for assam power distribution company limited (apdcl) · petition no. 16/2018 assam electricity...

ASSAM ELECTRICITY REGULATORY COMMISSION

(AERC)

TARIFF ORDER

March 01, 2019

True Up for FY 2017-18, APR for FY 2018-

19, ARR FOR FY 2019-20 to FY 2021-22

AND TARIFF FOR FY 2019-20

for

Assam Power Distribution Company

Limited (APDCL)

Petition No. 16/2018

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagei

Table of Contents

1 INTRODUCTION ................................................................................................................1

1.1 CONSTITUTION OF THE COMMISSION ......................................................................................1

1.2 TARIFF RELATED FUNCTIONS OF THE COMMISSION .....................................................................1

1.3 BACKGROUND ...................................................................................................................2

1.4 MULTI YEAR TARIFF REGULATIONS, 2015 ...............................................................................3

1.5 MULTI YEAR TARIFF REGULATIONS, 2018 ...............................................................................4

1.6 PROCEDURAL HISTORY ........................................................................................................6

1.7 STATE ADVISORY COMMITTEE MEETING..................................................................................7

2 SUMMARY OF APDCL’S PETITION ......................................................................................9

2.1 BACKGROUND ...................................................................................................................9

2.2 TRUE-UP FOR FY 2017-18 ...................................................................................................9

2.3 ANNUAL PERFORMANCE REVIEW (APR) FOR FY 2018-19 ........................................................ 10

2.4 CAPITAL INVESTMENT PLAN FOR MYT CONTROL PERIOD .......................................................... 11

2.5 AGGREGATE REVENUE REQUIREMENT FOR MYT CONTROL PERIOD .............................................. 12

2.6 PRAYERS OF APDCL ......................................................................................................... 13

3 BRIEF SUMMARY OF OBJECTIONS RAISED, RESPONSE OF THE APDCL AND COMMISSION’S

COMMENTS ......................................................................................................................... 15

4 TRUING UP FOR FY 2017-18 ............................................................................................ 41

4.1 METHODOLOGY FOR TRUING UP ......................................................................................... 41

4.2 ENERGY SALES ................................................................................................................ 42

4.3 DISTRIBUTION LOSS .......................................................................................................... 46

4.4 ENERGY REQUIREMENT ..................................................................................................... 47

4.5 POWER PURCHASE ........................................................................................................... 49

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pageii

4.6 SHARING OF (GAINS)/ LOSSES ON ACCOUNT OF EXCESS POWER PURCHASE COST DUE TO HIGHER THAN

APPROVED DISTRIBUTION LOSSES ................................................................................................. 53

4.7 O&M EXPENSES ............................................................................................................. 53

4.8 CAPITAL INVESTMENT & CAPITALISATION .............................................................................. 61

4.9 DEPRECIATION ................................................................................................................ 62

4.10 INTEREST AND FINANCE CHARGES ...................................................................................... 67

4.11 INTEREST ON WORKING CAPITAL ....................................................................................... 70

4.12 INTEREST ON CONSUMER SECURITY DEPOSIT ........................................................................ 71

4.13 OTHER DEBITS .............................................................................................................. 72

4.14 NET PRIOR PERIOD EXPENSES/(INCOME) ............................................................................. 72

4.15 RETURN ON EQUITY ........................................................................................................ 73

4.16 OTHER INCOME ............................................................................................................. 74

4.17 NON-TARIFF INCOME ...................................................................................................... 76

4.18 REVENUE FROM SALE OF POWER ....................................................................................... 76

4.19 REVENUE GRANT/SUBSIDY ............................................................................................... 80

4.20 ARR AND REVENUE GAP/(SURPLUS) AFTER TRUING UP OF FY 2017-18..................................... 80

5 ANNUAL PERFORMANCE REVIEW (APR) FOR FY 2018-19 ................................................. 82

5.1 INTRODUCTION ............................................................................................................... 82

5.2 ENERGY SALES ................................................................................................................ 83

5.3 DISTRIBUTION LOSS .......................................................................................................... 87

5.4 ENERGY BALANCE ............................................................................................................ 88

5.5 POWER PURCHASE ........................................................................................................... 90

5.6 OPERATION AND MAINTENANCE (O&M) EXPENSES................................................................. 95

5.7 CAPITAL INVESTMENT& FINANCING OF CAPITAL INVESTMENT..................................................... 99

5.8 DEPRECIATION .............................................................................................................. 102


5.10 INTEREST ON WORKING CAPITAL ..................................................................................... 109

5.11 INTEREST ON CONSUMERS’ SECURITY DEPOSIT .................................................................... 110

5.12 PROVISION FOR BAD AND DOUBTFUL DEBTS ...................................................................... 111

5.13 RETURN ON EQUITY ...................................................................................................... 111

5.14 NON-TARIFF INCOME .................................................................................................... 113

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pageiii

5.15 OTHER INCOME ........................................................................................................... 113

5.16 REVENUE FROM SALE OF ELECTRICITY AT EXISTING TARIFF ...................................................... 115

5.17 TARGETED SUBSIDY FROM GOA ...................................................................................... 115

5.18 AGGREGATE REVENUE REQUIREMENT (ARR) AND REVENUE GAP/(SURPLUS) ............................ 116

6 CAPITAL INVESTMENT PLAN FOR THE MYT CONTROL PERIOD ........................................ 118

6.1 CAPITAL INVESTMENT PLAN FOR FY 2019-20 TO FY 2021-22 PROPOSED BY APDCL .................... 118

6.2 ASSAM POWER SECTOR ENHANCEMENT INVESTMENT PROGRAM (APSEIP) ................................ 118

6.3 STATE ANNUAL PLAN ...................................................................................................... 119

6.4 NEC PLAN ................................................................................................................... 120

6.5 RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA (RGGVY) ................................................... 120

6.6 DEENDAYAL UPADHYAY GRAM JYOTI YOJANA (DDUGJY) ....................................................... 121

6.7 DDG PROJECT .............................................................................................................. 121

6.8 INTEGRATED POWER DEVELOPMENT SCHEME (IPDS) ............................................................. 122

6.9 R-APDRP PROJECT ........................................................................................................ 122

6.10 UDAY SCHEME ........................................................................................................... 123

6.11 SAUBHAGYA SCHEME ................................................................................................ 124

6.12 DISTRIBUTION SYSTEM ENHANCEMENT AND LOSS REDUCTION PROJECT .................................... 124

6.13 SUMMARY OF CAPITAL INVESTMENT PLAN SUBMITTED BY APDCL ........................................... 125

6.14 CAPITALISATION OF THE SCHEMES .................................................................................... 126

6.15 CAPITAL INVESTMENT PLAN APPROVED BY THE COMMISSION FOR FY 2019-20 TO FY 2021-22 ..... 127

6.16 CAPITALISATION APPROVED BY THE COMMISSION FOR FY 2019-20 TO FY 2021-22.................... 129

7 ARR FOR MYT CONTROL PERIOD FROM FY 2019-20 TO FY 2021-22 ................................ 133

7.1 INTRODUCTION ............................................................................................................. 133

7.2 ENERGY SALES .............................................................................................................. 133

7.3 CATEGORY-WISE PROJECTED ENERGY SALES ........................................................................ 133

7.4 DISTRIBUTION LOSS ........................................................................................................ 137

7.5 ENERGY BALANCE .......................................................................................................... 139

7.6 POWER PURCHASE ......................................................................................................... 140

7.7 OPERATION AND MAINTENANCE (O&M) EXPENSES............................................................... 152

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pageiv

7.8 DEPRECIATION .............................................................................................................. 156


7.10 INTEREST ON WORKING CAPITAL ..................................................................................... 161

7.11 INTEREST ON CONSUMERS’ SECURITY DEPOSIT .................................................................... 162

7.12 PROVISION FOR BAD AND DOUBTFUL DEBTS ...................................................................... 163

7.13 RETURN ON EQUITY ...................................................................................................... 163

7.14 NON-TARIFF INCOME .................................................................................................... 165

7.15 OTHER INCOME ........................................................................................................... 165

7.16 REVENUE FROM SALE OF ELECTRICITY ................................................................................ 166

7.17 AGGREGATE REVENUE REQUIREMENT (ARR) AND REVENUE GAP/(SURPLUS) ............................ 167

8 CUMULATIVE REVENUE GAP TILL FY 2017-18 & TARIFF FOR FY 2017-18 ......................... 169

8.1 CUMULATIVE REVENUE GAP/ (SURPLUS) ............................................................................. 169

8.2 TARIFF FOR FY 2019-20 ................................................................................................. 172

8.3 COST OF SUPPLY ............................................................................................................ 173

8.4 TARIFF PHILOSOPHY AND DESIGN ...................................................................................... 175

8.5 CATEGORY-WISE CROSS-SUBSIDY ....................................................................................... 181

8.6 FUEL PRICE AND POWER PURCHASE ADJUSTMENT CHARGES (FPPPA)........................................ 183

9 WHEELING CHARGES AND CROSS-SUBSIDY SURCHARGE ................................................ 184

9.1 INTRODUCTION ............................................................................................................. 184

9.2 ALLOCATION MATRIX ..................................................................................................... 184

9.3 WHEELING CHARGES ...................................................................................................... 185

9.4 APPLICABLE WHEELING LOSSES ......................................................................................... 186

9.5 CROSS-SUBSIDY SURCHARGE (CSS) .................................................................................... 186

9.6 APPLICABILITY OF TARIFF ................................................................................................. 187

10 DIRECTIVES ................................................................................................................. 188

11 TARIFF SCHEDULE ....................................................................................................... 196

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagev

12 ANNEXURES ............................................................................................................... 210

24TH MEETING OF THE STATE ADVISORY COMMITTEE..................................................................... 210

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagevi

LIST OF TABLES

Table 1:True Up for FY 2017-18 as submitted by APDCL (Rs. Crore) ............................ 9

Table 2: APR for FY 2018-19 as submitted by APDCL (Rs. Crore) ................................10

Table 3: Capital Investment Plan for MYT Control Period as submitted by APDCL (Rs. Cr)

......................................................................................................................................11

Table 4: ARR for FY 2019-20 to 2021-22 as submitted by APDCL (Rs. Crore) ..............12

Table 5: Revenue Gap as projected by APDCL (Rs. Crore) ..........................................13

Table 6: Energy Sales for FY 2017-18as submitted by APDCL (MU) ............................42

Table 7: Energy Sales for FY 2017-18 approved by the Commission (MU) ...................45

Table 8: Actual Distribution Loss for FY 2017-18 computed by the Commission ...........47

Table 9: Energy Requirement approved by the Commission after True-Up for FY 2017-18

......................................................................................................................................48

Table 10: Power Purchase approved by the Commission after True-Up for FY 2017-18

(MU) ..............................................................................................................................51

Table 11: Sharing of Efficiency (Gain)/Loss approved by the Commission on account of

Distribution Losses after True-Up for FY 2017-18 (Rs. Crore) .......................................53

Table 12: O&M Expenses for FY 2017-18 as submitted by APDCL (Rs. Crore) ............54

Table 13: Approved Employee Expenses for FY 2017-18 (Rs. Crore) ...........................57

Table 14: Approved R&M Expenses for FY 2017-18 (Rs. Crore) ...................................58

Table 15: Approved A&G Expenses for FY 2017-18 (Rs. Crore) ...................................59

Table 16: Normative O&M Expenses approved by Commission for FY 2017-18 (Rs.

Crore) ...........................................................................................................................60

Table 17: Sharing of losses/(gains) for O&M Expenses approved by the Commission

for FY 2017-18 (Rs. Crore) ...........................................................................................60

Table 18: Capital Expenditure and capitalisation approved by the Commission (Rs. Crore)

......................................................................................................................................62

Table 19: Funding of Capitalised Works approved by the Commission (Rs. Crore) .......62

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagevii

Table 20: Depreciation Calculation for FY 2017-18 as submitted by APDCL (Rs.

Crore) ...........................................................................................................................64

Table 21: Depreciation Claimed by APDCL (Rs. Crore) .................................................65

Table 22: Depreciation approved for FY 2017-18 (Rs. Crore) ........................................67

Table 23: Interest and Finance Charges as submitted by APDCL for FY 2017-18 .........68

Table 24: Approved Interest & Financing Charges for FY 2017-18 (Rs. Crore) ..............70

Table 25: IoWC approved by the Commission for FY 2017-18 (Rs. Crore) ....................71

Table 26: Interest on CSD claimed by APDCL for FY 2017-18 (Rs. Crore) ....................71

Table 27: Other Debits as submitted by APDCL (Rs. Crore) ..........................................72

Table 28: Prior Period Expenses/(Income) approved by the Commission for FY 2017-18

(Rs. Crore) ....................................................................................................................73

Table 29: RoE approved by the Commission for FY 2017-18 (Rs. Crore) ......................74

Table 30: Other Income approved by the Commission for FY 2017-18 (Rs. Crore) .......75

Table 31: Non-Tariff Income for FY 2017-18 (Rs. Crore) .........................................76

Table 32: ARR & Revenue Gap/(Surplus) approved in the Truing up for FY 2017-18 (Rs.

Crore) ............................................................................................................................81

Table 33: Category-wise Energy Sales Projected by APDCL for the FY 2018-19 (MU) .84

Table 34: Growth rates considered by the Commission for FY 2018-19 (MU)................86

Table 35: Category-wise Energy Sales estimated by the Commission for FY 2018-19 (MU)

......................................................................................................................................87

Table 36: Distribution Losses approved by the Commission for FY 2018-19 .................88

Table 37: Energy Balance for FY 2018-19as projected by APDCL (MU) .......................88

Table 38: Energy Balance for FY 2018-19 approved by the Commission (MU) .............89

Table 39: Power Purchase Quantum and Cost approved by the Commission for the FY

2018-19 .........................................................................................................................93

Table 40: O&M Expenses projected for FY 2018-19 by APDCL (Rs. Crore) ..................95

Table 41: Employee Expenses projected for FY 2018-19 by APDCL (Rs. Crore) ..........96

Table 42: R&M Expenses for FY 2018-19 as submitted by APDCL (Rs. Crore) .............96

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pageviii

Table 43: A&G Expenses for FY 2018-19 as submitted by APDCL (Rs. Crore) .............96

Table 44: Approved Employee Expenses for FY 2018-19 (Rs. Crore) ...........................98

Table 45: Approved R&M Expenses for FY 2018-19 (Rs. Crore) ...................................98

Table 46: Approved A&G Expenses for FY 2018-19 (Rs. Crore) ...................................99

Table 47: Capital expenditure and Capitalization as submitted by APDCL (Rs. Crore) 100

Table 48: Trend of Capital Expenditure and Capitalization (Rs. Crore) ........................ 101

Table 49: Capital Expenditure and capitalisation approved by the Commission in APR of

FY 2018-19 (Rs. Crore) ............................................................................................... 102

Table 50: Funding of Capitalised Works for FY 2018-19 considered by the Commission

(Rs. Crore) .................................................................................................................. 102

Table 51: Depreciation calculation for FY 2018-19 as submitted by APDCL (Rs. Crore)

.................................................................................................................................... 104

Table 52: Depreciation claimed by APDCL for FY 2018-19 (Rs. Crore) ....................... 105

Table 53: Depreciation approved for FY 2018-19 (Rs. Crore) ...................................... 106

Table 54: Interest and Finance Charges as submitted by APDCL for FY 2018-19 (Rs.

Crore) .......................................................................................................................... 107

Table 55: Impact of UDAY Scheme for FY 2018-19 (Rs. Crore) .............................. 108

Table 56: Approved Interest on Loan Capital for FY 2018-19 (Rs. Crore) .............. 109

Table 57: IoWC approved by the Commission for the FY 2018-19 (Rs. Crore) ............ 109

Table 58: Return on Equity projected by APDCL for FY 2018-19 (Rs. Crore) .............. 112

Table 59: Return on Equity approved by the Commission for FY 2018-19 (Rs. Crore) 112

Table 60: Non-Tariff Income as submitted by APDCL for FY 2018-19 (Rs. Crore) ....... 113

Table 61: Other Income as submitted by APDCL for FY 2018-19 (Rs. Crore) ............. 114

Table 62: Revenue from sale of surplus power ............................................................ 114

Table 63: Revenue from Sale of Electricity for FY 2018-19 (Rs. Crore) ....................... 115

Table 64: ARR & Revenue Gap/(Surplus) considered by the Commission for FY

2018-19 (Rs. Crore) .................................................................................................... 116

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pageix

Table 63: Project details of APSEIP-T-4 Loan No. 3200-IND AND APSIP-T-2 Loan No.

3327-IND ..................................................................................................................... 118

Table 64: Capital Expenditure - APSEIP-T-4 3200-IND and APSIP-T-2 3327-IND (Rs

Crore) ......................................................................................................................... 119

Table 65: Capital Expenditure - State Annual Plan (Rs. Crore) .............................. 119

Table 66: Funding - State Annual Plan (Rs. Crore) ................................................. 120

Table 67: Capital Expenditure - NEC Plan (Rs. Crore) ............................................ 120

Table 68: Funding - NEC Plan (Rs. Crore) ................................................................ 120

Table 69: Capital Expenditure - RGGVY Plan (Rs. Crore) ....................................... 121

Table 70: Funding - RGGVY Plan (Rs. Crore) .......................................................... 121

Table 71: Capital Expenditure –DDUGJY and DDG Plan (Rs. Crore) ..................... 121

Table 72: Funding - DDUGJY and DDG Plan (Rs. Crore) ........................................ 122

Table 73: Capital Expenditure –RAPDRP Plan (Rs. Crore) ..................................... 123

Table 74: Funding - RAPDRP Plan (Rs. Crore) ........................................................ 123

Table 75: Capital Expenditure –UDAY Scheme (Rs. Crore) .................................... 123

Table 76: Funding–UDAY Scheme (Rs. Crore) ........................................................ 123

Table 77: Capital Expenditure –Distribution System Enhancement and Loss

Reduction Project (Rs. Crore)................................................................................... 124

Table 78: Funding Pattern– Distribution System Enhancement and Loss Reduction

Project (Rs. Crore) ..................................................................................................... 124

Table 79: Capital Investment Plan proposed by APDCL from FY 2019-20 to FY 2021-

22 (Rs Crore) .............................................................................................................. 125

Table 80: Funding Pattern for Capital Investment Plan (Rs Crore) ........................ 125

Table 81: Proposed capitalisation from FY 2019-20 to FY 2021-22 (Rs Crore) ...... 126

Table 82: Funding pattern for proposed capitalisation (Rs Crore) ........................ 126

Table 83: Capital Investment Plan provisionally approved by the Commission for

APDCL for the Control Period (Rs Crore) ................................................................ 128

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagex

Table 84: Actual Capital Expenditure and Capitalisation achieved by APDCL from FY

2012-13 to FY 2017-18 (Rs. Crore) ............................................................................. 129

Table 85: Percentage of Capitalisation achieved by APDCL (Rs. Crore) ..................... 130

Table 86: Capital Expenditure and Capitalisation approved by the Commission for FY

2019-20 to FY 2021-22 (Rs. Crore) ............................................................................. 131

Table 87: Funding of Capitalised Works approved by the Commission for FY 2019-20 to

FY 2021-22 (Rs. Crore) ............................................................................................... 132

Table 89: Category-wise Growth Rates considered by APDCLforSales Projection ...... 134

Table 90:Category-wise Energy Sales Projected by APDCL for the Control Period (MU)

.................................................................................................................................... 135

Table 91: Category-wise Energy Sales Projected by the Commission for the Control

Period (MU) ................................................................................................................. 136

Table 92: Distribution Losses Projected by APDCL for the Control Period ................... 138

Table 93: Distribution Losses approved by the Commission for the Control Period ..... 139

Table 94: Energy Balance for FY 2019-20 to FY 2021-22 as Projected by APDCL (MU)

.................................................................................................................................... 139

Table 95: Energy Balance for FY 2019-20 to FY 2021-22 approved by the Commission

(MU) ............................................................................................................................ 140

Table 96: RPO Computation as submitted by APDCL ............................................ 142

Table 97: Power Purchase Quantum and Cost for the Control Period from FY 2019-20 to

FY 2021-22 as submitted by APDCL ........................................................................... 144

Table 98: REC Purchase considered by the Commission for the Control Period from FY

2019-20 to FY 2021-22 ................................................................................................ 148

Table 99: Power Purchase Quantum and Cost approved by the Commission for the

Control Period from FY 2019-20 to FY 2021-22 ........................................................... 149

Table 100: Employee Expenses from FY 2019-20 to FY 2021-22 (Rs Crores) ....... 152

Table 101: Approved Employee Expenses for the Control Period (Rs. Crore) ............. 154

Table 102: Approved R&M Expenses for Control Period (Rs. Crore) ........................... 155

Table 103: Approved A&G Expenses for the Control Period (Rs. Crore) ..................... 155

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexi

Table 104: Depreciation claimed by APDCL for the Control Period (Rs. Crore) ........... 156

Table 105: Depreciation approved for FY 2019-20 (Rs. Crore) .................................... 157



Table 108: Interest and Finance Charges as submitted by APDCL for Period from FY

2019-20 to FY 2021-22 (Rs. Crore) ............................................................................. 160

Table 109: Approved Interest on Loan Capital for FY 2019-20 to FY 2021-22(Rs. Crore)

.................................................................................................................................... 161

Table 110: IoWC from FY 2019-20 to FY 2021-22 as projected by APDCL (Rs Crore) 161

Table 111: IoWC approved by the Commission for the Control Period (Rs. Crore) ...... 162

Table 112: Interest on CSD for the Control Period as Projected by APDCL (Rs. Crore)

.................................................................................................................................... 162

Table 113: Interest on CSD for the Control Period approved by the Commission (Rs.

Crore) .......................................................................................................................... 163

Table 114: Return on Equity from FY 2019-20 to FY 2021-22 (Rs Crore) as submitted by

APDCL ........................................................................................................................ 164

Table 115: Return on Equity approved by the Commission for the Control Period (Rs.

Crore) .......................................................................................................................... 164

Table 116: Non-Tariff Income as submitted by APDCL for the Control Period (Rs. Crore)

.................................................................................................................................... 165

Table 117: Miscellaneous Income approved by the Commission for the Control Period

(Rs. Crore) .................................................................................................................. 166

Table 118: Revenue from Sale of Electricity for the Control Period (Rs. Crore) ........... 167

Table 119: ARR & Revenue Gap/(Surplus) for APDCL for the Control Period

approved by the Commission (Rs. Crore) ............................................................... 168

Table 120: Revenue Gap/ (Surplus) to be considered for recovery as submitted by APDCL

(Rs. Crore) .................................................................................................................. 169

Table 121: Revenue Gap proposed for recovery in FY 2019-20 by APDCL (Rs. Crore)

.................................................................................................................................... 170

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexii

Table 122: Cumulative Revenue Gap/(Surplus) for FY 2019-20 approved by the

Commission (Rs. Crore) .............................................................................................. 171

Table 123: ACOS approved by the Commission for FY 2019-20 ................................. 174

Table 124: Contributors of ACOS for FY 2019-20 ........................................................ 174

Table 125: Full Cost Tariff approved by the Commission for FY 2019-20 .................... 178

Table 126: Category-wise Cross-Subsidy approved for FY 2019-20 ............................ 181

Table 127: Allocation Matrix for Separation of ARR for Wires Business and Retail Supply

Business for FY 2019-20 ............................................................................................. 184

Table 128: Separation of ARR for Wires Business and Retail Supply Business for FY 2019-

20(Rs. crore) ............................................................................................................... 185

Table 129: Wheeling Charges approved by the Commission for FY 2019-20 .............. 185

Table 130: Wheeling Losses approved by the Commission for FY 2019-20 ................ 186

Table 131: Category-wise Cross-Subsidy Surcharge for FY 2019-20 (Rs/kWh) .......... 187

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexiii

List of Abbreviations

A&G Administrative & General

ABC Aerial Bunched Conductors

ABITA Assam Branch of Indian Tea Association

ABT Availability Based Tariff

ABP Average Basic Pay

ABR Average Billing Rate

ACoS Average Cost of Supply

ADB Asian Development Bank

AEGCL Assam Electricity Grid Corporation Limited

AERC Assam Electricity Regulatory Commission

APDCL Assam Power Distribution Company Limited

APDRP Accelerated Power Development Programme

APGCL Assam Power Generation Corporation Limited

APM Administered Pricing Mechanism

APR Annual Performance Review

ARR Aggregate Revenue Requirement

APSEIP Assam Power Sector Enhancement Investment Programme

APSIP Assam Power Sector Investment Programme

APTEL Appellate Tribunal for Electricity

ASEB Assam State Electricity Board

AT&C Aggregate Technical and Commercial

ATPA Assam Tea Planters Association

BPL Below Poverty Line

CAEDCL Central Assam Electricity Distribution Company Limited

CAGR Compound Aggregate Growth Rate

CAIDI Customer Average Interruption Duration Index

CAIFI Customer Average Interruption Frequency Index

CBDF Collection Based Distribution Franchisee

CEA Central Electricity Authority

CERC Central Electricity Regulatory Commission

CGRF Consumer Grievance Redressal Forum

CGS Central Generating Station

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexiv

COD Date of Commercial Operation

CPC Central Pay Commission

CPI Consumer Price Index

CPSU Central Public Sector Utility

CSD Consumer Security Deposit

CSS Cross-subsidy Surcharge

CTU Central Transmission Utility

CWIP Capital Work In Progress

DA Dearness Allowance

D/C Double Circuit

DD Demand Draft

DDUGJY Deendayal Upadhyay Gram Jyoti Yojana

DELP Domestic Efficient Lighting Programme

DISCOM Distribution Company

DMS Distribution Management System

DPR Detailed Project Report

DSM Demand Side Management

DT/DTR Distribution Transformer

EA, 2003 The Electricity Act, 2003

ECBC Energy Conservation Building Code

EE Energy Efficiency

EHV Extra High Voltage

EPC Engineering Procurement & Construction

ERP Enterprise Resource Planning

ERS Emergency Restoration System

FINER Federation of Industry & Commerce of North Eastern Region

FPPPA Fuel Price and Power Purchase Adjustment

FY Financial Year

GFA Gross Fixed Assets

GMRETCL GMR Energy Trading Company Limited

GoA Government of Assam

GoI Government of India

GPF General Provident Fund

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexv

HEP Hydro Electric Project

HH Household

HP Horse Power

HT High Tension

HV High Voltage

HVCMS High Value Consumer Management System

IOCL Indian Oil Corporation Limited

IPDS Integrated Power Development Scheme

ISTS Inter State Transmission System

IT Information Technology

IWC/IoWC Interest on Working Capital

JICA Japan International Cooperation Agency

JNNSM Jawaharlal Nehru National Solar Mission

kV kilo Volt

kVA kilo Volt Ampere

kW kilo Watt

kWh kilo Watt Hour

LAEDCL Lower Assam Electricity Distribution Company Limited

LED Light Emitting Diode

LOA Letter of Award

LT Low Tension

LTC Leave Travel Concession

LV Low Voltage

MAT Minimum Alternate Tax

MIS Management Information System

MNRE Ministry of New and Renewable Energy

MoP Ministry of Power

MOU Memorandum of Understanding

MRI Meter Reading Instruments

MU Million Unit

MW Mega Watt

MYT Multi-Year Tariff

NEEPCO North Eastern Electric Power Corporation Limited

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexvi

NEP National Electricity Policy

NERPSIP North Eastern Region Power System Improvement Project

NESSIA North Eastern Small Scale Industries Association

NFR North East Frontier Railway

NHPC NHPC Ltd.

NLCPR Non-lapsable Central Pool of Resources

NTPC NTPC Ltd.

O&M Operation and Maintenance

OA Open Access

OEM Original Equipment Manufacturer

OPGW Optical Ground Wire

PFA Power for All

PFC Power Finance Corporation Limited

PGCIL Power Grid Corporation of India Limited

PLF Plant Load Factor

PTCIL PTC Indian Limited

R&M Repairs and Maintenance

RAPDRP Restructured Accelerated Power Development & Reforms

Programme

REC Renewable Energy Certificate

RGGVY Rajiv Gandhi Grameen Vidyutikaran Yojana

ROE Return on Equity

ROW Right of Way

RPO Renewable Purchase Obligation

Rs. Rupees

SAC State Advisory Committee

SAIDI System Average Interruption Duration Index

SBI PLR State Bank of India Prime Lending Rate

S/C Single Circuit

SECI Solar Corporation of India Limited

SHEP Small Hydro Electric Project

SOP Standards of Performance

SPV Special Purpose Vehicle

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexvii

STU State Transmission Utility

SLDC State Load Dispatch Centre

TBCB Tariff Based Competitive Bidding

TOD Time of Day

TVS Technical Validation Session

UAEDCL Upper Assam Electricity Distribution Company Limited

UI Unscheduled Interchange

UDAY Ujwal DISCOM Assurance Yojana

VCoS Voltage-wise Cost of Supply

WB The World Bank

WPI Wholesale Price Index

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexviii

ASSAM ELECTRICITY REGULATORY COMMISSION

Guwahati

Present

Shri Subhash C. Das, Chairperson

Shri Dipak Chakravarty, Member

Petition No. 16 & 17/2018

Assam Power Distribution Company Limited (APDCL) - Petitioner

ORDER

(Passed on March 01, 2019)

(1) APDCL filed a Petition for approval of True Up for FY 2017-18, APR for FY 2018-19, ARR

for the Control Period from FY 2019-20 to FY 2021-22 and Tariff for FY 2019-20 on

November 30, 2018. The same was registered as Petition No 16/2018. However, APDCL

did not submit the Audited Statement of Accounts for FY 2017-18 and requested

condonation of delay vide separate petition (Petition No 17/2018) dated November 30,

2018.

(2) The Commission held an Admissibility Hearing on December 10, 2018 and admitted the

Petitions, with direction for submission of Statutory Auditor’s report within December 21,

2018 and to furnish the additional data and clarifications, as sought vide letter dated

December 10, 2018. Based on preliminary comments of the Commission, APDCL revised

the original petition and submitted the revised petition (Petition No. 16/2018) on December

15, 2018.

(3) In accordance with Section 64 of the Electricity Act 2003, the Commission directed APDCL

to publish a summary of the ARR and Tariff filings in local dailies to ensure due public

participation. A copy of the Petition and other relevant documents were also made

available to the consumers and other interested Parties at the office of the Managing

Director of APDCL, and offices of the Deputy General Manager of each circle of APDCL.

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexix

A copy of the Petition was also made available on the websites of the Commission and

APDCL.

(4) Accordingly, a Public Notice was issued by the APDCL inviting objections/suggestions

from respondents to be submitted on or before January 11, 2019. The notice was

published in six (6) leading newspapers of the State on December 18, 2018.

Date Name of Newspaper Language

18.12.2018

The Sentinel English

The Assam Tribune English

Amar Asom Assamese

Dainik Janambhumi Assamese

Purbanchal Prahari Hindi

Dainik Jugasankha Bengali

(5) In response to the Commission’s letter dated December 10, 2018, APDCL submitted their

replies on December 28, 2018.

(6) The Commission observed that there were several inconsistencies and discrepancies

even in the revised Petition and the replies to the first set of queries submitted by APDCL.

Accordingly, the Commission raised second set of queries on January 7, 2019 in order to

clarify the discrepancies, inconsistencies, and data gaps, and directed APDCL to submit

the consolidated revised documents in order to avoid confusion. APDCL submitted its

reply to the second set of queries on January 31, 2019. However, APDCL did not submit

the duly reconciled consolidated revised documents, and the replies to queries also

contained inconsistencies.

(7) As the regulatory process must be completed within the stipulated time, the Commission

has relied upon data considered to be more accurate/reliable within the multiple conflicting

data made available to the Commission and has made appropriate assumptions wherever

necessary. The Commission may be constrained to reject such Petitions in the future.

APDCL should conduct the necessary due diligence before submitting the Petitions and

replies in future.

(8) The Petitions were discussed in the meeting of the State Advisory Committee (SAC)

(constituted under Section 87 of the Electricity Act, 2003) held on February 5, 2019 at

Assam Administrative Staff College, Khanapara, Guwahati.

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Pagexx

(9) The Commission received written suggestions and objections from seven (7) stakeholders

on the Petitions filed by APDCL. The stakeholders were notified about the place, date and

time of Hearing, to enable them to take part in the Hearing. A News Paper notice was also

published inviting participation from the General Public as well as the Respondents. The

Hearing was held at Assam Administrative Staff College, Guwahati on February 12, 2019

as scheduled. All stakeholders/respondents who participated in the Hearing were given

the opportunity to express their views on the Petitions. The details are discussed in the

relevant Chapters of this Tariff Order.

(10) The Commission, now in exercise of its powers vested under Sections, 61, 62, 86and

181of the Electricity Act, 2003 and all other powers enabling it in this behalf and taking

into consideration the submissions made by the Petitioner, objections and suggestions

received from respondents/stakeholders and all other relevant materials on record, has

carried out the True-up for FY 2017-18, APR for FY 2018-19, approval of ARR for the

Control Period from FY 2019-20 to FY 2021-22, and determination of distribution and retail

supply tariff for FY 2019-20, as detailed in subsequent Chapters of this Order.

(11) The Commission directs APDCL to publish a Public Notice intimating the revised

distribution and retail supply tariff before the implementation of this Order in English and

Vernacular newspapers and on the website of APDCL.

(12) The approved Retail Supply Tariffs, Wheeling Charges and Cross-Subsidy Surcharge for

FY 2019-20 shall be effective from April 1, 2019 and shall continue until replaced by

another Order by the Commission.

(13) Accordingly, the Petitions 16 &17 of 2018 stands disposed of.

Sd/- Sd/-

(D. Chakravarty)

Member, AERC

(S. C. Das)

Chairperson, AERC

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Page1

1 INTRODUCTION

1.1 Constitution of the Commission

1.1.1 The Assam Electricity Regulatory Commission (hereinafter referred to as the AERC or

the Commission) was established under the Electricity Regulatory Commissions Act,

1998 (14 of 1998) on February 28, 2001. The first proviso of Section 82(1) of the

Electricity Act, 2003 (hereinafter referred as the Act or the EA, 2003) has ensured

continuity of the Commission under the Electricity Act, 2003.

1.1.2 The Commission is mandated to exercise the powers and functions conferred under

Section 181 of the Electricity Act, 2003 (36 of 2003) and to exercise the functions

conferred on it under Section 61, 62 and 86 of the Act from June 10, 2003.

1.2 Tariff related Functions of the Commission

1.2.1 Under Section 86 of the Act, the Commission has the following tariff related functions:

(a) To determine the tariff for electricity, wholesale, bulk or retail, as the case may be;

(b) To regulate power purchase and procurement process of the distribution utilities

including the price at which the power shall be procured from the generating

companies, generating stations or from other sources for transmission, sale,

distribution and supply in the State;

(c) To promote competition, efficiency and economy in the activities of the electricity

industry to achieve the objects and purposes of this Act;

1.2.2 Under Section 61 of the Act in the determination of tariffs, the Commission is to be

guided by the following:

(a) The principles and methodologies specified by the Central Commission for

determination of the tariff applicable to generating companies and transmission

licensees;

(b) That the electricity generation, transmission, distribution and supply are conducted

on commercial principles;

(c) That factors which would encourage efficiency, economical use of the resources,

good performance, optimum investments, and other matters which the State

Commission considers appropriate for the purpose of this Act;


(d) The interests of the consumers are safeguarded and at the same time, the

consumers pay for the use of electricity in a reasonable manner based on their

customer category cost of supply;

(e) That the tariff progressively reflects the cost of supply of electricity at an adequate

and improving level of efficiency and gradually reduces cross subsidies;

(f) The National Electricity Plan formulated by the Central Government including the

National Electricity Policy and Tariff Policy.

1.2.3 In accordance with the provisions of the Act, the Commission shall not show undue

preference to any consumer of electricity in determining the tariff, but may differentiate

according to the consumers’ load factor, power factor, voltage, total consumption of

energy during any specified period or the time at which the supply is required or the

geographical position of any area, the nature of supply and the purpose for which the

supply is required (Section 62 of the Act).

1.2.4 If the State Government requires the grant of any subsidy to any consumer or class of

consumers in the tariff determined by the Commission, the State Government shall

pay the amount to compensate the person affected by the grant of subsidy in the

manner the Commission may direct as a condition for the licence or any other person

concerned to implement the subsidy provided for by the State Government (Section

65 of Act 2003).

1.3 Background

1.3.1 In pursuance of notifications Memo No. PEL151/2003/Pt./165dated December 10,

2004 of the Government of Assam, three Distribution Companies were formed as a

successor to the ASEB. Vide subsequent Notification No PEL.41/2006/199 dated May

13, 2009, all these three Distribution Companies were merged into one and in

accordance with the Assam State Reform (Transfer and merger of Distribution

Functions and undertakings) scheme, 2009 and Certificate of Incorporation dated

October 23, 2009, the present Distribution Company Assam Power Distribution

Company Limited (APDCL) got formed.

1.3.2 Accordingly, presently APDCL is undertaking all the functions empowered as a

Distribution Company within the State of Assam.


1.4 Multi Year Tariff Regulations, 2015

1.4.1 The Commission, in exercise of the powers conferred under Section 61 read with

Section 181(2) (zd) of the Act, has notified the Assam Electricity Regulatory

Commission (Terms and Conditions for determination of Multi Year Tariff) Regulations,

2015 on June 2, 2015 and Amendments thereof (hereinafter referred as “MYT

Regulations, 2015”). These Regulations are applicable for determination of Tariff for

Generation, Transmission, SLDC, Wheeling and Retail Supply for the Control Period

of three financial years from April 1, 2016 onwards up to March 31, 2019. These

Regulations are applicable to all existing and future Generating Companies,

Transmission Licensees and Distribution Licensees within the State of Assam.

1.4.2 APDCL filed the MYT Petition for approval of ARR for the Control Period from FY 2016-

17 to FY 2018-19 and tariff for FY 2017-18 as per MYT Regulations, 2015,along with

True-up for FY 2014-15 and FY 2015-16 as per AERC (Terms and Conditions of Tariff)

Regulations, 2006 (herein after referred as “Tariff Regulations, 2006”).The

Commission issued the Order on the said MYT Petition on March31, 2017 and

approved the Tariff for FY 2017-18.

1.4.3 Further, the Commission notified the AERC (Terms and Conditions for determination

of Multi Year Tariff) Regulations, 2015, First Amendment, 2017 on November 8, 2017.

In the said Regulations, certain provisions regarding the scope of Annual Performance

Review, rate of interest for consumer security deposit, etc., were amended.

1.4.4 Regulation 10 of the MYT Regulations, 2015, as amended in November 2017,

specifies that the Commission shall undertake the APR and True-up for the respective

years of the Control Period from FY 2016-17 to FY 2018-19, as reproduced below:

“10.3 The scope of the annual review and True up shall be a comparison of the actual

performance of the Generating Company or Transmission Licensee or SLDC or

Distribution Licensee with the approved forecast of Aggregate Revenue Requirement

and expected revenue from tariff and charges and shall comprise the following:

a) True Up: a comparison of the audited performance of the applicant for the

previous financial year with the approved forecast for the financial year and

truing up of expenses and revenue in line with Regulation 11including pass

through of impact of uncontrollable items;

Annual Review: a comparison of the revised performance targets of the


applicant for the current financial year with the approved forecast in the Tariff

order corresponding to the Control period for the current financial year subject

to prudence check including adjusting trajectories of uncontrollable and

controllable items”.

1.5 Multi Year Tariff Regulations, 2018

1.5.1 The Commission, in exercise of the powers conferred under Section 61 read

withSection 181(2) (zd) of the Act, has notified the AERC (Terms and Conditions for

determination of Multi Year Tariff) Regulations, 2018 (herein after referred as “the MYT

Regulations, 2018”) on June 28, 2018. These Regulations are applicable for

determination of Tariff for Generation, Transmission, SLDC, Wheeling and Retail

Supply for the Control Period of three financial years from April 1, 2019 onwards up to

March 31, 2022. These Regulations are applicable to all existing and future Generating

Companies, Transmission Licensees and Distribution Licensees within the State of

Assam.

1.5.2 Regulation 4.2 of the MYT Regulations, 2018, specifies the MYT framework for the

Control Period from FY 2019-20 to FY 2021-22, as reproduced below:

“4.2 The Multi-Year Tariff framework shall be based on the following elements, for

calculation of Aggregate Revenue Requirement and expected revenue from tariff and

charges for Generating Companies, Transmission Licensee, SLDC, Distribution

Wheeling Business and Retail Supply Business:

(i) Before commencement of Control Period, a forecast of the Aggregate Revenue

Requirement and expected revenue from existing tariff and charges shall be submitted

by the applicant and approved by the Commission;

(ii) A detailed Capital Investment Plan for each year of the Control Period, shall be

submitted by the applicant for the Commission's approval;

(iii) The applicant shall submit operating norms and trajectories of performance

parameters for each year of the Control Period, for the Commission's approval;

(iv) The applicant shall submit the forecast of Aggregate Revenue Requirement and

expected revenue from existing tariff for each year of the Control Period, and the


Commission shall approve the tariff for Generating Companies, SLDC, Transmission

Licensee, Distribution Wheeling Business and Retail Supply Business, for each year

of the Control Period;

(v) In its tariff petition, a generating company shall submit information to support the

determination of tariff for each generating station

(vi) Annual Performance review vis-à-vis the approved forecast and categorization of

variation in performance as those caused by factors beyond the control of the applicant

(uncontrollable items) shall be undertaken by the Commission;

(vii) True up of the past years based on audited annual accounts of the licensees and

the Generation companies.

(viii) The mechanism for pass-through of approved gains or losses on account of

uncontrollable items as specified by the Commission in these Regulations;

(ix) The mechanism for sharing of approved gains or losses arising out of controllable

items as specified by the Commission in these Regulations;

(x) Tariff determination for Generating Companies, SLDC, Transmission Licensee and

Distribution Wheeling Business and Retail Supply Business, for each financial year

within the Control period based on the approved forecast. The tariff shall be reviewed

at the time of the true-up and annual performance review.

(xi) There will be no true-up of the controllable items except on account of Force

Majeure events or on account of variations attributable to uncontrollable items. The

variations in the controllable items, as defined in regulation 10, over and above the

norms specified will be governed by incentive and penalty framework specified in these

regulations.

(xii) The tariff determined by the Commission and the directions given in the MYT order

shall be the quid pro quo and mutually inclusive. The tariff determined shall, within the

time period specified in the order, be subject to the compliance of the directions by the

generating company and the licensees to the satisfaction of the Commission. Non-

compliance of directions given in the tariff order may also lead to invocation of the


provisions of section 142 of the Act.

(xiii) The tariff determined by the Commission shall continue to operate till it is modified

or revised by the Commission.”

1.6 Procedural History

1.6.1 As per Regulation 4.2 of the MYT Regulations, 2018, APDCL is required to file an

application for true-up for previous year, i.e., FY 2017-18, APR of current year, i.e., FY

2018-19, ARR for the Control Period from FY 2019-20 to FY 2021-22 and tariff for

ensuing year, i.e., FY 2019-20, not less than 120 days before the close of the current

year.

1.6.2 APDCL has filed its True-up Petition for FY 2017-18 and APR Petition for FY 2018-19

and MYT Petition for Control Period from FY 2019-20 to FY 2021-22 (Petition No.

16/2018) on November 30, 2018. However, APDCL did not submit the Audited

Statement of Accounts and requested condonation of delay vide separate Petition

(Petition No 17/2018). The Commission sought additional data and clarifications on the

MYT Petition vide letter dated December 10, 2018. Based on the preliminary

comments of the Commission, APDCL revised the original petition on December 15,

2018. Accordingly, the revised Petition is considered as Petition No. 16/2018. The

replies to first set of queries were submitted by APDCL on December 28, 2018.

1.6.3 The Commission observed that there were several inconsistencies and discrepancies

even in the revised Petition submitted by APDCL. In the interest of time, the

Commission admitted the Petition and raised second set of queries on January 7, 2019

in order to clarify the discrepancies, inconsistencies, and data gaps. APDCL submitted

its reply to the second set of queries on January 25, 2019. As the regulatory process

must be completed within the stipulated time, the Commission has relied upon data

considered to be more accurate/reliable within the multiple conflicting data available

with the Commission and has made appropriate assumptions wherever necessary.

1.6.4 The Commission held an Admissibility Hearing on December 10, 2018. Thereafter, in

accordance with Section 64 of the Electricity Act 2003, the Commission directed

APDCL to publish a summary of the ARR and Tariff filings in local dailies to ensure

due public participation. A copy of the Petition and other relevant documents were also

made available to the consumers and other interested Parties at the office of the


Managing Director of APDCL, and offices of the Deputy General Manager of each

circle of APDCL. A copy of the Petition was also made available on the websites of the

Commission (www.aerc.gov.in) and APDCL. (www.apdcl.org)

1.6.5 Accordingly, a Public Notice was issued by the APDCL inviting objections/suggestions

from respondents/stakeholders to be submitted on or before January 11, 2019, which

was published in the following newspapers on December 18, 2018:

Date Name of Newspaper Language

18.12.2018

The Sentinel English

The Assam Tribune English

Amar Asom Assamese

Dainik Janambhumi Assamese

Purbanchal Prahari Hindi

Dainik Jugasankha Bengali

1.6.6 The Commission received suggestions and objections from seven (7) stakeholders on

the Petitions filed by APDCL. The Commission considered the objections received and

sent communication to the stakeholders to take part in Hearing process by presenting

their views in person before the Commission. The stakeholders were notified about the

place, date and time of Hearing, to enable them to take part in the Hearing.The Hearing

was held at Assam Administrative Staff College, Guwahati on February 12, 2019 as

scheduled. All stakeholders/respondents who participated in the Hearing were given

the opportunity to express their views on the Petitions.

1.6.7 All the written representations submitted to the Commission and oral submissions

made before the Commission in the Hearing and the responses of APDCL have been

carefully considered while issuing this Tariff Order. The major issues raised by different

consumers and consumer groups along with the response of APDCL and views of the

Commission are elaborated in Chapter 3 of this Order.

1.7 State Advisory Committee Meeting

1.7.1 A meeting of the State Advisory Committee (SAC) (constituted under Section 87 of the

Act) was convened on February 5, 2019.During the SAC meeting, AEGCL, APGCL

and APDCL made presentations on their respective MYT Petitions filed for FY 2019-

http://www.aerc.gov.in/


20 to FY 2021-22.

1.7.2 The minutes of the SAC meeting are appended to this order as Annexure 1.


2 Summary of APDCL’s Petition

2.1 Background

2.1.1 APDCL submitted the revised Petition on December 15, 2018 seeking approval for

True up for FY 2017-18, APR for FY 2018-19, ARR for FY 2019-20 to FY 2021-22 and

Tariff for FY 2019-20.

2.2 True-up for FY 2017-18

2.2.1 APDCL submitted True-up for FY 2017-18 based on the statement of accounts.

APDCL submitted the Statutory Auditor’s report on December 21, 2018.The summary

of Aggregate Revenue Requirement and Revenue Gap/(Surplus) claimed by APDCL

for FY 2017-18 is shown in the following Table:

Table 1:True Up for FY 2017-18 as submitted by APDCL (Rs. Crore)

Sr. No. Particulars FY 2017-18

1 Cost of Power Purchase 4506.31

2 Operation and Maintenance Expenses

2.1 Employee Cost 802.39

2.2 Repair and Maintenance 124.26

2.3 Administrative and General Expenses 44.72

3 Depreciation 52.45

4 Interest and Finance Charges 47.50

5 Interest on Working Capital 5.58

6 Interest on Consumer Security Deposit 14.43

7 Other debits incl. Provisioning for Bad debts 10.15

8 Net Prior Period Expenses (21.20)

9 Sharing of gains/(losses) due to excess

distribution losses (13.12)

10 Return on Equity 26.04

11 Revenue Gap/(Surplus) of FY 2014-15 657.96

12 Carrying cost on Revenue Gap/(Surplus) of FY

2014-15 179.29

13 Revenue Gap/(Surplus) of FY 2015-16 354.52



14 Carrying cost on Revenue Gap/(Surplus) of FY

2015-16 45.38

15 Revenue Gap/(Surplus) of FY 2016-17 (686.74)

16 Total Expenses 6149.93

17 Less: Non-Tariff Income 233.20

18 Less: Other Income 341.87

19 Aggregate Revenue Requirement 5574.86

20 Revenue with approved Tariff 4369.35

21 State Government Targeted Subsidy 390.10

22 Total Revenue including Subsidy 4759.45

23 Revenue Gap/(Surplus) 815.40

2.3 Annual Performance Review (APR) for FY 2018-19

2.3.1 APDCL submitted the APR for FY 2018-19, based on the first half (H1) year actuals of

FY 2018-19 and projections for the second half, of the year as shown in the table

below:

Table 2: APR for FY 2018-19 as submitted by APDCL (Rs. Crore)


1 Cost of Power Purchase 4805.48

2 Operation and Maintenance Expenses

2.1 Employee Cost 861.83

2.2 Repair and Maintenance 130.56

2.3 Administrative and General Expenses 47.87

3 Depreciation 57.09

4 Interest and Finance Charges 52.84

5 Interest on Working Capital 15.01

6 Interest on Consumer Security Deposit 57.77


8 Other debits incl. Provisioning for Bad debts 12.35

9 Total Expenses 6096.58

10 Less: Non-Tariff Income 244.86



11 Less: Other Income 253.73

12 Aggregate Revenue Requirement 5597.99

13 Revenue with approved Tariff (including

FPPPA& Govt. Subsidy) 5572.53

14 Revenue Gap/(Surplus) 25.47

15 Differential Revenue Gap after true-up for FY

2016-17 487.88

16 Net Carrying cost of FY 2016-17 in FY 2018-19 36.22

17 Cumulative Revenue Gap/(Surplus) for FY

2018-19 549.57

2.4 Capital Investment Plan for MYT Control Period

2.4.1 APDCL has projected Capital Investment of Rs. 2782.04 Cr, Rs. 1165.86 Cr and Rs.

1091.83 Cr for FY 2019-20, FY 2020-21 and FY 2021-22, respectively. The scheme-

wise break-up of Capital Investment Plan as submitted by APDCL is shown in the table

below:

Table 3: Capital Investment Plan for MYT Control Period as submitted by APDCL (Rs.

