capps.powergridindia.com/cerc/docs/western region/2014/11/truing up 09... · 3. gujarat urja vlkas...

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BEFORE THE CENTRAL ELECTRICITY REGULATORY COMMISSION

NEW DELHI

IN THE MATTER OF: Approval under regulation-86 of CERC (Conduct of Business) Regulations, 1999, CERC (Terms and Conditions of Tariff) Regulations, 2009 and CERC (Terms and Conditions of Tariff) Regulations, 2014 for determination of (i) Truing up Transmission tariff for 2009-14 tariff block and (ii) Transmission tariff for 2014-19 tariff block

for the asset 1x125 MVAR Bus Reactor at Khandwa along with associated bays (DOCO:01.10.2010) and 1x125 MVAR Bus Reactor at Dehgam along with associated bays (DOCO:01.11.2010) under WRSS VII Transmission Scheme in Western Region.

PETITIONER Power Grid Corporation of India Ltd. (Govt. of India undertaking) Registered office: B-9, Qutab Institutional Area, Katwaria Sarai, New Delhi- 110 016 Corporate office: "Saudamini", Plot no.2, Sector-29, Gurgaon -122 001. (Haryana)

Power Grid Corporation of India Ltd., the petitioner in the matter, is filing petition under Regulation-86 of CERC (Conduct of Business) Regulations, 1999 for approval of transmission tariff for assets under under WRSS VII Transmission Scheme in Western Region.

In terms of Regulation 3(2) of the Central Electricity Regulatory Commission (Procedure for making of application for determination of tariff, publication of the application and other related matters) Regulations, 2004, copy of complete tariff application is hereby served to the respondents (beneficiaries of Western Region), for information and necessary action in the matter.

The tariff application is hereby served through the nodal officers of the respondents for CERC matters, on the addresses as mentioned below:

ADDRESSES OF NODAL OFFICERS

1. MADHYA PRADESH POWER MANAGEMENT COMPANY LTD. SHAKTI BHAWAN, RAMPUR JABALPUR - 482 008 REPRESENTED BY ITS MD

2. PRAKASHGAD, 4TH FLOOR ANDHERI (EAST), MUMBAI - 400 052 REPRESENTED BY ITS MD

A

3. GUJARAT URJA VlKAS NIGAM LTD. SARDAR PATEL VIDYUT BHA WAN, RACE COURSE ROAD VADODARA - 390 007 REPRESENTED BY ITS CHAIRMAN

4. ELECTRICITY DEPARTMENT GOVT. OF GOA VIDYUT BHAWAN, PANAJI, NEAR MANDVI HOTEL, GOA - 403001

REPRESENTED BY ITS CHIEF ENGINEER (ELECTRICAL)

5. ELECTRICITY DEPARTMENT ADMINISTRATION OF DAMAN & DIU DAMAN - 396 210 REPRESENTED BY ITS SECRETARY (FIN.)

6. ELECTRICITY DEPARTMENT ADMINISTRATION OF DADRA NAGAR HAVELI U.T., SILVASSA - 396 230 REPRESENTED BY ITS SECRETARY (FIN.)

7. CHHA TTISGARH STATE ELECTRICITY BOARD P.O.SUNDER NAGAR, DANGANIA, RAIPUR CHHATISGAARH-4920 13 REPRESENTED BY ITS CHAIRMAN

8. MADHYAPRADESH AUDYOGIK KENDRA VIKAS NIGAM (INDORE) LTD. 3/54, PRESS COMPLEX, AGRA-BOMBAY ROAD, INDORE-452 008

Kindly acknowledge the receipt.

PETITIONER POWER GRID CORPORATION OF INDIA LTD.

RE~~~DBY ~1

Mohd Mohsin GURGAON ASST. GENERAL MANAGER (COMMERCIAL) DATED: j...\ .11.2014


NEW DELHI .

PETITION FOR

Approval under Regulation-86 of CERC (Conduct of Business) Regulations, 1999 and Regulation-6 of CERC (Terms and Conditions of Tariff) Regulations, 2009 and CERC (Terms and Conditions of Tariff) Regulations, 2014 for determination of

(i) Truing up Transmission tariff for 2009-14 tariff block and (ii) Transmission tariff for 2014-19 tariff block

for the Combined asset 1x125 MVAR Bus Reactor at Khandwa along with associated bays (DOCO:01.10.2010) and 1x125 MVAR Bus Reactor at Dehgam along with associated bays (DOCO:01.11.2010) under WRSS VII Transmission Scheme in Western Region.

PETITION NO. : .

TRUING UP TARIFF FOR 2009 - 2014

AND

TARIFF FOR 2014 - 2019

POWER GRID CORPORATION OF INDIA LTD.

REGISTERED OFFICE B-9, QUTAB INSTITUTIONAL AREA, KATWARIA SARAI,

NEW DELHI - 110 016

CORPORATE CENTRE "SAUDAMINI", PLOT NO-2, SECTOR-29,

GURGAON-122 001 (HARYANA) EPABX: 0124-2571 700 TO 719, FAX: 0124-2571989


NEW DELHI PETITION NO.: .

IN THE MATTER OF:



for Combined asset of 1x125 MVAR Bus Reactor at Khandwa along with associated bays (DOCO:01.10.2010) and 1x125 MVAR Bus Reactor at Dehgam along with associated bays (DOCO:01.11.2010) under WRSS VII Transmission Scheme in Western Region.

IN THE MATTER OF: Power Grid Corporation of India Ltd. -- PETITIONER Registered office: B-9, Qutab Institutional Area, Katwaria Sarai, New Delhi 110 016 and Corporate office: "Saudamini",Plot no.2, Sector-29, Gurgaon -122 001. (Haryana)

Madhya Pradesh Power Management Company Ltd. -- RESPONDENTS Shakti Bhawan, Rampur Jabalpur - 482 008 Represented By Its MD And Others

INDEX

51. Description Enclosure No. Page No. No.

1 Letter for registration 2 Memo of Parties 3 Affidavit 4 Petition 5 CERC Order Encl-1 6 Auditor Certificate Encl-2

Trued up Tariff Forms (2009-14 block) Encl-37 8 Tariff Forms (2014-19 block) Encl-4 9 Check List

ASST. GENERAL MANA GURGAON DATED: "-t '-tl '- t1t

2


NEW DELHI PETITION NO.: ..........

IN THE MATTER OF:




IN THE MATTER OF: Power Grid Corporation of India Ltd. -- PETITIONER Registered office: B-9, Qutab Institutional Area, Katwaria Sarai, New Delhi 110016 and Corporate office: "Saudamini",Plot no.2, Sector-29, Gurgaon -122 001. (Haryana)


To The Secretary Central Electricity Regulatory Commission New Delhi. 110 001

Sir,

The application filed under Requlation-Be of CERC (Conduct of Business) Regulations'1999 and Regulation-6 of CERC (Terms and Conditions of Tariff) Regulations, 2009 and CERC (Terms and Conditions of Tariff) Regulations' 2014 for determination of Truing up Transmission tariff for 2009-14 tariff block and Transmission tariff for 201.4-19 tariff block may please be registered.

GURGAON DATED: ~J _\\ L \ ~

3



IN THE MATTER OF:




IN THE MATTER OF: Power Grid Corporation of India Ltd. -- PETITIONER Registered office: B-9, Qutab Institutional Area, Katwaria Sarai, New Delhi 110 016 and Corporate office: "Saudarnini",Plot no.2, Sector-29, Gurgaon -122 001. (Haryana)


MEMO OF PARTIES

POWER GRID CORPORATION OF INDIA LTD. --PETITIONER

VERSUS

1 MADHYA PRADESH POWER MANAGEMENT --- RESPONDENTS COMPANY LTD. SHAKTIBHAWAN,RAMPUR JABALPUR - 482 008 REPRESENTED BY ITS MD

2 MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. PRAKASHGAD, 5TH FLOOR BANDRA (EAST), MUMBAI - 400 051 REPRESENTED BY ITS CHIEF ENGINEER

(POWER PURCHASE CELL)

4

3 GUJARAT URJA VIKAS NIGAM LTD. SARDAR PATEL VIDYUT BHAWAN, RACE COURSE ROAD VADODARA - 390007 REPRESENTED BY ITS CHAIRMAN

4 ELECTRICITY DEPARTMENT GOVT. OF GOA VIDYUT BHAWAN, PANA.II, NEAR MANDVI HOTEL, GOA - 403001

REPRESENTED BY ITS CHIEF ENGINEER (ELECTRICAL)

5 ELECTRICITY DEPARTMENT ADMINISTRATION OF DAMAN & DIU DAMAN - 396 210 REPRESENTED BY ITS SECRETARY (FIN.)

6 ELECTRICITY DEPARTMENT

ADMINISTRATION OF DADRA NAGAR HAVELI U.T., SILVASSA - 396 230 REPRESENTED BY ITS SECRETARY (FIN.)

7 CHHATTISGARH STATE ELECTRICITY BOARD P.O.SUNDER NAGAR, DANGANIA, RAIPUR CHHATISGAARH-492013 REPRESENTED BY ITS CHAIRMAN

8 MADHYAPRADESH AUDYOGIK KENDRA VIKAS NIGAM (INDORE) LTD. 3/54, PRESS COMPLEX, AGRA-BOMBAY ROAD, INDORE-452 008

PETITIONER POWER GRID CORPORATION OF INDIA LTD.

~ REPRESENTED BY

ASST. GENERAL MANAGER (COMMERCIAL)

GURGAON DATED: ~\ ,\~~ \ ~

5

gl{[JIOH HARYANA BEFORE ?RAA 245295 ~ THE CENTRAL ELECTRICITY REGULATORY COMMISSIdN"

NEW DELHI PETITION NO.: .

. IN THE MATTER OF:

Approval! under Regulation-86 of CERC (Conduct of Business) Regulations, 1999 and Regulati~n-6 of CERC (Terms and Conditions of Tariff) Regulations, 2009 and CERC (Terms and Conditions of Tariff) Regulations, 2014 for determination of (i) Truing up Transmission tariff for 2009-14 tariff block and (ii) Trailsmission tariff for 2014-19 tariff block

for Com~jned asset of 1x125 MVAR Bus Reactor at Khandwa along with associated bays (DOCO:01.1 0.201 0) and 1x125 MVAR Bus Reactor at Dehgam along with associated bays (DOCO:cr .11.2010) under WRSS VII Trans ._ . ' eme in Western Region.

