uttar pradesh electricity regulatory commission · 2015-06-03 · uttar pradesh electricity...

UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION

PETITION NO.: 739/2011 & 793/2012

FILED BY

U. P. POWER TRANSMISSION CORPORATION LIMITED

IN THE MATTER OF

DETERMINATION OF ANNUAL REVENUE REQUIREMENT (ARR)

AND TARIFF FOR FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13

ORDER UNDER SECTION 64 OF

THE ELECTRICITY ACT, 2003

LUCKNOW

19th October, 2012

TABLE OF CONTENTS

Chapter 1. BACKGROUND AND BRIEF HISTORY......................................................................................... 6

1.1 BACKGROUND: .................................................................................................................................. 6

1.2 TRANSMISSION TARIFF REGULATIONS: ............................................................................................. 8

1.3 FILING OF ARR / TARIFF PETITION: .................................................................................................... 8

Chapter 2. PROCEDURAL HISTORY ............................................................................................................ 9

2.1 ARR & TARIFF PETITIONS FILING BY THE UTILITY: ............................................................................. 9

2.2 PRELIMINARY SCRUTINY OF THE PETITIONS: .................................................................................. 11

2.3 INTERACTION WITH THE PETITIONERS: .......................................................................................... 13

2.4 ADMITTANCE OF ARR / TARIFF PETITION OF THE LICENSEE: .......................................................... 13

2.5 PUBLICITY OF THE PETITION:........................................................................................................... 14

Chapter 3. PUBLIC HEARING PROCESS .................................................................................................... 15

3.1 OBJECTIVE: ...................................................................................................................................... 15

3.2 PUBLIC HEARING: ............................................................................................................................ 15

3.3 VIEWS / COMMENTS / SUGGESTIONS / OBJECTIONS / REPRESENTATIONS ON ARR / TARIFF ....... 16

Chapter 4. BRIEF ANALYSIS OF THE TARIFF PETITION’S .......................................................................... 22

4.1 INTRODUCTION: .............................................................................................................................. 22

4.2 TRANSMISSION LOSSES: .................................................................................................................. 23

4.3 COMPONENTS OF ARR AND ANALYSIS OF EACH COMPONENT: ..................................................... 24

Chapter 5. AGGREGATE REVENUE REQUIREMENT FOR FY 2010 - 11 ..................................................... 25

5.1 ESCALATION / INFLATION INDEX ..................................................................................................... 25

5.2 OPERATION & MAINTENANCE EXPENSES: ...................................................................................... 27

5.3 GFA BALANCES AND CAPITAL FORMATION ASSUMPTIONS: ........................................................... 35

5.4 DEPRECIATION EXPENSE ................................................................................................................. 37

5.5 INTEREST AND FINANCE CHARGES: ................................................................................................. 39

5.6 OTHER INCOME: .............................................................................................................................. 42

5.7 RETURN ON EQUITY: ....................................................................................................................... 42

5.8 OTHER DEBITS (INCLUDING PROVISION FOR DOUBTFUL DEBTS): .................................................. 44

5.9 SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR TRANSCO: .......................................... 44


6.1 ESCALATION / INFLATION INDEX:.................................................................................................... 45


Order on ARR and Tariff Petitions of UPPTCL

Page 2




6.6 OTHER INCOME: .............................................................................................................................. 60

6.7 RETURN ON EQUITY: ....................................................................................................................... 60



7.1 ESCALATION INDEX / INFLATION RATE ........................................................................................... 63





7.6 OTHER INCOME: .............................................................................................................................. 76

7.7 RETURN ON EQUITY: ....................................................................................................................... 77


7.9 SLDC CHARGES: ............................................................................................................................... 79

7.10 TRANSMISSION CHARGES: ......................................................................................................... 80

7.11 OPEN ACCESS: TRANSMISSION CHARGES: ................................................................................. 82

Chapter 8. DIRECTIVES ............................................................................................................................ 84

Chapter 9. APPLICABILITY OF THE ORDER ............................................................................................... 89


Page 3

LIST OF TABLES

TABLE 3-1 : SCHEDULE OF PUBLIC HEARING AT VARIOUS LOCATIONS OF UTTAR PRADESH ........................ 15

TABLE 4-1: SUMMARY OF ARR PETITIONS FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13 (RS. CRORES) ............ 22

TABLE 4-2: APPROVED TRANSMISSION LOSSES FOR FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13 .................. 23

TABLE 5-1: INFLATION INDEX FOR FY 2010 - 11 ............................................................................................ 27

TABLE 5-3: APPROVED INCREMENTAL EXPENSES FOR FY 2010 - 11 (RS. CRORES) ....................................... 29

TABLE 5-2: ALLOCATION OF INCREMENTAL O&M EXPENSES (RS. CRORES) ................................................. 29

TABLE 5-4: APPROVED EMPLOYEE EXPENSES FOR FY 2010 - 11 (RS. CRORES) ............................................. 31

TABLE 5-5: APPROVED A&G EXPENSES FOR FY 2010 - 11 (RS. CRORES) ....................................................... 33

TABLE 5-6: APPROVED R&M EXPENSES FOR FY 2010 - 11 (RS. CRORES) ....................................................... 35

TABLE 5-7: APPROVED CAPITALIZATION AND WIP FOR FY 2010 - 11 (RS. CRORES) ...................................... 37

TABLE 5-8: DEPRECIATION APPROVED FOR FY 2010 - 11 (RS. CRORES) ........................................................ 39

TABLE 5-9: INTEREST ON LONG TERM LOAN FOR FY 2010 - 11 (RS. CRORES) ............................................... 40

TABLE 5-10: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2010 - 11 (RS. CRORES) ......................... 41

TABLE 5-11: APPROVED RETURN ON EQUITY FOR FY 2010 - 11 (RS. CRORES) .............................................. 43

TABLE 5-12: SUMMARY OF ARR FOR FY 2010 - 11 (RS. CRORES) .................................................................. 44




TABLE 6-4: APPROVED A&G EXPENSES FOR FY 2011 - 12 (RS. CRORES) ..................................................... 53





TABLE 6-9: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2011 - 12 (RS. CRORES) ........................... 60






TABLE 7-4: APPROVED A&G EXPENSES FOR FY 2012 - 13 (RS. CRORES) ....................................................... 70


Page 4





TABLE 7-9: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2012 - 13 (RS. CRORES) ........................... 76



TABLE 7-12: APPROVED SLDC CHARGES (RS. CRORES) .................................................................................. 80

TABLE 7-13: APPROVED SLDC CHARGES PAYABLE BY UPPTCL ...................................................................... 80

TABLE 7-14: ANALYSIS OF TRANSMISSION TARIFFS ...................................................................................... 81

TABLE 7-15 APPROVED TRANSMISSION CHARGES FOR FY 2012 - 13 ............................................................ 81

TABLE 7-16: APPROVED VOLTAGE LEVEL TRANSMISSION OA CHARGES – LONG TERM (RS./KWH) ............. 83

TABLE 7-17: APPROVED VOLTAGE LEVEL TRANSMISSION OA CHARGES – SHORT TERM (RS./KWH)............ 83

TABLE 8-1: DIRECTIVES .................................................................................................................................. 84


Page 5

Before

UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION

Petition No.: 739/2011 & 793/2012

IN THE MATTER OF:

Application dated 28th March, 2011 & 21st February, 2012 regarding Aggregate Revenue

Requirement and determination of Tariff for FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13,

Uttar Pradesh Power Transmission Corporation Limited (UPPTCL)

And

IN THE MATTER OF:

U.P. Power Transmission Corporation Limited (UPPTCL)

ORDER

The Commission having deliberated upon the above petitions and also the subsequent

filings by the Petitioner (the last being on 14th June, 2012 and the petitions thereafter

being admitted on 25th June, 2012), and having considered the views / comments /

suggestions / objections / representations received during the course of the above

proceedings and also in the public hearings held, in exercise of power vested under

Sections 61, 62, 64 and 86 of the Electricity Act 2003, hereby pass this Order signed,

dated and issued on 19th October, 2012. The licensee, in accordance to Section 139 of

the Uttar Pradesh Electricity Regulatory Commission (Conduct of Business) Regulations

2004, shall arrange to get published within one week from the date of issue of this Order

the tariffs approved herein by the Commission. The tariffs thus notified shall be effective

from 1st October, 2012 and unless amended or revoked, shall continue to be in force till

issuance of the next Tariff Order.


Page 6

Chapter 1. BACKGROUND AND BRIEF HISTORY

1.1 BACKGROUND:

1.1.1 The Uttar Pradesh Electricity Regulatory Commission (UPERC) was formed under

U. P. Electricity Reform Act, 1999 by Government of Uttar Pradesh (GoUP) in one

of the first steps of reforms & restructuring process of the power sector in the

State. Thereafter, in pursuance of the reforms & restructuring process the

erstwhile Uttar Pradesh State Electricity Board (UPSEB) was unbundled into the

following three separate entities through the first Transfer Scheme dated 14th

January 2000:

Uttar Pradesh Power Corporation Limited (UPPCL): vested with the function

of Transmission and Distribution within the State,

Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL): vested with

the function of Thermal Generation within the State,

Uttar Pradesh Jal Vidyut Nigam Limited (UPJVNL): vested with the function of

Hydro Generation within the State.

1.1.2 Through another Transfer Scheme dated 15th January, 2000, assets, liabilities and

personnel of Kanpur Electricity Supply Authority (KESA) under UPSEB were

transferred to Kanpur Electricity Supply Company (KESCO), a company registered

under the Companies Act, 1956.

1.1.3 After the enactment of the Electricity Act, 2003 (EA 2003) the need was felt for

further unbundling of UPPCL (responsible for both Transmission and Distribution

functions) along functional lines. Therefore the following four new distribution

companies (hereinafter collectively referred to as “DISCOMS”) were created vide

Uttar Pradesh Transfer of Distribution Undertaking Scheme, 2003 dated 12th

August 2003, to undertake distribution and retail supply of electricity in the areas

under their respective zones specified in the scheme:

Dakshinanchal Vidyut Vitaran Nigam Limited : (Agra DISCOM)

Madhyanchal Vidyut Vitaran Nigam Limited : (Lucknow DISCOM)

Pashchimanchal Vidyut Vitaran Nigam Limited: (Meerut DISCOM)

Purvanchal Vidyut Vitaran Nigam Limited : (Varanasi DISCOM)

Under this scheme the role of UPPCL was specified as “Bulk Supply Licensee” as

per the license granted by the Uttar Pradesh Electricity Regulatory Commission

and as “State Transmission Utility” under sub-section (1) of Section 27-B of the

Indian Electricity Act, 1910 as notified by the State Government.


Page 7

1.1.4 Subsequently, the Uttar Pradesh Power Transmission Corporation Limited

(UPPTCL), a Transmission Company (TRANSCO), was incorporated under the

Companies Act, 1956 by an amendment in the ‘Object and Name’ clause of the

Uttar Pradesh Vidyut Vyapar Nigam Limited. The TRANSCO started functioning

with effect from 26th July 2006 and is entrusted with the business of transmission

of electrical energy to various utilities within the State of Uttar Pradesh. This

function was earlier vested with UPPCL. Further, Government of Uttar Pradesh

(GoUP) in exercise of power under the Section 30 of the EA 2003, vide

notification No. 122/U.N.N.P/24-07 dated 18th July, 2007 notified Uttar Pradesh

Power Transmission Corporation Limited as the “State Transmission Utility” of

Uttar Pradesh.

1.1.5 Thereafter, on 21st January, 2010, the distribution companies of UPPCL, created

through UP Power Sector Reforms (Transfer of Distribution Undertakings)

Scheme, 2003 were issued fresh distribution licenses for their respective areas of

supply.

1.1.6 Further, assets and liabilities of transmission business were transferred from

UPPCL to UPPTCL through a Transfer Scheme No. 2974/24-P-2-2010 dated 23rd

December, 2010. UPERC granted the Transmission License to UPPTCL on 3rd

August, 2011. UPPTCL is entrusted with the responsibilities of planning and

development of an efficient and economic intra-state transmission system,

providing connectivity and allowing long-term open access for use of the intra-

state transmission system in coordination, among others, licensees and

generating companies. In doing so, it is guided by the provisions of UP Electricity

Grid Code, UPERC (Terms & Conditions for Open Access) Regulations, 2004,

UPERC (Grant of connectivity to Intra State Transmission System) Regulations,

2010 as amended from time to time.

1.1.7 Government of Uttar Pradesh (GoUP) in exercise of the powers under Section 31

of the Electricity Act, 2003, vide notification No. 78/24-U.N.N.P.-11-525/08 dated

24th January, 2011, notified ‘Power System Unit” as the “State Load Despatch

Centre” of Uttar Pradesh for the purposes of exercising the powers and

discharging the functions under Part V of EA, 2003. SLDC shall be operated by the

Uttar Pradesh Power Transmission Corporation Ltd., in its capacity as the State

Transmission Utility. State Load Despatch Centre shall be apex body to ensure

integrated operation of the power system in the State.


Page 8

1.2 TRANSMISSION TARIFF REGULATIONS:

1.2.1 The Uttar Pradesh Electricity Regulatory Commission (Terms and Conditions for

Determination of Transmission Tariff) Regulations, 2006 (hereinafter referred to

as the “Transmission Tariff Regulations”) were notified by the Commission on 6th

October, 2006. These regulations are applicable for the purposes of ARR filing

and Tariff determination of the transmission licensee within the State of Uttar

Pradesh.

1.3 FILING OF ARR / TARIFF PETITION:

1.3.1 The transmission utility in the State has filed the ARR and Tariff petitions in line

with the provisions of the Transmission Tariff Regulations and the same is being

processed by the Commission accordingly.


Page 9

Chapter 2. PROCEDURAL HISTORY

2.1 ARR & TARIFF PETITIONS FILING BY THE UTILITY:

2.1.1 Uttar Pradesh Power Transmission Corporation Limited (hereinafter referred to

as "UPPTCL”) submitted its ARR / Tariff petition for FY 2010 - 11 and FY 2011 - 12

(Petition No. 739/2011) under Section 64 of the Electricity Act, 2003 and the

provisions of the UPERC (Conduct of Business) Regulations, 2004 & Transmission

Tariff Regulation before the Commission on 28th March, 2011.

2.1.2 UPPTCL also submitted the ARR / Tariff petition for FY 2012 - 13 (Petition No.

793/2012) on 21st February, 2012.

2.1.3 The Commission noticed that the submissions of the Petitioner were void of the

audited accounts for FY 2009 - 10, FY 2010 - 11 and FY 2011 - 12. The UPERC

(Terms and Conditions for Determination of Transmission Tariff) Regulations,

2006 requires the distribution licensee to submit along with ARR / Tariff petition

the audited accounts of the relevant year. The Petitioner has failed to do so.

2.1.4 The Hon’ble Appellate Tribunal For Electricity (hereinafter referred to as

"APTEL”) in its judgement in Appeal No. 121 of 2010 dated 21st October, 2011

has, vide Para 12.1, upheld the Tariff Regulations in the matter of requirement of

the audited accounts for the previous year in any ARR / Tariff filing. The order

also stipulates to consider the audited accounts for the previous year and

provisional half yearly accounts for the current year as part of the Annual

Performance Review. It further held that in case the previous year audited

accounts are not available, then the audited accounts for the year prior to the

previous year could be taken into consideration. The Hon’ble APTEL vide Para

6.15, gave directions to the Petitioner with regards to time lines for filing the

audited accounts for FY 2007 - 08, FY 2008 - 09 and FY 2009 - 10. It also gave

directions to State Commission to immediately initiate true-up exercise after

receipt of the same. The timelines for submission of the audited accounts by the

licensee / Petitioner were as follows:

Financial Year Last date of Submission

2007 – 08 21.11.2011

2008 – 09 31.01.2011 (May be read as 31.01.2012)

2009 – 10 31.03.2012


Page 10

2.1.5 The above - referred judgement of the Hon’ble APTEL’s judgment reproduced

below:

“..Therefore, we direct the respondents 3 to 8 to submit the audited accounts for

the FY 2007 - 08 to the State Commission within one month of the date of this

judgment. The audited accounts for the FY 2008 - 09 and 2009 - 10 should be

furnished by 31.01.2011 and 31.3.2012 respectively to the State Commission. The

State Commission shall initiate the true up exercise upto FY 2006-07 immediately,

followed by the true up of the FY 2007 - 08, 2008 - 09 and 2009 - 10 immediately

after the receipt of the respective audited accounts…”

2.1.6 As per the provisions of the Electricity Act, 2003, the UPERC (Terms and

Conditions for Determination of Transmission Tariff) Regulations, 2006 and the

Hon’ble APTEL’s Judgment referred above it is clear that the submission of the

audited accounts for the previous year is one of the requirements to be fulfilled

by the Petitioner for its petition to be admitted. Accordingly for processing of the

ARR / Tariff Petition for any financial year the following are required:

Provisional half year accounts for the current financial year,

Annual audited accounts for the previous year along with true up

petition,

In case due to any reason the audited accounts for previous year is not

available, then the audited accounts for at least the year prior to the

previous year is required along with provisional accounts for the previous

year.