Cr)

Name of the Scheme FY 2019-20 FY 2020-21 FY 2021-22

APSEIP-T-4 Loan No. 3200-IND 48.00 0.00 0.00

APSIP-T-2 Loan no 3327-IND 73.00 0.00 0.00

State Annual Plan 200.20 220.22 242.22

NEC Plan 2.61 0.00 0.00

RGGVY XIIth Plan 674.76 0.00 0.00

DDUGJY 930.38 0.00 0.00

DDG (DDUGJY) 147.70 0.00 0.00

IPDS 266.67 433.33 38.67

RAPDRP 320.90 0.00 0.00

UDAY 8.94 0.00 0.00

Saubhagya 0.00 0.00 0.00



Distribution System Enhancement and

loss reduction 229.88 512.31 811.16

Total 2782.04 1165.86 1091.83

2.5 Aggregate Revenue Requirement for MYT Control Period

2.5.1 APDCL has projected the ARR for the Control Period as detailed in the Table below:

Table 4: ARR for FY 2019-20 to 2021-22 as submitted by APDCL (Rs. Crore)

Sr.

No. Particulars FY 2019-20 FY 2020-21 FY 2021-22

1 Power Purchase Expense 5381.81 5961.45 6536.12

2 Operation and Maintenance

Expenses

2.1 Employee Cost 940.68 1010.37 1085.22

2.2 Repair and Maintenance 201.71 337.59 459.31

2.3 Administrative and General

Expenses 51.03 54.20 57.38

3 Depreciation 53.20 31.41 0.00

4 Interest and Finance Charges 67.13 77.41 79.97

5 Interest on Working Capital 21.64 28.94 37.18

6 Interest on CSD 68.02 68.02 68.02

7 Return on Equity 85.53 85.53 85.53

8 Other Debits, incl. provisioning

for Bad Debts 12.35 12.35 12.35

9 Total Expenses 6883.11 7667.26 8421.09

10 Less: Non-Tariff Income 257.11 269.96 283.46

11 Less: Other Income 206.83 217.17 228.03

12 Aggregate Revenue

Requirement 6419.18 7180.14 7909.61

13 Revenue at Approved Tariff

(including FPPPA) 6037.28 6415.85 6853.25

14 Revenue Gap/(Surplus) 381.89 764.29 1056.36


2.5.2 APDCL has thus estimated the total Revenue Gap as shown in the Table below:

Table 5: Revenue Gap as projected by APDCL (Rs. Crore)

Sr.

No Particulars

Rate of

Interest

Revenue

Gap

1 Revenue Gap after Truing up of FY 2017-18 815.40

2 Carrying/(Holding) cost for FY 2017-18 (Half year) 12.60% 51.37

3 Carrying/(Holding) cost for FY 2018-19 (Full year) 12.20% 99.48


5 Total Revenue Gap for FY 2017-18 (including

carrying cost)

1017.01

6 Revenue Gap after APR of FY 2018-19 549.57



9 Total Revenue Gap for FY 2018-19 (including

carrying cost)

617.30

10 Revenue Gap for FY 2019-20 381.89

11 Cumulative Revenue Gap for FY 2019-20 2016.21

2.5.3 APDCL submitted that, they have not prayed for recovery of the total revenue deficit

of Rs. 2016.21 Crore in FY 2019-20. APDCL has proposed recovery of 50% of revenue

gap after true-up of FY 2017-18 and 50% of the revenue gap for FY 2019-20 amounting

to Rs 598.65 Cr through retailed tariff. APDCL has further proposed to request Govt

of Assam for funding the remaining amount of Rs. 1417.56 Cr.

2.5.4 For the proposed recovery, APDCL has proposed average tariff increase to the extent

of 9.9%.

2.6 Prayers of APDCL

2.6.1 APDCL, in its Petition, has prayed as reproduced below:

1. “To admit the petition for True-up of ARR for FY 2017-18, annual performance

review of FY 2018-19 and ARR for MYT Control period from FY 2019-20 to FY

2021-22.and Tariff for FY 2019-20


2. To admit petition for approval of the capital investment plan for the control period

from FY 2019-20 to FY 2021-22

3. To approve amount of revenue gap for True-up of ARR for FY 2017-18

4. To approve the amount of revenue gap as mentioned in APR for FY 2018-19

5. To approve the ARR for the control period from FY 2019-20 to FY 2021-22 and

tariff for FY 2019-20 as submitted by the Petitioner

6. To approve the Capital Investment Plan for FY 2019-20 to FY 2021-22 as

submitted by the Petitioner

7. To condone any inadvertent omissions/ errors/ shortcomings and permit the

petitioner to add/ change/ modify/ alter this filing and make further submissions as

may be required at a future date

8. To allow further submissions, addition and alteration to this Petition as may be

necessitated from time to time

9. To treat the filing as complete in view of substantial compliance as also the specific

requests for waivers with justification placed on record

10. To grant any other relief as the Hon’ble Commission may consider appropriate.

11. Pass any other order as the Hon’ble Commission may deem fit and appropriate

under the circumstances of the case and in the interest of justice”.


3 Brief Summary of Objections Raised, Response of

the APDCL and Commission’s Comments

3.1.1 The Commission received objections/suggestions from the following seven (7)

stakeholders on the Petition filed by APDCL.

Sl.

No. Name of objector

1 Assam Branch of India Tea Association (ABITA)

2. Assam Tea Planters’ Association (ATPA)

3. Bidyut Grahak Mancha (BGM)

4. Federation of Industries and Commerce of North

Eastern Region (FINER)

5. Ms. Mallika Sharma Bezbaruah (Ms. M.S. Bezbaruah)

6. North East Frontier Railway (NFR)

7. North Eastern Small Scale Industries Association

(NESSIA)

3.1.2 APDCL submitted its responses to the objections/suggestions received from the above

stakeholders.

3.1.3 The Commission considered the objections / suggestions received and notified the

Respondents to take part in the Hearing process by presenting their views in person

before the Commission, if they so desired.

3.1.4 The Commission held Hearing at the Assam Administrative Staff College, Guwahati

on February 12, 2019.

3.1.5 The objectors attended the Hearing and submitted their views/ suggestions. All the

written representations submitted to the Commission and the oral submission made

before the Commission in the Hearing and the responses of APDCL have been

carefully considered while issuing this Tariff Order.

3.1.6 The objections/ suggestions made by the stakeholders and responses of the Petitioner


are briefly dealt with in this Chapter. The major issues raised by the objectors are

discussed below along with the response of the Petitioner (APDCL) and views of the

Commission.

3.1.7 While all the objections /suggestions have been given due consideration by the

Commission, only major responses/ objections received on the Petitions and also

those raised during the course of Hearing have been grouped and addressed issue-

wise, in order to avoid repetition.

Issue 1: Energy Sale & projection

Objections

ABITA, FINER, BGM & Ms. M.S Bezbaruah submitted that energy sale for FY 2017-18

has been less than approved for both LT and HT consumers. APDCL has failed to give

any explanation for such a decline.

ABITA submitted that the sale in Jeevan Dhara category continues to remain higher and

the average monthly consumption of Jeevan Dhara consumers in FY 2017-18 is

approximately 64 units, which is more than double the limit prescribed for this category.

ABITA requested the Commission to examine the matter.

BGM submitted that due to the peculiar consumer mix, more power supply to the consumer

results in more losses. An optimum solution needs to be evolved by the Commission with

the State Government playing a crucial role to achieve a financial turnaround of the

Discom, as is necessary.

ABITA and ATPA submitted that APDCL have not provided any relevant basis for the

growth rates considered for sales projections for each of the categories, during FY 2018-

19 and FY 2019-20 to FY 2021-22. APDCL has also not provided past data of sales to

understand if the proposed increase in sales is in line with the past trends. ABITA

requested the Commission to direct APDCL to submit actual category-wise revenue and

see if the average tariff recorded in the accounts are in line with the approved tariffs.

ABITA further submitted that the Petitioner had not considered any reduction/ savings

accrued on account of demand side measures such as distribution of LED appliances, etc.

in the State.


Response of APDCL

Most of the Jeevan Dhara (JV) consumers often consumes more than 30 units per month

and such consumers are billed to the next higher category (Dom A) however only those

JV consumers who consume more than 30 units per month in two consecutive months,

are converted to Domestic A and are billed under Domestic A category thereafter.

Regarding decline of energy sales vis-à-vis approved in MYT order, APDCL submitted that

the actual energy sales for FY 2017-18 is more than that for FY 2016-17, both for the LT

and HT category. It was submitted that the energy sales projected in the MYT order were

based on certain growth assumptions on past trend; however, the sales as shown in the

true-up of ARR for FY 2017-18 are actual sales and APDCL requested that this should be

allowed.

APDCL submitted that the contention of the respondent that the growth rate of category-

wise consumers and connected load is unrealistic is not correct. The detailed rationale for

projecting the category-wise energy sales has already been mentioned in the petitions. As

on 25th January, 2019 APDCL has achieved 100% household electrification under the

SAUBHAGYA scheme, which will increase the household consumption, particularly in the

rural areas, from FY 2018-19.

Commission’s View

The category-wise sales approved by the Commission are detailed in relevant Chapters

of this Order.

Issue 2: Distribution loss

Objections

ABITA and FINER submitted that APDCL has estimated T&D loss of 18.34% against

approved T&D target of 16.85% for FY 2018-19, despite the fact that, the Discom has

already achieved T&D loss reduction of 17.64% in FY 2017-18.

The respondents submitted that APDCL’s rationale for non-achievement of distribution

loss in the past and not being able to reduce the loss further in the Control Period is based

on a premise that there is a deterioration in the HT:LT sales mix over the period which is

going to worsen on account of Saubhagya scheme is not correct; as during the period FY

2015-16 and FY 2016-17, despite 26% and 10% growth in overall LT sales and worsened


HT:LT sales mix, APDCL was able to bring down its distribution losses by approx. 3% each

year.

The respondents highlighted that APDCL has committed to AT & C loss target of 15% by

end of FY 2018-19 as part of UDAY scheme and the entire restructuring of loans as well

as other benefits would only accrue to the State if the milestones are achieved. Therefore,

the respondents requested the Commission to maintain the loss target for FY 2018-19 and

approve further reduction in distribution loss during the next Control Period.

ATPA submitted that although the distribution loss has reduced over the last decade, it is

still high when compared with all India Utilities and requested the Commission to direct

APDCL to reduce its losses further to All India level.

Ms. M. S. Bezbaruah submitted that under R-APDRP, APDCL was to reduce AT&C losses

to 15% in 72 tons. APDCL did not submit any Report regarding various ongoing and

completed projects under the Scheme.

BGM appreciated that APDCL was able to achieve actual distribution loss of 17.64%

against the target of 17.10% in FY 2017-18, despite various constraints like adverse HT:LT

Ratio, incremental sale to LT consumers, old infrastructure etc.

Response from APDCL

During FY 2016-17 under UDAY, APDCL received Rs 50 Cr for system strengthening

which is insufficient for reduction of AT&C losses to 14.5%.

APDCL has taken various measures to reduce the loss level and loss level has come down

considerably from 37% in the last 10 years. However, due to implementation of RGGVY

(now known as DDUGJY) and Saubhagya schemes the network has increased manifold

in the rural areas.

APDCL is trying its best to achieve the targets of loss reduction by implementation of some

ongoing projects under R-APDRP and other initiatives. APDCL has been able to reduce

the distribution loss in the urban area in Assam below 15% but because of the huge

expansion of rural network the loss level as a whole is on the higher side. At present, HT:

LT ratio of consumption in APDCL is 33:67 which also hampers the reduction of loss level.

The slow growth of industrialization in Assam is also one of the reasons for the skewed

HT: LT ratio.


APDCL submitted that social disturbances in some parts of the State have also contributed

to high losses in those areas. Advantage of IT has been taken in meter reading, collection

through MDAS for high value consumers, DTR meters of public DTR (schemes taken in

UDAY) and also meter reading and billing in rural consumers by implementing e-subidha.

APDCL requested the Commission to approve actual distribution loss of 17.64% for FY

18.

Commission’s Views:

Distribution Losses are a controllable parameter. The Commission has considered the

approved Distribution Loss level, and disallowed the excess power purchase cost in the

true-up of FY 2017-18, by restricting the power purchase quantum to that corresponding

to the approved Distribution Loss level. The Distribution Loss trajectory for the Control

Period is elaborated in Chapter 7 of this Order.

Issue 3: Power Purchase

Objections

Ms. M. S. Bezbaruah submited that the power purchase cost of APDCL for FY 2017-18 is

higher than the approved cost and APDCL did not provide adequate explanation for this.

The Respondent submitted that despite more generation in RHEP, unit cost is high, while

generation in DHEP was less but unit cost was high.

FINER requested the Commission to allow the power purchase cost claimed by APDCL,

only after prudence check, as per the Regulations. FINER further submitted that APDCL

considered Rs. 6.39/kWh for BgTPS-III (NTPC) Plant on assumption basis for FY 2018 -

19 without any justification.

BGM submitted that APDCL had to buy power through trading and power exchange over

and above the quantum approved by the Commission at a higher price due to less supply

of power from APGCL. Further, BgTPS of NTPC was supposed to supply 1567.7 MU to

APDCL at a price of Rs 5.71/unit. Finally, NTPC supplied only 1007.75 MU at a price of

Rs.6.40/unit.


ABITA observed that as per the practice adopted by the Commission in previous true-up

Orders, the amount of Rs. 27.07 Cr. relating to delayed payment of power purchase bills

should not be allowed. Large amount paid through short-term procurement i.e. IEX and

DSM needs to be analysed. ABITA requested the Commission to direct the petitioner for

planning its power procurement in advance, and undertake procurement through DEEP

portal to ensure that short-term power is procured at competitive rates.

ABITA submitted that the amount of Rs 13.12 Cr pertaining to the non-achievement of

distribution loss should be disallowed in line with the provisions of the Tariff Regulations.

Further, ABITA proposed that the rebate on power purchase payment may be adjusted

from the total power purchase amount.

Response of APDCL

APDCL submitted that the cost of purchase of power from APGCL and NTPC (BgTPS)

has been claimed on actual basis for FY 2017-18. The increase in power purchase cost is

due to increase in tariff of APGCL and BgTPS which is beyond the control of the Petitioner

and should be allowed on actual basis for pass through in the true-up of ARR for FY 2017-

18. APDCL submitted that the rate of RHEP is found to be on the higher side during FY

2017-18 due to supplementary bills raised to APDC on account of recovery of energy

shortfall. Regarding DHEP, the generator had exceeded the design energy and recovered

incentive bill against the excess energy supplied to APDCL.

APDCL contended that the unit cost of BgTPS is higher than the approved cost because

of less quantum supplied.

Regarding minimization of short-term power purchase, APDCL had floated e-bidding

tender for 50 MW Medium term power at deep portal. However, there was no participation.

APDCL is procuring some of its requirements via banking and is also planning to float e-

bidding tender for 100 MW small hydro power.

Commission’s Views.

The Commission has trued up the power purchase cost based on the Audited Accounts

and prudence check. The Commission has restricted the power purchase quantum to that

corresponding to the approved Distribution Loss level, in the true-up of FY 2017-18, as

Distribution Losses are a controllable parameter.


The detailed analysis of power purchase expenses for FY 2017-18 is elaborated in Chapter

4 of this Order. The detailed analysis of power purchase cost for the Control Period is

elaborated in the relevant Chapters of this Order.

Issue 4: Energy Balance

Objections

ABITA submitted that as APDCL has not been able to achieve the distribution losses, the

Energy requirement as submitted by APDCL for FY 18 is based on the higher Distribution

loss for the year. APDCL should be allowed the energy requirement as per the approved

distribution loss only.

Response from APDCL

The energy balance has been drawn by the Petitioner on the basis of actual sales and

power purchase and requested the Commission to kindly consider the same on the basis

of actuals. The sharing of (gain)/loss on account of non-achievement in distribution losses

has been claimed by the Petitioner in accordance with the Regulations.

Commission’s Views.

The Commission has allowed the power purchase cost in the true-up of FY 2017-18 by

invoking the Regulations regarding sharing of gains/ losses in case of controllable

parameters including distribution loss.

Issue 5: Power from Bongaigaon Thermal Power Plant

Objections

FINER submitted that APDCL has assumed a price of Rs. 6.39/KWh for BgTPS-III (NTPC)

Plant for FY 2018 -19 without any justification. APDCL proposed to purchase 353.87 MU

thermal power from APGCL with an average cost of Rs. 4.13/kWh in FY 19-20, whereas

it proposed to purchase 2096.45 MU thermal power from NTPC with an average cost of

Rs. 6.37/kWh, which is 54% higher. FINER submitted that APDCL should re-negotiate the

PPA with NTPC to reduce the additional cost.


FINER, BGM and Ms. M.S. Bezbaruah requested the Commission to instruct APDCL to

play an active role in fixation of tariff for NTPC-BTPS in the Central Electricity Regulatory

Commission, by submitting response petitions against the claims of NTPC.

Response from APDCL

APDCL submitted that the proposed tariff of Rs. 6.39/kWh for BgTPS-III (NTPC) in FY

2018-19 is based on the average power purchase cost from BgTPS plant for H1 of FY

2018-19. APDCL has also considered the Partial Requisition imposed to the high cost

power stations from time to time for disposal of the surplus power. Since the tariff of

BgTPS-III has not been determined by the CERC, the same has been pegged at the

average power purchase rate of BgTPS for H1 of FY 2018-19.

Regarding purchase of costly power from NTPC (BgTPS), the same has been claimed on

actual basis for FY 2017-18.

Commission’s Views

The views of respondents and APDCL are noted. APDCL is procuring power from other

sources after purchasing in full, the generation of APGCL.

APDCL should play a more active role during tariff fixation of Central Sector Generating

Units by CERC. Large Consumer groups may also consider filing objections/ suggestions

before CERC in this regard.

Issue 6: O& M Expenses

Objections

FINER submitted that in view of the 3.08% growth rate achieved in FY 17- 18, the growth

rate projected @ 4.28% for FY 19-20, appears unrealistic. FINER further submitted that

APDCL has not provided any justification and details such as nature of work, the salary

structure, etc., regarding additional recruitment of 3000 employees for FY 19-20.

ATPA submitted that the employee expenses submitted by APDCL is very high and needs

to be examined.

BGM submitted APDCL should make a proper manpower plan following the norms

prescribed by relevant guidelines of CEA, for carrying out its substation operations and

maintenance smoothly. Parallel training arrangement for the existing outsourced man


power needs to be made by APDCL in its existing lineman training institutes so that

outsourced employees could be engaged in the newly created manned substations

instead of being dependent on contractors for such O&M works. BGM requested the

Commission to direct APDCL to submit the breakup of the expenses incurred in involving

external agencies and payment to outsourced manpower.

ABITA re-determined the O&M projections for FY19 and subsequent Control Period and

requested the Commission to accept the O& M projections proposed by them after

necessary prudence check.

Reply of APDCL

APDCL requested the Commission to allow expenditure of Rs. 15 Cr on account of new

recruitment of 3000 employees as a separate one-time provision, as the same is not

captured in the normal growth trend of employees.

The Petitioner requested that the R&M expenses should be allowed on actual basis in FY

2017-18. The ageing infrastructure of the utility necessitates higher R&M expenditure for

maintaining system operations.

Commission’s View

The Commission has allowed O&M expenses after prudence check, as elaborated in the

relevant chapters of this Order.

Issue 7: Capital Expenditure and Capitalization

Objections

ABITA and FINER submitted that APDCL has not provided any progress report for

scheme-wise details of the capital expenditure incurred during FY 2018-19. Instead, it has

proposed capital expenditure of Rs. 3,572 Cr. and capitalisation of Rs. 3355 Cr. for FY

2018-19, which is unrealistic, considering the past performance.

ABITA submitted that the proposed claims for capital expenditure and capitalization of Rs.

5300 Cr. and capitalisation of Rs. 8609 Cr. including the capitalisation of Opening CWIP

for FY 2018-19, in the control period from FY 2019-20 to FY 2021-22, are not only

overstated but also, the operational efficiency of implementing such large CAPEX has

never been demonstrated by APDCL in any of the past years. ABITA requested the


Commission to direct APDCL for prioritizing its various ongoing schemes, which may yield

the desired benefits.

BGM requested the Commission to direct APDCL to develop a proper project management

system and submit the same for AERC’s approval with a firm commitment to adhere to it.

ATPA requested the Commission not to permit further capital expenditure until, physical

verification report of fixed assets done by competent and reliable authority is available.

Response of APDCL

APDCL submitted that it has provided all the details before the Commission and requested

the Commission to consider the same while approving capital expenditure plan for the

ensuing control period.

Commission’s View

The Commission noted the views of both the petitioner and respondents. The details

regarding approved capital expenditure and capitalization is discussed in the relevant

Chapters of this Order.

Issue 8: Depreciation

Objections

ABITA proposed revised depreciation based on the closing GFA for FY 2017-18 and the

projected capitalization during FY 2018-19 and each year of the Control Period FY 2019-

20 to FY 2021-22, based on their revised estimates of capital expenditure and

capitalisation.

Further, ABITA requested the Commission to direct APDCL for conversion of loans to

grants as part of UDAY scheme.

BGM submitted that a delay in capitalisation due to non-completion of the projects on time

is adversely affecting depreciation and the financial health of the Company.

Response of APDCL

APDCL submitted that the impact of conversion of loans into grant and equity as per the

UDAY scheme has been considered in FY 2018-19 and for upcoming control period of FY

2019-20 to FY 2021-22.


Commission’s View

Depreciation allowed by the Commission is discussed in the relevant Chapters of this

Order.

Issue 9: Interest and Finance Charges

Objections

FINER submitted that the assumed interest rate of 9.40% as per UDAY scheme guideline,

and interest rate on the loan for R-APDRP scheme of 11.50%, by APDCL, appears to be

high. FINER requested the Commission to consider the actual interest rate or the minimum

interest rate available for long term loan while determining ARR and tariff.

BGM submitted that financial restructuring of APDCL is not backed by any loan repayment

plan.

Reply of APDCL

The rate of interest on R-APDRP loan of 11.50% has been considered as per the loan

agreement of R-APDRP and the same is reflected in the audited annual accounts for FY

2017-18. The detailed calculation and basis of the interest & finance charges has been

elaborated in the MYT petition

Commission’s View

The Commission’s analysis and decisions regarding interest and finance charges is

elaborated in the relevant chapters of this Order.

Issue 10: Interest on Working Capital

Objection

FINER submitted that the interest rate of Working Capital claimed @ 11.50% is high and

requested the Commission to grant IWC as per the Regulations.

Reply of APDCL

APDCL submitted that the interest on working capital has been calculated on normative

basis in line with the formula given in Regulation 36.4 of the MYT Regulations, 2018, as

under:

‘’Rate of interest shall be at interest rate equivalent to the normative interest rate of three


hundred (300) basis points above the average State Bank of India MCLR (One Year Tenor)

prevalent during the last available six months for the determination of tariff.’’

The SBI MCLR (one-year tenor) effective from 1st October 2018 of 8.50% has been

considered. Accordingly, the rate of interest on working capital has been considered as

(8.50% + 3.00%) = 11.50%.

Commission’s View

The Commission has computed IWC in accordance with the MYT Regulations and the

same is elaborated in the relevant Chapters of this Order.

Issue 11: Return on Equity

Objections

ABITA requested the Commission that no return on equity should be allowed on the

transferred equity balance of ASEB to APDCL as it has not resulted in any creation of

distribution assets.

ABITA also submitted that the conversion of loans to equity in the books of accounts does

not entitle APDCL to claim return on equity on such amount, as the same has already been

allowed to be recovered as interest on normative loans, as per the provisions of the Tariff

Regulations.

FINER submitted that APDCL’s claim of ROE on the State Government loans of Rs.

283.13 Cr which was converted to equity in accordance with the UDAY scheme is not

logical, as the equity is a kind of grant by the State Government, for development of the

power sector.

Reply of APDCL

APDCL submitted that anticipating the notification by Govt. of Assam on the share

application money pending allotment amounting to Rs. 88.04 Cr transferred from erstwhile

ASEB on transfer of trading function to APDCL w.e.f. 01-04-2009 and Rs. 0.63 Cr

transferred on dissolution of ASEB as on 31- 03-2013, equity capital of Rs. 88.68 Cr has

been considered as part of the equity capital base. Also, APDCL considered that the


existing loans from GoA to the tune of Rs. 283.13 Cr shall be converted to equity in

accordance with the UDAY scheme. Accordingly, the same has been considered as part

of the equity capital base. The rate of return on equity has been taken as 16% as provided

in the MYT Regulations, 2018.

Commission’s View

The computation of Return on Equity is detailed in relevant Chapters of this Order.

Issue 12: ARR and Revenue Surplus/Gap

Objections

FINER submitted that substantial expenses have been projected by APDCL for General

Public Purpose, Public Lighting, Agriculture up to 25 kW and Small Industries Rural up to

25 kW. These are essential services provided by the licensee and have higher loss levels.

The respondent requested the Commission to consider directing subsidies for the above-

mentioned categories. FINER further requested the Commission to review the projected

revenue gap.

ATPA submitted that the expenses projected are based on data and statistics which are

unrealistic and requested the Commission to examine all heads of expenses in depth

before proceeding to determine MYT.

ABITA proposed revised ARR and revenue gap for FY 2018-19 and the MYT control

period. ABITA submitted a revised gap of Rs 198.46 Cr as against Rs 549.5 Cr proposed

by APDCL in FY 2018-19. ABITA proposed a surplus of Rs 142.2 Cr, Rs 450.5 Cr and Rs

354.5 Cr for FY 2019-20, FY 2020-21 and FY 2021-22 respectively against huge gaps

submitted by APDCL.

Reply of APDCL

APDCL contended that detailed reasoning and rationale for projecting the expenses from

FY 2019-20 has been spelt out in the MYT tariff petition for the control period from FY

2019-20 to FY 2021-22 along with supporting documents.

APDCL submitted that the ARR/revenue gap of the Petitioner has been claimed after

detailed explanation of the various heads of income/expense of the Petitioner and

requested the Commission that the same may be allowed, after due prudence check.


Commission’s View

The ARR for the Control Period has been determined after necessary prudence check and

in accordance with the MYT Regulations, 2018.

Issue 13: High Tariff for tea Category

Objection

ABITA & ATPA submitted that the tariff applicable for Tea & Coffee Estates/ Plantations is

amongst the highest in the State. ABITA agreed that the tariff in any State is based on

multiple factors including consumer mix, power purchase mix, etc. However, it is the

responsibility of the utilities to identify and implement measures to ensure affordability,

especially, if the same is possible in neighbouring states faced with similar situations.

Reply of APDCL

APDCL submitted that there has been no revision in fixed charges during the last few

years for the Tea Category. The increase has mostly been in energy charge as the power

supply position was not very impressive and any increase in fixed charge would have put

a burden on a section of consumers without meeting their demand uniformly. In fact, the

energy charges for tea category were reduced in the last tariff order although, the power

supply position has improved considerably in recent times.

Commission’s View

Noted.

Issue 14: Increase in Fixed & Energy Charges

Objections

Some respondents submitted that APDCL has again proposed a revision in fixed and

energy charges across categories to cover the erroneous computation of revenue gap for

FY 2019-20.

NESSIA submitted that with the power interruptions, unscheduled load shedding and poor

quality of power existing in different areas of the State, increase of fixed charge is not

justified. NESSIA further submitted that for HT Small Industries upto 50 KW even the

existing fixed charge is on a higher side. NESSIA requested the Commission to reduce


fixed charges for the Domestic and Small Industry categories.

Reply of APDCL

APDCL submitted that uncontrollable costs like power purchase cost, fuel price, etc.,

should be recovered speedily to ensure that future consumers are not burdened with past

costs, hence, APDCL has proposed increase in the Energy Charges.

Further, APDCL has proposed to charge a higher fixed component of the tariff imposed

on various consumers. This would lead to recovery of large part of the revenue as a big

proportion of the expenditure for DISCOMs is of fixed nature without significantly affecting

the consumers as they are already getting higher quantum of power. Given the additional

supply of power, the average per unit charges paid by consumer on account of fixed

charges would remain the same, even after the proposed increase.

Commission’s view

The submissions of the petitioner and respondents are noted.

Issue 15: Determination of Tariff based on Voltage-wise Cost of Supply

Objections

ABITA & FINER submitted that the proposed tariff increases by APDCL are higher for the

already subsidizing consumers. This shall further create an imbalance in the various tariff

categories and shall be against the principles laid down in the Tariff Policy.

ABITA and other respondents had raised the issue for determination of voltage-wise cost

of supply during the processing of previous tariff orders and had highlighted to the

Commission regarding the non-compliance of the directive in this regard on a continuous

basis by APDCL.

Reply of APDCL

APDCL submitted that it has initiated the process of determination of VCoS. APDCL has

initiated the collection of the feeder-wise revenue data along with the feeder-wise energy

audit from the respective field offices. Steps have been taken to replace the stopped and

defective meters both at consumer end and at the strategic locations (feeders/DTRs) for


proper energy audit. After reconciliation of data, VCoS will be calculated accordingly.

A sample project on Energy Audit is being carried out by PPS Enterprise Limited for the

three circles of APDCL namely Jorhat, GEC-II and Cachar under guidance of the

Commission, the outcome of which will surely be helpful in this aspect.

APDCL therefore, submitted that it would not be appropriate to determine tariffs on the

basis of VCoS at this point in time.

Commission’ s view

The Cost of Supply to consumers and its treatment is detailed in the later part of this

Order.

Issue 16: Power Factor Rebate

Objection

FINER submitted that while levying the penalty for power factor lower than 80%, the

penalty is levied for every 1% fall in power factor. For consumers maintaining power factor

above 85%, a rebate of 1% and for power factor above 95%, a rebate of 2% on unit and

for power factor above, 97%, a rebate of 3% on unit consumption is proposed to be

applicable.

It may be observed from the details provided for other States that incentive is provided in

steps for every 1% increase in power factor beyond 95%and requested the Commission

to implement the same.

Reply of APDCL:

The Petitioner submits that the existing power factor rebate clause should continue.

Commission’s View

The Commission considers that the existing incentive scheme for Power Factor is

reasonable for the present.

Issue 17: Load factor Rebate

Objection

FINER submitted that many distribution companies in India, have started giving a load

factor rebate for maintaining an above average load by the unit. This helps the Discom in


planning the load requirement and optimum utilization of resources may happen, with

negligible shortages.

The industry on the other hand gets incentivized to maintain a high load factor, and

thereby increasing the efficiency and performance of the system.

Reply of APDCL

Two part tariff has an in-built incentive for higher load factor. The existing provisions may

continue. APDCL will analyze the suggestion given by the respondent for future course of

action.

Commission’s View

Noted. The fixed charges for the contracted load for HT consumers under APDCL is one

of the lowest compared to that of other Discoms in the country. APDCL may come up with

their views regarding introduction of load factor incentive in future.

Issue 18: Peak Load Shedding

Objection

FINER submitted that during Peak load, there is sometimes load shedding for 5-6 hours

for an industry in a day, however the fixed charge is being charged in full from the

consumer. The respondent requested the Commission that, the fixed charges per unit

may be pro-rated, as per availability during a day or a month.

Reply of APDCL

APDCL submitted that the respondent needs to be specific as to when and where load

shedding of 5-6 hours have occurred during the peak hours of a day. All efforts are being

made to improve the reliability and quality of supply to the consumers of APDCL. APDCL

is now arranging power supply nearest to 24X7 basis subject to availability of the system

network. Notices are also published at least 24 hours in advance during maintenance

shutdown and planned load shedding in every Circle. However, due to uncertainty of grid

availability in certain conditions such as weather, storm etc. it is difficult to make a

scheduled load shedding plan.


Commission’s View

Non-compliance of the Standards of Performance by APDCL as per the AERC

(Distribution Licensee’s Standards of Performance) Regulations, 2005 may be brought to

the notice of the Commission with full details by the consumers for taking necessary action

by the Commission.

Issue 19: Contract Demand

Objection

FINER submitted that the contract demand should be allowed to be changed at any given

time of the year before the start April of new financial year. APDCL is not allowing change

in contract demand after November 2018 for the FY 2019- 20. FINER requested the

Commission to remove the time constraint for change of contract demand.

Reply of APDCL:

APDCL submitted that change is not allowed in contract demand as the Company has to

compile half yearly data of the current financial year for calculation of performance review

and ARR for submission of tariff petitions every year by the month of November before

the Commission.

Commission’s View

Noted.

Issue 20: Timely payment & BG

Objection

FINER submitted that the consumers should be given a discount for timely payment of

dues so as to improve the cash flow of the Company.

FINER also submitted that Bank Guarantee be allowed to be given as security deposit for

any consumer.

Reply of APDCL

APDCL welcomed the proposal on cash discount for timely payment and submitted that

the proposal may be accepted in future after proper analysis.

APDCL further submitted that the requirement of giving security deposit in cash is as per

the AERC (Electricity Supply Code) Regulations, 2017.


Commission’s View

Noted.

Issue 21: Special Tariff at 132 kV

Objection

FINER submitted that many industrial and commercial consumers in the State of Assam

desire to take power at 132 KV level. However, as there is no separate tariff for this

category, consumers do not upgrade to 132 KV, which is undesirable.

Reply of APDCL:

APDCL submitted that it is not opposed to voltage-wise tariff structure as long as the total

revenue requirement is allowed to be recovered through suitable tariff structure.

APDCL has initiated the process of energy audit in one of its sub-division under the PAT

scheme initiative. The result of the audit is awaited and based on the output the utility will

implement the process of energy audit in rest of the sub-divisions. Steps have been taken

to replace the stopped and defective meters both at consumer end and at the strategic

locations (feeders/DTRs) for proper energy audit.

Commission’s View

Noted. The Commission has already allowed a rebate of 1.5% on energy charge for

consumers availing power at 33 KV and 3% on energy charge for consumers availing

power at 132 KV and above.

Issue 22: Cross subsidy

Objection

ABITA submitted that the current level of cross-subsidies in the State of Assam is very

high in comparison to other States where average realizations for historically cross-

subsidized categories have progressively moved towards cost of supply/ average cost of

supply thereby easing off the burden of high tariff on the historically cross-subsidizing

categories.


ABITA requested the Commission is to reduce the high level of cross-subsidy for Tea

Estates as such large level of cross-subsidy is hampering the viability of this industry.

Commission’s View

The cross subsidy has been reduced over time. The Commission has determined tariffs

for FY 2019-20 such that the cross subsidy for most categories is within the band of +

20% of ACOS, as stipulated in the Tariff Policy, while at the same time ensuring the

revenue gap is met and that no category is subjected to tariff shock.

Issue 23: Time of Day Tariff for Tea, Coffee and Rubber Category

Objection

ABITA appreciated the Commission’s decision to increase night time concession which

has led to better management of the load. ABITA submitted that this decision has

benefitted APDCL as well considering that sale of surplus power during night hours is

significantly lower. ABITA requested the Commission to continue with the night time

rebate of Rs. 1.50 per unit.

Reply of APDCL

APDCL submitted that it has no objection on continuation of the night time rebate of Rs.

1.50/unit.

Commission’s View

Noted.

Issue 24: INTEREST ON CONSUMER SECURITY DEPOSIT

Objection

BGM observed that payment of interest on security deposit to the 45 lakh electricity

consumers at present, is a humongous and costly exercise. BGM suggested that the

Commission should define the necessity of security deposit explicitly with comment that

no interest would be paid to consumer on security deposit but would be considered as

advance for two months of electricity bill. Such collective waiver of interest by the

consumer would help them avail reduction of electricity tariff proportionately since interest


payment, to consumers in general, has never been made.

Reply of APDCL

APDCL submitted that the claim on interest on consumer security deposit for the control

period from FY 2019-20 to FY 2021-22 has been made in accordance with Regulation

36.4 (c) of the MYT Regulations, 2018 which states that:

‘’Interest shall be allowed on the amount held as security deposit by the Distribution

Licensee from consumers, at the rate equal to SBI base rate as on 1st April of the financial

year plus one percent.’’

The latest available SBI base rate of 8.95% as on 01.07.2018 has been considered. The

interest on consumer security deposit for the control period is claimed at the rate of (8.95

+ 1.00) = 9.95% on the consumer security deposit amount held by the licensee.

Commission’s View

The Commission has been allowing payment as per actual against the interest on

consumer security deposit in the ARR.

Issue 25: Power Theft

Objection

NESSIA submitted that APDCL should take appropriate action to reduce power theft

Reply of APDCL

APDCL submitted that it has taken various measures to reduce the distribution loss level

like disconnection, legal action by initiating money suit against the defaulting consumers,

and strengthening of the Vigilance Wing, and loss level has reduced significantly from

37% in last 11 years. The High Value consumer monitoring system cell of APDCL has

contributed significantly in detection of theft and other malpractices, prevention of wrong

billing and enhancement in revenue realization of APDCL through monitoring of HT

Consumers.


Commission’s View

Noted.

Issue 26: Open Access

Objection

NESSIA suggested that all HT industries above 1 MW should be encouraged to take

power on open access with dedicated line.

Reply of APDCL

APDCL submitted that Open Access Regulation 2018 is in place and all consumers

having contracted demand of 1 MW and above with dedicated lines are eligible to apply.

Commission’s View

Noted

Issue 27: Realization of outstanding power tariff dues

Objection

NESSIA submitted that APDCL should try to recover its outstanding dues from

Government departments

Reply of APDCL

APDCL submitted that it is making all efforts to recover the outstanding dues from Govt.

establishment, Capital Complex etc.

Commission’s View

Noted

Issue 28: Regular reporting and performance improvement plan

Objection

NESSIA requested the Commission to issue directions to APDCL to submit reports of

implementation of its directives and schemes on half yearly basis.

Reply of APDCL:

APDCL submitted that compliance report of the directives of the Commission is being


submitted at regular intervals. The Petitioner is making all efforts to adhere to the various

directives of the Commission in order to improve its performance.

Commission’s View

The suggestion of the respondent is noted. Apart from asking for reports, the Commission

reviews the compliance of the directives and implementation of its ongoing projects of the

three utilities on quarterly basis.

Issue 29: Affordable Power Purchase

Objection

NESSIA submitted that APDCL should purchase more power to overcome the present

and future demand since affordable power is easily available nowadays.

Reply of APDCL

APDCL submitted that the affordable power is not easily available. APDCL has tried to

procure RE power through deep portal (competitive bidding) during FY 2017-18 for

fulfilling its RPO requirements but the power available was at the higher rates. Further,

APDCL has floated tender for procurement of 50 MW medium term power supply but

there was no participation. Moreover, the prices in IEX have increased significantly in

recent years.

APDCL submitted that the following steps have been taken to increase its power supply

position in the coming control period.

1. APDCL is planning to float e-bidding tender for 100 MW small hydro power

2. APDCL has tied-up with new sources of power purchase such as Wind Power (PTC), Wind

Power (SECI), PTC Nikachu having competitive tariff and lower power purchase cost than

purchase from IEX etc. These plants will commence operation from FY 2019-20. The

levelised tariff of these plants is as below.

Wind Power (PTC) – Rs. 3.53/kWh

Wind Power (SECI) – Rs. 2.72/kWh

PTC Nikachu – Rs. 4.152/kWh

3. SPV (100 MW) Assam will commence operation from December 2019 having tariff of Rs.

3.325/kWh. This is also likely to bring down the average power purchase cost


4. Additional capacity allocation from Bhutan expected is ~500 MW in FY 2021-22.

Commission’s View

The effort of the DISCOM is noted. APDCL should continuously endeavour to procure

power at reasonable rates.

Issue 30: New Railway Traction Tariff

Objection

North East Frontier Railway (NFR) requested the Commission for a new tariff category of

Railway Traction. NFR observed that HT Commercial Tariff proposed by APDCL as tariff

for Railway Traction is on a higher side, considering the tariff for Railway Traction in other

States.

Reply of APDCL

The tariff proposal for HT Railway Traction has been made on the basis of cost of supply

as ascertained by the Petitioner. The Commission may decide the cost of supply to be

passed on to the consumers and this can form the basis for determining the tariff for the

category.

The tariff proposal for this category is based on the assumption that railway traction

consumers will opt for open access and will not be direct beneficiaries of APDCL. The

tariff for HT Railway Traction has been proposed considering the cross-subsidy

surcharges which Railway Traction consumers will have to pay to APDCL. In case, the

railway traction consumers intend to take power directly from APDCL, the same should

be intimated to APDCL. Further, the tariff proposed for railway traction to be pegged at

HT Commercial is only for the first year.

Commission’s View

As proposed, the Commission has introduced two new tariff categories for HT Railway

Traction and Electric Vehicles.


Issue 31: Statutory Audit Report

Objection

ATPA submitted that the proposed ARR and MYT petitions for 2019-20 to 2021-22 are

not supported by statutory audits nor vetted by CAG and therefore, should not be

considered.

Reply of APDCL

APDCL submitted that the certified audited accounts along with the certified Statutory

Audit Report have been submitted before the AERC on 21.12.2018. APDCL further

submitted that the copy of the C&AG Report for FY 2017-18 will be submitted after

completion of the AG Audit. Further the reply to the audit reports will also be submitted

after approval of Board.

Commission’s View

Noted.

Issue 32: Subsidy from State Government

Objection:

ATPA requested the Commission to take into account the subsidy component if received

from the State government while determining tariff.

Reply from APDCL

Regarding the receipt of subsidy for the next year i.e. FY 2019-20, APDCL submitted that

the same will be intimated to the Commission once it is received/notified.

Commission’s View

Noted

Issue 33: Digital meter reading

Objection

ATPA submitted that the consumers fitted with electronic meters must be trained to read

the meters which will help the consumers of electricity in conservation of energy.


Response of APDCL

APDCL welcomed the suggestion.

Commission’s View

Noted.


4 Truing up for FY 2017-18

4.1 Methodology for Truing Up

4.1.1 The Commission had approved the ARR for APDCL for FY 2017-18 in the MYT Order

dated March 31, 2017.

4.1.2 APDCL submitted the Truing-up Petition for FY 2017-18 on November 30, 2018 based

on annual accounts and provisions of MYT Regulations, 2015.APDCL had initially not

submitted the audited statement of accounts and statutory auditor report at the time of

filing of revised Petition. The audited annual accounts along with the Statutory

Auditor’s Report was submitted on December 21,2018.

4.1.3 The Commission approved the cost parameters through approval of the Annual

Revenue Requirement at the beginning of the year, keeping in view the data available

at that point of time. The cost approvals for each of the items were based on projection

of expenses and revenue before beginning of the year and the provisions of MYT

Regulations, 2015, wherever applicable. However, the projections might vary over the

course of the year.

4.1.4 The actual cost/values for certain elements/parameters may vary as against the

approved cost during the year due to various controllable and uncontrollable factors.

The Licensee may end up with higher or lower expenditure, as the case may be, at the

end of the year as against the approved cost.

4.1.5 The Commission analyses the actual expenditure for the previous year/years based

on the audited Annual Accounts of the Licensee and allows/disallows the recovery of

the actual expenditure through the ensuing year’s tariff, subject to prudence check.

4.1.6 The Commission has carried out the Truing up for FY 2017-18 based on the

submissions of APDCL, audited annual accounts for FY 2017-18 and provisions of

MYT Regulations, 2015.

4.1.7 The Commission has analysed all the elements of actual expenditure and revenue of

APDCL for FY 2017-18 and undertaken the truing-up of expenses and revenue in


accordance with Regulation 10.1 of the MYT Regulations, 2015. The Commission has

approved the sharing of gains and losses on account of controllable factors between

APDCL and the consumers, in accordance with Regulation 13 of the MYT Regulations,

2015.

4.2 Energy Sales

4.2.1 APDCL submitted the actual category-wise energy sales in its Truing Up Petition and

stated that the actual sales were 6814 MU for FY 2017-18, as against approved sales

of 7524 MU, as shown in the Table below:

Table 6: Energy Sales for FY 2017-18as submitted by APDCL (MU)

Consumer Category Approved in MYT Order dt. 31.03.17

Actual

Jeevan Dhara 565 669

Domestic A 3134 2727

Domestic-B 288 277

Commercial Load 693 627

General Load 136 99

Public Lighting 23 13

Agriculture 17 20

Small Industries Rural 61 66

Small Industries Urban 32 30

Temporary 6 7

LT TOTAL 4955 4534

HT Domestic 46 31

HT Commercial 395 352

Public Water Works 71 71

Bulk Supply Govt. Edu Inst 94 76

Bulk Supply Others 414 383

HT Small Industries upto 50 kw 23 23

HT Industries-1 50kw to 150 kw 88 67

HT Industries-II above 150 kw (33 KV)

793 702

Tea Coffee& Rubber 442 484

Oil & Coal 182 76

HT Irrigation Load above 7.5 HP 22 15

HT Temporary -

HT Electric Crematorium -

HT TOTAL 2570 2280

TOTAL Energy Sales (excluding OA consumption)

7524 6814


4.2.2 APDCL submitted that sales to Jeevan Dhara Category had significantly increased on

account of the massive rural electrification undertaken through various ongoing

flagship programmes like RGGVY/DDUGJY/SAUBHAGYA of Govt. of India. Such

programmes have led to manifold increase in domestic consumers in a small span of

time. Further, the supply hours to rural areas have also increased in the last few years

owing to greater availability of power and the vision of moving towards24x7 Power for

All.

4.2.3 APDCL also submitted that there was significant decline in HT sales due to availing of

Open Access facility by eligible HT-II category consumers, who have consumed 353

MU under Open Access in FY 2017-18.

4.2.4 APDCL requested the Commission to approve the actual retail sale of 6814 MU

(excluding OA consumption) for true-up, since it is uncontrollable.

Commission’s Analysis

4.2.5 The Commission has analysed the category-wise and total sales submitted by APDCL

in the Petition and found several inconsistencies in APDCL’s submissions, as under:

a) In the initial submissions, for FY 2017-18, the opening number of consumers

for Jeevan Dhara category were shown as 14,63,256 and closing number of

consumers were shown as 8,63,949, which indicates a huge reduction in the

number of consumers;

b) The opening number of consumers for FY 2017-18 for Domestic A category

was different from the closing number of consumers for FY 2016-17 considered

in the true-up of FY 2016-17 based on APDCL’s submissions in this regard;

c) The sales shown to the Jeevan Dhara category amount to average monthly

consumption of 35 units per month for FY 2017-18, against the ceiling

consumption of 30 units per month, beyond which the Jeevan Dhara must be

categorised under the Domestic A category;

4.2.6 The Commission sought clarification from APDCL for the below inconsistencies/data

for Jeevan Dhara and Domestic A category consumers/sales from APDCL:

a) Separate addition of consumers on account of SAUBHAGYA Scheme in

Jeevan Dhara and Domestic A category;

b) Shift of consumers from Jeevan Dhara to Domestic A category during the year;

c) Clarification on ‘Other’ consumers mentioned in the Petition/Reply;


d) Number of hours of supply to rural areas for Jeevan Dhara and Domestic A

category.

4.2.7 In its reply, APDCL submitted as under:

a) The closing number of Jeevan Dhara consumers for FY 2017-18 is 15,79,385

with an addition of 1,16,129 during FY 2017-18, and requested the

Commission not to consider the earlier submission of closing number of

8,63,949;

b) Data on addition of consumers under SAUBHAGYA scheme separately under

Jeevan Dhara and Domestic A category is not available;

c) Data on number of hours of supply in rural areas is not available;

d) The opening balance of consumers of Domestic A category was revised to

21,71,625 which is different from the closing balance of consumers in FY 2016-

17 considered in the true-up of FY 2016-17 based on APDCL’s submissions

in this regard.

4.2.8 Thus, the Commission did not receive satisfactory replies to most of the queries raised

regarding number of consumers and consumption of Jeevan Dhara and Domestic A

Category for FY 2017-18.

4.2.9 Even after submitting the revised number of consumers for Jeevan Dhara Category,

the average consumption per month was still exceeding the ceiling of 30 units. Owing

to these inconsistencies, the Commission adopted the following approach based on

the data available for approving the category-wise sales in the true-up for FY 2017-18:

a) The actual closing number of consumers in Jeevan Dhara category has been

considered as 15,79,385 for FY 2017-18;

b) The sales to Jeevan Dhara category have been restricted to 30 units per month,

and the consumption in excess of 30 units per month has been included under

sales to Domestic A category;

The Commission has accepted the sales submitted by APDCL for all other

categories.

4.2.10 The category-wise sales approved by the Commission after true-up of FY 2017-18is

as shown in the Table below:


Table 7: Energy Sales for FY 2017-18 approved by the Commission (MU)

Consumer Category Approved after

true-up

Jeevan Dhara 548

Domestic A 2,848

Domestic-B 277

Commercial Load 627

General Load 99

Public Lighting 13

Agriculture 20

Small Industries Rural 66

Small Industries Urban 30

Temporary 7

LT Total 4,534

HT Domestic 31

HT commercial 352

Public Water Works 71

Bulk Supply Govt. Educational Inst. 76

Bulk Supply Others 383

HT Small Industries upto 50 kVA 23

HT Industries-I 50 kVA to 150 kW 67

HT Industries-II above 150 kVA 702

Tea Coffee & Rubber 484

Oil & Coal 76

HT Irrigation Load above 7.5 HP 15

HT Temporary -

HT Electric Crematorium -

HT Total 2,280

TOTAL 6,814

Accordingly, the Commission approves the total energy sales of 6,814 MU in the

Truing up for FY 2017-18.

4.2.11 As discussed in above paragraphs, APDCL has not been relying on its own data

submitted during last Petition/previous replies and has been constantly changing the

numbers without any justifications. Data on category-wise sales and revenue is the

basic commercial data that needs to be maintained in absolutely unambiguous manner

by any Distribution Licensee. Further, as all the consumers are metered and the

agricultural consumption in the State is also very less, APDCL is not faced with the

problems faced in some other States having large number of unmetered agricultural

connections. There is no reason why APDCL should not be able to submit proper


authenticated and consistent commercial data.

