
due to high cost of doing business and any tariff hike would put the industry into further
hardships. He also submitted that the inefficiencies of UPCL should not be passed on as tariff hikes
to the consumers.
Shri Man Singh of Alps Industries Ltd. submitted that the recent tariff hikes have affected
the operation of the textile sector and requested the Commission to ease their tariff burden by
charging them Rs. 1.00/ unit less than the tariff rate and exempt them from electricity duty for the
next 7 years as per Order No. 791/VII-1/40-SIDCUL/2014 Dehradun dated December 11, 2014.
Shri Pawan Agarwal of Uttarakhand Steel Manufacturers Association and Shri V.K.
Aggarwal of Balaji Action Buildwell submitted that the green energy cess levied at Rs. 0.10/unit is
an additional burden to electricity duty and should be removed.
2.8.1.2 Petitioner’s Reply
The Petitioner submitted that UPCL is a commercial organization and is required to meet its
Annual Revenue Requirement out of the revenue realized from the consumers through electricity
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
20 Uttarakhand Electricity Regulatory Commission
tariffs. Justification has been provided in the Petition in respect of each claim of expenditure by
UPCL. Further, additional information have also been provided/is being provided to the
Commission as per their direction.
The Petitioner further submitted that the revenue deficit for FY 2017-18 has been estimated
at Rs. 748.99 Crore for which tariff hike of 13.48% is required. This average tariff hike has been
proposed for all the categories.
As regards levy of cross-subsidy, the Petitioner submitted that it has maintained the same
level of cross subsidy as was approved by the Commission in its Tariff Order for FY 2016-17 in its
Petition.
As regards levy of fixed charges, the Petitioner submitted that the total cost of UPCL may be
segregated into power purchase cost and other cost. The other cost is about 10% to 15% of total cost
and is fixed in nature. This cost has necessarily to be incurred by UPCL and is not related to the
energy consumed, but is related to the contracted load of the consumers. Thus, this cost needs to be
recovered through fixed/demand charges.
As regards levy of electricity duty and green cess, the Petitioner submitted that
a) As per Section 4 of the Uttarakhand Green Energy Cess Act, 2014, Government of
Uttarakhand has levied the cess w.e.f. July 1, 2015 at Rs. 0.10/unit on the Electricity
consumption by Commercial and Industrial Consumers. UPCL is charging this cess as
per Government Orders. This cess charged from consumers is payable by UPCL to GoU.
Therefore, the matter may be taken up with GoU.
b) As per section 3 of Uttar Pradesh Electricity (Duty) Act (Uttarakhand Adaptation and
Modification) Order 2001, State Government is empowered to fix the rates of Electricity
Duty to be charged from various categories of consumers. Government of Uttarakhand
vide its notification no. 79/I/2016-01(3)/01/2003, dated January 25, 2016 has fixed these
rates applicable w.e.f. January 1, 2016. UPCL is charging electricity duty as per
Government Orders. The Electricity duty charged from consumers is payable by UPCL
to GoU. Therefore, the matter may be taken up with GoU.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 21
2.8.1.3 Commission’s Views
As discussed earlier, based on APR for FY 2016-17 and Revised ARR for FY 2017-18
including impact of truing up for FY 2015-16, the Commission has marginally increased the tariff to
meet the projected revenue gap as discussed in detail in Chapter 5 of the Order. Further, continuing
with the approach adopted in previous years, the Commission has attempted to reduce the cross-
subsidy while designing the tariffs for various categories as elaborated in Chapter 5 of the Order.
Further, the issues of Green Cess and Electricity Duty do not fall under the purview of the
Commission.
2.8.2 Time of Day Tariff
2.8.2.1 Stakeholder’s Comments
Shri Rajeev Gupta of Kashi Vishwanath Steels Pvt. Ltd. submitted as follows
a) Morning peak hours of 06:00 to 09:30 hrs in winter season should be discontinued as
most of the industries start production from 22.00 to 07.00 every day. Hence, it should be
from 07:00-09:30 hours.
b) In the existing tariff, peak-hour charge is more than sufficient for all types of load factors.
He suggested that it should remain same for the next financial year 2017-18.
c) In winter season, load during off–peak hours, i.e. 22:00-07:00 hrs remains much lesser in
comparison with the day time and, hence, existing rebate at 10% on nominal energy
charge during off-peak hours should be increased to 25% for encouraging utilization of
maximum load during off-peak hours. He, further suggested that the difference between
normal hour’s rate per unit and off-peak hour’s rate per unit should be maintained at
10% accurately.
Shri Sandeep Sharma of Cavendish Industries Ltd. submitted that the time of day tariff
should change. He suggested that in winter, Morning Peak- 06:00 to 09:00 hrs, Normal Hours- 09:00
to 18:00 hrs, Evening Peak- 18:00 to 22:00 hrs and Off Peak Hours- 22:00 to 06:00 hrs should be
adopted. In summer, Normal Hours- 06:00 to 18:00 hrs, Evening Peak- 18:00 to 22:00 hrs and Off
Peak Hours- 22:00 to 06:00 hrs should be adopted.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
22 Uttarakhand Electricity Regulatory Commission
Shri G.S. Bedi of Indian Drugs & Pharmaceuticals Ltd. submitted that morning peak hours
beyond 08:00 hrs is to be reduced as it is not leaving space for eight hours general shift working at
normal rates in the industry.
Shri Pawan Agarwal of Uttarakhand Steel Manufacturers Association submitted that the
overall peak hours per day is five in case of summer and eight in case of winter. He submitted that
all other States have peak hours of only 4 hours per day charged at 20% higher than the normal
tariff, while UPCL charges 50% higher during peak hours. This has led to purchase of economic
power through open access by 75% of Steel Industries during morning peak hours and the power of
UPCL is sold in UI market at lower prices.
2.8.2.2 Petitioner’s Reply
The Petitioner submitted that the morning peak hours have been kept only in the winter
season, i.e. from October to March of the financial year. The timings of morning peak hours are
from 06:00 hrs to 09:30 hrs. Morning peak hours have been imposed due to heating load and
reduced generation in winter season, whereas the Air Conditioning load during summer season in
the State of Uttarakhand from 06:00 hrs to 09:30 hrs is negligible. Therefore, morning peak hours in
winter are required to be continued.
The Petitioner also submitted that the objective of introduction of ToD tariff is to minimize
the gap between maximum (peak) demand and minimum demand and to bring the peak demand
as closer to the average demand as possible. On every reduction of this gap, the generation cost,
transmission cost, distribution cost and power cuts will be reduced and the higher demand can be
catered from the available capacity. In other words, ToD tariff is very effective tool of demand side
management which make possible the optimum utilization of the available capacity of Generation,
Transmission and Distribution, resulting in reduction of costs. The benefit of such reduction in cost
is passed on to the consumers. With a view to effectively implement the ToD Tariff, substantial
increase in tariff is required for consumption during peak hours.
The Petitioner further submitted that presently, the peak hours have been fixed keeping in
view the trend of increased demand during the period.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 23
2.8.2.3 Commission’s Views
The Commission has analysed the actual daily hourly load curves in the State of
Uttarakhand and has found that apparent morning peak demand exist in the State during winter
months. The Commission feels the need for DSM and having ToD tariff as a measure for ensuring
curtailment of morning as well as evening peaks. The Commission in the present Order is
continuing with the same Peak, Normal and Off-peak hour duration for ToD metering slots
including percentage of peak hour surcharge and peak hour rebate as approved in the earlier Tariff
Order dated April 11, 2015.
2.8.3 Rostering and Load Shedding
2.8.3.1 Stakeholder’s Comments
Shri Rajeev Gupta of Kashi Vishwanath Steels Pvt. Ltd. and Shri Vijay Singh Verma of Kisan
Club submitted that in Uttarakhand there is the problem of un-schedule power rostering, resulting
in huge hidden losses which need special attention.
Shri Sanjay Kumar Aggarwal of Shree Karuna Kalyan Samithi submitted that the consumers
are facing a lot of losses as the day-to-day activities are affected due to the unavailability of power
throughout the day. He requested the Commission to ensure that continuous power is available for
everyone.
2.8.3.2 Petitioner’s Reply
The Petitioner submitted that UPCL during FY 2015-16 met more than 98% of its demand of
electricity. Less than 2% unmet demand was due to gap of demand and availability of energy/
transmission network/distribution network. The Petitioner also submitted that UPCL has also
prepared its power cut policy which provides the conditions for power rostering in Uttarakhand.
2.8.3.3 Commission’s Views
In this regard, the Commission in its MYT Order dated May 6, 2013 observed that any
outage which is continuously been imposed by the Petitioner for certain number of hours in a day
for 15 or more days shall not be considered as unscheduled/emergency outage. The Commission
has also given directions in its MYT Order dated May 6, 2013 vide which the Petitioner has to obtain
prior approval of the Commission for load shedding to be carried out continuously for certain
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24 Uttarakhand Electricity Regulatory Commission
number of hours in a day for 15 or more days. Further, in case, during any month if the average
supply hours are less than 18 hours per day for HT Industry, then in that case HT Industrial
consumers are charged only 80% of the applicable demand charges as per rate schedule.
2.8.4 Load Factor based Tariff
2.8.4.1 Stakeholder’s Comments
Shri Shakeel A Siddiqui of Kashi Vishwanath Textile Mill Pvt. Ltd. submitted that in
Uttarakhand, HT industries are consumer of more than 53% of electricity. Most of the prominent
industrial active states have defined tariff slab load wise, the cost of service to HT consumer
connected at high voltage is much less than the average cost of supply, since the distribution losses
are very much less in comparison to low voltage consumers. He proposed that tariff rates should be
reversed with lower tariffs for consumption above 40% load factor to promote energy consumption
by HT industries who are the maximum contributor of revenue to UPCL.
Shri Vikas Jindal of Kumaun Garhwal Chamber of Commerce & Industry and Shri LS
Chamyal of Khatema Fibres Ltd. submitted that the existing load factor based tariff, applicable for
industries is not rational and deprives the consumer from using power upto his contracted demand
at the basic energy rate. The existing load factor based tariff penalizes the industry with incremental
consumption within its contracted demand by way of high energy rates on whole of the
consumption for load factor below 40% and further higher energy rates for load factor above 40%.
Such approach completely ignores the interest of the consumers.
They also submitted that the basic calculation for load factor has to be corrected as it takes
the billed maximum demand instead of contracted demand. This anomaly can be rectified by
revising the formula for calculation of load factor as follows:
Load factor= Consumption during billing period x 100
Billable demand or contracted demand if billable demand is higher than
Contracted demand X No. of hrs. in billing period.
Shri Nikhil Tyagi of BST Textile Mills Pvt. Ltd. submitted that load factor based tariff should
be abolished.
Shri R.K. Singh of Tata Motors Ltd. and Shri R.S. Yadav of India Glycols Ltd. submitted that
the Central Government has recommended lower tariffs for heavy users to encourage electricity
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 25
consumption as the country is moving from power deficit to power surplus situation, while load
factor based tariff was designed for power shortage scenario. They requested the Commission to
change this framework.
Shri Sandeep Sharma of Cavendish Industries Ltd. submitted that the first slab of load factor
should increase upto 50% in place of the current 40%.
Shri Pawan Agarwal of Uttarakhand Steel Manufacturers Association submitted that the
load factor based tariff should be levied till 40% at the lower rate and the costlier tariff should be
levied only for the units consumed at load factor greater than 40%. He also submitted that the 40%
should be increased to 70% to encourage more power consumption by the industrial consumers.
2.8.4.2 Petitioner’s Reply
The Petitioner submitted that as per Section 62(3) of the Electricity Act, 2003, tariff may be
differentiated on the basis of consumers load factor.
The Petitioner submitted that higher energy charges are levied for higher consumption due
to the fact that procurement of additional firm power (marginal power) has higher cost. At higher
load factor, demand charges per unit is reduced which is the incentive to the consumer for having
higher load factor and average tariff per unit for the consumers having load factor upto 40% and
above 40% is maintained at the same level. In case telescopic energy charges are imposed, the rate
of higher load factor shall increase, accordingly, with a view to have a uniform average effective
tariff at both the levels of load factors.
The Petitioner also submitted that load factor formula is based on the actual requirement of
load of the consumer. In case maximum demand is lower than the contracted load, maximum
demand (actual requirement) is considered. In case maximum demand is higher than the contracted
load, contracted load is considered because the consumer has contracted this capacity.
2.8.4.3 Commission’s Views
This issue has been dealt in detail by the Commission in the in-house paper issued during
the previous tariff proceedings. Thus, to have cost reflective tariffs, the energy charges should
increase with load factor. Further, the Commission has deliberated on this issue in detail in Chapter
5 of the Order.
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26 Uttarakhand Electricity Regulatory Commission
2.9 Minimum Consumption Guarantee (MCG)
2.9.1.1 Stakeholder’s Comments
Shri Vikas Jindal of Kumaun Garhwal Chamber of Commerce & Industry, Shri Rajiv
Agrawal, M/s Industries Association of Uttarakhand and Shri LS Chamyal of Khatema Fibres Ltd.
submitted that the Commission had abolished MCG in the Tariff Order for FY 2005-06. In the Tariff
Order dated March 18, 2008, the Commission had again introduced monthly minimum
consumption charge over and above the fixed charges/demand charges for the industrial
consumers. This clearly indicates that the industrial consumers are being burdened with an
additional charge to compensate the inefficiency of UPCL in ensuring proper meter reading and
billing of its consumers. They requested that the Commission has to safeguard the interest of the
consumers and not pass on the inefficiencies of the distribution utility to the consumers. They
submitted that the Commission has been increasing fixed charge/demand charge also almost in its
every tariff order and additionally continuing with the provision of minimum consumption
guarantee in the tariff to the industries on the plea of recovery of fixed cost of the licensee which
burdens the consumers and is not justified.
They also submitted that the Commission should have directed the distribution utility to
improve its internal mechanisms to ensure prompt meter reading, billing and diligent recovery of
the bills. By allowing the MCG, the Commission provided an avenue to the utility to continue with
its lacklustre functioning rather than ensuring that the utility improves its internal practices and
commercial functioning.
Shri Pankaj Gupta of Industries Association of Uttarakhand submitted that UPCL has not
projected revenue receipt on account of MCG. As per the past data, this amount is very low and it
causes heavy burden on the consumers paying MCG. In respect of Cross Subsidy to be within the
range of target latest by the end of year 2010-11, tariffs are within ± 20% of the average cost of
supply. In case of LT, the Tariff is as high as 100% in some cases being subjected to MCG. MCG
would result in wastage of power as the consumer is left with no incentive to save power. As most
of the LT industries are paying MCG, this is resulting in unnecessary extra burden on them. They
requested that the MCG be removed in the current Tariff fixation.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 27
2.9.1.2 Petitioner’s Reply
The Petitioner submitted that the total cost of UPCL may be segregated into power purchase
cost and other cost. The other cost is about 10% to 15% of total cost and fixed in nature. This cost
should be recovered through fixed/demand charges.
About 40% of total Power Purchase Cost of UPCL is also fixed cost and is borne by UPCL
whether or not it draws power from the respective generating station. UPCL has made its
arrangement to supply sufficient power to the consumers but in case the consumer does not
consume power even at very low load factor, UPCL is required not to draw some power having
fixed cost. This fixed cost needs to be recovered from the consumers through Minimum
Consumption Guarantee Charges.
Minimum Consumption Guarantee has been proposed at very low level of consumption, i.e.
at 6.85% load factor for non-domestic category and LT industry category and at 13.70% for HT
industry category. In case during certain months, actual consumption is less than MCG, MCG is
charged in those months. Any excess of billed consumption over actual consumption or minimum
consumption, whichever is higher is adjusted at the end of the financial year.
As regards receipt of revenue on account of MCG, the Petitioner submitted that in its
Petition, while computing the revenue for FY 2017-18, UPCL has also considered revenue from
MCG as follows:-
RTS – 2 : Rs. 9.40 Crore
RTS – 4 : Rs. 5.52 Crore
LT Industry : Rs. 9.29 Crore
HT Industry : Rs. 35.10 Crore
The details are available in the UPCL’s submission made vide letter no. 4143/UPCL/RM/B-
18, dated December 8, 2016 at page no. 231.
2.9.1.3 Commission’s Views
The Commission would like to clarify that the MCG is only applicable for the consumers if
their load factor is very low, in the range of 10-15% with 3-4 hours/day usage of electricity. Hence,
MCG charges would actually be recovered from consumers having abnormally low consumption of
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28 Uttarakhand Electricity Regulatory Commission
electricity with respect to their sanctioned/contracted load. While for other consumers having
reasonable level of consumption with respect to their load, the MCG charges gets subsumed in
energy charges.
Further, the Commission would like to clarify that the minimum consumption guarantee
charges are computed by considering the applicable base energy charges for the relevant category
of consumer along with the specified MCG and adjusted only towards the energy charges. Further,
as per the prevalent mechanism, in case cumulative actual consumption, from the beginning of the
financial year, exceeds the units specified for annual minimum consumption guarantee (MCG), no
further billing of monthly MCG is done and in such cases, differential paid, in excess of actual
billing is adjusted in the bill for the month of March. This mechanism has been elaborated through
an illustration in “General Condition of Supply” in the Rate Schedule. In case of HT Industry, the
annual adjustment (refund) of the energy charges for units billed to cover MCG, if any, shall be
given at the energy charge during normal hours for load factor upto 40%.
2.10 Delayed Payment Surcharge (DPS)
2.10.1.1 Stakeholder’s Comments
Shri Rajeev Gupta of Kashi Vishwanath Steels Pvt. Ltd. submitted that the DPS at present is
levied at 1.25% p.m. on the amount of electricity bill unpaid even if the payment is made 1 day after
the due date which appears quite unreasonable. It was suggested that the same should be charged
on pro-rata basis at 0.75% if the payment is made within 15 days after the due date and at 1% if the
payment is made after 15 days from the due date. He submitted that the interest on delayed
payment is paid on the basis of number of delayed days for other tax authorities. He requested the
Commission to adopt similar policy for UPCL also.
2.10.1.2 Petitioner’s Reply
The Petitioner submitted that Delayed Payment Surcharge is the cost of money not received
by UPCL in time. This surcharge is also levied with a view to discourage the consumers who do not
pay their bills within due date. As per the provisions of Income Tax Act, interest for the full month
is paid in case of delay in payment of tax even for a single day. In this connection, Rule 119 A (b) of
the Income Tax Act is as follows:-
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 29
“where the interest is to be calculated for every month or part of a month comprised in a period, any
fraction of a month shall be deemed to be a full month and the interest shall be so calculated”
The Petitioner also submitted that Delayed Payment Surcharge in Uttarakhand is lower than
that charged by other utilities in other States. In the Table below DPS charged by different States are
given:
Table 2.2: Details of DPS in various States State Delayed Payment Surcharge
Haryana 1.5 % on unpaid amount of the bill for each 30 days successive period or part thereof until the amount is paid in full.
Uttar Pradesh 1.25% upto first three months and subsequently 2% of per month on unpaid amount
Delhi 1.5% per month on unpaid amount Himachal Pradesh 2% per month on unpaid amount Uttarakhand 1.25% per month on unpaid amount
2.10.1.3 Commission’s Views
The Commission is of the view that the objective of Delayed Payment Surcharge is to recover
the cost of funds for delayed payment by the consumers, and the main objective of DPS is to act as
deterrent so that the consumers pay their bill on time.
2.11 Rebate and Incentives
2.11.1.1 Stakeholder’s Comments
Shri Shakeel A Siddiqui of Kashi Vishwanath Textile Mill Pvt. Ltd. submitted that since
many HT consumers are required to pay their monthly bill in advance every month, an incentive of
1% per month on the amount which remains with the licensee at the end of calendar month
(excluding security deposit) may be credited to the account of the consumer after adjusting any
amount payable to the licensee. He also requested that an incentive for prompt payment at 0.25% of
bill amount (excluding arrears, security deposit, meter rent and Government levies, viz. Electricity
Duty and Cess) may be given in case the payment is made at least 7 days in advance of the due date
of payment where the current month billing amount is equal to or greater than Rs. One Lakh.
Shri Shakeel A Siddiqui of Kashi Vishwanath Textile Mill Pvt. Ltd. and Shri Nikhil Tyagi of
BST Textile Mills Pvt. Ltd. submitted that it is more relevant that losses at higher voltages are less,
however, the rebates offered for availing supply at higher voltages that the base voltage is not
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30 Uttarakhand Electricity Regulatory Commission
commensurate with the benefit the licensees derives for supply at higher voltages in terms of
reduction in distribution losses. Accordingly, they have proposed to either determine the cost to
severe to various consumer categories or increase the voltage rebate from 2.5% to 5% for supply at
33 kV and from 7.5% to 12% for supply at 132 kV.
Shri Shakeel A Siddiqui of Kashi Vishwanath Textile Mill Pvt. Ltd. also submitted that most
SERCs provide incentives on higher load factor to HT consumers. If the consumer draws maximum
power in the same contract demand, licensee’s average power purchase cost and consumer’s
average tariff will automatically get reduced and, therefore, the gain on account of reduction on
average power purchase cost can be passed on the consumer through load factor incentive. Higher
load factors also result in maximum utilization of transmission and distribution assets, thus
resulting in average lower costs for the licensee. He, therefore, proposed a rebate of 5% on normal
energy charge for monthly load factor between 65-70% and rebate of 10% on normal energy charge
for monthly load factor of 70% and above.
Shri R.S.Yadav of India Glycols Ltd. submitted that the present High Voltage Rebate for 132
kV should be increased from 7.5% to 10% as the line losses in these categories are not more than 2%
when compared to the average losses of 14.75%. In addition, he also claimed that high voltage
rebate should also be given on power purchase through open access. He suggested that
alternatively, Open Access consumers at high voltage should be charged only transmission loss in
place of average distribution loss.
Shri Pramod Singh Tomar of Galwalia Ispat Udyog Pvt. Ltd. submitted that the HT Tariff
Rebates does not reflect the Cost of Supply. He commented that the landed cost of supply is
calculated based on the average distribution loss in the State while the losses are much lower in HT
connection and should reflect the cost of supply for industrial consumers or the rebate should be
increased.
Shri Rajeev Gupta of Kashi Vishwanath Steels Pvt. Ltd. submitted that independent feeders
give huge benefit to the distribution licensee on account of distribution losses as losses come out
less than 1% in comparison with the average losses of 15-16% in case of H.T Industries which are
not connected with an Independent feeder. Hence, a uniform rebate of 10% on Rate of charges
should be given to Industries connected with Independent feeder at 33 kV/132 kV/220 kV supply.
The rebate on “rate of charge” for very high voltage consumers for the last 5 years was only allowed
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 31
as rebate on energy charges not on demand charges. Consumers should be benefitted by a rebate on
demand charges along with energy charges.
Shri LS Chamyal of Khatema Fibres Ltd. and Shri Vikas Jindal of Kumaun Garhwal
Chamber of Commerce & Industry submitted that tariff to the consumers is fixed at average billing
rate which consists of demand and energy charges while, rebate is being allowed presently for
energy charges only. A few years back, the Commission had been allowing HV rebates in the tariff
on rate of charge, i.e. demand and energy charge. They requested to consider the mechanism for
allowing HV rebate on rate of charge, i.e. on demand and energy charges in the Tariff Order.
Shri R.K. Singh of Tata Motors Ltd. submitted that the voltage supply rebate for 220 kV
consumers should be differentiated from 132 kV consumers as they have negligible transmission
/distribution losses and a rebate of 12.5% should be granted for such consumers.
Shri Sanjay Kumar Chaurasia of Hindustan National Glass & Industries Ltd. and Shri
Sandeep Sharma of Cavendish Industries Ltd. submitted that the voltage rebate should increase to
5% for 33 kV and 10% for 132 kV and above. They also submitted that voltage rebate should also be
given on power purchase through open access.
Shri G.S. Bedi of Indian Drugs and Pharmaceuticals Ltd. suggested considering a
rebate/incentive for consumers directly connected to PTCUL substations on account of reduced line
losses. Supply switch gear located in PTCUL for IDPL is separated only by a boundary wall from
IDPL substation receiving supply. He further submitted that Rebate/incentive for reactive power
management by keeping very high PF in case of RTS-8 based on kW/kWh billing be considered to
encourage consumers as it offloads UPCL system from reactive power.
2.11.1.2 Petitioner’s Reply
The Petitioner submitted that presently, no consumer is required to make advance payment
of his electricity dues. The Petitioner also submitted that the rebate for prompt payment may be
considered by the Commission at the rate of 0.19% of bill amount (10% annual rate/365 days x 7
days).
The Petitioner further submitted that presently, voltage wise/category wise losses are not
available and category wise tariff has been calculated on the basis of average cost of supply and
permissible level of cross subsidy as per Regulation 91 of the UERC Tariff Regulations, 2015. The
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32 Uttarakhand Electricity Regulatory Commission
Petitioner apprised the Commission that UPCL is in the process of calculating the voltage wise cost
of supply as per the direction of the Commission.
UPCL submitted that in the absence of availability of voltage wise losses, which is mix of
Technical Losses and Commercial Losses, the Distribution Losses are required to be charged on
average basis from all the categories of consumers.
In response to the comment on rebate on Open Access, the Petitioner submitted that High
Voltage Rebate is admissible on the Energy Charges. As no energy charges is payable on the Open
Access Energy, the question does not arise for allowing rebate on Open Access Energy.
The Petitioner also submitted that rebate for taking supply at higher voltage was revised by
the Commission in its Tariff Order dated April 10, 2014 from 1.5% to 2.5% and from 5% to 7.5% for
taking supply at 33 kV and 132 kV and above respectively. Thus, presently there is no justification
for increasing the existing level of High Voltage Rebates.
The Petitioner submitted that there is no relation of Distribution Losses with Contracted
Load and Demand Charges and, therefore, voltage rebate should not be admissible on demand
charges.
As regards rebate on RTS-8 category, the Petitioner submitted that the Tariff is determined
keeping in view the fact that the consumer will maintain a healthy power factor.
