tariff order 2013 - karnataka orders...tariff order 2013 on annual performance review for fy12 &...
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KARNATAKA ELECTRICITY REGULATORY COMMISSION
TARIFF ORDER 2013
ON
ANNUAL PERFORMANCE REVIEW FOR FY12
&
APPROVAL OF ARR FOR FY14-16
&
TRANSMISSION TARIFF FOR FY14-16
OF
KPTCL
UNDER MYT FRAMEWORK
6th
May 2013
6th and 7th Floor, Mahalaxmi Chambers
9/2, M.G. Road, Bangalore-560 001
Phone: 080-25320213 / 25320214
Fax : 080-25320338 Website: www.kerc.org
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C O N T E N T S
CHAPTER
Page No.
1.0 Brief History of KPTCL 02
1.1 Multi Year Tariff Regulations 03
1.2 Tariff Orders Issued By the Commission 03
1.3 Open Access 04
1.4 KPTCL at a glance 05
2.0 Validation and public hearing process 06
2.1 Background 06
2.2 Commission’s Directives & Compliance by KPTCL 06
2.3 Public hearing process
07
2.4 Consultation with Advisory Committee of the
Commission
08
3.0 Suggestions & objections
09
3.1 Hon’ble Shri M.V Rajashekharan, Former Union
Minister of State for Planning, Sri Mallikarjuna
Nilaya, No. 20/1, Kanakapura road,
Basavanagudi, Bangalore -4.
09
3.2 Hon’ble Shri Ramachandra Gowda, MLC, Vice
Chairman, State Planning Commission, Vidhana
Soudha, Bangalore-1.
09
3.3 The following stakeholders have filed/ offered
their suggestions/ views/objections on the APR
for 12, ERC, ARR of KPTCL for FY14, FY15 and FY16
and Transmission Tariff Petition for FY14, FY15 and
FY16.
10
3.4 List of the persons who made oral submission
during the Public Hearing on 22.02.2013
10
3.5 Brief outline of Objections raised, response from
KPTCL and Commission’s views
11
3.6 Commission’s Views 22
4.0 KPTCL’s Filing for APR for FY12 27
4.1 KPTCL’s Submission 27
4.2 KPTCL’s Financial Performance as per Audited
Accounts for FY12
29
5.0 Annual Revenue Requirement for FY14-16 47
6.0 Transmission tariff for fy14-16 71
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LIST OF TABLES
Table
No.
Content Page
No.
4.1 KPTCL’s filing –APR -12 28
4.2 Financial performance for FY12 29
4.3 Computation of Penalty for non achievement of
target loss levels for FY12
31
4.4 System Availability-FY12 32
4.5 Approved Incentive for better transmission system
availability for FY12
32
4.6 Approved additional employee cost 35
4.7 Approved allowable O&M expenses for FY12 35
4.8 Allowable interest on long term loans for FY12 40
4.9 Allowable interest on working capital for FY12 41
4.10 Return on equity for FY12 42
4.11 Allowable Return on Equity for FY12 42
4.12 Expenses Capitalized – KPTCL’s Submission 43
4.13 Allowable SLDC Charges for FY11 45
4.14 Abstract of Approved ARR for FY12 46
5.1 ARR for FY14-16- KPTCL’s submission 47
5.2 Transmission charges for FY14-16 48
5.3 Capex for FY14-16- KPTCL’s submission 50
5.4 Capex performance for FY08-FY12 51
5.5 Approved Capex for FY14-16 53
5.6 Transmission losses for FY14-16- KPTCL’s submission 54
5.7 Projected transmission losses 54
5.8 Approved trajectory of transmission losses for FY14-16 56
5.9 O&M expenses for FY14-16- KPTCL’s projections 58
5.10 Approved additional employee cost for FY14-16 61
5.11 Normative O&M expenses for FY14-16 61
5.12 Approved O&M expenses for FY14-16 62
5.13 Approved interest on loans for FY14-16 64
5.14 Approved interest on working capital for FY14-16 66
5.15 Approved return on equity for FY14-16 67
5.16 Approved ESCOM wise SLDC charges for FY14-16 70
5.17 Abstract of approved ARR for FY14-16 70
6.1 ESCOM wise transmission capacity for FY14-16 71
6.2 Transmission charges KPTCL’s submission 72
6.3 ESCOM wise proposed transmission charges 72
6.4 Transmission charges payable by ESCOMs for FY14 73
6.5 Transmission charges payable by ESCOMs for FY15 74
6.6 Transmission charges payable by ESCOMs for FY16 74
6.7 Transmission charges for short term open access
consumers
75
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ABBREVIATIONS
AAD Advance Against Depreciation
AEH All Electric Home
ABT Availability Based Tariff
A & G Administrative & General Expenses
ARR Annual Revenue Requirement
ATE Appellate Tribunal for Electricity
BBMP Bruhut Bangalore Mahanagara Palike
BDA Bangalore Development Authority
BESCOM Bangalore Electricity Supply Company
BMP Bangalore Mahanagara Palike
BST Bulk Supply Tariff
BWSSB Bangalore Water Supply & Sewerage Board
CAPEX Capital Expenditure
CCS Consumer Care Society
CERC Central Electricity Regulatory Commission
CEA Central Electricity Authority
CESC Chamundeshwari Electricity Supply Corporation
CPI Consumer Price Index
CWIP Capital Work in Progress
DA Dearness Allowance
DCB Demand Collection & Balance
DPR Detailed Project Report
EA Electricity Act
EC Energy Charges
ERC Expected Revenue From Charges
ESAAR Electricity Supply Annual Accounting Rules
ESCOMs Electricity Supply Companies
FA Financial Adviser
FKCCI Federation of Karnataka Chamber of Commerce & Industry
FR Feasibility Report
FoR Forum of Regulators
FY Financial Year
GESCOM Gulbarga Electricity Supply Company
GFA Gross Fixed Assets
GoI Government Of India
GoK Government Of Karnataka
GRIDCO Grid Corporation
HESCOM Hubli Electricity Supply Company
HP Horse Power
HRIS Human Resource Information System
ICAI Institute of Chartered Accountants of India
IFC Interest and Finance Charges
IW Industrial Worker
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IP SETS Irrigation Pump Sets
KASSIA Karnataka Small Scale Industries Association
KEB Karnataka Electricity Board
KER Act Karnataka Electricity Reform Act
KERC Karnataka Electricity Regulatory Commission
KM/Km Kilometre
KPCL Karnataka Power Corporation Limited
KPTCL Karnataka Power Transmission Corporation Limited
KV Kilo Volts
KVA Kilo Volt Ampere
KW Kilo Watt
KWH Kilo Watt Hour
LDC Load Despatch Centre
MAT Minimum Alternate Tax
MD Managing Director
MESCOM Mangalore Electricity Supply Company
MFA Miscellaneous First Appeal
MIS Management Information System
MoP Ministry of Power
MU Million Units
MVA Mega Volt Ampere
MW Mega Watt
MYT Multi Year Tariff
NFA Net Fixed Assets
NLC Neyveli Lignite Corporation
NCP Non Coincident Peak
NTP National Tariff Policy
O&M Operation & Maintenance
P & L Profit & Loss Account
PLR Prime Lending Rate
PPA Power Purchase Agreement
PRDC Power Research & Development Consultants
REL Reliance Energy Limited
R & M Repairs and Maintenance
ROE Return on Equity
ROR Rate of Return
ROW Right of Way
SBI State Bank of India
SCADA Supervisory Control and Data Acquisition System
SERCs State Electricity Regulatory Commissions
SLDC State Load Despatch Centre
SRLDC Southern Regional Load Dispatch Centre
STU State Transmission Utility
TAC Technical Advisory Committee
TCC Total Contracted Capacity
T&D Transmission & Distribution
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TCs Transformer Centres
TPC Tanirbavi Power Company
TR Transmission Rate
VVNL Visvesvaraya Vidyuth Nigama Limited
WPI Wholesale Price Index
WC Working Capital
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KARNATAKA ELECTRICITY REGULATORY COMMISSION
BANGALORE - 560 001
Dated this 6th day of May, 2013
ORDER ON KPTCL’s Annual Performance Review for 12 , ARR for FY14 to
FY16 and Transmission Tariff for FY14 to FY16. UNDER MULTI YEAR TARIFF
FRAMEWORK.
In the matter of:
Application of KPTCL in respect of the Annual Performance Review for FY12 and
Approval of the ARR and Transmission Tariff for FY14 to FY16 under Multi Year Tariff
framework.
Present: Shri M.R.Sreenivasa Murthy Chairman
Shri Vishvanath Hiremath Member
Shri K.Srinivasa Rao Member
O R D E R
The Karnataka Power Transmission Corporation Ltd (hereinafter
referred to as KPTCL) is a Transmission Licensee under the provisions
of the Electricity Act 2003. Under the provisions of the KERC (Terms
and Conditions for Determination of Transmission Tariff) Regulations
2006, KPTCL, has filed its application on 21st November 2012 and 10th
December 2012 for the Annual Performance Review for the
financial year 2011-12 (FY12) ARR and Transmission Tariff for FY 2013-
14 to FY 2015-16.
In exercise of the powers conferred under Sections 62, 64 and other
provisions of the Electricity Act, 2003, read with KERC (Terms and
conditions for Determination of Transmission Tariff) Regulations 2006, and
other enabling Regulations the Commission has carefully considered the
applications and the views and objections submitted by the consumers
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and other stakeholders. The Commission’s decisions are given in this
order, Chapter wise.
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CHAPTER – 1
INTRODUCTION
1.0 Brief History of KPTCL:
Karnataka Power Transmission Corporation Ltd., (KPTCL) is a transmission
licensee under Section 14 of the Electricity Act 2003 (hereinafter referred
to as the Act). This is also a State Transmission utility under Section 39 of
the Act.
KPTCL is a registered company under the Companies Act, 1956,
incorporated on 28th July 1999. It has commenced its operations from 1st
August 1999 continuing its operations of Transmission and Distribution
functions of the erstwhile Karnataka Electricity Board (KEB).
In Karnataka, the unbundling of Transmission and Distribution business
came into effect from 1st June 2002. KPTCL became a Transmission
company and the Distribution business was vested with newly created
Distribution companies (ESCOMs).
Consequent to the enactment of the Electricity Act, 2003 with effect from
10th June 2005, KPTCL became a wire company and the bulk power
purchase activity was vested with a newly created SPV namely, the State
Power Procurement and Coordination Committee (SPPCC) presently
renamed as the Power Corporation of Karnataka Ltd., (PCKL).
KPTCL enables Transmission of power from generating stations to the
ESCOMs and to the open access consumers within the State. The
company operates 966 sub stations and 30539 circuit kilometers of
transmission lines with voltage of 66 KV and above. The area of operation
of the company is divided into 6 transmission zones headed by Chief
Engineers and these zones are further divided into 14 circles headed by
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Superintending Engineers. Further, the 14 circles are divided into 44
divisions headed by Executive Engineers.
In addition to the above, there are 30 Transmission line and Sub-station
Divisions (TL&SS) which are set up to look after the operation and
maintenance of the transmission system besides implementation of
augmentation works. Further, there are 4 Relay Testing (RT) Circles which
are divided into 14 Divisions. These RT divisions are responsible for
maintenance of protective relays, and meters, and addressing trouble
shooting issues of KPTCL Stations. The engineering wing is assisted by 74
accounting units which are responsible for accounting all transactions
and preparing the annual accounts of KPTCL.
1.1 Multi Year Tariff Regulations:
In terms of KERC (Terms and Conditions for Determination of Transmission Tariff)
Regulations, 2006 (MYT Regulations), KPTCL is filing its ERC & Tariff
applications from FY08 onwards. Under this MYT regime, the incentive/penalty
framework is based on over or under achievement of the licensee with respect to the
targets set by the Commission on the transmission losses, availability of the network,
and expenses that are deemed ‘controllable’ in the tariff regulations.
1.2 Tariff Orders Issued By the Commission
Since its constitution in 1999, the Commission has been issuing Tariff
orders for transmission as well as retail supply of electricity from time
to time. The Commission, till now, has issued the following tariff
orders in respect of transmission tariff:
i) Tariff Order - 2002 dated 8th May 2002 approving ERC and
determining bulk supply and transmission tariff of KPTCL for
FY03.
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ii) Tariff Order - 2003 dated 10th March 2003 approving ERC and
determining bulk supply and transmission tariff of KPTCL for
FY04
iii) Tariff Order - 2005 dated 25th September 2005 approving ERC
and determining bulk supply and transmission tariff of KPTCL
for FY06.
iv) Tariff Order - 2006 dated 7th April 2006 in respect of ERC &
Tariff of KPTCL for FY07.
v) Tariff Order - 2007 dated 6th July, 2007 under MYT frame work
in respect of ERC & Tariff of KPTCL for FY08 to FY10.
vi) Supplementary Tariff Order, 2007 dated 31st December, 2007
in respect of ERC & Tariff of KPTCL for FY08 to FY10.
vii) Tariff Order - 2009 dated 25th November 2009 in respect of
Revised ERC & Transmission Tariff for FY10 of KPTCL under MYT
Framework.
viii) Tariff Order - 2010 dated 7th December 2010 in respect of APR
for FY10 and ERC & Transmission Tariff for FY11-13 of KPTCL
under MYT Framework.
ix) Tariff Order – 2012 dated 30th April 2012 in respect of APR for
FY11 and revised ARR and Transmission Tariff for FY13.
1.3 Open Access:
The Commission has introduced open access in a phased manner
by framing Open Access Regulations 2004, with the object of
encouraging competition in the electricity generation and
distribution sectors. The Commission is also determining the
transmission and wheeling charges and cross-subsidy surcharge for
Open Access consumers.
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1.4 KPTCL at a glance:
Sl. No Particulars (As on 31-03-2012) 2011-12
1.
Generation Capacity
(connected to Transmission
System)
MW
12031
a) KPC Hydro and Thermal MW 5985
b) CGS(Karnataka Share) MW 1700
c) NCE, IPPs and Others MW 4346
2.
No. of Receiving Sub-Stations
/Length of Tr. Lines (as on
31.03.2012)
Nos./CKms. 966/3053
9
a). 400 kV Nos./CKms.
4/1978
b). 220 kV Nos./CKms. 89/9760
c). 110 kV Nos./CKms. 331/9063
d). 66 kV Nos./CKms. 542/9738
3. Assets as at the end of FY12 Rs. in
Crores 9959.21
4. Total employees:
a) Sanctioned Nos 14333
b) Working Nos 9183
5.
Demand (FY-12) Charges for
Transmission of Power to
ESCOMs
Rs. in
Crores 1663.00
6. Collections of transmission
charges
Rs. in
Crores 1586.11
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CHAPTER – 2 VALIDATION AND PUBLIC HEARING PROCESS
2.1 BACKGROUND:
In its order dated 07.12.2010, the Commission had approved the ERC and
transmission tariff for KPTCL for the period FY11 to FY13. The ARR and
Transmission tariff for FY13 was revised as per the Commission’s tariff order
dated 30th April 2012. KPTCL in its application dated 21st November 2012, has
sought approval for the Annual Performance Review for FY12. Further, on 10th
December 2012 KPTCL has submitted an application for approval of ERC and
Transmission Tariff for FY14 under MYT framework.
2.2 Commission’s Directives & Compliance by KPTCL:
The Commission, in its tariff order dated 7th
December 2010 and 30th
April 2012 has
issued directives on various matters pertaining to KPTCL. KPTCL has stated that:
i) It has been making sincere efforts to comply with the directives issued by
the Commission.
ii) There has been substantial improvement in processes like commercial
operation and financial management.
The Commission had directed KPTCL to ensure full compliance of the directions in a
time bound manner. A summary of the various directives issued by the Commission
and their compliance by KPTCL is annexed vide Appendix.
