rajasthan electricity regulatory commission petition...

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RAJASTHAN ELECTRICITY REGULATORY COMMISSION Petition No: RERC/1035/17

In the matter of Annual Performance Review (APR) for FY 2014-15 and FY 2015-16 for KTPS (Units- 1 to 7), STPS (Units- 1 to 6), CTPP (Units- 1 & 2), DCCPP, RGTPP (Stage- I & II), Mahi Hydel, MMH and approval of Aggregate Revenue Requirement & determination of tariff for FY 2017-18 for KTPS (Units- 1 to 7), STPS (Units- 1 to 6), CTPP (Units- 1 to 4), DCCPP, RGTPP (Stage- I,II & III), KaTPP (Units- 1& 2) and Mahi Hydel Power Stations of Rajasthan Rajya Vidyut Utpadan Nigam Ltd. Coram: Sh. Vishvanath Hiremath, Chairman

Sh. Vinod Pandya, Member Sh. R.P. Barwar, Member

Petitioner: Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN) Respondents:

1. Jaipur Vidyut Vitran Nigam Ltd. (JVVNL) 2. Ajmer Vidyut Vitran Nigam Ltd. (AVVNL) 3. Jodhpur Vidyut Vitran Nigam Ltd. (JdVVNL)

Date of hearing: 27.04.2017 Present:

1. Sh. A. K. Saxena, ACE, RVUN 2. Sh. Y. K. Upadhyay, CAO, RVUN 3. Sh. Ankit Sharma, Consultant, RVUN 4. Sh. S. T. Husain, SE, JVVNL 5. Sh. G. L. Sharma, Stakeholder

Date of Order: 20.06.2017

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ORDER

1.1. Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (in short ‘RVUN’), a Generating Company under the provisions of the Electricity Act 2003, has filed a petition for Annual Performance Review (True-Up) for FY 2014-15 and FY 2015-16 and approval of Aggregate Revenue Requirement (ARR) and determination of Tariff for sale of electricity from its existing power stations to distribution companies for FY 2017-18.

1.2. In exercise of the powers conferred under Sections 62, 64 and other provisions of Electricity Act 2003, read with RERC (Terms and Conditions for Determination of Tariff) Regulations, 2014, and other enabling Regulations, the Commission, after carefully considering each of the submissions of the Petitioner and suggestions/objections submitted by the Stakeholder, has passed the following Order.

1.3. This Order has been structured in following sections as given under: (1) Section 1: General (2) Section 2: Summary of True up and Tariff determination process. (3) Section 3: Summary of objections/comments/suggestions received

from Stakeholders and RVUN’s response thereon. (4) Section 4: Analysis of True up of RVUN Stations for FY 2014-15 and FY

2015-16. (7) Section 5: Determination of ARR and Tariff for RVUN generating Stations

for FY 2017-18. (8) Section 6: Provisional Tariff for new stations for FY 2017-18.

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SECTION 2 Summary of filing of True up and Tariff determination process.

2.1. In accordance with Regulation 8 of RERC (Terms and Conditions for Determination of Tariff) Regulations, 2014, hereinafter referred to as RERC Tariff Regulations, 2014, RVUN filed a petition on 13.01.2017 for true-up for FY 2014-15 and FY 2015-16 in respect of the following power stations:

Table 1: RVUN’s Generating Stations under True up for FY 2014-15 and FY 2015-16

Sr.No. Particulars Capacity(MW) 1 Kota Thermal Power Station(KTPS)(Unit 1 to 7) 1240

2 Suratgarh Thermal Power Station(STPS)(Unit 1 to 6) 1500

3 Ramgarh Gas Thermal Power Station(RGTPS) 110.5

4 Dholpur Combined Cycle Gas based Thermal Power Plant(DCCPP) 330

5 Mahi Hydel Power Project (MAHI) 140

6 Chhabra Thermal Power Station (CTPP)(Unit 1 & 2) 500

Total 3820.50

2.2. Further, in accordance with Regulation 11 of RERC (Terms and Conditions for Determination of Tariff) Regulations, 2014 (hereinafter referred to as RERC Tariff Regulations, 2014), RVUN also prayed for approval of ARR and determination of tariff for supply of electricity to distribution companies for FY 2017-18 in respect of the following power stations:

Table 2: RVUN Generating Stations under ARR and Tariff for FY 2017-18

Sr.No. Particulars Capacity(MW)

1 Kota Thermal Power Station(KTPS) (Unit 1 to 7) 1240

2 Suratgarh Thermal Power Station(STPS) (Unit 1 to 6) 1500

3 Ramgarh Gas Thermal Power Station (RGTPS) 110.50

4 Ramgarh Gas Thermal Power Plant (RGTPS) Stage III 160

5 Dholpur Combined Cycle Gas based Thermal Power Plant 330

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Sr.No. Particulars Capacity(MW)

(DCCPP)

6 Chhabra Thermal Power Station (CTPP) (Unit 1 to 4) 1000

7 Kalisindh Thermal Power Station (KaTPP) (Unit1 to 2) 1200

8 Mahi Hydel Power Project (MAHI) 140

Total 5680.50

2.3. The Petitioner vide its letter dt. 28.03.2017 has requested to allow interim tariff for FY 2017-18 till final order issued. Accordingly, Commission vide its order dt. 07.04.2017 allowed the interim tariff for existing power stations of Petitioner for FY 2017-18.

2.4. As required under Section 64(2) of the Electricity Act, 2003, public notice with salient features of the petition inviting objections/comments/suggestions were published in the following newspapers on the dates mentioned against each:

Sr. No. Name of News Paper Date of publishing

(i) DNA 18.02.2017

(ii) Dainik Bhaskar 18.02.2017

(iii) Rashtradoot 18.02.2017

2.5. The petition was also placed on the websites of the Commission and the Petitioner. The objections/comments/suggestions were received from Shri G.L. Sharma, Shri Shanti Prasad, Shri B.M Sanadhya.

2.6. The Commission forwarded the objections/comments/suggestions of the Stakeholder to RVUN for filing its reply.

2.7. The Commission vide letters dated 02.03.2017 and 11.05.2017, communicated some data gaps and deficiencies in the petition. The Petitioner furnished information vide its letter dated 11.04.2017 and 19.05.2017 respectively. The Petitioner also replied to the objections/comments/suggestions made by the stakeholders vide its letter

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dated 24.04.2017. Meanwhile, the Petitioner also filed a supplementary petition on 06.04.2017 for approval of ARR and tariff for DCCPP for FY 2017-18 with modification in original prayer.

2.8. The Commission had approved the Tariff for FY 2014-15 and FY 2015-16 in respect of KTPS (Unit 1 to 7), STPS (Unit 1 to 6), RGTPS (stage-II), DCCPP, CTPP (Unit 1 and 2) and Mahi Hydel Power Project vide its tariff order dated 09.10.2014 and 14.07.2015 respectively. In this Order, the Commission has undertaken the Truing up for FY 2014-15 & FY 2015-16 and determination of tariff for FY 2017-18 for RVUN power stations, as petitioned.

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SECTION 3 Summary of objections/comments/suggestions received form stakeholders and RVUN’s response thereon. General Reconciliation with Annual Accounts Stakeholder’s Comments/Suggestions:

3.1. Stakeholder submitted that the Petitioner has stated that it does not maintain power station wise accounts. Therefore, the Petitioner should clarify that in what manner the audited figures of the stations for which Annual Performance Review has been submitted has been segregated from the annual accounts provided, when the annual audited accounts of RVUN includes the audited figures of other power stations/units also such as Giral, MMH, RGTPS 160 MW, CTPP Unit 3 & 4 and KaTPP Unit 1 & 2. Further, the Petitioner should indicate the audited figures of other stations/units also.

3.2. In Annual Accounts of FY 2014-15 and FY 2015-16, the total generation of the respective years has been mentioned. Regarding this, the Petitioner should provide the following information:

(i) The Petitioner should clarify whether the above mentioned total generation include the infirm power and if yes, then the quantum of such infirm power along with revenue received for the same may be provided.

(ii) The above mentioned total generation may also include the generation of Giral, MMH, RGTPS 160 MW, CTPP Unit 3 & 4 and KaTPP Unit 1 & 2. Therefore, the Petitioner may provide units generated by these Power stations/ units along with the revenue received by each of these power stations/units for FY 2014-15 and FY 2015-16 separately.

(iii) The Petitioner in the Annual Accounts of FY 2014-15 and FY 2015-16 provided the total units sold to three Discoms i.e. JVVNL, AVVNL and JdVVNL in FY 2014-15 and FY 2015-16. Regarding this, the Petitioner

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should provide the units sold to each Discom separately for FY 2014-15 and FY 2015-16.

3.3. The Petitioner submitted that it has submitted the consolidated Annual Performance Review Petition for Power Plants for FY 2014-15 and FY 2015-16. Regarding this, the Stakeholder submitted that there is no provision in the Regulations for having any consolidated Annual Performance Review Petition and further, the Commission has also determined the station wise/ unit wise ARR and Tariff for FY 2014-15 and FY 2015-16. Therefore, the submissions made by the Petitioner in Para 2.2 to 2.14 at Page 328 to 332 and at Para 2.2 to 2.11 at Page 328 to 816 of the petition are redundant and no comments are being made for the same.

RVUN’s Response:

3.4. Petitioner submitted that there are separate entries of plant wise expenditure in Excel formats and print out of the same has also been provided with the replies of the data gaps. Expenditure of Head Office has been allocated on the basis of the capacity of the plants and the interest on working capital has been computed on the basis of ARR of the plant and the computation of the same has been provided in the main petition and other data are being booked in accounts as per plant.

3.5. Regarding the total generation mentioned in annual accounts of FY 2014-15 and FY 2015-16, RVUN submitted that:

(i) The total generation of FY 2014-15 and FY 2015-16 include the infirm power and the details of generation and revenue received have been submitted along with the replies to the data gaps submitted on 11.04.2017 as Annexure-F.

(ii) The Generation of all plants is included in 27736.75 MU and out of this the generation of 23425.74 MU belongs to truing up plants and the same has been provided in Table No. 3 of the main petition for FY 2014-15.

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(iii) The Generation of all plants is included in 26403.00 MU and out of this the generation of 16337.10 MU belongs to truing up plants and the same has been provided in Table No. 3 of the main petition for FY 2015-16.

(iv) Petitioner provided the details of unit sold to Discoms during FY 2014-15 and FY 2015-16.

3.6. Petitioner submitted that complete details for true-up of FY 2014-15 and FY 2015-16 have been filed as per Regulations.

True-up of MMH Stations and Mahi hydel power Station

Stakeholder’s Comments/Suggestions:

3.7. Stakeholder submitted that as per Regulation 58 of RERC Tariff Regulations, 2014, the tariff for existing MMH station for the control period shall be Rs. 3.78 per kWh. Therefore, the true-up of these stations cannot be done and the same stand has been taken by the Commission in past also. Hence, the material/ data provided by the Petitioner for the true-up of MMH stations for FY 2014-15 and FY 2015-16 may not be considered in accordance with the decision taken by the Commission in past.

3.8. Regarding the true-up of Mahi hydel power station, the Stakeholder submitted that the same may be finalised on the same basis as adopted by the Commission in previous years as Regulations does not provide any fixed norms for the same.

RVUN’s Response:

3.9. Petitioner submitted that the Commission in its order dated 06.06.2013 in true-up of the true-up of FY 2009-10 stated that the tariff already allowed for MMH projects under RERC Tariff Regulations, 2009 is not subject to Annual Performance Review, therefore the Petitioner had not filed the APR petition for MMH for the control period from FY 2010-14.

3.10. Petitioner further submitted that during FY 2009-10 to FY 2015-16, due to non-filing of ARR, Annual Performance Review and adoption of consistent

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tariff of Rs. 3.78 per unit has incurred the loss of Rs. 28.17 Crore to RVUN towards MMH power plant.

3.11. Petitioner further submitted that the Commission under Regulation 58 of RERC Tariff Regulations, 2014 again fixed the tariff of Rs. 3.78 per unit i.e. same as was fixed in the RERC tariff Regulations, 2009. Petitioner submitted that it is observed that the expenditure on MMH is increasing Year on Year as the units are getting old and the tariff allowed by the Commission is not sufficient to meet the yearly expenditure of MMH. Further, these units are situated on canals and generation of electricity is only possible on release of water and most of the time machine is available but due to unavailability of water, the power could not be generated.

3.12. Petitioner requests the Commission to carry out the APR of MMH also in accordance with Regulation 94 to 96 of RERC Tariff Regulations, 2014 which empowers the Commission to deviate from any of the provisions contained in these Regulations. Therefore, the Commission may carry out the APR of MMH also as was done by the Commission for the period of FY 2004-05 to FY 2008-09 vide its order dated 27.04.2011.

3.13. True-up Petition for MAHI has been claimed as per RERC Norms.

True-up of FY 2014-15 and FY 2015-16: Gross Generation Stakeholder’s Comments/Suggestions:

3.14. Stakeholder submitted that the gross generation submitted by the Petitioner for KTPS in Table 8 of the petition for FY 2014-15 is not correct at 81.28% PLF and it should be 8828.96 MU.

RVUN’s Response:

3.15. Petitioner submitted that the generation and PLF shown in Table 8 of the petition are correct and the PLF is calculated on sent out basis.

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PLF and Auxiliary Consumption Stakeholder’s Comments/Suggestions:

3.16. Stakeholder submitted that the auxiliary consumption for FY 2014-15 and FY 2015-16 for KTPS should be allowed as per the norms prescribed in the Regulations. Further, the Stakeholder submitted that the contention of the Petitioner stating the reason of higher auxiliary consumption being the frequent back down and box-up instructions of SLDC does not hold good in view of the APTEL Order dated 18.09.2015 in Appeal No. 196 of 2014 and 326 of 2013.

3.17. Further, the Stakeholder submitted that the PLF and auxiliary consumption for KTPS, DCCPP, RGTPS, CTPP (Unit 1 & 2) and STPS for FY 2014-15 and FY 2015-16 are in variation with the norms prescribed in the Regulations. Therefore, the fixed charge should be reduced on account of reduced PLF and auxiliary consumption should be allowed as per the norms for KTPS for FY 2015-16.

RVUN’s Response:

3.18. Petitioner submitted that the Commission may consider the PLF of 87.98% including deemed generation for KTPS for FY 2014-15. Petitioner further submitted that the auxiliary consumption is on higher side due to backing down/box-up of unit as per the instruction of SLDC. Petitioner submitted that back down/box up instructions by SLDC both are beyond the control of RVUN and has direct impact on the auxiliary consumption of plant. Hence, the Petitioner has requested the Commission to allow the actual auxiliary consumption while approving the annual performance review of FY 2014-15 and FY 2015-16 for KTPS.

3.19. Regarding the auxiliary consumption of DCCPP and RGTPP, the Petitioner submitted that the lower availability of gas and back down/box up instructions from SLDC have increased the auxiliary consumption of the plant as the plant was running at the partial load at regular basis. Since both the factors are not in the control of the Petitioner, therefore, the

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Petitioner has requested the Commission to allow the actual auxiliary consumption.

Capital Cost Stakeholder’s Comments/Suggestions:

3.20. Stakeholder submitted that the Petitioner should submit the basis of considering the capital cost for KTPS Unit 1 to 6 for FY 2014-15 and FY 2015-16 along with the justification. Similar information may also be provided for KTPS Unit 7 for FY 2015-16.

3.21. Stakeholder submitted that the capital cost for STPS should be considered as admitted by the Commission.

RVUN’s Response:

3.22. Petitioner submitted that it has considered the admitted cost of Rs. 1185.16 Crore up to 31.03.2013 for FY 2014-15 for KTPS.

3.23. Petitioner submitted that the Commission has considered the capital cost of KTPS (Unit 1-6) of Rs. 1182.62 Crore as on 01.04.2014 including the additional capitalisation of Rs. 3.45 Crore approved by the Commission for FY 2013-14. Further, the Petitioner has claimed the additional capitalisation of Rs. 2.0492 Crore in FY 2014-15 towards Unit 1-6. Hence, the capital cost as on 01.04.2015 for KTPS Unit 1-6 works out to be Rs. 1190.67 Crore. Similarly, the Capital cost of KTPS Unit 7 as on 01.04.2014 after considering the additional capitalisation of Rs. 17.97 Crore, Rs. 8.52 Crore and Rs.1.11 Crore for FY 2010-11, FY 2012-13 and FY 2013-14 respectively works out to be Rs. 851.85 Crore.

3.24. Regarding the query related to the STPS, the Petitioner submitted that it has incurred additional capitalisation for FY 2014-15 as per Regulation 19 of RERC, Tariff Regulations, 2009. Further, breakup of the capital cost approved by BOD and Commission has already been submitted with the main petition.

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Additional Capitalisation Stakeholder’s Comments/Suggestions:

3.25. Stakeholder submitted that the Petitioner should provide the relevant paragraph of True-up Order of FY 2013-14 issued by the Commission where the additional capitalisation of Rs. 3.45 Crore was approved by the Commission for KTPS.

3.26. Regarding the additional capitalisation of amount of Rs. 2.0492 Crore for KTPS for FY 2014-15 Stakeholder submitted:

3.27. The Petitioner has submitted that the amount of Rs. 2.02 Crore has been claimed as per Purchase Order and as per Commission’s Order dated 10.05.2012. Regarding this, the Stakeholder submitted that as per P.O dated 10.04.2014 (Page 456) the total cost is Rs. 1.66 Crore and not Rs. 2.02 Crore. The Petitioner may clarify this variation.

3.28. Stakeholder submitted that the approval of the additional capitalisation for KTPS was sought on the urgency of requirement and the same was approved by the Commission on 10.05.2012 whereas the purchase order has been placed on 10-04.2014. RVUN should justify this delay of around two years in placing the purchase order.

3.29. The Commission in its Order dated 10.05.2012 directed that, when the Petitioner submits the proposal for admitting the expenditure for tariff setting, it shall also file the comparison of benefits anticipated at this stage vis-à-vis actual benefits arrived. Therefore, in compliance of the Commission’s Order, Petitioner should submit the comparison for FY 2014-15 and FY 2015-16 as directed by the Commission in its Order dated 10.05.2012 for KTPS.

3.30. Stakeholder further submitted that the additional capitalisation for FY 2014-15 and FY 2015-16 for KTPS has been claimed only on the basis of purchase order. Regarding this RVUN should submit the information, if the equipment has been received and commissioned and if it is so, then intimate the date of receipt of material, date of its completion of erection, date of its testing

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after completion of erection and the date of commissioning, as the additional capitalisation cannot be considered for tariff setting merely on the basis of purchase order.

3.31. Stakeholder submitted that the Petitioner should provide the reference of Commission’s Order where under the expenditure of Rs. 0.36 Crore for FY 2014-15 for KTPS has been approved by the Commission.

3.32. Stakeholder submitted that the additional capitalisation towards office equipment, Furniture & Fixtures for KTPS, DCCPP, RGTPS, Mahi, CTPP (Unit 1 & 2) and STPS for FY 2014-15 and FY 2015-16 is not admissible as the Commission in its Order dated 17.10.2016 stated that “the cost of assets pertaining to procurement of vehicles, office equipment and furniture and fixtures in FY 2013-14 are to be treated as revenue expenses and not capital expenses due to the nature of such small works”.

3.33. Stakeholder submitted that the Petitioner has claimed the additional capitalisation for FY 2010-11, FY 2011-12 and FY 2012-13 for KTPS and has stated that these additional capitalisation as approved. Stakeholder further submitted that the Commission in its order dated 17.10.2016 had not approved any additional capitalisation for KTPS for FY 2011-12 and FY 2013-14. Regarding this, the Petitioner should provide the reference of the Commission’s order where under the same additional capitalisation has been approved by the Commission.

3.34. Regarding the additional capitalisation of Rs. 66.99 Crore for KTPS for FY 2015-16, the Stakeholder submitted following:

(i) The information provided by the Petitioner on page No.817 of the petition does not reconcile with the Commission’s order dated 10.05.2012. The Petitioner may provide the information under the same head as mentioned in the Commission’s order dated 10.05.2012.

(ii) Purchase Order No. 93 dated 21.08.2013 provided by the Petitioner is not complete. The Petitioner may provide the complete purchase order.

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3.35. Stakeholder submitted that cut-off date for additional capitalisation for KTPS Unit 7 for FY 2015-16 has already expired as per Regulation 17 of Tariff Regulations, 2014. Therefore, no additional capitalisation is admissible for KTPS Unit 7 for FY 2015-16.

3.36. Stakeholder submitted that the Petitioner should provide the page no. of the petition for Annexure G-2 as the same is not found in the petition and the comments on the same will be submitted thereafter. The Stakeholder further submitted that the work of “Civil work of blow down system for cooling tower Unit 2,3,4 & 5” and “Construction of periphery road along the boundary wall (Unit 1-6) have actually been completed on 19.09.2015. and the total amount for above mentioned works is Rs. 6.12 Crore. As these works have got completed on 19.09.2015, the same cannot be capitalised in FY 2014-15. Therefore, the same may be disallowed for STPS.

3.37. Regarding the minutes of meeting of 21.03.2016 and 22.03.2016 for STPS, the Stakeholder submitted that in respect of supply of ETC of BTG in respect of Unit 6, LD amounting Rs. 27.38 Crore has been recovered. Further, in meeting dated 31.03.2016, a token penalty of Rs. 0.50 Crore has also been decided/suggested by WTD. The Petitioner may clarify if this amount has been reduced from the capital cost of STPS (Unit 6).

3.38. Regarding the additional capitalisation of Rs. 2.78 Crore for STPS for FY 2015-16, Stakeholder submitted the following:

(i) The Petitioner has stated the hydraulic work of Rs. 0.46 Core as the balance work of Work Order No. 388 dated 01.10.2014. Whereas, as per the submission made on Page No. 475 of the petition it is clear that the work has been completed on 19.09.2015 and the performance has been stated as satisfactory and the same has also resulted in the savings of Rs. 0.25 Crore. Therefore, the Petitioner may clarify that on what basis the work is stated as balanced work.

(ii) Petitioner has stated the other civil work of Rs. 2.09 Core as the balance work of Work Order No. 396 dated 09.10.2014. Whereas, as per the

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submission made on Page No. 483 of the petition it is clear that the work has been completed on 19.09.2015 and the performance has been stated as satisfactory and the same also resulted in the savings of Rs. 0.03 Crore. Therefore, the Petitioner may clarify that on what basis the work is stated as balanced work.

3.39. The Stakeholder submitted that the RERC Tariff Regulations, 2009 were applicable only up to 31.03.2014 and after this any additional capitalisation has to be dealt in accordance with Regulation 17 of RERC Tariff Regulations, 2014 and Regulation 17 of RERC Tariff Regulations, 2014 clearly states that no capitalisation has to be considered after cut-off date. Therefore, the additional capitalisation for STPS, DCCPP and CTPP (Unit 1 & 2) for FY 2014-15 and FY 2015-16 is not admissible. Stakeholder further submitted that the Petitioner should provide the details of work included in original scope of work along with the estimates of expenditure for STPS. The Petitioner should also provide the details regarding the progress of the work under original scope of work along with the reasons for the delay in completion.

3.40. Regarding the additional capitalisation of DCCPP, the Stakeholder submitted that the Commission in its order dated 17.10.2016 already decided, not to allow any additional capitalisation as the Petitioner has not taken any approval from the Commission.

3.41. Regarding the additional capitalisation of Rs. 3.31 Crore for FY 2015-16 for CTPP (Unit 1 & 2), Stakeholder submitted that :

(i) Out of the above amount, the Petitioner has claimed the amount of Rs. 0.52 Crore towards administration and overheads charges I.e. furniture and office equipment (assumed by the Stakeholder on the basis of last year) and the remaining amount as part of original scope of work.

(ii) As per Regulation 17 of RERC Tariff Regulations, 2014 the cut-off dates for CTPP Unit 1 & 2 have already expired. Therefore, no additional capitalisation is admissible.

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(iii) Petitioner should submit the reasons for deferred liabilities and for what reasons the execution of works was deferred.

(iv) Petitioner is claiming the additional capitalisation under original scope of work from so many years for example. the Petitioner claimed the additional capitalisation under original scope of work in FY 2011-12, FY 2012-13, FY 2013-14 and has claimed for FY 2014-15 and FY 2015-16 aslo. Regarding this, the Petitioner should provide the details of the work remained to be executed under original scope of work as on COD, deferred liabilities as on COD for all the stations of RVUN. No additional capitalisation is admissible till this information is provided by the Petitioner.

3.42. Stakeholder requested Commission to reduce the gross assets on account of additional capitalisation not admissible.

RVUN’s Response:

3.43. Petitioner submitted that the Commission in its order dated 17.10.2016 in true-up of FY 2013-14 has approved the additional capitalisation of Rs. 3.45 Crore for KTPS.

3.44. Regarding the additional capitalisation of Rs. 2.02 Crore for FY 2014-15 for KTPS, Petitioner submitted that there were two Purchase Orders and the second Purchase Order has been enclosed at page No. 463 of the petition. The benefits retrieved from this amount are as follows:

(i) High Efficiency of ESP system has been achieved by replacement of High voltage transformer for ESP’s and improvement has been observed in SPM level by 20%.

(ii) The purchase of Hydraulic re-railing equipment helped in timely and effectively attending derailment of wagons & locomotives.

3.45. Petitioner further submitted that this additional capitalisation of Rs. 2.02 Crore was approved by the Commission in it order dated 10.05.2012.

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3.46. Petitioner submitted that initially RVUN proceed with OEM (M/s. BHEL) for SIT of the equipment but the order could not be matured, thereafter the order was placed to Supplier that caused the delay in purchase of equipment after approval by RERC.

3.47. Regarding the additional capitalisation claimed towards office equipment and furniture, the Petitioner submitted that these expenditures are in a nature of fixed assets which are essential for smooth running of plants.

3.48. Regarding the additional capitalisation mentioned for FY 2010-11, FY 2012-13 and FY 2013-14 for KTPS, the Petitioner submitted that the Commission has approved these amounts in its order dated 23.07.2014, 7.9.2015 and 17.10.2016 respectively. Further, Petitioner submitted that it has claimed the additional capitalisation for FY 2014-15 for KTPS as per the audited accounts and as approved by the Commission.

3.49. Regarding the booked additional capitalisation of Rs. 66.99 Crore for FY 2015-16 towards KTPS, the Petitioner submitted that it has claimed the additional capitalisation on the basis of Commission order dated 10.05.2012 and on the amount actually incurred and booked in accounts for FY 2015-16. The details of the amount approved by the Commission in its order dated 10.05.2012 and claimed by the Petitioner is as shown in the table below:

S.No. Description of proposal Amount approved by

the RERC

Amount claimed in the Petition

FY 2014-15 FY 2015-16 1 Renovation of Static AVR of Unit no.1 & 2 by

Digital AVR (DAVR)

5.00

0.00

6.16

Supply of AC System for DAVR 0.19

2 Renovation of generator protection and associated 220 kV feeder protection for KSTPS Stage-I

4.00 0.00 2.36

3 Renovation of 25 kV MOCB’s installed at KSTPS switchyard 3.00 0.00 6.00

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S.No. Description of proposal Amount approved by

the RERC

Amount claimed in the Petition

FY 2014-15 FY 2015-16 4 Replacement of High Voltage transformer for

ESP’s 2.00 1.67 0.78

5 Purchase of Hydraulic Re-railing equipment 0.60 0.36 0.16

6 Railway over-bridge at LC-15 (R.O.B) 26.37 0.00 24.25

7 Up gradation of HMI System based on old computer architecture (Main Frame type) ABB make of unit #5 KSTPS with 800×A HMI system of M/s ABB.

7.40 0.00 8.34

8 R&M of SG/TG & Station C&I package of KSTPS Unit 3 & 4 36.00 0.00 18.747

Total 84.37 2.30 66.98

3.50. Petitioner provided a copy of purchase order dated 21.08.2013 and the details of R&M works.

3.51. Regarding the query related to the cut-off date of the project, the Petitioner submitted that the project achieved COD during the period 2009-14, therefore, the RERC Tariff Regulations, 2009 is applicable to this case and the additional capitalisation has been claimed as per Regulation 19 of RERC Tariff Regulations, 2009. Further, the cut-off date is not mentioned in RERC Tariff Regulations, 2009. However, the claimed amount is a deferred payment and the works have been completed well before. Therefore, the Petitioner requested the Commission to consider the additional capitalisation under the original scope of work.

3.52. Regarding the additional capitalisation of STPS, the Petitioner submitted that Annexure-2 has been submitted with the main petition on Page No. 467. Further, the hydraulic work was started on 01.10.2014 (P.O. date) and completed on 19.09.2015, thus the booking of the amount towards the same has been made in FY 2014-15 and FY 2015-16. Actual expenditure as per the work completion report is Rs. 2.46 Crore (excluding service tax) and the same has already been approved by the Commission.

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3.53. The Petitioner further submitted that civil work was started on 09.10.2014 and completed on 19.09.2015, thus the booking of the amount towards the same has been made in FY 2014-15 and FY 2015-16. Actual expenditure as per the work completion report is Rs. 3.63 Crore (excluding service tax). The Petitioner further submitted that the LD amount of Rs. 23.38 Crore has already been reduced by the Commission while approving the capital cost of STPS Unit #6 vide its order dated 06.06.2013.

3.54. Regarding the additional capitalisation of Rs. 2.78 Crore in FY 2015-16, the Petitioner submitted that:

Hydraulic work Rs. 0.46 Crore: The hydraulic work was started on 01.10.2014 (P.O. date) and completed on 19.09.2015, thus the booking of the amount towards the same has been made in FY 2014-15 and FY 2015-16. Actual expenditure as per the work completion report is Rs. 2.60 Crore (inclusive of service tax).

Other civil works Rs. 2.09 Crore: Civil work was started on 09.10.2014 and completed on 19.09.2015, thus the booking of the amount towards the same has been made in FY 2014-15 and FY 2015-16. Actual expenditure as per the work completion report is Rs. 3.63 Crore (excluding service tax).

Furniture & Fixtures and Office equipment: These expenditures are in the nature of fixed assets which are essential for smooth running of plants.

O&M expenses Stakeholder’s Comments/Suggestions:

3.55. The Stakeholder submitted that the O&M expenses for FY 2014-15 and FY 2015-16 for KTPS, DCCPP, RGTPS, CTPP (Unit 1 & 2) and STPS should be allowed only on normative basis and any excess O&M claimed is not admissible as per Regulation 9(2).

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RVUN’s Response:

3.56. Petitioner submitted that the O&M expenses for FY 2014-15 and FY 2015-16 for KTPS, DCCPP, RGTPP, CTPP. STPS have been claimed as per actuals. Further, the Commission may consider the Regulation 8(3) (a&b) of RERC Tariff Regulations, 2014 for sharing of gain/loss on account of controllable /uncontrollable factors.

Depreciation Stakeholder’s Comments/Suggestions:

3.57. Regarding the depreciation of KTPS, STPS for FY 2014-15 and FY 2015-16. the Stakeholder submitted that the Petitioner has not provided the details of assets more than 12 years old and not more than 12 years old. Further, the Petitioner should provide the information of Gross Assets as per the format provided by the Commission i.e. Form No. 6.1 as the format in which the Petitioner has provided the information is not acceptable. Further, the Stakeholder submitted that no depreciation is admissible on gross assets merely on the basis of purchase order until the same asset is commissioned and put in use.

3.58. The Stakeholder submitted that the Petitioner has not provided the information as per Regulation 22(4) for KTPS and STPS. The Commission may kindly deduct 20% from the admissible depreciation of KTPS and STPS in order to bring the Petitioner to books for making compliance of the Regulations.

3.59. The Stakeholder submitted that the depreciation for DCCPP, CTPP (Unit 1 & 2) and RGTPS for FY 2014-15 and FY 2015-16 may be allowed on the gross assets admitted. Further, no depreciation may be allowed on any additional capitalisation for DCCPP and RGTPS as no additional capitalisation is admissible for DCCPP and RGTPS.

RVUN’s Response:

3.60. Regarding the depreciation of KTPS and STPS for FY 2014-15 and FY 2015-16,

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the Petitioner submitted that the details of depreciation for FY 2014-15 and FY 2015-16 for KTPS and STPS have been provided in the prescribed Performa in the petition for true-up of FY 2014-15 and FY 2015-16. Further, the Petitioner submitted that it has claimed the additional capitalisation for KTPS for FY 2014-15 as was approved by the Commission in its order dated 10.05.2012 and 22.04.2013. Further, the depreciation has been claimed as per Regulation and bifurcated in the units upto 12 years and spread equally for rest of the useful life of the units after 12 years as per Regulation 22(4).

3.61. Petitioner submitted that it has claimed the depreciation for FY 2014-15 and FY 2015-16 as per Regulation 19 of RERC Tariff Regulations, 2009. These expenditures are in nature of fixed assets which are essential for smooth running of plants. Therefore, the Petitioner has requested the Commission to consider the additional capitalisation and allow depreciation with consideration of additional capitalisation in GFA.

Interest and Finance Charges on term loan Stakeholder’s Comments/Suggestions:

3.62. The Stakeholder submitted that the Petitioner should intimate the Debt: Equity amount in respect to the additional capitalisation admitted. Further, the interest and finance charges on term loan for KTPS and STPS for FY 2014-15 and FY 2015-16 may be allowed only on the normative term loan admitted.

3.63. The Stakeholder submitted that the interest and finance charges on term loans for FY 2014-15 and FY 2015-16 for DCCPP should be allowed by adopting the same approach as was adopted by the Commission in its order dated 17.10.2016.

3.64. The Stakeholder further submitted that in respect of additional capitalisation admitted, interest may be allowed only on the debt component.

3.65. The Stakeholder submitted that the interest and finance charges for CTPP

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(Unit 1 & 2) should be allowed on the admitted normative loan only.

RVUN’s Response:

3.66. Petitioner submitted that interest and finance charges for FY 2014-15 and FY 2015-16 for KTPS, DCCPP, RGTPP, CTPP, STPS have been claimed on actual basis.

Interest on transitional loan Stakeholder’s Comments/suggestions:

3.67. The Stakeholder submitted that the interest on transitional loan for KTPS, DCCPP and STPS for FY 2014-15 and FY 2015-16 should be governed as per the Commission’s order dated 21.01.2010.

3.68. The Stakeholder further submitted that the Petitioner may provide the details of the balance of transitional loans, if any, along with the detailed calculation of such balances for all the station of RVUN.

RVUN’s Response:

3.69. Petitioner submitted that the interest on transitional loan for FY 2014-15 and FY 2015-16 for KTPS, DCCPP, RGTPP, STPS has been claimed on actual basis.

Insurance on fixed Assets Stakeholder’s Comments/suggestions:

3.70. The Stakeholder submitted that the insurance on fixed Assets for KTPS, RGTPS, CTPP (Unit 1 & 2) and STPS for FY 2014-15 and FY 2015-16 may be allowed on the actual basis based on the documentary evidence, subject to ceiling as per the Regulation 25.

RVUN’s Response:

3.71. Petitioner submitted that the insurance on fixed assets have been claimed on actual basis and documentary proof of the same has been provided in the petition.

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Contribution to PF fund Stakeholder’s Comments/suggestions:

3.72. The Stakeholder submitted that it is part of regular O&M expenses and no such additional amount is admissible. However, the same may be allowed for KTPS for FY 2014-15 and FY 2015-16, if it is a payment of previous balance.