2.11.1.3 Commission’s Views
The Commission in its Order dated April 10, 2014 considering the requests made by various
stakeholders and UPCL’s response on the same, modified the provisions of voltage rebate and the
Commission feels that the provisions of the prevalent voltage rebate are appropriate.
As regards incentive for reactive power management, the Commission has been providing
for kVAh based tariff for industries in its Tariff Orders which covers the benefit of incentive as
suggested by the Respondents.
As regards the suggestion for incentive for timely payment, the Commission has already
dealt with the matter in its Tariff Order for FY 2003-04 which is being reproduced as under:
“The Commission finds that consumers already enjoy sufficiently long credit for the supplies made to
them. Petitioner has intimated the Commission that even for consumers being billed on monthly basis
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 33
the time lag between the first day of supply and actual payment is about two months, resulting in
interest free credit for an average period of 45 days for the entire billed amount. For consumers being
billed once in two months, the interest free credit period works out to around two months. This
existing arrangement itself is quite generous and no further concessions seem called for. Allowing
consumers rebate for timely payment and booking the cost of it on tariff through expenses incurred,
gives no real advantage to consumers and is only an exercise of smart packaging. The Commission has
therefore decided to do away with the system of rebate for timely payment of the bills by consumers.”
The above views of the Commission are relevant even in today’s context.
As regards the voltage rebate for open access, the Commission agrees with the Petitioner’s
views that as no energy charges are payable by open access consumers to UPCL and hence, the
issue of rebate is not applicable.
As regards load factor based tariff for HT industry consumers, the Commission has dealt
with this issue in detail in Chapter-5 of the Order.
2.12 Energy Sale Forecast
2.12.1.1 Stakeholder’s Comments
Shri Vikas Jindal of Kumaun Garhwal Chamber of Commerce & Industry and Shri Achal
Sharma of East West Products Ltd. submitted that the Compound Annual Growth Rate (CAGR) of
4.43% over the past 5 years from FY 2011-12 to FY 2015-16 had been considered by UPCL and it had
been assumed that energy consumption in future would continue to grow based on the past trends
of consumption. The CAGR of past 5 years may not be a good approach for energy sales during FY
2017-18 due to recent demonetization and consequent recession in the market.
They also submitted that UPCL has adopted the similar method for projection of category-
wise connected load and no. of consumers for the energy sales, i.e. adjusted trend analysis method.
The assumed growth rate in load of HT industries as 5.83%, LT as 13.09% and for non-domestic as
9.47% for FY 2017-18 cannot be achieved due to recent demonetisation factor. They requested the
Commission to consider this aspect also while doing its exercise.
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34 Uttarakhand Electricity Regulatory Commission
2.12.1.2 Petitioner’s Reply
The Petitioner submitted that impact of demonetization is for short term and will not affect
the economy in future. In this connection, the Petitioner submitted that the extract of Economic
Survey 2016-17 which is reproduced hereunder:
“We expect real GDP growth to be in the 63/4 to 71/2 percent range in FY 2018. Even under this
forecast, India would remain the fastest growing major economy in the world.”
2.12.1.3 Commission’s Views
The Commission has duly scrutinised and analysed the sales projected by the Petitioner and
has approved the category-wise sales based on past trends including recent trends and considering
the other factors submitted by the Petitioner and other stakeholders as elaborated in Chapter 3 of
the previous MYT Order. The Commission is of the view that for planning purposes, the sales
projections should be based on unrestricted sales and, accordingly, the Commission had projected
the unrestricted sales. Further, the Commission is of the view that the impact of demonetization is
temporary and the economy shall recover from it completely.
2.13 Cost of Supply and Cross Subsidy
2.13.1.1 Stakeholder’s Comments
Shri Pramod Singh Tomar of Galwalia Ispat Udyog Pvt. Ltd. submitted that the industrial
consumers are inherently cross-subsidising some other categories which is against the provisions of
the Electricity Act, 2003 and UERC Tariff Regulations, 2015.
2.13.1.2 Petitioner’s Reply
The Petitioner submitted that presently, voltage wise/category wise losses are not available
and Category wise Tariff has been calculated on the basis of average cost of supply and permissible
level of cross subsidy, which is as per Regulation 91 of the UERC Tariff Regulations, 2015.
2.13.1.3 Commission’s Views
The issue of level of cross-subsidy across various categories of consumers and increase in
tariffs has been deliberated by the Commission in Chapter 5 of the Order and is in accordance with
the Electricity Act, 2003 and the Tariff Policy notified thereunder.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 35
2.14 Continuous Supply
2.14.1.1 Stakeholder’s Comments
Shri R.S. Yadav of India Glycols Ltd. submitted that the 15% surcharge for continuous
supply is very high and should be reduced to 5% as adequate power is available now in the State.
He also submitted that no other State charges any additional amount for continuous supply except
Punjab where charges are 10 paise per unit. He also submitted that the Licensee (UPCL) should not
be allowed to charge any continuous supply charges for the power purchased through open access
and other bilateral contracts.
Shri Shakeel A Siddiqui of Kashi Vishwanath Textile Mill Pvt. Ltd. and Shri V.K. Aggarwal
of Balaji Action Buildwell submitted that the industries availing continuous power supply are
beneficial for the licensee as the utility may enter into a long-term PPA with a power producer. This
leads to better power purchase planning and reduction in cost of power purchased for such
consumers. Charging premium for continuous power is unjustifiable on account of poor power
purchase planning by the utility and requested to completely remove or reduce the continuous
supply charge from the existing level of 15% to 5%.
Shri Puneet Jain of Air Liquide India and Shri Sanjay Kumar Chaurasia of Hindustan
National Glass & Industries Ltd. submitted that the continuous supply charge should be reduced to
8-10%.
Shri LS Chamyal of Khatema Fibres Ltd. submitted that the industries opting for continuous
supply have to pay 15% extra energy charges for the whole year. He requested the Hon’ble
Commission to fix standards for continuous supply based on number of interruptions in a month
and devise a compensation mechanism for the consumers for power loss opting for continuous
supply.
Shri Sandeep Sharma of Cavendish Industries Ltd. submitted that continuous supply
surcharge should be eliminated or should be exempted during load shedding.
2.14.1.2 Petitioner’s Reply
The Petitioner submitted that Para-8.2.1 (1) of Tariff Policy provides that the consumers
willing to avail continuous and quality power supply are required to pay a tariff which reflects
efficient costs. This is an additional charge (premium) payable by the consumer to have the facility
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36 Uttarakhand Electricity Regulatory Commission
of getting continuous supply of power. These consumers are exempted from load shedding during
scheduled/unscheduled power cuts and during restricted hours of the period of restriction of
usages approved by the Commission from time to time. However, load shedding required due to
emergency break-down/shut-down is imposed on these consumers as and when the situation
arises. For the purpose of ensuring continuous supply, UPCL is required to incur extra
infrastructure cost as well as arrangement of energy availability at higher cost which cannot be kept
below 15% of energy charges and this cost is required to be recovered from the consumers having
the facility of getting continuous supply.
The Petitioner further submitted that for the purpose of ensuring continuous supply, UPCL
is required to incur extra infrastructure cost as well as arrangement of energy availability at higher
cost. Even in case the consumer purchase power through Open Access, UPCL is required to incur
this cost and, therefore, recovery of the same is also required on the Open Access Energy consumed.
2.14.1.3 Commission’s Views
The Commission in its ARR/Tariff Order dated April 11, 2015 after detailed deliberations on
the issue after floating the in-house paper extended the option of continuous supply to non-
continuous process industries in addition to the continuous process industries.
In these tariff proceedings, the Commission has received mixed responses from various
stakeholders. Some of the industries submitted that the continuous supply surcharge be reduced.
The Commission would like to clarify that it may not be appropriate to reduce the
continuous supply surcharge at this stage as the State of Uttarakhand is still facing power shortage
and UPCL is procuring short term power from market to meet the demand. Hence, the Commission
does not find any reason to reduce or abolish the continuous supply surcharge. However,
considering the views of stakeholders, the Commission has decided not to increase the continuous
supply surcharge and has retained the same as 15% of energy charges.
The Commission agrees with the stakeholder comments that UPCL should not charge
continuous supply surcharge on power purchase through open access under collective or bilateral
transactions. Accordingly, the Commission has included the aforesaid provision in the Rate
Schedule to exempt the application of continuous supply surcharge on the power purchased by the
consumers through open access under collective/bilateral transaction and not from UPCL.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 37
2.15 Components on ARR and Revenue
2.15.1 Prudence Check of Revised ARR
2.15.1.1 Stakeholder’s Comments
Shri Amit Joshi submitted that for FY- 2017-18, the revised ARR submission seeks a gap of
Rs. (748) Crore in comparison to the earlier gap of Rs. 168 Crore. He requested the Commission to
perform prudence check of the revised ARR submission as the difference is very high.
Shri Rajeev Gupta of Kashi Vishwanath Steels Pvt. Ltd. submitted that UPCL has proposed a
gross expenditure of Rs. 6150 Crore but the actual expenses for the year 2015-16 is Rs. 5908 Crore,
hence, UPCL has demanded Rs. 242 Crore extra in comparison to the actual expenses in 2015-16. He
suggested that there is no need to approve extra expenses/ tariff hike.
2.15.1.2 Petitioner’s Reply
As regards increase in ARR, the Petitioner submitted that on the Tariff Petition of UPCL, the
Commission held a Technical Validation Session and pointed out various deficiencies. As per
direction of Commission, revised submission was made by UPCL vide its letter no.
211/UPCL/RM/B-18, dated January 19, 2017. The details of variation due to revision in ARR may
be shown as follows:
Table 2.3: Details of Variation in ARR for FY 2017-18 S.
No. Particulars Rs. Crore
1. Power Purchase Cost 287.28 1.1 Gas based power plant (PLF 70% to 85%) 256.23 1.2 Upcoming Stations not considered in revised submission -65.71 1.3 Escalation on Tariff for CGS (2% to 4%) 33.67 1.4 Additional Procurement of Short Term Purchase 63.09 2. Revision in PGCIL Cost as per revised power purchase 56.46 3. Impact of revision in capitalization 67.96 4. Previous years adjustments 133.37 5. Profit sharing on working capital 17.60 6. Total 562.67 7. Gap as shown in the Petition 186.32 8. Revised Gap 748.99
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
38 Uttarakhand Electricity Regulatory Commission
2.15.1.3 Commission’s Views
The Commission is of the view that the overall gap is a function of projected Annual
Revenue Requirement for the ensuing year (including impact of truing up of expenses and revenue
for previous year) and projected revenue at existing tariffs. The Commission has carried out the
detailed scrutiny of APR for FY 2016-17, Revised ARR for FY 2017-18 and truing up for FY 2015-16
in accordance with the provisions of relevant Regulations as discussed in the subsequent Chapters
of the Order. Based on the actual ARR for FY 2017-18 including impact of truing up for FY 2015-16,
the Commission has marginally increased the tariff to meet the projected revenue gap as discussed
in detail in Chapter 5 of the Order.
2.15.2 Power Purchase Cost
2.15.2.1 Stakeholder’s Comments
Shri Vikas Jindal of Kumaun Garhwal Chamber of Commerce & Industry and Shri Achal
Sharma of East West Products Ltd. submitted that the objections are sometimes on purchase of
power from external sources through mutual discussions and trading and there have been instances
of allegations in the past on UPCL for purchase of power from outside at higher rates with mutual
discussion.
Shri Pramod Singh Tomar of Galwalia Ispat Udyog Pvt. Ltd. submitted that CERC in Tariff
Regulations 2014 changed the methodology for determining the energy charges with GCV of coal to
be considered “as receipt basis” instead of “as fired basis” CERC in its Order dated January 25, 2016
in Petition No. 283/GT/2014 decided this issue. He submitted on account of this Order, the variable
cost is likely to reduce by at least 25-30%. He further submitted that based on anticipated 20%
savings in variable cost, there will be a saving of Rs. 363.16 Crore for three year period. Thus, the
power purchase expenses have to be re-determined accordingly.
Shri Rajeev Gupta of Kashi Vishwanath Steels Pvt. Ltd. submitted that UPCL has projected
power purchase from many generating stations of Central Sector at Rs. 5/kWh to Rs. 12/kWh,
which is very high. UPCL should search alternate sources of power supply at cheaper price.
Shri Amit Joshi submitted that there is a sudden increase of approximately Rs. 300 Crore in
the revised power purchase cost on account of water tax. As per Uttarakhand Water Tax on
Electricity Generation Act, 2012, water tax is applicable from the date of notification of the above
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 39
Act and is allowed to be passed through in tariff of generating station. He requested the
Commission to kindly verify the earlier submission regarding inclusion of water tax.
Shri Munish Talwar of Asahi India Glass Ltd. submitted that long term contracts/
agreements should be finalized with corporations such as NTPC, NHPC, THDC, UJVNL and
SJVNL to control the power purchase cost with the rise in power demand within the State.
Dr. V.K. Garg submitted that the increase in power purchase cost in 2017-18 needs clarity
and the break-up of cost from own GENCOs vis-a-vis power purchased from outside and the
increase on account of quantity and price per unit (assumed) needs to be examined.
Shri Pawan Agarwal of Uttarakhand Steel Manufacturers Association submitted that inspite
of thermal power generation from Central Generating Stations becoming cheaper, the reduction in
power purchase cost is not reflected in the power tariffs. He also submitted that UPCL buys costly
power from gas based power plant in the Kumaon region and compensates it with levies such as
cess at Rs. 0.40/unit.
2.15.2.2 Petitioner’s Reply
The Petitioner submitted that all purchases of power are made through a transparent
process as specified in the Act and teh Regulations and all power purchase agreements are
approved by the Commission by an Order.
The Petitioner further submitted that the overall rate of power of NTPC for FY 2015-16 was
Rs. 3.19/unit whereas the rate of power in FY 2016-17 (upto December) is Rs. 3.38/unit. The
Petitioner submitted that there is no reduction in the power purchase rate of NTPC.
The Petitioner also submitted that it is very important for a distribution utility to have a
right mix of short and long term power. There may be a period when the rate of power from short
term market is higher than firm sources. There is no guarantee that the rate always remains lower as
compared to firm sources. Furthermore, there may be instances when short term power may not be
available during certain period. At that time, firm sources of power are the best option. It is always
advisable for a Discom to keep more and more power available from firm sources in order to keep
the power purchase cost minimal and for the purpose of energy security.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
40 Uttarakhand Electricity Regulatory Commission
The Petitioner further submitted that while taking assumptions for projecting the power
purchase cost from new stations, UPCL has tried to be as realistic as possible. The rate considered is
based on the industry trends observed in the past few years.
As regards increase in Power Purchase Charges, the Petitioner submitted that on the Tariff
Petition of UPCL, the Commission during the Technical Validation Session pointed out various
deficiencies. As per direction of the Commission, revised submission was made by UPCL vide its
letter no. 211/UPCL/RM/B-18, dated January 19, 2017. The details of variation due to revision in
ARR are submitted to the Commission.
The Petitioner further submitted that all information with respect to power purchase cost for
FY 2015-16 as specified in the Regulations and as desired by the Commission during this tariff
determination exercise has been/is being provided to the Commission for examination at their
level.
As regards comment on costly power from gas based plants, the Petitioner submitted that it
executed power purchase agreement for 428 MW Gas based generating stations situated in the State
with a view to provide quality and uninterrupted power supply to the consumers of the State. The
tariff of these generating stations is Rs. 4.70 per unit. The power of these generating stations is
available round the year and no PGCIL charges and losses are payable on this energy. Therefore,
the cost of this power is not more than the power as procured from outside the State. Further, UPCL
has also executed a power purchase agreement for 70 MW hydro generating station situated in
Himachal.
2.15.2.3 Commission’s Views
The issues related to power purchase quantum and costs have been deliberated by the
Commission in Chapter 3 and 4 of the Order.
2.15.3 PGCIL Charges
2.15.3.1 Stakeholder’s Comments
Shri Amit Joshi submitted that the PGCIL charges claimed by UPCL have increased in the
revised submission of ARR proposal. He requested that reason for this increase in charges needs to
be clarified.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 41
Dr. V.K. Garg submitted that the PGCIL charges have to be minutely examined based on the
number of units wheeled over the distance and PoC as the increase from Rs. 226 Crore to Rs. 741
Crore in two years is atrocious.
2.15.3.2 Petitioner’s Reply
As regards increase in PGCIL Charges, the Petitioner submitted that on the Tariff Petition of
UPCL, the Commission held a Technical Validation Session and pointed out various deficiencies. As
per directions of the Commission, revised submissions were made by UPCL vide its letter no.
211/UPCL/RM/B-18, dated January 19, 2017. The details of variation due to revision in ARR have
been submitted to the Commission.
As regards detailed analysis of PGCIL charges, the Petitioner submitted that PGCIL charges
have been calculated in the following manner. During the first six months of FY 2016-17, the
Petitioner had received bills of Rs. 350.28 Crore (against 3581.28 MU on PGCIL network) on account
of revised POC Charges starting from May 2015 as per various CERC amendments notified during
January to July 2015.
Subsequently, for estimating PGCIL transmission charges for FY 2016-17, the Petitioner has
assumed the same amount for remaining six months. The per MU PGCIL Charge for FY 2016-17
has been calculated using the estimated charges and energy coming from outside Uttarakhand
during FY 2017-18. The per MU rate thus calculated is escalated by 2% per annum and then
multiplied by the projected power purchase quantum for each year of the control period to arrive at
the total estimated PGCIL charges.
The details of PGCIL charges for FY 2017-18 is as follows:
Table 2.4: Details of PGCIL Charges for FY 2017-18 S. No. Particulars MU Rs/unit Rs. Crore
1. Power imported through PGCIL network 6411.70 1.00 639.66
2. Additional Procurement of Short term purchase 173.33 1.00 17.29
3. Banking of power 851.48 1.00 84.95 Total 6585.02 741.89
2.15.3.3 Commission’s Views
The issue of PGCIL charges has been deliberated by the Commission in Chapter 4 of the
Order.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
42 Uttarakhand Electricity Regulatory Commission
2.15.4 Return on Equity
2.15.4.1 Stakeholder’s Comments
Shri Munish Talwar of Asahi India Glass Ltd. submitted that the evaluation criteria to
compute calculation of Return on Equity has to be explained as the difference in the values of FY
2016-17 and FY 2017-18 is coming around Rs. 10 Crore.
Shri Pankaj Gupta of Industries Association of Uttarakhand submitted that no Return on
Equity should be allowed on the assets created out of grant in line with the earlier approach of the
Commission.
Dr. V.K. Garg submitted that the sudden increase in Return of Equity needs to be examined
with respect to the Capital Expenses and the Capital Employed.
2.15.4.2 Petitioner’s Reply
As regards increase in Return on Equity claimed, the Petitioner submitted that on the Tariff
Petition of UPCL, the Commission held a Technical Validation Session and pointed out various
deficiencies. As per directions of the Commission, revised submissions were made by UPCL vide its
letter no. 211/UPCL/RM/B-18, dated January 19, 2017. The details of variation due to revision in
ARR have been submitted to the Commission.
The Petitioner also submitted that the Commission in its Tariff Order for FY 2016-17
approved Return on Equity at 16.50% on the opening equity of Rs. 285.58 Crore. The Commission
computed the value of equity for each year equivalent to 30% of (capitalization as reduced by grant
and loans). Remaining 70% of capitalization has been considered as normative loan. Accordingly,
Return on Equity allowed for FY 2016-17 is Rs. 47.12 Crore.
As regards comment on RoE on assets created out of grants, the Petitioner submitted that it
has computed return on equity at 16% on the opening equity of Rs. 535.27 Crore for FY 2015-16.
Year wise addition to equity has been considered at maximum of 30% of the capitalization
excluding grants for each year. In the year when the equity deployed was less than 30%, actual
equity has been considered. The equity in excess of 30% has been considered as normative loan.
Detailed computation of return on equity is given in the Petition.
2. Stakeholders’Objections/Suggestions, Petitioner’s Responses and Commission’s Views
Uttarakhand Electricity Regulatory Commission 43
2.15.4.3 Commission’s Views
The issue of Return on Equity has been deliberated by the Commission in Chapter 3 and 4 of
the Order.
2.15.5 Operation & Maintenance Expenses
2.15.5.1 Stakeholder’s Comments
Shri Munish Talwar of Asahi India Glass Ltd. submitted that the Repair and Maintenance
Cost is escalated by almost 20% with respect to the previous year, which is very high compared to
the present market scenario and inflation index.
Brig. K.G. Behl submitted that the O&M expenses have gone up in comparison to previous
years and needs to be reviewed and reduced.
2.15.5.2 Petitioner’s Reply
As regards increase in O&M Expenses claimed, the Petitioner submitted that on the Tariff
Petition of UPCL, the Commission held a Technical Validation Session and pointed out various
deficiencies. As per directions of the Commission, revised submissions were made by UPCL vide its
letter no. 211/UPCL/RM/B-18, dated January 19, 2017. The details of variation due to revision in
ARR have submitted to the Commission.
The Petitioner also submitted that as against the O&M expenses of Rs. 644.25 Crore for FY
2017-18 approved in MYT Order, UPCL has claimed only Rs. 552.47 Crore.
As regards detailed analysis of O&M Expenses, the Petitioner submitted that the details of
approved O&M expenses for FY 2016-17 and claimed for FY 2017-18 are as follows:
Table 2.5: Details of Approved & Claimed O&M Costs Particulars
The Petitioner submitted the sales to HT Industry of 5437.27 MU for FY 2015-16. The
Commission in this regard sought clarification from UPCL whether the sales made to HT Industrial
category has been adjusted for power consumed by HT Industrial consumers through open access.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
86 Uttarakhand Electricity Regulatory Commission
The Petitioner in its reply submitted that the energy availed through open access energy by HT
Industrial consumers has been adjusted from the consumption units recorded in respect of HT
Industries. As the Petitioner has correctly submitted the sales for this category by excluding the
energy consumed by HT Industries through open access, the Commission has approved the sales
for HT Industries as submitted by the Petitioner.
Based on the above analysis, the category wise sale for FY 2015-16 as re-worked by the
Commission is as shown in the Table below:
Table 3.5: Category-wise Sales for FY 2015-16 (MU)
Categories Approved in the
Tariff Order dated 11.04.2015
Claimed in the Petition
Approved after Truing Up
Domestic (RTS - 1) 2476.84 2390.95 2342.26 Non-domestic, incl Commercial (RTS - 2) 1213.64 1118.52 1118.19 Public Lamps (RTS - 3) 44.33 45.37 42.98 Private Tubewell/Pump Sets (RTS - 4) 225.93 283.91 283.06 Government Irrigation System (RTS - 5) 117.36 141.03 140.90 Public Water Works (RTS - 6) 316.95 347.04 346.61 Industrial Consumers (RTS - 7) 5734.07 5719.58 5719.47 Mixed Load (RTS - 8) 219.47 186.78 186.78 Railway Traction (RTS - 9) 12.05 14.16 14.16 Extra State Supply - 2.52 2.52 Total 10360.63 10249.87 10196.93
3.1.2 Distribution Losses
The Petitioner in its Petition has submitted its distribution losses for FY 2015-16 at 18.39%.
The Commission for FY 2015-16 had approved distribution losses of 15.00% based on the loss
reduction trajectory approved in the MYT Order for the Control Period from FY 2013-14 to FY 2015-
16. However, as per the actual data submitted by the Petitioner and the sales approved by the
Commission, the actual distribution losses for FY 2015-16 works out to 18.81%.
The Commission, in accordance with the approach adopted in its previous Orders, has
allowed the actual quantum of power purchase made by the Petitioner. Considering the actual
energy input of 12,559.60 MU at distribution periphery (T&D interface) for FY 2015-16 and applying
the approved loss level of 15.00% for the year, the Commission has re-estimated the sales of
10675.66 MU for FY 2015-16. As against this sale of 10675.66 MU, the actual recasted sale approved
by the Commission for FY 2015-16 is 10196.93 MU. Therefore, there is a loss of sales to the tune of
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
Uttarakhand Electricity Regulatory Commission 87
478.73 MU on account of commercial inefficiencies of the Petitioner resulting from its failure to
achieve distribution loss target approved by the Commission. The Petitioner has submitted the
average billing rate of Rs. 4.55/kWh worked out on the sales claimed of 10249.87 MU. It is observed
that for computing ABR for FY 2015-16, the Petitioner has also considered revenue from delayed
payement surcharge which should not be included while computing the ABR for the year. The
Commission has, accordingly, computed the additional revenue on account of loss in sales due to
higher distribution loss considering the revenue excluding the revenue from delayed payment
surcharge and on the recasted sale of 10196.93 MU. The average billing rate thus computed works
out to Rs. 4.21/kWh and, accordingly, the Commission has worked out additional revenue of Rs.
201.61 Crore at an average billing rate of Rs. 4.21/kWh for the sales lost during FY 2015-16. The
following Table shows actual distribution loss and approved distribution loss along with efficiency
loss for FY 2015-16 as explained above.
Table 3.6: Assessed Distribution losses for FY 2015-16 (MU)
Particulars Approved in the
Tariff Order dated 10.04.2014
Revised Claim
Approved after Truing
Up Actual Energy Input at T-D Interface / Power Purchase Requirement (MU) 12261.10 12559.60 12559.60
Actual/ Recasted Sales (MU) 10360.63 10249.87 10196.93 Actual Distribution Loss (MU) 1900.47 2309.73 2362.67 Distribution Loss Level (%) 15.50% 18.39% 18.81% Commercial Loss Reduction (%) 0.50% - - (Loss)/Gain of sales due to inefficiency/efficiency (MU) (Normative Sales-Actual Re-casted Sales)
62.68 (425.79) (478.73)
Approved Distribution Loss (%) 15.00% 15.00% 15.00% Total Normative Sales (MU) 10421.94 10675.66 10675.66 PTCUL Losses (%) 1.80% 1.78% 1.78% Energy Input at State Periphery 12485.85 12787.21 12787.21
Further, since distribution loss is a controllable parameter, the Commission has carried out
the sharing of the impact of excess distribution loss in accordance with the provisions of UERC
Tariff Regulations, 2011.
