the rajasthan electricity regulatory commission

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RAJASTHAN ELECTRICITY REGULATORY COMMISSION Petition No: RERC/491/14 In the matter of Annual Performance Review (APR) for FY 2012-13 for KTPS (Unit 1 to 7), STPS (Unit 1 to 6), CTPP (Unit 1 and 2), DCCPP, RGTPP (110.5 MW), Mahi Hydel and Aggregate Revenue Requirement & tariff for FY 2015-16 for KTPS (Unit 1 to 7), STPS (Unit 1 to 6), CTPP (Unit 1 to 3), DCCPP, RGTPP (110.5 MW & 160 MW stage III), KaTPP (Unit 1), GLTPP (Unit 2) and Mahi Hydel Power stations of RVUN Coram: Sh. Vishvanath Hiremath, Chairman

Sh. Vinod Pandya, Member Sh. Raghuvendra Singh, Member

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

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

Date of hearing: 14.07.2015 Present:

1. Sh. P. S. Arya, Chief Engineer, RVUN 2. Sh. Y. K. Upadhyay, CAO, RVUN 3. Sh. D. K. Goyal, S.E., RVUN 4. Sh. Ankit Sharma, Consultant, RVUN 5. Sh. S. T. Husain, Executive Engineer, JVVNL 6. Sh. G. L. Sharma 7. Sh. D. S. Agarwal, Rudraksh Energy

Date of Order: 07.09.2015

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ORDER

1.1. Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (in short ‘RVUN’), a Generating Company under the provisions of the Electricity Act 2003, filed a petition for Annual Performance Review (True-Up)for FY 2012-13 and approval of Aggregate Revenue Requirement (ARR) and Tariff for sale of electricity from its existing power stations to distribution companies for FY 2015-16.

1.2. In exercise of the powers conferred under Sections 62, 64 and other provisions of Electricity Act 2003, read with RERC (Terms and Conditions for Determination of Tariff) Regulations, 2009, RERC (Terms and Conditions for Determination of Tariff) Regulations, 2014, and other enabling Regulations, the Commission has carefully considered the submissions of the Petitioner and suggestions/objections submitted by the various stakeholders. The Commission has passed the following Order.

1.3. This Order has been structured in 5 sections, as given under: (1) Section 1: General (2) Section 2: Summary of filing of Annual Performance Review and

Tariff determination process. (3) Section 3: Summary of objections/comments/suggestions

received from stakeholders and RVUN’s response on the True up of ARR for FY 2012-13 and ARR & Tariff for FY 2015-16.

(4) Section 4: Analysis of Annual Performance Review (True Up) of

RVUN Stations for FY 2012-13 (5) Section 5: Determination of ARR and Tariff for RVUN generating

Stations for FY 2015-16.

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SECTION 2

Summary of Filing

2.1. In accordance with Regulation 8 of RERC (Terms and Conditions for Determination of Tariff) Regulations, 2009, hereinafter referred to as RERC Tariff Regulations, 2009, Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN) filed a petition on 01.12.2014, for Annual Performance Review for FY 2012-13 for the following power stations:

Table 1: RVUN Generating Stations under True up for FY 2012-13

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

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

3 Ramgarh Gas Thermal Power Station(RGTPS) 110.5

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

5 Mahi Hydel Power Project (MAHI) 140

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

Total 3820.50

2.2. Further, in accordance to Regulation 11 of RERC (Terms and Conditions for

determination of Tariff) Regulations, 2014 hereinafter referred to as RERC Tariff Regulations, 2014, RVUN also prayed for determination of ARR and tariff for supply of electricity to distribution companies for FY 2015-16 for the following power stations:

Table 2: RVUN Generating Stations under ARR and Tariff for FY 2015-16

Sr.No. Particulars Capacity(MW)

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

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

3 Ramgarh Gas Thermal Power Station (RGTPS) 110.50 4 Ramgarh Gas Thermal Power Plant (RGTPS) Stage III 160

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Sr.No. Particulars Capacity(MW)

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

6 Chhabra Thermal Power Station (CTPP) (Unit 1 to 3) 750 7 Kalisindh Thermal Power Station (KaTPP) (Unit1) 600 8 Giral Lignite Thermal Power Station(GLTPP)(Unit 2) 125 9 Mahi Hydel Power Project (MAHI) 140

Total 4955.50

2.3. The petition was admitted on 18.03.2015 by the Commission for further

consideration.

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

Sr. No. Name of News Paper Date of publishing

(i) Rajasthan Patrika 05.05.2015

(ii) Dainik Bhaskar 05.05.2015

(iii) Times of India 05.05.2015

2.5. The petition was also placed on RERC and RVUN websites. The

objections/comments/suggestions were received from following stakeholders:

• Shri G.L. Sharma • Shri D.S. Agarwal, M/s Rudraksh Energy. • JVVNL (Jaipur Vidyut Vitran Nigam Ltd.)

2.6. The Commission forwarded the objections/ comments/ suggestions of

stakeholders to RVUN for its replies. The Petitioner replied to the objections/

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comments/ suggestions made by the objectors vide its letter dated 14.07.2015.

2.7. The Commission vide letter dated 03.02.2015, communicated some data gaps and deficiencies in the ARR and Tariff petition for FY 2015-16 and True-up petition for FY 2012-13. The Petitioner furnished information vide its letter dated 24.03.2015. In response to further queries raised by the Commission, the Petitioner submitted the replies on 18.08.2015.

2.8. The Public hearing in the matter was held on 14.07.2015.

2.9. The Commission had approved the Tariff for FY 2012-13 in respect of KTPS (Unit 1 to 7), STPS (Unit 1 to 6), RGTPS, DCCPP,CTPP (Unit 1 and 2) and Mahi Hydel Power Project in its Tariff Order dated 06.06.2013. The Commission in this Order is undertaking the Truing up of these Stations for FY 2012-13 and tariff for FY 2015-16 for RVUN Stations.

2.10. To facilitate reference, the abbreviations used in this Order and an index of the issues and points dealt with are placed in Annexure-1 and Annexure-2 respectively. The status of compliance as submitted by RVUN to the directions issued by Commission in its previous Orders is discussed in Annexure-3 of the Order.

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SECTION 3

Summary of Objections/Comments/Suggestions and Petitioner’s response on Annual Performance Review (APR), i.e., True Up of ARR for FY 2012-13 General Issues Stakeholders’ Comments/suggestions:

3.1. Stakeholder submitted that the Petitioner in its replies to data gaps stated that the detailed write up on best practices to be implemented for achieving maximum possible generation in respect of each station has been submitted to the Commission. In this regard, RVUN should provide the copy of the same.

3.2. The representative of Discoms submitted that Petitioner has not furnished

the truing up figures of Giral Unit II of RVUN for FY 2012-13. Therefore, it is requested that the Commission should direct Petitioner to submit the same and issue the Order after proper scrutiny.

RVUN’s Response:

3.3. The Petitioner provided the copy of detailed write up.

Availability and PLF

Stakeholders’ Comments/suggestions:

3.4. Stakeholder submitted that the Petitioner has claimed the Availability of 92.44% for KTPS (Unit 1 to 7), but has not provided the certificate from SLDC to substantiate the same. In absence of such certificate, any incentive on account of same should not be given to the Petitioner.

3.5. Stakeholder submitted that the actual Availability and PLF of STPS (Unit 1 to 6), RGTPS and DCCPP are lower than the Target Availability and Target PLF. The Petitioner should submit the SLDC Certificate for the actual Availability. Further, as the actual PLF is lower than the Target PLF for these stations, proportionate reduction in fixed charges should be carried out.

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3.6. Stakeholder submitted that the Petitioner has claimed actual Capacity Index of 46.32% for Mahi Hydel against normative Capacity Index of 85%. The Petitioner should provide the SLDC Certificate for the actual Capacity Index. As the actual Capacity Index is lower than the normative Capacity Index, proportionate reduction in fixed charges should be carried out.

3.7. Representative of DISCOM submitted that the availability claimed by Petitioner for some of the stations is higher than the PLF and Petitioner should provide the clarification for calculating availability on higher side. Further, he requested the Commission to proportionately reduce the fixed charges for respective RVUN stations due to non-achievement of normative PLF as determined by the Commission.

RVUN’s Response:

3.8. The Petitioner submitted that SLDC does not provide any certificate for Availability. The loss of generation on account of back down instructions has been certified by SLDC.

3.9. The Petitioner submitted that the actual PLF for STPS is lower than Target PLF on account of backing down instructions from SLDC. There has been loss of generation to the extent of 847.4 MU but SLDC has certified the losses of 771.12 MU. The deemed PLF of STPS is 86.84%, which is higher than the Target PLF. The Petitioner requested the Commission to allow full fixed charges.

3.10. For RGTPS and DCCPP the Petitioner submitted that the actual PLF is lower than the Target PLF due to back down instructions and non availability of gas. As directed by Central Electricity Authority (CEA), no new gas-based power plants will be set up in the country till 2015-16 due to non availability of gas. The Petitioner requested the Commission to allow deemed generation on account of SLDC instructions and non availability of gas. The

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deemed PLF after considering above two factors would be 69.02% for RGTPS and 78.43% for DCCPP.

3.11. The Petitioner submitted that Mahi Power House -I is located on a saddle dam of Mahi Dam periphery. The Mahi Dam is the property of Water Resources Dept. and the use/distribution of the water stored in the dam is completely in the control of Water Irrigation Committee headed by the District Collector, Banswara. The operation of machines is dependent on the irrigation requirements although the machines can remain in ready to start mode/available for operation. Mahi Power House-I is not purely run of river power station with pondage and storage type because the storage of water (Mahi Dam) is not within the control of RVUN.

3.12. Mahi Power House-II is a canal based power plant and its balancing reservoir is located at the end of Left Main Canal (LMC), means whenever water is released in LMC and after meeting the irrigation demand, the balance water is stored in the balancing reservoir. For the operation of machine, a certain level of water is to be maintained in the reservoir. The machines could be operated only if the available water in the reservoir is optimum for generation. So, at Mahi Power House-II although the machines remain in ready to start mode/available for operation, operation of machines is dependent on the availability of water.

3.13. In accordance with the RERC Tariff Regulations, 2009, deemed Generation

means the energy which a hydro power generating station was capable of generating but could not generate due to reasons beyond the control of the generating station or on account of non-Availability of Transmission Licensee's transmission lines or on receipt of backing down instructions from the State Load Dispatch Centre resulting in spillage of water. Considering the above uncontrollable factor and regulation 2 (20) of RERC Tariff Regulations, 2009, the Petitioner has requested the Commission not to reduce the fixed charges on pro-rata basis.

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Auxiliary Consumption Stakeholders’ Comments/suggestions:

3.14. Stakeholder submitted that the actual auxiliary consumption for KTPS, STPS and DCCPP is higher than the normative auxiliary consumption. In line with the Commission’s approach in the true up for FY 2009-10, only normative auxiliary consumption should be allowed.

3.15. Stakeholder submitted that the actual auxiliary consumption for RGTPS is 1.81% as against the normative auxiliary consumption of 5% approved by the Commission. However, as per cost audit report submitted in the replies to data gaps, the actual auxiliary consumption is only 1.48%. Since there is a gain in auxiliary consumption, 50% of the gain should be passed on to Discoms.

3.16. The representative of Discoms submitted that RVUN has claimed the plant-

wise auxiliary consumption during FY 2012-13. The Discom would like to highlight that the actual auxiliary consumption for KTPS and CTPP units as submitted by RVUN is 9.48% and 10.69% respectively as against 9.27% and 9.00% approved by the Commission respectively. The higher auxiliary consumption reflects the below standard performance of the stations and, therefore, the petitioner should be directed to provide appropriate reasons for the same.

3.17. Further, the auxiliary consumption for RGTPP and Mahi Hydel Station as

submitted by RVUN is 1.81% and 1.43% respectively as against 5.00%, and 1.84% approved by the Commission for FY 2012-13. As the actual auxiliary consumption is less than approved, therefore, it is requested that the Commission may pass on the benefit as per norms specified in the RERC Tariff Regulations, 2009. Further, the Commission has been requested to approve the auxiliary consumption on normative basis for the above mentioned plants while computing the true up requirement for RVUN stations for FY 2012-13.

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RVUN’s Response:

3.18. The Petitioner submitted that due to back down instructions from SLDC, the load (generation) reduces but all the running auxiliary equipments continue to operate. Therefore, higher auxiliary consumption in the percentage terms during the reduced load period had been observed. As per Regulation 8(6)(a) and Regulation 2(26)(v) of the RERC Tariff Regulations, 2009, the loss of generation on account of back down instructions is beyond the control of RVUN. As the excessive auxiliary consumption is the consequential effect of SLDC back down instructions, the increase in auxiliary consumption due to SLDC back down instructions should be allowed and considered as uncontrollable as the SLDC instructions are considered as uncontrollable. Further, if the back down was not imposed during FY 2012-13, the auxiliary consumption would have been lower than the normative auxiliary consumption.

Station Heat Rate Stakeholders’ Comments/suggestions:

3.19. Stakeholder submitted that the actual Station Heat Rate for STPS, RGTPS and DCCPP is higher than the normative Station Heat Rate approved by the Commission. Higher Station Heat Rate resulted in consumption of excess fuel and should not be allowed.

RVUN’s Response:

3.20. The Petitioner submitted that the actual Station Heat Rate is higher than the normative Station Heat Rate on account of back down instructions from SLDC. The Petitioner requested the Commission to allow actual Station Heat Rate as back down instructions are considered as uncontrollable factor.

3.21. The Petitioner submitted that RGTPS was operated for 6085 hours in open cycle mode and 7515 hours in combined cycle mode and accordingly the weighted average Station Heat Rate works out to 2386 kcal/kWh.

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3.22. The Petitioner submitted that DCCPP was operated for 4611 hours in open cycle mode and 5681 hours in combined cycle mode and accordingly, the weighted average Station Heat Rate works out to 2344 kcal/kWh.

Coal Transit Loss Stakeholders’ Comments/suggestions:

3.23. Stakeholder submitted that as per the observation of the CA in the Audited Accounts for FY 2012-13 the coal transit loss considered by the Petitioner in the computation of Fuel Price Adjustment is different from the normative transit loss. Hence, the fuel price should be allowed considering the normative transit loss.

RVUN’s Response

3.24. The Petitioner submitted that it has directed its units to comply with the RERC norms.

Cost of Generation Stakeholders’ Comments/suggestions:

3.25. Stakeholder submitted that in the reconciliation statement submitted for cost of generation of power of Rs. 7179.18 Crore, a note has been given that this is inclusive of Rs 11.23 Crore and Rs 2.11 Crore capitalised in respect of Kalisindh and CTPP Unit 3. The Petitioner should provide the justification for the same.

RVUN’s Response

3.26. The Petitioner submitted that the cost of generation and revenue thereof during trial run has been capitalized in accordance with the RERC Tariff Regulations.

Audited Accounts Stakeholders’ Comments/suggestions:

3.27. The Commission in its Order dated 06.06.2013 had directed the Petitioner for making necessary adjustments regarding the excess recovery made from

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Discoms amounting to Rs. 89.93 Crore in FY 2009-10 & FY 2010-11 and submit the compliance report. The Petitioner should provide details of the same. Further, the Commission had also directed the Petitioner to pay Rs. 206.53 Crore to Discoms in six equal monthly instalments. The Petitioner should provide the Discom wise details of the date and amount of such payments.

3.28. Stakeholder submitted that the expenses as per the reconciliation

statement submitted by the Petitioner in its replies to data gaps match only with statement of profit and loss of the audited accounts for FY 2012-13. Further, the Petitioner has referred to various Schedules of the audited accounts while the audited accounts contain Notes.

RVUN’s Response:

3.29. As regards the excess recovery from Discoms for FY 2009-10, the Petitioner submitted that the matter has been resolved in FY 2012-13 and the excess amount of Rs. 22.23 Crore was refunded in FY 2012-13 and adjusted in the audited accounts of FY 2012-13 under the head Revenue. Further, in compliance to the directive regarding payment of Rs. 206.53 Crore to Discoms, RVUN has paid the amount of 146.67 Crore to the Discoms on 18.11.2013. The remaining amount of Rs. 59.86 Crore has been revised to Rs. 53.52 Crore vide the Commission’s Order dated 10.12.2013 and the matter is sub-judice before the Hon’ble APTEL.

3.30. The Petitioner submitted that it has claimed the actual expenditure

incurred, for which it has prepared the reconciliation statement of expenditure claimed in the petition and expenditure as per audited accounts (Profit and Loss Account). The figure of assets and liability in the balance sheet of the audited accounts cannot be compared with figures of income and expenditure presented in the petition.

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Capital Cost Stakeholders’ Comments/suggestions:

3.31. Stakeholder submitted that the Petitioner should provide the capital cost and equity approved/admitted by the Commission as on 31.03.2012 and 31.03.2014 in respect of each generating station/unit. Further, the Petitioner should provide the details of debt outstanding as on 31.03.2012 and 31.03.2014 in respect of each generating station/Unit.

3.32. Stakeholder submitted that in the audited accounts for FY 2012-13, CAG has commented that a sum of Rs. 56.12 Lakh has been capitalized pertaining to administrative and other expenses incurred commonly on operational projects and cost of RGTPP Stage III. RVUN should clarify that whether such capitalised expenses have been reduced from the capital cost of RGTPP Stage III.

3.33. The representative of Discoms submitted that Petitioner has added Work Contract Tax (WCT) for arriving onto the balance capital cost of various stations. However, as the matter is still pending with APTEL, and also same was not allowed in the Commission’s Order dated June 6, 2013, therefore, it is requested to the Commission to disallow the same till final verdict is issued on the matter.

RVUN’s Response:

3.34. The Petitioner submitted that the Commission has approved the capital cost, debt and equity in its various orders. The Petitioner submitted that the details of capital cost, debt and equity have been furnished in Formats 6.1, 6.2 and 6.9 of ARR and tariff petition for FY 2015-16.

3.35. The Petitioner submitted that necessary adjustment has been made in the annual accounts for the FY 2013-14 as also stated in the reply of management in the audited accounts for FY 2012-13.

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Gross Fixed Assets

Stakeholders’ Comments/suggestions

3.36. Stakeholder submitted that as per the audited accounts for FY 2012-13, cost of building of Thermal Design Wing pertaining to RVUN share is Rs. 3.277 Crore. It appears that the same has been included in the gross assets block under “buildings” and depreciation has been claimed on the same. In this regard, RVUN should provide necessary clarification as such buildings cannot form asset of any of the generating station and hence no depreciation, interest on loan, etc. is admissible as per the Judgment of the Hon’ble APTEL in Appeal No. 94 of 2006.

RVUN’s Response

3.37. The Petitioner submitted that it has incurred the capital expenditure for construction of two floors. Since RVUN has incurred the capital cost to provide work place to its employees, it has requested to consider such cost and allow the depreciation.

Operation and Maintenance (O&M) expenses Stakeholders’ Comments/suggestions:

3.38. Stakeholder submitted that Petitioner should clarify that under what head the expenses of head office have been included and accounted for in the petition.

3.39. Stakeholder submitted that the lease rent of Rs. 1.05 Lakh/month as per the audited accounts for FY 2012-13 is not admissible and such expenses should be adjusted by the Petitioner from their normative O&M expenses.

3.40. Stakeholder submitted that RVUN is carrying out the operation and

maintenance of Rana Pratap Sagar Dam (RPS) and Jawahar Sagar Dam (JS) power stations. In this regard, RVUN should provide the following information:

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(i) Whether the persons/employees/staff of RVUN posted at these power

stations for O&M of the stations are on deputation with RVPNL or on the RVUN pay rolls.

(ii) In case the staff deployed is on pay roll of RVUN, whether necessary employee cost including pension contribution, EPF/GPF, etc. is being recovered from RVPNL. If so, then under what head of account these charges are being accounted for. If not, then for what reasons such claim has been preferred and what is the amount so far accumulated.

(iii) How the expenditure of normal repair and maintenance, general administrative expenses and other expenses are being met at these stations. In case, such expenditure is also being met by RVUN, then whether the same is being recovered from RVPNL and, if not, reasons should be submitted.

3.41. Stakeholder submitted that the actual O&M expenses for KTPS and Mahi are higher than the normative O&M expenses approved by the Commission. The actual O&M expenses for STPS, RGTPS and DCCPP are lower than the normative O&M expenses approved by the Commission. The Petitioner submitted that the actual O&M expenses are being claimed as per the audited accounts for FY 2012-13. In the audited accounts, station wise expenses are not given and as such the actual O&M expenses claimed by the Petitioner cannot be verified. Also, as per the audited accounts, provision for terminal benefits including provident fund is included in the O&M expenses. This being a part of normal O&M expense, it is not admissible as additional expenses. The O&M expenses should be approved as per norms specified in the RERC Tariff Regulations, 2009. Further, as O&M expenses are a controllable factor, the gain in O&M expenses has to be shared with the Discoms as per RERC Tariff Regulations, 2009.