3.73. The Stakeholder submitted that the Petitioner has claimed the pension fund for STPS for FY 2014-15 on account of balance of earlier period. Therefore, the same may be allowed. The Petitioner may submit, as to why the interest on account of delay has not been paid and how much amount becomes due on this account.

3.74. The Stakeholder submitted that the Petitioner for RGTPS, CTPP (Unit 1 & 2) and DCCPP has not deposited any pension fund in FY 2015-16 against the approved pension fund in the order. Regarding this, the Petitioner should give the reason for not depositing the approved amount to the pension fund. Further, the Stakeholder, requested the Commission to direct the Petitioner to deposit the amount with interest within a period of 3 to 4 months.

RVUN’s Response:

3.75. Petitioner submitted that the contribution to PF fund may be allowed to the extent of actual payment to the designated fund which has been furnished in the petition in line with previous year order.

Interest on working capital Stakeholder’s Comments/suggestions:

3.76. The Stakeholder submitted that the working capital for KTPS, DCCPP, RGTPS, CTPP (Unit 1 & 2) and STPS for FY 2014-15 and FY 2015-16 may be allowed on normative basis and interest accordingly.

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RVUN’s Response:

3.77. Petitioner requested the Commission to consider the Interest of working capital for FY 2014-15 and FY 2015-16 for KTPS, DCCPP, RGTPP, CTPP and STPS the same as claimed in the petition.

Prior period expenses Stakeholder’s Comments/suggestions:

3.78. The Stakeholder submitted that the Petitioner has not provided any details for the prior period expenses for KTPS for FY 2015-16. Therefore, the same is not admissible.

3.79. The Stakeholder submitted that the no prior period expense is admissible for RGTPS, CTPP (Unit 1 & 2) for FY 2014-15 and FY 2015-16. Therefore, the same may not be allowed.

RVUN’s Response:

3.80. Petitioner submitted that the prior period expenses have been claimed as per actual audited accounts and has requested the Commission to allow the same.

Return on Equity Stakeholder’s Comments/suggestions:

3.81. The Stakeholder submitted the Return on Equity for STPS, DCCPP, RGTPS and KTPS for FY 2015-16 may be allowed on the equity infused at the beginning of the year. Further, no equity should be allowed on the capital cost not admitted. The Stakeholder further submitted, that the same may be allowed for STPS at the rate of 5% as already decided as per the prayer of the Petitioner.

3.82. The Stakeholder submitted that the Return on Equity for CTPP (Unit 1 & 2) is admissible as per order already issued on admitted equity only.

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RVUN’s Response:

3.83. Petitioner has requested the Commission to allow the RoE as per provisions of RERC Tariff Regulations.

Variable Charges Stakeholder’s Comments/suggestions:

3.84. The Stakeholder submitted that the SHR for KTPS, CTPP (Unit 1 & 2) and STPS for FY 2014-15 and FY 2015-16 may be allowed only as per last order. Further, the revision of SHR for KTPS Unit 7 is not admissible as the same has been rejected by the Commission in its order dated 17.10.2016. Further, on account of excess SHR, fuel cost may also be dis-allowed accordingly.

3.85. The Stakeholder submitted that the SHR of DCCPP should be allowed in accordance with Regulation 45(3) of RERC Tariff Regulations, 2014.

3.86. The Stakeholder submitted that the Petitioner in the petition provided the details of working of open and combined cycle operation of RGTPS for FY 2014-15 and FY 2015-16 in Annexure- m and Annexure- k respectively. But the same are missing from the petition. Therefore, the Petitioner should provide the correct statement for the same. Further, the Stakeholder submitted that the normative SHR claimed by the Petitioner, based on its calculation, is on higher side and the SHR may be allowed as per norms. Further, on account of excess SHR, fuel cost may also be dis-allowed accordingly.

3.87. The Stakeholder submitted that the Petitioner should submit the actual fuel price and GCV for the month of January to March for FY 2015-16 and FY 2016-17 for KTPS and STPS along with their analysis report. Further, the CPRI report submitted by the Petitioner does not include the information on actual GCV.

3.88. The Stakeholder submitted that the Petitioner should submit the analysis report of GCV for CTPP (Unit 1 & 2) for FY 2014-15 and FY 2015-16.

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3.89. The Stakeholder submitted the Petitioner should submit the actual documents for each source of coal as the Petitioner is receiving coal from two sources for CTPP (Unit 1 & 2).

3.90. Transit loss for KTPS and STPS for FY 2014-15 and FY 2015-16 may be allowed only as per Regulation 45 (7).

RVUN’s Response:

3.91. Regarding the SHR of KTPS Unit 7, the Petitioner submitted that the Commission in the Tariff order for FY 2014-15 approved the SHR of KTPS Unit 7 as 2328.26 kCal/kWh based on the design heat rate of 2228 kCal/kWh as submitted by the Petitioner. Whereas the design heat rate as per the guarantee documents provided by OEM was 2284 kCal/kWh and the same documents were provided to the Commission during the proceedings of the case. Information provided by the Petitioner in Form 2.1 was an inadvertent error on RVUN part. The Petitioner requested the Commission to consider the SHR for KTPS Unit 7 based on the submissions made in the current petition. Further, SHR has been computed as per Regulation 45(3)(b) of RERC, Tariff Regulations 2014. The detailed calculation is as shown below:

Particulars Station Heat Rate Turbine Cycle Heat Rate (kCal/kWh) A 1966.00 Boiler Efficiency (%) B 86.06% Design Heat Rate (kCal/kWh) C=A/B 2284.45 Regulation 45(3)(b) of RERC Tariff Regulation 2014

D 1.045

Station Heat Rate E=C*D 2387.25

3.92. The Petitioner requests the Commission to consider the SHR of 2387.25 kCal/kWh for the period FY 2014-19.

3.93. Regarding the auxiliary consumption of KTPS for FY 2014-15 and FY 2015-16, the Petitioner requested the Commission to consider the same as mentioned in the petition.

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3.94. The Petitioner provided the few specimen copies of bill and coal analysis report from Jan-2015 to March -2015 for FY 2014-15 and from Jan-2016 to March-2016 for FY 2015-16.

3.95. Regarding the transit loss for FY 2014-15 and FY 2015-16 for KTPS and STPS the Petitioner requested the Commission to consider the actual transit loss as the same is an uncontrollable factor.

3.96. Regarding the SHR of DCCPP, RGTPP Petitioner has computed on normative basis as per Regulations considering the open and combined cycle operation hours. The Petitioner has requested the Commission to allow the SHR as claimed in the petition.

3.97. Regarding the SHR of CTPP and STPS, the Petitioner submitted that frequent cycling operation from full load to partial load results in the process cycle and deviation in operating parameters and hence increases the losses and the same are represented in form of increased Heat Rate. Since back down/ box up are beyond the control of RVUN and the increase in SHR above the normative parameters is one of the consequential effect of back down/box up. Further, SHR is also affected by drop down in GCV on storage of Coal.

3.98. Petitioner further submitted that there is a difference in GCV of coal when received and filling it in the bunkers, as it has to pass through various process of tripling, transportation through conveyor belts, sizing by crushers and storage. The loss of GCV in these process is not very high but when coal is stored for usage for longer time its quality gets deteriorated, therefore, there is always a reduction in GCV of bunkered(fired) coal. This difference is not uniform in nature and shows variation form sample to sample depending on the coal composition and storage duration. This difference in GCV though observed higher but may be allowed at least 150 kcal/kg on practical terms as the same is also confirmed by analysis reports of CPRI enclosed with the main petition.

3.99. Petitioner submitted that PSERC in order to get more precise methodology

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regarding the computation of cost of fuel being passed on to the consumers as an uncontrollable factor, went for fuel audit of all the thermal plants of PSPCL carried out as per international practices and the same was done by CPRI, Bangalore. Based on the report of CPRI PSERC passed an Suo-Moto order dated 08.10.2012. Against this order of the Commission, PSPCL filed a Review Petition stating that the gap of fired & received GCV is very high approx. 700 to 900 kCal/kWh for different units of PSPCL. However, while finalising the Review petition, PSERC stand still to it Suo-Moto order, further PSPCL approached to APTEL and the decision of APTEL is as shown below:

“The State Commission is fully and legally justified in determining the norms and giving directions to the appellant on the issue of drop in GCV between the receipted coal and fired /bunkered coal to 150 Kcal/kg as the impugned order has been passed after considering the relevant fats and the recommendations of CPRI. The State Commission is justified in accepting the recommendations of CPRI and the impugned order has been passed on due consideration of the recommendations and the factors available on record. We do not find any contradiction or discrepancy between the two reports submitted by CPRI, namely report submitted to the appellant on February, 2012 and to the State Commission in August ,2012. The State Commission is justified in giving various directions with regard to the fuel audit after due consideration that such directions are practically implementable. There is nothing on record to suggest or indicate that the directions given by the State Commission with regard to the fuel audit are practically not implementable. 17.2. The State Commission may take steps to frame regulation regarding drop and GCV between receipted coal and bunkered coal after following due process of law.18. Consequently, for the reasons stated above, the appeal has no merits and is hereby dismissed. The impugned order dated 27.02.2013 passed by the Commission is hereby affirmed. “

3.100. Therefore, Petitioner has requested the Commission to allow the GCV of coal to be lesser than 150 Kcal/kg than the received GCV.

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ARR and Tariff for FY 2017-18 Additional Capitalisation Stakeholder’s Comments/suggestions:

3.101. Regarding the additional capitalisation of Rs. 8.91 Crore under KTPS Unit 7 Stakeholder submitted that the Commission has already approved the capital cost of KTPS Unit 7 and any expenditure beyond this is subject to the approval of the Commission and in the absence of Commission’s approval, no additional capitalisation is admissible.

3.102. Further, the Petitioner has to provide the compliance report for all the additional capitalisation claimed as per Commission’s order dated 10.05.2012 and 31.10.2012 for KTPS and STPS respectively, in accordance with the Commission’s directive in the respective orders.

3.103. The Stakeholder submitted that the additional capitalisation of Rs. 78.06 Crore for STPS is not admissible as the cut-off date in accordance with Regulation 17 of RERC, Tariff Regulations, 2014 has already expired.

3.104. The Stakeholder submitted that regarding the additional capitalisation for FY 2014-15 for KaTPP Unit 1, the Petitioner should submit the list of undischarged liabilities and works deferred for execution as per Regulation 17(1). Further, the cut-off date of Unit 1 had already expired on 07.05.2015. Therefore, no additional capitalisation is admissible for KaTPP unit 1 for FY 2015-16.

3.105. The Stakeholder submitted that no additional capitalisation is admissible for DCCPP for the reasons as stated above.

3.106. The Stakeholder, further submitted that the Commission in its Order dated 17.10.2016 stated that the Petitioner is yet to file the petition for determination of final capital cost of KaTPP. Therefore, no additional capitalisation is admissible at this stage. Therefore, the Commission may not consider any additional capitalisation for any of the Units of KaTPP and ARR may be determined based on the provisionally determined capital cost.

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3.107. The Stakeholder submitted that the cut-off date as per RERC Tariff Regulations, 2014 for CTPP (Unit 1 to 4) has already expired. Therefore, no additional capitalisation is admissible for CTPP (Unit 1 to 4).

3.108. The Stakeholder submitted that the additional capitalisation for RGTPP Stage 1 & 2 and Mahi hydel power station is not admissible as the Petitioner has not taken any approval from the Commission for the expenditure and the same approach was adopted by the Commission in its order. Further, regarding the additional capitalisation of RGTPP Stage III, the Stakeholder submitted that the Petitioner is yet to file the petition for the determination of final capital cost. Therefore, at this stage no additional capitalisation is admissible.

3.109. The Stakeholder, regarding the expenditure of office equipment and furniture & fixtures towards Mahi hydel power station, submitted that the same is not admissible in accordance with the approach adopted by the Commission in its order dated 17.10.2016. Further, any other additional capitalisation of Mahi hydel power station for FY 2017-18 may be allowed as per Regulations.

RVUN’s Response:

3.110. Regarding the additional capitalisation of Rs. 8.91 Crore for KTPS Unit 7, the Petitioner submitted that after Commission order dated 10.05.2012, it has placed work order to various agencies and after completion of work, it has booked the amount in accounts and the same has been claimed. Copy of the work order has already been provided in the main petition.

3.111. Regarding the compliance report, the Petitioner submitted that the compliance report has been submitted after the completion of the work.

3.112. Regarding the additional capitalisation of KaTPP, the Petitioner submitted that Unit 1 achieved COD on 07.05.2014 and Unit 2 on 25.07.2015. Therefore, the cut-off date of the project is 31.03.2017. Further, the capital cost has been considered according to the Commission’s order dated 14.05.2015 and the additional capitalisation after COD has been

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considered as per audited accounts. Therefore, the Petitioner has requested the Commission to consider the capital cost as provisional and accordingly allow tariff for F 2017-18.

3.113. Regarding the additional capitalisation of RGTPP, the Petitioner submitted that these expenditures are in nature of Fixed Assets which are essential for smooth running of plants. Further, the Petitioner has considered the capital cost as per the Commission’s order dated 18.06.2015 and the additional capitalisation after COD has been considered as per audited accounts. Further, the Petitioner is in process to file the petition for the approval of final capital cost. Therefore, the Petitioner has requested to allow provisional Tariff for RGTPP Stage- 3.

PLF and Auxiliary Consumption Stakeholder’s Comments/suggestions:

3.114. The Stakeholder submitted that looking at the trend of FY 2015-16 to FY 2016-17, the Petitioner should ensure that it would maintain the normative PLF and auxiliary consumption for KTPS, CTPP (Unit 1 to 4), KaTPP (Unit 1 & 2), DCCPP, RGTPP and STPS in FY 2017-18.

3.115. The Stakeholder submitted that the auxiliary consumption for KaTPP (Unit 1 & 2) for FY 2017-18 may be allowed only on normative basis as the auxiliary consumption claimed by the Petitioner is in variation with the normative auxiliary consumption.

RVUN’s Response:

3.116. The Petitioner submitted that it shall make its efforts to maintain the normative PLF and auxiliary consumption.

3.117. The Petitioner submitted that it has considered the normative PLF and auxiliary consumption for FY 2017-18 for DCCPP.

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Depreciation Stakeholder’s Comments/suggestions:

3.118. The Stakeholder submitted that the Petitioner has not provided the details of Assets for KTPS and STPS for FY 2017-18 as per Regulation 22 (4) and in case the Petitioner does not provide the required information as per Regulation 22(4), the Commission may allow the same depreciation as allowed in the true-up of FY 2015-16 and no additional depreciation may be allowed on any additional capitalisation until the same is approved.

3.119. The Stakeholder submitted that the depreciation for CTPP (Unit 1 to 4), DCCPP and RGTPP may be allowed only on the assets admitted and no additional depreciation may be allowed on the additional capitalisation as the same is not admissible.

3.120. The Stakeholder submitted that the depreciation for KaTPP (Unit 1 & 2) may be allowed only on the basis of provisionally determined capital cost.

RVUN’s Response:

3.121. The Petitioner submitted that the depreciation for FY 2017-18 for KTPS, STPS, CTPP, DCCPP has been calculated as per RERC, Tariff Regulations, 2014.

3.122. For KaTPP, the Petitioner has requested the Commission to consider the computations of depreciation as claimed in the petition.

Insurance charges Stakeholder’s Comments/suggestions:

3.123. The Stakeholder submitted that the insurance charges for KTPS, CTPP (Unit 1 to 4), DCCPP, RGTPP and STPS for FY 2017-18 may be allowed on the basis of True-up of FY 2015-16 and in case the Petitioner provides any documentary evidence for FY 2017-18, the same may be allowed by the Commission.

3.124. The Stakeholder submitted that for insurance charges for FY 2017-18 for KaTPP (Unit 1 & 2), the Petitioner should submit the documentary proof of

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payments of previous financial years i.e. for FY 2015-16 and FY 2016-17.

RVUN’s Response:

3.125. The Petitioner submitted that the documents related to the insurance charges for FY 2016-17 have been furnished to the Commission in reply to the data gaps dated 11.04.2017. Further, the Petitioner has requested to allow the insurance charges as submitted in the petition.

O&M expenses Stakeholder’s Comments/suggestions:

3.126. The Stakeholder submitted that the O&M expenses for KTPS, CTPP (Unit 1 to 4), KaTPP Unit (1 & 2), DCCPP, RGTPP and STPS for FY 2017-18 may be allowed on normative basis.

RVUN’s Response:

3.127. The Petitioner has submitted that it has claimed the O&M expenses on normative basis.

Interest on term loan and finance charges Stakeholder’s Comments/suggestions:

3.128. The Stakeholder submitted that the interest on term loan for KTPS, CTPP (Unit 1 to 4), DCCPP, RGTPP and STPS for FY 2017-18 may be allowed on the normative loan admitted.

3.129. The Stakeholder submitted that the interest on term loan for KaTPP Unit (1 & 2) may be allowed on the basis of provisionally determined capital cost i.e. on normative loan.

RVUN’s Response:

3.130. The Petitioner submitted that it has claimed the interest on term loan and finance charges on normative basis.

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Interest on transitional loan Stakeholder’s Comments/suggestions:

3.131. The Stakeholder submitted that the interest on transition loan for KTPS, DCCPP, RGTPP and STPS for FY 2017-18 may be allowed on the balance of such loan as per order dated 21.01.2010. Stakeholder further submitted that there is no such loan for CTPP (Unit 1 to 4).

RVUN’s Response:

3.132. The Petitioner submitted that it has claimed the interest on transitional loan on normative basis.

Interest on working capital Stakeholder’s Comments/suggestions:

3.133. The Stakeholder submitted that the working capital for KTPS, CTPP (Unit 1 to 4), KaTPP (Unit 1 & 2), DCCPP, RGTPP and STPS for FY 2017-18 may be allowed on normative basis and accordingly the interest may be allowed.

RVUN’s Response:

3.134. The Petitioner submitted that it has claimed the interest on working capital on normative basis.

Non-tariff income Stakeholder’s Comments/suggestions:

3.135. The Stakeholder submitted that the non-tariff income for FY 2017-18 for KTPS, CTPP (Unit 1 to 4), KaTPP (Unit 1 & 2), DCCPP, RGTPP and STPS may be allowed as proposed by the Petitioner.

RVUN’s Response:

3.136. The Petitioner has requested the Commission to consider the non-tariff income as submitted in the petition.

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Return on Equity Stakeholder’s Comments/suggestions:

3.137. The Stakeholder submitted that the RoE for KTPS, CTPP (Unit 1 to 4), DCCPP, RGTPP and STPS for FY 2017-18 may be allowed on the admitted equity.

3.138. The Stakeholder submitted that the RoE of KaTPP (Unit 1 & 2) may be allowed on the basis of equity determined in the provisional capital cost approved.

RVUN’s Response:

3.139. The Petitioner has requested the Commission to compute the RoE on admitted equity and equity corresponding to additional capitalisation furnished in the petition.

Variable charges Stakeholder’s Comments/suggestions:

3.140. The Stakeholder submitted that the SHR for KTPS Unit 1-7 may be allowed as 2561.70 Kcal/KWh as decided by the Commission as normative SHR. Further, the Stakeholder submitted that the Review Petition of the Petitioner has already been dismissed by the Commission vide its order dated 09.12.2016.

3.141. The Stakeholder submitted that the Petitioner may provide the actual GCV and price of both indigenous and imported coal for the month of December-2016 to March-2017 along with the analysis report of GCV.

3.142. The Stakeholder submitted that the SHR for STPS for FY 2017-18 may be allowed on normative basis as was approved in the past.

3.143. The Stakeholder submitted that the Petitioner should submit the details of coal received and used from each source along with the supporting documents to substantiate the cost of coal for STPS and CTPP (Unit 1 to 4) for FY 2017-18. Further, the Petitioner should supply the details of coal at

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least for the month of December 2016 to March 2017 along with the GCV analysis report.

3.144. The Stakeholder submitted that the variable charges for KaTPP (Unit 1 & 2), RGTPP and DCCPP may be allowed on the same basis as per order dated 17.10.2016.

RVUN’s Response:

3.145. Regarding the SHR of KTPS Unit 7, the Petitioner submitted that the Commission in the Tariff order for FY 2014-15 approved the SHR of KTPS Unit 7 as 2328.26 kCal/kWh based on the design heat rate of 2228 kCal/kWh as submitted by the Petitioner. Whereas the design heat rate as per the guarantee documents provided by OEM was 2284 kCal/kWh and the same documents were provided to the Commission during the proceedings of the case. Information provided by the Petitioner in Form 2.1 was an inadvertent error on RVUN part. The Petitioner requested the Commission to consider the SHR for KTPS Unit 7 based on the submissions made in the current petition. Further, SHR has been computed as per Regulation 45(3)(b) of RERC, Tariff Regulations 2014. The detailed calculation is as shown below:

Particulars Station Heat Rate Turbine Cycle Heat Rate (kCal/kWh) A 1966.00 Boiler Efficiency (%) B 86.06% Design Heat Rate (kCal/kWh) C=A/B 2284.45 Regulation 45(3)(b) of RERC Tariff Regulation 2014

D 1.045


3.146. Petitioner requests the Commission to consider the SHR of 2387.25 kCal/kWh for the period FY 2014-19.

3.147. The Petitioner submitted that it has provided the details regarding the actual GCV and fuel price of coal as well as other fuels for all the stations for the month of December 2016 to March 2017 along with the analysis

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report of GCV.

3.148. Petitioner further submitted that it has considered the normative SHR for STPS for FY 2017-18.

3.149. Petitioner submitted that the SHR for CTPP should be considered as per the petition filed for the revision of SHR of CTPP Unit 1.

3.150. Petitioner submitted that the petition for KaTPP has been filed on normative basis.

Stakeholder’s Comments/Suggestions:

3.151. The Stakeholder further submitted that the Petitioner may clarify the efforts and expenses made by it towards the compliance of Regulation 6 of CEA (Measures relating to safety and electric supply) Regulations, 2010 and Regulation 10(5) of CEA (Safety requirements for constructions, operation and maintenance of electrical lines) Regulations, 2011. The Petitioner should also clarify the steps taken by the Petitioner to boost morale/morality of the workers and improving performance /image in light of the Article 43A of The Constitution of India.

RVUN’s Response:

3.152. Regarding the compliance of Regulation 6 of CEA (Measures relating to safety and electric supply) Regulations, 2010 and Regulation 10(5) of CEA (Safety requirements for constructions, operation and maintenance of electrical lines) Regulations, 2011, the Petitioner submitted that it has taken various measures viz fuel management, taking consultancy services and arranging trainings to staff etc. for reduction in losses of the company. These measures have resulted in better plant performance i.e. plant stability, reliability and helping to achieve better operational parameters like SHR, auxiliary power consumption, secondary fuel oil consumption, PLF etc. Measure taken by the Petitioner to reduce losses are as shown below:

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Fuel Management:

(i) Engagement of third party for sampling and analysis of coal at dispatch and receiving end, so that exact GCV of coal be estimated.

(ii) Appointment of CPRI, Banglore as fuel auditor has been made so that quantity and quality of coal shall be audited and determined.

(iii) Maximization of direct feeding of coal to bunkers from coal racks have been ascertain this have resulted in reduction of auxiliary power consumption.

(iv) Coal swapping among RVUN plants has been made between STPS and KTPS, which have resulted in reduction of coal transportation cost.

Consultancy:

(i) The Petitioner has been availing consultancy services from NTPC for overall improvement in plant performance by developing NTPC officers at CTPP and to adopt their best O&M practices, commercial awareness and fuel management at plant site etc.

(ii) The Petitioner has been availing consultancy services from NTPC for KTPS and KaTPP for overall improvement in plant performance in all aspects.

(iii) The Petitioner has conducted various workshops for energy efficiency management system by M/s. Efficient Power tech Solutions.

Training:

(i) The Petitioner has arranged 26 weeks comprehensive residential training program by 60 Nos. of RVUN engineers conducted at NPTI, Faridabad covering all operational, maintenance, skill development, safety, simulator, efficiency, commercial etc., related aspects.

(ii) Arranged 8 weeks comprehensive residential training program by 40 nos. RVUN Engineers at Mundra, Gujarat (Adani Power Institute) covering all

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operational, maintenance, safety, simulator etc related aspects.

(iii) Arranged few one-week residential training modules by RVUN Engineers & Chemists at NTPC in the areas covering various aspects of power plant like compressor and mill maintenance and power plant chemistry etc.

(iv) Similarly, conducting two weeks training module at NTPC covering various commercial & regulatory aspects.

(v) Strengthening of in-house plant training centres at Kota and Suratgarh with advanced simulator facilities providing training to RVUN engineers.

(vi) Creation of monitoring section at Jaipur Office to monitor daily performance related to operational and commercial aspects.

Safety Measures:

(i) General safety requirements pertaining to construction, installation, protection, operation & maintenance of electricity supply lines and apparatus.

(ii) Identification of earthed and unearthed neutral conductors and position of switches and switchgear therein.

(iii) Accessibility of bare conductors.

(iv) Danger notices are affixed permanently in Hindi or English with a sign of skull and bones of a design as per IS-2551.

(v) Handling of electric supply lines and apparatus.

(vi) Supply of vehicles and cranes are efficiently controlled by a suitable switch enabling all voltage to be cut in one operation.

(vii) Display of instructions for resuscitation of persons suffering from electric shock.

(viii) Installation and testing of generating units.

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(ix) General health & safety issue

(x) Gur is issued to persons working in dust prone area such as coal and ash handling.

(xi) Safety shoes, helmet & gloves are issued time to time.

(xii) Health check-up camps is arranged time to time.

Others Stakeholder’s Comments/Suggestions:

3.153. The Stakeholder submitted the following points regarding the terminal benefit claimed by the Petitioner:

a) The Stakeholder submitted that the Petitioner in its petition No. 594/16 submitted that the employee benefit expenses are inclusive of regular contribution towards CPF board contribution, FPF board contribution, terminal benefit for pension, terminal benefit for gratuity, PF inspections and audit charges etc., whereas the terminal benefit claimed is the additional contribution which has been transferred to designated fund and which is additionally allowed by the Commission in its order dated 31.08.2009. The above statement implies that a part of terminal benefit is included in the O&M expenses. But the same does not appear correct from the historical background. Regarding this, the Stakeholder submitted the gist of various Commission’s orders, which are as follows:

(i) Order dated 31.08.2009: - RVUN submitted that the actuarial valuation carried out on 31.03.2009 by the actuarial firm and the contribution to be made to meet the additional terminal liability will be based on actuarial valuation process, which is under process. As per the interim report of actuarial valuation in respect of RVUN, the additional contribution towards gratuity is Rs. 150 Crore and towards pension fund Rs. 250 Crore. Based on this, the Commission allowed annual instalment of Rs. 40 Crore for each year of MYT period with 50 % of the amount claimed by the RVUN and the rest may be reimbursed by the

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Government of Rajasthan or by increase in regular contribution to the fund or through the sharing of savings in O&M expenses.

(ii) Order dated 16.11.2010 and 30.11.2011: - RVUN made power station wise projections of terminal benefit, totalling to Rs. 40 Crores for each year which Commission has allowed.

(iii) Order dated 06.06.2013: - The Commission directed the Petitioner to immediately remit the amount allowed by the Commission and recovered from DIscoms into superannuation & gratuity trusts along with interest at the SBI’s base rate.

(iv) Order dated 24.02.2014: - The Petitioner submitted that it has already remitted the payments towards pension and gratuity funds for FY 2009-10 to FY 2011-12 (without interest) and the remaining balance shall be remitted according to the availability of funds and the delay in remitting the above amount was due to the fund availability. The Petitioner also stated that provisioning is required to be made by RVUN as per AS-15 based on actuarial valuation and the same is yet to be carried out for FY 2012-13. The Commission directed the Petitioner to remit the amount of Rs. 40.01 Crore into the Pension and Gratuity Trusts immediately and report the compliance of above direction to the Commission.

(v) Order dated 07.09.2015: - In the said order, the Stakeholder submitted that out of the total recovered amount of Rs. 200 Crore towards additional liability towards pension fund recovered from Discom, the Petitioner has deposited only 150.32 Crore into the fund till 27.03.2014 without any interest. RVUN stated that due to actual PLF being lower than the normative PLF, it has recovered lower fixed charges and consequently has deposited lower amount in the fund. The amount recovered by the RVUN for the period of FY 2009-10 to FY 2011-12 had been dis-allowed by the Commission on account of non-deposition of the same amount into the fund. Till FY 2013-14 RVUN has deposited the total amount of Rs. 155.32 Crore into the fund against Rs. 200 Crore.

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Against the recovery of Rs. 200 Crore from the Government of Rajasthan, the Petitioner submitted that the process of actuarial valuation is under process and once the same is finalised, the Petitioner shall take up the matter with the Government of Rajasthan. In the ARR for FY 2015-16, the Petitioner prayed to allow Rs. 44.68 Crore and in revised submission the Petitioner has claimed the amount of Rs. 68.96 Crore on account of additional liability towards pension and gratuity and the same was allowed by the Commission.

(vi) Order dated 17.10.2016: - The Petitioner stated that the terminal benefits are inclusive of provident fund amount and the employee benefit expenses are inclusive of regular contribution towards CPF board contribution, FPF board contribution, terminal benefit for pension, terminal benefit for gratuity, PF inspections and audit charges etc., Whereas the terminal benefit additionally claimed in the petition is the additional contribution which has been transferred to designated fund which is additionally allowed by the Commission in its order dated 31.08.2009.

b) From the above points, it can be stated that the Petitioner has not carried out actuarial valuation of the terminal benefit liability and the same has always been in under process and has considered the 50% of such liability determined in the year 2009 as due only. The same is reflected in the note 33- Contingent liabilities of their annual report of FY 2014-15. The same is as under: -

“d) As per Actuarial Valuation Report these short falls of Rs. 31,43,32,00,000 in respect of liabilities for Pension and Gratuity as on 31.03.2007. This liability was further estimated to have increased to Rs. 5000,00,00,000 (approx.) as on 31.03.2009, subject to revision on receipt of final Actuarial Valuation Report which is likely to take some more time. Based on the above estimation the share of RVUNL in the shortfall was Rs. 400,00,00,000 which the company has provided in the books of accounts for the year 2008-9. However, out of the above shortfall the RERC vide its order dated

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31.08.2009 has allowed the Nigam to recover Rs. 40 Crores per annum (total amount Rs. 200 Crores) out of such past year cost for MYT period i.e. 2009-10 to 2013-14. Accordingly, the fifth instalment has been received by the company through tariff in the year 2013-14 against the claim of Rs. 40 Crores. Further, RERC upon observance that the amount collected has not been remitted to the trust, directed to remit the same immediately with interest thereon at the base rate of SBI. The Company however due to its precarious financial condition though remitted the amount collected but has not paid interest thereon.”

c) The Stakeholder submitted that as per AS-15, the employer is required to made disclosure in respect of terminal benefits. The same is mandatory to follow from FY 2007-08 as per section 133 of the Companies Act 2013 and the non-compliance of the same is subject to penalty as per Section 129 (7) of the Companies Act. Further, as per clause 58, of AS-15, the detailed actuarial valuation of the present value of defined benefit obligations may be made at intervals not exceeding three years. The Stakeholder further submitted that the not getting the actuarial valuation done is the violation of Companies Act and represents a casual approach towards employees’ post retirement provisions.

d) The Stakeholder further submitted that the Petitioner and the Commission has considered after retirement benefits as pass through recovery made from Discom through tariff. But the same approach is not correct and this should be reflected in balance sheet as per AS-15 and had to be discharged irrespective of recovery from Discoms. The Stakeholder further submitted that the contribution of Rs. 141.41 Crore against the recovery of Rs. 150.32 Crore establishes that the Petitioner has not contributed any sum out of O&M expenses to the pension and gratuity trusts. The Stakeholder submitted that the O&M expenses claimed for FY 2014-15 and FY 2015-16 is less than the normative O&M expenses but the same has been remitted or proposed to be remitted to these trusts. The Stakeholder further submitted that as per the letter of CAO (P&F) RVPN, contribution of Rs. 245.74 was made during the FY

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2014-15 but the same is not supported by the Note-27 of the consolidated financial statement of FY 2014-15 which indicates the contribution to terminal benefit including PF as Rs. 25.56 Crore only.

e) The Stakeholder submitted that as per Accounting Standard 15, the Petitioner has made the disclosure of terminal benefit liability and provisions in the annual report of FY 2015-16. As per the disclosure made in note 27.3 of the annual report of FY 2015-16, against actuarial liability Rs. 581.77 Crores for pension and Rs. 127.41 Crores for gratuity, available funds at the beginning of FY 2015-16 were Rs. 377.28 Crores for pension and Rs. 138.89 Crores for gratuity. Further, against the benefits paid of Rs. 13.46 Crore and Rs. 8.08 Crore towards pension and gratuity funds respectively, the Petitioner contributed the amount of Rs. 10.55 Crores and Rs. 7.26 Crores towards pension and gratuity funds respectively.

f) The Stakeholder submitted, that the declaration made by the Petitioner does not indicate the year of actuarial valuation and according to AS-15, the actuarial valuation is to be done in every three years. From the declaration made by the Petitioner, it appears that the Petitioner is continuing with the actuarial valuation of 2009 and is making the contribution on the ground of the same recovered from the Discom.

g) The Petitioner submitted that Commission may consider above points to reflect the true O&M and may direct the Petitioner:

(i) To furnish actuarial valuation report, if already carried out and if it is yet to be carried out, the Petitioner should submit the same within 3 months.

(ii) To disclose their policy as to which part of terminal benefit will be included in O&M expenses and which part will be claimed separately and to indicate their amount in their future petition for ARR.

(iii) To disclose the amount of terminal benefit considered as part of O&M expenses and part proposed to be claimed separately in this petition and additional required for this year towards balance liability.

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(iv) To reconcile the sums remitted to pension and gratuity funds and clarify different figures appearing in its petition, CAO (P&F)’s letter, in annual reports and disclosure etc., under AS-15.

(v) To furnish the plan to liquidate its entire liability of terminal benefit as per actuarial valuation in a specified time frame, say it be 5 to 6 years and;

(vi) To discharge liability accordingly through equal monthly instalment for pension and gratuity payments through escrow on their revenue, having priority after salary payments.

3.154. Regarding minimizing the impact of backing down, the Stakeholder submitted the following points: -

(i) A substantial amount of generation capacity has remained unutilised. The utilisation of RVUN as a whole is as shown below:

Table 3: Utilization of RVUN as a whole for FY 2014-15 and FY 2015-16

Particulars Approved RERC order

Actual/ Audited for the year

% utilisation

Units sent out for FY 2014-15 (MU) 23980.65 21191.68 88.4%

Units sent out for FY 2015-16 (MU) 24046.01 14644.29 60.90%

(ii) It is clear from the submission of the Petitioner that underutilisation is due to backing down instructions from SLDC/RDPPC. The Stakeholder further submitted that due to the backing down instructions of SLDC/ RDPPC fixed charges are payable with no addition to energy availability which results in higher fixed charges /kWh of generation. The same is reflected in the true-up petition of FY 2015-16, which indicates that the fixed charges per unit in the true-up petition has increased by Rs. 0.50 per kWh and the resulted rise in fixed charges per unit has resulted in the total burden of Rs. 732.20 Crore on Discoms/consumers in respect to the total injected energy of 14644.29 MUs and the same will have an impact in FY 2017-18 also.