'. . #)f;..--- "IJt" IN THE !\tATTER OF: . r.,~/~~ Power GMd Corporation of India Ltd. ./«~_, '

the Power Grid Corporation of India Ltd., having its registered Office at B-9, Institutional Area, Katwaria Sarai, New Delhi-11 0 016, do hereby solemnly affirm and state as under:

1. I am the Asst. General Manager (Commercial) of Power Grid Corporation of India Ltd., the representative of the Petitioner in the above matter, and am duly authorized to make this affidavit.

2. I submit that the enclosed petition is being filed under Regulation-6 of CERC (Terms and Conditions of Tariff) Regulations' 2009 and CERC (Terms and Conditions of Tariff) Regulations' 2014 for determination of Truing up Transmission tariff for 2009-14 tariff block and Transmission tariff for 2014-19 tariff block for the Combined asset of 1x125 MVAR Bus Reactor at Khandwa along with associated bays (DOCO:01.1 0.2010) and 1x125 MVAR Bus Reactor at Dehgam along with associated bays (DOCO:01.11.2010) under WRSS VII Transmission Scheme in Western Region.

3. I submit that no other petition except this petition has been filed directly or indirectly under Regulation-6 of CERC (Terms and Conditions of Tariff) Regulations, 2009 and CERC (Terms and Conditions of Tariff) Regulations' 2014 for determination of truing up transmission tariff for 2009-14 tariff block and Transmission tariff for 2014-19 tariff block for the above said combined asset under WRSS VII Transmission Scheme in Western Region.

4. The statements made in the petition herein are based on petitioner company's official records maintained in the ordinary course of business and I believe them to be true and correct.

5. The documents attached Wi~~;~/__~_~~0~~:re.legible copies and duly attested by me.

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IN THE MATTER OF:




IN THE MATTER OF: Power Grid Corporation of India Ltd. -- PETITIONER Registered office: B-9, Qutab Institutional Area, Katwaria Sarai, New Delhi 110016 and Corporate office: "SaudarniniPlot no.2, Sector-29, Gurgaon -122 001. (Haryana)

Madhya Pradesh Power Management Company Ltd. •• RESPONDENTS Shakti Bhawan, Rarnpur Jabalpur - 482 008 Represented By Its MD And Others

To The Hon'ble Chairman and his Companion Members of The Hon'ble CERC The Humble application filed by the Petitioner

MOST RESPECTFULLY SHOWETH

1) The Petitioner herein, Power Grid Corporation of India Ltd. is a Government Company within the meaning of Companies Act, 1956. The Petitioner is also discharging the statutory functions under various applicable provisions, including in particular section 28 and 38 of the Electricity Act, 2003. In exercise of powers under sub-section (1) of section 38(1) the Electricity Act 2003, the Government of India has declared the Petitioner herein as the Central Transmission Utility.

2) That, Hon'ble Commission has notified CERC (Terms and Conditions of Tariff) Regulations, 2014, in accordance with which tariff based on capital cost of the transmission projects shall be determined. These Regulations have come in to force on 1.4.2014 and shall remain in force for a period of five (5) years, unless reviewed earlier or extended Q_ ~ttte Hon'ble Commission. . I~. Go'

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3) That the petitioner has been entrusted with the implementation of 1x125 MVAR Bus Reactor along with associated bays at Khandwa (Asset-1A); DOCO: 01.10.2010 and 1x125 MVAR Bus Reactor along with associated bays at Dehgam (Asset-1 B); Transmission System associated with WRSS VII Transmission Scheme in Western Region.

4) That the petitioner had filed the tariff petition for the Combined Assets ( Asset 1): 1x125 MVAR Bus Reactor along with associated bays at Khandwa (Asset-1A); DOCO: 01.10.2010 and 1x125 MVAR Bus Reactor along with associated bays at Dehgam (Asset-1B); DOCO: 01.11.2010 under WRSS VII Transmission Scheme in Western Region for determination of transmission tariff from DOCO to 31.03.2014. The transmission tariff based on admitted cost of Rs 1239.59 lakhs as on notional DOCO:01.11.2010 and Add Cap of Rs.383.34 lakh, Rs.208.04 lakh and Rs.102.44 lakh for the year 2010-11, 2011-12 and 2012-13 respectively for the Combined Assets (Asset 1) under WRSS VII Transmission Scheme in Western Region covered under this petition for tariff period 2009-14 has been approved by the Hon'ble Commission vide its order dated 1J3~05.2011 in petition no. 309/2010, a copy whereof is enclosed as Encl.-1, page.'~..to.::r.D

(Rs in Lakhs)

Name of Asset

Asset 1A

Apportione d approved

Cost

1589.42

Admitted Cost as

on DOCO

491.49

01.10.10 to

31.10.10

94.20

Admitted Add Cap

2010-11 2011-12

218.12 130.40

2012-13

70.67

Total Admitted Cost as

on 31.03.14

1004.52

Asset 18 1615.53 717.36 165.22 78.00 31.77 992.35

Combined Assets 1 3204.95

1239.59* (1303.05) 383.34 208.04

102.44 1933.41* (1996.87)

(* as against combined cost of Rs.1303.05 lakhs claimed as on notional DOCO: 01.11.2010; the Hon'ble Commission has admitted Rs.1239.59 lakhs after adjusting Rs.63.46 Lakhs towards excess initial spares of Rs. 111.80 lakhs claimed in the petition.)

5) That, Hon'ble Commission vide Regulation-6 of CERC (Terms and Conditions of Tariff) Regulations, 2009, for the tariff block 2009-14 has inter-alia stated as follows:

Quote:

6. Truing up of Capital Expenditure and Tariff.

(1) The Commission shall carry out truing up exercise along with the tariff petition filed for the next tariff period, with respect to the capital expenditure including additional capital expenditure incurred up to 31.3.2014, as admitted by the Commission after prudence check at the time of truing up.

9

http:Rs.63.46

Provided that the generating company or the transmission licensee, as the case may be, may in its discretion make an application before the Commission one more time prior to 2013-14 for revision of tariff.

(2) The generating company or the transmission licensee, as the case may be, shall make an application, as per Appendix I to these regulations, for carrying out truing up exercise in respect of the generating station a unit or block thereof or the transmission system or the transmission lines or sub-stations thereof by 31.10.2014;

(3) The generating company or the transmission licensee, as the case may be, shall submit forthe purpose of truing up, details of capital expenditure and additional capital expenditureincurred for the period from 1.4.2009 to 31.3.2014, duly audited and certified by the auditors;

Un-Quote

6) In view of the above, in this petition

(i) Truing up Transmission tariff for 2009-14 block: Truing up of transmission tariff for the block 2009-14 on account of the additional capital expenditure incurred from OOCO upto 31.03.2014 under Regulation-6 of CERC (Terms and Conditions of Tariff) Regulations, 2009, for the tariff block 2009-14

And

(ii) Transmission tariff for 2014-19 block: Approval under regulation-86 of CERC (Conduct of Business) Regulations' 1999 and CERC (Terms and Conditions of Tariff) Regulations' 2014 for determination of Transmission tariff for the tariff block 2014-19 for the assets covered under this petition.

has been carried out.

7) That the Petitioner is required to adjust the yearly impact of MAT as per regulation 6(5) of the 2nd amendment to the tariff Regulation 2009-14 period dated 21.06.2011 in the truing up petition for 2009-14 tariff block.

Regulation 6(5) of the 2nd amendment to the tariff Regulation 2009-14: Quote

"Provided further that Annual Fixed Charge with respect to the tax rate applicable to the generating company or the transmission licensee, as the case may be, in line with the provisions of the relevant Finance Acts of the respective year during the tariff period shall be trued up in accordance with Regulation 6 of these regulations. n

Regulation 6(1) of Tariff Regulation 2009-14: 10

Quote

"The Commission shall carry out truing up exercise along with the tariff petition filed for the next tariff period, with respect to the capital expenditure including additional capital expenditure incurred up to 31.3.2014, as admitted by the Commission after prudence check at the time of truing up."

Unquote

The MAT rate applicable to the petitioner for the various years as per the Finance Act of the relevant year and the revised grossed up ROE are as given below:

Year MAT Rate Grossed up ROE (Base rate/(1-t))

2009-10 16.995 18.674 2010-11 19.931 19.358 2011-12 20.008 19.377 2012-13 20.008 19.377 2013-14 20.961 19.610

In line with above Regulation the tariff for each year of the tariff period 2009-14 block w.r.t the actual tax rate applicable to the petitioner in line with provisions of the relevant Finance Acts has been trued up.

8) While filing tariff petition for 2009-14 period the petitioner had prayed for allowing the floating rate of Interest on loan adjustments. As per Hon'ble Commission order dated 08.06.2011 in petition no. 238/2010, it has been stated that interest on loan was calculated on basis of prevailing rates as on 01.04.2009/ date of commercial operation and any change in the rates of interest subsequent to 01.04.2009/date of commercial operation will be considered at the time of truing up. Accordingly in the instant petition, the truing up on account of impact due to change in MAT rate, floating rate of interest, FERV, as well as consequential loWC is being carried out.

9) That the present petition covers truing up of transmission tariff for the tariff block 2009-14 based on admitted capital expenditure incurred up to DOCO and actual additional capitalization from DOCO to 31.03.2014 and transmission tariff for tariff block 2014-19 for the Combined assets (Asset 1) of 1x125 MVAR Bus Reactor at Khandwa along with associated bays (DOCO:01.10.2010) and 1x125 MVAR Bus Reactor at Dehgam along with associated bays (DOCO:01.11.201 0) under WRSS VII Transmission Scheme in Western Region.

10) The details of underlying assumptions for additional capitalization during the period 2009-14 are summarized as follows:

The admissibility of additional capital expenditure (Add Cap) incurred after DOCO and up to cut of date is to be dealt in accordance with the provisions of Regulation 9 (1). The additional Capitalization incurred in the contextual assets is on account of any undischarged liability towards final payment/withheld payment due to contractual exigencies for .' ...~.:;:._'- cuted within the cut-off date. ~ ~~

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11) The details of actual additional capitalization incurred up to 31.03.2014 of different assets covered in this petition are summarized below:

( Rs. in Lakhs)

Name of Expendit Actual Add Cap expenditure in 2009-14 Total capital Expendit ure As On 31.03.14

Initial Spares SS (Actual )

Asst & DOCO

ure incurred

up to DOCO

1.10.10 to

31.10.10 2010-11

2011-12 2012-13

Asset 1A (01.10.2010) 491.49 95.21 109.86 92.03 13.65 802.23

55.87

Asset 18 (01.11.2010) 719.65 - 143.00 81.38 22.95 966.98 55.93 Combined Assets 1

(01.11.2010)

1237.05 (1306.35) 252.86 173.41 36.60 1699.91

(1769.21) 111.80

The above additional capitalization from DOCO up to cut off date i.e. 31.03.2013 was on account of Balance/Retention payment for substation works. As against the total allowed add cap of RS.693.82 Lakhs, actual expenditure incurred is Rs.462.87 Lakhs up to cut-off date 31.03.2013.