RVUN’s Response:

3.42. The Petitioner submitted that head office expenses have been reduced from total employee cost, total repair and maintenance and total

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administrative and general expenses and have been allocated to the individual stations.

3.43. As regards the lease rent, Petitioner submitted that lease rent is being paid

for utilization of land belonging to RVPN.

3.44. As regards the expenses of staff deployed for operation and maintenance work of RPS and JS power stations, the Petitioner submitted that employees of RVUN are deputed for the same and the expenses related to the said power stations are paid/borne by RVPN.

3.45. The Petitioner submitted that actual O&M expenses of KTPS are higher than that approved by the Commission, mainly because the normative O&M expenses allowed are uniform for all units of KTPS irrespective of their life and date of COD. Further, all other plants of RVUN (such as STPS, DCCPP, CTPP and RGTPS) are comparatively new and have saving in O&M expenses against normative O&M expenses. Accordingly, as KTPS has old Units, the actual O&M expenses may be allowed. The Petitioner submitted that the Central Electricity Regulatory Commission has allowed additional O&M expenses for old Units based on their life. The Petitioner submitted that the terminal benefits are claimed based on the actual. The Petitioner has submitted that plant wise expenses as per profit and loss account have been provided in replies to data gaps.

3.46. The Petitioner has requested the Commission to allow the loss or gain in O&M expenses in accordance with the RERC Tariff Regulations, 2009.

3.47. The Petitioner submitted that actual O&M expenses of Mahi are higher than the normative on account of following reasons:

(i) During FY 2012-13, the R&M expenditure increased approximately by 16% in comparison to previous FY 2011-12 due to price escalation. The life of power plant is more than 25 years. Therefore, there is increase in

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purchase of machines spares and R&M expenditure of plant. (ii) Increase in salary due to rise in DA twice in the year and AGI @3%. In

General, approximate 23% increase in salary. (iii) Increase in A&G expenses due to increase in wages of security services

and police armed guards as the outcome of revised fixation under 6th Pay Commission.

Depreciation Stakeholders’ Comments/suggestions:

3.48. Stakeholder submitted that in accordance with Regulation 23(6) of the RERC Tariff Regulations, 2009, depreciation shall be chargeable from the first year of commercial operation. The COD of KTPS Unit 1 is 01.04.1983, Unit 2 is 01.04.1984, Unit 3 is 11.03.1989, Unit 4 is 16.01.1990, Unit 5 is 18.07.1995, Unit 6 is 01.08.2004 and Unit 7 is 31.12.2009. Further, in accordance with Regulation 2(71), useful life of such units is 25 years. Thus, the first three units have completed their useful life. Hence, no depreciation is chargeable for these units.

3.49. Stakeholder submitted that the Petitioner has claimed depreciation for STPS

as Rs. 278.90 Crore as against Rs. 260.77 Crore approved by the Commission. The reason provided by the Petitioner for such deviation is not clear and, therefore, the Petitioner should provide proper reasons in detail.

3.50. Stakeholder submitted that in accordance with proviso under Regulation

23(4) of Tariff Regulations, 2009, depreciation value as on March 31 of the year closing after the period of 12 years from date of commercial operation shall be spread over the balance useful life of the assets. RVUN should provide details in this regard.

3.51. Stakeholder submitted that separate station wise gross asset details in the

book of accounts are not provided in the Petition. The depreciation should be allowed after prudence check.

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RVUN’s Response:

3.52. The Petitioner submitted that depreciation as reflected in the audited accounts and in the petition are based on rates of depreciation specified in the RERC Tariff Regulations. Depreciation has been claimed as per RERC Tariff Regulations, 2009.

Interest and Finance Charges Stakeholders’ Comments/suggestions:

3.53. Stakeholder submitted that the Commission in its Tariff Order for FY 2012-13 had approved the interest on term loan and transitional loan. Against the same, the Petitioner has claimed the actual interest on term loan and transition loan. The actual interest on term loan and transitional loan claimed by the Petitioner is higher than that approved by the Commission. The interest on transition loan should be approved as per the Commission’s Order dated 21.01.2010. The interest on term loan should be approved as per the Tariff Order for FY 2012-13. The gain in interest on term loan and transitional loan should be shared between RVUN and the Discoms.

RVUN’s Response:

3.54. The Petitioner submitted that the figure as mentioned at page number 367 of petition is the interest on loan, whereas, the figure as mentioned at page number 332 of the petition is the interest on loan including finance charges. The Tariff Order is the forecast/estimates of a particular year; however the true up petition of a year is based on actual. The deviation in the interest rate, i.e., approved vs actual and deviation in the approved repayment vs actual repayment is beyond the control of RVUN. Further, any addition in capital cost after approval of Tariff Order leads to increase in loan amount which consequentially increases the interest cost. Further, the actual interest charges are also subject to other bank and finance charges. RVUN requested the Commission to approve actual interest and finance charges.

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Insurance on Fixed Assets Stakeholders’ Comments/suggestions:

3.55. Stakeholder submitted that insurance on fixed assets should be allowed on the basis of actual payments made. In this regard, the Petitioner should provide supporting documents for actual payments made.

RVUN’s Response:

3.56. The Petitioner submitted that relevant documents of actual insurance paid and duly reconciled with audited accounts have been provided in its replies to data gaps.

Prior Period Expenses Stakeholders’ Comments/suggestions:

3.57. Stakeholder submitted that the Petitioner should provide the details of prior period expenses of Rs. 8.13 Crore for KTPS (Unit 1 to 7).

RVUN’s Response:

3.58. The Petitioner submitted that the details of prior period income/expenses are as follows:

Table 3: Prior Period Income/Expenses submitted by RVUN for FY 2012-13 (Rs.)

Prior Period Income / Expenses KTPS Other income related to prior period 37634.00 Sub-Total 37634.00 Prior Period Expenses-Coal related 23345135.00 Prior Period Expenses-Operating Exp. (110271542.72) Prior Period Expenses-Employee Cost (1173052.00) Dep. Under Prov. Previous Year 187471354.79 Prior Period Expenses-Adm.& General (13323183.50) Sub-Total 86048711.57 Total (86011077.57) Head office expenses allocation 4722579.21 Net Prior Period Income/Expenses (81288498.36)

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Pension and Gratuity Stakeholders’ Comments/suggestions:

3.59. Stakeholder submitted that the Commission in its Order dated 31.08.2009 allowed RVUN to claim additional liability towards Pension and Gratuity. Stakeholder submitted that the Petitioner has recovered Rs. 200 Crore and only Rs 150.32 Crore has been deposited into the fund till 27.03.2014 without any interest. The Commission in its Tariff Order for FY 2012-13 directed RVUN to remit the amount into pension and gratuity trust along with interest. In this regard, the Petitioner should provide the following:

(i) Reason behind non remittance of Rs. 200 Crore to Pension and gratuity fund and the time frame for clearing the dues by RVUN.

(ii) The amount of interest accrued till now on the above dues and time frame for payment of such dues to the pension and gratuity fund.

(iii) Reason for not paying Rs. 49.4818 Crore of true up amount with interest into the above fund and time frame for such payment.

(iv) Whether the balance of Rs. 200 Crore has been obtained from Government of Rajasthan and if so, whether the same has been passed into the fund. If not, RVUN is supposed to pay the same by sharing saving from its O&M expenses. In this regard, RVUN should provide the details of the amount that has been remitted to the fund by sharing saving from its O&M expenses. If such remittances are not made, then RVUN should provide the time frame for such payment along with interest.

3.60. Stakeholder submitted that the Petitioner should provide the reasons for the claim under additional liability towards Pension Fund. Till RVUN clears the dues including the interest, no amount under this head should be allowed by the Commission in true-up.

RVUN’s Response:

3.61. The Petitioner submitted that the Commission in its Orders dated 31.08.2009 and 06.06.2013 had allowed the terminal benefit in addition to O&M

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expenses. In compliance to that, RVUN while billing to the Discoms have recovered terminal benefits. However, due to actual PLF being lower than normative PLF, RVUN has recovered lower fixed charges and lower terminal benefit. Consequentially, on lower recovery of terminal benefit, RVUN has deposited the lower amount into the fund. Against the total terminal benefit of Rs 120 Crore, allowed during three years, i.e., 2009-2012, RVUN has deposited Rs. 113 Crore into the fund. The Petitioner further submitted that against instalment of Rs. 40 Crore allowed by the Commission for FY 2012-13, RVUN has paid Rs 37.11 Crore in FY 2013-14. Therefore this amount has not been claimed in this current petition for FY 2012-13 and RVUN shall claim the same in the true up for FY 2013-14.

3.62. The details of Rs. 113 Crore that has been deposited in the fund in FY 2012-

13 is as shown in table below:

Table 4: Additional Liability to Pension and Gratuity

Year Rs Crore

FY 2009-10 25.63 FY 2009-10 12.34 FY 2010-11 24.65 FY 2010-11 11.87 FY 2011-12 26.14 FY 2011-12 12.59

Total terminal benefit till FY 2011-12 paid in FY 2012-13

113.21

3.63. With regard to Rs. 49.48 Crore payable into the Trust as per the

Commission’s Order dated 10.05.2012, Rs. 5 Crore has been paid in FY 2013-14.

3.64. As regards the recovery of Rs. 200 Crore from Government of Rajasthan, the Petitioner submitted that the process of actuarial valuation is under

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process. After finalization of amount of actuarial valuation, RVUN shall take up the matter with Government of Rajasthan.

Penal Interest/Commitment Charges Stakeholders’ Comments/suggestions:

3.65. Stakeholder submitted that as per Note No. 26.1 of the audited accounts for FY 2012-13, Penal Interest/Commitment charges are included in interest & finance charges. In this regard, the Petitioner should submit the following:

(i) Amount of penal interest included in interest & finance charges and for what reasons and by whom such penal charges have been levied.

(ii) Amount of commitment charges and details regarding the same. RVUN’s Response:

3.66. The Petitioner submitted that penal interest is Rs. 9.86 Crore for FY 2012-13 and there are no commitment charges.

Liquidated Damages Stakeholders’ Comments/suggestions:

3.67. Stakeholder submitted that the Commission in its Order dated 06.06.2013 directed RVUN to finalise amount of liquidated damages to be recovered from BTG and BOP contractors in respect of KTPS Unit 7 and STPS Unit 6. The Petitioner in its replies to data gaps submitted that the same has not been finalized. Similarly finalization of liquidated damages of CTPP Phase 1 as per Order dated 24.02.2014 is pending. In this regard, RVUN should provide the reasons for such long delay in finalisation of LD amount.

RVUN’s Response:

3.68. The Petitioner submitted that the amount of liquidated damages (LD) determined against KTPS Unit 7, STPS Unit 6 and CTPP Unit 1&2 is as follows:

(i) LD from BHEL is yet to be finalised. (ii) LD from BOP contractor has been finalised and imposed as Rs. 8.00

Crore and Rs. 50 Lakh for KTPS Unit 7 and STPS Unit 6 respectively.

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(iii) LD from BOP contractor for CTPP Unit 1& 2 is yet to be finalised. Revenue from Sale of Power Stakeholders’ Comments/suggestions:

3.69. Stakeholder submitted that as per the audited accounts of FY 2012-13, revenue from sale of power for FY 2012-13 is net of the amount capitalised during the year. The Petitioner should submit the details in this regard.

RVUN’s Response:

3.70. The Petitioner submitted that balance sheet has two year data for FY 2011-12 and FY 2012-13 and the statement as quoted by auditor is for FY 2011-12 and does not pertain to FY 2012-13.

Average Tariff Stakeholders’ Comments/suggestions:

3.71. Stakeholder submitted that the Commission vide its Order dated 06.06.2013 had approved the weighted average rate as Rs. 3.495/kWh, against which the Petitioner has claimed the weighted average rate of Rs. 3.919/kWh. Further, the rate of variable charges was approved as Rs. 2.714/kWh. However, as per audited accounts, the Petitioner has worked out the rate of variable charges as Rs. 3.132/kWh, which is higher by more than 15% and has resulted in increase of Rs. 955 Crore in charges. In this regard, the Petitioner should provide detailed justification for such increase in energy and variable charges.

RVUN’s Response:

3.72. The Petitioner submitted that the approved per unit rate was based on estimated/projected data and actual per unit tariff has changed due to change in various factors pertaining to Depreciation, Interest on term loan and interest on working capital, O&M expenses, variable parameters such as SHR, auxiliary consumption, PLF and specific consumption of fuel,etc. The item wise details of variation in fixed and variable have been provided in the petition.

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Summary of Objections/Comments/Suggestions, RVUN’s response on ARR and Tariff for FY 2015-16 Availability and PLF Stakeholders’ Comments/suggestions:

3.73. Stakeholder submitted that the proposed PLF for Mahi for FY 2015-16 is much lower than the PLF for FY 2013-14 and FY 2014-15. The Petitioner should clarify whether project authorities have obtained any proposed schedule of release of water. The Petitioner should provide the copy of relevant documents.

3.74. Stakeholder submitted that the estimated generation for Mahi should be

worked out on the basis of actual generation during preceding five years or on the basis of designed PLF of a hydel project.

3.75. The representative of DISCOM submitted that Petitioner has proposed PLF of 15.38% and 80.00% for Giral Unit 2 for FY 2014-15 and FY 2015-16, respectively. Therefore, it is suggested that the Commission should proportionately reduce fixed charges for Giral Unit 2 for FY 2015-16 due to non achievement of normative PLF.

RVUN’s Response:

3.76. The PLF for FY 2015-16 is projected on the basis of expected water availability in FY 2015-16. The Petitioner submitted that the lower PLF for Mahi has been proposed on the basis of past practice followed for hydro generation based on the normal monsoon season. There has been no irrigation schedule provided by the Irrigation Department, so no scheduling of water to be released from the plant could be decided. The Irrigation Department instructs the plant to release the water with short notice; therefore it is not possible for the plant authorities to provide any such type of schedule in advance.

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Auxiliary Consumption Stakeholders’ Comments/suggestions:

3.77. Stakeholder submitted that auxiliary consumption for KTPS has increased from 9.79% in FY 2013-14 to 10.26% in FY 2014-15. In this regard, the Petitioner should provide proper justification.

3.78. Stakeholder submitted that the Commission in its Order dated 14.05.2015 had approved the auxiliary consumption of 5.25% for KaTPP. However, in the present petition, the auxiliary consumption has been claimed as 5.75%. Thus, auxiliary consumption should be corrected in accordance with Order dated 14.05.2015. Accordingly, net generation will be increased for determination of tariff.

3.79. The representative of Discoms submitted that Petitioner has proposed auxiliary consumption of 29.00% and 11.50% for Giral Unit 2 for FY 2014-15 and FY 2015-16, respectively, which is higher than the normative auxiliary consumption approved by the Commission. Therefore, it is requested that the Commission should approve the auxiliary consumption on normative basis for Giral Unit 2.

RVUN’s Response:

3.80. The Petitioner submitted that the auxiliary consumption has increased mainly due to backing down instructions from SLDC.

3.81. The Petitioner submitted that the Auxiliary Energy Consumption has been computed as per regulation 45 (6) (B) which has auxiliary consumption both for steam driven boiler and electrically driven boiler feed pump. With regard to KaTPP, for load below 400 MW, the electrically driven boiler feed pump has to be used because the pressure of boiler feed pump cannot be maintained by steam boiler feed pump at lower load, i.e., below 400 MW. For KaTPP, RVUN has used weighted average in the ratio of 80% for steam

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and 20% for electrical driven boiler feed pump, i.e., 5.25*80%+7.75*20%. Therefore, the weighted average computation works out as 5.75%.

Station Heat Rate Stakeholders’ Comments/suggestions:

3.82. Stakeholder submitted that SHR for KTPS works out to2375 kcal/kWh as against which the Petitioner has claimed 2561.70 kcal/kWh and accordingly claimed the fuel consumption and cost which is thereof on the higher side. The Commission should therefore not allow such higher cost. Further, it is requested that RVUN should provide the calculation of SHR claimed.

3.83. Stakeholder submitted that the Petitioner has claimed the SHR of 2476.28 kcal/kWh for STPS and accordingly claimed the fuel consumption and cost thereof on higher side. Therefore, the Commission should not allow such higher cost. Further, the Petitioner should provide the calculation of SHR claimed.

3.84. Stakeholder requested the Petitioner to submit the computations of SHR for CTPP.

RVUN’s Response:

3.85. The Petitioner submitted that SHR is 2328.26 kcal/kWh for KTPS Unit 1-6 and 2605.26 kcal/kWh for Unit 7. Accordingly, the weighted average SHR is 2561.70 kcal/kWh. The Petitioner has computed variable charges separately for Unit 1-6 and Unit 7 in Form 5.3 and has also computed the combined weighted average SHR.

3.86. The Petitioner submitted that SHR is 2357.68 kcal/kWh for STPS Unit 1 to 5 and

2500 kcal/kWh for STPS Unit 6. Accordingly, the weighted average SHR is 2476.28 kcal/kWh.

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3.87. The Petitioner requested the Commission to consider the revised SHR of 2316.54 kcal/kWh for CTPP due to change in boiler efficiency from 87.6 %( typo graphical error) to 87.76%. The existing and revised calculation are as follows:

Table 5: Station Heat Rate (kCal/kWh)

S. No. Particular Existing Revised A Design Heat rate(kCal/kWh) 1941.9 1941.9 B Boiler Efficiency (%) 87.6 87.76 C 1.045 X Design Heat Rate

(kcal/kWh) 1.045 1.045

D A*C/B 2316.54 2312.31 Fuel Price and GCV Stakeholders’ Comments/suggestions:

3.88. Stakeholder requested the Petitioner to provide the details of actual landed price for CTPP Unit 1& 2 and Unit 3 during FY 2014-15 along with the gross calorific value.

3.89. Stakeholder submitted that for CTPP, the Petitioner has claimed indigenous coal consumption of 0.49 kg/kWh for Unit 1& 2 and 0.58 kg/kWh for Unit 3. These figures are not correct and, therefore, the Petitioner should provide correct consumption along with calorific value.

3.90. Stakeholder submitted that for KaTPP, the Petitioner has considered the GCV of indigenous coal as 4050 kCal/kg, whereas Commission in its Order dated 14.05.2015 had allowed the GCV of 4358 kCal/kg. Thus, GCV should be corrected in accordance with Order dated 14.05.2015. Accordingly, fuel consumption and cost will be less. For other components also, the Commission should consider the minimum of the figure claimed by the Petitioner and the figure approved by the Commission in its Order dated 14.05.2015.

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3.91. Stakeholder submitted that the cost of imported coal for KTPS was Rs. 8817.98/ton during FY 2013-14 and this reduced to Rs. 8116.85/ton during FY 2014-15. However, RVUN has submitted increased cost of Rs. 8522.69/ton for FY 2015-16, which does not appear to be correct as the cost of imported coal shows decreasing trend. Therefore, the Petitioner should provide the actual landed cost of imported coal during January, 2015 to April, 2015.

3.92. Stakeholder submitted that Petitioner should provide the basis of claiming the cost of gas and the Commission should also examine the cost of gas claimed by the Petitioner.

RVUN’s Response:

3.93. The Petitioner submitted that GCV of 4050 kCal/kg is on fired basis. Further in the data gap reply, the GCV on received basis has been submitted to the Commission and it is requested to consider the same.

3.94. The Petitioner submitted that the information of price and GCV of coal for April 2014 to December 2014 has been submitted to the Commission in its replies to data gaps.

3.95. With regard to specific consumption for CTPP, the specific consumption for Unit 1& 2 is based on blending of domestic and imported coal, whereas for Unit 3 it is purely based on domestic Coal.

3.96. The Petitioner submitted that the price of imported coal is based on international market, which is beyond its control.

3.97. The Petitioner submitted that cost of gas for FY 2015-16 has been computed on the basis of average of cost of gas per SCM for three months of FY 2014-15.

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Tariff Stakeholders’ Comments/suggestions:

3.98. Stakeholder submitted that Petitioner has projected the tariff of Rs. 11.554/kWh and Rs. 17.917/kWh for FY 2013-14 and FY 2014-15 respectively for GLTPP Unit 2. This appears to be alarming due to low PLF achieved in actual. In this regard, the Petitioner should provide the details of remedial measures that have been taken by it to achieve the PLF of 80% in FY 2015-16.

3.99. The representative of Discoms requested that the Commission should not allow variable charges to RVUN stations beyond operating norms in respect of SHR, Auxiliary, specific oil consumption and lime consumption.