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Table 4: Increase in fixed charges and total charges per kWh sent out

Power Stations

Petition

Table

Fixed Charges

(Rs. /kWh)

Variable Charges

(Rs. /kWh)

Total (Rs.

/kWh)

Norm. PLF

Gen. (MU)

Projections for FY 2017-18 based on the FY 2015-16 data

PLF Gen. (MU)

Fixed charges

(Rs./kWh)

Total (Rs./kWh)

KTPS 16 0.627 2.787 3.415 82.00% 8081 70.50% 6943 0.730 3.517 STPP 13 0.820 3.270 4.088 82.00% 9805 44.00% 5261 1.528 4.798 CTPP (Unit 1 & 2)

13 1.502 2.193 3.694 80.00% 3189 37.00% 1475 3.248 5.441

CTPP (Unit 3) 13 1.942 2.339 4.281 80.00% 1594 60.60% 1208 2.563 4.902

CTPP (Unit 4) 13 1.635 2.339 3.974 80.00% 1654 67.30% 1392 1.943 4.282

KaTPP (Unit 1)

13 2.320 2.420 4.740 83.00% 4112 66.90% 3313 2.879 5.299

KaTPP (Unit 2)

13 2.100 2.420 4.520 83.00% 4112 64.20% 3179 2.716 5.136

RGTPP (110.5 MW)

13 0.870 2.470 3.339 70.00% 661 50.40% 476 1.209 3.679

RGTPP (160 MW)

13 1.830 3.050 4.881 70.00% 958 71.50% 978 1.830 4.881

DCPP 13 0.875 3.428 4.304 80.00% 2246 10.10% 282 6.965 10.393 Total Generation 36411 24508

(iii) Besides Discoms/ consumers, RUVN also gets affected by backing down instructions. This Costs to RVUN as oil consumption and SHR cannot be maintained at normative level and it creates stress on boilers and turbines. The Stakeholder therefore submitted that the Commission may direct the SLDC to consider these aspects while giving the backing down under merit order. The Stakeholder submitted the clause 4.5.3 of the standard PPA document for the procurement of power for Long Term Under Case-1 Bidding procedure through Tariff Based Competitive Bidding Process for meeting the base load requirements issued by Jaipur, Ajmer and JdVVNL states as under:

“4.5.3 If a Procurer does not avail of power up to the Available Capacity provided by the Seller corresponding to such Procurer’s Contracted Capacity, and the provisions of Article 4.5.2 (b) have been complied with, the Seller shall be entitled to sell such Available Capacity not scheduled by the Procurer(s), to any person without losing the right to receive the Capacity

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Charges from the Concerned Procurer for such un-availed Available Capacity. In such a case, the realization in excess of Energy Charges, shall be equally shared by the Seller with the Concerned Procurer…..”

The above clause shall be beneficial for both RVUN as well as Discoms/Consumers. Further, the Commission may direct the RVUN and Discoms to incorporate such a clause in their PPAs by mutual consent and may allow the generating stations to contract the unscheduled generation for sale to the third party outside the state under this clause with all the details of contract intimated to SLDC. Stakeholder further submitted that, in the present market the utilisation of the whole unscheduled generation is not possible but the utilisation of even a small part of this power will give some relief.

(iv) Petitioner in annual performance review has expressed the operational problem regarding mini micro hydel power plants but the Petitioner has not proposed the remedy to the issue. The Stakeholder further submitted that the Commission may consider this issue under RPO provisions.

(v) Availability of cheaper power form other private generating companies has come up as a serious problem for state owned generating stations as under this situation, RVUN plants are being compelled to back down their generation, which results in serious technical damage to the life of plants.

RVUN’s Response:

3.155. The Petitioner submitted that for FY 2017-18, it has claimed the total amount of Rs. 978.25 Crore against O&M expenses which includes repair & maintenance, employee cost and administrative expenses as major part and the employee cost includes the terminal benefits of the employees. The Petitioner further submitted that it has created a total liability of Rs. 400 Crore during FY 2008-09 under pension and gratuity fund accumulated on

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account of unbundling of erstwhile RSEB into five separate companies. The same amount was claimed in the true-up petition for FY 2004-05 to FY 2008-09. Rs. 100 Crore in O&M head and Rs. 300 Crore in prior period expenses head. As per the true-up order, the Petitioner had to refund Rs. 211.51 Crore. Against this true-up order, the Petitioner filed the Review Petition and the Commission issued its review order on 10.05.2012. According to that, the Petitioner had to claim an amount of Rs. 49.48 Crore from DISCOMS which includes Rs. 40 Crore allowed by the Commission in true-up for FY 2008-09.

3.156. During the true-up of FY 2009-10, one of the Stakeholder stated that this amount of Rs. 49.48 Crore has to be remitted in pension and gratuity fund and the Commission also directed the same to the Petitioner. The Commission in the MYT order FY 2009-10 to FY 2013-14 allowed Rs. 40 Crore per year and also directed the Petitioner to approach State Government with final actuarial valuation for remaining amount towards pension and gratuity fund. Further, the Commission in the true-up of FY 2009-10 to FY 2011-12 against the head pension and gratuity has not allowed any amount, since the Petitioner has not deposited any amount claimed in billing of these years. The summary of amount deposited by the Petitioner toward pension and gratuity fund afterward are as shown below:

Year Amount deposited (Rs. Crore) FY 2012-13 113.21 FY 2013-14 37.11 FY 2014-15 5.00 FY 2016-17 44.65 FY 2015-16 0.00

Total 199.97

3.157. The Petitioner further submitted that the actual fixed charges have increased as compared to the rates approves by the Commission. Therefore, it has requested the Commission to direct DISCOMS to revise their MOD considering the actual fixed charges.

3.158. Regarding the true cost of O&M, the Petitioner submitted that:

(i) It has carried out actuarial valuation, the report of which has been

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furnished by the Petitioner.

(ii) O&M expenses include R&M, employee cost and administrative expenses as a major part in which employee cost consist of terminal benefits of the employees.

(iii) The terminal benefits are the part of O&M expenses which are shown separately in the true up of that year. In addition to that there are separate claims as previous years liability under the head “pension and gratuity”.

(iv) The total amount deposited in pension and gratuity fund are as follows:

Year Amount deposited (Rs. Crore)

FY 2012-13 113.21 FY 2013-14 37.11 FY 2014-15 5.00 FY 2016-17 44.65

Total 199.97

(v) The previous liability of Rs. 200 Crore has been deposited as shown above and the case for depositing remaining amount as per actuarial valuation report is in process.

3.159. The Petitioner has requested the Commission to direct DISCOMS to provide their power requirements based on quarterly and annual projections and to declare to the Petitioner in advance the generation capacity not likely to be scheduled during that quarter and allow it to contract such generation capacity for sale to third party outside the state without losing the right to receive the capacity charges from the DISCOM for such un procured available capacity, as the same is also suggested by the Stakeholder.

3.160. The Petitioner submitted that it has published the notification containing the summary of the petitions in the widely circulated regional as well as national newspapers and has also made available on the sites of RVUN and RERC. The Petitioner also organizes public hearing, invites comments of

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the Stakeholder and provides the answers to their satisfaction.

3.161. Regarding the remedy of mini micro hydel power plants, the Petitioner submitted that the Tariff of Rs. 3.78 per unit provided in RERC, Tariff Regulations, 2014 is not sufficient to meet out the expenditures of these plants, because of which, the Petitioner has incurred a loss of Rs. 28.17 Crore in previous years. Therefore, the Petitioner has requested the Commission to consider the true-up of these plants.

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2

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3 SECTION 4

Analysis of True-up of ARR for FY 2014-15 & FY 2015-16 and Allowed Fixed Charges and Variable Charges Norms of Operation Availability RVUN’s Submissions

4.1. The actual Availability/Capacity Index submitted by RVUN for its stations for FY 2014-15 and FY 2015-16 are as shown in the Table below:

Table 5: Availability/Capacity Index as submitted by RVUN

Particulars

FY 2014-15 FY 2015-16

KTPS (Unit 1-7)

STPS (Unit 1-6)

RGTPS DCCPP Mahi CTPP (Unit 1-2)

KTPS (Unit 1-7)

STPS (Unit 1-6)


Target Availability for full recovery of fixed charges

82.00% 82.00% 70.00% 80.00% 90.00% 80.00% 82.00% 82.00% 70.00% 80.00% 90.00% 80.00%

Actual as claimed in petition

88.00% 87.98% 78.13% 45.75% 94.37% 77.86% 89.89% 81.70% 83.07% 66.58% 81.68% 44.29%

4.2. RVUN submitted that it had faced shortage of water at Mahi and shortage of gas at DCCPP and RGTPS for power generation in FY 2014-15 and FY 2015-16.

4.3. RVUN submitted that Mahi Power House – I is located on a saddle dam of Mahi Dam periphery. The Mahi Dam is the property of Water Resources Department and the use/ distribution of water stored in the dam is completely in the control of Water Irrigation Committee headed by District Collector Banswara. Therefore, only when there is a need of irrigation in the

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area and water is released in the LMC (Left Main Canal) & RMC (Right Main Canal), operation of machines at Mahi Power House-I is possible. Regarding this, the Water Irrigation Committee intimates to the plant in charge regarding the schedule of canals and quantity of water to be released in the LMC and RMC and accordingly the running hours of machines are decided. Therefore, the Petitioner submitted that operation of Mahi PH-I totally depends on the irrigation requirements and the Mahi PH-I is not purely run of river power station with pondage and storage type because RVUN does not have any control on water utilization.

4.4. Similarly, the RVUN submitted that Mahi PH-II is a canal based power plant and its balancing reservoir is located at the end of LMC, which means that whenever water is realized in LMC, only then the operation of machines is possible. Further, for the operation of machines, a certain level of water reservoir is required. It means whenever the water level in the balancing reservoir reaches optimum level for generation then only the machines at Mahi PH-II can run. Therefore, on the basis of above points, the Petitioner has requested the Commission not to reduce the fixed charges on pro-rata basis for FY 2014-15 and FY 2015-16.

Commission’s Analysis

4.5. The Commission observes that the reasons stated by RVUN for non-achievement of target availability are non-availability of gas for gas based stations, non-availability of water for hydel stations and backing down by SLDC.

4.6. The Commission in its Order dated 23.07.2014 directed RVUN to submit the SLDC Certificate towards actual availability and reasons for loss in generation, if any, along with true up Petitions from FY 2011-12 onwards. RVUN in the current petition has submitted the loss in generation due to back down instructions certified by SLDC in FY 2014-15 and FY 2015-16.

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Table 6: Generation Loss due to back-down/box-up instructions as verified by SLDC

Particulars

FY 2014-15 FY 2015-16 RVUN

Proposed generation loss (MU)

Verified by SLDC

(MU)

RVUN Proposed

generation loss (MU)

Verified by SLDC

(MU)

KTPS (Unit 1-7) 660.78 660.78 1509.51 1509.51

STPS (Unit 1-6) 1296.01 1296.01 4625.16 4625.16

RGTPS 173.74 173.74 27.98 27.98

DCCPP 385.67 385.67 647.62 647.62

CTPP (Unit 1-2) 293.04 293.04 89.54 89.54

Total 2809.24 2809.24 6899.81 6899.81

4.7. The generation loss due to back-down/box-up instructions of SLDC shown in the above table is for the stations/units for which RVUN has claimed the true up for FY 2014-15 and FY 2015-16 in the instant petition.

4.8. RVUN has submitted the computations of deemed PLF considering the loss of generation due to back-down/box-up instructions as per SLDC for FY 2014-15 and FY 2015-16.

4.9. As regards the non-availability of gas, the Commission is of the view that the responsibility for arrangement of fuel lies with the generator. In this regard, the Commission vide its Order dated 27.04.2011 in the truing up for RVUN for FY 2004-05 to FY 2008-09 observed as under:

“22. Fuel supply arrangement is the responsibility of RVUN. Therefore, non-availability of gas cannot be considered as a valid reason for non-availability of plant.”

4.10. The Commission, in its Order dated 17.10.2016 on approval of true up for FY 2013-14, had considered the actual availability equal to PLF, as approved, in the absence of SLDC Certificate for the actual availability. The Commission has approved the actual PLF in the subsequent paragraphs. The Commission, after taking into consideration the certification of SLDC for loss of generation due to back-down/box-up instructions, has recomputed

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the deemed PLF by adding the same to the actual Net Generation and in accordance with Regulation 41 of the RERC Tariff Regulations, 2014. The Commission for the purpose of computing the deemed PLF has considered the normative auxiliary consumption. The Commission has considered the PLF so computed as the actual availability for FY 2014-15 and FY 2015-16. The deemed PLF submitted by RVUN and as approved by the Commission is as shown in the Table below:

Table 7: Availability based on deemed generation for FY 2014-15

Particulars Units KTPS (Unit 1-7) STPS (Unit 1-6) RGTPS DCCPP CTPP (Unit 1-2)

RVUN Approved RVUN Approved RVUN Approved RVUN Approved RVUN Approved Installed Capacity MW 1240 1240 1500 1500 110.5 110.5 330 330 500 500

Auxiliary Consumption % 9.27% 9.27% 9.00% 9.00% 3.00% 2.40% 3.00% 2.93% 9.00% 9.00%

Actual Net Generation MU 8010.25 8010.25 9152.21 9152.21 435.87 435.87 829.11 829.11 2605.64 2605.64

Generation Loss due to back-down/box-up instructions verified by SLDC

MU 660.78 660.78 1296.01 1296.01 173.74 173.74 385.67 385.67 293.04 293.04

Sub-total MU 8671.03 8671.03 10448.22 10448.22 609.61 609.61 1214.78 1214.78 2898.68 2898.68

Deemed PLF % 87.98% 87.98% 87.38% 87.38% 64.93% 64.53% 43.32% 43.29% 72.73% 72.73%

Table 8: Availability based on deemed generation for FY 2015-16

Particulars Units KTPS (Unit 1-7) STPS (Unit 1-6) RGTPS DCCPP CTPP (Unit 1-2)

RVUN Approved RVUN Approved RVUN Approved RVUN Approved RVUN Approved Installed Capacity MW 1240 1240 1500 1500 110.5 110.5 330 330 500 500

Auxiliary Consumption % 9.27% 9.27% 9.00% 9.00% 3.00% 2.63% 3.00% 2.82% 9.00% 9.00%

Actual Net Generation MU 6962.32 6962.32 5275.55 5275.55 501.55 501.55 330.03 330.03 1664.61 1664.61

Generation Loss due to back-down/box-up instructions verified by SLDC

MU 1509.51 1509.51 4625.16 4625.16 27.98 27.98 647.62 647.62 89.54 89.54

Sub-total MU 8471.83 8471.83 9900.71 9900.71 529.53 529.53 977.65 977.65 1754.15 1754.15

Deemed PLF % 85.96% 85.96% 82.80% 82.80% 56.40% 56.18% 34.87% 34.80% 44.01% 44.01%

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4.11. The Availability/Capacity Index approved by the Commission is as shown in the Table below:

Table 9: Availability approved by the Commission for FY 2014-15 and FY 2015-16

Particulars

FY 2014-15 FY 2015-16

KTPS (Unit 1-7)

STPS (Unit 1-6)


KTPS (Unit 1-7)

STPS (Unit 1-6)


Availability Claimed

88.00% 87.98% 78.13% 45.75% 94.37% 77.86% 89.89% 81.70% 83.07% 66.58% 81.68% 44.29%

Approved on True up

87.98% 87.38% 64.53% 43.29% 94.37% 72.73% 85.96% 82.80% 56.18% 34.80% 81.68% 44.01%

4.12. The Commission has gone through the submissions of RVUN for allowing the recovery of full fixed charges on account of shortage of gas. In the truing up of previous years, the Commission had not considered the gas shortage situation for allowing recovery of full fixed charges for gas based thermal generating stations. This consistent approach of the Commission has been challenged before Hon’ble APTEL and is pending adjudication. Hence, the Commission, pending the decision of Hon’ble APTEL, maintains status-quo in the matter.

Plant Load Factor (PLF) RVUN’s Submission

4.13. The actual PLF as submitted by RVUN for its stations for FY 2014-15 and FY 2015-16 is as shown in the Table below:

Table 10: PLF as submitted by RVUN for FY 2014-15 and FY 2015-16 Particulars FY 2014-15 FY 2015-16

KTPS (Unit 1-7)

STPS (Unit 1-6)

RGTPS DCCPP CTPP (Unit 1-2)

KTPS (Unit 1-7)

STPS (Unit 1-6)


Target PLF for incentive

82.00% 82.00% 70.00% 80.00% 80.00% 82.00% 82.00% 70.00% 80.00% 80.00%

Approved in Order

82.00% 82.00% 70.00% 80.00% 80.00% 82.00% 82.00% 70.00% 80.00% 80.00%

Actual Claimed in petition

81.28% 76.54% 46.10% 29.57% 65.37% 70.45% 44.00% 50.38% 10.50% 37.00%

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4.14. RVUN submitted that the actual PLF for STPS, KTPS for FY 2014-15 and FY 2015-16 is lower than the target PLF on account of back down instructions from SLDC. For RGTPS and DCCPP, the actual PLF for FY 2014-15 and FY 2015-16 is lower than the target PLF on account of shortage of gas. The actual PLF of CTPP for FY 2014-15 is lower than the target PLF on account of back down instructions from SLDC.

4.15. For CTPP, for FY 2015-16, the actual PLF is lower than target PLF because Unit #1 remained out w.e.f. 24.05.2015 to 16.08.2015 for annual overhaul and from 18.08.2015 to 13.03.2016 due to huge fire in Generator Transformer of Unit#1. RVUN has requested the Commission to allow recovery of full fixed charges as the above factors were beyond the control of RVUN.

4.16. RVUN further submitted that as per RERC, Tariff Regulations, 2014, coal/lignite and gas based stations are allowed to be paid an incentive at a flat rate of 30.00 Paisa/kWh for ex-bus scheduled energy exceeding target PLF, which is 82 % for KTPS. RVUN has recovered incentive of Rs. 1.00 Crore based on the monthly generation. However, as the total PLF at the end of the year is less than the target PLF, RVUN has refunded the same amount of Rs. 1.00 Crore to the DISCOMs during FY 2015-16 and the same is also reflected in the audited accounts of FY 2015-16.


4.17. The Commission is of the view that under the RERC Tariff Regulations, 2014, RVUN is being allowed all the prudent expenses based on the availability of its Stations, however, at the same time, RVUN must also strive to achieve higher PLF so that more energy is made available to the Discoms within the State at a lower price.

4.18. RERC Tariff Regulations, 2014 specifically define the PLF as specified below:

“(44) “Plant Load Factor”, for a given period, means the total sent-out energy generation during such period, expressed as a percentage of sent out energy corresponding to installed capacity in that period and shall be computed in accordance with the following formula:

of 168 RERC/1035/17

N Plant Load Factor (%) = 10000 x I ΣAGi / {N x IC x (100 – AUXn)} % i=1 where - N = number of time blocks in the given period, AGi = Actual Generation in MW for the ith time block in such period IC = Installed Capacity of the generating station in MW, AUXn = Normative Auxiliary Consumption in MW, expressed as a percentage of gross generation”

4.19. The Commission, based on the submitted actual net generation and the normative net generation considering the normative auxiliary consumption, has recomputed the actual PLF as per the above specified formula. The PLF as submitted by the Petitioner and as considered by the Commission for FY 2014-15 and FY 2015-16 is as shown in the Table below:

Table 11: PLF as Approved by the Commission for FY 2014-15 and FY 2015-16

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)


KTPS (Unit 1-7)

STPS (Unit 1-6)


Actual as Submitted by the Petitioner 81.28% 76.54% 46.10% 29.57% 65.37% 70.45% 44.00% 50.38% 10.50% 37.00%

Actual reworked by the Commission and considered for true-up

81.28% 76.54% 46.14% 29.55% 65.37% 70.45% 44.00% 50.54% 10.04% 37.00%

Auxiliary Consumption RVUN’s Submissions

4.20. The actual auxiliary consumption submitted by RVUN for its Stations for FY 2014-15 and FY 2015-16 is as shown in the Table below:

Table 12: Auxiliary Consumption as submitted by RVUN

Particulars

FY 2014-15 KTPS (Unit 1-7)

STPS (Unit 1-6)

RGTPS DCCPP Mahi

CTPP (Unit 1-2) CC OC CC OC

Normative 9.27% 9.00% 3.00% 1.00% 3.00% 1.00% 1.11% 9.00% Approved in Tariff order

9.27% 9.00% 2.32% 3.00% - 9.00%

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Particulars

FY 2014-15 KTPS (Unit 1-7)

STPS (Unit 1-6)

RGTPS DCCPP Mahi


Actual 10.05% 9.36% 4.63% 5.64% 0.01% 11.00%

Particulars

FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)

RGTPS DCCPP Mahi


Normative 9.27% 9.00% 3.00% 1.00% 3.00% 1.00% 1.08% 9.00% Approved in Tariff order

9.27% 9.00% 2.32% 3.00%

9.00%

Actual 10.39% 10.63% 4.77% 14.34% 0.63% 11.17%

4.21. RVUN submitted that increase in auxiliary consumption for KTPS, STPS, DCCPP and CTPP is due to back-down/box-up instructions from SLDC and also lower availability of gas for DCCPP. RVUN submitted that in case of backing down of generation, though the load is reduced, but all the auxiliary equipments of the Station have to run and therefore, the auxiliary consumption in percentage terms is higher during the low load operation.

4.22. RVUN further submitted that as the tube mills are used instead of bowl mills, the auxiliary consumption of KTPS for FY 2014-15 and FY 2015-16 is higher than the normative, because tube mills are of high rating (2100 KW × 3 i.e. in Units- 5, 6 & 7) then the bowl mills (340 KW × 4 i.e. in units 1,2,3 & 4) and these mills always run on full capacity as balls are always loaded in the mills.

4.23. RVUN submitted that based on the hours of operation in open cycle and closed cycle mode, the normative auxiliary consumption of DCCPP works out as 2.93% and for RGTPS as 2.40% for FY 2014-15 against the actual auxiliary consumption of 5.64% and 4.63% for DCCPP and RGTPS respectively for FY 2014-15. Similarly, for FY 2015-16, based on the hours of operation in open cycle and closed cycle mode, the normative auxiliary consumption for DCCPP works out as 2.82% and for RGTPP as 2.63% against the actual auxiliary consumption of 14.34% and 4.77% for DCCPP and RGTPS respectively for FY 2015-16.

4.24. RVUN submitted that due to instructions from SLDC for back down and box

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up of its units, the load (generation) reduces but all the running auxiliary equipments continue to operate, thus electricity consumption does not reduce in that ratio, and therefore, higher auxiliary consumption in percentage terms is observed during the reduced load period.

4.25. RVUN submitted that the excessive auxiliary consumption is the consequential effect of SLDC back down instructions, therefore, requested the Commission that any excessive auxiliary consumption due to SLDC back down instructions may also be allowed and considered as uncontrollable as the SLDC instructions are considered as uncontrollable.


4.26. The Commission observes that RVUN has stated that the reason for higher auxiliary consumption than normative values is on account instructions from SLDC for back-down/box-up of its Stations.

4.27. Hon’ble APTEL vide its Judgment dated 18.09.2015 in Appeal Nos. 196 of 2014 and 326 of 2013 in Haryana Power Generation Corporation Ltd. Vs Haryana Electricity Regulatory Commission & Ors ruled as under:

“iii) According to the appellant/petitioner it is the PTPS Unit 1-4 which has outlived their useful economic life and the performance for the past few years has been well below the norm prescribed by the Tariff Regulations. Further, PTPS Unit-5, as per the appellant, is also nearing the end of its useful economic life due to which the auxiliary consumption remains high. Further, the submission of the appellant is that the other Unit of DCR Thermal Power Station had frequent shutdowns resulting in higher auxiliary energy consumption. The appellant contended that the large steps have been taken to reduce the auxiliary energy consumption of the power plants during the controlled period. The State Commission, after considering all these contentions of the appellant, has correctly and justly, not found it a fit case where power to relax could be exercised by the State Commission and the Commission has legally decided the issue as per the norms prescribed in MYT Regulations 2012. Further power to relax has to be exercised in exceptional cases when the same is in the public interest. In the case in hand if the contention of the appellant is allowed and norms for auxiliary are diluted or relaxed that would cost additional burden on the end consumers of the Discoms which should not be permitted considering the relevant

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provisions in this regard given in the Electricity Act, 2003. Consequently, this issue No. (c) is also decided against the appellant.”

4.28. In light of the above Judgment of Hon’ble APTEL, the prayer of RVUN for relaxing the normative auxiliary consumption is not allowable as the same is not in public interest and it will result in further increase in tariff which will cause additional burden on the Respondents and ultimately the end consumers of the electricity.

4.29. With regard to auxiliary consumption of CTPP, the Commission observes that the PLF of CTPP as submitted by RVUN is 37.00%. RVUN in this regard has submitted that the lower PLF was on account of technical faults and back-down/box-up instructions from SLDC. The Commission is, therefore, not convinced with the reasons submitted by RVUN. With regards to CTPP, RERC Tariff Regulations, 2014 do not recognise relaxed norms on account of technical faults and therefore, the Commission finds no basis for any relaxation of the norms. The Commission, therefore, has not allowed relaxation in auxiliary Consumption for FY 2014-15 and FY 2015-16.

4.30. It is also observed that RGTPS and DCCPP have been operated in open cycle and combined cycle mode. RVUN has submitted the number of hours of operation in both modes of operation. The Commission has worked out the auxiliary consumption for these stations considering the number of hours of operation in open and combined cycle mode. With regards to the normative auxiliary consumption of Mahi for FY 2014-15 and FY 2015-16, the Commission in its data gaps sought the gross generation separately for Phase-I and Phase-II for FY 2014-15 and FY 2015-16. As, Regulation 46 of RERC Tariff Regulations 2014 stipulates as:

“46. Norms of Operation for Hydro Power Generating Stations: (2) Auxiliary energy consumption

(c) Auxiliary energy consumption for existing hydro power stations i. Mahi PH 2- 3.0 Lakhs units per annum + 0.75% of energy

generated

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ii. Mahi PH 1- 4.0 Lakhs units per annum + 0.65% of energy generated”

4.31. In replies to the data gaps, RVUN submitted the required information as per Regulation 46 of RERC Tariff Regulations, 2014. Therefore, the Commission in this order has considered the normative auxiliary consumption for Mahi considering the Phase wise gross generation of Mahi PH-1 and Mahi PH-2 in accordance with Regulation 46 of RERC Tariff Regulations, 2014.

4.32. The auxiliary consumption approved by Commission for FY 2014-15 and FY 2015-16, is as shown in the table below:

Table 13: Auxiliary Consumption approved for FY 2014-15 and FY 2015-16 (%)

Particulars

FY 2014-15 KTPS (Unit 1-7)

STPS (Unit 1-6)


Actual as Submitted by the Petitioner

10.05% 9.36% 4.63% 5.64% 0.01% 11.00%

Normative 9.27% 9.00% 3.00% 1.00% 3.00% 1.00% 1.11% 9.00%

Approved on True Up

9.27% 9.00% 2.40% 2.93% 1.11% 9.00%

Particulars

FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



10.39% 10.63% 4.77% 14.34% 0.63% 11.17%

Normative 9.27% 9.00% 3.00% 1.00% 3.00% 1.00% 1.08% 9.00%

Approved on True Up

9.27% 9.00% 2.63% 2.82% 1.08% 9.00%

Station Heat Rate RVUN’s Submission

4.33. The actual station heat rate submitted by RVUN for its Stations for FY 2014-15 and FY 2015-16 is as shown in the Table below:

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Table 14: Actual Station Heat Rate as submitted by RVUN (kcal/kWh)

Particulars

FY 2014-15 FY 2015-16 KTPS

(Unit 1-7)

STPS (Unit 1-

6) RGTPS DCCPP

CTPP (Unit 1-

2)

KTPS (Unit 1-

7)

STPS (Unit 1-

6) RGTPS DCCPP

CTPP (Unit 1-

2)

Normative 2561.70 2476.28

CC-1950 OC-2850

CC-1950 OC- 2830

2316.54 2561.70 2476.28

CC-1950 OC-2840

CC-1950 OC- 2830

2312.31

Approved in Tariff order

2561.70 2476.28 2256.00 1950.00 2316.54 2561.70 2476.28 2256.00 1950.00 2312.31


3101.39 2953.78 2461.14 2245.00 3050.44 2805.19 2653.93 2533.23 2420.79 2746.31

4.34. Regarding the SHR of KTPS Unit 7, the Petitioner submitted that the Commission in the Tariff order for FY 2014-15 approved the SHR of KTPS Unit 7 as 2328.26 kCal/kWh based on the design heat rate of 2228 kCal/kWh as submitted by the Petitioner. Whereas the design heat rate as per the guarantee documents provided by OEM was 2284 kCal/kWh and the same documents were provided to the Commission during the proceedings of the case. Information provided by the Petitioner in Form 2.1 was an inadvertent error on RVUN part. The Petitioner requested the Commission to consider the SHR for KTPS Unit 7 based on the submissions made in the current petition. Further, RVUN submitted that SHR has been computed as per Regulation 45(3)(b) of RERC, Tariff Regulations 2014. The detailed calculation is as shown below:

Table 15:Revised SHR computations submitted by the Petitioner for KTPS Unit 7 (kCal/kWh)

Particulars Station Heat Rate Turbine Cycle Heat Rate (kCal/kWh) A 1966.00 Boiler Efficiency (%) B 86.06% Design Heat Rate (kCal/kWh) C=A/B 2284.45 Multiplying Factor as per Regulation 45(3)(b) of RERC Tariff Regulation 2014

D 1.045


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4.35. RVUN has requested the Commission to consider the SHR of 2387.25 kCal/kWh for the period FY 2014-19 for KTPS Unit 7 as computed above in accordance with Regulation 45(3) of RERC Tariff Regulations, 2014.

4.36. RVUN submitted that for DCCPP and RGTPS, due to unavailability of gas, there has been increase in SHR of the plant as the plant was running on partial loads on regular basis.

4.37. The efficiency of gas based power plants depends on ambient temperature, ambient pressure and relative humidity. During summer season the temperature at Dholpur/Jaisalmer is very high which affects the performance of gas turbine and increases SHR. During winter temperature is very low and due to fog, relative humidity of air increases thereby increasing the density of air which becomes insufficient for complete burning of fuel and therefore consumption of fuel increases for the same output.

4.38. RVUN requested the Commission to allow actual SHR in the true up for FY 2014-15 and FY 2015-16.

4.39. RVUN submitted that based on the hours of operation in open cycle and closed cycle mode, the normative SHR of DCCPP works out as 1979.27 kcal/kWh and for RGTPS as 2212.00 kcal/kWh for FY 2014-15. For FY 2015-16, based on the hours of operation in open cycle and closed cycle mode, the normative SHR of DCCPP works out as 2031.18 kcal/kWh and for RGTPS as 2113.49 kcal/kWh

4.40. RVUN submitted that the excessive SHR is the consequential effect of SLDC back down instructions and therefore, requested the Commission that any excessive SHR due to SLDC back down instructions may also be allowed and considered as uncontrollable as the SLDC instructions are considered as uncontrollable.


4.41. Regarding the SHR of KTPS, the Commission observes that RVUN had raised

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the same issue in its Review Petition against the Commission’s order dated 17.10.2016. The Commission has already finalised this issue in its order dated 09.12.2016. Extract of the said order is as shown below:

“19. The Commission carefully considered the above submissions made by the Petitioner. The arguments on the above aspects now submitted was the same made during the earlier proceedings and the Commission has already considered the said submissions now being made and passed its order. As per the settled legal position, Review Petition cannot give a right of re-argument to the review Petitioner on the issue which is already decided. Hence, the Commission is of the view that the review sought by the RVUN on this ground is also not permissible.”

4.42. Therefore, in accordance with the direction of the Commission vide its order dated 09.12.2016, it is not relevant to consider the revised SHR of KTPS as claimed by the Petitioner. Therefore, in this order the Commission has considered the normative SHR of 2561.70 kCal/kWh for KTPS as was approved by the Commission in the tariff-order of FY 2014-15 and FY 2015-16. Similarly, the SHR for STPS and CTPP has been considered as was approved by the Commission in the tariff order of FY 2014-15 and FY 2015-16.

4.43. The Commission observes that RVUN has stated the reasons for higher SHR than normative values as back-down/box-up instructions. The Commission is of the view that such limitations are not station specific and almost all stations face similar issues and therefore such reasons cannot be held responsible for increased station heat rate. Further, the norms specified in Regulations are based on past year’s operational performance.

4.44. Hon’ble APTEL vide its Judgment dated 18.09.2015 in Appeal Nos. 196 of 2014 and 326 of 2013 ruled as under:

“ii) Thus this Appellate Tribunal in Appeal No. 168 of 2012 while dealing with the same contention, namely that the backing down instructions caused higher station heat rate has been rejected, observing that if any power station has not achieved the same norms due to various factors like manufacturing design data curve, operation of station at

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60% PLF, frequent backing down as per direction of SLDC resulting in partial operation, then the said power generating company has to make out the cause for relaxation of norms specified for that purpose and if the appellant fails to make out the specific case then, it is not entitled to the relaxation of the said Tariff Regulations. We note that in the case in hand the appellant has miserably failed to establish that the relaxation of the norms prescribed in MYT Regulations 2012 is sought by the appellant in public interest. Further if the relaxation of the norms is not in public interest the same is bound to be rejected. Further, if the said contention of the appellant is accepted it will result in further increase in tariff which will cause additional burden on the respondents and ultimately the end consumers of the electricity. Besides it the appellant has failed to give any technical reason to explain why it has not achieved the said norms prescribed in MYT Regulations 2012. The State Commission is vested with powers to relax any of the provisions of MYT Regulations 2012 in the public interest but for exercising the power to relax, reasons are required to be recorded in writing by the State Commission. In the case in hand the State Commission has rightly and legally refused to exercise the power to relax in favour of the appellant on this aspect while passing the impugned order. No doubt discretionary power is vested with the State Commission but the discretion should be exercised judicially and judiciously that needs recording of special reasons in writing for the exercise of such power to relax. Thus in the aforesaid circumstances, the appellant has completely failed to give any reason whatsoever justifying the relaxation of the operational norms fixed in MYT Regulations 2012 on the aspect of station heat rate.”

4.45. In light of the above Judgment of Hon’ble APTEL, the prayer of RVUN for relaxing the normative SHR is not allowable as the same is not in public interest and it will result in further increase in tariff which will cause additional burden on the Respondents and ultimately the end consumers of the electricity.

4.46. RGTPS and DCCPP have been operated in open cycle mode and combined cycle mode. RVUN has submitted the number of hours of operation in both modes of operation. The Commission has worked out the normative SHR for the above stations considering the hours of operation in open cycle mode and combined cycle mode.