It is to mention that as against DOCO cost of RS.1303.05 lakhs, as per the auditor certificate dtd 11.11.2010, Hon'ble Commission has considered DOCO cost of RS.1239.59 lakhs for determination of tariff for the 2009-14 block after reducing excess cost of Rs.63.46 lakhs of initial spares for combined assets as on notional DOCO: 01.11.2010 (by restricting the initial spares@ 2.5% of estimated completion cost of Substation equipments).

Accordingly, the estimated completion cost allowed by the Hon'ble Commission was RS.1933.41 lakhs as against claimed amount of Rs.1996.87 lakhs. Now as per the final cost certificate, the completion cost of the assets is Rs1769.21 lakhs. Accordingly, cost of allowable Initial spares @2.5% of Substation cost works out to Rs.42.50 lakhs as against total spares cost of RS.111.8 lakhs indicated in the Auditor Certificate. The excess initial spares of RS.69.30 lakhs has been adjusted in the DOCO cost of RS.1306.35 lakhs and the adjusted DOCO of RS.1237.05 lakhs has been considered for the purpose of determination of tariff for 2009-14 block.

In view of above, the capital cost for determination of transmission tariff for truing up 2009-14 and tariff block 2014-19, is considered after restricting the initial spares to normative values (Rs.42.50 lakh), in line with the CERC Order dtd 13.05.2011 in the petition no 309/2010, as per the provision 8, Chapter-2, of the CERC Regulations 2009.

A copy of auditor's certificate in respect of the assets covered in this petition is enclosed herewith as Encl-2 (page 4i.. to ¥t). It is humbly prayed that tariff may be allowed on the adjusted actual Completion cost of Rs 1699.91 Lakhs.

12) Transmission tariff for Tariff block 2009-14 block

The revised transmission tariff for block 2009-2014 has been worked out on a up of the additional capitalization as per CERC (Terms and Conditions of T

12

2009. In the present petition the transmission tariff has been calculated taking actual expenditure Lip to DOCO and actual additional capitalization from DOCO to 31.03.2014. Calculations for working out the tariff along with supporting documentation are attached hereto as Encl.- 3, (page4~to ':}-\ ..).

The trued up annual transmission tariff for the tariff period 2009-14 is summarized as below: Rs.in Lakhs)

Name of Asset & DOCO 2010-11 2011-12 2012-13 2013-14

Asset 1A Annual Fixed Cost approved 13.61*

(01.10.2010) Revised AFC based on truing up 11.58*

Combined Asset 1

(01.11.2010)

Annual Fixed Cost approved Revised AFC based on truinq up

144.95**

129.44**

398.07

339.23

423.19

358.86

431.19

364.79

* Tariff for one (01) month on prorata basis for the period (01.10.2010 to 31.10.2010) ** Tariff for five (05) months on prorata basis for the period (01.10.2010 to 31.10.2010)

13) Transmission Tariff for 2014-19 block:

This petition also covers Approval under regulation-86 of CERC (Conduct of Business) Regulations1999 and CERC (Terms and Conditions of Tariff) Regulations 2014 for determination of Transmission tariff for the tariff block 2014-19 for the assets covered under this petition. As per Regulation 7 (3) CERC (Terms and Conditions of Tariff) Regulations' 2014, inter-alia states as under:

Quote:

(3) In case of an existing generating station or transmission system includingcommunication system or element thereof, the application shall be made not later than180 days from the date of notification of these regulations based on admitted capitalcost including any additional capital expenditure already admitted up to 31.3.2014(either based on actual or projected additional capital expenditure) and estimatedadditional capital expenditure for the respective years of the tariff period 2014-15 to 2018-19.

Un-Quote

Accordingly, the capital cost of Rs 1699.91 lakhs (after adjusting the cost of initial spares beyond 2.5% from actual completion cost of Rs 1769.21 lakhs) considered for determination of transmission tariff for 2014-19 block is as summarized follows:

( Rs in Lakhs

Name of the Asset

Capital cost as on 31.03.2014 (As per Table at SI No 12)

Projected Estimated Add Cap 2014-19 Total Cost

Combined Asset 1

1699.91 (1769.21)

0.0 1699.91

(1769.21)

No additional capitalization is projected in 2014-19 block.

14) That as per regulation 6(1) (i), 20 (3) and regulation 21 of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014, the tariff for transmission of electricity on ISTS shall comprise transmission charge for recovery of •. . ixed cost consisting of (a) Return on Equity, (b) Interest on Loan, (c) Depreci . ~ rest on

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15.1

15.2

15.3

15.4

15.5

Working Capital and (e) Operation and maintenance expenses. The tariff for block 2014-2019 has been worked out as per Appendix-I, part III of CERC (Terms and Conditions of Tariff) Regulations, 2014. In the present petition the transmission tariff has been calculated taking actual expenditure upto 31.03.2014 and estimated expenditure from 01.04.2014 to 31.03.2019 (O&M/construction) for estimated additional capitalization from 01.04.2014 to 31.03.2019. Calculations for working out the tariff along with supporting documentation are attached hereto as Encl-4 (Page1~ - .~.).

The annual transmission tariff for the tariff period 2014-19 is summarized as below: (Rs. In Lakhs)'#

SINo Name of Asset Combined asset (Notional01 DOCO:01.11.2010)

2014-15 2015-16 2016-17 2017-18 2018-19

352.53 352.27 352.26 352.51 353.01 ..11' "- While calculating Annual fixed O&M charges, rates as specified In the Tariff

Regulation'2014 have been considered. However, the petitioner is approaching the Hon'ble Commission through review petition for revision in the O&M rates. Thus the Annual Fixed Cost is subject to the outcome of the said review petition.

The asset will complete 12 Yrs beyond 2014-19 block. Accordingly depreciation has been calculated annually based on Straight Line Method.

That, it is submitted that the petitioner being liable to pay income tax at MAT rate, the ROE has been calculated @ 19.610 % after grossing up the ROE with MAT rate of 20.961% based on the rate prescribed by the Hon'ble Commission as per illustration under regulation 25 (2) (i) of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014. That as per clause25 (3) of the above regulation, the grossed up rate of ROE at the end of every financial year shall be trued up based on actual tax paid together with any additional tax demand including interest thereon duly adjusted for any refund of tax including interest received from the IT authorities pertaining to the tariff period 2014-15 to 2018-19 on actual gross income of any financial year. Any under-recovery or over-recovery of grossed up rate on ROE after truing up shall be recovered or refunded to beneficiaries on year to year basis. It is further submitted that the adjustment due to any additional tax demand including interest duly adjusted for any refund of tax including interest received from IT authorities shall be recoverable ladjustable during I after completion of income tax assessment of the financial year.

That as provided in clause 39 of Tariff Regulations 2009 and clause 49 of the Tariff Regulations 2014, the deferred tax liability before 01.04.2009 shall be recovered from the beneficiaries or the long term customers IDICs as and when the same gets materialized.

Service tax on transmission has been put in the negative list w.e.f. 01.04.2012 and accordingly the Transmission Charges indicated at para 15.1 above, is exclusive of Service Tax and the same shall be borne and additionally paid by the respondent(s) to the petitioner and the same shall be charged, billed separately by the petitioner if at any time the transmission charges is withdrawn from the negative list. Further, any additional taxes are to be paid by the petitioner on account of demand from Govt I statutory auth~he same may be allowed to be recovered from the beneficiaries. . ~ ~q.Gr;t.. O(j~Q

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15.6 In tariff calculation for 2009-14 period, Interest on Loan has been calculated based on actual interest rates for each year.

For the purpose of the supporting documents for rate of interest, kindly refer page 32 to page 41 (Volume 2) of our affidavit dtd. 26.06.2014 which was filed before the Hon'ble Commission to avoid duplicacy/repeatative submission of voluminous documents in each petition. These documents/details are also available on our website www.powergridindia.com.

15.7 In the tariff calculation for 2014-19 period Interest on Loan has been calculated on the basis of rate prevailing as on 01.04.2014. The change in Interest rate due to floating rate of interest applicable, if any, during 2014-19 period for the project needs to be claimed / adjusted over the tariff block of 05 years directly from / with the beneficiaries.,

15.8 The transmission charges at para-15.1 above is inclusive of O&M expenses for the project derived based on the norms for O&M expenditure for Transmission System as specified under regulation 29 (3) (a) of the tariff regulations for block 2014-19. It is the understanding of the petitioner that these norms for O&M expenditure been arrived by the Hon'ble Commission after considering (i) normalized actual O&M expenses of the petitioner on its various projects in various regions during the year 2008-09,2009-10,2010-11,2011-12 and 2012-13. It is submitted that the wage revision of the employees of the petitioner company is due during 2014-19 and actual impact of wage hike which will be effective from a future date has also not been factored in fixation of the normative O&M rates prescribed for the tariff block 2014-19. The scheme of wage revision applicable to CPSUs being binding on the petitioner, the petitioner reserves the right to approach the Hon'ble Commission for suitable revision in the norms for O&M expenditure for claiming the impact of wage hike, if any, during 2014-19.

15.9 The application filing fee, expenses incurred on publication of Notices in Newspapers and License fee may be allowed to be recovered separately from the respondents in terms of Regulation 52 Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014. The fees and charges to be paid by the petitioner as ISTS licensee (deemed ISTS licensee) under CERC (Fees and Charges of RLDC and other matters) Regulations as amended from time to time shall also be recoverable from the DICs as provided under clause 52(2) (a).

15.10 The Transmission Charges and other related Charges indicated at para 15.1 above, is exclusive of incentive, late payment surcharge, FERV, any statutory taxes, levies, duties, cess, filing fees, license fee, RLDC fees and charges or any other kind of imposition (s) and/ or other surcharges etc. whatsoever imposed / charged by any Government (Central/State) and / or any other local bodies/authorities/regulatory authorities in relation to transmission of electricity, environmental protection, and/or in respect of any of its installation associated with the Transmission System and the same shall be borne and additionally paid by the respondent(s) to the petitioner and the same shall be charged, billed separately by the petitioner on the respondents.