RVUN’s Response:

3.100. The Petitioner submitted that the lower PLF is mainly on account of leakages in the tubes and technical problems which were beyond its control.

Capital Cost and Additional Capitalization Stakeholders’ Comments/suggestions:

3.101. Stakeholder submitted that the Petitioner has stated that capital cost of KTPS Unit 7 though has been considered as per Order dated 06.06.2013, but reduction on account of WCT as mentioned in the said Order has not been considered as matter for this is pending in appeal before the Hon’ble APTEL. This position is not correct. Therefore, the Commission should disallow such higher cost as there is no stay for the same.

3.102. Stakeholder submitted that any claim for additional capitalisation though

rejoinder is not admissible. RVUN’s rejoinder dated 19.09.2013 has already been dealt with by the Commission in its Order dated 24.02.2014 and finally the Commission had not considered the submission of RVUN. The Order dated 24.02.2014 has attained finality and therefore RVUN has no basis for

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claiming additional capitalization of Rs 17.90 Crore for KTPS Unit 7. Accordingly, the tariff of KTPS Unit 7 has to be determined by considering capital cost of Rs 824.247 Crore only as determined in Order dated 06.06.2013.

3.103. Stakeholder submitted that the Petitioner should consider the capital cost of STPS Unit 6 only as per Order dated 06.06.2013. Further, the Commission in its Order dated 24.02.2014 has already ruled on additional capitalization.

3.104. Stakeholder submitted that the capital cost of CTPP (Unit 1 and 2) should be considered as per Commission’s Order dated 06.06.2013. Also, the claim of WCT should not be considered. Further, the Commission in its Order dated 22.05.2015 has also approved the capital cost of Unit 3 as Rs. 1431.31 Crore as against the Petitioner’s claim of Rs. 1527.47 Crore. Therefore, the Commission should consider the capital cost of Rs. 1431.31 Crore for CTPP Unit 3.

3.105. Stakeholder submitted that the Petitioner should intimate the capital cost for DCCPP, approved by the Commission giving the reference of the Order. Also, the Petitioner should intimate the amount of debt and equity.

3.106. Stakeholder submitted that form no. 6.1 of the petition for DCCPP, shows that this station has capital spares of Rs. 39.72 Crore. In this regard, the Petitioner should provide the copy of purchase orders of these spares.

3.107. Stakeholder submitted that the Commission in its Order dated 14.05.2015 has approved the provisional capital cost of Rs. 4502.07 Crore for KaTPP Unit 1. As per RVUN’s response at para 3.28 of the said Order, equity for Unit 1 is Rs 1017 Crore. The same figures of capital cost and equity may be considered for determining the tariff for Unit 1.

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3.108. Stakeholder submitted that the petition has been filed for Unit 1 of KaTPP only for which COD was achieved on 07.05.2014 with Capital expenditure as Rs. 5082.89 Crore up to COD and Rs. 472 Crore is proposed to be incurred in FY 2015-16. Thus, the total cost works out as Rs. 5555 Crore. Such high cost of more than Rs. 9 Crore/MW appears to be very high and it may be due to increase in IDC (due to delay in commissioning) and increase in the cost of water storage dam, which should be justified by the Petitioner. Further, the Petitioner should provide the status of KaTPP Unit 2 along with actual/expected date of commissioning.

3.109. Stakeholder submitted that final Capital cost of 125 MW GLTPP Unit 2 has been indicated as Rs. 915.56 Crore, i.e., about Rs. 7.3 Crore/MW which appears to be high. This may be due to increase in IDC because of delay in COD of the unit. In this regard, it appears that initially the capital cost as on COD (i.e., 12.03.2011) may be allowed which can be finalized after settlement of Liquidated Damages (LD) and IDC, etc.

RVUN’s Response:

3.110. As the matter of WCT is pending in appeal before Honb’le APTEL, the Petitioner has requested the Commission to consider the addition of WCT. With regard to additional capitalization of Rs. 17.90 Crore for KTPS, the Petitioner submitted that the same has been approved by the Commission in its Order dated 23.07.2014. With regard to additional capitalization of Rs. 48.70 Crore for STPS, the Petitioner submitted that the same has been approved by the Commission in its Order dated 23.07.2014.

3.111. The Petitioner submitted that the capital cost, debt and equity for DCCPP have been approved by the Commission through its various Orders.

3.112. The Petitioner submitted that the DCCPP has achieved the COD in March 2008 and, subsequently, the Commission has approved the capital cost of DCCPP. The gross fixed assets as reflected in Form 6.1 are as per commission approved capital cost.

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3.113. The Petitioner submitted that the Commission has approved the

provisional capital cost of KaTPP Unit 1. The Unit 2 has not achieved the COD yet, however, RVUN is under process to file the petition with expected date of COD of Unit 2.

3.114. The Petitioner submitted that the Commission has reserved the Order on petition for determination of capital cost of GLTPP (Unit 2).

Operation and Maintenance Expenses Stakeholders’ Comments/suggestions:

3.115. Stakeholder submitted that O&M expenses should be allowed as per norms prescribed in RERC Tariff Regulations, 2014.

RVUN’s Response

3.116. The Petitioner submitted that O&M expenses may be allowed as per norms.

Depreciation Stakeholders’ Comments/suggestions:

3.117. Stakeholder submitted that in accordance with Regulation 22(8) of RERC Tariff Regulations 2014, the Petitioner should give proper calculation of depreciation computing it from the date of commercial operation and taking into consideration the depreciation of individual Units of generating station. However, the Petitioner has not complied with the Regulations. Therefore, it is suggested that the Commission should allow only 75% of the claim till the Petitioner provides proper details as per Regulations.

3.118. Stakeholder submitted that the Commission in its Order dated 22.05.2015 has provided the details of gross assets of CTPP Unit 3 on the basis of approved capital cost. Hence, depreciation for Unit 3 should be allowed accordingly. Similarly, for CTPP (Unit 1 and 2), depreciation should be

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allowed on the basis of capital cost approved by the Commission in its Order dated 06.06.2013.

3.119. Stakeholder submitted that the Commission should allow depreciation for KaTPP on the basis of capital cost approved in Order dated 14.05.2015. The rates of depreciation should be considered in accordance with the RERC Tariff Regulations, 2014.

RVUN’s Response

3.120. The depreciation has been computed in accordance with RERC Tariff Regulations.

Interest on Loan Stakeholders’ Comments/suggestions:

3.121. Stakeholder submitted that term loan and transitional loan has been combined. In this regard, the Petitioner should provide segregation of these two loans. Also, the Petitioner should indicate as to when such transitional loan was obtained and under which order the Commission had approved the same. Stakeholder submitted that interest and finance charges should be allowed on the amount of debt only which has been worked on the basis of approved capital cost minus equity.

3.122. Stakeholder submitted that the Commission should allow interest on debt for KaTPP on the basis of capital cost approved in Order dated 14.05.2015 minus equity.

RVUN’s Response

3.123. The Petitioner submitted that the details of actual term loan and transitional loan till FY 2013-14 have been submitted. Further, the loan amount as mentioned in the petition is projected for FY 2015-16.

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Interest on Working Capital Stakeholders’ Comments/suggestions:

3.124. Stakeholder submitted that interest on working capital should be considered in accordance with the RERC Tariff Regulations, 2014.

RVUN’s Response

3.125. The Petitioner submitted that interest on working capital may be allowed as per norms.

Insurance Charges Stakeholders’ Comments/suggestions:

3.126. Stakeholder submitted that the Petitioner should produce documentary proof for the insurance charges paid in last year.

RVUN’s Response

3.127. The Petitioner submitted that documentary proof of actual insurance charges paid during FY 2014-15 has been submitted. The Petitioner has not paid any insurance charges for RGTPS stage III (160MW). With regard to Kalisindh Unit 1, the Petitioner submitted that it has not paid any insurance charges as the same was borne by M/s BGRESL limited.

Return on Equity (RoE) Stakeholders’ Comments/suggestions:

3.128. Stakeholder submitted that the Commission in its Order dated 09.10.2014 has not allowed any RoE for FY 2014-15. Therefore, the position mentioned for FY 2014-15 in this petition is totally wrong. Further, the Petitioner should provide the details of the amount of debt and equity in respect of total capital cost of KTPS (Unit 1 to 6) separately and for Unit 7 separately as approved by the Commission. Stakeholder submitted that the Petitioner should provide the details about the amount of debt and equity in respect of total capital cost of Units separately, for STPS (Unit 1 to 6) as approved by the Commission. Further, the Petitioner should provide the copy of minutes of BOD meeting under which the decision for claiming RoE was taken.

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3.129. The representative of Discom submitted that the Petitioner in its original Petition for determination of ARR for FY 2014- 15 has not claimed any ROE. But RVUN vide its additional submission in September 2014 requested the Commission for allowing ROE. In this regard, the Commission through its Order dated January 21, 2015 has not allowed Return on Equity as submitted by the Petitioner. Therefore, the Commission should not allow the tax on return on equity claimed by the Petitioner.

RVUN’s Response

3.130. The Petitioner submitted that after filing the tariff petition for FY 2014-15, the Government of Rajasthan has directed RVUN to claim the RoE @ nil for FY 2014-15 and 5% for FY 2015-16. Therefore, RVUN has requested the Commission to not consider the RoE for FY 2014-15 and consider the ROE for FY 2015-16 @ 5%. Further, the Petitioner has submitted the copy of MoM of BOD in replies to data gaps.

Income from FDR Stakeholders’ Comments/suggestions:

3.131. Stakeholder submitted that the Petitioner at form no. G.3.2 has claimed the income from FDR as Rs. 0.13 Crore. In this regard, the Petitioner should provide the details of amount of FDR and for what purpose the FDR was made.

RVUN’s Response

3.132. The Petitioner submitted that interest on FDR has been projected based on the data of past years assuming that same trend will continue in future years.

Audited Accounts Stakeholders’ Comments/suggestions:

3.133. Stakeholder submitted that the Petitioner has not submitted the unaudited accounts for FY 2014-15 which is to be submitted as per Regulation 11(4), i.e., information of previous year.

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3.134. Stakeholder submitted that in accordance with Regulation 11(5) (d) of the

RERC Tariff Regulations, 2014, RVUN should submit copy of annual reports and statistics along with an account of its activities during current year, previous year and ensuing year showing activities, targets and achievements in respect of various performance parameters.

RVUN’s Response:

3.135. The Petitioner submitted that work of compilation & consolidation of the accounts for FY 2014-15 is under process. As soon as the work of consolidation of accounts is completed, RVUN shall supply the copy of these unaudited accounts.

3.136. With regard to the performance parameters, the Petitioner further

submitted that various desired performance parameters such as PLF, Auxiliary consumption and SHR for FY 2014-15 have already been submitted in format 5.3 of ARR & Tariff petition for FY 2015-16.

Fixed Assets Register Stakeholders’ Comments/suggestions:

3.137. Stakeholder submitted that the Commission in its Order dated 06.06.2013 had directed RVUN to give a time bound programme for compliance of long standing observations and maintenance of fixed assets register. RVUN in its replies to data gaps submitted that fixed assets register has been provided to the Commission on 07.01.2015. In this regard, the Petitioner has been requested to provide the details of the period up to which the gross fixed assets of each power station has been finalized and submitted to the Commission. Also, the Petitioner should provide the details along with a copy of the workings of the gross fixed assets and cumulative depreciation as has been arrived in Form No. G.6.

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RVUN’s Response:

3.138. The Petitioner submitted that Fixed Assets Register till FY 2013-14 has been finalized and has been submitted to the Commission vide letter dated 6.1.2015.After submission of above details, the Commission vide letter dated 09.02.2015 had directed the Petitioner as follows:

“On the above subject it is informed that the fixed assets register prepared by you is required to be submitted to the statutory auditor in view of adverse comments given by them. Therefore Nigam may claim refund of 5% withheld amount of depreciation in the true up petition of FY 2014-15 only after receiving the report of audit of FY 2014-15.”

3.139. With regard to the above directive, the Petitioner submitted that process

of authentication of fixed assets register shall be completed after finalization of audited accounts for FY 2014-15 and same shall be submitted thereafter.

Revenue from Tariff Stakeholders’ Comments/suggestions:

3.140. Stakeholder submitted that in accordance with Regulation 11(1) of the RERC Tariff Regulations, 2014 RVUN should submit the forecast of ARR, expected revenue from (i) existing tariff and (ii) proposed tariff. However, the petition does not contain the revenue from existing tariff in respect of each generating station/unit and should be provided by the Petitioner. Further, in accordance with Regulation 11(3)(d) of the Tariff Regulations, 2014, RVUN should also provide the prevailing tariff in respect of each case/station/Unit as the same has not been provided in the Petition.

RVUN’s Response:

3.141. The Petitioner submitted that revenue from existing tariff has been submitted. Further, the prevailing tariff in respect of each case/station/Unit has been submitted.

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Commission’s Views on Issues raised by Stakeholders:

3.142. The Commission has taken note of all the comments/suggestions /observations of the Stakeholders raised in writing as well as during the course of hearing and RVUN’s responses to them. The Commission has attempted to capture all the comments/suggestions/observations. However, in case any comment/suggestion/observation is not specifically elaborated, it does not mean that the same has not been considered. The Commission has considered all the issues raised by the Stakeholders related to the ARR and Tariff Petition for FY 2015-16 and True Up of ARR for FY 2012-13 and RVUN’s response on these issues while carrying out the detailed analysis of the ARR and Tariff for FY 2015-16 and prudence check of the truing up of ARR for FY 2012-13 in accordance with RERC Tariff Regulations, 2014 and RERC Tariff Regulations, 2009 respectively as detailed in the next Sections of the Order.

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SECTION 4

Analysis of Annual Performance Review for FY 2012-13 (True Up) and Allowed Fixed Charges and Variable Charges

Norms of Operation Availability RVUN’s Submissions

4.1. The actual Availability/Capacity Index submitted by RVUN for its stations for FY 2012-13 as shown in the Table below:

Table 6: Availability/Capacity Index as submitted by RVUN

Particulars KTPS (Unit 1-7)

STPS (Unit 1-6) RGTPS DCCPP Mahi CTPP

(Unit 1-2) Target Availability for full recovery of fixed charges

82.00% 82.00% 70.00% 80.00% 85.00% 80.00%

Actual as claimed in Petition 92.44% 85.86% 69.79% 49.34% 46.32% 74.60%

4.2. RVUN submitted that it had faced shortage of water for power generation

at Mahi in FY 2012-13.

Commission’s Analysis

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

4.4. The Commission in its Order dated 23.07.2014 directed RVUN to submit the SLDC Certificate towards actual Availability and reasons for loss in generation, if any, along with true up Petitions from FY 2011-12 onwards. However, RVUN has not submitted the SLDC Certificate for actual Availability along with true up petition for FY 2012-13. The Commission, therefore, again asked RVUN to submit the SLDC Certificate for actual

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Availability as well as loss in generation due to back down instructions from SLDC for FY 2012-13. RVUN in its replies stated that it has requested SLDC for details of actual Availability but has not furnished the SLDC Certificate. RVUN has submitted the loss in generation due to back down instructions certified by SLDC.

4.5. RVUN, in its replies to data gaps, has submitted that lower Availability is on account of back down instructions from SLDC. RVUN further submitted that it has sought the certificate for loss of generation of 1469.04 MU from SLDC but SLDC has certified loss of generation of 1331.83 MU.

Table 7: Generation Loss due to back down instructions as approved by SLDC

Particulars Proposed by RVUN (MU)

Verified by SLDC (MU)

KTPS(Unit 1-7) 301.42 270.67 STPS (Unit 1-6) 847.39 771.12 RGTPS 12.23 11.62 DCCPP 24.35 23.13 CTPP(Unit 1-2) 283.66 255.29 Total 1469.05 1331.83

4.6. RVUN has also submitted the loss in generation in RGTPS and DCCPP due

to non-availability of gas. RVUN in its replies also submitted the revised computations of deemed PLF considering the loss of generation due to back down instructions as per SLDC and fuel shortage for gas based plants.

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

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

4.8. As regards Mahi HPP, the Commission is of the view that the non-

availability of water for generation is uncontrollable for RVUN and hence, allows relaxation in the target Capacity Index for full recovery of fixed charges. Accordingly, the Commission has allowed the full fixed charges for Mahi in true up for FY 2012-13.

4.9. The Commission in its Order dated 09.10.2014 for approval of true up for FY 2011-12 has considered the actual Availability equal to PLF as approved in the absence of SLDC Certificate for the actual Availability. The Commission has approved the actual PLF in the subsequent paragraphs. The Commission after taking into consideration the certification of SLDC for loss of generation due to back down instructions has recomputed the PLF by adding the same to the actual Net Generation and in accordance with Regulation 43 of the RERC Tariff Regulations, 2009. The Commission has considered the PLF so computed as the actual Availability for FY 2012-13. The Availability/Capacity Index approved by the Commission is as shown in the Table below:

Table 8: Availability approved by the Commission for FY 2012-13


STPS (Unit 1-6)

RGTPS DCCPP Mahi CTPP (Unit 1-2)

Availability Claimed

92.44% 85.86% 69.79% 49.34% 46.32% 74.60%

Approved on True up

92.20%

86.84%

52.82%

40.51%

46.32%

71.92%

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Plant Load Factor (PLF) RVUN’s Submission

4.10. The actual PLF as submitted by RVUN for its stations for FY 2012-13 is as shown in the Table below:

Table 9: PLF as submitted by RVUN


STPS (Unit 1-6) RGTPS DCCPP CTPP

(Unit 1-2) Target PLF for incentive 82.00% 82.00% 70.00% 80.00% 80.00%

Approved in Tariff Order 87.22% 82.00% 70.00% 80.38% 80.00%

Actual Claimed in Petition 89.66% 80.44% 51.44% 40.21% 66.76%

4.11. RVUN submitted that the actual PLF for STPS is lower than the target PLF on

account of back down instructions from SLDC. For RGTPS and DCCPP the actual PLF is lower than the target PLF on account of shortage of gas. For CTPP, the actual PLF is lower than target PLF on account of stabilisation of new Units.


4.12. The Commission is of the view that under the RERC Tariff Regulation, 2009 RVUN is being allowed all the prudent expenses based on the Availability of its Stations, however, at the same time, RVUN must also strive to achieve higher PLF so that more energy is made available to the Discoms within the State at lower price.

4.13. RERC Tariff Regulations, 2009 specifically define the PLF as specified below:

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

N Plant Load Factor (%) = 10000 x I ΣAGi / {N x IC x (100 – AUXn)} %

i=1

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where - N = number of time blocks in the given period, AGi = Actual Generation in MW for the ith time block in such period IC = Installed Capacity of the generating station in MW, AUXn = Normative Auxiliary Consumption in MW, expressed as a percentage of gross generation”

4.14. The Commission based on the submitted actual net generation and the normative net generation considering the normative auxiliary consumption has recomputed the actual PLF as per the above specified formula. The PLF as submitted by the Petitioner and as considered by the Commission for FY 2012-13 is as shown in the Table below:

Table 10: PLF as Approved by the Commission for FY 2012-13

Particulars KTPS

(Unit 1-7)

STPS (Unit 1-

6) RGTPS DCCPP CTPP

(Unit 1-2)

As submitted by the Petitioner 89.66% 80.44% 51.44% 40.21% 66.76%

Reworked by the Commission and Considered for True Up

89.45% 80.40% 51.59% 39.69% 65.52%

Auxiliary Consumption RVUN’s Submissions

4.15. The actual auxiliary consumption submitted by RVUN for its Stations for FY 2012-13 is as shown in the Table below:

Table 11: Auxiliary Consumption as submitted by RVUN


STPS (Unit 1-6)

RGTPS DCCPP Mahi CTPP

(Unit 1-2) Combined Cycle

Open Cycle

Normative 9.27% 9.00% 3.00% 1.00% 3.00% * 9.00%

Approved in Tariff order 9.27% 9.00% 5.00% 3.00% 1.04% 9.00%

Actual Claimed in Petition

9.48% 9.05% 1.81% 3.36% 0.70% 10.69%

*Mahi Ph- 2-3 lakh units per annum+0.75% of the energy generated Mahi Ph 1- 4.0 lakh units per annum+ 0.65% of the energy generated

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4.16. RVUN submitted that increase in auxiliary consumption for KTPS, STPS and CTPP is due to back down instructions from SLDC. RVUN submitted that in case of backing down of generation, though the load is reduced but all the auxiliary equipment of the Station has to run and therefore, higher auxiliary consumption in percentage terms is higher during the low load operation.

4.17. Further, for KTPS, RVUN submitted that the increase in auxiliary consumption is also on account of use of tube mills in Units 5 to 7 for coal crushing.