2.1.7 The Commission finds that non-submission of audited accounts by the Petitioner

is contrary to the provisions of the UPERC Transmission Tariff Regulations. The

Commission had accordingly convened a hearing on 27th March, 2012, wherein

the issue of non-submission of audited accounts was discussed. During the

discussions on the above matter, Sh. Nand Lal, the then Director (P&A), UPPCL,

on behalf of the Petitioners, speaking to the Commission that the accounts for FY

2008 - 09 were under audit by the CAG and would be made available to the

Commission. Further, he submitted that the CAG audited accounts for FY 2009 -

10 would be made available by December, 2012. However, till the issue of this

order no submission has been made.

2.1.8 The Commission also notices that the process of determination of ARR / Tariff for

the period under consideration in this order is already much delayed and so

would not like to stall it further due to the non-submission of requisite

information by the Petitioner as elaborated above. Further delay in


Page 11

determination of tariff would adversely affect the Petitioner as well as the

consumers of the State as a whole.

2.1.9 Accordingly the Commission, vide its order dated 29th March, 2012, had directed

the Petitioner to file the provisional accounts along with the schedules duly

certified by Chartered Accountant for FY 2009 - 10 and FY 2010 - 11 within 15

days.

2.1.10 The Petitioner had in compliance to the directives of the Commission had filed

the provisional accounts for FY 2009 - 10 and FY 2010 - 11 vide letter No.

605/RAU/ARR & Tariff FY 2012 - 13 dated 25th April, 2012.

2.2 PRELIMINARY SCRUTINY OF THE PETITIONS:

2.2.1 Subsequent to receipt of the ARR / Tariff Petitions a preliminary scrutiny of the

Petition was carried out by the Commission. It was observed that certain data

required as per the UPERC Transmission Tariff Regulations had not been

furnished with the submissions made by the licensee. Hence a detailed deficiency

note was sent to the licensee vide Letter No. UPERC/Secy./D(Tariff/11-251) dated

24th May 2011 and Letter No. UPERC/Secy./D(Tariff/12-945) dated 30th March

2012 directing it to provide the required information within 15 days. In response

to the deficiency note, the licensee provided some of the critical data required by

the Commission for acceptance / admission of the petition vide Letter No.

514/RAU/ARR & Tariff FY 2012 - 13 dated 12th April, 2012, Letter No.

936/RAU/ARR & Tariff FY 2012 - 13 dated 14th June, 2012. The latest submissions

on 14th June, 2012 were found to be at large variance with the data submitted

earlier. This was brought to the notice of the Petitioner vide Commission’s letter

dated 19th June, 2012, wherein it was also informed to the Petitioners that the

Commission would consider the latest submission of the Petitioner for analysing

the ARR.

2.2.2 The Commission also noted that the licensees had not submitted with their

petition the audited accounts for the respective years. The audited accounts are

primarily required for the purpose of undertaking the subsequent ‘true – up’

exercise for any given financial year. They serve the limited purpose of

recognizing the actual performance of the licensee and for considering whether

to permit or not permit the ‘true – up’ for performance variations vis-à-vis the

performance parameters considered in the Tariff Order. The ARR & Tariff

determination process on the other hand is the projected estimates based on


Page 12

forecast of number of consumers likely to take supply, expected quantum of

energy required to meet the demand, anticipated load etc. Further, the

characteristic of power sector business is such that more often than not the

Regulatory Commissions would have to deal with estimated / projected

information on various factors and determine the tariff on judgmental prognosis

adopting a balanced approach in addressing interests of both the consumers and

the licensee subject to adjustments during subsequent ‘true-up’ exercise based

in audited accounts.

2.2.3 The Petitioner is already reeling under tremendous financial pressure on account

of various factors including increase in Employee Cost, Administrative Costs,

R&M Costs and increased cost of power purchased etc. While the Petitioner

should not be allowed to recover any additional costs on account of

inefficiencies, they should be allowed to recover the legitimate increase in costs

through tariff revision as deemed necessary. The Commission opines that the

delay in submission of audited accounts should not lead to stoppage of the

process of ARR & Tariff determination.

2.2.4 The Commission vide its Letter No. 1476 dated 12th January 2012, No. 044 dated

11th April 2012, and No. 063 dated 13th April 2012 directed the Petitioner to

submit the audited accounts for FY 2010 - 11 and FY 2011 - 12 and true-up

petitions upto FY 2009 - 10. Further, UPPTCL filed the true-up petition (Petition

No. 809/2012) for FY 2000 - 01 to FY 2007 - 08 on 28th May, 2012. This petition

shall be taken up by the Commission separately. In the present order, the

Commission has not undertaken true-up of any of the past years as UPPTCL has

not submitted audited accounts timely which are required for this purpose, in

line with the UPERC Transmission Tariff Regulations.

2.2.5 However, the Petitioner has not filed any audited accounts for FY 2008 - 09

onwards. Accordingly, the Commission has not undertaken true-up process. For

this very reason the Commission has been seeking again and again the audited

annual accounts from the Petitioner. The final approval of actual expenses will be

undertaken at the time of truing up process.

2.2.6 The Commission once again directs the Petitioner to ensure finalisation of

audited accounts for the past years at the earliest and, in case of coming years,

within a reasonable time frame. Further, the Petitioner is also directed to ensure

that the annual accounts are submitted along with the next ARR / Tariff filing by

them to enable the true up process to be undertaken.


Page 13

2.2.7 The Commission has analysed the petitions, supplementary submissions,

provisional accounts etc. submitted by the Uttar Pradesh Power Transmission

Corporation Limited (UPPTCL) for approval of ARR/Tariff application for the FY

2010 - 11, FY 2011 - 12 and FY 2012 - 13 as detailed in the subsequent sections.

2.3 INTERACTION WITH THE PETITIONERS:

2.3.1 Subsequent to the admission of the petition several written and oral interactions

were held with the Petitioner wherein the additional information / clarification

were sought. Meetings were also held with UPPCL and the Petitioner in the office

of the Commission on 27th March, 2012 and 17th May, 2012 to hear their views

on their petition.

2.4 ADMITTANCE OF ARR / TARIFF PETITION OF THE LICENSEE:

2.4.1 Notwithstanding the fact that the structure of UP Power Sector is still not

completely in line with the spirit of the Electricity Act, 2003 the Commission, in

the larger interest of consumers as well as the Petitioner, admitted the petition

filed by them to honour its commitment to abide by the major statutory

obligation of tariff determination cast upon it by EA 2003.

2.4.2 The Commission observes that to proceed further in the matter of determination

of ARR / Tariff it has to refer to the data submitted by the licensees in their

petitions including the various additional data / clarifications submissions made

by them from time to time. The petition is void of the audited accounts which is a

primary requirement as per the Transmission Tariff Regulation. In the absence of

such details the petition is liable for rejection. In such a scenario the Commission

could have proceeded suo-motto, for determination of the ARR / Tariff, vide

powers conferred to it under the Section 26 of the UPERC (Conduct of Business)

Regulations, 2004. However, it is pertinent to note that while proceeding suo-

motto the Commission would be referring to all the data submitted by the

licensees vide their petitions including the various additional data / clarifications

submissions made from time to time. As such there would be no difference in the

analysis and the finalization of the ARR / Tariff orders if the petitions are

accepted in their present form. The only difference would be that in suo-motto

proceedings the Petitioners would play a passive role in the process involving

issue of public notices and holding of public hearings. The Commission,

therefore, is of the firm view that it would be in the best interest of the power

sector of the State to actively involve the Petitioner, who is also the biggest

stakeholder in the whole process. Required course correction with data based on


Page 14

audited accounts can be carried out as and when true up exercise is taken up

with the audited accounts for the respective years. Also it is now clear from the

perusal of the true up petition submitted for FY 2000 - 01 to FY 2007 - 08 that

there is a very large gap which needs to be addressed. Taking all the above

factors into consideration the Commission admitted the ARR / Tariff petitions of

the transmission licensee for FY 2010 - 11 & FY 2011 - 12 and FY 2012 - 13 on 25th

June, 2012.

2.4.3 The Commission through its admittance orders dated 25th June, 2012 directed

the licensee to publish the Public Notice detailing the salient information and

facts of the ARR petitions in at least two daily newspapers (one English and one

Hindi) for two successive days for inviting objections by all stakeholders and

public at large.

2.5 PUBLICITY OF THE PETITION:

2.5.1 The Public Notice detailing the salient features of the ARR petitions were made

by UPPCL on behalf of the Petitioner and they appeared in the daily newspaper

as detailed below inviting objections from public at large and all stakeholders:

Hindustan (Hindi) : 8th July, 2012; 9th July, 2012

Hindustan Times (English) : 8th July, 2012

Amar Ujala (Hindi) : 8th July, 2012; 9th July, 2012

Dainik Jagran (Hindi) : 8th July, 2012; 9th July, 2012

Aaj (Hindi) : 8th July, 2012

Sunday Times (English): 8th July, 2012

Rashtriya Swaroop (Hindi) : 8th July, 2012

Rashtriya Sahara (Hindi) : 8th July, 2012

Swatantra Bharat (Hindi) : 8th July, 2012

Voice of Lucknow (Hindi) : 8th July, 2012

Avadhnama (Urdu) : 8th July, 2012

Roznama (Urdu) : 8th July, 2012

Dainik In Dinon (Urdu) : 8th July, 2012

HIndustan (Hindi), Aligarh Edition : 9th July, 2012

HIndustan (Hindi), Agra Edition : 9th July, 2012

HIndustan (Hindi), Bareli Edition : 9th July, 2012

HIndustan (Hindi), Moradabad Edition: 9th July, 2012


Page 15

Chapter 3. PUBLIC HEARING PROCESS

3.1 OBJECTIVE:

3.1.1 The Commission, in order to achieve the twin objective i.e. to observe

transparency in its proceedings and functions and to protect interest of

consumers, has always attached importance to the views / comments /

suggestions / objections / representations of the public on the ARR / Tariff

petitions submitted by the licensees. The process gains significant importance in

a “cost plus regime”, where the entire cost allowed to the licensee gets

transferred to the consumer. The consumers therefore have a locus-standi to

comment on the ARR / Tariff Petition filed by the licensees.

3.1.2 The comments of the consumers play an important role in the determination of

tariff and the design of the rate schedule. Factors such quality of electricity

supply and the service levels need to be considered while determining the tariff.

The Commission takes into consideration the submissions of the consumers

before it embarks upon the exercise of determining the tariff.

3.1.3 The Commission, by holding public hearings, has provided the various

stakeholders as well as the public at large a platform where they were able to

share their views / comments / suggestions / objections / representations on the

ARR/Tariff petitions submitted by the distribution licensee for FY 2010 - 11, FY

2011 - 12 and FY 2012 - 13. It also enabled the Commission to adopt a

transparent and participative approach in the process of tariff determination.

3.2 PUBLIC HEARING:

3.2.1 To provide an opportunity to all sections of the population in the State to air

their views and to also obtain feedback from them, public hearings were held by

the Commission at various places in the State. The public hearings were

conducted from August 16th 2012 to September 11th 2012 as per details given

below:

TABLE 3-1 : SCHEDULE OF PUBLIC HEARING AT VARIOUS LOCATIONS OF UTTAR PRADESH

S.No. Date Venue of Hearing

1. 16.08.2012 Agra

2. 18.08.2012 Greater NOIDA

3. 18.08.2012 Noida


Page 16

S.No. Date Venue of Hearing

4. 23.08.2012 Allahabad

5. 25.08.2012 Kanpur

6. 11.09.2012 Lucknow

3.2.2 Consumer representatives, industry associations as well as several individual

consumers participated actively in the public hearing process. The Petitioners

were also given an opportunity to respond to the stakeholders.

3.2.3 The views / comments / suggestions / objections / representations on the ARR/

Tariff petitions received from the public were forwarded to the licensee for their

comments / response. The Commission considers these submissions of the

consumers and the response of the licensee before it embarks upon the exercise

of determining the tariff for a particular period.

3.2.4 Besides this the Commission, while disposing the ARR / Tariff petitions filed by

the distribution licensee, has also taken into consideration the oral and written

views / comments / suggestions / objections / representations received from

various stakeholders during the public hearings or through post or by e-mail.

3.2.5 The Commission has taken note of the views and suggestions submitted by the

various stakeholders which provided useful feedback on various issues and the

Commission appreciates their keen participation in the entire process.

3.3 VIEWS / COMMENTS / SUGGESTIONS / OBJECTIONS / REPRESENTATIONS ON

ARR / TARIFF

3.3.1 The Commission has taken note of the various views / comments / suggestions /

objections / representations made by the stakeholders and would like to make

specific mention of the following stakeholders for their valuable inputs:

a. Mr. Avadesh Kumar Verma b. Mr. Rama Shankar Awasthi c. Mr. N. S. Hanspal

3.3.2 The list of the consumers, who have submitted their views / comments /

suggestions / objections / representations, is appended at the end of this

chapter. The major issues raised therein, the replies given by the Petitioner and

the views of the Commission have been summarised as detailed below:


Page 17

ACTUAL COSTS

A) Comments / Suggestions of the Public:

3.3.3 UPPTCL has claimed a higher amount than the actual expenses incurred as per

the submissions made by the Petitioner.

B) The Petitioner’s response:

3.3.4 The Petitioner submitted that Govt of UP in exercise of power conferred under

sub section (4) of Section 13 of Electricity Act, 2003 on 23-12-2010 notified

Transfer Scheme, for the purpose of transfer proceedings from UP Power

Corporation Ltd to the UP Power Transmission Corporation. In the said Transfer

Scheme effective date was notified as 01-04-2007. Before this date there was

only one balance sheet while only after the issuance of the Transfer Scheme

separate balance sheet was prepared by the Petitioner. It is only after separation

of UPPTCL from UPPCL account, expenses toward transmission activities was

segregated. Now on the basis of Transfer Scheme, balance sheet has been

prepared and true-up has been submitted to the Commission for approval.

C) The Commission’s views:

3.3.5 In the previous Tariff Order of the Commission dated 31st March, 2010, the

Commission directed UPPTCL to co-ordinate with GoUP and expedite approval

process of the Transfer Scheme so that the actual expenses of the transmission

licensee can be ascertained to arrive at the accurate estimate of the aggregate

annual requirement. GoUP notified the transfer scheme on 23rd December, 2010

for transferring proceedings from UPPCL to UPPTCL.

3.3.6 Going forward, the Commission is of the view that after the above move from

GoUP and segregation of expenses of UPPTCL from UPPCL, accurate expenses of

the utility would be ascertained at the time of truing up exercise subject to the

submission of audited accounts for the respective years.

3.3.7 However the Commission has taken a prudent view in regard to the expenses

claimed by the Petitioner in the subsequent sections.


Page 18

NO NEED OF TARIFF HIKE


3.3.8 Consumer submitted that UPPTCL was revenue surplus in FY 2006-07, FY 2007 -

08 & FY 2008 - 09 with excess transmission charges charged in accordance to the

approval from Energy Task Force and Board of Directors of UPPTCL. If the said

amount is adjusted against the revenue gap for FY 2012 - 13, there might be no

need of tariff hike.


3.3.9 The licensee clarified that at the time of determination of transmission tariff for

the year FY 2007 - 08 and FY 2008 - 09, Transfer Scheme was not finalized due to

which balance sheet could not be prepared. Hence the transmission tariff has

been derived based upon estimate available at that time. The Commission

approved the ARR on the basis of data submitted. Further the transfer scheme

was issued on 23rd December, 2010 and draft account was prepared for FY 2007 -

08 on that basis a petition was filed on 14th Oct, 2011 for revision of transmission

tariff which was accepted by the Commission and provisional rate was approved

for FY 2007 - 08. Further true-up for FY 2007 - 08 has already been submitted for

approval. With regards to the approval by BOD / ETF concerned it is an internal

requirement of the licensee. Licensee had apprised its position to the Hon’ble

Commission.


3.3.10 The transmission tariff in the State is determined in accordance to the provisions

of the UPERC Transmission Tariff Regulations applicable from time to time. Every

year, the estimates of aggregate revenue requirement of the transmission

licensee is prepared aligned to the regulations and the tariffs are approved

accordingly. The Regulation 3.15 of the UPERC Transmission Tariff Regulations in

this regards states as follows:

“1. No tariff or part of any tariff may ordinarily be amended, more frequently

than once in any financial year.

2. Subject to other provisions of these regulations, the ARR determined by the

commission for any financial year shall be trued up on the basis of audited


Page 19

financial and operational results. Any deficit or surplus arising out of such true up

shall be adjusted while determining the tariff for the subsequent years.

Provided that the Commission shall allow higher expenditure actually incurred by

the licensee in any financial year on account of non controllable factors only after

due verification of such expenses and prudence check.”

In accordance to the said provisions, the tariff for the transmission licensee was

approved for the years, however, due to the delay in the approval of the Transfer

Scheme, the accurate estimates of the expenses couldn’t be ascertained. After

the approval of the GoUP on the said Transfer Scheme on 23rd December, 2012,

some progress has been made by the licensee towards segregation of costs and

balance sheet items from the holding company UPPCL. The Commission with this

order directs the licensee to streamline the operations of the transmission

licensee and completely segregate it from the distribution operations with

separate annual accounts to be filed timely with the Commission. This would

allow the Commission to arrive at the accurate level of expenses and henceforth

the transmission tariffs to be applicable in the State. Any variations in the

approved estimates and the actual revenue gap would be adjusted at the time of

truing up.