16 Sharing of Transmission Charges

Tariff for Transmission of Electricity (Annual Fixed Cost) as per para 15.1 above shall be recovered on monthly basis in accordance with Regulation 43 of Central EI rirl'b~~pgulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 and sh ch~.r'Mr\ by the

15

beneficiaries and long term transmission customers in Central Electricity Regulatory Commission (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010 dated 15.06.2010 and amendment to these Regulations issued vide order dated 30.11.2012 or as amended from to time.

However, the transmission charges for 2009-14 period upto 30.06.2011 shall be recovered on monthly basis in accordance with Regulation 23 and shall be shared by the respondents in accordance with regulation 33 of CERC (Terms and Conditions of Tariff) Regulations, 2009.

In the circumstances mentioned above it will be just and proper that the transmission tariff for the assets covered under this petition be allowed to be charged from the Respondents on the basis set out in para-15 above. The Petitioner submits that the Encl.-1 to Encl.-4 may please be treated as integral part of this petition.

PRAYER

It is respectfully prayed that the Hon'ble Commission may be pleased to

1) Approve the Trued up Transmission Tariff for the tariff block 2009-14 block for the assets covered under this petition, as per para-12.0 above. The adjustment billing shall be raised.

2) Admit the capital cost as on 31.03.2014 as claimed in the Petition and approve the Additional Capitalization incurred during 2009-14 period.

3) Approve the Transmission Tariff for the tariff block 2014-19 block for the assets covered under this petition, as per para 14 above.

4) Allow the petitioner to recover the shortfall or refund the excess Annual Fixed Charges, on account of Return on Equity due to change in applicable Minimum Alternate/Corporate Income Tax rate as per the Income Tax Act, 1961 (as amended from time to time) of the respective financial year directly without making any application before the Commission as provided under clause 25 of the Tariff regulations 2014.

5) Allow the petitioner to recover the deferred tax liability before 01.04.2009 from the beneficiaries or the long term customers/DICs as and when the same gets materialized.

6) Allow the Petitioner to approach Hon'ble Commission for suitable revision in the norms for O&M expenditure for claiming the impact of wage hike, if any, during period 2014-19.

7) Allow the petitioner to recover FERV on the foreign loans deployed as provided under clause 50 of the Tariff Regulations,2014.

8) Approve the reimbursement of expenditure by the beneficiaries towards petition filing fee, and expenditure on publishing of notices in newspapers in terms of Regulation 52 Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014, and other expenditure ( if any) in relation to the filing of petition.

9) Allow the petitioner to bill and recover Licensee fee and RLDC fees and charges, separately from the respondents in terms of Regulation 52 Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014.

10) Allow the petitioner to bill and adjust impact on Interest on Loan due Interest

16

rate on account of floating rate of interest applicable during 2014-19 period, if any, from the respondents.

11) Allow the Petitioner to bill and recover Service tax on Transmission Charges separately from the respondents, if at any time service tax on transmission is withdrawn from negative list at any time in future. Further, any taxes and duties including cess etc. imposed by any statutory/Govt./municipal authorities shall be allowed to be recovered from the beneficiaries

and pass such other relief as Hon'ble Commission deems fit and appropriate under the circumstances of the case and in the interest of justice

FILED BY POWER GRID CORPORATION OF INDIA LTD.

GURGAON DATED: ?-t'\I,\Lt

17

CENTRAL ELECTRICITY REGULATORY COMMISSION

NEW DELHI

Petition No. 309/2010

Coram: Dr. Pramod Deo, Chairperson Shri S.Jayaraman, Member Shri V.S.Verma, Member

Date of Hearing: 26.4.2011 Date of Order: 13.5.2011

In the matter of:

Approval under Regulation 86 of Central Electricity Regulatory Commission (Conduct of Business) Regulations'1999, and Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations'2009, for Tariff determination for the 1x125 MVAR Bus Reactor at Khandwa and 1x125 MVAR Bus Reactor at Dehgam along with bays associated under WRSS VII Transmission Scheme in Western Region from period from 1.4.2009 to 31.3.2014.

And

In the matter of:

PowerGrid Corporation of India Ltd., Gurgaon ... Petitioner

Vs

1. Madhya Pradesh Power Trading company Ltd., Jabalpur 2. Maharashtra State Electricity Distribution Company Ltd., Mumbai 3. Gujarat Urja Vikas Nigam Ltd. Vadodara 4. Electricity Department. Goa, Panaji 5. Electricity Deptt. Administration of Daman and Diu, Daman 6. Electricity Deptt., Govt. of UT of Dadra and Nagar Haveli,

Silvassa 7. Chattisgarh State Electricity Board, Raipur. 8. Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd., Indore ...... Respondents

The following was present:

Shri. U K Tyagi, PGCIL Shri Rajeev Gupta, PGCIL Shri. S S Raju, PGCIL Shri B Vamsi

ORDER

This petition has been filed seeking approval of transmission tariff in

respect of 1x125 MVAR Bus Reactor at Khandwa (hereinafter referred to as

-;;;.....~\ "~Jorder in Petition No. 309/2010

"the single asset") and 1x125 MVAR Bus Reactor at Dehgam along with bays

associated (both the assets collectively referred to hereinafter as "the

combined assets") under WRSS VII Transmission Scheme in the Western

Region for the period from 1.4.2009 to 31.3.2014, based on the Central

Electricity Regulatory Commission (Terms and Conditions of Tariff)

Regulations, 2009, (hereinafter referred to as "the 2009 regulations"). The

petitioner has also sought the following reliefs:

(a) Allow the petitioner, in case of the assets being combined, to

calculate the transmission charges to recover full depreciation (90%) of

the gross block) of the assets during the useful life (25 years for SIS

and 35 years for Transmission lines) reckoning from the actual date of

commissioning and permit the petitioner to treat the recovery of

depreciation after achieving the useful life by an asset in accordance

with para 9.1 of the petition.

(b) Allow grossing up of base rate of return with the applicable tax

rate as per the Finance Act for the relevant year and direct settlement

of tax liability between the generating company/transmission licensee

and the beneficiaries/long term transmission customers on year to year

basis.

(c) Approve reimbursement of expenditure towards petition filling

fee and publishing of notices in newspapers in terms of regulation 42 of

the 2009 regulations and other expenditure (if any) in relating to filling

of petition.

~;'''.~\

~~;; Order in Petition No. 309/2010

(d) Allow the petitioner to bill and recover Service Tax on

transmission charges separately from the respondents if at any time

exemption from Service Tax is withdrawn and transmission of power is

notified as a taxable service.

(e) Allow the petitioner to bill and recover Licensee fee separately

from the respondents

(f) Allow the petitioner to bill and adjust the impact on Interest on

Loan due to change in Interest rate on account of floating rate of

interest applicable during 2009-14, if any, from the respondents.

(g) Pass such other relief as Hon'ble Commission deems fit and

appropriate under the circumstances of the case and in the interest of

justice.

2. Investment approval for the transmission scheme was accorded by the

Board of Directors of the petitioner company vide their letter dated 25.2.2008

at an estimated cost of ~ 3205 lakh including IDC of ~ 169 lakh based on 3rd

quarter, 2007 price level.

3. Date of commercial operation of the components whose Transmission

charges are being determined in this petition are as under:

I, Detail of the asset Date of

I~ commercial operation

1x125 MVAR Bus Reactor at 1.10.2010 Khandwa alone with associated bays and 1x125 MVAR Bus Reactor at 1.11.2010 Dehqarn along with associated bays

,~;......~. \ §§,;; Order in Petition No. 309/2010 ~.>'

Remarks

Within schedule as per the investment approval

Page 3 of 23

4. The petitioner has claimed the following transmission charges:

~ in lakh) Sinale Asset

2010-11 (Pro Rata)

Depreciation 17.10 Interest on Loan 17.53 Return on equity 16.98 Interest on Working Capital 2.36 o & M Expenses 27.70

Total 81.67

Combined Assets

2010-11 (Pro-ratal

2011-12 2012-13 2013-14

Depreciation 32.88 94.53 102.73 105.43 Interest on Loan 33.33 91.41 92.56 87.49 Return on equity 32.66 93.89 102.03 104.72 Interest on Working Capital 4.19 11.20 11.88 12.22 O&M Expenses 46.17 117.14 123.84 130.92

Total 149.23 408.17 433.04 440.78

5. The details submitted by the petitioner in support of its claim for interest

on working capital are given hereunder:

~ in lakh) Sin !lIe Asset

2010·11 (Pro- ratal

Maintenance Spares 8.31 0& M expenses 4.62 Receivables 27.22

Total 40.15 Interest 2.36 Rate of Interest 11.75%

Combined Assets 2010-11

(pto-ratal 2011-12 2012-13 2013-14

Maintenance Spares 16.62 17.57 18.58 19.64 0& M expenses 9.23 9.76 10.32 10.91 Receivables 59.69 68.03 72.17 73.46

Total 85.54 95.36 101.07 104.01 Interest 4.19 11.20 11.88 12.22 Rate of Interest 11.75% 11.75% 11.75% 11.75%

6. None of the respondents have filed reply to the petition.

Page 4 of 23 i;»,'" :,~~~~; Order in Petition No. 309/2010~yt:,Y

7. Having heard the representatives of the parties and examined the

material on record, we proceed to dispose of the petition.

