before the orissa electricity regulatory commission ... · before the orissa electricity regulatory...

BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX,BHUBANESWAR.

Case No. 65 of 2007

In the matter of : Western Electricity Supply Company of Orissa

Limited (WESCO)

And In the matter of : Shri Sudarshan Goel Director, M/s Subh Ispat Limited Kalunga Road, Rourkela-769 012. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-2009. 1. COMPARISION OF ORISSA TARIFF WITH OTHER STATES

The tariff rates are determined by OERC keeping in view of recovery of

energy charges from consumers against the revenue requirement of the Distribution

Licensee. In Orissa, there is no subsidy to the distribution companies from the Govt.

of Orissa which is not so in other states. The power purchased for Discoms by

GRIDCO is from different sources with different rates. Higher power purchase cost is

normally attributes due to higher consumption of industries. Again the availability of

power and the rates of power purchase differ from state to state depending on their

local conditions. However, it has been examined that the retail supply tariff is not

higher in Orissa as compared to other States.

2. While fixing of tariff by Hon’ble OERC, availability of power and the rates of

purchase differ from state to state depending on their local conditions are being

considered. It has been examined that the power tariff is not higher in Orissa as

compared to other States. Hence cripple of industrialization does not arise.

3. POWER PROCUREMENT FROM HYDRO

WESCO is purchasing power in bulk from GRIDCO who either purchase power

from different generators which may be Hydro, Thermal or any other sources. Tariff

rate both for Bulk supply as well as retail supply tariff (RST) is determined by OERC

taking into consideration of all aspects i.e. power purchase for different source &

power sale to all categories of consumers. In this context, the licensee has no role to

determine the RST rate. Hence, the proposal of the objector is not applicable on the

part of WESCO.

4. AVAILING POWER SUPPLY FROM M/S GRIDCO INSTEAD OF DISTCOs.

M/s GRIDCO purchases power from different generating stations and sells to

distribution companies through M/s OPTCL who has got transmission license. M/s

WESCO is purchaser of bulk power from M/s GRIDCO and sells power in its area of

license. The energy billed to HT / EHT Consumers is from the energy meter installed

by WESCO & not from M/s GRIDCO meters.

However in the regime of open access, a consumer has got option to

purchase power from other agencies in accordance with the regulations framed by

the regulatory commission pertaining to open access for different categories of

consumers i.e. as per contract demand.

5. DISTRIBUTION LOSS & PREVENTION OF THEFT

WESCO is taking various steps for reduction of distribution loss such as

installation of Audit Metering for industrial consumers, cubicle metering, Energy

Audit, Feeder Metering, System Improvement Work, regularisation of unauthorized

consumers through consumer camps, vigilance checking, introduction of monthly

spot billing in urban areas, putting parallel meters, giving HT supply through

metering cubicles and XLPE cables for HT consumers. We have also started putting

round the clock guards (Ex-military personal) at strategic location and taking the

meter readings at very frequent interval for minimizing the theft of energy. Financial

loss is assessed on the consumers found indulging in theft of energy and additional

bill is raised accordingly as per I.E. Act-2003. Moreover in LT category, process is

always on to replace the defective meters, years old electromechanical meters &

consumers without meter. We have also started checking the meters of the

consumers through our own MRT / Vigilance teams where consumption is found to be

abnormally low.

WESCO has started analysing the consumption pattern of high value

consumers almost on daily basis for reduction of losses. Where ever uprating of

network is necessary high rating conductor size is laid to reduce losses. Although in

Domestic category more and more consumers have been brought to the billing fold it

is not possible to eliminate tampering and by-passing of meters in totality due to the

vast geographical area and large number of consumers. In practice it is noticed that

loss reduction can only be a gradual process, which cannot be achieved to a high

degree within a year. Operating at targeted figures of distribution loss is not feasible

due to other related factors including lack of Administrative support. Input based

franchisee have also been engaged in rural areas with monthly billing system who

have been entrusted for meter readings, bill distribution and revenue collection. The

energy police station has started functioning at Burla for Sambalpur district.

However, there is no appreciable effect on the consumers indulging in theft of energy

due to non-availability of adequate police personnel in the energy police station.

Further, although it has been decided by the Govt. to open energy police station in

each district, it is yet to be materialized.

Further, due to no change in RST for last 7 years and continuous increase in

BST so far WESCO is concerned, no surplus is left for investment in system

improvement, adequate operation & maintenance work, vigilance activities. Pre-

closure of APDRP schemes, inadequate funding of central assistance through State

Govt. had considerable effect for which WESCO is not able to reduce distribution loss

specifically in LT consumers. The rural electrification under PMGY & MNP has added a

lot of line & transformer as has added to the distribution loss.

6. COLLECTION OF UN-REALISED AMOUNT :-

WESCO has taken steps to collect the dues from its consumers. For defaulting

consumers, power supply was disconnected after serving disconnection notice. Also

WESCO is organizing collection camp in different areas to collect the dues and solve

the dispute of the consumer if any. Hence, the contention of the objector that,

unrealized amount are increasing and it affecting the genuine consumers is not true.

As per the direction of Hon’ble OERC, WESCO is carrying out receivable audit

of all the outstanding arrear as on 31.03.2005 of LT category of consumers. We have

already completed the audit work except two divisions i.e. Sambalpur & Sambalpur

East which will be completed within a week time. As per the scope of the audit, the

auditors have audited & certified the quantum of receivable amount out of the total

outstanding. Based on the outcome of the receivable audit, WESCO is planning to

collect the receivable amount as certified by the Chartered Accountants through

internal staff, outside agencies / NGOs by introducing various incentive schemes.