INCOMPLETE PETITION / DATA / INFORMATION


3.3.11 Consumers complained that the petitions filed by UPPTCL are incomplete as per

prescribed transmission formats in the Transmission Tariff Regulations. The

computations of depreciation, interest & finance charges, bifurcation of assets

etc. is not detailed and justified in the petition documents filed by UPPTCL.


3.3.12 The Petitioner has submitted that the provisional balance sheet for FY 2008 - 09,

FY 2009 - 10 & FY 2010 - 11 have been submitted before the Hon’ble Commission

which also includes the details of gross fixed assets.

3.3.13 The Petitioner has referred the Chapter 5.5 of the petition submitted for

explanation of the depreciation calculations. The Petitioner has submitted that it

has calculated the depreciation at a weighted average depreciation rate of 4.5%

on the opening GFA and on pro-rata basis for the assets capitalized during the


Page 20

year. The weighted average depreciation rate of 4.5% has been derived as per

un-audited balance sheet of FY 2010 - 11.

3.3.14 Interest & finance charges has been calculated based on current schedule of long

term debt, repayment and new debt requirement for new projects. In addition to

this interest on working capital has been calculated as per methodology

prescribed in Transmission Tariff Regulations.

3.3.15 The Petitioner further clarified that most of the formats here been submitted to

the Commission, henceforth the ARR is complete in all respect.


3.3.16 The Commission is in agreement to the contention of the objectors that the

transmission formats have not been complete in all respects having gone

through the petition documents. However, the Commission in the subsequent

deficiency notes and queries has sought information on the missing figures and

data / information which the licensee provided during the course of the process

of tariff determination. Further, after going through the supplementary

submissions, the Commission admitted the UPPTCL petitions for approval of year

wise aggregate revenue requirements.

3.3.17 The Commission has gone through the computations of depreciation, interest &

finance charges etc. done by the licensee in the petition documents and the

supplementary submissions. The order has been prepared in line with the

Transmission Tariff Regulations; analysis of the submissions made by the licensee

to arrive at aggregate revenue requirements is detailed in the subsequent

sections for estimates of individual items year-wise.

LINE LOSSES FOR UPPTCL


3.3.18 Consumers complained that how come UPPTCL has proposed line losses at the

rate of 3.63% which is similar for the three years.



Page 21

3.3.19 The licensee mentioned that ARR for FY 2012 - 13 has been filed before Hon’ble

Commission on 21.02.2012. At the time of preparation of ARR, actual data for FY

2010 - 11 was available and on the basis of available data transmission losses has

been calculated to be 3.63% for FY 2010 - 11. For estimation of ARR for FY 2011 -

12 & FY 2012 - 13, transmission losses has been assumed to be at same level as

was in FY 2010 - 11, hence there is nothing wrong in doing so.

However in revised estimate which were submitted to Commission in June 2012,

actual transmission losses for FY 2010 - 11 & FY 2011 - 12 were available, so

these losses has been revised accordingly as 3.25% & 4.20% respectively.


3.3.20 The Commission has analyzed the ARR of the Petitioner in accordance with the

provisions of the Transmission Tariff Regulations and the latest data available as

per UPPTCL submissions in response to the deficiency notes and additional

clarifications sought by the Commission. Accordingly, the year wise losses have

been approved as detailed in the subsequent sections after prudence check.

The above suggestions / observations have been taken into consideration by the

Commission while finalising this Tariff Order.


Page 22

Chapter 4. BRIEF ANALYSIS OF THE TARIFF PETITION’S

4.1 INTRODUCTION:

4.1.1 The Commission has analysed the petitions on Aggregate Revenue Requirement

(ARR) submitted by the Uttar Pradesh Power Transmission Corporation Limited

(UPPTCL) for approval of ARR/Tariff application for the FY 2010 - 11, FY 2011 - 12

and FY 2012 - 13 as detailed in the subsequent sections.

4.1.2 The ARR as submitted by the UPPTCL is inclusive of State Load Despatch Centre

(SLDC)’s ARR. A brief overview of the ARR petitions and the updated estimates by

the Petitioner is shown in the table below:

Table 4-1: SUMMARY OF ARR PETITIONS FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13 (RS. CRORES)

Sr. No. Particulars FY 2010 -

11 FY 2011 -

12 FY 2012 -

13

1 Employee cost 331.75 404.09 456.64

2 A&G expenses 14.42 19.75 22.42

3 R&M expenses 101.74 113.24 127.97

4 Interest on Loan Capital (including bank

charges) 317.56 378.93 435.49

5 Interest on Working Capital - 30.56 34.73

6 Depreciation 310.93 345.85 394.53

7 Gross Expenditure 1,076.40 1,292.44 1,471.78

8 Less: Employee cost capitalized 65.44 87.68 99.09

9 Less: Interest capitalized 107.91 84.94 98.96

10 Less: A&G expenses capitalized 10.85 3.75 4.26

11 Net Expenditure 892.20 1,116.06 1,269.47

12 Provision for Bad & Doubtful debts 39.91 - -

13 Debits, write-offs & other expenses 2.26 - -

14 Net Expenditure with provisions 934.38 1,116.06 1,269.47

15 Add: Reasonable Return / Return on Equity

55.32 61.81

16 Less: Non-Tariff Income 40.30 29.62 32.53

17 Annual Revenue Requirement (ARR) 894.08 1,141.76 1,298.75

4.1.3 In the subsequent chapters, the Commission has determined and approved the

ARRs of the UPPTCL for FY 2010 - 11, FY 2011 - 12 and FY 2012 - 13 on the basis

of petitions, supplementary submissions submitted by UPPTCL and have

elaborated upon the approach followed for the same in line with the

Transmission Tariff Regulations. the Commission has approved SLDC’s ARR

submitted by UPPTCL on behalf of SLDC in line with the UPERC (Procedure, Terms

& Conditions for payment of Fee and Charges to State Load Despatch Centre and


Page 23

other related provisions), Regulation, 2004 (hereinafter referred as SLDC

Regulations).

4.1.4 The Commission has not undertaken true-up of any of the past years as UPPTCL

has not submitted audited accounts which are required for this purpose, in line

with Transmission Tariff Regulations. In absence of the same, no true-up has

been considered by the Commission in this order.

4.2 TRANSMISSION LOSSES:

4.2.1 The Commission, in consultation with UPPCL, in its Tariff Order for FY 2001-02

had established the efficiency parameters i.e. T&D loss levels and Collection

Efficiency targets for a period of 5 (five) years to encourage UPPCL to exceed the

targets and thereby retain the benefits of improved performance.

4.2.2 The UPPTCL in the ARR petition for FY 2012 - 13 had mentioned the transmission

losses to be 3.63% for the three years FY 2010 - 11, FY 2011 - 12 and FY 2012 - 13

inclusive of inter-state transmission losses. However, for the three mentioned

years; UPPCL in their ARR petitions have mentioned different figures.

4.2.3 Henceforth, the Commission has considered the approved energy for all the

State DISCOMs while approving the losses for UPPTCL.

4.2.4 The details of energy purchased by UPPTCL and the corresponding losses after

delivering the same to DISCOMS as approved are presented in the table below:

Table 4-2: APPROVED TRANSMISSION LOSSES FOR FY 2010 - 11, FY 2011 - 12 & FY 2012 - 13

Details 2010-11 2011-12 2012-13

Gross Power Purchased & Billed A 65,271 73,962 74,703

Net Power purchase at state's periphery B 64146 72701 73150

Inter-state losses C=1-(B/A) 1.72% 1.70% 2.08%

Energy received by DISCOM D 62062 69648 70495

Intra-state losses E=1-(D/B) 3.25% 4.20% 3.63%

Total losses F=1-(D/A) 4.92% 5.83% 5.63%

4.2.5 Based on the computation done above, Commission approves the total

transmission loss at 4.92%, 5.83% & 5.63% for FY 2010 - 11, FY 2011 - 12 & FY

2012 - 13 respectively.


Page 24

4.2.6 In the last Tariff Order, the Commission had approved 5.98% overall transmission

loss for FY 2009 - 10 which has been brought down by UPPTCL to some extent.

The Commission acknowledges the efforts taken by UPPTCL for retaining the loss

at a competitive level as compared to other states and accordingly approves the

intra-state transmission loss at 3.25%, 4.20% & 3.63% for FY 2010 - 11, FY 2011 -

12 & FY 2012 - 13 respectively.

4.2.7 The Commission also encourages UPPTCL to undertake investments as specified

in Transmission Tariff Regulations to further strengthen its transmission lines to

reduce the losses. The Commission observes that the Petitioner’s Submission is

void of the voltage level wise losses which are essential for analysis of the

Commission while considering the performance targets for the ensuing year.

Further, the Commission directs UPPTCL to submit details of voltage-wise

losses within 3 months from the date of this Tariff Order along with method of

assessment adopted and supporting data / information.

4.3 COMPONENTS OF ARR AND ANALYSIS OF EACH COMPONENT:

4.3.1 The Commission has analysed all the components of the Aggregate Revenue

Requirement (ARR) submitted by the UPPTCL to provide suitable values for each

component. As per the Transmission Tariff Regulations, the ARR includes the

following components:

a) Operation & Maintenance Expenses

o Employee Expenses

o Administration & General Expenses

o Repairs and Maintenance Expenses

b) Interest Expenses

o Interest on Loan Capital

o Interest on Working Capital

c) Depreciation Expenses

d) Other Income (Non-tariff Income)

e) Special Appropriations

f) Return on Equity

g) Tax on Income

h) Any other relevant expenditure

4.3.2 Based on the ARR submission and Transmission Tariff Regulations, the

Commission has analysed each component of the ARR and accordingly approved

each of the component along with the justification for the same.


Page 25

Chapter 5. AGGREGATE REVENUE REQUIREMENT FOR FY 2010 - 11

5.1 ESCALATION / INFLATION INDEX

The Petitioner’s Submission:

5.1.1 The Petitioner has computed the Escalation Index / Inflation Rate for FY 2010 - 11

as per the formula:

Inflation Rate=0.6* Inflation based on WPI + 0.4*Inflation based on CPI

The Petitioner has computed the inflation index as shown in the table below:

INFLATION INDEX- PETITIONER

The Commission’s Analysis:

5.1.2 The Regulation 4.2 of Transmission Tariff Regulations stipulates the methodology

for consideration of the O&M Expenses, wherein such expenses are linked to the

inflation index determined under these Regulations. The relevant provisions of

the Transmission Tariff Regulation are reproduced below:

Month 2008 2009 2010 2008 2009 2010

Jan 218 229 251 134 148 172 Feb 220 228 251 135 148 170 Mar 226 228 253 137 148 170 Apr 229 232 258 138 150 170 May 231 234 260 139 151 172 Jun 237 235 261 140 153 174 Jul 240 239 263 143 160 178 Aug 241 241 264 145 162 178 Sep 242 243 146 163 179 Oct 239 243 148 165 Nov 234 247 148 168 Dec 230 248 147 169

Inflation 9.55% 9.88%

Weighted Average (WPI 60%: CPI 40%) 9.68%

Inflation index for FY2010 - 11

Wholesale Price Index Consumer Price Index


Page 26

“4.2 Operation and Maintenance Expenses

1. The O&M expenses for the base year shall be calculated on the basis of

historical/audited costs and past trend during the preceding five years. However,

any abnormal variation during the preceding five years shall be excluded. O & M

expenses so calculated for the base year shall then be escalated on the basis of

prevailing rates of inflation for the year as notified by the Central Government

and shall be considered as a weighted average of Wholesale Price Index and

Consumer Price Index in the ratio of 60:40. Base year, for these regulations

means, the first year of tariff determination under these regulations.

2. Where such data for the preceding five years is not available the Commission

may fix O&M expenses for the base year as certain percentage of the capital cost.

3. Incremental O&M expenses for the ensuing financial year shall be 2.5% of

capital addition during the current year. O&M charges for the ensuing financial

year shall be sum of incremental O&M expenses so worked out and O&M charges

of current year escalated on the basis of predetermined indices as indicated in

regulation 4.2.1 above.

4. However, the Commission may direct the utilities to bring down the O & M

expenses to an efficient level i.e., by fixing norms based on the circuit kilometers

of transmission lines, transformation capacity at the sub-stations, number of bays

in substation etc. of similarly placed efficient utilities, within such span of time, as

may be determined by the Commission.

5. The Commission shall examine and if satisfied shall allow inclusion in revenue

requirement in the next period additional O&M expenses on account of war,

insurgency, and change in laws or like eventualities for a specified

period.”[Emphasis supplied]

5.1.3 The Commission in accordance with the above stated regulation has calculated

the inflation index for the FY 2010 - 11 based on the weighted average index of

WPI and CPI. The Commission has considered the WPI and CPI index as available

on the website of Economic Advisor, Ministry of Commerce and Industry Ministry

of Labour respectively. The Commission has calculated the inflation index for

approval of O&M expenses at 9.96%. The computation of inflation index is given

in the table below:


Page 27

Table 5-1: INFLATION INDEX FOR FY 2010 - 11

2009-10 2010-11 2009-10 2010-11

April 125 138.6 150 170

May 125.9 139.1 151 172

June 126.8 139.8 153 174

July 128.2 141 160 178

August 129.6 141.1 162 178

September 130.3 142 163 179

October 131 142.9 165 181

November 132.9 143.8 168 182

December 133.4 146 169 185

January 135.2 148 172 188

February 135.2 148.1 170 185

March 136.3 149.5 170 185

Average for Financial Year 130.82 143.33 162.75 179.75

Inflation index for FY 2009-10


Applicable Inflation rate

Month Wholesale Price Index Consumer Price Index

Calculation of Inflation Index (CPI-40%, WPI-60%)

143.59

157.90

9.96%

5.1.4 The base year shall undergo a change post the true up exercise which would be

done after the audited accounts for the FY 2008 - 09 and FY 2009 - 10 are

submitted by the Petitioner. The variation would have a cascading effect on the

approval of the O&M expenses for the ensuing years.

5.2 OPERATION & MAINTENANCE EXPENSES:


5.2.1 Operation & maintenance expense comprises Employee costs, Administrative &

General Expenses and Repair & Maintenance expenses. The regulation 4.2 of the

Transmission Tariff Regulation issued by the Commission stipulates:

The O&M expenses for the base year shall be calculated on the basis of









Page 28

Where such data for the preceding five years is not available the Commission may

fix O&M expenses for the base year as certain percentage of the capital cost.

Incremental O&M expenses for the ensuing financial year shall be 2.5% of capital

addition during the current year. O&M charges for the ensuing financial year

shall be sum of incremental O&M expenses so worked out and O&M charges of

current year escalated on the basis of predetermined indices as indicated in


5.2.2 The Petitioner further submitted the details of individual elements of O&M

expenditure as per the Commission’s Analysis in the last Tariff Order wherein the

Commission was of the opinion that a suitable norm for allowance of O&M

expenses could be adopted only after undertaking a thorough study of the O&M

expenditure based on the past performances and the cost drivers of the same,

through a separate process. This study also has to be backed by audited

information for the past which needs to be made available by the licensees. Only

then the true picture of the trend in the O&M expenses may emerge. Till any

such norm for O&M expenditure is determined, the Commission emphasised to

consider the individual elements of O&M expenditure.

5.2.3 Further in addition to the O&M cost based on inflationary indices based

escalation, the Petitioner has computed and sought an additional O&M expenses

@ 2.5% of the additions to GFA during the previous year as per the tariff

regulations.

Petitioner has estimated individual components of O&M expenses based on

methodology below.

5.2.4 O&M Expenses on Addition to Assets during the Year

5.2.4.1 In addition to the Employee cost, A&G cost and R&M expenses described in

the succeeding section, Regulation provide for incremental O&M expenses on

addition to assets during the year. Regulation stipulates that “Incremental

O&M expenses for the ensuing financial year shall be 2.5% of capital addition

during the current year. O&M charges for the ensuing financial year shall be

sum of incremental O&M expenses so worked out and O&M charges of current

year escalated on the basis of predetermined indices as indicated in regulation

4.3 (1).”

5.2.4.2 Accordingly based on above the incremental O&M has been worked out by the

Petitioner in following table. The same are allocated across the individual


Page 29

elements of the O&M on the basis of the contribution of each element in the

gross O&M expenses excluding the incremental O&M charges and impact of

the 6th Pay Commission recommendation.

5.2.4.3 However, later in the petition submitted for FY 2012 - 13 as per the

Transmission formats filed, the Petitioner has not claimed any incremental

O&M expenses for FY 2010 - 11.


5.2.4.4 The Regulation 4.2 sub-section 3 of the Transmission Tariff Regulations provides

for consideration of the additional O&M expenses at 2.5% on additions to

assets during the previous year.

5.2.4.5 Based on the above, the Commission has approved incremental O&M expenses

for FY 2010 - 11 at Rs. 17.71 crores. The same are allocated across the

individual elements of the O&M expenses on the basis of the contribution of

each element in the gross O&M expenses which is being approved in

subsequent paragraphs.