CAPITAL COST

8. Clause 7(1) of the 2009 regulations provides as under:

"7. Capital Cost. (1) Capital cost for a project shall include:

(a) the expenditure incurred or projected to be incurred. including interest during construction and financing charges, any gain or loss on account of foreign exchange risk variation during construction on the loan - (i) being equal to 70% of the funds deployed, in the event of the actual equity in excess of 30% ofthe funds deployed, by treating the excess equity as normative loan, or (ii) being equal to the actual amount of loan in the event of the actual equity less than 30% of the funds deployed, - up to the date of commercial operation of the project, as admitted by the Commission, after prudence check;

(b) capitalised initial spares subject to the ceiling rates specified in regulation B;and

(c) additional capital expenditure determined under regulation 9:

Provided that the assets forming part of the project, but not in use shall be taken out of the capital cost. "

9. Details of the apportioned approved cost as on date of commercial

operation and estimated additional capitalization projected to be incurred for

the assets covered in this petition are summarized below:

(~in lakh)

Name of the asset Apportione Expenditure Projected expenditure during Total Estimated Completio n cost

d Approved Cost

ason date of commercial operation

1.10.10 to 31.10.10

2010·11 2011·12 2012·13

Bus Reactor at 400/220 kV Khandwa

1589.42 491.49* 94.20 218.12 130.40 70.67 1004.52

Bus Reactor at 400/220 kV Dehzam

1615.53 717.36* - 165.22 78.00 31.77 992.35

Combined asset of Bus Reactor at 400/220 kV Dehgam (Notional DOCO: 01.11.2010)

3204.95 1303.05* 383.34 208.04 102.44 1996.87

,..;.;»,~, Page 5 of 23 (~-ii0rder in Petition No. 309/2010

*Capital cost as on Date of Commercial operation is inclusive of initial spares

of ~ 111.80 lakh ( ~ 55.87 lakh and ~ 55.93 lakh for the individual assets)

10. As per the Auditors certificate dated 11.11.2010, the petitioner has

claimed initial spares of ~ 111.80 lakh (~ 55.87 lakh and ~ 55.93 lakh) in

respect of the above mentioned assets. The above stated cost of Initial spares

amounting to ~ 111.80 lakh is in excess by ~ 63.46 lakh as ceiling limit

defined in clause 8 of the 2009 regulations as per the detail given bellow:

(~in lakh) Project Cost as on Cut off date

Apportioned Initial Spares Claimed

Ceiling Limits as per clause 8 of the 2009 regulations

Initial Spares worked out

Excess Initial Spares (Diaallowed)

(a) (b) (e) (d)=*((a-b)*e) I (lOO-e)% (e)=(b)-(d)

1996.87 111.80 (55.93+55.87)

2.5% 48.34 63.46

11. Based on the above, the capital cost for the purpose of tariff

determination has been reduced by the amount of excess cost included in the

Initial Spares.

12. After the above stated adjustment towards excess initial spares, the

capital expenditure of ~ 491.49 lakh for the Single Asset as on 1.10.2010 and

~ 1239.59 lakh for Combined Assets as on 1.11.2010 has been considered for

tariff determination for 2009-14 period.

ADDITIONAL CAPITAL EXPENDITURE

13. With regard to additional capital expenditure, clause 9(1) of the 2009

regulations prescribes as under:

age 6 of 23

"Additional Capitalisation: (1) The capital expenditure incurred or projected to be incurred, on the following counts within the original scope of work, after the date of commercial operation and up to the cut-off date may be admitted by the Commission, subject to prudence check:

(i) Undischarged liabilities; (ii) XXX (iii) XXX (iv) XXX (v) XXX"

14. Besides, the 2009 regulations defines cut-off date as under:

"cut-off date means 31st march of the year closing after 2 years of the year of commercial operation of the project, and incase of the project is declared under commercial operation in the last quarter of the year, the cut-off date shall be er March of the year closing after 3 years of the year of commercial operation n.

15. The petitioner has claimed additional capital expenditure amounting to

~ 383.34 lakh, ~ 208.04 lakh and ~ 102.44 lakh for the year 2010-11 (from the

date of commercial operation to 31.3.2011),2011-12 and 2012-13 respectively.

Since the above stated expenditures are all within the cut-off date, the same are

allowed for the purpose of tariff calculation.

DEBT· EQUITY RATIO

16. Clause (1) of Regulation 12 of the 2009 regulations inter alia provides

that,

(1) For a project declared under commercial operation on or after 1.4.2009, if the equity actually deployed is more than 30% of the capital cost, equity in excess of 30% shall be treated as normative loan:

Provided that where equity actually deployed is less than 30% of the capital cost, the actual equity shall be considered for determination of tariff:

Provided further that the equity invested in foreign currency shall be designated in Indian rupees on the date of each investment.

(2) XXX.

17. Details of debt-equity claimed by the petitioner are as under:

Page 7 of 23.~;''''''\ Order in Petition No. 309/2010

(~in lakh) Capital Cost as on Date

of commercial Approved Cost operation

Single Asset Debt 1112.59 70.00% 344.04 69.999% Equitv 476.83 30.00% 147.45 30.001% Total 1589.42 100.00% 491.49 100.00%

Combined Assets Debt 2243.46 70.00% 912.12 69.999% Ecultv 961.48 30.00% 390.93 30.001% Total 3204.95 100.00% 1303.05 100.00%

18. As there is a difference between the capital as claimed by the petitioner

and that allowed herein above, correspondingly, there is a difference in debt

equity details also, as provided hereunder:

(~ in lakh) Capital Cost as on date

of commercial Approved operation

Single Asset Debt 1112.59 70.00% 344.04 70.000% Equity 476.83 30.00% 147.45 30.000% Total 1589.42 100.00% 491.49 100.00%

Combined Assets Debt 2243.46 70.00% 867.71 70.000% Equity 961.48 30.00% 371.87 30.000% Total 3204.95 100.00% 1239.59 100.00%

19. As regards the additional capital expenditure, debt-equity ratio of 70:30

has been applied as per the following details:

(~in lakh)

Actual Normative ~Iakh % ~Iakh %

Sinale Asset

Add Cap for 2010-11 Debt 0.00 0.00% 218.62 70.00% Equitv 0.00 0.00% 93.70 30.00%

Total 0.00 0.00% 312.32 100.00%

,.~...~ t~';: Order in Petition No. 309/2010

~ in lakh)

Combined Assets Add Cap for 2010-11

Actuals Normative Debt 0.00 0.00% 268.34 70.00% Equity 0.00 0.00% 115.00 30.00% Total 0.00 0.00% 383.34 100.00%

Add Cap for 2011-12 Debt 0.00 0.00% 145.63 70.00% Equity 0.00 0.00% 62.41 30.00% Total 0.00 0.00% 208.04 100.00%

Add Cap for 2012-13 Debt 0 0.00% 71.71 70.00% Equity 0 0.00% 30.73 30.00% Total 0 0.00% 102.44 100.00%

RETURN ON EQUITY

20. Regulation 15 of the 2009 regulations provides that,

"15. (1) Return on equity shall be computed in rupee terms, on the equity base determined in accordance with regulation 12.

(2) Return on equity shall be computed on pre-tax basis at the base rate of 15.5% to be grossed up as per clause (3) of this regulation:

Provided that in case of projects commissioned on or after 1st April, 2009, an additional return of 0.5% shall be allowed if such projects are completed within the timeline specified in Appendix-II:

Provided further that the additional return of 0.5% shall not be admissible if the project is not completed within the timeline specified above for reasons whatsoever.

(3) The rate of return on equity shall be computed by grossing up the base rate with the normal tax rate for the year 2008-09 applicable to the concerned generating company or the transmission licensee, as the case may be:

Provided that return on equity with respect to the actual tax rate applicable to the generating company or the transmission licensee, as the case may be, in line with the provisions of the relevant Finance Acts of the respective year during the tariff period shall be trued up separately for each year of the tariff period along with the tariff petition filed for the next tariff period.

(4) Rate of return on equity shall be rounded off to three decimal points and be computed as per the formula given below:

Rate of pre-tax return on equity = Base rate / (1-t)

Where t is the applicable tax rate in accordance with clause (3) of this regulation.

,.~.",.~ Page 9 of 23

21. Return on equity has been calculated based on Average equity

consequent to additional capital expenditure during the period 2010-11 to 12

13. Return on Equity has been calculated as follows- Base rate/(1-t), where

Base Rate is 15.5% and 't' is normal tax rate for the period 2008-09

applicable to PowerGrid which is under MAT i.e. 10%+

surcharge@10%+3%Education Cess.

22. The petitioner has also prayed that it may be allowed to gross up the

base rate of ROE as per the Finance Acts of the relevant years. This prayer

has already been taken cognizance of in the Commission's order dated

3.8.2010 in Petition 1\10. 17/2010 wherein a decision has been taken to

address the issue raised by the petitioner. Relevant portion of the said order is

extracted as under:

"We are of the view that this issue of 'grossing up the base rate with the normal tax rate for the year 2008-09' is generic in nature and therefore, it will be appropriate to make suitable provisions in the 2009 regulations to cater to any future changes in the tax rate. Accordingly, we direct the staff of the Commission to prepare and submit draft amendment to the 2009 regulations for allowing grossing up of base rate of return with the applicable tax rate as per the Finance Act for the relevant year and direct settlement of tax liability between the generating company/transmission licensee and the beneficiariesllong term transmission customers on year to year basis. Any under/over recovery on account of direct settlement of tax liability shall be subject to the final adjustment at the time of true up exercise."

23. Pending decision on revision of MAT rate, ROE has been computed as

per Regulation 15 of the 2009 regulations, and pre-tax ROE of 17.481% has

been considered.

24. As the single asset has been commissioned on 1.10.2010, RoE in

respect of the same has been calculated for six months in the year 2010

':....~ Page 10 of 23 \.~;: Order in Petition No. 309/2010

rX1

11.Detailed calculation of the ROE in respect the transmission assets is as

under:

(~ in lakh) Single Asset

2010·11 {Pro ratal

Opening Equity 147.45 Addition due to Additional Capitalisation 93.70 Closing Equity 241.14 Average Equity 194.30 Return on Equity (Base Rate) 15.50% Tax rate for the year 2008-09 (MAT) 11.33% Rate of Return on Equity (Pre Tax) 17.481 % Return on Equity (Pre Tax) 16.98

~ in lakh) Combined Assets

2010-11 (Pro rata)

2011·12 2012·13 2013·14

Opening Equity 371.88 486.88 549.29 580.02 Addition due to Additional Capitalisation 115.00 62.41 30.73 0.00 Closing Equity 486.88 549.29 580.02 580.02 Average Equity 429.38 518.08 564.66 580.02 Return on Equity (Base Rate) 15.50% 15.50% 15.50% 15.50% Tax rate for the year 2008-09 (MAT) 11.33% 11.33% 11.33% 11.33% Rate of Return on Equity (Pre Tax) 17.481% 17.481% 17.481 % 17.481% Return on Equity (Pre Tax) 31.27 90.57 98.71 101.39

INTEREST ON LOAN

25. Regulation 16 of the 2009 regulations provides that,

"16. (1) The loans arrived at in the manner indicated in regulation 12 shall be considered as gross normative loan for calculation of interest on loan.