2.3 Public hearing process
On receipt of the application of KPTCL, the Commission conveyed its
preliminary observations on 22nd December 2012. KPTCL furnished its
replies vide its letter dated 4th January 2013. The Commission also held a
validation meeting with KPTCL on 7th January 2013. In its letter dated 22nd
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January 2013, KPTCL has furnished its replies on the observations of the
Commission during the validation meeting.
The Commission in its letter dated 11th January 2013 has treated the
application of KPTCL as petition in terms of the Tariff Regulations subject to
further verification and validation. Accordingly, KPTCL was directed to
publish a summary of the application in the news papers within a week in
accordance with the Clause 5(1) of the KERC (Tariff) Regulations 2000 as
amended on 1st February 2012.
In compliance with the above directions of the Commission, KPTCL has
published the summary of its application in the following news papers on
18th & 19th January 2013.
The Hindu
Times of India
Prajavani
Udayavani
KPTCL’s ERC and Tariff Application were also made available on the web-sites
of KPTCL & KERC. In response to the notices published in the above
newspapers, calling for objections on the ERC and the tariff application of KPTCL
for FY13, the Commission received objections from six persons / organisations
within the stipulated time. KPTCL has provided replies to these objections.
The Commission held a Public Hearing on KPTCL’s ERC & Tariff petition on 22nd
February 2013 in the Court Hall of the Office of the Commission. The objections
raised, and the responses from KPTCL thereon, are discussed in Chapter - 3 of
this Order.
2.4 Consultation with Advisory Committee of the Commission
A meeting of the Advisory Committee of the Commission was held on 19th March
2013. The members of the Committee discussed the various issues involved in
the ERC and Tariff applications of KPTCL and offered valuable suggestions.
These suggestions have been taken note of by the Commission while finalising
this order.
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CHAPTER – 3
SUGGESTIONS & OBJECTIONS
The Commission had addressed the Members of Parliament from
Karnataka and Members of the State Legislature, requesting them
for their views/ opinion on the ARR and Tariff petitions filed by the
KPTCL and the ESCOMs. In response, the Commission has received
views from the following persons as detailed below:
3.1 Hon’ble Shri M.V Rajashekharan, Former Union Minister of State for
Planning, Sri MallikarjunaNilaya, No. 20/1, Kanakapura road,
Basavanagudi, Bangalore -4.
The Hon’ble Former Minister and Member of Karnataka Legislative
Council has expressed the view that it is not desirable to allow
increase in the price of Electricity as the State is facing a severe
drought situation, and the people are experiencing severe hardship
as the prices of essential commodities are sky rocketing.
3.2 Hon’ble Shri Ramachandra Gowda, MLC, Vice Chairman, State
Planning Commission, Vidhana Soudha, Bangalore-1.
The Hon’ble member of the Karnataka Legislative Council has given
the following suggestions/ views to the Commission.
1. The proposal for not increasing the Electricity charges in respect
of BJ/KJ and IP sets up to 10HP is appropriate.
2. Electricity rate shall not be raised in respect of consumers who
are consuming up to 100 units.
3. Electricity rate shall not be raised in respect of installations
pertaining to Backward, SC/ST and Public student’s hostels.
4. The proposal to hike Rs 0.70 per unit at a time seems to be high
and the same is to be reduced to Rs 0.35 per unit.
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KPTCL’s Reply:
KPTCL has replied that the objections raised by the above
dignitaries pertain to retail tariff and has to be replied by ESCOMs.
Commission’s Views:
The Commission has taken note of the points raised by the respected
dignitaries and the views expressed by them are kept in mind while
determining the Transmission tariff.
3.3 Other interested persons have filed/ offered their suggestions/
views/objections on the APR for 12, ERC, ARR of KPTCL for FY14, FY15
and FY16 and the Transmission Tariff Petition for FY14, FY15 and FY16.
Sl No Application
No.
Name & Address of Objectors
1. KA-01 Sri Jameel Ahmed Khan, FA & CAO, Bangalore Water Supply & Sewerage Board, Cauvery Bhavan, Bangalore -9
2. KA-02 Sri S. Rajashekar, Secretary General, FKCCI,
Federation House, K.G.Road, Bangalore- 560 009.
3. KA-03 Sri S.N. Eswar, Hon General Secretary, KASSIA.
#2/106, 17th Cross, Magadi Chord Road, Vijayanagar,
Bangalore-560 040.
4. KB-01 Sri A.Raja Rao, Consumer Care Society, No.593, 24th Cross, BSK II Stage, Bangalore-70.
3.4 List of persons who made oral submissions during the Public Hearing on
22.02.2013.
Sl No. Name & Address of Objectors
1. Sri.A.RajaRao Consumer Care Society
2. Sri .RohitRao, Advocate, KASSIA & FKCCI
3. Sri V.S. Arbatti, Advocate, BWSSB.
4. Sri.Gururaj,Kuvempunagar Welfare Association, BTM layout Bangalore.
3.5 Brief outline of Objections raised, response from KPTCL and Commission’s
views :
Sl.No Appn. Objections KPTCL Replies
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No.
1 KA-01 Bangalore Water Supply and
Sewerage Board.
1. KPTCL in its filing has stated that
the gap in revenue has arisen due
to change in the apparent
transmission capacity of KPTCL
from 14248 MW to 15814 MW for
FY12, 16749 MW for FY13 and the
ESCOMs have entered into
agreements for transmission
services for the same. KPTCL did
not produce any material in
support of the above. Objector has
requested the Commission to
direct the KPTCL to provide details
of the same.
2. In the details of the regarding
the quantity of energy at the
interface points proposed to be
increased are provided at Page 23
of KPCL filing which does not show
that there is substantial increase in
the energy availability, compare to
the earlier years. In view of the
same there is a large scale this
proportion between the increase in
the quantity of energy and the
increase in the proposed
transmission charges, which is very
high and KPTCL has fail to explain
the gross disproportion.
3. The objector has stated that, the
Perspective Plan for the proposed
In the present application, in
Table 28, (Page No.46) proposed
Transmission tariff is clearly
indicated. Hence, it is not correct
to say that KPTCL has not
specified any transmission
charge. Further it is to state that
KPTCL has entered into
agreements with ESCOMs as
directed by the Commission in its
Tariff Order dated 07.12.2010 and
30.04.2012.
KERC has determined the
transmission charges in
Rs/MW/Month from 25.11.2009
onwards. Hence the transmission
tariff is not proposed in Ps/unit.
Since KPTCL is not considering the
transfer of energy in Million units
for computation of transmission
tariff, trying to establish a
relationship between energy at
interface points and the
proposed transmission tariff is not
correct.
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period has not been submitted by
KPTCL & the Data furnished by
KPTCL in relation to the capital
works is not adequate. KPTCL also
has failed to provide the details of
the means of financing the
proposed investments.
4. Details for the revenue gap for
FY12 (Rs.293.23 crore) is not
furnished. Hence it cannot be
allowed to adjust the figures of
FY13. The Commission is requested
to direct KPTCL to furnish details.
5. The MYT application is filed
taking revised estimates of FY13,
which are not approved figures.
KPTCL may be directed to
incorporate approved figures of
FY13.Further, the R&M expenses
have been increased at an
average rate of 10.5% , but, the
previous years’ figures are not
provided.
6. KPTCL will not purchase or sell
power and the volume of its
KPTCL has entrusted the work of
preparing a perspective plan for
the 12th plan period to M/s PRDC
limited. The firm vide its letter
dated 18.02.2013 has requested
time till the end of March 2013 for
submission of the draft plan.
Workwise details of capital
expenditure are provided in
Annexure 2, 3 &4 to the MYT filing.
These works are necessary to
meet the load growth, provide
quality and reliable supply, and
ensure stable grid operations and
generation evacuation.
Financing is done through
borrowings from public sector
banks, REC and PFC.
The APR for FY12 has been filed
based on the Audited Accounts.
The difference in actuals and
approved numbers gives the
Revenue Gap. Reasons for
differences in each of the ARR
items are clearly brought out in
the APR filing for FY 12.
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operations has come down
substantially by which the
employee’s costs and
administrative and general
expenses should have reduced.
But the employee’s costs and
administrative and general
expenses have increased, as
evident from the figures submitted
by KPTCL, which contribute
significantly to the deficit
projected by KPTCL for FY12 to
FY16.
7. KPTCL has not followed the
CERC’s directions in relation to
depreciation for which data &
calculations are not adequately
furnished. Advance against
Depreciation has not been
claimed by the KPTCL which is
appropriate.
8. KPTCL has failed to provide
proper and complete details of the
means of finance for the proposed
capital investment and
consequently, the borrowings and
interest charges projected by
The MYT Regulation 2.5.1 states
that values for the base year are
to be determined based on
audited accounts. For the third
MYT period, the base year is 2012-
13, for which audited accounts
are not available, as the year has
not yet ended. Hence revised
estimates for FY13 are considered
as base for future projections.
Details of R&M expenses from
2010-11 onwards are available in
table T5 page No.62 of the filing
The core activity of KPTCL is to
transmit power generated to the
distribution companies. Costs
incurred by KPTCL are essentially
on account of creation and
maintenance of transmission
assets for this purpose. KPTCL’s
expenditure on Capital works or
O&M costs which include
employee costs and A&G
expenses do not get reduced
because of removal of the
trading activity from the scope of
KPTCL. Increase in employee
costs is mainly due to wage
revision, increase in contribution
towards terminal benefits,
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KPTCL cannot be correlated with
its investment program. No
information on loan terms, interest
rates and efforts to reduce the
interest is furnished by KPTCL. The
proposed revenue deficit for FY14
to FY16 can be wiped off, by a
single item of expenditure, the
interest and finance charges, as
projected by KPTCL for FY14 to
FY16.
9. The return on equity @15.5%
demanded by KPTCL is too high
and it cannot be supported by the
performance of KPTCL. If KPTCL
takes adequate measures to
control its interest charges,
employees costs and additional
expenses, KPTCL would have
adequate return on its equity.
10. KPTCL has not complied with
the directions issued by the
Commission. This is evident from
the response of KPTCL in relation
to the compliance details in the
tariff filing.
periodical increase in dearness
allowance and annual
increments.
Depreciation is calculated as per
the CERC Regulations for the tariff
period from 01.04.2009 to
31.03.2014 in terms of Regulation
17(4). KERC has in its tariff order
25.11.2009 in page No.86 stated
that it has adopted the rates as
per CERC Regulations. With this
background the Depreciation has
been worked out. Details of
Depreciation are adequately
furnished in format T8 of the filing.
The details of funding agencies
and interest and finance charges
are made available in the filing
format T9.
The KERC allows interest and
Finance charges based on the
normative Debt Equity ratio of
70:30. The debt required for
financing the projects and the
related interest cost are proposed
for the MYT in accordance with
the clause No. 3.1(b) and 3.7 of
MYT Regulations.
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Return on Equity at 15.5% is a
legitimate claim by KPTCL which is
in terms of CERC Regulation
15.Also KERC in its order dated
25.11.09 has adopted the CERC
rates for calculation of RoE.
KPTCL has made best efforts to
comply with the directives issued
by the Commission. It is to be
mentioned here that compliance
to the directives is a continuous
process. Compliance to the
directives as at the time of filing
has been clearly furnished in the
MYT filing.
2 KA-02
& KA-
3
FKCCI & KASSIA
Defective Filing.
The objector has stated that the
KPTCL has not published/ furnished
all the documents filed before the
Commission to them except:
1) The APR for FY12, ARR for FY14 –
FY16, and determination of tariff for
FY14.
KPTCL has made available all its
documents to the public
pertaining to APR for FY12 and
MYT filing. A notification to this
effect was published in leading
Kannada and English dailies on
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2) Copy of preliminary observations
by the Commission.
3) Copy of the response to the
preliminary observations by KPTCL.
Performance Review & Prudence
Check
The Objector has stated that, as
per KERC MYT Regulations the
capital expenditure and ARR shall
be subject to prudence check. The
projections and estimates for ARR
for capital investment /
expenditure shall be based on the
actuals of the previous control
period. None of the audited
accounts or the provisional
accounts for any of the previous
years has been made available to
the objectors.
Alteration/Modification of the
Control Period.
The objector has stated that, as
per KERC MYT Regulations the
control period shall mean, at the
first instance a period of 3 years
commencing from FY2008-09 and
thereafter a period of 5 years.
Whereas, KPTCL has considered 3
years which is contrary to MYT
Regulations.
18th& 19th of January 2013. The
Annual Accounts of KPTCL for
FY12 are also posted on the
website of KPTCL.
Year on Year KPTCL has filed its
APR before the Commission and
Commission has issued orders on
the same after conducting the
public hearing. The APR for FY12 is
also part of such exercise. KPTCL
has also submitted the details of
completed capital works for FY12
in the prescribed format for
prudence check by KERC.
On a combined reading of
Regulation 2(h) and 2.3 of MYT
Regulation, it is amply clear that
the control period will be
ordinarily for a period of 5 years or
the Commission can specify such
other period from time to time.
- 23 -
Non Adherence to Accounting
Standards.
BESCOM has not drawn up its
accounts in accordance with
Companies Act 1956 and also not
followed relevant Accounting
standards.
Objections to Petition for APR.
Any review of the performance at
the beginning of the control period
can only be a comprehensive
review and prudence check of the
earlier period. The KERC MYT
Regulations do not provide for APR
in between 2 control periods.
Regulations 2.7.1 of the KERC, MYT
Regulations clearly lays down that
the transmission licensee shall be
subject to an APR during the
control period. A further reading of
Regulation 2.7.1 would only
reinforce that APR is not meant to
be conducted in between two
control periods. Further it is
contended that truing up of
capital expenditure cannot
happen without prudence check
and also the O&M expenses and
interest and working capital and
RoE have not been calculated as
per KERC MYT regulations. As
such, the petition for APR is not
maintainable and deserves
The Commission has informed
KPTCL vide letter dated
24.09.2012 that the third control
period is fixed for three years
commencing from FY14. Hence it
is incorrect to state that KPTCL has
modified/varied the control
period.
KPTCL maintains its Accounts as
per the companies Act 1956 and
as per the Accounting standards
prescribed.
The second control period covers
the three year term commencing
from FY11-FY13. The APR filed by
FY12, is for the second year of the
Control period, which is being
taken up during the third control
period. There is no “in between
period” as perceived by the
objector. KPTCL has already
furnished details of its capital
expenditure in the prescribed
format for FY12, to the
Commission. Regarding O&M
expenses and the interest costs
- 24 -
dismissal.
Objections to the Contents in the
Petition for ARR, ERC and Tariff.
KPTCL has submitted that for
projecting expenditure for the 3rd
control period, it has taken into
account the revised ARR for
FY2013. This is a completely wrong
approach. The projections for the
ensuing control period ought to be
on the basis of the prudence
check of the previous control
period, by bringing the gains or
losses into the next control period.
The KPTCL has made proposals for
calculation of ROE and has
claimed 15.5%. It is submitted that
the rate of percentage proposed
by KPTCL is against the KERC MYT
Regulations, which alone applies
to the State.
Operation and Maintenance
Expenses.
KPTCL should have submitted the
consolidated O&M expenses for
the base year of the control period
and for the two years preceding
the base year. The O&M expenses
for the base year shall be
determined on the latest audited
accounts and the best estimates of
the licensee of the actual O&M
expenses for the relevant years. But
specific requests giving the
reasoning for the claim of KPTCL
are made in the filing in para 6.4
(a) (b) (c) and 6.6 of the APR filing
which are self-explanatory.
Depreciation and RoE calculation
have been made in accordance
with KERC order dated 30.04.2012,
which has accepted the norms
set by CERC.