3.1.3 Power Purchase Expenses (Including Transmission Charges)
The comparison of source wise power purchase quantum and cost as approved by the
Commission in the Tariff Order for FY 2015-16 and actual as claimed by UPCL for FY 2015-16 is as
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
88 Uttarakhand Electricity Regulatory Commission
shown in the Table below:
Table 3.7: Power Purchase Cost approved in the Tariff Order Vs Actual Power Purchase Cost for FY 2015-16 (Rs. Crore)
Source Approved in the Tariff Order Claimed by UPCL
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
98 Uttarakhand Electricity Regulatory Commission
3.2.2 Financing of Capital assets
3.2.2.1 Truing up of Capital Related Expense for FY 2015-16
The Commission vide its Order dated April 05, 2016 had carried out the true up for FY 2014-
15 and had approved the net GFA addition of Rs. 472.76 Crore for FY 2014-15. As discussed above,
the actual capitalisation for the year stands revised to Rs. 493.22 Crore. The means of finance
approved earlier and now trued up is as shown in the Table below:
Table 3.16: Approved Means of Finance for FY 2014-15 (Rs. Crore)
Particulars FY 2014-15 Approved Previously Now Approved
RGVVY Loan 9.62 9.62 AREP Loan - - State/District Plan - - APDRP Loan - - R-APDRP Part A 16.59 16.59 REC Loan 189.89 189.89 PMGY/MNP - - PTW Loan - - Deposit Works 181.84 181.84 Grant Internal resources 74.82* 95.28* Total 472.76 493.22
*30% has been considered as equity & balance 70% has been treated as mormative loan
The means of finance for the capitalisation of Rs. 284.78 Crore for FY 2015-16 as submitted
by the Petitioner is shown in the Table below:
Table 3.17: Means of Finance for FY 2015-16 as submitted by the Petitioner (Rs. Crore)
Particulars FY 2015-16 RGVVY Loan 0.00 R-APDRP Part A 2.43 REC Loan 139.81 Deposit Works 105.22 Grant Internal resources 37.32* Total 284.78
* 30% has been considred as equity and balance 70% considered as normative loan
The means of finance approved by the Commission for FY 2014-15 and FY 2015-16 is as
shown in the Table below:
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
Uttarakhand Electricity Regulatory Commission 99
Table 3.18: GFA & Means of Finance approved by the Commission (Rs. Crore)
Particulars FY 2014-15 FY 2015-16 Grants* Loan Equity Total Grants Loan Equity Total
Opening Value 1394.67 1329.08 478.80 3202.56 1593.10 1595.29 507.39 3695.78 Total Addition during the year 198.43 266.21 28.58 493.22 107.65 165.93 11.20 284.78
Closing Value of GFA 1593.10 1595.29 507.39 3695.78 1700.75 1761.22 518.58 3980.56 * Financing out of R-APDRP Part A has been considered as grant
3.2.2.1.1 Interest and Finance Charges
The Petitioner has claimed Interest and Finance Charges of Rs. 136.67 Crore for FY 2015-16
against the amount of Rs. 139.44 Crore approved by the Commission in the Tariff Order dated April
11, 2015.
The Petitioner submitted that it has claimed interest expenses on the following basis:
a) Actual interest accrued during the year has been claimed which is net off
capitalisation.
b) Interest on UPPCL Loans has not been considered.
c) Interest on REC (Old) loans has been taken in accordance with the interest
determined by the Commission in the Tariff Order for FY 2015-16 dated April 11,
2015.
d) Government Guarantee fees has been considered on actual basis.
e) The Petitioner has not considered the interest on GPF. However, the Petitioner
requested the Commission to allow interest on GPF as part of interest expense as this
is the statutory liability of the Petitioner. The Petitioner submitted that the
Government of Uttarakhand (GoU) has in the past refused to provide support on
account of Interest on GPF. The Petitioner added that GoU is already bearing the
terminal liability of the old employees unlike other States. The Petitioner, further,
requested the Commission that in case the interest on GPF has to be borne by the
State Government, the Commission should issue suitable directions to GoU in this
regard.
f) No Interest on short-term funding through overdraft facility has been considered.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
100 Uttarakhand Electricity Regulatory Commission
The Petitioner has again claimed interest on AREP loans which has not been allowed by the
Commission in its previous Tariff Orders for reasons given in the respective Orders. The Petitioner
has ignored the fact that the AREP loan were interest free loan and interest was payable in case of
default by the borrower and the costs associated with any default cannot be allowed to be pass
through in tariffs. Hence, the Commission again disallows the interest claimed on AREP loans. The
Commission has also not considered interest on R-APDRP loans in line with the approach adopted
by the Commission in the previous Tariff Order.
Regulation 28 of the UERC Tariff Regulations, 2011 stipulates the methodology for
computation of interest expenses. The Commission in accordance with the above Regulation has
worked out the Interest and Finance Charges for FY 2015-16 considering the loan amounts
corresponding to assets capitalised in the year based on the approved means of finance, and the
interest rate of 11.86% has been computed on the basis of weighted average interest rate on the
actual loan portfolio at the beginning of each year.
The Petitioner has again requested the Commission to allow interest on GPF as part of
interest expenses as the same is a statutory liability of the Petitioner. The Commission in the past
has not allowed such expenses for reasons given in the respective Orders. Hence, the Commission
again disallows the interest claimed on GPF.
The Petitioner has claimed interest liability on consumers’ security deposits (CSD) for FY
2015-16 as Rs. 51.04 Crore. In reply to the Commission’s query, the Petitioner submitted that the
actual interest on CSD paid/adjusted in the bills for FY 2015-16 was Rs. 57.88 Crore. The
Commission has approved the interest on CSD for FY 2015-16 as Rs. 57.88 Crore.
Further, the interest on REC Old Loan has been allowed as claimed by UPCL. The
Commission observed that the Petitioner has claimed substantially higher guarantee fee of Rs. 13.62
Crore as compared to Rs. 2.03 Crore approved in the Tariff Order for FY 2015-16. The Commission,
accordingly, directed the Petitioner to submit the details of the guarantee fees paid. The Petitioner
in response submitted the break up of guarantee fees claimed by it which is as shown in the Table
below:
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
UPCL in response to the above queries has submitted that the bad debt pertains to bills
raised against ghost consumers and fictitious billing adjustments and further submitted the
category wise details of the bad debts written off.
The Commission in its MYT Order dated 05.04.2016 with regard to writing off bad debt has
stated as follows;
“With respect to the amount written off by the Petitioner during FY 2011-12 and FY 2012-13, the
Petitioner in the previous proceedings had submitted that the wrong billing made in the earlier period
were corrected by the distribution divisions and the value of excess billing had been written off in FY
2011-12 and FY 2012-13. Since the write offs were basically the rectification of wrong billing and,
accordingly, the Commission had held that such corrections cannot be treated as writing off of bad
debts. This clearly indicates lack of proper policy framework for identification, recognition and
management of provision for bad and doubtful debt. Further, it is surprising that despite categorical
directions issued by the Commission in its previous Tariff Orders, to frame a transparent policy for
identifying, recognising and writing off the bad debts, the Petitioner in its reply has yet again
submitted that it is in the process to finalise the bad debts write off policy of the company. The
Petitioner is directed to finalise the Policy within three month from the date of Order
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
Uttarakhand Electricity Regulatory Commission 105
and submit the same for approval of the Commission.”
The Commission observed that the Petitioner is yet to finalise its bad debt policy as per the
above directions. The Commission directed the Petitioner to submit the current status towards
compliance of the said directions. The Petitioner in response submitted that the same shall be
submitted by March 2017. The Petitioner has, however, not submitted the same. The Petitioner is
directed to submit the bad debt policy within three month from the date of this Order.
Further, it is all the more surprising to note that the Petitioner has chosen to ignore the
provisions of Rs. 230 Crore inherited by it from UPPCL against the opening debtors of Rs. 619
Crore. The Transfer Scheme agreed by the two Corporation dates back to the year 2001. It cannot be
ruled out that out of Rs. 619 Crore inherited by UPCL, some amount may be bad and doubtful by
now which have to be written off by the Petitioner from the total amount of provisions available
with it.
The Commission has already allowed the Petitioner a total provision of Rs. 333.75 Crore till
FY 2008-09 which also includes the opening balance of the provision inherited from UPPCL. Even
considering the actual debt written off of Rs. 195.26 Crore till FY 2015-16, the Petitioner is still left
with a provision of about Rs. 138.49 Crore. The closing debtors of UPCL as on 31.03.2015 were to the
tune of Rs. 2147.25 Crore as per the Commercial Diary of UPCL. Hence, the provision available with
UPCL is to the extent of 6.45% for FY 2015-16 of the existing debtors and any additional provision is
not allowable in accordance with the Regulations as referred above.
3.2.5 Interest on Working Capital (IoWC)
The Petitioner has submitted that it has computed interest on working capital as per UERC
Tariff Regulations, 2011. However, as per the computation submitted by the Petitioner the net
working capital is submitted as Rs. -43.67 Crore. The Petitioner has submitted that it has not
claimed any IoWC.
The computation of interest on working capital as submitted by the Petitioner is detailed in
the Table below:
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
106 Uttarakhand Electricity Regulatory Commission
Table 3.23: Interest on Working Capital for FY 2015-16 (Rs. Crore) Particulars Amount
Operation and Maintenance Expenses (one month) 31.67 Maintenance @ 15% of O&M Expenses 57.01 Receivables (2 months) 810.26 Sub-total 898.95 Less: Adjustment for security deposits & Credit available for Power Purchase 942.61 Net working capital -43.67 Interest on working capital 0.00
The Commission has computed the working capital requirement as per UERC Tariff
Regulations, 2011. Similar to the Petitioner’s submission, the net working capital as worked out
based on the approved expenses is negative, therefore, the Commission is not approving any IoWC
for FY 2015-16.
3.2.6 Return on Equity
The Petitioner submitted that it has computed Return on Equity (RoE) for FY 2015-16 based
on actual equity invested in the business. The Petitioner further submitted that it has calculated RoE
on the basis of the following:
• Revised opening equity has been considered for FY 2001-02 depending upon the
finalisation of transfer scheme.
• Year wise addition of equity has been considered at maximum of 30% of the
capitalisation excluding grants and deposit works for each year. In the year when the
equity deployed was less than 30%, actual equity has been considered. The equity in
excess of 30% has been considered as normative loan.
• The closing equity for FY 2014-15 has been considered as the opening equity for FY 2015-
16.
• The capitalisation for FY 2015-16 excluding the grants and deposit works has been
considered to be funded in the debt equity ratio of 70:30.
• Return on equity has been computed on the average equity at the rate of return of 16%.
In this regard, Regulation 22 of UERC Tariff Regulations, 2011 specifies as under:
“22. Debt-equity ratio
(1) For a project declared under commercial operation on or after 1.4.2013, debt-equity ratio shall
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
Uttarakhand Electricity Regulatory Commission 107
be 70:30. Where equity employed is more than 30%, the amount of equity for the purpose of
tariff shall be limited to 30% and the balance amount shall be considered as normative loan.
Where actual equity employed is less than 30%, the actual equity would be used for
determination of Return on Equity in tariff computations...”
Further, Regulation 27 of UERC Tariff Regulations, 2011 specifies as under:
“27. Return on Equity
(1) Return on equity shall be computed on the equity base determined in accordance with Regulation
22.
Provided that, Return on Equity shall be allowed on amount of allowed equity capital
for the assets put to use at the commencement of each financial year…”
(Emphasis added)
Thus, it is to be noted that merely having equity in its accounts does not qualify the equity as
eligible for return purposes. For equity to be eligible for return, the same should have been invested
in creation of an asset. Moreover, contrary to UPCL’s practice of considering the year wise addition
of equity at maximum of 30% of the total capitalisation excluding grants and deposit works for each
year, the Commission in accordance with the Regulations has considered project wise financing as
submitted by UPCL and if in any project, equity is in excess of 30% of the cost of the project, balance
has been treated as normative loan. Further, as per the Regulations referred above, return on equity
is allowable on opening equity.
Further, in this regard it is also to be pointed towards the mismatch in the amount of equity
being allowed by the Commission and the amount of equity being claimed by the Petitioner. The
Commission has been considering the means of finance since FY 2001-02 as submitted by the
Petitioner based on the audited accounts for carrying out the truing up for the respective years. It
now appears that the Petitioner has revised its own submissions without assigning any reasons for
the same. It would be relevant to refer to Para 3.3.12 of the Order dated April 10, 2014 for FY 2014-
15 wherein the Commission had dealt with the issue in detail. The relevant extracts are reproduced
hereunder:
”…The Commission in its Order dated March 18, 2008, had accepted UPCL’s claim that the amount
of Rs. 46.48 Crore incurred towards funding of interest during construction and Rs. 49.57 Crore
incurred for creating fixed assets was funded out of its internal resources till FY 2006-07, from the
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
108 Uttarakhand Electricity Regulatory Commission
total approved surplus of Rs. 333.82 Crore for the period FY 2001-02 to FY 2006-07. Further, the
Commission in its Tariff Order for FY 2011-12, dated May 24, 2011 had observed as follows:
“…Thus, from the above reading, it is amply clear that the Commission had identified the total
surplus earned by the Petitioner upto 31.03.2007 as Rs. 333.82 Crore out of which Rs. 46.48 Crore
was treated as utilisation from the surplus towards funding of interest during construction and Rs.
49.57 Crore was treated as utilized by the Petitioner for creating fixed assets out of its internal
resources. Thus, the Petitioner has wrongly claimed RoE on the internal resources as the same has
already been financed out of the surplus generated from the consumers and it cannot be treated as
equity of the Petitioner in line with the Commission‘s approach in the Order dated March 18, 2008.”
Accordingly, the Commission did not consider the equity/internal resources of Rs. 96.05 Crore
utilized towards creation of assets out of the internal resources, to be eligible for return purposes. The
Commission had considered the write-offs in the asset base of the Petitioner during FY 2004-05, FY
2005-06 and FY 2006-07 and assets worth Rs. 3.57 Crore were written off from the equity employed
in the assets hence, balance assets of Rs. 92.48 Crore created out of the surplus remained in the books
of the Petitioner. Since, the Petitioner had utilised the net surplus earned by it, thus, continuing the
previous approach of the Commission, the Petitioner is not entitled for RoE on the same.
The Petitioner has created assets through internal resources also. The opening value of internal
resources for FY 2012-13 as shown in Table 3.51 is Rs. 623.49 Crore. After reducing Rs. 92.48 Crore
from the same, the internal resources left for allowing the servicing cost is Rs. 531.01 Crore. Since,
the assets worth Rs. 531.01 Crore have been created out of internal resources, the Commission has
applied the debt-equity ratio of 70:30 in accordance with the Tariff Regulations and, accordingly,
opening equity eligible for return for FY 2012-13 works out to Rs. 159.30 Crore and the balance
amount has been considered as normative loan and interest on the same has been allowed in
accordance with the Regulations...”
Accordingly, the Petitioner is directed to take note of the findings of the Commission in
the above referred Order and claim RoE strictly in accordance with the same and not cling to its
own set of figures without assigning any reasons for the difference in the two set of figures
submitted before the Commission.
Hence, the Commission has considered the closing equity for FY 2014-15 as the opening
equity for FY 2015-16. The Commission has approved the Return on Equity at the rate of 16% on the
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
Uttarakhand Electricity Regulatory Commission 109
opening equity in accordance with the Regulations. The Return on Equity approved by the
Commission for FY 2015-16 is as shown in the Table below:
Table 3.24: Return on Equity approved by the Commission for FY 2015-16 (Rs. Crore)
Particulars Approved in the Tariff Order Claimed by UPCL Approved
Return on Equity 48.88 85.64 40.94
3.2.7 Non-Tariff Income
The Petitioner submitted that the Non-Tariff Income includes income from non-tariff sources
such as income from investments, delayed payment surcharge, etc. The Petitioner, in its Petition,
has claimed non-tariff income as Rs. 174.71 Crore as against the actual Non-Tariff Income as per the
audited accounts of Rs. 228.16 Crore.
The Petitioner submitted that since UERC MYT Regulations, 2011 allows normative working
capital only, any additional rebate earned by the Petitioner by making early payment should be
allowed to be retained by the Petitioner. The Petitioner, accordingly, proposed to share only up to
1% of the rebate earned on account of timely payment of the power purchase bills as non-tariff
income which has been proposed as Rs. 28.77 Crore. The Commission does not accept this
contention of the Petitioner as the Commission in the past has also considered the total rebate
earned by the Petitioner as non-tariff income. In this regard, Hon’ble ATE in its Judgment dated
May 18, 2015 on the Appeal filed by the Petitioner has already given its findings contrary to the
claim of the Petitioner. Accordingly, the Commission has considered the entire rebate as part of
non-tariff income.
The Petitioner was directed to submit justification for not considering the total material cost
variance, transitory reserves as a part of NTI. The Petitioner in response submitted that the same
was in line with the approach followed by the Commission in the Tariff Order dated 05.04.2016
wherein the Petitioner has considered the amount after excluding the grant portion. Further with
regard to transitory reserves the Petitioner has submitted that the transitory reserve of Rs. 0.96
Crore pertains to write back off the provisions of FY 2003-04 and Rs. 0.065 Crore is write back off
the provisions of FY 2006-07 which were not allowed by the Commission and, therefore, the same
has not been considered as a part of NTI. The Commission agrees with the submissions made by the
Petitioner in this regard as the Commission also had not allowed the material cost variance on the
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
110 Uttarakhand Electricity Regulatory Commission
value of grants and also the transitory reserves.
The audited accounts for FY 2015-16, shows interest on loans for previous years written back
of Rs. 20.23 Crore. In this regard, the Petitioner submitted that the Commission did not allow
interest on UPPCL dues and interest on AERP loans, as expenses in the ARR of the Petitioner, the
said amount of interest has not been considered as Non-tariff income and the remaining amount of
Rs. 6.27 Crore towards State Government loans and APDRP loans has been considered under Non-
Tariff Income for FY 2015-16. This contention of the Petitioner is not accepted by the Commission as
the Commission has been allowing the interest on only those loans which have been capitalized by
the Petitioner and not based on the interest booked by it in its accounts. The Commission has also
not been allowing interest on UPPCL dues and on AREP loans, thus, the same has also not been
considered. Hence, the Commission has not considered the amount of interest written back by the
Petitioner.
Accordingly, the non-tariff income claimed by the Petitioner and that approved by the
Commission for the purpose of truing up for FY 2015-16 is as given in the Table below:
Table 3.25: Non-tariff Income approved by the Commission for FY 2015-16 (Rs. Crore)
Particulars Approved in the Tariff Order
Claimed by UPCL Approved
Interest on deposits
73.54
65.59 65.59 Income from staff welfare activities 0.15 0.15 Rebate/Incentive 28.77 45.69 Miscellaneous receipts 37.14 37.14 Material Cost Variance 36.78 36.78 Transitory Reserve Written Back 0.00 0.00 Interest on Institutional/Liabilities for previous years written back 6.27 0.00
Total 73.54 174.71 185.35
3.3 Tariff Revenue
The Petitioner submitted the revenue at existing tariff as Rs. 4667.68 Crore as against the
revenue of Rs. 4591.79 Crore approved by the Commission in the Tariff Order for FY 2015-16.
The Petitioner submitted that as per UERC Tariff Regulations, 2011, the baseline values for
the Control Period shall be determined by the Commission based on the historical data, latest
audited accounts, estimates for the relevant year and prudence check as applied by the
Commission. The Petitioner further submitted that in case there is a substantial difference between
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
Uttarakhand Electricity Regulatory Commission 111
the estimates provided earlier or considered for the determination of baseline values and the actual
audited accounts, the Commission may re-determine the baseline values for the base year suo-moto
or on an application filed by the Applicant.
Based on the above, the Petitioner has requested the Commission to re-determine the
distribution loss trajectory keeping in mind the actual distribution loss. The Petitioner submitted
that the Commission, in previous Tariff Orders, has been computing additional deemed revenue
earned by the Utility for adjusting the approved losses against the actual, which in reality is not
earned by the Petitioner. The Petitioner submitted that it has always strived to achieve the targets of
distribution losses fixed by the Commission and, thereby, provide the best service to its consumers.
The Petitioner further submitted that it has reduced distribution losses by 3.60% in the last 6 years.
The Petitioner, further, submitted that for the loss target not achieved during a particular
year, the Utility is being penalised every year for its non-achievement. The Petitioner has further
prayed not to consider any additional revenue on account of not meeting the norms and revisit and
adjust the revenue that have been considered in the past. However, in order to comply with the
approach adopted by the Commission in its previous Tariff Orders, the Petitioner has calculated
additional revenue for FY 2015-16 and is as shown in the Table below:
Table 3.26: Revenue loss due to higher distribution loss for FY 2015-16 claimed by the Petitioner
Particulars Formula Amount Actual/recasted sales (MU) A 10249.87 Actual energy input at distribution periphery (MU) B 12559.60 Approved distribution losses (%) C 15% Sales at approved distribution loss level (MU) D = B*(1-C) 10675.66 Loss of sale due to inefficiency in distribution loss (MU) E=D-A 425.79 Revenue for FY 2015-16 (Rs. Crore) F 4667.68 ABR (Rs./kWh) G= F/A 4.55 Revenue from additional sale (Rs. Crore) F=E*G 193.90
The Petitioner has submitted that as per UERC Tariff Regulations, 2011 distribution losses is
a controllable parameter and, hence, it has proposed to share losses on account of under-
achievement of distribution losses for FY 2015-16.
The Commission has considered the distribution loss for FY 2015-16 as approved by it in its
MYT Order and, accordingly, has computed the loss of sales as 478.73 MU due to commercial
inefficiencies of UPCL. As has been dealt elsewhere in the Order, despite huge capitalisation carried
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
112 Uttarakhand Electricity Regulatory Commission
out by the Petitioner, its losses at LT levels are not reducing. Further, no concrete steps have been
carried out by the Petitioner to reduce its losses. The meter exceptions of the Petitioner are on a
higher side. This issue has also been settled by Hon’ble ATE in its Judgment dated May 18, 2015 on
the Appeal filed by the Petitioner. The relevant extracts of the Judgment are reproduced hereunder:
“...It is clear from the submissions made by State Commission that the Appellant has not
been taking action on the directions given by the State Commission on defective meter and meter
not read which remained above 20% of total consumers more than five years in each billing cycle.
The State Commission UPCL has not taken action for energy audit. We do not find any infirmity
in fixing up of loss reduction targets by the State Commission. The Appellant has not given
any instances where funds for capital works for strengthening of distribution system have been
denied by the State Commission in ARR...”
Thus, the Commission finds no reason to revisit the loss reduction trajectory fixed by it.
While approving the category wise sales for FY 2015-16, the Commission has recasted the
sales of Domestic, PTW, Non-Domestic, PWW, Public Lamps from the sales submitted by the
Petitioner. Since, the sale has been reduced, the Commission has, accordingly, reduced the revenue
corresponding to the assessed sales from the total revenue submitted by the Petitioner. The revenue
corresponding to the assessed sale is shown in the Table below:
Table 3.27: Revenue for FY 2015-16 Corresponding to Assessed Sales
Particulars
Assessed Sales to be reduced based
on average metered sale (MU)
Actual ABR (Rs./kWh)
Revenue Corresponding to
Assessed Sales (Rs. Crore)
BPL and Kutir Jyoti 0.15 2.41 0.04 Other Domestic Consumers 2.89 3.08 0.89 Non Domestic 0.33 4.87 0.16 PTW 48.92 1.36 6.67 PWW 0.43 4.64 0.20 Public Lamps 2.39 4.31 1.03 Total 55.12 8.99
With regards the revenue from departmental employees, both in service and retired, it is
observed that based on the recasted sales for departmental employees, their average billing rate is
almost equal to the average billing rate of other domestic consumers and, accordingly, no
adjustment on this account has been carried out towards the Revenue for FY 2015-16.
Based on the above, the revenue from the sale of power, as worked out by the Commission
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
Uttarakhand Electricity Regulatory Commission 113
is shown in the Table below:
Table 3.28: Revenue from Sale of Power for FY 2015-16 (Rs. Crore) Particulars Amount
Actual Revenue 4667.68 Less: Revenue corresponding to reduction in Sales 8.99 Total Revenue 4658.69
Further, it observed that the Petitioner has also considered a revenue of Rs. 364.40 Crore
towards delayed payment surcharge while deriving ABR for computing revenue from additional
sales which is incorrect and should be excluded. The Commission for the computation of ABR has
not included the revenue received on account of delayed payment surcharge and has considered an
amount of Rs. 4294.29 Crore for computation of ABR. This reflects towards the callous approach of
the Petitioner in managing its day to day affairs where no differentiation is made between tariff as
well as non-tariff income. The Petitioner is directed to properly account for the revenues from
tariff as well as non-tariff income.
Further, as discussed above there is a loss of 478.73 MU on account of commercial
inefficiencies of the Petitioner failing to achieve target distribution loss approved by the
Commission. The Commission has considered the revenue of Rs. 201.61 Crore at an average billing
rate of Rs. 4.2114 kWh for this additional loss of sale on account of higher distribution losses while
truing up the ARR for FY 2015-16 as shown in the Table below:
Table 3.29: Additional Revenue from Sale due to inefficiency for FY 2015-16 (Rs. Crore) Sr. No. Particulars Claimed by UPCL Approved
1. Actual/ Re-casted Sales (MU) 10249.87 10196.94 2. Approved Distribution Loss Level (%) 15.00% 15.00% 3. Actual Energy Input at T-D Interface (MU) 12559.60 12559.60 4. Sales at Actual Energy Input with 15.00% Loss (MU) 10675.66 10675.66 5. Loss of Sales due to Inefficiency (MU) 425.79 478.73 6. Revenue at existing Tariff (Rs. Crore) 4667.68 4295.05 7. ABR (Rs./kWh) 4.55 4.2114 8. Additional Revenue due to higher distribution losses (Rs. Crore) 193.90 201.61 9. Losses to borne by Petitioner Rs Crore) (75% of (8)) 145.53 151.21
Accordingly, the Commission has considered tariff revenue of Rs. 4809.09 Crore including
Rs. 151.21 Crore as deemed revenue on account of excess loss for FY 2015-16 as against total
revenue of Rs. 4667.68 Crore claimed by the Petitioner.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
114 Uttarakhand Electricity Regulatory Commission
3.4 Sharing of gains and losses
The Petitioner submitted that it has achieved better performance against the targets specified
on the performance parameters, i.e. employee expenses, R&M expenses, A&G expenses and
collection efficiency and it was not able to achieve the performance target w.r.t. the distribution
losses.