7. THEFT OF ELECTRICITY :-

The existing laws relating to theft of electricity are sufficient, but as

everybody knows, due to non existence of energy police stations at every district for

unauthorized use of electricity, theft cases are not being registered. As a result, the

theft of electricity is not coming down and even people do not hesitate to hook the

line in broad day light. The no. of hooking, tampering of meter is so high that it has

out-numbered the existing employees to take proper steps for regularization /

preventing of theft & tampering. Accordingly creation of special police stations in

every district is a must. The objection of the consumers that transferring the cost is

illegal and unethical is not true. The reduction of losses due to theft of energy will

neutralize the expenditure and genuine consumers will derive benefit by way of

reduction in tariff, quality and stable supply.

8. LOAD FACTOR BASED ON “POWER ON HOUR”

Load factor of an industry is calculated as per the guidelines of OERC

distribution (Conditions Of Supply) Code 2004.

9. INCENTIVE ON IMPROVED POWER FACTOR

To maintain good power factor of the system, an industrial consumer should

have almost unity power factor and in no case it should be below 90%. In order to

achieve unity power factor, the commission has provided incentive for improvement

of power factor above 95% upto 100% which is quite reasonable.

Further relaxation in the power factor for incentive will not only discourage

the consumers for reaching higher power factor but also will affect demand and

energy consumption. Accordingly, power factor incentive above 90% instead of 95%

should not be allowed by the commission.

Since availing power at very high power factor in giving an incentive to the

consumer in terms of less demand for the same effective energy and also incentive

as high load factor, the power factor incentive should be 97% in stead of 95% as

approved by the Hon’ble Commission earlier.

10. SECURITY DEPOSIT

Bank guarantee against security deposit should not be allowed to the

consumers as it will be very difficult to monitor the expiry date of the Bank

Guarantee and its renewal. Further the Hon’ble Commission has already permitted

payment of annual interest on Security Deposit to consumers.

Regarding installation of pre-paid meter, till date, the same is not available in

the market.

11. PROMPT PAYMENT REBATE

The present rebate of 1% of the monthly bill if “full payment made within 72

hrs of presentation of bills” is an adequate incentive.

However, the licensee pays the bill for the energy purchase for all its

consumers as a whole to GRIDCO within 48 hours through an LC mechanism and the

bills are submitted to the licensee by GRIDCO / OPTCL with a copy to the bank.

12. PERIOD OF AGREEMENT TO BE REDUCED TO 1 YEAR

While making projection on load forecasting and estimate for investment

plans, it is considered that an existing load continues for at least five years. If the

period of agreement is reduced, there will be frequent termination and execution of

agreements. As a result of the same, a situation of chaos will arise. Also it may so

happen that resources created may be left underutilized. Keeping all these points in

view, the proposal be rejected.

13. Excess amount realization over & above BST has been taken by GRIDCO

towards past losses for which no money is left to carryout improvement activities.

However due to no increase in RST and considerable increase in BST, WESCO has

already made a loss of Rs. 244.0 crores from Apr-07 to Dec-07 during the financial

year 2007-08.

14. WESCO has proposed for hike in demand charges in case of consumers

having CD is 70 KVA and above but below 110 KVA. The wide difference in demand

charges between HT and high valued MI consumers is tempting to the MI consumers

for pilferage of electricity and suppressing the demand even if there connected load

is more than 110 KVA.

For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 20.01.2008 (Commercial) C.C : Shri Sudarshan Goel Director, M/s Subh Ispat Limited Kalunga Road, Rourkela-769 012 Note- This is also available at the licensee’s website-www.wescoorissa.com


Case No. 65 of 2007


Limited (WESCO)

And In the matter of : Shri Sunil Agarwal Director, M/s Sri Jagannath Alloys Pvt. Ltd. Basanti Colony Road, Rourkela-769 012. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-2009. 1. COMPARISION OF ORISSA TARIFF WITH OTHER STATES





















part of WESCO.

























abnormally low.





































the market.


















year 2007-08.






For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 20.01.2008 (Commercial) C.C : Shri Sunil Agarwal Director, M/s Sri Jagannath Alloys Pvt. Ltd. Basanti Colony Road, Rourkela-769 012. Note- This is also available at the licensee’s website-www.wescoorissa.com


Case No. 65 of 2007


Limited (WESCO)

And In the matter of : Shri Amit Agarwal Director, M/s Bajrangbali Re-rollers Pvt. Ltd. Lal Building, Kachery Road, Rourkela-769 012. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-2009. 1. COMPARISION OF ORISSA TARIFF WITH OTHER STATES





















part of WESCO.

























abnormally low.





































the market.


















year 2007-08.






For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 20.01.2008 (Commercial) C.C : Shri Amit Agarwal Director, M/s Bajrangbali Re-rollers Pvt. Ltd. Lal Building, Kachery Road, Rourkela-769 012. Note- This is also available at the licensee’s website-www.wescoorissa.com


Case No. 65 of 2007


Limited (WESCO)

And In the matter of : Shri Suvendu Kumar Das General Manager, M/s Scan Steels Limited Main Road, Rajgangpur, Dist. : Sundergarh. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-2009. 1. COMPARISION OF ORISSA TARIFF WITH OTHER STATES














3. POWER PROCUREMENT FROM HIRAKUD & CHIPILIMA THROUGH

HYDRO :-







part of WESCO.


License is issued by OERC for distribution of electricity in various zones of the

state to various companies. Hence question of competition among distribution

companies does not arise. Since RST is determined considering Orissa as a whole

state, there cannot be variation of rate in respect to categories of consumers.