4.47. The Station Heat Rate approved by the Commission for FY 2014-15 and FY 2015-16 is as shown in the Table below:

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Table 16: Station Heat Rate Approved for FY 2014-15 and FY 2015-16 (kCal/kWh)

Particulars

FY 2014-15 FY 2015-16 KTPS

(Unit 1-7)

STPS (Unit 1-

6) RGTPS DCCPP

CTPP (Unit 1-

2)

KTPS (Unit 1-

7)

STPS (Unit 1-

6) RGTPS DCCPP

CTPP (Unit 1-

2)


3101.39 2953.78 2461.14 2245.00 3050.44 2805.19 2653.93 2533.23 2420.79 2746.31

Approved on True Up

2561.70 2476.28 2218.79 1979.27 2316.54 2561.70 2476.28 2115.35 2031.18 2312.31

Secondary Fuel Oil Consumption RVUN’s Submission

4.48. The actual SFOC submitted by RVUN for its Stations for FY 2014-15 and FY 2015-16 is as shown in Table below:

Table 17: Secondary Fuel Oil Consumption as submitted by RVUN (ml/kWh)

Particulars FY 2014-15 FY 2015-16

KTPS (Unit 1-

7)

STPS (Unit 1-

6)

CTPP (Unit 1-

2)

KTPS (Unit 1-

7)

STPS (Unit 1-

6)

CTPP (Unit 1-

2) Normative 0.50 0.50 0.50 0.50 0.50 0.50


0.74 0.58 1.38 0.79 1.33 2.96


4.49. The Commission has allowed SFOC for all generating stations for FY 2014-15 and FY 2015-16 in accordance with the norms specified in RERC Tariff Regulations, 2014. The SFOC approved by the Commission is as shown in the Table below:

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Table 18: Secondary Fuel Oil Consumption as Approved for FY 2014-15 and FY 2015-16 (ml/kWh)


KTPS (Unit 1-

7)

STPS (Unit 1-

6)

CTPP (Unit 1-2)

KTPS (Unit 1-

7)

STPS (Unit 1-

6)

CTPP (Unit 1-

2)

Actual as Submitted by the Petitioner 0.74 0.58 1.38 0.79 1.33 2.96

Approved on True Up 0.50 0.50 0.50 0.50 0.50 0.50

Coal Transit loss Commission’s Analysis

4.50. RVUN has not submitted the Coal Transit Loss separately in percentage terms as specified by RERC Tariff Regulations, 2014. The Commission has computed the Transit Loss in percentage terms from the actual coal cost data submitted by RVUN.

4.51. The Commission, for the purpose of truing up, therefore, has considered the normative transit loss of 0.8% for domestic coal for FY 2014-15 and FY 2015-16 as specified in RERC Tariff Regulations, 2014. The Transit Loss approved by the Commission for FY 2014-15 and FY 2015-16 is as shown in the Table below:

Table 19: Transit Loss approved by the Commission for FY 2014-15 and FY 2015-16(ml/kWh)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)

CTPP (Unit 1-2)

KTPS (Unit 1-7)

STPS (Unit 1-6)

CTPP (Unit 1-2)

Actual computed as per details Submitted by the Petitioner

1.46% 0.80% 0.69% 1.15% 0.74% 0.39%

Approved on True Up 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%

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Fuel Price and Calorific Value RVUN’s Submission

4.52. RVUN submitted that there is a difference in GCV of coal when received at power stations and filling it in the bunkers, as it has to pass through the process of tripling, transportation through conveyor belts, sizing by crushers and storage. Although, the loss in GCV in this process is not very high, but when coal is stored for usage at some other point for longer period its quality gets deteriorated. As such there is always a reduction in GCV of bunkered (fired) coal than that on received basis. It is observed that the difference in GCV is not uniform in nature and shows variance on sample to sample basis depending on coal composition and storage duration. This difference in GCV, though observed higher, may be allowed at least 150KCal/Kg on practical terms and also confirmed by analysis reports (CPRI).

4.53. The Punjab State Electricity Regulatory Commission in order to check more precisely the methodology regarding computation of cost of fuel being passed on to the consumers as an uncontrollable element, the Commission considered it proper and fair to get the Fuel Audit of all the thermal plants of PSPCL carried out as per international practices. This job was assigned to CPRI, Bangalore vide Commission’s Work Order No. SERC/Tariff/T/152/8792 dated 10.1.2012.

4.54. Considering the CPRI report, PSERC passed an Suo-Moto order dated 08.10.2012, the decision of the PSERC is reproduced as below:

“Decision of the Commission: (a) To implement the various recommendations made in the CPRI report for fuel savings and cost reduction. (b) To take up with appropriate authorities (MOP & Coal India Limited) regarding inclusion of surface moisture in computation of GCV (which at present is being computed on equilibrated basis which considers only inherent moisture) at the sending end. Put efforts to get the payment for coal received from CIL made, on ‘As Received’ basis at its thermal plants(c) To adopt a uniform method of GCV measurement for receipted and bunkered coal by adding the effect of

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surface moisture to the GCV at the rate of 145 kCal/kg per 1% of moisture. (d) To bring down the drop in GCV between the receipted coal and bunkered coal within 150 kCal/kg. (e) To conduct an independent third party validation of the washery energetics to map the yield as a function of the input raw coal quality and washed coal quality is required to be got carried out. (f) To work out the monthly weighted average GCV of receipted coal (at the thermal plants) and bunkered coal and furnish the same quarterly and at the time of filing the ARR and Tariff petition with the Commission”

4.55. RVUN further submitted that the above order was challenged in Review Petition filed by PSPCL stating that the gap of fired & received GCV is very high approx. 700 to 900 kCal/kwh of different units of PSPCL, However, the PSERC while finalizing the Review petition had stood still to its Suo-Moto order and therefore, the PSPCL approached further to the APPTEL, Delhi, appeal No. 98 the Hon’ble APTEL, the decision of APTEL is reproduced as below.

“SUMMARY OF FINDINGS.

The State Commission is fully and legally justified in determining the norms and giving directions to the appellant on the issue of drop in GCV between the receipted coal and fired/bunkered coal to 150 kilocal/kg as the impugned order has been passed after considering the relevant facts and the recommendations of CPRI. The State Commission is justified in accepting the recommendations of CPRI and the impugned order has been passed on due consideration of the recommendations and other factors available on record. We do not find any contradiction or discrepancy between the two reports submitted by CPRI, namely, report submitted to the appellant in February, 2012 and the report submitted by the CPRI to the State Commission in August, 2012.

The State Commission is justified in giving various directions with regard to the fuel audit after due consideration considering that such directions are practically implementable. There is nothing on record to suggest or indicate that the directions given by the State Commission with regard to the fuel audit are practically not implementable. 17.2. The State Commission may take steps to frame regulation regarding drop & GCV between receipted coal and bunkered/fired coal after following due process of law.

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18. Consequently, for the reasons stated above, the appeal has no merits and is hereby dismissed. The impugned review order dated 27.02.2013 passed by the State Commission is hereby affirmed. No order as to costs.”

4.56. On the basis of above submissions, RVUN submitted that though the gap of received to fired GCV is very high in case of RVUN and the analysis report of CPRI also supports the same. RVUN requested the Commission to allow the GCV of coal to be lesser than 150 kCal/kg than the received GCV for KTPS, CTPP and STPS for FY 2014-15 and FY 2015-16.


4.57. RVUN in the petition submitted the quarterly actual fuel prices and GCV of fuel in the petition for FY 2014-15 and FY 2015-16. Further, in reply to the data gaps, RVUN submitted the month wise actual prices and GCV of fuel as sought by the Commission. The Commission has considered the actual GCV and landed prices of fuels as submitted by RVUN in its revised submissions.

4.58. As regards the variation in GCV of coal between as received coal and as fired coal, this issue was deliberated in detail while finalising the RERC Tariff Regulations, 2014. As per RERC Tariff Regulations, 2014, for computation of energy charge, the GCV of coal is considered on as received basis and hence the Commission has considered the same. Further, the Commission has recomputed the landed fuel price of domestic coal considering the approved transit loss. The fuel price and calorific value considered by the Commission is as shown in the Table below:

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Table 20: Landed Price and GCV of Fuel approved by the Commission for FY 2014-15 and FY 2015-16

Station Fuel

FY 2014-15 FY 2015-16 Gross Calorific Value

(kcal/kg, kcal/L, kcal/SCM

Landed fuel Price (Rs/MT, Rs/kL, Rs/

SCM

Gross Calorific Value (kcal/kg, kcal/L,

kcal/SCM

Landed fuel Price (Rs/MT, Rs/kL, Rs/

SCM RVUN Approved RVUN Approved RVUN Approved RVUN Approved

KTPS (Unit 1-7)

Domestic Coal 4478.77 4478.77 4180.13 4152.15 4183.32 4183.32 3907.75 3894.04

Imported Coal

6295.90 6295.90 7816.38 7816.38 6305.41 6305.41 7733.47 7733.47

HSD 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

HFO 9945.10 9945.10 43490.99 43490.99 9544.29 9544.29 30521.22 30521.22

STPS (Unit 1-6)

Domestic Coal

4233.52 4233.52 5085.23 5084.98 3981.72 3981.72 5348.94 5352.21

Imported Coal

6268.08 6268.08 8402.34 8402.34 6328.73 6328.73 7631.11 7631.11

LDO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

HFO 9761.74 9761.74 46038.71 46038.71 9774.19 9774.19 31168.68 31168.68

RGPTS Gas 4851.39 4851.39 6.35 6.35 5113.90 5113.90 7.00 7.00

Oil 9300.00 9300.00 39875.91 39875.91 9300.00 9300.00 42978.89 42978.89

DCCPP Gas 9136.59 9136.59 14.17 14.17 9160.07 9160.07 15.13 15.13

CTPP (Unit 1-2)

Domestic Coal

4283.42 4283.42 3013.19 3016.61 4249.96 4249.96 3300.05 3313.77

Imported Coal

6368.18 6368.18 7862.48 7862.48 6357.01 6357.01 7120.03 7120.03

LDO 9934.86 9934.86 62114.37 62114.37 12000.00 12000.00 44407.29 44407.29

HFO 9939.23 9939.23 43075.03 43075.03 10504.00 10504.00 28967.89 28967.89

Other Charges RVUN’s Submission

4.59. In addition to fuel cost, RVUN has claimed other charges under the heads of fuel related cost and operating expenses. The other charges claimed by the Petitioner for FY 2014-15 and FY 2015-16 are as shown in the Table below:

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Table 21: Other charges claimed by the Petitioner for FY 2014-15 (Rs)

Station KTPS RGTP DHOLPUR STPS MAHI CHHABRA

FUEL RELATED COSTS Coal handling contra. charges 25041448.00 0.00 0.00 0.00 0.00 0.00

Demurrage on coal wagons 127258103.00 0.00 0.00 15521638.00 0.00 0.00

Siding charges 0.00 0.00 0.00 50350.00 0.00 0.00

Commission to Coal Agents 1840204.00 0.00 0.00 15036413.00 0.00 0.00

Payment to Rly.staff 8793557.05 0.00 0.00 12120425.00 0.00 3104475.00

Other coal related costs 0.00 0.00 0.00 0.00 0.00 1803196.00 Oil Handling Contract Charges 0.00 0.00 0.00 0.00 0.00 0.00

Standing Charges For Oil Receipt 0.00 0.00 0.00 0.00 0.00 0.00

Sub Total 162933312.05 0.00 0.00 42728826.00 0.00 4907671.00

Operating Expenses

Cost of water 8470050.00 1258019.00 7912012.00 0.00 0.00 1160544.00 Lubrication & consumable store 24864082.44 9512728.66 11329122.00 33957118.00 28899.28 0.00

Station supplies 78264972.78 0.00 0.00 0.00 0.00 0.00

Other costs 1.00 0.00 0.00 260854433.00 0.00 69364447.37

Sub Total 111599106.22 10770747.66 19241134.00 294811551.00 28899.28 70524991.37

Total other charges 274532417.27 10770747.66 19241134.00 76685944.00 28899.28 75432662.37

Total in Rs Crore 27.45 1.08 1.92 7.67 0.003 7.54

Table 22: Other charges claimed by the Petitioner for FY 2015-16 (Rs)

Station KTPS RGTP DHOLPUR STPS MAHI CHHABRA FUEL RELATED COSTS Coal handling contra. Charges 26115045.15 0.00 0.00 0.00 0.00 0.00

Demurrage on coal wagons 20900344.00 0.00 0.00 5745645.00 0.00 38885257.00

Siding charges 0.00 0.00 0.00 59584.00 0.00 0.00

Commission to Coal Agents 0.00 0.00 0.00 12983728.00 0.00 0.00

Payment to Rly.staff 0.00 0.00 0.00 11471092.00 0.00 0.00

Other coal related costs 16265251.66 0.00 0.00 1703159.00 0.00 9489.00 Oil Handling Contract Charges 1169.00 0.00 0.00 0.00 0.00 0.00

Standing Charges for Oil Receipts 0.00 0.00 0.00 0.00 0.00 0.00

Sub Total 63281809.81 0.00 0.00 31963208.00 0.00 38894746.00

Operating Expenses

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Station KTPS RGTP DHOLPUR STPS MAHI CHHABRA Cost of water 46008274.00 2159950.00 6869602.00 27722671.00 0.00 1536662.00 Lubrication & consumable store 26999134.32 19372413.95 2973095.00 0.00 0.00 0.00

Station supplies 84411989.08 0.00 0.00 0.00 0.00 0.00

Other costs 0.00 0.00 0.00 205406391.45 0.00 57411033.86

Sub Total 157419397.40 21532363.95 9842697.00 233129062.45 0.00 58947695.86

Total other charges 220701207.21 21532363.95 9842697.00 59685879.00 0.00 97842441.86

Total in Rs. Crore 22.07 2.15 0.98 5.97 0.000 9.78


4.60. The Commission is of the view that the cost related to arrangement of fuel can only be considered as part of fuel cost to work out the variable charges and hence the Commission has considered the fuel related costs while approving the variable charges. However, as regards to other operating expenses, the Commission is of the view that such expenses cannot be treated as part of fuel cost to arrive at the variable charge and are to be treated as part of O&M expenses. Therefore, the Commission has considered the other operating expenses as a part of O&M expenses in accordance with the approach adopted by the Commission in previous years.

4.61. The other charges claimed by RVUN and approved by the Commission is as shown in the Table below:

Table 23: Other charges approved for FY 2014-15 (Rs. Crore)

Station Other charges

claimed by RVUN in fuel cost

Other charges considered by the Commission

In fuel cost In O&M expenses Total

KTPS 27.45 16.29 11.16 27.45 STPS 7.67 4.27 3.40 7.67 RGTPS 1.08 0.00 1.08 1.08 DCCPP 1.92 0.00 1.92 1.92 Mahi 0.00 0.00 0.00 0.00 CTPP 7.54 0.49 7.05 7.54 Total 45.67 21.06 24.61 45.67

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Table 24: Other charges approved for FY 2015-16 (Rs. Crore)

Station Other charges

claimed by RVUN in fuel cost

Other charges considered by the Commission

In fuel cost In O&M expenses Total

KTPS 22.07 6.33 15.74 22.07 STPS 5.97 3.20 2.77 5.97 RGTPS 2.15 0.00 2.15 2.15 DCCPP 0.98 0.00 0.98 0.98 Mahi 0.00 0.00 0.00 0.00 CTPP 9.78 3.89 5.89 9.78 Total 40.96 13.41 27.55 40.96

Annual Fixed Charges

4.62. The Annual Fixed Charges comprise of the following elements:

(i) Operation and Maintenance (O&M) expenses (ii) Depreciation (iii) Interest and Finance Charges on Term Loans (iv) Interest on Transitional Loans (v) Interest on Working Capital (vi) Inter-Unit Account balance written off (vii) Addl. Contribution towards Pension and Gratuity (viii) Prior Period Expenses/Income (ix) Return on Equity (x) Insurance Charges (xi) Less: Non-Tariff Income

4.63. Each of these elements has been dealt with in the following paragraphs.

Operation and Maintenance (O&M) expenses RVUN’s Submission

4.64. For most of the stations, the actual O&M expenses claimed by RVUN for FY 2014-15 are lower than that approved by the Commission. But for Mahi and

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KTPS, the actual O&M expenses are on the higher side than that approved by the Commission for FY 2014-15. RVUN submitted that the actual O&M expenses for Mahi and KTPS are higher due to old units, most of the units of KTPS are working since 1990 and therefore require more expenditure towards R&M. Similarly, for Mahi old units require frequent R&M for smooth operation.

4.65. In FY 2015-16, the reason remains the same for higher O&M expenses for KTPS and Mahi. For DCCPP and RGTPP, RVUN has claimed the O&M expenses as per audited accounts.

4.66. The details of O&M expenses as recovered by RVUN from Discoms as per Tariff Order for FY 2014-15 and FY 2015-16, and petitioned for truing up based on audited accounts are as shown in the Table below:

Table 25: O&M Expenses as submitted by RVUN for FY 2014-15 and FY 2015-16 (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS

(Unit 1-7)

STPS (Unit 1-

6) RGTPS DCCPP Mahi

CTPP (Unit 1-2)

Total KTPS

(Unit 1-7)

STPS (Unit 1-

6) RGTPS DCCPP Mahi

CTPP (Unit 1-2)

Total

Recovered from DISCOMs as per Tariff Order

199.52 241.35 16.18 39.80 13.89 80.45 591.19 211.19 255.47 17.12 42.13 14.70 85.16 625.77

As petitioned based on audited accounts

227.43 196.21 9.37 22.97 17.19 51.04 524.21 229.32 222.60 23.05 43.39 21.34 73.65 613.35

4.67. RVUN has proposed the sharing the of gains and losses in O&M expenses for FY 2014-15 and FY 2015-16 in accordance with Regulation 8(3)(a) & 8(3)(b) of RERC, Tariff Regulations, 2014.


4.68. RVUN has claimed the operating expenses such as cost of water, lubricants, etc. under other variable charges. The Commission in the true up of previous years has considered the same to be a part of O&M expenses based on the submissions of RVUN in the respective petitions. The Commission in this order also has considered such operating expenses in

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the O&M expenses and added the same to the actual O&M expenses claimed by RVUN.

4.69. Further, the Commission in the following paragraphs ruled that the cost of assets pertaining to procurement of vehicles, office equipment and furniture and fixtures in FY 2014-15 and FY 2015-16 are to be treated as revenue expenses and not capital expenses due to the nature of such small works. Hence, the Commission has considered the cost of the same as part of actual O&M expenses for FY 2014-15 and FY 2015-16 respectively. The cost of minor assets considered by the Commission in the actual O&M expenses for FY 2014-15 and FY 2015-16 is as shown in the Table below:

Table 26: Cost of Minor Assets claimed by RVUN for FY 2014-15 and FY 2015-16 (Rs. Crore)

Station Particulars FY 2014-15 FY 2015-16 KTPS (Unit 1-6) Office equipment 0.02 0.00 STPS (Unit 1-5) Furniture 0.00 0.12

Office equipment 0.00 0.11 Total STPS 0.00 0.23 DCCPP Furniture & Fixtures 0.01 0.02

Office Equipment 0.03 0.01 Total DCCPP 0.04 0.03

RGTPS Furniture 0.20 0.05 Mahi Furniture 0.00 0.02

Office equipment 0.00 0.03 Total Mahi 0.00 0.05

CTPP (Unit 1-2) Furniture & Fixtures 0.10 0.00 Office Equipment 0.23 0.00

Total CTPP (Unit 1-2) 0.33 0.00

4.70. In light of the above, the actual O&M expenses considered by the Commission for true up for FY 2014-15 and FY 2015-16 is as given in the Table below:

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Table 27: Actual O&M Expenses considered for FY 2014-15 (Rs. Crore)

Station Actual Other

Operating Charges

Minor assets

Total O&M

Expenses

KTPS (Unit 1-7) 227.43 11.16 0.02 238.61 STPS (Unit 1-6) 196.21 3.40 0.00 199.61 RGTPS 9.37 1.08 0.20 10.65 DCPP 22.97 1.92 0.04 24.93 Mahi 17.19 0.00 0.00 17.19 CTPP (Unit 1-2) 51.04 7.05 0.33 58.42

Total 524.21 24.61 0.59 549.42

Table 28: Actual O&M Expenses considered for FY 2015-16 (Rs. Crore)

Station Actual Other

Operating Charges

Minor assets

Total O&M

Expenses

KTPS (Unit 1-7) 229.32 15.74 0.00 245.06 STPS (Unit 1-6) 222.60 2.77 0.23 225.60 RGTPS 23.05 2.15 0.05 25.25 DCPP 43.39 0.98 0.03 44.40 Mahi 21.34 0.00 0.05 21.39 CTPP (Unit 1-2) 73.65 5.89 0.00 79.54

Total 613.35 27.55 0.35 641.25

4.71. Regulation 8(8) of the RERC Tariff Regulations, 2014 stipulates as follows:

“(8) Truing Up ................. (8) Some illustrative variations or expected variations in the performance of the applicant which may be attributed by the Commission to controllable factors include, but are not limited to, the following: ........................ (d) Variation in operation & maintenance expenses; .............”

4.72. Hence, O&M expenses are controllable in accordance with RERC Tariff Regulations, 2014.

4.73. Further, Regulation 9 of the RERC Tariff Regulations, 2014 specifies that:

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“9. Gains and Losses on account of Uncontrollable and Controllable factors (1) The approved aggregate gain or loss to the Generating Company or

Licensee on account of Uncontrollable factors shall be allowed as an adjustment in the tariff of the Generating Company or Licensee over such period as may be stipulated in the order of the Commission passed under these Regulations.

(2) Gain or loss to the Generating Company or Licensee on account of controllable factors shall be retained or borne by the Generating Company or Licensee, as the Case may be, except in case of the following: (a) Rate of interest on working capital requirement, which shall be as

per regulation 27; (b) Station Heat Rate, Auxiliary Consumption and Secondary fuel oil

consumption which shall be as per regulation 57 and (c) Distribution loss, which shall be as per regulation 76.

…..”

4.74. Therefore, from the above, it can be inferred that the RERC Tariff Regulations, 2014 do not provide any provision for sharing of gain/loss on account of variation in actual vs. normative O&M expenses. Accordingly, the Commission has not considered the sharing of O&M expenses provided by RVUN.

4.75. Further, Regulation 47 of RERC Tariff Regulations, 2014 specifies as under:

“47. Operation and Maintenance expenses (1) For Coal based generating station: (a) 110 MW and above up to 250 MW Unit size: Rs. 16.09 Lakh per MW for FY

2014-15 (b) Above 250 MW Unit size: Rs. 14.48 lakh/MW for FY 2014-15

(2) For lignite based generating stations: Rs. 21.16 Lakh per MW for FY 2014-15.

(3) Gas based/Combined Cycle generating stations Particulars Gas Turbine/Combined Cycle

Generating Stations for FY 2014-15

Small Gas Turbine Generating Stations (less than 50 MW unit) for FY 2014-15

With warranty spares for 10 years

Without warranty spares

Without warranty Spares

O&M Expenses for FY 2014-15

Rs. 8.04 Lakh/MW

Rs. 12.06 Lakh/MW

Rs. 14.64 Lakh/MW

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4.76. Regulation 24(3) of RERC Tariff Regulations, 2014 specifies as under:

“Normative O&M expenses allowed at the commencement of the Control Period (i.e. FY 2014-15) under these Regulations shall be escalated at the rate of 5.85% per annum for each year of the Control Period.”

4.77. The Commission has approved the O&M expenses for FY 2014-15 in accordance with Regulation 47 of RERC Tariff Regulations, 2014 and for FY 2015-16, the Commission has approved the O&M expenses, considering the approved normative O&M expenses in true up for FY 2014-15 and escalating the same with the annual escalation rate of 5.85% in accordance with Regulation 24(3) of RERC Tariff Regulations, 2014.

Table 29: Normative O&M expenses approved by the Commission for FY 2014-15 and FY 2015-16 (Rs. Crore)

Station

Normative O&M expenses approved

in true up for FY 2014-15

Escalation rate

Normative O&M expenses approved

in true up for FY 2015-16

KTPS (Unit 1-7) 199.52 5.85% 211.19 STPS (Unit 1-6) 241.35 5.85% 255.47 RGTPS 16.18 5.85% 17.12 DCCPP 39.80 5.85% 42.13 Mahi 13.89 5.85% 14.70 CTPP (Unit 1-2) 80.45 5.85% 85.16 Total 591.18 625.76

4.78. However, as discussed above, RERC Tariff Regulations, 2014 do not have any provision for sharing of gains and losses on account of O&M Expenses. Hence, the Commission has considered the normative O&M expenses while carrying out the truing up for FY 2014-15 and FY 2015-16. O&M expenses approved by the Commission for FY 2014-15 and FY 2015-16 are as shown in the table below:

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Table 30: O&M expenses approved by the Commission for FY 2014-15 and FY 2015-16 (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)

RGTPS DCCPP Mahi CTPP

(Unit 1-2)

Total KTPS (Unit 1-7)

STPS (Unit 1-6)


Total

Recovered from Discoms as per Tariff Order

199.52 241.35 16.18 39.80 13.89 80.45 591.19 211.19 255.47 17.12 42.13 14.70 85.16 625.77

Actual considered by Commission after considering other charges and minor assets

238.61

199.61

10.65

24.93

17.19

58.42

549.42

245.06

225.60

25.25

44.40

21.39

79.54

641.25

Approved for True Up 199.52 241.35 16.18 39.80 13.89 80.45 591.18 211.19 255.47 17.12 42.13 14.70 85.16 625.76

Additional Capitalization RVUN’s Submission

4.79. RVUN has claimed the additional capitalisation of Rs. 99.84 Crore and Rs. 86.08 Crore for true up for FY 2014-15 and FY 2015-16 as shown in the Table below:

Table 31: Additional Capitalisation for FY 2014-15 and FY 2015-16 as submitted by RVUN (Rs. Crore)

Station FY 2014-15 FY 2015-16 KTPS (Unit 1-6) 2.05 66.99 KTPS (Unit 7) 0.00 8.91 STPS (Unit 1-5) 3.87 2.78 STPS (Unit 6) 78.06 0.00 DCCPP 0.39 3.99 RGTPS 0.20 0.05 Mahi 0.00 0.05 CTPP 15.27 3.31

Total 99.84 86.08

4.80. RVUN submitted that the additional capitalisation for FY 2014-15 and FY 2015-16 has been claimed under Regulation 19 of the RERC Tariff Regulations, 2009. RVUN has also submitted some of the copies of work

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orders in support of the additional capitalisation claimed for FY 2014-15 and FY 2015-16.

4.81. In FY 2014-15, RVUN has claimed the additional capitalisation of Rs. 2.03 Crore for KTPS Unit 1-6 on account of replacement of high voltage transformers for ESP’s vide PO No. 430 dated 10.04.2014 for supplying hydraulic re-railing equipment & accessories. Further the same has been approved by the Commission vide its order dated 10.05.2012. Further, RVUN has claimed the additional capitalisation of Rs. 0.02 Crore for KTPS Unit 1-6 on account of office equipment as per Regulation 19(1)(f) of RERC, Tariff Regulations, 2014. Details of additional capitalisation claimed for FY 2014-15 and FY 2015-16 is as shown below:

Table 32: Additional capitalization claimed by RVUN for KTPS Unit 1-6 for FY 2014-15 and FY 2015-16

S.No. Description of proposal Amount

approved by the RERC

Amount claimed in the petition

FY 2014-15 FY 2015-16

1 i. Renovation of Static AVR of Unit no.1 & 2 by Digital AVR (DAVR) 5.00 0.00

6.16

ii. Supply of AC System for DAVR 0.19

2

Renovation of generator protection and associated 220 kV feeder protection for KSTPS Stage-I

4.00 0.00 2.36

3 Renovation of 25 kV MOCB’s installed at KSTPS switchyard 3.00 0.00 6.00

4 Replacement of High Voltage transformer for ESP’s 2.00 1.67 0.78

5 Purchase of Hydraulic Re-railing equipment 0.60 0.36 0.16

6 Railway over-bridge at LC-15 (R.O.B) 26.37 0.00 24.25

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S.No. Description of proposal Amount

approved by the RERC

Amount claimed in the petition

FY 2014-15 FY 2015-16

7

Up gradation of HMI System based on old computer architecture (Main Frame type) ABB make of unit #5 KSTPS with 800×A HMI system of M/s ABB.

7.40 0.00 8.34

8 R&M of SG/TG & Station C&I package of KSTPS Unit 3 & 4 36.00 0.00 18.75

9 Office Equipment 0.00 0.02 0.00

Total 84.37 2.05 66.98

4.82. RVUN submitted that in FY 2014-15, it has booked the additional capitalisation of Rs. 2.135 Crore for the hydraulic works against the WO No. D-388, dated 01.10.2014 for STPS Unit 1-5 for bow down system for cooling tower of Unit- 2,3,4 & 5. Further, an amount of Rs. 1.732 Crore has been claimed for other civil works against the WO No. D-396 dated 09.10.2014 for STPS Unit 1-5. The above claimed additional capitalisation has been approved by the Commission in its order dated 31.10.2012. The Total additional capitalisation claimed by RVUN for STPS Unit 1-6 is as shown below:

Table 33: Additional capitalisation claimed by RVUN for STPS (Unit 1-6) for FY 2014-15 (Rs. Crore)

S. No Particulars Amount 1 Building 5.02 2 Hydraulic Works 2.13 3 Other Civil Works 1.73 4 Plant & Machinery 74.74 5 Office Equipment 0.07 6 Capital Spares 2.96

Total 86.65

4.83. RVUN further submitted that the above amount of Rs. 86.65 Crore is inclusive of Rs. 4.73 Crore which was wrongly booked in assets of STPS which

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pertained to Suratgarh Super Critical Thermal Power Station and the same has been withdrawn from the accounts of FY 2016-17. Therefore, in the instant petition, RVUN has claimed Rs. 78.06 Crore as additional capitalisation for STPS Unit 6 and Rs. 3.87 Crore for STPS Unit 1-5 amounting to Rs. 81.93 Crore. RVUN further submitted that the above claimed amount towards STPS Unit 6 pertains to original scope of work and was already booked in previous year but has been transferred to assets after receiving the completion report. The Package wise detail of additional capitalisation claimed for FY 2014-15 towards STPS Unit 6 is as shown below:

Table 34:Additional capitalization claimed by RVUN for STPS Unit 6 for FY 2014-15 (Rs. Crore)

Particulars FY 14-15 Detailed Reasons for delay of payments and PO orders of the Work

BTG 35.99 Pertains to original scope work of U#6 and was already booked in previous years but transfer in Fixed assets after received of work completion report. Original PO placed to M/S BHEL and Indure Pvt Ltd, BHEL PO No. 2724 &2725, dt. 10.08.2006 placed by SE (TD- III) & BOP Package awarded to M/s Indure vide PO. NO. 3381 & 3382 dt. 03.10.2006 by SE (TD-II), RVUN Jaipur. Work Order Detail of Balance Civil Works which is Capitalized in F.Y. 2014-15 :-

(i) M/s Lahoti Buildcon Ltd. Vide Order No. RVUN/CE (Civil-jaipur)/D.798 Dated 03.02.11

(ii) M/S J.R. Construction Co. Vide Order No. D.554 Dated 25.01.11

(iii) M/s Rishab Telelinks Vide Order No. 653 Dated 13.11.09

BOP 34.97 Initial Spares 2.96

Misc. Mechanical Equipment (i0 Bull Dozer – BHEL (ii) Locomotives

1.51

Township 2.63 Total 78.06

Table 35: Additional capitalization claimed by RVUN

for STPS Unit 1-5 for FY 2014-15 (Rs. Crore) S. No Particulars Amount (Crores)

1 Hydraulic Works 2.13 2 Other Civil Works 1.73

Total 3.87

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4.84. RVUN submitted that it has booked the additional capitalisation of Rs. 0.39 Crore in FY 2014-15 towards DCCPP on account of furniture & fixtures, Office equipment and capital spares. The details of additional capitalisation claimed for DCCPP for FY 2014-15 is as shown below:

Table 36: Additional capitalization claimed by RVUN for DCCPP for FY 2014-15 (Rs. Crore)

S.No. Particulars Amount (Rs.) Justification/Remark 1 Furniture &

Fixtures 0.01 1 no. Sony LED against Order no. 3453/16.02.15 for Rs. 67800,

remaining Rs. 76034, 71 no's tube light fixture(D-2841/07.11.07),22 no's Exhaust fan ((D-2934/16.11.07),41 no's ceiling fan with regulator (2583/24.10.07)

2 Office equipment

0.03 2 no's hp printer for Rs. 24800,1 no. PC, 1 Laser let printer for Rs. 64500 (order no. d-(1499/20.10.14) &3 pc's, & 5 no's printer for rs. 208100(d-1499/20.10.14). Total rs. 297400

3 Capital (initial) Spares

0.35 It is also the part of Original scope of work (Initial spares) done by BHEL against order no. D-4072/05.11.2008

Total 0.39

4.85. RVUN has claimed the additional capitalisation of Rs. 0.20 Crore towards furniture and fixtures for FY 2014-15 for RGTPP as per Regulation 19(1)(f) of RERC Tariff Regulations, 2014.

4.86. RVUN has claimed the additional capitalisation of Rs. 15.28 Crore towards CTPP Unit 1 & 2 for FY 2014-15. The details of additional capitalisation claimed for FY 2014-15 for CTPP Unit 1 & 2 are as shown below:

Table 37: Additional capitalization claimed by RVUN for CTPP (Unit 1 & 2) for FY 2014-15 (Rs. Crore)

Sr. No. Particulars Name of Firm Amount Justification 1 Main Plant BTG Package M/s BHEL 14.27 It is part of

original scope of work. (Reg. 19(1)(a)&(b)

2 Package Other than BOP & BTG Package

ABB Ltd. 0.26 3 Bajaj Electrical 0.36

4 Civil Works (Pucca Road) Prem Chand Suman Jhalawar 0.05

5 Administration & Overhead Charges Furniture & Fixtures 0.10 Reg. 19 (1)(f)

6 Administration & Overhead Charges

Other Office Equipment 0.23 Reg. 19 (1)(f)

Total 15.28

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4.87. RVUN submitted that it has booked the additional capitalisation of Rs. 66.99 Crore for KTPS Unit 1-6 and Rs. 8.91 Crore for KTPS Unit 7 for FY 2015-16. The details of additional capitalisation claimed for KTPS Unit 7 and KTPS Unit 1-6 is as shown below:

Table 38: Additional capitalization claimed by RVUN for KTPS Unit 1-6 for FY 2015-16 (Rs. Crore)

CAPITAL HEAD NAME OF FIRM AMOUNT

10.559 Generator control &relay panel ABB FARIDABAD 1.55 0.81

10.576 Air Conditioning Plant ASTHA AIRTECH PVT.LTD. 0.12 0.07

10.503 Turbine Generator Steam P.Gen.

BHEL 4.05 2.1

SIEMENS LTD.GURGAON 12.66 6.09

BEMCO HYDROULICS 0.16

10.521 Control & Instrumentation ABB INDIA LTD. 7.47 0.87

10.557 Switchyard ALSTOM T&D INDIA LTD. 3.96 2.04

10.542 Other Transfarmers ABHISHEK ENTERPRISES 0.78 10.401 PACCA ROAD UIT Kota for ROB 24.25 Total 66.99

Table 39: Additional capitalization claimed by RVUN

for KTPS Unit 7 for FY 2015-16 (Rs. Crore) Name of package/ contract Amount

Main plant BGT package(BHEL) 1.40 BOP (Tata projects ltd.) 2.49 Station C&I(M/s I.L., Kota) 0.04 PA and communication system 0.01 Residential building in colony 4.97 Total 8.91

4.88. RVUN submitted that it has booked the additional capitalisation of Rs. 2.78 Crore for STPS Unit 1-5 for FY 2015-16. The details are as shown below:

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Table 40: Additional capitalization claimed by RVUN for STPS Unit 1-5 for FY 2015-16 (Rs. Crore)

Particulars Amount Justification

Hydraulic works 0.46

Approved RERC balance Work of Blow down system of cooling towers of Unit 2,3,4 & 5(Ref. petition No. RERC/283/11, Date of Order 31.10.2012) Awarded to M/s JR Construction Company, Suratgarh vide order No. RVUN/STPS/Civil-O&M/F./D 388, dt. 01.10.14.