4.2.12 The Commission therefore directs APDCL to submit authenticated figures of

number of consumers, connected load, contract demand, billing demand, and

consumption for each consumer category while processing the next True-up

Petition.

4.3 Distribution Loss

4.3.1 APDCL, in its Petition, submitted that it has achieved distribution loss level of 17.64%

in FY 2017-18 as against the approved level of 17.10%. APDCL submitted that it has

been able to maintain the gradually decreasing trend in losses even with various

constraints, i.e., adverse HT:LT ratio, incremental sales to LT consumers, old

infrastructure, etc.

4.3.2 APDCL submitted that the HT:LT ratio of the sales is decreasing every year, as the LT

sales are increasing on account of extensive rural electrification and implementation

of several Central Government Schemes. However, the HT sales are not increasing at

the same rate. Moreover, the increase in OA consumption every year has worsened

the situation for APDCL. APDCL added that with the present trend of decreasing HT:LT

ratio, there is a need to restate the target Distribution Losses.

4.3.3 APDCL claimed that the it has been able to achieve the distribution loss targets in

predominantly urban areas as well as areas without any social disturbances. However,

in some areas where the situation is beyond reasonable control of the Licensee, the

losses have crossed the approved limit. Frequent bandhs as well as perennial natural

calamities in some part of the State affects the performance in these areas resulting in

higher losses.

4.3.4 APDCL also submitted a trend of distribution losses from FY 2005-06 to FY 2017-18

showing that it has reduced the losses gradually, but, the trend of HT:LT ratio in last

10 years is affecting the distribution losses. APDCL requested the Commission to

approve the actual distribution loss of 17.64% in the true-up for FY 2017-18.

Commission Analysis

4.3.5 The Commission analysed the information submitted by APDCL regarding Distribution

Losses. It is observed that APDCL’s contention that the worsening HT:LT ratio

increases Distribution Losses, though correct in theory, is not borne out by APDCL’s

own performance over the last 3-4 years. Though HT:LT ratio has worsened over the

past 3-4 years, APDCL has reported improvement in Distribution Losses from 21.14%


(FY 2014-15) to 17.64% (FY 2017-18).

4.3.6 The Commission has considered the approved Distribution Loss level for FY 2017-18

of 17.10%, for the purpose of truing up for FY 2017-18, as approved in the MYT Order

dated March 31, 2017.

4.3.7 The Commission has computed the actual distribution loss based on the actual sales,

actual power purchase and actual inter-State and intra-State Transmission Losses.

The actual Distribution Loss achieved by APDCL in FY 2017-18 works out to 17.41%,

as shown in the Table below:

Table 8: Actual Distribution Loss for FY 2017-18 computed by the Commission

Sl.

No. Particulars FY 2017-18

1 Power Purchased (MU) 9345

2 Less Sale of Surplus Power 670

3 Net Energy Requirement 8675

2 Inter-State Transmission Loss (%) 1.40%

3 Inter-State Transmission Loss (MU) 121

5 Energy Available at G<>T Periphery 8553

6 Intra-State Transmission Loss (%) 3.55%

7 Intra-State Transmission Loss (MU) 304

8 Energy Available at T<>D Periphery 8250

9 Direct Sale (MU) 6814

10 Distribution Loss (MU) 1436

11 Distribution Loss (%) 17.41%

However, Distribution Loss is a controllable parameter. Accordingly, the

Commission approves the Distribution Loss level at 17.10% in the truing up for

FY 2017-18. The efficiency loss on account of higher than approved Distribution

Losses, in terms of excess power purchase expenses, has been shared between

APDCL and the consumers, as discussed subsequently in this Chapter.

4.4 Energy Requirement

4.4.1 APDCL submitted that the total energy requirement for sale of 6814 MU to retail

consumers in FY 2017-18 was 8694 MU excluding open access consumption, against


the approved energy requirement of 9544MU.


4.4.2 In the truing up for FY 2017-18, the Commission has approved the energy requirement

on the basis of approved sales, approved Distribution Losses, actual Transmission

Loss of AEGCL, and PGCIL Losses on external power purchase for the respective

year.

4.4.3 The Commission has considered the actual transmission loss of AEGCL, as against

the approved transmission loss for FY 2017-18, while approving energy requirement

for APDCL. The Commission is of the view that APDCL should not be penalized for

non-achievement of approved Transmission Loss by AEGCL.

4.4.4 It may be noted that the quantum of Surplus Power sold outside the State has not been

considered while computing the Energy Balance, and the revenue from the same has

been considered under Other Income, as discussed subsequently in this Order.

4.4.5 The gross Energy Requirement for FY 2017-18 as approved by the Commission in the

MYT Order, as submitted by APDCL, and as approved in the truing up are shown in

the following Table:

Table 9: Energy Requirement approved by the Commission after True-Up for FY 2017-

18

Particulars Unit MYT

Order

APDCL

Petition

Approved

after True-Up

Energy Sales MU 7524 6814 6,814

Distribution Loss % 17.10% 17.64% 17.10%

Energy Requirement at Distribution

Periphery T<>D

MU 9,076 8,273 8,219

Intra-State (AEGCL) Transmission

Loss

% 3.49% 3.49% 3.55%

Energy Input to Transmission

System

MU 9,404 8,572 8,522

Inter-State (PGCIL) Pooled Loss % 1.47% 1.40% 1.40%

Total Energy Requirement MU 9,544 8,694 8,643

Therefore, the Commission approves Energy Requirement of 8643 MU for sale

of 6814 MU to retail consumers in the truing up for FY 2017-18.


4.5 Power Purchase

4.5.1 APDCL submitted that it has incurred an amount of Rs.4506.31 Crore against the

approved power purchase cost of Rs.4376.30 Crore for FY 2017-18. APDCL submitted

that this increase in power purchase cost is on account of the following reasons:

a) Increase in the total quantum of power sourced from allocated sources with

compulsion as compared to the approved quantum at higher rate

b) Even with additional power from allocated sources, APDCL had to procure

power from other sources through bilateral trading, Power Exchange, etc.

4.5.2 APDCL submitted that the power purchase cost for FY 2017-18 comprises the basic

power purchase cost, transmission charges payable to AEGCL (inclusive of PGCIL

charge and Special Charge on BST), and submitted the comparison of approved and

actual source-wise power purchase quantum and cost.


4.5.3 The Commission queried APDCL on the increase in per unit rate from various sources

with respect to rates approved by the Commission for FY 2017-18 in the MYT Order.

4.5.4 APDCL provided source-wise reasons for escalation of power purchase cost per unit

as compared to approved rates. APDCL has also tied up with renewable sources at

competitive tariff.

4.5.5 The Commission observed that the units sold by APGCL and revenue earned by

APGCL from APDCL is not matching with the units purchased by APDCL from APGCL

and cost paid to APGCL. The Commission queried APDCL and APGCL on the same,

and it is observed that though the Accounts of both APGCL and APDCL for FY 2017-

18 are audited, APGCL has considered higher revenue in FY 2017-18 based on bills

raised by APGCL, while APDCL has considered lower cost of purchase from APGCL,

because of non-consideration of certain bills against power purchase cost in FY 2017-

18. The Commission is of the view that reconciliation is necessary in this regard at the

time of truing-up.

4.5.6 Similar inconsistency, though on a smaller scale, was observed in revenue earned by

AEGCL and cost paid by APDCL to AEGCL. Based on replies submitted by APDCL


and AEGCL, it is observed that the difference is because of accounting treatment of

one bill, which has been adjusted by APDCL in the first half of FY 2018-19, while

AEGCL has considered the same in FY 2017-18.

4.5.7 As the true-up for AEGCL and APGCL has been done by considering the Revenue

reported in their Audited Accounts for FY 2017-18, the Commission has considered

the respective amounts shown as revenue by APGCL and AEGCL as the cost of power

purchase from APGCL by APDCL and the Transmission Charges paid/payable to

AEGCL by APDCL, respectively. Similarly, the quantum of net generation shown by

APGCL has been considered as the net purchase by APDCL from APGCL.

4.5.8 APDCL had claimed that there was no Delayed Payment Surcharge paid during FY

2017-18. However, as per Statement of Accounts, APDCL had paid a Delayed

Payment Surcharge of Rs. 27.07 Crore, which was included in the total power

purchase cost claimed by APDCL. The Commission has therefore, excluded the

amount of Rs. 27.07 Crore from the total power purchase cost claimed in the Petition

as the Delayed Payment Surcharge is a penal payment and cannot be passed on to

the consumers.

APDCL was asked to submit the status of Renewable Purchase Obligation (RPO)

compliance for FY 2017-18. APDCL submitted that in FY 2017-18, it purchased Non-

Solar Renewable Energy Certificates (RECs) of Rs. 18.16 crore, over and above the

renewable power purchase. It is observed that APDCL has not achieved the RPO

target for the year, despite allowance of cost towards purchase of RECs in the Tariff

Order. The Commission will take up this matter of non-compliance of the RPO

separately in accordance with the AERC RPO Regulations.

4.5.9 The remaining source-wise purchases have been accepted by the Commission as

submitted by APDCL. The summary of power purchase quantum and cost as approved

in the Tariff Order for FY 2017-18, actual quantum and cost as submitted by APDCL

in its True-Up Petition, and the quantum and cost approved by the Commission after

true-up are summarized in the Tables below:


Table 10: Power Purchase approved by the Commission after True-Up for FY 2017-18 (MU)

Sl. Source

MYT Order dt. 31.03.17 APDCL Petition Approved after True-Up

Quantum Total

Charge Rate Quantum

Total Charge

Rate Quantum Total

Charge Rate

MU Rs.

Crore Rs. / kWh

MU Rs. Crore Rs. / kWh

MU Rs.

Crore Rs. / kWh

1 APGCL 2209.03 582.63 2.64 1423.25 415.07 2.92 1,403.92 453.89 3.23

2 NEEPCO

KOPILI I 350.00 39.55 1.13 550.89 57.71 1.05 550.89 57.71 1.05

KOPILI II 50.00 8.15 1.63 57.60 7.70 1.34 57.60 7.70 1.34

KHANDONG 95.00 16.72 1.76 141.73 22.60 1.59 141.73 22.60 1.59

RHEP 560.00 113.68 2.03 600.51 174.43 2.90 600.51 174.43 2.90

DHEP 70.00 30.59 4.37 113.64 54.72 4.82 113.64 54.72 4.82

Kameng HEP 28.00 9.80 3.50

Pare HEP 30.00 10.50 3.50

AGBPP 930.00 325.50 3.50 824.96 280.64 3.40 824.96 280.64 3.40

AGTPP+AGTPP2 345.00 106.73 3.09 267.53 98.62 3.69 267.53 98.62 3.69

3 OTPC 1100.00 314.60 2.86 1269.32 384.08 3.03 1,269.32 384.08 3.03

4 NTPC BTPS 1576.67 900.28 5.71 1007.75 645.45 6.40 1,007.75 645.45 6.40

5 NHPC 150.00 42.45 2.83 238.31 63.91 2.68 238.31 63.91 2.68

6 NTPC (Existing)

FARAKKA 250.00 83.25 3.33 222.62 79.26 3.56 222.62 79.26 3.56

KAHELGAON - I 130.00 46.28 3.56 115.02 42.28 3.68 115.02 42.28 3.68

KAHELGAON -II 540.00 211.14 3.91 550.90 194.92 3.54 550.90 194.92 3.54

TALCHER 140.00 37.52 2.68 141.73 39.01 2.75 141.73 39.01 2.75

8 HHPCPL (Champawati) 9.80 4.03 4.11 8.55 3.51 4.11 8.55 3.51 4.11

9 IOCL (AOD) 27.20 10.53 3.87 - - -


Sl. Source

MYT Order dt. 31.03.17 APDCL Petition Approved after True-Up

Quantum Total

Charge Rate Quantum

Total Charge

Rate Quantum Total

Charge Rate

MU Rs.

Crore Rs. / kWh

MU Rs. Crore Rs. / kWh

MU Rs.

Crore Rs. / kWh

10 MeECL 28.60 17.13 5.99 0.55 0.40 7.30 0.55 0.40 7.27

11 SECI Solar 31.00 18.68 6.03 39.17 24.41 6.23 39.17 24.41 6.23

12 JNNSM Solar Bundled 9.60 11.12 11.58 7.97 9.83 12.33 7.97 9.83 12.33

13 Suryatap Solar 0.56 0.54 9.72 6.15 5.45 8.86 6.15 5.45 8.86

14 Pohmura SHEP 0.47 0.14 2.91 - - -

15 JNNSM Coal Bundled 35.00 10.96 3.13 35.62 11.48 3.22 35.62 11.48 3.22

16 Trading Purchase 261.18 60.07 2.30 632.09 250.34 3.96 632.09 250.34 3.96

17 Power Exchanges 586.65 134.93 2.30 757.76 317.40 4.19 757.76 317.40 4.19

18 Additional Solar RECs 20.71 3.88 3.88

19 Additional Non-solar RECs 15.70 18.16 18.16

20 Deviation Settlement Mechanism

350.92 93.93 2.68 350.92 93.93 2.68

21 TOTAL PURCHASE 9543.77 3183.90 3.34 9364.54 3299.22 3.52 9,345.21 3,338.04 3.57

22 Transmission & SLDC Charges

1192.39 1207.09 1.29 1194.99

23 Less: Delayed Payment Surcharge

27.07

24 Total Power Purchase Cost 9543.77 4376.29 4.59 9364.54 4506.31 4.81 9,345.21 4,505.96 4.82

Therefore, the Commission approves Power Purchase Expenses of Rs. 4505.96 Cr after truing up for FY 2017-18.


4.6 Sharing of (Gains)/ Losses on account of excess Power Purchase cost

due to higher than approved Distribution Losses

4.6.1 As the actual Distribution Losses are higher than the approved Distribution Losses for

FY 2017-18, the efficiency loss on account of higher than approved Distribution

Losses, in terms of excess power purchase expenses, have been shared between

APDCL and the consumers, as shown in the Table below:

Table 11: Sharing of Efficiency (Gain)/Loss approved by the Commission on account of

Distribution Losses after True-Up for FY 2017-18 (Rs. Crore)

Particulars Unit FY 2017-18

Total Power Purchase MU 9,345

Trading Sale MU 670

Actual Energy Purchased for sale within State MU 8,675

Allowable Energy Purchase for sale within

State at approved Distribution Loss MU 8,643

Excess Energy Purchase MU 32

Average power purchase rate Rs/kWh 3.57

Excess Power Purchase Cost Rs. Crore 11.40

Share of loss/ (gain) to be borne by APDCL Rs. Crore 7.60

Share of loss/ (gain) to be borne by consumers Rs. Crore 3.80

Therefore, the Commission disallows two third of the excess power purchase

cost, i.e., Rs. 7.60 crore in the truing up for FY 2017-18, which will be borne by

APDCL, and one third of the excess power purchase cost, i.e., Rs. 3.80 crore is

passed on to the consumers as per the MYT Regulations, 2015.

4.7 O&M Expenses

4.7.1 APDCL submitted that it has incurred actual O&M expenses of Rs. 971.37 Crore

against the approved O&M expenses of Rs. 870.15 Crore for FY 2017-18, as shown

in the Table below:


Table 12: O&M Expenses for FY 2017-18 as submitted by APDCL (Rs. Crore)

Sl. No.

Particulars MYTOrder dt. 31.03.17

APDCL submission

1 Employee Expenses 728.12 802.39

2 Repair & Maintenance 103.21 124.26

3 Administrative & General Expenses 38.82 44.72

4 Total O&M expenses 870.15 971.37

Employee Expenses

4.7.2 APDCL submitted that Employee Expenses comprise salaries, dearness allowance,

bonus, terminal benefits in the form of contribution for pension and gratuity funding,

leave encashment, and staff welfare expenses.

4.7.3 APDCL referred to APR of FY 2017-18, passed vide Order dated March 19,2018 and

stated that the Commission had provisionally considered Rs. 28.88 Crore as impact

towards Revision of Pay (ROP). The ROP is applicable since April 2016, however,

implementation started from December 2017. Accordingly, salaries, etc., were paid at

the revised rates from December 2017onwards.The remaining pending arrears on

account of ROP will be paid along with the salaries for FY 2018-19.

4.7.4 APDCL submitted that the Employee Benefit Expenses’ in the books of accounts is

Rs. 742.06 Crore pertaining to FY 2017-18. The total arrears on account of ROP 17 to

be paid are Rs. 142.69 Crore, out of which Rs. 20.20 Crore have already been

released in FY 2017-18. The pending arrears on account of ROP are Rs. 122.67 Crore,

which will be released in FY 2018-19. Out of this, the pending arrears for FY 2016-17

and FY 2017-18 are Rs. 86.26 Crore and Rs. 36.23 Crore, respectively, which will be

released in FY 2018-19.

4.7.5 APDCL submitted that the pending arrears for FY 2017-18 is Rs. 36.23 Crore, which

should be included in the base expenses while projecting employee expenses for the

future based on norms (the entire increase in pay on account of ROP should be

considered in the base while projecting employee expenses for the future based on

norms). The provisioning done in the books of accounts for FY 2017-18 is Rs. 77.43


Crore (Schedule 2.09 of the Accounts).

4.7.6 APDCL has claimed normative employee expenses for FY 2017-18. The normative

Employee Cost works out to be Rs. 679.72 Cr after considering 3% escalation on

normative employee expenses over the previous year’s expenses. After addition of

ROP arrears amounting to Rs. 122.49 Crore, the total Employee Cost works out to be

Rs. 802.39 Cr.

Repair & Maintenance (R&M) Expenses

4.7.7 APDCL submitted thatR&M Expenses are incurred for daily upkeep of the distribution

network and forms an integral part of the Company's efforts towards reliable and

quality power supply.

4.7.8 APDCL submitted that most of its assets are old and not adequately maintained from

time to time, primarily due to restricted allowance in tariff for many previous years.

Regular maintenance of assets is a prerequisite to ensure uninterrupted operations.

APDCL has been trying its best to ensure uninterrupted operation of the system and

has accordingly been undertaking necessary expenditure for R&M activities.

Considering this fact, the expenditure incurred on R&M activities are uncontrollable in

nature.

4.7.9 APDCL has claimed actual expenditure of Rs. 124.26 Crore against the approved cost

of Rs. 103.21 Crore. The deviation in R&M Expenses from the approved level is mainly

due to:

• Restricted approval for R&M expenses based on MYT Regulations, irrespective of

the age and health of infrastructure for many previous years

• Outsourcing of O&M of many sub-stations due to severe human resource

constraints.

4.7.10 APDCL requested the Commission to approve the actual R & M expenses rather than

the normative R&M expenses linked to k-factor and WPI index.


Administrative and General (A&G) Expenses

4.7.11 APDCL submitted that A&G Expenses comprise rents, taxes, various statutory

charges, telephone and other communication expenses, professional charges, legal

charges, conveyance & travelling allowance, etc.

4.7.12 APDCL has claimed the actual A&G Expenses of Rs. 44.72 Crore for FY 2017-18 as

per the Audited Annual Accounts, as against approved normative A&G expenses of

Rs. 38.82 Crore.

4.7.13 APDCL submitted that actual A&G expenses depends on the growth in the business

size requiring higher operational activity thereby resulting in higher expenses in addition

to the inflation factor. The increase is also due to the uncontrollable reasons like

increase in telephonic charges, water charges and increase in other statutory taxes,

etc., vis-à-vis lump sum amount approved as per the Regulations on normative basis.

4.7.14 APDCL requested the Commission to consider actual expenditure under the head of

A&G expenses, rather than normative A&G expenses linked to WPI as it does not

adequately cover the expenses.


4.7.15 In accordance with Regulation 38.3 of the MYT Regulations, 2015, the Commission in

MYT Order dated March 31, 2017 has allowed O&M Expenses on normative basis.

However, APDCL had adopted a dual approach in the Petition by claiming employee

expenses on normative basis and R&M and A&G expense on actual basis. For truing

up for FY 2017-18, the Commission has computed the O&M Expenses on normative

basis as per Regulation 38 of the MYT Regulations, 2015. Any variation between

normative O&M expenses and actual O&M Expenses has been considered under

sharing of gains and loss on account of controllable items as per Regulation 13 of MYT

Regulations, 2015.

4.7.16 The Commission observed that there has been no net addition in number of employees

during FY 2017-18, rather there has been net reduction in number of employees during

FY 2017-18 due to retirements. Therefore, growth rate is considered as NIL for


computing normative employee expenses for FY 2017-18.

4.7.17 For computation of normative employee expenses for FY 2017-18, the Commission

has adopted the following approach:

a) The employee expenses approved after True-up for FY 2016-17 have been

considered as base expenses.

b) CPI inflation has been computed as average increase of CPI index for the period

from FY 2014-15 to FY 2016-17, which works out to 5.35%.

c) Considering that there has not been any net addition to the employee base in FY

2017-18, growth factor of 0% has been considered.

4.7.18 The normative employee expenses approved in the true-up for FY 2017-18 are shown

in the following Table:

Table 13: Approved Employee Expenses for FY 2017-18 (Rs. Crore)

Particulars MYT Order Approved

after true-up

Employee Expenses for Previous Year EMPn-1 659.40 640.20

Growth Factor Gn 3% 0%

CPI Inflation CPI 7.21% 5.35%

Employee Expenses 728.12 674.46

Therefore, the Commission approves Normative Employee Expenses of Rs.

674.46 crore for FY 2017-18.

4.7.19 Further, as regards arrears pertaining to ROP, APDCL submitted as follows:

“The total payment due on account of ROP for FY 2016-17 and FY 2017-18 is

Rs. 142.69 Crores, out of which Rs. 20.20 Crores have already been released.

The remaining pending arrears of Rs. 122.49 Crores would be paid along with

the salaries for FY 2018-19. The payment of Rs. 20.20 Crores on account of

wage revision has been made along with the salaries for FY 2017-18”

4.7.20 From the above submission, APDCL has made actual payment of Rs. 20.20 Cr only

during FY 2017-18, against arrears for ROP. Accordingly, the Commission

approves Rs. 20.20 Cr against impact of ROP for FY 2017-18, over and above the


normative employee expenses computed above.

4.7.21 For computation of R&M Expenses for FY 2017-18, the Commission has considered

the following approach:

a) The Commission has ignored the negative WPI Inflation rate of 3.65% for FY 2015-

16 and considered the average increase of WPI of FY 2014-15and FY 2016-17,

i.e.1.50%, for computation of R & M expenses.

b) K-factor governs the relationship between R&M expenses and Gross Fixed Assets.

The Commission has analysed the relationship between approved R&M expenses

and Gross Fixed Assets for the period from FY 2011-12 to FY 2015-16 in the

previous MYT Order and had approved 3.50% for entire Control Period up to FY

2018-19. The Commission therefore continues to adopt the K-factor of 3.50% for

truing-up of FY 2017-18.

c) Since, K-factor has been considered on the basis of average GFA, for computation

of R&M expenses for FY 2017-18, average GFA for previous years has been

considered.

4.7.22 The normative R&M expenses approved for FY 2017-18 are shown in the following

Table:

Table 14: Approved R&M Expenses for FY 2017-18 (Rs. Crore)


after true-up

Average GFA for previous year GFAn-1 2895.82 3,097.09

K Factor K 3.50% 3.50%

WPI Inflation WPI 1.83% 1.50%

R&M Expenses 103.21 110.02

Accordingly, the Commission approves R&M Expenses of Rs. 110.02 crore for

FY 2017-18.

4.7.23 For computation of A&G expenses for FY 2017-18, the Commission has adopted the

following approach:

a) The A&G expenses approved after True-up for FY 2016-17 have been considered

as base expenses.


b) The Commission has ignored the negative WPI Inflation rate of 3.65% for FY 2015-

16 and considered the average increase of WPI of FY 2014-15 and FY 2016-17,

i.e.,1.50%, for computation of A&G expenses.

4.7.24 For FY 2017-18, the Commission had considered total provision of Rs. 3 Crore in the

MYT Order comprising Rs. 1 crore for consumer awareness initiatives, Rs. 1 crore for

special initiatives proposed by APDCL, and Rs. 1 crore for making the Consumer

Grievance Redressal Forum (CGRF) independent, in accordance with the AERC

(Redressal of Consumer Grievances) Regulations, 2016. In the MYT Order, the

Commission had specifically directed APDCL to maintain details of activities

undertaken under such special initiatives as well as maintain the expenses separately

and submit the same to the Commission at the time of true-up.

4.7.25 APDCL was queried on the same and was asked to provide details of the expenditure

done against these heads under A&G expenses. APDCL did not provide the required

details regarding how this additional provision of Rs. 3 Crore has been utilised. As the

necessary details and justification have not been submitted by APDCL, the same has

not been considered in the true-up for FY 2017-18.

4.7.26 The approved A&G expenses for FY 2017-18 is shown in the following Table:

Table 15: Approved A&G Expenses for FY 2017-18 (Rs. Crore)

Particulars MYT Order

Approved

after true-up

A&G Expenses for Previous Year A&Gn-1 35.18 31.90

WPI Inflation WPI 1.83% 1.50%

Provision Provision 3.00 -

A&G Expenses 38.82 32.38

Therefore, the Commission approves A&G Expenses of Rs. 32.38 crore in the

true-up for FY 2017-18.

4.7.27 The normative O&M expenses approved by the Commission for FY 2017-18 is shown



Table 16: Normative O&M Expenses approved by Commission for FY 2017-18

(Rs. Crore)

Sl

No Particulars

MYT

Order APDCL

Approved after

Truing up

1 Employee Expenses 728.12 802.39 674.46

2 R&M Expenses 103.21 124.26 110.02

3 A&G Expenses 38.82 44.72 32.38

Total 870.15 971.37 816.85

4.7.28 Further, Regulation 11.2 of MYT Regulations, 2015 specifies that O&M Expenses

(excluding terminal liabilities with regard to employees on account of changes in pay

scales or dearness allowance due to inflation) is a controllable factor. Hence, for

undertaking sharing of gains/losses, the Commission has excluded the terminal

liabilities from normative as well as actual employee expenses. Accordingly, terminal

liabilities are allowed on actual basis.

4.7.29 The sharing of losses/(gains)on account of O&M Expenses is shown in the following

Table:

Table 17: Sharing of losses/(gains) for O&M Expenses approved by the

Commission for FY 2017-18 (Rs. Crore)

Sl. Particulars Actual Normative

(Gains)/

Losses

1/3 of

(Gains)/

Losses

A b c = (b-a) d = c x 1/3

1 Employee Cost 742.06* 674.46

Less: ROP Arrears 20.20 0.00

Employee Cost excl. ROP 721.86 674.46 47.40 15.80 Less: Terminal Benefits 87.21 87.21 0.00 0.00

Employee Cost excl. Terminal

Benefits & ROP 634.65 587.25 47.40 15.80

2 Repair & Maintenance 124.26 110.02 14.24 4.75

3 Administrative& General Expenses 44.72 32.38 12.35 4.12

4 TOTAL 911.04 816.85 73.99 24.66

Note – * As per Statement of Accounts

No sharing of gains or losses has been considered for Terminal liabilities.

Since, actual O&M expenses are higher than the normative expenses, the net

loss of Rs. 24.66 Crore has been shared and passed on through ARR.


4.8 Capital Investment & Capitalisation

4.8.1 APDCL submitted that actual Capital Expenditure of Rs. 735.32 Cr and Capitalization

of Rs. 211.46 Cr was achieved during FY 2017-18.

4.8.2 APDCL added that due to reasons such as delay in receipt of funds for various

schemes, deferred implementation of various schemes as per the last Business Plan,

delay in approval of schemes, etc. resulted in low capitalization during FY 2017-18.

Further, most of the schemes are being implemented in Packages (e.g. RGGVY/12th

plan package A/B/C, etc.). The capitalization is done only after completion of the entire

package.


4.8.3 APDCL was asked to submit the status of actual scheme-wise capital expenditure and

capitalisation achieved in FY 2017-18 as against the scheme-wise capital expenditure

and capitalisation approved by the Commission for FY 2017-18 in the last Business

Plan/MYT Order.

4.8.4 APDCL was also asked to submit the actual scheme- wise funding of capitalized works

with break-up of Grants, Loans, Consumer Contribution, Equity, etc., cost-benefit

analysis of all the schemes undertaken, reasons for increase/(decrease) in cost of

projects as compared to approved cost, and reasons for delay in execution of the

projects.

4.8.5 APDCL submitted the details of capital expenditure and capitalization against the

schemes approved in Business Plan/MYT Order.

4.8.6 APDCL submitted that the actual capital expenditure in FY 2017-18 was Rs.735.32

crore and capitalisation achieved was Rs. 211.46 crore. APDCL added that the net

addition to Gross Fixed Assets (GFA) for computing depreciation was Rs. 20.18 crore,

while Rs. 186.25crore of asset addition was towards assets not belonging to APDCL,

and Rs. 5.03 crore was funded by Consumer Contribution.

4.8.7 Hence, for the purpose of ARR and tariff determination in this Order, the Commission

has considered the actual capitalisation of Rs. 211.46 crore as submitted by APDCL.

Accordingly, the Capital Expenditure and Capitalisation approved by the Commission


for FY 2017-18 is shown in the following Table:

Table 18: Capital Expenditure and capitalisation approved by the Commission (Rs.

Crore)


after true-up

Opening CWIP 3,812.96 3,456.92

Capital Expenditure 1,000.00 735.32

Capitalisation 650.00 211.46

Closing CWIP 4,162.96 3,980.84

4.8.8 As regards the funding of capitalisation, the Commission has not considered any equity

funding based on APDCL’s submission. The grant and debt funding have been

considered as submitted by APDCL in its Petition, corresponding to the capitalisation

considered for tariff purposes in this Order. The funding of capitalized works, as

approved by the Commission is shown in the following Table:

Table 19: Funding of Capitalised Works approved by the Commission (Rs. Crore)


Grant 594.92 191.28

Equity - -

Debt 55.08 20.18

Total Capitalisation 650.00 211.46

Therefore, the Commission approves total Capitalisation of Rs. 211.46 crore in

the true-up for FY 2017-18.

4.9 Depreciation

4.9.1 APDCL submitted that the Opening GFA for FY 2017-18 as per Audited Accounts is

Rs. 3612.16 Crore. Depreciation has been calculated taking into consideration the

opening GFA as well as addition of assets during FY 2017-18 as per Audited Accounts.

4.9.2 APDCL submitted that out of the opening GFA, assets not belonging to the Company

is Rs. 1424.35 Crore and assets created out of Consumer Contribution is Rs.223.44


Crore.

4.9.3 APDCL submitted that while actual depreciation as per Companies Act is shown in

the Audited Accounts, the truing up claim has been made after re-calculating the

depreciation as per the MYT Regulations, 2015, as shown in the Table below:


Table 20: Depreciation Calculation for FY 2017-18 as submitted by APDCL (Rs. Crore)

Depreciation

Particulars As on

01.04.17

Net addition during

the year

Rate of Dep

Accumulated as on 01.04.17

Assets fully depreciated

On Opening Balance of GFA

On Addition of GFA

Total

Land & Rights

i) Land owned under full title 15.61 - - - - -

ii) Leasehold land 2.22 - 3.34% 0.07 0.07 0.00 0.07

Subtotal: 17.83 - 0.07 - 0.07 0.00 0.07

Building 53.86 1.21 3.34% 20.49 - 1.80 0.02 1.82

Hydraulic - - -

Other Civil Works 54.39 0.25 3.34% 24.90 - 1.82 0.00 1.82

Plant & Machinery 589.64 7.41 5.28% 352.61 214.60 19.80 0.20 20.00

Lines & Cable Network 1194.58 9.07 5.28% 610.38 388.81 42.54 0.24 42.78

Vehicles 11.94 - 5.28% 10.55 11.23 0.04 - 0.04

Furniture & Fixtures 15.83 0.78 6.33% 10.53 9.20 0.42 0.02 0.44

Office Equipment 26.30 1.46 6.33% 19.41 16.80 0.60 0.05 0.65

SUB TOTAL 1,964.36 20.18 3.44% 1050.73 640.64 67.10 0.53 67.63

Add: Consumers contribution deducted

from service connection under O.H. lines

& cable network

223.44 5.03 5.28% 91.68 11.80 0.13 11.93

Add: Assets not belonging to the entity 1424.35 186.25 - - -

Total 3612.16 211.46 1,142.41 640.64 78.89 0.66 79.56


Table 21: Depreciation Claimed by APDCL (Rs. Crore)

Grant for assets

not belonging

to entity

(RGGVY, MNRE

etc.)

Co

nsu

me

r

Co

ntr

ibu

tio

n

Total

As on

01.04.2005

As on

01.04.2017Sub total

Grants Available - 1,911.09 1,911.09 3,211.21 223.44 5,345.73

GFA (excluding Consumer Contribution and assets

not belonging to company)1,095.63 868.73 1,964.36 1,424.35 223.44 3,612.16

CWIP - 2,897.86 2,897.86 106.21 3,004.07

Total 1,095.63 3,766.59 4,862.22 1,530.56 223.44 6,616.22

Cumulative grants apportioned in the ratio of GFA

and CWIP

GFA - 440.78 440.78 2,988.38 3,429.15

CWIP - 1,470.31 1,470.31 222.83 1,693.14

Total - 1,911.09 1,911.09 3,211.21 - 5,122.30

Depreciation calculated as per the Regulation on

the GFA 37.72 29.91 67.63 - 67.63

Weighted Average Rate of Depreciation (%) 3.44% 3.44% 3.44% -

Depreciation to be deducted on the assets built on

the grants component on 90% asset value - 15.17 15.17 - 15.17

Depreciation claimed 37.72 14.73 52.45 - - 52.45

State Govt. grant

As on 01.04.2017

Particulars


4.9.4 APDCL submitted that the depreciation of Rs.52.45 crore claimed by APDCL is based

on:

a) Rates of depreciation as notified in addendum to MYT Regulations 2015 are

considered;

b) As depreciation on assets created out of consumer contribution was not charged in

Profit and Loss account, the same has also not been considered for claim;

c) No funding from grant for Fixed Assets vis-à-vis CWIP transferred to APDCL

consequent to unbundling of erstwhile ASEB as on 1st April 2005. As such, total

depreciation on the opening balance of GFA as on Transfer Scheme dated 1stApril

2005 amounting to Rs. 37.72 Crore calculated at the weighted average rate of

3.44% is claimed in totality;

d) Depreciation on subsequent assets is claimed after apportionment of available

grant. Total amount of depreciation claimed on this account is Rs. 14.73Crore after

adjustment of funding from grant for Rs. 15.17 Crore.

e) As no depreciation has been claimed on assets created out of RGGVY, MNRE as

well as consumer contribution, grant received against such schemes are shown

separately with no claim of depreciation.


4.9.5 The Commission has considered the opening GFA for FY 2017-18 as per the closing

GFA value approved in True up of FY 2016-17, vide Tariff Order dated March 19, 2018.

The Commission has computed depreciation as per scheduled rates specified in the


4.9.6 As per Regulation 33.2 of the MYT Regulations, 2015, the total depreciation during the

life of the asset shall not exceed 90% of the original cost of GFA. The Commission has

computed the depreciation separately for assets added under each asset head in each

year. The Commission has disallowed the depreciation on assets where depreciation

is in excess of 90% of the original cost of asset under different asset heads. The

Commission has not considered depreciation on assets funded through grants in


accordance with Regulations 31 and 33 of MYT Regulations, 2015, and in accordance

with the Commission’s own Orders and the Hon’ble APTEL Judgment in this regard.

4.9.7 Accordingly, the Commission has approved depreciation for FY 2017-18 as per MYT

Regulations, 2015, as given in the Table below:

Table 22: Depreciation approved for FY 2017-18 (Rs. Crore)

Sl. Particulars Opening GFA

Addition

during the

year

Rate of

depreciation

Depreciation

as per MYT

Regulations,

2015

1 Land & Rights 15.61 1.04 -

2 Lease hold Land 2.22 - 3.34% 0.07

3 Building 53.86 1.21 3.34% 1.82

4 Plant & Machinery 589.64 7.41 5.28% 20.01

5 Vehicle 11.94 - 9.50% 0.03

6 Furniture & Fixtures 15.83 0.78 6.33% 0.45

7 Office Equipment 26.30 1.46 6.33% 1.51

8 Other Civil Work 54.39 0.25 3.34% 1.83

9 Lines & Cable Network 1,194.58 9.07 5.28% 41.91

10 Total 1,964.37 20.18 67.62

11 Asset excluding land 1,948.76 20.18

12

Less: Depreciation for

Grants/Consumer

Contribution

53.39

13 Net Depreciation Allowed 14.23

Therefore, the Commission approves Depreciation of Rs. 14.23 crore in the

truing up for FY 2017-18.

4.10 Interest and Finance Charges

4.10.1 APDCL submitted that the Commission had approved interest on loan capital for the

year on normative basis in its previous tariff orders. The normative closing loan of Rs.

432.80 Crores for FY 2016-17 as approved in the true-up of FY 2016-17 was

considered as the normative loan outstanding as on April 1, 2017 during APR of FY


2017-18.

4.10.2 APDCL added that the Commission considered the amount of loan converted under

UDAY to grant equivalent to the net normative loan outstanding as on April 1, 2016,

i.e., Rs. 343.06 Crores, as the net normative loan outstanding was lower than the

amount of loan converted to Grant by the GoA. APDCL further submitted that, at the

time of APR of FY 2017-18, the Commission did not consider any conversion of loan

to equity, as the entire net normative loan outstanding had been converted to grants.

4.10.3 Accordingly, the Commission had considered the net addition of loan during FY 2017-

18 as the sum of loan of Rs. 79.12 Crore taken for funding the capitalization during FY

2017-18 and the reduction of loan of Rs. 343.06 Crore due to conversion to grant.

Thus, the Commission had considered a net reduction of loan of Rs. 263.95Crore in

FY 2017-18. Further, the loan repayment was considered equivalent to depreciation

approved. The Commission had considered the interest rate of 9.40% for the balance

loan amount as proposed by APDCL in accordance with the UDAY MoU. Accordingly,

the Commission had approved interest charges of Rs. 27.41 Crore and finance

charges of Rs. 3.78 Crore, thereby allowing Rs. 31.19 Crore as interest and finance

charges during APR of FY 2017-18.

4.10.4 APDCL submitted that the UDAY MoU was executed on 4thJanuary 2017 and as

conversion of Government loan requires going through process up to the level of

Cabinet approval, the same did not materialize during FY 2017-18. As such, the benefit

of reduction in interest on Government Loan consequent to conversion as envisaged

could not be availed during FY 2017-18 and actual debt structure has prevailed till the

end of FY 2017-18.

4.10.5 APDCL further submitted that considering the previous Tariff Orders, APDCL has not

claimed interest on Govt. of Assam (GoA) loan, Interest on GPF and Interest on NPS.

4.10.6 The net interest expenses claimed by APDCL are shown in the Table below:

Table 23: Interest and Finance Charges as submitted by APDCL for FY 2017-18

(Rs. Crore)

Particulars Approved Actual APDCL Claim

Interest on GoA Loan 193.33 -

Interest on Bank Overdraft 7.30 -


Particulars Approved Actual APDCL Claim

Bank Charges 4.26 4.26

Interest on GPF 28.03 -

Interest on New Pension Fund 4.93 -

Interest on R-APDRP Loan 60.00 60.00

Less: Interest Capitalized 78.03 18.48

Total 31.19 219.82 45.78

Normative IWC claimed in the

petition 5.58

Actual IWC (Interest on Bank

overdraft) 7.30

Difference (1.72)

Net claim of Interest &Finance

Charges in this Petition 47.50


4.10.7 The Commission has approved Interest on loan capital for FY 2017-18 on normative

basis as per Regulation 35 of MYT Regulations, 2015. The closing net normative loan

of FY 2016-17 has been considered as the opening net normative loan of FY 2017-18.

Further, as the conversion of loans to grants as per UDAY MoU has not been

implemented in FY 2017-18, the Commission has not considered this impact, and has

allowed the interest on the outstanding loans. The Commission has considered the net

addition of loan during FY 2017-18 as Rs. 20.18 crore against funding of capitalization

submitted by APDCL. The loan repayment has been considered equivalent to

depreciation approved for FY 2017-18 in this Order. The Commission has considered

the interest rate of 10.62% based on the weighted average of actual loan portfolio at

the beginning of FY 2017-18, in accordance with the MYT Regulations, 2015.

4.10.8 As regards APDCL’s claim of the difference between actual and normative Interest on

Working Capital (IoWC) under Interest and Finance Charges, the Commission is of

the view that the same cannot be allowed, in accordance with the MYT Regulations,

2018. The Commission has allowed the normative IoWC as discussed subsequently


in this Chapter.

4.10.9 The interest and Financing Charges as approved by the Commission for FY 2017-18

is shown in the following Table:

Table 24: Approved Interest & Financing Charges for FY 2017-18 (Rs. Crore)

Particulars FY 2017-18

Net Normative Opening Loan 432.81

Addition of normative loan during the year 20.18

Normative Repayment during the year 14.23

Net Normative Closing Loan 438.75

Interest Rate 10.62%

Interest Expenses 46.28

Therefore, the Commission approves Interest on Loans of Rs. 46.28 crore in the

truing up for FY 2017-18.

4.11 Interest on Working Capital

4.11.1 APDCL submitted that IoWC has been calculated on normative basis in accordance

with the MYT Regulations, 2015, and claimed IoWC of Rs. 5.58 crore in the true-up for

FY 2017-18, considering the normative rate of interest of 12.60%.


4.11.2 The Commission has computed IoWC in accordance with Regulations 37.3 and 37.4

of the MYT Regulations, 2015. The amount of Consumer Security Deposit (CSD) has

been taken from the Audited Accounts. The rate of Interest has been considered equal

to State Bank of India Base Rate as on 1st April of FY 2017-18 plus 350 basis points,

i.e., 12.60%.

4.11.3 As stated earlier, APDCL has claimed interest on bank overdraft as well, over and

above the normative IWC. It may be noted that IWC is a normative parameter and

hence, only Normative IWC is allowed.

4.11.4 The IoWC approved by the Commission in the truing up for FY 2017-18 is shown in


the following Table:

Table 25: IoWC approved by the Commission for FY 2017-18 (Rs. Crore)

Particulars MYT

Order

True-up

Claimed

Approved

after true-

up

O&M Expenses-One month 72.51 80.95 68.07

2-month Receivables 839.05 793.24 874.88

Maintenance spares @ 15% of O&M

Expenses 130.52 145.71 122.53

Less: One-month Power Purchase Cost 364.69 375.53 375.50

Less: Consumer Security Deposit 579.25 600.04 683.63

Total Working Capital 98.14 44.32 6.35

Rate of Interest on WC 12.80% 12.60% 12.60%

Interest on WC 12.56 5.58 0.80

Therefore, the Commission considers IoWC of Rs. 0.80 Cr in the truing up for FY

2017-18.

4.12 Interest on Consumer Security Deposit

4.12.1 APDCL submitted that Rs. 47.57 Crore is the provision for Interest on Consumer

Security Deposit (CSD) and out of the same, Rs. 14.43 Crore has been actually

paid/adjusted during FY 2017-18. APDCL claimed the actual paid amount of Rs. 14.43

Crore against interest on CSD and requested the Commission to allow pass through

of the remaining amount as and when payment is made.


4.12.2 APDCL submitted the details of actual Opening and Closing balance of Consumer

Security Deposit (CSD) for FY 2017-18 and interest on CSD paid, as shown in the

Table below:

Table 26: Interest on CSD claimed by APDCL for FY 2017-18 (Rs. Crore)


Opening Balance of CSD 587.71

Additions during the Year 95.92

Closing Balance of CSD 683.63

Interest payable 48.44

Interest Actually Paid 14.43


The Commission approves the actual interest on CSD of Rs. 14.43 crore paid by

APDCL to the consumers, in the truing up for FY 2017-18.

4.13 Other Debits

4.13.1 APDCL submitted that the Commission has approved an amount of Rs. 12.42 Crore

as provision for bad and doubtful debts in the MYT Order dt. 31.03.2017. The actual

amount booked under various heads of “Other Debits” including Bad & Doubtful debts

written off is Rs.10.15Crore. The component-wise break up of expenses booked under

Other Debits is given in the Table below:

Table 27: Other Debits as submitted by APDCL (Rs. Crore)

Particulars MYT Order APDCL

Compensation for injuries, deaths and damage of outsiders. - 1.34

Bad and doubtful Debt written off - 8.82

Provision for Bad & Doubtful Debts 12.42 -

Total: 12.42 10.15


4.13.2 The Commission has disallowed the Bad & Doubtful Debts Written off, in accordance

with past practice, as the actual write-off has to be done against the provision made

for the same in the Accounts. The Commission has also disallowed the amount paid

as compensation for injuries, deaths and damage to outsiders, as such expenses have

been incurred due to APDCL’s inefficient and unsafe practices and cannot be passed

on to the consumers through the ARR and tariff. The Commission has allowed

normative amount of 1% of receivables towards the provision for bad and doubtful

debts, in line with the MYT Regulations, 2015.

Therefore, under Other Debits, the Commission approves Provision for Bad

Debts of Rs. 12.35 crore in the truing up for FY 2017-18.

4.14 Net Prior Period Expenses/(income)

4.14.1 APDCL has claimed Net Prior Period Income of Rs. 21.20 Crore in the true-up for FY

2017-18 and submitted the details of each head of prior period expenses and prior

period income considered in the Audited Accounts of APDCL.



4.14.2 The Commission has analysed the component-wise details and justification for Net

Prior period expenses/(income) for FY 2017-18 as submitted by APDCL. The

Commission has considered the treatment of prior period items based on the treatment

allowed to that item in the true-up of the year to which the expenses/(income) pertain.

4.14.3 The Commission has disallowed the prior period expenses/(income) towards

depreciation and interest and finance charges since, these expenses had not been

allowed by the Commission in the past Orders based on audited accounts and were

allowed on normative basis. Similarly, the Commission has not considered the Excess

Provision in Past Period as prior period income, as the Commission has not allowed

expenses against provisioning in the earlier Tariff Orders, and only prudent

actual/normative expenses have been allowed.

4.14.4 The Net prior period expenses/(income) submitted by APDCL and approved by the

Commission in the true up for FY 2017-18, are shown in the Table below:

Table 28: Prior Period Expenses/(Income) approved by the Commission for FY 2017-18

(Rs. Crore)

Sl.No. Particulars APDCL Approved

A Prior Period Expenses

1 Employee Cost related to Prior Period 0.00 -

2 Prior Period Depreciation Charges 0.02 -

3 Interest relating to Prior Period 9.61 -

4 Other charges relating to prior period 0.01 0.01

5 Sub-Total 9.64 0.01

B Prior Period Income

6 Interest Income for Prior Period 30.51 30.51

7 Excess Provision in Prior Period 0.32 -

8 Sub- Total 30.84 30.51

9 Net Prior Period Expenses/(Income) (21.20) (30.50)

Accordingly, the Commission approves the Net Prior Period Income of Rs. 30.50

Crore in the truing up for FY 2017-18.

4.15 Return on Equity

4.15.1 APDCL submitted that the Commission considered equity of Rs.162.77 Crore and


allowed return @16% on the equity base for FY 2017-18. APDCL submitted that

pending notification by GoA on Share Application Money amounting to Rs. 88.04 Crore

transferred from erstwhile ASEB to APDCL and Rs.0.63 Crore transferred on

dissolution of ASEB on 31-03-2013, it was restricting its claim to the amount allowed

by the Commission in the MYT Order. Accordingly, Rs 26.04 Cr is claimed as Return

on Equity.


4.15.2 As equity shares are yet to be issued against the Share Application Money Pending

Allotment, the Commission has not considered RoE on this amount, in line with the

practice followed in earlier Orders.

4.15.3 The RoE allowed by the Commission at 16% of the equity capital of APDCL is shown


Table 29: RoE approved by the Commission for FY 2017-18 (Rs. Crore)

Particulars MYT Order APDCL

Petition

Approved

after true up

Opening Equity 162.77 162.77 162.77

Net Addition during the Year 0.00 0.00 0.00

Closing Equity 162.77 162.77 162.77

Rate of Return on Equity 16.00% 16.00% 16.00%

Return on Equity 26.04 26.04 26.04

Therefore, the Commission approves RoE of Rs. 26.04 crore in the truing up for

FY 2017-18.

4.16 Other Income

4.16.1 The Commission had approved the Other Income at Rs. 172.96 Crore for FY 2017-18

in the MYT Order, whereas APDCL has submitted Other Income of Rs. 341.87 Crore

as per the Audited Accounts for FY 2017-18, with the head-wise details. APDCL

stated that the increase in Other Income was primarily due to income from sale

of surplus power, made possible due to export of seasonal power from allocated

sources on account of significant gap in demand during peak and off-peak

hours.



4.16.2 On scrutiny of the Other Income claimed by APDCL, it is observed that APDCL

has not claimed Other Income pertaining to Revenue from sale of LED's, Tube

light, Fan, etc., of Rs 14.15 Crore. It is observed that for purchase of LED's,

Tube light, Fan, etc., APDCL has incurred an expenditure of Rs. 8.99 Crore and

thereafter, by selling the same, APDCL has earned revenue of Rs 14.15 Crore.

This has resulted in a Net Income of Rs. 5.16 Crore. Accordingly, the same is

considered as part of Other Income.

4.16.3 Further, APDCL has claimed Rebate on account of power purchase of Rs.

10.07 Crore as part of Other Income. However, the same is earned by APDCL

by timely payment of bills of power purchase. Therefore, the same is not

considered as part of Other Income.

4.16.4 As regards the remaining heads of Other Income, the Commission has considered the

actual Other Income as per the Audited Accounts in the true up for FY 2017-18.