However, the BST rate is determined by the Hon’ble Commission depending upon no.

of EHT & HT category of consumers of a particular zone which may vary from zone to

zone and no monopoly in respect of WESCO arises and there is no tariff variation

under RST category in respect of distribution companies.















abnormally low.
























6. LOAD FACTOR INCENTIVE :-

The Hon’ble Commission has already allowed load factor incentive beyond

50%. The amount lost due to the above is being passed on to the Consumers while

fixing the tariff. As such any further incentive on load factor will have an adverse

affect on the Consumers. Hon’ble Commission is requested not to accept the

proposal.

















9. SECURITY DEPOSIT






the market.


















year 2007-08.






14. DEMAND CHARGES FOR C.P.P.

As pointed out by the objector, consumers having CPP require emergency

power for plant overhauling when there is single unit operation, which may be for a

period of 20 to 30 days in a year. However, incase of outage of CPP due to system

disturbances, they require start up power which will effect the SMD for the entire

month even if the drawal of power is half an hour for which distribution licensee will

have to pay to GRIDCO without charging the same to the concerned CPP. This may

put the Distco into financial burden. To avoid such unforeseen cost, it has been

proposed to the Hon’ble Commission for considering the demand charge @ 120% of

the demand charges applicable to the respective tariff category on the maximum

demand recorded by the meter of the CPP. However, the minimum demand charge

concept i.e. 80% of CD should not be applicable to the CPPs.

For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 20.01.2008 (Commercial) C.C : Shri Suvendu Kumar Das General Manager, M/s Scan Steels Limited Main Road, Rajgangpur, Dist. : Sundergarh. Note- This is also available at the licensee’s website-www.wescoorissa.com


Case No. 65 of 2007


Limited (WESCO)

And In the matter of : Shri Chittaranjan Mohanty President, Basanti Forum, Basanti Nagar Rourkela. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-2009. 1. There is no change in RST for last 7 years and continuous increase in BST in

the context of WESCO. Regarding infusion of capital, it is responsibility of the stake-

holder to infuse capital where the state govt. is 49% stake-holder.

2. The licensee has not proposed any hike in tariff structure for the year 2008-

09. Hence the objection raised by the objector should not be considered. Again due

to no increase in RST and considerable increase in BST, WESCO has already made a

loss of Rs. 244.0 Crores (only BST impact) from Apr-07 to Dec-07 during the

financial year 2007-08.

3. The licensee has not proposed for any tariff hike for the year 2008-09. Hence,

as pointed-out by the objector to make profit by the licensee to hike tariff in various

ways is not true. Only the rate of return as per the norms has been considered.

4. The licensee for distribution of power in a particular zone is being determined

by Hon’ble OERC and the performance of the distribution companies is being very

closely monitored by OERC. Since purchase and sale rate of return (%) is being

determined by the Hon’ble Commission there is neither monopoly nor profit making

in our own way.

5. As objected by the objector regarding low voltage at Basanti Nagar, there is

no low voltage problem in that locality and the supply voltage is within the

permissible limit.

6. WESCO is not indulging any power cut except when there is system constraint

or non-availability of power from GRIDCO on real-time basis or interruption of line

due to fault / break-down. Regarding undeclared power cut by WESCO as objected by

the objector is not true.

7. Despite of fund constraint of the licensee, the licensee has taken every effort

to improve the existing lines & sub-stations in rural areas. However, electrical

accidents do not occur due to poor maintenance of lines but due to some other

reasons, like theft of conductor, cutting the stay wire at stay-point, snapping of

conductors due to cutting of tree branches etc. Inspite of that, the licensee is

creating public awareness by the way of campaigning, leaf-let, banner, press release

etc to avoid electrical accident.

7. That, WESCO is taking early action on the complaints of the consumers. Also

for quick action, Customer care centre is functioning at urban areas presently at

Sambalpur. Customer care is likely to operate at Rourkela shortly and will also

extend to the other district headquarter in a phased manner. Hence, as objected by

the objector non-attending the complaints of the consumer is not true and need to

be rejected by the Hon’ble Commission.

8. The licensee has taken utmost care to provide steady power supply to its

consumers. Regarding consumer grievances, in every sub-division, division and circle

offices, there is a consumer grievances cell is functioning for quick disposal of

consumer grievances. Apart from that, Grievance Redressal Forum (GRF) is also

functioning at every circle as per the direction of Hon’ble OERC.

9. The licensee has no role in generation of electricity. So question of suffering

of inhaling dust and sacrificing agricultural land is not applicable to the licensee.

Hence the objection raised by the objector doesnot hold good.

10. CHEAPEST MODE OF ENERGY FROM HYDRO

Though hydro-power is the cheapest mode of energy but as per the guidelines

of WESCO is purchasing power in bulk from GRIDCO who purchase power from

different generators which may be Hydro, Thermal or any other sources.








part of WESCO.

12. WESCO is an independent company where Govt. of Orissa / GRIDCO and

Reliance Energy Limited are stake-holder and it has independent Board of Directors.

Regarding infusion of capital, it is prime responsibility of the stake-holders to infuse

capital where GRIDCO is also a stake holder with 49% stake.

Regarding security deposit of the consumer is concerned, the same is not

being transferred physically during privatization. The Board of Directors of WESCO

having nominees of GRIDCO as well as Reliance Energy Limited are to decide for

infusion of capital in shape of equity for improvement.

13. Due to no increase in RST since for last seven years and considerable increase

in BST, WESCO has already incurred a loss of Rs. 244.0 Crores (only BST impact)

from Apr-07 to Dec-07 during the financial year 2007-08. In spite of that, the

licensee has not proposed for any tariff hike in RST for the year 2008-09. Hence, as

pointed-out by the objector to make profit by the licensee is not acceptable.