Other civil work 2.09

Approved RERC Balance Work of Construction of road on the inside along the boundary of the power station & pedestrian over bridge crossing across railway tracks on road to Gate # 3(Ref. petition No. RERC/283/11, Date of Order 31.10.2012) , Awarded to M/S Baghla Trading company , Suratgarh , vide order No. RVUN/STPS/Civil-O&M/F./D 396, dt 09.10.14.

Furniture and fixture 0.12 PO NO. D .253 Dated 10.03.15 and PO No. 283 dt. 31.03.15.

Office equipment 0.11 PO NO. d. 83 dt. 01.07.15 and d. 06 dt. 08.04.15

Total 2.78

4.89. RVUN submitted that it has incurred an amount of Rs. 3.99 Crore as additional capitalisation for FY 2015-16 for DCCPP. The details are as shown below:

Table 41: Additional capitalization claimed by RVUN for DCCPP for FY 2015-16 (Rs. Crore)

S.No. Particulars Amount (Rs.) Justification/Remark 1 Building &

Civil Works 3.68 This is the conversion of wip (buildings) into fixed assets

(buildings) after receiving the completion certificate from civil department. It is original scope of works done by M/s Rawassa Constructions.

2 Furniture & Fixtures

0.02 Rs. 34500 (D. 4111/11.01.16), 56280/- (D. 1796/14.07.15), 34500/- (D. 128/12.06.15), 69000/- (d. 557/17.03.15)

3 Office equipment

0.01 7 TFT monitor purchased for Rs. 67200/- from M/s kota computers. work order no. D-2409 dt. 25.3.14)

4 Capital (initial Spares)

0.28 It is a part of original scope of work (initial spares) done by BHEL against order no. 3311 & 4072.

Total 3.99

4.90. In FY 2015-16, RVUN has claimed the additional capitalisation of Rs. 0.05

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Crore towards office equipment and furniture for RGTPP as per Regulation 19 of RERC, tariff Regulations, 2009.

4.91. In FY 2015-16, RVUN has claimed the additional capitalisation of Rs. 0.05 Crore towards office equipment and furniture for Mahi as per Regulation 17 of RERC, tariff Regulations, 2014.

4.92. In FY 2015-16, RVUN has claimed the additional capitalisation of Rs. 3.31 Crore for CTPP Unit 1 & 2. The details are as shown below:

Table 42: Additional capitalization claimed by RVUN for CTPP Unit 1 & 2 for FY 2015-16 (Rs. Crore)

S.No. Particulars Name of Firm Amount Remark 1 Main Plant BTG

Package M/s BHEL Supply 1.67

It is a part of original scope of work

2 M/s BHEL ETC 0.40

3

Hydraulic Work (Annicat & Raising Dam)

XEN Water Resources Department 0.72

4 Administration & Overhead Charges

Other Capitalisation 0.52

Total 3.31


4.93. Regarding the additional capitalisation of existing stations, Regulation 17 of RERC Tariff Regulations, 2014 specifies as follows:

“17. Additional capitalization (1) The following capital expenditure, actually incurred after the date of

commercial operation and upto the cut-off date and duly audited, may be considered by the Commission against the original scope of work, subject to prudent check

(a) Due to undischarged liabilities; (b)On works deferred for execution; (c)To meet award of arbitration or satisfaction of order or decree of a

court; (d)On account of change in law; (e)On procurement of initial spares included in the original project costs

subject to the ceiling norm laid down in regulation 16.

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Provided that the details of the work included in the original scope of work along with estimates of expenditure shall be submitted along with the application for provisional tariff:

Provided further that a list of the undischarged liabilities and works deferred for execution shall be submitted along with the application for final tariff after the date of commercial operation of the generating station. (2)The capital expenditure incurred on the following counts after the cut-off

date may, at its discretion, be admitted by the Commission, subject to prudence check:

(i) Liabilities to meet award of arbitration or for compliance of the order or decree of a court;

(ii) Change in law; (iii) Deferred works relating to ash pond or ash handling system in the original

scope of work; (iv) Any additional works/ services, which have become necessary for efficient

and successful operation of a generating station or transmission system but not included in the original capital cost.

.........”

4.94. Any additional capitalisation has to be claimed in accordance with Regulation 17 of the RERC Tariff Regulations, 2014 giving a detailed justification for the same.

4.95. It is pertinent to mention that it may not be appropriate to consider the above Regulation in isolation. For the Stations in service before the regulatory regime in the State, the Commission had not determined the capital cost of such stations. It is for this reason that the Commission had emphasized on the prior approval for capital expenditure in the true up of previous years. The Commission had disallowed the capital expenditure for which the prior approval was not obtained in the true up for previous years. RVUN had not contested this decision of the Commission in the past.

4.96. The additional capitalisation approved by the Commission in its in-principle approval vide its order dated 10.05.2012 and the additional capitalisation claimed by the Petitioner against the in-principle approval for FY 2014-15

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and FY 2015-16for KTPS Unit 1-6 is as shown in the table below:

Table 43: Additional capitalization for KTPS Unit (1-6) (Rs. Crore)

Description of proposal

Amount approved by

the Commission vide its order dt. 10.05.2012

Amount claimed in the Petition Allowable

FY 2014-15 FY 2015-16 FY 2014-15 FY 2015-16

i. Renovation of Static AVR of Unit no.1 & 2 by Digital AVR (DAVR) 5.00 0.00

6.16 0.00 6.16

ii. Supply of AC System for DAVR 0.19 0.00 0.19

Renovation of generator protection and associated 220 kV feeder protection for KSTPS Stage-I

4.00 0.00 2.36 0.00 2.36

Renovation of 25 kV MOCB’s installed at KSTPS switchyard

3.00 0.00 6.00 0.00 6.00

Replacement of High Voltage transformer for ESP’s

2.00 1.67 0.78 1.67 0.78

Purchase of Hydraulic Re-railing equipment 0.60 0.36 0.16 0.36 0.16

Railway over-bridge at LC-15 (R.O.B) 26.37 0.00 24.25 0.00 24.25

Up gradation of HMI System based on old computer architecture (Main Frame type) ABB make of unit #5 KSTPS with 800×A HMI system of M/s ABB.

7.40 0.00 8.34 0.00 8.34

R&M of SG/TG & Station C&I package of KSTPS Unit 3 & 4

36.00 0.00 18.75 0.00 18.75

Total 84.37 2.03 66.98 2.03 66.98

4.97. From the above table, it can be observed that the additional capitalisation claimed by the Petitioner is in variation with the additional capitalisation approved by the Commission in its in-principle approval vide its order dated 10.05.2012 for KTPS Unit 1-6. The Commission in this order has considered the actual additional capitalisation for the purpose of true-up for FY 2014-15 and FY 2015-16 for KTPS Unit 1-6.

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4.98. The Commission in its order dated 31.10.2012 has in-principle approved the additional capitalisation of Rs.3.04 Crore for STPS Unit 1-5 against the blow down system of cooling tower for Unit 2,3,4 & 5 whereas the petitioner has incurred the additional capitalisation of Rs. 2.135 Crore in FY 2014-15 and Rs. 0.46 Crore in FY 2015-16. Therefore, the Commission has considered actual additional capitalisation for the purpose of true-up for FY 2014-15 and FY 2015-16 for STPS Unit 1-5.

4.99. The Commission in its order dated 31.10.2012 has in-principle approved the additional capitalisation of Rs. 5.89 Crore for STPS Unit 1-5 against the construction of road on the inside along the boundary of power station & pedestrian over bridge crossing across railway tracks on the road to Gate #3 whereas the petitioner has incurred the additional capitalisation of Rs. 1.73 Crore in FY 2014-15 and Rs. 2.09 Crore in FY 2015-16. Therefore, the Commission has considered actual additional capitalisation for the purpose of true-up for FY 2014-15 and FY 2015-16 for STPS Unit 1-5.

4.100. Regarding the additional capitalisation claimed towards KTPS (Unit 7), STPS (Unit 6) and CTPP (Unit 1-2), the Commission is of the view that in accordance with Regulation 2(17) of RERC Tariff Regulations, 2014, the cut-off date of all these units has already been over as KTPS Unit 7 achieved COD on 30.05.2009, STPS (Unit 6) achieved COD on 30.12.2009, CTPP (Unit 1) achieved COD on 11.06.2010 and CTPP (Unit 2) achieved COD on 15.10.2011. Regulation 2 (17) of the RERC, Tariff Regulations, 2014 states as follows:

“2. Definitions (17) “cut-off date” means 31st march of the year closing after 365 days from the date of commercial operation of the project, and in case the project is declared under commercial operation in the last quarter of a year, the cut-off date shall be 31st march of the year closing after 730 days from the date of commercial operation:

Provided that the cut-off date may be extended by the Commission if it is proved on the basis of documentary evidence that the capitalisation could not be made within the cut-off date for reasons beyond the control of the

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project developer”

4.101. Further, the Petitioner has not taken any in-principle approval for the additional capitalisation claimed for FY 2014-15 and FY 2015-16 for KTPS (Unit 7), STPS (Unit 6) and CTPP. Therefore, the Commission in this order has not approved any additional capitalisation for KTPS (Unit 7), STPS (Unit 6) and CTPP for FY 2014-15 and FY 2015-16.

4.102. RVUN has also sought the capitalisation of cost of assets pertaining to procurement of vehicles, office equipment and furniture and fixtures in FY 2014-15 and FY 2015-16, which are minor in nature, as shown in the Table below:

Table 44: Costs of minor assets claimed by RVUN for FY 2014-15 and FY 2015-16 (Rs. Crore)

Station Particulars FY 2014-15 FY 2015-16 KTPS (Unit 1-6) Office equipment 0.02 0.00 STPS (Unit 1-5) Furniture 0.00 0.12

Office equipment 0.00 0.11 Total STPS 0.00 0.23 DCCPP Furniture & Fixtures 0.01 0.02

Office Equipment 0.03 0.01 Total DCCPP 0.04 0.03

RGTPS Furniture 0.20 0.05 Mahi Furniture 0.00 0.02

Office equipment 0.00 0.03 Total Mahi 0.00 0.05

CTPP (Unit 1-2) Furniture & Fixtures 0.10 0.00 Office Equipment 0.23 0.00

Total CTPP (Unit 1-2) 0.33 0.00

4.103. The Commission finds that such equipments procured cannot be considered as part of capital expenses due to the nature of such assets. Regarding the cost of minor assets claimed by the Petitioner for FY 2014-15 and FY 2015-16, the Commission has adopted the same approach as was adopted during the true-up of FY 2013-14. Accordingly, the Commission has considered the cost of such minor equipment as a part of actual O&M expenses for the truing up of FY 2014-15 and FY 2015-16.

4.104. In light of the above, the additional capitalisation approved by the

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Commission for FY 2014-15 and FY 2015-16 is as shown in the table below:

Table 45: Additional Capitalisation approved by the Commission for FY 2014-15 and FY 2015-16 (Rs. Crore)

Station FY 2014-15 FY 2015-16 RVUN Approved RVUN Approved

KTPS (Unit 1-6) 2.05 2.03 66.99 66.98 KTPS (Unit 7) 0.00 0.00 8.91 0.00 STPS (Unit 1-5) 3.87 3.87 2.78 2.55 STPS (Unit 6) 78.06 0.00 0.00 0.00 DCCPP 0.39 0.00 3.99 0.00 RGTPS 0.20 0.00 0.05 0.00 Mahi 0.00 0.00 0.05 0.00 CTPP 15.27 0.00 3.31 0.00 Total 99.84 5.90 86.08 69.53

4.105. The Commission has considered the means of finance of the approved additional capitalisation in the debt equity ratio of 80:20 against the Petitioner’s claim of debt equity ratio of 70:30, as the actual means of finance for RVUN projects is in the debt: equity ratio of 80:20.

Depreciation RVUN’s Submission

4.106. The details of depreciation as recovered by RVUN from Discoms as per Tariff Order for FY 2014-15 and FY 2015-16 as per petition based on actual/audited accounts are as shown in the table below:

Table 46: Depreciation (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16

KTPS (Unit 1-7)

STPS (Unit 1-

6) RGTPS DCCPP Mahi

CTPP (Unit 1-

2) Total

KTPS (Unit 1-7)

STPS (Unit 1-

6) RGTPS DCCPP Mahi

CTPP (Unit 1-

2) Total

As per Tariff Order

84.46 176.99 1.90 55.28 5.87 114.23 438.73 78.60 160.24 1.99 57.92 4.20 120.25 423.20


78.10 194.02 14.92 57.02 4.20 125.13 473.39 83.47 154.21 14.93 57.14 4.19 125.62 439.56

4.107. RVUN submitted that variation in depreciation for the stations is on

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account of deviation in accounting heads of GFA in Tariff Order and audited accounts.

4.108. Further, regarding the depreciation of RGTPS for FY 2014-15, RVUN submitted that RGTPS extension achieved COD In the year 2003. The opening gross fixed assets of this extension is Rs. 225.93 Crore. In the first year itself i.e. FY 2003-04, the Commission has considered the accumulated depreciation of Rs. 92.49 Crore i.e. 41% (approx.) of opening GFA. Thus, due to excessive consideration of cumulative depreciation by the Commission, the balance depreciable value has been reduced drastically and consequently the Commission has computed the depreciation on lower side.


4.109. The Commission in this order has approved the depreciation of KTPS (Unit 1-6), STPS (Unit 15), RGTPS, DCCPP and Mahi Hydel Power for FY 2014-15 and FY 2015-16 by adopting the same approach as was adopted by the Commission in the MYT order for the Control period FY 2009-14. The Commission has computed the depreciation for the control period in the following manner:

(i) Considered Accumulated Depreciation till FY 2015-16 by adding year-wise depreciation allowed in Tariff Orders/True up orders from FY 2009-10 to FY 2015-16 to the accumulated depreciation till FY 2009-10.

(ii) Depreciation @5.28% if the Station/Stage/Unit has not completed 12 years life from the date of commissioning.

(iii) If the Station/Stage/Unit has completed 12 years life, depreciation computed by spreading remaining depreciation to be charged over the balance useful life of the asset.

4.110. For KTPS Unit 7, STPS Unit 6, and CTPP (Unit 1-2) the Commission has approved the depreciation for FY 2014-15 considering the closing GFA approved in true up for FY 2013-14 as the opening GFA for FY 2014-15 and

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the approved closing GFA of FY 2014-15 in this order has been taken as the opening GFA for FY 2015-16. The details of GFA RVUN plats are as shown in the table below:

Table 47: Asset class wise GFA details of KTPS (Unit 7) and STPS (Unit 6) (Rs. Crore)

Particulars Rate of Depreciation

KTPS (Unit 7) STPS (Unit 6)

At the beginning

of the year

At the end of

the year

At the beginning

of the year

At the end of

the year

Land & Land Rights 0.00% 0.00 0.00 0.00 0.00 Building & Civil Works of Power Plants 3.34% 126.19 126.19 209.48 209.48

Hydraulic Works 5.28% 10.98 10.98 15.73 15.73

Other Civil Works 3.34% 4.70 4.70 7.10 7.10

Plant & Machinery 5.28% 705.38 705.38 768.70 768.70

Lines & Cable Net work 5.28% 0.00 0.00 0.45 0.45

Vehicles 9.50% 0.00 0.00 0.00 0.00

Furniture & Fixtures 6.33% 0.04 0.04 0.10 0.10

Office Equipment 6.33% -3.19 -3.19 4.63 4.63

Capital Spares 5.28% 7.76 7.76 20.60 20.60

851.86 851.86 1026.79 1026.79

Table 48: Details of depreciation as per MYT for existing stations (Rs. Crore)

Particulars KTPS (Unit 1-6)

STPS (Unit 1-5)

RGTPS MAHI

Capital Cost 1185.17 4223.32 311.08 259.02 90% depreciable value 1066.65 3800.99 279.97 233.11 Dep. Allowed up to FY 2013-14 690.84 2522.10 268.70 185.37 Dep. Allowed in FY 2014-15

48.11 135.84 1.89

6.41

Dep. Allowed in FY 2015-16 36.49 113.63

1.89 6.41

Dep. Allowed up to FY 2015-16 775.44 2771.58 272.47 198.20 Balance dep. To be allowed 261.00 1029.41 5.61 34.91

4.111. The additional capitalisation approved for FY 2014-15 and FY 2015-16 has also been considered by the Commission while approving the depreciation

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for FY 2014-15 and FY 2015-16.

Table 49: Approved Depreciation (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

84.46 176.99 1.90 55.28 5.87 114.23 438.73 78.60 160.24 1.99 57.92 4.20 120.25 423.20

Approved for True Up

90.69 186.02 1.88 55.28 6.41 114.94 455.23 80.65 163.94 1.88 57.92 6.41 120.96 431.77

Interest and Finance Charges on Term Loans RVUN’s Submission

4.112. RVUN submitted that the variation in interest and finance charge is due to the variation in actual amount of loan, repayment and interest on loan. The details of Interest and Finance Charges as approved in the Tariff Order of FY 2014-15 and FY 2015-16 and as per petition based on actual/audited accounts are as shown in the table below:

Table 50: Interest and Finance Charges on Term Loans (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16

KTPS (Unit 1-7)

STPS (Unit 1-

6) RGTPS DCCPP Mahi

CTPP (Unit 1-

2) Total

KTPS (Unit 1-7)

STPS (Unit 1-6)

RGTPS DCCPP Mahi CTPP

(Unit 1-2)

Total

As per Tariff Order

61.71 126.82 0.77 47.96 0.00 182.69 419.95 53.09 96.81 0.08 40.81 0.00 168.10 358.89


57.18 107.36 0.00 40.30 0.00 208.33 413.17 50.08 98.89 0.00 32.51 32.51 184.57 398.56


4.113. It may be noted that the interest expenses would change from the approved figures only due to change in loan balances and due to interest rate variation. The Commission has computed the interest on term loans based on loan balance approved by the Commission for FY 2009-10 in its MYT Order and by considering the repayment equivalent to depreciation

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allowed for FY 2009-10, FY 2010-11, FY 2011-12, FY 2012-13 and FY 2013-14 as trued up in respective Orders. The Commission has considered the weighted average rate of interest calculated on the basis of actual loan portfolio at the beginning of the year. In case of KTPS Unit 7, STPS Unit 6, CTPP Unit 1 and Unit 2, the Commission has approved the interest charges by considering the closing loan balance for the respective stations approved in the true up for FY 2013-14 as the opening balance for FY 2014-15 and the closing loan balance of FY 2014-15 has been considered as the opening loan balance for FY 2015-16.

4.114. The Commission has considered the debt component of the approved additional capitalisation as loan addition during the year.

4.115. The Commission in its data gaps asked RVUN to submit the basis of claiming the finance charges for FY 2014-15 and FY 2015-16 and RVUN in replies submitted that the finance charges are claimed as actual paid to the Government as levy/commission against rendering guarantee on working capital loan. Therefore, Commission has considered the finance charge for each station as submitted by the Petitioner.

Table 51: Interest on term loans approved for FY 2014-15 (Rs. Crore)

Particulars FY 2014-15

KTPS (Unit 1 to 6)

KTPS (Unit 7)

STPS (Unit 1-5)

STPS (Unit 6)


Opening Balance 9.055 490.74 148.59 608.87 0.36 374.38 1586.32 Receipts during the Year 1.62 0.00 3.09 0.00 0.00 0.00 0.00

Repayment made during the Year 9.055 42.41 129.05 50.06 0.36 55.02 114.94

Closing Balance 1.62 448.34 22.63 558.81 0.00 319.36 1471.37 Weighted Average Interest Rate (%)

9.06 12.26 12.82 12.66 0.00 13.13 12.90

Interest 0.48 57.55 10.98 73.92 0.00 45.54 197.15 Finance Charges 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Interest and Finance Charges 0.48 57.55 10.98 73.92 0.00 45.54 197.15

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Table 52: Interest on term loan approved for FY 2015-16 (Rs. Crore)

Particulars

FY 2015-16 KTPS

(Unit 1 to 6)

KTPS (Unit 7)

STPS (Unit 1-

5)

STPS (Unit 6)

RGTPS DCCPP CTPP (Unit 1-

2) Opening Balance 1.62 448.34 22.63 558.81 0.00 319.36 1471.37 Receipts during the Year

53.59 0.00 2.04 0.00 0.00 0.00 0.00

Repayment made during the Year

1.62 42.41 19.54 50.06 0.00 57.92 120.96

Closing Balance 53.59 405.93 5.13 508.75 0.00 261.44 1350.41 Weighted Average Interest Rate (%)

10.64% 12.28% 12.72% 12.99% 0.00% 13.13% 12.59%

Interest 2.94 52.43 1.77 69.33 0.00 38.13 177.66

Finance Charges 0.27 0.00 0.95 0.00 0.00 0.00 0.05 Interest and Finance Charges

3.21 52.43 2.72 69.33 0.00 38.13 177.71

4.116. The interest and finance charges approved by the Commission, are as shown in the Table below:

Table 53: Approved Interest and Finance Charges on Term Loans.

Particulars

FY 2014-15 FY 2015-16 KTPS

(Unit 1-7)

STPS (Unit 1-

6) RGTPS DCCPP Mahi CTPP

(Unit 1-2) Total KTPS

(Unit 1-7)

STPS (Unit 1-6) RGTPS DCCPP Mahi

CTPP (Unit 1-

2) Total

As per Tariff Order 61.71 126.82 0.77 47.96 0.00 182.69 419.95 53.09 96.81 0.08 40.81 0.00 168.10 358.89


58.03 84.89 0.00 45.54 0.00 197.15 385.62 55.64 72.05 0.00 38.13 0.00 177.71 343.53

Interest on Transitional Loans RVUN’s Submission

4.117. The details of interest on transitional loans as recovered by RVUN from Discoms as per Tariff Order for FY 2014-15 and FY 2015-16 and as per petition based on audited accounts are provided in the table below:

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Table 54: Interest on Transitional Loans (Rs. Crore)


KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)

RGTPS DCCPP CTPP

(Unit 1-2)

Total

As per Tariff Order*

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


1.15 27.12 0.00 2.37 0.00 30.64 0.38 9.01 0.00 0.79 0.00 10.18

*Approved along with interest and finance charges in the Tariff Order


4.118. The Commission has already settled the issue of transitional loans earlier vide its Order dated 21.01.2010.

4.119. In line with the approach adopted by the Commission in the true up for FY 2013-14, the Commission has approved the interest on Transitional Loans for FY 2014-15 and FY 2015-16 as considered in Order dated 21.01.2010. The details of opening and closing balances of transitional loan for FY 2014-15 and FY 2015-16 are as shown in the table below:

Table 55: Transitional loan approved for FY 2014-15 (Rs. Crore) FY 2014-15

Sl No Particulars KTPS STPS RGTPS DCCPP

1 Opening balance of transitional loan as worked out by the Commission. 81.93 524.01 6.01 24.37

2 Depreciation allowed by the commission in MYT order 48.11 135.84 1.88 55.28

3 Term Loan repayment 9.06 129.05 0.36 55.02

4 Available balance to make repayment of transitional loans (equivalent to excess depreciation allowed in MYT order) (2-3)

39.05 6.79 1.52 0.26

5 Closing balance of transitional loan (1-4) 42.87 517.22 4.49 24.11

6 Interest@ 9.895% the weighted average rate of interest on transitional loans. 6.17 51.51 0.52 2.40

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Table 56: Transitional loan approved for FY 2015-16 (Rs. Crore)

FY 2015-16



2 Depreciation allowed by the commission in MYT order 36.49 113.63 1.88 57.92



34.86 94.09 1.88 0.00


6 Interest@ 9.895% the weighted average rate of interest on transitional loans. 2.52 46.52 0.35 2.39

4.120. The interest on Transitional Loans approved by the Commission is as shown in the Table below:

Table 57: Approved Interest on Transitional Loans (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16

KTPS (Unit 1-

7)

STPS (Unit 1-

6) RGTPS DCCPP

CTPP (Unit 1-

2) Total

KTPS (Unit 1-

7)

STPS (Unit 1-

6) RGTPS DCCPP

CTPP (Unit 1-

2) Total

As per Tariff Order 6.79 57.54 0.77 2.41 0.00 67.51 2.98 33.04 0.08 2.41 0.00 10.18

Approved for True Up 6.17 51.51 0.52 2.40 0.00 60.61 2.52 46.52 0.35 2.39 0.00 51.78

Interest on Working Capital RVUN’s Submission

4.121. The details of Interest on Working Capital (IWC) as recovered by RVUN from Discoms as per Tariff Order for FY 2014-15 and FY 2015-16 and as per petition based on audited accounts are as shown in the Table below:

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Table 58: Interest on Working Capital (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

Recovered from DISCOMs as per Tariff Order

94.35 125.80 4.51 18.09 0.71 30.24 273.70 100.01 134.95 5.05 19.31 0.89 31.91 292.12

As petitioned based on accounts

102.19 128.14 3.87 9.37 0.82 29.95 274.34 122.48 129.13 10.66 13.31 1.68 39.79 317.05

4.122. Further, RVUN has submitted that it has done the sharing of gains and losses on account of controllable/ uncontrollable factors, as per Regulation 8(3)(a) & 8(3)(b) of RERC Tariff Regulations, 2014. Further, the difference in interest in working capital is because of the actual interest paid and the normative approved.


4.123. RVUN has submitted the reconciliation of Interest on Working Capital claimed in true up for FY 2014-15 and FY 2015-16 as shown in the Table below:

Table 59: Reconciliation of Interest on WC and Interest on Transitional Loans for FY 2014-15 and FY 2015-16 (Rs. Crore)

Particulars FY 2014-15 FY 2015-16 IWC incl. transitional loan (item 78.44x) 290.32 500.82

Less: Interest on Transitional loan 30.64 10.18

Interest on WC 259.68 490.64

Add: WC Guarantee Commission 19.18 23.40

Total (Including other stations also) 278.86 514.04

Less: Giral, MMH, RGTPP 160 MW, KaTPP Unit 1 & 2 and CTPP Unit 3 & 4 55.46 196.99

Net interest on Working capital 223.40 317.05

4.124. RVUN has allocated the above Rs. 223.40 Crore and Rs. 317.05 Crore for FY 2014-15 and FY 2015-16 based on the installed capacity of its stations.

4.125. Accordingly, for arriving at actual IWC for FY 2014-15 and FY 2015-16, the

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Commission has deducted approved interest on transitional loan for the respective years, i.e., Rs 60.61 Crore and Rs. 51.79 Crore for FY 2014-15 and FY 2015-16 respectively from actual interest on WC and actual interest on transitional loan.

Table 60: Actual Interest on Working Capital approved by the Commission for FY 2014-15 and FY 2015-16 (Rs. Crore)


Actual IWC claimed by RVUN 223.40 317.05

Actual Interest on Transitional Loan claimed by RVUN 30.64 10.18

Total (A) 254.04 327.23

Interest on Transitional Loan approved by the Commission (B) 60.61 51.78

Actual IWC approved by the Commission (A-B) 193.43 275.45

4.126. The actual IWC considered by the Commission for FY 2014-15 and FY 2015-16 is Rs 193.43 Crore and Rs. 275.45 Crore respectively as against Rs 223.40 Crore and Rs. 317.05 Crore, as submitted by RVUN for FY 2014-15 and FY 2015-16 respectively. The Commission further computed the normative interest on working capital subjected to the target availability in accordance to RERC Tariff Regulations, 2014.

4.127. The Commission has computed the normative interest on working capital in accordance with Regulation 27 (2) of the RERC Tariff Regulations, 2014, which specifies that:

“(2) Rate of interest on working capital to be computed shall be on normative basis and shall be 250 basis points higher than the average Base Rate of State Bank of India prevalent during first six month of the year previous to the relevant year. The interest on working capital shall be computed on normative basis notwithstanding that the generating company or licensee has not taken working capital loan from any outside agency. The variation in the interest amount on account of actual vis-à-vis normative interest rate on normative working capital shall be shared in the ratio of 50:50 between the generating company/licensee and the beneficiary. “

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4.128. Accordingly, for the purpose of calculating interest on working capital, the Commission has considered SBI base rate of 9.71% existing during first six months of FY 2013-14 plus 250 basis points as per the RERC Tariff Regulations, 2014 for FY 2014-15. Similarly, for FY 2015-16, the Commission has considered SBI base rate of 10.00% existing during first six months of FY 2014-15 plus 250 basis points as per the RERC Tariff Regulations, 2014. The weighted average normative rate of interest thus works out to 12.21% for FY 2014-15 and 12.50% for FY 2015-16.

4.129. Further, as IWC is a controllable factor, the Commission has computed the sharing of gains/losses in accordance to Regulation 27(2) of RERC Tariff Regulations, 2014.

4.130. As per Regulation 27(2) of RERC Tariff Regulations, 2014 sharing of gains and loss has to be carried out with regards to variation in normative rate of interest and actual rate of interest. The normative rate of interest applicable is 12.21% and 12.50% for FY 2014-15 and FY 2015-16.

4.131. However, it is observed that RVUN has not carried out the sharing as per the above regulations and has instead shared the IoWC amount as per the audited accounts. RVUN has further not submitted the actual weighted average rate of interest of working capital for FY 2014-15 and FY 2015-16.

4.132. The Commission has computed the rate of interest on working capital for FY 2014-15 as per the audited accounts which works out to be 12.37%. Further, with regards to FY 2015-16, it was observed that interest rate on PFC and REC loan for working capital could not be worked out as no bifurcation of loan for working capital and term loan was available with the Commission. The Commission therefore, for working out the actual rate of interest on working capital has considered the increase in the SBI base rate in FY 2015-16 for the first six months over and above FY 2014-15 which is 0.29% and has added the same to the actual rate of IWC derived for FY 2014-15. Accordingly, the actual rate of interest on working capital for FY 2015-16 works out to be 12.66%.

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4.133. The IWC approved by the Commission for FY 2014-15 and FY 2015-16 is as shown in the Table below:

Table 61: Approved Interest on Working Capital for FY 2014-15(Rs. Crore)

Sharing of IOWC

Station Actual Normative (Gain) / Loss

50% Sharing

Net entitlement

KTPS (Unit 1-7) 82.91 81.82 1.10 0.55 82.37

STPS (Unit 1-6) 120.25 118.66 1.59 0.79 119.45

RGTPS 5.20 5.13 0.07 0.03 5.16

DCPP 19.02 18.77 0.25 0.13 18.90

Mahi 0.61 0.61 0.01 0.00 0.61

CTPP (Unit 1-2) 28.95 28.57 0.38 0.19 28.76

Total 256.95 253.55 3.39 1.70 255.25

Table 62: Approved Interest on Working Capital for FY 2015-16(Rs. Crore)

Sharing of IOWC

Station Actual Normative (Gain) / Loss

50% Sharing

Net entitlement

KTPS (Unit 1-7) 83.43 82.36 1.08 0.54 82.89

STPS (Unit 1-6) 133.70 131.97 1.73 0.86 132.83

RGTPS 5.46 5.39 0.07 0.04 5.42

DCPP 21.12 20.85 0.27 0.14 20.99

Mahi 0.91 0.90 0.01 0.01 0.90

CTPP (Unit 1-2) 30.46 30.06 0.39 0.20 30.26

Total 275.08 271.53 3.55 1.78 273.31

Additional Liability towards Pension and Gratuity RVUN’s Submission

4.134. The details of additional liability towards pension and gratuity as recovered by RVUN from Discoms as per Tariff Order for FY 2014-15 and FY 2015-16 and as per petition based on audited accounts are as shown in the Table below:

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Table 63: Additional Liability towards Pension and Gratuity (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.47 13.87 1.02 3.05 1.29 4.62 35.32


2.39 1.33 0.20 0.21 0.29 0.58 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00


4.135. In replies to the objections of Stakeholder RVUN submitted the amount deposited into the fund as follows:

Table 64: Details of Additional Contribution towards Pension and Gratuity as submitted by RVUN (Rs. Crore)

Year Deposited into fund FY 2012-13 113.21 FY 2013-14 37.11 FY 2014-15 5.00 FY 2015-16 0.00 FY 2016-17 44.65

Total 199.97

4.136. The Commission observed that RVUN has deposited Rs. 5.00 Crore into the pension and gratuity fund in FY 2014-15. In FY 2015-16, RVUN has not deposited any amount into the pension and gratuity fund.

4.137. The Commission has approved the actual amount of Rs. 5.00 Crore for FY 2014-15 deposited into the fund and allocated the additional liability towards pension and gratuity in the same proportion as allocated by RVUN for FY 2014-15. For FY 2015-16, the Commission has not approved any amount towards the pension and gratuity fund, as the Petitioner has not deposited into the fund in FY 2015-16.

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Table 65: Approved Additional Liability towards Pension and Gratuity (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.47 13.87 1.02 3.05 1.29 4.62 35.32


2.39 1.33 0.20 0.21 0.29 0.58 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Prior Period Expenses/Income RVUN’s Submission

4.138. RVUN in its petition has submitted prior period income of Rs. 1.69 Crore for true up for FY 2015-16. For FY 2014-15, RVUN has not claimed any prior period expenses/income. Prior period expense on actual basis for FY 2014-15 and FY 2015-16 as per the details given below:

Table 66: Prior Period Expenses/ (Income) (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00


0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 1.29 (7.18) 0.91 5.67 1.69


4.139. RVUN has submitted the reconciliation of station wise prior period expenses/income claimed in true up for FY 2015-16 reconciling the same with the audited accounts for FY 2015-16.

4.140. The Commission observes that the details of prior period items have been provided in Schedule No. 28 of the audited accounts for FY 2015-16. From the statement submitted by RVUN, it is observed that the heads under

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which the prior period expenses are booked are depreciation, fuel related expenses, etc. It is to be noted that the Commission while doing truing up of the previous years in accordance with the Tariff Regulations, had allowed the expenses on normative basis and also shared the same with actual expenses given at that time. As per Tariff Regulations, only fuel relates expenses are to be allowed on actual basis. Commission, therefore, only considers the fuel related expenses or gain of prior period.