The amount of Other Income considered in the MYT Order, amount claimed by

APDCL in the true up Petition and amount approved in the true up, is shown in

the Table below:

Table 30: Other Income approved by the Commission for FY 2017-18 (Rs. Crore)

Sl.No. Particulars MYT

Order APDCL Approved

1 Income from Investment, Fixed & Call Deposits

172.96

87.63 87.63

2 Income from Trading of Power 144.20 144.20

3 Net Revenue from sale of LED's, Tubelight Fan etc.

- 5.16

4 Rent from residential buildings 0.05 0.05

5 Receipt from Pension Trust 73.09 73.09

6 Rebate on account of power purchase 10.07 -

7 Miscellaneous receipts 26.83 26.83

8 Total 172.96 341.87 336.96

Therefore, the Commission approves Other Income of Rs. 336.96 crore in the

true up for FY 2017-18.


4.17 Non-Tariff Income

4.17.1 APDCL submitted that it has earned Rs.233.20 Crore of Non-Tariff Income during FY

2017-18, as per the Audited Annual Accounts.


4.17.2 The Commission has considered the actual Non-Tariff Income as per the Audited

Accounts in the true up for FY 2017-18. The amount of Non-Tariff Income considered

in the MYT Order, amount claimed by APDCL in the true up Petition and amount

approved in the true up, is shown in the Table below:

Table 31: Non-Tariff Income for FY 2017-18 (Rs. Crore)

Sl. Particulars MYT

Order Actual Approved

1 Rentals from Meters, Service Lines, Capacitors, etc.

166.28

21.29 21.29

2 Income from recoveries on account of theft of energy/ Malpractices

0.74 0.74

3 Delayed Payment Charges from Consumers 160.71 160.71

4 Miscellaneous Recoveries 21.63 21.63

5 Cross Subsidy Surcharge on Open Access Consumer

24.91 24.91

6 Wheeling Charges collected 3.92 3.92

Total 166.28 233.20 233.20

Therefore, the Commission approves Non-Tariff Income of Rs. 233.20 Crore based

on the Audited Accounts, in the truing up for FY 2017-18.

4.18 Revenue from Sale of Power

4.18.1 APDCL submitted that the revenue from sale of electricity in FY 2017-18 was Rs.

4369.35 Crore (excluding targeted subsidy) against the Commission approved

revenue of Rs. 5584.71 Crore in MYT Order dated March 31, 2017. APDCL added that

the lower recovery is primarily attributable to the negatively skewed sales mix as

compared to the approved sales mix. APDCL requested the Commission to consider

the net Revenue from sale of electricity of Rs. 4369.35 crore, excluding GoA targeted


subsidy of Rs. 390.10 crore, which has been considered separately, in the true up for

FY 2017-18.


4.18.2 APDCL, in its Petition, claimed Revenue from Sale of power as per the Statement of

Accounts, i.e., Rs. 4369.35 Crore (excluding targeted subsidy). Targeted subsidy

received from Govt. of Assam during FY 2017-18 was Rs. 390.10 crore, as recorded

in the Statement of Accounts. Thus, total revenue booked from sale of electricity is Rs.

4759.45 Crore.

4.18.3 APDCL had not submitted consumer category wise break-up of fixed charges, energy

charges and FPPPA for the revenue of Rs. 4759.45 Crore recorded in accounts of FY

2017-18. Considering the past trend of mismatch of Revenue, the Commission

directed APDCL for submission of category-wise, consumption slab-wise revenue from

fixed charges, demand charges, energy charges, revenue from FPPPA, State Govt.

subsidy and total revenue for FY 2017-18 during TVS.

4.18.4 In its reply, APDCL vide submission dated 27.12.2018, submitted that the total revenue

of Rs. 4759.45 Crore in FY 2017-18 includes revenue from Fixed Charge of Rs. 481.28

Crore, revenue from Energy Charge of Rs. 3888.07 Cr and Subsidy of Rs. 390.10 Cr.

On preliminary scrutiny of data, the Commission communicated the following

observations to APDCL and sought justification from APDCL:

a. Effective Energy charges per unit for all categories (computed by dividing the

revenue from energy charges in the category by the sales in that category/slab) is

not in line with the energy rate approved by the Commission in the MYT Order

dated March 31, 2017, for FY 2017-18 for the respective categories;

b. Average Billing Rate (ABR) reported by APDCL for FY 2017-18 is significantly

lower than the ABR calculated based on the category wise tariff approved by the

Commission in the MYT Order dated March 31, 2017.

4.18.5 APDCL submitted the following reply regarding under-recovery of ABR as compared

to that approved in the MYT Order dated March 31, 2017:

“The variation between approved and actual ABR is due to the less energy

requirements (8694 MU) as compared to the energy requirements (9544 MU)


approved in MYT order and correspondingly less energy sales (6814 MU) as

compared to the energy sales (7524 MU) approved in MYT order.”

4.18.6 The reply submitted by APDCL as reproduced above is incorrect and contradictory, as

reduction in category-wise sales would increase the category-wise ABR rather than

reduce the ABR, since the revenue from fixed charges, which is not linked to sales,

would get spread over lower quantum of sales.

4.18.7 APDCL was directed to clarify the difference in energy charge recovered and energy

charge approved. Thereafter, APDCL vide submission dated 29.01.2019, revised the

composition of the revenue and submitted that FY 2017-18 total revenue of Rs.

4759.45 Crore includes revenue from Fixed Charge of Rs. 309.02 Crore, revenue from

Energy Charge of Rs. 4060.33 Crore and Subsidy of Rs. 390.10 Crore.

4.18.8 It is pertinent to note that in addition to the above two submissions, APDCL also

submitted an MS-Excel document, where APDCL has shown a total revenue of

Rs.5244.64 Crore for FY 2017-18, with revenue from Fixed Charges of Rs. 776.92

Crore and Energy Charge of Rs. 4467.72 Crore.

4.18.9 The Commission is of the view that APDCL in its second reply dated 29.01.2019, has

matched the energy charge per unit approved in Tariff Order for FY 2017-18 by

reducing the recovery from fixed charges for FY 2017-18, by claiming that there were

linkage errors in the first reply submitted by them. APDCL also has not been able to

submit any satisfactory reply to the significantly lower ABR reported by APDCL as

compared to the ABR approved in the MYT Order dated March 31, 2017.

4.18.10 The revenue from fixed charges computed by the Commission based on the connected

load and contract/billed demand submitted by APDCL and tariff approved by the

Commission for FY 2017-18 works out to Rs. 755.12 Crore. APDCL had submitted

that the actual revenue from fixed charges was Rs. 481.28 Crore in its first reply. In its

second reply, in order to match the energy charge with the rates approved in the Tariff

Order, APDCL further reduced the revenue from fixed charge to Rs. 309.02 Crore,

which is less than half of the due revenue from fixed charge approved for that year.

4.18.11 It is evident that the quality of information being submitted to the Commission,

especially as regards commercial data related to sales and revenue is inconsistent


and contradictory and cannot be considered.

4.18.12 The Commission also had asked for the following additional information from APDCL:

a. Break-up of fixed and energy charges recovered under Option I and Option II of

HT-II Industries category;

b. ToD consumption data for FY 2017-18 and the ToD time-slot wise revenue from

each category.

4.18.13 APDCL did not submit both the above details, which would ideally form part of the

basic commercial data on sales and revenue.

4.18.14 The Commission for the purpose of approving revenue from sale of power for FY 2017-

18, has computed the revenue that APDCL should have earned at the approved Tariff

for FY 2017-18, by using the category-wise and slab-wise energy sales data and

connected load/contract load data submitted by APDCL.

4.18.15 It is observed that, APDCL should have earned a revenue of Rs. 4,494.14 Crore from

energy charge and Rs. 755.12 crore from fixed charge. The Commission believes that

based on the energy sales submitted by APDCL, there should have been complete

recovery of energy charges based on the rate approved in MYT Order dated March

31, 2017.As regards Fixed Charge recovery, there could be certain reasons why the

revenue from fixed charges is not exactly matching the revenue computed by the

Commission. However, the variation in revenue being sought by APDCL is extremely

high, at Rs. 274 crore. In absence of any reliable data regarding the revenue from fixed

charges, the Commission considers it reasonable to consider the average of the

revenue from fixed charge submitted by APDCL in its first reply (i.e., Rs. 481.28Crore)

and the revenue from fixed charge computed by the Commission (i.e. Rs. 755.12

Crore).. Accordingly, the Commission considers revenue from fixed charge at

Rs.618.06 Crore as against the computed revenue from fixed charge of Rs. 755.12

Crore. The Commission believes that the fixed charge recovery depends on factors

such as variation in billing demand which may vary frequently during the year and

therefore a conservative approach has been adopted while considering the computed

revenue from fixed charges for FY 2017-18.

4.18.16 Therefore, the Commission has considered a total Revenue from Sale of Power of Rs.

5112.14 Crore for FY 2017-18 as against APDCL claim of Rs. 4759.45 Crore


(including targeted subsidy).

Accordingly, the Commission approves the revenue of Rs. 5112 Crore in the

Truing up for FY 2017-18.

4.18.17 The mismatch between Revenue booked in the Accounts and the total Revenue

computed based on approved Tariff and Category wise sales and load, may be

because of under Billing or error in accounting of the category wise sales or a

combination of both. APDCL is directed to examine the matter on priority basis

and take necessary steps to avoid occurrence of such discrepancies in future.

4.19 Revenue Grant/Subsidy

4.19.1 APDCL submitted that it has received Targeted Subsidy of Rs.390.10 Crore for FY

2017-18. APDCL further submitted that it has also received Rs 330.30 Crore from

Government of Assam as Operational Fund Requirement (OFR) under UDAY

Scheme, however, the same is not to be utilised for meeting the Revenue Gap.

Accordingly, Rs 390.10 Cr is considered as targeted subsidy for FY 2017-18.


4.19.2 In the Tariff Order dated March 19, 2018, the Commission had observed that for

various reasons, APDCL was not able to meet its obligations to pay the power

purchase liabilities, and the GoA, as the owner of APDCL, has provided OFR cash

support under the terms of the UDAY MOU. Under these circumstances, the amount

of OFR support provided by GoA cannot be considered as Income for the purposes of

true up.

4.19.3 Further, as regards the Targeted Subsidy of Rs.390.10 Crore for FY 2017-18, the

Commission has considered Revenue at full tariff for the truing up of FY 2017-18,

additional amount of Targeted Subsidy is not considered as revenue.

4.20 ARR and Revenue Gap/(Surplus) after Truing Up of FY 2017-18

4.20.1 Considering the above heads of expense and revenue approved after truing up for FY

2017-18, the Net ARR and Revenue Gap/(Surplus) for FY 2017-18 is shown in the

following Table:


Table 32: ARR & Revenue Gap/(Surplus) approved in the Truing up for FY 2017-18 (Rs. Crore)

S.

No. Particulars

FY 2017-18

MYT

Order APDCL

Approved

in Trued

Up

1 Power Purchase Expenses 4,376.30 4,506.31 4,505.96

2 O&M Expenses 870.15 971.37 837.05

a) Employee Expenses 728.12 802.39 674.46

b) R&M Expenses 103.21 124.26 110.02

c) A&G Expenses 38.82 44.72 32.38

d Impact of ROP 20.20

3 Depreciation 21.93 52.46 14.23


5 Interest on Working Capital 12.56 5.58 0.80

6 Interest on CSD 40.00 14.43 14.43

7 Return on Equity 26.04 26.04 26.04

8 Income Tax

9 Prior Period Expenses/(Income) - (21.20) (30.50)

10 Other Debits, incl Provisioning for Bad

Debts 12.42 10.15 12.35

11 Reduction in Power Purchase cost due

to excess losses (13.30) (7.60)

12 Sharing of gains/(losses) on account of

O&M expenses 24.66

12 Revenue Gap/(Surplus) of FY 2014-15 657.96 657.96 657.96

13 Carrying Cost on Revenue

Gap/(Surplus) of FY 2014-15 179.29 179.29 179.29

14 Revenue Gap/(Surplus) of FY 2015-16 354.52 354.52 354.52

15 Carrying Cost on Revenue

Gap/(Surplus) of FY 2015-16 45.38 45.38 45.38

16 Revenue Gap/(Surplus) of FY 2016-17 (686.74) (686.74) (686.74)

19 Total Expenditure 5,923.95 6,149.75 5,994.11



22 Aggregate Revenue Requirement 5,584.71 5,574.68 5,423.95

Revenue

23 Revenue at Approved Tariff 5,584.71 4,369.35 5,112.14

24 State Government Subsidy 390.10 -

26 Total Revenue including subsidy 5,584.71 4,759.46 5,112.14

27 Revenue Gap/(Surplus) 815.22 311.81

The Commission approves Revenue Gap of Rs. 311.81 Crore in the truing up for

FY 2017-18 and the same is considered for adjustment during FY 2019-20.


5 Annual Performance Review (APR) for FY 2018-19

5.1 Introduction

5.1.1 The Commission, vide its Order dated March 19, 2018approved the ARR and Tariff for

FY 2018-19. This Chapter deals with Annual Performance Review (APR) for FY 2018-

19 in accordance with the provisions of MYT Regulations, 2015.

5.1.2 Regulation 10.3 of the MYT Regulations, 2015, as amended in November 2017,

specifies that the Commission shall undertake the APR and True-up for the respective

years of the Control Period from FY 2016-17 to FY 2018-19, as reproduced below:

“10.3 The scope of the annual review and True up shall be a comparison of

the actual performance of the Generating Company or Transmission Licensee

or SLDC or Distribution Licensee with the approved forecast of Aggregate

Revenue Requirement and expected revenue from tariff and charges and shall

comprise the following:

…

b) Annual Review: a comparison of the revised performance targets of

the applicant for the current financial year with the approved forecast in

the Tariff order corresponding to the Control period for the current

financial year subject to prudence check including adjusting trajectories

of uncontrollable and controllable items.” (emphasis added)

5.1.3 APDCL submitted the Annual Performance Review (APR) Petition for FY 2018-19,

supported by actual information available till September 2018 and estimated the next

six months values. APDCL has sought APR for FY 2018-19, with the estimated

Revenue Gap/(Surplus), to be recovered from the consumers.

5.1.4 However, from the above said Regulation, as amended in November 2017, it is clear

that the main objective of APR is to compare the actual performance for FY 2018-19

vis-à-vis approved forecast in the Tariff Order for FY 2018-19 dated March 19, 2018.

The Revenue Gap/(Surplus) arising out of APR for FY 2018-19 shall not be

passed onto the consumers, and the same shall be considered at the time of


Truing-up only.

5.1.5 In this Chapter, the Commission has analysed the revised submission of all the

components of ARR vis-à-vis approved values in Tariff Order for FY 2018-19. The

Commission has computed the Revenue Gap/(Surplus) as an indication of the

performance in FY 2018-19. No sharing of (gains)/ losses has been undertaken at

this stage and the same shall be considered at the time of Truing up for FY 2018-

19.

5.2 Energy Sales

5.2.1 The Commission vide Order dated March 19, 2018, had approved energy sales of

7784 MU. APDCL has submitted estimated energy sales for FY 2018-19, based on

the actual performance during first half (H1) of FY 2018-19, actual energy sales of FY

2017-18 and effect of implementation of SAUBHAGYA scheme.

5.2.2 The Petitioner submitted that as on November 2018, around 9,62,704 households

were pending for electrification in Assam. APDCL claimed in the Petition that the

pending households will be electrified by December 2018.

5.2.3 The Petitioner further submitted that, due to such electrification of households under

SAUBHAGYA Scheme, additional sales to Jeevan Dhara category would be 487 MU.

Therefore, APDCL has considered the additional sales over and above the 4-year

CAGR considered. The actual impact of the increase in sales due to SAUBHAGYA

implementation will be considered at the time of true-up of ARR for FY 2018-19.

5.2.4 For the rest of the categories, APDCL has considered 3-year,4-year, and 5-year

Compounded Annual Growth Rate (CAGR) along with year-on-year (y-o-y) growth, on

case to case basis for arriving at estimated sales figure for FY 2018-19. In cases where

the growth trend in recent years is negative, APDCL has considered 0% growth rate

for estimating sales for these consumer categories.

5.2.5 The following table shows the consumer category wise sales submitted by APDCL for

FY 2018-19.


Table 33: Category-wise Energy Sales Projected by APDCL for the FY 2018-19 (MU)

Consumer Category Order dt.

19.03.2018

APDCL Submission

H1-FY 2018-19

(Actual)

FY 2018-19

(Estimated)

LT GROUP

JEEVAN DHARA 782 151 1207

DOMESTIC A 3163 1705 2890

Domestic-B 325 199 293

Commercial 754 416 669

General Purpose 125 74 99

Public Lighting 17 8 13

Agriculture 23 12 25

Small Industries Rural 80 42 72

Small Industries Urban 37 19 31

Temporary 9 3 8

LT TOTAL 5314 2628 5307

HT GROUP

HT Domestic 36 12 31

HT commercial 485 209 381

Public Water works 103 41 71

Bulk Supply Govt. Edu Inst. 105 46 77

Bulk Supply Others 429 212 385

HT Small Industries 28 12 23

HT Industries 85 36 67

HT Industries-II 617 465 798

Tea, Coffee & Rubber 449 285 516

Oil & Coal 112 40 76

HT Irrigation Load 21 9 15

Electric Crematorium - 0.02 1

HT TOTAL 2470 1369 2442

GRAND TOTAL 7784 3998 7749


5.2.6 As elaborated in Chapter 4 of this Order, the Commission has considered the closing

number of Jeevan Dhara consumers for FY 2017-18 to be 15,79,385. APDCL has

claimed that there will be significant increase in Jeevan Dhara Consumers in H2 of FY

2018-19 due to implementation of SAUBHAGYA Scheme.


5.2.7 The Commission asked APDCL to submit opening number of consumers, number of

additions and closing number of consumers for Jeevan Dhara and Domestic A

Category at the end of FY 2018-19. APDCL submitted that there will be 22,41,736

consumers at the end of FY 2018-19 for Jeevan Dhara Category.

5.2.8 APDCL in its reply to data gaps dated 31 January, 2019 submitted the status of

SAUBHAGYA scheme as on 25.01.2019, and stated that all the households within the

State of Assam have been electrified. Considering the same, the Commission accepts

the closing number of 22,41,736 consumers for Jeevan Dhara Category at the end of

FY 2018-19.

5.2.9 APDCL has submitted only 155 MU in H1 of FY 2018-19 for Jeevan Dhara Category

and projected 1207 MU for entire year of FY 2018-19 because of implementation of

SAUBHAGYA Scheme. In reply to the Commission’s query in this regard, APDCL

submitted that the lower consumption of 155 MU in H1 is due to higher consumption

in the summer months. The consumption for the Jeevan Dhara category normally

exceeds the normative consumption limit of 30 units/month and therefore sales for the

consumers under this category have been booked under Domestic A category. As per

APDCL the trend would not be same in H2.

5.2.10 The Commission asked APDCL to submit the break-up of sales in H1 and H2 in the

last three years for all consumer categories. The Commission observed that there is

no significant change in consumption pattern between H1 and H2 in the last three

years for Jeevan Dhara Category and the H2 sales have been almost in line with H1

sales. Therefore, there is no basis of APDCL’s contention that H1 sales is usually lower

than H2 sales for Jeevan Dhara Category, and that too to the extent projected by

APDCL.

5.2.11 However, considering the fact that a large number of households are stated to have

been electrified in H2 of FY 2018-19 and significant number of households fall in

Jeevan Dhara Category, the consumption is bound to increase in H2 as compared to

H1. The Commission has therefore adopted the same approach as that adopted in

true-up of FY 2017-18 for projecting the sales to Jeevan Dhara Category. The sales to

Jeevan Dhara consumers in FY 2018-19 have been projected based on the normative

monthly consumption of 30 units applied to the average number of opening and closing


number of Jeevan Dhara consumers during FY 2018-19.

5.2.12 For other consumer categories, the Commission has projected sales for FY 2018-19

based on growth rates applied on approved sales of FY 2017-18. In case the growth

trend in recent years is negative, the Commission has considered 0% growth rate for

such consumer categories. The growth rates considered for different consumer

categories for projecting sales of FY 2018-19 are as shown in the table below.

Table 34: Growth rates considered by the Commission for FY 2018-19 (MU)

Consumer Category Description Growth Rate

(%)

LT GROUP

DOMESTIC A 2-year CAGR 8.68%

Domestic-B above 5 kW to 20 kW 4-year CAGR 10.15%

Commercial Load above 0.5 to 20 kW 2-year CAGR 4.16%

General Purpose Load upto 20 kW Nil Growth 0.00%

Public Lighting Nil Growth 0.00%

Agriculture upto 7.5 HP YOY growth 14.54%

Small Industries Rural upto 20 kW 4-year CAGR 5.05%

Small Industries Urban Nil Growth 0.00%

Temporary 3-year CAGR 13.55%

HT GROUP

HT Domestic 20 kW and above Nil Growth 0.00%

HT commercial 20 kW & above 2-year CAGR 4.23%

Public Water works Nil Growth 0.00%

Bulk Supply Govt. Edu Inst. Nil Growth 0.00%

Bulk Supply Others 4-year CAGR 1.02%

HT Small Industries up to 50 kW Nil Growth 0.00%

HT Industries-1 50kw to 150 kW Nil Growth 0.00%

HT Industries-II above 150 kW YOY growth 6.65%

Tea, Coffee & Rubber 3-year CAGR 6.57%

Oil & Coal Nil Growth 0.00%

HT Irrigation Load above 7.5 HP Nil Growth 0.00%

5.2.13 The category-wise sales estimated by the Commission for FY 2018-19 are given in the

Table below:


Table 35: Category-wise Energy Sales estimated by the Commission for FY 2018-19

(MU)

Consumer Category Order dt.

19.03.2018 APDCL Commission

LT GROUP

JEEVAN DHARA 782 1,207 688

DOMESTIC A 3163 2,890 3,095

Domestic-B above 5 kW to 25 kW 325 293 305

Commercial Load above 0.5 to 25 kW 754 669 653

General Purpose Load upto 25 kW 125 99 99


Agriculture upto 7.5 HP 23 25 23

Small Industries Rural upto 25 kW 80 72 69

Small Industries Urban 37 31 30

Temporary 9 8 8

LT TOTAL 5314 5,307 4,983

HT GROUP

HT Domestic 25 kW and above 36 31 31

HT commercial 25 kW & above 485 381 367

Public Water works 103 71 71

Bulk Supply Govt. Edu Inst. 105 77 76

Bulk Supply Others 429 385 387

HT Small Industries up to 50 kVA 28 23 23

HT Industries-1 50kw to 150 kVA 85 67 67

HT Industries-II above 150 kVA 617 798 748

Tea, Coffee & Rubber 449 516 516

Oil & Coal 112 76 76

HT Irrigation Load above 7.5 HP 21 15 15

HT Electric Crematorium - 1.0 0.5

HT TOTAL 2470 2,442 2,377

GRAND TOTAL 7784 7,749 7,360

Therefore, the Commission considers total sales of 7,360 MU for FY 2018-19.


5.3.1 APDCL submitted that, during the H1 of FY 2018-19, it has achieved loss level of

18.34%. Citing the electrifications under SAUBHAGYA Scheme, APDCL submitted


that it will not be possible to achieve the stipulated loss level of 16.85%. APDCL prayed

for considering the H1 loss of 18.34% for the entire year.


5.3.2 The Commission recognises the fact that the number of domestic category

connections shall increase significantly due to implementation of SAUBHAGYA

scheme, which may have an impact on the distribution loss.

5.3.3 APDCL has computed losses for H1 of FY 2018-19. However, the computation of

losses for only first half of FY 2018-19 does not give the correct picture of the

distribution losses in the system. Moreover, maximum connections to domestic

category under SAUBHAGYA scheme are stated to have been released in the second

half of FY 2018-19.

5.3.4 In view of the above, the Commission has considered the Distribution Loss for FY

2018-19 as approved in Tariff Order dated March 19, 2018, as shown in the Table

below:

Table 36: Distribution Losses approved by the Commission for FY 2018-19

Particulars

T.O. dt.

19.03.2018

APDCL

Projection Approved

Distribution Loss (%) 16.85% 18.34% 16.85%

5.4 Energy Balance

5.4.1 APDCL has submitted the Energy Balance for FY 2018-19 based on the distribution

loss of 18.34% calculated on the basis of actual energy sale and purchase during H1

of FY 2018-19. The Energy Balance for FY 2018-19 as submitted by APDCL is shown


Table 37: Energy Balance for FY 2018-19as projected by APDCL (MU)

Sl. Particulars T.O. dt.

19.03.2018 APDCL

1 Energy Sale (MU) 7784 7749

2 Distribution Loss (MU) 1577 1741


Sl. Particulars T.O. dt.

19.03.2018 APDCL

2.1 Distribution Loss (%) 16.85% 18.34%

3 Energy Requirements (MU) 9361 9490

4 Transmission Loss (MU) 334 338

4.1 Transmission Loss (%) 3.44% 3.44%

5

Total Energy for sale within the

State (MU) 9695 9828

6 Pooled Loss of PGCIL (MU) 144 146

6.1 Pooled Loss of PGCIL (%) 1.47% 1.47%

7 Total Energy Requirement (MU) 9839 9974


5.4.2 The Commission approves the Energy Balance for FY 2018-19 based on the

provisionally approved energy sales, approved Distribution Loss, approved

Transmission Loss trajectory for AEGCL, and proportionate PGCIL Losses on external

power purchase (based on actual PGCIL loss for FY 2017-18). The quantum of

Surplus Power sold outside the State has not been considered while computing the

Energy Balance, and the revenue from the same has been considered under Other

Income, as discussed subsequently in this Order. The Energy Balance approved by

the Commission in the APR for FY 2018-19 is shown in the Table below:

Table 38: Energy Balance for FY 2018-19 approved by the Commission (MU)

Sl. Particulars Tariff Order

dt. 19.03.18 APDCL Approved

1 Energy Sales 7784 7,749 7,360

2 Distribution Loss (%) 16.85% 18.34% 16.85%

3 Energy Requirement at

T<>D periphery 9,361 9,490 8,852

4 Intra State (AEGCL)

Transmission Loss (%) 3.44% 3.44% 3.44%

5 Energy input to

Transmission System 9,695 9,828 9,167

8 Inter-State (PGCIL) Pooled

Loss (%) 1.47% 1.47% 1.40%

9 Total Energy Requirement 9,839 9,974 9,297


Therefore, the Commission considers total Power Purchase Requirement of

9297 MU for FY 2018-19.

5.5 Power Purchase

5.5.1 APDCL submitted that it is largely dependent on APGCL and Central Generating

Stations to meet the Base Load, however, to meet the Peak demand of the State,

APDCL has tied up certain bilateral power and it also purchases power from Power

Exchanges from time to time to meet the deficit.

5.5.2 APDCL submitted that it has projected the source-wise power purchase for FY 2018-

19 based on the following assumptions:

➢ APGCL: APDCL has firm allocation from all the existing and upcoming power

plants of APGCL. For projecting the energy availability from these stations,

APDCL has considered the approved norms over the allocated capacity. The

fixed cost is considered as per the Tariff Order dated 19.03.2018 and the

variable charge is projected based on H1 data of FY 2018-19. Regarding

Myntriang SHEP, provisional tariff of Rs 2.18/kWh is considered (as approved

by the Commission).

➢ Central Generating Stations (NER & ER): The share allocation of the various

plants of CGS (NER) has been considered based on the latest REA, PLF is

considered based on the average of last 3-4 years actual generation and other

norms as per CERC is considered. The fixed cost is considered as per the

latest CERC Tariff Orders and the variable charge is projected based on H1

data of FY 2018-19. For Pare the provisional tariff of Rs. 5.00/kWh has been

considered.

➢ NTPC (BTPS): The third Unit of NTPC (BTPS) will commence operation is

second half of FY 2018-19. The tariff for H1 of FY 2018-19 is considered on

assumption basis for projecting cost, as the final tariff is yet to be passed by

the Commission.

➢ Other sources: The power availability and cost for other sources is considered

based on the existing contract and the rates of H1 of FY 2018-19. For HHPL

and SEIPL, the levelized tariff as approved by the Commission is considered.


Generation from NVVNL Solar Bundled (JNNSM) and NVVNL Coal Bundled

(JNNSM) for H2 of FY 2018-19 has been considered equal to that of H1 in

FY2018-19. The Energy Charge Rate has been considered equal to the H1

average energy rate for the latest available six months. Trading purchase

quantum has been considered equal to that of H1. The balance quantum of

power purchase has been projected to be met from Power Exchanges, etc.

➢ Renewable sources: APDCL has projected to meet the RPO by mix of

purchase from renewable sources and REC purchase. The rates for Solar

RECs and Non-Solar RECs are considered at Rs. 1/kWh and Rs. 1.50/kWh,

respectively.


5.5.3 The Commission has estimated the source-wise quantum of purchase for FY 2018-19

based on the following:

a) APGCL Stations: The quantum has been considered same as that submitted

by APDCL in its Petition.

b) CGS: As regards Central Sector generating stations, the power purchase

quantum considered is same as the actual H1 purchase as submitted by

APDCL and H2 purchase is arrived by applying the average PLF and Auxiliary

Consumption as submitted by APDCL over the allocated capacity. Further, as

regards NTPC-BTPS, one-month generation is considered for the upcoming

third unit.

c) Other Sources: All other sources such as Renewables, IPP, bundled power

stations etc., the Commission has considered the quantum of power purchase,

same as projected by APDCL.

5.5.4 The Commission has considered the rate of purchase from various sources based on

the rate of power purchase provisionally approved for FY 2017-18, with the following

exceptions:

a) APGCL Stations: The cost has been considered same as that submitted by

APDCL in its Petition

b) CGS: As regards Central Sector generating stations, the power purchase cost

is considered same as the actual H1 cost as submitted by APDCL. H2 cost is


arrived by taking into consideration the latest Tariff Orders of these CGS

stations as issued by CERC till FY 2018-19. The energy charges are calculated

based on the Energy Charge Rate approved by CERC in respective Tariff

Order and applied the same on the quantum of purchase projected for H2. The

fixed charge however is calculated based on the allocated capacity of that plant

to APDCL.

d) For the other sources, the cost of power purchase is estimated to be same as

submitted by APDCL.

e) Transmission Charges have been considered as approved in the Tariff Order

for AEGCL dated March 19, 2018.

5.5.5 The Commission has considered the Solar RPO and Non-Solar RPO as 5% and 6%,

respectively, for FY 2018-19, in accordance with the RPO Regulations, and considered

purchase of Solar RECs and Non-Solar RECs at the rate of Rs. 1 /kWh, i.e. the present

floor price.

5.5.6 The source-wise power purchase quantum and costs provisionally approved by the

Commission in the APR for FY 2018-19, is shown in the Table below:


Table 39: Power Purchase Quantum and Cost approved by the Commission for the FY 2018-19

Source

Tariff Order 19.03.2018 APDCL Approved

Quantum (MU)

Cost (Rs. Cr.)

Average Rate (Rs. / kWh)

Quantum (MU)

Cost (Rs. Cr.)

Average Rate (Rs.

/ kWh)

Quantum (MU)

Total Cost (Rs.

Crore)


APGCL NET 1959.26 592.13 3.02 1525.55 517.22 3.39 1,526.24 503.83 3.30

CSGS NER

Kopili HEP 516.50 48.70 0.94 606.58 60.75 1.00 564.66 58.54 1.04

Kopili HEP - II 55.90 6.20 1.11 53.15 7.12 1.34 65.74 8.05 1.22

Khandong HEP 139.10 20.30 1.46 129.57 20.68 1.60 136.84 21.24 1.55

RHEP 580.90 146.20 2.52 510.49 106.08 2.08 617.34 117.40 1.90

DHEP 114.10 48.90 4.29 116.35 52.91 4.55 133.74 57.72 4.32

AGBPP 801.40 267.90 3.34 801.00 280.11 3.50 800.98 280.11 3.50

AGTPP 317.10 109.10 3.44 261.46 82.99 3.17 261.46 82.99 3.17

AGTPP2

NHPC 226.10 69.50 3.07 221.40 64.34 2.91 221.42 64.34 2.91

OTPC 1259.30 409.20 3.25 1370.68 436.09 3.18 1,371.11 436.16 3.18

NTPC, BTPS 912.70 485.41 5.32 1558.63 962.00 6.17 1,558.63 962.00 6.17

NTPC, BTPS Unit-III 141.47 90.39 6.39 47.16 30.13 6.39

Pare HEP 178.12 89.11 5.00 178.12 89.11 5.00

CSGS NER GROSS 4923.10 1611.33 3.27 5948.89 2252.58 3.79 5,957.2 2207.79 3.71

CSGS ER

Farakka 269.68 102.60 3.80 200.14 66.09 3.30 200.34 66.16 3.30

Kahalgaon I 141.74 49.12 3.47 191.44 64.31 3.36 191.35 64.28 3.36


Source

Tariff Order 19.03.2018 APDCL Approved

Quantum (MU)

Cost (Rs. Cr.)


Quantum (MU)

Cost (Rs. Cr.)

Average Rate (Rs.

/ kWh)

Quantum (MU)

Total Cost (Rs.

Crore)


Kahalgaon II 568.68 197.90 3.48 445.21 144.03 3.24 445.05 143.98 3.24

Talcher 144.15 36.65 2.54 145.37 41.85 2.88 145.53 35.60 2.45

CSGS ER GROSS 1124.25 386.27 3.44 982.16 316.28 3.22 982.27 310.02 12.35

OTHERS

HHPCPL (Champawati) 8.67 3.56 4.11 7.79 3.20 4.11 7.79 3.20 4.11

MeECL 0.68 0.54 7.94 0.38 0.26 6.80 0.38 0.26 6.80

SECI Solar 35.55 22.25 6.26 33.26 20.51 6.17 33.26 20.51 6.17

JNNSM Solar Bundled 7.83 9.63 12.30* 10.28 12.22 11.88 10.28 12.22 11.88

Suryatap Solar 6.51 5.08 7.80 6.31 5.54 8.78 6.31 5.54 8.78

JNNSM Coal Bundled 36.48 11.87 3.25* 34.96 9.30 2.66 34.96 9.30 2.66

TRADING PUR_NET 596.90 217.37 3.64 596.90 217.37 3.64

Power Exchanges 1736.89 521.07 3.00 771.00 360.46 4.68 771.00 360.46 4.68

DSM 56.44 17.89 3.17 56.44 17.89 3.17

Additional Solar RPO (RECs) 25.58 31.37 19.04

Additional Non-solar PO(RECs) 45.34 20.47 12.88

OTHERS 1832.61 644.92 3.52 1517.32 698.58 4.60 1517.32 678.66 4.47

TOTAL PURCHASE 9839.22 3234.65 3.29 9973.93 3784.67 3.79 9,983.01 3,700.30 3.71

Transmission & SLDC Charges 1160.64 1020.81 1160.64

Total Power Purchase Cost 9839.22 4395.29 4.47 9973.93 4805.48 4.82 9,983.01 4,860.94 4.87


Therefore, the Commission considers total Power Purchase Cost of Rs. 4860.94

crore for FY 2018-19.

5.6 Operation and Maintenance (O&M) Expenses

5.6.1 The O&M expenses include Employee Expenses, R&M expenses and A&G expenses.

APDCL submitted the O&M expenses calculated on normative basis, as shown in the

Table below:

Table 40: O&M Expenses projected for FY 2018-19 by APDCL (Rs. Crore)

Particulars Tariff Order

dt. 19.03.18 APDCL

Employee expenses 869.33 861.83

A&G expenses 38.52 47.87

R&M Expenses 146.40 130.56

Total O&M Expenses 1054.25 1040.26

Employee Expenses

5.6.2 APDCL has adopted the following approach for estimating Employee Cost:

a) The employee expenses approved after true-up for FY 2017-18 have been

considered as base expenses for FY 2018-19

b) CPI inflation has been computed as average increase of CPI for the period from

FY 2015-16 to FY 2017-18, which works out to 4.28%

c) Considering the growth in the number of employees in FY 2018-19, growth factor

of 3% has been considered

d) The ROP is applicable from April 2016; the implementation of ROP in APDCL has

taken place in December 2017, consequently, the impact of ROP is effected in the

salaries for the period from April’18 onwards. APDCL submitted that the impact of

ROP has been considered in the employee expenses for FY 2017-18 and

therefore, the same is not being considered separately in the revised employee

expenses in the APR for FY 2018-19.


5.6.3 The Employee Cost as projected by APDCL for FY 2018-19 is shown in the table

below.

Table 41: Employee Expenses projected for FY 2018-19 by APDCL (Rs. Crore)

Particulars TO dt.

19.03.2018 APDCL

Employee Expenses of Previous year Emp n-1 694.69 802.39

Growth Factor Gn 3% 3%

CPI Inflation CPI 5.35% 4.28%

Subtotal 753.81 861.83

Provision against ROP 16 115.52 -

Total 869.33 861.83

5.6.4 APDCL has projected the Employee expenses of Rs.861.83 Crore, for FY 2018-19.

Repair and Maintenance (R&M) Expenses

5.6.5 APDCL has projected R&M expenses at Rs.130.56 Crore for FY 2018-19based on

Regulation 38 of the MYT Regulations, 2015. APDCL has proposed the value of ‘K’ as

3.50% and the WPI has been considered as 0.33%. The R&M expenses projected by

APDCL are shown in the Table below:

Table 42: R&M Expenses for FY 2018-19 as submitted by APDCL (Rs. Crore)


dt. 19.03.18 APDCL

Average GFA of previous year 4,144.04 3717.89

K factor 3.50% 3.50%

WPI inflation 0.94% 0.33%

R&M Expenses 146.40 130.56


5.6.6 APDCL has projected A&G expenditure at Rs.47.87 Crore for FY 2018-19based on

Regulation 38 of the MYT Regulations, 2015. The Petitioner has considered WPI of

0.33% and a provision of Rs. 3 Crores in FY 2018-19. The A&G expenses projected

by APDCL are shown in the Table below:

Table 43: A&G Expenses for FY 2018-19 as submitted by APDCL (Rs. Crore)

Particulars Tariff Order dt.

19.03.18 APDCL

A&G Expenses for previous year 35.19 44.72

WPI inflation 0.94% 0.33%

Provision 3.00 3.00


Particulars Tariff Order dt.

19.03.18 APDCL

A&G Expense 38.52 47.87


5.6.7 The Commission has computed the normative O&M Expenses for FY 2018-19 as per

Regulation 38 of the MYT Regulations, 2015. Any variation between normative O&M

expenses and actual O&M Expenses shall be considered under sharing of gains and

losses on account of controllable items as per Regulation 13 of the MYT Regulations,

2015 at the time of truing up for FY 2018-19.

5.6.8 For computation of employee expenses for FY 2018-19, the Commission has adopted


a) The employee expenses approved after True-Up for FY 2017-18 have been

considered as base expenses for FY 2018-19.

b) CPI inflation has been computed as average increase of CPI index for the period

from FY 2015-16 to FY 2017-18, which works out to 4.28%.

c) Considering the actual number of employees in FY 2018-19, it is observed that

there is net reduction in the number of employees as retirements are higher than

new employees joined during the year. Hence, growth factor of 3% has not been

considered.

d) Further, ROP has been implemented and during FY 2018-19, APDCL has made

payment of salaries based on revised pay scale. Therefore, to arrive at Employee

Cost for FY 2018-19, as per the revised pay scale, the Commission has used the

following methodology:

▪ Step-1: Arrive at base figure for FY 2017-18 based on the revised pay scale:

Add the pending arrears of Rs. 36.23 Cr (to be paid in FY 2018-19)

pertaining to FY 2017-18 to the actual Employee cost of Rs. 742.06 Cr for

FY 2017-18 (as per Audited Statement of Accounts)

▪ Step-2: Apply the CPI inflation rate over the base figure of FY 2017-18

5.6.9 Accordingly, the normative employee expenses approved for FY 2018-19 are shown



Table 44: Approved Employee Expenses for FY 2018-19 (Rs. Crore)


Employee Expenses for Previous Year

as per revised pay scale EMPn-1 778.29

Growth Factor Gn 0%

CPI Inflation CPI 4.28%

Employee Expenses on revised pay

scale 811.62

5.6.10 APDCL has submitted that over and above the normative employee expense, the

pending ROP arrears pertaining to previous years are being paid during this year.

Accordingly, the pending arrears for previous years (FY 2016-17 and FY 2017-18),

i.e., Rs. 122.67 Crore has been considered separately.

5.6.11 The Commission directs APDCL to submit the actual impact on account of ROP, along

with detailed justification and documentary evidences on the basis of Audited Accounts

of FY 2018-19 at time of Truing up.

Therefore, the Commission approves Employee Expenses of Rs. 811.62 Crore

for FY 2018-19 and arrears pertaining to ROP of Rs. 122.67 Crore, subject to

prudence check at the time of Truing up.

5.6.12 For computation of R&M Expenses for FY 2018-19, the Commission has considered


a) The Commission has ignored the negative WPI Inflation rate of 3.65% for FY 2015-

16 and considered the average increase of WPI of FY 2016-17 and FY 2017-18,

i.e., 2.33% for computation of R & M expenses;

b) K-factor has been considered as 3.50% as approved in MYT Order. Since, K-factor

has been computed on the basis of average GFA, for working out R&M expenses

for FY 2018-19, average GFA for previous year has been considered.

5.6.13 The normative R&M expenses approved for FY 2018-19 are shown in the following

Table:

Table 45: Approved R&M Expenses for FY 2018-19 (Rs. Crore)


Average GFA for previous year GFAn-1 3729.09

K Factor K 3.50%

WPI Inflation WPI 2.33%



R&M Expenses 133.55

Therefore, the Commission approves R&M Expenses of Rs. 133.55 crore for FY

2018-19.

5.6.14 For computation of A&G expenses for FY 2018-19, the Commission has adopted the

following approach:

a) The A&G expenses approved after Truing up for FY 2017-18 have been

considered as base expenses for FY 2018-19.

b) Similar to R&M expenses, WPI inflation has been considered as 2.33%.

c) In Tariff Order dated March 19, 2018, the Commission had approved an additional

expense provision of Rs. 3 Crores for FY 2018-19. However, APDCL was not able

to provide sufficient details of expenditure for the amount that was approved

additionally. Therefore, for APR of FY 2018-19, no provision has been considered.

However, these will be considered at the time of truing up, if APDCL can

substantiate the same

5.6.15 The normative A&G expenses approved for FY 2018-19 are shown in the following

Table:

Table 46: Approved A&G Expenses for FY 2018-19 (Rs. Crore)


A&G Expenses for Previous Year A&Gn-1 32.38

WPI Inflation WPI 2.33%

Provision Provision 0

A&G Expenses 33.13

Therefore, the Commission approves A&G Expenses of Rs. 33.13 crore for FY

2018-19.

5.7 Capital Investment& Financing of Capital Investment

5.7.1 APDCL submitted that it has estimated the capital expenditure and capitalisation in the

APR for FY 2018-19 based on the estimates of the capital expenditure works carried

out till date.

5.7.2 APDCL submitted that a total Capital Expenditure of Rs. 3572.06 Crore will be made

during FY 2018-19. APDCL proposed to capitalise Rs. 3355.87 Crore during FY 2018-

19. APDCL submitted the following:


Table 47: Capital expenditure and Capitalization as submitted by APDCL (Rs. Crore)

Particulars Approved in

TO 19.03.18

APDCL

submission

Opening CWIP 4205.28 3421.72

Capital Expenditure 1433.86 3572.06

Capitalization 756.21 3355.87

Closing CWIP 4882.93 3,637.91

5.7.3 APDCL has assumed that 70% of the capital expenditure shall be capitalised in the

same year and 30% shall be capitalised in the next year. Capitalisation of the opening

CWIP has been considered at Rs.855.43 Crore.

5.7.4 APDCL also submitted the funding pattern of the capital expenditure/capitalization

through combination of loan and grant whereby around 10% would be loan and 90%

would be grant.


5.7.5 APDCL submitted the scheme-wise break-up of capital expenditure proposed to be

incurred during FY 2018-19. It is observed that out of the total capital expenditure of

Rs. 3572.06 Crore proposed by APDCL, Rs. 2271.24 Crore is to be spent in

implementation of SAUBHAGYA scheme.

5.7.6 The Commission sought break-up of lines and sub-stations along with their individual

cost falling under each scheme and also asked APDCL to map each of the schemes

with respect to the approval given by the Commission in the Business Plan Order for

the Control Period from FY 2016-17 to FY 2018-19.The Commission also asked

APDCL to submit the cost-benefit analysis of each scheme, purpose of investment,

efficiency improvement sought from implementation of the scheme and delays in

execution of these projects.

5.7.7 The Commission did not receive satisfactory reply to the queries raised on capital

expenditure and capitalization proposed by APDCL.

5.7.8 The Commission had also directed APDCL to submit the details of the scheme-wise

Capital Expenditure made till date during FY 2018-19. APDCL, however, vide reply

dated 5 February, 2019, submitted the same figures as claimed in the Petition for

capital expenditure and capitalization for FY 2018-19,stating that the actual capital

expenditure is in line with that projected in the Petition for FY 2018-19.


5.7.9 The Commission would like to highlight the inconsistencies that have been found in

the data submitted by APDCL. The Commission during the processing of APR of FY

2017-18 had asked APDCL to submit actual capitalization in H1 of FY 2017-18.

APDCL had replied that the actual capitalization during H1 of FY 2017-18 is

Rs.1,608.84 Crore, as reflected in Table No. 54 of the Tariff Order dated March 19,

2018.The Commission had therefore, approved higher capitalization in APR for FY

2017-18 based on the actual capitalisation in H1 of FY 2017-18, as submitted by

APDCL. However, the actual capitalization as per accounts for FY 2017-18 was only

Rs. 211.46 Crores. Therefore, the provisional data submitted by APDCL cannot be

relied upon. The Commission therefore, has not accepted the provisional capital

expenditure and capitalization numbers submitted by APDCL in the APR of FY 2018-

19.

5.7.10 The Commission has analysed the past trend of Capital Expenditure and Capitalisation

by APDCL, as shown in the table below:

Table 48: Trend of Capital Expenditure and Capitalization (Rs. Crore)

Particulars FY14 FY15 FY16 FY17 FY18

Capex during the year 780 758 550 1035 735

Capitalisation 54 64 649 1053 211

Closing GFA 1,841 1,905 2,554 3,607 3,817

5.7.11 It is observed from the above that APDCL has achieved maximum Capitalisation of

Rs. 1053 Crore during FY 2016-17 against a maximum Capital Expenditure of Rs.

1035 Crore during the same year. During the last 3 years, APDCL has achieved

average Capitalisation of Rs. 650 Crore.

5.7.12 Considering the above, the Commission deems it fit to consider Capital Expenditure

of Rs. 1000 Crore and Capitalisation of Rs. 650 Crore for APR of FY 2018-19.

However, APDCL has the liberty to incur Capital Expenditure and Capitalisation higher

than the amount approved in APR for FY 2018-19 based on its requirement. The

Commission shall approve the Capital Expenditure and Capitalisation at the time of

truing up based on prudence check.


Table 49: Capital Expenditure and capitalisation approved by the Commission

in APR of FY 2018-19 (Rs. Crore)


dt. 19.03.18

APDCL

Petition

Approved in

APR

Opening CWIP 4205.28 3421.72 3,980.84

Capital Expenditure 1433.86 3572.06 1,000.00

Capitalisation 756.21 3355.87 650.00

Closing CWIP 4882.93 3,637.91 4330.84

5.7.13 As regards the funding of capitalisation, the Commission has not considered any equity

funding. The grant and debt funding have been considered in the ratio of 90:10 in line

with APDCL’s submissions.

5.7.14 The funding of capitalized works, as approved by the Commission is shown in the

following Table:

Table 50: Funding of Capitalised Works for FY 2018-19 considered by the

Commission (Rs. Crore)


dt. 19.03.18

Approved in

APR

Grant 716.77 585.00

Equity - -

Debt 39.44 65.00

Total Capitalisation 756.21 650.00

Therefore, the Commission provisionally approves Capitalisation of Rs. 650.00

crore for FY 2018-19.

5.8 Depreciation

5.8.1 APDCL submitted that Depreciation has been claimed in accordance with the MYT

Regulations, 2015, after apportionment of depreciation for assets created out of

consumer contribution. APDCL added that the assets which have been depreciated to

the extent of 90% of original cost are excluded from the asset base for the purpose of

calculating depreciation.

5.8.2 Depreciation on subsequent assets is claimed after apportionment of available grant.

As no depreciation has been charged on assets created out of RGGVY, MNRE as well

as consumer contribution, grant received against such schemes are shown separately


with no claim of depreciation. The depreciation projected by APDCL for FY 2018-19

is shown in the Table below:


Table 51: Depreciation calculation for FY 2018-19 as submitted by APDCL (Rs. Crore)

ParticularsAs on

01.04.18

Net addition

during the

year

Rate of DepAccumulated as

on 01.04.18

Assets fully

depreciatedOn OB

On

AdditionTotal

Land & Rights

i) Land owned under full title 15.61 - - - - -

ii) Leasehold land 2.22 - 3.34% 0.14 0.07 - 0.07

Sub total: 17.83 - 0.14 - 0.07 - 0.07

Building 55.07 19.28 3.34% 24.10 - 1.84 0.32 2.16

Hydraulic - - - - - -

Other Civil Works 54.64 4.01 3.34% 26.72 - 1.82 0.07 1.89

Plant & Machinery 597.05 117.58 5.28% 372.61 214.60 20.19 3.10 23.30

Lines & Cable Network 1,203.65 143.91 5.28% 653.16 388.81 43.02 3.80 46.82

Vehicles 11.94 - 5.28% 10.59 11.23 0.04 - 0.04

Furniture & Fixtures 16.61 12.32 6.33% 10.97 9.20 0.47 0.39 0.86

Office Equipment 27.76 23.20 6.33% 20.06 16.80 0.69 0.73 1.43

SUB TOTAL 1,984.55 320.30 3.86% 1,118.36 640.64 68.16 8.42 76.57 Ad d : Consumers contribution deducted from

service connection under O.H.lines & cable

network

228.47 79.85 5.28% 103.61 12.06 2.11 14.17

Ad d : Assets not belonging to the entity 1,610.60 2,955.72 - - -

3,823.62 3,355.87 1,221.97 640.64 80.22 10.52 90.74

(All amount in Rs. Crores) Depreciation


Table 52: Depreciation claimed by APDCL for FY 2018-19 (Rs. Crore)

Grant for assets

not belonging

to entity

(RGGVY, MNRE

etc.)