Table 5-3: APPROVED INCREMENTAL EXPENSES FOR FY 2010 - 11 (RS. CRORES)

Incremental O&M expenses Approved

Capitalization in previous year 708.58

Incremental O&M expenses approved @ 2.5% 17.71

a) Employee costs 13.06

b) R&M expenses 4.32

c) A&G expenses 0.33 5.2.5 Employee Costs


5.2.5.1 The projection of employee costs involves a detailed examination of the

various components of salary such as basic pay and dearness allowance for the

Capitalised Assets during previous year 743.18

Incremental O&M Expenses 18.58

a) Employee Costs 14.50

b) A&G Expenses 0.54 c) R&M Expeses 3.53

Incremental O&M Expenses @2.5% of

capital additions during the previous year FY 2010 - 11

Table 5-2: ALLOCATION OF INCREMENTAL O&M EXPENSES (RS. CRORES)


Page 30

various grades of employees. It would also involve an understanding of the

extent of retirements as well as the manpower additions planned. Considering

above the Petitioner has estimated employee cost in the FY 2010 - 11 petition

filed based on un-audited data of FY 2009 - 10 and data available till the date

of filing. Here the Petitioner also mentioned that UPPCL vide order dated 27th

Nov 2010 has allowed its employees benefit of Assured Career Progression

(ACP) scheme in line with the recommendation of Sixth Pay Commission &

GoUP order in this regard. Under this scheme employees of UPPCL are allowed

first, second and third time scale in the year of 09, 14 & 19th years of their

service respectively. Further UPPCL vide order dated 14th August 2010 has

allowed applicability of third time scale since 01.01.1996 which was previously

allowed on different dates between 01.01.2006 to 19.02.2009. Impact of these

order has also been included in estimation of employees cost. Further as per

UPPCL order for implementation of Sixth Pay commission, the cost burden on

account of payment of instalment of arrear has also been provided. As per

arrear payment schedule the first instalment of three months arrear from Jan

2006 to March 2006 is due in FY 2010 - 11 and the second instalment of arrear

for the period April 2006 to March 2007 is due in FY 2011 - 12. So burden of

arrears has also been included in the employee expenses.

5.2.5.2 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the

numbers were revised based on unaudited accounts for the relevant year.


5.2.5.3 In accordance with the Transmission Tariff Regulations as mentioned in Para

5.1.2 of this order, the O&M expenses are linked to the inflation index. The

Commission opines that escalating O&M expenses based on Petitioner

submission is incorrect, as it takes wrong base year, hence the Commission has

decided that for FY 2010 – 11, the components of A&G expenses and R&M

expenses of O&M expenses would be escalated based on approved O&M

expenses of FY 2009 - 10. However for employee expenses, the Commission

has taken a different view on account of Sixth Pay Commission salary revision

impact.

5.2.5.4 Accordingly, the Commission approves the following items of employee

expenses viz, Basic salaries, dearness allowance (DA) and other allowances &

relief as submitted by Petitioner. Terminal benefits like pension, gratuity and

other annulment benefits as are linked to basic salary and DA the Commission

therefore approves as these submitted by Petitioner. Commission approves


Page 31

the other items of employee expenses viz. Bonus / Ex-gratia, Medical Expenses

Reimbursement, Earned Leave Encashment etc. based on the escalation factor

of 9.96% over the numbers approved by the Commission for FY 2009 - 10.

An incremental expense of 2.5% of GFA addition during the previous year has

also been added.

5.2.5.5 The employee expenses claimed by the Petitioner as per the provisional

accounts as against the approved figures is highlighted in the table below:

Table 5-4: APPROVED EMPLOYEE EXPENSES FOR FY 2010 - 11 (RS. CRORES)

Provisional Approved

Salaries 176.1 176.1

Dearness Allowance 72.3 72.3

Other Allowances & Relief 13.1 13.1

Bonus/Exgratia 1.8 3.8

Medical reimbursment 2.5 6.5

Leave travel alownce 0.1 0.1

Earned Leave Encashment 24.3 8.4

Compensation to Employees 0.0 0.0

Employeee welfare expencess 0.3 0.7

Pension and gratuity 37.5 37.5

Other terminal benefits 3.5 0.0

Expenses on trust 0.3 0.0

Any other employee expenses 0.0 0.0

Arrear of Pay Commission/Time Scale 0.0 0.0

Additional employee Expenses(@2.5% of

incremental GFA)

0.0 13.1

Grand Total 331.7 331.6

Employee expenses capitalised 65.4 65.4

Net Employee expenses 266.3 266.2

ParticularsFY 2010-11

5.2.6 Administration and General (A&G) Expenses:


5.2.6.1 These expenses are incurred by the Petitioner for meeting day-to-day

expenses related to the administration of its offices, insurance,

communication, professional charges, audit fees, advertisement expenses &

freight etc. All these expenses are directly affected by inflation. A&G expenses

were projected by the petition in the petition filed for FY 2010 - 11 earlier

considering the impact of inflation and need for addition of more substation

and offices.


Page 32


numbers were revised based on unaudited accounts.


5.2.6.3 Commission approves the A&G expenses for FY 2010 - 11 based on the

escalation factor of 9.96% over the approved figures for FY 2009 - 10. The

Commission appreciates the commitment of the Petitioner to keep costs under

control and accordingly approves gross A&G expenses of Rs. 6.71 Cr for FY 2010

- 11 including allocation of additional A&G expenses.

5.2.6.4 The Petitioner has proposed capitalized of A&G expenses @ 75% of the total

A&G expenses for FY 2010 - 11. The Petitioner has failed to adhere with the

Commission direction in its last Tariff Order to submit an appropriate policy on

capitalization of A&G expenses and develop proper accounting system to

capture the same. The Petitioner has failed to adhere with the Commission

direction in its last Tariff Order to submit an appropriate policy on capitalization

of A&G expenses and develop proper accounting system to capture the same.

In the absence of a capitalization policy framework the Commission has

considered the A&G capitalization percentage as submitted by Petitioner for FY

2010 - 11.

5.2.6.5 Therefore for the purpose of this Tariff Order, the Commission has considered

the capitalization @75% of the total A&G expenses as proposed by Petitioner.

However, the Commission directs that the Petitioner should capitalise the

expenditure based on the actual expenses incurred / projected, at the time of

next ARR filing. Further Petitioner should have proper accounting system to

capture the expenses related to capital schemes rather than assuming a

standard capitalisation %age.

5.2.6.6 An additional incremental expenses of 2.5% of GFA addition during the

previous year has also been added.

5.2.6.7 The A&G expenses claimed by the Petitioner as per the provisional accounts as

against the approved figures is highlighted in the table below:


Page 33

Table 5-5: APPROVED A&G EXPENSES FOR FY 2010 - 11 (RS. CRORES)


Administration Expenses

Rent rates and taxes (Other than all taxes on

income and profit)

0.66 0.79

Insurance of employees, assets, legal l iability 0.24 0.29

Revenue Stamp Expenses Account 0.00 0.00

Telephone,Postage,Telegram, Internet Charges 1.77 2.11

Incentive & Award To Employees/Outsiders 0.00 0.00

Consultancy Charges 0.13 0.16

Travelling 0.00 0.00

Technical Fees 0.27 0.33

Other Professional Charges 0.00 0.00

Conveyance And Travel (vehicle hiring,

running)

2.76 3.30

UPERC License fee 0.00 0.00

Security / Service Charges Paid To Outside

Agencies

0.00 0.00

Regulatory Expenses 0.00 0.00

Sub-Total of Administrative Expenses 5.83 6.97

Other Charges 0.00 0.00

Fee And Subscriptions Books And Periodicals 0.00 0.00

Printing And Stationery 0.63 0.75

Advertisement Expenses (Other Than Purchase

Related) Exhibition & Demo.

1.28 1.53

Contributions/Donations To Outside Institute /

Association

0.00 0.00

Electricity Charges To Offices 0.45 0.53

Water Charges 0.00 0.00

Any Study - As per requirements 0.00 0.00

Any Other expenses 4.97 5.93

Sub-Total of other charges 7.33 8.76

Legal Charges 0.92 1.10

Auditor'S Fee 0.34 0.40

Freight - Material Related Expenses 0.00 0.00

Departmental Charges 0.00 0.00

Total Charges 14.42 17.23

Additional A&G expenses(@2.5% of

incremental GFA)

0.00 0.33

Total Charges Chargeable To Capital Works 10.85 10.85

Total Charges Chargeable to Revenue Expenses 3.57 6.71



Page 34

5.2.7 Repair and Maintenance (R&M) Expenses:


5.2.7.1 The commission in the last Tariff Order has approved a total R&M expenditure

of Rs 76.12 Crores for FY 2009 - 10 as against Rs 76.27 Crores projected by the

Petitioner. As per un-audited balance sheet of FY 2009 - 10 the actual

expenditure incurred by the licensees under R&M expenditure is Rs 86.06

Crores which is more than the amount approved by the commission. This

increase is mainly attributed to substantial increase in raw material prices for

electrical equipment and fuel cost. The Petitioner submitted that this has

substantially increased the cost burden. Petitioner further submitted that it

has added a number of transformers, cables, grid substation etc. for which

there has been an increase in the amount of annual maintenance contracts,

which has translated to a higher R&M expenses in the ensuing year. Further

Petitioner has initiated proactive preventive maintenance and capital

expenditure to improve the quality of supply and reduction in number of

overloaded transformer etc.

5.2.7.2 In the ARR for FY 2010 - 11, Petitioner has assumed same methodology as

approved in last Tariff Order. Therefore, R&M expenses have been projected

from expenses of FY 2009 - 10 and have been increased with Escalation index

to offset impact of inflation. The amount so estimated has been spread out

proportionally among the sub-accounts. Further an additional incremental

expenses of 2.5% of GFA addition during the previous year has also been

added.


numbers were revised based on the unaudited accounts.


5.2.7.4 The Commission has approved the R&M expenses for FY 2010 - 11 after

considering escalation factor on approved expenses of previous year and an

additional expense of 2.5% of GFA addition during the previous year.

5.2.7.5 The R&M expenses claimed by the Petitioner as against the approved figures

are highlighted in the table below:


Page 35

Table 5-6: APPROVED R&M EXPENSES FOR FY 2010 - 11 (RS. CRORES)


Plant and Machinery 86.29 71.00

Building 5.14 4.23

Civil Works 0.00 0.00

Hydraulic Works 0.00 0.00

Transformers 0.00 0.00

Lines, Cables Networks etc. 10.21 8.40

Vehicles 0.01 0.01

Furniture and Fixtures 0.00 0.00

Office Equipments 0.08 0.06

Transportation 0.00 0.00

Sub station maintenance by private agencies 0.00 0.00

Any other items (Incremental expenses @2.5%

of the GFA)

0.00 4.32

Total 101.74 88.02


5.3 GFA BALANCES AND CAPITAL FORMATION ASSUMPTIONS:


5.3.1 The assumptions used by the Petitioner in the petition for FY 2010 - 11 for

projecting GFA and CWIP were as follows:

The opening GFA and CWIP for FY 2010 - 11 have been taken as per the closing

figures provisional annual accounts of FY 2009 - 10.

25% the opening CWIP and 25% of investment made during the year, expenses

capitalised & interest capitalised (25% of total investment) has been assumed to

get capitalised during the year.

Investment through “deposit work“ has not been taken for capital formation as

per policy adopted by commission in its last Tariff Order. Thus, investments

shown in capital formation table below don’t include work funded through

deposit work.

Table below shows Licensee’s investment plan for FY 2010 - 11 along with the

proposed funding of each component of the investment plan.


Page 36

UPPTCL INVESTMENT PLAN: (RS. CRORES)

5.3.2 Petitioner has considered capitalisation of investment as 25% of the sum of

opening WIP, investment made during the year (excluding deposit work),

employees expenses capitalised, A&G expenses capitalised and interest

capitalised.

5.3.3 Later the Petitioner submitted the petition for FY 2012 - 13 where-in the

numbers were revised based on unaudited accounts.


5.3.4 The Petitioner has submitted the provisional accounts for FY 2010 - 11 along with

the transmission tariff formats during the petition filed for FY 2012 - 13. The

Commission for the purpose of this order has considered the provisional

accounts submitted by the Petitioner.

5.3.5 The Commission has considered the additions to the Gross Fixed Assets as per

the provisional accounts submitted for FY 2010 - 11. Further the Commission also

observes that the Petitioner has not provided any substantial basis for

consideration of the expenses capitalised and the interest capitalised. Therefore

the Commission for the purpose of this order has considered the expenses and

interest capitalised as considered by the Petitioner which is verified from the

provisional accounts. The Commission observes that the figures are based on the

Petitioner’s provisional accounts, the variation in GFA between the Commission

approved figures and the actual figures for FY 2010 - 11 will be subject to true-up

once audited accounts are finalized and submitted for the analysis of the

Commission. Accordingly, the details of approved Capitalisation and Work-in-

progress for FY 2010 - 11 as per the provisional accounts are provided in the

table below:


Page 37

Table 5-7: APPROVED CAPITALIZATION AND WIP FOR FY 2010 - 11 (RS. CRORES)


Opening WIP as on 1st April A 1,299.90 1,299.90

Investments B 1,315.20 1,315.20

Employee Expenses Capitalisation @ 15% C 65.44 65.44

A&G Expenses Capitalisation @ 15% D 10.85 10.85

Interest Capitalisation @ 23% on Interest on

long term loans

E 107.91 107.91

Total Investments F= A+B+C+D+E 2,799.28 2,799.28

Transferred to GFA (Total Capitalisation) G=F*25% 394.59 394.59

Closing WIP H= F-G 2,404.70 2,404.70


5.4 DEPRECIATION EXPENSE


5.4.1 The Commission in its Transmission Tariff Regulations has specified the

methodology for the computation of depreciation. The regulation also specifies

the rates to be used for the purpose of computation of the depreciation charged

during the year. In the last Tariff Order the Commission has approved

depreciation on the basis of weighted average depreciation rates as against

specific depreciation rates for each class of asset. Further Transmission Tariff

Regulations provide for charging depreciation on opening GFA and a pro-rata

basis on assets capitalized during the year. Petitioner has used same

methodology for computing depreciation in this ARR.

In last Tariff Order Commission had assessed weighted average

depreciation rate of 3.08%, so in this petition Petitioner has also used

same rate for depreciation.

The depreciation has been charged for the entire year on the opening

GFA and pro-rata basis for the assets capitalized during the year.

Opening GFA for FY 2010 - 11 has been taken from provisional balance

sheet of FY 2009 - 10. Hence based on the same and using above

specified weight average depreciation rate of 3.08%, the Petitioner has

calculated depreciation for FY 2010 - 11.


numbers were revised based on latest estimates.


Page 38


5.4.3 The Commission vide the Transmission Tariff Regulation has specified the

methodology for the computation of depreciation. The Regulation specifies the

rates to be used for the purpose of computation of the depreciation charged

during the year. Regulation 4.3 requires that “Provided that where the Fixed

Assets Registers are not maintained, the Commission shall allow only as much

depreciation as it may consider appropriates”.

5.4.3.1 The Commission vide its previous orders has repeatedly several directions to

the Petitioner to ensure that proper and detailed Fixed Assets Registers are

maintained at the field offices. Further, the Honourable Appellate Tribunal for

Electricity (order to Appeal No. 121 of 2010 & I.A. No. 83 of 2011, Para 7.4, 7.5

& 7.6) has also reinforced Commission views and directed the distribution

licensee to comply with the regulation and direction issued by the Commission.

However the Petitioner has failed to produce any records relating to fixed

assets registers.

5.4.4 The Petitioner seems to be ignorant of significance of maintenance of Fixed Asset

Register and filing of investment plans with cost benefit of capital expenditure.

Components of the ARR viz, depreciation, allowable interest on debt and return

on equity are adversely affected by inadvertent misrepresentations of capital

assets creation numbers. Non-maintenance of Fixed Asset Register and absence

of strict policy framework for under taking capital investment based on cost

benefit analysis gives ample room for such misrepresentations.

5.4.5 Given the very sad state of Petitioner on the above matter and reluctance to act

on repeated direction issued by the Commission and the Appellate Tribunal of

Electricity, the Commission is severely hindered in its chore of undertaking

prudence check of ARR components viz, depreciation, and allowable interest on

debt and return on equity. On account of lack of details of fixed assets register,

the Commission has assessed depreciation on the basis of weighted average

depreciation rates as against specific depreciation rates for each class of asset.

The Commission while approving the depreciation expenses for other state

distribution utilities has considered the average depreciation rate approved for

FY 2009 - 10. However, in case of UPPTCL the asset transfer scheme is under

progress and at this stage it is difficult to ascertain the accurate level of

depreciation. Henceforth, for the purpose of this order, the Commission has

approved the depreciation based on the weighted average depreciation rate as


Page 39

claimed by the Petitioner. The Commission approves the depreciation expenses

on the GFA as below:

Table 5-8: DEPRECIATION APPROVED FOR FY 2010 - 11 (RS. CRORES)


Depreciation Rate 4.41% 4.41%

Opening GFA as on 1st April 6,911.25 6,911.25

Addition to GFA during the year 394.59 394.59

Deduction from GFA during the year 113.32 113.32

Closing GFA as on 31st March 7,192.52 7,192.52

Opening Accumulated Depreciation 2,702.78 2,702.78

Depreciation on Opening GFA + Addition

during the year310.93 313.43


5.4.6 The Commission reiterates its direction to the Petitioner to ensure that they

maintain proper and detailed fixed assets registers to work out the depreciation

expense as specified in the Transmission Tariff Regulations and directs the

Petitioner to submit report regularly to the Commission citing clearly as to how

they are maintaining fixed assets registers for the various assets.