4.18. The Commission observed that RVUN has stated that the reason for higher auxiliary consumption than normative values is on account instructions from SLDC for shutdown/backing down of RVUN Stations. It is observed that the contention of the Petitioner is unsound regarding increased auxiliary consumption in KTPS on account of partial loading, as the PLF for KTPS station is considerably higher than the target PLF and PLF for STPS is marginally lower than the target PLF, and hence the reason behind increased auxiliary consumption on account of partial loading cannot be accepted.

4.19. With regard to auxiliary consumption of CTPP, the Commission observes that the PLF of CTPP as submitted by RVUN is 66.76%. RVUN in this regard has submitted that the lower PLF was on account of stabilisation of the new plant. The Commission is of the view that stabilisation issues cannot be held as a reason for increased auxiliary consumption as the same is not provided in the Regulations. The Commission is therefore not convinced with the reasons submitted by RVUN. Further, the Commission is of the view that the norm specified in Regulations for KTPS is based on the past years’ actual operational performance and therefore it takes care of the contention of the petitioner as mentioned above. With regards to CTPP,

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RERC Tariff Regulations, 2009 do not recognise relaxed norms on account of stabilisation period and therefore the Commission finds no basis for any relaxation of the norms. The Commission, therefore, has not allowed relaxation in Auxiliary Consumption for FY 2012-13.

4.20. It is also observed that, RGTPS and DCCPP have been operated in open cycle and combined cycle mode. RVUN has submitted the number of hours of operation in both modes of operation. The Commission has worked out the auxiliary consumption for the above stations considering the number of hours of operation in open and combined cycle mode. Further, as auxiliary consumption is a controllable performance parameter, the Commission has computed the sharing of gains/losses in accordance with Regulation 10 of RERC Tariff Regulations, 2009.

4.21. The auxiliary consumption approved by Commission for FY 2012-13, is as shown in the table below:

Table 12: Auxiliary Consumption approved for FY 2012-13



(Unit 1-2) Actual as Submitted by the Petitioner

9.48% 9.05% 1.81% 3.36% 0.70% 10.69%

Approved 9.27% 9.00% 2.11% 2.10% 0.70% 9.00%

Station Heat Rate RVUN’s Submission

4.22. The actual station heat rate submitted by RVUN for its Stations for FY 2012-13 is as shown in the Table below:

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Table 13: Actual Station Heat Rate as submitted by RVUN (kcal/kWh)



(Unit 1-2)

Normative 2581.00 2491.58 CC:1950 OC:2880

CC:1950 OC:2830 2356.57

Approved in Tariff Order 2581.00 2491.58 2414.96 1950.00 2356.57

Actual Claimed in Petition

2526.22 2540.00 2571.93 2444.23 2708.65

4.23. RVUN submitted that, for STPS and CTPP, increase in SHR is attributable to

partial loading due to back down instructions from SLDC. For DCCPP and RGTPS, RVUN has submitted that due to unavailability of gas, there has been increased SHR of the plant, as the plant was running on partial loads on regular basis.


4.24. The Commission observed that actual SHR for STPS and CTPP is higher than normative SHR, while the actual SHR for KTPS is lower than normative value. The Commission observed that RVUN has stated the reasons for higher SHR than normative values for STPS is backing down instructions and for CTPP is backing down instructions and stabilisation of new plant. The Commission is of the view that such limitations are not station specific and almost all stations face similar issues and therefore such reasons cannot be held responsible for increased station heat rate. Further, the norms specified in Regulations are based on past years operational performance and takes care of all the reasons cited by the petitioner as mentioned above.

4.25. The SHR for some of the stations is higher than the normative SHR while for some of the stations, the same is lower. In case the actual SHR is

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considered, the entire objective of specifying the targets for performance parameters with sharing of gains and losses will be lost. The Commission, therefore, has not allowed any relaxation in SHR for FY 2012-13.

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

4.27. As Station Heat Rate is a controllable performance parameter, the Commission has computed the sharing of gains/losses in accordance with Regulation 10 of the RERC Tariff Regulations, 2009.

4.28. The Station Heat Rate approved by the Commission for FY 2012-13 is as shown in the Table below:

Table 14: Station Heat Rate Approved for FY 2012-13 (kCal/kWh)



(Unit 1-2) Actual as Submitted by the Petitioner

2526.22 2540.00 2571.93 2444.23 2708.65

Approved 2581.00 2491.58 2366.11 2344.26 2356.57

Secondary Fuel Oil Consumption RVUN’s Submission

4.29. The actual SFOC submitted by RVUN for its Stations for FY 2012-13 is as shown in Table below:

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Table 15: Secondary Fuel Oil Consumption as submitted by RVUN (ml/kWh)


STPS (Unit 1-6)

CTPP (Unit 1-2)

Normative 1.00 1.00 1.00 Approved in Tariff order 1.00 1.00 1.00

Actual Claimed in Petition 0.40 1.07 1.65

4.30. RVUN has not submitted any specific justification for increase in SFOC for

STPS and CTPP. Commission’s Analysis

4.31. The Commission has allowed SFOC for all generating stations for FY 2012-13 in accordance with the norms specified in RERC Tariff Regulations, 2009. Further, as SFOC is a controllable performance parameter, the Commission has computed the sharing of gains/losses in accordance with Regulation 10 of RERC Tariff Regulations, 2009. The SFOC approved by the Commission is as shown in the Table below:

Table 16: Secondary Fuel Oil Consumption as Approved for FY 2012-13 (ml/kWh)


STPS (Unit 1-6)

CTPP (Unit 1-2)

Actual as Submitted by the Petitioner 0.40 1.07 1.65

Approved 1.00 1.00 1.00 Coal Transit loss Commission’s Analysis

4.32. RVUN has not submitted the Coal Transit Loss separately in percentage terms as specified by RERC Tariff Regulations, 2009. The Commission has computed the Transit Loss in percentage terms from the actual coal cost data submitted by RVUN. The Commission, for the purpose of truing up, therefore, has considered the normative transit loss of 0.9% for domestic coal for FY 2012-13 as specified in RERC Tariff Regulations, 2009. Further, as Transit Loss is a controllable performance parameter, the Commission has

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computed the sharing of gains/losses in accordance with Regulation 10 of the RERC Tariff Regulations, 2009. The Transit Loss approved by the Commission for FY 2012-13 is as shown in the Table below:

Table 17: Transit Loss approved by the Commission for FY 2012-13


STPS (Unit 1-6)

CTPP (Unit 1-2)

Actual Computed as per details submitted by the Petitioner

1.63% 0.94% 1.70%

Approved 0.90% 0.90% 0.90%

Fuel Price and Calorific Value Commission’s Analysis

4.33. RVUN submitted the actual fuel prices and GCV of fuel in the Petition. RVUN in its additional submissions in response to queries raised by the Commission provided the revised values of fuel prices and calorific value for FY 2012-13. The Commission has considered the actual GCV of fuels as submitted by RVUN in its revised submissions. Further, the Commission has recomputed the landed fuel price of domestic coal considering the approved transit loss. The fuel price and calorific value considered by the Commission is as shown in the Table below:

Table 18: Landed Price and GCV of Fuel approved by Commission for FY 2012-13

Station Fuel Gross Calorific Value

(kcal/kg, kcal/L, kcal/SCM Landed fuel Price

(Rs/MT, Rs/kL, Rs/SCM RVUN Approved RVUN Approved

KTPS (Unit 1-7)

Domestic Coal 3700.00 3700.00 3580.00 3553.67 Imported Coal 6600.00 6600.00 8145.00 8145.00 HSD 10504.00 10504.00 39882.00 39882.00 HFO 11150.00 11150.00 39197.63 39197.63

STPS (Unit 1-6)

Domestic Coal 3754.00 3754.00 4442.73 4440.81 Imported Coal 6451.00 6451.00 8794.07 8794.07 LDO 9200.00 9200.00 50463.00 50463.00 HFO 9500.00 9500.00 45766.00 45766.00

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Station Fuel Gross Calorific Value

(kcal/kg, kcal/L, kcal/SCM Landed fuel Price

(Rs/MT, Rs/kL, Rs/SCM RVUN Approved RVUN Approved

RGPTS Gas 5202.10 5202.10 5.84 5.84 Oil 9300.00 9300.00 32366.35 32366.35

DCCPP Gas 9202.97 9202.97 13.01 13.01

CTPP (Unit 1- 2)

Domestic Coal 3901.38 3901.38 2863.48 2840.24 Imported Coal 6600.00 6600.00 8660.35 8660.35 HFO 10504.00 10504.00 45797.04 45797.04 LDO 11200.00 11200.00 64204.32 64204.32

Other charges RVUN’s Submission 4.34. In addition to fuel cost, RVUN has claimed other charges under the heads

of fuel related cost and operating expenses. The other charges claimed by the Petitioner for FY 2012-13 is as shown in the Table below:

Table 19: Other charges claimed by the Petitioner (Rs)

Station KTPS RGTPS DCCPP STPS CTPP Fuel Related Costs Coal handling contract charges 316495.82 Demurrage on coal wagons 37700128.00 46117530.00 Siding charges 103960.00 Commission to Coal Agents 14173925.00 Payment to Rly. staff 5122813.00 Other coal related costs 13171259.00 975550.00 0.00 Sub Total 51187882.82 0.00 0.00 66493778.00 0.00 Operating Expenses Cost of water 38219266.00 470314.00 7966066.00 32815065.00 700400.00 Lubrication & consumable store 34559525.79 13655342.33 9307163.20 Station supplies 64990302.29 41209207.51 Other costs 1226969.00 0.00 207964604.80 34578493.00 Sub Total 138996063.08 55334863.84 17273229.20 240779669.80 35278893.00 Total other charges 190183945.90 55334863.84 17273229.20 307273447.80 35278893.00

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Commission’s Analysis 4.35. The Commission is of the view that the cost related to arrangement of fuel

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

Annual Fixed Charges 4.36. The Annual Fixed Charges comprise of the following elements:

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

4.37. Each of these elements has been dealt with in the following paragraphs. Operation and Maintenance (O&M) expenses RVUN’s Submission

4.38. For most of the stations the actual O&M expenses claimed by RVUN are lower than that approved by the Commission. But, for KTPS and Mahi, the actual O&M expenses are on the higher side than that approved by the

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Commission. RVUN submitted that actual O&M expenses for KTPS are higher as the normative O&M expenses allowed are uniform for all units of KTPS irrespective of their life and date of COD and as KTPS has old units, therefore, excessive expenditure is observed.

4.39. For Mahi, there was 16% increase in repair and maintenance costs, due to

price escalation. Similarly, there was an increase in A&G expenses by 65% due to increase in salary wages of security services due to revised fixation under 6th Pay Commission.

4.40. The details of O&M expenses as recovered by RVUN from Discoms as per Tariff Order for FY 2012-13, and petitioned for truing up based on audited accounts are as shown in the Table below:

Table 20: O&M Expenses as submitted by RVUN (Rs. Crore)



(Unit 1-2) Total

Recovered from Discoms as per Tariff Order

178.31 215.70 14.45 35.56 12.41 71.90 528.33

As petitioned based on audited accounts

190.43 146.72 11.74 15.16 15.35 43.79 423.19

Commission’s Analysis 4.41. Regulation 8(7) of the RERC Tariff Regulations, 2009 specifies that:

“(8) Annual Review of Performance ................. (7) Some illustrative variations or expected variations in the performance of the applicant which may be attributed by the Commission to controllable factors include, but are not limited to, the following: ........................ (g) Variation in operation & maintenance expenses; .............”

4.42. Hence, O&M expenses are controllable in accordance with RERC Tariff Regulations, 2009.

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4.43. Further, Regulation 10 of the RERC Tariff Regulations, 2009 specifies that: “10. Sharing of Gains and Losses on account of Controllable factors (1) The approved aggregate gain to the Applicant on account of controllable factors shall be dealt with in the following manner: (a) 50% of such gain shall be passed on as a rebate in tariffs over such period as may be specified in the Order of the Commission; (b) The balance amount of gain may be utilized at the discretion of the Applicant. (2) The approved aggregate loss to the Applicant on account of controllable factors shall be dealt with in the following manner: (a) 50% of the amount of such loss may be passed on as an additional charge in tariffs over such period as may be specified in the Order of the Commission under; and (b) The balance amount of loss shall be absorbed by the Applicant.”

4.44. As O&M expenses are controllable in accordance with RERC Tariff Regulations, 2009, the Commission has computed the sharing of gains/losses in accordance with Regulation 10 of the RERC Tariff Regulations, 2009.

4.45. The Commission is of the view that when the O&M expenses are approved on normative basis, it could happen that the actual O&M expenses for some of the stations may be higher than normative and, for some of the stations lower than the normative O&M expenses. Accordingly, any variation in actual O&M expenses has to be trued up in accordance with Regulation 10 of the RERC Tariff Regulations, 2009.

4.46. The Commission observes that reasons given by RVUN for KTPS for increase in O&M expenses is on account of presence of old units. Any variation in actual O&M expenses has to be trued up in accordance with Regulation 10 of the RERC Tariff Regulations, 2009. If the actual O&M expenses are approved on actual basis, then there will be no sanctity of performance trajectory for controllable factors and sharing of gains and losses. Accordingly, the Commission has considered the normative O&M expenses as per the RERC Tariff Regulations, 2009 while carrying out the

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truing up of O&M expenses along with sharing of gains and losses as per the provisions of RERC Tariff Regulations, 2009.

4.47. RVUN has submitted the reconciliation of station wise O&M expenses as claimed in the Petition with the audited accounts. The Commission observes that the actual O&M expenses claimed by the Petitioner are in order with the audited accounts.

4.48. Regulation 25(4) of RERC Tariff Regulations, 2009 specifies as under: “Normative O&M expenses allowed at the commencement of the Control Period (i.e. FY 2009-10) under these Regulations shall be escalated at the rate of 5.72% per annum. Further, the same shall be subject to revision on account of annual escalation linked to WPI in the subsequent years for the purpose of true-up.”

4.49. The Commission approved the O&M expenses for FY 2012-13 considering

the normative O&M expenses for FY 2011-12 and escalating the same with the annual escalation rate of 7.35% based on the increase in WPI for FY 2012-13 over FY 2011-12.

4.50. RVUN in its subsequent submissions revised the insurance charges for KTPS after adjusting Rs 59.56 Lakh towards security charges and requested to consider the same as a part of O&M Expenses. The Commission has considered the revised insurance charges for KTPS and has considered the security expenses of Rs 59.56 Lakh as a part of actual O&M Expenses.

4.51. RVUN has claimed the operating expenses like cost of water, lubricants, etc. under other variable charges. The Commission in the true up of previous years has considered the same to be a part of O&M expenses based on the submissions of RVUN in the respective petitions. As discussed earlier in this Order, the Commission has considered such operating expenses in the O&M expenses and added the same to the actual O&M expenses claimed by RVUN as per details given below:

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Table 21: Actual O&M expenses including Other Operating Charges considered for FY 2012-13 (Rs. Crore)

Station Actual O&M

Expenses

Other Operating Charges

Total O&M Expenses

KTPS (Unit 1-7) 191.03 13.90 204.93 STPS (Unit 1-6) 146.72 24.08 170.79 RGTPS 11.74 5.53 17.27 DCCPP 15.16 1.73 16.88 Mahi 15.35 0.00 15.35 CTPP (Unit 1-2) 43.79 3.53 47.31 Total 423.79 48.77 472.54

4.52. The O&M expenses approved by the Commission for true up is as shown in

the Table below: Table 22: Approved O&M expenses for FY 2012-13 (Rs. Crore)

Station

Actual including

Other Operating Expenses

(A)

Normative (B)

(Gain) / Loss

C=(B-A)

50% Sharing (X=C/2)

Net entitlement

(B+X)

KTPS (Unit 1-7) 204.93 193.36 11.57 5.78 199.14 STPS (Unit 1-6) 170.79 233.90 -63.11 -31.55 202.35 RGTPS 17.27 15.67 1.60 0.80 16.47 DCCPP 16.88 38.56 -21.68 -10.84 27.72 Mahi 15.35 13.45 1.90 0.95 14.40 CTPP (Unit 1-2) 47.31 77.97 -30.65 -15.33 62.64

Total 472.54 572.92 -100.38 -50.19 522.73 Additional Capitalization Commission’s Analysis 4.53. There has been a GFA addition of Rs. 87.18 Crore as per the audited

accounts for FY 2012-13. RVUN submitted the statement of station wise and asset class wise GFA addition in FY 2012-13 reconciling the same with the audited accounts for FY 2012-13 as per details given below:

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Table 23: Details of Additional Capitalisation as submitted by RVUN

Particulars KTPS RGTPS DCCPP STPS BIKANER Chhabra Kali Sindh Total

Land 0.00 0.00 0.27 0.00 0.00 0.00 0.91 1.17 Building 1.77 0.00 0.40 0.00 0.00 0.00 0.00 2.17 Hydraulic Works 0.13 0.00 0.00 0.00 0.00 0.16 0.00 0.28 Road and Railway Siding Work 0.48 0.00 0.00 0.00 0.00 1.06 4.80 6.35 Plant and machinery 45.17 0.00 0.15 0.00 3.72 16.41 7.68 73.13 Cables and Lines 0.00 0.00 0.03 0.00 0.00 0.00 0.00 0.03 Furniture 0.00 0.02 0.01 0.12 0.00 0.73 0.17 1.05 Office Equipment 0.00 0.00 0.00 1.17 0.00 0.12 0.02 1.31 capital spares 1.06 0.00 0.49 0.00 0.00 0.00 0.00 1.55 Total 48.61 0.02 1.34 1.30 3.72 18.48 13.57 87.05

4.54. The Commission observed that the GFA addition has been under the asset

categories of civil works, hydraulic works, plant and machinery, etc. for some of the existing stations.

4.55. As regards additional capitalisation for existing stations, Regulation 19 of the RERC Tariff Regulations, 2009 specifies as follows: “19. Additional capitalization (1) The following capital expenditure, actually incurred after the date of commercial operation and duly audited, may be considered by the Commission, subject to prudent check (a) Due to deferred liabilities within the original scope of work, (b) On works within the original scope of work, deferred for execution (c) To meet award of arbitration or satisfaction of order or decree of a court arising out of original scope of works, (d) On account of change in law, (e) On procurement of initial spares included in the original project costs subject to the ceiling norm laid down in Regulation 18, (f) Any additional works/ services, which have become necessary for efficient and successful operation of a generating station or a transmission or a distribution system but not included in the original capital cost: ………………….”

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4.56. Any additional capitalisation has to be claimed in accordance with Regulation 19 of the RERC Tariff Regulations, 2009 giving a detailed justification for the same. The Petitioner has neither obtained any approval of the Commission separately for this additional expenditure nor submitted any justification for the additional capitalization in accordance with the provisions of Regulations. Hence, the Commission has not considered any additional capitalization in FY 2012-13.

Depreciation RVUN’s Submission 4.57. The details of depreciation as recovered by RVUN from Discoms as per

Tariff Order for FY 2012-13 and as per Petition based on actual/audited accounts are as shown in the table below:

Table 24: Depreciation (Rs. Crore)



(Unit 1-2) Total


100.54 260.77 13.92 57.20 6.18 120.52 559.13


96.49 278.90 14.92 56.98 4.20 122.93 574.42

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

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

Commission’s Analysis 4.59. The Commission is of the view that the depreciation for KTPS (Unit 1 to 6),

STPS (Unit 1 to 5), CTPP, RGTPS, DCCPP and Mahi Hydel Power Project needs to be allowed as already allowed in the Tariff Order for FY 2012-13, as the opening Gross Fixed Assets has not changed. While computing the depreciation for KTPS Unit 7 and STPS Unit 6, the Commission has considered the revised Capital Cost of KTPS Unit 7 and STPS Unit 6 as approved in True up Order dated 23.07.2014 for FY 2010-11.