Co

nsu

me

r

Co

ntr

ibu

tio

n

Total

As on

01.04.2005

As on

01.04.2018Sub total

Grants Available - 2,448.86 2,448.86 3,873.68 228.47 6,551.01

GFA (excluding Consumer Contribution and assets

not belonging to company)1,095.63 888.92 1,984.55 1,610.60 228.47 3,823.62

CWIP - 3,421.72 3,421.72 3,421.72

Total 1,095.63 4,310.63 5,406.26 1,610.60 228.47 7,245.33

Cumulative grants apportioned in the ratio of GFA

and CWIP

GFA - 504.99 504.99 3,873.68 4,378.67

CWIP - 1,943.87 1,943.87 - 1,943.87

Total - 2,448.86 2,448.86 3,873.68 - 6,322.54

Depreciation calculated as per the Regulation on

the GFA 42.27 34.30 76.57 - 76.57

Weighted Average Rate of Depreciation (%) 3.86% 3.86% 3.86% -

Depreciation to be deducted on the assets built on

the grants component on 90% asset value - 19.48 19.48 - 19.48

Depreciation claimed 42.27 14.81 57.09 - - 57.09

Particulars

State Govt. grant

As on 01.04.2018



5.8.3 For computation of depreciation, the Commission has considered the closing GFA for

FY 2017-18 as approved in this Order as the Opening GFA for FY 2018-19. The

Commission has approved capitalization of Rs. 650 Crore for FY 2018-19. The

Commission has considered the funding ratio as submitted by APDCL for FY 2017-18,

for computation of funding of capitalization of Rs. 650 Crore in FY 2018-19.

5.8.4 The Commission has considered the scheduled depreciation rates as specified in MYT

Regulations, 2015.As per Regulation 33.2 of the MYT Regulations, 2015, the total

depreciation during the life of the asset shall not exceed 90% of the original cost of

GFA. The Commission has computed the depreciation separately for assets added

under each asset head in each year. The Commission has disallowed the depreciation

on assets where depreciation is in excess of 90% of the original cost of asset under

different asset heads. The Commission has not considered depreciation on assets

funded through grants in accordance with Regulation 31 and 33 of MYT Regulations,

2015.

5.8.5 In view of the above, the Commission has approved depreciation for FY 2018-19 as

per MYT Regulations, 2015, as given in the Table below:


Sl. Particulars Opening

GFA

Addition

during

the year

Rate of

depreciation

Depreciation

as per MYT

Regulations,

2015

1 Land & Rights 15.61

2 Leasehold Land 2.22 3.34% 0.07

3 Building 55.07 38.97 3.34% 2.49

4 Plant & Machinery 597.05 238.68 5.28% 26.50

5 Vehicle 11.94 - 9.50% 0.03



8 Other Civil Work 54.64 8.05 3.34% 1.96


10 Total 1984.55 650.00 85.24

11 Less: Depreciation for

Grants/Consumer Contribution 70.99



Accordingly, the Commission considers Depreciation of Rs. 14.24 crore for FY 2018-19.


5.9.1 APDCL submitted that it has projected interest and finance charge based on the

existing source-wise loans outstanding, repayment schedule and prevailing interest

rates.

5.9.2 APDCL submitted that it has loans mainly from Government of Assam and from PFC

(which are mainly for R APDRP). APDCL submitted that UDAY scheme is expected to

materialize in FY 2018-19 as PIB of Assam has already given in-principle approval.

5.9.3 APDCL submitted that it has considered the impact of UDAY in FY 2018-19 and has

accordingly reduced the interest charges in FY 2018-19 for loan from GoA. However,

the R-APDRP loan is not covered under UDAY scheme and therefore interest on such

loan is claimed by APDCL.APDCL submitted interest and finance charges for FY 2018-

19 as shown in the Table below:

Table 54: Interest and Finance Charges as submitted by APDCL for FY 2018-19 (Rs.

Crore)

SI. No.

Particulars

FY 2018-19

TO dt. 19.03.18

APDCL’s Claim

1 Interest on State Govt. Loan

19.10

4.81

2 Bank Charges 4.26

3 Interest on GPF -

4 Interest on New Pension Fund -

5 Interest on R-APDRP Loan 76.53

6 Less: Interest Capitalised 25.06

7 Other borrowing cost -

8 Total 19.10 60.55

Normative IWC claimed in this petition 15.01

Actual interest on WC 7.30

Difference 7.70

Net claim for Interest & Finance charges in this Petition

52.84


5.9.4 Interest on loan for FY 2018-19 is required to be allowed on normative basis as per


Regulation 35 of MYT Regulations, 2015. Accordingly, the normative closing loan for

FY 2017-18 of Rs. 438.75 crore is considered as the normative loan outstanding as

on April 1, 2018.

5.9.5 The Commission accepts the submission of APDCL and has assumed that UDAY

scheme shall materialize in FY 2018-19. The Commission has computed the impact

of implementation of UDAY in FY 2018-19.

5.9.6 The following table shows the impact of UDAY scheme considered in APR of FY 2018-

19.

Table 55: Impact of UDAY Scheme for FY 2018-19 (Rs. Crore)


Total GoA loan outstanding during FY 2016-17 (at the time of

signing of MoU) 1,510.04

Total Loans to be taken over as per UDAY scheme (75% of

the outstanding loans) 1,132.53

Total Loan to be converted to Grant (75% of the total amount

of loan to be taken over by Govt. under UDAY) 849.40

Normative Outstanding loan at the beginning of FY 2018-19 438.75

Normative Loan to be converted to Grant 438.75

Addition of Loan during the year (10%of capitalization) 65.00

Net Additions to Equity on account of conversion from

loan to Equity Nil

5.9.7 The Commission has considered the normative addition of loan during FY 2018-19 as

Rs. (373.75) crore, after considering the impact of UDAY as shown in the table above.

Further, the loan repayment has been considered equivalent to depreciation approved

for the respective year approved in this Order.

5.9.8 APDCL has considered the interest rate of 9.40% for FY 2018-19, since it has

assumed that UDAY shall be implemented from FY 2018-19. However, it is observed

that the UDAY scheme had not materialized till December 2018 and is expected to get

implemented in last 2-3 months of FY 2018-19. Therefore, it would not be appropriate

to consider the interest rate of 9.40% for entire year of FY 2018-19.

5.9.9 The Commission therefore considered the weighted average interest rate of 10.95%

based on actual loan portfolio of APDCL. However, the Commission has considered

the Interest rate of 9.40%for the next Control Period, i.e., FY 2019-20 to FY 2021-22.


As stated in the previous Chapter, there is no provision for allowing the difference

between normative IoWC and actual IoWC in the ARR, and hence, the same has not

been considered in the Interest and Finance Charges.

5.9.10 The interest on loan capital as considered by the Commission for FY 2018-19 is shown


Table 56: Approved Interest on Loan Capital for FY 2018-19 (Rs. Crore)


Net Normative Opening Loan 438.75

Less: Loan converted to Grant 438.75

Addition of normative loan during the year 65.00

Normative Repayment during the year 11.67

Net Normative Closing Loan 53.33

Interest Rate 10.95%

Interest Expenses 26.81

Therefore, the Commission considers Interest on Loans of Rs. 26.81 crore for

FY 2018-19.


5.10.1 APDCL submitted that it has projected IoWC in accordance with the MYT Regulations

2015, as Rs. 15.01 crore for FY 2018-19, considering the interest rate of 12.20%.


5.10.2 The Commission has computed IoWC in accordance with Regulations 37.3 and 37.4

of the MYT Regulations, 2015. The rate of Interest has been considered equal to State

Bank of India Base Rate as on 1st April of 2018 plus 350 basis points i.e., 12.20%.

5.10.3 The IoWC approved by the Commission for FY 2018-19 is shown in the following

Table:

Table 57: IoWC approved by the Commission for the FY 2018-19 (Rs. Crore)

Particulars TO dt.

19.03.18

APDCL APR

FY 2018-19

One month of the amount of O&M

expenses 87.85 86.69 72.50

Two months’ equivalent of the expected

revenue from sale of electricity 953.44 928.75 913.28

Maintenance spares @15% of O&M 158.14 156.04 130.50


Particulars TO dt.

19.03.18

APDCL APR

FY 2018-19

expenses


Less: Amount held as CSD 647.96 648.00 717.81

Total Working Capital Requirement 185.19 123.02 (6.61)

Rate of Interest 12.60% 12.20% 12.20%

Interest on Working Capital 23.33 15.01 -

Therefore, the Commission considers ‘Nil’ IoWC for FY 2018-19 as the normative

Working Capital requirement works out to be negative.

5.11 Interest on Consumers’ Security Deposit

5.11.1 APDCL has considered the closing CSD amount as per the books of accounts for FY

2017-18, i.e., Rs. 683.63 Crore, as the opening CSD for FY 2018-19. APDCL has

claimed interest on CSD in accordance with the amendment to Regulation 35.9 of the


5.11.2 APDCL has claimed the Interest on CSD of Rs. 57.77 Crore, as against Rs. 15.37

Crore approved in Tariff Order dated 19.03.2018.


5.11.3 The Commission has also considered the opening balance of FY 2018-19 same as

the closing balance of CSD approved in this Order. The Commission observed that

the interest on CSD actually paid is much lesser that the interest accrued based on

the security deposit with APDCL.

5.11.4 The Commission, therefore for the purpose of APR of FY 2018-19 has considered the

same amount as approved in Tariff Order dated 19.03.2018. The Commission shall

consider the actual amount of Interest on CSD at the time of truing-up of FY 2018-19.

Therefore, the Commission considers Interest on CSD of Rs. 15.77crore for FY

2018-19 as approved in previous Tariff Order.


5.12 Provision for Bad and Doubtful Debts

5.12.1 APDCL submitted that as per Regulation 94.9 of MYT Regulations, 2015, the provision

for bad debts may be considered as 1% of the amount shown as receivables in the

audited accounts of that year.

5.12.2 The trade receivables appearing in audited accounts are Rs. 1235.47 Crore, therefore

APDCL has claimed 1% of Rs. 1235.47 Crores, i.e., Rs. 12.35 Crore as Provision for

Bad and Doubtful Debts in the APR of FY 2018-19.


5.12.3 The Commission accepts the contention of APDCL and provides the amount of 1% of

the receivables reflecting in the audited accounts of FY 2017-18 as provision for bad

and doubtful debts for FY 2018-19. The value shall be subject to change as and when

the actual audited receivables of FY 2018-19 are available.

Therefore, the Commission considers provision for bad and doubtful debts of

Rs. 12.35crore for FY 2018-19.


5.13.1 APDCL submitted that existing base of Equity is Rs. 162.77 Crore. The share

application money pending allotment amounting to Rs. 88.04 Crore transferred from

erstwhile ASEB on transfer of trading function to APDCL w.e.f. 01-04-2009 and Rs.

0.63 Crore transferred on dissolution of ASEB on 31- 03-2013 was not considered by

the Commission in its Tariff Order dated March 19, 2018.

5.13.2 Anticipating the notification by Govt. of Assam on the share application money pending

allotment, equity capital of Rs. 88.68 Crore has been considered as part of the equity

capital base.

5.13.3 APDCL submitted that it has considered that the existing loans from GoA to the extent

of Rs.283.13 Crore shall be converted to equity, in accordance with UDAY scheme.

The rate of return has been considered as 16% as specified in the MYT Regulations,


2015. APDCL has not considered any other equity addition during FY 2018-19.

5.13.4 The RoE projected by APDCL for FY 2018-19 is shown in the Table below:

Table 58: Return on Equity projected by APDCL for FY 2018-19 (Rs. Crore)

Particulars Approved in TO

19.03.18

APR

submission

Opening Equity 162.77 162.77

Net Addition during the Year - 371.81

Closing Equity 162.77 534.58

Average Equity 162.77 348.68

Rate of Return on Equity 16.00% 16.00%

Return on Equity 26.04 55.79


5.13.5 The Commission has approved the Return on Equity in accordance with Regulation

34 of the MYT Regulations, 2015. The Commission has considered the closing equity

of FY 2017-18 as trued up in this Order, as the opening equity for FY 2018-19.

5.13.6 As far as the impact of UDAY is concerned, the Commission observed that since the

entire normative loan outstanding as at the beginning of FY 2018-19 shall be converted

to grant based on the explanation given in the previous Chapter of this Order. There

shall be no normative loan left to be converted to equity.

5.13.7 The Commission has therefore considered the addition of equity as Nil during for FY

2018-19, based on the funding of capitalisation approved in this Order and the impact

of UDAY derived in this Order. The Return on Equity for FY 2018-19 at 16% is shown

in the Table below:

Table 59: Return on Equity approved by the Commission for FY 2018-19 (Rs. Crore)

Sr. No. Particulars Approved

1 Opening Equity Capital 162.77

2 Equity addition during the year -

3 Closing Equity 162.77

5 Rate of Return on equity 16.00%



Therefore, the Commission considers RoE of Rs. 26.04 crore for FY 2018-19.


5.14.1 APDCL submitted that it has projected Non-Tariff Income considering escalation of 5%

p.a. over the actual Non-Tariff Income for FY 2017-18, as shown in the Table below:

Table 60: Non-Tariff Income as submitted by APDCL for FY 2018-19 (Rs. Crore)

Sl. Particulars TO dt.

19.03.2018 APDCL

1 Rentals from Meters, Service Lines, Capacitors etc. 23.14 22.35

2 Income from recoveries on account of theft of

energy/ Malpractices 0.31 0.78

3 Delayed payment charges from Consumers 155.20 168.75

4 Misc. Recoveries 26.14 22.71

5 Cross Subsidy surcharge on Open Access

Consumer 10.46 26.16

6 Wheeling charges collected 3.06 4.12

Total 218.32 244.86


5.14.2 The Commission has considered the Non-Tariff Income for FY 2018-19 as submitted

by APDCL in its Petition.

Therefore, the Commission considers Non-Tariff Income of Rs. 244.86 crore for

FY 2018-19.

5.15 Other Income

5.15.1 APDCL submitted that it has projected Other Income considering escalation of 5% p.a.

over the Other Income for FY 2017-18, except income on sale of surplus power.

5.15.2 In case of income from sale of surplus power, APDCL has considered amount of

Rs.56.75 Crore as per actual H1of FY 2018-19. APDCL has not projected any amount

for H2 of FY 2018-19. Accordingly, APDCL proposed Rs. 253.73 Cr as Other Income,

as shown in the table below:


Table 61: Other Income as submitted by APDCL for FY 2018-19 (Rs. Crore)

Particulars Approved in

TO 19.03.18 APDCL

Interest from banks and investment 92.01

Receipt from sale of LED bulb,

Tubelight, Fan etc. -

Rent from residential buildings 0.05

Miscellaneous receipts 28.17

Bad and doubtful debts provided for -

dues from consumers -

Receipt from Pension Trust 76.74

Income on seasonal export of surplus

power/Revenue from Sale of Power –

IEX

56.75

Total 159.63 253.73


5.15.3 The Commission has considered annual increase of 5% over the Other Income for FY

2017-18 approved in this Order, for all heads of Other Income, except Income on Sale

of Surplus Power.

5.15.4 The Commission has considered income from sale of surplus power based on the

difference between the approved power purchase quantum and energy required for

sale to consumers within the State. The following table shows the income from sale of

surplus power considered by the Commission.

Table 62: Revenue from sale of surplus power

Particulars Unit Approved

Total energy purchased during FY 2018-

19 as approved in power purchase MU 9983

Total Energy requirement for APDCL as

approved in Energy Balance MU 9297

Additional Energy available for sale to

outside State MU 686

Per unit rate for sale of surplus energy for

FY 2018-19 (derived after escalating

actual per unit rate of sale of surplus

power for FY 2017-18)

Rs/unit 2.26

Revenue from sale of Surplus power Rs. Crore 154.83

5.15.5 The surplus energy has been considered to be sold at the rate of Rs. 2.26 per unit,


which is derived after escalating the FY 2017-18 average rate for sale of surplus power

by 5%.

Accordingly, the Commission considers Other Income of Rs. 357.23 crore for FY

2018-19.

5.16 Revenue from sale of electricity at existing Tariff

5.16.1 APDCL has projected the Revenue at existing tariff by adding the actual revenue from

sale of power for H1 of FY 2018-19, with the estimated revenue from sale of power for

H2 of FY 2018-19.

5.16.2 APDCL has submitted that the revenue from sale of power for H2 of FY 2018-19 is

arrived at by applying the approved Tariff over the projected category-wise sales for

H2 of FY 2018-19. Accordingly, APDCL has projected a total of Rs. 5572.53 Crore as

revenue from sale of power for FY 2018-19.


5.16.3 The Commission has estimated the Revenue from sale of electricity at existing tariff

based on the projected sales and applicable tariff, as per the Tariff Order dated March

19, 2018 and the projected category-wise sales for FY 2018-19. The Commission has

considered the full-cost tariff, without considering any Targeted Subsidy, for the

purposes of estimating the revenue from sale of electricity at existing tariff. No FPPPA

has been considered as part of the existing tariff, as the FPPPA is zero at present.

5.16.4 The Revenue from Sale of Electricity from existing tariff as submitted by APDCL and

as computed by the Commission for FY 2018-19 is given in the Table below:

Table 63: Revenue from Sale of Electricity for FY 2018-19 (Rs. Crore)

Particulars APDCL Petition Approved

Revenue from Sale of Electricity 5572.53 5479.67

5.17 Targeted Subsidy from GoA

5.17.1 APDCL has not projected any amount pertaining to Targeted Subsidy separately for

FY 2018-19.



5.17.2 As stated above, the Commission has considered the full-cost tariff, without

considering any Targeted Subsidy, for the purposes of estimating the revenue from

sale of electricity at existing tariff. Hence, the Commission has considered the revenue

from Targeted Subsidy as NIL for FY 2018-19.

5.18 Aggregate Revenue Requirement (ARR) and Revenue Gap/(Surplus)

5.18.1 Considering the above heads of expense and revenue provisionally approved in the

APR for FY 2018-19, the summary of ARR as submitted by APDCL and as considered

by the Commission for FY 2018-19 is given in the Table below:

Table 64: ARR & Revenue Gap/(Surplus) considered by the Commission for FY 2018-19

(Rs. Crore)


19.03.18

APDCL

Petition

APR for FY

2018-19

1 Power Purchase Expenses 4395.29 4805.48 4,860.94

2 O&M Expenses 1054.26 1040.26 1,100.97

a) Employee Expenses 869.33 861.83 811.62

b) R&M Expenses 146.40 130.56 133.55

c) A&G Expenses 38.52 47.87 33.13 Impact of ROP 122.67

3 Depreciation 26.66 57.09 14.24


5 Interest on Working Capital 23.33 15.01 -

6 Interest on CSD 15.37 57.77 15.37

7 Return on Equity 26.04 55.79 26.04

8 Other Debits, incl. Provisioning for

Bad Debts 14.42 12.35 12.35

9 Total Expenditure 5574.47 6096.58 6,056.73



12 Aggregate Revenue Requirement 5196.52 5597.99 5,454.64

Revenue

13 Revenue at Approved Tariff 5830.18 5572.53 5,479.67

14 State Government Targeted Subsidy

15 Total Revenue 5830.18 5572.53 5,479.67

16 Revenue Gap/(Surplus) (633.66) 25.47 (25.03)

17 Differential Revenue Gap after true-up

for FY 2016-17 487.88 487.88 487.88



19.03.18

APDCL

Petition

APR for FY

2018-19

18 Net Carrying cost of FY 2016-17 in FY

2018-19 36.22 36.22 36.22

19 Cumulative Revenue Gap/(Surplus)

for FY 2018-19 (109.56) 549.57 499.07

20 Adjustment in Tariff for FY 2018-19 109.56 -

21 Final Revenue Gap/(Surplus) for FY

2018-19 0.00 549.57 499.07

Accordingly, the Commission has arrived at a Revenue Gap of Rs. 499.07 Crore

after APR of FY 2018-19. The same will be adjusted after truing up of FY 2018-

19.


6 Capital Investment Plan for the MYT Control Period

6.1 Capital Investment Plan for FY 2019-20 to FY 2021-22 proposed by APDCL

6.1.1 APDCL has submitted the Capital Investment Plan for the MYT Control Period from

FY 2019-20 to FY 2021-22 under different schemes, for undertaking various works for

improvement of the distribution network. In anticipation of timely completion of various

projects, no escalation has been considered in the project cost over the Control Period

from FY 2019-20 to FY 2021-22.

6.2 Assam Power Sector Enhancement Investment Program (APSEIP)

6.2.1 The details of schemes envisaged under the Assam Power Sector Enhancement

Investment Program (APSEIP) and Assam Power Sector Investment Program (APSIP)

for the improvement of the distribution network are shown in the table below:

Table 65: Project details of APSEIP-T-4 Loan No. 3200-IND AND APSIP-T-2

Loan No. 3327-IND

Loan Projects Project Cost

(Rs Cr)

APSEIP-T-4

Loan No

3200-IND

20 no. substations, augmentation of 5 no. 33/11 kV

substations, R&M work in 12 no. substations,

construction of 477 km 33 kV line, 730 km of 11 kV

line, 31 km of 11 kV ABC line, supply of 18 no. mobile

T&C vehicles equipped with T&C equipment, and

installation of 8572 no. modems in high value

consumers for remote metering

428.62

APSIP-T-2

Loan no

3327-IND

Construction of 1 no. 33/11 kV substation, 141 km of

33 kV line, 11 km of 11 kV line, 20 nos. of 33 kV

terminal bays, re-conductoring and R&M work for 955

km of 33 kV line, 1000 km of 11 kV line, 1555 km of

LT line, replacement of oil filled DTRs with 204 nos.

dry DTRs, replacement of HT and LT overhead lines

by UG cables in 14 km, installation of 2 nos. Area

Load Dispatch Centres, and installation of 1 no. meter

testing laboratory in Assam Engineering College

314.66


6.2.2 The above projects are entirely funded by Asian Development Bank (ADB) and

Government of Assam (GoA) and both the project loans will close in FY 2019-20.

Therefore, APDCL has considered only the balance CAPEX during FY 2019-20 as

shown below:

Table 66: Capital Expenditure - APSEIP-T-4 3200-IND and APSIP-T-2 3327-IND (Rs

Crore)

Name of the Scheme FY 2019-20

CAPEX Loan Equity Grant

APSEIP-T-4 Loan No. 3200-IND 48.00 - - 48.00

APSIP-T-2 Loan no 3327-IND 73.00 - - 73.00

6.3 State Annual Plan

6.3.1 This is an on-going scheme. The works under the State Annual Plan primarily include

improvement of distribution system by construction of new substations and addition of

distribution lines, renovation of existing substations, replacement of damaged

transformer and installation of new transformer, bifurcation of 11 kV feeder, etc. The

works also include roof top interactive Solar PV station, individual home lighting system

through mini solar power plant, smart street lighting Solar project in identified urban

area, Grid Interactive/Stand-Alone Roof Top/Ground Mounted SPV power plant, etc.

The works to be undertaken also include replacement of existing bamboo/wooden

poles in HT/LT network of APDCL and upgradation of low-lying substations prone to

floods, construction of dedicated feeder for tea garden, etc.

6.3.2 The funds for the projects under the State Annual Plan are received from the

Government of Assam.

Table 67: Capital Expenditure - State Annual Plan (Rs. Crore)

Name of Scheme FY 2019-20 FY 2020-21 FY 2021-22



Table 68: Funding - State Annual Plan (Rs. Crore)


Loan Equity Grant Loan Equity Grant Loan Equity Grant

State Annual Plan 20.02 - 180.18 22.02 - 198.20 24.20 - 217.80

6.4 NEC Plan

6.4.1 The works under the NEC Plan primarily include construction of 33/11kV, 2x5 MVA

sub-station along with associated 33kV, 11kV and LT Feeder at Bishnupur Panch Ali

under Dhemaji Elect. Division, Assam. The total project cost is Rs. 10.25 Crore.

6.4.2 The project started in 2017 and scheduled date of completion is November 2018.

APDCL proposed to spend the remaining Rs. 2.61 Cr during FY 2019-20. The funding

is in the form of grant from NEC.

Table 69: Capital Expenditure - NEC Plan (Rs. Crore)


NEC Plan 2.61 - -

Table 70: Funding - NEC Plan (Rs. Crore)



NEC Plan - - 2.61 - - - - - -

6.5 Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)

6.5.1 It is the rural electrification scheme initiated by the Govt. of India. In Assam, RGGVY

is applicable in 16 districts in the State. Total sanctioned cost of funds under RGGVY

XIIth Plan is Rs. 1621.06 Crore. Of the total funds of Rs. 890.18 Crore released under

the scheme upto 31st March 2018, 90.24% funds have been utilised till 31st March

2018. In FY 2018-19, upto 31st August 2018, Rs. 946.30 Crore have been released,

out of which 96.64% funds have been utilised.

6.5.2 APDCL has proposed to utilise the remaining funds in FY 2019-20 itself, therefore no


further capital expenditure is proposed in future years.

Table 71: Capital Expenditure - RGGVY Plan (Rs. Crore)


RGGVY Plan 674.76 - -

Table 72: Funding - RGGVY Plan (Rs. Crore)



RGGVY Plan 67.48 - 607.28 - - - - - -

6.6 Deendayal Upadhyay Gram Jyoti Yojana (DDUGJY)

6.6.1 Total sanctioned cost of funds under DDUGJY Plan is Rs. 1267.74 Crore. Of the total

funds of Rs. 312.19 Crore released under the scheme upto 31st March 2018, 63.24%

funds have been utilized upto 31st March 2018. Upto 31st August 2018, Rs. 337.36

Crore has been released, out of which 70.30% funds have been utilized.

6.7 DDG Project

6.7.1 This project comprises the Micro Grid System (SPV) and the Standalone System. The

total sanctioned cost of DDG (DDUGJY) is Rs. 273.18 Crore. Under DDG (DDUGJY),

an amount of Rs. 120.20 Crore has been released upto 31.03.2018, of which 78.28%

funds have been utilized upto 31st March 2018. Upto 31st August 2018, an amount of

Rs. 126.10 Crore has been released, out of which 87.93% funds have been utilized.

Table 73: Capital Expenditure –DDUGJY and DDG Plan (Rs. Crore)


DDUGJY Plan 930.38 - -

DDG Project 147.70 - -


Table 74: Funding - DDUGJY and DDG Plan (Rs. Crore)



DDUGJY Plan 93.04 - 837.34 - - - - - -

DDG Project 14.77 - 132.93 - - - - - -

6.8 Integrated Power Development Scheme (IPDS)

6.8.1 The scheme launched by Government of India (GoI) aims mainly to strengthen the

sub-transmission and distribution system, including provisioning of solar panels,

metering of distribution transformers, feeders and consumers in the urban areas and

IT enablement of distribution sector for completion of targets given under R-APDRP

for XIIth and XIIIth Plans. IPDS focuses on 24x7 power supply for consumers, reduction

of AT&C losses and providing access to all urban households.

6.8.2 A grant of 85% will be provided by Government of India (GoI) and remaining15% will

be own funds under IPDS.

6.9 R-APDRP Project

6.9.1 The Government of India approved the R-APDRP during XIth Plan as a Central Sector

scheme. The key objective of this scheme is to expedite the reform process in the

distribution segment.

6.9.2 Funds for the projects under R-APDRP are provided as loan from the Government,

which is convertible to grants on fulfilling certain performance criteria. 100% of the

project cost in case of Part-A projects and 25% for the Part-B projects is provided as

normal loan from the Government on which interest is payable. Subsequently 100% of

the loan amount of Part A as well as the interest amount can be converted into grant

on completion of the project. Under R-APDRP Part B, 50% of project cost and interest

can be converted into grant on achieving the target of 15% AT&C losses on a

sustained basis for 5 years in the project area.

6.9.3 100% funding for R-APDRP Part A is provided by Government of India. Funding for

Part B is 90% Government of India and remaining 10% from own funds. APDCL has

submitted that the ongoing R-ADPRP project will get completed during FY 2019-20.


Table 75: Capital Expenditure –RAPDRP Plan (Rs. Crore)


RAPDRP Plan 320.90 - -

Table 76: Funding - RAPDRP Plan (Rs. Crore)



R-APDRP Plan 32.09 - 288.81 - - - - - -

6.10 UDAY Scheme

6.10.1 Under the UDAY scheme, financial support of Rs. 555.55 Crore from Govt. of Assam

is being provided for implementation of targeted activities. Of this amount, Rs. 286.27

Crore will be provided during FY 2016-17, Rs. 224.11 Crore during FY 2017-18, Rs.

36.23 Crore during FY 2018-19 and Rs. 8.94 Crore will be provided during FY 2019-

20.

6.10.2 Of the works to be undertaken during FY 2019-20, the primary works would include

installation of smart meters for all consumers other than agricultural consumers

consuming above 200 units/month. Remaining works under the UDAY scheme such

as 100% feeder metering, 100% DT metering, energy audit up to 11 kV level in rural

areas, physical feeder segregation, etc. are to be completed by FY 2018-19.

Table 77: Capital Expenditure –UDAY Scheme (Rs. Crore)


UDAY Scheme 8.94 - -

Table 78: Funding–UDAY Scheme (Rs. Crore)



UDAY Scheme - - 8.94 - - - - - -


6.11 SAUBHAGYA Scheme

6.11.1 The Ministry of Power, Govt. of India, on 11th October 2017 vide Office Memorandum

F. No. 44/2/2016-RE has launched ‘Pradhan Mantri Sahaj Bijli Har Ghar Yojna –

SAUBHAGYA’ to achieve universal household electrification in the country.

Government of India (GOI) has formulated this scheme to ensure last mile connectivity

and electricity connections to all remaining households in rural areas and poor

households in urban areas of the country by December 2018.

6.11.2 APDCL submitted that the SAUBHAGYA scheme is planned to be completed in FY

2018-19 itself, therefore, there is no capital expenditure proposed against this scheme

for the next Control Period.

6.12 Distribution System Enhancement and Loss Reduction Project

6.12.1 This project would be taken-up for implementation during the ensuing Control Period,

and would be funded jointly by ADB and the Government of Assam. Under this project,

new 33/11 kV substations and 33 kV terminal bays would be installed. HVDS system

units with 11/0.25 kV 5 kVA and 10 kVA DTRs and 6 km 11 kV insulated conductor,

augmentation of 33/11 kV sub-station would be done.

6.12.2 The total estimated cost of the scheme is Rs. 3302.9 Crore, out of which ADB fund is

Rs. 2337.02 Crore and GoA fund is Rs. 965.32 Crore. The details of year-wise

investment and corresponding funding pattern proposed are as follows:

Table 79: Capital Expenditure –Distribution System Enhancement and Loss Reduction

Project (Rs. Crore)


Distribution System Enhancement

and Loss Reduction Project 229.88 512.31 811.16

Table 80: Funding Pattern– Distribution System Enhancement and Loss Reduction

Project (Rs. Crore)



Distribution System

Enhancement and

Loss Reduction

Project

- - 229.88 - - 512.31 - - 811.16


6.13 Summary of Capital Investment Plan submitted by APDCL

6.13.1 The Capital Investment Plan proposed by APDCL for the Control Period from FY 2019-

20 to FY 2021-22 is summarized in the Table below.

Table 81: Capital Investment Plan proposed by APDCL from FY 2019-20 to FY 2021-22

(Rs Crore)


APSEIP-T-4 Loan No. 3200-IND 48.00 - -

APSIP-T-2 Loan no 3327-IND 73.00 - -


NEC Plan 2.61 - -

RGGVY XIIth Plan 674.76 - -

DDUGJY 930.38 - -

DDG (DDUGJY) 147.70 - -

IPDS 266.67 433.33 38.67

RAPDRP 320.90 - -

UDAY 8.94 - -

SAUBHAGYA - - -

Distribution System Enhancement and Loss

Reduction 229.88 512.31 811.16

TOTAL 2782.04 1165.86 1091.83

6.13.2 The funding pattern for the proposed Capital Investment Plan for the Control Period

from FY 2019-20 to FY 2021-22 is summarised in the Table below:

Table 82: Funding Pattern for Capital Investment Plan (Rs Crore)

Name of the

Scheme

FY 2019-20 FY 2020-21 FY 2021-22


APSEIP-T-4 Loan

No. 3200-IND - - 48.00 - - - - - -

APSIP-T-2 Loan no

3327-IND - - 73.00 - - - - - -

State Annual Plan 20.02 - 180.18 22.02 0.00 198.20 24.20 0.00 217.80

NEC Plan 0.26 - 2.35 - - - - - -

RGGVY XIIth Plan 67.48 - 607.28 - - - - - -

DDUGJY 93.04 - 837.34 - - - - - -

DDG (DDUGJY) 14.77 - 132.93 - - - - - -

IPDS 40.00 - 226.67 65.00 - 368.33 5.80 - 32.87

RAPDRP 32.09 - 288.81 - - - - - -

UDAY - - 8.94 - - - - - -


Name of the

Scheme

FY 2019-20 FY 2020-21 FY 2021-22


SAUBHAGYA - - - - - - - -

Distribution System

Enhancement and

Loss Reduction

- - 229.88 - - 512.31 - - 811.16

TOTAL 267.66 - 2514.38 87.02 - 1078.84 30 - 1061.83

6.14 Capitalisation of the Schemes

6.14.1 APDCL submitted that for projecting the addition to GFA, it has assumed that 70% of

the Capital Investment undertaken in the year shall be capitalized in the same year

and 30% shall be capitalized in the next year. Further, it has been assumed that 1/4th

of the Capital Work in Progress (CWIP) of Rs. 3421.72 Crore shall be capitalized

during FY 2018-19 and for each year of the Control Period from FY 2019-20 to FY

2021-22.

6.14.2 APDCL has assumed that 30% of the estimated capital expenditure for FY 2018-19,

i.e., Rs. 3572.06 Crore would be capitalised during FY 2019-20.

Table 83: Proposed capitalisation from FY 2019-20 to FY 2021-22 (Rs Crore)

Particulars FY 2019-20 FY 2020-21 FY 2021-22

Schemes in the Control Period (70% of capex) 2129.13 816.10 764.28

Schemes in the Control Period (30% of last

year capex) 1071.62 912.49 349.76

Opening CWIP for FY 2018-19 855.43 855.43 855.43

TOTAL 4056.18 2584.02 1969.47

6.14.3 The proposed funding of the capitalised works by APDCL is given in the Table below.

APDCL submitted that the opening CWIP for FY 2018-19 has been assumed to be

funded in the ratio of 90:10 from grants and loans as considered for FY 2018-19 in the

Tariff Order dated March 19, 2018.

Table 84: Funding pattern for proposed capitalisation (Rs Crore)



Schemes in the

Control Period 197.06 - 1932.07 60.92 - 755.19 21.00 - 743.28




Schemes in the

Control Period

(prev. yr)

101.74 - 969.88 84.46 - 828.03 26.11 - 323.65

Opening CWIP for

FY 2018-19 85.54 - 769.89 85.54 - 769.89 85.54 - 769.89

TOTAL 384.34 - 3671.84 230.91 - 2353.10 132.65 - 1836.82

6.15 Capital Investment Plan approved by the Commission for FY 2019-20 to FY

2021-22

6.15.1 The Commission while approving the capital expenditure and capitalization for FY

2017-18 and FY 2018-19 in the MYT Order dated March 31, 2017, had directed

APDCL to submit the scheme-wise capital expenditure and capitalisation, along with

funding details based on latest status of implementation of schemes, approvals

received, funds arranged, orders placed, work commencement, timelines committed

by contractor, etc., as compared to the schemes approved in the Business Plan for the

Control Period from FY 2016-17 to FY 2018-19. However, such detailed scheme-wise

information has not been submitted to the Commission.

6.15.2 The Commission has analysed the details of different Schemes proposed by APDCL

for the Control Period from FY 2019-20 to FY 201-22, and observes as under:

a) Most of the Schemes proposed by APDCL are ongoing Schemes;

b) Most of the Schemes are Central Government Schemes, viz., RGGVY,

DDUGJY, IPDS, R-APDRP, and UDAY, or State Government Schemes, viz.,

APSEIP, State Annual Plan, and NEC Plan;

c) All the above Schemes are intended to achieve greater rural and urban

electrification, strengthening of the distribution network, improvement of the

quality of supply, etc.;

d) The Distribution System Enhancement and Loss Reduction Project proposed

by APDCL is required, in order to ensure that the Distribution Losses are

maintained within the trajectory approved by the Commission;

e) The Schemes are either 100% Grant funded or 90% Grant funded, and the

funds have been tied-up for all the ongoing Schemes.

6.15.3 In view of the above, the Commission provisionally approves the Scheme-wise Capital


Investment Plan as proposed by APDCL, and summarised in the Table below:

Table 85: Capital Investment Plan provisionally approved by the Commission for

APDCL for the Control Period (Rs Crore)


APSEIP-T-4 Loan No. 3200-IND 48.00 - -

APSIP-T-2 Loan no 3327-IND 73.00 - -


NEC Plan 2.61 - -

RGGVY XIIth Plan 674.76 - -

DDUGJY 930.38 - -

DDG (DDUGJY) 147.70 - -

IPDS 266.67 433.33 38.67

RAPDRP 320.90 - -

UDAY 8.94 - -

SAUBHAGYA - - -

Distribution System Enhancement and Loss

Reduction 229.88 512.31 811.16

TOTAL 2782.04 1165.86 1091.83

6.15.4 APDCL is directed to maintain database on the individual Projects under each

Scheme with the following details:

a) Details/Scope of Project including activities, area covered, etc.;

b) Start date of Project;

c) Scheduled completion date of Project;

d) Funding Plan;

e) Cost-Benefit-Analysis of the Project

f) Present Status of Project, indicating physical progress in percentage terms

and in monetary terms;

g) Status of Capitalisation as per Field Reports and as per Accounts;

h) Whether the intended benefits of the Project have been achieved, etc.

6.15.5 Maintenance of such project-wise database will help APDCL track the progress of the

Project during execution as well as ensure that the Capitalisation as per Accounts

tallies with the asset being physically put to use. APDCL should submit such Project-

wise data to the Commission at the time of true-up for each Year, for the Projects that

have been capitalised during that Year. APDCL should also justify the Projects


proposed to be capitalised in the ensuing Year based on the above database.

6.16 Capitalisation approved by the Commission for FY 2019-20 to FY 2021-22

6.16.1 The Commission notes that in the past years, while the capital expenditure in each

year incurred by APDCL is in line with that approved in the MYT Order and respective

Tariff Orders, the annual capitalisation achieved by APDCL is significantly lower as

compared to the approved values in most of the years, which has been made up in FY

2015-16 and FY 2016-17, wherein, APDCL has achieved significantly higher

capitalisation as compared to the approved capitalisation. However, again in FY 2017-

18, APDCL achieved a minimal capitalization of Rs. 211.46 Crore, which is significantly

lower than its approved number.

6.16.2 It is noted that however, the actual capital expenditure and capitalisation are both

significantly lower than that originally proposed by APDCL in its respective Business

Plan/Tariff Petitions. This shows that APDCL has been generally projecting much

higher capital expenditure and capitalisation than that actually achieved/achievable,

which needs to be borne in mind, while approving the capital expenditure and

capitalisation for the Control Period from FY 2019-20 to FY 2021-22.

6.16.3 The comparison of proposed vs. approved vs. actual capital expenditure and

capitalisation over the period from FY 2012-13 to FY 2017-18 is shown in the Table

below:

Table 86: Actual Capital Expenditure and Capitalisation achieved by APDCL

from FY 2012-13 to FY 2017-18 (Rs. Crore)

Particulars FY 13 FY 14 FY 15 FY 16 FY 17 FY 18

Capital Expenditure

Proposed by APDCL in

Business Plan/ Tariff

Petition

933.96 822.09 553.74 83.59 3724.24 4300.96

Approved in respective

Order 489.62 844.97 545.78 134.11 1000.00 1000.00

Actual 431.38 779.95 758.06 550.24 1035.37 735.32

Capitalisation

Proposed by APDCL in

Business Plan/ Tariff

Petition

884.77 429.41 458.61 212.44 * *

Approved in respective

Order 190.33 144.86 73.24 179.33 650.00 650.00

Actual 48.69 54.28 64.41 649.30 1041.35 211.46


Note: * - APDCL had not projected Capitalisation in the MYT Business Plan Petition, but had

indicated Capitalisation equal to Capital Expenditure for some of the Schemes

6.16.4 The capitalisation in any year depends on the CWIP as well as the capital expenditure

in the concerned year. The Commission has summarised the capitalisation as a

percentage of the summation of the CWIP and capital expenditure over the period from

FY 2012-13 to FY 2017-18, as shown in the Table below:

Table 87: Percentage of Capitalisation achieved by APDCL (Rs. Crore)

Particulars FY 13 FY 14 FY 15 FY 16 FY 17 FY 18

CWIP plus Capex

during the Year 2,191.39 2,922.65 3,626.43 4,112.26 4,498.33 4,192.30

Capitalisation during

the Year 48.69 54.28 64.41 649.30 1041.35 211.46

Capitalisation as

percentage of CWIP

plus Capex during the

Year

2% 2% 2% 16% 23% 5%

6.16.5 As can be seen from the above Table, the capitalisation has been in the range of Rs.

50 crore to Rs. 211 crore annually, except in FY 2015-16 and FY 2016-17, when the

capitalisation of Rs. 649 crore and Rs. 1041 Cr has been achieved. The capitalisation

of Rs. 1041 crore is the highest ever achieved by APDCL. The maximum capital

expenditure achieved in these years has been Rs. 1035 crore.

6.16.6 In terms of percentage, the capitalisation as a percentage of the CWIP plus the capital

expenditure in the concerned years has been only 2%-5%, except in FY 2015-16 and

FY 2016-17, when the capitalisation achieved was 16% and 23% of the CWIP plus the

capital expenditure.

6.16.7 The Commission observes that there appears to be a disconnect in the Accounting of

the capital expenditure and capitalisation, as many times, the asset may be physically

completed and electrically charged, but due to some minor accounting related issues,

the asset is unable to be capitalised in the Accounts of APDCL. As a result, the tariff

recovery for such assets is delayed, even though the asset is functional and has been

put to use for the benefit of the consumers.

6.16.8 APDCL should seriously investigate this matter and initiate measures to complete the

capitalisation as per accounts at the earliest, for schemes that have commenced quite

some time ago. If this is done, the amount of CWIP is likely to reduce significantly and


the amount of GFA shall increase correspondingly.

6.16.9 Against the above background, the capital expenditure proposed by APDCL for each

year of the Control Period at Rs. 2782 crore, Rs. 1166 crore, and Rs. 1091 crore, and

proposed capitalisation of Rs. 4056 crore, Rs. 2584 crore, and Rs. 1969 crore appear

unrealistic. The annual capitalisation proposed by APDCL for FY 2019-20 in fact

exceeds the present GFA, i.e., APDCL is projecting to add more than the existing GFA

in FY 2019-20. Further, APDCL has not submitted any evidence that the necessary

funds have been tied up.

6.16.10 Hence, for the purpose of ARR and tariff determination in this Order, the

Commission has assumed that annual capital expenditure would be around Rs. 1000

crore while the annual capitalisation has been considered as Rs. 650 crore, which was

the same approach adopted in the earlier MYT Order for FY 2016-17 to FY 2018-19.

6.16.11 Accordingly, the Capital Expenditure and Capitalisation approved by the

Commission for the purposes of ARR and Tariff for the Control Period from FY 2019-

20 to FY 2021-22 is shown in the following Table:

Table 88: Capital Expenditure and Capitalisation approved by the Commission

for FY 2019-20 to FY 2021-22 (Rs. Crore)


APDCL Petition

Capital Expenditure 2782.04 1165.86 1091.83

Capitalisation 4056.18 2584.02 1969.47

Approved by the Commission

Capital Expenditure 1,000.00 1,000.00 1,000.00

Capitalisation 650.00 650.00 650.00

6.16.12 The Commission clarifies that the approach adopted by the Commission is only

restricted to tariff purposes and does not bar APDCL from implementing the schemes

as proposed by them, which are approved by the Commission in principle. In case the

total capital expenditure exceeds the approved amount of Rs. 1000 crore in each year,

APDCL may do so with prior intimation to the Commission. Similarly, if APDCL takes

up any scheme other than those mentioned in para 6.13.1 (Table 79), which has not

been included in its Proposal for the MYT Control Period, APDCL may move the


Commission with all details, for approval of the Commission.

6.16.13 As regards to the funding of capitalisation, the Commission has not considered

any equity funding based on APDCL’s submission. The overall grant and debt funding

have been considered in the 90:10 ratio.

6.16.14 The funding of capitalized works approved by the Commission for the Control

Period from FY 2019-20 to FY 2021-22 is shown in the following Table:

Table 89: Funding of Capitalised Works approved by the Commission for FY

2019-20 to FY 2021-22 (Rs. Crore)


Grant 585.00 585.00 585.00

Equity 0.00 0.00 0.00

Debt 65.00 65.00 65.00

Total Capitalisation 650.00 650.00 650.00

Therefore, the Commission approves Capitalisation of Rs. 650 crore for each

Year of the Control Period.

APDCL is directed to submit the necessary detail as identified in para 6.15.4

above for all ongoing projects at the time of true-up and Tariff for ensuing year.

Further, for all Projects that have not commenced by March 31, 2019, AEGCL

shall obtain the Commission’s prior approval based on the necessary detail as

identified in para 6.15.4, even if in-principle approval has been received.


7 ARR for MYT Control Period from FY 2019-20 to FY

2021-22

7.1 Introduction

7.1.1 This Chapter deals with the determination of ARR for APDCL for the Control Period

from FY 2019-20 to FY 2021-22 in accordance with the provisions of MYT Regulations,

2018.

7.2 Energy Sales

7.2.1 Appropriate estimation of category-wise energy sales for the Control Period is essential

to arrive at the quantum of power to be purchased and the likely revenue from sale of

energy.

7.2.2 The following section examines in detail the consumer category-wise energy sales

projected by APDCL in its MYT Petition for the Control Period from FY 2019-20 to FY

2021-22, and the category-wise sales approved by the Commission.

7.3 Category-Wise Projected Energy Sales

7.3.1 APDCL submitted that it has to complete the remaining household electrification by

December 2018 as per the provisions of the SAUBHAGYA scheme. This will increase

the household consumption, particularly in the rural areas from FY 2018-19.

7.3.2 All efforts are being made to achieve the stipulated timeline. 9,62,704 households are

pending electrification as on 29th November 2018 in Assam (as per figures on

SAUBHAGYA portal). APDCL, through its reply to data gaps dated 31 January, 2019

also submitted that all the pending households have been electrified as on January 25,

2019.

7.3.3 For projection of sales to Jeevan Dhara category in the Control Period from FY 2019-

20 to FY 2021-22, APDCL has considered the historical 4-year CAGR of sales. For

Domestic A category, APDCL has considered the average YoY growth seen during

last two years, to project the sales for the Control Period from FY 2019-20 to FY 2021-

22.

7.3.4 APDCL submitted that for the remaining consumer categories, the energy sales have


been projected keeping historical growth rates in mind and projecting the 3-year, 4-

year, 5-year CAGR along with the YoY growth seen in the consumer categories.

Reasonable estimates about the growth rates of the various consumer categories have

been made to arrive at the energy sales forecast for the Control Period from FY 2019-

20 to FY 2021-22.

7.3.5 In case the growth trend is recent years was negative, APDCL has considered 0%

growth rate for those consumer categories. The growth rate as observed by the trend

of CAGR has been adjusted in line with the recent YoY growth rates observed for the

different consumer categories wherever required.

7.3.6 The growth rates considered by APDCL for projection of category-wise sales for the

Control Period are given in the Table below:

Table 90: Category-wise Growth Rates considered by APDCLforSales Projection

Consumer Category Growth

Rate

Growth

Rate (%)

LT Categories

JEEVAN DHARA* CAGR 4 yr 7.8%

DOMESTIC A below 5 kW Adjusted 6.0%

Domestic-B 5 kW and above upto 25 kW YoY 6.0%

Commercial Load above 0.5 kW and upto 25 kW CAGR 3 yr 6.6%

General Load upto 25 kW Adjusted 0%

Public Lighting Adjusted 0%

Agriculture upto 25 kW CAGR 3 yr 25.4%

Small Industries Rural upto 25 kW CAGR 3 yr 9.6%

Small Industries Urban upto 25 kW CAGR 3 yr 2.8%

Temporary YoY 4.6%

LT Categories

HT Domestic above 25 kW (30 kVA) Adjusted 0%

HT Commercial above 25 kW (30 kVA) CAGR 3 yr 8.3%

Public Water Works Adjusted 0%

Bulk Supply Govt. Edu Inst above 25 kW (30 kVA) CAGR 3 yr 2.2%

Bulk Supply Others above 25 kW (30 kVA) CAGR 3 yr 0.6%

HT Small Industries above 25 kW (30 kVA) and upto 50 kVA CAGR 3 yr 0.5%

HT Industries-I 50 kVA to 150 kVA Adjusted 0%

HT Industries-II above 150 kVA YoY 13.7%

Tea Coffee& Rubber CAGR 3 yr 6.6%

Oil & Coal Adjusted 0%

HT Irrigation Load above 25 kW (30 kVA) Adjusted 0%

HT Temporary - -

HT Electric Crematorium - Increase of 1

MU each year


Note: *- For Jeevan Dhara category, sales estimated to grow at 4-year CAGR of 7.8% during FY 2018-

19 plus additional sales of 487 MU due to addition in households due to SAUBHAGYA scheme; for the

control period from FY 2019-20 to FY 2020-21 sales estimated to grow at 4-year CAGR of 7.8%

7.3.7 The category-wise sales projected by APDCL for the Control Period based on the

above growth rates are given in the Table below:

Table 91:Category-wise Energy Sales Projected by APDCL for the Control Period (MU)

Consumer Category FY 2019-20 FY 2020-21 FY 2021-22

JEEVAN DHARA 1301 1402 1511

DOMESTIC A below 5 kW 3064 3248 3442

Domestic-B 5 kW and above upto 25

kW 311 330 350

Commercial Load above 0.5 kW and

upto 25 kW 713 761 811

General Load upto 25 kW 99 99 99


Agriculture upto 25 kW 31 39 49

Small Industries Rural upto 25 kW 79 87 95

Small Industries Urban upto 25 kW 32 33 34

Temporary 8 8 9

LT TOTAL 5651 6018 6412

HT Domestic above 25 kW (30 kVA) 31 31 31

HT Commercial above 25 kW (30

kVA) 413 447 484

Public Water Works 71 71 71

Bulk Supply Govt. Edu Inst above 25

kW (30 kVA) 79 81 83

Bulk Supply Others above 25 kW (30

kVA) 388 390 392

HT Small Industries above 25 kW

(30 kVA) and upto 50 kVA 24 24 24

HT Industries-I 50 kVA to 150 kVA 67 67 67

HT Industries-II above 150 kVA 908 1032 1174

Tea Coffee & Rubber 550 586 624

Oil & Coal 76 76 76

HT Irrigation Load above 25 kW (30

kVA) 15 15 15

HT Temporary

HT Electric Crematorium 2 3 4

HT TOTAL 2622 2822 3045

TOTAL 8273 8841 9457



7.3.8 The Commission has considered the submission of APDCL regarding addition of

Jeevan Dhara consumers from FY 2018-19 onwards for projecting the number of

Jeevan Dhara consumers for the Control Period. Accordingly, it is estimated that the

closing number of consumers under this category will be 23,08,989, 23,78,258 and

24,49,606respectively for FY 2019-20, FY 2020-21 and FY 2021-22 as submitted by

APDCL in its Petition. The Commission has accepted the submission made by APDCL

with respect to the addition in consumers due to electrification under SAUBHAGYA

Scheme.