5.5 INTEREST AND FINANCE CHARGES:

5.5.1 INTEREST & FINANCE CHARGES ON LONG TERM LOAN:


5.5.2 Transmission Tariff Regulation stipulate that Interest and finance charges on loan

capital shall be computed on the outstanding loans based on the existing

agreements and arrangements terms regarding the interest rate and the

repayment schedules. Interest on fresh loans shall be allowed only on loan raised

for projects approved and undertaken in accordance with the guidelines

contained in Para 3.7 of these regulations. Accordingly Petitioner has computed

interest and financing costs in the FY 2010 - 11 petition based on the current

schedule of long-term debt, repayments and new debt requirements for new

project to be executed.




Page 40


5.5.4 The Commission has computed the interest and finance charges for FY 2010 - 11

based on the approved investments for UPPTCL. This has already been discussed

in the section on GFA balances and capital formation. A debt-equity ratio of

70:30 in accordance with the 3.9 of the Transmission Tariff Regulations has been

considered for arriving at the normative equity and debt.

5.5.5 The opening loans for FY 2010 - 11 has been taken from the closing loans as

approved for FY 2009 - 10 by the Commission in the previous Tariff Order.

5.5.6 Due to lack of adequate data and inconsistencies seen in the data submitted by

the Petitioner, the Commission has considered the interest rates for the loans as

approved in the last Tariff Order. Any variations would be taken up at the time of

truing up.

5.5.7 Based on above assumptions, Commission approves the interest on long term

debt as below:

Table 5-9: INTEREST ON LONG TERM LOAN FOR FY 2010 - 11 (RS. CRORES)

Interest on long term debt Approved

Old Loans

GoUP 14.96

NCR 2.46

PFC 93.51

REC Loans 53.99

HUDCO 9.10

New Loans 35.51

Total 209.53

5.5.8 INTEREST ON WORKING CAPITAL:

5.5.9 The Transmission tariff regulation provides for normative interest on working

Capital based on the methodology outlined in the regulations. The Petitioner is

eligible for interest on working capital worked out on methodology specified in

the regulations.


Page 41

5.5.10 Further Transmission tariff regulations provide following methodology for

calculating working capital -

(i) Operation and Maintenance expenses, which includes Employee costs,

R&M expenses and A&G expenses, for one month;

(ii) One-twelfth of the sum of the book value of stores, materials and supplies

at the end of each month of current financial year.

(iii) Receivables equivalent to 60 days average billing of consumers less

security deposits by the beneficiaries

5.5.11 In accordance with the Transmission Tariff Regulation the interest on the working

capital requirement would be the Bank rate as specified by the Reserve Bank of

India as on 1st April of the relevant year plus a margin as decided by the

Commission. Accordingly the Commission for this order has considered the

interest rate on working capital requirement at 12.5% including margin. The

actual rate of interest would be considered based on the audited accounts during

the true-up process for the year in accordance the Transmission Tariff

Regulations.

5.5.12 The Commission has in accordance with the above mentioned Transmission Tariff

regulation has considered the interest on working capital which is shown in the

table below:

Table 5-10: APPROVED INTEREST ON WORKING CAPITAL FOR FY 2010 - 11 (RS. CRORES)

FY 2010-11

Approved

O&M Expenses

Employee Expenses 331.59

R&M Expenses 88.02

A&G Expenses 6.71

Total O&M Expenses 426.32

One Months O&M Expenses 35.53

Book Value of Stores 363.47

One twelvth of the sum of book value of the

material in storesSum of Material in stores at

the end of each month

30.29

Recievable equivalent to 60 days average

bill ing of consumers

136.55

Total Working Capital Requirement 202.37

Interest rate 12.50%

Interest on working capital 25.30

Particulars


Page 42

5.6 OTHER INCOME:


5.6.1 Other Income includes only non-tariff income, which comprises interest on loans

and advances to employees, income from fixed rate investment deposits and

interest on loans and advances to Licensees.


5.6.2 As per the provisional accounts for FY 2010 - 11, other income is Rs. 40.3 Crores

and the same is approved by the Commission. Any variation would be taken up

at the time of true-up.

5.7 RETURN ON EQUITY:


5.7.1 Under provisions of the Regulation licensees are allowed a return of @ 14% on

equity base, for equity base calculation debt equity ratio shall be 70:30. Where

equity involves is more than 30%, the amount of equity for the purpose of tariff

shall be limited to 30%. Equity amount more than 30% shall be considered as

loan. In case of actual equity employed is less than 30%, actual debt and equity

shall be considered for determination of tariff. In this petition return on equity

has been computed as per methodology adopted by Hon’ble Commission in last

Tariff Order.

5.7.2 In view of the huge gap in the recovery of cost of supply at the DisCom level,

Petitioner is of the view that return on equity would only result in accumulation

of receivables. As such Petitioner proposed to charge return on equity @ 2% for

the financial year 2010 - 11. ROE is calculated on the equity inflow from GoUP up

to FY 2009 - 10 and normative equity portion in capitalised assets during the

year.


5.7.3 In terms of the Regulation 4.6 of the Transmission Tariff Regulation the Petitioner

is entitled for a return on equity at 14% on the equity base. The equity base shall

be determined in accordance with the Regulation 3.9 of the Transmission Tariff

Regulations which states as follows:


Page 43

“In case of all projects, debt-equity ratio as on the date of commercial operation

shall be 70:30 for determination of tariff. Where equity employed is more than

30%, the amount of equity for the purpose of tariff shall be limited to 30% and

the balance amount shall be considered as the normative loan.

Provided that in case of the projects where actual equity employed is less than

30%, the actual debt and equity shall be considered for determination of tariff.

Provided further that in case of existing projects, the actual debt equity shall be

used for tariff determination.

The debt and equity amounts arrived at in accordance with clause (1) above shall

be used for calculating interest on loan, return on equity and Advance Against

Depreciation.”

5.7.4 The Petitioner has submitted that the in view of the high cost of supply at the

discom level the claim of return on equity would result into accumulation of

receivables, therefore the Petitioner has only claimed return on equity at 2%.

5.7.5 The Commission while undertaking analysis for allowance of return on equity has

considered opening level of equity for FY 2010 - 11 based on the closing

regulatory equity approved in the previous Tariff Order. Further the equity

during the year has been allowed in terms of the Regulation 3.9 reproduced

above.

5.7.6 Accordingly the Commission has considered the submission of the Petitioner and

allowed the rate of return at 2% only. Accordingly the Commission approves the

return on equity of Rs. 45.66 Crores

Table 5-11: APPROVED RETURN ON EQUITY FOR FY 2010 - 11 (RS. CRORES)


Equity at the beginning of the year 2,533.68 2,223.97

Assets Capitalised 281.27 394.59

Addition to Equity 84.38 118.38

Closing Equity 2,618.06 2,342.35

Average Equity 2,575.87 2,283.16

Rate of Return 2% 2%

Return on Equity 51.52 45.66



Page 44

5.8 OTHER DEBITS (INCLUDING PROVISION FOR DOUBTFUL DEBTS):

5.8.1 UPPTCL has claimed an amount of Rs. 39.91 Cr for other debits, write-offs,

provision for doubtful debts etc. without any detailed breakup. However, the

Commission after referring to the unaudited / provisional accounts for FY 2010 -

11 has failed to understand how there can be bad-debts for a transmission

company. The Transmission Tariff Regulations also does not have any specific

provision for creation of bad and doubtful debts. Further the bad debts are only

a provision in the audited accounts and are not supported with any write off

sanction. Hence the Commission has disallowed the same for FY 2010 - 11.

5.9 SUMMARY OF AGGREGATE REVENUE REQUIREMENT FOR TRANSCO:

5.9.1 In the preceding sections, the Commission has detailed the expenses under

various heads submitted by UPPTCL in the petition and those which are now

approved. The summary of the expenses under different heads as approved by

the Commission for FY 2010 - 11 is given in table below:

Table 5-12: SUMMARY OF ARR FOR FY 2010 - 11 (RS. CRORES)


Employee cost 331.75 331.59

A&G expenses 14.42 17.23

R&M expenses 101.74 88.02

Interest on Loan Capital (including bank charges) 317.56 209.53

Interest on Working Capital - 25.30

Depreciation 310.93 313.43

Gross Expenditure 1,076.40 985.10

Less:Employee cost capitalized 65.44 65.44

Less:Interest capitalized 107.91 -

Less:A&G expenses capitalized 10.85 10.85

Net Expenditure 892.20 908.82

Provision for Bad & Doubtful debts 39.91 -

Debits, write-offs & other expenses 2.26 -

Net Expenditure with provisions 934.38 908.82

Add: Reasonable Return / Return on Equity - 45.66

Less: Non Tariff Income 40.30 40.30

Annual Revenue Requirement (ARR) 894.08 914.18



Page 45


6.1 ESCALATION / INFLATION INDEX:


6.1.1 The Petitioner has computed the Escalation Index/Inflation Rate for FY 2011 - 12

as per the formula:


Accordingly, the Petitioner has computed 9.68% as escalation index in the FY

2011 - 12 petition.























Page 46










6.1.3 The Commission in accordance with the above stated regulation has calculated




of Labour respectively. The Commission has calculated the inflation index for

approval of O&M expenses at 8.67%. The computation of inflation index is given

in the table below:


2010-11 2011-12 2010-11 2011-12

April 138.60 152.10 170.00 186.00

May 139.10 152.40 172.00 187.00

June 139.80 153.10 174.00 189.00

July 141.00 154.20 178.00 193.00

August 141.10 154.90 178.00 194.00

September 142.00 156.20 179.00 197.00

October 142.90 157.00 181.00 198.00

November 143.80 156.90 182.00 199.00

December 146.00 156.90 185.00 202.28

January 148.00 157.70 188.00 198.00

February 148.10 158.40 185.00 199.00

March 149.50 159.80 185.00 201.00





171.59

8.67%



157.90


Page 47



6.2.1 Operation & maintenance expense comprises of Employee costs, Administrative

& General Expenses and Repair & Maintenance expenses. The regulation 4.2 of

the Transmission Tariff Regulation issued by the Commission stipulates:

“The O&M expenses for the base year shall be calculated on the basis of














regulation 4.2.1 above.”














Page 48


regulations.


methodology below.

6.2.4 O&M Expenses on Addition to Assets:

6.2.5 In addition to the Employee cost, A&G cost and R&M expenses described in the

succeeding section, Regulation provide for incremental O&M expenses on

addition to assets during the year. Regulation stipulates that “Incremental O&M

expenses for the ensuing financial year shall be 2.5% of capital addition during

the current year. O&M charges for the ensuing financial year shall be sum of

incremental O&M expenses so worked out and O&M charges of current year

escalated on the basis of predetermined indices as indicated in regulation 4.3

(1).”

6.2.6 Accordingly based on above the incremental O&M has been worked out by the



gross O&M expenses excluding the incremental O&M charges and arrears as per

the 6th Pay Commission Recommendations.

6.2.7 In the petition for FY 2011 - 12 filed earlier, UPPTCL claimed 19.72 crores as

incremental O&M expenses.

6.2.8 However, later in the petition submitted for FY 2012 - 13 as per the Transmission

formats filed, the Petitioner claimed incremental O&M expenses of Rs. 7.03

Crores.


6.2.9 The Regulation 4.2 sub-section 3 of the Transmission Tariff Regulations provides

for consideration of the additional O&M expenses at 2.5% on additions to assets

during the previous year.

6.2.10 Based on the above, the Commission has approved incremental O&M expenses

for FY 2011 - 12 at Rs. 9.86 crores. The same are allocated across the individual

elements of the O&M expenses on the basis of the contribution of each element

in the gross O&M expenses which is being approved in subsequent paragraphs.


Page 49







c) A&G expenses 0.37

6.2.11 Employee Costs


6.2.12 The projection of employee costs involves a detailed examination of the various

components of salary such as basic pay and dearness allowance for the various

grades of employees. Petitioner has estimated employee cost for FY 2011 - 12

based on un-audited data of FY 2010 - 11 and data available to date.

6.2.13 As mentioned above evolution of sub account of employee cost has been

forecasted from base figure of FY2009 - 10 balance sheet and actual figure

available till date. While projecting the expenses for ensuing years, Petitioner has

endeavoured to control the employee expenses but cost has increased due to

impact of implementation time scale and arrear of pay commission which is

totally beyond the control of the Petitioner. Various sub account were estimated

by the Petitioner as follows:

Basic salary: The Petitioner projected the expenses for FY 2011 - 12 by

considering 5% increase on FY 2010 - 11 provisional figures.

Dearness Allowance (DA): The Petitioner projected the expenses for FY 2011 - 12

by considering 58% increase on FY 2010 - 11 figures on account of the new pay

scales.

Other allowance: Other allowance for FY 2011 - 12 has been forecasted in the

ratio as actually incurred in FY 2010 - 11 of Basic Salary.

Likewise, Medical Reimbursement, LTA, Earned leave encashment, staff welfare

expenses and other terminal benefit have been forecast to increase by inflation

index per year from FY 2010 - 11.


Page 50

Pension and Gratuity: Pension and Gratuity have been calculated at 16.7% and

2.38% (i.e. 19.08%) of Basic Salary and Dearness Allowance.

Capitalisation of Expenses: Employee Expenses Capitalized has been taken 22%

as per audited balance sheet of FY 2007 - 08.

An additional incremental expenses of 2.5% of GFA addition during the previous

year has also been added.


6.2.14 In accordance with the Transmission Tariff Regulations as mentioned in para

6.1.2 of this order the O&M expenses are linked to the inflation index. The

Commission opines that escalating O&M expenses based on Petitioner

submission is incorrect, as it takes wrong base year, hence, the Commission has

decided that for F Y 2011 - 12 the A&G expenses and R&M expenses components

of O&M expenses would be escalated based on approved O&M expenses of FY

2009 - 10. However for employee expenses, the Commission has taken a

different view on account of Sixth Pay Commission salary revision impact

6.2.15 Accordingly the Commission approves the following items of employee expenses

viz, Basic salaries, dearness allowance (DA) and other allowances & relief as

estimated by Petitioner, which have been actually the same as projected by the

Petitioner. Terminal benefits like pension, gratuity and other annulment benefits

as are linked to basic salary and DA the Commission therefore approves as these

estimated by Petitioner. Commission approves the other items of employee

expenses viz. Bonus/ Exgratia, Medical Expenses Reimbursement, Earned Leave

Encashment etc. FY 2011 - 12 based on the escalation factor of 8.67% over the

numbers approved by the Commission for FY 2010 - 11. The rationale for

considering components as proposed by the Petitioner, is as follows:

Basic Salary: The Commission has considered the basic salary separately to

account for the revision in the wages due to implementation of the 6th Pay

Commission. UPPTCL has projected an increase of 5% in the basic salary for the

FY 2011 - 12 over the provisional figures of FY 2010 - 11. The escalation rate

considered by the Commission comes to 8.67%. The Commission appreciated

the Petitioners efforts to restrict its expenses and therefore approves the

escalation of 5% on the approved figures of FY 2010 - 11 for Basic Salaries.


Page 51

Dearness Allowance: The dearness allowance has a direct linkage with the

Basic Salaries approved. The Commission has considered the average Dearness

Allowance for the FY 2011 - 12 based on the actual rate of 58%.

Terminal Benefits and other annulment benefits: These expense are linked

directly to the Basic Salary and the Dearness allowance disbursed therefore

these are considered as a percentage of Basic and DA as proposed by the

Petitioner.

6.2.16 An additional incremental expenses of 2.5% of GFA addition during the previous


6.2.17 The employee expenses claimed by the Petitioner as per the revised estimates as



Estimated Approved
















incremental GFA)

5.3 7.3




FY 2011-12Particulars



6.2.19 These expenses are incurred by the Petitioner for meeting day-to-day expenses

related to the administration of its offices, insurance, communication,

professional charges, audit fees, advertisement expenses & freight etc. All these


Page 52

expenses are directly affected by inflation. A&G expenses were projected by the

petition in the petition filed for FY 2011 - 12 considering the impact of inflation

and need for addition of more substation and offices.



6.2.21 The A&G estimates for FY 2011 - 12 as submitted by UPPTCL is as below:


6.2.22 Commission approves the A&G expenses for FY 2011 - 12 based on the escalation

factor of 8.67% over the approved figures for FY 2010 - 11. The Commission

appreciates the commitment of the Petitioner to keep costs under control and

accordingly approves gross A&G expenses of Rs. 15.49 Crores for FY 2011 - 12

including allocation of additional A&G expenses.

6.2.23 Petitioner has proposed capitalized of A&G expenses @ 19% of the total A&G

expenses for FY 2011 - 12. The Petitioner has failed to adhere with the

Commission direction in its last Tariff Order to submit an appropriate policy on

capitalization of A&G expenses and develop proper accounting system to capture

the same. The Petitioner has failed to adhere with the Commission’s direction in

its last Tariff Order to submit an appropriate policy on capitalization of A&G

expenses and develop proper accounting system to capture the same. In the


Page 53

absence of a capitalization policy, the Commission has considered the A&G

capitalization percentage as submitted by Petitioner for FY 2010 - 11.