Projections for FY14 to FY16 were
made based on the revised
estimates for FY13. The revised
estimates for FY13 are based on
the audited accounts for FY12.
The details of actual capital
expenditure for FY12 for the
purpose of prudence check have
already been submitted to KERC.
RoE calculations are in
accordance with the norms set
by KERC in its order dated
- 25 -
the basis for the O&M expenses
claimed by KPTCL is only the
revised figures of FY13. Further
without the audited accounts for
the year previous to the base year,
which is mandatory requirement, it
would be impossible to make
projections for the O&M expenses
for the ensuing control period. As
such the filing for O&M expenses of
the KPTCL in the present form
cannot be accepted.
30.04.2012.
Operation and Maintenance
charges are worked out in
accordance with the norms set
by the Commission in its order
dated 30.04.2012. This is indicated
in table 19(page38) of MYT
petition. However based on the
past experience of the normative
expenses approved by the
Commission falling short of
actuals, KPTCL has requested the
Commission to relook at the
norms set by the Commission.
3 KB-01 Consumer Care Society.
1. KPTCL has not filed a perspective
plan for 5 years and there is no
KPTCL has entrusted the work of
load forecast and perspective
- 26 -
mention of any Load forecast and
a Capital investment plan.
2. The Commission has issued the
previous tariff order without stating
the transmission Capacity of the
network. There is no mention of the
contracted transmission capacity
between KPTCL and ESCOMs.
KPTCL has stated that there is an
agreement for “Transmission
Service”, the terminology of which
is not in the Regulations.
3. Transmission Capacity was only
used in a secondary way and the
only purpose was to enable KPTCL
to collect their approved ARR and
also to enable this ARR to be
allocated to the ESCOMs and the
real purpose of transmission
capacity has been lost sight of.
4. The objector is interested in
knowing the present and the future
transmission CAPACITY operated in
a manner that can transmit the
PEAK LOAD of the ESCOMs in an
plan to M/s PRDCL Limited,
Bangalore. The firm has submitted
its load forecast report on 13th
February 2013. The gist of the
Load forecast for the 12th plan
period as furnished by PRDCL is
enclosed as Annexure A. The firm
has requested time till the end of
March for submission of the
Perspective plan.
Transmission Agreements in the
Standard Agreement format
approved by KERC, have been
entered into with ESCOMs by
KPTCL during May 2012 and in
accordance with the directions
by KERC in its tariff order dated
07.12.2010 and 30.04.2012. Copy
of the said Agreements are
submitted to KERC. In this
agreement, the Contracted
Capacity is included.
For the purpose of transmission
tariff transmission capacity is
considered at the 220KV level
since most of the energy
transmission takes place through
220 KV level. Keeping the 220KV
level capacity for FY2011-12 as
the base number, year on year
- 27 -
efficient manner with minimum
losses and with enough
redundancy to cater to faults and
outages both forced and
unforced.
5. KPTCL needs to carry out load
flow, stability and other system
studies on a continuous basis.
Based on such studies we need to
reach “transmission capacity”
figures which would help in
assessing the investments being
planned by KPTCL and included in
the CAPEX figures and the results of
such studies are made available to
the Commission as well as to the
users.
6. SLDC needs to upgrade itself in
terms of both hardware &
software. Since it plays very
important role in managing the
intra-state transmission network.
7. The transmission charges in
respect of FY14, FY15 &FY16 are of
the order of Rs.2.5 lakhs, Rs.2.3
lakhs & Rs.2.38 lakhs as per the
objector’s calculations and not of
the order of Rs.1.2 lakhs and Rs.1.11
lakhs as claimed by KPTCL. Also the
energy charges are of the order of
planned capacity additions are
taken to arrive at the transmission
capacity for the MYT period i.e.
from FY14 to FY16.
Transmission system planning is
done keeping in mind (n-1) and
(n-2) contingencies. Hence
redundancy is a must in a
transmission system.
Capex is planned based on the
requirements of ESCOMs to cater
to the load growth. Also, to meet
the system improvement
requirements and generation
evacuation in the State. It is to be
mentioned here that the
transmission system is planned
taking into account unrestricted
peak demand and not the peak
demand in the restricted supply
conditions.
The State Load Dispatch Centre
- 28 -
Rs.0.4 per unit which is extremely
high.
of Karnataka is carrying out grid
operations efficiently and strictly
in accordance with IEGC and
KEGC. This has been appreciated
by KERC and SRPC in official
meetings. SLDC is actively
involved in implementation of
SCADA in the State.
Transmission Tariff of KPTCL is
comparable with similarly placed
states like Andhra Pradesh and
Gujarat. The following table
provides the details:
For FY13 (as approved by
respective SERC order).
State ARR
(Rs.Cr)
Capacity
in MW
Karnataka 1917 14248
Gujarat 1996 18510
AP 1405 17877
* Andhra Pradesh maintains
transmission network up to 132 KV
level only. Whereas both
Karnataka and Gujarat handle
transmission network up to 66KV
level. Hence the statement that
KPTCL is the costliest transmission
company is not correct.
5 Objections raised during the public
hearing by Sri. A. Raja Rao from
- 29 -
Consumer Care Society.
1. Referring to the 12th Annual
report it is stated that, the MW
capacity indicated is different from
what is presented in the hearing.
Further, it is stated that, the
generation capacity was
considered in the previous years
and suddenly the transformer
capacity has been shown in the
filing as transmission capacity for
which the basis was not furnished.
The MD KPTCL has stated that, the
generation capacity was considered
earlier to arrive at the transmission
capacity and subsequently after the
signing of the transmission
agreement with ESCOMs the
aggregate of 220 kV substation
transformer capacities are
consideredas the transmission
capacity.
3.6 Commission’s Views:
Regarding General Observations on Service made by the
Objectors:
The consumer organizations, as well as several individual objectors,
during the course of their oral submissions, were generally
appreciative of the services rendered by the company. Further,
several suggestions were made for further improvement regarding
the loading of transformer, safety of the equipment established at
the public places, grant of sanctions, etc. Most of these suggestions
were welcome suggestions and the Managing Director
representing the KPTCL expressed his sincere thanks for the
suggestions made and assured that the company will take the
suggestions in all sincerity and bring in further improvements in the
services. The Commission also appreciates the efforts of the
company in improving the quality of service and hope that KPTCL
will achieve still better standards and earn further accolades from
the consumer public.
- 30 -
Regarding Transmission Agreement and Contracted Transmission
Capacity.
The Commission in its tariff order dated 07.12.2010 had directed the
KPTCL to enter into Transmission Agreement with ESCOMS.
Accordingly, the KPTCL has executed the Transmission Agreements
with ESCOMs. The details are as follows:
SL.No Name of the
Company
Capacity (In MVA) Date of Agreement
1 BESCOM 11166.50 08.05.2012
2 MESCOM 2545.00 21.05.2012
3 CESC 2450.00 08.05.2012
4 HESCOM 4060.00 08.05.2012
5 GESCOM 2300.00 26.05.2012
Regarding O&M Expenses.
O&M costs which includes employees costs and A&G expenses
does not get reduced because of removal of trading activity from
the scope of KPTCL. Increase in employees cost is mainly due to
wage revision. Commission allows O&M expenses for the third
control period based on the norms prescribed under the MYT
Regulations.
Regarding RoE Calculation.
As per clause 3.10 of KERC (Terms and Conditions for determination of
Transmission Tariff) Regulations 2006, Rate of Return on Equity at 14% has
been amended to 15.5% vide notification dated 1st February 2012. Hence,
KPTCL is being allowedRoE at the rate of 15.5%.
Regarding Perspective Plan
- 31 -
KPTCL shall obtain the details of perspective plan from M/s PRDC
Ltd, Bangalore and to file the up dated perspective plan, taking
into consideration the updated load forecast.
Regarding Depreciation
The Commission has allowed Depreciation as per the rates
prescribed in the MYT Regulations.
Regarding Prudence Check
This issue will be dealt separately.
Regarding Altering Control period.
FKCCI and KASSIA have contended that as per KERC MYT
Regulations, the Control Period shall mean, at the first instance a
period of 3 years commencing from FY-2008-09 and thereafter a
period of 5 years; whereas KPTCL has considered 3 years, which is
contrary to MYT Regulations.
While raising the above contention, the objector has not noticed
the Regulation fully. Regulation 2.4 of the KERC MYT Regulations,
2006 states that the Control Period normally shall be five years or
such other period as may be specified by the Commission from
time-to-time. Accordingly, the Commission has fixed present period
again as three years. This is followed by KPTCL and the same
cannot be found fault with.
- 32 -
Regarding Non adherence to Accounting Standards:
It is contended by the objectors that ESCOMS / KPTCL have not
drawn up their accounts in accordance with the Companies Act,
1956 and also have not followed the relevant Accounting
Standards.
The Hon’ble Appellate Tribunal for Electricity (ATE), while passing its
Order dated 2.1.2013 in Appeal No.108/2010 filed by the objector
(FKCCI), has ordered at Paragraph-57(ii)as follows :
“Since Section 69 of the 1948 Act was not applicable to the
Companies those were in the business of supply of
electricity prior to enactment of the Electricity Act 2003, it
cannot be held to be applicable to the companies formed
after the enactments of 2003 Act and restructuring of the
Board under Section 172 of 2003 Act by virtue of 185(2)(d)
of the 2003 Act. The Commission is accordingly directed to
direct the 2nd
Respondent to submit the Annual Accounts
Statement in accordance with the Companies Act
henceforth. Depreciation on Grants, consumer’s
contribution etc shall have to be treated in accordance
with Accounting Standard 12 of Institute of Charted
Accounts.” [Emphasis supplied]
As per the above Order, the accounts of ESCOMs / KPTCL have to
be in accordance with the provisions of the Companies Act after
2013. Therefore, the accounts filed by KPTCL along with the present
application have to be considered. However, it is ordered that the
KPTCL has to maintain its accounts hereafter as per the provisions of
the Companies Act and file the same.
- 33 -
Regarding objection on Interest Payment.
The Commission is to allow interest on finance charges on the
proposed CAPEX subject tosubsequent truing up and Prudence
Check. Hence, Commission has only allowed the interest on finance
charges on the proposed CAPEX after detailed scrutiny of the
CAPEX programs submitted by KPTCL.
G E N E R A L :
The views expressed by some of the objectors, who did not file any
objections within the time permitted, have also been considered by
the Commission while determining the Tariff.
- 34 -
CHAPTER – 4
ANNUAL PERFORMANCE REVIEW FOR FY12
4.0 KPTCL’s Filing for APR for FY12:
KPTCL in its application dated 19th November 2012, has filed for approval
of Annual Performance Review for FY12 based on the Audited Accounts
for FY12. Further, KPTCL in its application dated 10th December 2012 has
filed for approval of ERC for FY14 to FY16 and approval of Transmission
Tariff for FY14.
The Commission vide its letter dated 28th December 2012 had
communicated its preliminary observations on its filing to KPTCL which has
in its letter dated 4th January 2013 replied to the preliminary observations
of the Commission.
The Commission in its tariff order dated 7th December 2010, had approved
ERC and Transmission tariff for FY11 – FY13. Further, in its tariff order dated
30th April 2012, the Commission has approved the APR for FY11 and has
revised the ERC and Transmission tariff for FY13. In this tariff order, the
Commission has factored the surplus of Rs.13.78 Crores of FY11 into the
approved ARR for FY13.
In this Chapter, the Commission has taken up the Annual Performance
Review for FY12 based on the Audited Accounts filed by KPTCL as
discussed below:
4.1 KPTCL’s Submission:
KPTCL has submitted its proposal for revision of ARR for FY12 based on the
Audited Accounts as follows:
TABLE – 4.1
KPTCL’s filing – APR FY12
Amount in Rs. Crs.
- 35 -
Sl.
No Particulars
As appd in
Order dated
07.12.2010
As per Filing
21.11.2012
1 Revenue 1542.14 1542.14
Expenditure
2 O&M Expenses 473.64 645.49
3 Depreciation 444.59 449.53
4 Interest & Finance Charges 548.50 592.56
5 Interest on working capital 48.05
6 RoE 278.56 334.20
7 Provision for taxation 0.00 0.00
8 Other Debits 0.00 118.51
9 Power purchase cost 0.54
Less
10 SLDC charges 10.22 0.77
11 Interest & Finance Charges capitalised 154.05 95.74
12 Other Expenses capitalised 31.93 33.61
13 Other Income 55.00 22.98
14 Net Prior Period Charges 0.00 5.06
15 Extraordinary items -5.06
16 Less Interest on belated power
purchase cost 108.21
17 Less Expenses shared by ESCOMs 17.68
18 NET ARR 1542.14 1861.84
19 Gap 0.00 -319.70
As per its petition, KPTCL has projected a revenue deficit of Rs.319.70
Crores for FY12 considering the approved revenue of Rs.1542.14 Crores.
However, considering the actual revenue from transmission charges and
Open access charges amounting to Rs.1568.61 Crores, the revenue deficit
for FY12 is projected at Rs.293.23 Crores. KPTCL has proposed to carry
forward this gap to its proposed ARR for FY14.
- 36 -
4.2 KPTCL’s Financial Performance as per Audited Accounts for FY12:
The overview of the financial performance of KPTCL for FY12 as per their
Audited Accounts is as follows:
TABLE – 4.2
Financial Performance for FY12
Amount in Rs. Crs.
Sl.
No Particulars
As per
Audited
Accts
1 Revenue 1663.01
Expenditure
2 O&M Expenses 645.49
3 Depreciation 449.53
4 Interest & Finance Charges 592.57
5 Interest on working capital
6 RoE
7 Provision for taxation 1.04
8 Other Debits 118.51
Power purchase cost 0.54
9 Less
10 SLDC charges 0.00
11 Interest & Finance Charges capitalised 95.74
12 Other Expenses capitalised 33.61
13 Other Income 22.98
14 Net Prior Period Charges 5.06
15 Extraordinary items -5.06
16 NET ARR 1655.35
17 Profit for the Year 7.66
As per the Audited Accounts, KPTCL has earned a profit of Rs.7.66 Crores
for FY12. Considering the surplus earned by the Company in the previous
years, the cumulative surplus would be Rs.182.15 Crores as reflected in the
audited Balance Sheet for FY12.
Commission’s Analysis and decisions:
The Annual Performance Review for FY12 has been taken up duly
considering the actual expenses as per the Audited Accounts against the
- 37 -
expenses approved by the Commission in its tariff order dated 7th
December 2010.
In accordance with the provisions of the KERC (Terms and Conditions for
Determination of Transmission Tariff) Regulations, 2006 and the
amendment notified on 1st February 2012, the Commission has taken up
the Annual Performance Review of KPTCL for FY12. The item wise review
of expenditure and the decisions of the Commission thereon are
discussed in the following paragraphs:
i) Transmission Losses for FY12:
The Commission had approved the annual average transmission loss of
3.98% for FY12. KPTCL, in its filing has reported a transmission loss of 3.907%.
However as per the Audited Accounts the transmission losses are
indicated as 4.536%. The Commission, in its preliminary observations,
sought details of the assessment of transmission losses and to indicate
correct transmission losses for FY12. KPTCL, in its replies to the preliminary
observations, has stated that, the transmission losses for FY12 is 3.907%
considering the energy input into KPTCL grid and the energy delivered to
ESCOMs and open access consumers. However, considering the earlier
methodology of comparing the total energy handled by KPTCL from the
generation bus bar to the interface points of ESCOMs and open access
consumers, the transmission losses are indicated in the Audited Accounts
as 4.536%.
The Commission in its tariff order dated 7th December 2010, had fixed the
target transmission losses of 3.98% for FY12 on the basis of the
methodology followed by KPTCL till then (which included overall
transmission losses inclusive losses in southern grid outside KPTCL’s
network). Therefore, for the present, the Commission recognizes the
transmission losses of 4.536% as against an approved target of 3.98%.