7.3.9 The sales to Jeevan Dhara consumers for each year of the Control Period has been

projected based on the normative monthly consumption of 30 units applied to the

average number of Jeevan Dhara consumers during the respective year.

7.3.10 For the remaining consumer categories, the Commission has considered the category-

wise sales approved for FY 2017-18 as the base figure. Further, growth rate is arrived

at after analysing the 2-year, 3-year, 4-year, 5-year CAGR along with the Y-o-Y growth

seen in the consumer categories.

7.3.11 Reasonable estimates about the growth rates of the various consumer categories have

been made to arrive at the energy sales forecast for the Control Period. In case the

growth trend is recent years is negative, 0% growth rate has been considered for these

consumer categories.

7.3.12 The growth rate considered for projecting the sales to different categories and the

category-wise sales projected by the Commission for the Control Period are given in

the Table below:

Table 92: Category-wise Energy Sales Projected by the Commission for the Control

Period (MU)

Category Growth

Rate FY 2019-20 FY 2020-21 FY 2021-22

JEEVAN DHARA ^ 819 844 869

DOMESTIC A 8.68% 3,364 3,656 3,974

Domestic-B above 5 kW to 25 kW 10.15% 336 370 407

Commercial Load above 0.5 to 25 kW 4.16% 680 709 738

General Load upto 25 kW 0% 99 99 99

Public Lighting 0% 13 13 13

Agriculture upto 7.5 HP 14.54% 26 30 34


Category Growth

Rate FY 2019-20 FY 2020-21 FY 2021-22

Small Industries Rural upto 25 kW 5.05% 73 76 80

Small Industries Urban 0% 30 30 30

Temporary 13.55% 9 11 12

LT TOTAL 5,449 5,837 6,256

HT Domestic 25 kW and above 0% 31 31 31

HT commercial 25 kW & above 4.23% 382 399 415

Public Water works 0% 71 71 71

Bulk Supply Govt. Edu Inst 0% 76 76 76

Bulk Supply Others 1.02% 391 395 399

HT Small Industries upto 50 kVA 0% 23 23 23

HT Industries-I 50 kVA to 150 kVA 0% 67 67 67

HT Industries-II above 150 kVA 6.65% 798 851 908

Tea Coff& Rub 6.57% 550 586 624

Oil & Coal 0% 76 76 76

HT Irrigation Load above 7.5 HP 0% 15 15 15

HT Temporary 0%

HT Electric Crematorium 0% 0.50 0.50 0.50

HT TOTAL 2,481 2,590 2,706

TOTAL ENERGY SALES 7,930 8,427 8,962

Note: ^ - projected by considering 30 units per month for average consumer base

Therefore, the Commission approves total sales of 7930 MU, 8427 MU, and 8962

MU for FY 2019-20, FY 2020-21, and FY 2021-22, respectively.


7.4.1 APDCL submitted that the HT: LT ratio has undergone major change over the years,

and Losses increase with increase in LT consumption, at the same performance levels.

7.4.2 APDCL submitted that considering the present scenario in the State, the Distribution

Loss trajectory stipulated in the UDAY Scheme will not be achieved. APDCL

mentioned that with implementation of the SAUBHAGYA scheme, the LT sales have

increased suddenly due to increased rural electrification, which has resulted in

increased distribution losses in H1 of FY 2018-19 vis-à-vis the actual distribution loss

in FY 2017-18.

7.4.3 APDCL requested the Commission to consider the H1 loss level of FY 2018-19 as

base and then reduce the same by 0.5% for projecting the distribution loss trajectory


for the Control Period from FY 2019-20 to FY 2021-22. APDCL has proposed the

following loss levels:

Table 93: Distribution Losses Projected by APDCL for the Control Period

Parameters FY 2019-20 FY 2020-21 FY 2021-22

Distribution Loss trajectory 17.84% 17.34% 16.84%


7.4.4 APDCL signed the UDAY MoU in FY 2016-17. The UDAY MoU is a tri-partite MoU

between Government of India (GoI), Government of Assam, and APDCL, and is

binding in nature on all the Parties to the MoU. The GoI is also regularly monitoring the

Distribution Loss and Aggregate Technical & Commercial (AT&C) Loss being achieved

with respect to the targets under the MoU. However, the Commission appreciates that

GoI Schemes for accelerated rural electrification like Power for All (PFA) and

SAUBHAGYA scheme have been implemented after signing of the UDAY MoU. Under

the SAUBHAGYA scheme, the number of consumers in Jeevan Dhara and Domestic

A category have increased steeply. This will lead to a change in the HT:LT sales mix.

At the same time, APDCL has also proposed high cost capital expenditure schemes

towards system strengthening and system improvement.

7.4.5 It is accepted that the large increase in number of consumers in Jeevan Dhara

category may increase the Distribution Loss as these consumers are served through

LT connections in remote rural areas. The State Government may consider

compensating APDCL for increase in Distribution Loss because of increase in quantum

of supply to the Jeevan Dhara category.

7.4.6 Moreover, the addition in sales due to SAUBHAGYA scheme are only in Jeevan Dhara

and Domestic A category.

7.4.7 Considering all the above, it may be difficult for APDCL to achieve the Distribution Loss

level prescribed in the UDAY MoU within the timelines prescribed in the UDAY MoU,

but the Commission also cannot accept the loss trajectory proposed by APDCL. After

observing the past trend of loss reduction of APDCL, the Commission feels that

APDCL will be able to reduce the loss level at a standard rate. Further, APDCL has

proposed capital investment of around Rs. 3300 crore including investment of around

Rs. 1340 crore in the MYT Control Period from FY 2019-20 to FY 2021-22 towards the

Distribution System Enhancement and Loss Reduction Project, which would enable it


to reduce the Distribution Losses.

7.4.8 The Commission is of the view that considering the past performance of APDCL as

reported, and the capital investment proposed, APDCL should be able to maintain

Distribution Loss of 16% for FY 2019-20, as compared to the Distribution Loss of

14.57% as agreed under UDAY scheme, even after considering the increase in losses

on account of higher sales to Jeevan Dhara and Domestic A category consumers. In

view of the above, the Commission has decided to deviate slightly from the UDAY

targets and approves Distribution Loss of 16% for FY 2019-20 and annual loss

reduction of 0.5% for FY 2020-21 and FY 2021-22, as shown in the following Table:

Table 94: Distribution Losses approved by the Commission for the Control Period

Parameters FY 2019-20 FY 2020-21 FY 2021-22

Distribution Loss trajectory approved

for APDCL 16.00% 15.50% 15.00%

7.5 Energy Balance

7.5.1 APDCL has submitted that for computing the energy requirements for the Control

Period, APDCL has considered the intra-State Transmission Loss (AEGCL) loss at

3.44%, i.e., the approved loss level of FY 2018-19. APDCL has considered the inter-

State Transmission Loss as 1.55%, i.e., the latest weighted average 52-week

transmission loss of NER and ER regions.

7.5.2 The Energy Balance as projected by APDCL is shown in the following Table:

Table 95: Energy Balance for FY 2019-20 to FY 2021-22 as Projected by APDCL (MU)


Energy Sales 8,273 8,841 9,457



Periphery T-D 10,069 10,695 11,372

Intra-State Transmission Loss (%) 3.44% 3.44% 3.44%

Energy input to Transmission System 10428 11076 11777

Inter-State (PGCIL) Pooled Loss (%) 1.55% 1.55% 1.55%

Total Energy Requirement 10,592 11,250 11,962



7.5.3 The Commission approves the Energy Balance for the Control Period based on the

projected sales, approved Distribution Loss trajectory, approved Transmission Loss

trajectory for AEGCL, and estimated PGCIL Losses, as shown in the Table below:

Table 96: Energy Balance for FY 2019-20 to FY 2021-22 approved by the Commission

(MU)


Energy Sales 7,930 8,427 8,962



Periphery T-D 9,440 9,972

10,544

Intra-State Transmission Loss (%) 3.39% 3.34% 3.29%

Energy input to Transmission System 9,771 10,317 10,902

Inter-State (PGCIL) Pooled Loss (%) 1.40% 1.40% 1.40%

Total Energy Requirement 9,910 10,464 11,057

Total Energy purchased from tied

up sources 10,092 10,464 11,311

Energy Surplus available for sale

outside State 182.22 0.00 253.77

Therefore, the Commission approves total Power Purchase Requirement of 9910

MU, 10,464 MU, and 11,057 MU for FY 2019-20, FY 2020-21, and FY 2021-22,

respectively, for sale within the State. The revenue from the projected sale of

Surplus Power has been considered under Other Income.

7.6 Power Purchase

7.6.1 APDCL submitted that it is largely dependent on APGCL and Central Generating

Stations to meet the Base Load, however, to meet the Peak demand of the State,

APDCL sources power from short-term sources like Traders and Power Exchanges to

meet the deficit.

7.6.2 APDCL submitted that it has projected the source-wise power purchase for the Control


Period based on the following assumptions:

➢ APGCL: APDCL has firm allocation from all the existing and upcoming power

plants of APGCL. For projecting the energy availability from these stations,

APDCL has considered the approved norms over the allocated capacity.

Further, APDCL has considered new capacity additions by APGCL by way of

commissioning of NRPP (62.25 MW in FY 2019-20 and additional 36.15 MW

in FY 2020-21), Myntriang SHP (other stages) (9 MW in FY 2019-20), and

Namrup SPV (15 MW in FY 2020-21). The fixed cost is arrived by escalating

the figure approved in the Tariff Order dated 19 March, 2018 by 5%. The

variable charge is projected by escalating the H1 data of FY 2018-19 by 5%.

Regarding Myntriang SHEP, provisional tariff of Rs 2.18/kWh is considered (as

approved by the Commission). For NRPP, per unit cost of Rs. 4/kWh has been

considered by APDCL.

➢ Central Generating Stations (NER & ER): The share allocation of the various

plants of CGS (NER) has been considered based on the latest REA, PLF has

been considered based on the average of last 3-4 years actual generation, and

other norms as per CERC have been considered. The fixed cost is considered

as per the latest CERC Tariff Orders and the variable charge is projected based

on H1 data of FY 2018-19 and further escalating the same by 5%. For Pare,

provisional Tariff of Rs 5/kWh is considered. For Kameng HEP, provisional

Tariff of Rs. 4/kWh is considered by APDCL.

➢ NTPC (BTPS): As regards NTPC (BTPS), the third Unit will commence

operation in second half of FY 2018-19. For NTPC (BTPS), Tariff of Rs.

6.39/kWh is considered.

➢ Other sources: The power availability and cost from other sources is

considered based on the existing contract and the rates of H1 of FY 2018-19.

For HHPL and SEIPL, the levelized tariff as approved by the Commission is

considered.

➢ Renewable Sources: APDCL has projected to meet the RPO by mix of

purchase from renewable sources and REC purchase.

➢ New Capacity Addition: APDCL has proposed to start purchasing 100 MW of

Wind Power, as per the tie-up with PTC (50MW) and SECI (50MW) during FY

2019-20. APDCL also proposed to purchase 80 MW from Bhutan based

Nikachu HEP through PTC during FY 2019-20. SPV (100 MW) Assam will

commence operation from December 2019. Over and above these, APDCL will


purchase power from 3 more Bhutan based HEP, i.e., Punatsangchhu-I (204

MW), Punatsangchhu-II (174 MW) and Mangadechhu (122 MW) during FY

2021-22. Wind Power (PTC) tariff has been considered as Rs. 3.53/kWh based

on agreement signed by the Petitioner. Wind Power (SECI) tariff has been

considered as Rs. 2.72/kWh for the Control Period. SPV (100 MW) tariff of Rs.

3.325/kWh has been considered based on solar reverse bidding document

signed by the Petitioner. Levelized tariff of Rs. 4.152/kWh has been considered

for PTC (Nikachu) based on Power Sale Agreement (PSA) signed between

PTC India Ltd. and APDCL.

➢ Medium Term Power: In addition to above, APDCL has floated e-bidding

tender for 50MW medium-term power at DEEP portal and is planning to float

e-bidding tender for 100 MW small hydro power. The impact of the same has

not been considered for purposes of this Petition; however, the same would be

considered once the bidder for the same is allocated.

➢ Short Term Power: The balance energy requirement has been proposed to

be met from short-term sources of power, i.e., Power Exchanges, etc.

7.6.3 APDCL has computed the Solar and Non-Solar RPO requirement in accordance with

the applicable AERC RPO Regulations, on the energy sale duly reduced by the

quantum of purchase from hydro sources. In order to meet the shortfall in purchase of

Solar and Non-Solar RE, APDCL has proposed to procure RECs at the rate of Rs. 1

per unit and Rs. 1.5 per unit for Solar and Non-Solar RECs, respectively. The details

are shown in the Table below:

Table 97: RPO Computation as submitted by APDCL

SL. Particulars FY 2019-20 FY 2020-21 FY 2021-22

1 Solar RPO 6.00% 7.00% 8.00%

2 Non-Solar RPO 7.00% 8.00% 9.00%

3 TOTAL 13.00% 15.00% 17.00%

ENERGY SALE EXC. HYDRO

(MU) 6074.96 6578.05 5753.06

1 Solar 364.50 460.46 460.24

2 Non-Solar 425.25 526.24 517.78

3 TOTAL 789.75 986.71 978.02

COMPLIANCE (MU)


SL. Particulars FY 2019-20 FY 2020-21 FY 2021-22

1 Solar 88.64 213.16 213.16

2 Non-Solar 308.37 308.37 308.37

3 TOTAL 397.02 521.53 521.53

REC PURCHASE REQD.

(MU)

1 Solar 275.85 247.30 247.08

2 Non-Solar 116.88 217.87 209.40

3 TOTAL 392.73 465.17 456.49

REC Cost (Rs. Crore)

1 Solar 27.59 24.73 24.71

2 Non-Solar 17.53 32.68 31.41

3 TOTAL 45.12 57.41 56.12

7.6.4 APDCL submitted that it has to pay Transmission Charges to PGCIL for use of

transmission facilities enabling power drawal from the Eastern Region. The PGCIL

Charges payable have been calculated as per prevailing CERC Regulations for Point

of Connection (PoC) rates and are as per latest CERC Order dated 30thAugust 2018

and corrigendum dated 19thSeptember 2018. Escalation of 5% has been considered.

Further, intra-State Transmission Charges and SLDC Charges have been considered

by escalating the Charges approved by the Commission in AEGCL’s Tariff Order dated

March 19 2018 for FY 2018-19 by 5% for the Control Period.

7.6.5 The following table shows the power purchase quantum and cost submitted by APDCL

for FY 2019-20 to FY 2021-22.


Table 98: Power Purchase Quantum and Cost for the Control Period from FY 2019-20 to FY 2021-22 as submitted by APDCL

Sl.No. Source

FY 2019-20 FY 2020-21 FY 2021-22

Power

Purchase

(MU)

Total Cost

(Rs.

Crore)

Average

Rate

(Rs/kWh)

Power

Purchase

(MU)

Total

Charges

(Rs.

Crore)

Average

Rate

(Rs/kWh)

Power

Purchase

(MU)

Total

Cost

(Rs.

Crore)

Average

Rate

(Rs/kWh)

I STATE GENERATING STATIONS

APGCL (THERMAL)

NTPS 145.56 62.96 4.33 145.56 94.94 6.52 145.56 99.69 6.85 NRPP 208.31 83.32 4.00 208.31 83.32 4.00 208.31 83.32 4.00 NRPP (Waste Heat) 151.21 60.48 4.00 151.21 60.48 4.00 LTPS 402.32 171.03 4.25 402.32 179.59 4.46 402.32 188.56 4.69 LRPP 384.63 115.85 3.01 384.63 121.65 3.16 384.63 127.73 3.32 APGCL (HYDRO)

MEHEP 10.64 2.32 2.18 10.64 2.32 2.18 10.64 2.32 2.18 MEHEP 21.28 4.64 2.18 21.28 4.64 2.18 21.28 4.64 2.18 KLHEP 323.23 103.55 3.20 387.87 119.09 3.07 387.87 125.04 3.22

II CGS (NER)

NEEPCO (HYDRO)

KOPILI – I 422.79 44.77 1.06 422.79 47.01 1.11 422.79 49.36 1.17 KOPILI – II 51.76 6.43 1.24 51.76 6.75 1.30 51.76 7.09 1.37 RANGANODI (RHEP) 548.20 88.72 1.62 548.20 93.16 1.70 548.20 97.82 1.78 KHANGDONG 111.29 17.59 1.58 111.29 18.47 1.66 111.29 19.39 1.74 DOYANG (DHEP) 97.97 45.53 4.65 97.97 47.80 4.88 97.97 50.19 5.12 PARE 154.58 77.29 5.00 154.58 77.29 5.00 154.58 77.29 5.00 KAMENG (KaHEP) 225.48 90.19 4.00 225.48 90.19 4.00 225.48 90.19 4.00 NEEPCO (THERMAL)

AGBPP 788.12 292.08 3.71 788.12 306.68 3.89 788.12 322.02 4.09 AGTPP 274.23 95.44 3.48 274.23 100.21 3.65 274.23 105.22 3.84


Sl.No. Source

FY 2019-20 FY 2020-21 FY 2021-22

Power

Purchase

(MU)

Total Cost

(Rs.

Crore)

Average

Rate

(Rs/kWh)

Power

Purchase

(MU)

Total

Charges

(Rs.

Crore)

Average

Rate

(Rs/kWh)

Power

Purchase

(MU)

Total

Cost

(Rs.

Crore)

Average

Rate

(Rs/kWh)

NHPC (HYDRO)

LOKTAK 216.01 57.61 2.67 216.01 60.49 2.80 216.01 63.52 2.94 SUBANSIRI 901.93 360.77 4.00 OTPC PALATANA (THERMAL) 1,388.04 469.37 3.38 1,388.04 492.84 3.55 1,388.04 517.49 3.73 NTPC (THERMAL)

BTPS 1,530.58 955.77 6.24 1,530.58 1,003.56 6.56 1,530.58 1,053.74 6.88 BTPS – III 565.87 379.62 6.71 565.87 418.53 7.40 565.87 484.50 8.56

III CGS (ER)

NTPC (THERMAL)

FARAKA 229.30 80.34 3.50 229.30 84.35 3.68 229.30 88.57 3.86 KAHELGOAN I 269.83 93.41 3.46 269.83 98.09 3.64 269.83 102.99 3.82 KAHELGOAN II 469.42 146.11 3.11 469.42 153.41 3.27 469.42 161.08 3.43 TALCHER 151.07 47.83 3.17 151.07 50.23 3.32 151.07 52.74 3.49

IV OTHERS

MeECL 0.55 0.38 6.80 0.55 0.38 6.80 0.55 0.38 6.80 HHPCL (NCE) 14.75 6.06 4.11 14.75 6.06 4.11 14.75 6.06 4.11 NVVNL Solar Bundled (JNNSM) 7.97 9.47 11.88 7.97 9.47 11.88 7.97 9.47 11.88 NVVNL Coal Bundled (JNNSM) 35.62 9.47 2.66 35.62 9.47 2.66 35.62 9.47 2.66 Suryapratap Solar (SEIPL) 6.55 5.75 8.78 6.55 5.75 8.78 6.55 5.75 8.78 SECI (Solar) JNNSM 39.17 24.15 6.17 39.17 24.15 6.17 39.17 24.15 6.17 Wind Power from PTC India Ltd. 87.16 30.77 3.53 87.16 30.77 3.53 87.16 30.77 3.53 Wind Power from SECI 87.16 23.71 2.72 87.16 23.71 2.72 87.16 23.71 2.72 PTC Nikachu 279.20 115.92 4.15 279.20 115.92 4.15 279.20 115.92 4.15 SPV (100 MW) Assam 34.95 11.62 3.33 139.81 46.49 3.33 139.81 46.49 3.33 Punatsangchhu-I - - - - 539.11 215.64 4.00


Sl.No. Source

FY 2019-20 FY 2020-21 FY 2021-22

Power

Purchase

(MU)

Total Cost

(Rs.

Crore)

Average

Rate

(Rs/kWh)

Power

Purchase

(MU)

Total

Charges

(Rs.

Crore)

Average

Rate

(Rs/kWh)

Power

Purchase

(MU)

Total

Cost

(Rs.

Crore)

Average

Rate

(Rs/kWh)

Punatsangchhu-II - - - - - -

Mangdechhu - - - - - -

TRADING PURCHASE 596.90 228.23 3.82 596.90 239.65 4.01 596.90 228.23 3.82 IEX 412.00 202.25 4.91 730.00 376.27 5.15 - -

UI Pool (DSM) - - - - - -

Additional Solar RPO (RECs) 27.59 24.73 24.71

Additional Non-Solar RPO (RECs) 17.53 32.68 31.41

V TOTAL PP COST 10,592.50 4,244.71 4.01 11,250.88 4,767.49 4.24 11,961.91 5,174.82 4.33

VI OTHER CHARGES

A Interstate Transmission Charges 737.54 774.41 920.78

B Interstate Other Charges - - -

C Intrastate Transmission Charges 395.78 415.57 436.34

D SLDC Charges 3.79 3.98 4.18

TOTAL OTHER CHARGES 1,137.10 1,193.96 1,361.31

VII GRAND TOTAL 10,592.50 5,381.81 5.08 11,250.88 5,961.45 5.30 11,961.91 6,536.12 5.46



7.6.6 The Commission has accepted APDCL’s submissions regarding new generating

stations that are likely to come up over the Control Period from FY 2019-20 to FY 2021-

22.

7.6.7 The Commission has considered the rate of purchase from various sources based on


a) The cost of power purchase from APGCL stations has been considered as

approved in the MYT Order for APGCL dated March 01, 2019 for the Control

Period from FY 2019-20to FY 2021-22.

b) For purchase from the existing Central Sector sources, the approved rate of

H2 of FY 2018-19 is escalated by 5%.

c) The rate for purchase from HHPCPL (Champawati) has been considered as

Rs. 4.11 per kWh, based on the approved rate.

d) The rate for Suryataap Solar has been considered at the approved level of Rs.

8.78 per kWh, as per final Tariff Order issued by the Commission.

e) For the upcoming Central Sector Power Plants like Pare and Kameng, the cost

is considered to be same as Doyang HEP.

f) For other upcoming projects, the cost is considered to be same as proposed

by APDCL.

g) APDCL is required to purchase the required short-term power either from the

Power Exchanges or through competitive bidding. The purchase through

bilateral sources has been clubbed with the purchase through Power

Exchanges, and the purchase rate has been considered as Rs.4.68per unit,

for FY 2020-21.

7.6.8 The RPO for the Control Period has been considered in accordance with the prevailing

AERC RPO Regulations, as a percentage of the total energy handled, which is equal

to the sales, reduced by the proportionate quantum of purchase from hydro sources.

7.6.9 In order to meet the projected shortfall in purchase of Solar and Non-Solar RPO after

purchase of RE Power, the Commission has considered purchase of RECs. The rate

for purchase has been considered as the revised floor rate of Rs. 1.00 per kWh and


Rs. 1.00 per kWh Solar and Non-Solar RECs, respectively. APDCL is directed to

ensure that the RPO targets are met for each year of the Control Period by

purchase of the necessary RE power or RECs. The total quantum of Solar and Non-

Solar RECs and the cost of purchase of RECs considered by the Commission for the

Control Period from FY 2019-20 to FY 2021-22, is shown in the Table below:

Table 99: REC Purchase considered by the Commission for the Control Period from FY

2019-20 to FY 2021-22

Year

Solar RPO Non-Solar RPO

Shortfall

(MU)

REC Rate

(Rs/ kWh)

Total Cost

(Rs. Cr)

Shortfall

(MU)

REC Rate

(Rs/kWh)

Total Cost

(Rs. Cr)

2019-20 247 1.00 24.75 60 1.00 5.96

2020-21 222 1.00 22.17 156 1.00 15.59

2021-22 254 1.00 25.39 184 1.00 18.44

7.6.10 For this Control Period, APDCL has proposed PGCIL Charges and AEGCL Charges

separately. As per APDCL submission, from FY 2019-20 onwards, Transmission

Service Agreement with PGCIL will be transferred from AEGCL to APDCL and

accordingly, PGCIL will raise bills directly to APDCL. For projecting the PGCIL charges

for the Control Period, the Commission has escalated the PGCIL Charges estimated

for FY 2018-19 by 5%. The AEGCL and SLDC Charges have been considered same

as approved in the MYT Order for AEGCL dated March 01, 2019 for the Control Period

from FY 2019-20 to FY 2021-22.

7.6.11 The source-wise power purchase quantum and costs approved by the Commission for

the Control Period from FY 2019-20 to FY 2021-22, is shown in the Table below:


Table 100: Power Purchase Quantum and Cost approved by the Commission for the Control Period from FY 2019-20 to FY 2021-22

Source

FY 2019-20 FY 2020-21 FY 2021-22

Power

Purchased

(MU)

Total Cost

(Rs Cr)

Average

rate

(Rs/kwh)

Power

Purchased

(MU)

Total Cost

(Rs Cr)

Average

rate

(Rs/kWh)

Power

Purchased

(MU)

Total Cost

(Rs Cr)

Average

rate

(Rs/kWh)

NTPS 165.91 68.80 4.15 165.91 66.26 3.99 165.91 76.10 4.59

LTPS 402.32 187.36 4.66 402.32 195.39 4.86 402.32 198.69 4.94

KLHEP 388.05 94.73 2.44 388.05 92.63 2.39 388.05 80.76 2.08

LRPP 502.59 128.15 2.55 501.22 128.91 2.57 501.22 130.03 2.59

NRPP 785.62 206.35 2.63 951.77 241.09 2.53 951.77 253.14 2.66

MSHEP 31.03 7.10 2.29 31.03 7.46 2.40 31.03 7.83 2.52

MSHEP (Other

Stages) 62.05 14.20 2.29 62.05 14.91 2.40 62.05 15.66 2.52

Namrup SPV 20.97 7.34 3.50 20.97 7.71 3.68

APGCL NET 2,337.57 706.70 3.02 2,523.31 753.98 2.99 2523.31 769.93 3.05

CSGS NER

Kopili HEP 422.79 44.78 1.06 422.79 47.02 1.11 422.79 49.37 1.17

Kopili HEP - II 51.76 6.43 1.24 51.76 6.75 1.30 51.76 7.09 1.37

Khandong HEP 111.29 17.59 1.58 111.29 18.47 1.66 111.29 19.40 1.74

RHEP 548.20 88.73 1.62 548.20 93.16 1.70 548.20 97.82 1.78

DHEP 97.97 45.53 4.65 97.97 47.80 4.88 97.97 50.19 5.12

AGBPP 788.12 292.07 3.71 788.12 306.67 3.89 788.12 322.01 4.09

AGTPP 176.61 79.81 4.52 176.61 83.80 4.74 176.61 87.99 4.98

AGTPP2 84.05 13.46 1.60 84.05 14.13 1.68 84.05 14.84 1.77

NHPC 216.58 57.73 2.67 216.58 60.62 2.80 216.58 63.65 2.94

OTPC 1,388.14 469.41 3.38 1,388.14 492.88 3.55 1,388.14 517.52 3.73

SUBANSIRI HEP - - 901.93 227.50 2.52


Source

FY 2019-20 FY 2020-21 FY 2021-22

Power

Purchased

(MU)

Total Cost

(Rs Cr)

Average

rate

(Rs/kwh)

Power

Purchased

(MU)

Total Cost

(Rs Cr)

Average

rate

(Rs/kWh)

Power

Purchased

(MU)

Total Cost

(Rs Cr)

Average

rate

(Rs/kWh)

KAMENG HEP 225.41 99.61 4.42 225.41 104.59 4.64 225.41 109.82 4.87

NTPC, BTPS 1,530.58 959.03 6.27 1,530.58 1,006.98 6.58 1,530.58 1,057.33 6.91

NTPC BTPS Unit

III 565.87 354.57 6.27 565.87 372.62 6.58 565.87 391.25 6.91

Pare HEP 128.35 54.35 4.23 128.35 57.07 4.45 128.35 59.92 4.67

CSGS NER

GROSS 6,335.72 2,583.09 4.08 6,335.72 2,712.56 4.28 7,237.65 3,075.69 4.25

CSGS ER

Farakka 229.30 80.38 3.51 229.30 84.40 3.68 229.30 88.62 3.86

Kahalgaon I 111.51 57.52 5.16 111.51 60.40 5.42 111.51 63.42 5.69

Kahalgaon II 469.42 146.06 3.11 469.42 153.37 3.27 469.42 161.04 3.43

Talcher 151.07 34.65 2.29 151.07 36.39 2.41 151.07 38.20 2.53

CSGS ER GROSS 961.29 318.62 3.31 961.29 334.55 3.48 961.29 351.28 3.65

OTHERS

HHPCPL

(Champawati) 14.66 6.33 4.32 14.66 6.64 4.53 14.66 6.98 4.76

IOCL (AOD) - - - -

MeECL 2.17 1.55 7.14 2.17 1.62 7.49 2.17 1.71 7.87

SECI Solar 34.95 22.63 6.47 34.95 23.76 6.80 34.95 24.95 7.14

JNNSM Solar

Bundled 8.74 10.38 11.88 8.74 10.38 11.88 8.74 10.38 11.88

Suryatap Solar* 4.19 3.68 8.78 4.19 3.68 8.78 4.19 3.68 8.78

JNNSM Coal

Bundled 35.09 9.80 2.79 35.09 10.29 2.93 35.09 10.80 3.08


Source

FY 2019-20 FY 2020-21 FY 2021-22

Power

Purchased

(MU)

Total Cost

(Rs Cr)

Average

rate

(Rs/kwh)

Power

Purchased

(MU)

Total Cost

(Rs Cr)

Average

rate

(Rs/kWh)

Power

Purchased

(MU)

Total Cost

(Rs Cr)

Average

rate

(Rs/kWh)

Wind Power (PTC) 87.16 30.77 3.53 87.16 30.77 3.53 87.16 30.77 3.53

Wind Power (SECI) 87.16 23.71 2.72 87.16 23.71 2.72 87.16 23.71 2.72

PTC Nikachu 139.81 58.05 4.15 139.81 58.05 4.15 139.81 58.05 4.15

SPV Assam 43.69 14.53 3.33 174.76 58.11 3.33 174.76 58.11 3.33

Short Term 54.53 25.49 4.68

Solar RECs 24.75 22.17 25.39

Non-solar RECs 5.96 15.59 18.44

OTHERS 457.63 212.13 4.70 643.23 290.27 4.51 588.70 272.96 4.64

TOTAL

PURCHASE 10,092.21 3,820.54 3.79 10,463.55 4,091.37 3.91 11,310.95 4,469.86 3.95

PGCIL Charges 537.18 564.04 592.24

AEGCL Charges 360.84 381.36 403.65

SLDC charges 3.85 4.90 6.40

Total Power

Purchase Cost 10,092.21 4,722.41 4.68 10,463.55 5,041.32 4.82 11,310.95 5,471.43 4.84

Therefore, the Commission approves total Power Purchase Expenses of Rs. 4722.41 crore, Rs. 5041.32 crore, and Rs.

5471.43crore for FY 2019-20, FY 2020-21, and FY 2021-22, respectively.


7.7 Operation and Maintenance (O&M) Expenses

7.7.1 The O&M expenses include Employee Expenses, R&M expenses and A&G expenses.

Employee Expenses

7.7.2 APDCL submitted that the employee expenses have been projected on normative

basis as per Regulation 37 of the MYT Regulations, 2018. The following approach has

been adopted:

a) The employee expenses projected for FY 2018-19 have been considered as base

expenses for the Control Period from FY 2019-20 to FY 2021-22.


FY 2015-16 to FY 2017-18, which works out to 4.28%.

c) Considering the growth in the number of employees in FY 2018-19 vis-à-vis FY

2017-18, growth factor of 3% has been considered

7.7.3 The normative employee expenses computed by APDCL for the Control Period from

FY 2019-20 to FY 2021-22 are as shown below:

Table 101: Employee Expenses from FY 2019-20 to FY 2021-22 (Rs Crores)


Employee Expenses for Previous Year 861.83 940.68 1010.37

Growth Factor 3.00% 3.00% 3.00%

CPI Inflation 4.28% 4.28% 4.28%

Employee Expenses 925.68 1010.37 1085.22

Add: Provision due to new recruitment

of 3000 employees 15.00 - -

Total Employee Expenses 940.68 1010.37 1085.22

7.7.4 APDCL submitted that the projected employee expenses are inclusive of impact of

ROP and requested the Commission to consider the trajectory of normative employee

expenses inclusive of impact of ROP.

7.7.5 Accordingly, APDCL has projected the Employee expenses at Rs.940.68 Crore,

Rs.1010.37 Crore and Rs.1085.22 Crore for FY 2019-20, FY 2020-21 and FY 2021-


22, respectively.

Repair and Maintenance (R&M) Expenses

7.7.6 APDCL submitted that it has proposed R&M expenditure based on the MYT

Regulations, 2018. APDCL has proposed the value of ‘K’ as 3.65%, which is the

average of the actual ‘K’ from FY 2013-14 to FY 2017-18. APDCL submitted that the

increase in GFA is based on the proposed Capital Investment Plan. APDCL has

considered the average WPI from FY 2015-16 to FY 2017-18 of 0.33%.

7.7.7 APDCL has projected the R&M expenses at Rs.201.71 Crore, Rs.337.59 Crore and

Rs.459.31 Crore for FY 2019-20, FY 2020-21 and FY 2021-22, respectively.


7.7.8 APDCL submitted that it has proposed A&G expenditure based on the MYT

Regulations, 2018. Over and above normal A&G Expenses, for each year of the

Control Period, APDCL has proposed a provision of Rs. 1 Crore for consumer

awareness initiatives, Rs. 1 Crore for special initiatives proposed by APDCL, and Rs.

1 Crore for making the Consumer Grievance Redressal Forum (CGRF) independent.

For other regular expenses, APDCL has proposed escalation at the rate of WPI of

0.33% over the actual of past years as per the above Regulations.

7.7.9 APDCL has projected the A&G expenses at Rs.51.03 Crore, Rs.54.20 Crore and

Rs.57.38 Crore for FY 2019-20, FY 2020-21 and FY 2021-22, respectively.


7.7.10 The Commission has computed the O&M Expenses for the Control Period on

normative basis as per the MYT Regulations, 2018. Any variation between normative

O&M expenses and actual O&M Expenses shall be considered under sharing of gains

and losses on account of controllable items as per the MYT Regulations, 2018 at the

time of truing up for respective year.

7.7.11 For computation of employee expenses for the Control Period, the Commission has

adopted the following approach:

a) The employee expenses computed in the APR of FY 2018-19 have been

considered as base expenses (Inclusive of the ROP);


FY 2016-17 to FY 2018-19 (8 months), which works out to 3.77%;


c) Considering the projected expansion of the distribution network and projected

increase in number of employees over the Control Period, growth factor of 1% has

been considered.

7.7.12 The normative employee expenses approved for the Control Period are shown in the

following Table:

Table 102: Approved Employee Expenses for the Control Period (Rs. Crore)


Employee Expenses for Previous Year

811.62 850.68 891.61

Growth Factor 1% 1% 1%

CPI Inflation 3.77% 3.77% 3.77%

Employee Expenses 850.68 891.61 934.52

Therefore, the Commission approves Employee Expenses of Rs. 850.68 crore,

Rs. 891.61 crore, and Rs. 934.52 crore for FY 2019-20, FY 2020-21 and FY 2021-

22, respectively.

7.7.13 For computation of R&M Expenses for the Control Period, the Commission has

considered the following approach:

a) WPI inflation has been computed as average increase of WPI index for the period

from FY 2016-17 to FY 2018-19 (8 months), which works out to 3%;

b) K-factor governs the relationship between R&M expenses and Gross Fixed Assets.

The Commission has analysed the relationship between approved R&M expenses

and Gross Fixed Assets for the past periods and accordingly the K-factor for the

Control Period is kept at the same level of 3.50% as approved for the last Control

Period, as there has been an increasing trend in R&M expenses over the years.

c) Since, K-factor has been considered on the basis of average GFA, for projection

of R&M expenses for the Control Period, average GFA for previous years has been

considered.

7.7.14 The normative R&M expenses approved for the Control Period are shown in the

following Table:


Table 103: Approved R&M Expenses for Control Period (Rs. Crore)


Average GFA for previous year

4,159.82 4,809.82 5,459.82

K Factor 3.50% 3.50% 3.50%

WPI Inflation 3.00% 3.00% 3.00%

R&M Expenses 149.97 173.40 196.84

Therefore, the Commission approves R&M Expenses of Rs. 149.97 crore, Rs.

173.40 crore, and Rs. 196.84 crore for FY 2019-20, FY 2020-21 and FY 2021-22,

respectively.

7.7.15 For computation of A&G expenses for the Control Period, the Commission has adopted


a) The A&G expenses approved after APR of FY 2018-19 have been considered as

base expenses.

b) WPI inflation has been computed as average increase of WPI index for period from

FY 2016-17 to FY 2018-19 (8 months), which works out to 3%

c) For each Year of the Control Period, the Commission has considered total

provision of Rs. 2 crore comprising Rs. 1 crore for consumer awareness initiatives

and Rs. 1 crore for capacity building of APDCL employees. As additional provision

has been made for these special initiatives, APDCL shall submit segregated details

of activities undertaken and corresponding expenses incurred, at the time of true-

up.

7.7.16 The approved A&G expenses for the Control Period are shown in the following Table:

Table 104: Approved A&G Expenses for the Control Period (Rs. Crore)


A&G Expenses for Previous Year

45.76 49.14 52.62

WPI Inflation 3.00% 3.00% 3.00%

Provision 2.00 2.00 2.00

A&G Expenses 49.14 52.62 56.20

Therefore, the Commission approves A&G Expenses of Rs. 49.14 crore, Rs.

52.62 crore, and Rs. 56.20 crore for FY 2019-20, FY 2020-21 and FY 2021-22,

respectively.


7.8 Depreciation

7.8.1 APDCL submitted that the depreciation has been claimed in accordance with the MYT

Regulations, 2018 after apportionment of depreciation for assets created out of

consumer contribution. Assets that have been depreciated to the extent of 90% of the

original cost are excluded from the asset base for calculating the depreciation.

7.8.2 APDCL submitted that its claim for depreciation is based on no funding from grant

considered for Fixed Assets vis-à-vis CWIP transferred to APDCL consequent to

unbundling of erstwhile ASEB as on 1st April 2005. As such, total depreciation on the

opening balance of GFA as on transfer scheme 1st April 2005 is claimed in totality.

7.8.3 Depreciation on subsequent assets is claimed after apportionment of available grant.

As no depreciation has been charged on assets created out of RGGVY, MNRE as well

as consumer contribution, grant received against such schemes is shown separately

with no claim of depreciation.

7.8.4 APDCL submitted that the effect of conversion of loan to grant as per the UDAY

scheme has been considered in FY 2018-19 and accordingly the opening balance of

grants including grants of Rs. 849.40 Crore (loans converted to grants under the UDAY

scheme) has been considered for purposes of calculating the depreciation in FY 2019-

20.

7.8.5 The depreciation proposed by APDCL for the Control Period from FY 2019-20 to FY

2021-22 is shown in the Table below:

Table 105: Depreciation claimed by APDCL for the Control Period (Rs. Crore)


Opening GFA 7,179.49 11,235.67 13,819.69

Closing GFA 11,235.67 13,819.69 15,789.16

Average GFA 9,207.58 12,527.68 14,804.43

Total Depreciation 113.99 134.81 149.09

Net Average Depreciation Rate 1.24% 1.08% 1.01%

Less: Depreciation on Asset funded

through Grant 60.79 103.40 149.09

Net Depreciation 53.20 31.41 -


7.8.6 For computation of depreciation, the Commission has considered the closing GFA for


FY 2018-19 as approved in this Order, as the Opening GFA for FY 2019-20. The

Capitalisation approved for tariff determination purposes in the Chapter on Capital

Investment Plan for the MYT Control Period, has been considered as asset addition

during the years. The Commission has considered the scheduled depreciation rates

as specified in MYT Regulations, 2018.

7.8.7 As per the Regulation 32 of the MYT Regulations, 2018, the total depreciation during

the life of the asset shall not exceed 90% of the original cost of GFA. The Commission

has computed the depreciation separately for assets added under each asset head in

each year. The Commission has disallowed the depreciation on assets where

depreciation is in excess of 90% of the original cost of asset under different asset

heads. The Commission has not considered depreciation on assets funded through

grants in accordance with Regulation 32of the MYT Regulations, 2018. The impact of

conversion of loan to grant under the UDAY Scheme, as explained in the Chapter on

APR for FY 2018-19, has also been considered.

7.8.8 In view of the above, the Commission has approved depreciation for the Control Period

from FY 2019-20 to FY 2021-22 as per MYT Regulations, 2018, as given in the Tables

below:


SL Particulars Opening

GFA

Addition

during

the year

Rate of

depreciation

Depreciation as

per MYT

Regulations, 2018

1 Land & Rights 15.61 4.95 0.00% -

2 Leasehold Land 2.22 0.70 3.34% 0.08

3 Building 58.97 18.70 3.34% 3.53

4 Plant & Machinery 620.92 196.92 3.34% 38.25

5 Vehicle 11.94 3.79 5.28% 0.17



8 Other Civil Work 55.45 17.58 6.33% 2.36


10 Total 2,049.55 650.00 119.21

11


Grants/Consumer

Contribution

101.44





GFA

Addition

during the

year

Rate of

depreciation

Depreciation as

per MYT

Regulations, 2018

1 Land & Rights 20.56 4.95 0.00% -

2 Leasehold Land 2.92 0.70 3.34% 0.10

3 Building 77.67 18.70 3.34% 4.30

4 Plant & Machinery 817.84 196.92 3.34% 49.14

5 Vehicle 15.73 3.79 5.28% 0.44



8 Other Civil Work 73.03 17.58 6.33% 2.87


10 Total 2,699.55 650.00 152.97

11


Grants/Consumer

Contribution

132.03




GFA

Addition

during the

year

Rate of

depreciation

Depreciation as

per MYT

Regulations, 2018

1 Land & Rights 25.51 4.95 0.00% -

2 Leasehold Land 3.63 0.70 3.34% 0.12

3 Building 96.37 18.70 3.34% 5.08

4 Plant & Machinery 1,014.76 196.92 3.34% 60.02

5 Vehicle 19.51 3.79 5.28% 0.71



8 Other Civil Work 90.61 17.58 6.33% 3.39


10 Total 3,349.55 650.00 186.44

11


Grants/Consumer

Contribution

162.71



Therefore, the Commission approves Depreciation of Rs. 17.77 crore, Rs. 20.94

crore, and Rs. 23.73 crore for FY 2019-20, FY 2020-21, and FY 2021-22,

respectively.


7.9.1 APDCL submitted that, it has projected the interest and financial charges based on the

existing source-wise loans outstanding, repayment schedule and prevailing interest

rates. At present, APDCL has loans mainly from Government of Assam and PFC (R-

APDRP loans). In order to reduce the interest burden and financial liabilities of APDCL

and to achieve financial turnaround, APDCL has joined the UDAY scheme of

Government of India. APDCL submitted that the UDAY MoU was executed on

4thJanuary 2017. Accordingly, process for conversion of Government loan into grant

and equity under UDAY is expected to be completed within FY 2018-19.

7.9.2 APDCL has claimed the interest and finance charges in line with the approach followed

in the true-up for FY 2017-18 and APR for FY 2018-19. GoA will take over 75% of

outstanding GoA loan of Rs. 1510.04 Crore as on 30-09-2015 which will amount to Rs.

1132.53 Crore in the form of Grant (Rs. 849.40 Crore) and Equity (Rs. 283.13 Crore).

With the taking over of outstanding GoA loan of Rs. 1132.53 Crore, only fresh loan

additions have been considered for the Control Period from FY 2019-20 to FY 2021-

22. The outstanding normative GoA loan balance of FY 2018-19 (based on

methodology adopted by APDCL in its previous submissions before the Commission)

would be entirely liquidated with the taking over of GoA loan as per the UDAY scheme.

7.9.3 Further, in accordance with the UDAY guidelines, the interest rate has been assumed

to be 9.40% for the new loans. R-APDRP loans are given by PFC and governed by

separate guidelines and not covered by UDAY guidelines.

7.9.4 APDCL submitted that considering the observations made by the Commission in its

previous Tariff Orders, interest liabilities on GPF as well as NPS have not been claimed

in the instant Petition to provide tariff relief to that extent. Bank charges and interest on

bank overdraft have been estimated at the same level as actual payment made during

FY 2017-18. The same would be trued-up based on actuals during true-up of the

respective years.

7.9.5 Accordingly, APDCL submitted interest and finance charges for the Control Period


from FY 2019-20 to FY 2021-22 as shown in the Table below:

Table 109: Interest and Finance Charges as submitted by APDCL for Period from FY

2019-20 to FY 2021-22 (Rs. Crore)

SI. No. Particulars

FY 2019-20 FY 2020-21 FY 2021-22

1 Interest on existing PFC Loan 88.45 90.97 90.97

2 Interest on GoA Loan and new loans

23.13 46.01 61.62

3 Bank Charges 4.26 4.26 4.26

4 Less: Interest Capitalized 34.37 42.19 47.00

5 Total 81.47 99.04 109.85

6 Normative IWC claimed in

the petition 21.64 28.94 37.18

7 Estimated IWC (interest on

bank overdraft) 7.30 7.30 7.30

8 Difference 14.34 21.64 29.88

9

Net claim for interest &

finance charges in this

petition 67.13 77.41 79.97


7.9.6 The Commission notes that Interest on loan capital for the Control Period is required

to be allowed on normative basis as per Regulation 34 of MYT Regulations, 2018.

7.9.7 The normative closing balance of loan approved in APR for FY 2018-19is considered

as the normative opening balance of loan for FY 2019-20. The normative closing

balance of loan approved by Commission is after taking into account the impact of

implementation of UDAY scheme as detailed in APR of FY 2018-19.

7.9.8 The Commission has considered the addition of loan equal to 10% of the capitalization

approved in Capital Investment Plan for each year of Control Period. Repayment has

been considered in line with the depreciation approved for each year of Control Period.

7.9.9 The Commission has considered interest rate of 9.40% as agreed under UDAY

scheme, as the Commission has already envisaged that UDAY shall get implemented

in FY 2018-19. The interest rate shall therefore prevail for the entire Control Period. As

elaborated in earlier Chapters, the IoWC is being allowed on normative basis as

detailed in a subsequent section, and there is no provision for allowing the difference


between the normative IoWC and actual IoWC as part of the Interest and Financing

Charges.

7.9.10 The interest on loan capital as approved by the Commission for the Control Period is

shown in the following Table:

Table 110: Approved Interest on Loan Capital for FY 2019-20 to FY 2021-22(Rs. Crore)


Net Normative Opening Loan 50.76 97.99 142.06

Addition of normative loan during the

year 65.00 65.00 65.00

Normative Repayment during the year 17.77 20.94 23.73

Net Normative Closing Loan 97.99 142.06 183.33

Interest Rate 9.40% 9.40% 9.40%

Interest Expenses 6.99 11.28 15.29

Therefore, the Commission approves Interest on Loans of Rs. 6.99 crore, Rs.

11.28 crore, and Rs. 15.29 crore for FY 2019-20, FY 2020-21, and FY 2021-22,

respectively.


7.10.1 APDCL submitted that it has computed the IoWC as per Regulation 36 of the MYT

Regulations, 2018.The SBI MCLR (one-year tenor) of 8.50% effective from 1st October

2018 has been considered. Accordingly, the rate of interest on working capital has

been considered as 11.50% (8.50% + 3.00%). The computation of IoWC is as shown

below.