6.2.24 Therefore for the purpose of this Tariff Order, the Commission has considered

the capitalization @19% of the total A&G expenses as proposed by Petitioner.

However, the Commission directs that the Petitioner should capitalise the

expenditure based on the actual expenses incurred / projected, at the time of

next ARR filing. Further Petitioner should have proper accounting system to

capture the expenses related to capital schemes rather than assuming a standard

capitalisation %age.

6.2.25 The Commission thus approves the net A&G expenses (after capitalization) as

below:


Estimated Approved



incremental GFA)

0.26 0.37






6.2.27 The commission in the last Tariff Order has approved a total R&M expenditure of

Rs 76.12 Crores for FY 2009 - 10 as against Rs 76.27 Crores projected by the

Petitioner. As per un-audited balance sheet of FY 2009 - 10 the actual

expenditure incurred by the licensees under R&M expenditure is Rs. 86.06 Crores

which is more than the amount approved by the commission. This increase is

mainly attributed to substantial increase in raw material prices for electrical

equipment and fuel cost. The Petitioner submitted that this has substantially

increased the cost burden. Petitioner further submitted that it has added a

number of transformers, cables, grid substation, etc. for which there has been an

increase in the amount of annual maintenance contracts, which has translated to

a higher R&M expenses in the ensuing year. Further Petitioner has initiated


Page 54

proactive preventive maintenance and capital expenditure to improve the quality

of supply and reduction in number of overloaded transformer etc.

6.2.28 In the ARR for FY 2011 - 12, Petitioner has assumed same methodology as

approved in last Tariff Order. Therefore R&M expenses have been projected from

expenses of FY 2010 - 11 and have been increased with Escalation index to offset

impact of inflation. The amount so estimated has been spread out proportionally

among the sub-accounts. Further an additional incremental expenses of 2.5% of

GFA addition during the previous year has also been added.




6.2.30 The Commission has approved the R&M expenses for FY 2011 - 12 after

considering escalation factor on approved expenses of previous year and an

additional incremental expense of 2.5% of GFA addition during the previous year.

6.2.31 The R&M expenses claimed by the Petitioner as against the approved figures are

highlighted in the table below:


Estimated Approved


Building 5.65 4.60





Vehicles 0.01 0.01






of the GFA)

1.48 2.22

Total 113.24 93.18





Page 55



The opening GFA and CWIP for FY 2011 - 12 have been taken as per the closing

figures provisional annual accounts of FY 2010 – 11.

25% the opening CWIP and 25% of investment made during the year, expenses

capitalised & interest capitalised (25% of total investment) has been assumed to

get capitalised during the year.

Investment through “deposit work “has not been taken for capital formation as

per policy adopted by commission in its last tariff Order. Thus investments shown

in capital formation table below don’t include work funded through deposit

work.


proposed funding of each component of the investment plan.

TRANSCO INVESTMENT PLAN: (RS. CRORES)




capitalised.




6.3.4 The Commission has considered the opening balance of GFA as per the closing

balance from the provisional balance sheet for FY 2010 - 11.


Page 56

6.3.5 The Commission has considered the capital investments as submitted by the

Petitioner for FY 2011 - 12. Further the Commission also observes that the

Petitioner has not provided any reasonable basis for consideration of the

expenses capitalised and the interest capitalised. Therefore, the Commission for

the purpose of this order has considered the expenses capitalised as approved in

the previous section. The interest capitalization has been considered as per the

Petitioner’s submission. Commission observes a lot of anomalies in computation

of interest capitalization hence the variation in GFA between the Commission

approved figures and the actual figures for FY 2011 - 12 will be subject to true-up

once audited accounts are finalized and submitted for the analysis of the

Commission. Accordingly, the details of approved Capitalisation and Work-in-

progress for FY 2011 - 12 are provided in the table below:


Estimated Approved


Investments B 1,363.00 1,363.00




long term loans

E 84.94 84.94


Transferred to GFA (Total Capitalisation) G=F*25% 986.02 941.92

Closing WIP H= F-G 2,958.05 2,825.77





methodology for the computation of depreciation. The Regulation also specifies









Page 57

In last Tariff Order Commission had assessed weighted average

depreciation rate of 3.08%, so in this petition Petitioner has also used

same rate for depreciation.



Opening GFA for FY 2011 - 12 has been taken from closing figures as

claimed in the previous section. Hence based on the same and using

above specified weight average depreciation rate of 3.08%, the Petitioner

has calculated depreciation for FY 2011 - 12.




6.4.3 On account of the reasons highlighted in Section 5.4, the Commission while

approving the depreciation expenses for FY 2011 - 12 has considered the average

depreciation rate as claimed by the Petitioner.

6.4.4 The Commission approves the depreciation expenses on the GFA as computed

below:


Estimated Approved



Addition to GFA during the year 986.02 941.92







6.4.5 The Commission had directed UPPTCL to ensure that proper and detailed Fixed

Assets Registers at the field offices. The UPPTCL in response has intimated that

necessary instructions have been issued to the field offices with regards to

maintaining the Fixed Assets Register and the work is in progress.


Page 58

6.4.6 Hence, in this regard the Commission reiterates its direction to the UPPTCL to

ensure that they maintain proper and detailed fixed assets registers to work out

the depreciation expense as specified in the Transmission Tariff Regulations.








for projects approved and undertaken in accordance with the guidelines

contained in Para 3.7 of these regulations. Accordingly Petitioner has computed

interest and financing costs in the FY 2011 - 12 petition based on the current

schedule of long-term debt, repayments and new debt requirements for new

project to be executed.




6.5.4 The Petitioner has submitted the provisional accounts for FY 2010 - 11 along with

the transmission tariff formats during the petition filed for FY 2012 - 13.




70:30 has been considered by UPPTCL on proposed investments as per

Transmission Tariff Regulations.






Page 59


truing up.


debt as below:



Old Loans

GoUP 14.96

NCR 1.74

PFC 93.39

REC Loans 77.87

HUDCO 4.76

New Loans 101.96

Total 294.67


6.5.10 The Transmission Tariff Regulation provides for normative interest on working

Capital based on the methodology outlined in the Regulations. The Petitioner is


the Regulations.


calculating working capital







6.5.12 In accordance with the Transmission Tariff Regulation the interest on the working

capital requirement would be the Bank rate as specified by the Reserve Bank of

India as on 1st April of the relevant year plus a margin as decided by the





Page 60


Regulations.

6.5.13 The Commission has in accordance with the above mentioned Transmission Tariff

regulation has considered the interest on working capital which is shown in the

table below:


Estimated Approved

O&M Expenses

Employee Expenses 404.09 390.16

R&M Expenses 113.24 93.18

A&G Expenses 16.00 15.49

Total O&M Expenses 533.34 498.83

One Months O&M Expenses 44.76 41.57

Book Value of Stores 363.47 363.47




9.47 30.29



190.29 181.72

Total Working Capital Requirement 244.52 253.58

Interest rate 12.50% 12.50%

Interest on working capital 30.56 31.70


6.6 OTHER INCOME:





6.6.2 The Petitioner has estimated the non-tariff income as Rs. 29.62 Crores and the

same is approved by the Commission. Any variation would be taken up at the

time of true-up.






Page 61



shall be considered for determination of tariff. In this petition return on equity

has been computed as per methodology adopted by Hon’ble Commission in the

last Tariff Order.




the financial year 2011 - 12. ROE is calculated on the equity inflow from GOUP up


year.



regulatory approved in the previous section.

6.7.4 In absence of any substantial and verifiable information, the Commission has

allowed RoE @2% for FY 2011 - 12 as below:


Estimated Approved


Assets Capitalised 986.02 941.92








In the preceding sections, the Commission has detailed the expenses under





Page 62


Estimated Approved



R&M expenses 113.24 93.18

Interest on Loan Capital 378.93 294.67

Interest on Working Capital 30.56 31.70


Gross Expenditure 1,292.44 1,173.66




Net Expenditure 1,116.06 1,085.40

Provision for Bad & Doubtful debts - -

Debits, write-offs & other expenses - -

Net Expenditure with provisions 1,116.06 1,085.40

Add: Reasonable Return / Return on Equity 55.32 49.67


Annual Revenue Requirement (ARR) 1,141.76 1,105.45



Page 63


7.1 ESCALATION INDEX / INFLATION RATE


7.1.1 The Petitioner has computed the Escalation Index/Inflation Rate for FY 2012 - 13

as per the formula:


Accordingly, the Petitioner has computed 9.85% as escalation index in the FY

2012 - 13 petition.

























Page 64








7.1.3 The Commission in accordance with the above stated Regulation has calculated




of Labour respectively. The Commission has used the inflation index of actuals

available for previous year for approval of O&M expenses of FY 2012 - 13 at

8.67%. The computation of inflation index is given in the table below:


2010-11 2011-12 2010-11 2011-12

April 138.60 152.10 170.00 186.00

May 139.10 152.40 172.00 187.00

June 139.80 153.10 174.00 189.00

July 141.00 154.20 178.00 193.00

August 141.10 154.90 178.00 194.00

September 142.00 156.20 179.00 197.00

October 142.90 157.00 181.00 198.00

November 143.80 156.90 182.00 199.00

December 146.00 156.90 185.00 202.28

January 148.00 157.70 188.00 198.00

February 148.10 158.40 185.00 199.00

March 149.50 159.80 185.00 201.00





171.59

8.67%



157.90



7.2.1 Operation & maintenance expense comprises Employee costs, Administrative &

General Expenses and Repair & Maintenance expenses. The regulation 4.2 of the

Transmission Tariff Regulation issued by the Commission stipulates:


Page 65

The O&M expenses for the base year shall be calculated on the basis of




























regulations.


methodology below.

7.2.4 O&M Expenses on Addition to Assets during the Year

7.2.5 In addition to the Employee cost, A&G cost and R&M expenses described in the

succeeding section, Regulation provide for incremental O&M expenses on


Page 66

addition to assets during the year. Regulation stipulates that “Incremental O&M

expenses for the ensuing financial year shall be 2.5% of capital addition during

the current year. O&M charges for the ensuing financial year shall be sum of

incremental O&M expenses so worked out and O&M charges of current year

escalated on the basis of predetermined indices as indicated in regulation 4.3

(1).”

7.2.6 Accordingly based on above the incremental O&M has been worked out by the



gross O&M expenses excluding the incremental O&M charges and 6th Pay

Commission installment arrears.

7.2.7 In the petition for FY 2012 - 13 filed, UPPTCL claimed Rs. 24.65 Crores as

incremental O&M expenses.


7.2.8 The Regulation 4.2 sub-section 3 of the Transmission Tariff Regulations provides

for consideration of the additional O&M expenses at 2.5% on additions to assets

during the previous year.

7.2.9 Based on the above, the Commission has approved incremental O&M expenses

for FY 2012 - 13 at Rs. 23.55 crores. The same are allocated across the individual

elements of the O&M expenses on the basis of the contribution of each element

in the gross O&M expenses which is being approved in subsequent paragraphs.







c) A&G expenses 0.88

7.2.10 Employee Costs:



Page 67

7.2.11 The projection of employee costs involves a detailed examination of the various

components of salary such as basic pay and dearness allowance for the various

grades of employees. Petitioner has projected employee cost for FY 2012 - 13

based on un-audited data of FY 2010 - 11 and data available to date.

7.2.12 As mentioned above evolution of sub account of employee cost has been

forecasted from base figure of FY 2010 - 11 balance sheet and actual figure

available till date. While projecting the expenses for ensuing years, Petitioner has

endeavoured to control the employee expenses but cost has increased due to

impact of implementation time scale and arrear of pay commission which is

totally beyond the control of the Petitioner. Various sub account were estimated

by the Petitioner as follows:

Basic salary: The Petitioner projected the expenses for FY 2012 - 13 by considering escalation factor (inflation index) on FY 2011 - 12 estimated figures.

Dearness Allowance (DA): The Petitioner projected the expenses for FY 2012 - 13 by considering escalation factor on FY 2011 - 12 figures.

Other allowance: Other allowance for FY 2012 - 13 has also been forecasted by considering escalation factor on FY 2011 - 12 figures.

Likewise, Medical Reimbursement, LTA, Earn leave encashment, staff welfare expenses and other terminal benefit have been forecast to increase by inflation index per year from FY 2011 - 12.

Pension and Gratuity: Pension and Gratuity have been calculated at 16.7% and 2.38% (i.e., 19.08%) of Basic Salary and Dearness Allowance.

Capitalisation of Expenses: Employee Expenses Capitalized has been taken 22% as per audited balance sheet of FY 2007 - 08.

An additional incremental expenses of 2.5% of GFA addition during the previous year has also been added.


7.2.13 As discussed in the preceding sections the Commission is treating employee

expenses for FY 2012 - 13 in a different manner to factor-in the

recommendations of the 6th Pay Commission. The Commission approves to

escalate employee expenses of FY 2011 - 12 at the escalation factor of 8.67% for

FY 2012 - 13.

7.2.14 An additional incremental expenses of 2.5% of GFA addition during the previous



Page 68

7.2.15 The employee expenses claimed by the Petitioner as per the revised estimates as



Projected Approved
















incremental GFA)

18.5 17.3







7.2.17 These expenses are incurred by the Petitioner for meeting day-to-day expenses

related to the administration of its offices, insurance, communication,

professional charges, audit fees, advertisement expenses & freight etc. All these

expenses are directly affected by inflation. A&G expenses were projected by the

Petitioner in the petition filed for FY 2012 - 13 considering the impact of inflation

and need for addition of more substation and offices.

7.2.18 The A&G projections for FY 2012 - 13 as submitted by UPPTCL are given below:


Page 69


7.2.19 UPPTCL has mentioned that A&G expenses are for meeting the day-to-day

expenses relating to the administration of its offices, insurance, communication,

professional charges, audit fees, advertisement expenses, freight etc. and are

directly linked with inflation indices. The UPPTCL has cited lower A&G expenses

owing to variation in actual capital investments made in past years.

7.2.20 The Commission has approved the A&G expenses for FY 2009 - 10 based on the

escalation factor of 8.74% (inflation index) over provisional figures of Rs. 15.22

Crores for FY 2008 - 09. Keeping the same methodology for FY 2012 - 13, the

Commission is considering escalation factor of 8.63% over the approved A&G

expenses for FY 2011 - 12.

7.2.21 For the purposes of this Tariff Order, capitalization @19% of the total A&G

expenses as proposed by UPPTCL has been accepted by the Commission.

However, the Commission directs that UPPTCL should capitalise the expenditure

based on the actual expenses incurred / projected, at the time of next ARR filing.

Further UPPTCL should have proper accounting system to capture the expenses

related to capital schemes rather than assuming a standard capitalisation %age.

7.2.22 The Commission thus approves the net A&G expenses (after capitalization) as

below:


Page 70


Projected Approved



incremental GFA)

0.91 0.88






7.2.24 In the ARR for FY 2012 - 13, Petitioner has assumed same methodology as

approved in last Tariff Order. Therefore R&M expenses have been projected from

expenses of FY 2011 - 12 and have been increased with Escalation index to offset

impact of inflation. The amount so estimated has been spread out proportionally

among the sub-accounts. Further an additional incremental expenses of 2.5% of

GFA addition during the previous year has also been added.


7.2.25 The Commission has approved the R&M expenses for FY 2012 - 13 after

considering escalation factor on approved expenses for FY 2011 - 12 and an

additional incremental expense of 2.5% of GFA addition during the previous year.

7.2.26 The R&M expenses claimed by the Petitioner as against the approved figures are

highlighted in the table below:


Page 71


Projected Approved


Building 6.21 5.00





Vehicles 0.01 0.01






of the GFA)

5.20 5.32

Total 127.97 104.18






The opening GFA and CWIP for FY 2012 - 13 have been taken as per the closing figures claimed in FY 2011 - 12 estimates.

25% the opening CWIP and 25% of investment made during the year, expenses capitalised & interest capitalised (25% of total investment) has been assumed to get capitalised during the year.

Investment through “deposit work “has not been taken for capital formation as per policy adopted by commission in its last tariff Order. Thus investments shown in capital formation table below don’t include work funded through deposit work.


proposed funding of each component of the investment plan:


Page 72

Transco Investment Plan: (Rs. Crores)




capitalised.


7.3.3 The Commission has considered the opening balance of GFA as per the closing

balance approved for FY 2011 - 12.

7.3.4 The Commission has considered the capital investments as submitted by the

Petitioner for FY 2012 - 13. Further the Commission also observes that the

Petitioner has not provided any substantial basis for consideration of the

expenses capitalised and the interest capitalised. Therefore the Commission for

the purpose of this order has considered the expenses capitalised as approved in

the previous section. The interest capitalization has been considered as per the

Petitioner’s Submission. The Commission observes a lot of anomalies in

computation of interest capitalization hence the variation in GFA between the

Commission approved figures and the actual figures for FY 2012 - 13 will be

subject to true-up once audited accounts are finalized and submitted for the

analysis of the Commission. Accordingly, the details of approved Capitalisation

and Work-in-progress for FY 2012 - 13 are provided in the table below:


Page 73


Projected Approved


Investments B 1,549.95 1,549.95




long term loans

E 98.96 98.96


Transferred to GFA (Total Capitalisation) G=F*25% 1,177.59 1,093.93

Closing WIP H= F-G 3,532.72 3,281.79





methodology for the computation of depreciation. The regulation also specifies








In the petition, the Petitioner had assessed weighted average

depreciation rate of 4.50% for FY 2012 - 13.