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4.60. Further, while computing depreciation for CTPP Unit 1 and CTPP Unit 2 the Commission has considered the Capital Cost for these Units as approved in the Commission’s Order dated 06.06.2013.Accordingly, the depreciation as already allowed in the Tariff Order for FY 2012-13 is retained for KTPS Unit 1-6, STPS Unit 1-5, CTPP, RGTPS, DCCPP and Mahi Hydel Power Project. The depreciation approved by the Commission in true up for FY 2012-13 is as shown in the Table below:

Table 25: Approved Depreciation (Rs. Crore)



(Unit 1-2) Total


100.54 260.77 13.92 57.20 6.18 120.52 559.13

Approved 101.30 240.31 13.92 57.20 6.18 120.52 539.43

Interest and Finance Charges on Term Loans RVUN’s Submission 4.61. RVUN submitted that the variation in interest and finance charge is due to

the variation in actual amount of loan, repayment and interest on loan. The details of Interest and Finance Charges as approved in the Tariff Order of FY 2012-13 and as per Petition based on actual/audited accounts are as shown in the table below:

Table 26: Interest and Finance Charges on Term Loans (Rs. Crore)

Particulars KTPS (Unit 1-7


(Unit 1-2) Total


68.67 113.40 1.10 56.11 0.00 205.59 444.86


72.92 126.84 1.91 56.73 0.00 188.17 446.57

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Commission’s Analysis 4.62. It may be noted that the interest expenses would change from the

approved figures only due to change in loan balances and due to interest rate variation. The Commission has computed the interest on term loans based on loan balance approved by the Commission for FY 2009-10 in its MYT Order and by considering the repayment equivalent to depreciation allowed for FY 2009-10, FY 2010-11 and FY 2011-12 as trued up in respective Orders. The Commission has considered the weighted average rate of interest calculated on the basis of actual loan portfolio. In case of KTPS Unit 7 and STPS Unit 6 the Commission has approved the interest and finance charges as per the Capital Cost approved by the Commission in its Order dated 23.07.2014 and for CTPP Unit 1 and Unit 2, the Commission has approved the interest and finance charges as per the Capital Cost approved by the Commission in its Order dated 06.06.2013.

4.63. RVUN has submitted the station wise loan balance reconciling the same

with the audited accounts for FY 2012-13. The Commission has considered the station wise loan details as submitted by the Petitioner and has computed the interest by applying the prevalent interest rates on such loan balances. As the Commission has computed the interest expenses by applying the interest rate applicable for each loan and hence the penal charges paid by RVUN are not considered while approving the interest expenses.

4.64. The Commission has considered the actual finance charges for each station as submitted by the Petitioner.

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

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Table 27: Approved Interest and Finance Charges.



(Unit 1-2) Total


68.67 113.40 1.10 56.11 0.00 205.59 444.86

Approved for True Up 68.21 112.84 1.66 58.47 0.00 211.41 452.58

Interest on Transitional Loans

RVUN’s Submission

4.66. The details of interest on transitional loans as recovered by RVUN from Discoms as per Tariff Order for FY 2012-13 and as per petition based on audited accounts are provided in the table below:

Table 28: Interest on Transitional Loans (Rs. Crore)


STPS (Unit 1-6) RGTPS DCCPP Total


11.58 66.04 1.50 2.41 81.54


19.80 58.75 3.00 6.62 88.17

Commission’s Analysis 4.67. The Commission has already settled the issue of transitional loans earlier

vide its Order dated 21.01.2010. However, it is observed that RVUN in its submissions has submitted higher values of interest on transitional loans. The reasons for variation as stated by RVUN include difference due to variation in actual loan amount, repayment and interest on loan.

4.68. As regards the interest on transitional loans, the Commission vide its Order

dated 09.10.2014 on true up for FY 2011-12 ruled as under:

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“4.60 ………………. The Commission is of the view that this issue needs to be examined in detail for the entire Control Period for FY 2009-10 to FY 2013-14. The Commission directs RVUN to submit the detailed year-wise statement of loan balances on transitional loans and interest on transitional loans for the period FY 2009-10 to FY 2013-14 alongwith the truing up Petition for FY 2013-14. 4.61 At this stage, the Commission has allowed the interest on Transitional Loans for FY 2011-12 as considered in Order dated 21.01.2010 as under…………”

4.69. In line with the approach adopted by the Commission in the true up for FY

2011-12, the Commission has approved the interest on Transitional Loans for FY 2012-13 as considered in Order dated 21.01.2010. The interest on Transitional Loans approved by the Commission is as shown in the Table below:

Table 29: Approved Interest on Transitional Loans (Rs. Crore)


STPS (Unit 1-6) RGTPS DCCPP Total

As petitioned based on audited accounts 19.80 58.75 3.00 6.62 88.17

Approved 11.58 66.04 1.50 2.41 81.54

Interest on Working Capital RVUN’s Submission

4.70. The details of Interest on Working Capital as recovered by RVUN from Discoms as per Tariff Order for FY 2012-13 and as per petition based on audited accounts are as shown in the Table below:

Table 30: Interest on Working Capital (Rs. Crore)



(Unit 1-2) Total


91.40 117.82 5.21 23.48 0.93 27.10 265.94


63.16 76.40 5.63 16.81 7.13 25.47 194.59

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Commission’s Analysis 4.71. RVUN has submitted the reconciliation of Interest on Working Capital

claimed in true up for FY 2012-13 as shown in the Table below:

Table 31: Reconciliation of Interest on WC and Interest on Transitional Loans

Particulars Rs Crore IWC incl. transitional loan (A) 278.17 Interest on Transitional loan(B) 88.63 Guarantee Charges on Transitional loans(C) 4.02

Interest on WC (A-B-C) 193.56 Add: WC Guarantee Commission 8.61 Total (including Giral & MMH) 202.17 Less: Giral & MMH 7.58 Actual IWC claimed by RVUN 194.59

4.72. RVUN has allocated the above Rs. 194.59 Crore based on the installed

capacity of its stations.

4.73. Accordingly, for arriving at actual IWC for FY 2012-13, the Commission has deducted approved interest on transitional loan, i.e., Rs 81.54 Crore from actual interest on WC and actual interest on transitional loan of Rs 282.76 Crore (278.17+4.02).

Table 32: Actual Interest on Working Capital approved by the Commission

Particulars Rs. Crore Actual IWC claimed by RVUN 194.59 Actual Interest on Transitional Loan claimed by RVUN 88.17

Total 282.76 Interest on Transitional Loan approved by the Commission 81.54

Actual IWC approved by the Commission 201.22

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4.74. The actual IWC considered by the Commission for FY 2012-13 is Rs 201.22 Crore as against Rs 194.59 Crore, as submitted by RVUN. The Commission further computed the normative interest on working capital subjected to the target Availability, in accordance to RERC Tariff Regulations, 2009.

4.75. Regulation 28 of the RERC Tariff Regulations, 2009 states that the rate of

interest on working capital to be computed as provided subsequently in these regulations shall be on normative basis and shall be equal to the short term prime lending rate of State Bank of India (SBI) as on April 1 of the relevant year. The above provision was in effect dated 26.09.2012, i.e., the date of gazette notification of Fifth Amendment of RERC Tariff Regulations, 2009.

4.76. As per the Fifth Amendment to RERC Tariff Regulations, 2009, notified on 26.09.2012, the interest rate on working capital shall be considered 250 basis points higher than the average base rate of State Bank of India prevalent during the first six months of the previous year. For FY 2012-13, the Commission has considered the short term prime lending rate of SBI as on 01.04.2012 till 25.09.2012 and thereafter the rate of interest on working capital has been considered as 250 basis points higher than the base rate of SBI prevalent during 01.04.2011 to 30.09.2011. The Commission has considered the weighted average of annual interest rates which works out to 13.23% for FY 2012-13.

4.77. Further, as IWC is a controllable factor, the Commission has computed the sharing of gains/losses in accordance to Regulation 10 of RERC Tariff Regulations, 2009.

4.78. The IWC approved by the Commission for FY 2012-13 is as shown in the Table below:

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Table 33: Approved Interest on Working Capital (Rs. Crore)

Station Actual (A)

Normative (B)

(Gain) / Loss

(C=B-A)

50% Sharing

(X=C/2)

Net entitlement

(B+X) KTPS (Unit 1-7) 65.31 92.38 -27.07 -13.54 78.84 STPS (Unit 1-6) 79.00 129.92 -50.92 -25.46 104.46 RGTPS 5.82 5.30 0.52 0.26 5.56 DCCPP 17.38 21.68 -4.30 -2.15 19.53 Mahi 7.37 0.79 6.58 3.29 4.08 CTPP 26.33 31.69 -5.35 -2.68 29.01 Total 201.22 281.76 -80.54 -40.27 241.49

Lease Rent: RVUN’s Submission 4.79. RVUN has claimed the lease rent of Rs 0.01 Crore in true up for FY 2012-13.

RVUN has allocated the same proportionately based on the installed capacity of its stations.

Commission’s Analysis 4.80. The Commission has approved the lease rent as claimed by RVUN in true

up for FY 2012-13 as the same has been actually incurred by RVUN and is also reflected in the Annual Accounts for FY 2012-13.

Inter- Unit Account Balance Written off: RVUN’s Submission

4.81. The details of plant wise inter-unit account balances as recovered by RVUN from Discoms as per Tariff Order for the FY 2012-13 and as per Petition based on audited accounts are as shown in the table below:

Table 34: Inter- Unit account balance written off (Rs. Crore)


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


10.01 4.96 0.38 0.32 0.11 0.00 15.78

As Petitioned based on audited accounts 10.01 4.96 0.38 0.32 0.11 0.00 15.78

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Commission’s Analysis 4.82. The Commission, to avoid very high tariff adjustments, in its order dated

28.06.2008 has decided to have the inter unit account balances spread over in 5 equal instalments starting from FY 2008-09 to FY 2012-13. The Commission observed that, RVUN has submitted the same as per approved values of FY 2012-13 as per Commission’s Order dated 06.06.2013.

4.83. Accordingly, The details of inter-unit balances approved by the Commission considering the RVUN’s submissions for true up are as shown in Table below:

Table 35: Approved Inter-unit account balance written off (Rs.Crore)


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

Recovered from Discoms as per Tariff Order 10.01 4.96 0.38 0.32 0.11 0.00 15.78

Approved 10.01 4.96 0.38 0.32 0.11 0.00 15.78 Additional Liability towards Pension and Gratuity RVUN’s Submission

4.84. RVUN submitted that the Commission in its Order dated 31.08.2009 and 06.06.2013 had allowed the terminal benefit in addition to O&M expenses. In compliance to that, RVUN while billing to the Discoms has recovered terminal benefits. However, due to actual PLF being lower than normative PLF, RVUN has recovered lower fixed charges and lower terminal benefit. Consequentially, on lower recovery of terminal benefit, RVUN has deposited the lower amount into the fund. Against the total terminal benefit of Rs 120 Crore allowed during three years, i.e., 2009-2012, RVUN has deposited Rs. 113.21 Crore (including Giral & MMH) into the fund. The Petitioner further submitted that against instalment of Rs. 40 Crore allowed by the Commission for FY 2012-13, RVUN has paid Rs 37.11 Crore in FY

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2013-14. Therefore this amount has not been claimed in this current petition for FY 2012-13 and RVUN shall claim the same in the true up for FY 2013-14.

Table 36: Additional Liability towards Pension and Gratuity (Rs. Crore)



(Unit 1-2) Total


14.54 17.39 1.54 4.59 1.95 0.00 40.01


35.37 42.78 3.15 9.41 3.99 14.26 108.96

4.85. Subsequently, RVUN vide its letter dated 17.08.2015 submitted that the

claim towards additional liability towards pension and gratuity is Rs. 68.96 Crore for FY 2012-13. The submissions in this regard are detailed in the following paragraph:

4.86. The Petitioner submitted that the Commission had allowed Rs. 160 Crore

towards additional liability of terminal benefit from FY 2009-10 to FY 2012-13 and Rs. 40 Crore in FY 2013-14, i.e., Rs. 200 Crore upto FY 2013-14. Further, the Commission had also allowed Rs. 40 Crore towards the same in true up for FY 2008-09. During the true up for FY 2009-10, FY 2010-11 and FY 2011-12, RVUN has claimed the additional liability towards pension and gratuity. However, the Commission did not allow the same as the amount was not deposited into the fund during the above period. RVUN has deposited an amount of Rs. 113.21 Crore in FY 2012-13 which is inclusive of Rs. 40 Crore pertaining to FY 2008-09. Hence, the total amount for FY 2012-13 is Rs. 73.21 Crore (113.21 – 40). Out of the same, Rs. 3.57 Crore is for GLTPP Unit 2 and Rs. 0.68 Crore is for MMH and hence, the net claim of additional liability towards Pension and Gratuity is Rs. 68.96 Crore.

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Commission’s Analysis 4.87. The Commission in the true up of FY 2009-10 to FY 2011-12 had not

approved the additional liability towards pension and gratuity as the amount has not been remitted by RVUN to the fund. RVUN in its revised submissions dated 17.8.2015 has claimed Rs. 68.96 Crore on account of additional liability towards Pension and Gratuity in true up for FY 2012-13. RVUN has not submitted the station wise allocation of the same. Hence, the Commission has allocated the same station wise in the same proportion of Rs. 108.96 Crore as allocated by RVUN in the main Petition.

Table 37: Approved Additional Liability towards Pension and Gratuity (Rs. Crore)



(Unit 1-2) Total


14.54 17.39 1.54 4.59 1.95 0.00 40.01

Approved 22.39 27.08 1.99 5.96 2.53 9.03 68.96

Prior Period Expenses/Income RVUN’s Submission

4.88. RVUN has claimed an amount of Rs 17.73 Crore, on account of Prior period income on actual basis as per the details given below:

Table 38: Prior Period Expenses/ (Income) (Rs. Crore)



(Unit 1-2) Total


0.00 0.00 0.00 0.00 0.00 0.00 0.00


8.13 -18.83 -0.14 -8.12 -0.07 1.30 -17.73

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Commission’s Analysis 4.89. RVUN has submitted the reconciliation of station wise prior period

expenses/income claimed in true up for FY 2012-13 reconciling the same with the audited accounts for FY 2012-13.

4.90. The Commission observed that the details of prior period items have been

provided in Note No. 29 of the audited accounts for FY 2012-13. Some prior period gains have been shown under the head ‘Fuel Related Gains’. Any prior period gains under the head ‘Fuel Related Gains’ as shown in the audited accounts need to be considered while carrying out the truing up. The prior period income claimed by RVUN is inclusive of such fuel related gains as per the audited accounts. The Commission has considered prior period income as submitted by RVUN as shown in table below:

Table 39: Prior period expenses/(income) approved for FY 2012-13 (Rs. Crore)



(Unit 1-2) Total


0.00 0.00 0.00 0.00 0.00 0.00 0.00

Approved for True Up 8.13 -18.83 -0.14 -8.12 -0.07 1.30 -17.73

Recovery of ARR and Tariff Petition Fees RVUN’s Submission

4.91. RVUN has submitted ARR and Tariff Petition fees in accordance with the audited figures. The allocation plant wise has been done based on the ratio of their capacities. The details, as filed by RVUN is as under:

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Table 40: Recovery of ARR and Tariff Petition Fees (Rs. Crore)



(Unit 1-2) Total


0.62 0.75 0.06 0.17 0.01 0.25 1.86


0.68 0.83 0.06 0.18 0.08 0.28 2.11

Commission’s View 4.92. The Commission is of the view that ARR and Tariff Petition Fees shall be

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

Table 41: ARR and Tariff Petition fee approved by the Commission (Rs. Crore)



(Unit 1-2) Total


0.62 0.75 0.06 0.17 0.01 0.25 1.86

Approved 0.62 0.75 0.06 0.17 0.07 0.25 1.91

Insurance on Fixed Assets RVUN’s Submission

4.93. RVUN submitted the insurance on fixed assets as against that approved in Tariff Order as follows:

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Table 42: Insurance on Fixed Assets (Rs. Crore)



(Unit 1-2) Total


0.00 0.00 0.00 0.00 0.00 2.92 2.92


3.10 1.51 0.33 1.16 0.00 2.81 8.91

Commission’s Analysis 4.94. The Commission vide its data gaps asked RVUN to submit the supporting

documents for substantiating the insurance claimed for various generating stations. RVUN in its replies to the data gaps submitted the supporting documents/statements for insurance charges as claimed in the true up petition. Further, RVUN has revised the claim for KTPS to Rs. 2.50 Crore in its replies to data gaps dated 17.08.2015. The Commission found the documents in order, and approves the same.

Table43: Approved Insurance Charges on Fixed Assets (Rs. Crore)



(Unit 1-2) Total


0.00 0.00 0.00 0.00 0.00 2.92 2.92

Approved for True Up 2.50 1.51 0.33 1.16 0.00 2.81 8.31

Return on Equity 4.95. The Commission, in view of RVUN not claiming any Return of Equity for FY

2012-13, has not provided for the same for true up for FY 2012-13.

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Non-Tariff Income RVUN’s Submission 4.96. The details of plant-wise non-tariff income as per the Tariff Order for FY

2012-13 and as per Petition based on actual/audited accounts are as shown in the table below:

Table 44: Non-Tariff Income (Rs. Crore)



(Unit 1-2) Total


6.00 7.75 0.40 0.40 0.30 0.20 15.05


15.78 9.30 7.99 6.02 0.38* 5.34 44.83

*Subsequent submission

Commission’s Analysis 4.97. The Commission has considered the non-tariff income as per Petition

based on actual/audited accounts in true-up exercise for FY 2012-13. The details are as under:

Table 45: Approved Non-Tariff Income for FY 2012-13



(Unit 1-2) Total

Recovered from DIscoms as per Tariff Order

6.00 7.75 0.40 0.40 0.30 0.20 15.05

Approved 15.78 9.30 7.99 6.02 0.38 5.34 44.83

Annual Fixed Charges 4.98. The actual Availability of some of the stations of RVUN has been lower

than the normative Availability approved by the Commission in this Order. For such stations, the Commission has reduced the recovery of Annual Fixed Charge on pro-rata basis. The approved Annual Fixed Charges and Annual Fixed Charges reduced by the Commission are as shown in Tables below:

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Table 46: Approved AFC for FY 2012-13(Rs. Crore)



(Unit 1-2) RVUN (Total)

O&M Expenses 193.36 233.90 15.67 38.56 13.45 77.97 572.92 Depreciation 101.30 240.31 13.92 57.20 6.18 120.52 539.43 Interest & Finance Charges 68.21 112.84 1.66 58.47 0.00 211.41 452.58

Interest on transitional loan 11.58 66.04 1.50 2.41 0.00 0.00 81.54

Interest on working capital 92.38 129.92 5.30 21.68 0.79 31.69 281.76

Lease Rental 0.00 0.00 0.00 0.00 0.00 0.00 0.01 Insurance on fixed assets 2.50 1.51 0.33 1.16 0.00 2.81 8.31

Inter Unit Account Balance Written Off 10.01 4.96 0.38 0.32 0.11 0.00 15.78

Recovery of ARR & Tariff Petition Fees 0.62 0.75 0.06 0.17 0.07 0.25 1.91

Addl. contribution towards Pension & Gratuity Fund

22.38 27.08 1.99 5.96 2.53 9.02 68.96

Prior Period Charges 8.13 -18.83 -0.14 -8.12 -0.07 1.30 -17.73

Total fixed charges 510.47 798.48 40.68 177.80 23.06 454.97 2005.46 Less: Non Tariff Income 15.78 9.30 7.99 6.02 0.38 5.34 44.83

Net fixed charges 494.69 789.18 32.68 171.78 22.68 449.62 1960.63 4.99. The recovery of full fixed charges is allowed if the actual Availability is

equal to or more than the Target Availability. If the actual Availability is lower than the Target Availability, the approved normative Fixed Charges are reduced proportionately in truing up. In this regard, the Commission is of the view that additional liability towards pension and gratuity should not be considered in AFC for proportionate reduction in Fixed Charges as this is a sort of additional expenditure allowed separately and is not a part of AFC. Further, RVUN should be able to honour the payment to the fund as per the approval of the Commission. Hence, the Commission has not considered the additional liability towards pension and gratuity in Annual

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Fixed Charges for the purpose of proportionate reduction of Annual Fixed Charges for non-achievement of Target Availability.