In view of the non-achievement of the target for reduction of transmission
losses in FY12, the Commission has decided to impose a penalty at the
- 38 -
rate of 1% of RoE for every 0.5% variation from the approved band of
transmission losses as per the decision in the Commission’s MYT order
dated 6th July 2007. Accordingly, the penalty for non-achievement of the
loss reduction target for FY12 to the extent of 0.46% is Rs.2.48 Crores as
worked out below:
TABLE – 4.3
Computation of Penalty for Non achievement of target loss levels for FY12
Penalty for increased Transmission losses in FY12
Particulars Amount Rs.in
Crs.
1% of RoE (Rs Crs) 2.72
Target upper band of Tr. Losses in % 4.08
Actual Transmission Losses 4.54
Increase in loss level beyond allowable
upper band 0.456
Penalty for increased Transmission
losses Rs. Crs 2.48
ii) System Availability:
In accordance with Clause 3.17(1) of the MYT Regulations, the
transmission licensee is entitled to incentives for achieving system
availability above the target availability of 98%. As per Clause 3.17(2) of
the MYT Regulations, 50% of the incentives are to be shared with long term
customers in the ratio of their average allotted transmission capacity for
the year.
The availability details furnished by KPTCL is 99.81% as against the
availability of 99.85% in FY11. It is observed that, the availability has come
down by 0.04% from the previous year.
Further, the Commission has verified the data of system availability
furnished by KPTCL. It was observed that, the transmission line availability
pertaining to Bagalkot transmission zone was found to be 99.59% as
against 99.62% furnished by KPTCL and the transmission line availability
pertaining to Bangalore transmission zone was found to be 99.78% as
against 99.79% furnished by KPTCL.
- 39 -
The transmission system availability after validation is as shown in the table
below:
TABLE – 4.4
System Availability - FY12
Sl
No
Name of the
Transmission Zone
Total No of
AC
Transmission
Lines
%
Availability
of Total No
of AC lines
Total No
of ICT’s
%
Availability
of Total No
of ICT’s
1 BANGALORE 268 99.7800 488 99.9368
2 TUMKUR 96 99.8423 336 99.9587
3 HASSAN 161 99.6194 263 99.8886
4 BAGALKOT 289 99.5900 450 99.9821
5 GULBARGA 146 99.8571 290 99.9229
6 MYSORE 133 99.8731 227 99.9246
TOTAL 1093 2054
System Availability For the Year 2011-12 = 99.81%
In the present filing KPTCL has reported system availability of 99.81%. In
accordance with provisions of the MYT Regulations, the incentive
admissible to KPTCL is worked out as follows:
TABLE – 4.5 Approved Incentive for better Transmission System Availability for FY12
Particulars
System Target Availability 98%
Actual System Availability for FY12 99.81
No incentive allowed beyond 99.75%
as per MYT Regulations 99.75%
Availability beyond target levels 1.75
Incentives for Availability beyond
target levels linked to approved ARR in
Rs. Crs 28.79
50% to be shared with the ESCOMs and
balance to be retained by KPTCL Rs.
Crs 14.39
The Commission allows an incentive of Rs.14.39 Crores towards better
system availability beyond the target availability stipulated in the MYT
Regulations. The mode of collecting this incentive is detailed below:
- 40 -
The above said incentives for better system availability are to be
recovered by KPTCL, while the penalty for non achievement of targeted
losses are to be borne by KPTCL. As such the net incentive is worked out
as follows:
Particulars Amount in
Rs. Crs.
Incentive on account of better system
availability in FY12 14.39
Penalty for non achievement of loss target in
FY12 2.48
Net amount recoverable from ESCOMs 11.91
The Commission directs KPTCL to recover Rs.11.91 Crores from the ESCOMs
in proportion of the energy supplied at the interface points for FY12. The
breakup of incentives to be claimed from ESCOMs shall be furnished to
the Commission.
iii) Power Purchase:
As per the Audited Accounts, KPTCL has indicated an amount of Rs.53.70
lakhs to be paid towards cost related to power purchase pertaining to the
period prior to 10th June 2005. The Commission in its earlier tariff orders has
already directed KPTCL to recover these expenses from the ESCOMs and
not to include them in the ARR of KPTCL. The Commission, in the present
order also reiterates its earlier stand that, the cost of power purchase is not
a component of transmission charge. The Commission has therefore
decided not to allow the amount of Rs.53.70 lakhs in APR of KPTCL for
FY12.
iv) Operation and Maintenance Expenses:
- 41 -
The actual O&M Expenses reported by KPTCL is Rs.645.49 Crores. This
includes Employee costs of Rs.518.27 Crores, Administrative & General
Expenses of Rs.41.46 Crores and Repairs & Maintenance expenses of
Rs.85.76 Crores. The Commission in its Tariff Order dated 7th December
2010, had approved O&M Expenses of Rs.473.44 Crores. The actual O&M
Expenses incurred are higher than the approved expenses by Rs.172.05
Crores.
In accordance with the provisions of the MYT Regulations KPTCL has
computed O & M expenses for FY12 at Rs.371.66 Crores. It has stated that,
though the actual O & M expenses are Rs.611.88 Crores (net of
capitalization), the O & M expenses as per norms are Rs.371.66 Crores and
hence there is a huge difference of Rs.240.22 Crores. Further, KPTCL has
cited the method of calculating O & M expenses prescribed by CERC and
has requested the Commission to approve O & M expenses as per
actuals.
As per the provisions of the MYT Regulations, the normative O &M
expenses are determined based on the actual O & M expenses of the
base year, the number of bays and circuit kilometers of transmission lines
and the inflation factor.
The Commission in its tariff order dated 7th December 2010, while
approving the O & M expenses for the control period FY11 to FY13 had
considered additional employee costs due to revision of pay, increase in
the number of employees, and increase in the contribution to Pension
and Gratuity fund. These additional expenses were treated as
uncontrollable O & M expenses besides the normative O & M expenses.
In this APR, on the same principle, the Commission considers O & M
expenses as controllable in accordance with the provisions of the MYT
Regulations. However, the O & M expenses on account of additional
employee costs incurred by KPTCL due to revision of pay and change in
- 42 -
Pension & Gratuity contribution are treated as uncontrollable O & M
expenses. Thus the allowable O & M expenses for FY12 are as follows:
TABLE – 4.6
Approved Additional Employee Cost (Uncontrollable O&M Expenses)
Sl.
No.
Particulars Amount in Rs
Crs
1 Additional Employee Cost due to pay
revision and revision of HRA as furnished
by KPTCL vide letter dated 11.02.2013
206.50
2 Additional Employee Cost due to pay
revision and revision of HRA already
allowed during APR of FY11 as per
Commission’s Tariff order dated 30th April
2012
111.20
3 Balance to be allowed in FY12 95.30
4 Contribution to P&G Trust as per audited
accounts of FY12
95.87
5 Less Contribution to P&G Trust and Newly
Defined Contributory Pension Scheme
(NDCPS) already factored in contribution
to P&G Trust as per audited accounts for
FY12 under item (4) above.
40.45
Uncontrollable O & M expenses for FY12 150.72
TABLE – 4.7
Approved Allowable O & M expenses for FY12
Particulars Amount
in Rs Crs
O&M cost without terminal benefits in terms Rs.
thousands/bay 65.30
O&M cost without terminal benefits in terms Rs.
thousands/Km of Line 86.74
Inflation rate* 5.49
No. of Bays 18340.00
Length of Line in Kms 30539.00
O&M Expenses for Bays Rs Crs 119.76
O&M Expenses for Lines Rs Crs 264.91
Total O&M Expenses without terminal benefits as per
Norms Rs Crs 384.67
Additional employee cost 150.72
Total O&M Expenses allowable in Rs Crs 535.39 * Inflation rate is as per CERC Order dated 25.09.2012
Thus, the allowable O & M expenses for FY12 are determined at Rs.535.39
Crores.
- 43 -
v) Depreciation:
KPTCL has indicated an amount of Rs.449.53 Crores towards depreciation
for FY12. The Commission in its tariff order 7th December 2010, had
approved Rs.444.59 Crores towards depreciation. Therefore, the actual
depreciation is more by Rs.4.94 Crores.
The Commission has to determine the allowable depreciation in
accordance with the KERC (Terms and Conditions for Determination of
Transmission Tariff) Regulations, 2006 as amended on 1st February 2012.
Considering the actual average gross block of fixed assets for FY12, the
weighted average rate of depreciation works out to 4.73%. Since KPTCL
has determined the actual depreciation based on the opening block of
gross fixed assets and the actual capitalization/retirement of assets from
time to time during the year, the Commission decides to consider
depreciation of Rs.449.53 Crores as claimed by KPTCL. Depreciation
allowed in this order is subject to review in respect of depreciation on
assets created if any out of consumer contribution and grants.
vi) Prudence Check of Capital Investment for FY10 to FY12:
KPTCL has incurred total capital expenditure of Rs 4984 Crores in the
period 2009-10 to 2011-12 which included expenditure of Rs. 2959.12
Crores on ongoing works at the beginning of the period and Rs. 2965.98
Crores on newly started works. It was able to complete capital works with
an expenditure of Rs 3529.86 Crores during these years with ongoing
works costing Rs. 1454 Crores remaining at the close of the financial year
2011-12. The year wise capital expenditure incurred and the works
completed is as follows:
- 44 -
The approved and actual capital Investment for FY10, FY11 and FY12:
YEAR Proposed &
Approved Capex
Capital
Investment
(Actuals)
% age
Achievement Short fall
FY-08 2400 2093 87% 307
FY-09 2100 1809 86% 291
FY-10 1600 1452 91% 148
FY-11 1692 1133 67% 559
FY-12 1692 944.86 56% 747.14
Total 9484 7431.86 78% 2052.14
The Voltage Class Wise Commissioned Works in FY 10, FY11 and FY12 are as
under:
Sl
No. Year Particulars
Voltage class (in kV) Total
400 220 110 66
Nos. MVA/
Ckms Nos.
MVA/
Ckms Nos.
MVA/
Ckms Nos.
MVA/
Ckms Nos.
MVA/
Ckms
1 2009-
10
Station 3 610 15 310 12 155.5 30 1075.5
Line 6 69.25 19 262.33 18 179.48 43 511.06
Augmentation 4 350 19 270 22 172.9 45 792.9
2 2010-
11
Station 6 1215.5 5 70 25 447.3 36 1732.8
Line 8 329.5 11 131.98 36 227.7 55 689.18
Augmentation 1 315 16 170 12 119.7 29 604.7
3 2011-
12
Station 1 208 16 280 9 164.5 26 652.5
Line 4 387.84 20 276.47 19 211.61 43 875.92
Augmentation 1 10 26 325 29 241.4 56 576.4
In order to carry out a prudence check of the capital expenditure
incurred during the period, KERC Commissioned a study through M/s TERI
(The Energy Research Institute) in December 2012. The study covered
aspects of capital works completed during the period like the actual cost
and capacity of the works as executed and ranked them according to
the degree to which the intended outcomes of the works have been
realised in terms of augmentation of loads, reduction in line losses,
improvements in voltage etc. the TERI study covered a sample of 61 nos of
capital works out of 83 capital works costing Rs 5.00 crores or more which
were completed during the period FY10 to FY12. The total amount of
- 45 -
expenditure incurred on the works covered by the prudence check was
Rs.1722.58 crores as compared to the total capital expenditure of
Rs.3529.86 Crores incurred during the period. The Commission also held
joint review meetings on 23rd and 25th March 2013, between the KPTCL
officials and those of the ESCOMs to elicit responses of KPTCL and ESCOMs
on the findings of the TERI with respect to individual works.
The prudence check of KPTCL capital works thus carried out by the
Commission has indicated the following:-
a) All the capital works studied were undertaken after considering
detailed project reports which contained adequate justification for the
investment proposed and indicated a favourable benefit to cost ratio.
The works were also approved by a Technical Advisory Committee
before being sanctioned.
b) The Augmentation and the link line proposals are discussed in the
Technical coordination committee meeting held regularly involving
the representatives of KPTCL and ESCOMs.
c) Most of the projects have led to improvement in Voltage levels and
reduction in interruption.
The Commission’s prudence check of KPTCL’s capital works also revealed
the following short comings in the planning and execution of works.
a) In eighteen 66/11 kV sub stations, the transformers are not uniformly
loaded and efforts are to be made to share the loads among the
transformers properly.
b) The capacity utilization of four of the projects is not met at present due
to non commissioning of 33kV and 11 kV lines by ESCOMs. KPTCL has to
make coordinated efforts with ESCOMs to ensure commissioning of
these lines.
The report of the Consultant will be uploaded on the Commission’s
website.
During the meeting held with KPTCL in March 2013, KPTCL have prayed
for some time to address the issues raised in the study relating to the
- 46 -
prudence check and submit detailed compliance report to the
Commission. They have also pleaded that full utilization of the capacity
of the infrastructure created by the KPTCL will require ESCOMs completing
several items of their own capital works which will be co-ordinated with
them.
The Commission has considered the KPTCL’s request and has decided to
allow time up to 31st December 2013 to KPTCL to address the issues which
have come up during the prudence check and submit compliance
reports to the Commission. After considering the action taken by KPTCL in
compliance of the above direction, the Commission will take a view on
whether the entire capital expenditure during the relevant period should
be considered as meeting the norms of prudence, or whether the
Commission should consider disallowing any part of the capital
expenditure incurred. This will be factored into the annual performance
review for the financial year 2012-13 to be taken up before 31st March
2014.
vii) Interest and Finance Charges:
KPTCL has claimed an amount of Rs.592.57 Crores towards interest and
finance charges. The Commission in its tariff order dated 7th December
2010, had approved an amount of Rs.548.50 Crores. It is observed that, as
per the Audited Accounts an amount of Rs.54.05 Crores pertaining to
interest on short term loans is included in the interest and finance charges
of Rs.592.57 Crores. As such the actual interest and finance charges for
long term loans is Rs.538.52 Crores. Thus, the actual interest and finance
charges is less than the approved interest and finance charges by Rs.9.98
Crores.
As per the Audited Accounts and data furnished under format D9,
considering the opening and closing balances of loans, the average loan
for the year FY12 would be Rs.4957.97 Crores. The weighted average rate
of interest works out to 10.86%.
- 47 -
Further, the Commission notes that, KPTCL has achieved a capex of
Rs.945.00 Crores against a proposed investment of Rs.1692 Crores. KPTCL
has availed long term loans of Rs.365 Crores towards capex of Rs.945.00
Crores during FY12.
TABLE – 4.8
Allowable Interest on long term loans
Amount in Rs.Crs.
Particulars FY12
Secured Loans 4986.71
Unsecured Loans 26.92
Total 5013.63
Less Interest accrued & dues 0.00
Long term secured & unsecured loans 5013.63
Add new Loans 365.00
Less Repayments 476.33
Total loan at the end of the year 4902.30
Average Loan 4957.97
Interest payable on long term loans (as
filed) 538.52
Weighted average rate of interest based
on the actual interest proposed on long
term loans in FY12 as per audited accts in
%
10.86%
Allowable Interest on long term loans 538.52
In view of the above, considering the prevailing interest rates, the
Commission decides to allow actual interest and finance charges of
Rs.538.52 Crores for FY12. Further, considering the actual capitalization of
interest of Rs.95.74 Crores the net interest and finance charges would be
Rs.442.78 Crores.
viii) Interest on Working Capital:
As per the format D9 of the filing, KPTCL has incurred interest on short term
loans to an extent of Rs.54.05 Crores. As per the norms under MYT
Regulations as amended, KPTCL is entitled to interest on working capital
as shown below:
- 48 -
TABLE – 4.9 Allowable Interest on Working Capital for FY12
Particulars
Amount
in Rs.