The sharing of gains and losses claimed by the Petitioner for FY 2015-16 is as shown in the
Table below:
Table 3.30: Sharing of Gains and Losses for FY 2015-16 claimed by the Petitioner (Rs. Crore)
Particulars Amount Consumer Share UPCL Share
A. Gain 20% 80% Employee Expenses 82.69 16.54 66.15 A&G Expenses 9.88 1.98 7.90 R&M Expenses 18.88 3.78 15.11 Subtotal (A) 111.45 22.30 89.16 B. Loss 25% 75% Revenue from Additional Sales 193.90 48.48 145.43 Subtotal (B) 193.90 48.48 145.43 Grand Total – (Loss)/ profit to be borne (26.18) (56.26)
In addition to above, the Petitioner in its subsequent submissions claimed sharing on
account of savings on IoWC from FY 2013-14 to FY 2015-16 as shown below.
Table 3.31: Sharing of Gains and Losses on account of IoWC for FY 2013-14 to FY 2015-16 (Rs. Crore)
Regulation 13 of the UERC Tariff Regulations, 2011 specifies that:
“13. Annual Performance Review
…
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
Uttarakhand Electricity Regulatory Commission 115
(5) The “uncontrollable factors” shall include the following factors which were beyond the control
of, and could not be mitigated by, the applicant, as determined by the Commission. Some
examples of uncontrollable factors are as follows:-
…
c) Economy wide influences such as unforeseen changes in inflation rate, market interest rates,
taxes and statutory levies;
…
(6) Some illustrative variations or expected variations in the performance of the applicant which
may be attributed by the Commission to controllable factors shall include, but not limited to, the
following:-
…
d) Variations in working capital requirements;
…
h) Variation in operation & maintenance expenses
…
(10) Upon completion of the Annual Performance Review, the Commission shall pass on an order
recording-
a) The approved aggregate gain or loss to the Applicant on account of uncontrollable factors and
the mechanism by which the Applicant shall pass through such gains or losses in accordance with
Regulation 14;
b) The approved aggregate gain or loss to the Applicant on account of controllable factors and the
amount of such gains or such losses that may be shared in accordance with Regulation 15;
c) The approved modifications to the forecast of the Applicant for the ensuing year, if any;
The surplus/deficit determined by the Commission in accordance with these Regulations on
account of truing up of the ARR of the Applicant shall be carried forward to the ensuing financial
year.”
Regulation 14 of the UERC Tariff Regulations, 2011 specifies that:
“14. Sharing of Gains and Losses on account of Uncontrollable factors
(1) The approved aggregate gain or loss to the Applicant on account of uncontrollable factors shall be
passed through as an adjustment in the tariff/charges of the Applicant over such period as may be
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
116 Uttarakhand Electricity Regulatory Commission
specified in the Order of the Commission;
…”
Regulation 15 of the UERC Tariff Regulations, 2011 specifies that:
“15. Sharing of Gains and Losses on account of Controllable factors
(1) The approved aggregate gain to the Applicant on account of controllable factors shall be dealt
with in the following manner:
a) 20% of such gain shall be passed on as a rebate in tariffs over such period as may be
specified in the Order of the Commission;
b) The balance amount of gain may be utilized at the discretion of the Applicant.
(2) The approved aggregate loss to the Applicant on account of controllable factors shall be dealt
with in the following manner:
a) 25% of the amount of such loss shall be allowed by the Commission to be recovered through
tariffs over such period as may be specified in the Order of the Commission under;
b) The balance amount of loss shall be absorbed by the Applicant.”
Hence, in accordance with UERC Tariff Regulations, 2011, the O&M expenses and
Distribution losses are controllable factors and any gain or loss on account of the controllable factors
is to be dealt in accordance with the provisions of Regulation 15 of the above mentioned
Regulations.
With regard to the Petitioner’s claim on account of sharing of interest on working capital for
previous years, the Commission is of the view that the same was not carried out in the previous
Orders and, therefore, the same has now been considered. The Commission has worked out the loss
on account of IoWC considering the actual IoWC as per the audited accounts of the Petitioner and
has compared it with the normative Interest on Working capital expenses as shown below:
Table 3.32: Sharing of Loss on account of IoWC for FY 2013-14 to FY 2015-16 (Rs. Crore) Particulars 2013-14 FY 2014-15 FY 2015-16 As per Audited Accounts 20.46 10.27 20.56 Normative 0.00 0.00 0.00 Loss 20.46 10.27 20.56 Consumer Share (25%) 5.12 2.57 5.14
3. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Truing-up for FY 2015-16
Uttarakhand Electricity Regulatory Commission 117
The Commission has considered the impact of sharing of loss on account of IoWC for FY
2013-14 and FY 2014-15 along with the carrying cost, to be recovered alongwith the ARR of FY 2017-
18, as shown below:
Table 3.33: Impact of Sharing of Loss of IoWC for FY 2013-14 and FY 2014-15 (Rs. Crore) Particulars FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17
5. RTS-5: Government Irrigation System 138.32 5.16% Avg. less outliers 145.47
6. RTS-6: Public Water Works 364.07 3.82% 5 year CAGR 377.98 7. RTS-7: LT & HT Industry Total LT 307.34 4.35% Avg. Less outliers 320.70 Total HT 5618.17 5.68% 5 year CAGR 5937.16
As has been held by the Commission in its Tariff Order dated April 05, 2016, losses in LT
categories of consumers (excluding HT consumers) as on March 31, 2015 were about 30%.
Moreover, the Commission in the said Order had also held that for past 3 years virtually there had
been no reduction in losses of LT category of consumers which clearly suggested that the Petitioner
did not put in serious efforts in reducing AT&C losses for such consumers, thereby, failing to bring
these losses within acceptable limits. Further, to reduce the distribution losses at LT level and to
achieve loss level in acceptable limits, the Petitioner was required to take up certain works, like
replacement of all mechanical meters in a time-bound manner in all the divisions, removal of all
ghost/fictitious/non-existent consumers from its billing database, ensuring that all the meters of
the consumers are read and their bills prepared and distributed within time and also that no
provisional bills namely NA/NR are issued for more than two billing cycles in accordance with the
provision of Electricity Supply Code Regulation, 2007, etc. However, UPCL has not made any
substantial progress in ensuring compliances.
The Petitioner had itself been making unmetered supply to some of the consumer categories
including the departmental employees despite categorical directions and being subject to a
recurring daily penalty imposed on it by the Commission. Apparently, the provisional billing on
assumed consumption basis for aforesaid consumers is used for booking of losses by the Petitioner
in order to camouflage its distribution losses as held by the Commission in its previous Orders.
Further, as already dealt by the Commission in Chapter 3 of this Order, Hon’ble ATE in its
Judgment dated May 18, 2015 in Appeal no. 180 of 2013 has also held that it did not find any
infirmity in fixing up of loss reduction targets by the State Commission as no instances were
produced where funds for capital works for strengthening of distribution system had been denied
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
128 Uttarakhand Electricity Regulatory Commission
by the State Commission in ARR. Hence, the issue was decided against UPCL by Hon’ble ATE.
Hence, based on the above discussions and more so in the absence of any energy audit study
and considering the ground realities, the Commission decides not to modify the opening loss for FY
2017-18. UPCL’s inaction and continuous high level of inefficiency does not allow it to seek revision
of the loss trajectory approved by the Commission, which if allowed would defeat the intent of the
MYT framework. Accordingly, the Commission decides to retain the distribution loss for FY 2017-
18 at 14.75% and the Petitioner is directed to abstain from seeking relaxation in this regard in
every ensuing Tariff Petition once the issue has been settled by the Commission. The distribution
loss trajectory proposed by the Petitioner and approved by the Commission for FY 2017-18 is shown
in the Table below:
Table 4.8: Distribution Losses for FY 2017-18 Particulars Proposed Approved Distribution Losses 16.39% 14.75%
In line with the approach adopted by the Commission in its MYT Order, the Commission
has considered the entire distribution loss reduction target for each year of the Control Period as
reduction in commercial losses of the Petitioner and has, therefore, considered the impact of
distribution loss reduction in terms of increase in sales due to efficiency improvement.
Accordingly, the estimated energy requirement at distribution periphery, State periphery
and approved loss level for FY 2017-18 is given in the Table below:
Table 4.9: Energy Input requirement approved by the Commission for FY 2017-18 Particulars Quantum
Distribution Sales (MU) 11,849 Loss level for Energy Input (MU) 15.00% Energy Input required at T-D interface (MU) 13,940 Commercial Loss reduction (%) 0.25% Commercial Loss reduction (Additional sales due to efficiency improvement) (MU) 34.85 Total sales with efficiency improvement (MU) 11,884 Overall Distribution Loss (%) 14.75% PTCUL Loss (%) 1.60% Energy Input at State periphery (MU) 14,167
4.4 Aggregate Revenue Requirement
Regulation 69 of the UERC Tariff Regulations, 2015 specifies as follows:
“69. Aggregate Revenue Requirement for each Financial Year of the Control Period
(1) The total annual expenses and return on equity of the Distribution Licensee for each financial year
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 129
of the Control Period shall be worked out on the basis of expenses and return allowed in terms of these
Regulations.
(2) The retail supply tariff of a Distribution Licensee for each financial year of the Control Period shall
provide for recovery of Aggregate Revenue Requirement of the Distribution Licensee for each financial
year of the Control Period, as reduced by the amount of non-tariff income, income from wheeling in
respect of open access customers, income from Other Business and receipts on account of cross-
subsidy surcharge and additional surcharge for the relevant financial year, as approved by the
Commission, and subsidy from the State Government for the financial year, if any, and shall comprise
the following:
(a) Cost of power purchase;
(b) Transmission charges;
(c) System Operation Charges i.e. Fee and Charges paid to NLDC/RLDC/SLDC
(d) Interest and Finance charges on Loan Capital and on consumer security deposit;
(e) Depreciation, including and amortisation of intangible assets;
(f) Lease Charges
(g) Operation and Maintenance expenses;
(h) Interest on working capital; and
(i) Return on equity capital;
(j) Income-tax;
(k) Provision for Bad and doubtful debts
(3) Net Revenue Requirement from sale of electricity = Aggregate Revenue Requirement, as above,
minus:
(a) Non-Tariff Income;
(b) Income from wheeling charges recovered from open access customers;
(c) Income from Other Business, to the extent specified in these Regulations;
(d) Receipts from cross-subsidy surcharge from open access consumers; and
(e) Receipts from additional surcharge on charges of wheeling from open access consumers.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
130 Uttarakhand Electricity Regulatory Commission
(f) Any revenue subsidy or grant received from the State Government other than the subsidy
under Section 65 of Electricity Act, 2003.”
The Commission in this Order has determined the Net Revenue Requirement for FY 2017-18
as detailed in the subsequent Paras of this Chapter.
4.5 Power Purchase Cost
The power requirement of UPCL is met from various sources which includes the following
generating stations:
• State Generating Stations of UJVN Ltd.
• NTPC Ltd.
• NHPC Ltd.
• NPCIL
• SJVN Ltd.
• THDC Ltd.
• Independent Power Producers (IPPs)
• State Gas Generating Stations
• SHPs and Solar Power Generators
• Deficit in power purchases met through Banking arrangements, open market
purchases etc.
The Petitioner in its Petition submitted the source wise power purchase from various
sources along with the cost of power purchase. The Petitioner, however, revised its power purchase
quantum and cost through its revised Petition dated 19.01.2017. The Commission has considered
the revised submissions of the Petitioner for projection of power purchase quantum and cost.
For projecting the availability of power for FY 2017-18, the Petitioner has considered the
average of the actual monthly energy generation during the past 3 years. For the stations which
have not been operational for complete 3 years, the average of the actual monthly generation during
the years in which such stations have been fully operational has been considered. The energy
availability from various sources has been projected based on the following:
• UJVN Ltd. – For 10 LHPs and SHPs, the average of actual monthly energy generation
during the past 2 years, i.e. FY 2014-15 and FY 2015-16 has been considered. The
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 131
Petitioner has submitted that since these plants were not operational for most of the part
of FY 2013-14 due to floods, two year average has been considered.
• NTPC – For all the stations of NTPC except for Koldam, the average of actual monthly
energy generation during the past 3 years from FY 2013-14 to FY 2015-16 has been
considered. For Koldam HPS, the energy availability for April 2017 to September 2017
and October 2017 to March 2018 has been projected on the basis of actual monthly
generation from April 2016 to September 2016 and from October 2015 to March 2016
respectively as the plant came in full operation from August 2015.
Further, the share in monthly generation has been considered by considering the total
allocation from each station to Uttarakhand.
• NHPC – For Salal, Tanakpur, Chamera I, II & III, Dulhasti, Uri and Sewa-II, the average
of actual monthly energy generation during the past 3 years from FY 2013-14 to FY 2015-
16 has been considered. For Dhauliganga the average of actual monthly energy
generation for FY 2014-15 and FY 2015-16 has been considered because of non-
functioning of the plant during major part of FY 2013-14. For Uri II and Parbati III, the
monthly energy availability has been projected based on the actual generation for two
years, i.e. FY 2014-15 and FY 2015-16 as these stations achieved COD in the later half of
FY 2013-14.
Further, the share in monthly generation has been considered by considering the total
allocation from each station to Uttarakhand.
• NPCIL – For NAPP and RAPP, the average of actual monthly generation during the past
3 years from FY 2013-14 to FY 2015-16 has been considered.
• SJVNL – For Nathpa Jhakri, the average of actual monthly generation during the past 3
years from FY 2013-14 to FY 2015-16 has been considered. For Rampur HEP, the energy
availability has been projected based on the Design Energy of the station and the share
allocation to UPCL.
• THDC – For Tehri and Koteshwar, the average of actual monthly energy generation
during the past 3 years from FY 2013-14 to FY 2015-16 has been considered.
• Vishnu Prayag HEP and GVK Srinagar – For Vishnu Prayag HEP, the average of actual
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
132 Uttarakhand Electricity Regulatory Commission
monthly energy generation during FY 2014-15 and FY 2015-16 has been considered. As
the station was not operational for most of the part of FY 2013-14 only two year has been
considered for projection. The monthly availability from GVK Srinagar station has been
projected based on the monthly generation of FY 2015-16 as the plant came into
operation in FY 2015-16.
• UREDA stations and IPPs – The Petitioner has estimated the monthly availability from
UREDA and IPP stations (except for Sasan, Greenko Budhil, Sarju II and III, Gangani,
Badiyar, solar roof top, Madhav Infra, Small Solar IPP, Gama & Shravanti generators)
based on previous three years’ average of monthly generation depending upon
operations & information provided by the developers. The availability from Sasan
UMPP has been calculated considering 85% PLF for FY 2017-18 in line with the approach
adopted by the Commission in the Tariff Order of FY 2015-16. Monthly estimation from
Greenko Budhil Station has been considered by the Petitioner on the basis of Design
Energy, auxiliary consumption & Uttarakhand’s share in power generated. Monthly
estimation for Sarju II and Sarju III Station has been estimated by the Petitioner on the
basis of Design Energy, auxiliary consumption & Uttarakhand’s share in power
generated. For estimating the availability from IPP’s Gangani and Badiyar, the actual
energy received from the plant during FY 2015-16 has been considered as the project had
stable generation from FY 2015-16. The availability from solar rooftop generators,
Madhav Infra, Small Solar IPP has been estimated by the Petitioner on the basis of
capacity, normative PLF and normative auxiliary consumption of solar power stations.
• State Gas Station: The availability from Gama, Beta and Shravanti Gas Plant has been
calculated considering 85% PLF for FY 2017-18.
• Upcoming stations – The energy availability from hydro stations expected to be
commissioned during the year has been projected considering the likely COD of such
generating stations from various sources like CEA reports, PPA signed and as per the
information made available by the generators. Power availability has been computed
considering the normative performance parameters and share allocation to UPCL.
• Forward banking of power – The Petitioner has proposed a forward banking of 851.48
MU in FY 2017-18 from the month April 2017 to September 2017 which shall be received
under reverse banking during October 2017 to January 2018.
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 133
• Transmission Losses – The Petitioner has considered the POC losses of 4.55% and intra-
State transmission losses of 1.78%.
• Short term purchases – Based on the energy balance at UPCL periphery, after
considering the energy availability from firm sources, the Petitioner has projected a
shortfall of 173.33 MU in FY 2017-18.
• The Petitioner has proposed the total power purchase of 14203.28 MU in FY 2017-18.
The Commission has gone through the submissions of the Petitioner. The
Commission for projection purposes has considered the energy availability from various generating
stations on the basis of month-wise energy availability from all the generating stations. On the basis
of monthly energy availability and estimated energy requirement, the Commission has computed
the deficit/surplus quantum of power which the Petitioner would be required to purchase/bank
depending on its requirement. The Commission for projecting power purchase has considered both
existing generating stations and upcoming stations to be commissioned during FY 2017-18 in which
UPCL has firm allocation. The detailed approach for approving the power purchase quantum has
been discussed below.
For projecting the energy availability quantum from various sources, the Commission
sought the following information from the Petitioner:
• Likely COD of the upcoming generating stations along with the source on which the
Petitioner has relied upon.
• Station wise POC Losses for projecting energy availability.
• Basis for considering PLF of 70% for State gas generating stations instead of normative
PLF of 85%.
In reply, UPCL submitted the following:
• Copies of PPAs for the upcoming generating stations.
• Likely COD of the upcoming generating stations along with the source data.
• Revised energy availability from the State based gas generating stations.
• Revised projection on the basis of POC Losses.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
134 Uttarakhand Electricity Regulatory Commission
The Commission while projecting the quantum of energy available from various sources for
FY 2017-18 has made the assumptions as detailed below.
4.5.1 Power Purchase from UJVN Ltd.
The Commission has considered the availability from generating stations of UJVN Ltd. as
under:
Table 4.10: Power Purchase from UJVN Ltd. Stations of UJVN
Ltd. Basis Rationale
UJVN Ltd. (9 LHPs)
Average of actual month wise gross generation in FY 2012-13, FY 2015-16 & FY 2016-17 (actual for 10 months, projections for 2 months);
FY 2013-14 has not been considered as the hydro generation in the State was adversely affected due to natural calamity. Further, FY 2014-15 has not been considered as the generation in the year was below par. Maneri Bhali-II
Average of actual month wise gross generation in FY 2012-13, FY 2015-16 & FY 2016-17 (actual for 10 months, projections for 2 months);
SHPs, viz. Pathri, Mohammadpur & Galogi
For Pathri and Mohammadpur energy availability considered as per the project specific tariff order issued by the Commission. For Galogi, average of actual month wise gross generation in FY 2014-15 to FY 2016-17 (actual for 10 months, projections for 2 months)
In Pathri and Mohammadpur, RMU works have been completed and the Commission has determined the tariff considering the improved generation from the projects.
The Commission has estimated the energy availability from these generating stations to
UPCL at State Periphery after considering the normative auxiliary consumption and excluding the
share allocation to Himachal Pradesh. The summary of energy availability from UJVN Ltd. for FY
2017-18 as estimated by the Petitioner and the Commission is shown in the Table below:
Table 4.11: Summary of Energy Availability from UJVNL for FY 2017-18 (MU)
Mohammadpur 64.27 Galogi 6.02 Total 4044.63 4488.24
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 135
4.5.2 Power Purchase from NHPC Ltd.
The Commission has considered the availability from generating stations of NHPC Ltd. as
under:
Table 4.12: Power Purchase from NHPC Ltd. Stations of
NHPC Basis Rationale
Salal
Average of actual month wise gross generation in FY 2014-15, FY 2015-16 & FY
2016-17 (actual for 9 months, projections for 3 months)
Three Year’s Average as per the Commission’s earlier approach
Chamera I Chamera II Chamera III Uri Dulhasti Sewa II Uri II Prabati III Tanakpur Average of actual month wise gross
generation in FY 2012-13, FY 2015-16 & FY 2016-17 (actual for 9 months, projections for
3 months)
FY 2013-14 and FY 2014-15 not considered as the generation for those years were affected due to force majeure events. Dhauliganga
The Commission has estimated the energy availability from these generating stations to
UPCL at State Periphery after considering the normative auxiliary consumption, station wise POC
losses approved by CERC for the Quarter January 2017 to March 2017 and considering share
allocation to Uttarakhand. The summary of energy availability from NHPC Ltd. for FY 2017-18 as
estimated by the Petitioner and the Commission is shown in the Table below:
Table 4.13: Energy Availability from NHPC Ltd. for FY 2017-18 (MU) Station Estimated by UPCL Estimated by Commission
Salal 38.73 40.25 Tanakpur 10.21 16.40 Chamera I 80.89 82.56 Chamera II 19.19 19.99 Chamera III 48.99 51.00 Uri 96.48 98.77 Dhauliganga 39.14 52.81 Dulhasti 109.46 112.27 Sewa II 27.39 27.49 Uri II 55.43 58.64 Parbati III 30.81 32.90 Free Power-Tanakpur 38.39 51.88 Free Power-Dhauliganga 103.45 120.85 Total 698.56 765.80
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
136 Uttarakhand Electricity Regulatory Commission
4.5.3 Power Purchase from THDC India Ltd.
The Commission has considered the availability from generating stations of THDC Ltd. as
under:
Table 4.14: Power Purchase from THDC India Ltd. Stations of THDCIL Basis Rationale
Tehri HEP Average of actual month wise gross generation in FY 2014-15, FY 2015-16 & FY 2016-17 (actual for 9 months, projections for 3 months)
Three year average considered as per the standard approach followed by the Commission in past.
Koteshwar HEP
The Commission has estimated the energy availability from these generating stations to
UPCL at State Periphery after considering the normative auxiliary consumption, station wise POC
losses approved by CERC for the Quarter January 2017 to March 2017 and considering the share
allocation to Uttarakhand. The summary of energy availability from THDC Ltd. for FY 2017-18 at
State periphery as estimated by the Petitioner and the Commission is shown in the Table below:
Table 4.15: Energy Availability at State periphery from THDC Ltd. for FY 2017-18 (MU)
State Estimated by UPCL Estimated by Commission
Tehri HEP 109.68 102.04 Free Power-Tehri HEP 386.46 352.25 Koteshwar HEP 61.18 67.18 Free Power-Koteshwar HEP 150.53 138.29 Total 707.85 659.77
4.5.4 Power Purchase from NTPC Ltd.
The Commission has considered the availability from generating stations of NTPC Ltd. as
under:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 137
Table 4.16: Power Purchase from NTPC Ltd. Stations of
NTPC Basis Rationale
Singrauli STPS
Average of actual month wise gross generation in FY 2014-15, FY 2015-16 & FY 2016-17 (actual for 9 months,
projections for 3 months)
Actual monthly generation of past 3 years as per the
standard approach
followed by the Commission
Rihand STPS Rihand I Rihand II Rihand III Unchahar TPS Unchahar I Unchahar II Unchahar III Anta CCPP Auraiya CCPP Dadri CCPP Dadri (NCTPP) Jhajjar Kahalgaon TPS
Koldam Average of actual month wise gross generation in FY 2015-16 & FY 2016-17 (actual for 9 months, projections
for 3 months)
Station generation
started from April 2015.
The Commission has estimated the energy availability from these generating stations to
UPCL at State Periphery after considering the normative auxiliary consumption, station wise POC
losses approved by CERC for the Quarter January 2017 to March 2017 and considering the share
allocation to Uttarakhand. The summary of energy availability from NTPC Ltd. for FY 2017-18 at
State periphery as estimated by the Petitioner and the Commission is shown in the Table below:
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
138 Uttarakhand Electricity Regulatory Commission
Table 4.17: Energy Availability from NTPC Ltd. at State periphery for FY 2017-18 (MU)
Station Estimated by UPCL Estimated by Commission Singrauli STPS 757.83 702.51 Rihand STPS Rihand I 299.08 270.49 Rihand II 276.53 245.22 Rihand III 231.97 281.92 Unchahar TPS Unchahar I 258.70 218.23 Unchahar II 132.82 103.01 Unchahar III 98.92 83.65 Anta CCPP 79.93 53.22 Auraiya CCPP 79.27 57.28 Dadri CCPP 123.41 100.68 Dadri (NCTPP) 33.47 46.27 Jhajjar 18.04 33.00 Kahalgaon TPS 196.35 265.45 Koldam 200.59 197.78 Total 2786.91
2658.71
4.5.5 Power Purchase from SJVN Ltd.
The Commission has considered the availability from generating stations of SJVN Ltd. as
under:
Table 4.18: Power Purchase from SJVN Ltd. Stations of
SJVNL Basis Rationale
Nathpa Jhakri HEP
Average of actual month wise gross generation in FY 2014-15, FY 2015-16 & FY 2016-17 (actual for 9 months, projections for 3 months)
Actual monthly generation of past 3 years as per the standard approach followed by the Commission Rampur
HPS
The Commission has estimated the energy availability from these generating stations to
UPCL at State Periphery after considering the normative auxiliary consumption, station wise POC
losses approved by CERC for the Quarter January 2017 to March 2017 and considering the share
allocation to Uttarakhand. The summary of energy availability from SJVN Ltd. for FY 2017-18 as
estimated by the Commission is shown in the Table below:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 139
Table 4.19: Energy Availability from SJVN Ltd. at State periphery for FY 2017-18 (MU)
Station Estimated by UPCL
Estimated by Commission
Nathpa Jhakri HEP 51.29 52.24 Rampur HPS 184.19 186.05 Total 235.48 238.29
4.5.6 Power Purchase from NPCIL Stations
For estimating the energy availability from these stations the Commission has considered
the monthly average generation for the last three years, i.e. FY 2014-15 to FY 2016-17 (9 months
actual and 3 months projection). The Commission has estimated the energy availability from these
generating stations to UPCL at State Periphery after considering the normative auxiliary
consumption, station wise POC losses approved by CERC for the Quarter January 2017 to March
2017 and considering the share allocation to Uttarakhand. The summary of energy availability from
NPCIL for FY 2017-18 as estimated by the Commission is shown in the Table below:
Table 4.20: Energy Availability from NPCIL at State periphery for FY 2017-18 (MU)
Station Estimated by UPCL Estimated by Commission NAPP 123.66 133.12 RAPP 148.85 137.52 Total 272.51 270.64
4.5.7 Power Purchase from existing Renewable Energy Sources
The existing renewable energy sources include the hydro power stations of UREDA, IPPs,
co-generation plants, and existing as well as upcoming solar power plants within the State and solar
power to be received from outside the State. For SHPs of UREDA, the Commission has considered
the projected generation as received from UREDA. For other generating stations, the Commission
has considered the energy availability at State periphery as projected by UPCL.