Opening GFA for FY 2012 - 13 has been taken from closing figures as

claimed in the previous section. Hence based on the same and using

above specified weight average depreciation rate of 4.50%, the Petitioner

has calculated depreciation for FY 2012 - 13.


7.4.2 On account of the reasons highlighted in Section 5.4, the Commission while

approving the depreciation expenses for FY 2012 - 13 has considered the average

depreciation rate as claimed by the Petitioner.


Page 74

7.4.3 The Commission approves the depreciation expenses on the GFA as computed

below:


Projected Approved



Addition to GFA during the year 1,177.59 1,093.93







7.4.4 The Commission had directed UPPTCL to ensure that proper and detailed Fixed

Assets Registers are maintained at the field offices. The UPPTCL in response has

intimated that necessary instructions have been issued to the field offices with

regards to maintaining the Fixed Assets Register and the work is in progress.

7.4.5 Hence, in this regard the Commission reiterates its direction to the UPPTCL to

ensure that they maintain proper and detailed fixed assets registers to work out

the depreciation expense as specified in the Transmission Tariff Regulations.








for projects approved and undertaken in accordance with the provisions of Para

3.7 of these Regulations. Accordingly, the Petitioner has computed interest and

financing costs in the FY 2012 - 13 petition based on the current schedule of

long-term debt, repayments and new debt requirements for new project to be

executed.


Page 75





70:30 has been considered by UPPTCL on proposed investments as per

Transmission Tariff Regulations.






truing up.


debt as below:



Old Loans

GoUP 14.96

NCR 1.02

PFC 90.87

REC Loans 100.98

HUDCO 0.00

New Loans 126.25

Total 334.07


7.5.8 The Transmission tariff regulation provides for normative interest on working

Capital based on the methodology outlined in the regulations. The Petitioner is


the regulations.


calculating working capital




Page 76





7.5.10 In accordance with the Transmission Tariff Regulation, the interest on the

working capital requirement would be the Bank rate as specified by the Reserve

Bank of India as on 1st April of the relevant year plus a margin as decided by the





Regulations.

7.5.11 The Commission has, in accordance with the above mentioned Transmission

Tariff Regulation, considered the interest on working capital which is shown in

the table below:


Projected Approved

O&M Expenses

Employee Expenses 456.64 433.44

R&M Expenses 127.97 104.18

A&G Expenses 22.42 17.20

Total O&M Expenses 607.03 554.81

One Months O&M Expenses 50.59 46.23

Book Value of Stores 129.17 129.17




10.76 10.76



216.46 204.06

Total Working Capital Requirement 277.81 261.06

Interest rate 12.50% 12.50%

Interest on working capital 34.73 32.63


7.6 OTHER INCOME:






Page 77

7.6.2 The Petitioner has projected the non-tariff income as Rs. 32.53 Crores and the

same is approved by the Commission. Any variation would be taken up at the

time of true-up.







shall be considered for determination of tariff. In the petition, return on equity

has been computed as per methodology adopted by Hon’ble Commission in last

Tariff Order.




the financial year 2012 - 13. ROE is calculated on the equity inflow from GoUP up


year.



regulatory approved in the previous section.

7.7.4 In absence of any substantial and verifiable information, the Commission has

allowed RoE @2% for FY 2012 - 13 as below:


Projected Approved


Assets Capitalised 1,177.59 1,093.93








Page 78


7.8.1 In the preceding sections, the Commission has detailed the expenses under





Projected Approved



R&M expenses 127.97 104.18

Interest on Loan Capital 435.49 334.07

Interest on Working Capital 34.73 32.63


Gross Expenditure 1,471.78 1,316.21




Net Expenditure 1,269.47 1,218.13

Provision for Bad & Doubtful debts - -

Debits, write-offs & other expenses - -

Net Expenditure with provisions 1,269.47 1,218.13

Add: Reasonable Return / Return on Equity 61.81 55.78


Annual Revenue Requirement (ARR) 1,298.75 1,241.38



Page 79

7.9 SLDC CHARGES:

7.9.1 Load Despatch Centres have been termed as apex bodies in the

electricity industry. They need true independence not only in financial terms but

also in decision making. The Ministry of Power, Government of India had also

constituted a Committee on “Manpower Certification and Incentives for System

Operation and Ring Fencing Load Despatch Centres” to ensure functional

autonomy for Load Despatch Centres. The Committee in its report dated 11th

August, 2008 observed that functional autonomy would mean taking decisions

without being adversely influenced by extraneous issues originating from the

Company Management or any of the market players, which can be ensured

through:

Independent governance structure;

Separate accounting;

Adequate number of skilled manpower having high ethical standards and driven by altruistic values;

Adequate logistics / infrastructure.

7.9.2 For implementation of the above recommendations, the Commission has

decided to determine the SLDC Charges which shall be payable by UPPTCL and

which will be recovered through transmission tariff as per the Clause 8 (2) of the

SLDC Regulations.

7.9.3 UPPTCL has also provided separate cost estimates for its SLDC Charges in the

filings for FY 2010 - 11, FY 2011 - 12 and FY 2012 - 13

7.9.4 However, these costs are already embedded in the transmission ARR submitted

by the TRANSCO. The Commission hereby redirects the TRANSCO / SLDC, that the

ARR and budget for SLDC should be submitted separately along with the ARR

submission of TRANSCO at time of next filing. The costs have to be separately

identified and not embedded in the TRANSCO ARR.

7.9.5 The estimated costs of running UPPTCL central load despatch centre in Lucknow

and four regional load despatch centres at Panki, Sahupuri, Modipuram and

Moradabad which are owned and operated by UPPTCL are provided in the below

along with the Commission’s approved values for FY 2010 - 11, FY 2011 - 12 and

FY 2012 - 13. The Commission has decided to approve all the expenses as given in

the SLDC’s ARR since SLDC is yet to be separated from UPPTCL there is no basis


Page 80

to actually determine the SLDC’s ARR. However, any difference between actual

and approved figures could be adjusted at the time of true-up of the given

financial years.

Table 7-12: APPROVED SLDC CHARGES (RS. CRORES)

Petition Approved Petition Approved Petition Approved

Employee cost 7.19 7.19 7.89 7.89 8.92 8.92

A&G expenses 0.61 0.61 0.68 0.68 0.75 0.75

R&M expenses 0.14 0.14 0.15 0.15 0.20 0.20

Depreciation 3.86 3.86 6.77 6.77 7.73 7.73

Interest & Finance charges 5.00 5.00 6.35 6.35 7.27 7.27

Less: Other Income 0.53 0.53 0.58 0.58 0.64 0.64

Add: Reasonable Return 1.43 1.43 1.08 1.08 1.21 1.21

Annual Revenue Requirement (ARR) 17.70 17.70 22.34 22.34 25.43 25.43

ParticularsFY 2010-11 FY 2011-12 FY 2012-13

7.9.6 These approved values have been already included in Approved UPPTCL ARR as

shown in previous tables.

7.9.7 Based on the above ARR and as per the Clause 9 (2) of the SLDC Regulations, the

monthly SLDC charges payable by UPPTCL is given below:

Table 7-13: APPROVED SLDC CHARGES PAYABLE BY UPPTCL

Particulars FY 2010-11 FY 2011-12 FY 2012-13

Approved ARR for SLDC (Rs. Cr.) 17.70 22.34 25.43

Monthly charges to be paid by UPPTCL (Rs./kWh) 1.48 1.86 2.12 7.9.8 These charges shall be paid by the UPPTCL to the SLDC on monthly basis.

7.10 TRANSMISSION CHARGES:

7.10.1 The Transmission Tariff Regulations provide for capacity (MW) based

transmission charges. But there are still numerous issues involved in the

determination of the MW based transmission tariff like allocation of transmission

capacity to the existing long term transmission system users, allocation of the

existing PPAs etc.

7.10.2 Presently, the State Discoms have not been allotted transmission capacity as

such, henceforth the Transmission tariff has been calculated by the Petitioner on


Page 81

the basis of numbers of units wheeled by the transmission licensee for

distribution licensees.

7.10.3 The Petitioner has computed the transmission tariff applicable for the FY 2010 -

11, FY 2011 - 12 and FY 2012 - 13 based on the above methodology. The

Commission in its analysis approves similar methodology since the allocation of

transmission capacity to the long term transmission system users is not available

currently. Accordingly, the Commission highlights below the analysis of

transmission tariffs for the respective years as against the Petitioner’s

Submissions.

Table 7-14: ANALYSIS OF TRANSMISSION TARIFFS

Petition Commission Petition Commission Petition Commission

Aggregate Revenue Requirement (Rs. Cr.) 894.08 914.18 1,141.76 1,105.45 1,298.75 1,241.38

Energy delivered to DISCOMs (MUs) 61,814 62,062 70,070 69,648 79,043 70,495

Transmission charges (Rs. /kWh) 0.145 0.147 0.163 0.159 0.164 0.176

ParticularsFY 2010-11 FY 2011-12 FY 2012-13

7.10.4 Since the FY 2010 - 11 and FY 2011 - 12 has already lapsed, the transmission

charges for the FY 2010 - 11 and FY 2011 - 12 have been recovered by the

licensee based on the previous Tariff Order. Henceforth, the Commission do not

find any rationale for implementation of the above tariffs in the lapsed years. The

transmission tariffs determined above are only for the sake of analysis.

7.10.5 The Commission has approved the Transmission Tariff for FY 2012 - 13 based on

the revenue gaps determined for FY 2010 - 11 & FY 2011 - 12 and the approved

ARR for FY 2012 - 13. Any differences in the ARR and revenue gap for previous

years would be subject to true up.

7.10.6 Thus, the Transmission Charges payable by all the distribution licensees in the

state are as given in the table below:

Table 7-15 APPROVED TRANSMISSION CHARGES FOR FY 2012 - 13

Particulars Approved

Revenue Gap for FY 2010-11 (Rs. Crores) 83.49

Revenue Gap for FY 2011-12 (Rs. Crores) (97.71)

ARR for FY 2012-13 (Rs. Crores) 1,241.38

Total (Rs. Crores) 1,227.16

Energy delivered to DISCOMs (MUs) 70,495

Transmission charges (Rs. /kWh) 0.174


Page 82

7.10.7 The revenue gap for FY 2010 - 11 has been computed after considering the

revenue as per provisional accounts for FY 2010 - 11.

7.10.8 The revenue gap for FY 2011 - 12 has been computed after considering the

transmission charges approved for the DISCOMs in the previous Tariff Order.

7.10.9 The Commission thus approves a transmission tariff of Rs. 0.174 /kWh for FY

2012 - 13.

7.10.10 The transmission charges as determined are payable by all distribution

licensees of the State.

7.11 OPEN ACCESS: TRANSMISSION CHARGES:

7.11.1 The Commission has computed the transmission charges for respective years at

Para 7.10.3 of this order for use of the UPPTCL network for transmission of

power.

7.11.2 The Commission in its previous order had impressed upon the Petitioner to

submit the details in support of the voltage wise losses claimed. However the

Petitioner had not submitted any supporting study to justify the voltage wise

losses. The present petition of UPPTCL is also void of any supporting information

/ study with regard to the voltage wise losses considered.

7.11.3 The Commission in its previous order had considered the interim allocation of

cost at various voltage levels and approved the Transmission charges payable by

the Open Access consumers. In absence of any study and details of voltage wise

losses the Commission is constrained to adopt a normative approach for the

determination of Open Access charges at different voltage levels. Therefore, the

Commission has adopted the same approach as considered in its last order for

approval of transmission charges at different voltage levels.

7.11.4 Accordingly, the transmission charges for long term consumers connected at 132

kV voltage level are assumed to be same as computed in section 7.10.3 of this

order. The transmission charges for open access consumers connected at voltage

levels above 132 kV are assumed to be at 75% of the charges specified for

consumers connected at 132 kV voltage level. The short term open access


Page 83

charges shall remain same as approved in the previous Tariff Order dated 31st

March 2010. The transmission open access charges approved are given in the

table below:

Table 7-16: APPROVED VOLTAGE LEVEL TRANSMISSION OA CHARGES – LONG TERM (RS./KWH)

FY 2010-11 FY 2011-12 FY 2012-13

Long Term Long Term Long Term

Connected at 132 kV Voltage Level 0.147 0.159 0.176

Connected above 132 kV Voltage Level 0.110 0.119 0.132

Particulars

7.11.5 The Commission has retained the short term open access charges as approved in

the previous order. The approved short term open access charges are given in

the table below:

Table 7-17: APPROVED VOLTAGE LEVEL TRANSMISSION OA CHARGES – SHORT TERM (RS./KWh)

FY 2010-11 FY 2011-12 FY 2012-13

Short Term Short Term Short Term

Connected at 132 kV Voltage Level 0.05 0.05 0.05

Connected above 132 kV Voltage Level 0.04 0.04 0.04

Particulars

7.11.6 In addition to the above charges the open access consumer would also be liable

to bear the transmission losses in kind. In the absence of authenticated voltage

level loss data, the Commission has ruled that the transmission losses for FY 2012

- 13 would be 3.63% as approved at Table 4-2: APPROVED TRANSMISSION

LOSSES FOR FY 2010 - 11, FY 2011 - 12 & FY 20Table 4-2 of this order, irrespective

of the voltage levels at which the consumers are connected to the grid.

7.11.7 The Open Access charges and the losses to be borne by the open access

consumers may be reviewed by the Commission on the submission of the

relevant information by the Petitioner.


Page 84

Chapter 8. DIRECTIVES

8.1.1 The Commission had issued several directives to UPPTCL / SLDC in the previous

Tariff Order. This chapter deliberates upon the status of compliance of those

directives. The Petitioner, in the ARR and Tariff petition for FY 2010 - 11 & FY

2011 - 12, provided the status on compliance of the directives. In the ARR and

Tariff petition for FY 2012 - 13, the Petitioner did not provide any updated status

on compliance of the directives.

8.1.2 The Commission once again directs the UPPTCL / SLDC to comply with the

balance directives issued in the previous Tariff Order. The compliance report on

the said directives shall be submitted to the Commission within two months

from the date of issue of this Tariff Order.

8.1.3 Further, some of the directives issued by the Commission in the present Tariff

Order are in continuation or similar to the directives issued in the previous Tariff

Order. In case UPPTCL / SLDC has not complied with the same earlier, it shall be

necessary for them to provide reasons for non - compliance and further comply

with the same as per the time-lines prescribed in the present Tariff Order.

8.1.4 The directives to the Petitioner as issued under the present Tariff Order along

with the time frame for compliance are given in the table below:

TABLE 8-1: DIRECTIVES

S. No. Description of Directive for TRANSCO / SLDC Time Period for compliance from the date of issue of the Tariff Order

1 The Commission directs UPPTCL to submit details of voltage-wise losses, method of assessment adopted and supporting data / information on the same.

3 months

2 The Commission directs UPPTCL to suggest an appropriate policy on capitalization of salaries & wages.

Along with the petition for FY 2013-14

3 The Commission directs UPPTCL to submit the Fresh Actuarial Valuation Study Report in respect to employee expenses.


4 The Commission directs UPPTCL to capitalise the expenditure based on the actual A&G expenses incurred/ projected to be incurred. Further UPPTCL should have proper accounting system to capture the expenses related to capital schemes rather than



Page 85


assuming a standard capitalisation %age.

5 The Commission reiterates its direction to the UPPTCL to ensure proper maintaining of detailed fixed assets registers to work out the depreciation expense as specified in the Transmission Tariff Regulations and directs the UPPTCL to submit a report to the Commission citing clearly as to how they are maintaining fixed assets registers for the various assets.


6 The Commission directs UPPTCL to develop a system whereby the actual interest accrued/ incurred till the capital scheme is completed and put to use gets captured in separate account typically called as ‘Interest during Construction’ (IDC) rather than assuming a standard capitalisation % age.


7 The Commission hereby redirects the UPPTCL / SLDC that the ARR / budget for SLDC should be submitted separately along with the ARR submission of TRANSCO. The costs have to be separately identified and not embedded in the TRANSCO ARR.


8 The Commission directs UPPTCL to submit the detailed billing procedure of transmission charges for approval of the same.

1 month

9 The Commission directs UPPTCL to initiate the process of signing of BPTA with distribution licensees who are the existing long-term customers and submit the status on execution of BPTA of the same.

3 months

10 The Commission directs the SLDC to submit the status of compliance on scheduling, energy accounting, balancing and settlement of Open Access Transactions.

1 month

11 The Hon’ble Central Electricity Regulatory Commission as a first step towards inclusion of non-ISTS lines in the Point of Connection (PoC) transmission charges, has vide Order dated 14.03.2012 in Petition No.15/Suo-moto/2012 proposed to include the transmission lines connecting two States for computation of PoC transmission charges and losses. However, for the disbursement of transmission charges, tariff for

Immediately


Page 86


such assets needs to be approved by the Hon’ble CERC in accordance with the provisions of the Sharing Regulations. Accordingly the CERC has directed the owners of such inter-state lines including UPPTCL to file tariff petitions for determination of ARR in accordance with the CERC (Terms and Conditions of Tariff) Regulations 2009 in respect of its inter-state transmission lines. In the order dated 14-3-2012, the CERC had directed the UPPTCL to file the ARR Petition by April 20, 2012. The Commission directs UPPTCL to submit a copy of such petition which it has filed before the CERC.