14. The licensee is taking every effort to reduce the T & D loss which is a gradual

process.

15. As per the OERC guidelines, once the cost of meter is recovered from the

consumer, no meter rent is being levied by the licensee. The billing software is

developed accordingly and it will not charge after recovery of the meter cost.

For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 20.01.2008 (Commercial) C.C : Shri Chittaranjan Mohanty President, Basanti Forum, Basanti Nagar Rourkela. Note- This is also available at the licensee’s website-www.wescoorissa.com


Case No. 65 of 2007


Limited (WESCO)

And In the matter of : Shri Samir Kumar Mishra Belpahar, Jharsuguda. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-2009. 1. There is no change in RST for last 7 years and continuous increase in BST in















in our own way.



permissible limit.















extend to the other district headquarter in a phased manner. As per the direction of

Hon’ble OERC, Grievance Redressal Forum (GRF) is also functioning at every circle

under the jurisdiction of the licensee. Hence, as objected by the objector, non-

attending the complaints of the consumer is not true and need to be rejected by the

Hon’ble Commission.















part of WESCO.















process.




For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 20.01.2008 (Commercial) Copy to : Shri Samir Kumar Mishra Belpahar, Jharsuguda. Note- This is also available at the licensee’s website-www.wescoorissa.com


Case No. 65 of 2007


Limited (WESCO)

And In the matter of : Shri Surendra Dash General Secretary, Nagarika Samiti Rourkela. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-2009. 1. There is no change in RST for last 7 years and continuous increase in BST in















in our own way.



permissible limit.




part of WESCO.















process.




For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 20.01.2008 (Commercial) Copy to : Shri Surendra Dash General Secretary, Nagarika Samiti Rourkela. Note- This is also available at the licensee’s website-www.wescoorissa.com

BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION

KALYANI MARKET COMPLEX,BHUBANESWAR.

Case No. 65 of 2007


Limited (WESCO)

And In the matter of : Shri Susanta Ku Pradhan General Secretary, Resident Association Civil Township, Rourkela. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-2009. 1. There is no change in RST for last 7 years and continuous increase in BST in















in our own way.



permissible limit.




part of WESCO.















process.




For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 20.01.2008 (Commercial) Copy to : Shri Susanta Ku Pradhan General Secretary, Resident Association Civil Township, Rourkela. Note- This is also available at the licensee’s website-www.wescoorissa.com

BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION

KALYANI MARKET COMPLEX,BHUBANESWAR.

Case No.65 of 2007

In the matter of : Western Electricity Supply Company of Orissa Limited (WESCO)

And

In the matter of : Shri Anand Prakash Mishra, Vice President, M/s L&T Ltd., Kansbahal Works, Kansbahal-770034. Sundargarh Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-09

1. Lack of improvement in quality of Power Supply by WESCO

The objector has compared the purchase rate and selling rate of electricity

and opined that wesco is making huge profit. At present Wesco’s power

purchase cost is Rs.1.9767 paise per unit apart from the other O&M cost. The

revenue requirement of WESCO is determined not only from the cost of power

but other components of expenditure as mentioned in F-13 in the ARR

application. The tariff rate of different categories of consumers is fixed by

OERC to balance the revenue requirement. Hence, the objection raised by the

objector that wesco is making monopoly business in the western part of

Orissa without looking quality power supply is base less.

2. Failure in prevention of theft of Electricity

To control and reduce theft of energy, Govt. of Orissa has planned to set-up

an energy police station at Sambalpur and a Special Court at Sambalpur has

already started functioning. To arrest / minimize theft of energy WESCO has

already taken up the work such as replacing of bare conductor with AB cable,

installation of audit meters, replacement of metering units by metering

cubicles, round the clock guard for audit meters installed for industries,

deployment of de-hooking squads by Ex-military personnel, strengthening of

MRT & vigilance activity and the percentage of loss is gradually going down.

Hence objection of the petitioner for failure in prevention of theft of electricity

by WESCO is not true.

3. Frequent failure of power supply

With regard to frequent power failure and voltage fluctuation, 4th Auto

Transformer has been installed in Tarkera Grid during January 2007 after

which the power interruption rate has substantially reduced.

M/s. L & T at present is receiving power from two sources for minimizing the

duration of interruption. Whenever there is change-over due to break-down of

one feeder, there will be interruption. As there are many 33 KV consumers in

that feeder, problem in any of industries may affect the feeder and there is

likely that interruption will occur.

M/s. L & T is having a CD of 6 MVA which normally should be in EHT category.

They have been informed no. of times to avail power supply at EHT, but with

one reason or the other they are yet to avail power supply at EHT.

4. Charge of Tariff at Domestic Rate for use of Power in Colony.

At present industries are availing 10% of their consumption towards colony

consumption is an incentive by the Hon’ble Commission. Beyond 10%

consumption, they are to pay at industrial rate, which is still, less than the

prevailing rate of domestic category consumers.

5. Power Factor Incentive


have almost unity power factor and in no case it should be below 90%. In

order to achieve unity power factor, the commission has provided incentive

for improvement of power factor above 95% upto 100%. The incentive for

improvement of power factor was started from 97% up to 100% in the

previous tariff. It may be mentioned here that revenue forgone on account of

power factor incentive during 1st six month of FY 2006-07 and FY 2007-08 is

Rs.3.40 crores and Rs.4.53 crores respectively. This is due to reduction of

availment of PF incentive limit from 97% to 95%. At the same time the

licensee is getting Rs.2.05 crores and Rs.1.50 crores respectively for the

period 1st Six month of FY 2006-07 and FY 2007-08 from power penalty.


the consumers for reaching higher power factor but also will affect demand

and energy consumption. Accordingly, power factor incentive above 90%

instead of 97% (previous tariff) should not be allowed by the commission


consumer in terms of less demand for the same effective energy and also

incentive as high load factor, the power factor incentive be 97% as it was

earlier the prevailing 95%.