Crs.
One-twelfth of the amount of O&M Exp. 44.62
Opening GFA as per Audited Accts 9025.51
Stores, materials and supplies 1% of
Opening balance of GFA 90.26
One-sixth of the expected revenue from
Transmission user at the prevailing tariffs* 261.44
Total Working Capital 396.31
Rate of Interest (% p.a.) 11.75%
Interest on Working Capital 46.57 *As per actual revenue for FY12
ix) Other Debits:
KPTCL in its filing and Audited Accounts has claimed an amount of
Rs.118.51 Crores towards other debits. This includes an amount of
Rs.108.21 Crores towards interest on belated payment for cost of power
purchase. However, KPTCL in its filing has not considered Rs.108.21 Crores
while projecting its ARR for FY12. The balance amount of Rs.10.30 Crores
pertains to mainly the cost of decommissioning of assets, small and low
value items written off and miscellaneous losses and write offs. The
Commission decides to allow an amount of Rs.10.30 Crores towards other
debits for FY12.
x) Return on Equity:
KPTCL has claimed an RoE of Rs.334.20 Crores at 19.018% (considering
MAT of 18.5%) on equity of Rs.1757.26 Crores.
- 49 -
TABLE – 4.10
Return on Equity - KPTCL’s Submission
Calculation of RoE Amount
Rs.in Crs.
Equity at beginning of 2011-12 690.32
Shares pending allotment 885.00
Reserves and Surplus 181.94
Equity Considered for Calculation of RoE 1757.26
RoE 334.20
The Commission in its tariff order dated 7th December 2010 had approved
an RoE of Rs.278.56 Crores.
The Commission, in accordance with the MYT Regulations has considered
the paid up share capital, share deposits and reserves & surplus as per the
audited accounts for FY12. Further, the Commission has considered 15.5%
RoE and decides to allow taxes as per actuals. Accordingly, the
allowable RoE for FY12 is as follows:
TABLE – 4.11
Allowable Return on Equity for FY12
Particulars
Amount
Rs.in
Crs.
Paid Up Share Capital 690.32
Share Deposit 885.00
Reserves and Surplus 179.55
Total Equity 1754.87
Approved RoE 272.00
xi) Provision for Taxation:
KPTCL in its Audited Accounts has indicated an amount of Rs.1.04 Crores
as expenses towards payment of tax for FY12. Since the Commission has
allowed RoE @ 15.5% without considering allowable MAT, the Commission
decides to allow the actual expenses towards payment of tax of Rs.1.04
Crores for FY12.
- 50 -
xii) Net Prior Period Charges:
KPTCL in its Audited Accounts has indicated an amount of Rs.5.06 Crores
as net prior period charges. This amount pertains to net off excess / under
provisions pertaining to depreciation, employee cost and other
administrative expenses.
The Commission allows an amount of Rs.5.06 Crores as net prior period
charges for FY12.
xiii) Extraordinary items:
KPTCL in its Audited Accounts has indicated an amount of Rs.5.06 Crores
as income from exceptional items. This amount pertains to gains on
account of sale of land. The Commission decides to allow an amount of
Rs.5.06 Crores as exceptional income for FY12.
xiv) Other Expenses Capitalized:
KPTCL in its filing has indicated an amount of Rs.33.61 Crores towards
capitalization of other expenses. This mainly pertains to capitalization of
employees costs, A&G and R&M.
TABLE – 4.12
Expenses Capitalized – KPTCL’s Submission
Particulars Amount in
Rs.Crs.
Repairs and Maintenance 0.11
Administration and General Expenses 4.50
Employee Cost 29.00
Total expenses capitalized 33.61
The Commission allows an amount of Rs.33.61 Crores towards
capitalization of other expenses.
- 51 -
xv) Other Income:
KPTCL in its Audited Accounts has indicated an amount of Rs.22.98 Crores
as other income. This mainly pertains to rent from staff quarters, rent from
ESCOMs and interest on bank deposits. However, KPTCL has accounted
other operating income of Rs.94.39 Crores under revenue demand. This
amount mainly consists of income from sale of scrap, supervision charges,
miscellaneous recoveries and refunds / withdrawal of miscellaneous
income accounted in previous year.
The Commission decides to allow an amount of Rs.117.37 Crores as other
income on the above items.
xvi) SLDC Charges:
KPTCL in its filing has deducted an amount of Rs.0.77 Crores pertaining to
SLDC charges from the ARR for FY12. Further, as per the audited
accounts, an amount of Rs.17.68 Crores has been deducted from the
O&M expenses as the same pertains to expenses shared by ESCOMs.
The Commission in its Tariff Order dated 7th December 2010 has observed
that the system operation by SLDC being not a transmission activity, the
SLDC charges cannot be included in the ARR of KPTCL. The Commission
has also allowed SLDC charges in the ARR of ESCOMs while determining
cost of power purchase.
The amount of Rs.18.45 Crores (Rs.17.68 Crores pertaining to O & M
expenses of SLDC plus Rs.0.77 Crores pertaining to depreciation of assets
of SLDC) shall be recovered from the ESCOMs and other long term
transmission network users in proportion to the energy supplied at
interface points for FY12.
Further, KPTCL in its filing has stated that, the Commission in its order dated
30th April 2012, has deducted an amount of Rs.22.31 Crores pertaining to
- 52 -
SLDC charges in the Annual Performance Review for FY11. KPTCL has
requested to add back the excess amount of Rs.13.08 Crores deducted in
APR of FY11.
The Commission, in its order dated 30th April 2012, had deducted an
amount of Rs.22.31 Crores from the allowable ARR for FY11 as KPTCL in its
filing had indicated that this amount pertains to SLDC. However, as per
the audited accounts for FY11 the following are the actual SLDC
expenses:
TABLE – 4.13
Allowable SLDC Charges for FY11
Sl.No. Particulars Amount in
Rs. Crs.
1 SLDC Charges deducted in the APR for FY11 as per
the Commission’s order dated 30th April 2012
22.31
2 Actual SLDC expenses as per audited accounts
a) R&M expenses 3.79
b) Employee Cost 7.54
c) A&G expenses 4.07
d) Depreciation 0.77
TOTAL as per audited accounts 16.17
3 Difference of amount (1) and (2) above to be
factored in APR 12
6.14
Since the actual amount as per audited accounts is less than the amount
deducted in the APR for FY11, the Commission decides to include the
difference of Rs.6.14 Crores in the APR for FY12.
xvii) Abstract of Approved ARR for FY12:
As per the above item wise decisions of the Commission, the consolidated
Statement of ARR for FY12 is as follows:
- 53 -
TABLE – 4.14
Abstract of Approved ARR for FY12 Amount in Rs. Crs.
Sl.
No Particulars
As appd in
Order
dated
07.12.2010
As per
Filing
21.11.2012
As per
Audited
Accts
Approved
As per
APR
Expenditure
1 Power purchase cost 0.54 0.54 0.00
2 O&M Expenses 473.64 645.49 645.49 535.39
3 Depreciation 444.59 449.53 449.53 449.53
4 Interest & Finance Charges 548.50 592.56 592.57 538.52
5 Interest on working capital 48.05 46.57
6 RoE 278.56 334.20 272.00
7 Provision for taxation 0.00 0.00 1.04 1.04
8 Other Debits 0.00 118.51 118.51 10.30
Less
9 SLDC charges 10.22 0.77 0.00 0.77
10 Interest & Finance Charges
capitalised 154.05 95.74 95.74 95.74
11 Other Expenses capitalised 31.93 33.61 33.61 33.61
12 Other Income 55.00 22.98 22.98 117.37
13 Net Prior Period Charges 0.00 5.06 5.06 5.06
14 Extraordinary items -5.06 -5.06 -5.06
15 Interest on belated power
purchase cost 108.21 0.00
16 Expenses shared by ESCOMs 17.68
17 Difference of excess SLDC
charges deducted in APR 11 6.14
NET ARR 1542.14 1861.84 1655.35 1612.00
Thus, as against an approved ARR of Rs.1542.14 Crores and KPTCL’s actual
expenditure of Rs.1655.35 Crores, the Commission after the annual review
of performance for FY12 decides to allow an ARR of Rs.1612.00 Crores for
FY12. Considering the actual revenue of Rs.1568.62 Crores, there is a
deficit of Rs.43.38 Crores for FY12. The Commission decides to carry
forward this deficit to the proposed ARR for FY14 as discussed in the
subsequent chapter of this Order.
- 54 -
CHAPTER – 5
ANNUAL REVENUE REQUIREMENT FOR FY14 – 16
5.0 ERC Application for FY14–16:
KPTCL in its application dated 10th December 2012, has requested the
Commission to approve ARR and transmission charges for FY14-16 and to
carry forward the deficit of FY12 into the ARR of FY14 while determining
the transmission tariff for FY14.
KPTCL’s Submission:
KPTCL has proposed its ARR for FY14-16 as summarised below:
TABLE – 5.1
ARR for FY14 -16- KPTCL’s Submission
Sl.
No Particulars FY14 FY15 FY16
1 Revenue from Transmission of power in
Rs.Crs 2193.08 2338.56 2591.08
Expenditure in Rs.Crs
2 Employee Cost 651.50 715.86 782.70
3 Repairs & Maintenance 113.65 125.42 138.43
4 Admin & General Expenses 53.35 58.89 65.00
5 Total O&M Expenses 818.50 900.17 986.13
6 Depreciation 595.70 647.18 698.66
7 Interest & Finance Charges 648.27 761.61 834.64
8 Interest on working capital 42.00 36.75 26.25
9 Return on Equity 450.95 536.71 638.79
10 Provision for taxation 0.00 0.00 0.00
11 Other Debits 12.46 13.71 15.08
12 Extraordinary items 0.00 0.00 0.00
Less
13 Interest & Finance Charges capitalised 99.61 101.60 103.63
14 Other Expenses capitalised 36.34 37.43 38.55
15 Other Income 25.55 26.14 26.79
16 Net Prior Period Charges 0.00 0.00 0.00
17 Less SLDC Charges 0.77 0.77 0.77
18 NET ARR 2405.61 2730.19 3029.81
19 Gap -212.53 -391.63 -438.73
- 55 -
However, as per format A1 of the filing, the gap is indicated as Rs.213.30
Crores, Rs.392.41 Crores and Rs.439.49 Crores for FY14, FY15 and FY16
respectively. It is observed that, the difference is due to SLDC charges of
Rs.0.77 Crores for each year of the control period.
Considering the above ARR, KPTCL has requested to approve the
following transmission charges for the control period FY14-16:
TABLE – 5.2
Transmission Charges FY14-16 – KPTCL’s Submission
Particulars FY14 FY15 FY16
Transmission Capacity in MW 19061 20336 22546
ARR 2405.61 2730.19 3029.81
Gap of FY12 293.23 - -
SLDC charges Excess Deducted 28.25 - -
Total Revenue Requirement 2727.09 2730.19 3029.81
Transmission Tariff (in
Rs./MW/Month)
119226.43 111878.36 111986.24
Commissions’ Analysis and Decisions:
The Commission, in accordance with the provisions of the KERC (Terms
and Conditions for Determination of Transmission Tariff) Regulations 2006
as amended has taken up the item wise analysis of expenditure. In this
Chapter the analysis and the decisions of the Commission thereon are
discussed in the following paragraphs.
i) Capital Investment Programme for FY14-16:
KPTCL has proposed its capital investment plan for the 3rd control period
with the following objectives.
a) To meet additional Load.
b) To improve the voltage profile.
c) To evacuate power from new generating stations.
d) To strengthen the existing network to meet contingencies.
e) To ensure development of efficient, coordinated and economical
system of intra state transmission lines.
- 56 -
f) To achieve cost effective delivery of power.
On the basis of the above objectives, the works proposed taken up and
the Budget allocations are stated in the table below:
Classification of
works
2013-14 2014-15 2015-16
Budget in
Rs. Crs
%
Allocation
Budget in
Rs. Crs
%
Allocation
Budget
in Rs
Crs
%
Allocation
Additional Load 828.54 59.18% 601.25 42.95% 443.79 31.70%
To improve
voltage profile 72.1 5.15% 48.81 3.49% 27.78 1.98%
To evacuate
power from new
generating
station
141.37 10.10% 488.22 34.87% 639.12 45.65%
To strengthen
existing system 358 25.57% 261.72 18.69% 289.34 20.67%
KPTCL has proposed setting up of additional Transmission capacity duly
taking into consideration the expected additional generation. It has cited
Central Electricity Authority norms for Capital Investment Requirement
between generation, transmission and distribution in the ratio of 2:1:1.
Accordingly, it is stated that considering the cost of Thermal Generation
Rs.5 Crores for Megawatt, an investment of Rs.2.5 crores per Megawatt is
required in transmission for evacuation of the power generated.
Further, KPTCL has stated that, it has added 31539 kms of transmission lines,
in FY13 and has proposed to add 32089, 32689 and 33889 kms of
transmission lines of various Voltage class in the MYT control period of FY14,
FY15 & FY16.
The details of transmission lines as per voltage class furnished below:
- 57 -
Voltage
Class
2012-13
RE
2013-14
Projected
2014-15
Projected
2015-16
Projected
400 kV 2338 2338 2338 2938
220 kV 9869 9919 10019 10219
110 kV 9244 9444 9644 9844
66 kV 10088 10388 10688 10888
Total 31539 32089 32689 33889
KPTCL has stated that it has added a total of 19009 Nos of terminal Bay till
Fy13 and has proposed to enhance it to 19624, 20239 & 20854 Nos in FY
14, FY15 & FY16, and the different category of terminal bays are shown
below:
KPTCL has stated that, In order to meet the load growth, evacuate power
from the generating stations and the required strengthening of network,
Capital Investment of 1400 Crores for each year in the Control Period for
FY14 to FY16 is required as shown in the following table:
TABLE – 5.3
Capex for FY14-16 – KPTCL’s Submission
Amount in Rs. Crs
Details 2013-14 2014-15 2015-16
Nos Budget Nos Budget Nos Budget
Completed
Works 83 134.59 144 113.41 128 417.46
Ongoing Stations 144 450.35 249 1138.53 242 952.02
New Works 481 732.52 236 119.52 114 10.19
General 83.00 28.54 20.33
Total 708 1400 629 1400 484 1400
Commission’s Analysis
Year
Line
Bay
Transformer
Bays
PT
Bay
Capacitor
Bank Bay
11 KV
Bay Total
A B C D E (A+B+C+D+E)
2012-13 4952 2154 1411 744 362 19009
2013-14 5052 2229 1451 794 350 19624
2014-15 5152 2304 1491 844 350 20239
2015-16 5252 2379 1531 894 350 20854
- 58 -
The Commission notes that KPTCL needs to augment its network to
evacuate the increased generation capacity to the point of distribution,
which is expected to reach 16890 MW in 2013-14, 17526 MW in 2014-15
and 18797 MW in 2015-16. Such enhancement of generation capacity
requires additional transmission network with new substations and
augmentation of the existing substations for effective transmission of
power from point of generation to the point of distribution.
The Commission observes that, as per the data furnished by the KPTCL, an
additional Transformer Capacity of 2312 MVA, 1275 MVA and 2210 MVA is
indicated to be added for FY14, FY15 & FY16 respectively. It is noted that,
KPTCL has incurred 7431.86 Crore Capex as against the
proposed/approved capex of 9484 Crores, during the period FY08 to FY12
and has been able to achieve an overall 78% of the targets. The capital
investment achieved also shows a declining trend after FY08 even though
the energy handled by the network has increased.