4.141. The prior period income claimed by RVUN is inclusive of such fuel related gains as per the audited accounts. The Commission has considered prior period income as submitted by RVUN as shown in table below:

Table 67: Prior Period Expenses/(Income) approved for FY 2014-15 and FY 2015-16 (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00


0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (7.18) 0.00 0.00 (7.18)

Recovery of ARR and Tariff Petition Fees RVUN’s Submission

4.142. RVUN has submitted ARR and Tariff Petition fees for FY 2014-15 and FY 2015-16 in accordance with the audited figures. The allocation plant wise has been done based on the ratio of their capacities. The details, as filed by RVUN is as under:

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Table 68: Recovery of ARR and Tariff Petition Fees (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16

KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

0.62 0.75 0.06 0.17 0.07 0.25 1.92 0.62 0.75 0.06 0.17 0.07 0.25 1.92


1.25 1.50 0.11 0.33 0.14 0.50 3.83 0.62 0.75 0.06 0.17 0.07 0.25 1.92

Commission’s View

4.143. The ARR and Tariff Petition Fees shall be allowed at the rate as specified in RERC (Fees for Petitions) Regulations, 2005. Accordingly, the Commission has computed the ARR and Tariff Petition Fees at the rate of Rs. 5000/MW for all the generating stations. The details of Recovery of ARR and Tariff petition fees approved by the Commission for True up of FY 2014-15 and FY 2015-16 are provided below:

Table 69: ARR and Tariff petition fee approved by the Commission (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16

KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

0.62 0.75 0.06 0.17 0.07 0.25 1.92 0.62 0.75 0.06 0.17 0.07 0.25 1.92


0.62 0.75 0.06 0.17 0.07 0.25 1.91 0.62 0.75 0.06 0.17 0.07 0.25 1.91

Insurance on Fixed Assets RVUN’s Submission

4.144. RVUN submitted the actual insurance on fixed assets along with supporting documents as against that approved in Tariff Order for FY 2014-15 and FY 2015-16 as follows:

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Table 70: Insurance on Fixed Assets (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

2.54 2.63 0.37 1.23 0.67 3.25 10.69 2.82 2.67 0.22 1.32 0.00 3.50 10.53


2.72 2.60 0.23 0.83 0.00 2.80 9.18 2.84 2.60 0.29 0.84 0.00 3.14 9.71


4.145. RVUN submitted the supporting documents for insurance expenses for FY 2014-15 and FY 2015-16. The Commission found the documents in order and approves the same.

Table71: Approved Insurance Charges on Fixed Assets (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

2.54 2.63 0.37 1.23 0.67 3.25 10.69 2.82 2.67 0.22 1.32 0.00 3.50 10.53


2.72 2.60 0.23 0.83 0.00 2.80 9.18 2.84 2.60 0.29 0.84 0.00 3.14 9.71

Return on Equity

4.146. The Commission, in view of RVUN not claiming any Return of Equity for FY 2014-15, has not provided for the same for true up for FY 2014-15. For FY 2015-16, RVUN has claimed the RoE at the rate of 5%. RoE submitted by RVUN as shown in table below:

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Table 72: RoE for FY 2015-16 (Rs. Crore)

Particulars

FY 2015-16

KTPS (Unit 1-7)

STPS (Unit 1-6)


Total

As per Tariff Order 24.32 58.69 6.01 17.35 8.52 24.16 139.05

As petitioned based on audited accounts 25.11 59.96 6.01 17.39 8.52 25.07 142.06


4.147. GoR in its letter dated 18.03.2015 has allowed rate of RoE as 5% in FY 2015-16, 10% in FY 2016-17 and 15.5% in FY 2017-18 onwards. However, in the revised letter of Government of Rajasthan (GOR) dated 21.03.2016, the rate of RoE for FY 2016-17 is revised to 15.5 % but the rate of RoE for FY 2015-16 remained the same i.e. 5%. Therefore, the Commission has approved the ROE for FY 2015-16 as per the latest order of GoR and in accordance with the Regulation 20 of the RERC Tariff Regulations, 2014.

4.148. The Commission has considered the equity base approved for FY 2014-15 in this tariff order as the equity base for FY 2015-16. Further, the Commission has also considered the equity addition in FY 2014-15 and FY 2015-16 on account of the approved additional capitalisation in this order.

Table 73: Equity portion of additional capitalization allowed in FY 2014-15 and FY 2015-16 (Rs. Crore)

Generating Station

Tariff Order for FY 2005-06

dated 09-06-2005

Tariff Order for FY 2008-09

dated 28-06-2008 (Rs.

Crore)

Tariff Order for FY 2012-13 and True up Order for FY 2009-10 dated 06-06-

2013 (Rs. Lakh)

True up Order FY 2010-11 (Add. Cap) (Rs. Crore)

Equity Portion of additional capitalisation for FY 2012-

13


14


15


16

Total Equity

upto FY 2015-

16

ROE @8% Equity

ROE @

11%

Equity Debt Equity Debt Equity Equity Equity Equity Equity Equity

KTPS Unit 1-6 24.52 306.50

2.56 1.37 0.41 13.40

504.07 KTPS Unit 7 - - 648.25 176.00 14.13 3.84 0.00 0.00 STPS Unit 1-5

77.36 967.00

0.29 0.77 0.51 1175.40 STPS Unit 6 - - 781.07 197.02 38.89 9.81 0.00 0.00

RGTPS 9.61 120.13

0.00 0.00 120.13

mailto:ROE@11%25

mailto:ROE@11%25

mailto:ROE@11%25

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DCCPP - - 38.17 347.00

0.00 0.00 347.00

Mahi Hydel 13.63 170.38

0.00 0.00 170.38

CTPP Unit 1 - -

941.60 235.40 5.29 8.12 0.00 0.00

496.61 CTPP Unit 2 - - 991.20 247.80

4.149. Hence, in view of the above, the Commission approves ROE at the rate of 5% for FY 2015-16, as shown in the Table below:

Table 74: RoE approved for FY 2015-16 (Rs. Crore)

Particulars

FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)


Total

As per Tariff Order 24.32 58.69 6.01 17.35 8.52 24.16 139.05

Approved for True Up 25.20 58.77 6.01 17.35 8.52 24.83 140.68

Non-Tariff Income RVUN’s Submission

4.150. The details of plant-wise non-tariff income as per the Tariff Order for FY 2014-15 and FY 2015-16 and as per petition based on actual/audited accounts are as shown in the table below:

Table 75: Non-Tariff Income (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16

KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

6.30 8.14 0.10 2.13 0.32 3.36 20.35 9.90 7.92 0.08 0.94 0.07 0.31 19.22


9.00 7.76 0.48 1.49 0.61 3.94 23.28 16.03 8.47 0.52 1.47 0.57 2.85 29.91


4.151. The Commission has considered the non-tariff income as per petition

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based on actual/audited accounts in true-up exercise for FY 2014-15 and FY 2015-16. The details are as under:

Table 76: Approved Non-Tariff Income for FY 2014-15 and FY 2015-16 (Rs. Crore)

Particulars

FY 2014-15 FY 2015-16 KTPS (Unit 1-7)

STPS (Unit 1-6)



STPS (Unit 1-6)


Total

As per Tariff Order

6.30 8.14 0.10 2.13 0.32 3.36 20.35 9.90 7.92 0.08 0.94 0.07 0.31 19.22


9.00 7.76 0.48 1.49 0.61 3.94 23.28 16.03 8.47 0.52 1.47 0.57 2.85 29.91

Annual Fixed Charges

4.152. The actual availability of some of the stations of RVUN has been lower than the normative availability approved by the Commission in this Order. For such stations, the Commission has reduced the recovery of Annual Fixed Charge on pro-rata basis. The approved Annual Fixed Charges and Annual Fixed charges reduced by the Commission are as shown in Table below:

Table 77: Approved AFC for FY 2014-15 (Rs. Crore)

FY 2014-15

S.No. Particulars KTPS (Unit 1-7)

STPS (Unit 1-6) RGTPS DCCPP Mahi CTPP (Unit

1-2) RVUN (Total)

1 O&M Expenses 199.52 241.35 16.18 39.80 13.89 80.45 591.18

2 Depreciation 90.69 186.02 1.88 55.28 6.41 114.94 455.23

3

Interest & Finance Charges

58.03 84.89 0.00 45.54 0.00 197.15 385.62

4 Interest on transitional loan

6.17 51.51 0.52 2.40 0.00 0.00 60.61

5 Interest on working capital

81.82 118.66 5.13 18.77 0.61 28.57 253.55

6 Insurance on fixed assets

2.72 2.60 0.23 0.83 0.00 2.80 9.18

7

Recovery of ARR & Tariff Petition Fees

0.62 0.75 0.06 0.17 0.07 0.25 1.91

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FY 2014-15

S.No. Particulars KTPS (Unit 1-7)

STPS (Unit 1-6) RGTPS DCCPP Mahi CTPP (Unit

1-2) RVUN (Total)

8

Addl. contribution towards Pension & Gratuity Fund

2.39 1.33 0.20 0.21 0.29 0.58 5.00

9 Prior Period Charges

0.00 0.00 0.00 0.00 0.00 0.00 0.00

10 Total fixed charges

441.96 687.11 24.20 163.00 21.27 424.74 1762.28

11 Less: Non-Tariff Income

9.00 7.76 0.48 1.49 0.61 3.94 23.28

12 Net fixed charges

432.96 679.35 23.72 161.51 20.66 420.80 1739.00

Table 78: Approved AFC for FY 2015-16 (Rs. Crore)

FY 2015-16

S.No. Particulars

KTPS (Unit 1-

7) STPS (Unit

1-6) RGTPS DCCPP Mahi

CTPP (Unit 1-

2) RVUN (Total)

1 O&M Expenses 211.19 255.47 17.12 42.13 14.70 85.16 625.76

2 Depreciation 80.65 163.94 1.88 57.92 6.41 120.96 431.77

3 Interest & Finance Charges

55.64 72.05 0.00 38.13 0.00 177.71 343.53

4 Interest on transitional loan

2.52 46.52 0.35 2.39 0.00 0.00 51.78

5 RoE 25.20 58.77 6.01 17.35 8.52 24.83 140.68

6 Tax on RoE 0.00 0.00 0.00 0.00 0.00 0.00 0.00

7 Interest on working capital

82.36 131.97 5.39 20.85 0.90 30.06 271.53

8 Insurance on fixed assets

2.84 2.60 0.29 0.84 0.00 3.14 9.71

9

Recovery of ARR & Tariff Petition Fees

0.62 0.75 0.06 0.17 0.07 0.25 1.91

10

Addl. contribution towards Pension & Gratuity Fund

0.00 0.00 0.00 0.00 0.00 0.00 0.00

11 Prior Period Charges

0.00 0.00 0.00 -7.18 0.00 0.00 -7.18

12 Total fixed charges

461.02 732.07 31.10 172.59 30.60 442.12 1869.49

13 Less: Non-Tariff Income

16.03 8.47 0.52 1.47 0.57 2.85 29.91

14 Net fixed charges 444.99 723.60 30.58 171.12 30.03 439.27 1839.58

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4.153. The recovery of full fixed charges is allowed if the actual availability is equal to or more than the target availability. If the actual availability is lower than the target availability, the approved normative Fixed Charges are reduced proportionately in truing up of FY 2014-15 and FY 2015-16. In this regard, the Commission is of the view that additional liability towards pension and gratuity should not be considered in AFC for proportionate reduction in Fixed Charges as this is a sort of additional expenditure allowed separately and is not a part of AFC. Further, RVUN should be able to honour the payment to the fund as per the approval of the Commission. Hence, the Commission has not considered the additional liability towards pension and gratuity in Annual Fixed Charges for the purpose of proportionate reduction of Annual Fixed Charges for non-achievement of Target availability for FY 2014-15 and FY 2015-16.

Table 79: Approved AFC and AFC Reduced for not achieving Target Availability FY 2014-15 (Rs. Crore)

Station

AFC after true-

up excluding

Additional

Contribution

towards Pension

and Gratuity

Fund

Actual

Availability

Considered

by the

Commission

Normative

Availability

Reduced AFC

excluding

Additional

Contribution

towards Pension

and Gratuity Fund

AFC

reduced

KTPS (Unit 1-7) 430.57 87.98% 82.00% 430.57 0.00

STPS (Unit 1-6) 678.02 87.38% 82.00% 678.02 0.00

RGTPS 23.52 64.53% 70.00% 21.68 1.84

DCCPP 161.30 43.29% 80.00% 87.29 74.01

CTPP (Unit 1-2) 420.22 72.73% 80.00% 382.01 38.21

Total 1713.64

1599.57 114.06

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Table 80: Approved AFC and AFC Reduced for not achieving

Target Availability FY 2015-16 (Rs. Crore)

Station

AFC after true-up excluding

Additional Contribution

towards Pension and Gratuity

Fund

Actual Availability Considered

by the Commission

Normative Availability

Reduced AFC excluding Additional

Contribution towards Pension

and Gratuity Fund

AFC reduced

KTPS (Unit 1-7) 444.99 85.96% 82.00% 444.99 0.00

STPS (Unit 1-6) 723.60 82.80% 82.00% 723.60 0.00

RGTPS 30.58 56.18% 70.00% 24.55 6.04

DCCPP 171.12 34.80% 80.00% 74.43 96.68

CTPP (Unit 1-2) 439.27 44.01% 80.00% 241.65 197.62

Total 1809.55

1509.22 300.34

Variable Charges Commission’s Analysis

4.154. The Commission has computed the variable charges for FY 2014-15 and FY 2015-16 considering the approved performance parameters and actual fuel price and calorific value. RVUN in its additional submissions provided the month wise values of fuel price and calorific value and the same have been considered while approving energy charges. The variable charges computed by the Commission for FY 2014-15 and FY 2015-16 are as shown in the Table below:

Table 81: Variable Charges Approved by the Commission for FY 2014-15 Particulars KTPS STPS RGTPS DCCP CTPP

Petition Approved Petition Approved Petition Approved Petition Approved Petition Approved Capacity in (MW) 1240.00 1240.00 1500.00 1500.00 110.50 110.50 330.00 330.00 500.00 500.00

PLF 81.28% 81.28% 76.54% 76.54% 46.10% 46.14% 29.57% 29.55% 65.37% 65.37%

Unit Generated (MU)

8905.21 8905.21 10097.26 10097.26 457.01 457.01 878.70 878.70 2927.86 2927.86

Auxiliary Consumption

10.05% 9.27% 9.36% 9.00% 4.63% 2.40% 5.64% 2.93% 11.00% 9.00%

Units Sent out (MU) 8010.24 8079.70 9152.16 9188.51 435.85 446.03 829.14 852.92 2605.80 2664.35

SHR kcal/Kwh 3101.39 2561.70 2953.78 2476.28 2461.14 2218.79 2245.00 1979.27 3050.44 2316.54

Specific Indian Coal

0.615 0.487 0.606 0.508 0.000 0.000 0.000 0.000 0.618 0.471

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Particulars KTPS STPS RGTPS DCCP CTPP Petition Approved Petition Approved Petition Approved Petition Approved Petition Approved

consumption(kg/kwh) Specific imported Coal consumption(kg/kwh)

0.075 0.059 0.061 0.051 0.000 0.000 0.000 0.000 0.061 0.046

Specific Oil (HFO) Consumption (ml/Kwh)

0.74 0.50 0.58 0.50 0.00 0.00 0.00 0.00 1.17 0.42

Specific Oil (LDO) Consumption (ml/Kwh)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.21 0.08

Specific Oil (HSD) Consumption (ml/Kwh)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Specific gas consumption (scm/kWh)

0.00 0.00 0.00 0.00 0.51 0.46 0.25 0.22 0.00 0.00

GCV of Indian Coal(kcal/kg)

4478.77 4478.77 4233.52 4233.52 0.00 0.00 0.00 0.00 4283.42 4283.42

GCV of Imported Coal(kCal/kg)

6295.90 6295.90 6268.08 6268.08 0.00 0.00 0.00 0.00 6368.18 6368.18

GCV of Oil (HFO) (kcal/litre)

9945.10 9945.10 9761.74 9761.74 0.00 0.00 0.00 0.00 9939.23 9939.23

GCV of Oil (LDO) (kCal/litre)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 62114.37 62114.37

GCV of Oil (HSD) (kCal/litre)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

GCV of oil (kcal/litre)

0.00 0.00 0.00 0.00 9300.00 9300.00 0.00 0.00 0.00 0.00

GCV of gas (kCal/scm)

0.00 0.00 0.00 0.00 4851.39 4851.39 9136.59 9136.59 0.00 0.00

Price of Indian coal(Rs./kg)

4180.13 4152.15 5085.23 5084.98 0.00 0.00 0.00 0.00 3013.19 3016.61

Price of Imported coal (Rs./kg)

7816.38 7816.38 8402.34 8402.34 0.00 0.00 0.00 0.00 7862.48 7862.48

Price of Oil (HFO) (Rs/ KL)

43490.99 43490.99 46038.71 46038.71 0.00 0.00 0.00 0.00 43075.03 43075.03

Price of Oil (LDO) (Rs/ KL)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 62114.37 62114.37

Price of Oil (HSD) (Rs/ KL)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Price of Oil (Rs/L) 0.00 0.00 0.00 0.00 39875.91 39875.91 0.00 0.00 0.00 0.00 Price of gas (Rs/scm)

0.00 0.00 0.00 0.00 6.35 6.35 14.17 14.17 0.00 0.00

Cost of Coal (Rs. In Cr)

2813.48 2215.57 3628.70 3042.23 0.00 0.00 0.00 0.00 685.73 522.45

Cost of Oil (Rs. In Cr)

28.82 19.36 26.98 23.24 0.35 0.32 0.00 0.00 18.57 6.73

Cost of gas (Rs in Cr)

0.00 0.00 0.00 0.00 147.16 132.67 306.12 269.82 0.00 0.00

Other Variable Charges (Rs in Cr)

22.21 16.29 7.67 4.27 0.00 0.00 2.12 0.00 6.68 0.49

Variable Cost of generation (Rs.in Cr.)

2864.51 2251.23 3663.36 3069.74 147.52 132.99 308.24 269.82 710.98 529.67

Variable Charges (Rs. /kWh sent out)

3.58 2.79 4.00 3.34 3.38 2.98 3.72 3.16 2.73 1.99

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Table 82: Variable Charges Approved by the Commission for FY 2015-16

Particulars KTPS STPS RGTPS DCCP CTPP

Petition Approved Petition Approved Petition Approved Petition Approved Petition Approved

Capacity in (MW) 1240.00 1240.00 1500.00 1500.00 110.50 110.50 330.00 330.00 500.00 500.00

PLF 70.45% 70.45% 44.00% 44.00% 50.38% 50.54% 10.50% 10.04% 37.00% 37.00%

Unit Generated (MU) 7769.54 7769.54 5902.98 5902.98 501.55 501.55 330.03 330.03 1664.61 1664.61

Auxiliary Consumption 10.39% 9.27% 10.63% 9.00% 4.77% 2.63% 14.34% 2.82% 11.17% 9.00%

Units Sent out (MU) 6962.28 7049.30 5275.49 5371.71 477.63 488.37 282.70 320.74 1478.67 1514.80

SHR kcal/Kwh 2805.19 2561.70 2653.93 2476.28 2533.23 2115.35 2420.79 2031.18 2746.31 2312.31

Specific Indian Coal consumption(kg/kwh)

0.639 0.577 0.614 0.575 0.000 0.000 0.000 0.000 0.617 0.524

Specific imported Coal consumption(kg/kwh)

0.025 0.023 0.031 0.029 0.000 0.000 0.000 0.000 0.015 0.012

Specific Oil (HFO) Consumption (ml/Kwh)

0.79 0.50 1.33 0.50 0.00 0.00 0.00 0.00 0.00 0.00

Specific Oil (LDO) Consumption (ml/Kwh)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.32 0.05

Specific Oil (HSD) Consumption (ml/Kwh)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.64 0.45

Specific gas consumption (scm/kWh)

0.00 0.00 0.00 0.00 0.02 0.41 0.26 0.22 0.00 0.00

GCV of Indian Coal(kcal/kg)

4183.32 4183.32 3981.72 3981.72 0.00 0.00 0.00 0.00 4249.96 4249.96

GCV of Imported Coal(kCal/kg)

6305.41 6305.41 6328.73 7631.11 0.00 0.00 0.00 0.00 6357.01 6357.01

GCV of Oil (HFO) (kcal/litre)

9544.29 9544.29 9774.19 9774.19 0.00 0.00 0.00 0.00 0.00 0.00

GCV of Oil (LDO) (kCal/litre)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 12000.00 12000.00

GCV of Oil (HSD) (kCal/litre)

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10504.00 10504.00

GCV of oil (kcal/litre) 0.00 0.00 0.00 0.00 9300.00 9300.00 0.00 0.00 0.00 0.00

GCV of gas (kCal/scm) 0.00 0.00 0.00 0.00 5113.90 5113.90 9160.07 9160.07 0.00 0.00

Price of Indian coal(Rs./kg)

3907.75 3894.04 5348.94 5352.21 0.00 0.00 0.00 0.00 3300.05 3313.77

Price of Imported coal (Rs./kg)

7733.47 7733.47 7631.11 7631.11 0.00 0.00 0.00 0.00 7120.03 7120.03

Price of Oil (HFO) (Rs/ KL) 30521.22 30521.22 31168.68 31168.68 0.00 0.00 0.00 0.00 0.00 0.00

Price of Oil (LDO) (Rs/ KL) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 44407.29 44407.29

Price of Oil (HSD) (Rs/ KL) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 28967.89 28967.89

Price of Oil (Rs/L) 0.00 0.00 0.00 0.00 42978.89 42978.89 0.00 0.00 0.00 0.00

Price of gas (Rs/scm) 0.00 0.00 0.00 0.00 7.00 7.00 15.13 15.13 0.00 0.00

Cost of Coal (Rs. In Cr) 2090.50 1882.13 2079.04 1946.06 0.00 0.00 0.00 0.00 356.17 303.87

Cost of Oil (Rs. In Cr) 18.85 11.86 24.41 9.20 0.04 0.03 0.00 0.00 15.06 2.55

Cost of gas (Rs in Cr) 0.00 0.00 0.00 0.00 173.98 145.28 131.68 110.69 0.00 0.00

Other Variable Charges (Rs in Cr)

10.32 6.33 9.79 3.20 0.00 0.00 -1.79 0.00 25.64 3.89

Variable Cost of generation (Rs.in Cr.)

2119.67 1900.31 2113.24 1958.46 174.02 145.31 129.89 110.69 396.88 310.31

Variable Charges (Rs. /kWh sent out)

3.04 2.70 4.01 3.65 3.64 2.98 4.59 3.45 2.68 2.05

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4.155. Further, Regulation 57(2) of RERC Tariff Regulations, 2014 states as follows:

“57. Sharing of gains and losses on account of controllable factors (1) … (2) The Financial losses by a generating company on account of Station Heat Rate, Auxiliary Consumption and Secondary Fuel Oil Consumption shall be borne by the Generating Company”

4.156. Therefore, from the Regulation 57(2) of RERC Tariff Regulations 2014, it is clear that any loss on account of controllable factor has to be borne by the generator and no sharing of the same will be done. Therefore, the Commission in this order has not done the sharing of energy charges in accordance with Regulation 57(2) of RERC Tariff Regulations 2014.

4.157. Regulation 52 of the RERC Tariff Regulations, 2014 specifies that incentive shall be payable by the beneficiary at a flat rate of 30.0 paise/kWh for ex-bus scheduled energy corresponding to scheduled generation in excess of ex-bus energy corresponding to target Plant Load Factor. It further specifies that incentive shall be payable when the Capacity Index (CI) exceeds 90% for run-of-river hydel plants. For Mahi although, RVUN has submitted that the actual capacity Index for FY 2014-15 is 94.37% but it has not booked any revenue on this account. Hence the Commission has not allowed any incentive for Mahi for FY 2014-15. Against the Petitioner’s claim of incentive of Rs. 1.00 Crore in FY 2014-15, the Commission has not allowed any incentive as the Petitioner for FY 2014-15 and FY 2015-16 has not been able to achieve target PLF.

Revenue Side True Up RVUN’s Submission

4.158. RVUN has claimed the revenue for true up of FY 2014-15 as Rs. 7855.14 Crore and for FY 2015-16 as Rs. 6321.12 Crore.


4.159. The Commission has considered the revenue earned from fixed charges,

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variable charges including FPA and Incentive for carrying out the truing up for FY 2014-15 and FY 2015-16.

4.160. Based on the revenue details submitted by the Petitioner, the Commission observed that it has considered the Late Payment Surcharge as part of revenue while carrying out the truing up. Further, the Petitioner has considered the Late Payment Surcharge on the expenses side while carrying out the truing up. The Commission is of the view that Late Payment Surcharge is towards the delay in receipt of bills by the Petitioner beyond the due date. As the Commission approves the tariff on normative basis, the Commission has not considered the Late Payment Surcharge neither as part of revenue nor as part of expenses while carrying out the truing up.

4.161. Accordingly, the revenue considered by the Commission for truing up purposes is as shown in the Table below:

Table 83: Revenue Considered by the Commission for FY 2014-15 (Rs. Crore)

Station Fixed Charges Variable Charges FPA Total

KTPS (Unit 1to 7) 436.90 2619.35 -357.34 2698.92

STPS (Unit 1 to 6) 666.20 3276.49 -207.70 3734.99

DCCPP 79.68 250.39 5.57 335.63

CTPP (Unit 1-2) 376.36 568.04 -51.49 892.92

RGTPS 17.81 109.84 23.34 150.99

MAHI 17.05 4.76 0.00 21.81

Total for True-Up 1594.00 6828.87 -587.62

Revenue from Sale of power 7835.25

Revenue from Generation Incentive

1.00

Total Revenue 7836.25

Table 84: Revenue Considered by the Commission for FY 2015-16 (Rs. Crore)

Station Fixed Charges Variable Charges FPA Total

KTPS (Unit 1to 7) 472.21 2339.34 -418.95 2392.60

STPS (Unit 1 to 6) 715.53 1967.78 -77.05 2606.26

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DCCPP 74.91 87.35 6.09 168.36

CTPP (Unit 1-2) 215.87 325.32 -27.14 514.05

RGTPS 23.97 129.44 23.66 177.07

MAHI 24.75 5.02 0.00 29.77

Total for True-Up 1527.24 4854.26 -493.38

Revenue from Sale of power 5888.12


0.00


Summary of True Up RVUN’s submission

4.162. The summary of true up claimed by RVUN is as shown below:

Table 85: Summary of true up for FY 2014-15 claimed by RVUN (Rs. Crore)

Particulars As per

Commission’s Order

Actual/Audited FY 2014-15

Cost side True Up Total Fixed Cost 1715.83 1659.56 Variable cost 7693.95 7713.84 Add: PLF Based Incentive 0 1.00 Late payment surcharge 18.89 Total Expenses 9409.78 9393.28 Extra Cost running By RVUNL (A) -16.50

Revenue Side True up

Revenue From electricity (fixed And Energy charges) 9409.78 7835.25

Add: PLF Based Incentive 1.00 Late payment surcharge 18.89 Total Revenue 9409.78 7855.14 Extra Amount billed to Discom by RVUNL (B) -1554.64 Total True-Up Calculation Total Amount Sought from Discom C=(A+B) 1538.14

D. Additional gain of O&M expenses 66.97

E. Additional gain of IoWC 78.15

Total amount sought from Discom F=C+D+E 1683.26

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Table 86: Summary of true-up for FY 2015-16 claimed by RVUN (Rs. Crore)

Particulars As per

Commission’s Order

Actual/Audited FY 2015-16

Cost side True Up Total Fixed Cost 1867.58 1871.58

Variable cost 7968.12 4959.14

Add: PLF Based Incentive 0 0.00

Late Payment Surcharge 433.00

Total Expenses 9835.70 7263.72

Extra Cost running By RVUNL (A) -2571.98

Revenue Side True up

Revenue From electricity (fixed And Energy charges) 9835.70 5888.12

Add: PLF Based Incentive 0 0.00

Late Payment Surcharge 433.00

Total Revenue 9835.70 6321.12

Extra Amount billed to Discom by RVUNL (B) -3514.58

Total True-Up Calculation Total Amount Sought from Discom C=(A+B) 942.60

D. Additional gain of O&M expenses 12.42

E. Additional gain of IoWC 2.97

Total amount sought from Discom F=C+D+E 957.99

4.163. RVUN has claimed the net gap of Rs. 1683.26 Crore on true-up for FY 2014-15 and the net gap of Rs. 957.99 Crore on true-up for FY 2015-16.


4.164. Based on component wise cost and revenue approved as discussed above, the summary of True Up for FY 2014-15 and FY 2015-16 as approved by the Commission with respect to Petitioner’s claim and computations of same are as shown below:

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Table 87: Summary of True Up approved for FY 2014-15 (Rs. Crore) Particulars Tariff Order Actual Trued-up Deviation Efficiency

(Gain)/Loss Net entitlement

O&M charges 591.19 549.42 591.18

591.18

Depreciation charges

438.73 473.39 455.23

455.23

Finance Charges 6.50 413.17 385.62

385.62

Interest on term loan 413.45

0.00 Interest on transitional loans 30.64 60.61 60.61

Interest on WC 273.70 256.95 253.55 3.39 1.70 255.25

AAD 0.00 0.00 0.00

0.00

Insurance on fixed assets

10.69 9.18 9.18

9.18

Recovery of ARR & Tariff Petition fees

1.92 3.83 1.91

1.91

Additional liability towards pension and gratuity

0.00 5.00 5.00

5.00

Prior period charges 0.00 0.00 0.00

0.00

Gross Fixed Charges 1736.18 1741.58 1762.28 3.39 1.70 1763.98

Variable Cost 7693.95 7669.99 6253.45

6253.45

Late Payment Surcharge

18.89 0.00

0.00

Generation Incentive 0.00

0.00

ARR 9430.13 9430.46 8015.73

8017.43

Revenue from sale of power

7835.25 7835.25

7835.25


1.00 0.00

0.00

Non-Tariff Income 23.28 23.28

23.28

Late Payment Surcharge

18.89 0.00

0.00

Revenue pertaining to previous years

0.00 0.00

0.00

Revenue loss due to higher auxiliary consumption

58.24

0.00

Total Revenue

7858.53

Gap/(Surplus)

158.89

Reduction in AFC 114.06

Net Gap/(Surplus) 44.83

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Table 88: Summary of True Up approved for FY 2015-16 (Rs. Crore)

Particulars Tariff Order Actual Trued-

up Deviation Efficiency (Gain)/Loss

Net entitlement

O&M charges 625.77 641.25 625.76

625.76

Depreciation charges 423.20 439.56 431.77

431.77

Interest on term loan & Finance charges 358.89

366.05 343.53

343.53

Interest on transitional loans 10.18 51.78 51.78

RoE 139.05 142.06 140.68

140.68

Tax on RoE 0.00 0.00 0.00

0.00

Interest on WC 292.12 275.08 271.53 3.55 1.78 273.31

AAD 0.00 0.00 0.00

0.00

Insurance on fixed assets 10.53 9.71 9.71

9.71

Recovery of ARR & Tariff Petition fees 1.92 1.92 1.91

1.91

Additional liability towards pension and gratuity 35.32 0.00 0.00

0.00

Prior period charges 0.00 1.69 -7.18

-7.18


Variable Cost 0 4906.15 4425.07

4425.07

Late Payment Surcharge 433.00 0.00

0.00

0.00

ARR 1886.80 6793.65 6294.57

6296.34

Revenue from sale of power 5888.12 5888.12

5888.12

Revenue from Generation Incentive 0.00 0.00

0.00

Late Payment Surcharge 433.00 0.00

0.00

Non-Tariff Income 29.91 29.91

29.91

Revenue pertaining to previous years 0.00 0.00

0.00

Revenue loss due to higher auxiliary consumption

87.74

0.00


Gap/(Surplus) 378.31

Reduction in AFC 300.34

Net Gap/(Surplus) 77.98

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Table 89: Summary of True Up for FY 2014-15 (Rs. Crore)

Particulars Petition Approved after

sharing of gains and losses

Cost side True Up Fixed Cost Less Non-Tariff Income 1804.68 1740.70


PLF Incentive 1.00 0.00

Late payment surcharge 18.89 0.00

Less: Reduction in AFC due to non-achievement of Target Availability

0.00 -114.06

TOTAL (A) 9538.40 7880.09

Revenue Side True up Revenue From sale of electricity 7835.25 7835.25

Add: PLF Based Incentive 1.00 0.00

Late payment surcharge 18.89 0.00

TOTAL (B) 7855.14 7835.25

Net Revenue Gap (C=A-B) 1683.26 44.83

Table 90: Summary of True Up for FY 2015-16 (Rs. Crore)

Particulars Petition Approved after

sharing of gains and losses

Cost side True Up Fixed Cost Less Non-Tariff Income 1886.97 1841.36


PLF Incentive 0.00 0.00

Late Payment surcharge 433.00 0.00

Less: Reduction in AFC due to non-achievement of Target Availability

0.00 -300.34

TOTAL (A) 7279.11 5966.09

Revenue Side True up Revenue From sale of electricity 5888.12 5888.12

Add: PLF Based Incentive 0.00 0.00

Late Payment surcharge 433.00 0.00

TOTAL (B) 6321.12 5888.12

Net Revenue surplus (C=A-B) 957.99 77.98

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4.165. Accordingly, the Commission has approved the revenue gap of Rs. 44.83 Crore as against the revenue gap of Rs. 1683.26 Crore claimed by RVUN for FY 2014-15. Similarly, the Commission has approved the revenue gap of Rs. 77.98 Crore as against the revenue gap of Rs. 957.99 Crore claimed by RVUN for FY 2015-16. The Commission allows RVUN to recover the approved revenue gap of Rs. 44.83 Crore and Rs. 77.98 Crore from the Discoms in the ratio of total energy purchased by them in FY 2014-15 and FY 2015-16.

True-up of MMH Plants: RVUN’s Submission

4.166. RVUN submitted that as per the decision of the Commission in the order dated 06.06.2013 in the true up of FY 2009-10, the Commission stated that the tariff already allowed for MMH projects under RERC Tariff Regulations 2009 is not subject to Annual Performance Review, therefore RVUN has not filed the Annual Performance Review petition for MMH for the control period from FY 2010-14 and FY 2015-16.

4.167. It is observed that during FY 2009-10 to FY 2015-16, due to non-filing of ARR, Annual Performance Review and adoption of constant tariff of Rs. 3.78 per unit, RVUN has incurred losses of Rs. 28.17 crore in MMH power plant.

4.168. Further, the Commission under regulation 58 of RERC Tariff Regulations 2014 has again fixed the same tariff of Rs 3.78/kWh, as it was allowed under regulation 82 (2) (d) of RERC Tariff Regulations 2009. It is observed that the yearly expenditure of MMH is increasing on YOY as the units are very old and the tariff allowed by the Regulatory Commission of 3.78 kWh of year 2009 is insufficient to meet the yearly expenditure of MMH. Secondly, these mini micro plants are situated on canals and generation of electricity is only possible on release of water, most of the time machines are available but due to unavailability of water, we could not generate the power.

4.169. Regulation 94 to 96 of RERC Tariff Regulations empowers the Hon’ble Commission, to deviate from any of the provisions contained in these Regulations, provided that the reasons for such deviation shall be recorded

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in writing.

4.170. Therefore, RVUN has requested the Commission to also carry out the Annual Performance Review of MMH power plant in line with other plants. As also done by the Commission for the concerned period 2004-05 to 2008-09 vide order dated 27.04.2011. RVUN has submitted a separate chapter of MMH true up and has requested the Commission to approve the same.

Commission’s Analysis:

4.171. In this regard it may be observed that Commission while framing the Tariff Regulations, 2009 introduced the tariff of MMH Plants. Commission in its Memo on Statement of objects and reasons and consideration of comments /objections/ suggestions, issued on 23.01.2009 dealt this issue and recorded as under:

“55.---------------------- Regarding O&M expenses for Mini and Micro Hydel stations, as per the Notification of MNRE, any hydel station with capacity lower than 25 MW is considered as a Renewable Energy Source. Accordingly, the Commission has in Clause 82(7) separately specified the single part tariff for Mini and Micro hydel stations. O&M expense norms for Mahi hydel station has been revised after considering the last five years actual O&M expenses and the corresponding modifications have been made in the Regulations.”