The summary of energy availability from existing renewable energy sources for FY 2017-18
as estimated by the Petitioner and the Commission is shown in the Table below:
Table 4.21: Energy Availability from existing Renewable Energy Sources for FY 2017-18 (MU)
Station Estimated by UPCL Estimated by Commission Existing renewable energy sources 828.53 836.01
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
140 Uttarakhand Electricity Regulatory Commission
4.5.8 Free Power from Vishnu Prayag HEP and GVK Srinagar as State Royalty Power
For estimating the State Royalty power from Vishnu Prayag HEP, the Commission has
considered the average of actual monthly generation for the years FY 2012-13, FY 2015-16 and FY
2016-17 (actual for 9 months, projections for 3 months) as the generation from the station was
affected during FY 2013-14 and FY 2014-15 due to force majeure event. With regard to GVK
Srinagar, the Commission has considered the projections as submitted by the Petitioner. The
Commission has estimated the energy availability from these generating stations to UPCL at State
Periphery, after considering the normative auxiliary consumption, POC losses approved by CERC
for the Quarter January 2017 to March 2017 and considering the free power share of 12% to
Uttarakhand. The summary of energy availability from these stations as estimated by the Petitioner
and the Commission is shown in the Table below:
Table 4.22: Energy Availability from Vishnu Prayag HEP and GVK Srinagar at State Periphery (Free Power) for FY 2017-18 (MU)
UPCL in its Petition has submitted that based on the Ministry of Power, GoI Order dated
July 22, 2016, it was meeting the RPO obligations, for both Solar and Non-Solar category from the
existing procurement from the renewable sources and has, therefore, not projected any cost towards
meeting RPO. It is, however, observed that the Petitioner has erroneously computed the RPO target
in MU by excluding the consumption from hydro generating stations which is not as per the UERC
(Compliance of Renewable Purchase Obligation) Regulations, 2010 and subsequent amendment
thereafter.
The Commission had specified the RPO for FY 2017-18 as 2.50% for Solar & 8.00% for Non-
Solar. Based on the estimated power purchase from renewable energy sources, the status of
fulfillment of RPO and additional renewable purchase required is as shown in the Table below:
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
144 Uttarakhand Electricity Regulatory Commission
Table 4.28: Additional Purchase for fulfilling RPO Particulars Units FY 2017-18
Total Power Purchase at State Periphery MU 14166.67 RPO
Solar % 2.50% Non-Solar % 8.00%
RPO Solar MU 354.17 Non-Solar MU 1133.33 Total MU 1487.50
Purchase from Renewable Sources Solar MU 374.62 Non-Solar MU 685.72 Total MU 1060.34
Additional Energy to be purchased for fulfilment of RPO Solar MU 0.00 Non-Solar MU 447.61 Total MU 447.61
Hence, the additional energy to be purchased from Non-Solar renewable energy sources,
over and above the energy sources listed above, for fulfilling the RPO targets for FY 2017-18 is
447.61 MU for FY 2017-18.
4.5.15 Deficit/(Surplus) Energy
The Petitioner in its Petition has proposed forward banking, i.e. advance banking of 851.48
MU power in FY 2017-18 from the month of April 2017 to September 2017 and has proposed to
withdraw the power from the month of October 2017 to January 2018 through return banking. In
addition to the above, the Petitioner has estimated a deficit of 173.33 MU to be procured from short
term market.
However, as per the Commission’s projection as against the energy requirement of 14166.67
MU, the total estimated energy available from firm sources is 14385.45 MU leaving an overall
surplus of 218.78 MU. However, as per month wise requirement and energy availability the
monthly deficit works out to 899.35 MU during winter months and the total monthly surplus works
out to 1118.12 MU for summer months. The Commission directs the Petitioner to bank the surplus
energy during the month of April 2017 to September 2017 and withdraw the same in the month
of October 2017 to March 2017. The balance 218.78 MU of power can be banked for the next
financial year FY 2018-19.
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 145
The Petitioner should put in sincere efforts to suffice its requirement of power during
deficit period/lean hydro generation period from the surplus energy available during the high
hydro generation period through appropriate banking arrangements/agreements.
4.5.16 Cost of power purchase
The Petitioner submitted that the cost of power purchase has been projected based on the
following assumptions.
• UJVN Ltd. - For procurement of power from 10 LHPs and SHPs of UJVN Ltd., the
Petitioner has considered the Net AFC and Energy charges for UJVN Ltd.’s Large
stations and MB II. For small SHPs, the Petitioner has considered the cost as per
power purchase bills for FY 2016-17 with no escalation.
• NTPC: The annual fixed charges and variable charges have been derived (in
proportion to UPCL’s share) from the tariff order approved by the CERC for
Singrauli, Rihand I, and Anta Gas. The Fixed and Variable cost for the remaining
plants were not available, therefore, the Fixed cost and Variable cost of FY 2016-17
has been increased by 4%. For Koldam Station the AFC for FY 2016-17 as approved
by CERC and as per allocation to UPCL has been escalated by 4%.
• NHPC: Annual fixed charges (AFC) for Salal, Tanakpur, Chamera II, Uri,
Dhauliganga, Dulhasti and Uri II has been derived from the tariff order issued for FY
2014-19 by CERC in FY 2015-16. Annual fixed charges (AFC) for the remaining
stations were not available, and, therefore, the cost of power purchase for FY 2016-17
has been increased by 4%.
• SJVNL: For Naptha Jakhri HEP station, since CERC (Terms and Conditions of Tariff)
Regulations, 2014 was applicable from FY 2014-19 and fixed cost for FY 2017-19 was
not available, therefore, the AFC of FY 2013-14 has been escalated by 5% to arrive at
the AFC for FY 2014-15 which has again been escalated by 5% to arrive at the AFC
for FY 2015-16 which has been escalated by 4% to arrive at the fixed cost for FY 2016-
17 which was again escalated by 4% to arrive at the AFC for FY 2017-18.
For Rampur HEP, since the Annual fixed charges (AFC) for the station was not
available, therefore, the cost of power purchase for FY 2015-16 has been escalated by
5% twice to determine the fixed cost for FY 2017-18.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
146 Uttarakhand Electricity Regulatory Commission
• THDC: Since CERC (Terms and Conditions of Tariff) Regulations, 2014 is applicable
from FY 2014-19, and the fixed cost for FY 2017-19 was not available, therefore, UPCL
has escalated the AFC of FY 2013-14 by 5% to arrive at the AFC for FY 2014-15 which
has again been escalated by 5% to arrive at the AFC for FY 2015-16 which has been
escalated by 4% to arrive at the fixed cost for FY 2016-17 which was again escalated
by 4% to arrive at the AFC for FY 2017-18.
• NPCIL: For NPCIL plants, power purchase bills for FY 2016-17 has been increased by
4% to arrive at the cost for FY 2017-18.
• IPPs and Private Projects: The cost of power available from IPPs and other private
stations are as per the tariff determined by UERC and for Sasan as per the tariff bid
by the developer for each year. The tariff for the small solar power plants has been
considered as per the tariff bid by the developer.
• Cost of Power from new stations: For projects, which are under development by the
private developers, the rate has been projected based on the PPA/relevant
regulations and as per tariff determined by UERC.
• Cost of Free Power: The cost of free power has been calculated for FY 2017-18 based
on the approach adopted by the Commission in its earlier Tariff orders. The rate of
state royalty/free power has been considered equal to the average rate of power
procured by the Petitioner from large hydel stations.
• Short Term Purchase for deficit power: The Petitioner has proposed to procure the
net deficit of 173.33 MU through short term purchase at the rate of Rs. 3.64 per unit
as approved by the Commission in the MYT Order dated April 05, 2016 for the
second Control Period and Rs. 0.99/kWh has been considered under open access
charges.
• Cost of Injection and Withdrawal Charges of Banking: The Petitioner has
submitted that it has considered Rs. 0.99/kWh towards such charges.
The Petitioner has projected the average power purchase cost of Rs. 3.10/kWh for FY 2017-
18.
The Commission has estimated the cost of power purchase from various sources as detailed
below:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 147
Table 4.29: Approach of the Commission in estimating the Cost of Power Purchase Source Approach of the Commission in estimating the cost of power purchase
UJVN Ltd.
The Commission has considered the approved Tariff of UJVN Ltd. (10 LHPs) for FY 2017-18. As per the GoU Notification No. 1632/I(2)/2009-04(3)/22/2008 dated October 26, 2009 read with Notification No. 2837/I-2004-05-13/2003 dated June 20, 2005 and Notification No. (6604/03)/567/IX-3-Urja/Power Fund/03, the Cess for the purpose of PDF is leviable if the tariff is less than Rs. 0.80/kWh for more than 10 years old stations at the time of notification. The Commission has not considered the cess imposed by GoU for the purpose of Power Development Fund as the approved tariff is more than Rs. 0.80/kWh for all the 10 LHPs. Further, as the approved tariff for all the stations is more than Rs. 0.80/kWh, the Commission has also not considered the royalty of 10 paise/kWh towards royalty to the State Govt. based on notification no. 1993/I/2005-01(3)/1/03 dated 25.4.2005. For SHPs, the Commission has considered the applicable Tariff for those generating stations as specified in the Renewable Energy Regulations.
NHPC Ltd., THDC Ltd., SJVN Ltd.
For the generating stations for which the Tariff Order for FY 2017-18 has been issued by the Central Electricity Regulatory Commission, the approved Tariff for FY 2017-18 has been considered. For other stations, the latest approved Tariff has been considered with annual escalation of 3%.
NTPC Ltd.
For the generating stations for which the Tariff Order for FY 2017-18 has been issued by the Central Electricity Regulatory Commission, the approved AFC for FY 2017-18 has been considered. For other stations, the latest approved AFC in the CERC Tariff Orders has been considered with annual escalation of 3%. For estimating the Energy Charges for FY 2017-18, the weighted average rate of actual Energy Charges for the months of September 2016 to November 2016 has been considered with an escalation of 4%.
NPCIL The tariff for NPCIL stations has been considered based on the actual billing during FY 2016-17 which have been escalated by 3% to determine the costs for FY 2017-18.
Renewable energy sources
The applicable tariffs for the respective generating stations within the State have been considered as per the Tariff Orders issued by the Commission in accordance with the Renewable Energy Regulations and the Tariff specified in the Renewable Energy Regulations.
Sasan UMPP
The applicable tariff for FY 2017-18 as per the PPA has been considered.
State Gas Stations
The tariff has been considered as Rs. 4.70/kWh as provisionally approved by the Commission.
Greenko Budhil Hydro
The approved tariff of Rs. 3.80/kWh has been considered.
Additional purchase for fulfilling RPO
The Tariff for the additional purchase for fulfilling the Non-Solar RPO has been considered as Rs. 4.75/kWh in line with the Commission’s approach in the previous Tariff Orders
Upcoming Stations
For upcoming renewable generating stations within the State, the applicable Tariff as per the Renewable Energy Regulations has been considered. For the solar generating capacity
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
148 Uttarakhand Electricity Regulatory Commission
Table 4.29: Approach of the Commission in estimating the Cost of Power Purchase Source Approach of the Commission in estimating the cost of power purchase
commissioned by April 2017, the tariff of Rs. 5.77/kWh has been considered and for NTPC solar generating capacity the tariff of Rs. 3.50/kWh has been considered. For Kishanganga and Unchahar IV, a tariff of Rs. 4/kWh has been considered.
Cost of free power
The cost of free power has been computed in line with the methodology adopted by the Commission in its previous Tariff Orders as shown below:
Particulars Quantum Total Cost Average Cost MU Rs. Crore Rs./kWh
The Commission, further, directs the Petitioner to seek prior approval of the Commission,
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
150 Uttarakhand Electricity Regulatory Commission
in case the variation in power purchase quantum or total power purchase cost in any quarter
exceeds by more than 5% of the approved power purchase quantum and cost for the respective
quarter worked out on pro-rata basis from the total approved quantum and cost for FY 2017-18 as
indicated in the Table below, failing which, the Commission may disallow power purchases so
made while Truing up the ARR for FY 2017-18.
Table 4.31: Quarterly Power Purchase approved by the Commission for FY 2017-18 Quarter Power Purchase Quantum
(MU) Power Purchase Cost
(Rs. Crore) April – June 3726.23 1133.53 July – September 4433.18 1348.59 October – December 3110.92 946.35 January – March 3115.11 947.63 Total 14385.45 4376.09
The base Energy Charges of thermal stations (base fuel cost) for the purpose of computation
of FCA is given in the Table below:
Table 4.32: Energy Charges of thermal generating stations for FY 2017-18 Generating Station Energy Charges
(Rs./kWh) Singrauli STPS 1.566 Rihand STPS Rihand I 1.770 Rihand II 1.775 Rihand III 1.755 Unchahar TPS Unchahar I 2.909 Unchahar II 2.894 Unchahar III 2.897 Anta CCPP 2.537 Auraiya CCPP 3.303 Dadri CCPP 2.752 Dadri (NCTPP) 3.162 Jhajjar 3.879 Kahalgaon TPS 2.475 Gama Infraprop 3.20 Shravanthi Energy 3.20 Beta Power 3.20
4.5.17 Cost of Meeting RPO Target
As discussed earlier, the Petitioner, in order to meet its RPO Targets has to additionally
procure 447.61 MU of power from non-Solar generating stations. The Commisison has factored in
the cost towards meeting the RPO targets at the rate of Rs. 4.75/kWh at the State Periphery, i.e.
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 151
inclusive of PoC charges & losses, as approved by the Commission in its MYT Order dated
05.04.2016. The cost, thus, works out to Rs. 212.61 Crore. The Commission has not factored the same
in power purchase requirement as additional non-solar renewable power has not been available to
UPCL in the past. However, if the same is available it will not only be available to meet the RPO
requirement of the Petitioner but also can be utilized by the Petitioner for banking of power to be
utilized to meet the deficit in its requirement during winter months.
4.6 Transmission Charges
4.6.1 Inter-State Transmission Charges payable to PGCIL
The Petitioner submitted that during the first six months of FY 2016-17, it has received bills
of Rs. 350.28 Crore towards Inter-State Transmission Charges. The per kWh PGCIL charge for FY
2016-17 has been calculated using the amount paid and energy coming from outside the State
during the same period. The per kWh rate calculated has been escalated by 2% per annum and then
multiplied by the projected power purchase quantum for FY 2017-18. The Petitioner has proposed
the Inter-State Transmission Charges of Rs. 741.90 Crore for FY 2017-18. The Commisison has
considered the energy received from outside the State during April 2016 to January 2017 of FY 2016-
17 and the amount billed by PGCIL after excluding the arrear amount billed by PGCIL for
computing per kWh rate. The Commisison has then considerd 5% escalation on the rate derived for
FY 2016-17 for FY 2017-18. Accordingly, the Inter-State Transmission charges approved for FY 2017-
18 is Rs. 506.40 Crore.
4.6.2 Intra-State Transmission Charges payable to PTCUL
The Petitioner submitted that the Intra-State Transmission Charges for FY 2017-18 have been
projected by considering the ARR approved by the Commission vide its MYT Order dated
05.04.2016 for PTCUL.
The Commission has approved the Annual Transmission Charges for PTCUL of Rs. 237.63
Crore for FY 2017-18. Hence, the Commission has considered the same in the approval of ARR for
FY 2017-18 for the Petitioner.
4.6.3 Transmission Charges
The Transmission Charges claimed by the Petitioner and approved by the Commission for
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
152 Uttarakhand Electricity Regulatory Commission
FY 2017-18 is as shown in the Table given below:
Table 4.33: Transmission Charges for FY 2017-18 (Rs. Crore) Particulars Claimed by UPCL Approved
The Petitioner has claimed SLDC charges of Rs. 13.72 Crore for FY 2017-18 as approved by
the Commission in its Order dated April 05, 2016 for the Control Period from FY 2016-17 to FY 2017-
18.
The Commission has considered the SLDC Charges of Rs. 15.15 Crore as approved by it for
FY 2017-18.
4.8 Water Tax
The Petitioner requested the Commission to consider the impact of Water Tax in
determination of ARR for the Petitioner.
Section 17 of the Uttarakhand Water Tax on Electricity Generation Act, 2012 specifies as
follows:
“17. (1) The user shall be liable to pay the Water Tax under the Act at such rates as the Government
may by notification fix in this behalf.
(2) The State Government may review, increase, decrease or vary the rates of the Water Tax fixed
under this section from time to time in the manner it deems fit.”
The State Government vide the notification dated November 7, 2015 notified the applicable
rates of Water Tax.
The Petitioner in its Petition has submitted that the impact of water tax is Rs. 153.82 Crore.
The Commission in its MYT Order dated 05.04.2016 had computed the likely impact of Water Tax
for the Petitioner for FY 2016-17 as Rs. 153.82 Crore. The Commission has considered the same in
the approval of ARR for FY 2017-18 for the Petitioner. The same shall be trued up based on the
actual amount paid by the Petitioner for FY 2017-18 without considering the variation of the same
as efficiency gain or loss. The Commission directs the Petitioner to submit all the relevant
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 153
information along with the supporting documents for substantiating the actual expenses
incurred on account of Water Tax, for FY 2016-17 and FY 2017-18 along with its proposals for True
up for FY 2017-18.
4.9 GFA and Additional Capitalisation
4.9.1 GFA base for FY 2016-17 and FY 2017-18
The Commission vide its Order dated April 05, 2016 on approval of ARR for the second
Control Period had approved the capitalisation of Rs. 523.44 Crore for FY 2016-17 and Rs. 546.02
Crore for FY 2017-18. As against the same, the Petitioner, in its Petition has proposed the
capitalisation of Rs. 594.62 Crore and Rs. 958.41 Crore for FY 2016-17 and FY 2017-18 respectively.
The Petitioner in its Petition has submitted that in order to achieve the anticipated load
growth and target loss reduction, it has carried out detailed analysis of capital investment required
for FY 2016-17 and FY 2017-18. The Petitioner further submitted that the investment plan has been
projected based on various technical and physical requirements carried out at senior management
level. The Petitioner with regard to cost submitted that the same has been projected based on the
historical trends of UPCL for FY 2016-17 with suitable escalations for the Control Period. The
Petitioner projected capital expenditure for the 2 years as Rs. 2462.92 Crore. Out of this, Rs. 1222.62
Crore are proposed for Central schemes like R-APDRP, DDUGJY and IPDS while the remaining Rs.
1240.29 Crore are proposed for the internal schemes proposed by UPCL. The Petitioner further
submitted that the capital investment is proposed under the following benefit centres:
a) Growth development plan to meet the load growth b) Loss reduction c) System reliability and safety improvement d) Creation of Infrastructure Facilities & other misc. works
The Petitioner has further submitted various schemes to achieve the above targets as shown
below:
a) Growth Development Plan to meet the load growth:
i. Construction of 33/11 kV Substation & associated 33 kV and 11 kV Lines for strengthening of Distribution System
ii. Increasing Capacity of 33/11 kV substations iii. Release of New PTW Connections
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
154 Uttarakhand Electricity Regulatory Commission
iv. Installation of meters for giving new connections v. Deen Dayal Upadhyay Grameen Vidyut Yojana
b) Loss reduction
i. Installation of Capacitor Bank at 33/11 kV substations ii. Implementation of R-APDRP Part A scheme
iii. Implementation of R-APDRP Part B scheme iv. Installation of Double metering in selected 11 kV & 33 kV consumers v. Implementation of AMR
vi. Integrated Power Development Scheme vii. Replacement of Mechanical Meters with Electronic Meters and Installation of
Electronic meters in un-metered connections viii. 11 kV covered cable for forest
ix. 11kV ABC cable x. Laying of LT ABC
xi. Replacement of defective meters xii. Smart Metering
xiii. Laying of 33 kV underground cables
c) System reliability & safety improvement:
i. Additional Transformers installation with associated 11 kV ii. Installation of LT protection system on the transformers, fencing of
transformers, installation of poles and guard wires, reconductoring of lines, etc.
iii. Safety Measures iv. Installation of 11 kV underground cables v. Smart Grid projects for industrial areas
vi. Laying of LT ABC
d) Creation of infrastructure facilities & other misc. works:
i. Video conferencing services and integrating it with all the divisions/ sub-divisions
ii. Procurement of Sub-station and consumer meter testing equipment iii. Consumer care centres, E-payment of bills and Cash collection centres iv. New and emerging technologies and miscellaneous works like, new vehicles,
office infrastructure, IT infrastructure, etc.
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 155
The Petitioner in its Petition estimated that the expenditure incurred towards central
schemes would be capitalized into 35%, 35% and 30% over three years based on the historical trend
from the year in which the expenditure has been incurred, while the balance capital expenditure
shall be capitalised as 25%, 25% and 50% over three years starting from FY 2016-17 based on the
historical trend.
The Petitioner in its revised Petition revised the capitalisation rate and submitted that it has
estimated that the expenditure incurred towards Central Government schemes will be capitalized
within two years (50% each year) and the balance capital expenditure (other than central schemes)
will be capitalised into 25%, 25% and 50% over three years. The Petitioner has, accordingly, revised
the additional capitalisation to Rs. 795.04 Crore and Rs. 1236.27 Crore for FY 2016-17 and FY 2017-18
respectively. The capital expenditure and additional capitalisation as proposed in the Petition and
revised Petition is as shown in the Table below:
Table 4.34: Proposed Capital Expenditure and Capitalisation for FY 2016-17 and FY 2017-18 (Rs. Crore)
In comparison to the capitalisation achieved during the last four years, the capitalisation
proposed for FY 2016-17 and FY 2017-18 is considerably higher. The Commission asked UPCL to
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
156 Uttarakhand Electricity Regulatory Commission
submit the status of capital works (both physical and financial) which has been proposed in FY
2016-17 and FY 2017-18. In response UPCL again submitted the details of capital expenditure
proposed by it without giving the status of the proposed work.
The Commission in its MYT Order had already taken a view on the capital expenditure after
detailed analysis and, therefore, the Commission finds no reason to revise the same considering the
historical performance/achievement with regard to the capitalisation of the Petitioner.
The Commission has, therefore, considered the capitalisation for FY 2016-17 and FY 2017-18
as approved in MYT Order dated 05.04.2016. However, during the Annual Performance
Review/Truing-up exercise, the Commission shall consider the Capitalisation on actual basis
subject to capitalisation of only those Schemes which fulfill the conditions as stipulated by the
Commission in its respective Investment Approval Orders. The Commission has, accordingly,
approved the following capitalization and GFA for FY 2017-18.
Table 4.36: GFA base approved by the Commission (Rs. Crore)
Particulars FY 2016-17 FY 2017-18 Claimed by UPCL Approved Claimed by UPCL Approved
Opening GFA 3980.57 3980.56 4775.61 4504.00 GFA addition during the year 795.04 523.44 1236.27 546.02 Closing GFA 4775.61 4504.00 6011.88 5050.02
4.10 Means of Finance
The Commission has approved the funding of the approved capitalisation for FY 2016-17
and FY 2017-18 by considering the average of the actual funding pattern of the Petitioner’s
capitalisation during FY 2012-13 to FY 2014-15. The Commission, as discussed above, has
considered the capitalisation as approved in the MYT Order for the second Control Period and,
therefore, the financing of the approved capitalisation has also been considered as same as
considered in the MYT Order dated 05.04.2016 which is as shown in the Table below:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 157
Table 4.37: Means of Finance approved by the Commission (Rs. Crore) Particulars FY 2016-17 FY 2017-18
Capitalisation 523.44 546.02 Financing Debt 296.32 309.11 Equity-State Government 39.27 40.96 Grant-Central Government 187.85 195.95 Total 523.44 546.02
4.11 Interest and Finance Charges
The Petitioner submitted that the interest expenses have been computed based on the
existing loans and new loans proposed for funding the capital expenditure. For existing loans,
interest has been separately calculated for each loan based on the terms and conditions of such
loans. For new loans, the sources have been considered as PFC and REC. For schemes covered
under RAPDRP, Part-A and B the funding would be from PFC and for all other schemes, loans from
REC has been considered. The new loans have been considered with 3 years’ moratorium, 10 years’
repayment period and 11.86% rate of interest. The same is in line with existing arrangement of
loans with REC and PFC. The Petitioner submitted that the interest on GPF loan shall be claimed
based on the actual interest during the truing up for the respective year.
Accordingly, the Petitioner has proposed the interest of Rs. 158.40 Crore for FY 2017-18. The
Petitioner has claimed the interest on consumer security deposit of Rs. 46.11 Crore for FY 2017-18.
The Petitioner has claimed the guarantee fee of Rs. 13.62 Crore for FY 2017-18 equivalent to the
actual fees paid by the Petitioner to the State Government in FY 2015-16.
Regulation 27 of the UERC Tariff Regulations, 2015 specifies as follows:
“27. Interest and finance charges on loan capital and on Security Deposit
(1) The loans arrived at in the manner indicated in Regulation 24 shall be considered as gross
normative loan for calculation of interest on loan.