(2) The normative loan outstanding as on 1.4.2009 shall be worked out by deducting the cumulative repayment as admitted by the Commission up to 31.3.2009 from the gross normative loan.

(3) The repayment for the year of the tariff period 2009-14 shall be deemed to be equal to the depreciation allowed for that year:

(4) Notwithstanding any moratorium period availed by the generating company or the transmission licensee, as the case may be the repayment of loan shall be considered from the first year of commercial operation of the project and shall be equal to the annual depreciation allowed,.

,~;"".~ age 11 of 23 ~Order in Petition No. 309/2010

(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:

Provided that if there is no actual loan for a particular year but normative loan is still outstanding, the last available weighted average rate of interest shall be considered: Provided further that if the generating station or the transmission system, as the case may be, does not have actual loan, then the weighted average rate of interest of the generating company or the transmission licensee as a whole shall be considered.

(6) The interest on loan shall be calculated on the normative average loan of the year by applying the weighted average rate of interest.

(7) The generating company or the transmission licensee, as the case may be, shall make every effort to re-finance the loan as long as it results in net savings on interest and in that event the costs associated with such re-financing shall be borne by the beneficiaries and the net savings shall be shared between the beneficiaries and the generating company or the transmission licensee, as the case may be, in the ratio of 2:1.

(8) The changes to the terms and conditions of the loans shall be reflected from the date of such re-financing.

(9) In case of dispute, any of the parties may make an application in accordance with the Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999, as amended from time to time, including statutory re-enactment thereof for settlement of the dispute:

Provided that the beneficiary or the transmission customers shall not withhold any payment on account of the interest claimed by the generating company or the transmission licensee during the pendency of any dispute arising out of re-financing of loan."

26. In these calculations, interest on loan has been worked out as detailed

below:

(a) Gross amount of loan, repayment of instalments and rate of

interest and weighted average rate of interest on actual average loan

have been considered as per the petition.

(b) The repayment for the tariff period 2009-14 shall be deemed to

be equal to the depreciation allowed for that period.

~..,.;;,,, Page 12 of 23 ;,~~) Order in Petition No. 309/2010"'-'Y

(c) In respect of the moratorium period availed by the transmission

licensee, the repayment of the loan shall be considered from the first

year of commercial operation of the project and shall be equal to the

annual depreciation allowed.

(d) Weighted average rate of interest on actual average loan

worked out as per (a) above is applied on the notional average loan

during the year to arrive at the interest on loan.

(e) The interest on Loan has been calculated on the basis of rate

prevailing as on 1.4.2009/date of commercial operation. Any

subsequent change in rate of Interest will be considered at the time of

truing up.

(f) As mentioned hereinabove, tariff is to be allowed for the Single

Asset only for the month of October'2010. Repayment of Normative

Loan i.e. ~ 2.85 lakh for the Single Asset for the month ofOctober 2010

has been considered as cumulative Repayment of Normative Loan for

Combined Assets as on Notional date of commercial operation i.e.

1.11.2010.

27. Detailed calculation of the weighted average rate of interest in respect

of the two transmission assets are annexed to this order as Annexure -I and

Annexure - II. Details of the calculation of Interest on Loan are given

overleaf.

30

Page 13 of 23~"".''\ \.~: Order in Petition No. 309/2010

Single Asset 2010-11

(Pro rata) Gross Normative Loan 344.04 Cumulative Repayment upto Previous Year 0.00 Net Loan-Opening 344.04

Addition due to Additional Capitalisation 218.62 Repayment during the year 17.10

I Net Loan-Closing 545.57 Average Loan 444.81 Weighted Average Rate of Interest on Loan 7.8816% Interest 17.53

(~in lakh)

Combined Assets I 2010·11 2011-12 2012-13 2013·14

I (Pro rata) Gross Normative Loan 867.71 1136.05 1281.68 1353.38 Cumulative Repayment upto Previous Year 2.85 34.34 125.52 224.90 Net Loan-Opening 864.86 1101.71 1156.16 1128.48 Addition due to Additional Capitalisation 268.34 145.63 71.71 0.00 Repayment during the year 31.49 91.18 99.38 102.08 Net Loan-Closina 1101.71 1156.16 1128.48 1026.40 Averaae Loan 983.29 1128.93 1142.32 1077.44 Weiahted Averaae Rate of Interest on Loan 7.7888% 7.8106% 7.8422% 7.8671% Interest 31.91 88.18 89.58 84.76

DEPRECIATION

28. Regulation 17 of the 2009 regulations provides for computation of

depreciation in the following manner, namely:

"17. (1) The value base for the purpose of depreciation shall be the capital cost of the asset admitted by the Commission.

(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.

xxxx xxxx

(3) Land other than the land held under lease and the land for reservoir in case of hydro generating station shall not be a depreciable asset and its cost shall be excluded from the capital cost while computing depreciable value of the asset.

(4) Depreciation shall be calculated annually based on Straight Line Method and at rates specified in Appendix-III to these regulations for the assets of the generating station and transmission system:

Provided that, the remaining depreciable value as on 31st March of the year closing after a period of 12 years from date of commercial operation shall be spread over the balance useful life of the assets.

3/

.~.f.."."'\ Page 14 of 23 (~.;: Order in Petition No. 309/2010

(5) In case of the existing projects, the balance depreciable value as on 1.4.2009 shall be worked out by deducting the cumulative depreciation as admitied by the Commission up to 31.3.2009 from the gross depreciable value of the assets.

(6) Depreciation shall be chargeable from the first year of commercial operation. In case of commercial operation of the asset for part of the year, depreciation shall be charged on pro rata basis. "

29. The assets involved in the petition were commissioned on 1.10.2010

and 1.11.2020. Accordingly they will complete 12 years beyond 2013-14 and

thus depreciation has been calculated annually based on Straight Line

Method and at rates specified in Appendix-III. Depreciation of Asset-1 for the

month of October'2010 has been considered as cumulative Depreciation for

the Combine Asset-2.

30. As the single asset has been commissioned on 1.10.2010, depreciation

in respect of the same has been calculated for six months in the year 2010

11. Based on the above, depreciation for the period the tariff period has been

worked out are as under:

(~ in lakh) Sinale Asset

2010-11 (Pro rata)

Opening Gross Block (As per Last OrderIDOCO)

491.49 491.49

Addition during 2009-14 due to Projected Additional Capitalisation

312.32

Closinq Gross Block 803.81 Averaoe Gross Block 647.65 Rate of Depreciation 5.2800% Depreciable Value 90% 582.89 Remaininq Depreciable Value 582.89 Depreciation 17.10

~ in lakh) Combined Assets

Ooenino Gross Block (As per Last Order/DOCOI

2010-11 (Pro rata)

2011-12 2012·13

1830.97 102.44

1933.41 1882.19

5.2800%

2013-14

1239.59 1622.93 1933.41 Addition during 2009-14 due to Projected Additional Capitalisation

383.34

1622.93

208.04 0.00

Closino Gross Block 1830.97 1933.41 Averaae Gross Block 1431.26 1726.95 1933.41 Rate of Depreciation 5.2800% 5.2800% 5.2800% Depreciable Value 90% 1288.13 1554.25 1693.97

1568.45 99.38

1740.06 Remainino Depreciable Value 1285.28 1519.91 1515.17 Depreciation 31.49 .!l1.18 102.08·

~'d.G~ ,~.q;. l"C'

.:~.;.....~ Page 15 of 23J~Hf?;'.~;order in Petition No. 309/2010 ~~ .~

OPERATION & MAINTENANCE EXPENSES

31. Clause (g) of Regulation 19 the 2009 regulations prescribes the

following norms for operation and maintenance expenses based on the type

of sub-station and line. It is seen that the petitioner has claimed O&M charges

based on the above norms. Accordingly, O&M charges have been allowed @

~ 27.70 lakh (pro-rata) for the year 2010-11 for the Single asset and @ ~ .

46.17 lakh, ~ 117.14 lakh, ~ 123.84 lakh and ~ 130.921akh for 2010-11 (Pro

rata), 2011-12, 2012-13 and 2013-14 respectively for the combined assets.

32. As stated above, the petitioner has reserved the right to approach the

Commission for suitable revision in the norms for 0&1\11 expenditure in case

the impact of wage hike w.eJ 1.1.2007 is more than 50%. This issue is

premature at this stage. Petition, if any filed by the petitioner will be dealt with

in accordance with the provisions of law.

INTEREST ON WORKING CAPITAL

33. As per the 2009 regulations, the components of the working capital and

the interest thereon are discussed hereunder:

(h) Receivables: As per Regulation 18(1)(c)(i) of the 2009 regulations,

receivables will be equivalent to two months' average billing calculated

on target availability level. The petitioner has claimed the receivables

~.;.....~ '\__~.~;::order in Petition No. 309/2010

Page 16 of 23

In the tariff being allowed, receivables have been worked out on the

basis of 2 months' transmission charges.

(ii) Maintenance spares: Regulation 18(1)(c)(ii) of the 2009

regulations provides for maintenance spares @ 15% per annum of the

o & M expenses from 1.4.2009. The value of maintenance spares has

accordingly been worked out.

(iii) 0 & M expenses: Regulation 18(1) (c) (iii) of the 2009 regulations

provides for operation and maintenance expenses for one month as a

component of working capital. The petitioner has claimed O&M

expenses for 1 month of the respective year as claimed in the petition.

This has been considered in the working capital.

(iv) Rate of interest on working capital: As per Regulation 18(3) of

the 2009 regulations, rate of interest on working capital shall be on

normative basis and shall be equal to the short-term Prime Lending

Rate of State Bank of India as on 1.4.2009 or on 1st April of the year in

which the project or part thereof (as the case may be) is declared

under commercial operation, whichever is later. The interest on

working capital is payable on normative basis notwithstanding that the

transmission licensee has not taken working capital loan from any

outside agency. The petitioner has claimed interest on working capital

@ 12.25% based on SBI PLR as on 1.4.2009, which is in accordance

with the 2009 regulations and has been allowed.