6. Prompt Payment Rebate



However, the licensee pays the BST bill to GRIDCO and OPTCL within 48

hours through L.C. mechanism and the bills are submitted to the licensee by

GRIDCO and OPTCL with a copy to the bank.

7. Load Factor Incentive

The Hon’ble Commission has already allowed load factor incentive beyond

50%.The amount lost due to the above is being passed on to the Consumers

while fixing the tariff. As such any further incentive on load factor will have an

adverse affect on the Consumers. Hon’ble Commission is requested not to

accept the proposal.

8. Proper steps for collection of Bills

The contention of the objector that WESCO has been committing gross

negligence in discharging responsibilities by not collecting revenue from

defaulting consumers is not true. Regular disconnections are being made in

case of defaulting consumers. On many occasions installments are allowed to

consumers having huge arrears. As a result the collection has increased and

still there is scope to improve. The process is on. The contention of the

consumer that WESCO is shifting the financial burden to genuine consumers

is not true.

9. Special Tariff for off peak hours

Concession given by OERC on TOD tariff to the consumer has already resulted

in loss of revenue of Rs.3.77 crores for the 1st six month of the current year

2007-08 to WESCO. Further Concession on TOD will result in more loss on

revenue and the tariff on other category of consumers will also be affected.

As such OERC is requested to reject the petition for allowing further

concession on TOD tariff.

Moreover it is not out of place to mention here that WESCO is not getting any

incentive with regard to energy consumption during off peak hours. Therefore

the proposal may be rejected.

10. Special Tariff for Running of Foundry

OERC has categorized the consumers in various categories based on the

usage of power and also fixes different rates of tariff for each category. Fixing

different types of tariff for sub-categories like Foundry, Steel Industry,

Cement Industry, Food processing, Fabrication within the Large Industry

category, and sub-category based on contract demand is not a good proposal.

11. Waiver of Penalty on Overdrawal

The existing provisions regarding overdrawal penalty for maximum demand is

required to be maintained to guard against the understatement of contract

demand by consumers. Overdrawal attracts additional burden for system

stability and reliability thereby affecting all other consumers apart from

distorting power procurement planning. Thus overdrawal charge is essential

to discourage consumers from overdrawal especially when the ABT system is

in vogue. Exemption has already been given by OERC for consideration of

overdrawal up to the extent of 120% during off peak hours.

12. Revenue Gap projected for FY 2008-09.

The revenue gap calculated for the ensuing year 2008-09 as Rs.627.44 crores

considering power purchase cost at 2007-08 BSP price. If BSP of 2005-06 will

be considered then the revenue Gap will be Rs.276.29 crores.

Regarding billing to irrigation consumers we have already considered the

increase of revenue as shown in T-1 format, which is higher by 33% as

compared to current year.

So the objector’s view regarding understatement of revenue is not correct.

For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 21.01.2008 (Commercial) C.C. : Shri A.P.Mishra, Vice President, M/s L&T Ltd., Kansabahal Works, Kansabahal-770034. Sundargarh Note- This is also available at the licensee’s website-www.wescoorissa.com


Case No.65 of 2007


Limited (WESCO)

And In the matter of : Shri Suryakanta Pati, Manager (Electrical)/C, M/s OCL India Ltd., PO/PS:Rajgangpur-770 017. Dist:Sundargarh Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-09

1. Objector’s Suggestion for providing incentive for good performer and

penalty for bad performer.

The objector has suggested various points like reduction of tariff for

consumption between 50% to 60% and consumption >60%, TOD benefit

from 10 paise to 20 paise per unit, TOD benefit time:- from 10 am to 6 pm.,

power factor incentive and power factor penalty etc. The above suggestions

are base less and without proper calculation in consideration facts and

figures. Hence these are not acceptable.

2. Distribution Loss


installation of Audit Metering for industrial consumers, cubicle metering,

Energy Audit, Feeder Metering, System Improvement Work, regularisation of

unauthorized consumers through consumer camps, vigilance checking,

introduction of monthly spot billing in urban areas, putting parallel meters,

giving HT supply through metering cubicles and XLPE cables for HT

consumers. We have also started putting round the clock guards (Ex-military

personal) at strategic location and taking the meter readings at very frequent

interval for minimizing the theft of energy. Financial loss is assessed on the

consumers found indulging in theft of energy and additional bill is raised

accordingly as per I.E. Act-2003. Moreover in LT category, process is always

on to replace the defective meters, years old electromechanical meters &


consumers through our own MRT / Vigilance teams where consumption is

found to be abnormally low.


consumers almost on daily basis for reduction of losses. Where ever uprating

of network is necessary high rating conductor size is laid to reduce losses.

Although in Domestic category more and more consumers have been brought

to the billing fold it is not possible to eliminate tampering and by-passing of

meters in totality due to the vast geographical area and large number of

consumers. In practice it is noticed that loss reduction can only be a gradual

process, which cannot be achieved to a high degree within a year. Operating

at targeted figures of distribution loss is not feasible due to other related

factors including lack of Administrative support. Input based franchisee have

also been engaged in rural areas with monthly billing system who have been

entrusted for meter readings, bill distribution and revenue collection. The


However, there is no appreciatly effect is on the consumers indulging in theft

of energy due to non-availability of adequate police personnel in the energy

police station. Further, although it has been decided by the Govt. to open

energy police station in each district, it is yet to be materialized.