(2) The normative loan outstanding as on 1.4.2016 shall be worked out by deducting the
cumulative repayment as admitted by the Commission up to 31.3.2016 from the gross normative
loan.
(3) The repayment for each year of the Control Period shall be deemed to be equal to the
depreciation allowed for that year…
…
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
158 Uttarakhand Electricity Regulatory Commission
(5) The rate of interest shall be the weighted average rate of interest calculated on the basis of the
actual loan portfolio at the beginning of each year applicable to the project:
…
(6) The interest on loan shall be calculated on the normative average loan of the year by applying
the weighted average rate of interest.
…”
The Commission has considered the closing loan balance for FY 2015-16 as opening loan
balance for FY 2016-17. Thereafter, the Commission has considered the loan addition during FY
2016-17 as per the approved means of finance for FY 2016-17. The Commission has considered the
depreciation for FY 2016-17 as the normative repayment for the year. The Commission has
considered the closing loan balance for FY 2016-17 as the opening loan balance for FY 2017-18. The
Commission has considered the loan addition during FY 2017-18 as per the means of finance
approved above. The Commission has considered the normative repayment equivalent to the
approved depreciation for the year. The Commission has considered the interest rate of 11.86%
which is the actual weighted average rate of interest for FY 2015-16. The Commission has
determined the interest on loan by applying the interest rate of 11.86% on the amount of average of
the opening loan & closing loan excluding the loan additions corresponding to the assets capitalised
during the year. The Commission has not allowed interest on additions during year as the
Petitioner capitalises the assets at the end of the financial year and during the year, whatever
interest accrues on the loan portion corresponding to the capital expenditure, the same is Interest
during construction and is capitalised as CWIP. The interest on loan approved by the Commission
for FY 2017-18 is as shown in the Table given below:
Table 4.38: Interest on Loan approved by the Commission for FY 2017-18 (Rs. Crore) Particulars Claimed Allowable
Opening Loan balance 1109.83 904.63 Drawal during the year 605.10 309.11 Repayment during the year 153.58 136.36 Closing Loan balance 1561.35 1077.38 Interest Rate 11.86% 11.86% Interest on Loan 158.40 99.20 Interest on Consumer Security Deposit (CSD) 46.11 46.11 Total Interest 204.51 145.31
In addition to the above, the Commission has considered interest on account of REC Old
Loan of Rs. 17.28 Crore. With regard to guarantee fee, the Commission has considered the same
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 159
amount as approved for FY 2015-16, i.e. Rs. 3.42 Crore. The guarantee fee considered by the
Petitioner for FY 2017-18 of Rs. 13.62 Crore is equivalent to the guarantee fee for FY 2015-16.
However, it also includes the provisions for penalty to be paid to the State Government on account
of non-payment of Guarantee Fee which cannot be allowed for the reasons already dealt in the
previous section.
The financing charges of Rs. 1.06 Crore as considered for FY 2015-16 has also been
considered for FY 2017-18. Thus, the total interest expenses approved for FY 2017-18 works out to
be Rs. 167.07 Crore as against the claim of Rs. 218.31 Crore.
4.11.1 Depreciation
The Petitioner submitted that the asset class wise depreciation has been computed
considering the projected capitalisation for each year and as per the rates of depreciation specified
in the UERC Tariff Regulations, 2015. Accordingly, the Petitioner has proposed the depreciation of
Rs. 153.58 Crore for FY 2017-18.
Regulation 28 of the UERC Tariff Regulations, 2015 specifies as follows:
“28. Depreciation
(1) The value base for the purpose of depreciation shall be the capital cost of the asset admitted by
the Commission.
Provided that depreciation shall not be allowed on assets funded through Consumer Contribution
and Capital Subsidies/Grants.
(2) The salvage value of the asset shall be considered as 10% and depreciation shall be allowed up
to maximum of 90% of the capital cost of the asset.
...
(4) Depreciation shall be calculated annually based on Straight Line Method and at rates specified
in Appendix - II to these Regulations.
…”
The Petitioner has claimed depreciation on the average of opening and closing balances of
the depreciable GFA for the year. However, as observed from the audited accounts till FY 2015-16 of
the Petitioner, the Petitioner follows the practice of capitalising the assets on the last day of the
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
160 Uttarakhand Electricity Regulatory Commission
Financial Year. Nothing has been brought on record by the Petitioner to show that the asset is
capitalised when it is put to use. Infact the Petitioner in its accounts also calculates depreciation on
the straight line method on opening GFA. Hence, the Commission has adopted the similar approach
as adopted by it in the previous Tariff Orders for allowing the depreciation on the opening GFA.
The Petitioner in the current proceedings has submitted that Fixed Assets Registers of UPCL
were prepared by M/S L. B. Jha & Co, Chartered Accountants for the FY 2001-02 to 2012-13 which
were also submitted to the Commission. Thereafter, M/s RSA & Co. Chartered Accountants was
entrusted with the task of preparation of Fixed Assets Register of Urban Distribution Division
(South) Dehradun for FY 2013-14 & 2014-15 on a pilot/sample basis. Now RFP has been finalized
for floating of open tender for updating and preparation of Fixed Assets Registers of UPCL for the
FY 2013-14 to 2015-16. The Petitioner further submitted that due to imposition of Model Code of
Conduct in State of Uttarakhand, new tenders cannot be invited during this period. The Petitioner
further submitted that the agreement with the consultant firms shall be executed in between March-
April 2017. The consultant firm shall be required to prepare unit-wise registers of all the three FY
2013-14, 2014-15 and 2015-16, duly matching the same with Annual Financial Statement of UPCL.
This work is expected to be completed by October, 2017.
In the absence of complete Fixed Asset Register, the Commission at this stage has considered
the weighted average rate of 5.21% computed for FY 2015-16 and has applied the same on the
opening depreciable GFA for FY 2017-18.
The depreciation approved by the Commission for FY 2017-18 is as shown in the Table given
The Petitioner has submitted that the interest on working capital for FY 2017-18 has been
proposed in accordance with UERC Tariff Regulations, 2015. Accordingly, the Petitioner has
proposed the IWC of Rs. 19.50 Crore for FY 2017-18.
Regulation 33(2) of the UERC Tariff Regulations, 2015 specifies as follows:
“(2) Distribution
a) The Distribution Licensee shall be allowed interest on the estimated level of working capital
for the financial year, computed as follows:
(i) Operation and maintenance expenses for one month;
(ii) Maintenance spares @ 15% of operation and maintenance expenses; plus
(iii) Two months equivalent of the expected revenue from sale of electricity at
prevailing tariffs;
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
168 Uttarakhand Electricity Regulatory Commission
(iv) Capital required to finance such shortfall in collection of current dues as may be
allowed by the Commission; minus
(v) Amount held as security deposits under clause (a) and clause (b) of sub-section
(1) of Section 47 of the Act from consumers and Distribution System Users; minus
(vi) One month equivalent of cost of power purchased, based on the annual power
procurement plan.”
The Commission has determined the interest on working capital for FY 2017-18 in
accordance with the UERC Tariff Regulations, 2015.
4.11.7.1 One Month O&M Expenses
The annual O&M expenses approved by the Commission are Rs. 507.67 Crore for FY 2017-
18. Based on the approved O&M expenses, one month’s O&M expenses work out to Rs. 42.31 Crore
for FY 2017-18.
4.11.7.2 Maintenance Spares
The Commission has considered the maintenance spares as 15% of annual O&M expenses in
accordance with UERC Tariff Regulations, 2015, which works out to Rs. 76.15 Crore for FY 2017-18.
4.11.7.3 Receivables
The Commission has approved the receivables for two months equivalent to the expected
revenue from the sale of electricity at the net revenue requirement of Rs. 5840.98 Crore for FY 2017-
18, which works out to Rs. 973.50 Crore for FY 2017-18.
4.11.7.4 Capital required to finance shortfall in collection of current dues
The Petitioner has claimed Rs. 79.28 Crore towards the capital required to finance the
shortfall in collection of current dues.
The Commission has approved the collection efficiency of 98.75% for FY 2017-18 while
approving the Business Plan of UPCL for the second Control Period of FY 2016-17 to FY 2018-19. In
accordance with the provisions of the UERC Tariff Regulations, 2015 the Commission has approved
the capital required to finance shortfall in collection of current dues as shown in the Table given
below:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 169
Table 4.44: Capital required to finance the shortfall in collection of current dues approved by the Commission
Particulars Legend FY 2017-18 Net Revenue Requirement (Rs. Crore) A 5840.98 Collection efficiency approved B 98.75% Difference C=100%-B 1.25% Short fall in current dues (Rs. Crore) CxA 73.01
4.11.7.5 Adjustment for security deposits and credit by power suppliers
The Petitioner has proposed the amount held as security deposit as Rs. 683.12 Crore and one
month of power purchase cost as Rs. 467.92 Crore totalling to Rs. 1151.04 Crore for FY 2017-18.
The Commission has allowed fortnightly billing to the gas generators in the State as they
have to make the payment to GAIL on fortnightly basis. Hence, the Commission has relaxed the
requirement of adjustment of power purchase cost of one month to 15 days in case of the three gas
generators in the State to facilitate UPCL in meeting the power purchase payments to them. For
other generators the adjustment of one month would continue. The Commission has also
considered the same amount of security deposit as proposed by the Petitioner and, accordingly, the
Commission has approved the total amount of Rs. 1077.32 Crore for FY 2017-18 as the amount held
as security deposits and credit by power suppliers.
Based on the above, the total working capital requirement of the Petitioner for FY 2017-18,
works out to Rs. 87.64 Crore. The Commission has considered the rate of interest on working capital
as 14.05% equal to State Bank Advance Rate (SBAR) of State Bank of India as on the date of filing of
the MYT Petition and, accordingly, the interest on working capital works out to Rs. 12.31 Crore for
FY 2017-18. The interest on working capital for FY 2017-18 approved by the Commission is as
shown in the Table below:
Table 4.45: Interest on working capital approved by the Commission for FY 2017-18 (Rs. Crore)
Particulars Claimed by UPCL Approved O&M expenses for 1 month 46.04 42.31 Maintenance Spares 82.87 76.15 2 months of expected revenue at prevailing tariffs 1081.57 973.50 Capital required to finance shortfall in collection of current dues 78.82 73.01 Minus: Amount held as security deposits and credit by power suppliers 1150.50 1077.32
Net Working Capital 138.80 87.64 Rate of Interest on Working Capital 14.05% 14.05% Interest on Working Capital 19.50 12.31
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
170 Uttarakhand Electricity Regulatory Commission
4.11.8 Return on Equity
The Petitioner has considered the opening Equity for FY 2017-18 as Rs. 745.63 Crore. The
Petitioner has considered the equity addition during the year as per the proposed financing plan for
the year. The Petitioner has proposed the Return on Equity at the rate of 16.50% on the average
equity for the year. Accordingly, the Petitioner has proposed the Return on Equity of Rs. 123.03
Crore for FY 2017-18.
Regarding the Return on Equity, Regulation 26 of the UERC Tariff Regulations, 2015
specifies as follows:
“26. Return on Equity
(1) Return on equity shall be computed on the equity base determined in accordance with Regulation
24.
Provided that, Return on Equity shall be allowed on account of allowed equity capital for the assets
put to use at the commencement of each financial year.
(2) Return on equity shall be computed on at the base rate of 15.50% for thermal generating stations,
transmission licensee, SLDC and run of river hydro generating station and at the base rate of 16.50%
for the storage type hydro generating stations and run of river generating station with pondage and
distribution licensee on a post-tax basis.”
In accordance with the UERC Tariff Regulations, 2015, Return on Equity is allowable on the
opening equity for the year. Hence, the Commission has determined the Return on Equity for FY
2017-18 considering the eligible opening equity for return purposes.
The Commission has considered the closing eligible equity for return purposes approved for
FY 2015-16 as the opening balance for FY 2016-17. Thereafter, the Commission has considered the
equity addition during FY 2016-17 as per the approved means of finance for FY 2016-17. The
Commission has considered the closing balance for FY 2016-17 as the opening balance for FY 2017-
18.
The Commission with regard to the mismatch of equity considered by the Petitioner for
return puposes has already discussed the issue in Chapter 3 of this Order. The Petitioner must
adhere to the directions given therein. The Return on Equity approved by the Commission for FY
2017-18 is as shown in the Table below:
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 171
Table 4.46: Return on Equity approved by the Commission for FY 2017-18 (Rs. Crore)
Particulars Claimed by UPCL Approved Opening Equity 745.63 306.32 Addition during the year 259.33 40.96 Closing Equity 1004.96 347.29 Rate of Return 16.50% 16.50% Return on Equity 123.03 50.54
4.11.9 Income Tax
The Petitioner has not claimed any Income Tax in its ARR proposals for FY 2017-18.
Regulation 34 of the UERC Tariff Regulations, 2015 specifies as follows:
“34. Tax on Income
Income Tax, if any, on the income stream of the regulated business of Generating Companies,
Transmission Licensees, Distribution Licensees and SLDC shall be reimbursed to the Generating
Companies, Transmission Licensees, Distribution Licensees and SLDC shall be reimbursed to the
Generating Companies, Transmission Licensees, Distribution Licensees and SLDC as per actual
income tax paid, based on the documentary evidence submitted at the time of truing up of each year of
the Control Period, subject to prudence check.”
As stated above, Income Tax is admissible at the time of Truing up and hence, the
Commission has not considered any Income Tax in the approval of ARR for FY 2017-18.
4.11.10 Provision for Bad and doubtful debts
The Petitioner has proposed collection efficiency as approved by the Commission in its MYT
Order dated 05.04.2016. The Petitioner submitted that the provision for bad debts has been
considered as per the UERC Tariff Regulations, 2015. The Petitioner further requested the
Commission to consider bad debts at the rate of ‘100% minus collection efficiency’ of the estimated
revenue. Accordingly, the Petitioner has proposed the provision for bad debts as Rs. 57.42 Crore for
FY 2017-18. The Petitioner has, however, not considered the same as the part of ARR.
Regulation 31 of the UERC Tariff Regulations, 2015 specifies as follows:
“31. Bad and doubtful debts
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
172 Uttarakhand Electricity Regulatory Commission
(1) The Commission may allow a provision for bad and doubtful debts upto one percent (1%) of
the estimated annual revenue of the distribution licensee, subject to actual writing off bad debts
by it in the previous years.
Provided further that where the total amount of such provisioning allowed in previous years for
bad and doubtful debts exceeds five (5) per cent of the receivables at the beginning of the year, no
such appropriation shall be allowed which would have the effect of increasing the provisioning
beyond the said maximum.”
As discussed in Chapter 3 of the Order, the Petitioner has chosen to ignore the provisions of
Rs. 230 Crore inherited by it from UPPCL against the opening debtors of Rs. 619 Crore. The Transfer
Scheme agreed by the two Corporation dates back to the year 2001. It cannot be ruled out that out of
Rs. 619 Crore inherited by UPCL, some amount may be bad and doubtful by now which has to be
written off the Petitioner by the total amount of provisions available with it.
The Commission in the previous Tariff Order had directed the Petitioner to carry out an
audit of receivables and also identify and classify the same and come up with a bad debt write off
policy however, till date the Petitioner has not complied with the directions of the Commission.
Hence, the Commission has not considered the provision for bad and doubtful debts in the
approval of ARR for FY 2017-18 in accordance with the UERC Tariff Regulations, 2015.
4. Petitioner’s Submissions, Commission’s Analysis, Scrutiny and Conclusion on Annual Revenue Requirement for FY 2017-18
Uttarakhand Electricity Regulatory Commission 173
4.11.11Non-Tariff Income
The Petitioner has proposed non-tariff income of Rs. 185.70 Crore for FY 2017-18. In absence
of any yardstick for estimating the non-tariff income of the Petitioner, the Commission
provisionally accepts the same for the FY 2017-18. The same shall, however, be Trued up based on
the actual audited accounts for the year.
4.11.12 Treatment of past year adjustments
The Commisison in its MYT Order dated 05.04.2016 had approved the recovery of past year
provisioned amount on account of material cost variance and write off of liabilities towards cost of
power purchase. The Commission had determined the past year adjustments of Rs. 522.91 Crore
with carrying cost to be returned by the Petitioner. The Commission further adjusted the true up of
capital related rexpenses of the past years leaving behing Rs. 366.04 Crore to be refunded in three
equal installements out of which an amount of Rs. 122.01 Crore was adjusted in the MYT Order in
FY 2016-17 and balance Rs. 244.02 Crore have to be passed on in the next two years. The amount to
be adjusted on account of the same is as shown in the table below.
Table 4.47: Past Year Adjustment approved for FY 2017-18 (Rs. Crore)
Past Year Adjustments Revised Estimate FY 2016-17 FY 2017-18
Opening 366.04 278.32 Addition (Adjustment) -122.01 -139.16 Closing 244.03 139.16 Average 305.03 Interest rate (as approved for WC borrowings) 14.05% 14.05% Carrying Cost 34.29 19.55 Adjusted during the year -122.01 -139.16 Final Closing Gap 278.32 158.71
4.11.13Revenue Requirement for FY 2017-18
Based on the above, the Revenue Requirement approved by the Commission for FY 2017-18
is as shown in the Table below:
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
174 Uttarakhand Electricity Regulatory Commission
Table 4.48: Revenue Requirement approved by the Commission for FY 2017-18 (Rs. Crore)
6.1.3 Revenue Pattern during FY 2014-15 & FY 2015-16
With regard to the revenue from sale of energy during FY 2014-15, the contribution of
Industrial consumers was 62.05% [HT Industrial consumers was 58.59%, LT industrial consumers
was 3.46%] whereas Domestic consumers were contributing around 16.32%. The following Chart
shows the Revenue Pattern of various consumer categories in the State.
CHART 5: Revenue Mix in FY 2014-15
With regard to the revenue from sale of energy during FY 2015-16, the contribution of
Industrial consumers was 60.67% [HT Industrial consumers was 57.62%, LT industrial consumers
was 3.05%] whereas Domestic consumers were contributing around 16.42%. The following Chart
shows the Revenue Pattern of various consumer categories in the State.
CHART 6: Revenue Mix in FY 2015-16
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
220 Uttarakhand Electricity Regulatory Commission
On comparing the revenue pattern of FY 2014-15 and FY 2015-16, it is noticed that the %age
revenue share of Industrial Consumers & non-domestic consumers with respect to the total revenue
had decreased by 1.39% & 0.57% respectively and for domestic consumers, it had increased by
0.10%. The decrease in revenue share of the industrial consumers is mainly due to them opting for
power through open access.
6.2 Commission’s Analysis and Directions on Commercial Performance
The Commission has been monitoring & reviewing the performance of the Petitioner based
on the information/reports submitted by it. Infact, higher distribution losses in distribution system
are detrimental to financial and commercial viability of the Petitioner. Therefore, analysis of
Petitioner’s performance especially in respect of metering, billing and revenue collection is vital
with the focus on reducing the Aggregate Technical and Commercial (AT&C) losses of the
Petitioner. The Commission from its very first Tariff Order has been issuing various
directions/Orders in this regard from time to time. However, the Petitioner has always been non-
compliant. The Commission had, therefore, decided to monitor the commercial performance of the
Petitioner in a more structured manner on a monthly basis and, accordingly, various formats were
issued to the Petitioner vide Commission’s letter UERC/7/CL/152/2008-09/284 dated 17.05.2012
with the direction to submit the above information in these Formats regularly for each month by
15th day of the next month.
Despite, the specific directions issued by the Commission in its previous Tariff Orders, the
Petitioner had neither been submitting the periodical reports timely nor in accordance with the
prescribed formats.
Considering the fact that the Petitioner encompasses 35 number of Distribution Divisions in
the State, the Commission felt the need to monitor UPCL on Distribution Divisional basis. In order
to quantify the improvement on month on month basis on any of the performance indicators, it is
necessary that Division-wise targets on each parameter be provided by the licensee which would
make the whole monitoring process more meaningful. Hence, the Commission vide its letter no.
UERC/5/Tech/112/2014-15/1622 dated 27.11.2014 issued following revised Commercial
Performance Monitoring formats directing UPCL to submit information on these formats in hard as
well as in soft copy (MS-excel file in CD) on regular basis latest by 25th day of the next month from
January, 2015 onwards.
6. Review of Commercial Performance of UPCL
Uttarakhand Electricity Regulatory Commission 221
Table 6.4: Revised Formats prescribed by the Commission vide letter dated 27.11.2014
S. No. Description Format 1. No. of Consumers 1 2. Quarterly Targets of NA/NR/IDF/ADF/RDF 2 3. Status of Not Accessible (NA) Consumers (in Percentage) 2(A) 4. Status of Not Read (NR) Consumers (in Percentage) 2(B) 5. Status of Identified Defective Meters (IDF) (in Percentage) 2(C) 6. Status of Appeared Defective Meters (ADF) (in Percentage) 2(D) 7. Status of Reading Defective Meters (RDF) (in Percentage) 2(E)
8. Quarterly Targets of IDF Meters/Mechanical Meters/Un-metered Consumers/Ghost Consumers 3
9. Status of Identified Defective Meters (IDF) 3(A) 10. Status of Un-metered Consumers 3(B) 11. Status of Mechanical Meters 3(C) 12. Status of Ghost Consumers 3(D) 13. Status of Not Billed (NB)/Stop Billed (SB) Cases 4 14. Status of Outstanding Arrears 5 15. MRI Status of KCC Consumers 6 16. Status of Revenue realisation per unit of Energy Sold 7 17. Status of AT&C Losses of UPCL 8
However, the Commission has observed that the Distribution Licensee has been inconsistent
in furnishing the Commercial Performance Monitoring reports on the aforesaid formats in hard as
well as in soft copy (MS-excel file in CD) on regular basis in accordance with the directions, i.e.
latest by 25th day of the next month.
The Commission has observed that the Petitioner has not only been inconsistent in
furnishing the Commercial Performance Monitoring reports within the stipulated time frame but
also has failed to submit Format - 2 & Format- 3 alongwith the report of the first month of the
Financial Year, i.e. alongwith the report of April 2016. The Commission has observed that despite
categorically mentioning in the guidelines of the prescribed Formats regarding submission of
Quarterly Targets in the first month of the Financial Year i.e. April 2016, the Petitioner submitted
the Quarterly Targets in Format-2 & Format-3 to the Commission as late as November 2016.
The Commission is of the view that the basic purpose of advance target setting for each
quarter is to enable analysis of actual performance vis-a-vis target performance of the licensee. In
the absence of advance target setting, comparative analysis is rendered impossible which clearly
shows a lackadaisical approach of the Petitioner towards compliance of the provisions of the
Act/Regulations and directions of the Commission.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
222 Uttarakhand Electricity Regulatory Commission
Therefore, the Commission directs Petitioner to submit monthly Commercial
Performance Monitoring reports strictly in the prescribed formats on regular basis, so as to reach
the Commission latest by 25th day of the following month and without fail furnish the Quarterly
Targets as per prescribed Format - 2 & 3 alongwith the Commercial Performance Monitoring
report for the month of April, 2017.
The Commission’s analysis on the information submitted by the Petitioner for the period
April 2016 to December 2016 through its various submissions is being discussed in the following
paragraphs:
6.2.1 Metering
The Commission in its earlier Tariff Orders had been repeatedly giving directions to the
Petitioner to energise new connections (including metering of unmetered connections) with the
static/electronic meters and to replace all old mechanical meters with new electronic/static meters
in accordance with CEA Regulations.
However, the Commission has observed that the Petitioner has a lackadaisical approach in
furnishing correct report in this regard to the Commission in the prescribed formats. The reports
pertaining to various performance parameters on metering and other issues have been analysed and
findings thereof are being discussed below:
6.2.1.1 Status of NA/NR, IDF/ADF/RDF
The Commission vide its Tariff Order dated 05.04.2016, had issued directions to the
Petitioner to reduce the percentage NA/NR cases to below 2% in both Hill & Plain area of the State
latest by 31.12.2016.
The Petitioner vide its letter No. 2481/UPCL/RM/C-12 dated 13.07.2016 submitted that an
efficiency plan has been prepared and circulated to the field officers in which NA/NR cases have
been targeted below 2% in both Hill & Plain areas by 31.12.2016.
On examination of the Quarterly Targets submitted by UPCL in Format-2, it is observed that
the targeted NA/NR cases at the end of 3rd quarter of FY 2016-17 in 23 divisions out of total 35
divisions were exceeding 2% which shows that the Petitioner is bound to fail in achieving its own
targets set besides failing to comply with the directions of the Commission issued in the Tariff
6. Review of Commercial Performance of UPCL
Uttarakhand Electricity Regulatory Commission 223
Order dated 05.04.2016. Taking a strong exception, the Commission is of the view that the Petitioner
indeed requires improvement at division level in order to reduce provisional billing cases and
achieve overall target set for NA/NR cases in the State. Hence, UPCL is required to diligently
monitor & pursue each Distribution Division rigorously so as to align its actual percentage of
NA/NR billing with the targets in accordance with the Commission’s directions.
The Commission has observed that the percentage of provisional billing cases namely
NA/NR, RDF/ADF/IDF, furnished in prescribed formats 2(A), 2(B), 2(C), 2(D) & 2(E) for FY 2016-
17 are still at alarmingly high levels vis-a-vis total number of consumers as shown in the Table
given below:
Table 6.5: Status of Provisional Billing viz. NA/NR/IDF/ADF/RDF
The Commission has taken note of the compliance made by the Petitioner. The Commission
hereby directs the Petitioner to regularly incorporate monthly target level alongside actual level
of Distribution losses as directed by the Commission vide its Order dated March 4, 2013 in the
Petitioner’s future submissions.
7. Commission’s Directives
Uttarakhand Electricity Regulatory Commission 259
7.1.5 Power Purchase Quantum and Cost
The Commission directed the Petitioner to restrict the net drawal from the grid within its
drawal schedules in order to ensure grid discipline.