TABLE – 5.4
Capex- Performance FY08- FY12
Amount in Rs. Crs
YEAR Proposed&
Approved Capex
Capital Investment
(Actuals)
% age
Achievement Short fall
FY-08 2400 2093 87% 307
FY-09 2100 1809 86% 291
FY-10 1600 1452 91% 148
FY-11 1692 1133 67% 559
FY-12 1692 944.86 56% 747.14
Total 9484 7431.86 78% 2052.14
- 59 -
The installed capacity added from FY09 to FY12 and total MVA as on
31.3.2012 is indicated below:
The Commission further notes that, the work in progress is also increasing
from year to year which shows the need for completing and capitalizing
capital works within the target time. The project execution needs to be
monitored very closely at all levels of execution and especially at the
corporate level to complete the works and to capitalize in a given time
frame. KPTCL is required to address issues like Land acquisition, forest
clearances, and the right of way problems etc., as special cases with
additional task forces, so as to enable completion of work as per its plans.
The work in progress details are shown in the table below:
Amount in Rs.
Crs.
Description 2010-11
(Actual)
2011-12
(Actual)
2012-13
RE)
2013-14
(Projection)
2014-15
(Projection)
2015-16
(Projection)
Opening balance 2,189.00 1,771.73 1,789.53 1,869.53 2,269.53 2,669.53
Add:
i) Capital expenditure 981.73 815.51 1017.07 1264.05 1260.97 1257.82
ii) Interest & Finance
charges capitalised 87.39 95.74 97.65 99.61 101.60 103.63
iii) Other expenses
capitalised 25.57 33.61 35.28 36.34 37.43 38.55
Total capital expenditure for
the year 1094.69 944.86 1150.00 1400.00 1400.00 1400.00
Less: Expenditure
Capitalised (Transferred to
Form-T15/D15)
1287.85 993.32 1070.00 1000.00 1000.00 1000.00
Other Adjustments -224.11 66.26
Voltage
Class
MVA as on
31.3.2008
MVA Added MVA as
on
31.3.2012 2008-09 2009-10 2010-11 2011-12
400kV 3598 - - 315 - 3913
220kV 12786.5 3525 960 1215.5 218 18705
110kV 8235 825 580 240 605 10485
66kV 10789.9 1079.2 328.4 567 405.9 13170.4
Total 35409.4 5429.2 1868.4 2337.5 1228.9 46273.4
Capital
Investment
(Actuals)
2093 (87%) 1809 (86%) 1452 (91%) 1133 (67%)
944.86 (56%)
- 60 -
Closing Balance (Work in
progress) 1,771.73 1,789.53 1,869.53 2,269.53 2,669.53 3,069.53
The Commission notes that, KPTCL has proposed capital investments of
Rs.1400 Crores for each of the years in the control period FY14 to FY16.
Upon observing the achievements of previous years and the proposed
investment plan, the Commission directs KPTCL to initiate concrete
measures to complete execution of its projects and their capitalization in
time. With this observation the Commission considers an amount of
Rs.1400 Crores as Capex for each of the years of the control period FY14
to FY16. The capex approved is subject to prudence check while allowing
the same in the APR for the relevant years.
The approved capex in respect of the classification of works as per the
request of KPTCL are as under:
TABLE – 5.5
Approved Capex for FY14-16
Classification of works 2013-14 2014-15 2015-16
Budget
in Rs Crs
Budget
in Rs Crs
Budget
in Rs Crs
Additional Load 828.54 601.25 443.79
To improve voltage profile 72.10 48.81 27.78
To evacuate power from new generating station 141.37 488.22 639.12
To strengthen existing system 358.00 261.72 289.34
Total 1400 1400 1400
In addition to the above, the Commission directs KPTCL to study the
existing bottle necks, if any, in the transmission system and arrange for
improving the network connectivity for both importing power from outside
the State as well as to cater it to the end consumers keeping in view the
increased penetration of dispersed nature of the NCE projects throughout
the State.
Further, to improve the reliability and availability of power during
contingencies, KPTCL should construct alternative power lines to the
substations especially those which are very remotely located and tapped
from very long transmission lines of 110 kV or 66 KV.
ii) Transmission Losses:
- 61 -
KPTCL in its filing has projected transmission losses for the control period
based on the energy input into the KPTCL grid and energy output as
measured at interface points. The energy assessed for supply through
open access is also included in the projections. The transmission losses
projected for the control period are as follows:
TABLE – 5.6
Transmission Losses FY14-16 – KPTCL’s Submission
Particulars FY14 FY15 FY16
Input Energy in KPTCL Grid (MU) 62009 73118 81967
Energy at interface point (MU) 59566 70252 78770
Transmission loss in MU 2443 2866 3197
Transmission loss in % 3.94 3.92 3.90
The proposed transmission loss trajectory for the control period is shown as
follows:
TABLE – 5.7
Projected Trajectory of transmission losses (in % terms)
Range FY14 FY15 FY16
Upper Limit 4.04 4.02 4.00
Average 3.94 3.92 3.90
Lower Limit 3.84 3.82 3.80
KPTCL in its loss reduction measures has stated that it has taken up system
improvement works like adding new/link lines, augmentation of existing
transformer capacities and establishment of new sub-stations closer to the
load centers. KPTCL has stated that, these works would result in:
a. Reduction of transmission losses
b. Reduction of distribution losses
c. Improvement of system reliability
d. Enable creation of robust transmission network.
Commission’s Analysis & Decision:
The Commission, in its earlier orders had benchmarked transmission losses
on the basis of the methodology followed by KPTCL till then wherein the
- 62 -
input energy data included not only energy input of KPTCL system but also
the energy of the southern grid meant for supply in the State.
KPTCL in its present filing has proposed the transmission loss trajectory on
the basis of energy input into KPTCL system and output as per the energy
delivered at the interface points of ESCOMs. The actual transmission losses
as per the above methodology for FY12 are reported at 3.907%.
The Commission in its preliminary observations directed KPTCL to restate its
projected transmission loss trajectory for the control period duly
considering the actual loss levels achieved in FY12. KPTCL in its replies has
stated that:
i. The Transmission losses for FY12 is 3.907%
ii. The projected transmission losses for FY13 is 3.96% considering the
fact that there are no additions in 400KV network and
considering the 220KV stations commissioned in the year FY13.
iii. Considering the additions in 400KV and 220KV during the control
period the projected transmission losses would be 3.94%, 3.92%
and 3.90% for FY14, FY15 and FY16 respectively.
iv. Interstate transmission losses have not been accounted.
The Commission notes that the proposal of KPTCL to consider energy input
as measured at its periphery and energy output at IF Points with ESCOMs
for determining transmission losses would be a correct proposition as the
losses will then reflect those within the KPTCL network.
The Commission notes that, the capital expenditure incurred by KPTCL in
the previous control period and the percentage transmission losses with
reference to input energy are as follows:
Year Energy handled
in MUs
Percentage
Transmission loss as
per Audited Accounts
Capex for the
year in Rs.
Crores
- 63 -
FY09 44122 4.30 1809
FY10 47783 4.20 1452
FY11 50516 4.39 1133
FY12 56891 4.54
(3.90% as per the
revised methodology)
945
Considering the actual loss levels achieved in FY12 and the capex
proposals for the control period, the Commission decides to accept the
proposal of KPTCL and accordingly the following is approved as the loss
trajectory for FY14-16:
TABLE – 5.8
Approved Trajectory of Transmission Losses for FY14-16
Range FY14 FY15 FY16
Upper Limit 4.04 4.02 4.00
Average 3.94 3.92 3.90
Lower Limit 3.84 3.82 3.80
iii) O & M Expenses:
KPTCL in its filing has projected O & M expenses in terms of R& M expenses,
A&G expenses and employee cost as detailed below:
a) Repairs and Maintenance Expenses
KPTCL has stated that, R&M Expenses have increased over the previous
years at an average rate of about 10.5% year on year and this increase is
essential to improve the existing stations and other office buildings, as also
the stations likely to come up during the 3rd control period. Further, KPTCL
has taken into account the maintenance of SCADA infrastructure, station
control room equipment, TCD and RT division equipment etc. The R & M
expenses projected for the control period are as follows:
R&M expenses – KPTCL’s projections
Amt in Rs. Crs
Particulars FY13 FY14 FY15 FY16
Repairs and maintenance 98.63 113.65 125.42 138.43
b) Employees Costs
- 64 -
KPTCL in its filing has stated that, the Employees costs estimations are
based on normal increases like Annual Increments and Dearness
Allowance of 4.25% per installment for two installments every year. Other
allowances have been considered at the existing rates. Further, KPTCL has
computed contributions to Pension Trust considering the provisional
actuarial valuation at 35% on Basic pay, Dearness pay and Dearness
Allowance for Pension and for Gratuity at 6% on Basic Pay and Dearness
Pay for FY13 and thereafter 1% increase on the above percentages year
on year for the MYT period. The details of the Employees Costs proposed
by KPTCL are as follows:
Employee cost – KPTCL’s projection
Amt in Rs. Crs
Particulars FY13 FY14 FY15 FY16
Employees Cost 586.88 651.51 715.85 782.71
iv) Administration and General Expenses:
KPTCL has stated that, the Administration & General Expenses are
projected based on the realistic estimates made by the accounting units
for the base year. A & G Expenses are estimated at an average of 10% for
the third control period taking into account expenses like Rent, Rates and
Taxes, Expenses to be incurred towards Security arrangement, Insurance
and Telephone charges etc. Accordingly, the projected A&G expenses
for the control period are as follows:
A&G Expenses - KPTCL’s Projections
Amount in Rs. Crs
Particulars FY13 FY14 FY15 FY16
A & G Expenses 48.31 53.35 58.89 64.98
TABLE – 5.9
O&M Expenses for FY14-16 – KPTCL’s projections
Amount in Rs. Crs
Particulars FY13 FY14 FY15 FY16
R&M Expenses 98.63 113.65 125.42 138.43
Employee Cost 586.88 651.51 715.85 782.70
- 65 -
A&G Expenses 48.31 53.35 58.89 64.98
O & M expenses 733.82 818.51 900.16 986.11
Further, in accordance with the provisions of the MYT Regulations, KPTCL in
its filing has computed the O & M expenses as follows:
Normative O&M Expenses as per Tariff Order dated 30.04.2012
Particulars FY13
O & M Expenses for lines (in Rs. thousands / km) 88.09
O & M Expenses(in Rs. Thousands/ bay) 66.31
The projected details of circuit kilometers of transmission lines and station
bay are as follows:
Voltage class wise transmission lines – KPTCL’s Projections
Transmission lines in Ckmts
Voltage
Class FY13 FY14 FY15 FY16
400 Kv 2338 2338 2338 2938
220 Kv 9869 9919 10019 10219
110 Kv 9244 9444 9644 9844
66 Kv 10088 10388 10688 10888
Total 31539 32089 32689 33889
Number of Bays – KPTCL’s Submission
Considering the norms approved in tariff order 30.04.2012, the normative
O&M expenses projected for the control period are as follows:
Normative O&M expenses – KPTCL’s Projections
Amt in Rs. Crs
Particulars FY14 FY15 FY16
Normative O&M expenses for bays 130.13 134.20 138.28
Normative O&M expenses for lines 282.68 287.96 298.53
Total 412.81 422.17 436.81
Year
Line Bay Transformer
Bays PT Bay
Capacitor
Bank Bay
11 KV
Bay Total
A B C D E (A+B+C+D+
E)
FY13 4952 2154 1411 744 362 19009
FY14 5052 2229 1451 794 350 19624
FY15 5152 2304 1491 844 350 20239
FY16 5252 2379 1531 894 350 20854
- 66 -
KPTCL has stated that, even if the inflation at the rate of 5.17% factored by
the Commission in its calculations in tariff order 2012 is considered, the
O&M expenses as per norms would increase marginally. This amount is
too low as compared to the projections by the KPTCL based on actuals of
FY-12 escalated by a moderate increase of 10%.
The O&M expenses as per audited accounts and as approved by the
Commission in respective tariff orders indicate that the O&M expenses
based on norms are lower than actuals by substantive amounts.
O&M expenses as per audited accounts Vs approved O & M expenses –
KPTCL’s Submission Amt in Rs.
Crs
Particulars FY09 FY10 FY11 FY12
O&M Expenses as per actuals 301.97 353.73 516.35 611.88
Increase as per actual 14.63% 45.97% 18.50%
O&M Expenses as approved by KERC 288.78 325.21 453.27 473.64
Increase as approved by KERC 12.62% 39.38% 4.49%
In view of the above, KPTCL has requested to allow average increase in O
& M expenses by 10% over the actuals.
Commission’s Analysis and Decision:
As per the provisions of the MYT Regulations, the transmission licensee is
required to propose O & M expenses on the basis of per Ckt – Km of
transmission lines and per bay of sub-stations for the base year and apply
appropriate inflation factors.
KPTCL has requested the Commission to allow normative increase of 10%
over the actuals, since the approved O & M expenses as per norms is not
sufficient enough to meet the actual O& M expenses.
The Commission notes that, the projections of R&M expenses, employee
costs and O&M expenses made by KPTCL indicate an annual increase of
about 10%. Further, it is observed that, the employee costs also include
contribution to pension and gratuity trust. This P & G contribution is varying
- 67 -
as per the actuarial valuations undertaken by KPTCL on an annual basis.
Also, KPTCL is providing additional pension contribution for its employees
recruited on or after 1st June 2006 to meet the pension obligations of such
employees under the “Newly Defined Contributory Pension Scheme”. The
Commission notes that, these contributions for the terminal benefits of the
employees constitute an additional cost over and above the regular
employee cost which are factored on the normative basis. As such the
Commission decides to consider these costs as uncontrollable O & M
expenses and thereby determine the normative O & M expenses
(controllable O & M expenses) duly considering the actual O & M
expenses for the base years without P&G contribution.
Accordingly, the Commission has computed the allowable O & M
expenses for the control period FY14 to FY16 by considering the actual O
& M expenses for the base years FY10 to FY12 (without P&G contribution)
duly applying the inflation factor as per the latest rate of inflation notified
by CERC in its order dated 25th September 2012.
TABLE – 5.10
Approved Additional Employee Cost
(Uncontrollable O&M Expenses) for FY14-16
Particulars FY14 FY15 FY16
Basic Pay+DP 360.14 370.95 382.08
DA 43.22 74.19 106.98
Basic Pay+DP+DA 403.36 445.14 489.06
Pension [email protected]% on
Basic+DP+DA 117.42 129.58 142.36
Gratuity [email protected]% on Basic+DP 12.03 12.39 12.76
Increase in HRA wef 01.04.2012 4.95 5.10 5.25
Total P&G Contribution 134.40 147.07 160.38
TABLE – 5.11
Normative O & M Expenses FY14 – FY16
Particulars FY10 FY11 FY12 Average
Actual O&M expenses without SLDC
Charges and contribution to P&G Trust 353.59 464.99 550.91 456.49
O&M Costs for stations in terms of
bays @30% of O&M Expenses 106.08 139.50 165.27 136.95
- 68 -
O&M Costs for Transmission Lines in
terms of Ckt. Kms @70% of O&M
Expenses 247.51 325.49 385.63 319.55
Bays (Nos.) 17035 17694 18340 17689.67
Line length (Ckt. Km)- 28942 29630 30539 29703.67
O&M Costs per bay Rs in thousands 62.27 78.84 90.12 77.42
O&M Costs per Ckt. Km Rs in
thousands 85.52 109.85 126.28 107.58
Particulars FY14 FY15 FY16
O&M cost in terms Rs. Lakhs/bay 0.91 0.96 1.01
O&M cost in terms Rs. Lakhs/Km of Line 1.26 1.33 1.41
Inflation rate* 5.49 5.49 5.49
No. of Bays 19624.00 20239.00 20854.00
Length of Line in Kms 32089.00 32689.00 33889.00
O&M Expenses for Bays Rs Crs 178.34 194.03 210.90
O&M Expenses for Lines Rs Crs 405.24 435.48 476.25
TOTAL O&M Expenses as per Norms Rs Crs 583.58 629.51 687.16
TABLE- 5.12
Approved O&M Expenses for FY14-16
Amount in Rs. Crs.