BST so far WESCO is concerned; no surplus is left for investment in system

improvement, adequate operation & maintenance work, vigilance activities.

Pre-closure of APDRP schemes, inadequate funding of central assistance

through State Govt. had considerable effect for which WESCO is not able to

reduce distribution loss specifically in LT consumers. The rural electrification

under PMGY & MNP has added a lot of line & transformer as has added to the

distribution loss.

3. Tariff of EHT Category

The objector has suggested tariff for EHT category off Consumers, which are

not even covering the present power purchase cost of the licensee. The

objector is asking power at the rate of generation cost. In this connection it is

not at all advisable to avail power from DISCOMs rather the objector should

go for an open access by paying cross subsidy surcharge, wheeling charges

and other open access charges to the licensee

4. Special Tariff for EHT Large Industry above 40 MVA.

At present OERC has allowed special tariff @ Rs2 per unit for the consumers

having CD of more than 100 MVA. However if the same will be allowed for the

consumers having CD of 40 MVA then the licensee will have heavy loss as

EHT consumers are cross subsidizing the Domestic consumers of the state.

Keeping the growth of the state’s economy and other employment

opportunities poor domestic consumers are sacrificing their normal peaceful

life by inviting industrialization in the state. So by exploiting the domestic

category of consumers where cost of supply is very much high , the

suggestion is not acceptable.

5. Tariff for colony consumption

At present industries are availing 10% of their consumption towards colony

consumption is an incentive by the Hon’ble Commission. Beyond 10%

consumption, they are to pay at industrial rate, which is still, less than the

prevailing rate of domestic category consumers.

6. Rebate on early payment

The present rebate of 1% of the monthly bill if “full payment made within 72 hrs of presentation of bills” is an adequate incentive.

As far as liquidity is concerned licensee’s liquidity position will not improve to

the extent of BST and Transmission charges even 100% payment will be

made by all the EHT and HT consumers immediately, as the licensee pays the

BST bill to GRIDCO and OPTCL within 48 hours through L.C. mechanism and

the bills are submitted to the licensee by GRIDCO and OPTCL with a copy to

the bank.

For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 21.01.2008 (Commercial) C.C. : Shri Suryakanta Pati, Manager (Electrical)/C, M/s OCL India Ltd., PO/PS:Rajgangpur-770 017. Dist:Sundargarh Note- This is also available at the licensee’s website-www.wescoorissa.com

BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX, BHUBANESWAR.

Case No. 65 of 2007

In the matter of: Western Electricity Supply Company of Orissa

Limited (WESCO)

And In the matter of: Shri Govind Narayan Agrawal, Convenor cum General Secretary Sambalpur Dist. Consumers Federation Balaji Mandir Bhawan, Khetrajpur, Sambalpur Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-09

1. Special tariff for consumers who had lost their land for Hirakud

Dam

At present Hon’ble Commission is determining the tariff as per applicable

provisions of the Indian Electricity Act-2003 and in conformity with the

provision of OERC (Terms & conditions for determination of tariff)

Regulations, 2004 and OERC (Conduct of Business) Regulation, 2004.

Acordingly tariff is designed for different categories like Domestic, General

Purpose, irrigation , PWWS, Large, Heavy, Railway traction etc. Tariff

cannot be determined village wise and consumer wise; hence proposal

raised by the objector is not acceptable.

2. There is proper accounting of the replaced materials including wires,

conductor, cable and poles. Whenever police station seizes poles, wires,

angles, they inform the distribution authorities to identify the materials.

Immediate actions are being taken to identify the materials in police

stations.

3. There is stable power supply in Deogarh after construction of 220/33 Kv

Grid substation at Barkote. However at present there is also a 220/33 Kv

20 MVA Transformer. OPTCL has already initiated to put another 20 MVA

220/33 Kv Transformer at Barkote. The transformer has already reached

at Barkote. Only infrastructure work is in progress for commission of the

2nd transformer by OPTCL. Regarding power supply to Bargarh it is from

Burla end. Incase of emergency power is availed from Kesinga, which is

very occasional. There is low voltage in Bargarh, Agalpur, Melchamunda,

Ghensh area for which a new 132/33 Kv Grid sub station at Barpali is

under construction by OPTCL. After completion of the sub station the low

voltage problem will be over.

4. Incase any detection is being intimated by Spot Billing agency, immediate

action is being taken to resolve issue. May it be defective meter,

tampering, non-metering or any other irregularity including suspectible

cases due to low consumption.

5. Indulging in any activity by making alleged way by individual is very much

difficult to watch. However action is being taken on receipt of information

from any source. In the instant case the concerned individual is already

put under suspension.

6. When the Hon’ble Commission allowed interest on security deposit and the

date line was fixed for giving interest on security deposit. The old cases

specifically Domestic/ General purposes consumers who are consumer

from the OSEB period and security deposit details are not available,

basing on the certain criteria, interest has been given. Also it was notified

in the local dailies for updating the security deposit amount in case it is

not properly accounted for. Hence bifurcation of SD in the form of NSC,

OSEB Bond etc cannot be made as suggested by the objector. As regards

book balance of SD amount which is a audited figure including opening

balance of Rs.48 crores transferred to WESCO as on 31-3-99 only on

paper. No real fund was remitted. Hence the objection as raised is not

true.

For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy General Manager 21.01.2008 (Commercial) C.C : Shri Govind Narayan Agrawal, Convenor cum General Secretary Sambalpur Dist. Consumers Federation Balaji Mandir Bhawan, Khetrajpur, Sambalpur Note- This is also available at the licensee’s website-www.wescoorissa.com

BEFORE THE ORISSA ELECTRICITY REGULATORY COMMISSION KALYANI MARKET COMPLEX, BHUBANESWAR.