12 The Commission directs the UPPTCL to exclude the transmission charges approved by CERC towards transmission lines connecting two States from the overall transmission charges claimed in the next ARR filing for UPPTCL


13 Clause 5.3.5 of the National Electricity Policy states the following: “To facilitate orderly growth and development of the power sector and also for secure and reliable operation of the grid, adequate margins in transmission system should be created. The transmission capacity would be planned and built to cater to both the redundancy levels and margins keeping in view international standards and practices. A well planned and strong transmission system will ensure not only optimal utilization of transmission capacities but also of generation facilities and would facilitate achieving ultimate objective of cost effective delivery of power. To facilitate cost effective transmission of power across the region, a national transmission tariff framework needs to be implemented by CERC. The tariff mechanism would be sensitive to distance, direction and related to quantum of flow. As far as possible, consistency needs to be maintained in transmission pricing framework in inter-State and intra-State systems. Further it should be ensured that the present network deficiencies do not result in unreasonable transmission loss compensation requirements.” In exercise of the powers conferred under section 178 read with Part V of the Electricity Act, 2003 (36 of 2003), and in line with the above provision of the

Six Month


Page 87


National Electricity Policy, the Central Electricity Regulatory Commission notified the regulations i.e. CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010 on 15th June 2010 which came into effect from 1.7.2011. Further, the Clause 7.1 (7) of the National Tariff Policy states the following: “After the implementation of the proposed framework for the inter-State transmission, a similar approach should be implemented by SERCs in next two years for the intra-State transmission, duly considering factors like voltage, distance, direction and quantum of flow.” The National Tariff Policy requires the states to adopt the mechanism similar to the one adopted at the Central level within two years of its implementation at the central level. Hence, the transmission pricing mechanism in line with the PoC mechanism has to be implemented at the state level by June 2013 The Commission directs the UPPTCL to submit load flow studies along with the assessment of various options with regards to transmission pricing, their relative advantages and disadvantages and suitability for adoption in Uttar Pradesh

14 The Commission directs UPPTCL to formalise the capacity of transmission system in use by long-term open access customers (distribution licensees or generating companies) in accordance with the principle laid down under Regulation 3.11 of Transmission Tariff Regulations and based on existing PPAs / MoU’s signed by them for purchase or sale of electricity.

Immediate

15 The Commission directs UPPTCL to create database for implementation of open access and making operational and managerial decisions by UPPTCL.

Immediate

16 The Commission directs UPPTCL to follow the procedure laid down under UPERC Open Access Regulations for grant of LTOA to the distribution licensees or generating companies or open access consumers by capturing all information for taking decision in this regard.

Immediate

17 The Commission directs UPPTCL to follow the procedure laid down under UPERC Connectivity

Immediate


Page 88


Regulations for grant of connectivity to the generating companies or distribution licensees or captive users or open access consumers and sign connection agreements.

18 The Commission directs UPPTCL to follow the procedure laid down under UPEGC for co-ordinated planning of transmission system and submit long-term transmission plan including 12th Plan period.

Immediate

19 The Commission directs SLDC to submit organizational structure of SLDC and status of implementation of the same in view of its creation on 24th January, 2011 by a notification of State Govt.

Within one month.

20 The Commission directs SLDC to make rules and procedures for conduct of business of State Power Committee.

Within three month.

21 The Commission directs SLDC to submit status of compliance of the directions issued in Para 9 and 10 of order dated 12.09.11 passed in Petition No. 659 of 2010.

Within one days.

8.1.5 The Commission would like to mention here that the list given above may not be

exhaustive and the Petitioner is directed comply with all directives given in the

text of this Tariff Order.

Order on ARR and Tariff Petition for UPPTCL

Chapter 9. APPLICABILITY OF THE ORDER

The licensee, in accordance to Section 139 of the Uttar Pradesh Electricity Regulatory

Commission (Conduct of Business) Regulations 2004, shall arrange to get published

within one week from the date of issue of this Order, the tariffs approved herein by the

Commission. Petitioner shall ensure that the same is published in atleast two daily

newspapers (one English and one Hindi) having circulation in the area of supply. The

tariffs so published shall become the notified tariffs applicable in the area of supply and

shall be effective from 1st October, 2012 and unless amended or revoked, shall continue

to be in force till issuance of the next Tariff Order.

(Meenakshi Singh) (Shree Ram)

Member Member

Dated: 19th October, 2012

Lucknow


ANNEXURE – I

LIST OF PERSONS WHO HAVE ATTENDED PUBLIC HEARING AT 6 PLACES FOR ARR & TARIFF

DETERMINATION FOR FY 2012 - 13:

List of Persons who attended Public Hearing in Lucknow on 11 September, 2012

S.N Name Organization

1 A.K. Arora NPCL

2 B.B.Jindal Consultant

3 M.P.Sharma Pvt Business

4 Deven Kumar IIA

5 Manish Goel IIA

6 D.S.Verma IIA

7 Prashant Bhatia IIA

8 Avadesh Kumar Verma Upabhokta Parishad

9 Pradeep Kumar Misra Rolia Icecream,Purani Tikoli Lucknow

10 Mohd.Ghufran R.A.U

11 V.K.Agarwal Pvt Business

12 A.K. Singh MMVNL

13 Col. M.C Pal Veteran

14 Prof. Rakesh Goel Akhil Bharatiya Matadhikari Sangh

15 Manish Garg General Consumer

16 J.P.Arya (Advocate) Indira Nagar Adhikarata Sangh

17 R.S.Bhadawria (IFS retd) President, Janhet Manch

18 Mohd. Yonus Siddiqui Industries Welfare Association UP

19 Syed Mohd Farhat Industries Welfare Association UP

20 A.K.Kansal MVVNL

21 Dr. Satyabrat Farmer

22 Dr. Anil Chaudhary Ex-MLA (RLD)

23 S.Johari UPPCL

24 P.K.Johari SE, UPPCL

25 Brijesh Kumar Atul Advertising

26 Atul Kumar Shobha Publicity

27 V.K.Saxsena NTPC

28 N.S. Hanspal IIA

29 G.C.Chaturvedhi IIA

30 M.K.Tiwari Individual (Domestic Consumer)

31 S.P.Singh IIA


List of Persons who attended Public Hearing in Lucknow on 11 September, 2012


32 Shiv Shankar Awasthi IIA

33 Vijay Pratap UPPCL (Retd)

34 Harish Chandel CE (Retd) UPSEB/UPPCL

35 BML Garg A to Z Group

36 Dharmendra Gupta A to Z Group

37 Prashant Chaturvedhi NTPC

38 Nitishwar Kumar MD,MVVNL

39 M.C. Aggarwal SE MVVNL

40 Sunil Kumar Misra

41 M.S.Gulati Big Apple

42 M.K.Rastogi

43 V.K.S. Tewari MVVNL

44 Ravi Shrivastava MVVNL


List of Persons who attended Public Hearing in Allahabad on 23 August, 2012


1 Dr G.S. Darbari President, Eastern UP Chamber of Commerce & Industry

2 V.K.Tandon Secy. Eastern UP Chamber of Commerce & Industry

3 V.D.Singh EE UPPCL

4 Sanjay Sharma SDO UPPCL

5 O.P.Mishra SDO Civil Lines

6 Arvind Yadav SDO

7 Ashwani K R EE CBSC

8 K.N.Pandey UPPCL

9 Chandprakesh, Gangapur Parshad Gangapur ex-Parshad

10 Lal Ranvijay Gupta Hindusthan Times

11 Raj Kumar Srivastava Jan Sandesh Times

12 Ashutosh Amar Ujala

13 Arivind Singh Amar Ujala

14 A.R.Verma EE UPPCL

15 Br. R.R.Pal EE UPPCL

16 Ashish Asthana EE UPPCL

17 Er. N.K.Singh EE UPPCL

18 Sr.A.K.Dubey SE UPPCL

19 Mukesh Kumar EE UPPCL

20 B.K.Chaudhary EE UPPCL

21 A.K.Verma SE UPPCL

22 Anil Mital CE (TE) UPPCL

23 S.Agrawal SE UPPCL

24 Mohd. Ghufran SE UPPCL

25 M.L.Sharma CE

26 C.B.S. Rathore CE Retd

27 Durgaprasad Farmer

28 Vinod

29 Ajay Kumar

30 Sudeep Kumar Mishra General Consumer

31 Vikas Kapoor EE,UPPCL

32 Jeevan Prakash EE EDD

33 A.S.Raghuvansy EE EUDD

34 L.K.Projapati JE - Civil

35 A.K.Singh

36 Dr. L.Singh


List of Persons who attended Public Hearing in Allahabad on 23 August, 2012


37 Pankaj Sadhana News

38 Rohit Srivastava Shri News

39 Rakesh Das

40 Rajesh Kumar

41 G.P.Verma


List of Persons who attended Public Hearing in Noida on 18 August, 2012


1 M.K.Jain M/s Bhushan Sheet Ltd

2 R.R.Puri Ghaziabad Industrial Association

3 R.K.Jain Western UP Chamber of Commerce & Industry

4 S.P.Chauhan SBP. Industrial Association

5 Anil Gupta Industrial Area MFRS Association

6 S.K.Maheshwari Sr. Vice President Industries Federation

7 Arun Sharma President Industries Federation

8 Vijay Narain Gupta Ghaziabad Industrial Association

9 Alok Gupta Noida Enterprises Association

10 Kamal Kumar Noida Enterprises Association

11 Pradeep Mehta Noida Enterprises Association

12 Vipin Malhan Noida Enterprises Association

13 Harish Taneja Noida Enterprises Association

14 Amarjeet Noida Enterprises Association

15 V.K.Seth Priya Plastics

16 S.C.Jain R.J.Enterprises

17 Dharamveer Sharma N.E.A

18 Sushil Agarwal FONRWA

19 N.P.Supti FONRWA

20 A.N.Dhawan FONRWA

21 C.L.Dhir Industries Forum Ghaziabad

22 R.K.Suri

23 Rahesh Gupta PEPL

24 Rajeev Bansal PEPL

25 D.C.Verma UPPCL

26 V.K.Singh UPPCL

27 Pratap Bhan UPPCL

28 Rajnish Kumar Shri Ram Pistong & Rugs Ltd

29 Yogesh Goel UP Steel

30 R.C.Mishra UP Steel

31 Ashok Aggarwal Baishano Steel Pvt, Muzzafurnagar

32 Sudhir Goyal IIA, Muzzafurnagar

33 Rama Shankar Awasthi General Consumer

34 S.C.Jain Wazi Industries, Muzzafarnagar

35 Kamalsheel Maheshwari Shri Rathi Steel Ltd

36 P.K.Goel SE PVVNL


List of Persons who attended Public Hearing in Noida on 18 August, 2012


37 R.P.Singh CE PVVNL

38 S.K.Gupta SE PVVNL

39 Rajesh Sharma SDO III, Nioda

40 S.M.Singh Vice President, Rajya Vidhut Prishad J.E's Santhan

41 R.K.Bhatia Jr. Engg Noida

42 A.Rajesh UPPCL

43 M.K.Pallak UPPCL

44 Rajesh Kumar UPPCL

45 Ranjeet Singh Yadav UPPCL

46 K K Teofia UPPCL

47 A.P.Singh UPPCL

48 Anshul Agarwala UPPCL

49 P.K.Metha UPPCL

50 A.K.Singh UPPCL

51 D.K.Jain UPPCL

52 Sahil Yadav UPPCL

53 J.S.Yadav UPPCL

54 C.L.Gupta UPPCL


List of Persons who attended Public Hearing in Greater Noida on 18 August, 2012


1 Dharmveer Singh Kanpur

2 Rama Shankar Awasthi Lucknow

3 Vikram Singh Alpha II

4 Bhimraj Kanpur

5 Mahavir Kanpur

6 P.K.Tiwari IIA, Greater Noida

7 Ajay Bhati Pradhan Bisrahka

8 Naveen Janpath

9 Manoj Bhatt Bisrahka

10 Subhash Bhati Janpath

11 Mahesh Tygi IIA, Greater Noida

12 S.P. Shan IIA, Greater Noida

13 Dalip Singh Association of Energy Engineering, Delhi NCR

14 Azad Kumar

15 Sunrendra Ram Natioanl Duniya


List of Persons who attended Public Hearing in Kanpur on 25 August, 2012



2 Atul Seth PIA

3 J.P.Gupta PIA

4 Mohd.Ghufrani R.A.U

5 P.K.Johari SE, UPPCL

6 Bhushan Rastogi Consultant KESCO

7 Pankaj S Dy. CEO KESCO

8 Rajesh Grover Gen.Sec IIA

9 Manmohan Rajpal Div. Chairman IIA

10 G.R.Ambwani Advisory - IIA

11 Sheshnarayan Triwedi President Kapada Committee.

12 V.P.Handgil IIA

13 Gurdeep Singh IIA

14 A.S.Kotwal Secy. Coop Estate DADA Nagr

15 Brijendrakumar KESCO

16 Suresh Chandra Guha PIA

17 Arun RR Jain Coop Estate DADA Nagar

18 A.A.Khan CE (RAU) UPPCL

19 S.K.Verma SE, KESCO

20 Sushil Garg EE, KESCO

21 Jai Prakash Aggarwal President, Laghu Udyog Bharati

22 Subodh Pramodaka UP Industrial Estate Manufacturers Association

23 Ladli Prasad Laghu Udyog Bharati

24 Hardeep Singh Rakhra IIA

25 Rohit Baijpuria IIA

26 A.K.S Chaudhari KESCO

27 Mahesh Medhani

28 Vijay Udasi S B Pri P.Rd. U.M

29 Anurag Mishra Dinik Jagaran

30 Poroshatam Triwedi Hindusthan Times

31 Shubham E.TV News (UP)

32 Abhishek

33 Mr. Ravindra Kumar CE - KESCO

34 Mr. R.S. Pandey Managing Director, KESCO

35 OmPrakash KESCO


List of Persons who attended Public Hearing in Agra on 16 August, 2012


1 Chaudhari Buddha Singh Pradhan, Bharati Kisan Union, Mathura

2 Rahguveer Prasad Pachori Farmer

3 Bhishampal Singh Landlord, Farmer


5 Pradeep Singal RCS Rallies Elec Mills Ltd

6 O.P.Rathi

7 V.K.Mittal

8 Vijay Singh

9 Lal Singh

10 Prakask Baghal Farmer

11 Subhash Chandra Pal Farmer

12 Ranjeet Kumar Farmer

13 Chaudhari Omprakash Singh Farmer

14 ChaudhariMahavir Singh Farmer

15 Shivkumar Verma Farmer

16 Pancham Singh Farmer

17 Yojendra Singh Farmer

18 Rajpal Singh Farmer

19 Layak Singh Farmer

20 Sardar Singh Farmer

21 Rambabu Singh Farmer

22 Thakur Kaluram Farmer

23 Chandraveer Singh Farmer

24 Jagveer Singh Farmer

25 Omkar Singh Farmer

26 Hari Singh Farmer

27 Dharmapal Singh Farmer

28 Jagdish Parsad Farmer

29 Omveer Singh Farmer

30 Saheb Singh Farmer

31 Veerpal Singh Farmer

32 Bacchu Singh Farmer

33 Mohan Singh Farmer

34 Narayan Farmer

35 Bhagwan Singh Farmer

36 Gopal Farmer

37 Puran Singh Farmer


List of Persons who attended Public Hearing in Agra on 16 August, 2012


38 Vijendra Singh Farmer

39 Mohan Singh Chahar Farmer

40 Atra Singh Farmer Leader

41 Kishanpal Singh Farmer

42 Narendra Singh Farmer

43 Rameshbabu Farmer

44 Hari Singh Farmer

45 Rajendra Singh Farmer

46 Shahibhushan Mishra Upabhokta Sarakahan & Kalyan Samiti

47 Mukul Pandey Upabhokta Sarakahan & Kalyan Samiti

48 Prempal Sharma Farmer

49 M.M.Sharma DVVNL

50 Rajiv Jain DVVNL

51 Ajay Chopra Agra Vyapar Mandal Sangathan, Agra

52 Mohan Singh Nagla Raddo Noogawan

53 Omprakash Farmer

54 Rambabu Farmer

55 Rameshchandra Farmer

56 Mohan Singh Farmer

57 Than Singh Farmer

58 Deven Singh Farmer

59 Chaudhari Mahaveer Singh Farmer

60 Radhacharan Singh Farmer

61 Kale Khan Farmer

62 Ramveer Singh Farmer

63 D.C.Sharma Farmer

64 V.B.Agarawal National Chamber of Industries & Commerce

65 S.S.Goyal National Chamber of Industries & Commerce

66 B.K.Aggarwal Factory Owner Association

67 Rajesh Goyal Agra Cold Storage Association, IIA Agra

68 Ravindra Pal Singh President, Savdaan Vyapari Federation

69 Govind Agarwal President, Agra Mandal Vyapari Sangthan

70 Kamal Agarwal Agra Cold Storage Association

71 Kiran Dhawan Foundry Nagar Industries Association

uttar pradesh electricity regulatory commission · 2015-06-03 · uttar pradesh electricity...

Documents