Table 111: IoWC from FY 2019-20 to FY 2021-22 as projected by APDCL (Rs Crore)


O&M Expenses-One month 99.45 116.85 133.49

2-month Receivables 1006.21 1069.31 1142.21

Maintenance spares @ 15% of O&M

Expenses 179.01 210.32 240.29


Less: Consumer Security Deposit 648.00 648.00 648.00

Total Working Capital 188.19 251.69 323.31

Rate of Interest on WC 11.50% 11.50% 11.50%

Interest on WC 21.64 28.94 37.18



7.10.2 The Commission has computed IoWC in accordance with Regulation36 of the MYT

Regulations, 2018. The rate of Interest has been considered equal to State Bank of

India MCLR Rate (one-year tenor) prevailing for last available 6 months plus 350 basis

points, i.e., 11.50%

7.10.3 The Interest on Working Capital approved by the Commission for the Control Period

from FY 2019-20 to FY 2021-22 is shown in the following Table:

Table 112: IoWC approved by the Commission for the Control Period (Rs. Crore)


One month of the amount of O&M expenses 87.48 93.14 98.96

Maintenance spares @15% of O&M expenses 157.47 167.64 178.13

Two months’ equivalent of the expected

revenue from sale of electricity 890.12 959.06 1030.25


Less: Amount held as CSD 753.70 791.39 830.96

Total Working Capital Requirement (12.17) 8.34 20.43

Rate of Interest 11.50% 11.50% 11.50%

Interest on Working Capital - 0.96 2.35

Therefore, the Commission approves IoWC of Nil, Rs. 0.96 crore, and Rs. 2.35

crore for FY 2019-20, FY 2020-21, and FY 2021-22, respectively.

7.11 Interest on Consumers’ Security Deposit

7.11.1 APDCL has claimed Interest on CSD as per Regulation 36.4 (c) of AERC MYT

Regulations, 2018, as shown in the Table below:

Table 113: Interest on CSD for the Control Period as Projected by APDCL (Rs. Crore)


Interest on Consumer Security Deposit 68.02 68.02 68.02


7.11.2 As discussed in Chapter 4 of this Order, the actual Interest on CSD paid by APDCL is

much lower than the amount considered in the Audited Accounts. APDCL is duty

bound to pay/adjust the interest on CSD to all the HT and LT category consumers

every year. Therefore, the Commission has considered Interest on Consumer Security

Deposit after escalating approved interest of FY 2018-19 by 5% for each year of the


Control Period, as shown in the Table below:

Table 114: Interest on CSD for the Control Period approved by the Commission (Rs.

Crore)


Interest on Consumer Security Deposit 16.14 16.95 17.79

Therefore, the Commission approves Interest on CSD of Rs. 16.14 crore, Rs.


respectively.

7.12 Provision for Bad and Doubtful Debts

7.12.1 APDCL submitted that it has projected the provision for bad and doubtful debts as 1%

of the outstanding receivables of the past year as per the MYT Regulations, 2018.

7.12.2 The trade receivables appearing in the audited accounts for FY 2017-18 are Rs.

1235.47 Crore. Accordingly, the Petitioner has claimed Provision for Bad and Doubtful

Debts at 1% of Rs. 1235.47 Crore, i.e. Rs. 12.35 Crore in the respective ARR for the

MYT Control Period from FY 2019-20 to FY 2021-22.


7.12.3 The Commission has approved the Provision for Bad and Doubtful Debts as submitted

by APDCL, as it is in line with the MYT Regulations, 2018.

Accordingly, the Commission allows the Provision for Bad and Doubtful Debts

of Rs. 12.35 crore for each Year of the Control Period.


7.13.1 APDCL submitted that the Commission has considered equity base of Rs.162.77 Crore

and allowed return @16% on the equity base of Rs. 26.04 Crores in its previous Tariff

Orders. Anticipating the notification by Govt. of Assam on the share application money

pending allotment amounting to Rs. 88.04 Crores transferred from erstwhile ASEB on

transfer of trading function to APDCL w.e.f. 01-04-2009 and Rs. 0.63 Crores

transferred on dissolution of ASEB as on 31- 03-2013, equity capital of Rs. 88.68


Crores has been considered as part of the equity capital base.

7.13.2 APDCL has considered that the existing loans from GoA to the tune of Rs. 283.13

Crores shall be converted to equity in accordance with the UDAY scheme provisions.

Accordingly, the same has been considered as part of the equity capital base. The rate

of return on equity has been taken as 16% as provided in the MYT Regulations, 2018.

The Return on Equity claimed by the Petitioner for the Control Period from FY 2019-

20 to FY 2021-22 is as shown below.

Table 115: Return on Equity from FY 2019-20 to FY 2021-22 (Rs Crore) as submitted by

APDCL


Opening Equity 534.58 534.58 534.58

Net Addition during the Year - - -

Closing Equity 534.58 534.58 534.58

Average Equity 534.58 534.58 534.58

Rate of Return on Equity 16.00% 16.00% 16.00%

Return on Equity 85.53 85.53 85.53


7.13.3 The Commission has approved the Return on Equity in accordance with Regulation 33

of the MYT Regulations, 2018. The Commission has considered the addition of equity

as Nil during each Year of the Control Period, based on the funding of capitalisation

approved in this Order. Further, as the entire net normative outstanding loan has been

converted to grants under UDAY scheme, the Commission has not considered any

conversion of loan to equity under UDAY. Therefore, the approved Return on Equity

at 16% for the Control Period is shown in the Table below:

Table 116: Return on Equity approved by the Commission for the Control Period (Rs.

Crore)

Sr.

No. Particulars FY 2019-20 FY 2020-21 FY 2021-22

1 Opening Equity Capital 162.77 162.77 162.77

2 Equity addition during the year - - -

3 Closing Equity 162.77 162.77 162.77

5 Rate of Return on equity 16.00% 16.00% 16.00%

6 Return on Equity 26.04 26.04 26.04


Therefore, the Commission approves RoE of Rs. 26.04 crore for each Year of the

Control Period.


7.14.1 APDCL submitted that it has projected Non-Tariff Income considering annual

escalation of 5% over the estimated Non-Tariff Income for FY 2018-19, as shown in

the Table below:

Table 117: Non-Tariff Income as submitted by APDCL for the Control Period (Rs. Crore)


Rentals from Meters, Service Lines,

Capacitors, etc. 23.47 24.64 25.88

Income from recoveries on account of

theft of energy/ Malpractices 0.82 0.86 0.90

Delayed Payment Charges from

Consumers 177.19 186.05 195.35

Miscellaneous Recoveries 23.84 25.03 26.29

Cross Subsidy Surcharge on Open

Access Consumer 27.47 28.84 30.28

Wheeling Charges collected 4.32 4.54 4.76

TOTAL 257.11 269.96 283.46


7.14.2 The Commission has also considered annual increase of 5% over the Non-Tariff

Income approved for FY 2018-19for projecting Non-Tariff Income for FY 2019-20 to

FY 2021-22. Therefore, the Commission approves Non-Tariff Income at the same

level as proposed by APDCL.

7.15 Other Income

7.15.1 APDCL submitted that it has projected Other Income by considering annual escalation

of 5% over the estimated Other Income for FY 2018-19.

7.15.2 APDCL has projected Other Income of Rs.206.83 Crore for FY 2019-20, Rs.217.17


Crore for FY 2020-21, and Rs.228.03 Crore for FY 2021-22.

7.15.3 APDCL has not considered any sale of surplus power during the Control Period.


7.15.4 The Commission has considered annual increase of 5% over the Other Income

approved for FY 2018-19, except income from sale of surplus power.

7.15.5 The Commission has considered income from sale of surplus power in line with the

surplus energy available for sale outside State as per the Energy Balance approved in

this Order for the MYT Control Period. The rate of Rs. 2.26 per unit is applied on the

surplus energy available for sale. The rate is same as that considered for projecting

revenue from sale of surplus power for FY 2018-19.

7.15.6 The Other Income approved by the Commission for the Control Period from FY 2019-

20 to FY 2021-22, is shown in the Table below:

Table 118: Miscellaneous Income approved by the Commission for the Control Period

(Rs. Crore)


Other Income 253.67 223.14 291.61

Therefore, the Commission approves Other Income of Rs. 253.67 crore, Rs.


respectively.

7.16 Revenue from sale of electricity

7.16.1 APDCL has submitted that the Revenue from sale of electricity at existing tariff has

been computed based on the approved Tariff as per Tariff Order dated 19 March2018

and the category-wise sales projected by APDCL for the Control Period from FY 2019-

20 to FY 2021-22.

7.16.2 APDCL has submitted revenue at existing tariff of Rs. 6037.28 Crore for FY 2019-20,

Rs. 6415.85 Crore for FY 2020-21, and Rs. 6853.25 Crore for FY 2021-22.


7.16.3 The Commission has estimated the Revenue from sale of electricity at existing tariff

based on the tariff approved in the Tariff Order dated March 19, 2018 and the approved


category-wise sales for the Control Period.

7.16.4 The Revenue from Sale of Electricity from existing tariff as submitted by APDCL and

as computed by the Commission for the Control Period from FY 2019-20 to FY 2021-

22 is given in the Table below:

Table 119: Revenue from Sale of Electricity for the Control Period (Rs. Crore)

Particulars

FY 2019-20 FY 2020-21 FY 2021-22

APDCL

Petition Commission

APDCL

Petition Commission

APDCL

Petition Commission

Revenue from

Sale of Electricity 6,037.28 5,788.91 6,415.85 6,088.96 6,853.25 6,533.88

7.17 Aggregate Revenue Requirement (ARR) and Revenue Gap/(Surplus)

7.17.1 As discussed in earlier paragraphs, the Commission has approved the expenses

based on the principles specifies in MYT Regulations, 2018. The summary of ARR and

Revenue Gap/(Surplus) as submitted by APDCL and as approved by the Commission

for the Control Period from FY 2019-20 to FY 2021-22 is given in the Table below:


Table 120: ARR & Revenue Gap/(Surplus) for APDCL for the Control Period approved by the Commission (Rs. Crore)

S. No.


APDCL Approved APDCL Approved APDCL Approved

1 Power Purchase Expenses 5,381.81 4,722.41 5,961.45 5,041.32 6,536.12 5,471.43

2 O&M Expenses 1,193.42 1,049.78 1,402.15 1,117.63 1,601.91 1,187.55

a) Employee Expenses 940.68 850.68 1,010.37 891.61 1,085.22 934.52

b) R&M Expenses 201.71 149.97 337.59 173.40 459.31 196.84

c) A&G Expenses 51.03 49.14 54.20 52.62 57.38 56.20

d Impact of ROP

3 Depreciation 53.20 17.77 31.41 20.94 - 23.73

4 Interest and Finance Charges 67.13 6.99 77.41 11.28 79.97 15.29

5 Interest on Working Capital 21.64 - 28.94 0.96 37.18 2.35

6 Interest on CSD 68.02 16.14 68.02 16.95 68.02 17.79

7 Return on Equity 85.53 26.04 85.53 26.04 85.53 26.04

10 Other Debits, incl Provisioning for Bad Debts

12.35 12.35 12.35 12.35 12.35 12.35

19 Total Expenditure 6,883.11 5,851.49 7,667.27 6,247.46 8,421.09 6,756.54

20 Less: Non-Tariff Income 257.11 257.11 269.96 269.96 283.46 283.46

21 Less: Other Income 206.83 253.67 217.17 223.14 228.03 291.61

22 Aggregate Revenue Requirement 6,419.18 5,340.71 7,180.14 5,754.36 7,909.61 6,181.48 Revenue

23 Revenue at Approved Tariff (incl FPPPA)

6,037.28 5,788.91 6,415.85 6,088.96 6,853.25 6,533.88

27 Revenue Gap/(Surplus) 381.89 (448.19) 764.30 (334.59) 1,056.36 (352.40)

The Commission approves the Revenue Surplus of Rs.448.19 Crore for FY 2019-20, Rs. 334.59 Crore for FY 2020-21, and Rs.

352.40 Crore for FY 2021-22, at existing Tariff.


8 Cumulative Revenue Gap till FY 2017-18 & Tariff for

FY 2017-18

8.1 Cumulative Revenue Gap/ (Surplus)

8.1.1 APDCL has submitted the cumulative Revenue Gap/ (Surplus) after Truing up of FY

2017-18 and APR of FY 2018-19 and ARR of FY 2019-20 as shown in the Table below:

Table 121: Revenue Gap/ (Surplus) to be considered for recovery as submitted by

APDCL (Rs. Crore)

Particulars Rate of Interest Amount

Revenue Gap/(Surplus) after Truing up of FY 2017-18

815.40

Carrying cost/(Holding) Cost for FY 2017-18 (half year)

12.60% 51.37

Carrying cost/(Holding) Cost for FY 2018-19 (full year)

12.20% 99.48


12.45% 50.76

Total Carrying Cost 201.61

Total Revenue Gap/(Surplus) for FY 2017-18 1017.01

Revenue Gap/(Surplus) after APR of FY 2018-19

549.57


12.20% 33.52


12.45% 34.21



Revenue Gap /(Surplus) for FY 2019-20 381.89

Cumulative Revenue Gap/(Surplus) for FY 2019-20

2016.21

8.1.2 APDCL submitted that it has rationalized the tariff and further reduced the cross-

subsidy between the consumer categories while proposing tariffs for the various

consumer categories for FY 2019-20. APDCL submitted that most of the tariff


categories are within +/-20% of the ACoS.

8.1.3 APDCL submitted that the total Revenue Gap of Rs. 2016.21 Crore cannot be entirely

recovered in a single year as it would result in a tariff shock for the consumers. Hence,

APDCL proposed to recover only 50% of the Revenue Gap after true-up of FY 2017-

18 and 50% of the Revenue Gap for FY 2019-20, amounting to Rs. 598.65 Crore as

detailed below.

Table 122: Revenue Gap proposed for recovery in FY 2019-20 by APDCL (Rs. Crore)

Particulars Amount

50% of the Revenue Gap after true-up for FY 2017-18

407.70

50% of the Revenue Gap for FY 2019-20 190.95

Total Revenue Gap proposed for recovery 598.65

Revenue at existing Tariff 6037.28

Percentage increase in Tariff 9.9%

8.1.4 APDCL submitted that the proposed increase in Tariff to meet the above Revenue Gap

shall be only 10% over the existing tariff, as shown in the above table.

8.1.5 The balance amount of Rs. 1417.56 Crore along with corresponding carrying cost is a

legitimate expense of the Petitioner. Therefore, APDCL proposed to request the Govt.

of Assam for funding of the same and the rest may be kept as Regulatory Assets to be

amortised in the subsequent years with adequate carrying cost.

8.1.6 APDCL also submitted that it reserves the right to claim any shortfall in the amount not

claimed herein in case of non-consideration by Government of Assam in subsequent

periods.


8.1.7 In Chapter 4 of this Order, the Commission has approved the Revenue Gap of Rs.

311.81 Crore for FY 2017-18 based on final truing-up. In Chapter 5, the Commission

has approved the Revenue Surplus of Rs. 25.84 Crore for FY 2018-19 based on APR.

However, the Commission has not considered the surplus arrived after APR of FY

2018-19 in line with the Regulation 10.3 of the MYT Regulations, 2015, as amended


in November 2017.

8.1.8 In Chapter 7, the Commission has computed the Revenue Surplus for FY 2019-20, FY

2020-21, and FY 2021-22 based on the approved ARR and revenue from existing tariff

as specified in MYT Regulations, 2018. The Commission has also considered the

Revenue Gap/(Surplus)approved for APGCL and AEGCL in their respective True-up

for FY 2017-18, by directly passing through the same in the Revenue Gap/(Surplus) of

APDCL for FY 2019-20.

8.1.9 The Cumulative Revenue Gap/(Surplus) approved by the Commission for FY 2017-18

and FY 2019-20, along with the carrying cost, to be recovered in Tariff of APDCL for

FY 2019-20, is given in the Table below:

Table 123: Cumulative Revenue Gap/(Surplus) for FY 2019-20 approved by the

Commission (Rs. Crore)

Sr. No.

Particulars Rate of Interest

(%) Amount

1 Revenue Gap/(Surplus) after Truing up of FY 2017-18

311.81

Carrying Cost for FY 2017-18 (half year) 12.60% 19.64

Carrying Cost for FY 2018-19 (full year) 12.20% 38.04

Carrying Cost for FY 2019-20 (half year) 12.45% 19.41

Total Revenue Gap/(Surplus) for FY 2017-18 (A) 388.90

2 Revenue Requirement for FY 2019-20 (B) 5,340.71

3 Cumulative Revenue Requirement for FY 2019-20 (C) = (A+B)

5,729.61

4 Revenue from Existing Tariff in FY 2019-20 (D) 5,788.91

5 Cumulative Revenue Gap/(Surplus) of APDCL for FY 2019-20 (E) = (C) – (D)

(59.29)

6 Impact of True-up of FY 2017-18 for APGCL along with holding cost (F)

(15.33)

7 Impact of True-up of FY 2017-18 for AEGCL along with holding cost(G)

(121.29)

8 Cumulative Revenue Gap/(surplus) for FY 2019-20 to be adjusted in Tariff along with holding cost (H)=(E)+(F)+(G)

(195.91)

8.1.10 Thus, the Cumulative Revenue Surplus after considering True-up of FY 2017-18 for

APDCL, AEGCL and APGCL along with holding cost and the Revenue Surplus of FY


2019-20 based on revised ARR and revenue at existing tariff, works out to a surplus

of Rs. 195.91 Crore.

8.1.11 Accordingly, the Commission has rationalised the category-wise tariffs to pass through

the Revenue Surplus of Rs. 195.91 Crore as well as further reduce the cross-subsidy

between consumer categories, as elaborated in subsequent sections of this Order.

8.2 Tariff for FY 2019-20

8.2.1 APDCL has proposed average tariff increase of 9.9% in order to recover additional

revenue of Rs.598.65 crore in FY 2019-20. APDCL has proposed to claim the balance

amount of Rs.1417.56 Crore from Govt. of Assam.

8.2.2 APDCL has not proposed any increase in energy charges for the Jeevan Dhara

category. However, APDCL has proposed an increase of Rs. 10 per connection in the

fixed charges for this category.

8.2.3 APDCL has proposed increase in both Fixed Charges as well as Energy Charges for

all other consumer categories. APDCL stated that it has made an attempt to bring

cross-subsidies within the range of +-20% of Average Cost of Supply (ACoS).


8.2.4 In determining the ARR and the retail supply tariff of APDCL for

FY 2019-20, the Commission has been guided by the provisions of the EA 2003,

National Electricity Policy (NEP), Tariff Policy, and the MYT Regulations, 2018.

8.2.5 Section 61 of the EA 2003 lays down the broad principles and guidelines for

determination of retail supply tariffs. The basic principle is to ensure that tariff should

progressively reflect the cost of supply of electricity and gradually reduce the cross-

subsidies between categories. The EA 2003 lays down special emphasis on

safeguarding of consumers’ interest and requires that the costs should be recovered

in a reasonable manner. The EA 2003 mandates that tariff determination should be

guided by factors which “encourage competition, efficiency, economical uses of


resources, good performance and optimum investment”.

8.2.6 The Commission is guided by the Tariff Policy of GoI for determination of category-

wise tariff, especially the limits of cross-subsidy by other consumers. The total impact

on revenue because of large increase in consumers of Jeevan Dhara category cannot

be off-set by cross-subsidy by other consumers within the prescribed limit. The

Commission feels that the State Government should come forward to compensate

APDCL for this impact on revenue through Revenue Grants/Subsidy.

8.2.7 The EA 2003 provides that while determining the tariff, the Commission shall not show

undue preference to any consumer of electricity but may differentiate according to the

consumer's load factor, power factor, voltage, total consumption of electricity during

any specified period or the time at which the supply is required or the geographical

position of any area, the nature of supply and the purpose for which the supply is

required. The Tariff Policy notified by the Government of India provides comprehensive

guidelines for determination of tariff and determination of ARR of power utilities. The

Commission has followed these Guidelines, as far as possible.

8.2.8 The Commission has carried forward the process of tariff rationalization in this Order

to ensure that the tariffs of most categories are within +20% of the ACoS. For

categories, where the tariffs are beyond +20% of the ACoS, the Commission has tried

to ensure that the cross-subsidies are reduced. The Commission has tried to pass on

the benefit of cumulative Revenue Surplus for FY 2019-20 evenly to all categories of

consumers, while at the same time, reducing the cross-subsidies to the extent

possible.

8.3 Cost of Supply

8.3.1 APDCL submitted that considering the projected sale of 8273 MU during FY 2019-20,

the ACoS works out to Rs. 9.73 per kWh.


8.3.2 Considering the Net ARR after adjustments of gaps/(surplus) of AEGCL and APGCL

and the total sales approved by the Commission for FY 2019-20, the ACOS approved


by the Commission for FY 2019-20 works out to Rs. 7.06 per kWh, as shown in the

Table below:

Table 124: ACOS approved by the Commission for FY 2019-20

Particulars Unit Amount

Cumulative Revenue Requirement for FY 2019-20 Rs. Crore 5,593.00

Sales MU 7,930

Average Cost of Supply Rs/kWh 7.05

8.3.3 The Commission’s analysis of the contributors to the ACoS is shown in the Table below

Table 125: Contributors of ACOS for FY 2019-20

Particulars Total ARR (Rs. Crore)

Contributors to ACOS

Rs/kWh %

Power Purchase Expenses 4,722.41 5.96 84.43%

Employee Expenses 850.68 1.07 15.21%

R&M Expenses 149.97 0.19 2.68%

A&G Expenses 49.14 0.06 0.88%

Depreciation 17.77 0.02 0.32%

Interest and Finance Charges 6.99 0.01 0.12%

Interest on Working Capital - - 0.00%

Interest on CSD 16.14 0.02 0.29%

Return on Equity 26.04 0.03 0.47%

Income Tax - - 0.00%

Provisioning for Bad & Doubtful Debts 12.35 0.02 0.22%

Less: Non-Tariff Income 257.11 -0.32 -4.60%

Less: Other Income 253.67 -0.32 -4.54%

Total ARR 5,340.71 6.73 95.49%

Past Revenue Gap/(Surplus) of APDCL, AEGCL and APGCL along with carrying cost

252.28 0.32 4.51%

Net Revenue Requirement for FY 2019-20 5,593.00 7.05 100.00%

8.3.4 Thus, power purchase expenses and employee expenses alone contribute around

90% of the ARR, which is reduced by 9% on account of Non-Tariff Income and Other

Income, and the combined Past Revenue Gap of APDCL, AEGCL and APGCL


contributes around 4.5% of the ARR.

8.3.5 As regards determination of the voltage-wise cost of supply (VCoS), the Commission

requires several inputs from APDCL based on the data developed on sustainable

basis.

8.3.6 The Commission had asked APDCL to submit the voltage-wise distribution loss of the

system. APDCL submitted that presently, the data is not sufficient to provide voltage-

wise loss data. APDCL submitted that a project on Energy Audit is being carried out

for three circles of APDCL namely Jorhat, GEC-II and Cachar, under the Commission’s

guidance. APDCL submitted that the outcome of this energy audit shall be helpful in

deriving voltage-wise losses.

8.3.7 In the Tariff Order for FY 2018-19, the Commission computed voltage wise cost of

supply based on the voltage wise losses submitted by APDCL and in line with the

methodology prescribed by APTEL. However, due to non-submission of data by

APDCL, the Commission is not in a position to compute voltage-wise cost of supply for

FY 2019-20.

8.3.8 The Commission directs APDCL to complete the metering at 33 kV, 11 kV level

and LT level for arriving at the voltage-wise losses. The Commission also directs

APDCL to expedite the energy audit exercise which shall give correct picture for

voltage wise cost of supply.

8.4 Tariff Philosophy and Design

8.4.1 Fixed costs comprise around 62% of the ARR of APDCL (excluding past Revenue

Gap/(Surplus)). However, the existing levels of Fixed Charges are quite low, and only

around 23% of the fixed cost is recovered through Fixed Charges. This translates to

recovery of only 14% of the total Revenue through Fixed Charges.

8.4.2 In view of the above, the Commission has approved a marginal increase in the Fixed

Charges for some HT categories.

8.4.3 As there is an overall reduction in ACoS, the Commission has reduced the Energy

Charges for all categories by different levels, to pass on the benefit of cumulative


surplus for FY 2019-20, partly/fully offset the increase in Fixed/Demand Charges for

certain HT categories and to rationalise the cross-subsidy in line with the Tariff Policy.

8.4.4 The rebate for Power Factor (PF) (leading or lagging) shall be as under:

a) In case, the average PF (leading or lagging) maintained by the consumer is

more than 0.85 and upto 0.95, a rebate of 1% on the Energy Charges on unit

consumption shall be applicable;

b) For PF (leading or lagging) of 0.95 and above upto 0.97, a rebate of 2% on the

Energy Charges on unit consumption shall be applicable;

c) For PF (leading or lagging) of 0.97 and above upto Unity PF, a rebate of 3% on

the Energy Charges on unit consumption shall be applicable.

8.4.5 The penalty for Power Factor (PF) (leading or lagging) shall be as under:

a) In case average PF (leading or lagging) in a month for a consumer falls below

0.85, a penalty @1% for every 1% fall in PF (leading or lagging) from 0.85 to

0.60; plus 2% for every 1% fall below 0.60 to 0.30 upto and including 0.30 shall

be levied on total unit consumption. PF penalty shall be levied on those

consumers where PF is recorded electronically.

8.4.6 The Commission has retained the night off-peak rebate to Rs. 1.50 per kWh, which is

equal to the additional charges of Rs. 1.50 per kWh during evening peak hours. This

is intended to incentivise the identified consumer categories to shift more of their

consumption to night off-peak hours, thereby increasing the utilisation of power within

the State, rather than APDCL having to sell the surplus power outside the State at

lower rates prevailing during night off-peak hours. This will also reduce the overall tariff

applicable to the categories having TOD tariff.

8.4.7 As stated earlier, the Commission has retained a rebate of 1.5% and 3% in the Energy

Charges with respect to the Energy Charges determined for FY 2019-20, for all

consumers taking supply at 33 kV and 132 kV, respectively.

8.4.8 The Commission has created the following two additional consumer tariff categories


to be applicable from the date of issuance of this Order.

a. Electric Vehicles Charging Stations (LT and HT)

b. HT Railway Traction

8.4.9 At present, GoA is providing targeted subsidies for a few categories. In the absence of

any written commitment from GoA for providing category-wise subsidy in FY 2019-20,

the Commission has approved the full cost tariff for FY 2019-20, as shown in the Table

below:


Table 126: Full Cost Tariff approved by the Commission for FY 2019-20

Sl. No. Consumer Category

Existing Tariff Increase/(Decrease) in Tariff Revised tariff

Fixed Charges (Rs/kW/mth or Rs/kVA/mth)

Energy Charges (Rs. per

kWh)



kWh)



kWh)

LT Category

LT-1 Jeevan Dhara 0.5 kW and 1 kWh/day*

20* 4.60 No change (0.05) 20* 4.55

LT-II Domestic A- below 5 kW

0 to 120 units per month 40 5.45 No change (0.05) 40 5.40

121 to 240 units per month 40 6.70 No change (0.05) 40 6.65

Balance units 40 7.70 No change (0.05) 40 7.65

LT-III Domestic-B 5 kW and above up to 25 kW

40 7.30 No change (0.05) 40 7.25

LT-IV Commercial Load above 0.5 kW and up to 25 kW

120 7.90 No change (0.30) 120 7.60

LT-V General Purpose Supply 135 6.80 No change (0.30) 135 6.50

LT-VI Public Lighting 120 6.65 No change (0.05) 120 6.60

LT-VII Agriculture upto 25 kW 40 4.65 No change (0.05) 40 4.60

LT-VIII(i)

Small Industries Rural up to 25 kW

40 5.20 No change (0.05) 40 5.15

LT-VIII(ii)

Small Industries Urban up to 25 kW

50 5.45 No change (0.05) 50 5.40

LT-IX Temporary Supply

Domestic 80 9.44 No change (0.05) 80 9.39

Non-Domestic Non- Agriculture

125 11.54 No change (0.05) 125 11.49






kWh)



kWh)



kWh)

Agriculture 50 5.19 No change (0.05) 50 5.14

LT-X LT Electric Vehicles Charging Stations

120 5.40

HT Category

HT-I HT Domestic above 25 kW (30 kVA)

40 7.30 No change (0.05) 40 7.25

HT-II HT commercial above 25 kW (30 kVA)

145 8.00 15.00 (0.40) 160 7.60

HT-III Public Water Works 135 6.40 No Change (0.05) 135 6.35

HT-IV Bulk Supply above 25 kW (30 kVA)

HT-IV(i) Government Educational Institutions

130 6.80 No Change (0.05) 130 6.75

HT-IV(ii)

Others 170 7.65 No Change (0.15) 170 7.50

HT-V(A)

HT Small Industries above 25 kW (30 kVA) and upto 50 kVA

60 5.90 No Change (0.05) 60 5.85

HT-V(B)

HT Industries-1 50 kVA to 150 kVA

130 6.55 10 (0.15) 140 6.40

HT-V(C)

HT Industries-II above 150 kVA (Option 1)

180 7.20 20 (0.30) 200 6.90

HT Industries-II above 150 kVA (Option 2)

300 6.50 No change (0.05) 300 6.45






kWh)



kWh)



kWh)

HT-VI Tea, Coffee & Rubber 230 7.20 20 (0.30) 250 6.90

HT-VII Oil & Coal 300 7.80 No change (0.05) 300 7.75

HT-VIII HT Irrigation Load above 25 kW (30 kVA)

60 6.15 No change (0.05) 60 6.10

HT - IX HT Temporary Supply 160 9.20 No change (0.05) 160 9.15

HT – X HT Electric Crematorium 160 4.50 No change (0.05) 160 4.45

HT – XI HT Railway Traction - - - - 300 6.45

HT-XII Electric Vehicles Charging Station

160 6.90

Notes:

1. $$ - These are Base Tariffs; Additional ToD tariffs have been detailed in the Tariff Schedule

2. The Fixed Charges for LT Temporary and HT Temporary are respectively on Rs/kW/Day and Rs/kVA/Day basis as detailed in the Tariff Schedule

3. *- Jeevan Dhara Fixed Charge is Rs per connection per month

APDCL MYT Order for Control Period from FY 2019-20 to FY 2021-22 Page 181

8.4.10 In case the GoA desires to provide category-wise subsidy in FY 2019-20 under

Section 65 of the EA 2003 after the issue of this Order, the GoA may do so under

intimation to the Commission. APDCL shall levy category-wise tariffs after adjusting

the amount of category-wise subsidy announced by the GoA, under intimation to the

Commission along with the complete calculations in this regard. APDCL shall obtain

post-facto approval of the Commission for the category-wise tariff after giving effect to

the targeted subsidy, as applicable.

The detailed Tariff Schedule is given in Chapter 11.

8.5 Category-wise Cross-subsidy

8.5.1 The Commission has computed the cross-subsidy with respect to the ACoS and

attempted to ensure that the cross-subsidies are within the limits of +20% of the ACoS,

as laid down in the Tariff Policy as well as several Judgments of Hon’ble APTEL. The

category-wise cross-subsidy approved for FY 2019-20 by the Commission in this

Order are given in the Table below:

Table 127: Category-wise Cross-Subsidy approved for FY 2019-20

Sr. No.

Category of consumers

Average Billing Rate

(Rs/kWh) *

Average Cost of Supply

(Rs/kWh)

Ratio of ABR to ACOS

(%)

Cross-subsidy provided

/(received)(%)

LT Category

1. Jeevan Dhara 0.5 kW

and 1kWh/day 5.23 7.06 74% -26%

2. Domestic A- below 5 kW 5.94 7.06 84% -16%

3. Domestic-B 5 kW and

above up to 25 kW 8.28 7.06 117% +17%

4. Commercial Load above

0.5 kW and up to 25 kW 8.69 7.06 123% +23%

5. General Purpose Supply 8.75 7.06 124% +24%

6. Public Lighting 7.47 7.06 106% +6%

7. Agriculture upto 25 kW 6.28 7.06 89% -11%

8. Small Industries Rural

upto 25 kW 6.36 7.06 90% -10%


Sr. No.

Category of consumers

Average Billing Rate

(Rs/kWh) *

Average Cost of Supply

(Rs/kWh)

Ratio of ABR to ACOS

(%)

Cross-subsidy provided

/(received)(%)

9. Small Industries Urban

upto 25 kW 6.81 7.06 97% -3%

HT Category

11. HT Domestic above 25

kW (30 kVA) 7.75 7.06 110% +10%

12. HT commercial above

25 kW (30 kVA) 8.61 7.06 122% +22%

13. Public Water Works 7.47 7.06 106% +6%

14. Bulk Supply above 25

kW (30 kVA)

14A Government Educational

Institutions 7.78 7.06 110% +10%

14B Others 8.59 7.06 121% +21%

15. HT Small Industries

above 25 kW (30 kVA)

and upto 50 kVA

7.76 7.06 110% +10%

16. HT Industries-I 50 kVA

to 150 kVA 8.38 7.06 119% +19%

17. HT Industries-II above

150 kVA 8.63 7.06 122% +22%

18. Tea, Coffee & Rubber 8.37 7.06 118% +18%

19. Oil & Coal 8.66 7.06 122% +22%

20. HT Irrigation Load above

25 kW (30 kVA) 8.71 7.06 123% +23%

Note: (+) Cross-subsidy provided to other consumer categories

(-) Cross-subsidy received from other consumer categories

* - ABR has been calculated based on the estimation of the total load and units to be

sold to that particular category in FY 2019-20. However, the ABR for individual

consumer in a category may vary depending on the total units consumed by the

consumer

8.5.2 As can be seen from the above Table, the Average Billing Rate for most of the

categories is within the band of 80% to 120% of ACoS, which is in accordance with


the Tariff Policy.

8.6 Fuel Price and Power Purchase Adjustment Charges (FPPPA)

8.6.1 Fuel Price and Power Purchase Adjustment charges as per the Regulations notified

by the Commission are applicable. As per Regulation 5.2 of the AERC (Fuel and Power

Purchase Price Adjustment) Regulations, 2010

“The FPPPA charges shall not exceed 25% of the variable cost component of

tariff or such other ceiling as may be stipulated by the Commission from time

to time, where the variable component of tariff is defined as total estimated

revenue from energy charges (EC) in a year the approved in the Tariff Order

divided by total estimated sales of the year. When FPPPA charges exceed

25% of the variable component of tariff, the licensee shall make a petition to

the Commission for recovery of the charges over the specified cap which shall

be recovered after Commission’s scrutiny and directives”.

8.6.2 APDCL shall strictly follow the above Regulation and when FPPPA charges exceed

25% of the variable components of the tariff, APDCL shall file a Petition before the

Commission and FPPPA charges beyond 25% of the variable cost component of tariff

shall be recovered only after Commission’s scrutiny and approval


9 Wheeling Charges and Cross-Subsidy Surcharge

9.1 Introduction

9.1.1 The Commission has, in the present Order, determined the Wheeling Charges and

Cross-Subsidy Surcharge applicable for Open Access consumers of APDCL for FY

2019-20.

9.2 Allocation Matrix

9.2.1 The Commission has considered the following matrix, in line with the approach

adopted in its previous Orders, for allocation of expenses between the Wires Business

and Retail Supply Business as shown in the Table below:

Table 128: Allocation Matrix for Separation of ARR for Wires Business and Retail

Supply Business for FY 2019-20

Sr.

No.

Particulars Wires

Business

Retail Supply

Business

1 Power Purchase Expenses 0% 100%

2 Employee Expenses 60% 40%

3 R&M Expenses 90% 10%

4 A&G Expenses 50% 50%

5 Depreciation 90% 10%

6 Interest and Finance Charges 90% 10%

7 Interest on Working Capital 10% 90%

8 Interest on CSD 0% 100%

9 Return on Equity 90% 10%

10 Income Tax 90% 10%

11 Provisioning for Bad & Doubtful Debts 0% 100%

12 Less: Non-Tariff Income 0% 100%

13 Less: Other Income 10% 90%

9.2.2 The approved ARR for APDCL for FY 2019-20 has been segregated between the

Wires Business and Retail Supply Business, based on the above Allocation Matrix, as


given in the Table below:

Table 129: Separation of ARR for Wires Business and Retail Supply Business for FY

2019-20(Rs. crore)

Sr.

No.

Particulars Wires

Business

Retail Supply

Business

Total APDCL

1 Power Purchase

expenses - 4722.41 4722.41

2 Employee expenses 510.41 340.27 850.68

3 R&M expenses 134.97 15.00 149.97

4 A&G expenses 24.57 24.57 49.14

5 Depreciation 15.99 1.78 17.77

6 Interest and Finance

charges 6.29 0.70 6.99

7 Interest on Working

Capital - - -

8 Interest on Consumers’

Security Deposit - 16.14 16.14

9 Provision for Bad &

Doubtful Debts - 12.35 12.35

10 Return on Equity 23.44 2.60 26.04

11 Less: Other Income - 257.11 257.11


13 ARR 690.30 4650.41 5340.71

9.3 Wheeling Charges

9.3.1 The Wheeling Charges applicable for Distribution Open Access consumers at 33KV

voltage level for FY 2019-20, has been determined from the ARR of the Distribution

Wires Business, as determined in the above Table.

Table 130: Wheeling Charges approved by the Commission for FY 2019-20

Sr.

No.

Particulars Units Total

1 Net ARR of Wire Business Rs. Crore 690.30

2 Total Energy Input into Distribution system MU 9440.01

3 Distribution Cost for Wires Business for 33 kV

voltage level (assuming 35% of cost at 33 kV)

Rs. Crore 241.61

4 Wheeling Charges for 33 kV voltage level Paise/kWh 26


9.3.2 The Wheeling Charges for FY 2018-19 as determined in the above Table, are

applicable for use of the distribution system of APDCL by other Licensees or

generating companies or captive power plants or consumers/users who are permitted

open access at 33 kV voltage level under Section 42(2) of the Electricity Act, 2003.

9.3.3 APDCL may approach the Commission for determination of Wheeling Charges for 11

kV level, as and when applicable, with all the relevant data, computations, and

justification.

9.4 Applicable Wheeling Losses

The Wheeling Losses applicable for Open Access transactions for FY 2019-20 shall

be as under:

Table 131: Wheeling Losses approved by the Commission for FY 2019-20

Sr. No. Particulars Total

1 At 33 kV level 5%

2 At 11 kV level 11%

9.5 Cross-Subsidy Surcharge (CSS)

9.5.1 The Open Access consumers are liable to pay the CSS to compensate the utility for

any loss of revenue due to the shifting of the consumer to the Open Access system.

Eligible consumers with a connected load of 1 MW and above shall be allowed Open

Access.

9.5.2 The CSS for HT-II Commercial Category, HT-IV (i) Bulk Supply Govt. Edu. Institutions

category, HT-IV (ii) Bulk Supply Others category, HT-V (C) HT Industry category, HT-

VI Tea, Coffee & Rubber category, and HT-VII Oil & Coal category, computed in

accordance with the philosophy approved in previous Tariff Orders, is shown in the

Table below:


Table 132: Category-wise Cross-Subsidy Surcharge for FY 2019-20 (Rs/kWh)

Particulars Legend Approved

Average Billing Rate for HT-II– HT Commercial category A 8.61

Average Billing Rate for HT-IV (i) - HT Bulk Supply - Govt. Edu. Inst. category

B 7.78

Average Billing Rate for HT-IV (ii) - HT Bulk Supply Others category

C 8.59

Average Billing Rate for HT V (C ) HT-II Industry above 150 kVA category

D 8.67

Average Billing Rate for Tea, Coffee & Rubber category E 8.37

Average Billing Rate for Oil & Coal category F 8.66

Average Cost of Supply G 7.05

Cross-Subsidy Surcharge for HT Commercial category H = A - G 1.56

Cross-Subsidy Surcharge for HT Bulk Supply - Govt. Edu. Inst. Category

I = B - G 0.72

Cross-Subsidy Surcharge for HT Bulk Supply Others category

J = C - G 1.54

Cross-Subsidy Surcharge for HT-II Industry above 150 kW category

K = D - G 1.62

Cross-Subsidy Surcharge for Tea, Coffee & Rubber category

L = E - G 1.31

Cross-Subsidy Surcharge for Oil & Coal category M = F - G 1.61

9.6 Applicability of Tariff

The approved Retail Supply Tariffs, Wheeling Charges and CSS for FY 2019-20 shall

be effective from April 1, 2019 and shall continue until replaced/modified by an Order

of the Commission.

(D. Chakravarty)

Member, AERC

(S. C. Das)

Chairperson, AERC


10 Directives

The Commission has issued certain directives to APDCL in the past Orders, with an objective

of attaining operational efficiency and streamlining the flow of information, which would be

beneficial to the sector and the Petitioner, both in the short-term and long-term.

As regards the directives issued by the Commission in the Tariff Order dated 19th March,

2018, APDCL has submitted the report to the Commission on compliance. The Commission

has reviewed the compliance of directives as submitted by APDCL and the status is as follows:

Status of Directives issued in the Tariff Order dated 19th March, 2018

Directive 1 - Change in beneficiary of PGCIL

The Commission directs APDCL and AEGCL to work out the modalities to make APDCL rather

than AEGCL the beneficiary of PGCIL, before the commencement of the next MYT Control

Period (from FY 2019-20 onwards), so that the PGCIL bills are raised to APDCL directly.

APDCL should include the PGCIL Charges in their Tariff Petition with effect from FY 2019-20.

Status: Complied with

Directive 2 – Revision of Pay

The Commission directs APDCL to submit actual impact on account of Revision of Pay,

including detailed calculation and justification along with documentary evidences based on

Audited Accounts for FY 2017-18 and revised projections for FY 2018-19. APDCL should

maintain details of expenses incurred on ROP in FY 2017-18 and FY 2018-19 and also for the

arrears paid separately.


Directive 3 – Submission of Voltage-wise Losses and Voltage-wise Cost of Supply

APDCL is directed to submit properly reconciled data on voltage-wise losses and VCoS, based

on proper energy audit, and with complete explanation and supporting data, along with the

MYT Petition for the next Control Period.


Status:

APDCL has reported that inadequate infrastructure has been a hurdle for carrying out

computation of voltage-wise losses and voltage-wise cost of supply since long. However, after

commissioning of necessary infrastructure under various schemes like IPDS, UDAY etc.,

APDCL expects to compute actual VCoS. Besides, outcome of the project carried out by PPS

Enterprise Limited of the three circles namely Jorhat, GEC-II and Cachar under guidance of

the Commission, will be helpful in this aspect.

Directive 4 – FPPPA

APDCL shall strictly follow the AERC (Fuel and Power Purchase Price Adjustment)

Regulations, 2010, for levy of FPPPA, and intimate the Commission and consumers before

levy of FPPPA.

Status: No FPPPA was claimed during FY 2018-19.

Directive 5: Verification of Sales and Revenue Data

APDCL is directed to reconcile the actual category-wise revenue and the revenue computed

using the actual category-wise sales and load and the tariffs applicable during the particular

Year, while submitting its true-up Petition for any Year. Such reconciliation should form part of

all future True-up Petitions filed by APDCL

Status:

APDCL reported that revenue is accounted on the basis of periodic system generated reports

through billing software. Absence of specific patch for various events viz. Assessment bill,

arrear adjustment at any subsequent period sometimes necessitates manual intervention for

course correction. However, action is being taken in this regard.

This Directive has not been complied with, as is evident from the discrepancies between

Revenue booked in the Accounts and the total Revenue computed based on approved Tariff

and Category wise sales and load, as observed during the Truing Up of FY 2017-18.

Directive 6 – Capacity Building of Tariff Cell

The Commission observes that there are several obvious errors in filing of the Petitions and

calculation and presentation of Revenue Gap/ (Surplus), etc. It is also seen that many of the


submissions are conceptually wrong. The Commission has provided for a Training Budget of

Rs. 1 Crore in the ARR of FY 2018-19. APDCL should prepare and submit the Training

Calendar for FY 2018-19 to the Commission by April 30, 2018. The Training should also focus

on capacity building of the Tariff Cell through special training regarding regulatory aspects of

ARR and Tariff determination, financial principles, etc., in order to realise long-term benefits.

Status:

Partially Complied with. Details of action taken regarding Capacity Building of the manpower

not submitted.

Directive 7 - Approval for deviation in Capital Expenditure scheme approved in

Business Plan Order dated September 1, 2016

The Commission directs APDCL to take prior approval of the Commission in case of any

addition and/or deletion of schemes or any change in funding pattern of schemes approved in

Business Plan Order dated September 1, 2016. APDCL shall also take prior approval of the

Commission in case of any emergency works, apart from the works approved in Business

Plan Order dated September 1, 2016, to be carried out during the Control Period from FY

2016-17 to FY 2018-19.

Status: Complied with.

Directive 8 - Compliance of Audit Observations

The Commission noted that Statutory Auditors and CAG have made several comments on the

Audited Accounts. APDCL is directed to take corrective actions on the same expeditiously.


Directive 9 - Separation of Feeders for Tea category

APDCL is directed to expedite the separation of Feeders for the Tea category from the rural

load, in order to ensure reliable quality of supply for the Tea category.

Status:

APDCL has informed the Commission that steps are being taken to install separate feeders

for the Tea gardens. However, these are under different stages of implementation.


Directive 10: Voluntary Disclosure Scheme for Connected Load

APDCL is directed to carry out a campaign for soliciting details of the actual Connected Load

of the consumers through a Voluntary Disclosure Scheme, in order to facilitate recovery of the

appropriate Fixed Charges. APDCL should ensure that the Scheme is simple and easy to

administer and the Format and procedure for voluntary submission of revised Connected Load

does not result in undue harassment to the consumers.


Directive 11 – Safety Measures

APDCL is directed to expedite the preparation of a DPR for improving the safety levels of

system operation, as there have been several concerns expressed regarding the safety of

APDCL’s operations. The Commission has provided Rs. 1 crore in the ARR of FY 2018-19 for

preparation of the DPR. APDCL should submit the DPR within 3 months of this Order and take

urgent steps to arrange the funds for taking up the capital works for necessary safety

improvement measures.

Status:

APDCL reported one Electrical Safety Officer was appointed. Further, M/s PPS Energy

Solutions has been appointed for preparation of DPR for improving the safety levels of system

operation. DPR yet to be submitted.

Directive 12 – Outsourcing of sub-stations

APDCL is directed to re-examine the present practice of outsourcing the maintenance of some

of the 33/11 kV sub-stations after analysing the pros and cons of such an approach. In case

outsourcing is done because of unavoidable reasons, APDCL is required to ensure proper

supervision and monitoring of the work of the Contractors appointed for the purpose, as the

primary responsibility for proper and adequate maintenance of the sub-stations and collection

of data on SAIDI, CAIDI, etc., lies with APDCL.

Status:


APDCL informed that due to shortage of manpower, they resorted to outsourcing for

maintenance of some of the 33/11 kV sub-stations. However, APDCL is taking action for

recruitment of necessary manpower.

Directive 13: Provisioning for Bad and Doubtful Debts

It is observed that APDCL is provisioning for Bad and Doubtful debts every year, which is

approved by the Commission. However, the accumulated provision is not being utilised for

actual write-off of bad debts. APDCL needs to rationalise its approach and assess whether

further provisioning is required, and also to verify which receivables are beyond recovery and

need to be written off, through a proper process.

Status: Complied with.

Directive 14 - Incentive Scheme for Employees

APDCL shall examine to formulate an Incentive Scheme for employees, to reward the

employees for achieving clearly identified performance levels, which shall be payable in case

APDCL earns profit in any year. APDCL shall submit such Employee Incentive Scheme for

the Commission’s approval, along with the basic framework of the scheme, assessed

expenses, proposed method to recover the expenses on account of incentives, etc.

Status:

Not Complied with.

New Directives:

The Commission hereby issues the following to APDCL as under:

Directive 1: Submission of Voltage-wise Losses and Voltage-wise Cost of Supply

The Commission directs APDCL to complete the metering at 33kV, 11 kV and LT level for

arriving at the voltage wise losses. The Commission also directs APDCL to expedite Energy

Audit exercise in this regard. APDCL is directed to submit properly reconciled data on voltage-

wise losses and VCoS, based on proper energy audit, and with complete explanation and

supporting data, along with the MYT Petition for the next Control Period.


Directive 2: Energy Accounting

It is observed that there is no proper metering arrangements in the 33KV and 11KV feeders

and also at the DTR level. The Commission directs APDCL to complete the metering at 33kV,

11 kV and LT level for arriving at the voltage wise losses, proper Energy Accounting and

assessment of loss.

Directive 3: Replacement of Defective Meters

It is seen that a large number of consumer meters are defective. APDCL is directed to take up

an exercise to verify the defective meters and to replace the defective meters.

Directive 4: Verification of Sales and Revenue Data

It is observed during Truing Up of FY 2017-18, there is mismatch between Revenue booked

in the Accounts and the total Revenue computed based on approved Tariff and Category wise

sales and load. APDCL is directed to examine the matter on priority basis and take necessary

steps to avoid occurrence of such discrepancies in future.

APDCL is directed to reconcile the actual category-wise revenue billed vis-a-vis revenue

computed using the actual category-wise sales, contracted demand/ Load and the tariffs

applicable during the particular year, while submitting its true-up Petition for any Year. Such

reconciliation should form part of all future True-up Petitions filed by APDCL.

Directive 5: Separation of Rural Feeders:

APDCL is directed to expedite the separation of Rural Feeders and the Industrial feeders in

order to ensure reliable quality of supply to the consumers.

Directive 6: Voluntary Disclosure Scheme for Connected Load

APDCL is directed to continue with its campaign for soliciting details of the actual Connected

Load of the consumers through a Voluntary Disclosure Scheme, in order to facilitate recovery

of the appropriate Fixed Charges. APDCL should ensure that the Scheme is simple and easy

to administer and the Format and procedure for voluntary submission of revised Connected

Load does not result in undue harassment to the consumers.


Directive 7: Capacity Building

In view of the recruitment drive of APDCL in 2018-19, where several new technical and

managerial personnel have been inducted, the Commission has provided Rs 1.00 (one) crore

for capacity building of APDCL in the ARR of FY 2019-20.

The Commission directs APDCL to prepare and submit the Training Calendar for FY 2019-20

to the Commission by April 30, 2019.