Case No. 65 of 2007

In the matter of: Western Electricity Supply Company of Orissa

Limited (WESCO)

And In the matter of: Shri R.P. Mohapatra, Plot No.-775 (P), Lane-3 Jaydev Vihar, Bhubaneswar-751 013. Rejoinder to objections received by the Secretary, Orissa Electricity Regulatory Commission against the Retail supply Tariff Application by WESCO for the year 2008-09

1. DISTRIBUTION LOSS:-


installation of Audit Metering for industrial consumers, cubicle metering,

Energy Audit, Feeder Metering, System Improvement Work, regularisation of

unauthorized consumers through consumer camps, vigilance checking,

introduction of monthly spot billing in urban areas, putting parallel meters,

giving HT supply through metering cubicles and XLPE cables for HT

consumers. We have also started putting round the clock guards (Ex-military

personal) at strategic location and taking the meter readings at very frequent

interval for minimizing the theft of energy. Financial loss is assessed on the

consumers found indulging in theft of energy and additional bill is raised

accordingly as per I.E. Act-2003. Moreover in LT category, process is always

on to replace the defective meters, years old electromechanical meters &


consumers through our own MRT / Vigilance teams where consumption is

found to be abnormally low.


consumers almost on daily basis for reduction of losses. Where ever uprating

of network is necessary high rating conductor size is laid to reduce losses.

Although in Domestic category more and more consumers have been brought

to the billing fold it is not possible to eliminate tampering and by-passing of

meters in totality due to the vast geographical area and large number of

consumers. In practice it is noticed that loss reduction can only be a gradual

process, which cannot be achieved to a high degree within a year. Operating

at targeted figures of distribution loss is not feasible due to other related

factors including lack of Administrative support. Input based franchisee have

also been engaged in rural areas with monthly billing system who have been

entrusted for meter readings, bill distribution and revenue collection. The


However, there is no appreciably effect is on the consumers indulging in theft

of energy due to non-availability of adequate police personnel in the energy

police station. Further, although it has been decided by the Govt. to open

energy police station in each district, it is yet to be materialized.


BST so far WESCO is concerned; no surplus is left for investment in system

improvement, adequate operation & maintenance work, vigilance activities.

Pre-closure of APDRP schemes, inadequate funding of central assistance

through State Govt. had considerable effect for which WESCO is not able to

reduce distribution loss specifically in LT consumers. The rural electrification

under PMGY & MNP has added a lot of line & transformer as has added to the

distribution loss.

The distribution loss actual for FY 2006-07, estimated for FY 2007-08 and

projected for FY 2008-09 under LT & HT category as shown in Annexure-II by

the objector is wrong. The statement represents the LT & HT loss, however

the objector has mentioned the billing %. This may be due to oversight.

However the actual loss in LT & HT for FY 2006-07 is 45.65%, estimated

43.87% for FY 2007-08 and projected 41.77% for FY 2008-09. Hence the

negative performance as exhibited is not true.

2. Amount collected from consumers is being properly accounted for against

current and arrear. In the performance review the licensee is showing both

collection from arrear and current. While calculating collection efficiency only

collection from current dues is being considered.

3. T&D loss target as allowed by Hon’ble commission from time to time is always

very high and non achievable. Based on the approved T&D loss if the

differential power purchase cost will not be allowed in the ARR, the same may

not be payable to Gridco.

4. As far as securitisation is concerned, it will be securitised with 0% interest

and payable in 10 years equal installments. Hence there is no chance of

passing of interest cost in the ARR and finally to the consumers.

5. Revenue collected out of outstanding of Govt. consumers as on 1-4-1999 has

already remitted to GRIDCO. Regarding sharing of amount collected, 50% to

GRIDCO and balance 50% of DISCOM. It is the amount if collected out of the

consumers declared as bad and doubtful as on 31-3-1999 and collection made

out of the consumers declared as bad and doubtful. As the revenue audit is

going to be completed shortly and based on the report due care will be taken

accordingly.

6. Provisions for Bad & Doubtful Debts.

Provision for bad and doubtful debt is considered as per AT & C concept,

hence the difference between billing made and the amount of collection is

shown as provision for Bad debt. In addition to this it has already proved from

the revenue audit report submitted by auditor that the % of recoverability is

around 30% of the outstanding amount. The division wise statement of

revenue audit report is as follows

Sl No Division Auditors's Name

Amount outstanding as on 31-03-05

Recoverable Amt

Non-Recoverable Amt

% of Recoverable

RKL CIRCLE 1 Rourkela M/s Dass Maulik (8110-8114) 47.45 21.55 25.90 45%

M/s A.K. Kar & Co.(8115 - 8117) 37.91 18.49 19.42 49% 2 Rajgangpur M/s Tej Raj & Pal (8130-8133) 20.85 9.03 11.82 43% 3 Sundargarh M/s S.K. Palai (8120-8123) 17.55 7.31 10.24 42%

TOTAL-RKL CIRCLE 123.77 56.38 67.39 46% BURLA CIRCLE

4 Jharsuguda M/s HSB Associates (4132/4133/4134) 35.81 13.17 22.64 37%

M/s. M.K.Sultania (4130/4131) 38.14 11.20 26.94 29% 5 Deogarh M/s Tanmaya S. Pradhan 11.08 3.36 7.72 30% 6 Bargarh(W) M/s Tej Raj & Pal (4150-4154) 54.39 11.65 42.74 21%