Particulars FY14 FY15 FY16
O&M Expenses as per Norms Rs Crs 583.58 629.51 687.16
Additional O&M Expenses on account of P&G
Contribution 134.40 147.07 160.38
Allowable O&M Expenses with P&G
Contribution 717.98 776.58 847.54
v) Depreciation:
KPTCL has projected depreciation for the control period duly considering
the rates of depreciation specified by CERC. Further, KPTCL has stated
that the increase in depreciation is projected considering the projected
addition of assets to an extent of Rs.1000 Crores for each year of the third
control period.
Depreciation – KPTCL’s Projections
Amount in Rs.Crs
Depreciation FY13 FY14 FY15 FY16
542.56 595.70 647.18 698.66
- 69 -
Commission’s Analysis and Decisions:
As per the MYT Regulations, as amended, the allowable depreciation is
based on the rate of depreciation as specified by CERC from time to
time. The Commission has considered the projected opening and closing
gross block of assets for each financial year of the control period as
furnished by KPTCL. Since depreciation during the year is computed on
the basis of capitalization of assets during the year from time to time, the
Commission has determined the allowable depreciation on the average
gross block of assets by applying the rate of depreciation as specified by
CERC. Accordingly, the allowable depreciation for the control period are
as follows:
Approved Depreciation for FY14 – 16
Amt. Rs.in Crs.
Particulars FY14 FY15 FY16
Approved depreciation 562.55 607.81 652.95
vi) Interest and Finance Charges:
KPTCL in its filing has stated that, interest has been estimated on the
existing loan portfolios and on drawals during the current year. In the case
of the existing loans as on 31-03-2012, the interest on loans is computed
based on the actual rates applicable. For the future period of the control
period, KPTCL has considered the weighted average rate of 11.30%.
As regards the capex Programme of Rs. 1400 Crores for each year of the
third control period, the funding is expected through long term debts of
Rs.1280 Crores and the balance Rs.120 Crores from internal resources.
Further, KPTCL has raised loans at the rates ranging from 9.0% to 10.75% for
short term borrowings during 2012-13.
KPTCL has stated that,
a. The scheduled banks are not inclined to finance power sector utilities
consequent to a direction from the RBI regarding sanction of loans to
distribution companies.
b. As a result, KPTCL is finding it difficult to arrange debt through long
term loans.
- 70 -
c. KPTCL is managing its finances through short term borrowings.
However, KERC is not allowing interest on short term borrowings on the
ground that it allows interest on working capital on a normative basis.
d. The interest cost allowed on Working Capital on normative basis is not
sufficient to cover the interest on short term borrowings.
KPTCL has requested to consider the same and allow the projected
interest cost for the control period including interest on short term
borrowings. The details of Interest and Finance charges projected for FY
13 to FY 16 are as follows:
Interest & Finance Charges – KPTCL’s Projections
Amount Rs. in Crs
Interest and Finance
charges
FY14 FY15 FY16
648.27 761.61 834.64
Commission’s Analysis and Decisions:
As discussed in the preceding paragraphs of this Chapter the Commission
has allowed capex of Rs.1400 Crores for each years of the control period.
The claims of KPTCL to allow interest on short term loans for financing
capex cannot be considered as the short term loans are being provided
for working capital and the interest on such working capital is being
allowed separately as per the provisions of the MYT Regulations.
The weighted average rate of interest as per the audited accounts for
FY12 is 10.86%. The weighted average rate of interest claimed by KPTCL
for the control period is 11.30%. The Commission, on the basis of the
actual figures of FY12 decides to consider 11% as the allowable rate of
interest for the control period. On that basis and considering the closing
balance of long term loans for FY13, the Commission has computed the
allowable interest on loans as detailed below:
TABLE – 5.13
Approved Interest on Loans for FY14-16
Amount in Rs.Crs.
- 71 -
The approved interest and finance charges are subject to prudence
check of capex for the relevant years of the control period.
vii) Interest on Working Capital:
KPTCL has not claimed interest on working capital separately. However
under format T9, KPTCL has indicated short term loans and interest on short
term loans for the control period as follows:
Interest on Working Capital – KPTCL’s Projections
Amt. Rs.in Crs
Particulars FY14 FY15 FY16
Opening balance of short term
loans / borrowings for working
capital
400 400 300
Interest on working capital 42.00 36.75 26.25
Further, KPTCL has stated that, it has raised short term loans during FY13 at
the rates ranging from 9% to 10.75%.
Commission’s Analysis and Decisions:
Particulars FY14 FY15 FY16
Secured Loans 5342.67 5889.70 6289.19
Unsecured Loans 10.33 8.64 6.95
Total 5353.00 5898.34 6296.14
Less Interest accrued & dues 0.00 0.00 0.00
Long term secured & unsecured loans 5353.00 5898.34 6296.14
Add new Loans 1000.00 1000.00 1000.00
Less Repayments 454.66 602.20 698.17
Total loan at the end of the year 5898.34 6296.14 6597.97
Average Loan 5625.67 6097.24 6447.06
Interest payable on long term loans (as
filed by KPTCL) 648.27 761.61 834.64
Weighted average rate of interest
based on the proposed long term loans
in %
11.00% 11.50% 11.50%
Allowable Interest Rate in % 11.00% 11.00% 11.00%
Allowable interest on loans 618.82 670.70 709.18
- 72 -
The Commission has not considered interest on short term loans while
allowing interest on long term loans. KPTCL, in its audited accounts for
FY13 has indicated an amount of Rs.700 Crores as the closing balance of
short term loans for FY12. KPTCL has projected to repay Rs.300 Crores in
FY13, Rs.100 Crores in FY16 and thereby an amount of Rs.300 Crores would
remain at the end of FY16.
The Commission notes that, the working capital has to be incurred on a
short term basis and utilized for the purpose of financial management of
the day to day business of the utility. However, the KPTCL’s filing does not
indicate any addition or repayment of short term loans on a regular basis
during the control period.
The interest rates for the working capital loans by State Bank of India with
effect from 1st June 2012 is base rate of 10.00% plus spread of 2.50% for
loans between Rs.1.00 Crore to Rs.100.00 Crores. Further, the base rate
which was considered at 10% as on 1st June 2012 has reduced to 9.70%
with effect from 4th June 2013. Since interest rates are at present on a
downward trend
the Commission has considered the normative rate of interest of 11.75%
p.a.
As such, the Commission in accordance with the norms under MYT
Regulations, decides to approve the following interest on working capital
considering the normative rate of interest for short term loans at 11.75%.
TABLE – 5.14
Approved Interest on Working Capital for FY14-16
Amount Rs.in Crs.
Particulars FY14 FY15 FY16
One-twelfth of the amount of O&M Exp. 59.83 64.72 70.63
Opening GFA as per Audited Accts 10953.42 11875.35 12794.94
Stores, materials and supplies 1% of Opening
balance of GFA 109.53 118.75 127.95
One-sixth of the expected revenue from
Transmission user at the prevailing tariffs 365.51 389.76 431.85
- 73 -
Total Working Capital 534.88 573.23 630.42
Rate of Interest (% p.a.) 11.75% 11.75% 11.75%
Approved Interest on Working Capital 62.85 67.35 74.07
viii) Return on Equity:
KPTCL has computed Return on Equity considering the equity plus reserves
and surpluses at the beginning of the year and applying the rate
considered by KERC inclusive of Minimum Alternate Tax at the applicable
rate. i.e. (MAT of 18.5% using the formula 15.5% ÷ (1- 0.185) = 19.018% as
post tax return.
Return on Equity – KPTCL’s Projections Amount Rs. in Crs
Particulars FY-13 FY-14 FY-15 FY-16
Equity 1718.61 1818.61 1818.61 1818.61
Reserves & Surplus 189.60 552.51 1003.46 1540.17
Total 1908.21 2371.12 2822.07 3358.78
RoE @ 19.018%
(Including MAT of
18.5%)
362.91 450.95 536.71 638.77
Commission’s Analysis and Decisions:
The Commission has considered the closing balance of paid up share
capital, share deposit and capital reserves & surplus as per the audited
accounts for FY12 and has projected the same for the control period.
Further, the Commission has considered infusion of additional equity of
Rs.80 Crores during FY13 by Government of Karnataka. The Commission
has considered the prevailing rate of Minimum Alternate Tax (MAT) at
20.00775% on the Return on Equity of 15.50% as specified in the MYT
Regulations.
TABLE – 5.15
Approved Return on Equity for FY14-16
Amount in Rs.Crs.
Particulars FY14 FY15 FY16
Paid Up Share Capital 1123.26 1123.26 1123.26
Share Deposit 632.06 632.06 632.06
Reserves & Surplus 470.06 814.99 1213.39
Total Equity 2225.38 2570.31 2968.71
RoE inclusive of MAT 431.21 498.05 575.24
ix) Interest and other Expenses capitalized:
- 74 -
KPTCL in its filing has indicated the following interest and other expenses to
be capitalized during the control period:
Proposed capitalization Interest and other Expenses
Amount Rs.in Crs.
Particulars FY14 FY15 FY16
Interest expenses
capitalized
99.61 101.60 103.63
Other expenses
capitalized
36.34 37.43 38.55
The Commission allows these expenses as proposed by KPTCL for the
control period.
x) Non Tariff Income:
KPTCL in its filing has projected non tariff income at Rs.25.55 Crores,
Rs.26.14 Crores and Rs.26.79 Crores for FY14, FY15 and FY16 respectively.
This mainly includes income on account of interest on investments, receipt
of rent from staff quarters and receipt of rent from other office buildings.
The non-tariff income as proposed by KPTCL for FY12 to FY16 are as
follows:
Amount in Rs. Crs.
Particulars
FY11 FY12 FY13 FY14 FY15 FY16
As per
Audited
Accounts
As per
audited
accounts
As projected
Income from investments 3.23 5.38 5.91 6.5 7.15 7.86
Income from interest on
staff loans and advances 1.31 0.78 0.7 0.63 0.57 0.51
Income from trading like
sale of scrap, sale of store
materials and
miscellaneous receipt from
trading 15.65 14.08
Rent from staff quarters and
others 11.14 15.00 16.50 16.50 16.50 16.50
Miscellaneous recoveries 203.07 65.98 1.92 1.92 1.92 1.92
Income from wheeling
charges 5.00 5.56
Supervision charges 7.83 10.59
TOTAL 247.23 117.37 25.03 25.55 26.14 26.79
- 75 -
Commission’s Analysis and Decisions:
The Commission notes that, KPTCL in its filing under format T4 has
projected non tariff income for the control period considering only
income from investments and miscellaneous receipts excluding income
from sale of scrap, revenue from open access transactions and
miscellaneous recoveries.
As per the Audited Accounts for FY12, KPTCL has accounted for Rs.94.39
Crores as other operating income which is inclusive of profit from sale of
scrap, miscellaneous recoveries etc. Further, an amount of Rs.22.98
Crores is indicated as non tariff income for FY12. Thus the net income
apart from the income from transmission charges for FY12 works out to
Rs.117.37 Crores.
The Commission is of the view that, the non tariff income projected by
KPTCL is on the lower side. As such, for the purpose of projecting the non
tariff income for the control period the Commission decides to retain the
same at the existing levels as per audited accounts of FY12.
Accordingly, the allowable non tariff income for the control period FY14 to
FY16 is as follows:
Approved Non Tariff Income for FY14-16
Amount in Rs. Crs.
Non Tariff Income FY14 FY15 FY16
117 117 117
xi) SLDC Charges:
KPTCL in its filing has excluded the SLDC charges in terms of employee
cost, R&M expenses and A&G expenses as detailed below:
Amount in Rs. Crs.
Particulars FY14 FY15 FY16
Employee cost 12.99 13.64 14.32
R&M expenses 2.40 2.52 2.64
A&G expenses 4.11 4.32 4.54
- 76 -
Depreciation and other
costs relating to fixed assets
0.77 0.77 0.77
TOTAL 20.27 21.25 22.27
Commission’s Analysis and Decisions:
The system operations of SLDC charges being an activity not related to
transmission business, the Commission decides that the SLDC charges
cannot be factored into the ARR of KPTCL. However, as KPTCL is incurring
these costs but has excluded the same in its filing, the same needs to be
collected from the users of the transmission network.
The Commission decides that these charges are to be recovered by
KPTCL from ESCOMs and long term transmission network users in
proportion to the transmission capacity as follows:
- 77 -
TABLE – 5.16
Approved ESCOM wise SLDC Charges for FY14-16
Particulars
FY14 FY15 FY16
Transmission
Capacity
Allocation in
MW
SLDC
charges
Rs.Crores
Transmission
Capacity
Allocation in
MW
SLDC
charges
Rs.Crores
Transmission
Capacity
Allocation in
MW
SLDC
charges
Rs.Crores
BESCOM 9201 9.33 9966 9.87 11326 10.53
MESCOM 1615 1.64 1615 1.60 1955 1.82
CESC 2083 2.11 2253 2.23 2253 2.10
HESCOM 2295 2.33 2635 2.61 2805 2.61
GESCOM 3867 3.92 3867 3.83 4207 3.91
TOTAL (MW) 19061 19.33 20336 20.13 22546 20.97
TABLE – 5.17
Abstract of Approved ARR for FY14 – 16
The abstract of approved ARR for the control period FY14-16 are as
follows: Amount in Rs.Crs.
Sl.
No Particulars
FY14 FY15 FY16
As filed As appd As filed As appd As filed As appd
Expenditure
1 Employee Cost 651.50 715.86 782.70
2 Repairs & Maintenance 113.65 125.42 138.43
3 Admin & General Expenses 53.35 58.89 65.00
4 Total O&M Expenses 818.50 717.98 900.17 776.58 986.13 847.54
5 Depreciation 595.70 562.55 647.18 607.81 698.66 652.95
6 Interest & Finance Charges 648.27 618.82 761.61 670.70 834.64 709.18
7 Interest on working capital 42.00 62.85 36.75 67.35 26.25 74.07
8 Return on Equity 450.95 431.21 536.71 498.05 638.79 575.24
9 Provision for taxation 0.00 0.00 0.00 0.00 0.00 0.00
10 Other Debits 12.46 0.00 13.71 0.00 15.08 0.00
11 Extraordinary items 0.00 0.00 0.00 0.00 0.00 0.00
Less
12
Interest & Finance Charges
capitalised 99.61 99.61 101.60 101.60 103.63 103.63
13 Other Expenses capitalised 36.34 36.34 37.43 37.43 38.55 38.55
14 Other Income 25.55 117.00 26.14 117.00 26.79 117.00
15 Net Prior Period Charges 0.00 0.00 0.00 0.00 0.00 0.00
16 Carry forward of deficit(-) of
FY12 -43.38
17 Less SLDC Charges 0.77 0.77 0.77 0.77 0.77 0.77
18 NET ARR 2405.61 2183.07 2730.19 2363.69 3029.81 2599.03
Based on the approved ARR for FY14-16, the transmission charges for FY14-
16 is determined in the subsequent chapter of this order.