The Commission directed the Petitioner to seek prior approval of the Commission, in case
the variation in power purchase quantum or power purchase cost in any quarter exceeded by more
than 5% of the approved power purchase quantum and cost for the respective quarter worked out
on pro-rata basis from the total approved quantity and cost for FY 2016-17 as indicated in the Table
5.6 of the Order, failing which, the Commission may disallow such additional power purchase cost
while truing up the ARR for FY 2016-17.
The Commission directed the Petitioner to prepare its power purchase plan for the next
three years and initiate the bidding process to meet the deficit, if any. The Petitioner was directed to
submit an action plan in this regard within 15 days of the date of the Order. The Petitioner was also
directed to ensure compliance of the Regulations issued by the Commission from time to time,
failing which any consequent liability would be to the account of the Petitioner.
Petitioner’s Submissions
The Petitioner submitted that it is restricting its net drawal from the grid within the net
drawal schedules. However, in case of excess demand over availability, overdrawal is made within
permissible limit to comply with the directions of the Commission and in the interest of grid
discipline.
The Petitioner submitted that the details of power purchases for the quarter ending June,
2016 has been submitted to the Commission vide UPCL’s letter no. 2416/ UPCL/ UERC, dated
August 12, 2016. These details are as follows:
Table 7.2: Power Purchase for 1st Quarter of FY 2016-17 as submitted by the Petitioner
S. No. Particulars MU Rs. Crore
1. Power Purchase approved in the Tariff Order 3224.26 818.35
2. Power Purchase allowed up to 105% of ‘1’ 3385.47 859.27 3. Actual power purchase 3344.80 1044.94
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
260 Uttarakhand Electricity Regulatory Commission
As per the above details, the quantum of power purchase in the first quarter of FY 2016-17 is
3344.80 MU which is within the limit of the quantum approved by the Commission. The cost of
power purchase is Rs. 1044.94 Crore which is more than approved cost for the quarter. Following
were the main reasons of the increase in cost of power purchase in first quarter of FY 2016-17:
a) Payment of water tax to M/s UJVN Ltd. amounting to Rs. 85.36 Crore
b) Payment of arrear of tariff revision of various generating stations amounting to Rs. 71.03
Crore
c) Increase in cost due to difference between the approved average power purchase rate
and actual average power purchase rate of Rs. 26.90 Crore
d) The remaining difference was due to change in mix quantum as approved by the
Hon’ble Commission.
The Petitioner also submitted that the desired revised power purchase plan has been
submitted to the Commission vide UPCL’s letter no. 3012/UPCL/Com, dated September 1, 2016.
The Commission has taken note of the compliance. However, it is observed that the
Petitioner has not filed a separate Petition for prior approval of power purchase costs towards
more than 5% variation in power purchase costs for the first quarter of 2016-17. The Commission
has taken serious note of the same.
The Commission, further, directs the Petitioner to seek prior approval of the Commission,
in case the variation in power purchase quantum or total power purchase cost in any quarter
exceeds by more than 5% of the approved power purchase quantum and cost for the respective
quarter worked out on pro-rata basis from the total approved quantum and cost for FY 2017-18 as
indicated in the Table below, failing which, the Commission may disallow power purchases so
made while Truing up the ARR for FY 2017-18. (Refer Para 4.5)
7.1.6 Fixed Assets Register
The Commission once again directed the Petitioner to expedite the process and submit the
Fixed Assets Register updated upto 31.3.2015 within 3 months of the date of the Order and Fixed
Assets Register updated upto 31.3.2016 within 6 months of the date of the Order.
7. Commission’s Directives
Uttarakhand Electricity Regulatory Commission 261
Petitioner’s Submissions
The Petitioner submitted that Fixed Assets Registers of UPCL were got prepared from M/s
L.B. Jha & Co., Chartered Accountants, Kolkata for FY 2001-02 to FY 2012-13 and were submitted to
the Commission.
Fixed Assets Register for FY 2013-14 & FY 2014-15 of UDD (South), Dehradun have been got
prepared from M/s RSA & Co., Chartered Accountants, Kolkata on a pilot project basis. On the
same lines, UPCL is in the process to award task for remaining units for FY 2013-14 & FY 2014-15,
which is expected to be completed by the end of March, 2017.
Fixed Assets Register for FY 2015-16 shall be prepared immediately after the finalisation of
Fixed Assets Registers for FY 2013-14 & 2014-15.
The Commission has taken note of the compliance on Fixed Asset Register. The
Commission, hereby, once again directs the Petitioner to expedite the process and submit the
Fixed Assets Register updated upto 31.3.2014 within 3 months of the date of the Order and the
Fixed Assets Register updated upto 31.3.2015 within 6 months of the date of this Order.
7.1.7 Depreciation
The Commission directed the Petitioner to maintain proper Fixed Asset Register showing
amongst others the date of capitalisation of each asset, their location, alongwith the accumulated
depreciation on the same and submit the same along with the next Tariff filings and also claim
depreciation based on the rates as specified in the Regulations for each class of asset.
Petitioner’s Submissions
Fixed Assets Registers of UPCL were got prepared from FY 2001-02 to FY 2012-13 by M/s
L.B. Jha & Co., Chartered Accountants, Kolkata in which the details as required by the Commission
were not available.
The Petitioner also submitted that the instructions have been issued to field units to
maintain records of Fixed Assets in the manner prescribed by the Commission, so that the desired
details can be incorporated in the Fixed Assets Registers.
The Commission has taken note of the efforts made by the Petitioner. The Commission once
again directs the Petitioner to maintain proper Fixed Asset Register showing amongst others the
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
262 Uttarakhand Electricity Regulatory Commission
date of capitalisation of each asset, their location, along with the accumulated depreciation on
the same and submit the same along with the next Tariff filings.
The Commission also directs the Petitioner to claim depreciation in line with its practice
followed in the accounts. (Refer Para 3.2.3)
7.1.8 Return on Equity
The Commission once again directed the Petitioner to look into the issue of creating long
term assets from current liability and take appropriate remedial action for correcting this practice.
Further, the Petitioner was directed to expedite the matter and submit the details of assets created
by mode other than loan/grants/subsidies/deposit works/consumer contributions from FY 2001-
02 onwards and submit the source of such finances duly validating the same from their cash flow
and fund flow statements from FY 2001-02 within 3 months of issue of the Order.
Petitioner’s Submissions
The Petitioner submitted that Fixed Assets are created out of various sources like loans from
various Financial Institutions, Grants, Deposits and Internal Resources (including Equity). The fund
received towards Security Deposit from Consumers as well as Retention money from
Suppliers/Contractors are also utilised for creation of Fixed Assets, which are clubbed under the
heading of “Other Current Liabilities”. Therefore, a portion of Fixed Assets are also created through
Current Liabilities, which is shown under “Internal Resources”.
The means of financing of Plant and Machinery and Line and Cable networks for FY 2007-08
to FY 2013-14 have been submitted to the Commission vide letter nos. 390 dated 04.02.15 & 769
dated 13.02.15. The means of financing of Plant and Machinery and Line and Cable networks for FY
2001-02 to FY 2006-07 have been submitted to the Commission vide UPCL’s letter no.
2481/UPCL/RM/C-12, dated 13-07-2016.
The Commission has taken note of the Compliance as regards RoE. The Petitioner is
directed to take note of the findings of the Commission in this Order and claim RoE strictly in
accordance with the same and not cling to its own set of figures without assigning any reasons
for the difference in the two set of figures submitted before the Commission. (Refer Para 3.2.6)
7. Commission’s Directives
Uttarakhand Electricity Regulatory Commission 263
7.1.9 Employee Expenses
The Commission directed the Petitioner to expedite the recruitment process and also submit
a quarterly status report to the Commission detailing the steps taken by it in this regard and also the
status of the recruitments planned.
Petitioner’s Submissions
The Petitioner submitted the status of direct recruitment as shown in the Table given below:
Table 7.3: Recruitment Status as submitted by the Petitioner Group Post No. of
Vacancies Current Status Remark
B Accounts Officer 11 Written Exam for these posts held on 24.4.2016.
Result & other action withheld vide Govt Letter No. 574/I (2)/2016-06(2)-14/2016 dated 26-04-2016
B Law Officer 2 B Assistant Engineer (E&M) 47 B Assistant Engineer (Civil) 7
C Junior Engineer (E&M) 13 Appointment letters issued to 11 no. selected candidates.
09 no. selected candidates have joined UPCL. Remaining posts have been included in the fresh recruitment plan.
C Junior Engineer (Civil) 20 Appointment letters issued to 16 no. selected candidates.
15 no. selected candidates have joined UPCL. Remaining posts have been included in the fresh recruitment plan.
C Office Assistant-III 77 Written exam held on 20/09/2015 by Uttarakhand Pravidhik Shiksha Parishad.
● List of eligible candidates for appointment / selection, has been provided to UPCL by Uttarakhand Pravidhik Shiksha Parishad. ● As per direction of Hon'ble High Court, Nainital dated 17-11-2015 in SPA No. 524 of 2015," …the corporation will not fill up the posts, through this selection process, which are occupied by the persons who have been appointed on contract basis through UPNL.......". ● Matter pending before Hon'ble High Court, Nainital.
C Technician Grade-2 496
Advertisement has been released on 8.12.2013 by Uttarakhand Pravidhik Shiksha Parishad. Rectt. process withheld as per directions of GoU till further orders.
●The recruitment for the post of TG-2 has been stopped by Govt. vide letter No. 31/2014 dated 26-08-2014. ● Matter pending before Hon'ble High Court, Nainital.
C Assistant Accountant 57
Appointment letters issued to 45 no. candidates selected by Uttarakhand Pravidhik Shiksha Parishad candidates.
39 no. selected candidates have joined UPCL. Remaining posts have been included in the fresh recruitment plan.
C Assistant Store Keeper 20
17 no. candidates were selected by Uttarakhand Pravidhik Shiksha Parishad after written & typing test.
● Matter has been put up in 75th Board Meeting ● According to minutes of 75th meeting, Board of Directors have discussed and deferred the proposal. Letter written to Government for providing necessary directions.
Total 750
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
264 Uttarakhand Electricity Regulatory Commission
The Petitioner also submitted that Adhiyachan for the following posts has been sent/under
process to Uttarakhand AdhinasthaSewaChayanAyog:-
Table 7.4: Posts Under-Process as submitted by the Petitioner
Group Post No. of Vacancies Remark
C Junior Engineer (E&M) 160 According to additional staff structure vide G.O. No.
801/I (2)/2016-06(2)-08/2002 dated 23-06-2016 Revised Adhiyachan for 160 posts of JE-E&M and 06 post of JE-Civil has been sent to Adhinastha Sewa Chayan Ayog. Advertisement released on 21-09-2016. Online applications invited. Further recruitment process is in progress.
C Junior Engineer (Civil) 6
C Assistant Accountant 40
According to additional staff structure vide G.O. No.801/I (2)/2016-06(2)-08/2002 dated 23-06-2016 Adhiyachan for 40 posts of Assistant Accountant has been sent to AdhinasthaSewaChayanAyog. Advertisement released on 21-09-2016. Online applications invited. Further recruitment process is in progress.
C Draughtsman 19
Adhiyachan for 19 posts of draftsman has been sent to Adhinastha Sewa Chayan Ayog. Advertisement released on 21-09-2016. Online applications invited. Further recruitment process is in progress.
225 *Vacancies are provisional and can increase/decrease.
The Commission has taken note of the Compliance on Employee Expenses. The Petitioner is
directed to submit a plan of action regarding the recruitment process within one month of the
issue of Tariff Order. (Refer Para 2.26.10.2)
7.1.10 Bad &Doubtful Debts
The Petitioner was directed to finalize the Policy within three month of the date of Order
and submit the same for approval of the Commission.
UPCL was directed to submit the basis of arriving at the ageing of debtors within one month
of the date of Order.
Petitioner’s Submissions
The Petitioner submitted that the policy has been prepared and was put up to the Audit
Committee in the meeting held on June 24, 2016. Audit Committee directed to get the same
examined and verified through a firm of Professional Chartered Accountants. The process of
examination and verification of the policy is in progress.
7. Commission’s Directives
Uttarakhand Electricity Regulatory Commission 265
The information relating to ageing of Arrears has been submitted to the Commission vide
UPCL’s letter no. 1542/UPCL/RM/N-20 dated May 16, 2016.
The Commission has taken note of the Petitioner submission. The Petitioner is directed to
submit the bad debt policy within three months from the date of this Order. (Refer Para 3.2.4)
7.1.11 Reliability Indices
The Commission directed the Petitioner to submit monthly report on Reliability Indices in
the format prescribed by the Commission vide letter no. 1200/UERC/Tech/9/2010 dated
September 28, 2010. These reports should also be submitted in MS-Excel soft form.
Petitioner’s Submissions
The Petitioner submitted that the monthly report of reliability indices for the month of April,
2016 has been submitted to the Commission vide UPCL’s letter no. 1830/ UPCL/ RM/ SM, dated 4-
06-2016.
The Commission has noted the Petitioner’s reply on Reliability Indices. However, the
Petitioner is not submitting the monthly report on Reliability Indices in the prescribed format on
regular basis. The Commission once again directs the Petitioner to submit the monthly report on
Reliability Indices on regular basis.
7.1.12 Voltage wise Cost of Supply
The Commission directed the Petitioner to submit the action plan along with the timelines
by which the Petitioner will be completing the work as per the action plan, within one month of
issue of the Order.
Petitioner’s Submissions
The Petitioner submitted that it has identified all the points where metering is required at 33
kV voltage level and a detailed plan was submitted to the Commission vide UPCL’s letter no.
2941/D(O)/UPCL/C-4, dated November 1, 2015. As per this plan, the work of 33 kV Metering was
targeted to be completed by August 31, 2016.
The status of metering was reported to the Commission vide UPCL’s letter no.
3293/D(O)/UPCL/C-4, dated November 2, 2016 with the request to grant time upto December 31,
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
266 Uttarakhand Electricity Regulatory Commission
2016 for completion of the work. The Petitioner also submitted that Meters on DT’s under 31 Towns
of R-APDRP project area have already been installed. 952 nos of meters are proposed to be installed
at DT’s under IPDS scheme in Towns other than R-APDRP Towns.
The Commission has taken note of the submissions of the Petitioner on Voltage wise cost of
supply. The Commission once again directs the Petitions to expedite the activities in this regard
and submit quarterly report on the status of metering alongwith an Action Plan to conduct
Energy Audit & also related costs to determine the Voltage-wise Cost of Supply.
7.1.13 Demand Side Management Measures
The Commission directed the Petitioner to submit the report on various Demand Side
Management measures at regular quarterly intervals to the Commission.
Petitioner’s Submissions
The Petitioner submitted that GoU on October 30, 2015 approved a scheme for distribution
of LED Bulbs in Uttarakhand. Under the scheme all domestic consumers and Non-domestic
consumers (up to 10 kW) would be provided three LED Bulbs at a price of Rs. 105 per bulb (now Rs.
95 per bulb). There was a target of 55.65 lacs LED distribution under the scheme. 33.77 lacs LED
bulbs have been distributed so far. 75% cost of the LED bulbs in respect of BPL Consumers & 25%
cost in respect of Domestic Consumers having monthly consumption of 100 units is being borne by
GoU.
The Commission has taken note of the submissions of the Petitioner. The Commission
directs the Petitioner to submit the report on various Demand Side Management measures at
regular quarterly intervals to the Commission.
7.1.14 Issues raised by the Petitioner again despite Commission’s ruling in previous Tariff
Orders
The Commission directed the Petitioner to not raise such issues again in the subsequent
ARR and Tariff Petitions on which the Commission have already taken the decision and given its
ruling in the previous Tariff Orders, failing which, the Commission may reject the Petition upfront.
7. Commission’s Directives
Uttarakhand Electricity Regulatory Commission 267
Petitioner’s Submissions
The Petitioner submitted that this ARR and Tariff filing is being done keeping in view the
direction issued by the Commission and provisions of Law in the matter.
The Commission has noted the Petitioner’s reply in this regard. The Commission would
like to clarify that the directives issued by the Commission are also in accordance with the
provisions of law. The Commission directs the Petitioner to not raise such issues again in the
subsequent ARR and Tariff Petitions on which the Commission have already taken the decision
and given its ruling in the previous Tariff Orders, failing which, the Commission may reject the
Petition upfront.
7.1.15 Metering of unmetered connections
The Commission directed the Petitioner to submit the actual status within one month of date
of the Order.
Petitioner’s Submissions
The Petitioner submitted that as per information received from the field offices, there were
45 unmetered connections at the end of March, 2016 and 9 unmetered connections at the end of
August, 2016. Metering of all unmetered connections under Pithoragarh Circle has been completed.
This area was earlier maintained and operated by UREDA/UJVNL.
Further, the Petitioner in its subsequent monthly progress reports has submitted the number
of unmetered consumers as nil.
The Commission has taken note of the Petitioner’s submission. The Commission directs
that from December 2016 onwards any un-metered consumer, if found, in any of the Petitioner’s
record or billing ledger shall be treated as mis-declaration/wrong reporting by the Petitioner in
its monthly Commercial Performance Monitoring reports and appropriate action under
Act/Regulations may be initiated against the concerned officers of the Petitioner including
Executive Engineer (Distribution) of the concerned Division. (Refer Para 6.2.1.3)
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
268 Uttarakhand Electricity Regulatory Commission
7.1.16 Interest on GPF Trust
The Commission directed the Petitioner to expedite the Audit of Accounts of the trust to
ensure that audit is completed by June 30, 2016 and to submit the audit report to the Commission by
July 31, 2016.
Petitioner’s Submissions
The Petitioner submitted that UPCL vide its letter no. 1854/UPCL/RM/C-11, dated May 1,
2015 submitted the copies of Audited Accounts of UPCL Employees GPF Trust for the period from
FY 2002-03 to FY 2009-10.
The work of preparation of Accounts and Audit of the same for the remaining period is
under progress and shall be provided to the Commission by December 31, 2016.
The Commission has taken note of the compliance made by the Petitioner. The Commission
directs the Petitioner to submit the audit report to the Commission within one month from the
date of issue of the Order.
7.1.17 Treatment of Assets sent for repairs
The Commission directed the Petitioner to submit the information sought within 3 months
from the date of issue of the Order.
The Commission also directed the Petitioner to analyse the capitalisation amount from FY
2001-02 onwards and segregate the same under the following heads:
1. Asset class wise actual capitalisation incurred on creation of new assets;
2. Asset class wise capitalisation on account of receipt of repaired assets,
3. Asset class wise actual asset deletion/written off;
4. Asset class wise asset deletion on account of an asset being sent for repairs.
Further, the Commission also asked the Petitioner to segregate the associated financing with
regard to S. No. 1 to 4, i.e. financing of the asset capitalised and financing of the asset written off.
Further, the Petitioner was required to submit the above information within six months from the
date of issue of the Order and quarterly status report in this regard.
7. Commission’s Directives
Uttarakhand Electricity Regulatory Commission 269
Petitioner’s Submissions
The Petitioner submitted that the assets like transformers, electric equipment, etc. which are
sent for repairs are shown as deductions from Fixed Assets. The said assets are replaced by
working/new transformers or equipment, available in the stock. As and when these items are
required at site or as per demand of distribution units, the same are issued at stock issue rates as
applicable as on the date of issue.
The Petitioner also submitted that the policy for showing the asset as deductions from Gross
Fixed Assets when it is sent for repairs and, thereafter, adding the same once it is received back
and/or replaced is being followed since inception by UPCL.
Therefore, in the case of transformers, the additions comprise of new additions (i.e. creation
of new assets) as well as replacement by working/repaired transformers. Similarly, the deductions
comprise of actual deletion as well as deletion on account of damaged transformers being sent for
repairs.
The deductions in the case of Fixed Assets also comprises of Assets, which are included in
additions as well as deletions. The net additions in Plant & Machinery and Line & Cable Network
including their financing for the Financial Years 2001-02 to 2006-07 has been submitted to the
Commission vide UPCL’s letter no. 2481/UPCL/RM/C-12, dated July 13, 2016.
The Commission has taken note of the compliance made by the Petitioner.
7.1.18 Power Purchase Expenses (Including Transmission Charges)
The Petitioner was directed to separately claim the cost of the energy returned under
banking during truing up exercise of FY 2015-16 and not show the same as adjustment from the
provisions.
The Commission directed the Petitioner to put in place a mechanism for recording the
arrears paid in a year for submission along with its claim of truing up for the respective year in the
absence of which the Commission shall take an appropriate view regarding the allowable power
purchase cost while carrying out the truing up exercise.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
270 Uttarakhand Electricity Regulatory Commission
Petitioner’s Submissions
The Petitioner submitted that as directed by the Commission, the cost of inward banking
energy in FY 2014-15 shall be claimed in FY 2015-16 (during truing-up exercise), i.e. the year in
which the energy has been returned.
The Commission has taken note of the Petitioner’s submission on Power Purchase Expenses.
The Commission directs the Petitioner to include the provisioning amount of Rs. 50.88 Crore
towards banked power in the Petition for truing up of FY 2016-17. (Ref Para 3.1.3)
7.1.19 Deficit/Surplus Power
The Commission directed the Petitioner to put its sincere efforts to procure the deficit energy
through a mix of long term arrangements, medium term arrangements and short term purchases
optimizing the cost of power purchase and reliable power. Further, the procurement should be
through transparent process of bidding and not on mutual agreements as has been the practice of
UPCL. UPCL was directed to submit a comprehensive plan as to how it intends to meet the deficit
within one month of the date of Order.
Petitioner’s Submissions
The Petitioner submitted that the desired revised plan has been submitted to the
Commission vide UPCL’s letter no. 3012/UPCL/Com, dated September 1, 2016.
The Commission has taken note of the Petitioner’s submission. The Commission directs the
Petitioner to bank the surplus energy during the month of April 2017 to September 2017 and
withdraw the same in the month of October 2017 to March 2017. (Refer Para 4.5.15)
The Petitioner should put in sincere efforts to suffice its requirement of power during
deficit period/lean hydro generation period from the surplus energy available during the high
hydro generation period through appropriate banking arrangements/agreements.
7.1.20 RTS-4 (Private Tubewells)
The Commission directed the Petitioner to conduct a study to identify and assess the load
and consumption of thrasher, cane crusher and rice huller consumers and submit its report to the
Commission within 6 months from the date of the Order.
7. Commission’s Directives
Uttarakhand Electricity Regulatory Commission 271
Petitioner’s Submissions
The Petitioner submitted that the study to identify and assess the load and consumption of
thrasher, cane crusher and rice huller consumers has been got done in EDD (U), Roorkee and it was
found that out of total 2429 PTW connections, cane crashers are being operated on 23 connections.
The results of this study has been submitted to the Commission vide UPCL’s letter dated October
22, 2016, as follows:
Table 7.5: PTW Assessment as submitted by the Petitioner
Particulars
The details of 23 PTW Connections
on which cane crashers are being
operated
The details of total PTW Connections under the
division as on 31-03-2016
No. of PTW Connections 23 2,429 Contracted Load 150 kW 13,876 kW Electricity Consumption 59,989 units p.m. 11,99,583 units p.m. Average Electricity Consumption
399.92 units p.m./kW 86.45 units p.m./kW
Electricity consumption of cane crashers on PTW Connections
(399.92-86.45) x 150 » 11,99,583 = 3.92%
The Commission has taken note of the Petitioner’s submission in this regard.
7.1.21 Status of NA/NR, IDF/ADF/RDF
The Commission directed the Petitioner to reduce the percentage of NA/NR cases to below
2% in both Hill & Plain area of the State latest by 31.12.2016.
Petitioner’s Submissions
The Petitioner submitted that for the improvement in the financial and operational efficiency
of the Company, UPCL prepared an efficiency plan and circulated the same to the Field Officers
vide letter no. 1629/UPCL/RM/N-38, dated March 23, 2016. In this efficiency plan, the NA/NR
cases have been targeted to be below 2% in both Hill & Plain areas by December 31, 2016. A copy of
the plan was submitted to the Commission vide UPCL’s letter no. 2481/UPCL/RM/C-12, dated
July 13, 2016.
As on December 31, 2016, the NA/NR Cases were 5.87%.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
272 Uttarakhand Electricity Regulatory Commission
The Commission takes a serious note of the non-compliance of the Petitioner. The
Commission directs the Petitioner to reduce the percentage NA/NR cases to below 2% in the
entire State latest by 31.09.2017, failing which the concerned Chief Engineer (Distribution),
(ii) For industrial consumers billed on billable demand:
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
296 Uttarakhand Electricity Regulatory Commission
Contracted demand 2500 kVA, Maximum Demand 2800 kVA, Billable Demand =2800 kVA
Excess Demand =2800-2500=300 kVA, Rate of Demand Charges= Rs. 345/kVA
Demand Charges for contracted demand =2500 x 345=Rs. 862500
Demand Charges for excess demand = 300x (2 x 345) =Rs. 207000
Total Demand Charges = 862500+207000= Rs. 1069500
13. Minimum Consumption Guarantee (MCG)
The minimum consumption guarantee (MCG) charges shall be applicable to all non-
domestic consumers having load above 25 kW and all industrial consumers for their consumption
in kWh (where kWh tariff is applicable) and kVAh (where kVAh tariff is applicable). However, no
MCG would be applicable on consumers having pre-paid connections. The Commission has
specified the minimum consumption guarantee on monthly basis as well as on annual basis. The
minimum consumption guarantee charges will be levied on monthly basis when monthly
consumption is less than the units specified for monthly minimum consumption guarantee (MCG).
In case Cumulative actual consumption from the beginning of financial year exceeds the units
specified for annual minimum consumption guarantee (MCG) no further billing of monthly MCG
shall be done. In such cases differential paid in excess of actual billing shall be adjusted in the bill
for month of March 2018.