4.172. Since these Plants were considered as Renewable Energy Sources single part generic tariff was allowed and considering the same, Commission in its order dt. 06.06.2013 declined to true up the same. Keeping the same view the tariff allowed for MMH Plants cannot be trued up.

4.173. Regulation 58 of RERC Tariff Regulations, 2014 specifically spells out the tariff for existing Mini and Micro hydel generation plants. The tariff for next 5 years period has been stipulated as Rs. 3.78 per kWh. Therefore, question of allowing expenses like O & M, depreciation, interest and finance expenses, interest on working capital, insurance expense, additional liability towards pension and gratuity etc. does not arise. As per Regulations whatever quantum of energy is generated and supplied to the Discoms, the same can be billed on rate of Rs. 3.78/ kWh only and not beyond this.

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4 SECTION 5 Determination of ARR and Tariff for FY 2017-18

5.1 RVUN filed the petition for approval of ARR and Tariff for FY 2017-18 for following generating stations:

(i) Kota Thermal Power Station (KTPS) (Unit 1 to 7)

(ii) Suratgarh Thermal Power Station (STPS) (Unit 1 to 6)

(iii) Ramgarh Gas Thermal Power Station (RGTPS)

(iv) Ramgarh Gas Thermal Power Plant (RGTPS) (Stage III)

(v) Dholpur Combined Cycle Gas based Thermal Power Plant (DCCPP)

(vi) Chhabra Thermal Power Station (CTPP) (Unit 1 to 4)

(vii) Kalisindh Thermal Power Station (KaTPP) (Unit 1 to 2)

(viii) Mahi Hydel Power Project (MAHI)

5.2 The Commission in this section has determined the Tariff for the stations KTPS (Unit 1-7), STPS (Unit 1-6), RGTPS, DCCPP, CTPP (Unit 1-2) and Mahi. For the new Stations for which the final capital cost is yet to be approved by the Commission, the provisional Tariff has been determined in the following section.

5.3 The Annual Fixed Charges comprise of the following elements:

(i) Operation and Maintenance (O&M) Expenses

(ii) Depreciation

(iii) Interest on Term Loans

(iv) Interest on Transitional Loans

(v) Finance Charges

(vi) Return on Equity

(vii) Interest on Working Capital

(viii) Insurance Charges

(ix) Less: Non-tariff Income

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5.4 Each of the annual fixed charges elements has been dealt with in the following paragraphs.

Operation and Maintenance Expenses RVUN’s Submission

5.5 RVUN submitted that the Operation & Maintenance Expenses for FY 2017-18 have been computed on the basis of norms prescribed under Regulation 47 of RERC Tariff Regulations, 2014.

5.6 The details of the O&M expenses as claimed in petition for FY 2017-18 are as shown in the Table below:

Table 91: O&M Expenses as per Petition for FY 2017-18 (Rs. Crore)

Particular KTPS (Unit 1-7)

STPS (Unit 1-6)

CTPP (Unit 1-2) DCCPP RGTPS

(110.5 MW) Mahi Total

As per petition 236.62 286.23 95.41 47.20 19.18 16.47 701.11


5.7 The Commission has verified RVUN’s computations of normative O&M expenses and found it to be in order as per provisions of the Regulations and accordingly, the same has been approved.

5.8 The O&M expenses as approved by the Commission for FY 2017-18 are as shown in the Table below:

Table 92: O&M Expenses approved for FY 2017-18(Rs. Crore)


STPS (Unit 1-6)



As per petition 236.62 286.23 95.41 47.20 19.18 16.47 701.11

Approved 236.62 286.23 95.41 47.20 19.19 16.47 701.11

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5.9 RVUN submitted that it has considered the capital cost of KTPS Unit 1-6 and Unit 7 as Rs. 1190.93 Crore and Rs. 851.85 Crore respectively as per true-up petition of FY 2014-15 as on 01.04.2015. Further, in FY 2015-16 RVUN has booked an additional capitalisation of Rs. 66.99 Crore and Rs. 8.91 Crore towards KTPS Unit 1-6 and Unit 7 respectively in accordance with Regulation 19 of RERC Tariff Regulations, 2009. While computing the depreciation, these additional capitalisations have also been considered.

5.10 RVUN submitted that it has considered the capital cost of STPS Unit 1-5 and Unit 6 as Rs. 4228.15 Crore and Rs. 1104.84 Crore respectively as per true-up petition of FY 2014-15 as on 01.04.2015. Further, in FY 2014-15, RVUN has booked the additional capitalisation of Rs. 3.867 Crore towards STPS Unit 1-5 and Rs. 78.06 Crore towards STPS Unit 6. In FY 2015-16, RVUN has booked the additional capitalisation of Rs. 2.78 Crore towards STPS Unit 1-5 While computing the depreciation these additional capitalisations has also been considered.

5.11 RVUN submitted that the CTPP Unit 1 and Unit 2 had achieved COD on 11.06.2010 and 15.10.2011 respectively. The Commission vide its order dated 06.06.2013 had approved the final capital cost of CTPP (Unit 1-2) as Rs. 2416 Crore as against Rs. 2718 Crore claimed by RVUN. Further during the true-up of FY 2013-14, the Commission has approved the additional capitalisation of Rs. 17.62 Crore and Rs. 27.06 Crore against the RVUN claim of Rs. 18.16 Crore and Rs. 37.63 Crore for FY 2012-13 and FY 2013-14 respectively. Against the disallowance of additional capitalisation, RVUN filed a Review Petition dated 15.11.2016 and the Commission has dismissed the petition. Accordingly, RVUN has considered the Capital Cost of CTPP Unit 1 & 2 as Rs. 2460.68 Crore as on 31.03.2014. Further, during FY 2014-15 and FY 2015-16, RVUN has submitted that it has booked the additional capitalisation of Rs. 15.28 Crore and Rs. 3.31 Crore respectively in accordance with Regulation 19 of RERC Tariff Regulations, 2009. While

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computing the additional depreciation, these additional capitalisations have also been considered by RVUN.

5.12 RVUN submitted that it has considered the opening balance of Capital cost of DCCPP as Rs. 1115 Crore as per Commission’s order dated 17.10.2016. Further, it has included the additional capitalisation of Rs. 0.39 Crore and Rs.3.99 Crore for FY 2014-15 and FY 2015-16.

5.13 RVUN submitted that it has considered the opening balance of Capital cost of RGTPP Stage 1 & 2 (110.5 MW) as Rs. 311.08 Crore as per Commission’s order dated 17.10.2016. Further, RVUN has incurred the additional capitalisation of Rs. 0.20 Crore and Rs. 0.05 Crore in FY 2014-15 and FY 2015-16 towards Furniture and Office equipment and the same has also been considered while computing the depreciation.

5.14 RVUN submitted that it has considered the opening balance of capital cost of Mahi as Rs. 259.02 Crore as per Commission’s order dated 17.10.2016.

5.15 The details of depreciation as claimed in the petition for FY 2017-18 are as follows:

Table 93: Depreciation as per Petition for FY 2017-18 (Rs. Crore)


STPS (Unit 1-6)



As per petition 83.66 154.21 125.71 58.08 14.93 4.19 440.78


5.16 The Commission has approved the Depreciation for FY 2017-18 in accordance with Regulation 22 of RERC Tariff Regulations, 2014.

5.17 Regarding the additional capitalisation claimed by RVUN for FY 2014-15 and FY 2015-16, the Commission has dealt with this issue in detail in Section 4 of this order on true up for FY 2014-15 and FY 2015-16.

5.18 In light of the above, for KTPS (Unit 1-7), STPS (Unit 1-6), RGTPS, DCCPP, CTPP

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(Unit 1-2), the Commission has considered the closing GFA for FY 2016-17 approved in the Tariff Order for FY 2016-17 as the opening GFA for FY 2017-18. In addition, the Commission has revised the opening GFA for FY 2017-18 for those stations for which the additional capitalisation has been approved for FY 2014-15 and FY 2015-16 in this order while carrying out the truing up of FY 2014-15 and FY 2015-16.

5.19 For KTPS (Unit 1 to 6), STPS (Unit 1 to 5), RGTPS, DCCPP and Mahi, depreciation has been computed as per the approach adopted in MYT Order for FY 2009-10 to FY 2013-14. The Commission has computed the depreciation for the Control Period in the following manner:

(i) Considered Accumulated Depreciation till FY 2016-17 by adding year-wise depreciation allowed in Tariff Orders/True up orders from FY 2009-10 to FY 2016-17 to the accumulated depreciation till FY 2009-10.

(ii) Depreciation @5.28% if the Station/Stage/Unit has not completed 12 years life from the date of commissioning.

(iii) If the Station/Stage/Unit has completed 12 years life, depreciation computed by spreading remaining depreciation to be charged over the balance useful life of the asset.

5.20 In line with the approach adopted by the Commission in the approval of tariff for previous years, the Commission has not considered any additional capitalisation for FY 2017-18. The Commission may consider the additional capitalisation for FY 2017-18, if any, during the truing up exercise in accordance with the Regulations.

Table 94: Asset class wise GFA details (Rs. Crore)


KTPS (Unit 7) STPS (Unit 6) CTPP (Unit 1-2)

At the beginning

of the year

At the end of

the year

At the beginning

of the year

At the end of

the year

At the beginning

of the year

At the end of

the year

Land & Land Rights 0.00% 0.00 0.00 0.00 0.00 12.73 12.73

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Building & Civil Works of Power Plants

3.34% 126.19 126.19 209.48 209.48 257.85 257.85

Hydraulic Works 5.28% 10.98 10.98 15.73 15.73 21.47 21.47

Other Civil Works 3.34% 4.70 4.70 7.10 7.10 88.55 88.55

Plant & Machinery 5.28% 705.38 705.38 768.70 768.70 2005.79 2005.79

Lines & Cable Net work 5.28% 0.00 0.00 0.45 0.45 28.97 28.97

Vehicles 9.50% 0.00 0.00 0.00 0.00 0.12 0.12

Furniture & Fixtures 6.33% 0.04 0.04 0.10 0.10 0.72 0.72

Office Equipment 6.33% -3.19 -3.19 4.63 4.63 6.84 6.84

Capital Spares 5.28% 7.76 7.76 20.60 20.60 37.66 37.66

Total 851.86 851.86 1026.79 1026.79 2460.69 2460.69



DCCPP

At the beginning

of the year

At the end of

the year

Land & Land Rights 0.00% 2.86 2.86

Building & Civil Works of Power Plants

3.34% 39.11 39.11

Hydraulic Works 5.28% 14.96 14.96

Other Civil Works 3.34% 2.86 2.86

Plant & Machinery 5.28% 1011.09 1011.09

Lines & Cable Net work 5.28% 2.45 2.45

Vehicles 9.50% 0.12 0.12

Furniture & Fixtures 6.33% 0.80 0.80

Office Equipment 6.33% 0.12 0.12

Capital Spares 5.28% 40.61 40.61

Total 1115.00 1115.00

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Table 96: Details of depreciation as per MYT for existing stations (Rs. Crore)

Particulars

KTPS (Unit 1-6)

STPS (Unit 1-5)

RGTPS MAHI

Capital Cost 1185.17 4223.32 311.08 259.02 90% depreciable value 1066.65 3800.99 279.97 233.11 Total Dep. Allowed up to FY 2013-14 690.84 2522.10 268.70 185.37

Dep. Allowed in FY 2014-15 48.11 135.84 1.88 6.41 Dep. Allowed in FY 2015-16 36.49 113.63 1.88 6.41 Total Dep. Allowed up to FY 2015-16 775.44 2771.58 272.47 198.20

Dep. Allowed for FY 2017-18 25.41 113.63 1.88 6.41 Total Dep. Allowed up to FY 2017-18 831.06 2998.84 276.24 211.03

5.21 Accordingly, the depreciation approved by the Commission for FY 2017-18, is as shown in the Table below:

Table 97: Depreciation approved for FY 2017-18 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2) DCCPP

RGTPS (110.5 MW)

Mahi Total

As per petition 83.66 154.21 125.71 58.08 14.93 4.19 440.78

Approved 71.11 163.98 123.33 57.92 1.88 6.41 424.64

Interest on Term Loan RVUN’s Submission

5.22 RVUN submitted that the loan wise interest expenses and finance charges include term loans as well as transitional loans. The loan repayment for terms loans and transitional loans combined has been taken to be equal to depreciation for the year. RVUN has computed the interest on term loan in accordance with Regulation 21 of RERC Tariff Regulations, 2014.

5.23 RVUN has not provided the interest charges on long term loans and the interest charges on transitional loans separately. The details of interest charges on long term loans and transitional loan as submitted by RVUN in its

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petition for FY 2017-18 has been provided in the table below:

Table 98: Interest on Term Loan and Transitional Loan as submitted in Petition for FY 2017-18 (Rs. Crore)


STPS (Unit 1-6)



As per petition 39.51 64.38 148.55 17.60 0.00 0.00 270.04


5.24 The Commission has considered the closing term loan balance approved for FY 2016-17 in the tariff order for FY 2016-17 as the opening loan balance for FY 2017-18. The allowable depreciation for the year has been considered as the normative repayment for the year.

5.25 As per Regulation 21 (5) of RERC Tariff Regulations, 2014, the rate of interest to be considered is weighted average rate of interest calculated on the basis of the actual loan portfolio at the beginning of each year. In accordance with this Regulation, the Commission in its data gaps had asked RVUN to submit the details of the actual loans for considering the average interest rate along with the supporting computations.

5.26 The RVUN has not replied for the same. Hence, Commission has provisionally considered the rate of interest as submitted by the Petitioner.

Table 99: Weighted Average Interest Rate as considered by the Commission for FY 2017-18

Station/Unit Interest Rate KTPS(Unit 1-6) 9.07% KTPS(Unit 7) 9.07% STPS (Unit 1-5) 12.50% STPS (Unit 6) 12.50% DCCPP 12.70% RGTPS (110.5 MW) 12.50% CTPP (Unit 1&2) 12.50%

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5.27 The Commission in its data gap asked RVUN to submit the basis of claiming the finance charge for FY 2017-18. RVUN in replies to the data gaps submitted that finance charges are claimed as actual paid to the Government as levy/commission against rendering guarantee on working capital loan specific to each station. The Commission at this stage has provisionally approved the finance charges as claimed by RVUN. However, the same shall be subject to truing up at the time of final true up exercise for FY 2017-18.

Table 100: Interest and Finance Charges on Term Loans as approved by the Commission for FY 2017-18 (Rs. Crore)

Power station

Opening Balance

for FY 2017-18

Addition Repayment

(Equivalent to depreciation)

Closing Balance

for FY 2017-18

Rate of Interest

Interest Paid

Finance Charges

Total Int &

Finance Charges

KTPS (Unit 1 to 6) 53.59 0.00 28.70 24.88 9.07% 3.56 0.00 3.56

KTPS (Unit 7) 363.53 0.00 42.41 321.12 9.07% 31.05 0.70 31.75 STPS (Unit 1 to 5) 0.00 0.00 0.00 0.00 12.50% 0.00 0.00 0.00

STPS Unit 6 458.69 0.00 50.06 408.62 12.50% 54.21 0.05 54.26 CTPP (Unit 1 to 2) 1227.79 0.00 123.33 1104.46 12.50% 145.77 1.00 146.77

RGTPS (110.5 MW) 0.00 0.00 0.00 0.00 12.50% 0.00 0.00 0.00

DCCPP 203.52 0.00 57.92 145.59 12.70% 22.17 0.05 22.22

Total 2307.10 0.00 302.42 2004.68 256.75 1.80 258.55

Interest on Transitional Loans RVUN’s Submission

5.28 As discussed earlier in this Order, RVUN has not provided separately the interest charges on long term loans and the interest charges on transitional loans.


5.29 The Commission in this order has carried out the final true up for FY 2014-15 and FY 2015-16. Considering the closing balance for FY 2015-16, the Commission has worked out the opening balance for FY 2017-18 in line with

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the approach adopted in its previous tariff orders. The interest on transitional loans approved by the Commission is as shown in the Table below:

Table 101: Interest on Transitional Loans approved by the Commission (Rs. Crore)



2 Depreciation allowed by the commission in MYT order

28.70 113.92 1.88 57.92



0.00 113.92 1.88 0.00

5 Repayment from AAD 0.00 0.00 0.00 0.00


7 Interest@ 9.895% the weighted average rate of interest on transitional loans.

0.00 24.98 0.04 2.41


5.30 RVUN submitted that the requirement for working capital loan has been computed on the basis of Regulation 27 of RERC Tariff Regulations, 2014 and the rate of interest on Working Capital Loan has been taken equal to 250 basis points higher than the average Base Rate of State Bank of India prevalent during first six months of the previous year.

5.31 The details of interest on working capital as claimed in petition for FY 2017-18 have been provided in the table below:

Table 102: Interest on Working Capital as per Petition for FY 2017-18 (Rs. Crore)


STPS (Unit 1-6)



As per petition 87.89 131.83 32.68 20.17 4.10 1.16 277.83

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5.32 Regulation 27(2) of the RERC Tariff Regulations, 2014 specifies that the rate of interest on working capital to be computed shall be on normative basis and shall be 250 basis points higher from SBI base rate prevalent during first six months of the year previous to the relevant year. Accordingly, for working out interest on working capital, weighted rate of interest has been considered as per admissible rates during the previous year. The same works out to 11.80% p.a. which has been used for calculating interest on working capital. The computation of the bank rate is as shown in the Table below:

Table 103: Computations of Bank rate as considered by the Commission for FY 2017-18

Month No. of Days

SBI Base Rate

250 Basis Point

Approved Interest

Rate

Apr-16 30 9.30%

2.50% 11.80%

May-16 31 9.30%

Jun-16 30 9.30%

Jul-16 31 9.30%

Aug-16 31 9.30%

Sep-16 30 9.30%

5.33 Further, the Commission has worked out the working capital requirement in accordance with Regulation 27 of the RERC Tariff Regulations, 2014. The interest on working capital as approved by the Commission for FY 2017-18 has been provided in the table below:

Table 104: Approved Interest on working Capital (Rs. Crore)


STPS (Unit 1-6)


RGTPS (110.5 MW)

Mahi Total

As per petition 87.89 131.83 32.68 20.17 4.10 1.16 277.83

Approved 87.36 132.14 32.61 20.27 3.95 1.19 277.52

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Return on Equity RVUN’s Submission

5.34 RVUN has claimed RoE at the rate of 15.50% for FY 2017-18 in accordance with Regulation 20 of RERC Tariff Regulations, 2014.

5.35 The details of Return on equity as claimed in petition for FY 2017-18 has been provided in the table below:

Table 105: Return on Equity as per petition for FY 2017-18 (Rs. Crore)


STPS (Unit 1-6)



As per petition 79.61 185.93 77.83 53.99 18.63 26.42 442.41


5.36 The GoR in its letter dated 18.03.2015 has allowed rate of RoE as 5% in FY 2015-16, 10% in FY 2016-17 and 15.50% in FY 2017-18 onwards. However, in the revised letter of Government of Rajasthan (GOR) dated 21.03.2016, the rate of RoE from FY 2016-17 is revised to 15.50 %. Therefore, the Commission has approved the ROE for FY 2017-18 as per the latest order of GoR and in accordance with the Regulation 20 of the RERC Tariff Regulations, 2014.

5.37 The Commission observed that equity as considered by RVUN while computing RoE for FY 2017-18 is higher than the equity approved by the Commission. The Commission has considered the closing equity base approved for FY 2016-17 in the tariff order for FY 2016-17 as the opening equity base for FY 2017-18. Further, the Commission has also considered the equity addition in FY 2014-15 and FY 2015-16 in the opening equity on account of the approved additional capitalisation in this order.

5.38 Hence, in view of the above, the Commission approves ROE at the rate of 15.50% for FY 2017-18, as shown in the Table below:

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Table 106: Approved Return on Equity (Rs. Crore)


STPS (Unit 1-6)


RGTPS (110.5 MW)

Mahi Total

As per petition 79.61 185.93 77.83 53.99 18.63 26.42 442.41 Approved 78.13 182.19 76.97 53.79 18.62 26.41 436.11 Recovery of ARR and Tariff Petition Fees RVUN’s Submission

5.39 The recovery of ARR and tariff petition fees as proposed by RVUN for FY 2017-18 is provided in the table below:

Table 107: ARR and Tariff Petition Fees as per petition for FY 2017-18


STPS (Unit 1-

6)

CTPP (Unit 1-

2) DCCPP

RGTPS (110.5 MW)

Mahi Total

As per petition 0.62 0.75 0.25 0.17 0.06 0.07 1.92


5.40 The Commission has computed the ARR and Tariff Petition Fees at the rate of Rs. 5000/MW for all the generating stations as shown in the Table below:

Table 108: ARR and Tariff Petition Fees Approved for FY 2017-18 (Rs. Crore)


STPS (Unit 1-6)



As per petition 0.62 0.75 0.25 0.17 0.06 0.07 1.92 Approved 0.62 0.75 0.25 0.17 0.06 0.07 1.92

Insurance Charges RVUN’s Submission

5.41 RVUN in its petition has claimed insurance charges for FY 2017-18 based on the estimates of actual insurance charges paid in the preceding year with an increment of 5% YoY (Year on Year). The details are as shown below:

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Table 109: Insurance Charges as claimed in petition (Rs. Crore)


STPS (Unit 1-6)


RGTPS (110.5 MW)

Mahi Total

As per petition 3.14 2.87 3.40 0.93 0.32 0.00 10.66 Commission’s Analysis

5.42 The Commission has approved the insurance charges in this order as claimed by RVUN. Any variation shall be adjusted during the truing up exercise for FY 2017-18. The insurance charges as approved by the Commission are as follows:

Table 110: Insurance Charges Approved for FY 2017-18


STPS (Unit 1-6)


RGTPS (110.5 MW)

Mahi Total



5.43 RVUN in its petition submitted that the main heads of Non-Tariff Income are Sale of Scrap, interest on FD/Staff loans, miscellaneous receipts (rebates), etc. The Non-tariff income as proposed by RVUN is provided in the table below:

Table 111: Non-Tariff Income as claimed by RVUN (Rs. Crore)


STPS (Unit 1-6)



As per petition 18.19 8.93 3.14 1.63 0.57 0.63 33.09


5.44 The Commission has approved the Non-Tariff Income for FY 2017-18 as

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claimed by the Petitioner as shown in the Table below:

Table 112: Non-Tariff Income Approved for FY 2017-18(Rs. Crore)


STPS (Unit 1-6)


RGTPS (110.5 MW)

Mahi Total


Adjustment of Excess Depreciation Commission’s Analysis

5.45 The Commission has approved the AAD till FY 2008-09 in accordance with the applicable Tariff Regulations as shown in the Table below:

Table 113: AAD approved by the Commission (Rs. Crore)

Particulars FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 Total

Tariff Order

Trued -up

Tariff Order

Trued -up

Tariff Order

Trued –up

Tariff Order

Trued -up

Tariff Order

Trued –up

Tariff Order

Trued -up

KTPS (Unit 1-6) 0.13 0.00 9.14 44.99 14.94 52.23 55.55 55.55 53.23 53.23 132.99 206.00 STPS (Unit 1-5) 0.26 0.00 37.05 23.70 62.45 28.51 109.74 109.74 293.19 293.19 502.69 455.14 RGTPS 0.01 0.00 3.75 3.48 5.97 3.95 7.32 7.32 10.36 10.36 27.41 25.11 DCCPP 9.41 7.00 0.00 0.00 9.41 7.00 Mahi 0.00 0.00 1.47 0.00 1.62 0.49 (3.42) (3.43) 0.11 0.11 (0.22) (2.83) MMH 0.00 0.00 0.26 0.21 0.44 0.24 0.70 0.70 1.31 1.31 2.71 2.46 Total 0.40 0.00 51.67 72.38 85.42 85.42 179.30 176.88 358.20 358.20 674.99 692.88

5.46 Further, the Commission has carried out the adjustment of Rs. 1.85 Crore in truing up for FY 2009-10 and Rs. 8.33 Crore in truing up for FY 2013-14 for RGTPS in its order dated 17.10.2016.

5.47 The Commission, in the MYT order for the Control Period FY 2009-10 to FY 2013-14, while working out the remaining depreciable value for each station has considered only the depreciation and not the AAD allowed till FY 2008-09.

5.48 The Commission finds that the outstanding balance of transitional loan is getting repaid completely for all stations while the outstanding balance for RGTPS and KTPS is already zero in FY 2017-18. However, the depreciation is allowable for those stations in accordance with the Tariff Regulations. The

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advance against depreciation allowed by the Commission was for the repayment of term loans and the transitional loans. Also, the term loans for some of the old stations have already been repaid in full. Hence, the depreciation including advance against depreciation over and above the repayment of the term loans and the transitional loans is in excess with RVUN. As the loan repayments are getting over, for which the advance against depreciation was allowed to RVUN, the advance against depreciation allowed needs to be adjusted to ensure that the total depreciation allowed for each station is equivalent to total depreciable value. Accordingly, the Commission has adjusted such advance against depreciation from the AFC for the respective stations for FY 2017-18 as shown in the Table below:

Table 114: Adjustment of Advance Against Depreciation (Rs. Crore)

Particulars FY 2017-18

KTPS STPS RGTPS DCCPP Total

AAD allowed till FY 2008-09 and after adjustment in FY 2009-10 187.62 455.14 13.05 7.00

Outstanding Transitional loan balance

0.00 309.44 0.72 24.37

Depreciation for the year 28.70 113.92 1.88 57.92

Repayment of LT Loan 28.70 0.00 0.00 57.92

Balance Depreciation available for repayment of transitional loan

0.00 113.92 1.88 0.00

Repayment of transitional Loan 0.00 113.92 0.72 0.00

Excess depreciation to be deducted from ARR

0.00 0.00 1.17 0.00 1.17

5.49 The Commission in its order dated 17.10.2016 also stated that it shall carry out this adjustment of advance against depreciation for each year from FY 2016-17 onwards till the cumulative adjustment reaches equal to the AAD allowed by the Commission for the respective stations. Similar approach has been adopted here in this order also.

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Annual Fixed Charge for FY 2017-18

5.50 Based on the above analysis, the approved Station wise Fixed Charges for FY 2017-18 is as shown in the Table below:

Table 115: Approved Annual Fixed Charges for FY 2017-18 (Rs. Crore)

Particulars KTPS (Unit 1-7) STPS (Unit 1-6) CTPP (Unit 1-2) Petition Approved Petition Approved Petition Approved

Interest on Term Loans and Finance Charges 39.51

35.31 64.38

54.26 148.55 146.77

Interest on Transitional Loan 0.00 24.98 0.00 0.00

Depreciation 83.66 71.11 154.21 163.98 125.71 123.33

O & M Expenses 236.62 236.62 286.23 286.23 95.41 95.41

Return on Equity 79.61 78.13 185.93 182.19 77.83 76.97

Interest on WC 87.89 87.36 131.83 132.14 32.68 32.61

Recovery of ARR & Tariff Petition fees 0.62 0.62 0.75 0.75 0.25 0.25

Insurance Charges 3.14 3.14 2.87 2.87 3.40 3.40


Non-Tariff Income 18.19 18.19 8.93 8.93 3.14 3.14

Adjustment of excess depreciation 0.00 0.00 0.00 0.00 0.00 0.00

Net Fixed Cost (i.e. Capacity Charges) 512.86 494.09 817.27 838.47 480.69 475.60

Net Generation 8081.47 8081.47 9805.07 9805.07 3188.64 3188.64

Per Unit Fixed Cost(Rs/kWh)(only indicative) 0.635 0.611 0.834 0.855 1.508 1.492

Particulars DCCPP RGTPP (110.5 MW) Mahi Petition Approved Petition Approved Petition Approved

Interest on Term Loans and Finance Charges

17.60

22.22

0.00

0.00 0.00 0.00

Interest on Transitional Loan 2.41 0.04 0.00 0.00

Depreciation 58.08 57.92 14.93 1.88 4.19 6.41

O & M Expenses 47.20 47.20 19.18 19.19 16.47 16.47

Return on Equity 53.99 53.79 18.63 18.62 26.42 26.41

Interest on WC 20.17 20.27 4.10 3.89 1.16 1.19

Recovery of ARR & Tariff Petition fees

0.17 0.17 0.06 0.06 0.07 0.07

Insurance Charges 0.93 0.93 0.32 0.32 0.00 0.00


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Non-Tariff Income 1.63 1.63 0.57 0.57 0.63 0.63

Adjustment of excess depreciation

0.00 0.00 0.00 1.17 0.00 0.00

Net Fixed Cost (i.e. Capacity Charges)

196.51 203.27 56.65 42.25 47.68 49.92

Net Generation 1571.90 2245.57 661.32 661.32 148.50 148.50

Per Unit Fixed Cost(Rs/kWh)(only indicative)

1.250 0.905 0.857 0.639 3.211 3.362

Determination of Variable Charges for FY 2017-18 RVUN’s Submissions

5.51 RVUN sought revision of normative SHR for KTPS Unit 7. RVUN submitted in its Tariff petition for FY 2014-15, the Design Heat Rate for KTPS Unit 7 as 2228 kcal/kWh based on which the SHR was approved by the Commission. RVUN submitted that it had inadvertently submitted the design heat rate of KTPS Unit 7 as 2228 kcal/kWh. RVUN requested the Commission to revise the SHR for KTPS Unit 7 as shown in the Table below:

Table 116: Normative SHR for KTPS Unit 7 as submitted by RVUN

Particulars Legend Value Design Heat Rate of Turbine (kcal/kWh) A 1966.00 Boiler Efficiency (%) B 86.06% Design Heat Rate (kcal/kWh) C=A/B 2284.45 Station Heat Rate (kcal/kWh) D=1.045XD 2387.25

5.52 Accordingly, RVUN has claimed the SHR for KTPS (Unit 1-7) as 2570.98 kcal/kWh as against 2561.70 kcal/kWh approved by the Commission in the determination of Tariff for FY 2014-15 and FY 2015-16.

5.53 RVUN has submitted the supplementary petition for FY 2017-18 for DCCPP stating that because of the shortage of gas and as per the directions of the Commission in previous orders that responsibility of arrangement of fuel lies with the generator, it has decided to arrange the remaining quantity of required gas from the open market through e-bidding process.

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5.54 The Commission has gone through the submissions of RVUN regarding the revision of normative SHR for KTPS 7. The Commission finds that it is not appropriate to revise the normative SHR for KTPS Unit 7 particularly when RVUN had not approached the Commission through appropriate means after the issuance of the Tariff Order for FY 2014-15. Further the same had been requested by the Petitioner in the Review Petition on the Commission’s order dated 17.10.2016 and the same petition has been disposed of by the Commission vide its order dated 09.12.2016. Therefore, Commission does not find it appropriate to consider the Petitioner’s contentions when the same has been observed by the Commission in its order dated 09.12.2016.

5.55 Petitioner filed the supplementary petition for ARR and Tariff of FY 2017-18 for DCCPP, stating that 30% of the gas requirement will be fulfilled through PMT gas and the remaining 70% through SPOT gas. Accordingly, the Petitioner has submitted GCV and price of gas separately for PMT Gas form GAIL and SPOT RLNG gas from Open Market. Regarding this, the Petitioner has submitted the copy of letter form GAIL dated 01.02.2017 Stating the Ex-terminal SPOT RLNG price and GCV.

5.56 Further from the supplementary petition submitted by the Petitioner for RVUN for FY 2017-18, the Commission observed that the landed fuel price for gas from SPOT RLNG is Rs. 23.82 per SCM which is very high against the PMT gas price of Rs. 15.35 per SCM. Accordingly, the final energy charge works out to be Rs. 8.789 per unit. The Commission at this stage cannot allow such costly power, as the same will be against the interest of end consumers and the same will also not get any place in the MOD. Therefore, the Commission in this order has not considered the supplementary petition submitted by the Petitioner and has considered the original petition for DCCPP.

5.57 Regarding the SHR of CTPP, the Commission in its order dated 24.04.2017 has revised the SHR of CTPP (Unit 1-4) to 2400 kCal/kwh for FY 2017-18

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against the normative SHR of 2312.31 kCal/kwh. But the same was subject to prudence check on the basis of steps taken by RVUN to improve its SHR. Therefore, at this stage the Commission has considered the normative SHR of 2312.31 kCal/kWh and the revised SHR of 2400 kcal/kWh shall be considered at the time of true-up subject to prudence check in accordance with the directions given by the Commission in its order dated 24.02.2017.

5.58 The Commission has approved Variable Charges for the FY 2017-18 on the basis of following approach.

(i) While allowing the variable cost of the generating stations, the Commission has considered normative SHR, PLF and auxiliary consumption.

(ii) The Commission has considered the normative Station Heat Rate for RVUN stations for FY 2017-18. For DCCPP and RGTPS (110.5 MW), the Commission has considered the proportion of operation in closed cycle and open cycle for FY 2017-18 as proposed by RVUN and has accordingly considered the Station Heat Rate and auxiliary Consumption same as that proposed by RVUN.

(iii) As regards GCV and price of fuel for all stations, the Commission asked the Petitioner to submit the details of actual fuel prices and GCV for months January 2017 to March 2017. In replies to the data gaps, the Petitioner submitted the price and GCV of fuel for all stations for months of October-2016 to December-2016. Further, in replies the Petitioner has not provided the GCV of secondary fuels for CTPP Unit (Unit 1-4) and KaTPP (Unit 1-2). The Commission has considered the fuel prices and calorific values as submitted by the Petitioner in the replies of data gaps dated 11.04.2017 and for GCV of secondary fuel oils for CTPP (Unit 1-4) and KaTPP(Unit 1-2) the Commission has considered the GCV provided in the petition.

(iv) Secondary fuel oil consumption has been allowed as per Regulation

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45(4) of RERC Tariff Regulations, 2014.