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CHAPTER – 6
6.0 TRANSMISSION TARIFF FOR FY14-16
KPTCL’s Submission:
In accordance with the directions of the Commission in its tariff order
dated 30th April 2012, the ESCOMs have entered into agreements with
KPTCL for transmission services with a contracted transmission capacity of
18605 MVA for 2011-12. Based on the above, transmission capacity for the
years FY13 to FY16 are worked out as follows:
TABLE – 6.1
ESCOM Wise Transmission Capacity From FY-14 - 16 – KPTCL’s Submission
Company Capacity in MVA Capacity in MW
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
BESCOM 10825 11725 13325 9201 9966 11326
MESCOM 1900 1900 2300 1615 1615 1955
CESC 2450 2650 2650 2083 2253 2253
HESCOM 2700 3100 3300 2295 2635 2805
GESCOM 4550 4550 4950 3867 3867 4207
TOTAL 22425 23925 26525 19061 20336 22546
Considering the proposed ARR for FY14-16 and the gap in revenue for
FY12, KPTCL has projected the transmission tariff for the control period as
follows:
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TABLE – 6.2
Transmission Charges-KPTCL’s Submission Amount in Rs. Crs
Particulars FY14 FY15 FY16
Transmission Capacity in MW 19061 20336 22546
Net ARR - (A) 2405.61 2730.19 3029.81
Add: Gap of 2011-12 – (B) 293.23 - -
Add: SLDC charges Excess Deducted – (C) 28.25 - -
Total Revenue Requirement (A+B+C) 2727.09 2730.19 3029.81
Transmission Tariff (in Rs./MW/Month) 119226.43 111878.36 111986.24
Further, as per the above transmission tariff, KPTCL has proposed the
following transmission charges to be collected from ESCOMs during the
control period FY14-16.
TABLE – 6.3
ESCOM Wise Proposed Transmission charges – KPTCL’s Submission
Company
2013-14 2014-15 2015-16
Transmission
Capacity in
MW
Transmission
Charges
Rs.in Crs.
Transmission
Capacity in
MW
Transmission
Charges
Rs. in Crs.
Transmission
Capacity in
MW
Transmission
Charges
Rs.in Crs.
BESCOM 9201 1316 9966 1338 11326 1522
MESCOM 1615 231 1615 217 1955 263
CESC 2083 298 2253 302 2253 303
HESCOM 2295 328 2635 354 2805 377
GESCOM 3867 553 3867 519 4207 565
TOTAL 19061 2727 20336 2730 22546 3029
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Commission’s Analysis and Decision:
The Commission in its previous order dated 30th April 2012, had directed
KPTCL to enter into transmission agreements with all long term users of
transmission system including ESCOMs. Subsequently, the Commission has
approved the standard “Transmission Agreement” to be entered
between KPTCL and ESCOMs / long term transmission network users.
Accordingly, KPTCL has entered into Transmission Agreements with the
ESCOMs.
Considering, KPTCL’s proposals, the transmission capacity in MW for the
control period FY14-16 is projected as follows:
Name of the
ESCOM
Transmission Capacity in MW
FY14 FY15 FY16
BESCOM 9201 9966 11326
MESCOM 1615 1615 1955
CESC 2083 2253 2253
HESCOM 2295 2635 2805
GESCOM 3867 3867 4207
TOTAL 19061 20336 22546
As per the approved ARR as detailed in preceding Chapter, the
approved Transmission tariff for the control period is as follows:
TABLE – 6.4
Transmission Charges payable by ESCOMs for FY14
Particulars
Transmission
Capacity
Allocation in MW
Transmission charges
for FY14 Rs.Crores per
annum
Transmission charges
for FY14 Rs.Crores per
Month
BESCOM 9201 1053.80 87.82
MESCOM 1615 184.97 15.41
CESC 2083 238.57 19.88
HESCOM 2295 262.85 21.90
GESCOM 3867 442.89 36.91
TOTAL (MW) 19061 2183.07 181.92
TABLE – 6.5
Transmission Charges payable by ESCOMs for FY15
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Particulars Transmission
Capacity Allocation
in MW
Transmission
charges for FY15
Rs.Crores per annum
Transmission charges
for FY15 Rs.Crores per
Month
BESCOM 9966 1158.36 96.53
MESCOM 1615 187.71 15.64
CESC 2253 261.87 21.82
HESCOM 2635 306.27 25.52
GESCOM 3867 449.47 37.46
TOTAL (MW) 20336 2363.69 196.97
TABLE – 6.6
Transmission Charges payable by ESCOMs for FY16
Particulars Transmission
Capacity Allocation
in MW
Transmission
charges for FY16
Rs.Crores per annum
Transmission charges
for FY16 Rs.Crores per
Month
BESCOM 11326 1305.62 108.80
MESCOM 1955 225.37 18.78
CESC 2253 259.72 21.64
HESCOM 2805 323.35 26.95
GESCOM 4207 484.97 40.41
TOTAL (MW) 22546 2599.03 216.59
The monthly transmission charges payable for the control period FY14-16
are as follows:
FY14 - Rs.95442 / MW / Month
FY15 - Rs.96860 / MW / Month
FY16 - Rs.96064 / MW / Month
In accordance with the KERC (Terms and Conditions of Open Access)
Regulations, 2004 the transmission charges for short term open access
consumers are indicated as follows:
TABLE – 6.7
Transmission charges for short term open access consumers
Transmission Charges (Rs/MW) FY14 FY15 FY16
More than 12 hrs & upto 24 hrs in a day in one
block 784.46 796.11 789.57
More than 6 hrs & upto 12 hrs in a day in one block 392.23 398.05 394.78
Upto 6 hrs in a day in one block 196.11 199.03 197.39
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The transmission tariff determined above for long-term and short-term open
access is applicable to all the ESCOMs, all other open access customers,
excluding developers of Renewable energy sources that generate and supply
within the State (Intra State). Such renewable energy generators continue to pay
charges as per the existing orders of the Commission.
The charges determined above are applicable for use of the transmission system
only. Where Open Access customers use the networks of ESCOMs in addition to
the transmission system, the wheeling charges payable would be as determined
by the Commission in the respective Tariff Orders of the ESCOMs.
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6.1 Commission’s Order
1. In exercise of the powers conferred on the Commission under
Sections 62 and 64 and other provisions of the Electricity Act 2003, the
Commission hereby determines and notifies the transmission tariff of
KPTCL for FY14-16 as stated in Chapter – 6 of this Order.
2. The tariff determined in this order shall come into effect from 1st May
2013.
3. This order is signed dated and issued by the Karnataka Electricity
Regulatory Commission at Bangalore this day, the 6th May 2013.
Sd/- Sd/- Sd/-
(M.R.Sreenivasa Murthy) (Vishvanath Hiremath) (K.Srinivasa Rao)
Chairman Member Member
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APPENDIX
COMMISSION’S DIRECTIVES AND COMPLIANCE BY KPTCL
The Commission, in the Tariff Order dated April 30, 2012 and in the earlier
Tariff Orders under the MYT framework, had issued the following directives
for compliance by KPTCL. Compliance of those directives by KPTCL is
discussed in this section.
I. Directive on Management Information System- MIS
The KPTCL shall improve its Management Information System in the
next filing to give greater details and explain the basis for all the
projections indicating the sources of data and the method of
estimating projected values. The Commission notes that the
progress in MIS needs improvement. This has also resulted in KPTCL
furnishing inconsistent data at different points of time.
The Commission, besides reiterating its earlier directives, had directed KPTCL to
furnish consistent data on time regarding the following:
i) Details of Transmission Losses
ii) Voltage-wise Losses
iii) Details of capex as per formats issued by the Commission
iv) Implementation of Intra-state ABT
The Commission has directed KPTCL to furnish the status of implementation of the
Intra-State ABT. Further, the Commission also had directed KPTCL to furnish
ESCOM-wise UI charges to ensure that the cost of over drawal of power at
frequencies below the permissible band, should be borne by the respective ESCOMs.
Compliance by KPTCL
It is stated that from August 1, 2012 all the generators (both thermal and
hydro including UPCL and Jindal except NCE generators) in the State are
declaring their day ahead availability. Also all the distribution companies
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in the State are furnishing their day ahead requirement. The above data is
consolidated and the daily day ahead drawal schedule to ESCOMs and
generation schedule to generators is being issued before 5 pm every day.
Mock exercises have been started from August 1, 2012 for implementing
Intra State ABT at 220 kV level. As a first step, Intra State grid operation and
monitoring screen have been developed.
Further, as per the real time grid operation screen which requires all the
data to be integrated ESCOM wise generator wise with respect to
frequency variation are being captured on 15 minutes block and the
same is being utilised for generation of UI billing format on weekly basis.
Commission’s Views
The Commission notes that the implementation of Intra State ABT has
been delayed inordinately. It is to be recalled that in the Advisory
Committee meeting held on 30.03.2011 the MD KPTCL had informed that
the Intra State ABT would be implemented from April 2011 and the
generators would also be included. This deadline is not kept up which
goes to show that there is no proper follow up action on the part of
KPTCL/ESCOMs to implement the Intra State mechanism in the State. The
Commission views non compliance of its directive seriously and directs
that the KPTCL and the ESCOMs jointly in coordination shall take all
necessary measures to complete the remaining activities in
implementation of Intra State ABT fully and report compliance within the
next three months.
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II. Directive on Energy Audit
Metering plan for Energy Audit of KPTCL grid system, voltage level wise such as
400 KV, 220 KV etc., should be prepared and submitted to the Commission. The
work of procurement of metering equipment and accessories and their installation
should be completed. Further, KPTCL shall ensure that accuracy class of meters
match with that of CT/PT so as to measure the parameters accurately. The interface
metering system shall be in conformity with the CEA Regulations on (Installation and
Operation of Meters) 2006 and its amendments from time to time.
The Commission directs KPTCL to furnish voltage-wise losses on a monthly basis.
Further, KPTCL shall maintain the entire interface metering system in healthy
condition, as accurate readings of the meters are required for accurate Energy
Audit/accounting and is one of the sound practices to be followed by any utility.
Compliance by KPTCL It is stated that month wise and transmission voltage wise losses for the
Year 2011-12 has been submitted to KERC vide letter No:
KPTCL/B36/33098/2012-13/364-68 dated 09.11.2012. The details of voltage
wise losses for FY 12 are indicated as below:
Voltage Class in kV % Loss
400 0.334
220 2.144
110 0.425
66 1.004
Total 3.97
Commission’s Views
The Commission notes the details of voltage wise losses furnished by KPTCL
and directs KPTCL to furnish the data of voltage wise losses to the
Commission regularly on a monthly basis. The Commission directs KPTCL to
analyse the losses on the basis of energy audit and take appropriate
remedial measures to bring down loss levels further in its transmission
system. A regular review and follow up action needs to be taken in this
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regard. The Commission reiterates its directive to KPTCL to furnish voltage-
wise losses on a monthly basis regularly.
III. Directive on Quality of Service
KPTCL shall take all measures to improve the Quality of Service i.e. reduction of
interruptions and maintenance of good voltage and frequency. KPTCL shall display
on its web site the details of interruptions of major Sub-Stations and lines with
maximum and minimum voltage at Station bus of each Sub-Station on a monthly
basis.
The Commission had directed to take note of the permissible frequency band for
operation of the grid between 49.8 Hz and 50.2 Hz as per the IEGC (first amendment)
Regulations of CERC dated March 5, 2012. Also as per the decision taken in the
Forum of Regulators (FOR) meeting held during June 11& 12, 2009 the penal UI
charges for any over drawl will not be allowed to be passed on to the consumers
through tariff. Any such penal charges have to be borne by the ESCOMs from their
own finances. In the light of this, KPTCL, through SLDC/ALDCs, shall take
necessary steps to avoid overdrawal from the Southern grid when frequency level
goes below 49.80 Hz to ensure that payment of additional UI charges is avoided.
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Compliance by KPTCL
It is stated that SLDC is monitoring regularly the grid operations for
maintaining grid frequency as per IEGC norms and maintaining the
frequency within permissible limits between 49.8 Hz and 50.20 Hz. No
violation notice from SRLDC from the past 3-4 years which was
appreciated in SRPC, TCC and OCC meetings.
Commission’s Views
The Commission notes that SLDC / KPTCL have strictly adhered to the Grid Code
norms consistently for the last couple of years in maintaining grid discipline. In this
regard the KPTCL and SLDC shall have to take all possible measures to ensure that
grid frequency always remains within the specified frequency band. Further, the
commission is also of the opinion that auditing of all the protective system in the grid
is taken up expeditiously and completed so that recurrence of the grid collapse of the
kind witnessed in the north could be prevented. These activities shall be regularly
monitored. Accordingly, the Commission reiterates its directive to adhere to the
norms of IEGC as amended from time to time in grid operation.
IV. Directive on Capital Works Programme
a) To submit the details of capex actually incurred and
capitalisation of assets in the formats already prescribed by the
Commission to undertake necessary prudence check during
annual performance review.
b) To maintain separate accounts with respect to the costs incurred
in respect of lines and bays respectively.
The KPTCL is directed to furnish the details in specified formats used in
respect of capex incurred to enable the Commission to carry out
prudence check during APR. Further, it is directed to maintain separate
accounts with respect to the costs incurred for lines and bays.
Compliance by KPTCL
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It is stated that details of capex actually incurred for the year 2011-
12 as per format 1 & 2 prescribed by KERC and capitalisation of
assets in the formats has already been submitted to KERC vide letter
No: KPTCL/B36/33080/2012-13/219-22 dated 04.08.2012.
Further, it is stated that information regarding costs incurred in
respect of lines and bays have been submitted to KERC vide letter
No: KPTCL/B36/24262/2011-12/227-34 dated 22.07.2011 for the year
2010-11. A statement showing the details of expenditure incurred in
respect of lines and bays for FY 12 is enclosed as Annexure-1.
Commission’s views
The Commission directs KPTCL to continue to
i. Submit the details of capex incurred and capitalisation of assets
to undertake necessary prudence check during the APR.
ii. Maintain separate accounts with respect to the costs incurred in
respect of lines and bays. These details for FY 12 shall be furnished
immediately.
V. Directive on Studies conducted
The Commission has directed KPTCL to have a fresh look into its
manpower requirements keeping in view the technological
advancements and the changed organisational set-up [i.e.
corporatization].
The Commission in its earlier Tariff Orders had directed KPTCL to
complete the manpower studies at the earliest and submit the
interim report of ASCI.
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Compliance by KPTCL
It is stated that the recommendations in the ASCI report were reviewed by
an internal Committee constituted for the purpose. The Committee has
submitted a report containing recommendations on staffing pattern for 15
years of field units/offices and 10 other offices. The recommendations are
being reviewed by the Management for taking suitable action in the
matter.
Commission’s Views
The Commission notes that there is inordinate delay in finalisation of
report submitted in respect of man power studies by ASCI. KPTCL is
directed to take immediate action to finalise the report on
manpower studies conducted and report the compliance to the
Commission whether the recommendations in the report have been
accepted or not. Further, it is also directed to furnish an action plan
for implementation of measures to streamline the operational
structure for optimum utilisation of its manpower.
VI. Directive on prevention of electrical accidents
The Commission had directed KPTCL to prepare an action plan to
effect improvements in the transmission network and implement
safety measures to prevent electrical accidents. Detailed
Transmission Line and Sub-Station Division wise action plans were to
be submitted to the Commission within two months.
Compliance by KPTCL
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It is stated that the Zone-wise action plan for prevention of electrical
accidents has been submitted to KERC vide letter No:
KPTCL/B36/33098/2012-13/353 dated 28. 09.2012.
Commission’s views
The Commission notes that many works planned under action plan
are yet to be taken up by KPTCL which needs to be expedited to
ensure that hazardous installations in the transmission network that
to in public places are rectified in a time bound manner. Further, it is
also directed KPTCL to hold regular review of action plan works and
take remedial measures for rectification of hazardous installations in
public places for preventing electrical accidents. It is also important
to create continuous awareness on safety aspects and employees
needs to be given training on safety measures to be adopted while
carrying out work on the network. The compliance of the above
shall be submitted to the Commission early. The Commission
reiterates its directive to regularly submit transmission line and Sub-
Station wise details of action plan for prevention of electrical
accidents.
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