~;..~.~\ age 17 of 23 \~; Order in Petition No. 309/2010

34. Necessary computations in support of interest on working capital are

appended hereinbelow:

(~ in lakh) sinale Asset

2010-11 For October 2010

Maintenance Spares 1.39 O&Mexpenses 0.77 Receivables 4.54

Total 6.69 Rate of Interest 11.75% Interest 0.39

(~ in lakh) Combined Assets

2010-11 2011·12 2012-13 2013-14 (Pro rata)

Maintenance Spares 16.62 17.57 18.58 19.64 o & M expenses 9.23 9.76 10.32 10.91 Receivables 57.98 66.35 70.53 71.87

Total 83.83 93.68 99.43 102.41 Rate of Interest 11.75% 11.75% 11.75% 11.75% Interest 4.10 11.01 11.68 12.03

TRANSMISSION CHARGES

35. The transmission charges being allowed for the transmission lines are

summarized below:

(~in lakh) Sin ale Asset

2010·11 (Pro ratal

Depreciation 2.85 Interest on Loan 2.92 Return on equity 2.83 Interest on Working Capital 0.39 o &M Expenses 4.62

Total 13.61

Combined Assets

2010·11 (Pro ratal

2011-12 2012·13 2013·14

Depreciation 31.49 91.18 99.38 102.08 Interest on Loan 31.91 88.18 89.58 84.76 Return on equity 31.27 90.57 98.71 101.39 Interest on Working Capital 4.10 11.01 11.68 12.03 o & M Expenses 46.17 117.14 123.84 130.92

Total 144.95 398.07 423.19 431.19

i.;.-.~", Page 18 of 23 ;~~) Order in Petition No. 309/2010 ",,-,y

APPLICATION FEE AND THE PUBLICATION EXPENSES

36. The petitioner has sought approval for the reimbursement of fee paid

by it for filing the petition. In accordance with our decision in order dated

11.1.2010 in Petition No. 109/2009, the petitioner shall be entitled to recover

the filing fee from the beneficiaries.

37. Accordingly, expenses incurred by the petitioner on application filing

fees and publication of notices in connection with the present petition shall be

directly recovered from the beneficiaries on pro rata basis.

SERVICE TAX

38. The petitioner has made a specific prayer to be allowed to bill and

recover the Service tax on Transmission charges separately from the

respondents if at any time exemption from Service tax is withdrawn and

transmission of Power is notified as a taxable Service. This prayer of the

petitioner is premature. If such a contingency as foreseen by the petitioner

arises, the issue will be decided in accordance with law.

39. The transmission charges allowed in this order shall be recovered on

monthly basis in accordance with Regulation 23 and shall be shared by the

respondents in accordance with Regulation 33 of the 2009 regulations.

40. This order disposes of Petition No. 309/2010.

Sd/· Sd/- Sd/

(V.S.Verma) (S.Jayaraman) (Dr. Pramod Deo) Member Member Chairperson

Page 19 of 23~;"\r.'" ~-?; Order in Petition No. 30912010

Annexure-l

(~ In lakh)

CALCUALTION OF WEIGHTED AVERAGE RATE OF INTEREST Details of Loan Bond XXXI Gross loan opening

Cumulative Repayment upto DOCO/previous year

Net Loan-Opening Additions during the year

Repayment during the year Net Loan-Closing Average Loan Rate of Interest Interest Rep Schedule

Bond XXXIII Gross loan opening

Cumulative Repayment upto DOCO/previous year

2010-11

79.00 1

0.00

79.00 0.00

0.00 79.00 79.00 8.90%

7.03

219.15

0.00

219.15

-

2

Net Loan-Opening Additions during the year

Repayment during the year Net Loan-Closing Average Loan Rate of Interest Interest Rep Schedule

Bond XXXIII (ADD CAP For 2010-2011 Drawls on 31.03.2011)

Gross loan opening Cumulative Repayment upto DOCO/previous year Net Loan-Opening Additions during the year Repayment during the year Net Loan-Closing Average Loan Rate of Interest Interest Rep Schedule