Table 47: Approved AFC and AFC Reduced for not achieving Target Availability

Station

AFC after true-up excluding

Addl. Contribution

towards Pension &

Gratuity Fund

Actual Availability

Considered by the Commission

Normative Availability

Reduced AFC excluding

Addl. Contribution

towards Pension &

Gratuity Fund

AFC reduced

KTPS(Unit 1-7) 472.31 92.20% 82.00% 472.31 0.00 STPS (Unit 1-6) 762.13 86.84% 82.00% 762.10 0.00 RGTPS 30.69 52.82% 70.00% 23.16 7.53 DCCPP 165.82 40.51% 80.00% 83.97 81.85 CTPP (Unit1-2) 440.60 71.92% 80.00% 396.10 44.50

Total 1871.52 1737.64 133.88 Revenue Gain/(Loss) due to lower/higher auxiliary consumption 4.100. The Commission, as elaborated in the preceding paragraphs has

approved the normative auxiliary consumption in the true up of FY 2012-13. Further, as auxiliary consumption is a controllable performance parameter, the Commission has carried out the sharing of revenue gain/loss due to lower /higher auxiliary consumption in comparison to the normative auxiliary consumption for each Station as shown in the Table below:

Table 48: Sharing of Revenue Gain/(Loss) due to lower/higher auxiliary consumption


STPS (Unit1-6) RGTPS DCCPP CTPP

(Unit 1-2) Total

Gross Generation (MU) 9739.64 10570.32 497.90 1162.39 2924.17 Actual Auxiliary Consumption 9.48% 9.05% 1.81% 3.36% 10.69% Normative Auxiliary Consumption 9.27% 9.00% 2.11% 2.10% 9.00% (Lesser )/Additional Sales due to (higher)/better Auxiliary Consumption (MU)

-20.80 -5.29 1.47 -14.60 -49.39

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STPS (Unit1-6) RGTPS DCCPP CTPP

(Unit 1-2) Total

Approved Energy Charge (Rs./kWh) 2.75 3.00 2.82 3.01 1.67 Revenue (Loss)/gain due to higher /better Auxiliary Consumption (Rs. Crore)

-5.71 -1.59 0.41 -4.39 -8.23 -19.50

Variable Charges Commission’s Analysis 4.101. The Commission has computed the variable charges for FY 2012-13

considering the approved performance parameters and actual fuel price and calorific value. RVUN in its additional submissions provided the revised values of fuel price and calorific value and the same have been considered while approving energy charges. The variable charges computed by the Commission for FY 2012-13 are as shown in the Table below:

Table 49: Variable Charges Approved by the Commission*

Particulars

KTPS STPS RGTPS DCCPP CTPP Petition Approved Petition Approved Petition Approved Petition Approved Petition Approved

Capacity in (MW) 1240.00 1240.00 1500.00 1500.00 110.50 110.50 330.00 330.00 500.00 500.00

PLF 89.66% 89.45% 80.44% 80.40% 51.44% 51.59% 40.21% 39.69% 66.76% 65.52% Unit Generated (MU)

9739.64 9739.64 10570.32 10570.32 497.90 497.90 1162.39 1162.39 2924.17 2924.17

Auxiliary Consu. 9.48% 9.27% 9.05% 9.00% 1.81% 2.11% 3.36% 2.10% 10.69% 9.00%

Units Sent out (MU) 8815.98 8836.78 9613.71 9618.99 488.89 487.42 1123.33 1137.93 2611.60 2660.99

SHR kcal/kWh 2526.22 2581.00 2540.00 2491.58 2571.93 2366.11 2444.23 2344.26 2708.65 2356.57

Specific Indian Coal cons.(kg/kwh)

0.585 0.596 0.605 0.593 0.568 0.495

Specific imported Coal cons.(kg/kwh)

0.054 0.056 0.040 0.040 0.072 0.063

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Particulars


Specific Oil (HFO) Cons. (ml/Kwh)

0.36 0.89 1.02 0.95 1.38 0.83

Specific Oil (LDO) Consumption (ml/Kwh)

0.00 0.00 0.05 0.05 0.00 0.00

Specific Oil (HSD) Cons. (ml/Kwh)

0.04 0.11 0.00 0.00 0.27 0.17

Specific gas cons. (scm/kWh)

0.548 0.455 0.266 0.255

GCV of Indian Coal(kcal/kg)

3700.00 3700.00 3754.00 3754.00 3901.38 3901.38

GCV of Imported Coal(kCal/kg)

6600.00 6600.00 6451.00 6451.00 6600.00 6600.00

GCV of Oil (HFO) (kcal/litre)

11150.0 11150.00 9500.00 9500.00 10504.00 10504.00

GCV of Oil (LDO) (kCal/litre)

9200.00 9200.00 0.00 0.00

GCV of Oil (HSD) (kCal/litre)

10504.0 10504.00 11200.00 11200.00

GCV of oil (kcal/litre) 9300.00 9300.00

GCV of gas (kCal/scm) 5202.10 5202.10 9202.97 9202.97

Price of Indian coal Rs./kg

3580.00 3553.67 4442.73 4440.81 2863.48 2840.24

Price of Imported coal Rs./kg

8145.00 8145.00 8794.07 8794.07 8660.35 8660.35

Price of Oil (HFO) (Rs/ KL)

39197.63 39197.63 45766.00 45766.00 45797.04 45797.04

Price of Oil (LDO) (Rs/ KL)

50463.00 50463.00 64204.32 64204.32

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Particulars


Price of Oil (HSD) (Rs/ KL)

39882.00 39882.00

Price of Oil (Rs/L) 32366.35 32366.35

Price of gas (Rs/scm) 5.84 5.84 13.01 13.01

Cost of Coal (Rs. In Cr)

2470.50 2501.65 3215.01 3152.47 658.33 570.31

Cost of Oil (Rs. In Cr) 15.57 38.25 51.73 48.38 0.20 0.18 24.50 14.28

Cost of gas (Rs in Cr) 0.00 0.00 0.00 0.00 159.35 132.20 401.65 385.22 0.00 0.00

Other Variable Charges (Rs in Cr)

19.02 5.12 30.73 6.65 5.53 0.00 1.73 0.00 3.53 0.00

Variable Cost of generation (Rs.in Cr.)

2505.10 2545.01 3297.47 3207.50 165.08 132.38 403.37 385.22 684.24 584.59

Variable Charges (Rs. /kWh sent out)

2.84 2.88 3.43 3.33 3.38 2.72 3.59 3.39 2.62 2.20

*Considering the revised submissions of the Petitioner

4.102. Further, the Commission has carried out the sharing of gains / losses on account of variation in controllable performance parameters (SHR, SFOC & Transit Losses) as shown in the Table below:

Table 50: Approved Variable Charges after Sharing of Gain/Loss for FY 2012-13 (Rs. Crore)

Station Actual (A)

Normative (B)

(Gain) / Loss

(C=A-B)

50% Sharing

(X=C/2)

Net entitlement

(B+X) KTPS (Unit 1-7) 2505.10 2545.01 -39.92 -19.96 2525.05 STPS (Unit 1-6) 3297.47 3207.54 89.97 44.98 3252.48 RGTPS 165.08 132.28 32.70 16.35 148.73 DCCPP 403.37 385.22 18.16 9.08 394.29 CTPP (Unit 1-2) 684.24 584.59 99.65 49.82 634.41

Total 7055.26 6854.70 200.56 100.28 6954.98

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4.103. Regulation 55 of RERC Tariff Regulations, 2009 specifies that incentive shall be payable by the beneficiary at a flat rate of 25.0 paise/kWh for ex-bus scheduled energy corresponding to scheduled generation in excess of ex-bus energy corresponding to target Plant Load Factor. Regulation 73 of RERC Tariff Regulations, 2009 specifies that incentive shall be payable when the capacity Index (CI) exceeds 85% for run-of-river hydel plants. The Commission has computed the incentive for thermal generation for Stations which have achieved PLF more than the target PLF. For Mahi, the Commission has not allowed any incentive as the actual Capacity Index is lower than the target Capacity Index. The incentive for generation beyond the target PLF/Capacity Index approved by the Commission is as shown in the Table below:

Table 51: Incentive for generation beyond Target PLF/Capacity Index approved by the Commission


STPS (Unit 1 -6) DCCPP CTPP

(Unit 1-2) RGTP MAHI Total

Incentive (Claimed by Petitioner)

18.36 0.00 0.00 0.00 0.00 0.00 18.36

Approved Additional Net Generation Eligible for Incentive (MU)

734.51 0.00 0.00 0.00 0.00 0.00 734.51

Rate of Incentive 0.25 0.25 0.25 0.25 0.25 0.25 Incentive Approved 18.36 0.00 0.00 0.00 0.00 0.00 18.36

Revenue Side True-Up RVUN’s Submission 4.104. RVUN has claimed the revenue for true up of FY 2012-13 as Rs. 8733.74

Crore. Subsequently, RVUN vide its letter dated 17.08.2015 submitted that the revenue for true up as submitted in the Petition is inclusive of Rs. 49.48 Crore approved by the Commission for recovery from Discoms in its Order

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dated 10.05.2012. Hence, the revenue for true up for FY 2012-13 is Rs. 8684.25 Crore.

Commission’s Analysis 4.105. The Commission in its Order dated 10.05.2012 ruled as under:

“33. Thus, the amount recoverable by RVUN as a result of truing up for the year 2004-05 to 2008-09 is 49.4818 Crores, which will be recovered from respective Distribution Companies in proportion to sale of Electricity to them during this period..”

4.106. The Commission in this regard is of the view that the amount to be

recovered by RVUN based on the true up for previous years is the amount which RVUN has recovered based on entitlement approved by the Commission based on truing up of previous years and the same cannot be considered as part of revenue for carrying out the truing up for FY 2012-13. Hence the Commission has not considered Rs. 49.48 Crore in revenue for true up for FY 2012-13.

4.107. Hence, The Commission has considered the revenue earned from fixed charges, variable charges including FPA and Incentive for carrying out the truing up for FY 2012-13. The revenue considered by the Commission for truing up purposes is as shown in the Table below:

Table 52: Revenue Considered by the Commission (Rs. Crore)

Station Fixed Charges Variable Charges FPA

KTPS (Unit 1 to 7) 469.67 2420.87 144.50 STPS (Unit 1 to 5) 789.08 2884.15 330.24 DCCPP 110.67 337.98 -16.14 CTPP (Unit 1-2) 399.18 434.94 142.67 RGTPS 37.65 138.40 15.67 MAHI 21.29 5.07 0.00 Total for True-Up 1827.54 6221.41 616.94 Revenue from Sale of Power 8665.89 Revenue from Generation Incentive 18.36 Total Revenue 8684.25

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Summary of True Up RVUN’s submission

4.108. The summary of true up claimed by RVUN is as shown below: Table 53: Summary of true up for FY 2012-13 claimed by RVUN (Rs. Crore)

Particulars As per Commission’s Order Actual/Audited

FY 13 Cost side True Up

Total Fixed Cost 1925.32 1800.23 Variable cost 6692.99 7139.43 Add: PLF Based Incentive

18.36

Total Expenses 8618.31 8958.02 Extra Cost running By RVUNL (A) 339.71 Revenue Side True up

Revenue From electricity (fixed And Energy charges) 8618.31 8665.89 Add: PLF Based Incentive

18.36

Add: True Up Income 2004-09 0.00 0.00 Total Revenue 8618.31 8684.25 Extra Amount billed to Discom by RVUNL (B) 65.94 Total True up Calculation

Total Amount Sought from Discom C=(A-B) 273.77

4.109. RVUN has claimed the net gap of Rs. 273.77 Crore on true up for FY 2012-13.


4.110. Based on component wise cost and revenue approved as discussed above, the summary of True Up for FY 2012-13 as approved by the Commission with respect to Petitioner’s claim and computations of same are as shown below:

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Table 54: True- Up approved for FY 2012-13(Rs. Crore)

Particulars Tariff Order Actual Trued Up Deviation Efficiency

(Gain)/Loss Net

entitlement O&M charges 528.33 472.54 572.92 -100.38 -50.19 522.73 Depreciation charges 559.13 574.43 539.43 539.43

Interest & Financial Charges 444.86 446.57 452.58 452.58

Interest on transitional loans 81.54 88.17 81.54 81.54

Interest on WC 265.94 201.22 281.76 -80.54 -40.27 241.49 Lease Rental 0.00 0.01 0.01 0.01 Insurance on fixed assets 2.92 8.91 8.31 8.31

Inter unit account balance written off 15.78 15.78 15.78 15.78

Recovery of ARR & Tariff Petition fees 1.86 2.11 1.91 1.91

Additional liability towards pension and gratuity

40.01 108.96 68.96 68.96

Prior period charges 0.00 -17.73 -17.73 0.00 -17.73 Gross Fixed Charges 1940.37 1900.97 2005.46 1915.00

Variable Cost 6692.78 7055.26 6854.70 200.56 100.28 6954.98 Generation Incentive 18.36

ARR (A) 8633.15 8956.23 8860.16 8888.34 Revenue from sale of power 8665.89 8665.89

Revenue from Generation Incentive

18.36 18.36

Non-Tariff Income 44.83 44.83 44.83 Revenue loss due to higher auxiliary consumption

19.50 9.75 9.75

Total Revenue (B) 8729.09 8738.84 Gap/(Surplus) (A-B) 149.51 Reduction in AFC 133.84 Net Gap/(Surplus) 15.67

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Table 55: Summary of True Up for FY 2012-13

Particulars Petition Approved after sharing of gains and losses

Cost side true up Fixed Cost less Non Tariff Income 1800.23 1870.17 Variable Cost 7139.43 6954.98 PLF incentive 18.36 18.36 Less: Reduction in AFC due to non-achievement of Target Availability 0.00 -133.84

Total (A) 8958.02 8709.67 Revenue side true up Revenue from sale of electricity 8665.89 8665.89

PLF incentive 18.36 18.36 Sharing of Revenue loss due to higher auxiliary consumption 0.00 9.75

Total (B) 8684.25 8694.00 Net Revenue Gap (C = A - B) 273.77 15.67

4.111. The Commission vide its Order dated 06.06.2013 directed RVUN to pay the amount of Rs 206.53 Crore to Discoms in the ratio of energy purchased by them in six equal monthly instalments. In compliance to the direction, RVUN submitted that it has paid the amount of 146.67 Crore to the Discoms on 18.11.2013 and the remaining amount of Rs. 59.86 Crore has been revised to Rs. 53.52 Crore vide the Commission’s Order dated 10.12.2013 and the matter is sub-judice before the Hon’ble APTEL. In this regard, the Commission is of the view that, though the matter might be pending before Hon’ble APTEL as per RVUN’s submissions, but as no stay has been granted by the Hon’ble APTEL, RVUN should comply with the directions of the Commission and refund the amount to the Discoms, subject to the final decision of the Hon’ble APTEL.

4.112. The Commission has adjusted the gap of Rs. 15.67Crore upon truing up of FY 2012-13 from Rs 53.52 Crore to be paid by RVUN to Discoms. Thus, the net amount to be refunded by RVUN to Discoms works out to Rs 37.85 Crore. The Commission directs the RVUN to refund an amount of Rs 37.85 Crore to Discoms in 3 monthly instalments in the ratio of energy purchased by them.

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SECTION 5

Determination of ARR and Tariff for FY 2015-16

5.1. RVUN filed the Petition for approval of ARR and Tariff for following generating stations:

i. Kota Thermal Power Station (KTPS) (Unit 1 to 7) ii. Suratgarh Thermal Power Station (STPS) (Unit 1 to 6) iii. Ramgarh Gas Thermal Power Station (RGTPS) iv. Ramgarh Gas Thermal Power Plant (RGTPS) (Stage III) v. Dholpur Combined Cycle Gas based Thermal Power Plant (DCCPP) vi. Chhabra Thermal Power Station (CTPP) (Unit 1 to 3) vii. Kalisindh Thermal Power Station (KaTPP) (Unit 1) viii. Giral Lignite Thermal Power Station (GLTPP) (Unit 2) ix. Mahi Hydel Power Project (MAHI)

5.2. Subsequently RVUN informed that Giral Lignite Thermal Power Station

(GLTPP) (Unit 2) has been transferred from RVUN to GLPL w.e.f. 1st April 2015. This Order pertains to approval of ARR and Tariff for FY 2015-16 for generating stations of RVUN only. The Commission has hence, not approved the ARR and Tariff of GLTPP (Unit 2). However, Company managing the Unit 2 may file a petition and Commission will consider the same separately.

5.3. For KaTPP (Unit 1), CTPP (Unit 3), RGTPS (Stage III), the Commission has issued the Order approving the Provisional Capital Cost on 14.05.2015, 22.05.2015 and 18.06.2015 respectively. The Commission in this Order has provisionally approved the tariff for FY 2015-16 for KaTPP (Unit 1), CTPP (Unit 3) and RGTPS (Stage III) considering the provisional capital cost as approved by the Commission. Since capital cost of then is yet to be determined.

5.4. The Annual Fixed Charges comprise of the following elements: (i) Operation and Maintenance (O&M) Expenses

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(ii) Depreciation (iii) Interest on Term Loans (iv) Interest on Transitional Loans (v) Finance Charges (vi) Return on Equity (vii) Interest on Working Capital (viii) Insurance Charges (ix) Less: Non-tariff Income

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

Operation and Maintenance Expenses RVUN’s Submission

5.6. RVUN submitted that the Operation & Maintenance Expenses for FY 2015-16 have been computed on the basis of norms prescribed under Regulation 47 of RERC Tariff Regulations, 2014.

5.7. The details of the O&M expenses as claimed in petition for FY 2015-16 are as shown in the Table below:

Table 56: O&M Expenses as per petition for FY 2015-16 (Rs. Crore)

Particular KTPS (Unit 1-7)

STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III

KaTPP Unit 1 Mahi Total

As per petition 211.19 255.47 85.16 42.58 42.13 17.12 20.42 91.96 14.70 780.73


5.8. The Commission has verified RVUN’s computations of normative O&M expenses and found it to be in order and accordingly, same has been approved.

5.9. The O&M expenses as approved by the Commission for FY 2015-16 are as shown in the Table below:

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Table 57: O&M Expenses approved for FY 2015-16(Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 211.19 255.47 85.16 42.58 42.13 17.12 20.42 91.96 14.70 780.73

Approved 211.19 255.47 85.16 42.58 42.13 17.12 20.42 91.96 14.70 780.73 Depreciation RVUN’s Submission

5.10. RVUN submitted that the depreciation for FY 2015-16 has been computed on the basis of norms prescribed under Regulation 22 of RERC Tariff Regulations, 2014. RVUN submitted that depreciation for KTPS Unit 7, STPS Unit 6 and CTPP Unit 1-2 has been computed on the basis of the Capital Cost as approved by the Commission.

5.11. The Commission in its Order dated 06.06.2013 approved the Capital Cost of KTPS Unit 7, STPS Unit 6 and CTPP Unit 1-2 by reducing amount of Rs. 9.89 Crore, Rs. 14.26 Crore and Rs. 22.46 Crore from the total Capital Cost of these Stations respectively on account of Work Contract Tax (WCT). However, RVUN has not considered this reduction on account of WCT by stating that the matter for reduction of WCT from Capital Cost of these Stations is pending in Appeal before the Hon’ble APTEL and accordingly, RVUN in its Petition has considered Capital Cost for KTPS Unit 7, STPS Unit 6 and CTPP Unit 1-2 by adding the amount reduced on account of WCT into the total Capital Cost as approved by the Commission in its Order dated 06.06.2013. Further, RVUN has also considered an Additional capitalization of Rs. 17.90 Crore and Rs. 48.71 Crore for KTPS Unit 7 and STPS Unit 6 respectively as submitted in supplementary petition for FY 2013-14 as well.

5.12. RVUN has considered capital cost of CTPP Unit 3 as Rs 1527.47 Crore as on

date of COD. For RGTPP Stage III, RVUN has considered expenditure

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incurred as on COD as Rs 559.39 Crore and further expenditure expected to be incurred during FY 2014-15 and FY 2015-16 as Rs 247.36 Crore and Rs 114.86 Crore respectively.

5.13. The details of depreciation as claimed in the petition for FY 2015-16 are as

follows:

Table 58: Depreciation as per petition for FY 2015-16 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 78.60 160.24 123.38 80.97 56.64 14.92 44.45 265.77 4.20 829.17


5.14. The Commission asked the Petitioner to submit the computations of depreciation in accordance with RERC Tariff Regulations, 2014. The Petitioner has not submitted the same. The Petitioner submitted that process of authentication of fixed assets register shall be completed after finalization of audited accounts for FY 2014-15 and same shall be submitted thereafter. The Commission in the absence of authenticated Fixed Asset Register has approved the Depreciation for FY 2015-16 broadly in accordance with the provisions of RERC Tariff Regulations, 2014.

5.15. For some stations, it is observed that there is variation in opening GFA and accumulated depreciation as on April 1, 2015 as submitted by the Petitioner and as per previous Tariff Orders. Due to this variation, depreciation for such stations for FY 2015-16 was working out to be higher than that claimed by RVUN. The Commission is of the view that such issues can be resolved when the authenticated Fixed Asset Register is available. Therefore, the Commission at this stage for such stations has allowed the depreciation for FY 2015-16 as claimed by the Petitioner.

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5.16. The Commission with regards to expenses incurred towards work contract tax is of the view that as the matter of reduction of Rs. 9.89 Crore, Rs. 14.26 Crore and Rs. 22.46 Crore from the Capital Cost of KTPS Unit 7, STPS Unit 6 and CTPP Unit 1-2 respectively on account of WCT is still pending in appeal before the Hon’ble APTEL, it will not be appropriate to consider the same as part of Capital Cost. The Commission has therefore considered the Capital Cost of KTPS Unit 7, STPS Unit 6 and CTPP Unit 1-2 as already approved by the Commission.