Directive 8: Compliance of Audit Observations

The Commission noted that Statutory Auditors have made several comments on the Audited

Accounts. APDCL is directed to take corrective actions on the same expeditiously.

Directive 9: Load Factor Incentive

APDCL is directed to submit their views on introduction of load factor incentives by September

2019.

Directive 10: Interest on Consumer Security Deposit

APDCL should devise a mechanism to pay interest on security deposit to all consumers

including LT consumers based on the present connected Load/Contracted Demand.

APDCL is directed to submit the status of compliance of above Directives to the

Commission at the end of each quarter. The Commission will review the status in the

month following the end of that quarter.

Directive 11 – Maintenance of Project-wise Database

APDCL is directed to maintain database on the individual Projects under each Scheme

with the following details and submit the following details for all ongoing projects at

the time of true-up and Tariff for ensuing year. Further, for all Projects that have not

commenced by March 31, 2019, APDCL shall obtain the Commission’s prior approval


based on the necessary details as identified below, even if in-principle approval has

been received:

a) Details/Scope of Project including activities, area covered, etc.;

b) Start date of Project;

c) Scheduled completion date of Project;

d) Funding Plan;

e) Cost-Benefit-Analysis of the Project

f) Present Status of Project, indicating physical progress in percentage

terms and in monetary terms;

g) Status of Capitalisation as per Field Reports and as per Accounts;

h) Whether the intended benefits of the Project have been achieved, etc.

Sd/- Sd/-

(D. Chakravarty) (S. C. Das)

Member, AERC Chairperson, AERC


11 Tariff Schedule

This Chapter details the tariffs applicable in the State of Assam with effect from April 1, 2019

until replaced/modified by an Order of the Commission.

For the purpose of this Schedule, the consumers are divided into two distinct groups based

on voltage of supply, i.e., LT Group and HT Group. The consumers are further divided into

categories based on purpose of supply and nature of supply.

Common Terms & Conditions for both, LT Group and HT Group

(a) Surcharge for delayed payment: Surcharge @ 1.5% per month or part thereof at simple

interest shall be levied, if payment is not made in full on or before the due date.

(b) Payments shall be made by cash/local cheque/DD/Electronic Transfer (where

applicable): For all payments made by DD, the commission shall be borne by the

consumers.

(c) The Tariff does not include any tax or duty, etc., on electrical energy that may be payable

at any time in accordance with any law/State Government Rule in force. Such charges,

if any, shall be payable by the consumers in addition to tariff charge.

LT GROUP

Supply Voltage: 1 Ph, 230 V AC and 3 Ph, 415 V AC

Common Terms & Conditions for LT Group

(a) For the purpose of determination of monthly fixed charge based on Connected

Load, the Connected Load shall be rounded up to the next higher kW if the

decimal is higher than 0.5 and the nearest lower kW if the decimal is lower than

0.5.

(b) For Jeevan Dhara consumers having Connected Load below 0.5 kW,

Connected Load shall be rounded off to 0.5 kW.

Power factor penalty and rebate

[Applicable for LT IV –Commercial, LT V – General Purpose Supply, LT VIII – Small Industries,

and HT I – Domestic, HT II – Commercial, HT III – Public Water Works, HT IV – Bulk Supply,

HT V (A) - Small Industries, HT V (B) – HT I Industry, HT V (C) – HT II Industry, HT VI – Tea,

Coffee & Rubber, HT VII – Oil & Coal, HT VIII – Irrigation, and HT X – Electric Crematorium]


(a) Power Factor Rebate:

i. In case, the average PF (leading or lagging) maintained by the consumer is

more than 0.85 and upto 0.95, a rebate of 1% on the Energy Charges on

unit consumption shall be applicable;

ii. For PF (leading or lagging) of 0.95 and above upto 0.97, a rebate of 2% on

the Energy Charges on unit consumption shall be applicable;

iii. For PF (leading or lagging) of 0.97 and above upto Unity PF, a rebate of 3%

on the Energy Charges on unit consumption shall be applicable.

(b) Power Factor Penalty:

i. In case average PF (leading or lagging) in a month for a consumer falls

below 0.85, a penalty @1% for every 1% fall in PF (leading or lagging) from

0.85 to 0.60; plus 2% for every 1% fall below 0.60 to 0.30 upto and including

0.30 shall be levied on total unit consumption. PF penalty shall be levied on

those consumers where PF is recorded electronically.

LT Category-1 Jeevan Dhara:

Applicability

This Tariff shall be applicable for supply of power to any premises exclusively for the

purpose of own requirements with a Connected Load of not more than 0.5 kW and

consumption upto 1 kWh/day or 30 kWh per month.

(c) Tariff:

Consumption Energy Charge Fixed Charge

For consumption upto 30

kWh per month

Rs. 4.55 /kWh Rs. 20 per connection per

month

If any Jeevan Dhara consumer consumes more than 30 units per month for 2

consecutive months, then such consumer should be transferred to Domestic A

category and billed accordingly thereafter, irrespective of the number of units

consumed.


LT Category –II: Domestic A

Applicability

This tariff shall be applicable for supply of power to consumers having connected load

below 5 kW for residential premises, exclusively for domestic purposes only. This shall

also include supply of power to occupants of flats in multi-storied buildings, if the

premises have not been classified under Domestic B or HT Domestic and receiving

bulk power at single point without any individual metering arrangements for domestic

purposes.

(a) Tariff

Consumption Energy Charge Fixed Charge

First 120 kWh per month Rs. 5.40 /kWh

Rs. 40 /kW/ month From 121 – 240 kWh per Month Rs. 6.65 /kWh

Balance kWh Rs. 7.65 /kWh

NOTE:

If any part of the domestic connection is utilised for any use other than dwelling purpose

like commercial, industrial, etc., the entire consumption shall be treated under that

category and the respective tariff shall be applied for the entire consumption.

LT Category-III: Domestic-B

Applicability

This tariff shall be applicable for supply of power to consumers having Connected Load

of 5 kW and above upto 25 kW exclusively for domestic purposes only. This shall also

include bulk supply at single point for supply to occupants of flats in multi-storied

buildings having individual metering for domestic purposes.

(a) Tariff:

Energy Charge Fixed Charge

For all consumption. Rs 7.25 /kWh Rs. 40 /kW/month

NOTE:





LT Category-IV: LT Commercial

Applicability


upto 25 kW to all establishments and institutions of commercial nature and connected

with trading activities, including commercial offices, Government and public sector

commercial installations, commercial houses, optical houses, shops, hotels,

restaurants, bars, refreshment stalls, showcases of advertisements, theatres, cinema

halls, guest houses, laundries, dry-cleaners, Railway stations, public and private bus-

stands not covered under any other category of consumers, copy works, X-ray

installations, private nursing homes/clinical laboratories, photographic studios, battery

charging units, workshops, petrol pumps, factory & printing presses not using motive

power in the manufacturing process, private educational and cultural institutions,

lodging and boarding houses.

(a) Tariff


For all consumption Rs. 7.60 /kWh Rs. 120 /kW/month

LT Category V- LT General Purpose Supply

Applicability


upto 25 kW to all Non-commercial and Non-domestic users of electric power like

Government offices, Semi-Government Educational and cultural institutions,

Government hospitals, dispensaries, Charitable institutions and Trusts (public or

private formed solely for charitable or religious purposes), Dharamshala, Non-

commercial boarding and lodging houses and other Non-commercial institutions.


(a) Tariff


For all consumption. Rs. 6.50 /kWh Rs. 135 /kW/month

LT Category VI-Public Lighting

Applicability

This tariff is applicable to supply of power for street lighting systems in Municipalities,

Town Committees and Panchayat, etc., Signal systems in roads and park lighting, in

areas of Municipality/Town Committee/Panchayat, etc.

(a) Tariff


For all consumption. Rs. 6.60 /kWh Rs. 120 /kW/month

N.B. In case any unmetered supply is provided in exigency, the energy shall be

assessed considering 12 hours per day burning hours for the energy charge. For

example, if the total connected load of the street light service is 1 kW, energy shall be

assessed as 12 units per day.

LT Category VII-Agriculture

Applicability

This tariff shall be applicable for supply of power for agriculture / irrigation purpose in

the agricultural sector having Connected Load upto 25 kW.

(a) Tariff


For all consumption Rs. 4.60 /kWh Rs. 40 /kW/month

LT Category VIII – Small Industries

Applicability

This tariff is applicable for supply of power for industrial purposes having licence from


designated authority of appropriate Government and not covered under any other

category, for consumers having Contract Demand/Connected Load upto 25 kW.

(a) Tariff

Energy

Charge

Fixed Charge

Rural Industries – for all consumption Rs. 5.15 /kWh Rs. 40 /kW/month

Urban Industries - for all consumption Rs. 5.40 /kWh Rs. 50 /kW/month

LT Category IX: Temporary Supply:

Applicability

This Tariff will be applicable for electric supply of power at LT, which is temporary in

nature for a period not exceeding one month.

Charges

Domestic Rs. 80/kW/day or Rs. 9.39/kWh whichever is higher

Non-Domestic non-

agricultural

Rs.125/kW/day or Rs. 11.49/kWh whichever is higher

Agricultural Rs. 50/kW/day or Rs. 5.14/kWh whichever is higher.

LT Category X: Electric Vehicles Charging Station:

Applicability

This tariff is applicable to consumers who use electricity exclusively for Electric Vehicle

Charging installations at LT level.

(a) Tariff


For all consumption

Domestic Rs 5.40 /kWh Rs. 120 /kW/month

Note: Consumers can charge their own Electric Vehicles at their respective premises,

paying the charge applicable to the consumer category.


HT GROUP

Tariff for this group is applicable for those consumers availing power supply at 11 kV

or above. Calculations shall be deemed to be in kVA for consumers under this part of

the tariff schedule. However, consumers above 25 kW (or 30 kVA) Connected Load

and drawing power at LT are also covered under this Group. During the period of

conversion from LT supply to HT supply, the consumer shall have to pay the necessary

compensatory charges (10% & 3% of total energy consumption for LT line & DTR,

respectively).

Common Terms & Conditions for HT Group

(a) For supply at voltages higher than as applicable to the consumers, rebate @ 3%

shall be applicable on energy consumption for each higher level of voltage, and

a surcharge of 3% shall be applicable if consumer draws power at lower than the

applicable voltage level.

(b) In case, metering is done on the L.T. side of the distribution transformer, for a

group of consumers receiving power, then for the purpose of billing, an additional

energy consumption on account of transformer loss computed @ 3% on the

consumer’s Energy Charges shall be added.

(c) Voltage Rebate

i) A rebate of 3% in the Energy Charges shall be applicable for all consumers

taking supply at 132 kV.

ii) A rebate of 1.5% in the Energy Charges shall be applicable for all

consumers taking supply at 33 kV.

(d) Contract Demand: The Contract Demand shall be as per the Agreement executed

between the consumer and APDCL. In case declaration/option is not made by the

consumer, 100% of the Connected Load converted to kVA shall be the contracted

demand.

(e) Billable Demand: Billing demand shall be 100% of Contracted Demand or

Recorded Demand, whichever is higher. In case the meter remains defective in a

month, billing demand shall be considered as per clause 6.3.4 of AERC (Electricity

Supply Code) Regulations, 2017, as amended from time to time.

(f) Overdrawal Penalty: If the Recorded Demand is higher than the Contracted


Demand in a month, then fixed charge based on Contracted Demand shall be

levied at three times the normal rate for the portion of demand exceeding the

Contracted Demand.

HT Category I: HT Domestic

Applicability


above 25 kW (or 30 kVA) to residential premises, exclusively for domestic purposes

only. This shall also include supply of power to occupants of flats in multi storied

buildings/ residential colony, receiving bulk power at single point with single metering

for domestic purposes.

(a) Tariff:


For all consumption. Rs. 7.25 /kWh Rs. 40 /kVA/month

NOTE:




HT Category-II: HT Commercial

Applicability


above 25 kW (or 30 kVA) to all establishments and institutions of commercial nature

and connected with trading activities, including commercial offices, Government and

public sector commercial installations, commercial houses, optical houses, shops,

shopping malls, restaurants, hotels, bars, refreshment stalls, showcases of

advertisements, theatres, cinema halls, guest houses, laundries, dry-cleaners, Railway

stations, public and private bus-stands not covered under any other category of

consumers, copy works, X-ray installations, private nursing homes/clinical

laboratories, photographic studios, battery charging units, workshops, petrol pumps,


factory & printing presses not using motive power in the manufacturing process, private

educational and cultural institutions, lodging and boarding houses.

(a) Tariff


For all consumption Rs. 7.60 /kWh Rs. 160 /kVA/month

HT Category - III: Public Water Works

Applicability

This tariff is applicable for public water supply maintained by Government or

Government Corporations, Municipalities, Town Committees and Panchayats.

(a) Tariff



HT Category – IV: Bulk Supply

Applicability

This tariff is applicable to Bulk consumers with a Connected Load above 25 kW (or 30

kVA) provided that the consumers not covered by any other category such as any

domestic connection, industries, tea, etc., and who make their own internal distribution

arrangement at their own cost and receive power at the point of supply at high or extra

high voltage. This is further classified as under:

(i) Government educational institution-like universities, engineering colleges,

medical colleges with residential facilities and

(ii) Others - categories not included in any of the above categories, including

Government offices, Railways, Military Engineering Services, etc.

(a) Tariff

(i) Bulk Government Educational Institutions




(ii) Others



HT Category V (A): HT Small Industries

Applicability

This tariff is applicable for supply of power for industrial purposes having licence from


category, for consumers with Connected Load above 25 kW (or 30 kVA) and up to 50

kVA, irrespective of location of the industry in rural area or urban area.

(a) Tariff



HT Category V (B)-HT-I Industries

Applicability

This tariff is applicable for supply of power to industrial consumers having licence from


category, at a single point for industrial purposes with Contract Demand/Connected

Load above 50 kVA and up to 150 kVA.

(a) Tariff

Energy Charge (Base

Tariff)

Fixed Charge


TOD tariff

In addition to the above Base Tariff, the following Time of Day (TOD) tariff for HT-I

industries shall be applicable:


Time Slot Energy charge (Rs. /kWh)

0600 hrs to 1700 hrs (normal) 0.00

1700-2200 hrs (peak) (+) 1.50

2200-0600 hrs (night off-peak) (-) 1.50

HT Category V (C): HT-II Industries

Applicability

This tariff is applicable for supply of power at a single point for industrial purposes

having licence from designated authority of appropriate Government and not covered

under any other category, for Contract Demand/Connected Load above 150 kVA.

(a) Tariff

A consumer may opt for any one of the following Options depending on his

requirements by prior intimation to concerned billing unit of Discom. A consumer may

change his Option only after six months of availing that particular Option.

Option -1

Energy Charge

(Base Tariff)

Fixed Charge


In addition to the above Base Tariff, the following Time of Day (TOD) tariff for HT-II

Industries shall be applicable:

Time Slot Energy Charge (Rs. /kWh)


1700-2200 hrs (peak) (+) 1.50


Option -2



No TOD Tariff will be applicable for consumers who opt for Option-2.


HT Category VI-Tea, Coffee and Rubber

Applicability

This tariff is applicable for tea, coffee and rubber plantation/production by utilisation of

electrical power in factory, irrigation, lighting, etc., in the Estate.

(a) Tariff

Energy Charge

(Base Tariff)

Fixed Charge


In addition to the above Base Tariff, the following Time of Day (TOD) tariff for

HT-VI Tea, Coffee & Rubber shall be applicable:

Time Slot Energy Charge (Rs./kWh)


1700-2200 hrs (peak) (+) 1.50


HT Category VII - Oil and Coal

Applicability

This tariff shall be applicable for supply of power to consumers at a single point for

installations of Oil and Coal Sector.

(a) Tariff

Energy Charge (Base

Tariff)

Fixed Charge


In addition to the above Base Tariff, the following Time of Day (TOD) tariff for HT-VII

Oil and Coal shall be applicable:

Time Slot Energy Charge (Rs./kWh)


1700-2200 hrs (peak) (+) 1.50



HT Category VIII: HT Irrigation

Applicability

This tariff shall be applicable for electricity supply for agriculture / irrigation purpose in

the agricultural sector for pump set above 25 kW (or 30 kVA) and for whom power has

been supplied at 11 kV or above.

(a) Tariff



HT Category IX: Temporary Supply:

Applicability

This Tariff will be applicable for electric supply of power at HT which is temporary in

nature for a period not exceeding one month.

HT Category – X: Electric Crematorium

Applicability

This tariff is applicable for electricity used in Electric Crematoriums for all purposes,

including lighting.

(a) Tariff


For all consumption. Rs. 4.45/kWh Rs. 160/kVA/month

Charges

Rs. 160 /kVA/day or Rs. 9.15 /kWh, whichever is

higher


HT Category XI: Railway Traction:

Applicability

This tariff is applicable to the Railways for traction loads.

(b) Tariff



HT Category XII: Electric Vehicles Charging Stations:

Applicability

This tariff is applicable to consumers who use electricity exclusively for Electric Vehicle

Charging installations at HT level.

(c) Tariff



Note: Consumers can charge their own Electric Vehicles at their respective premises,

paying the charge applicable to the consumer category.

This Tariff Order shall continue to be applicable until it is replaced/modified by an Order

of the Commission.

This Tariff Order is signed by the Assam Electricity Regulatory Commission on March

01, 2019.

These Tariffs take effect from April 1, 2019.

Sd/- Sd/-

(D. Chakravarty)

Member, AERC

(S. C. Das)

Chairperson, AERC


12 Annexures

24th Meeting of the State Advisory Committee

VENUE : ASSAM ADMINISTRATIVE STAFF COLLEGE, GUWAHATI – 22.

DAY / DATE : TUESDAY, 5th February, 2019.

LIST OF MEMBERS / SPECIAL INVITEES: AT ANNEXURE-I (ENCLOSED)

The 24th Meeting of State Advisory Committee (SAC) was chaired by the Hon’ble

Chairperson, AERC, Shri S.C. Das IAS, (Retd.). At the onset, the Chairperson welcomed all

members and invitees to the meeting. He briefed the participants that the meeting was

convened, primarily, to discuss the Multi Year Tariff (MYT) Petitions for FY 2019-20 to

FY2021-22, which were filed by the State Power Utilities in December 2018. The

Chairperson informed that the utilities would make short PowerPoint presentations on the

important features of their respective petitions during the meeting. He further informed the

participants that a Public Hearing is also scheduled to be held on 12th February 2019 on

these petitions.

The Chairperson stated that as stipulated by Section 87 of the Electricity Act 2003, the

Commission has made it a point to approach the SAC for advice in all important matters of

policy, including Regulations and Tariff making. He requested the members to offer their

valuable advice on the petitions and in particular, on the following aspects:

a) The Discom has claimed increase in fixed charges stating that these charges

accounted for only 14% of the electricity tariff as on date, while fixed cost

constituted 60% of the total cost. The Commission increased fixed charges last

year by Rs 5 and Rs 10 across different categories of consumers.

b) The High Tension (HT) consumers have been claiming that cross subsidy

surcharge be reduced further and tariff be based on voltage wise cost of supply.

c) APDCL have signed the UDAY scheme and as per the MoU, the Company has

to restrict the distribution loss to 15% or below in 2019-20. The distribution loss

achieved by APDCL in FY 2018-19 is 17.64 %.Whether the Distribution loss

trajectory for the MYT period is to be determined keeping in view the MOU under

the UDAY scheme.


The Chairperson observed that the State Power Companies have been making huge capital

investments and most of these are funded under different schemes of the State & Central

Governments and loans from ADB and the World Bank. With capitalization of these projects,

electricity tariff is likely to be affected over the next couple of years. The Chairperson further

observed that there is a possibility of decrease in POC charges with increase in State

generation in the coming years and concern displayed by the Central Government regarding

high POC charges for few states and constitution of a Committee to study the matter afresh.

The Welcome address was followed by an introductory session among the members and

invitees. Thereafter, the agenda items were taken up for discussion in seriatim.

The important points raised by the Hon’ble Members during the course of discussions are

briefly recorded below.

Agenda: Confirm the Minutes of the 23rd meeting of SAC held on 15.06.2018

The Minutes of the 23rd Meeting of the Committee were circulated among the Members and

Special Invitees. The following comments were received on the above:

a) Shri A.K. Baruah, Adviser AASIA brought to the notice of the Commission that point

No.VI of Agenda No. 5 regarding the status of reconstitution of the Consumer Grievance

Redressal Forums was raised by him and not by the member mentioned in the minutes.

b) Shri Baruah stated that one of his observations regarding non-payment of load security

interest to LT consumers by APDCL was also not recorded in the minutes.

The Chairperson, AERC directed that necessary modifications be made to the minutes.

It is regretted that there was an inadvertent mistake in the name of the member. As directed

by the Commission, rectification has been made and point No.VI of Agenda No. 5 of the

minutes of the 23rd meeting of SAC held on 15.06.2018 shall henceforth be read as under:

“Shri A. K. Baruah, Adviser, AASSIA enquired regarding the status of the re-

constituted Consumer Grievance Redressal Forums. Chairperson AERC remarked

that the Commission had written to the Discom to reconstitute 3 CGRFs in Jorhat,

Guwahati and Silchar as per the AERC Regulations and the process is underway.”


Chairperson AERC remarked that at present there are eight (8) CGRFs across the State

and the Commission has directed only three to be reconstituted with independent members

according to the AERC Regulations, 2016. This was because the total number of cases

recorded in the 8 CGRFs annually was not more than 20-25. He observed that most of the

grievances, more than 95%, were sorted out at the sub-divisional level. The Chairperson

further observed that APDCL should improve record keeping of the grievances attended at

sub-divisional and divisional levels.

Regarding the point of non-payment of load security interest to LT consumers, an addition

has been made to the minutes in Agenda No 5 as Point No. viii as under:

“Shri A.K. Baruah, Adviser AASSIA stated that although, APDCL is paying load

security interests to HT consumers, no payment is being made to the LT consumers.

He observed that this is a contravention to the provisions of the Electricity Act 2003

as the Act advocates interest payment to all consumers irrespective of the category

to which the consumers belong”.

The Commission directed APDCL to devise a means to pay interest on load security to the

LT consumers as well, as has been specified in the AERC Regulations & the Electricity Act,

and furnish an action taken report in the next SAC meeting.

Shri Champak Baruah, Member stated that he mentioned about the introduction of merit

cum seniority in promotion of Engineers of the three Companies but there are no records

of the same in the minutes.

The Chairperson clarified that as the matter relates to internal administration of the utilities

over which the Commission has no jurisdiction, it was not recorded.

Agenda: Action Taken on the minutes of the 23rd Meeting of SAC.

A power-point presentation was made by Assistant Director (Engineering) AERC, Shri J.

Bezbaruah on the salient features of action taken reports submitted by the power utilities.

Hard copies of the action taken reports were also circulated among the members of SAC.

The Chairperson AERC asked the respective utilities to respond to any query from the SAC

Members. The important points of discussion are noted below:


i. Shri Subodh Sharma, President, Bidyut Grahak Manch stated that solid steps need

to be taken by the State Generating Sector to improve own generation capacity. He

observed that more State generation would help reduce the POC charges. He further

observed that performance of the state generation sector has a direct bearing on the

health of the State Transmission and Distribution utilities.

ii. Shri Dilip Kumar Sarma, Sr. Consultant, NETC stressed that all efforts should be

made to establish large sized generation plant inside the State of Assam either in

State or Central sector which will contribute towards moderating the existing POC

charges and in turn the domestic tariff.

iii. Regarding action taken by the Generation Company following decision of

construction of the National Gas Grid in the State, MD APGCL, Ms Kalyani Baruah

informed that APGCL has submitted a proposal to both MOPNG and GAIL for 9.75

MMSCMD of gas to set up power plants at various locations of Assam. Out of the

9.75 MMSCMD of gas, 6.60 MMSCMD is for the proposed 250 MW Chandrapur

Thermal Power Project and 1450 MW (2X725 MW) Thermal Power Project at Lower

Assam. The balance 3.15 MMSCMD gas is proposed to be utilized by the 725 MW

Amguri Thermal Power Project and 100 MW Ph-II Namrup Replacement Power

Project. MD, APGCL further informed that the price of gas available would be high

and APDCL is considering appointing consultants to conduct a feasibility study for

the proposed projects.

Chairperson AERC observed that APGCL should accept the gas available even if

price may be high, keeping in mind the future energy security of the State.

Shri V.K. Pipersenia, IAS (Retd), Chairman APDCL/AEGCL /APGCL informed that

they would soon initiate the process to appoint consultants to conduct a feasibility

study regarding the viability of the proposed gas projects vis-à-vis the cost of gas

available.

Shri D. Chakravarty, Member AERC, suggested that gas available should be a

mixture of both domestic and RLNG to reduce cost. MD, APGCL informed that

MOPNG has given assurance that the gas made available would be a mixture of

both domestic and RLNG and likely to be priced between $8- $12 per MMBTU.

Shri Subodh Sharma suggested that since the National Gas Grid is likely to be

completed by 2020, therefore, the viability study needs to be completed at an early


date so that these projects come into existence before gas becomes available. He

informed the house that M/s GAIL had proposed uniform pricing of gas throughout

the country; however, the outcome of the proposal is unknown.

Shri Dilip Kumar Sarma stressed that APGCL through the Govt. of Assam should

vigorously pursue the proposal of M/s GAIL to the Ministry of Petroleum for uniform

pricing of gas through out the country irrespective of distance or direction. At the

same time, commitment from GAIL should also be obtained for minimum quantum

of gas required for economic operation of gas based plants to be established by

APGCL

Shri Dilip Kumar Sarma also observed that, given the present energy scenario, the

gas that would be available in the country for the next 50 years would meet only 15-

20% of the total requirement. Therefore, gas that would be supplied to Assam would

be imported gas and likely to be priced at $8-$9 per MMBTU.

iv. Shri K. Medhi, Secretary, NESSIA opined that there have been discussions

regarding setting up of power projects in Chandrapur since a long time, however,

nothing concrete has been achieved so far.

MD, APGCL replied that different kinds of projects were proposed in the past. She

stated that as suggested by Advisory Committee Members, a pumped storage

project was proposed to be set up at Chandrapur. It was informed that although some

investors had shown interest in the project initially, they failed to bid when tenders

were floated for the same, even after repeated extensions.

v. Shri A.K Baruah, Adviser, AASSIA suggested that APGCL should ensure adherence

to the timelines for completing their projects.

vi. Shri Subodh Sharma enquired regarding the new timelines for completion of the

NRPP project.

MD, APGCL informed that gas turbine (Open Cycle) project of NRPP is likely to be

commissioned in April, 2019 and the combined cycle project by December, 2019.

vii. He further enquired as to why same generation output was shown throughout the

MYT period for NRPP. It was informed that APDCL has committed gas of 0.66


mmscmd from M/s GAIL of which 0.49 will be utilized in NRPP and with the remaining

gas, APGCL proposes to run few units of NTPS.

Shri Sharma observed that APGCL should make efforts to actually achieve the

proposed generation or else power procurement planning of APDCL gets affected

and the consumers may end up paying higher electricity price. He suggested that

the quantum of generation shown by APDCL and APGCL should match.

viii. Shri Champak Baruah enquired as to the status of the 70 MW Amguri Solar Power

Project. He emphasized the fact that while the last date for bidding of the project was

shown as 29.05.2019 in the last meeting, now the same is shown as 06.02.2019.

It was informed by the MD, APGCL that as suggested by SAC Members in the last

meeting, APGCL decided to implement the project on its own through EPC

contractors as project implementation through SECI was getting delayed. Therefore

new tenders were floated and it is expected to receive a number of bids by

06.02.2019.

It was emphasized from the Chair that APGCL should take steps for timely

completion of their projects such as NRPP, 120 MW Lower Kopili Hydel project, 24

MW Borpani Middle-II SHEP, etc

ix. Shri K. Medhi, General Secretary, NESSIA suggested that since APGCL has not

succeeded in adding sizeable new generation capacity, perhaps, APGCL may not

undertake any new project and instead, APDCL may be asked to procure power from

outside sources through different modes.

Chairperson, AERC agreed that APGCL had not achieved much success with new

projects in recent years except for 70 MW Lakwa Replacement Power Project

(LRPP), which was commissioned in time, and reiterated that the Company must

make ardent efforts to increase generation. He observed that the power generated

by APGCL is one of the cheapest powers available to the Discom. The Chairperson

further observed that emphasis must also be laid for fast completion of the Central

Sector Generation projects in Assam as the State receives 50% allocated power

from these projects.


x. Regarding (2x800) MW Coal based Margherita Project, it was informed by MD,

APGCL that although the matter has been pursued with the Central Government

several times, no progress has been made in getting coal linkage for the project, so

far.

xi. There was a suggestion in the last meeting that newly recruited engineers of the

State distribution company may be trained on the technical aspects of electricity by

their deputation to generation/ transmission Company and similar measure may be

adopted for engineers of the generation / transmission sector so that these new

recruits get a good idea of the overall power sector. Shri V.K. Pipersenia, Chairman,

APGCL/AEGCL/APDCL commented that although it’s a good suggestion, the three

power Companies must devise their own HR policies. Shri Pipersenia informed that

at present, the Discom has a shortage of manpower and therefore, they are not in a

position to depute any Engineer to other utilities. The three companies have to

together decide on the matter.

Regarding the Development of 100 MW (25x4) Solar Power Plant within the State by

APDCL it was informed by Shri R. Agarwal, IAS, MD, APDCL that Azure Power India

Pvt. Ltd, New Delhi and Maheshwari Mining and Energy Pvt. Ltd, Telangana were

the successful bidders for 90 MW and 10 MW respectively. It was informed that the

timeline for implementation of the projects will be 18 months from the date of signing

the PPA. It was further informed that the bidders have identified the land for the

projects. The land in Udalguri area which was identified for one project has already

been transferred to the developer by the BTC administration while land acquisition is

under process for the rest of the projects.

Shri Subodh Sharma suggested that as agricultural land cannot be used for power

projects, the low lying lands of Brahmaputra river valley may be used for the purpose.

MD, APDCL informed that the land identified for the projects were lying vacant and

as such, there was some relaxation in norms and conversion of the land allowed for

the purpose of setting solar plants.


xii. It was further informed by MD, APDCL that as suggested in the last meeting, APDCL

is carrying out energy audit of the 33/11 KV Jalukbari sub-station under PAT scheme.

Based on its output, it was informed that, similar audit may also be carried out in near

future for other sub-stations.

Chairperson AERC stated that as was informed in the last meeting, energy audit

study has been taken up by the Commission in three circles of APDCL namely

Guwahati Circle II, Jorhat and Cachar. Two Consultants were engaged through open

bidding but the work was delayed due to absence of transformer meters and 33 KV

& 11 KV line meters. He informed that meetings with concerned APDCL officers was

held from time to time and metering works are likely to be completed shortly. The

audit works will start immediately when the necessary infrastructure is in place.

Shri Subodh Sharma observed that the meters installed should have provisions for

IT connectivity in future.

MD, APDCL responded positively stating that the meters installed have the provision

for IT connectivity.

xiii. On safety related aspects, MD, APDCL informed that the Company have taken a

slew of measures to ensure safety of the consumers. APDCL have started replacing

the bare conductors for LT consumers with AB conductors, all transformers under

Saubhagya scheme are fenced and whenever cases of unfenced transformers are

reported, the Company immediately takes necessary action for fencing.

Shri Subodh Sharma suggested that many electrical accidents can be avoided if

emphasis is laid on proper earthing of the conductors.

MD, APDCL agreed to the suggestion and assured that action would be taken in this

regard. He requested the members to offer suggestions to APDCL regarding these

issues so that appropriate action can be initiated. He stated that there is shortage of

manpower to maintain the lines and recently a number of recruitments have taken

place in this regard which is expected to help the Company considerably.

Shri Champak Baruah commented that accidents also take place due to non

adherence to safety procedures by the linemen and officers of APDCL. Instances


have come to his notice where linemen are taking shutdown instead of JEs, which is

not as per safety protocol. He observed that prior information of shutdown to the local

people while working on the electric lines /poles/ transformers is essential.

Chairperson AERC observed that APDCL must ensure that the safety protocols are

being followed and continue with their safety initiatives for the consumers.

xiv. Shri Saurav Agarwal, FINER informed that as requested in the last meeting, APDCL

circulated an advisory to the field offices regarding the new provision that the

requirement for declaring minimum 65% of the contracted demand no longer exist.

However, APDCL is not allowing a consumer to reduce the contract demand after

the month of September.

It was clarified by APDCL that it is sticking to the month of September as tariff

petitions, showing the load, is to be submitted by the month of November each year.

Chairperson AERC informed that as per the Supply Code Regulations, a consumer

can reduce the contract demand only once in a year, but as this was the first year of

the new

Supply Code Regulations, he asked APDCL to look into the matter to consider some

relaxation, if feasible.

Agenda: Presentation on MYT Petitions for FY 2019-20 to FY 2021-22 by AEGCL

There was a brief power point presentation on the MYT petitions for FY 2019-20 to FY

2021-22 along with true up for FY 2017-18 and Annual Performance Review for FY 2018-

19. The presentation of AEGCL is enclosed as Annexure I. The following discussions took

place during the course of the presentation.

i. It was informed that from FY 2019-20, the transmission charges on account of

PGCIL shall be reflected in the tariff of APDCL.

ii. Shri Subodh Sharma commented that APDCL must correctly ascertain the PGCIL

charges and may seek help of AEGCL in this regard.

Chairperson AERC observed that PGCIL charges are basically the POC charges

and the actual amount can be ascertained through SLDC. He opined that APDCL


shall acquire the expertise in calculating these charges over a period of time and

until then, may seek assistance from AEGCL.

iii. Shri Subodh Sharma pointed out that while the cost of AEGCL should have been

around 30-40 paise/unit for the MYT period of FY 2019-20 to FY 20121-22, AEGCL

was asking a tariff of 51- 62 paise/unit.

MD, AEGCL explained that the tariff included the BST charges of 20 paise per unit.

.

iv. Shri Subodh Sharma stated that Generators like Kathalguri Power Station, being a

central sector generator, despite having the AEGCL network at their bays, have to

evacuate their power through PGCIL network. Therefore, the consumers of Assam

have to bear high POC charges. These issues need to be taken up by the Assam

Government with the Central Government and Shri Sharma requested AERC to

bring the matter to the notice of the State Government.

Chairperson AERC observed that many States are facing similar issues and these

matters are being examined in the Central Government. However, he noted the

suggestion of Shri Sharma.

v. Shri Subodh Sharma opined that AEGCL is the best performing company among

the three power utilities of the State and it is important that policy decisions should

not cause any harm to the Company.

vi. Shri Sharma again pointed out the issue regarding Tariff Based Competitive

Bidding (TBCB) which has been made compulsory for setting up new intrastate

transmission projects as per the Tariff Policy, 2016. He expressed concern that the

State Transmission Company may suffer if TBCB is accepted.

Chairperson, AERC stated that it is a policy decision of the Government of India

that any intra state transmission project, which cost above a threshold limit, shall

be developed by the State Government through competitive bidding process and

the limit is to be decided by the State Electricity Regulatory Commissions. The

Chairperson informed that AERC, in consultation with the State Government and

AEGCL, has specified a threshold limit through a draft notification in January 2019.

He further informed that comments on the draft notification may be submitted within

31st March, 2019.


vii. Shri S.N. Kalita MD, AEGCL informed that as directed by the Commission, the

Company has taken initiative to restructure and strengthen SLDC.

Agenda: Presentation on MYT Petitions for FY 2019-20 to FY 2021-22 by APGCL

APGCL made a brief power point presentation on MYT petitions for FY 2019-20 to FY

2021-22 along with true up for FY 2017-18 and Annual Performance Review for FY 2018-

19. The presentation of AEGCL is enclosed as Annexure II. The important points raised

by the participants during the course of the presentation are summarized below:

i) MD APGCL, Ms K. Baruah informed that the tariff proposed for Lakwa Thermal

Power Station (LTPS) for the MYT period starting with FY 2019-20 are Rs 5.31/unit,

Rs 5.66/unit and Rs 5.62/unit respectively. The proposed tariffs are the highest

among the APGCL power stations as special R&M has been proposed for the

Station which will require major overhauling.

ii) It was further informed by MD, APGCL that the new projects are being financed

from ADB as 90 % Grant and 10% loan while R&M of old plants are being financed

with State Government assistance. On a query from Shri Subodh Sharma, it was

further informed by Ms Baruah that APGCL may restructure the Company and

convert the capital grants to equity.

iii) The members expressed concern that the thermal stations of APGCL were unable

to generate to their installed capacity due to inadequate availability of gas and

important projects like Margherita Coal based project is yet to receive coal linkage.

Besides, commissioning of most of the ongoing projects of APGCL has been

delayed due to various reasons. They observed that if APGCL did not improve its

performance, the performance of AEGCL will suffer too. And the consumers also

have to bear greater cost of power through POC charges for power purchased from

outside the State.

Given the above scenario, all members agreed that the State Government has to

play a pivotal role in ensuring adequate gas availability and coal linkage for the

projects of APGCL, at the earliest.


Agenda: Presentation on MYT Petitions for FY 2019-20 to FY 2021-22 by

APDCL

There was a short Power Point presentation from APDCL on the MYT petitions for

FY 2019-20 to FY 2021-22 along with true up for FY 2017-18 and Annual Performance

Review for FY 2018-19. The presentation of AEGCL is enclosed as Annexure III. The

following discussions took place during the course of the presentation:

i. APDCL informed that due to repeated persuasions against the POC charges by six

States including Assam, the Ministry of Power called a meeting to hear their

grievances. It was further informed that APDCL submitted their viewpoints on the

matter and requested that 80% of the fixed cost may be socialized instead of 20%

as is done now.

MD, AEGCL observed that only 26% of the PGCIL transmission capacity is being

utilsed and the rest 74% stands for reliability of the system and future use. He

therefore, suggested that 74% may be proposed as reliability cost of the network to

be equally shared by all users.

Chairperson AERC observed that if 50% of the charges are socialized and 50%

charged through POC, even then there will be some considerable reduction in the

transmission charges..

ii. It was informed that for the first time Assam is receiving 50 MW RTC Wind Power

from projects in Tamil Nadu. APDCL has signed agreement with SECI and PTC and

Assam is receiving the power from 4th February, 2019. It was further informed that

APDCL would receive another 50 MW of wind power within this year. It was also

informed that the 3rd unit of NTPC Bongaigaon Thermal Power Station will be

commissioned shortly. Although, the price of this thermal power is high, APDCL will

procure the power as per PPA. APDCL informed that Assam will soon also receive

around 200 MW power from Mangdechu Hydro Electric project in Bhutan.

iii. The Discom informed that APDCL has been chosen the ADB Best Performing Utility

award for timely implementation of its projects under 2017 ADB loan 3200 IND. The

award would be given in October this year


Agenda: Comment and suggestion of the Members

i. Shri Subodh Sharma offered the following suggestions –

a) Due to SAUBHAGYA, DDUGJY and other such schemes of the

Government of India, the domestic consumers are increasing at a faster

pace than any other consumer category. As such, increased sale to such

consumers also increases the distribution losses of the Company and

affecting its revenue. APDCL is expected to function as a commercial entity;

however, the peculiar consumer mix is preventing it from doing so. As such,

adequate subsidy from the State Government is essential.

b) Although, first financial restructuring of the distribution Company was

carried out years back and with signing of the UDAY scheme, another

restructuring is underway, APDCL is yet to draw up a master plan to bring

a commercial turnaround. The loss making utility must try to chalk out a

master plan as to what should be the tariff at which it can achieve a financial

turnaround, considering all the regulatory provisions and subsidies of the

State Government that is likely to be available. They must also consider the

investments required to bring the losses to the required level.

c) The three State Power Companies are symbiotically interconnected and in

the long run, success of one would depend not only on its own performance

but on the performance of the other two as well. Therefore, each Company

must try to build itself as a robust commercial organization.

Chairperson AERC stated that in every Tariff Order, the Commission sets

some parameters for achievement by the Companies. APDCL should make

all efforts to achieve the targets set in tariff orders like distribution loss,

collection efficiency, etc; so as to achieve a financial turnaround. The

Chairperson observed that technical loss in the system may be higher than

what is envisaged, in addition to commercial losses. A lot of investment in

distribution infrastructure is required to reduce technical loss and to have


an idea of these losses, the Commission is conducting the energy audit in

three Electrical Circles. The final report of this audit is likely to be submitted

by the end of this year and then the Commission would be in a better

position to issue directions.

ii. Shri K. Medhi, General Secretary, NESSIA offered the following suggestions –

a) The proposed increase in fixed charges is very high while improved power

scenario is a matter of opinion and usually differs from place to place.

Instead of enhancing fixed charges, APDCL may conduct actual load

survey sub-division wise. This would help increase the connected load and

increase in fixed charges may not be necessary.

He requested the Commission to look into the above aspects before

allowing any enhancement.

b) Due to programmes such as SAUBHAGYA and DDUGJY, the performance

of APDCL is dwindling. He stated that AT&C losses have increased

substantially, collection efficiency has gone down even when the number

of connections have increased; and arrears increased compared to earlier

years. In view of the above scenario Shri Medhi suggested that

1. APDCL should try to enhance alternate and effective time tested

methods for revenue realization.

2. Adopt energy efficient technologies & equipments and encourage

consumers to do the same.

c) APDCL should encourage use of solar rooftops in the State and try to draw

the benefits of Central Government sponsored schemes for solar rooftops.

d) There are many ghost (non-existent) electricity consumers and if the arrear

of these ghost consumers are taken out, the balance sheet will be cleaner.

Shri Medhi opined that there is a presumption that 40% of the total arrear

is due to non-existent consumers.


Chairperson AERC assured that the suggestions would be considered

while taking any decision.

iii. Shri Abhijit Sharma, Secretary, ABITA made the following submissions –

a) He enquired regarding the status of providing dedicated feeders to the tea

gardens.

Shri Rakesh Agarwal, MD APDCL stated that an amount of Rs 20 Crores

were earmarked in the budget for installation of 11 numbers of dedicated

feeders. However, tendering for the purpose is in process.

He informed that from FY 2018-19, the process of financing of the State

government has undergone a massive change. Initially, whenever, funds

were allocated by the State Government, the entire fund was released to

APDCL and the money could be utilized. However, now, the State

Government gives an allocation in the budget, a DPR/ proposal has to be

submitted from APDCL, then administrative approval is received, then

tendering/ allotment of works have to be done, then it has to be uploaded

for financial sanction, and once the work is partially executed, only then the

finance is released just like a State Government Department. He observed

that due to this change in the process of release of funds, works are getting

delayed.

MD, APDCL informed that during the last year 14,000 smart meters were

installed in Guwahati as a pilot project and in January this year the

Company was able to generate bills for 11000 meters without any kind of

human intervention. He stated that technological interventions would make

services convenient for the consumers; however, this would not only

require the support of consumers but also massive investments. He

informed that APDCL is trying to bring investments through IPDS, ADB

Financing and the State Government.


b) While appreciating the endeavors of APDCL, Secretary, ABITA stated that

the tea sector contributed around 8% of the total revenue of the Company

amounting to approximately Rs 800 Cr. He explained that unless the supply

to rural consumers and the tea gardens are separated, power position in

the tea estates is unlikely to improve as the quality of power available may

not be good enough for use in the tea gardens. As a result, the tea gardens

have to utilize their generators and power produced is costlier than the

power. from APDCL. While APDCL loses revenue, the tea gardens have to

pay greater cost of production.

c) Secretary, ABITA also observed that as directed by the Commission in the

last meeting, the Company can introduce Voluntary Disclosure of load

program from time to time where consumers can be asked to disclose their

loads. The Company may allow consumer to enhance their loads in a

hassle free way with very few documentation requirements.

MD APDCL informed that this is being done and about Rs 25 Cr additional

fixed charges are collected after the VDL scheme in October last year.

Chairman APDCL suggested that online facility for enhancement of load

should be made available.

d) Secretary, ABITA stated that with the ongoing works of SAUBHAGYA, all

the development works of APDCL has taken a backseat.

MD APDCL informed that some of the contractors involved in the

development schemes like ADB, IPDS were also chosen for implementing

the SAUBHAGYA scheme and since it is a time bound program, the

development works were somewhat delayed. However, he assured that he

and Chairman APDCL are personally reviewing the progress of every work

under the schemes, and lots of advancement in the works is expected in

the next couple of weeks.

It was informed from APDCL that online facilities were launched for new LT

connections, however, applications received through online facility are very

few. Therefore, as directed by Chairman, APDCL, the Company is planning


to facilitate only online applications for new connection for LT consumers

so that they get acquainted with the new systems. It was further informed

that online facility for new HT connections will be launched too, shortly.

Shri Subodh Sharma observed that the electronic meters are equipped with

facilities to capture the maximum demand during the month and APDCL

can check if the contracted demand has been exceeded by any consumer.

Chairperson, AERC agreed to the suggestion and observed that the meter

readers are not taking such readings and may be asked to do so by the

concerned authorities. He noted that for HT consumers, it is being done

because if these consumers exceeded contract demand they were

penalized but for LT consumers, the same was not practiced. He further

observed that this practice will do away with the necessity for conducting

internal load survey by the Company, as has been proposed.

iv. Shri Saurav Agarwal, Chairperson, Power, FINER made the following observations:

a) As load enhancement is to be allowed online, load reduction should also

be allowed online once a year.

Chairperson AERC directed APDCL to look into the matter.

b) Cost of power is one of the highest. One of the factors contributing to this

is costly power from NTPC Bongaigaon Station. APDCL and the consumers

must raise their voice against such tariffs when the petitions are filed for tariff

determination in the Central Electricity Regulatory Commission. APDCL may

consider opening a separate Cell or assign competent officers with the

responsibility to voice these concerns in CERC. Recently, the draft MYT

Regulations has been notified and there was no representation from Assam.

APDCL can have a dedicated Cell to voice the concerns of the people of Assam

in appropriate Forums like CERC, whenever necessary.

It was clarified from APDCL that the Company has been submitting response

petitions before the CERC against NTPC tariff petitions and also contesting


these in the Appellate Tribunal. APDCL cited an example where the Kathalguri

station of NEEPCO had filed a petition before CERC requesting for reduction

in PLF stating non availability of fuel. NEEPCO stated the example of APGCL

gas stations whose PLF were low due to non availability of gas. This is a recent

case where APDCL managed to win the case against NEEPCO.

Chairperson AERC observed that the consumers like FINER and ABITA may

also file petitions before the concerned forum.

Shri Subodh Sharma stated that an individual consumer residing in Delhi have

made representations to CERC against the NTPC petitions. However, he also

observed that this is a costly affair and large consumers like FINER and ABITA

should come forward.

c) In the last budget, the Government of Assam has announced 5% electricity

duty ad valorem on the total consumption which has increased the electricity

duty substantially for the industrial consumers.

Chairperson AERC opined that it is the policy decision of the State

Government.

d) A number of points have been raised by the Statutory Auditors on the

financial Statements of APDCL and requested the Commission to consider

those while determining tariff.

The Commission assured that all the points which are likely to impact the tariff will be

scrutinized before making a decision.

The Chairperson, AERC thanked the members for their suggestions.

Agenda: Discussions on Draft Regulations notified by AERC

Two draft Regulations namely Draft AERC (Electricity Supply Code) (First Amendment)

Regulations, 2018 and Draft AERC (Deviation Settlement Mechanism and Related Matters)

Regulations, 2018 were notified as previous publications as per Section 181 (3) of the

Electricity Act 2003 and public hearings were also held. These Regulations were circulated


among the Advisory Committee members. Chairperson, AERC requested the Members to

submit their comments on the Regulations, if any.

There was no comment from any member.

Agenda: Any Other matter.

No other matter came up for discussion.

Chairperson, AERC assured the members that the MYT proposals of the utilities would be

prudently scrutinized and the valuable suggestions offered by each stakeholder would be

taken into account while determining tariffs for FY 2019-20 and Annual Revenue Requirement

for FY 2020-21 and FY2021-22.

The meeting ended with vote of thanks from the Chair.

Sd/-

Secretary,

Assam Electricity Regulatory Commission.


ANNEXURE –A

24th Meeting of SAC - LIST OF MEMBERS & SPECIAL INVITEES PRESENT

MEMBERS

1. Shri Subhash Chandra Das, IAS (Retd), Chairperson, AERC.

2. Shri Dipak Chakravarty, Member, AERC

3. Smt. Utpala Saikia, Joint Secretary, Power Deptt., Government of Assam

4. Shri G.A Nayyar, Deputy Secretary, Finance Department, Government of Assam.

5. Shri Subodh Sharma, Consumer Activist

6. Shri Dilip Kumar Sarma, Sr. Consultant, NETC

7. Shri Abhijit Sharma, Secretary. ABITA

8. Shri Abhijit Kakati, MRK, ABITA

9. Shri Niladri Roy, Advocate, Silchar Bar Council

10. Shri A.K. Baruah, Advisor, AASSIA

11. Shri Sailen Baruah, President, NESSIA

12. Shri Kumud Medhi, Secretary, NESSIA

13. Shri P.K. Goswami, Former Director, Technical Education and Retd. VC, Assam

Science and Technology University

14. Shri Saurav Agarwal, Chairperson, Power, FINER

15. Shri Rajeev Goswami, DDG, FINER

16. Shri Champak Baruah, Ex- Member (Technical), APDCL.

17. Shri Arup Kr Mishra, Director, AEDA

18. Shri Pronip Kr. Barthakur, Ex Director, ONGC

19. Shri Birendra Kr. Das, President, Grahak Surakha Sanstha

SPECIAL INVITEES

1. Shri V.K. Pipersenia, IAS (Retd), Chairman, APDCL/AEGCL/APGCL

2. Shri Rakesh Agarwal, IAS, Managing Director, APDCL

3. Ms. Kalyani Baruah, Managing Director, APGCL

4. Shri Satyendra Nath Kalita, Managing Director, AEGCL

for assam power distribution company limited (apdcl) · petition no. 16/2018 assam electricity...

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