0.00

0.00 219.15 219.15 8.64%

18.93

0.00 0.00

0.00 65.95

3

0.00 65.95 32.98 8.64%

2.85

~~~~ ~..,t..

.~;"'".~ -I Page 20 of 23 order in Petition No. 309/2010

~~\ I'~} 37

I

Annexure- 2

CALCULATION OF WEIGHTED AVERAGE RATE OF INTEREST ON LOAN (~ in lakh)

--,-~

Details of Loan 2010·11 2011-12 2013-142012·13 Bond XXXI Gross loan opening

1 214.00 214.00 214.00 214.00

~

Cumulative Repayment upto 0.000.00 0.00 0.00 DOCO/previous year Net Loan-Opening 214.00 214.00214.00 214.00 Additions durinq the year 0.000.00 0.000.00 Repayment during the year 0.00 17.830.00 0.00 Net Loan-Closing 196.17214.00 214.00 214.00 Average Loan 214.00 214~OO 214.00 205.0a

-8.90%r-Rate of Interest 8.90%8.90% 8.90%

Interest 19.05 19.05 19.05 18.25 12 Annual instalments from 25.02.2014. Rep Schedule

Bond XXXIII 2 Gross loan opening 573.60 573.60 573.60573.60

Cumulative Repayment upto 0.00 0.00 0.00 0.00 DOCO/previous year Net Loan-Opening 573.60573.60 573.60 573.60 Additions durina the year 0.00 0.000.00 0.00

'-.Repayment during the year 0.00 0.00 0.00 0.00

f- Net Loan-Closing 573.60573.60 573.60 573.60

573.60573.60~verage Loan 573.60 573.60 I

8.64%Rate of Interest 8.64% 8.64% 8.64% Interest 49.56 49.56 49.56 49.56

12 annual installments from 08.07.2014 -

Rep Schedule ~~

ADB III (Exchange Rate @ 45.44)3 Gross loan opening 45.89 45.8945.89 45.89

5.61Cumulative Repayment upto 2.18 3.821.42 DOCO/previous year Net Loan-Opening 44.48 43.71 40.2942.08

------0.00Additions durina the year 0.00 0.00 0.601.97

40.29 f-. 38.32Repayment during the year 0.76 1.64 1.79 Net Loan-Closing 43.71 42.08 Average Loan 39.3044.10 42.90 41.18

1.72% 1.72%-. 1.72%Rate of Interest 1.72% Interest

I 0.76 0.71 0.680.74 Rep Schedule Half yearly Instalments from 15.01.2010

>;~..\\ Page 22 of 23 ;\~> Order in Petition No. 309/2010 "'~~

4 ADB III (Exchange Rate @ 44.93 Gross loan openino 78.63 78.63 78.63 78.63 Cumulative Repayment upto 2.43 3.73 6.54 9.64 DOCO/orevious vear Net Loan-Opening 76.20 74.90 72.09 68.99 Additions during the year 0.00 0.00 0.00 0.00 Repayment during the year 1.31 2.81 3.10 3.41 Net Loan-Closing 74.90 72.09 68.99 65.58 Average Loan 75.55 73.49 70.54 67.28 Rate of Interest 1.72% 1.72% 1.72% 1.72% Interest 1.30 1.26 1.21 1.16 Rep Schedule Half yearly Instalments from 15.01.2010

Total Loan Gross loan opening 912.12 912.12 912.12 912.12 Cumulative Repayment upto 3.85 5.91 10.36 15.25 DOCO/previous year

Net Loan-Opening 908.28 906.21 901.76 896.88 Additions during the year 0.00 0.00 0.00 0.00 Repayment during the year 2.07 4.45 4.89 23.22 Net Loan-Closing 906.21 901.76 896.88 873.66 Average Loan 907.24 903.99 899.32 885.27 Rate of Interest 7.7888% 7.8106% 7.8422% 7.8671% Interest 70.66 70.61 70.53 69.64

.~.; »,~ Page 23 of 23 :

HUH l\Jo 6-3- 244(S. );nada Dc'" Slicer.SAGAR & ASSOCIATES Pre m i'Jagar. Hyder abad . 500004.

Phone. 040 - 23303371.2339 S5 88CHARTERED ACCOUNTANTS [-ax . 040 - 23 J9 0 I S I F rna" . sagarandassoClates(cl)yahoo.coln F-rn.ul sagilrilndassDciates.ca(ci)gmall.com EIl'a" vvsagMbabuC0gmad.com Service T,lX Regn. No. AAJFS7295N STOOl

CERTIFICATE OF CAPITAL COST

Project Name: 1'125 MVAR 8us Roactor at Khandwa Substation along with assoclatod bays under WRSS VII SCheme

Date of Commercial Operation: DOCO 01.10.2010 (RS I LAKHS)

l

PARTICULARS

Expenditure upto

30.09.2010(u pta DOCO)

Expenditure from

01.10.2010 upto

31.10.2010

Expenditure from

01.11.2010 upto

31.03.2011 Expenditure

2011·12 Expenditure

2012·13 Expendilure

2013·14 Total

Expenditure

0.00LAND 0.00 0.00 0.00 0.00 0.00 0.00

BUILDING ,CIVIL WORKS & COLONY 0.00 0.00 0.00 0.00 0.00 0.00 0.00

TRANSMISSION LINE 0.00 0.00 0.00 0.00 0.00 0.00 0.00

SUB·STATION 491.49 95.21 109.86 92.03 13.65 0.00 802.23

PLCC 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total 491.49 95.21 109.86 92.03 13.65 0.00 802.23

Initial Spares Included In the above 55.87

"'Note :-Incluslve of FERV of Rs.1.68 Lakhs Loss upto 30.09.2010 pertaining to ADB ·111 Loan for the period upto 30-09-2010 taken to Profit & Loss

Account of the project as per Accounting Standard ·11 revised 2003 (The effects of Changes In Foreign Exchange Rates) and Accounting Standard-16

(Borrowing costs) Issued by Institute of Chartered Accountants of India and as per opinion of Expert Advisory Committee of ICAI.

This Is to certify that the above summary has been prepared on the basis of the information drawn from the Audited Statement of Accounts of Power

Grid Corporation of India ltd., Western Region·lI, Vadodara upto 31-03·2014.

Place: Hyderabad

Date: 23.09.2014

BO_ No. 38, (Old No. 14), Second Main Road. CIT Colony, Mylapor , nai - 600004. Tel. +91-44-24990993 BO.: Flat No. 3C, [eevan Residency. Behind Kalanjali. Renigunta Road. Tlrupati - 517 50 I.

B 0 H.No. 10-1-86. Mehar Nagar. Old Gajuwaka. Visakhaparnarn - 530026

H.O l-lNo 6·3·244;S. Sar~d~ Dev, S,/(~e,SAGAR & ASSOCIATES hem N~gM. Hvderabac . 500004.

Phone 040·23303311.23395588CHARTERED ACCOUNTANTS rax 040·23390151 E-rn.ld sagar ilndasSoCiates(c.VYdnOO,(O .m t nLlri sagar;)ndassociates.ca(ivgfllJd C01Ti E '''''i1 vvS:lg:lrbabu(q)gmad .r om Serv«.e T;,x Regn No. AAjFS7295N STOOl


Project Name: 1*125 MVAR Bus Reactor at Khandwa Substation along with

associated bays under WRSSVII Scheme

Date of Commercial Operation: DOCO 01.10.2010 ( RSJ LAKHS)

PARTICULARS CAPITAL

COST

***

IEDC IDC TOTAL

Expenditure upto 30.09.2010(upto DOCO)

Expenditure from 01.10.2010 upto 31.10.2010

Expenditure from 01.11.2010 upto 31.03.2011

Expenditure 2011-12

Expenditure 2012-13

Expenditure 2013-14

407.24

95.21

109.86

92.03

13.65

0.00

72.64

0.00

0.00

0.00

0.00

0.00

11.61

0.00

0.00

0.00

0.00

0.00

491.49

95.21

109.86

92.03

13.65

0.00

Total 717.98 72.64 11.61 802.23

***Note ;- inclusive of FERV of Rs.1.68 Lakhs Loss upto 30.09.2010 pertaining to ADB • III Loan for the

period upto 30-09·2010 taken to Profit & Loss Account of the project as per Accounting Standard -11

revised 2003 (The effects of changes in Foreign Exchange Rates) and Accounting Standard-16

(Borrowing costs) issued by Institute of Chartered Accountants of India and as per opinion of Expert

Advisory Committee of ICAI.

This is to certify that the above summary has been prepared on the basis of the information drawn from

the Audited Statement of Accounts of Power Grid Corporation of India Ltd., Western Region-II, Vadodara

upto 31-03-2014.

Place: Hyderabad

Date: 23.09.2014 J

-42-BO. No. 38. (Old No 14). Second Main Road. c.1.T. Colony, Mylapore. Chennai - 600004. Tel: +-91-44-24990993

B.a. Flat No. 3C. Jeevan Residency. Behind Kalanjali. Rerugunta Road. Tirupati - 517 50 I. B o· HNo. 10-1-86. Mehar Nagar. Old Gajuwaka. Visakhapatnam - 530026

110 H No 6·) 244,'5. Sar"da Oev. Su·c,:

--------------------

H 0 !iNo 6-3·244iS. )arad" Dev' SneeiSAGAR & ASSOCIATES I',,>m N"gor Hvderabad 500004.

I'hull" 040 23303371.2339 5S 88 CHARTERED ACCOUNTANTS r-u 040-23390151 f m;,I! : >agar,,"da\sOc'~te5C(pyahoo.coll f -111(\11. sflgarandassociates.ca(il)grrl;\I! (0111

E·ma,1 vvs"garbabu(ri)gma,l.com Scrvrce Tax Regn, No. AAjFS729SN 5'1'001


Project Name: 1*125 MVAR Bus Reactor at Dehgam Substation along with

associated bays under WRSS VII Scheme

Date of Commercial Operation: DOCO 01.11,2010 ( RS.I LAKHS)

PARTICULARS CAPITAL

COST U

JEDC IDC TOTAL

Expenditure upto 31.10.2010 (upto DOCO)

Expenditure 01.11.2010 to 31.03.2011

Expenditure 2011-12

Expenditure 2012-13

Expenditure 2013-14

590.32

143.00

81.38

22.95

0.00

111,36

0,00

0,00

0.00

0.00

17,97

0.00

0.00

0.00

0.00

719,65

143.00

81.38

22.95

0.00

Total 837.65 111.36 17.97 966.98

UNote:- inclusive of FERVof Rs. 3.10 Lakhs Loss upto 30.09.2010 pertaining to ADS -III Loan for the period upto 30-09-2010 taken to Profit & Loss Account of the project as per Accounting Standard -11 revised 2003 (The effects of changes in Foreign Exchange Rates) and Accounting Standard-16

. (Borrowing costs) issued by Institute of Chartered Accountants of India and as per opinion of Expert Advisory Committee of ICAI.

This is to certify-that the above summary has been prepared on the basis of the information drawn from the Audited Statement of Accounts of Power Grid Corporation of India Ltd., Western Region-II, Vadodara upto 31-03-2014.

Place: Hyderabad

Date: 23.09.2014

------------------=---------------------_.B 0. No. 38, (Old No. 14), Second Main Road. CI.T Colony, Mylapore, Chennai - 600004 Tel' +91-44-24990993

B.O,: Flat No. 3C, [eevan Residency. Behind Kalanjali. Renigunta Road. Tirupati - 517 SO I. B.O H.No. 10-1-86. Mehar Nagar. Old Gajuwaka. Visakhapatnarn - 530026

Form I

Summary Sheet

Name of the Transmission Licensee: Power Grid Corporation of India Limited

Name of the Region: WESTERN REGION

Name of the Project: WRSS - VII

Name of the Transmission Element: 1*125 MVAR BUSREACTOR AT KHANDWA S!S

Date of Commercial Operation: 01-0ct-2010

Rs. in Lacs

Particulars Revised 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Depreciation-(Form No. 11) a 0.00 2.61 0.00 0.00 0.00 Interest on loan-(Form No. 13A) a 0.00 1.14 0.00 0.00 0.00 Return on Equity-(Form No. IA) a 0.00 2.88 0.00 0.00 0.00 Int. on Working Capital-(Form No. 13B) a 0.00 0.33 0.00 0.00 0.00 Op. and Maintenance-(Form No.2) a 0.00 4.62 0.00 0.00 0.00 Total 0.00 11.58 0.00 0.00 0.00

Note: Form 1 for Pro-Rata Tariff from 01.10.2010 to 31.10.2010

A&$[1 l' +0 3t· I 0 .;(nK)1AAIPr

~ 4s

Form I

Summary Sheet




Name of the Transmission Element: 1*125 MVAR BUS REACTOR AT KHANDWA SIS


Rs. in Lacs


Depreciation-(Form No. 11) 0 0.00 15.68 39.21 42.00 42.36

Interest on Loan-(Form No. 13A) 0 0.00 6.84 15.05 15.87 13.81

Return on Equity-(Form No. IA) 0 0.00 17.25 43.17 46.24 47.20

Int. on Working Capital-(Form No. 13B) 0 0.00 1.99 4.45 4.72 4.87

Op. and Maintenance-(Form No.2) 0 0.00 27.70 58.57 61.92 65.46

Total 0 69.46 160.45 170.75 173.7

Form IA

Calculation of Return on Equity




Name of the Transmission Element: 1*125 MVAR BUS REACTOR AT KHANDWA sts Date of Commercial Operation: 01-0ct-2010

Rs. in Lacs


Opening Equity 0 0 147.45 208.97 236.58 240.67

Notional Equity on Add Cap 0 0 61.52 27.61 4.09 0

Total Equity 0 0 208.97 236.58 240.67 240.67

Average Equity 0 0 178.21 222.78 238.63 240.67

Rate of Return on Equity (%) 0 0 19.358 19.377 19.377 19.61

Return on Equity 0 0 34.5 43.17 46.24 47.2

Pro rata Return on Equity 0 0 17.25 43.17 46.24 47.2

Calculation of Grossed up Rate of ROE

Rate of ROE 0 0 15.5 15.5 15.5 15.5

Time Line Incentive 0 0 0 0 0 0

Effective Rate of ROE 0 0 15.5 15.5 15.5 15.5

MAT Rate 0 0 19.93 20.01 20.01 20.96

Grossed up Rate of ROE 0 0 19.358 19.377 19.377 19.61

-47

Form-6

Financial Package upto COD(Block Year- 2009-2014)

Name of the Transmission Licensee: Power Grid Corporation of India Limited Name of the Region: WESTERN REGION

I\lame of the Project: WRSS - VII

Name of the Transmission Element: 1*125 MVAR BUSREACTOR AT KHANDWA S!S

Date of commercial Operation: 01-0ct-2010

Rs. In Lakhs

Particulars Financial Package as Financial Package as on As Admitted by COD!

Approved COD 31.03.2014

Currency and Amount Currency and Amount Currency and Amount

Loans

Loans-Domestic INR 0 INR 79.01

Loans-Foreign INR 265.03

Total Loans INR o INR 344.04 INR

Equity

Foreign

Domestic INR o INR 147.45 Notional

Total Equity INR o INR 147.45 INR

Debt Equity Ratio 70:30:00

Total Cost INR o INR 491.49 INR

Debt Equity Total

Add Cap for 2010-2011 205.07

Add Cap for 2011-2012 92.03

Add Cap for 2012-2013 13.65

Add Cap for 2010-2011 Actual Normative

Debt 143.55

Equity 61.52

Total 205.07

Total Capital cost with Addcap 802.24 -::.-c. :::. .teT.

, ~ ~

Form-9

Statement of Additional Capitalisation after COD

Name of the Petitioner: Power Grid Corporation of India Limited



Name of the Transmission Element or Communication system: 1*125 MVAR BUSREACTOR AT KHANDWA SIS


Work / Equipment

SI. No. Year proposed to be added after Amount capitalised and

Justification Regulation under which

Admitted Cost CODuto cut off proposed to be capitalised covered

date/beyond cut off date

1 2010-2011 SUB STATION 205.07 Balanee/Retention 9(1)

2010-2011 Total 205.07

2 2011-2012 SUB STATION 92.03 Balanee/Rete ntion 9(1)

2011-2012 Total 92.03

3 2012-2013 SUB STATION 13.65 Balance/Retention 9(1)

2012-2013 Total 13.65 - ~ ttl E:. )

Financing of Additional Capitalisation

Name of the Petitioner: Power Grid Corporation of India Limited


Name of the Project: WRSS- VII

Name of the Transmission Element or Communication System: 1*lZ5 MVAR BUS REACTOR AT KHANDWA SIS

Date of Commercial Operation: Ol-Oct-ZOIO

Financial Year Actual/Projected

Amount Capitalised in Work/Equipment 2009-10 2010-11 2011-12 2012-13 2013-14

Admitted

Form -10

Amount in Lakhs

Financing Details

Loan 0 143.55 64.42 9.56 0

Total Loan 0 143.55 64.42 9.56 0

Equity 0 61.52 27.61 4.09 0

Total 0 205.07 92.03 13.65 0 c::::.-. ~ ~r~~ 1

(Petitioner)

1

8 \

Form 11

Calculation of Depreciation Rate



Name of the Project: WRSS - V

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