5.17. As regards the issue of additional capitalization of Rs. 17.90 Crore and Rs.

48.71 Crore for KTPS Unit 7 and STPS Unit 6 respectively, the Commission has already scrutinized this issue in detail in its Order dated 23.07.2014. Accordingly, the Commission has considered the Capital Cost for KTPS Unit 7 and STPS Unit 6 as approved in the Order dated 23.07.2014.

5.18. For KTPS (Unit 1 to 6), STPS (Unit 1 to 5), RGTPS and DCCPP, depreciation has been computed as per the approach adopted in MYT Order for FY 2009-10 to FY 2013-14. The Commission has computed the depreciation for the Control Period in the following manner:

• Considered Accumulated Depreciation till FY 2014-15 by adding year-wise depreciation allowed in Tariff Orders/True up orders from FY 2009-10 to FY 2014-15 to the accumulated depreciation till FY 2009-10.

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

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

5.19. For CTPP Unit 3, the Commission has considered the capital cost as

approved in the Order dated 22.05.2015. For RGTPS Stage III, the Commission has considered the capital cost as approved in the Order

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dated 18.06.2015. For KaTPP Unit 1, the Commission has considered the capital cost as approved in the Order dated 14.05.2015.

5.20. Accordingly, the depreciation approved by the Commission for FY 2015-16, is as shown in the Table below:

Table 59: Depreciation approved for FY 2015-16 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition

78.60 160.24 123.38 80.97 56.64 14.92 44.45 265.77 4.20 829.17

Approved 78.60 160.24 120.25 73.23 57.92 1.99 35.40 214.19 4.20 746.02

Interest on Term Loan RVUN’s Submission

5.21. RVUN submitted that for computation of interest expenses, the loan repayment amount for the term loans and transitional loans combined has been kept equal to the depreciation to arrive at the opening balance of term loans for FY 2015-16.

5.22. RVUN has not provided the interest charges on long term loans and the interest charges on transitional loans separately. The details of interest charges on long term loans and transitional loans as submitted by RVUN in its petition for FY 2015-16 have been provided in the table below:

Table 60: Interest on Term Loan and Transitional Loan as submitted in Petition for FY 2015-16 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 67.00 99.96 143.46 142.07 41.19 0.00 80.01 529.47 0.00 1103.15

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Commission’s Analysis 5.23. RVUN in its petition has submitted the computation of interest on loan for

FY 2015-16 considering the average rate of interest. As per Regulation 21 (5) of RERC Tariff Regulations, 2014, the rate of interest to be considered is weighted average rate of interest calculated on the basis of the actual loan portfolio at the beginning of each year. In accordance with this Regulation, the Commission in its data gaps had asked RVUN to submit the details of the actual loans for considering the average interest rate along with the supporting computations.

5.24. In reply to the data gaps, RVUN submitted that the interest rate of 12.48% submitted for FY 2015-16 is based on assumption.

5.25. The Commission hence observed that RVUN has not submitted the details of actual loan and computations of weighted average rate of interest in accordance with RERC Tariff Regulations, 2014. Accordingly, Commission has considered the weighted average rate of interest as allowed for FY 2014-15, in Order dated 09.10.2014. For stations KaTPP Unit 1, CTPP Unit 3 and RGTPS Stage III, the Commission has considered the interest rates approved in the respective Orders while approving the Provisional Capital Cost and Tariff for previous years.

Table 61: Weighted Average Interest Rate as considered by the Commission for

FY 2015-16

Station/Unit Interest Rate

KTPS(Unit 1-6) 10.11% KTPS(Unit 7) 11.27% STPS(Unit 1-5) 11.85% STPS(Unit 6) 11.52% CTPP(Unit 1-2) 12.14% CTPP(Unit 3) 12.50% DCCPP 12.59% RGTPS Stage III 13.00% KaTPP Unit 1 13.00%

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5.26. The Commission has arrived at the opening balance of term loans for FY 2015-16 by considering the opening balance for FY 2009-10 as already approved in the MYT Order for FY 2009-10 to FY 2013-14 and by taking the repayment equivalent to depreciation less the repayment amount for Transitional Loan for FY 2009-10 to FY 2013-14 as approved by the Commission in true up for FY 2009-10, FY 2010-11, FY 2011-12 and Tariff Orders for FY 2012-13 and FY 2013-14. The computations of the opening balance for FY 2015-16 for KTPS Unit 1-6, STPS Unit 1-5, RGTPS and DCCPP are as shown in the Table below:

Table 62: Opening Balance of Term Loans as computed by the Commission for FY 2015-16 (Rs. Crore)

Stations KTPS

(Unit 1-6) STPS

(Unit 1-5) DCCPP RGTPS Total

FY 2009-10 Opening Loan 249.62 912.3 684.85 50.68 1897.46 Rep. Equal to Depr. 62.58 195.36 65.25 13.3 336.49






FY 2015-16 Opening Loan 0 0 326.16 0 326.16

5.27. The details of finance charges as submitted by RVUN for FY 2015-16 is as follows:

Table 63: Finance Charges as submitted in petition for FY 2015-16 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit 3) DCCPP RGTPS

RGTPS

Stage III KaTPP Unit 1 Mahi Total

As per petition 2.50 2.00 1.00 1.00 1.00 0.00 0.00 2.00 0.00 9.50

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5.28. The Commission in its data gaps had asked RVUN to submit the basis for estimating the Finance Charges for each station for FY 2015-16. RVUN in its replies submitted that the finance charges are projected based on past years finance charges incurred for each station.

5.29. The Commission at this stage allows the finance charges as claimed by RVUN for FY 2015-16. However, same shall be subject to truing up at the time of final true up exercise for FY 2015-16.

5.30. The Interest and finance charges allowed by the Commission for FY 2015-16 are as shown in the Table below:

Table 64: Interest and Finance Charges as approved by the Commission for FY

2015-16 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


Approved Interest on Term Loan

50.11 63.77 168.10 127.82 38.40 0.00 65.17 431.19 0.00 944.55

Interest on Transitional Loans RVUN’s Submission 5.31. As discussed earlier in this Order, RVUN has not provided separately the

interest charges on long term loans and the interest charges on transitional loans.

Commission’s Analysis 5.32. As already discussed earlier in this Order, the interest on transitional loans

needs to be examined in detail during the truing up exercise for FY 2013-14. Accordingly, as of now the Commission has adopted the same approach as adopted in the Tariff Order for FY 2014-15 for approving the transitional loans. The closing balance of transitional loan as approved in the Tariff Order for FY 2014-15 has been considered as the opening

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balance for FY 2015-16. The interest on transitional loans approved by the Commission is as shown in the Table below:

Table 65: Interest on Transitional Loans approved by the Commission (Rs. Crore)

Sl No Particulars KTPS STPS RGTPS DCCPP

1 Opening balance of transitional loan as worked out by the Commission.

48.50 389.04 1.54 24.37

2 Depreciation allowed by the commission in MYT order

36.67 110.17 1.99 58.19

3 Term Loan repayment 0.00 0.00 0.00 58.19

4

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

36.67 110.17 1.99 0.00

5 Closing balance of transitional loan (1-4)

11.83 278.87 0.00 24.37

6 Interest@ 9.895% the weighted average rate of interest on transitional loans.

2.98 33.04 0.08 2.41

Interest on Working Capital RVUN’s Submission

5.33. RVUN submitted that the requirement for working capital loan has been computed on the basis of Regulation 27 of RERC Tariff Regulations, 2014 and the rate of interest on Working Capital Loan has been taken equal to 250 basis points higher than the average Base Rate of State Bank of India prevalent during first six months of the previous year.

5.34. The details of interest on working capital as claimed in Petition for FY 2015-16 has been provided in the table below:

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Table 66: Interest on Working Capital as per petition for FY 2015-16 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition

101.21 137.59 32.91 17.50 19.52 5.44 8.50 49.90 1.36 373.93


Regulation 27(2) of the RERC Tariff Regulations, 2014 specify that the rate of interest on working capital to be computed shall be on normative basis and shall be 250 basis points higher from SBI base rate prevalent during first six months of the year previous to the relevant year. Accordingly, for working out interest on working capital, weighted rate of interest has been considered as per admissible rates during the previous year. The same works out to 12.50% p.a. which has been used for calculating interest on working capital. The computation of the bank rate is as shown in the Table below:

Table 67: Computations of Bank rate as considered by the Commission for FY

2015-16

Month SBI Base Rate

250 Basis Point

Approved Interest Rate

Apr-14 10.00%

2.50% 12.50%

May-14 10.00% Jun-14 10.00% Jul-14 10.00%

Aug-14 10.00% Sep-14 10.00%

Interest Rate 10.00%

5.35. Further, the Commission has worked out the working capital requirement

in accordance with Regulation 27 of the RERC Tariff Regulations, 2014. The interest on working capital as approved by the Commission for FY 2015-16 has been provided in the table below:

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Table 68: Approved Interest on working Capital (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition

101.21 137.59 32.91 17.50 19.52 5.44 8.50 49.90 1.36 373.93

Approved 100.00 134.95 31.91 16.42 19.31 5.05 8.51 48.02 0.89 365.06

Additional Liability towards Pension and Gratuity RVUN’s Submission

5.36. RVUN in its replies to data gaps dated 17.08.2015 claimed an amount of Rs. 44.68 Crore is to be recovered from the Discoms towards additional liability towards pension and gratuity in the ARR of FY 2015-16. The Petitioner submitted the reasons for the same as follows:

5.37. The Commission in its MYT Order for FY 2009-10 to FY 2013-14 had allowed

Rs. 200 Crore to be recovered from Discoms towards pension and gratuity in 5 equal yearly instalments. During the years FY 2009-10, FY 2010-11 and FY 2011-12, Rs. 37.97 Crore, Rs. 36.51 Crore & Rs. 38.73 Crore respectively had been recovered from Discoms which subsequently got disallowed by Commission in the true-up of the respective year due to non-deposition of recovered amount by RVUN. During the year FY 2012-13, RVUN recovered Rs. 37.11 Crore from Discoms and deposited Rs. 113.21 Crore to the pension and gratuity fund. During the year FY 2013-14, RVUN recovered Rs. 37.60 Crore from Discoms and deposited Rs. 42.11 Crore to pension and gratuity fund. Thus, RVUN has deposited an amount of Rs. 155.32 Crore (Rs. 113.21 Crore+ Rs. 42.11Crore) to the pension and gratuity fund out of 200 Crore. Hence, an amount of Rs 44.68 Crore is yet to be allowed to RVUN therefore, Petitioner prayed to allow Rs. 44.68 Crore in ARR for FY 2015-16 against contribution to pension and gratuity fund without linking it to the PLF/availability. The plant wise breakup would be submitted subsequently.

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Commission’s Analysis 5.38. The Commission has gone through the submissions of the Petitioner and

observes that the Petitioner is yet to recover and deposit Rs 44.68 Crore against Rs 200 Crore allowed by the Commission. The Commission hence approves Rs. 44.68 Crore on account of contribution towards pension and gratuity in FY 2015-16. The Commission for the purpose of this Order has approved the station wise allocation based on the installed capacity of each station.

5.39. The contribution to pension and gratuity fund approved by the

Commission is as shown in the Table below:

Table 69: Contribution to pension and gratuity fund approved for FY 2015-16 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-

2)

CTPP (Unit 3) DCCPP RGTPS

RGTPS Stage

III


Approved 11.47 13.87 4.62 2.31 3.05 1.02 1.48 5.55 1.29 44.68

Return on Equity RVUN’s Submission 5.40. RVUN submitted that the Government of Rajasthan has made an

announcement for RoE in annual budget. Accordingly the Board of Directors of RVUN in its 238th meeting dated 24.07.2014, has approved to claim RoE and vide letter dated 14.08.2014, the Dy. Secretary to Government of Rajasthan directed RVUN to implement the budget announcement.

5.41. Further, in compliance to the above direction of the State Government, RVUN submitted that it has claimed RoE for FY 2015-16, along with MAT (Minimum Alternative Tax) as per Regulation 20 & 29 respectively of Rajasthan Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulations, 2014.

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5.42. RoE is allowed to be claimed by GOR for FY 2015-16 at the rate of 5%, 10%

for FY 2016-17 and 15.5% for the year FY 2017-18 and onwards.

Table 70: Return on Equity as per Petition for FY 2015-16 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 77.43 186.15 87.42 49.38 53.79 18.61 26.79 172.21 26.42 698.19

Commission’s Analysis 5.43. RVUN in its petition has submitted the letter of Govt of Rajasthan dated

18.03.2015, whereby the GOR has allowed ROE as 5% in FY 2015-16, 10% in FY 2016-17 and 15.5% in FY 2017-18 onwards. However, the Commission observes that, RVUN in its computations for ROE has considered rate of return at 15.5%, instead of 5%, as per letter of GOR. The opening equity for FY 2015-16 has been arrived at by considering the approved capital cost and approved means of finance for each station/Unit.

5.44. The Commission observed that equity as considered by RVUN while computing the return on equity for FY 2015-16 is higher than the equity approved by the Commission under various Tariff Orders. The Commission for the purpose of computation of ROE for FY 2015-16 has considered the equity as already approved under its various Tariff Orders as shown in the Table below:

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Table 71 : Equity Considered by the Commission for ARR and Tariff for FY 2015-16 (Rs. Crore)

Generating Station

Tariff Order for FY 2005-06

dated 09-06-2005

Tariff Order for FY 2008-09

dated 28-06-2008

Tariff Order for FY 2012-13 and

True up Order for FY 2009-10

dated 06-06-2013

True up Order FY 2010-11 (Additional

Capitalization) Total Equity

ROE @8% Equity

ROE @

11%

Equity Debt Equity Debt Equity

KTPS Unit 1-6 24.52 306.50 - - - - - - 306.50 STPS Unit 1-5 77.36 967.00 - - - - - - 967.00 RGTPS 9.61 120.13 - - - - - - 120.13 DCCPP - - 38.17 347.00 - - - - 347.00 Mahi Hydel 13.63 170.38 - - - - - - 170.38 KTPS Unit 7 - - - - 648.247 176.00 14.1329 3.8371 179.84 STPS Unit 6 - - - - 781.067 197.018 38.8902 9.8098 206.83 CTPP Unit 1 - - - - 941.60 235.40 - - 235.40 CTPP Unit 2 - - - - 991.20 247.80 - - 247.80

5.45. For new stations, i.e., CTPP Unit 3, KaTPP and RGTPS Stage III, the Commission has provisionally considered the equity as approved while approving the provisional Capital Cost in respective Order.

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

Table 72: Approved Return on Equity (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 77.43 186.15 87.42 49.38 53.79 18.61 26.79 172.21 26.42 698.19

Approved 24.32 58.69 24.16 14.31 17.35 6.01 6.85 45.02 8.52 205.22

mailto:ROE@11%25

mailto:ROE@11%25

mailto:ROE@11%25

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Tax on Return on Equity RVUN’s Submission

5.47. The details of tax on ROE as submitted by RVUN are as stated in the Table below:

Table 73: Tax on ROE as per Petition for FY 2015-16 (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 20.53 49.36 23.18 13.10 14.26 4.94 7.10 45.67 7.00 185.15

Commission’s Analysis 5.48. Regulation 29 of the RERC Tariff Regulations, 2014 specifies as under:

“29. Tax on Return on Equity (1) Tax on income corresponding to Return on Equity approved by the Commission for the generating company or the licensee, as the case may be, shall be directly recovered from the beneficiaries……………”

5.49. As per the provisions of Regulations, tax on Return on Equity is to be directly recovered from the beneficiaries and is not a part of AFC. Hence, the Commission has not approved the tax on Return on Equity as part of AFC and Income Tax is to be recovered separately from the beneficiaries in accordance with the provisions of RERC Tariff Regulations, 2014.

Recovery of ARR and Tariff Petition Fees RVUN’s Submission 5.50. RVUN submitted that it has proposed for the recovery of ARR and Tariff

petition fees as the Commission in its order dated 10.03.2008 has allowed passing through the fees levied for filing of ARR and Tariff petition as expenses in the ARR. The recovery of ARR and tariff petition fees as proposed by RVUN for FY 2015-16 is provided in the table below:

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Table 74: ARR and Tariff Petition Fees as per Petition for FY 2015-16


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 0.62 0.75 0.25 0.13 0.17 0.06 0.08 0.30 0.07 2.42

Commission’s Analysis 5.51. The Commission approved the recovery of ARR and Tariff Petition Fees as

claimed by RVUN for FY 2015-16 as shown in the Table below:

Table 75: ARR and Tariff Petition Fees Approved for FY 2015-16


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 0.62 0.75 0.25 0.13 0.17 0.06 0.08 0.30 0.07 2.42

Approved 0.62 0.75 0.25 0.13 0.17 0.06 0.08 0.30 0.07 2.42 Insurance Charges RVUN’s Submission

5.52. RVUN in its petition has claimed insurance charges for FY 2015-16 based on the estimates of actual insurance charges paid in the preceding year with an increment of 5% YoY (Year on Year). The details are as shown below:

Table 76: Insurance Charges as claimed in Petition (Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 2.82 2.67 3.50 2.90 1.32 0.22 1.59 10.34 0.00 25.34

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Commission’s Analysis 5.53. The Commission has approved the insurance charges in this order, as

claimed by RVUN. Any variation shall be adjusted during the truing up exercise for FY 2015-16. The insurance charges as approved by the Commission are as follows:

Table 77: Insurance Charges Approved for FY 2015-16


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 2.82 2.67 3.50 2.90 1.32 0.22 1.59 10.34 0.00 25.34

Approved 2.82 2.67 3.50 2.90 1.32 0.22 1.59 10.34 0.00 25.34 Non-Tariff Income RVUN’s Submission 5.54. RVUN in its petition submitted that the main heads of Non-Tariff Income

are Sale of Scrap, interest on FD/Staff loans, miscellaneous receipts (rebates), etc. The Non tariff income as proposed by RVUN is provided in the table below:

Table 78: Non-Tariff Income as claimed by RVUN(Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 9.90 7.92 0.31 0.17 0.94 0.08 0.44 2.21 0.07 22.04

Commission’s Analysis 5.55. The Commission has approved the Non-Tariff Income for FY 2015-16 as

claimed by the Petitioner as shown in the Table below:

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Table 79: Non-Tariff Income Approved for FY 2015-16(Rs. Crore)


STPS (Unit 1-6)

CTPP (Unit 1-2)

CTPP (Unit

3) DCCPP RGTPS

RGTPS Stage

III


As per petition 9.90 7.92 0.31 0.17 0.94 0.08 0.44 2.21 0.07 22.04

Approved 9.90 7.92 0.31 0.17 0.94 0.08 0.44 2.21 0.07 22.04 Annual Fixed Charge for FY 2015-16 5.56. Based on the above analysis, the approved Station wise Fixed Charges for

FY 2015-16 is as shown in the Table below:

Table 80: Approved Annual Fixed Charges for FY 2015-16 (Rs. Crore)

Particulars KTPS (Unit 1-7) STPS (Unit 1-6) CTPP (Unit 1-2) Petition Approved Petition Approved Petition Approved

Interest on Term Loans + Finance Charges+ Transitional Loans 67.00 53.09 99.96 96.81 143.46 168.10

Depreciation 78.60 78.60 160.24 160.24 123.38 120.25

O & M Expenses 211.19 211.19 255.47 255.47 85.16 85.16

Return on Equity 77.43 24.32 186.15 58.69 87.42 24.16

Tax on ROE 20.53 0.00 49.36 0.00 23.18 0.00

Interest on WC 101.21 100.01 137.59 134.95 32.91 31.91 Inter-Unit account balance written off 0.00 0.00 0.00 0.00 0.00 0.00

Recovery of ARR & Tariff Petition fees 0.62 0.62 0.75 0.75 0.25 0.25

Insurance Charges 2.82 2.82 2.67 2.67 3.50 3.50

Additional Liability towards Pension and Gratuity Fund 0.00 11.47 0.00 13.87 0.00 4.62

Gross Fixed Charges 559.40 482.11 892.19 723.45 499.26 437.95

Non-Tariff Income 9.90 9.90 7.92 7.92 0.31 0.31 Net Fixed Cost (i.e. Capacity Charges) 549.50 472.21 884.27 715.53 498.95 437.64

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Particulars CTPP Unit 3 DCCPP RGTPS Petition Approved Petition Approved Petition Approved

Interest on Term Loans+Finance Charges+Transitional Loans 142.07 127.82 41.19 40.81 0.00 0.08

Depreciation 80.97 73.23 56.64 57.92 14.92 1.99 O & M Expenses 42.58 42.58 42.13 42.13 17.12 17.12 Return on Equity 49.38 14.31 53.79 17.35 18.61 6.01 Tax on ROE 13.10 0.00 14.26 0.00 4.94 0.00 Interest on WC 17.50 16.42 19.52 19.31 5.44 5.05 Inter-Unit account balance written off 0.00 0.00 0.00 0.00 0.00 0.00 Recovery of ARR & Tariff Petition fees 0.13 0.13 0.17 0.17 0.06 0.06 Insurance Charges 2.90 2.90 1.32 1.32 0.22 0.22 Additional Liability towards Pension and Gratuity Fund 0.00 2.31 0.00 3.05 0.00 1.02