5.59 Plant wise variable charges determined by Commission for FY 2017-18 are as under:

Table 117: Approved Variable Charges for FY 2017-18

Particulars Unit KTPS (Unit 1 to 7) STPS (Unit 1 to 6) CTPP (Unit 1- 2)

Petition* Approved Petition* Approved Petition* Approved Installed Capacity MW 1240.00 1240.00 1500.00 1500.00 500.00 500.00

Plant Load Factor % 82.00% 82.00% 82.00% 82.00% 80.00% 80.00%

Gross Generation MU 8907.17 8907.17 10774.80 10774.80 3504.00 3504.00

Auxiliary Consumption % 9.27% 9.27% 9.00% 9.00% 9.00% 9.00%

Auxiliary Consumption MU 825.69 825.69 969.73 969.73 315.36 315.36

Net Generation MU 8081.47 8081.47 9805.07 9805.07 3188.64 3188.64

Station Heat Rate kCal/kWh 2570.98 2561.70 2476.28 2476.28 2312.31 2312.31

GCV Indigenous Coal kcal/kg 3844.19 3844.19 3929.76 3929.76 4098.46 4098.46

Imported Coal kcal/kg 0.00 0.00 0.00 0.00 0.00 0.00

HFO kcal/ltr 10140.77 10140.77 9915.00 9915.00 10504.00 10504.00

HSD kcal/ltr 0.00 0.00 0.00 0.00 0.00 0.00

LDO kcal/ltr 0.00 0.00 9635.21 9635.21 12000.00 12000.00

Natural Gas kCal/SCM 0.00 0.00 0.00 0.00 0.00 0.00

Lignite kCal/kg 0.00 0.00 0.00 0.00 0.00 0.00

Lime kCal/kg 0.00 0.00 0.00 0.00 0.00 0.00 Landed Price of Fuel Indigenous Coal Rs./MT 4105.55 4105.55 5485.96 5485.96 3825.03 3825.03

Imported Coal Rs./MT 0.00 0.00 0.00 0.00 0.00 0.00

HFO Rs./KL 26852.59 26852.59 27228.15 27228.15 22962.85 22962.85

HSD Rs./KL 0.00 0.00 0.00 0.00 0.00 0.00

LDO Rs./KL 0.00 0.00 46976.31 46976.31 39619.71 39619.71

Natural Gas Rs./SCM 0.00 0.00 0.00 0.00 0.00 0.00

Lignite Rs./MT 0.00 0.00 0.00 0.00 0.00 0.00

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Particulars Unit KTPS (Unit 1 to 7) STPS (Unit 1 to 6) CTPP (Unit 1- 2)

Petition* Approved Petition* Approved Petition* Approved

Lime Rs./MT 0.00 0.00 0.00 0.00 0.00 0.00 Cost of Generation per Unit (at Generation terminal)

Rs/kWh 2.754 2.744 3.465 3.465 2.165 2.165

Cost of Generation per Unit (Ex-bus)

Rs/kWh 3.035 3.024 3.807 3.807 2.380 2.380

Particulars Unit DCCPP RGTPP (110.5 MW) Petition* Approved Petition* Approved

Installed Capacity MW 330.00 330.00 110.50 110.50

Plant Load Factor % 80.00% 80.00% 70.00% 70.00%

Gross Generation MU 2312.64 2312.64 677.59 677.59

Auxiliary Consumption % 2.90% 2.90% 2.40% 2.40%

Auxiliary Consumption MU 67.07 67.07 16.26 16.26

Net Generation MU 2245.57 2245.57 661.32 661.32

Station Heat Rate kCal/kWh 1994.00 1994.00 2214.00 2214.00

GCV

Indigenous Coal kcal/kg 0.00 0.00 0.00 0.00

Imported Coal kcal/kg 0.00 0.00 0.00 0.00

HFO kcal/ltr 0.00 0.00 0.00 0.00

HSD kcal/ltr 0.00 0.00 9300.00 9300.00

LDO kcal/ltr 0.00 0.00 0.00 0.00

Natural Gas kCal/SCM 9194.43 9194.43 4375.87 4375.87

Lignite kCal/kg 0.00 0.00 0.00 0.00

Lime kCal/kg 0.00 0.00 0.00 0.00

Landed Price of Fuel

Indigenous Coal Rs./MT 0.00 0.00 0.00 0.00

Imported Coal Rs./MT 0.00 0.00 0.00 0.00

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Particulars Unit DCCPP RGTPP (110.5 MW) Petition* Approved Petition* Approved

HFO Rs./KL 0.00 0.00 0.00 0.00

HSD Rs./KL 0.00 0.00 42978.89 42978.89

LDO Rs./KL 0.00 0.00 0.00 0.00

Natural Gas Rs./SCM 15.35 15.35 3.51 3.51

Lignite Rs./MT 0.00 0.00 0.00 0.00

Lime Rs./MT 0.00 0.00 0.00 0.00

Cost of Generation per Unit (at Generation terminal)

Rs/kWh 3.329 3.329 1.797 1.797


Rs/kWh 3.428 3.428 1.841 1.841

*Considering revised fuel prices and GCV submitted by RVUN

Tariff for Mahi Hydel Generating Station

5.60 In accordance with RERC Tariff Regulations, 2014, the Commission approves the two-part tariff for sale of electricity from Mahi Hydel generating station comprising annual capacity charges and primary energy charge.

5.61 Regulation 51(7) of RERC Tariff Regulations, 2014 states that rate of Primary Energy for hydro power stations shall be 50% of cost of generation or incentive rate applicable for thermal power stations, whichever is less. Accordingly, the primary energy rate approved by the Commission is 30 paise/kWh.

5.62 The capacity charge approved by the Commission for FY 2017-18 is Rs 45.47 Crore as given in the Table:

Table 118: Approved Capacity Charges for Mahi Hydel Power Project

Annual Fixed Charges (Rs. in Crore)

Net Energy (MU)

Energy Rate (Paise/kWh)

Energy Charges (Rs. in Crore)

Capacity Charges (Rs. in

Crore) 49.92 148.50 30.00 4.46 45.47

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5.63 Incentive for Thermal and Mahi Hydel Station shall be claimed by RVUN as per Regulation 52(1) and 52(2) respectively of RERC Tariff Regulations, 2014. Recovery of Capacity Charges shall be in accordance with Regulation 50 of RERC Tariff Regulations, 2014.

5.64 The Summary of tariff as approved by the Commission for FY 2017-18 is given in the Table below:

Table 119: Summary of Tariff for FY 2017-18

Particulars KTPS(Unit 1 to 7) STPS(Unit 1 to 6) CTPP(unit 1 to2)

Petition Approved Petition Approved Petition Approved Fixed Charges (Rs. Crore) 512.86 494.09 817.27 838.47 480.69 475.60

Fixed Charges(Rs./kWh) 0.635 0.611 0.834 0.855 1.508 1.492

Variable Charges (Rs. Crore)

2452.84 2444.02 3733.03 3733.03 758.75 758.75

Variable Charges(Rs/kWh)

3.035 3.024 3.807 3.807 2.380 2.380

Total Tariff 3.670 3.636 4.641 4.662 3.887 3.871

Particulars RGTPS (110.5 MW) DCCPP

Petitioned Approved Petitioned Approved

Fixed Charges (Rs. Crore) 56.65 42.25 196.51 203.27

Fixed Charges(Rs./kWh) 0.857 0.639 1.250 0.905

Variable Charges (Rs. Crore) 121.76 121.76 769.87 769.87

Variable Charges(Rs/kWh) 1.841 1.841 3.428 3.428

Total Tariff 2.698 2.480 4.679 4.334

5.65 The tariff approved by the Commission for RVUN Stations for FY 2017-18 shall be effective from April 1, 2017. The Commission directs RVUN to bill/adjust the difference in tariff approved by the Commission in this Order and tariff charged by RVUN as provisionally approved by the Commission.

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5 SECTION 6 Determination of provisional tariff for new Units for FY 2017-18

6.1. For KaTPP (Unit 1), CTPP (Unit 3), RGTPS (Stage III), CTPP (Unit 4), the Commission has issued the Orders approving the Provisional Capital Cost on 14.05.2015, 22.05.2015, 18.06.2015 and 01.01.2016 respectively. The Commission in this Order has provisionally approved the tariff for FY 2017-18 for KaTPP (Unit 1), CTPP (Unit 3), RGTPS (Stage III), and CTPP (Unit 4) considering the provisional capital cost as approved by the Commission as RVUN is yet to file the petition(s) for determination of final capital cost of these Stations.

6.2. The Commission vide its order dated 21.01.2016 had approved the provisional tariff of KaTPP (Unit 2) for FY 2015-16. In the aforesaid order, the Commission has approved the provisional fixed charges for KaTPP (Unit 2) for FY 2015-16 by applying the ratio of provisional fixed charges approved to the provisional charges claimed for KaTPP (Unit 1) in the approval of provisional tariff for FY 2014-15. In line with the same approach, the Commission has approved the provisional fixed charges for KaTPP (Unit 2) for FY 2017-18. In the absence of approved capital cost, the Commission has not approved the individual components of Annual Fixed Charges for KaTPP (Unit 2) for FY 2017-18. The Commission has approved the variable charges for KaTPP (Unit 2) for FY 2017-18 considering the latest available fuel parameters and in accordance with RERC Tariff Regulations, 2014.

6.3. The Annual Fixed Charges comprise of the following elements:

(i) Operation and Maintenance (O&M) Expenses

(ii) Depreciation

(iii) Interest on Term Loans

(iv) Interest on Transitional Loans

(v) Finance Charges

(vi) Return on Equity

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(vii) Interest on Working Capital

(viii) Insurance Charges

(ix) Less: Non-tariff Income

6.4. Each of the annual fixed charges elements has been dealt with in the following paragraphs.

Operation and Maintenance Expenses RVUN’s Submission

6.5. RVUN submitted that the Operation & Maintenance Expenses for FY 2017-18 have been computed on the basis of norms prescribed under Regulation 47 of RERC Tariff Regulations, 2014.

6.6. The details of the O&M expenses as claimed in petition for FY 2017-18 are as shown in the Table below:

Table 120: O&M Expenses as per Petition for FY 2017-18 (Rs. Crore)

Particular CTPP (Unit 3)

CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 47.71 47.71 22.88 103.02


6.7. The Commission has verified RVUN’s computations of normative O&M expenses and found it to be in order and accordingly, same has been approved, except for KaTPP (Unit 2).

6.8. The O&M expenses as approved by the Commission for FY 2017-18 are as shown in the Table below:

Table 121: O&M Expenses approved for FY 2017-18(Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 47.71 47.71 22.88 103.02

Approved 47.71 47.71 22.88 103.04

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6.9. RVUN submitted that CTPP Unit 3 and Unit 4 achieved COD on 19.12.2013 and 30.12.2014 respectively. The Commission vide its orders dated 22.05.2015 and 01.01.2016 had approved the provisional capital cost of CTPP Unit 3 and Unit 4 as Rs. 1431.31 Crore and Rs. 1162.54 Crore respectively as against Rs. 1565.26 Crore and Rs. 1401.69 Crore claimed by RVUN. RVUN submitted that the additional capitalisation of Rs. 57.30 Crore has been incurred in FY 2014-15 against the original scope of work under Unit 3. Further, in FY 2015-16, RVUN has submitted that it has incurred additional capitalisation of Rs. 51.66 Crore towards unit 3 and Rs. 82.65 Crore towards unit 4 as a part of the original scope of work.

6.10. RVUN submitted that KaTPP Unit 1 achieved COD on 07.05.2014. The Commission vide its order dated 14.05.2015 had approved the provisional capital cost of Rs. 4502.07 Crore as against Rs. 5082.89 Crore claimed by RVUN. RVUN submitted that it had incurred additional capitalisation of Rs. 80.80 Crore in FY 2014-15, Rs. 87.68 Crore in FY 2015-16 and an amount of Rs. 209.33 Crore is expected to be incurred against the original scope of work.

6.11. RVUN submitted that KaTPP Unit 2 achieved COD on 25.07.2015. A petition has been filed on 02.11.2015 for determination of capital cost under Regulation 42(4) of the RERC Tariff Regulations, 2014 and the Commission is yet to dispose the above petition. RVUN submitted that is has claimed the capital cost of Rs. 4101.26 Crore upto FY 2015-16 and further has incurred an additional capitalisation of Rs. 164.47 Crore during FY 2016-17. RVUN requested the Commission to approve the capital cost of KaTPP Unit 2 as Rs. 4265.73 Crore for determination of ARR and Tariff for FY 2017-18.

6.12. RVUN submitted that RGTPP Stage III (160 MW) achieved COD on 07.06.2014. The Commission vide its order dated 18.06.2015 had approved the provisional capital cost of Rs. 684.88 Crore for RGTPP Stage III as against Rs. 806.66 Crore claimed by RVUN. RVUN submitted that it has incurred additional capitalisation of Rs. 29.72 Crore in FY 2015-16 and expected

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capitalisation of Rs. 55.57 Crore in FY 2016-17. RVUN has claimed the capital cost of RGTPP Stage-III (160 MW) as Rs. 799.21 Crore for approval of tariff of FY 2017-18.

6.13. RVUN submitted that the depreciation for FY 2017-18 has been computed on the basis of above capital cost and additional capitalisation claimed.

6.14. The details of depreciation as claimed in the petition for FY 2017-18 are as follows:

Table 122: Depreciation as per petition for FY 2017-18 (Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 77.78 62.58 40.95 276.74


6.15. The Commission has approved the depreciation for FY 2017-18 in accordance with the provisions of RERC Tariff Regulations, 2014.

6.16. For CTPP Unit 3, CTPP Unit 4, RGTPP Stage III (160 MW), KaTPP Unit 1 and KaTPP Unit 2, RVUN is yet to file the petition(s) for approval of final capital cost and hence, the Commission does not find it appropriate to consider the actual capital cost for the respective stations for determination of ARR and tariff for FY 2016-17. For CTPP Unit 3, CTPP Unit 4, RGTPP Stage III (160 MW), KaTPP Unit 1, the Commission has considered the closing GFA for FY 2016-17 approved in the tariff order for FY 2016-17 as the opening GFA for FY 2017-18.

6.17. In line with the approach adopted by the Commission in the approval of tariff for previous years, the Commission has not considered any additional capitalisation for FY 2017-18. The Commission may consider the additional capitalisation for FY 2017-18, if any, during the truing up exercise in accordance with the Regulations.

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CTPP (Unit 3) CTPP (Unit 4) RGTPP (160 MW)

At the beginning

of the year

At the end of

the year

At the beginning

of the year

At the end of

the year

At the beginning

of the year

At the end of

the year

Land & Land Rights 0.00% 0.00 0.00 0.00 0.00 0.00 0.00 Building & Civil Works of Power Plants

3.34% 107.33 107.33 94.92 94.92 38.96 38.96

Hydraulic Works 5.28% 58.54 58.54 52.65 52.65 18.25 18.25

Other Civil Works 3.34% 12.57 12.57 34.10 34.10 0.06 0.06

Plant & Machinery 5.28% 1230.97 1230.97 963.11 963.11 627.62 627.62

Lines & Cable Net work 5.28% 21.45 21.45 16.59 16.59 0.00 0.00

Vehicles 9.50% 0.00 0.00 0.00 0.00 0.00 0.00

Furniture & Fixtures 6.33% 0.02 0.02 1.18 1.18 0.00 0.00

Office Equipment 6.33% 0.09 0.09 0.00 0.00 0.00 0.00

Capital Spares 5.28% 0.00 0.00 0.00 0.00 0.00 0.00

1430.97 1430.97 1162.55 1162.55 684.88 684.88

Particulars Rate of depreciation

KaTPP (Unit 1)

At the beginning of the year

At the end of

the year Land & land Rights 0.00% 9.20 9.20 Building & civil works of power plant 3.34% 1177.37 1177.37

Hydraulic Works 5.28% 73.74 73.74 Plant & machinery including substation equipment 5.28% 3227.98 3227.98

communication equipment 0.00% 3.83 3.83 Vehicles 6.33% 0.09 0.09 Furniture & fixtures 6.33% 0.60 0.60

Office equipment 6.33% 0.10 0.10 Capital spares 5.28% 9.15 9.15 Total 4502.07 4502.07

6.18. Accordingly, the depreciation approved by the Commission for FY 2017-18 is as shown in the Table below:

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Table 124: Depreciation approved for FY 2017-18 (Rs. Crore)

Particular CTPP (Unit

3)

CTPP (Unit

4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 77.78 62.58 40.95 276.74

Approved 73.23 58.89 35.40 214.19

Interest on Term Loan RVUN’s Submission

6.19. RVUN submitted that the loan wise interest expenses and finance charges include term loans as well as transitional loans and has been worked out in accordance with Regulation 21 of RERC Tariff Regulations, 2014. The loan repayment for term loans and transitional loans combined has been taken equal to depreciation for the year.

6.20. The details of interest charges on long term loans as submitted by RVUN in its petition for FY 2017-18 has been provided in the table below:

Table 125: Interest on Term Loan as submitted in petition for FY 2017-18 (Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 119.03 104.34 77.41 375.21 Commission’s Analysis

6.21. For all the stations excluding CTPP Unit 4, the Commission has considered the closing term loan balance approved for FY 2016-17 in the tariff order for FY 2016-17 as the opening loan balance for FY 2017-18. For CTPP Unit 4, the Commission has considered the opening loan balance for FY 2017-18 based on the outstanding loan balance approved on approval of provisional capital cost. The allowable depreciation for the year has been considered as the normative repayment for the year.

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6.22. As per Regulation 21 (5) of RERC Tariff Regulations, 2014, the rate of interest to be considered is weighted average rate of interest calculated on the basis of the actual loan portfolio at the beginning of each year. In accordance with this Regulation, the Commission in its data gaps had asked RVUN to submit the details of the actual loans for considering the average interest rate along with the supporting computations.

6.23. The RVUN in its reply to data gaps has not submitted the same. Hence, Commission has provisionally considered the rate of interest as submitted by the Petitioner for FY 2017-18.

Table 126: Weighted Average Interest Rate as considered by the Commission for FY 2017-18

Station/Unit Interest Rate RGTPS (160 MW) 12.50% CTPP (Unit 3) 12.50% CTPP (Unit 4) 12.50% KaTPP (Unit 1) 12.50%

6.24. The Commission in its data gap asked RVUN to submit the basis of calculating the finance charge for FY 2017-18. RVUN in replies to the data gaps submitted that the finance charges have been claimed as actual paid to the Government as levy/commission against rendering on working capital loan specific to each station. The Commission at this stage has provisionally approved the finance charges as claimed by RVUN. However, the same shall be subject to truing up at the time of final true up exercise for FY 2017-18.

Table 127: Interest on term loan and Finance Charges as approved by the Commission for FY 2017-18 (Rs. Crore)

Particulars CTPP (Unit 3)

CTPP (Unit 4)

RGTPP (160 MW)

KaTPP (Unit 1)

Opening Loan 904.69 841.52 448.19 2980.21

Receipts 0.00 0.00 0.00 0.00

Repayment 73.23 58.89 35.40 214.19

Closing Balance 831.46 782.63 412.79 2766.02

Interest Rate 12.50% 12.50% 12.50% 12.50%

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Particulars CTPP (Unit 3)

CTPP (Unit 4)

RGTPP (160 MW)

KaTPP (Unit 1)

Interest Paid 103.93 97.83 51.60 345.75

Finance Charges 1.00 1.00 0.05 1.00

Total Int. & Fin Charges 104.93 98.83 51.65 346.75


6.25. RVUN submitted that the requirement for working capital loan has been computed on the basis of Regulation 27 of RERC Tariff Regulations, 2014 and the rate of interest on Working Capital Loan has been taken equal to 250 basis points higher than the average Base Rate of State Bank of India prevalent during first six months of the previous year.

6.26. The details of interest on working capital as claimed in petition for FY 2017-18 has been provided in the table below:

Table 128: Interest on Working Capital as per petition for FY 2017-18 (Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)


6.27. Regulation 27(2) of the RERC Tariff Regulations, 2014 specifies that the rate of interest on working capital to be computed shall be on normative basis and shall be 250 basis points higher from SBI base rate prevalent during first six months of the year previous to the relevant year. Accordingly, for working out interest on working capital, weighted rate of interest has been considered as per admissible rates during the previous year. The same works out to 11.80% p.a. which has been used for calculating interest on working capital. The computation of the bank rate is as shown in the Table below:

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Table 129: Computations of Interest Rate as considered by the Commission for FY 2017-18

Month No. of Days

SBI Base Rate

250 Basis Point

Approved Interest

Rate Apr-16 30 9.30%

2.50% 11.80%

May-16 31 9.30% Jun-16 30 9.30% Jul-16 31 9.30%

Aug-16 31 9.30% Sep-16 30 9.30%

6.28. Further, the Commission has worked out the working capital requirement in accordance with Regulation 27 of the RERC Tariff Regulations, 2014. The interest on working capital as approved by the Commission for FY 2017-18 has been provided in the table below:

Table 130: Approved Interest on working Capital (Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 17.06 16.89 9.42 48.79

Approved 16.73 16.74 8.88 47.25

Return on Equity RVUN’s Submission

6.29. RVUN submitted that the RoE has been claimed in accordance with Regulation 20 of RERC Tariff Regulations, 2014.

6.30. The details of Return on equity as claimed in petition for FY 2017-18 have been provided in the table below:

Table 131: Return on Equity as per petition for FY 2017-18 (Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 47.75 38.60 24.78 151.28

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6.31. The GoR in its letter dated 18.03.2015 has allowed rate of RoE as 5% in FY 2015-16, 10% in FY 2016-17 and 15.5% in FY 2017-18 onwards. However, in the revised letter of Government of Rajasthan (GOR) dated 21.03.2016, the rate of RoE had been revised to 15.5 % form FY 2016-17 onwards. Therefore, the Commission has approved the ROE for FY 2017-18 as per the latest order of GoR and in accordance with the Regulation 20 of the RERC Tariff Regulations, 2014.

6.32. The Commission observed that equity as considered by RVUN while computing RoE for FY 2017-18 is higher than the equity approved by the Commission. The Commission has considered the equity base approved for FY 2016-17 in the tariff order for FY 2016-17 as the equity base for FY 2017-18 and has also considered the equity portion of the additional capitalisation approved by the Commission in this order for FY 2014-15 and FY 2015-16.

6.33. For CTPP Unit 4, the Commission has provisionally considered the equity as approved while approving the provisional Capital Cost in respective Order.

6.34. Hence, in view of the above, the Commission approves ROE at the rate of 15.5% for FY 2017-18, as shown in the Table below:

Table 132: Approved Return on Equity (Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 47.75 38.60 24.78 151.28

Approved 44.37 38.33 21.23 139.56

Recovery of ARR and Tariff Petition Fees RVUN’s Submission

6.35. The recovery of ARR and tariff petition fees as proposed by RVUN for FY 2017-18 is provided in the table below:

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Table 133: ARR and Tariff Petition Fees as per petition for FY 2017-18


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)


6.36. The Commission has computed the ARR and Tariff Petition Fees at the rate of Rs. 5000/MW for all the generating stations as shown in the Table below:

Table 134: ARR and Tariff Petition Fees Approved for FY 2017-18


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 0.13 0.13 0.08 0.30

Approved 0.13 0.13 0.08 0.30 Insurance Charges RVUN’s Submission

6.37. RVUN in its petition has claimed insurance charges for FY 2017-18 based on the estimates of actual insurance charges paid in the preceding year with an increment of 5% YoY (Year on Year). For kaTPP Unit 1 & 2, RVUN submitted that it has claimed the insurance charges in accordance with Regulation 25 of RERC Tariff Regulations, 2014. The details are as shown below:

Table 135: Insurance Charges as claimed in petition (Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 1.70 1.70 0.42 4.50


6.38. The Commission in its data gaps directed the Petitioner to justify the basis of

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claiming insurance charges on 5% YoY (Year on Year) increment. In replies to the data gaps, the Petitioner has not justified this. The Commission has provisionally approved the insurance charges in this order as claimed by RVUN. Any variation shall be adjusted during the truing up exercise for FY 2017-18. The insurance charges as approved by the Commission are as follows:

Table 136: Insurance Charges Approved for FY 2017-18


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 1.70 1.70 0.42 4.50

Approved 1.70 1.70 0.42 4.50


6.39. RVUN in its petition submitted that the main heads of Non-Tariff Income are Sale of Scrap, interest on FD/Staff loans, miscellaneous receipts (rebates), etc. The Non-tariff income as proposed by RVUN is provided in the table below:

Table 137: Non-Tariff Income as claimed by RVUN (Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 1.57 1.57 0.84 2.87


6.40. The Commission has approved the Non-Tariff Income for FY 2017-18 as claimed by the Petitioner as shown in the Table below:

Table 138: Non-Tariff Income Approved for FY 2017-18(Rs. Crore)


CTPP (Unit 4)

RGTPS (160 MW)

KaTPP (Unit 1)

As per petition 1.57 1.57 0.84 2.87

Approved 1.57 1.57 0.84 2.87

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Annual Fixed Charge for FY 2017-18

6.41. Based on the above analysis, the approved Station Wise Fixed Charges for FY 2017-18 are as shown in the Table below:

Table 139: Approved Annual Fixed Charges for FY 2017-18 (Rs. Crore)

Particulars CTPP Unit 3 CTPP Unit 4

Petition Approved Petition Approved Interest on Term Loans and Finance Charges

119.03

104.93 104.34

98.83

Interest on Transitional Loan 0.00 0.00 Depreciation 77.78 73.23 62.58 58.89

O & M Expenses 47.71 47.71 47.71 47.71

Return on Equity 47.75 44.37 38.60 38.33

Interest on WC 17.06 16.73 16.89 16.74

Recovery of ARR & Tariff Petition fees 0.13 0.13 0.13 0.13

Insurance Charges 1.70 1.70 1.70 1.70

Gross Fixed Charges 311.16 288.79 271.95 262.33

Non-Tariff Income 1.57 1.57 1.57 1.57

Adjustment of excess depreciation 0.00 0.00 0.00 0.00

Net Fixed Cost (i.e. Capacity Charges) 309.59 287.22 270.38 260.76

Net Generation 1594.32 1594.32 1654.11 1654.11


1.942 1.802 1.635 1.576

Particulars RGTPP (160 MW) KaTPP Unit 1 Petition Approved Petition Approved

Interest on Term Loans and Finance Charges 77.41 51.65 375.21 346.75

Interest on Transitional Loan 0.00 0.00 Depreciation 40.95 35.40 276.74 214.19

O & M Expenses 22.88 22.88 103.02 103.04

Return on Equity 24.78 21.23 151.28 139.56

Interest on WC 9.41 8.88 48.79 47.25

Recovery of ARR & Tariff Petition fees 0.08 0.08 0.30 0.30

Insurance Charges 0.42 0.42 4.50 4.50

Gross Fixed Charges 175.93 140.55 959.84 855.59

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Particulars RGTPP (160 MW) KaTPP Unit 1 Petition Approved Petition Approved

Non-Tariff Income 0.84 0.84 2.87 2.87

Adjustment of excess depreciation 0.00 0.00 0.00 0.00

Net Fixed Cost (i.e. Capacity Charges) 175.09 139.71 956.97 852.72

Net Generation 957.57 957.57 4111.64 4133.45


1.828 1.459 2.327 2.063

6.42. The Commission in this order has approved the tariff of KaTPP Unit 1 for FY 2017-18. For KaTPP Unit 1, the Commission has allowed the fixed charges of Rs. 2.063/kWh as against Rs. 2.327/kWh claimed by RVUN. RVUN has claimed the fixed charges of Rs. 2.105/kWh for KaTPP Unit 2 for FY 2017-18. Applying the same ratio of approved fixed charges of KaTPP 1 to claimed fixed charges of KaTPP 1, the Commission hereby allows fixed charge as Rs. 1.866/kWh as against Rs. 2.105/kWh claimed by RVUN for KaTPP Unit 2. Further, the Commission has approved the variable charges for KaTPP Unit 2 for FY 2017-18 in accordance with RERC Tariff Regulations, 2014 considering the latest available fuel parameters.

Determination of Variable Charges for FY 2017-18 Commission’s Analysis

6.43. The Commission has approved Variable Charges for the FY 2017-18 on the basis of following approach.

(i) While allowing the variable cost of the generating stations, the Commission has considered normative SHR, PLF and auxiliary consumption. For KaTPP Unit 1 and Unit 2, the Commission has considered the normative auxiliary consumption of 5.75% as approved for KaTPP Unit 1 for FY 2016-17.

(ii) The Commission has considered the normative Station Heat Rate for RVUN stations for FY 2017-18. For RGTPS (160 MW), the Commission has considered the proportion of operation in closed cycle and open cycle

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for FY 2017-18 as proposed by RVUN.

(iii) Regarding the SHR of CTPP, the Commission in its order dated 24.04.2017 has revised the SHR of CTPP (Unit 1-4) to 2400 kCal/kwh for FY 2017-18 against the normative SHR of 2312.31 kCal/kwh. But the same is subject to prudence check on the basis of steps taken by RVUN to improve its SHR. Therefore, at this stage the Commission has considered the normative SHR of 2312.31 kCal/kWh and the revised SHR of 2400 kcal/kWh shall be considered at the time of true-up subject to prudence check in accordance with the directions given by the Commission in its order dated 24.02.2017.

(iv) As regards GCV and price of fuel for all stations, the Commission asked the Petitioner to submit the details of actual fuel prices and GCV for months January 2017 to March 2017. In replies, the Petitioner submitted the GCV and Prices of fuel of all stations for months of October 2016 to December 2016. Further, in replies the Petitioner has not provided the GCV of secondary fuels for CTPP Unit (Unit 1-4) and KaTPP (Unit 1-2). The Commission has considered the fuel prices and calorific values as submitted by the Petitioner in the replies of data gaps dated 11.04.2017 and for GCV of secondary fuel oils for CTPP (Unit 1-4) and KaTPP(Unit 1-2) the Commission has considered the GCV provided in the petition.

(v) Secondary fuel oil consumption has been allowed as per Regulation 45(4) of RERC Tariff Regulations, 2014.

6.44. Plant wise variable charges determined by Commission for FY 2017-18 are as under:

Table 140: Approved Variable Charges for FY 2017-18

Particulars Unit CTPP Unit 3 CTPP Unit 4 Petition* Approved Petition* Approved

Installed Capacity MW 250.00 250.00 250.00 250.00

Plant Load Factor % 80.00% 80.00% 83.00% 83.00%

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Particulars Unit CTPP Unit 3 CTPP Unit 4 Petition* Approved Petition* Approved

Gross Generation MU 1752.00 1752.00 1817.70 1817.70

Auxiliary Consumption % 9.00% 9.00% 9.00% 9.00%

Auxiliary Consumption MU 157.68 157.68 163.59 163.59

Net Generation MU 1594.32 1594.32 1654.11 1654.11

Station Heat Rate kCal/kWh 2312.31 2312.31 2312.31 2312.31

GCV Indigenous Coal kcal/kg 4205.12 4205.12 4205.12 4205.12

Imported Coal kcal/kg 0.00 0.00 0.00 0.00

HFO kcal/ltr 10504.00 10504.00 10504.00 10504.00

HSD kcal/ltr 0.00 0.00 0.00 0.00

LDO kcal/ltr 12000.00 12000.00 12000.00 12000.00

Natural Gas kCal/SCM 0.00 0.00 0.00 0.00

Lignite kCal/kg 0.00 0.00 0.00 0.00

Lime kCal/kg 0.00 0.00 0.00 0.00 Landed Price of Fuel Indigenous Coal Rs./MT 3815.96 3815.96 3815.96 3815.96

Imported Coal Rs./MT 0.00 0.00 0.00 0.00

HFO Rs./KL 22962.85 22962.85 22962.85 22962.85

HSD Rs./KL 0.00 0.00 0.00 0.00

LDO Rs./KL 39619.71 39619.71 39619.71 39619.71

Natural Gas Rs./SCM 0.00 0.00 0.00 0.00

Lignite Rs./MT 0.00 0.00 0.00 0.00

Lime Rs./MT 0.00 0.00 0.00 0.00 Cost of Generation per Unit (at Generation terminal)

Rs/kWh 2.106 2.106 2.106 2.106


Rs/kWh 2.314 2.314 2.314 2.314

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Particulars Unit

RGTPP (160 MW) KaTPP Unit 1 KaTPP Unit 2


Installed Capacity MW 160.00 160.00 600.00 600.00 600.00 600.00

Plant Load Factor % 70.00% 70.00% 83.00% 83.00% 83.00% 83.00%

Gross Generation MU 981.12 981.12 4362.48 4362.48 4362.48 4362.48


% 2.40% 2.40% 5.75% 5.25% 5.75% 5.25%


MU 23.55 23.55 250.84 229.03 250.84 229.03

Net Generation MU 957.57 957.57 4111.64 4133.45 4111.64 4133.45

Station Heat Rate kCal/kWh 2156.23 2156.23 2320.63 2320.63 2320.63 2320.63

GCV Indigenous Coal kcal/kg 0.00 0.00 4238.58 4238.58 4274.23 4274.23

Imported Coal kcal/kg 0.00 0.00 0.00 0.00 0.00 0.00

HFO kcal/ltr 0.00 0.00 9883.00 9883.00 9883.00 9883.00

HSD kcal/ltr 0.00 0.00 0.00 0.00 0.00 0.00

LDO kcal/ltr 0.00 0.00 9883.00 9883.00 9883.00 9883.00

Natural Gas kCal/SCM 8919.96 8919.96 0.00 0.00 0.00 0.00

Lignite kCal/kg 0.00 0.00 0.00 0.00 0.00 0.00

Lime kCal/kg 0.00 0.00 0.00 0.00 0.00 0.00

Landed Price of Fuel Indigenous Coal Rs./MT 0.00 0.00 4411.49 4411.49 4433.20 4433.20

Imported Coal Rs./MT 0.00 0.00 0.00 0.00 0.00 0.00

HFO Rs./KL 0.00 0.00 26520.55 26520.55 26520.55 26520.55

HSD Rs./KL 0.00 0.00 0.00 0.00 0.00 0.00

LDO Rs./KL 0.00 0.00 41191.43 41191.43 41360.37 41360.37

Natural Gas Rs./SCM 12.41 12.41 0.00 0.00 0.00 0.00

Lignite Rs./MT 0.00 0.00 0.00 0.00 0.00 0.00

Lime Rs./MT 0.00 0.00 0.00 0.00 0.00 0.00

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Particulars Unit

RGTPP (160 MW) KaTPP Unit 1 KaTPP Unit 2


Cost of Generation per Unit (at Generation terminal)

Rs/kWh 3.000 3.000 2.424 2.424 2.416 2.416


Rs/kWh 3.074 3.074 2.572 2.558 2.563 2.550

*Considering the revised fuel prices and GCV submitted by RVUN

6.45. Incentive for Thermal Station shall be claimed by RVUN as per Regulation 52(1) and 52(2) respectively of RERC Tariff Regulations, 2014.

6.46. Recovery of Capacity Charges shall be in accordance with Regulation 50 of RERC Tariff Regulations, 2014.

6.47. The Summary of provisional tariff as approved by the Commission for new units for FY 2017-18 is given in the Table below:

Table 141: Summary of Tariff for FY 2017-18

Particulars CTPP (Unit 3) CTPP (Unit 4)

Petitioned Approved Petitioned Approved Fixed Charges (Rs. Crore) 309.59 287.22 270.38 260.76

Fixed Charges(Rs./kWh) 1.942 1.802 1.635 1.576

Variable Charges (Rs. Crore) 368.94 368.94 382.77 382.77

Variable Charges(Rs/kWh) 2.314 2.314 2.314 2.314

Total Tariff 4.256 4.116 3.949 3.891

Particulars RGTPS (160 MW) KaTPP(Unit 1) KaTPP(Unit 2)

Petition Approved Petition Approved Petition Approved Fixed Charges (Rs. Crore) 175.09 139.71 956.97 852.72 865.58 -

Fixed Charges(Rs./kWh) 1.828 1.459 2.327 2.063 2.105 1.866

Variable Charges (Rs. Crore) 294.32 294.32 1057.53 1057.53 1053.89 1053.89

Variable Charges(Rs/kWh) 3.074 3.074 2.572 2.558 2.563 2.550

Total Tariff 4.902 4.533 4.900 4.621 4.668 4.416

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6.48. The provisional tariff approved by the Commission for new units for FY 2017-18 shall be effective from April 1, 2017. The Commission directs RVUN to bill/adjust the difference in tariff approved by the Commission in this Order and tariff charged by RVUN as provisionally approved earlier by the Commission.

6.49. Copy of this order may be sent to the Petitioner, Respondents, Objectors, CEA and Government of Rajasthan.

(R.P Barwar) (Vinod Pandya) (Vishvanath Hiremath) Member Member Chairman

rajasthan electricity regulatory commission petition...

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