7 Bargarh M/s A.K. Kar & Co.(4120-4122)-Draft 77.43 19.75 57.68 26%

TOTAL-BRL CIRCLE 216.84 59.12 157.72 27% BOLANGIR CIRCLE

8 Bolangir M/s Narendra K. Jain & Ass.(9110-9113 & 9115) 43.25 9.67 33.58 22%

9 KEED M/s Bal & Co 29.54 6.16 23.38 21% 10 Nuapada M/s P Swain & Co 14.38 2.83 11.56 20% 11 Sonepur M/s Tanmaya S. Pradhan 36.68 5.99 30.69 16% 12 KWED M/s DVR Murty & Co 19.01 5.35 13.65 28%

TOTAL-BGR CIRCLE 142.86 29.99 112.86 21% GRAND TOTAL 483.47 145.49 337.97 30%

7. Incentive tariff for HT & EHT category of Consumers

The objector has suggested tariff structure for HT & EHT category of

consumers, as it is increasing cross subsidy which is contrary to the principle

annunciated in the OERC (Terms & Conditions of Determination of Tariff)

Regulation, 2004 and the National Tariff Policy. In this case the objector has

suggested considering only the revenue portion of the licensee without

looking the cost aspect. So when higher BST and other O&M cost will be taken

in to account the cross subsidy will not increase with increase RST. Hence the

suggestion of the objector will be appreciable, when BST cost will be reduced

to a greater extent so far the licensee is concerned.

8. Other Tariff related issues

a) Power Factor Incentive


have almost unity power factor and in no case it should be below 90%. In

order to achieve unity power factor, the commission has provided incentive

for improvement of power factor above 95% upto 100%. The incentive for

improvement of power factor was started from 97% up to 100% in the

previous tariff. It may be mentioned here that revenue forgone on account of

power factor incentive during 1st six month of FY 2006-07 and FY 2007-08 is

Rs.3.40 crores and Rs.4.53 crores respectively. This is due to reduction of

availment of PF incentive limit from 97% to 95%. At the same time the

licensee is getting Rs.2.05 crores and Rs.1.50 crores respectively for the

period 1st Six month of FY 2006-07 and FY 2007-08 from power penalty.


the consumers for reaching higher power factor but also will affect demand

and energy consumption. Accordingly, power factor incentive above 90%

instead of 97% (previous tariff) should not be allowed by the commission


consumer in terms of less demand for the same effective energy and also

incentive as high load factor, the power factor incentive be 97% as it was

earlier the prevailing 95%.

b) Computation of Consumption Ratio

The licensee is following the existing system of tariff for calculation of

consumption ratio.

C) Allowance towards interruption of Power Supply In a distribution system, interruption of the line, which may be due to various

reason can not be eliminated. We are trying our best to reduce the duration

of interruption to minimum. In a system there are many industries are

availing power, due to fault developed in any industry may cause line shut

down which affects the other industries. Sometimes the interruption is also

caused due to Grid failure of OPTCL.

Demand charges is calculated as per the prescribed regulation/ notification of

the Hon’ble Commission.

d) Supervision charges are collected on account of services rendered by the

licensee for supervising the electrical installation work of the prospective

consumer. The asset ultimately transferred to the licensee, who will maintain

the asset at its own cost. The amount so collected is booked as other income

in the books and accounts of the licensee, which is ultimately passed on in the

ARR. When an up-gradation of conductor and transformer is required for

giving power supply to the consumer, a non-remunerative portion is being

taken from the consumer in order to make the new line/ up gradation of the

line for giving power supply to the consumer.

This matter ahs already been discussed in several occasion before the Hon’ble

Commission.

9. Other Issues

The objector has suggested for non-implementation of the various proposals

as follows

a) Increase in the reconnection charges

The objector’s view is to adjust the same from S.D amount, which is

not at all correct as S.D is only against energy charges. Apart from the

above it is not at all practically possible to adjust the reconnection

amount from SD amount.

b) DPS FOR LT CONSUMERS :-

Rebate has been allowed by the Hon’ble Commission to encourage the

consumer to pay their dues in time. A consumer not paying in time has

to loose rebate. At the same time for non payment of energy charges

DPS is payable as the licensee is paying DPS for non payment of BST

bills within due date.

c) EMERGENCY POWER SUPPLY TO THE CPP/ GENERATING

STATION:-

Incase of outage of CPP due to system disturbances, they require start

up power which will effect the SMD for the entire month even if the

drawal of power is half an hour for which distribution licensee will have

to pay to GRIDCO without charging the same to the concerned CPP.

This may put the Distco in financial burden. To avoid such unforeseen

cost, it has been proposed to the Hon’ble Commission for considering

the demand charge @ 120% of the demand charges applicable to the

respective tariff category on the maximum demand recorded by the

meter of the CPP. However, the minimum demand charge concept i.e.

80% of CD should not be applicable to the CPPs. As suggested by the

objector for reimbursement of Demand charges, the same may not be

collectible from the consumer unless it is notified in the tariff structure

by Hon’ble Commission.

d) The justification for non-acceptance of various tariff rationalization

measures, as suggested by the licensee is being objected by the

objector without assigning any sufficient reason. Hence it is not

acceptable.

e) Withdrawal of recovery of meter rent.

As far as OSEB is concerned sales tax was exempted as explained by

the objector. However at the present scenario Distribution companies

are not exempted from purview of sales tax. Hence the suggestion of

the objector will not hold good for the present scenario.

For and on behalf of Western Electricity Supply Company of Orissa Limited Burla Dy. General Manager 21.01.2008 (Commercial) C.C : Shri R.P. Mohapatra, Plot No.-775 (P), Lane-3 Jaydev Vihar, Bhubaneswar-751 013. Note- This is also available at the licensee’s website-www.wescoorissa.com

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