Gross Fixed Charges 348.62 279.69 229.01 182.06 61.31 31.54 Non-Tariff Income 0.17 0.17 0.94 0.94 0.08 0.08 Net Fixed Cost (i.e. Capacity Charges) 348.45 279.52 228.07 181.11 61.23 31.46

Particulars RGTPS Stage III KaTPP Mahi Hydel Petition Approved Petition Approved Petition Approved

Interest on Term Loans+Finance Charges+Transitional Loans 80.01 65.17 529.47 431.19 0.00 0.00

Depreciation 44.45 35.40 265.77 214.19 4.20 4.20 O & M Expenses 20.42 20.42 91.96 91.96 14.70 14.70 Return on Equity 26.79 6.85 172.21 45.02 26.42 8.52 Tax on ROE 7.10 0.00 45.67 0.00 7.00 0.00 Interest on WC 8.50 8.51 49.90 48.02 1.36 0.89 Inter-Unit account balance written off 0.00 0.00 0.00 0.00 0.00 0.00

Recovery of ARR & Tariff Petition fees 0.08 0.08 0.30 0.30 0.07 0.07

Insurance Charges 1.59 1.59 10.34 10.34 0.00 0.00 Additional Liability towards Pension and Gratuity Fund 0.00 1.48 0.00 5.55 0.00 1.29

Gross Fixed Charges 188.93 139.50 1165.62 846.58 53.75 29.67 Non-Tariff Income 0.44 0.44 2.21 2.21 0.07 0.07 Net Fixed Cost (i.e. Capacity Charges) 188.49 139.06 1163.41 844.37 53.68 29.61

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Determination of Variable Charges for FY 2015-16

5.57. The Commission has approved Variable Charges for the FY 2015-16 on the basis of following approach. (a) While allowing the variable cost of the generating stations, the Commission has considered normative SHR, PLF and Auxiliary consumption. Further, as detailed earlier in this order, the station heat rate and auxiliary consumption for RGTPS has been computed after considering its operation in open cycle mode and combined cycle mode for various days of the year in the same proportion as considered for FY 2014-15 in accordance with the RERC Tariff Regulations, 2014. (b) The Commission has considered the Station Heat Rate for RVUN stations for FY 2015-16 the same as approved in the Tariff Order for FY 2014-15. For CTPP Unit 3, the Commission has considered the SHR as approved in the Order dated 22.05.2015. For RGTPS Stage III, the Commission has considered the SHR as approved in the Order dated 18.06.2015. For KaTPP Unit 1, the Commission has considered the SHR as approved in the Order dated 14.05.2015. (c) As regards GCV and price of fuel for all stations, the Commission asked the Petitioner to submit the details of actual fuel prices and GCV for months January 2015 to March 2015. However, the information submitted by Petitioner was incomplete. In the absence of latest actual fuel price and calorific value, the Commission has considered the fuel prices and calorific values as assumed by the Petitioner in its Petition. (d) Secondary fuel oil consumption has been allowed as per Regulation 45(4) of RERC Tariff Regulations, 2014.

5.58. Plant wise variable charges determined by Commission for FY 2015-16 are as under:

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Table 81: Approved Variable Charges for FY 2015-16

Particulars Unit KTPS (Unit 1 to 7) STPS (Unit 1 to 6)

Petition Approved Petition Approved Installed Capacity MW 1240.00 1240.00 1500.00 1500.00

Plant Load Factor % 82.00% 82.00% 82.00% 82.00%

Gross Generation MU 8931.57 8931.57 10804.32 10804.32 Auxiliary Consumption % 9.27% 9.27% 9.00% 9.00%

Auxiliary Consumption MU 827.96 827.96 972.39 972.39

Net Generation MU 8103.61 8103.61 9831.93 9831.93 Station Heat Rate kCal/kWh 2561.70 2561.70 2476.28 2476.28 GCV Indigenous Coal kCal/kg 3600.00 3600.00 3664.00 3664.00

Imported Coal kCal/kg 6600.00 6600.00 6350.00 6350.00

HFO kCal/ltr 10504.00 10504.00 9500.00 9500.00 LDO kCal/ltr 11150.00 11150.00 9200.00 9200.00 Landed Price of Fuel Indigenous Coal Rs./MT 4173.87 4173.87 4980.15 4980.15

Imported Coal Rs./MT 8522.69 8522.69 8752.00 8752.00 HFO Rs./KL 49470.39 49470.39 51671.55 51671.55 LDO Rs./KL 59773.75 59773.75 65214.45 65214.45 Cost of Generation (at Generation terminal)

Rs/kWh 3.05 3.05 3.39 3.39

Cost of Generation (Ex-bus) Rs/kWh 3.36 3.36 3.73 3.73

Particulars Unit CTPP (Unit 1 to2) CTPP (Unit 3) DCCPP Petition Approved Petition Approved Petition Approved

Installed Capacity MW 500 500 250 250 330 330

Plant Load Factor % 80.00% 80.00% 80.00% 80.00% 80.00% 80.00%

Gross Generation MU 3513.6 3513.6 1756.8 1756.8 2318.98 2318.98

Auxiliary Consumption % 9.00% 9.00% 9.00% 9.00% 3.00% 3.00%

Auxiliary Consumption MU 316.22 316.22 158.11 158.11 69.57 69.57

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Particulars Unit CTPP (Unit 1 to2) CTPP (Unit 3) DCCPP Petition Approved Petition Approved Petition Approved

Net Generation MU 3197.38 3197.38 1598.69 1598.69 2249.41 2249.41

Station Heat Rate kCal/kWh 2316.54 2312.31 2316.54 2312.31 1950.00 1950.00

GCV Indigenous Coal kcal/kg 4005.00 4005.00 4000.00 4000.00

Imported Coal kcal/kg 6600.00 6600.00 0.00 0.00

HFO kcal/ltr 10540.00 10540.00 10504.00 10504.00 LDO kcal/ltr 11200.00 11200.00 12000.00 12000.00 Natural Gas kCal/SCM 9138.59 9138.59 Landed Price of Fuel Indigenous Coal Rs./MT 3118.82 3118.82 3277.05 3277.05

Imported Coal Rs./MT 8511.62 8511.62

HFO Rs./KL 49600.81 49600.81 49600.81 49600.81 LDO Rs./KL 70628.37 70628.37 70628.37 70628.37 Natural Gas Rs./SCM 14.03 14.03 Cost of Generation (at Generation terminal)

Rs/kWh 2.01 2.00 1.92 1.92 2.99 2.99

Cost of Generation (Ex-bus)

Rs/kWh 2.21 2.20 2.11 2.11 3.09 3.09

Particulars Unit RGTPS RGTPS Stage III KaTPP

Petition Approved Petition Approved Petition Approved

Installed Capacity MW 110.50 110.50 160.00 160.00 600.00 600.00

Plant Load Factor % 70.00% 70.00% 70.00% 70.00% 83.00% 83.00%

Gross Generation MU 679.44 679.44 983.81 983.81 4374.43 4374.43

Auxiliary Consumption % 5.00% 2.32% 3.00% 3.00% 5.75% 5.75%

Auxiliary Consumption MU 33.97 15.76 29.51 29.51 251.53 251.53

Net Generation MU 645.47 663.68 954.29 954.29 4122.90 4122.90

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Particulars Unit RGTPS RGTPS Stage III KaTPP

Petition Approved Petition Approved Petition Approved

Station Heat Rate kCal/kWh 2256.00 2256.00 1950.00 1881.08 2320.63 2320.63

GCV Indigenous Coal kcal/kg 4050.00 4050.00

Imported Coal kcal/kg 6600.00 6600.00 HFO kcal/ltr 10000.00 10000.00 HSD kcal/ltr 9300.00 9300.00 LDO kcal/ltr 10000.00 10000.00 Natural Gas kCal/SCM 6539.66 6539.66 8686.64 8686.64 Lignite kCal/kg Landed Price of Fuel Indigenous Coal Rs./MT 3770.35 3770.35

Imported Coal Rs./MT 8445.49 8445.49 HFO Rs./KL 49787.45 49787.45 HSD Rs./KL 42155.68 42155.68 LDO Rs./KL 67847.32 67847.32 Natural Gas Rs./SCM 7.62 7.62 12.07 12.07 Cost of Generation (at Generation terminal)

Rs/kWh 2.64 2.64 2.71 2.61 2.31 2.31

Cost of Generation Unit (Ex-bus)

Rs/kWh 2.78 2.71 2.79 2.69 2.45 2.45

Tariff for Mahi Hydel Generating Station

5.59. In accordance to RERC Tariff Regulations, 2014, the Commission approves the two part tariff for sale of electricity from Mahi Hydel generating station comprising annual capacity charges and primary energy charge.

5.60. Regulation 51(7) of RERC Tariff Regulations, 2014 states that rate of Primary Energy for hydro power stations shall be 50% of cost of generation or incentive rate applicable for thermal power stations, whichever is less. Accordingly the primary energy rate approved by the Commission is 30 Paise/kWh.

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5.61. The capacity charge approved by the Commission for FY 2015-16 is Rs

25.76 Crore as given in the Table:

Table 82: Approved Capacity Charges for Mahi Hydel Power Project

Annual Fixed Charges (Rs. in

Crore) (1)

Net Energy (MU) (2)

Energy Rate (Paise/kWh)

(3)

Energy Charges (Rs. in Crore) (4)=(2)x(3)

Capacity Charges (Rs. in

Crore) (1)-(4)

29.61 128.37 30.00 3.85 25.76

5.62. Incentive for Thermal and Mahi Hydel Station shall be claimed by RVUN as

per Regulation 52(1) and 52(2) respectively of RERC Tariff Regulations, 2014.

5.63. Recovery of Capacity Charges shall be in accordance with Regulation 50 of RERC Tariff Regulations, 2014.

5.64. The Summary of tariff as approved by the Commission for FY 2015-16 is given in the Table below:

Table 83: Summary of Tariff for FY 2015-16

Particulars KTPS(Unit 1 to 7) STPS(Unit 1 to 6) CTPP(Unit 1 to2) Petition Approved Petition Approved Petition Approved

Fixed Charges (Rs. Crore) 549.50 472.21 884.27 715.53 498.95 437.64

Fixed Charges per unit (Rs/kWh) 0.68 0.58 0.90 0.73 1.56 1.37

Variable Charges per unit (Rs/kWh) 3.36 3.36 3.73 3.73 2.21 2.20

Total Tariff unit per(Rs/kWh) 4.04 3.94 4.63 4.46 3.77 3.57

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Particulars Mahi DCCPP RGTPS Petition Approved Petition Approved Petition Approved

Fixed Charges (Rs. Crore)

53.68 29.61 228.07 181.11 61.23 31.46

Fixed Charges per unit (Rs/kWh)

- - 1.01 0.81 0.95 0.49

Variable Charges(Rs/kWh)

- - 3.09 3.09 2.78 2.71

Total Tariff unit per(Rs/kWh)

4.17 2.30 4.10 3.90 3.73 3.20

Table 84: Provisional Tariff allowed for FY 2015-16

Particulars RGTPS Stage III KaTPP CTPP (Unit 3) Petition Allowed Petition Allowed Petition Allowed

Fixed Charges (Rs. Crore)

188.49 139.06 1163.41 844.37 348.45 279.52

Fixed Charges per unit (Rs/kWh)

1.98 1.46 2.82 2.05 2.18 1.75

Variable Charges(Rs/kWh)

2.79 2.69 2.45 2.45 2.11 2.11

Provisional Tariff unit per(Rs/kWh)

4.77 4.15 5.27 4.50 4.29 3.86

5.65. The tariff approved by the Commission for RVUN Stations for FY 2015-

16shall be effective from April 1, 2015. The Commission directs RVUN to bill the difference in tariff approved by the Commission in this Order and tariff charged by RVUN as provisionally approved by the Commission for the period April 1, 2015 to August 31, 2015 in next 5 months bills.

5.66. Copy of this order may be sent to the Petitioner, Respondents, Objectors,

CEA and Government of Rajasthan.

(Raghuvendra Singh) (Vinod Pandya) (Vishvanath Hiremath)

Member Member Chairman

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Annexure-1 ABBREVIATIONS

Abbreviation A&G Administrative and General Expenses AAD Advance against Depreciation ABT Availability Based Tariff Act Electricity Act, 2003 AFC Annual Fixed Charges APR Annual Performance Review APTEL Appellate Tribunal for Electricity ARR Aggregate Revenue Requirement AVVNL Ajmer Vidyut Vitran Nigam Limited BGRESL BGR Energy Systems Limited BHEL Bharat Heavy Electricals Ltd. BOD Board of Directors BoP Balance of Plant BTG Boiler, Turbine & Generator CAG Comptroller & Auditor General CC Closed Cycle CEA Central Electricity Authority CHP Coal Handling Plant CoD Commercial Operation Date CTPP Chhabra Thermal Power Station DA Dearness Allowance DCCPP Dholpur Combined Circle Power Station Discoms Distribution Companies EPF Employee Provident Fund FDR Fixed Deposit Receipt FPA Fuel Price Adjustment FY Financial Year GCV Gross Calorific Value GFA Gross Fixed Assets GLPL Giral Lignite Power Limited GLTPS Giral Lignite Thermal Power Station GoR Government of Rajasthan GPF General Provident Fund HFO High Furnace Oil HSD High Speed Diesel IDC Interest during Construction

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JS Jawahar Sagar Dam JVVNL Jaipur Vidyut Vitran Nigam Limited KaTPP Kalisindh Thermal Power Station kCal kilo calorie kL kilo Litre KTPS Kota Thermal Power Station kW kilo Watt kWh kilo Watt hour LD Liquidated Damages LDO Light Diesel Oil LMC Left Main Canal MMH Mini Micro Hydel Stations MoM Minutes of Meeting MT Metric Ton MU Million Units MW Mega Watt MYT Multi Year Tariff O&M Operation & Maintenance OC Open Cycle P&L Profit and Loss PLF Plant Load Factor PPA Power Purchase Agreement R&M Repair and Maintenance RERC Rajasthan Electricity Regulatory Commission RGTPS Ramgarh Gas Thermal Power Station ROE Return on Equity RPS Rana Pratap Sagar Dam RVPNL Rajasthan Rajya Vidyut Prasaran Nigam Limited RVUNL Rajasthan Vidyut Utpadan Nigam Limited SBI State Bank of India SCM Standard cubic meter SFOC Secondary Fuel Oil Consumption SHR Station Heat Rate SLDC State Load Despatch Centre STPS Suratgarh Thermal Power Station TPS Thermal Power Station VAT Value Added Tax WCL Working Capital Loan WCT Works Contract Tax WPI Wholesale Price Index YoY Year on Year

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Annexure-2 Section/ Para/ Annexure Particulars Page

No.

Section 1 General 1-2

Section 2 Summary of filing, Annual Performance Review and Tariff determination process 3-5

Section 3

Summary of objections/ comments/ suggestions received from stakeholders and RVUN’s response on the ARR and Tariff Petition for FY 2015-16 and True up of ARR for FY 2012-13

6-38

Section 4 Analysis of Annual Performance Review (True Up) of RVUN Stations for FY 2012-13 39-81

Section 5 Determination of ARR and Tariff for RVUN generating Stations for FY 2015-16 82-107

Annexure 1 Abbreviations 108-109

Annexure 2 Index 110

Annexure 3 Status of compliance to the directions issued by the Commission and Fresh Directions issued by the Commission

111-113

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Annexure 3: Status of Compliance to the Directives issued by the Commission

Sr. No. Reference Commission’s

Directive RVUN’s Response Commission’s Observations/

Directions 1 RERC Order

dt. 06.06.2013 (True up for 2009-10 and tariff for 2012-13) – Para 2.72 & 7.28,

Order dated 06.06.2013 Para 2.72 & 7.28- “Regarding non-maintenance of proper fixed assets registers; the Commission observed that it is long standing observation/ comment of all the stakeholders, respondents. The Statutory Auditors have been taking repeated observations since inception of the Company regarding non-maintenance of fixed assets registers. The Commission observes that it is very serious lapse on the part of the petitioner and cannot be allowed to continue such situation for indefinite period. The petitioner is directed to give a time bound programme for compliance of the long standing observations within two months of issue of this order.”

RVUN submitted that fixed asset register has been submitted on 07/01/2015. In its replies to one of the stakeholders, the Petitioner further submitted that process of authentication of fixed assets register shall be completed after finalization of audited accounts for FY 2014-15 and same shall be submitted thereafter.

The Commission vide letter dated 09.02.2015 had directed the Petitioner as follows: “On the above subject it is informed that the fixed assets register prepared by you is required to be submitted to the statutory auditor in view of adverse comments given by them. Therefore Nigam may claim refund of 5% withheld amount of depreciation in the true up petition of FY 2014-15 only after receiving the report of audit of FY 2014-15.” The Commission directs the Petitioner to submit the Fixed Assets Register duly authenticated by Statutory Auditor and submit the same with truing up Petition for FY 2014-15.

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Directions 2 RERC Order

dt. 06.06.2013 (True up for 2009-10 and tariff for 2012-13) – Para 7.39, Para 2.41 and RERC Order dt. 24.02.2014 (Tariff for 2013-14)-Para 2.83

Order dt. 06.06.2013 Para 7.39- "Further, the Commission has agreed to allow an amount of Rs.200 cr. in installments towards contribution to pension and gratuity fund subject to the condition mentioned at (i) to (iii) above. Against the amount to Rs.200 cr., the Commission has already allowed around Rs.160 cr. towards contribution to pension and gratuity fund, besides amount of Rs. 49.4818 cr. considered as payable into the Trusts after true-up up to FY 2008-09 vide order dated 20.5.2012. The remaining amount of Rs.40 cr. is being allowed in FY 2012-13. RVUN is directed to remit this amount of Rs.40 cr. along with Rs.49.4818 cr. into the Pension & Gratuity Trusts immediately and report compliance to the Commission.”

RVUN submitted its factual position regarding the additional liability of terminal benefit as follows:

Particulars

Actually Recovered

in Revenue

(B)

Allowed in True Up of

ARR (C)

Deposited into Fund

(D)

Allowed in FY 2008-09 True Up

40.00 0.00

ARR - FY 2009-10 37.97 - 0.00

ARR - FY 2010-11 36.51 - 0.00

ARR - FY 2011-12 38.73 - 0.00

ARR - FY 2012-13 37.11

Claimed Rs 73.21

Cr 113.21

ARR - FY 2013-14 37.6 To be

Filed 42.11

The Commission has noted that RVUN has deposited Rs. 113.21 Crore against the additional liability of terminal benefit. This additional liability of Rs. 113.21 Crore includes Rs. 40 Crore for FY 2008-09 and Rs. 37.11 Crore for FY 2012-13. The total claim comes out to be Rs. 73.21 Crore during FY 2012-13, including the amount for GLTPP Unit-2. The Commission directs RVUN to deposit remaining amount with interest to the trust.

3 RERC Order dt. 06.06.2013 (True up for 2009-10 and tariff for 2012-13)– Para 3.25 & 3.52

Order dated 06.06.2013 Para 3.25 regarding Liquidated damages for KTPS Unit 7 Para 3.52 regarding LD for STPS unit 6 Para 5.28 regarding LD for CTPP Phase 1

RVUN submitted that, For Giral unit 2 the LD has been finalized and the details have been provided in the petition for determination of capital cost and ARR of Giral Unit 2. Further, with regard to KTPS, STPS and CTPP, the LD amount is yet to be finalized.

The Commission directs RVUN to finalize the LD amount with regard to KTPS, STPS and CTPP at the earliest and submit the same to the

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Directions Order dated

24.02.2014, Para 154 regarding LD for GLTPS Unit 2

Commission.

5 RERC Order dated: 09/10/2015 Para 4.31 (Fuel Price and Calorific Value)

“The Commission directs RVUN to carry out the Fuel Audit of Primary Fuel for all its thermal plants through an independent agency which should include audit of quantity and calorific value of coal at loading point, quantity and calorific value of coal as received at the generating station and calorific value as fired . The Commission also directs RVUN to submit the independent agency report towards along with the True Up Petitions from FY 2014-15 onwards.”

For conducting the fuel audit the appointment of fuel auditors are in process.

The Commission directs RVUN to conduct the fuel audit of primary fuel through an independent agency and submit the report for the same along with the True Up Petitions from FY 2014-15 onwards.

the rajasthan electricity regulatory commission

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