Example:
Illustrative case for LT Industry-Connected load of 10 kW
Month Actual
consumption (kWh)
Cumulative Actual
Consumption (kWh)
Billed Consumption
(kWh)
Cumulative Billed
Consumption (kWh)
Apr 450 450 500 500 May 550 1000 550 1050 Jun 540 1540 540 1590 Jul 600 2140 600 2190 Aug 350 2490 500 2690 Sep 300 2790 500 3190 Oct 400 3190 500 3690 Nov 700 3890 700 4390 Dec 800 4690 800 5190 Jan 550 5240 550 5740 Feb 650 5890 650 6390 Mar 550 6440 50 6440
8. Annexures
Uttarakhand Electricity Regulatory Commission 297
14. Single Point Bulk Supply for Domestic, Non Domestic and Mixed Load
Categories
(i) Single Point Bulk Supply connection shall only be allowed for Sanctioned/Contracted
Load above 75 kW with single point metering for further distribution to the end users.
However, this shall not restrict the individual owner/occupier from applying for
individual connection.
(ii) The person who has taken the single point supply shall be responsible for all payments
of electricity charges to the Licensee and collection from the end consumer as per tariff
prescribed for such consumer. The Licensee shall ensure that tariff being charged from
end consumer does not exceed the prescribed tariff for the concerned category of the
consumer.
(iii) The person who has taken the single point supply shall also be deemed to be an agent
of Licensee to undertake distribution of electricity for the premises for which single
point supply is given under seventh proviso to section 14 of the Electricity Act, 2003
and distribution licensee shall be responsible for compliance of all provisions of the
Act and Rules & Regulations thereunder within such area.
(iv) Single Point Bulk Supply under “Domestic” shall only be applicable for Residential
Colonies/Residential Multistoreyed Buildings including common facilities (such as
Lifts, Common Lighting and Water Pumping system) of such Residential
Colonies/Residential Multistoreyed Buildings. In case these Residential
Colonies/Residential Multistoreyed Buildings also have some shops or other
commercial establishments, the tariff of Mixed Load shall be applicable for such
premises.
(v) Single Point Bulk Supply Under “Non-Domestic” shall only be applicable for Shopping
Complexes/Multiplex/Malls.
15. Rounding off
(i) The contracted load/demand shall be expressed in whole number only and fractional
load/demand shall be rounded up to next whole number.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
298 Uttarakhand Electricity Regulatory Commission
Example:
Contracted/Sanctioned Load of 0.15 kW shall be reckoned as 1 kW for tariff purposes.
Similarly, contracted/sanctioned load of 15.25 kW/kVA shall be taken as 16 kW/kVA.
(ii) All bills will be rounded off to the nearest rupee.
16. Other Charges
Apart from the charges provided in the Rate of Charge and those included in the Schedule of
Miscellaneous Charges, no other charge shall be recovered from the consumer unless approved by
the Commission.
8. Annexures
Uttarakhand Electricity Regulatory Commission 299
B. Tariffs RTS-1: Domestic
1. Applicability
This schedule shall apply to supply of power to:
(i) Residential premises for light, fan, power and other domestic purposes including common facilities (such as Lifts, Common Lighting and Water Pumping system)
(ii) Single Point Bulk Supply above 75 kW for Residential Colonies, Residential Multi-storeyed buildings where energy is exclusively used for domestic purpose including common facilities (such as Lifts, Common Lighting and Water Pumping system) of such Residential Colonies/Residential Multistoreyed Buildings
(iii) Places of worship, i.e. Mandir, Masjid, Gurudwara, Church, etc. (only for standalone places of worship and not for the places of worship which have other facilities such as Dharamshala, Community Hall, Dormatories, etc. attached with it)
(This rate schedule shall also be applicable to consumers having contracted load upto 2 kW
as also consumption upto 200 kWh/month and who are using some portion of the premises
mentioned above for non-domestic purposes. However, if either contracted load for such premises
is above 2 kW or consumption is more than 200 kWh/month, then the entire energy consumed shall
be charged under the appropriate Rate Schedule unless such load is segregated and separately
metered.)
2. Rate of Charge
Description Fixed Charges* Energy Charges 1) Domestic
1.1)BPL/Life line consumers
Below Poverty Line and Kutir Jyoti having load upto 1 kW and consumption upto 30 units per month
Rs. 18/ connection/month Rs. 1.50/kWh
1.2) Other Domestic Consumers
Upto 100 units per month Rs. 45 /month Rs. 2.55/kWh
101-200 units per month Rs. 70 /month Rs. 3.30/kWh
201-300 units per month Rs. 110/month Rs. 4.50/kWh
301-400 units per month Rs. 135/month Rs. 4.50/kWh
401-500 units per month Rs. 180/month Rs. 5.10/kWh
Above 500 units per month Rs. 210/month Rs. 5.10/kWh
2) Single Point Bulk Supply Rs. 60/kW/month Rs. 4.05/kWh *Fixed Charges in case of other domestic consumers for the month shall be charged at the rates equivalent to the total consumption in
the month.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
300 Uttarakhand Electricity Regulatory Commission
RTS-1A: Snowbound
1. Applicability
This schedule shall apply to supply of power to:
(i) Domestic and non-domestic consumers in snowbound areas.
(ii) This Schedule applies to areas notified as snowbound/snowline areas by the
concerned District Magistrate.
2. Rate of Charge
Description Fixed Charges Energy charges 1) Domestic
Rs.18/connection/month Rs. 1.50/kWh
2) Non-domestic upto 1 kW Rs. 1.50/kWh 3) Non-domestic more than 1 kW & upto 4 kW Rs. 2.25/kWh 4) Non-Domestic more than 4 kW Rs. 30/connection/month Rs. 3.40/kWh
3. All other conditions of this Schedule shall be same as those in RTS-1.
8. Annexures
Uttarakhand Electricity Regulatory Commission 301
RTS-2: Non-Domestic 1. Applicability
This schedule should apply to supply of power to:
1.1 (i) Government/Municipal Hospitals (ii) Government/Government Aided Educational Institutions
(iii) Charitable Institutions registered under the Income Tax Act, 1961 and whose income is exempted from tax under this Act.
1.2 Small Non Domestic Consumers with connected load upto 4 kW and consumption upto 50
units per month.
1.3 Other Non-Domestic Users including single point bulk supply above 75 kW for shopping
complexes/multiplex/malls including common facilities (such as lifts, common lighting and
water pumping system).
1.4 Independent Advertisement Boards/Hoardings - All commercial (road side / roof top or on
the side of the buildings etc.) standalone independent advertisement hoardings such as
private advertising sign posts/ sign boards/ sign glows/flex that are independently
metered through a separate meter.
2. Rate of Charge S.
No. Description Fixed Charges
Energy charges
MCG (kVAh/kW of contracted load)*
1.1
(i) Government/Municipal Hospitals (ii) Government/Government Aided Educational Institutions (iii) Charitable Institutions registered under the Income Tax Act,
1961 and whose income is exempted from tax under this Act
(a) Upto 25 kW Rs. 55/ kW Rs. 4.30/ kWh
(b) Above 25 kW Rs. 65/ kVA Rs. 4.00/ kVAh
50 kVAh /kVA /month & 600 kVAh/
kVA/annum
1.2.
Other Non Domestic Users (a) Small Non Domestic Consumers with connected load upto
4 kW and consumption upto 50 units per month* Rs. 60 /
kW Rs. 4.45/ kWh
(b) Others upto 25 kW not covered in 1.2(a) above Rs. 65 / kW Rs. 5.25/ kWh
(c) Above 25 kW Rs. 65 / kVA
Rs. 5.15/ kVAh
50 kVAh /kVA /month & 600 kVAh/ kVA/
annum
1.3 Single Point Bulk Supply** Rs. 65 / kVA
Rs. 5.05/ kVAh
50 kVAh /kVA /month & 600 kVAh/ kVA/
annum 1.4 Independent Advertisement Hoardings Rs. 80/kW Rs. 5.50/kWh
* If consumption exceeds 50 units/month, then on the entire energy consumed tariff as per sub-category 1.2(b) shall be charged
** For loads above 75 kW for shopping complexes/multiplex/malls
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
302 Uttarakhand Electricity Regulatory Commission
3. Other Conditions 3.1 For consumers having contracted load in kW, the contracted load for MCG purposes
shall be calculated by considering a power factor of 0.85.
3.2 The Minimum Consumption Guarantee Charge shall be in addition to fixed/demand
charge and shall be levied if Consumption during a month is less than MCG and will be
subject to adjustment.
3.3 ToD Meters shall be read by Meter Reading Instrument (MRI) only with complete dump
with phasor diagram, Tamper Reports, full load survey reports etc. shall be downloaded
for the purpose of complete analysis.
3.4 All consumers above 25 kW shall necessarily have ToD Meters.
3.5 No meter shall be read at zero load or very low load. Licensee shall carry appropriate
external load and shall apply the same, wherever, necessary to take MRI at load.
3.6 Copy of MRI Summary Report shall be provided alongwith the Bill. Full MRI Report
including load survey report shall be provided on demand and on payment of Rs. 15/
Bill.
8. Annexures
Uttarakhand Electricity Regulatory Commission 303
RTS-3: Public Lamps
1. Applicability
This schedule shall apply to supply of power to public lamps including street lighting
system, traffic control signals, lighting of public parks, etc. The street lighting of Harijan Bastis and
villages are also covered by this Rate Schedule.
2. Rate of Charge
Category Fixed Charges Energy Charge
Urban (Metered) Rs. 55/kVA/month Rs. 4.75/ kVAh
Rural (Metered) Rs. 45/kVA/month Rs. 4.75/ kVAh
3. Maintenance Charge
In addition to the “Rate of Charge” mentioned above, a sum of Rs. 10/- per light point per
month shall be charged for operation and maintenance of street lights covering only labour charges
where all material required will be supplied by the local bodies. However, the local bodies will have
the option to operate and maintain the public lamps themselves and in such case no maintenance
charge will be charged.
4. Provisions of Street Light Systems
In case, the maintenance charge, as mentioned above, is being charged then the labour
involved in the subsequent replacement or renewals of lamps shall be provided by the licensee but
all the material shall be provided by the local bodies. If licensee provides material at the request of
local body, cost of the same shall be chargeable from the local body.
The cost involved in extension of street light mains (including cost of sub-stations if any) in
areas where distribution mains of the licensee have not been laid, will be paid for by the local
bodies.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
304 Uttarakhand Electricity Regulatory Commission
RTS-4: Private Tube Wells/ Pumping Sets
1. Applicability
This schedule shall apply to supply of power to private tube-wells/pumping sets for
irrigation purposes and for incidental agricultural processes confined to chaff cutter, thrasher, cane
crusher and rice huller only. However, the tariff applicable for RTS-4 shall only be applicable if such
incidental agricultural processes are being carried out for agricultural produce of the connection
sanctioned for irrigation purposes.
2. Rate of charge
Category Fixed Charges Rs./BHP/Month
Energy Charges Rs./kWh
RTS 4: PTW (Metered) Nil 1.75
3. Payments of bills and Surcharge for Late Payment
The bill shall be raised for this category twice a year only, i.e. by end of December (for
period June to November) and end of June (for period December to May). The bill raised in
December may be paid by the consumer either in lump-sum or in parts (not more than four times)
till 30th April next year for which no DPS shall be levied. Similarly, bill raised in June may be paid
by 31st October without any DPS. In case consumer fails to make payment within the specified
dates, a surcharge @ 1.25% per month for the period (months or part thereof) shall be payable on the
outstanding amount.
8. Annexures
Uttarakhand Electricity Regulatory Commission 305
RTS-4A: Agriculture Allied Activities
1. Applicability
This schedule shall apply to supply of power for use in nurseries growing plants/saplings,
polyhouses and other units growing flowers/vegetables and fruits including mushroom cultivation
which doesn’t involve any kind of processing of product except for storing and preservation.
2. Rate of charge
Category Fixed Charges Rs./BHP/Month
Energy Charges Rs./kWh
RTS 4(A): Agricultural Allied Services Nil 1.75
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
306 Uttarakhand Electricity Regulatory Commission
RTS-5: Government Irrigation System
1. Applicability
This schedule shall apply to supply of power to:
(i) State Tubewells, World Bank Tubewells, Pumped Canals and Lift irrigation schemes,
Laghu Dal Nahar etc.,
(ii) Irrigation system owned and operated by any Government department.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
308 Uttarakhand Electricity Regulatory Commission
RTS-7: LT and HT Industry
1. Applicability
This schedule shall apply to supply of power to:
(i) Industries and /or processing or agro- industrial purposes, power loom as well as to
Arc/Induction Furnaces, Rolling/Re-rolling Mills, Mini Steel Plants and to other
power consumers not covered under any other Rate Schedule.
(ii) The vegetable, fruits, floriculture & Mushroom integrated units engaged in processing,
storing and packaging in addition to farming and those not covered under RTS-4A
shall also be covered under this Rate Schedule.
2. Specific Conditions of Supply
(i) All connections shall be connected with MCB (Miniature Circuit Breaker) or Circuit
Breaker / Switch Gear of appropriate rating and BIS Specification.
(ii) The supply to Induction and Arc Furnaces shall be made available only after ensuring
that the loads sanctioned are corresponding to the load requirements of tonnage of
furnaces. The minimum load of 1 Tonne furnace shall in no case be less than 400 kVA
and all loads will be determined on this basis. No supply will be given for loads below
this norm.
(iii) Supply to Steel Units shall be made available at a voltage of 33 kV or above through a
dedicated individual feeder only with check meter at sub-station end. Difference of
more than 3%, between readings of check meter and consumer meter(s), shall be
immediately investigated by the licensee and corrective action shall be taken.
(iv) Supply to all new connections with load above 1000 kVA should be released on
independent feeders only with provisions as at (iii) above.
8. Annexures
Uttarakhand Electricity Regulatory Commission 309
Description Energy Charge Fixed /Demand
Charge per month
Minimum Consumption
Guarantee (MCG) ** 1. LT Industry having contracted load upto 75kW (100 BHP)
1.1 Contracted load up to 25 kW Rs. 4.20/kWh Rs. 140/ kW of contracted load
$50 kWh/kW of contracted load /
month &
600 kWh/kW of contracted load /
annum
1.2 Contracted load more than 25 kW Rs. 3.85/kVAh Rs. 140/ kVA of contracted load
50 kVAh/kVA *** of contracted load /
month &
600 kVAh/kVA of contracted load /
annum 2. HT Industry having contracted load above 88 kVA/75 kW (100 BHP) Load Factor# Rs./ kVAh
2.1 Contracted Load up to 1000 kVA Upto 40% 3.65 Rs. 285/kVA of the
billable demand* 100 kVAh/kVA of contracted load /
month &
1200 kVAh/kVA of contracted load /
annum
Above 40% 4.00
2.2 Contracted Load More than 1000 kVA Upto 40% 3.65
Rs. 345/kVA of the billable demand* Above 40% 4.00
$ 30 kWh/kW/month and 360 kWh/kW/annum for Atta Chakkis. * Billable demand shall be the actual maximum demand or 80 % of the contracted load whichever is higher.
** The Minimum Consumption Guarantee Charge shall be in addition to fixed/demand charge and shall be levied if Consumption during a month is less than MCG and will be subject to adjustment on annual basis. The energy charges for units billed to cover MCG during any month shall be charged at the rates specified for load factor upto 40% during normal hours and the annual adjustment (refund) of such excess energy charges, if any, shall also be given at the rates
specified for load factor upto 40% during normal hours. *** For consumers having contracted load in kW, the contracted load for MCG purposes shall be calculated by
considering a power factor of 0.85.
#For tariff purposes Load Factor (%) would be deemed to be =
100period billing in the hours of No. x less is whicheverDemand Contractedor Demand Maximum
period billing theduring access)open through receivedenergy the(excludingn Consumptio×
Provided that in cases where maximum demand during the month occurs in a period when open access is being availed by the consumer, then maximum demand for the purpose of computation of load factor shall be that occurring during the period when no open access is being availed.
3. Time of Day Tariff
(i) The rates of energy charge given above for LT industry with load more than 25 kW
and HT industry shall be subject to ToD rebate/surcharge.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
310 Uttarakhand Electricity Regulatory Commission
(ii) ToD Meters shall be read by Meter Reading Instrument (MRI) only with complete
dump with phasor diagram, Tamper Reports, full load survey reports etc. shall be
downloaded for the purpose of complete analysis and bills shall be raised as per ToD
rate of charge.
(iii) No meter shall be read at zero load or very low load. Licensee shall carry appropriate
external load and shall apply the same, wherever, necessary to take MRI at load.
(iv) Copy of MRI Summary Report shall be provided along with the Bill. Full MRI Report
including load survey report shall be provided on demand and on payment of Rs. 15/
* Load Factor shall be as defined in Clause 2 above
4. Seasonal Industries
Where a consumer having load in excess of 18 kW (25 BHP) and ToD meter and avails
supply of energy for declared Seasonal industries during certain seasons or limited period in the
year, and his plant is regularly closed down during certain months of the financial year, he may be
levied for the months during which the plant is shut down (which period shall be referred to as off-
season period) as follows:
8. Annexures
Uttarakhand Electricity Regulatory Commission 311
(i) The tariff for ‘Season’ period shall be same as “Rate of Charge” as given in this
schedule.
(ii) Where actual demand in ‘Off Season’ Period is not more than 30% of contracted load,
the energy charges for “Off-Season” period shall be same as energy charges for
“Season” period given in Rate of Schedule above. However, the contracted demand in
the “Off Season” period shall be reduced to 30%.
(iii) During ‘Off-season’ period, the maximum allowable demand will be 30% of the
contracted demand and the consumers whose actual demand exceeds 30% of the
contracted demand in any month of the ‘Off Season’ will be denied the above benefit of
reduced contracted demand during that season. In addition, a surcharge at the rate of
10% of the demand charge shall be payable for the entire ‘Off Season’ period.
Terms and Conditions for Seasonal Industries
(i) The period of operation should not be more than 9 months in a financial year.
(ii) Where period of operation is more than 4 months in a financial year, such industry
should operate for at least consecutive 4 months.
(iii) The seasonal period once notified cannot be reduced during the year. The off-season
tariff is not applicable to composite units having seasonal and other categories of
loads.
(iv) Industries in addition to sugar, ice, rice mill, frozen foods and tea shall be notified by
Licensee only after prior approval of the Commission.
5. Factory Lighting
The electrical energy supplied under this schedule shall also be utilised in the factory
premises for lights, fans, coolers, etc. which shall mean and include all energy consumed for factory
lighting in the offices, the main factory building, stores, time keeper’s office, canteen, staff club,
library, creche, dispensary, staff welfare centres, compound lighting, etc.
6. Continuous and Non-continuous supply
(i) Continuous Process Industry as well as non continuous process industrial consumers
connected on either independent feeders or industrial feeder can opt for continuous
supply. For industrial feeder, all connected industries will have to opt for continuous
supply and in case any consumer on industrial feeder does not wish to opt for
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
312 Uttarakhand Electricity Regulatory Commission
continuous supply, all the consumers on such feeder will not be able to avail
continuous supply. Such Industrial consumers who opt for continuous supply shall be
exempted from load shedding during scheduled/unscheduled power cuts and during
restricted hours of the period of restriction in usage approved by the Commission from
time to time, except load shedding required due to emergency breakdown/shutdown.
(ii) Consumers who are existing Continuous Supply Consumers shall continue to remain
Continuous Supply Consumers and they need not apply again for seeking continuous
supply. Such consumers shall pay 15% extra energy charges, in addition to the energy
charges given above, w.e.f. April 01, 2017 till March 31, 2018. However, in case of any
pending dispute with UPCL in the matter of continuous supply on certain feeders,
those consumers will have to apply afresh, for availing the facility of continuous
supply, by April 30, 2017.
(iii) The new applicants for continuous supply of power (including those who are applying
afresh as per above) can apply for seeking the continuous supply option at any time
during the year. However, continuous supply surcharge for such consumers shall be
applicable with effect from May 1, 2017 till March 31, 2018. UPCL shall provide the
facility of continuous supply within 7 days from the date of application, subject to
fulfilment of Conditions of Supply.
(iv) In case of re-arrangement of supply through independent feeder, UPCL shall provide
the facility of continuous supply from the date of completion of work of independent
feeder subject to fulfilment of Conditions of Supply and the Continuous Supply
Surcharge on such consumers shall be applicable from the date of energisation of
aforesaid independent feeder till 31st March 2018, irrespective of actual period of
continuous supply option.
(v) In case of a new consumer (new connection) opting continuous supply, 15% extra
energy charges as Continuous Supply Surcharge shall be applicable from the date of
new connection till 31st March 2018, irrespective of the actual period of continuous
supply.
(vi) The existing consumers availing continuous supply option, who wish to discontinue
the continuous supply option granted to them earlier, will have to communicate, in
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Uttarakhand Electricity Regulatory Commission 313
writing, to UPCL latest by April 30, 2017 and they shall continue to pay continuous
supply surcharge alongwith the tariff approved in this Order till April 30, 2017.
Further, in this regard, if due to withdrawal by one consumer from availing
continuous supply option on a particular feeder, supplying to other continuous supply
consumers as well, the status of other continuous supply consumers on that feeder is
affected, then UPCL shall inform all the affected consumers in writing, well in
advance.
(vii) The Continuous Supply Surcharge shall not be applicable on the power procured by
the industrial consumers through open access.
(viii) UPCL shall not change the status of a continuous supply feeder to a non-continuous
supply feeder.
(ix) UPCL/PTCUL shall take up augmentation, maintenance and overhauling works on
top priority, specially in the sub-stations where circuit breakers, other equipment, etc.
are in dilapidated condition and, thereby, shall ensure minimisation of interruptions of
the continuous supply feeders.
(x) UPCL/PTCUL shall carry out periodical preventive maintenance of the feeders
supplying to continuous supply consumers. The licensees shall prepare preventive
maintenance schedule, in consultation with continuous supply consumers, well in
advance, so that such consumers can plan their operations accordingly.
(xi) The Licensee should show the energy charges and continuous supply surcharge
thereon separately in the bills.
7. Demand Charges for HT Industry
If the minimum average supply to any HT Industry Consumers is less than 18 hours per day
during the month, the Demand Charges applicable for such HT Industry Consumer shall be 80% of
the approved Demand Charges for HT Industry.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
314 Uttarakhand Electricity Regulatory Commission
RTS 8: Mixed Load
1. Applicability
This schedule applies to single point bulk supply connection of more than 75 kW where the
supply is used predominantly for domestic purposes (with more than 60% domestic load) and also
for other non-domestic purposes. This schedule also applies to supply to MES.
2. Rate of Charge
The following rates shall apply to consumers of this category
Fixed Charges Energy Charges Rs. 70/kW/month Rs. 4.75/kWh
3. Other conditions
Apart from the above, other conditions of tariff shall be same as those for RTS-1 consumers.
However, excess load penalty shall be applicable as per clause 12 of General Conditions of Supply.
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Uttarakhand Electricity Regulatory Commission 315
RTS 9: Railway Traction
1. Applicability
This schedule applies to Railways utilizing power for traction purposes.
2. Rate of Charge
The following rates of energy and demand charge shall apply to this category:
Demand Charges Energy Charges Rs./kVA/month Rs./ kVAh
240/- Rs. 4.25
3. Other conditions
Apart from the above, other conditions of tariff shall be same as those for General HT
Industries under RTS-7 consumers except applicability of ToD tariff and surcharge for continuous
supply.
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
316 Uttarakhand Electricity Regulatory Commission
RTS-10: Temporary Supply
(A) Temporary Supply
1. Applicability (i) This schedule shall apply to temporary supplies of light, fan and power loads for all
purposes including illumination/public address/ceremonies and festivities/functions/
temporary shops not exceeding three months.
(ii) This schedule shall also apply for power taken for construction purposes including civil
work by all consumers including Government Departments. Power for construction
purposes for any work / project shall be considered from the date of taking first connection
for the construction work till completion of the work / project.
However, use of electricity through a permanent connection sanctioned for premises
owned by the consumer for construction, repair or renovation of existing building, shall
not be considered as unauthorised use of electricity as long as the intended purpose/use
of the building/apartments being constructed is same/permissible in the sanctioned
category of the connection.
2. Rate of Charge The rate of charge will be corresponding rate of charge in appropriate Schedule Plus 25%.
The appropriate rate schedule for the temporary supplies for cane crusher upto 15 BHP given for
maximum period of four (4) months will be RTS-7. However, the minimum consumption guarantee
charges shall not be applicable for temporary supply.
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Uttarakhand Electricity Regulatory Commission 317
8.2 Annexure 2: Schedule of Miscellaneous Charges
Sl. No
Nature of Charges Unit Approved (Rs.)
1
Checking and Testing of Meters a. Single Phase Meters Per Meter 50.00 b. Three Phase Meters Per Meter 75.00 c. Recording Type Watt-hour Meters Per Meter 170.00 d. Maximum Demand Indicator/ LT CT operated Meters Per Meter 350.00 e. Tri-vector Meters/ HT Meters with CT/PT Per Meter 1000.00 f. Ammeters and Volt Meters Per Meter 65.00 g. Special Meters Per Meter 335.00 h. Initial Testing of Meters Per Meter NIL
2 Subsequent testing and installation other than initial testing Per Meter 80.00
3
Disconnection and Reconnection of supply on consumers request or non-payment of bill (for any disconnection or reconnection the charge will be 50%)
a. Consumer having load above 100 BHP/75 kW Per Job 600.00 b. Industrial and Non Domestic consumers upto 100 BHP/75 kW Per Job 400.00 c. All other categories of consumers Per Job 200.00
4
Replacement of Meters a. Installation of Meter and its subsequent removal in case of Temporary Connections
Per Job 75.00
b. Changing of position of Meter Board at the consumer's request
Per Job 100.00
5
Checking of Capacitors (other than initial checking) on consumer's request:
a. At 400 V/ 230 V Per Job 150.00 b. At 11 kV and above Per Job 300.00
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
318 Uttarakhand Electricity Regulatory Commission
8.3 Annexure 3: Public Notice
8. Annexures
Uttarakhand Electricity Regulatory Commission 319
Order on approval of True-up for FY 2015-16, APR for FY 2016-17 & ARR for FY 2017-18
320 Uttarakhand Electricity Regulatory Commission
8.4 Annexure 4: List of Respondents Sl. No. Name Designation Organization Address
1. Sh. R.S. Yadav Vice President (HR & Admn.) M/s India Glycols Ltd.
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